Vol. 123 No. 14
I move amendment No. 1:—
In page 2, between lines 15 and 16, to insert:—
the expression "the Act of 1927" means the currency Act, 1927 (No. 32 of 1927).
This is merely a drafting amendment which arises from the fact that there are now two references to the Currency Act, 1927 in the Bill—which occur in Sections 10 (2) and 18 (1). It is the custom to mention in the definitions section of a Bill any Act which occurs more than once in the text of the Bill.
I move amendment No. 2:—
In sub-section (4) paragraph (a), line 2, page 4, before "weight" to insert "standard."
This is a drafting amendment which is being inserted solely in the interests of uniformity throughout the whole of sub-section (4) (a) of Section 6.
I move amendment No. 3:—
To delete sub-section (1).
With the permission of the Chair, I should like to discuss amendments Nos. 3 and 4 together. It was discovered at a late point that sub-section (2) of Section 10 prohibited the making of any coins of "mixed metal" except coins issued under the Bill. Although the Bill was intended to apply only to token coinage and the definitions in the Bill and heading of Part II ("Coinage, other than Gold Coinage") clearly indicated this, Section 10 was not drafted so as to permit in future the coining of gold coins which are of standard fineness. Since these are made of eleven-twelfths gold and one-twelfth other metal, they are in fact pieces of mixed metal made and issued as coins. Although the matter is largely academic in present circumstances, it was decided to amend the Bill so that it should relate only to token coinage as was intended. Amendment No. 4, to insert the words "gold coins issued under the Act of 1927", has, therefore, been prepared so as to remove any doubt as to the continuance of the power to issue gold coins of standard fineness. Amendment No. 3 is consequential.
I move amendment No. 4:—
In sub-section (2), page 4, line 22, to insert "gold coins issued under the Act of 1927 and" after "except".
I move amendment No. 5:—
In line 15 to add the following:—"except in the case of silver and gold coins withdrawn which shall be held or melted down and added to the reserves of these metals held by the bank".
Would the Minister indicate his willingness to accept this amendment and thus save argument?
I am afraid it is quite useless. The Central Bank can do what they like with silver or gold which they have otherwise than that mentioned in this measure. What is the good of putting this prohibition on it?
I want to get the Minister to take away the right of the Central Bank to dispose of bullion, whether silver or gold.
May I interrupt the Deputy? All he proposes is to prevent them in respect of silver and gold withdrawn and melted down. They already have other resources. They can do what they like with those.
The Minister will agree that the Central Bank can at present build up its reserves in any form it likes. If it has gold it can dispose of gold. I want a discussion on whether we have not yet reached the stage of having to decide whether it would be wise or not to keep in the custody of the Central Bank, for the benefit of the State, precious metals.
We have, within the possession of and belonging to the State, silver coinage in circulation. This Bill proposes that it be called in and that it be substituted by another base metal or mixture of base metals. The Central Bank have the right under the Act setting it up, to call in these. The Minister himself indicated in the other House that by calling in silver coinage and melting it down and replacing it by a substitute coinage and by melting down and selling bullion, a profit of £1,000,000 would be made. My attitude to that is that it would only be £1,000,000 profit in paper money, or, if you like, a book-keeping transaction.
What I am asking to achieve is that there should be a direction from this House to the Central Bank to hold that bullion. We know that it is of more value to-day than its face value. It was more valuable before devaluation than its face value. It is a metal which to-day is one of the scarcest and dearest. It has an international value. If the Minister has followed the price of silver in the years preceding devaluation, he would have found that it had gradually crept up to a price much higher than it had ever been before. Since devaluation, it has gone up to such an extent that the Minister himself admitted that one of the reasons why it was being called in was that there would be a big loss to the State if he had to replace the silver coinage by issuing new coinage to replace the worn out coins.
