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Dáil Éireann debate -
Thursday, 8 Nov 1951

Vol. 127 No. 3

Oireachtas Restaurant Joint Committee. - Supplies and Services (Temporary Provisions) Act, 1946 (Continuance) Bill, 1951—Second Stage (Resumed).

A terrible amount of confusion, I think, has arisen in the public mind as a result of the repudiation yesterday of the Central Bank and all its pomps and works by the Tánaiste, so much so that I found I was being asked this morning by some Fianna Fáil supporters whether in fact there was a split in Fianna Fáil and if there was any suggestion that an understanding might be reached with some section of Fianna Fáil. However, I think that we have to examine this Central Bank question a little more carefully than the public has done so far. There are two things which the Tánaiste said categorically yesterday which I think are worth underlining so that we will know exactly where we stand in the course of this discussion. In the first place, he disowned the Central Bank categorically and, in the second place, he disclaimed any responsibility in relation to the contraction of credit and, indeed, indicated that he did not approve of such a contraction of credit.

The Official Report of the Tánaiste's statement not being available, perhaps the House would permit me to quote from the Irish Press one or two statements that the Tánaiste made yesterday. He declared that the Government's intention in solving that problem was diametrically opposite to that suggested by the bank; that the views expressed by the board on the financial position did not reflect the outlook, much less the intention of the Government. At a later stage he repeated more or less the same thing with possibly a greater degree of emphasis. I am quoting from the Irish Press of to-day. He said that the Central Bank had not demonstrated to him that the country was not capable of supporting a still larger capital investment programme than anything yet attempted. Later, by implication, he waved a certain threat at the Central Bank. He said:

"I think we will get the co-operation of the Central Bank and the commercial banks. If we do not get that co-operation, then I think we will have to do something about it."

I should say also that the theme of the Tánaiste's speech yesterday was that some foul attempt had been made to hang the Central Bank Report around the neck of the Government. It was an unfair attack.

The Taoiseach also, speaking at the Fianna Fáil Árd-Fheis yesterday, as reported in to-day's papers, said:

"The Opposition pretended that Fianna Fáil was trying to deceive the people and had attacked them and the chairman and directors of the Central Bank. He wanted to nail one falsehood that was being sedulously circulated—that the Government had advised the banks to restrict credit and that the restriction was done on Government instruction."

The Tánaiste yesterday was also most emphatic that the Government was in no way responsible for the restriction of credit. According to the Irish Press he said in the House:—

"If there had been any change in the policy by the boards of the banks to curtail credit for any purposes other than merely speculative or excessive borrowing, then he was entitled to express resentment that they made that change of policy without telling the Government."

These are clear, categorical statements that the Government, in the first place, repudiate completely the policy advocated by the Central Bank and, in the second place, that the Government have no responsibility for the restriction of credit and that in so far as the banks are restricting credit it was contrary to the Government's wish in the matter. These are sentiments which we would all willingly endorse in this House.

I have great respect for the ability of the Tánaiste but, to be quite frank in this matter, I do not trust him. I do not think he has been candid with this House. I think he is trying to run away from a situation which he and his colleague, the Minister for Finance, deliberately set about to create, possibly for mean, petty, political advantage, but a situation which they undoubtedly have created. If I may, I should like to give my reasons for not accepting the startling disclaimers made in this House yesterday by the Tánaiste in regard to the Central Bank Report. My first reason for disbelieving, if I may put it that far, the statement made by the Tánaiste in this House yesterday is that the Report of the Central Bank in proof form was submitted to the Government before it was presented to this House, and I challenge the Government to deny that. It is a clear-cut statement. It was submitted to the Cabinet and to the Ministers and I challenge them to deny that that is so. That was done in the first week of the month of October. It was read by the Ministers and discussed by the Ministers. In the light of that fact, how can Ministers come to this House on 7th November, a month afterwards, and disclaim responsibility for the curtailment of credit which has taken place in the country?

But that is not all. We all know —and I am not trying to refer to this in any derogatory sense but merely to establish a fact—that the Irish Press is a journal which is controlled entirely by the Taoiseach, the Tánaiste and the Taoiseach's son, Deputy de Valera. We all know that in so far as a newspaper can represent the views of a Government, the views of a Party, the Irish Press is the tied and official organ of the present Government.

