asked the Minister for Finance whether, in view of the devaluation of sterling, he is now in a position to make any statement arising from my question of the 15th December, 1948 (Volume 113, columns 1525 and 1526) and, further, whether he will state how he proposes to provide for the increased repayment liability of over £5,000,000 and interest charges arising from the Marshall Aid dollar loan up to the date of devaluation.
Ceisteanna—Questions. Oral Answers. - Effect of Devaluation.
I am not in a position to make any statement on the matters raised by the Deputy. The whole question is receiving consideration.
As the Deputy is aware, interest payments on the loan do not commence until December 31, 1952, and repayments of principal do not commence until June 30, 1956. Article 4 of the Loan Agreement dated October 28, 1948, with the U.S. Government provides for a situation in which there might be difficulty in making the repayments on foot of the loan and for modification, by mutual consent, of the terms of the loan in certain circumstances.
Would it not be expected that the Minister should now make some approach to the matter in view of the fact that we have had one step, devaluation? Is he now prepared to accept the view that there could be another devaluation?
I do not think that my view arises on this question as to an approach.
Will the Minister at some stage make a statement to this House about the whole position with which the nation will be confronted arising from the loss already to the nation of over £5,000,000 from devaluation on the transactions up to 18th September and about what arrangements will be made if an extra liability is put on the nation through steps which were taken by somebody who is not under the control of this country and which affect our country?
The Deputy's Party left me with a Currency Act which made the loss inevitable.
Nonsense. What did you leave?
I did not leave that situation.
The Currency Act was passed in 1926.
It was renewed in 1942 and made worse.
I referred in my question to a question which was put to the Minister in December, 1948. At that time the Minister apparently was not prepared to agree that there was any danger of devaluation.
Oh, no, I did not say that.
He regarded it as a variety of assumptions, many of which would not arise.
That was not the assumption in that reply.
Would the Minister read that answer?
I have already read it and considered it.
Will the Minister discuss this at some time?
Yes, at some time prior to 31st December, 1952, when the interest payments begin.
We may have such a heap of extra charges from the loan on our heads by then that all the attacks about extravagance which were made on this side when it was the Government will sink into insignificance. There has been a loss of £5,000,000 on one transaction in less than two months.
It is almost as bad as the Argentine wheat or the Deputy's coal.
They were a better buy than sterling.
asked the Minister for Finance whether, in view of the position in which the Government found itself as a result of the British Government's decision to devalue sterling, he will introduce at an early date proposals for such legislation as will enable the Government to deal expeditiously and effectively with any similar situation which may arise in the future.
The position arising out of the prospective devaluation of sterling was fully and expeditiously considered by the Government, whose decision was announced on the 18th September. A statement giving the reasons for this decision was broadcast by me from Radio Éireann on the evening of 19th September.
As regards the Deputy's suggestion that legislation should be introduced, I would refer him to the remarks I made in Seanad Éireann on the 26th October in reply to the motion on the monetary policy of the State.
Does the Minister not agree that the Government was in a pretty helpless position when this sudden decision was taken by the British Government?
Yes, I agree to that.
Would it not be wise, then, to arm yourself against future contingencies?
The position would only be partly affected by legislation. There are other circumstances.
Besides the Currency Act.
The Deputy has fairly explained the position which arises out of the Currency Act.
£5,000,000 gone down the drain.
A drain the Deputy dug.