I am asking the Minister to make this House the authority which will decide for the Central Bank as to whether or not they will release or sell for paper money the valuable metals which we may find would serve us, in times to come, much more than just the credit in paper notes which we would get for the disposal of this metal. I am asking the Minister to accept this amendment and so make this House the deciding authority as to whether the bank shall or shall not sell and dispose of this particular bullion after the passing of this Bill.
I suggest to the Deputy that he ought to get this matter into its proper framework. Under the Central Bank Act of 1942, which the Deputy assisted in having passed, there is Section 7 which says:
"It shall be lawful for the bank to do, for the purposes of or through the general fund, all or any of the following things on such occasions and to such extent as the board shall think proper, that is to say:—
(a) buy or sell coin or gold or silver bullion or any foreign currency, ..."
and a whole lot more. The bank are empowered either to buy or sell bullion. That was a power given to them in 1942. They were thought to be experts in this matter, and it was left to their judgment and discrimination to decide whether they would buy or sell. While we leave them with that power, the proposal now is that anything that they may get from the melting down of silver and gold coins withdrawn from circulation, they are to keep indefinitely. Suppose the bank decided they should sell? Are they to sell out of their present reserves and keep this? If the Deputy wants to do what he is proposing in this amendment, then I suggest he should try and get the Central Bank Act amended.
Read the amendment.
Section 14 of the Bill says:
"The Central Bank may carry to the currency reserve the proceeds of melting down of coins withdrawn from circulation or of coins held in stock by the Central Bank and not required for issue or reissue."
The Deputy wants to amend that by adding to it the words:
"except in the case of silver and gold coins withdrawn which shall be held or melted down and added to the reserves of these metals held by the bank".
I want to add to the reserve of metals held by the bank— to ensure that they will hold on to them.
Does the Deputy pretend to believe that his amendment would prevent the bank from depleting the reserves it has? Of course it would not.
Perhaps the Minister would help me in the drafting of an amendment.
The Deputy is taking up the peculiar position that, under the Central Bank Act, he is prepared to accept the judgment of the directors of the bank on a vast heap of matters, but he wants to restrict them on this small point. If you want to show that it is a new view with regard to the Central Bank, then that ought to be put by way of amendment to the Central Bank Act and not by this kind of back-door amendment.
Will the Minister accept it as an amendment to the Central Bank Act?
I might put in a whole lot more drastic amendments with regard to the Central Bank. But that is for another day and at the proper time. There should be a coherent programme with regard to anything of that nature. This is not the way to do it. The Deputy must agree that his amendment would only give the bank a certain sum—call it £1,000,000—to be derived from calling in the silver coinage and melting it down. If the bank says that it has enough reserves it may take this £1,000,000 and sell another £1,000,000 of other reserves which they have. Are we now to say that silver ought to be maintained for ever? The effect of the amendment, if passed, would be to require the bank to hold silver bullion indefinitely. I think it is absurd.
Perhaps the Minister would indicate what is his attitude of mind on the matter. I assume that the Minister and the Central Bank authorities work very closely together on questions of financial policy.
Does the Deputy assume that from previous experience?
I think so.
I wonder.
In any case it would be interesting to know what the attitude of the Minister is on the question of having reserves, of maintaining not merely this, because this is only a small portion of the reserves of bullion, whether gold or silver. Will the Minister say what his own attitude on the matter is at present, and whether he should use his influence with the Central Bank to reserve the bullion as far as possible, whether it be gold or silver?
On that point, I would ask the Central Bank to advise me.
But surely the question of general policy arises.
I do not know.
It arises in this way, that it would satisfy public opinion, if this amendment fails, if it were to know what the attitude of the Minister is on this matter as well as on the general question.
I am surprised at the Minister taking up the attitude that he has taken. The history of this country in issuing its own paper money was followed in the beginning by the Minister's Party—it was then the Government and the Minister was a member of it—lodging in England, on account of the Bank of Ireland, £5,000,000 worth of gold as security for our money. That was subsequently sold for £5,000,000 worth of British war loan which was lodged in the Bank of England as security for our money which was in circulation with them. Is that not so?