The Irish Press published a leading article prior to the publication of the Report of the Central Bank. They published that leading article on 24th October, at least a fortnight or three weeks after the Government had had the report before them. I think it is not unfair to the Government, I think it is not unfair to the Tánaiste who was managing director of that paper until very recently, I think it is not unfair to Deputy Major de Valera who now occupies a position on the staff of that paper and I think it is not unfair to the Taoiseach who holds a controlling interest in that paper to suggest that that leading article was only published after mature consideration and was intended to represent the policy of the Fianna Fáil Party and the Government. I shall quote from the article and I shall ask the House to compare the article with the repudiations we heard yesterday from the Tánaiste of the Central Bank Report.

"When the Tánaiste, in recent addresses, warned the people of the grave economic situation in which the country was placed, Mr. Costello, rushing in to defend Coalition policy, talked about ‘hysteria' and accused Mr. Lemass ‘of trying to raise a scare'.

We wonder if he will be as flippant about the Report of the Central Bank? The report deals with the conditions that existed at the close of the financial year that ended on the 31st March, 1951. The accumulated deficit in the balance of payments was then just short of £90,000,000."

That, of course, is untrue.

"Since then the situation has seriously worsened and, according to a recent statement of An Tánaiste, the deficit will mount up to as much as £160,000,000——"

Even the Department of Finance White Paper could not mount up to that figure.

"——unless drastic measures are taken to deal with the situation. Yet, in the opinion of the Directors of the Central Bank, drastic measures were already needed last March.

They—the Directors of the Central Bank—do not speak as politicians, they are bankers, professional economists, leaders of commerce, agriculture, labour, etc., and, presumably, hold different political views. If Mr. Costello is consistent he will accuse them of trying to raise a scare though no reasonable person could regard their report as anything but sober and objective."

That is the report which we heard denounced here last night by the Tánaiste.

"The spending policy of the Coalition is shown to have been inflationary in a variety of ways. It is pointed out, for example, that many of the public works undertaken did not promise a return that would compensate us for the income on the external assets which they used up."

Of course, the building of a hospital does not provide one with a financial return, but it does help to preserve the health of our people. Of course, the building of a house does not provide one with an income, and the planting of forests throughout the country do not yield an immediate income.

This is probably the choicest piece of the editorial:—

"This criticism"—the criticism of the Central Bank—"seems to be particularly relevant to Mr. Dillon's ‘land project', under which as much as £500 an acre has been spent in reclaiming land which will scarcely yield an annual return of 1 per cent."

Even if that were true, it would be something more than the British securities yield in which the Central Bank has invested. But, of course, it is not true. If any meaning is to be taken from that leading article, which is presumably a pronouncement of policy by the present Government and the Fianna Fáil Party in its party organ, it is a clear indication that they subscribe to the doctrine set forth in the report of the Central Bank, that they regard the criticism of the Central Bank as being particularly justified in regard to the land rehabilitation project and generally adopt the language of the Central Bank in relation to that much-publicised word in this House, inflation, upon which, no doubt, the Minister for Finance will later hold forth at length.

I am no defender of the Central Bank. I am sure that the governors of the Central Bank would probably be horrified if they thought I would say a word in their defence. But I think it is grossly unfair to the Central Bank to allow that body to issue a report of this nature, to praise that report in editorials in the Irish Press and to avail of the report to make political speeches throughout the country, such as those we have had from the Tánaiste in recent weeks, and then come here when public opinion had been stirred and when there is a wave of indignation at the conservative, retrograde measures propounded by the Central Bank, throw that body to the wolves and disown it because of what has happened. I think it is only fair to the Central Bank that I should say that.

I will now expose the fallacy of their arguments and the anti-national attitude of mind demonstrated by the advocates of their policy, an attitude of mind which has been largely responsible for the under-development of our country in the last 30 years; an attitude of mind which indicates that the eyes of the advocates of that policy are focussed on Threadneedle Street and the British Treasury rather than on the interests of the Irish people.

I think the action of the Tánaiste in coming into this House and throwing over the report of the Central Bank is a political manæuvre. I doubt the Tánaiste's candour. Let us examine the position in relation to the restriction of credits. We had repeated assurances here yesterday that the restriction of credits by the banks was in no way influenced by the Government.

We have had similar assurances from the Taoiseach who waxed eloquent about it yesterday at his Ard-Fheis when he said that people "were trying to deceive the people," and went on: "He wanted to nail one falsehood being sedulously circulated—that the Government had advised the banks to restrict credit". Let us examine what the position is as to the advice which the Government gave. The Minister for Finance in this House, speaking on the Estimates for his Department on 18th July, (volume 126, No. 12, column 1899) reviewed the economic position, and, generally, started painting a tale of woe, with a general criticism of the terrible things which the last Government had done. He then said that various things contributed to that position, and he proceeded to enumerate the contributing factors to the desperate economic position which he had just painted. These are the contributing factors according to him:—

Private and public spending are causing congestion that can be relieved only by a reduction of one or the other.

