Before I turn to the assets side, let me here interpolate that when you get a Deputy like Deputy Hickey, the Lord Mayor of Cork, who is a responsible man and a prominent man, facing the picture that I have drawn with murmurs about changing the system, and Deputy Davin talking about banks, knowing as much about banks as my foot, we realise the full measure of the Government's iniquity because they have drawn well-intentioned and honest men into the temptation of trying methods to relieve the country from the disaster that that Government has brought upon it, which those who understand economics and banking realise will bring far greater disaster upon us. When the Minister for Finance tries to explain to Deputy Hickey and to Deputy Davin the perils of the courses they advocate he will find he is talking to an absolutely blank wall—and I mean no disrespect to Deputy Hickey or Deputy Davin. But difficult, impossible, as the task may be of explaining to them the perils of the courses they advocate, it is nothing compared with the difficulty of explaining those perils to the mass of the electorate of this country who are invited by responsible, honest, well-meaning men to adopt radical methods to deal with admitted evils and who are assured by those well-meaning men that those methods will provide the key to solve the problem. The Minister for Finance and the Taoiseach, having brought the country into the position when we begin thinking of such methods, find themselves charged with the task of explaining the perils to the public and discover that they might as well be addressing them in Sanscrit or Persian for all the impression they can make upon their minds. That is one great crime with which I indict the Taoiseach and the Government at the present time, not only for having pursued courses the logical conclusions of which are national bankruptcy, but for having brought our people within the range of the temptation to resort to uncontrolled inflation and wild economic experiments which must ultimately react upon the poor of this country and virtually upon the poor alone because, as I have pointed out in this House before, the rich will go and take their money with them, just as they did in Australia, just as they did in New Zealand and just as they did in Newfoundland, and will leave the poor behind to suffer. When the suffering is over the rich can come back and collect the spoils.
Look at the other side of the balance sheet—our assets side. We heard Deputy Davin raving about the holdings of the banks, the profits they made, as if no bank had any deposits at all, and that they had invested all their profits outside the country. One of the grimmest features of the present situation is that the banks' holdings and securities outside this country have been steadly dwindling. The net external assets of the joint stock banks of this country began to dwindle three years ago and they have never stopped. Up to last year they were dwindling slowly and steadily. In the last six months they have begun to fall catastrophically, and the Minister for Finance knows it. Remember this, that as they fall one of our most valuable invisible exports falls with them—the interest that we got on those investments from the countries where we had investments. Those external assets are to this country the same property as that which makes Great Britain wealthy in her own right. What is it that makes Great Britain the greatest mercantile State in the world? What is it that gave her trade in all five Continents, and makes her to-day the only rival of the greatest military power in Europe? It is the external assets of her citizens. We were one of the only small countries in the world that had wealth comparable with that wealth of England, and we see it dwindling rapidly as it is dwindling to-day.
We know that the people of this country who had high standards of living are going to have forced upon them a lower standard of living, inevitably and certainly, coupled with the fact that the joint stock banks of this country are becoming choked with Government paper. The time has passed for discreet silence: now is the time—while there is still a chance to save the situation—to speak frankly. The banks of this country have taken up as much of the Government paper as they can with safety take and we find £5,000,000 of short-term loan unfunded. At this moment, £5,000,000 is outstanding on short-term loan and we have got to look for money wherewith to fund it. That short-term loan is at present saddled on the joint stock banks who already have in their portfolios an undue proportion of Government paper. The Minister for Finance knows that.
What is the result of the 5/6 income-tax? One of the first results is, that it has stopped saving amongst the people, because there is no surplus to save. People save only after they have provided themselves with that standard of living to which they have been accustomed. If you impose upon them an altogether unprecedented income-tax rate, they are not going to reduce the standard of living overnight: they simply stop saving. If that is allowed to become a permanent factor in our life, it may be that we shall find it hard to re-establish a margin of saving for years to come. For some time after the first impact has had its effect people stop saving, and saving in this country has now stopped.
Anyone who is trading in rural Ireland knows the condition of trade. There is no shopkeeper in rural Ireland at the present time, I believe, who is earning his expenses. I doubt if many farmers are making profit. Unemployment is rising. It is true that the published figure is kept in some control by the tide of emigration flowing to Great Britain but remember that, after years of that steady flow, they are going still. They came up with me on the train to-day—they were emigrants for England. If that tide were not flowing, the unemployment figures would be absolutely staggering. But, even with that immense exodus of young people—some of them going in the knowledge that they are in danger of being conscripted in Great Britain —we still have an immense army of unemployed. I do not think anyone driving through the streets of Dublin will deny that poverty is still widespread. Drive through Buckingham Street, Rutland Street, Mountjoy Square or Gloucester Street, or most parts of that constituency where we had a by-election so recently, and you will find plenty of poverty still, never mind that poverty which we all know in rural Ireland, which never is as arresting or cruel as the poverty of city life, because it is tempered by the charity of neighbours. Not, indeed, that charity is unknown in the tenement houses of Dublin: perhaps there is more charity there than in many places in the country, but unfortunately they have not got the same resources to help neighbours as are happily still surviving in rural parts of Ireland.
The transport system has broken down. Railways are bankrupt—and that, after we have passed drastic legislation, five years ago, which we were sure was going to save the situation for all time. I have got here the balance of trade figures. We used to be told that the adverse trade balance of £11,000,000 on a total trade of £95,000,000, spelt bankruptey. We were told that by the present Minister for Finance, at a time when our invisible exports were substantial. To-day we have an adverse trade balance of £16,000,000 on a total trade of £67,000,000; and it has been as high recently as £22,000,000 on a total trade of £60,000,000.