I never heard of it.
You never heard of the Currency Commission lodging in the Bank of England bullion originally and subsequently British Certificates of a public loan as part guarantee of money of ours in circulation?
I must confess that if I ever heard it I have forgotten it. I do not believe I ever heard it.
Will the Minister deny it?
If I never heard it, I cannot deny it.
What has it to do with this amendment?
Every country which issues currency has to have some form of backing for it. When the British had paper money in circulation at one time they had a gold reserve to guarantee the value of their money which was publicly reported on from time to time. I suppose the Minister will deny that.
Does the Deputy maintain that arguing about the gold reserve is relevant to this amendment?
Yes.
What is the Bill for?
The Bill is for taking out of circulation silver coinage which has an intrinsic value and the only reason that silver coinage is being taken out of circulation is that the Government find it is worth twice as much as its face value and they are proposing to sell it to make a profit of £1,000,000 in paper money. I am suggesting that, rather than sell it, they should hold it and add it to other gold and silver reserves in the hands of the bank and retain it here as part guarantee of our money in circulation.
That is the Deputy's amendment and is quite in order, but he has gone much further than that in the discussion.
I am going further because the Minister is taking the line that he does not understand what it is all about, and is relating it to a single transaction of a puny £1,000,000. That is the way he is looking at it. I am introducing this amendment to try to get a new approach in the mind of the Minister and the Central Bank authorities that the time has arrived when we should have our own money guaranteed with certain commodities, and this could be the beginning.
I doubt if the Deputy's amendment would have been accepted if that was the purpose.
I am very much surprised at the contentions put forward by Deputy Briscoe. He maintains that this is an attempt to obtain a new approach. Really when you listen to him and his conception of money in the bank it is a very old approach. It is too old to be entertained by the House. It is the approach of the old mercantilist theorists. I think we all realise nowadays that money is credit to the Bank of England, and as far as that is obtained by any means it is good credit and good money as long as we are in the sterling area, whether we agree with the whole set-up of the banking system or not. The purpose of the amendment, I take it, would be to deprive the Central Bank of making a cool £1,000,000 in profit by calling in this silver, melting it down, and selling it when the market shows it is proper. The retention of this silver would not in any way increase the credit of the Central Bank. It is preposterous to allege that it will increase the credit of the Central Bank with the Bank of England, which is the ultimate source of credit for the Central Bank, as Deputy Briscoe realises. Therefore, I think there is no point whatever in his amendment and, as the Minister said correctly, it should be resisted.
I move amendment No. 6:—
To delete sub-section (1) and substitute the following sub-section:—
"(1) In this section, the expression ‘Irish coins' means any coins being—
(a) coins issued under the repealed enactments, or
(b) gold coins issued under the Act of 1927, or
(c) coins issued under this Act."
This is a drafting amendment following on the insertion of a reference to gold coins which we have already passed in Section 10.
May I suggest to the Minister that when he takes this Bill back to the Seanad with these official amendments considered necessary by him he will explain that it knocks the bottom out of their theory that it is better that legislation of this kind should be first introduced in the Seanad rather than in this House?
I will express the Deputy's view to the Seanad, but it is not complimentary to the Seanad.
In the Criminal Justice Bill introduced in the Seanad which is coming on later, more amendments have been put down here than there would be to a Bill introduced here.
Will the Deputy accept the sequence that when legislation leaves this House it has to be amended in the Seanad, and that shows that this House is worth nothing?
The theory is that the Seanad is a leisurely House which can take Bills of this kind and go through them with such care that no further amendment is necessary in this House. They pass Bills like sausages out of a machine, and any amending has to be done here.
May I say, without any disrespect to this House, that there was a better discussion on the Coinage Bill in the Seanad than there was here?
