One would be entitled to assume that Section 6 was an attempt to indicate to the central bank what its public policy was to be. This is the only section in which an effort is made to indicate that the bank is to concern itself in some way with the welfare of the people—that, in fact, their interests are to be its predominant aim. I imagine that Section 6 was drafted by a person who had a mechanised heart, and that he was assisted by somebody who had some tint of affection for high and lofty principles. Section 6 seems to be the metallic-hearted banker providing that the bank shall exercise all the functions which it has as a bank with the high-minded, pious legislator saying, "All right; that may be so, but will you please put in something to give the impression that the bank is also concerned with looking after the welfare of the people when it is not manipulating currency and credit?" The impact of these two outlooks has produced Section 6 in its present form.
Section 6 is just humbug. It has no meaning whatsoever. It is not possible for the bank, under Section 6, to do anything but what banks have been doing since they were first established. If asked to accept what it implied in Section 6 as one of his articles of association, no banker might be worried on the score that he would have to deviate one iota from his normal banking practice. This is rather an effort to fool the people. Even then, it is a very feeble effort. One need not read the section with any great care to realise that it is quite impossible to implement the second portion of Section 6 so long as the first portion of that section stands. The Taoiseach and the Minister for Finance will say that they did not overlook the welfare of the people when drafting the Bill, that they put in a few phrases in Section 6 about them. But they know that the tail-end of Section 6 has no real meaning and is likely to have no effect whatever on normal banking practice in this country. I suspect that, when the directors of the central bank are appointed—and particularly the three banking directors — whatever obligations they will see in the first portion of Section 6, they will see no obligations or impediments to normal banking practice, as understood by past operations, in whatever piece of piety has been injected into the latter end of the section.
In so far as Section 6 is concerned with public policy at all, as distinct from pretending to be concerned with public policy, the vital importance of the section, to me, is that it ought to indicate that it is the purpose of the State to insist that the central bank— so far as it can make any contribution to our financial difficulties—should have imposed upon it functions which would enable it to interfere with the provision of money for State purposes in this country. There is no indication whatever in Section 6, which carries in it all the obligations at present imposed on the Currency Commission under the Act of 1927, that the central bank is likely to have any effect whatever on interest charges in this country, or on the creation or extension of credit facilities. It has been made abundantly clear, in the course of the debate on this Bill, that the public mind is concerned with the necessity for the provision of cheap money for State purposes and with the necessity for the issue of State credits essential to finance schemes of a national character, such as the reorganisation and regeneration of agriculture, the provision of assistance for industrial development and the financing of our social needs. Nowhere in Section 6, or in the Bill as a whole, do we find the slightest indication of any bend or bias being given towards shaping the policy of the new central bank in the direction of supplying cheap money to the State or cheap money to finance worth-while schemes of national and industrial regeneration.
This Bill—as I see it through Section 6; and for the purpose of my remarks I take Section 6 as being the section which is supposed to indicate the public policy of the bank—gives no hope whatever that we are likely to have any economic resurgence as a result of its passage and in particular as a result of the passage of this impossible section. We are not likely to be in the slightest way delivered from our present-day economic difficulties, so long as Section 6 remains as at present in the Bill. Money will be as dear and as scarce as ever, and as long as money is dear and scarce the things that only money can buy and the activities that only money can create under our present currency and financial system will be scarce and considerably restricted.
When this Bill, with Section 6 in it, is passed, we will still have a condition of affairs which is reflected in an underdeveloped agricultural country, an industrial position which is far from wealthy, and we will continue to have the drift from the rural areas to the towns in search of work. We will continue to export large numbers of our people to another country to get there the employment which they find it impossible to obtain here. The industry which is our basic industry and which probably for all time must provide the main source of our wealth, will continue to be starved for want of the necessary credits, or the credits will be made available only on terms which will impose new burdens on the industry.
In the course of a lecture which he delivered at Cork recently, the Minister for Agriculture told us what our post-war agricultural policy is likely to be. He told us we would be in keen competition with every other agricultural country, that the industry could not continue to live on subsidies and bounties, that in respect of our produce which was sold elsewhere it would be sold on the basis of the survival of the fittest. He told us that we could only succeed in maintaining the industry by being able to produce commodities and sell them in what is now our only market—Britain—in competition with countries with a better method of financing agriculture than we have, with resources more extensive than ours and with certain natural and climatic advantages not possessed by our country.
Can anybody visualise the agricultural economy of this people if we have to face the position envisaged by the Minister for Agriculture—a position in which no more bounties or subsidies will be available for agriculture? Does not everybody know that if bounties and subsidies for agriculture were removed to-morrow the industry would not last, that if it had to rely on an export market it would not last 24 hours?