A reduction of private spending or a reduction of public spending—that is quite clear. There is nothing misleading about that. His next diagnosis and remedy is that:

"Credit facilities are encouraging outlay on less essential goods."

Credit facilities, of course, mean credit facilities extended by the banks. If that is not a clear invitation to the banks to restrict credit facilities I do not know what the meaning of ordinary language is. The Minister for Posts and Telegraphs will have his opportunity of telling us the adverse effect on the holding of sterling balances in London as he has done on other occasions.

The next proposition put forward by the Minister for Finance was that:

"Money incomes of all kinds are being raised irrespective of increases in output."

In other words, reduce money, reduce wages and reduce the earnings of the people. Is there very much difference between the policy advocated by the Minister for Finance on 18th July in this House and the policy advocated by the Central Bank in its report? Can you blame the Central Bank if they were misled by the Minister for Finance into putting forward the various propositions to which I will refer later. I have referred to these merely in order to give the grounds why I am slow to accept as truthful the assurances which have been given to this House that the Government had nothing to do with the restriction of credit by the banks.

We have, first of all, the statement made in this House by the Minister for Finance on 18th July. The next thing we have is the Report of the Central Bank itself which, as I have indicated, was considered by the Government before it was published, and was before the Cabinet in proof form even. They knew it was being issued. They could, as had been done on previous occasions if the Minister will take the trouble to find out, have indicated to the Central Bank that the contents of its report were not in accordance with Government policy, and that, if they insisted on issuing a report of this kind they were putting themselves in a position where it was likely they would be repudiated publicly by the Government, as they were repudiated publicly by the Government in this House yesterday. What does the Central Bank Report say in regard to credit? At page 16, paragraph 20, it says:

"Rigorous restriction of bank credit for non-essential and less urgent purposes is now imperative."

That sentence was considered by the Government weeks before this report was released to the public. Was any indication given to the bank that it was an anti-national act to restrict credit in the present circumstances, as we have been told by the Taoiseach, at the Fianna Fáil Árd-Fheis, and by the Tánaiste in this House yesterday? Assuming that the Government did convey that information to the Central Bank, did they then inform the Central Bank, in fairness as they should have: "If you publish this report you are merely putting us in a position where we will have to throw you overboard publicly". Did the Central Bank receive any directions? Did they receive any expression of views from the Minister for Finance or did the Minister for Finance sit back and say: "This is good to shelter behind; this is good propaganda against the other political Parties", until he found that the Tánaiste who is, possibly, a shrewder politician, realised that the tide of public opinion was surging against him, and until the members of the Government began to read the leading articles from some of their own provincial newspapers attacking them for their acceptance of the Central Bank Report? Is that why we have had the somersault?

Is that why we have been given statements in this House which do not bear examination by a child of six as to the restriction of credit? Possibly some excuse will be given to us such as: "Of course, we have no control over the Central Bank. What the Central Bank says does not influence anybody." I do not think that even that line of retreat is open to the Government. I would like to refer the House to a statement made in this House by a former Minister for Finance who is now Minister for External Affairs, Deputy Aiken. On the 21st March, 1950, in Volumn 119, column 2089 of the Official Debates, no doubt talking from his experience as Minister for Finance, valuable experience he gained when he was, I think, put in there to clear up certain difficulties that had arisen, he said:

"The Central Bank, in my opinion, gives the Government, through the Minister for Finance, and the Central Bank itself, power to influence the attitude of the Banks in regard to the supply of credit."

That, I think, is a fair statement of the position by the present Minister for External Affairs which he no doubt gave as a result of his experience in the Department of Finance: "The Central Bank in my opinion gives the Government, through the Minister for Finance..."

The Central Bank Act.

That is not what I I have here, but if the Minister says so I will accept it. However, I do not think it alters the meaning, reading it either ways: "The Central Bank Act (if so) in my opinion gives the Government through the Minister for Finance and the Central Bank itself power to influence the attitude of the banks in regard to the supply of credit."

I hope the Deputy will remember that and not say the Bank of England afterwards.

I am saying at the moment that the Government had full power to influence credit here and that they have influenced it in order to restrict it and, having found that, they have now caused a panic in the country and brought business to a standstill, thus causing disemployment, they are now running away from their decisions.

There were more bank issues in the September quarter than in the March quarter.

The Minister for Posts and Telegraphs will have plenty of time to justify his stand in regard to sterling assets, of which he is so enamoured.

The Deputy has shown himself enamoured of them also.

