I want to correct what I think was an unconscious representation by the Minister for Finance yesterday of my position. He said that I advocated unlimited expansion of credit. I did no such thing. I was arguing on a thesis that, in modern life, with all its commercial, economic, industrial and agricultural complexities, the State must necessarily interest itself in the expansion and restriction of credit. If it desires an ordered industrial life, an ordered agricultural life, or a planned economic development, it is essential for the State not to adopt the policy adopted by States in the Victorian period of leaving the handling of currency and credit to professional bankers. I did not advocate an unlimited expansion of credit. What I did suggest was that, in an under-developed country, with considerable potentialities, industrial and agricultural, with a relatively underdeveloped national asset, the State should intervene to ensure an expansion of credit so as to provide for full-blooded industrial and agricultural development on the one hand, and for an enrichment of the national asset by the creation of public amenities on the other hand. In my advocacy of the expansion of credit I was concerned with ensuring that credit was made available for the creation of sources of wealth which would enrich the whole community, or for the expansion of the national asset by the creation of public amenities. I do not think it was a fair deduction from what I said to suggest that I advocated an unlimited expansion of credit.
My point of view on the whole matter is briefly epitomised by saying that, in times of recession, when unemployment tends to increase and trade conditions tend to go back, due to internal or external causes, in order to correct that tendency the State should have some authority to try to catch up that lag by the expansion of credit so as to encourage the maintenance of industrial or agricultural activities, or so as to divert those activities into some profitable channel which will keep employment going and stop the lag in employment which might otherwise occur. If, on the other hand, you reach a period when labour is scarce due to the fact that you have intense agricultural or industrial development, the State might think it prudent, in order to avoid inflation, to restrict credit, if it is shown that in fact the availability of credit is so great as to bring inflation within the realms of possibility. My advocacy all the time was based upon a planned expansion and restriction of credit. If things are bad, expand credit to take up the sag; when things are good, then you can keep the reins of credit expansion in your hands, and not issue credits as easily as you would in other circumstances.
The Minister was at pains to say that I was pinning my belief for economic stability, the abolition of unemployment and the creation of high social standards, purely to manipulation of the financial policy. I was not doing any such thing, but I realise that any Government, no matter how carefully thought out its plans may be in the matter of providing employment, in the matter of avoiding emigration or in the matter of developing an underdeveloped country, cannot implement those plans unless it has under its control the expansion of credit and the general financial policy which the country is to pursue. If this Government were a Government of economic wizards sitting in Merrion Street, and having all the ability to find a solution for our various economic and social problems, with the best will in the world they would be powerless to implement their plans unless they could ensure that they had control over the means of giving effect to them. So long as the wages envelope is the passport to food and clothing and shelter, so long as it still represents the passport of the ordinary man and woman to live, it would be impossible for the Government to implement any economic policy, any development policy, unless it had within its control the power to harness the credit potentialities of the country to whatever economic plans it had laid.
It is quite obvious to anybody reading this Bill that it is based upon the Majority Report of the Banking Commission, and, if ever there was a bankers' report, the Majority Report of the Banking Commission is a bankers' report. One has only got to read that report to realise the extent to which that is so. The Majority Report indulged in adverse comments on the subsidisation of housing schemes, schemes which, in the circumstances, were very good. It describes those as wasteful and extravagant expenditure on the part of the State. It disapproved of State borrowing for revenue, a thing which, I think, is quite understandable in the circumstances. My only cavil in that respect would be that you cannot keep on borrowing and you cannot keep on taxing when the productivity of the country is falling, but, so long as it is rising, borrowing for revenue purposes is quite a legitimate activity on the part of the State, particularly in times of crisis and times of stress. It disapproved of the Land Commission's policy in acquiring estates and settling thereon as many economic holders as possible. Whatever views we might have as to whether a particular holding is economic or otherwise, or whatever we might think of the advisability of making capital available for stocking such lands for small and relatively penniless people, I think everyone approves, at all events, of the transition from the big prairie ranch to the self-contained holdings which tend to anchor our people to the land and stop the drift to the towns. But, if one reads the Majority Report of the Banking Commission, one gets the impression that those who signed that report were perfectly satisfied to let things drift on as they are. Their policy was: "Things have gone along as they are for a long time. Why rock the boat now? If anybody does not like the boat, he can get out of it, but do not upset the boat; do not change the boat's course; let things sail on as they are."
The report even dogmatises on the possibility of emigration, the possibility of rearing Irish lads here and sending them far afield where they might obtain some temporary eminence, where they might forget the country that gave them birth, and where they might assimilate conceptions of right entirely different from ours. One gets a viewpoint on the Banking Commission's Report when one discovers the reference to the possibility of emigration. Those who signed the Majority Report of the Banking Commission were saturated with this mentality, that people will not live here, that it is all "cod" and all fraud to try to get them to live here if they want to emigrate and, therefore, so long as they want to emigrate, let us keep as close as we can to the financial hub of the world; do not let us change our policy at all; let us follow meekly and sheepishly in the financial paths which Britain has blazed. That has been the whole line of the Majority Report of the Banking Commission. That is the line of this Bill, because, like the Majority Report of the Banking Commission, it makes no perceptible contribution to the solution of any of our difficulties here.
I said yesterday that I wanted an ordered expansion of credit to meet the necessity for a development policy here. It is not possible under Section 6; it is not possible under this Bill, one of the reasons being, apparently, that the joint stock banks have so much of the volume of credit at their disposal that the central bank in the circumstances is relatively powerless to set the pace for them or to curb the activities of the joint stock banks. Contrary to what the Minister for Finance said yesterday, I do not believe that the existence of good intentions on the part of the Government is sufficient to ensure an adequate contribution to the relief of our economic difficulties. You may have good intentions. I do not doubt that this Government have good intentions. I do not doubt that any Government sitting here will have good intentions but, even if they are tattooed with good intentions, it will be of no use unless they have the wherewithal to implement them. My answer to the Minister for Finance is that, though the Government may have good intentions, it is necessary that they should have control over currency and finance to ensure that these intentions will be given full play. One would think from what the Minister for Finance said yesterday evening that the Government had all sorts of high ideals in respect of the solution of our financial and social difficulties. Notwithstanding the ideals of the Government, we shall have all the existing evils with us in an intensified form if present currency conditions continue. Why are so many of our people idle? Is it because we have no work for them to do in a relatively undeveloped country? Why do so many of our people emigrate? Is it because they have a passionate longing to leave their wives and families and tear up the roots of nativity that they have here? Why do we continue to export beef when our own people do not get a sufficiency of beef? Why are our people insufficiently housed when there is an abundance of material to house them and sufficient craftsmen to operate a housing policy—craftsmen who, even before the war, were forced to go to Britain for work? I might ask, also, why our land is not properly planted and why so many of our industries are struggling.
These things are not happening because the Government desire them to happen, but because they have no plan for dealing with them. There may be theoretical plans in the Government Chamber, but theoretical plans in the possession of a Government without adequate access to currency and without power over credit-expansion will remain theoretical. Our people will continue to suffer because it has never been possible, divorced, as the Government are, from control of credit-expansion, freely to anchor to their good intentions the necessary means to implement them. What I say is probably outside the realm of Section 6, but I want to make clear that the Government are making a profound mistake in being satisfied with their good intentions regarding the solution of our various economic and social difficulties while, at the same time, they handcuff themselves so that they cannot obtain access to the means for implementing whatever good intentions they have in the economic field.