So long as we have to rely on an export market to consume goods which we cannot sell to our own people because they are too impoverished to buy, then we must maintain the scheme of subsidisation for those exports or introduce new methods of agricultural production and new schemes to finance agricultural production. There is no indication in this section that agriculture is to get money more cheaply in the future than in the past; there is no indication of any special facilities to finance agricultural activities and no indication that agriculture will get any special attention to equip it for the type of fitness expected from it in the post war period by the present Minister for Agriculture. Therefore, in so far as this Bill is concerned, neither industry nor agriculture can look forward to any relief from their present pressing problems. They will have to continue to stagger and struggle on as best they can. This Bill gives them no hope that any of their difficulties will be so appreciated by the State that some special assistance will be extended to them.
There was a time when it was believed that it was the privilege of bankers to talk on money matters and interfere in currency and financial questions. That was a domain which they claimed for themselves. The ordinary man in the street, particularly in the last 25 years, has begun to realise that finance is just as important a matter to him and just as important in his daily national life as it is to those who live by selling and circulating money. If there is any one thing which has stood out more pre-eminently than another in respect of currency and financial matters in the past 25 years, it is the interest which the ordinary citizens are taking in these matters. The extent of that interest is shown by the movement in many countries critically to analyse the whole basis of finance and credit, and as a result there has been a rapidly growing disposition to alter methods of currency and finance at one time regarded as sacrosanct. Deputy McGilligan quoted from Pethick Lawrence's book "War Loans and the Banks"—a book that is most revealing and that indicates very clearly that, no matter in what kind of majesty and pomp bankers may endeavour to enshroud themselves, banks have in the past been able to manipulate currency and credit with most bewildering efficiency, as was indicated by the quotation which Deputy McGilligan gave to-day from that book.
One of the most noticeable features of the past 25 years has been a disposition to abandon the rigidity which was formerly associated with the methods of finance and many countries have found to their own advantage that it was desirable to introduce new methods of finance, new conceptions of finance and new uses for finance which were unheard of 50 years ago. To-day there is a growing disposition to recognise the basic truth of the saying that nations live on what they produce, that there is nothing else on which they can live. But the manner in which a nation produces its goods is related to the manner in which its production is financed, and the manner of financing the production of goods in this and every other country in a very large measure determines the standard of the produce and the extent of the production. There is not a farmer in this country but will tell you that if he gets cheap money he can have better land and better productivity and in return, the national wealth will correspondingly increase.
Finance, therefore, has played, and is continuing to play, an ever-increasing part in our agricultural and industrial activity and it is vital to us, if we want to see any industrial or agricultural expansion, if we want to see social problems dealt with comprehensively by the central authority of the State, to ensure that not only is cheap money made available, but that the State, by controlling the issue of credits, the expansion and, if necessary, the restriction of credits, should be able at all times to determine what are the needs of the people in relation to the methods of financing their industrial, agricultural and domestic lives.
My complaint with relation to Section 6 is that, while it makes some effort to pretend it is the purpose of the central bank to be concerned with the welfare of the people, in fact, neither the section nor any one of the other sections gives the slightest indication that there will be any real concern for the welfare of the people. If this Bill is passed every banker will say: "Well, that temporary storm has blown away; we can just carry on in the same way as we have carried on since banking institutions were established," and they will probably feel that because of the passage of the Bill they will be immune from any serious annoyance from the Legislature for a very considerable time to come.
I think Section 6 might have been a good section if it had been given the bend which I sought to give it by my amendment; but it is now a contradictory section, an effort to keep the bank purely as an automatically-run banking institution and, on the other hand, an effort to give to the bank certain pious functions which are impossible of implementation. I do not regard the Central Bank Bill—and the Taoiseach agrees with me—as likely to solve any difficulty we have. He takes the view, and I take the same view, that even when this Bill is passed, every problem we have will still be with us and that the Bill does not in the slightest way point to the road along which we may find a solution of any of our present difficulties. In so far as it might be of use at all, one would imagine that there would be some full-blooded direction given to the directors of the bank in Section 6. Instead of that, they are asked to implement in their public policy a section which is contradictory, a section which, because of the way in which it is drawn, makes it impossible for the banks to do anything but discharge the functions imposed on them by the first portion of the section. If one reads Section 6 in conjunction with the statements of members of the Government, one can only confess complete disappointment that this measure, which has been produced as a result of the labours of the Banking Commission, should be such an anæmic document.