These interruptions, the House will clearly realise, are intended to deflect the attention of the House from the issue I have put, which is this, that I disbelieve the assurances which have been given by the Tánaiste in relation to restriction of credit by the banks. I will recapitulate my reasons. Firstly, the Government knew, as was proved by the statement made by the Minister for External Affairs in this House in 1950: "I have had the power to influence credit directly through the banks and through the Central Bank." We have had that assurance by the Minister for External Affairs who is a member of the present Government. Secondly, we have what amounts to a virtual direction by the present Minister for Finance in this House on 18th July that credit should be restricted. Thirdly, we have the Government considering and virtually approving at a Cabinet meeting of the Central Bank Report.

There ought to be some limit to the Deputy's absurdities.

Does the Minister deny that that report was considered by the Cabinet at the beginning of October? Does he deny that he considered it when it was in proof form when he had an opportunity of saying to the Governor of the Central Bank that it was contrary to Government policy to restrict credit? If not, let him keep silence.

I am giving the Deputy all the rope he wants. He will be swung by that chain Deputy Costello was talking about last night.

The Minister has been hedging on this matter and has been trying to conceal the position in regard to sterling assets from the members of this House and the people of Ireland. I might as well say that it was rather foolish of the Minister to hedge in that way because it has only served the purpose of drawing a greater degree of public attention to the question. It would have been much better to say: "True, that is the position." Instead of that we have had, day after day, the spectacle of the Minister here giving very nearly misleading replies to questions put to him, certainly not candid replies, and then evading the issue by indulging in personalities as he usually does.

Not foolish replies.

The public have read them and I do not think they have been impressed. I think that even members of the Minister's Party have not been impressed, as I have received many letters from Fianna Fáil supporters on that issue.

How many years ago was that?

It was only last week. I do not think the Fianna Fáil Ard Fheis was particularly enamoured of the Minister's replies either.

The Ard Fheis opened the windows for them.

Certainly. As the Minister has drawn me on to this subject now, he might like to take the opportunity when he is replying—as he obviously intends to do, as he is taking copious notes since yesterday—to explain what he means by this idiotic statement that he made at the Fianna Fáil Ard Fheis: "There was the problem of the balance of payments and the currency problem. It was putting the Government to the pin of its collar to preserve the value of the Irish pound on a parity with the British £1."

Now where did he get that from? Has he not read the Currency Acts? He has been Minister for Finance before, so I cannot give him the fool's pardon on these things. I think he was trying to mislead his own Ard Fheis into believing that the Irish currency was separate from English currency, that the Government had power to vary the parity between the two currencies. I think he was trying to mislead his own Ard Fheis. He should not do that. I believe he is underestimating the intelligence of the members of his own organisation, many of whom have studied these problems. I have dealt with these two questions, with the acceptance of the Central Bank Report or the views expressed by the Central Bank and with the policy of restricting credit by the commercial banks. But, generally speaking, I think the whole background of the Minister for Finance certainly indicates that he shares the views of the Governor of the Central Bank. If I am not mistaken, I think he had to leave the Department of Finance before, more or less because of the difficulties created on that score. We had a eulogy from him not so long ago in this House on the Central Bank and the adoption by him of very different words, tactics and theories from those used by his colleague, the Tánaiste, who now repudiates the Central Bank Report with a great flourish of trumpets. Speaking in this House last year, the present Minister for Finance, dealing with the Central Bank Report, quotes a piece from their report apparently with great approval. I quote:—

"These are brave words."

Would the Deputy be good enough to quote the words which I used?

Certainly, I will quote them in full because I know that they are words which are cherished by the Minister and by the Governor of the Central Bank:—

"The inflationary factors on which we have commented in previous reports continued to operate during the year."

They have talked about these inflationary factors and of all this gloom and of all this disaster for 20 years. They opposed the Shannon scheme and the Electricity Supply Board on the grounds that they would cause inflation.

Would the Deputy please give chapter and verse for that statement?

I will. Did not the Minister himself and members of his Party oppose that scheme?

It was the Central Bank who opposed the Shannon scheme, according to the Deputy.

I did not say that the Central Bank opposed the scheme but the people who make up the Central Bank.

The Central Bank was in existence in 1942.

Did not the Deputy's Party appoint the members of the Central Bank?

Some of them are henchmen of the Minister's Party. While the last Government were in office the Central Bank would not have been allowed to issue a report upon which it was going to be denounced publicly by the Government, without being given due warning that that was going to take place. If the Minister takes the trouble to inquire he will find that the views of the Governor of the Central Bank were modified in a number of respects. It has been grossly unfair and treacherous to allow officials of the Central Bank to issue a report and then to come to this House and denounce that report. That is what the Minister has been doing.