There is, however, a far more sinister and dangerous fact existing than those deplorable figures relating to the trade of this country. When we had an adverse trade balance of £11,000,000 on a total trade of £95,000,000, we had a steadily increasing quantity of invisible exports. What is the position in regard to those invisible exports now? Remember that the invisible exports of this State—if we are to judge by the returns of the joint stock banks from year to year—were more than enough to cover the visible adverse trade balance prior to 1931. What are the principal invisible exports of this State? They are the interest from investments abroad, the receipts from emigrants' remittances, the sweepstakes, the British pensions and the tourist traffic. All of these were on the up-grade in 1931, and they were more than enough to extinguish the adverse trade balance, and they were increasing. What are they now? I have not by me at the moment the figures for the external assets of the joint stock banks, but I may have them before I sit down. They are going down rapidly, and as they go down the interest on our investments held abroad must go down too. It is common knowledge that it is.
Emigrants' remittances have virtually stopped. Eight years ago we derived an astonishing annual income from the remittances of those who went out to the United States of America. Anyone who understands that business, or who lives amongst the people, realises that the history of that remittance business was that the emigrant who went to America sent home a portion of his earnings to his parents—or her parents—for the first ten or 12 years of his sojourn in the United States. By that time the emigrant married and settled down and the remittances tended to dwindle away—certainly as an annual amount. But, as the remittances of one flight of emigrants dwindled away, another flight of emigrants took their place; and so a constant stream of remittances was maintained and did, in fact, become a very substantial invisible export of this country. With the cessation of emigration to America which took place during Mr. Cosgrave's régime, that stream of remittances began to dwindle, and, as it is now approaching ten years since emigration stopped, the stream of remittances has almost completely ended—and there is no sign of its beginning again. It is true that some money comes in from England, but it is nothing to compare with the remittances that came in from the United States in the past.
There can be little doubt that the sweepstakes will not yield the same return in the future as they have yielded in the past. With every public disturbance the world over their interest and fascination for the world tends to dwindle. They will progressively decline over the next ten, 15 or 20 years. We had a very large income in this country from the pensions payable to persons who had been in the British service and who are now resident in Éire. These people are dying off, and others are going to live in England, with resultant loss of that invisible export to this State.
Another item, to which I do not think even the Banking Commission has directed its attention, is that we are acquiring an invisible import, a liability, because a great many of the old people who owned land in this country, and who were bought out under the Land Acts, had their life and being in this country, but they educated their children in England, and, as they are dying off, the younger people who have made their lives in England, do not come to live here and the income and property of their parents is distributed amongst the young people, all of whom are living abroad, with the result that if the old people held British securities, we lose the invisible export of the interest payments which they received. If they hold Irish securities, those securities are transferred to external ownership and become for us, in the matter of trade balance, an invisible import which will tend to grow. The tourist traffic, we were led to believe, would provide a substantial asset, but if we are to continue blowing up the post offices of the British people, and generally creating pandemonium, and painting the blank walls of Killarney with: "Damn your concessions, Enland," and "To hell with Great Great Britain," I cannot see the tourist industry in this country developing on a very handsome scale. We must pay the price of our patriotism in the economic consequences of our own acts.
I take this occasion to say to the Taoiseach who, after all, is ultimately responsible for the policy of the Government: "What are you going to do about it?" We, the Opposition, perpetrated one serious error in the last five years, that is, that we foresaw the present situation too soon. Five years ago, we told the Taoiseach that his policy must inevitably end in the bankruptcy of this country, and I do not deny that that superbly astute political operator extracted considerable kudos from going out and saying: "We are not `bust' yet; they have been telling us that we are going `bust,' but we are not. Look at us— we are blooming." His colleague, the Minister for Finance, has been growing a little gloomy, however, in the last few years. The Taoiseach is still radiant and quite cheerful, but I notice that the Minister for Finance slumps a little lower in his chair every time he returns to the charge, and I do not blame him. The trouble of it is that when he and the Taoiseach were in optimistic humour together, they were in step. Unfortunately, they have got out of step now, and the Minister for Finance is learning more quickly than the Taoiseach, and woe betide any colleague of the Taoiseach who ever lets him see that he thinks he knows more than the Taoiseach, because Jonah never went down the whale's throat more quickly than that colleague of the Taoiseach will go.
So long as you sit at the feet of the god and adore, you are quite welcome to share in the reflected glory, but start to climb up towards his knees, and a very different tale will be told. The Irish Times need lay no soothing unction to its soul that if they secure the support of the Minister for Finance, the day is won. Little they know the Machiavellian operator they are conspiring against. The dagger in his sleeve is quite as ready as the gentle word, and so long as the gentle word will persuade the Irish Times to assure the residents of Pembroke that Mr. de Valera is not as bad as he looks, the gentle word will be forthcoming, but if they imagine that, by capturing the Minister for Finance, they can stay the Taoiseach's career, the dagger will emerge from the sleeve with equal certitude and lethal effect.
I want to try to open the eyes of the Taoiseach to the emergency into which he has brought this country, and to ask him what is he going to do about it. Deputy Davin wants him to do what New Zealand did. I told him, four years ago, that he would find himself confronted with the dilemma of Newfoundland. Newfoundland had to call the British into Newfoundland, and New Zealand had to send its Minister for Finance to what Deputy Davin calls Thread-the-Needle Street, and he is there now, and he will stay there until he gets money from the British Government to stop the leaks which his policy have put in the bottom of the ship of New Zealand finance. Are we going to Thread-the-Needle Street, or are we going to invite British Treasury officials over here to run this country? God forbid that that day should ever come; but, as certainly as we are standing in this House, if measures, and active measures are not taken soon to correct the economic position of this country and to re-establish its finance on sound foundations, to Thread-the-Needle Street the Taoiseach will have to go, and he can bring Deputy Davin with him.