It is better to denounce it here than behind closed doors.


Hear, hear.

I know a great many things which happened to the Deputy behind closed doors.(Interruptions.)

Deputy MacBride is entitled to make his speech without interruption.

The Minister for Finance has asked me to quote the passages that he quoted, with approval, from the Central Bank Report.

Yes, I asked you to quote the passages. I did not mention the word "approval".

I quote:

"The inflationary factors on which we have commented in previous reports continued to operate during the year."

And then it went on to say, and this is very ad rem to what we are talking about—I am referred now to a quotation which the Minister made from the Report of the Central Bank:

"The course of Budget development has reached a point where, it is greatly to be hoped, measures of restraint will be accepted as a matter of urgency. In particular, the scope and scale of State capital projects raise questions which have a vital bearing on Irish monetary stability. The avoidance of inflation and the methods adopted to finance these projects is a consideration of high importance."

I end the quotation which the Minister quoted, I think, with some approval.

Give my comments.

Let me finish. Do not be afraid of your own words:

"These are grave words. They are the words of men who are expert in these matters, of men who have made a life-study of these matters. The Governor of the Central Bank is a recognised authority the wide world over.

Certainly, they are grave words.

This man who was thrown overboard yesterday by the Tánaiste is a recognised wide world authority.

"He was, first of all, secretary to the Department of Finance; he was chairman of the Currency Commission before the Central Bank was established, and he has been a close, acute, and intelligent student of these financial and economic problems for now, I suppose, as far as I know him at least 27 years."

Then, of course, we had the usual personalities.

"Against him, on the other side, telling us that there is no sign of inflation in this country stands the Minister for External Affairs, a political will-o'-the-wisp, one who takes up one position to-day and abandons it to-morrow, who could not in the busy hours of his profession and in the long days he spends publicising himself and in his flights from and to this country, have devoted any time to the serious study of this question."

I hope that the Minister for Finance has spent many long hours studying these questions.

"The governor and the directors of the Central Bank state very definitely:—

‘The inflationary factors on which we have commented in previous reports continued to operate. ...The course of Budget development has reached a point where it is greatly to be hoped measures of restraint will be accepted as a matter of urgency. In particular, the scope and scale of State capital projects raise questions which have a vital bearing on Irish monetary stability. The avoidance of inflation and the methods adopted to finance these projects is a consideration of high importance.'"

So much did the Minister for Finance approve of the Central Bank statement that he quoted it twice in the same speech.

The Deputy must have approved of it too because he said that he would not have agreed to anything he did not approve of.

That is not what I said. Let us have a clear understanding and no misrepresentation of what I did say. I said that the Government of which I was a member would not have allowed the Governor of the Central Bank to issue a report which the Government proposed to repudiate publicly, without giving due notice of that fact.

Therefore, you approved of the report.

That is the conclusion, of course.

What the present Government, which of course includes the present Minister for Finance and the present Minister for External Affairs did was this. They had copies of this report for weeks, discussed it, considered it and without giving——

You will make your own speech at the proper time. Without giving any indication to the governor or the directors of the bank that they intended to throw them to the wolves, if public opinion mounted against them, they let them publish the report and then threw them to the wolves.

That is a fiction, of course.

I have already asked the Minister to deny whether he had the report in proof form at the beginning of the month of October. Then we had a certain amount of play as to whether there was a crisis or not, as to whether or not it had been said that there was a crisis, as to whether it was Deputy Costello and members on this side of the House or the Tánaiste and members of the Government who created that atmosphere. The Taoiseach, speaking at the Fianna Fáil Árd-Fheis yesterday—I am again quoting from the Irish Press—said: “that it had been suggested that Fianna Fáil were trying to pretend that there was a crisis and that there was nothing of the kind”. We were told that by the Taoiseach yesterday, speaking at the Fianna Fáil Árd-Fheis. The delegates were told that bold, bad, villain people had been trying to pretend that Fianna Fáil said there was a crisis.

That was the winding-up speech to cheer up the boys.

Again relying on the Irish Press—I hope they are accurate in their reports—the Tánaiste went and made a speech at the Publicity Club which is reported in the Irish Press of the 12th October. There is a heading in black type to portion of the Tánaiste's speech with the two words, “Real Crisis”. Are we responsible for that heading? Are we responsible for the speech that caused that heading or is the Tánaiste, the Taoiseach and those who control the Irish Press responsible? On that occasion the Tánaiste said: “This is a real crisis which we are facing and it will not be easy for us to escape it.” Then the Taoiseach goes to the Ard Fheis and says: “Some villains are pretending outside that Fianna Fáil said there was a crisis. Quite wrong. There is no crisis at all.” That is after it had been decided to throw over the Central Bank.

I do not know whether the somersaults which we witnessed in recent days on the part of the Government result from an intention on their part to mislead the people and to mislead this House or whether they are merely an indication that there is a complete split between Deputy Lemass, the Tánaiste, and Deputy MacEntee, the Minister for Finance. We have read a great many paragraphs of various sorts in the newspapers in the last few weeks. Certainly if one compares the statements of these two Ministers, it is very hard to understand how they can sit in the same Cabinet.

That is ten years old.

You would not find it hard to sit in any Cabinet with anybody.

At least we did not try to mislead the people as to the position.

You merely censored the bank's reports.

At least we did not, two days before an election, publish a half-page advertisement in every daily paper and every provincial paper throughout the country, costing over £10,000 to the Fianna Fáil Party, referring to the cost of living and to the price of butter, and depicting a good-looking housewife with a worried expression and carrying a notebook and pencil, pointing to the increased price of butter, and then come into this House three weeks later to increase the price of butter. For political dishonesty there was nothing to equal that.

Thirty per cent. reduction was your promise.

Try to get away from your advertisement.

What about your advertisement? A 30 per cent. reduction in the cost of living was your promise.

If Ministers insist on interrupting me, they will be paid back very hard.

Stand by the 30 per cent.

Stand by the advertisement which you published with the aid of subscriptions from people who obtained concessions from you. That charge was made by me the other day in the House and it was not denied. I asked whether it was true.

The Deputy made other charges which he did not prove.

Any charge I made in this House was proved, and in some cases the party concerned was prosecuted. If the Minister likes to discuss that one, I would like to discuss it with him, and also some recent happenings, but I advise the Minister to remain silent on that issue or he will be sorry he raised it.

That dog will not bite.

The Deputy must be allowed to make his speech without interruption.

Will the Minister publish the opinion of the Attorney-General concerning a prosecution in relation to a person who was recently appointed by the present Government to a certain post? Now there is silence.

Is this a charge of corruption?

It is not.

The Deputy has been at that all his life. It has got his Party wiped out. The members of it are down to two and there will be a further reduction if the Deputy keeps on that line.

The Minister first raised the question of the charges I made about others. Why not publish the opinion of the Attorney-General?

I shall not publish the confidential opinion of the Attorney-General and it is a disgrace to the Deputy's profession that he should request it.

On a point of order, I ask a Leas-Chinn Chomhairle, is Deputy MacBride to be allowed to make his speech?

Without charges of corruption.

I did not make any charges of corruption.

Yes; the Deputy is running away again.

I did not make any charges until the Minister had taunted me with making false charges before. I then offered the Minister for Finance that I would give him particulars of the charges and produce the names of the people who were prosecuted and convicted.

That is not so.

Whatever Deputies or Ministers think of what Deputy MacBride is saying or whatever their reactions are to it, I submit to the Chair that Deputy MacBride is entitled to be allowed to make his speech without a barrage of interruptions.

The Chair is endeavouring to give every facility to Deputy MacBride. He ought to be allowed to make his speech without interruption.

I have further reasons to doubt the candour of the statements that have been made here disclaiming agreement with or responsibility for the policy advocated by the Central Bank because, as a matter of fact and of practice, that policy is in course of implementation at the moment. There has been, not merely restriction of credit by the banks, but there has been restriction of credit by the Government in regard to housing, by the Government in regard to Local Works Acts and, as we heard yesterday from the Minister for Lands, the forestry programme is now to be cut down to 10,000 acres from 25,000 acres.

An Ceann Comhairle resumed the Chair.

When did it go to 25,000 acres?

That was the target. There is a target and that target has now been abandoned by the present Minister. We know that during the 16 years of office of Fianna Fáil they did practically nothing for forestry.

That is not true.

Look at the plantation rate, and there was not a war for 16 years.

We had nothing else but wars——

Before this barrage starts again, I want to say that just before you came into the Chair, I had to ask the Leas Cheann Comhairle whether, no matter what Deputies or Ministers thought of what Deputy MacBride was saying, no matter what their reactions thereto, he was entitled to make his speech without being interrupted. As a result of the Leas Cheann Comhairle's ruling, the two Ministers who were unable to contain themselves have left the House. Before Deputy Davern starts the game again——

The Deputy is making a speech.

——I would ask whether or not Deputy MacBride is entitled to make his speech without an organised piece of interruption.

There is no such thing.

I think it is common knowledge in the House that every Deputy is entitled to make a statement without interruptions. Interruptions are disorderly from whatever side or whatever bench they come.

We were treated yesterday by the Tánaiste to a long discourse on prices. I could not help feeling that much of what the Tánaiste had to say in regard to prices was said in order to divert attention from the issue that was raised in relation to the Central Bank and to the restriction of credit. Let me say straight away in regard to prices that I quite agree that in regard to a great many prices the Government could do nothing about them, that most of the increases in prices that took place took place as a result of circumstances that arose outside the country, took place largely as a result of devaluation in the first instance and, secondly, as a result of the Korean war. All right. I think the Minister is entitled to complain if he is accused of having been responsible for increasing the prices of commodities whose prices are principally governed by causes outside the country.

Again, I doubt the candour of the Tánaiste in dealing with that question in the House, for this reason: The Tánaiste complained about the Price Freeze Order. He said that it was not possible to administer it efficiently. There may have been a certain amount of justification in that complaint. Nevertheless, it was a Price Freeze Order that froze prices at a certain level and prices could not be raised from that level without there being an application to the Government and the Prices Advisory Body. It had certainly a psychological effect on shopkeepers and traders. Whatever psychological effect it had on shopkeepers and traders, the removal and the suspension of that Price Freeze Order had a tremendous effect on shopkeepers and traders. In fact, they were then at liberty to charge what they liked.

Apart from that, as we learned yesterday in this House, one of the first acts of the Tánaiste in his capacity as Minister for Industry and Commerce was to dispense with the services of 25 of the 50 price control inspectors in his Department. If the Tánaiste had any desire or intention to control prices, why did he halve the number of price control inspectors in his Department? This must have been known and was, of course, known to all traders and shopkeepers in the country. The gamekeepers have been withdrawn; they reduced them to half, from 50 to 25. Is that the only contribution they make to the control of prices?

Then we had the increase in the price of butter. I have already referred to what I think was one of the worst features of that, namely, the cynicism and lack of morality, if I may put it that way, the lack of public morality it displayed. We had an election campaign a short time before in which the price of butter was one of the matters upon which the last Government was being attacked. We had these advertisements in relation to the price of butter published at a heavy cost. Within three weeks of the change of Government the present Government itself increased the price of butter, presumably in order to buy some support.

I do not know whether the increase in the price of butter was necessary or not. I do not know whether subsidies could not have met the increased cost if it was felt that the farmers should get a higher price for milk. I do know that the increase in the price of milk led to an increase in the price of butter and cheese. I do know that, at a time when prices were mounting right, left and centre, the Government, instead of giving an example by keeping prices of essential commodities down, itself, of its own voluntary act, increased the prices of these three primary essential commodities. I do not think that was the example which a Government sensible of its responsibilities in that situation should have given even if it required to buy political support. I agree that as regards most of the price increases that have occurred they could not have been avoided. They were due to outside causes just as much as the inflationary tendency is also due to outside causes over which our Central Bank has no control of any kind.

Let us come back to the declaration of policy which we had yesterday. I have also some doubts as to what the Tánaiste intended to convey to the House as to the future policy of the Government. At one stage he told us he was proceeding with bigger and better capital development—bigger and more expansive programmes of national development. In the same breath he would tell us that it would have to be financed out of additional taxation. Of course, one could not possibly proceed on any expansive scale of capital development if it had to be financed out of taxation. It would be exactly the same as if an ordinary working man or business man or professional man was expected to build a new house for himself and pay for it out of that year's wages. It cannot be done, and it would be perfectly ridiculous even to attempt to do it. This is the very type of policy which has retarded the development of this country over a long period of years— a disastrous policy, which has been followed by successive Governments here, largely, I think, at the instance of the type of mentality portrayed in the Central Bank Report.

When I read these gloomy speeches and the Central Bank Report and the White Paper produced by the Minister for Finance, I could not help remembering certain memoranda that were circulated to us immediately after the change of Government. I could not help remembering the memoranda that had been circulated to the last Government predicting doom and disaster very nearly in the same terms as the present White Paper and the speeches which we have heard from the Minister for Finance.

One of these was issued, I think, in December, 1947. It started off by reciting that the attention of the Government was drawn to unfavourable circumstances and factors on at least five previous occasions—and then it proceeded to recite the grounds upon which it was considered that the economy of the country was in danger.

I went to some considerable trouble to examine the basis for these predictions of doom and disaster made at the end of 1947 to the last Government and repeated immediately to the new Government when it came in. It makes an interesting comparison. The first thing that was pointed out was that the volume of production of transportable goods was only 110.9 in the June quarter of 1947 as against 111.7 in the June quarter of 1946. With some considerable difficulty, I searched and ascertained what the comparative figures have been since. Remember that we are threatened with doom and disaster because, among other reasons, the volume of industrial production was only 110.9 in the June quarter of 1947. In the June quarter of 1938 it was 136.3. In the June quarter of 1949 it was 149.6. In the June quarter of 1950 it was 170.6. In the June quarter of 1951 it was 180.1. Yet the fact that it had gone back from 111.7 to 110.9 between 1946 and 1947 was adduced as a disappointing factor. Possibly it was. But if it was a disappointing factor that it went back by .8 between 1946 and 1947, why is there silence to-day, in all this documentation that is bandied about, in regard to the fact that it has gone up to 180.1?

The next point taken is the volume of production of agricultural goods. The volume of production in agricultural produce has gone up since then.

The next point taken is the acreage of crops: this is of 1947.

The next point taken is the cattle population of the country. We were told then, and our predecessors were told, that there was an alarming and significant drop in our live-stock figures. We were told that the total cattle population fell between 1946 and 1947 by 4.5 per cent. Again, I took a certain amount of trouble to find out what has happened to our cattle population since. In 1947 the total cattle population was 3,950,152. In 1948, it was 3,920,922. In 1949, it climbed to 4,126,758. In 1950, it climbed to 4,321,600. In 1951, on the return so far available in the last issue of the Trade Journal which was, I think, the basis upon which the information was then founded, 4,381,300, an increase of nearly 500,000 head of cattle since 1947. The fact that there had been a decrease between 1946 and 1947 was then used as an indication that the country was in a bad way. Is the fact that it has increased by half since then not to be used as an indication of the prosperity of the country? Are these facts to be ignored? Is it only the facts that are derogatory and damaging to the interests of the country that are to be used? We hear enough about the diminution of sterling assets but are we told anything about the increase of assets in this country since? As against that, has the value of the 20,000 to 30,000 houses built in this country not been weighed? Is the fact that we have increased assets here to the extent of £44,500,000 net not to be taken into consideration? Is the only thing that is to matter what we have in the Bank of England in Threadneedle Street? Are the assets in this country to be ignored?

I would appeal to Deputies on the other side of the House to listen and ask themselves who governs this country. Is it the Government? Is it the Dáil? Is it the people or is it a number of people desirous of trafficking in paper notes, paper assets in England?

I often wondered who was doing the governing during the last three years.

There is this to be said, I think it was realised in the course of the last three or four years.

I think you had it in turns then.

We certainly did not engage in the type of political policy upon which apparently it is now proposed to embark.

You bought from the nigger.

This conversation can take place elsewhere. Let Deputy MacBride make his statement without interruption.

You also had a number of other factors such as the volume of exports in 1930, which was also adduced as a severe factor in the situation. In the first five months of 1947 it was pointed out that the volume of exports at 1930 prices was only 6.7 million. In the first five months of 1950 the exports at 1930 prices were 9.67 million, an increase of more than 33 per cent., not in price but in volume at 1930 prices. That, of course, is not adduced on the credit side of the picture. In the first five months of 1951, at 1930 prices, the volume of exports was 9.68 million. The value of exports increased considerably in cash, but I am now giving figures in relation to the volume of exports at 1930 prices.

May I turn to the report of the Central Bank itself. As I indicated yesterday, in my view, this report is practically ultra vires the powers of the Central Bank. The report was presented to us under the provision of Section 361 of the Currency Act, which I referred to yesterday. It is my submission to this House that it is an abuse of the privilege and the powers of the Central Bank, under the guise of a report of its proceedings, to publish a damaging document of this nature. The report does not contain what it should contain. It does not contain the record of the proceedings of the Central Bank. It does not contain the number of meetings they had to attend, the decisions they came to, or what they did with the money under their control. It is purely a political document, in effect the views of political economists of the last century for the most part. I will ask the House now—possibly I hit very hard when talking—to forget about politics for one second and listen to this. Is it wise to empower a body that has no responsibility to produce a report of this kind advocating the pursuit of a certain policy?

Would it not be highly dangerous if the Governor of the Central Bank happened to differ strongly from the Government of the day; that he should be allowed to go to town and denounce the Government of the day? Is it wise that the governor and directors of the Central Bank should be entitled to create a panic when they so desire it? Is it wise that they should be entitled to tell the commercial banks that they must restrict credit? Is it wise that they should have it in their power to create unrest in the country, to create unemployment in the country, to create emigration in the country, because if their policy is pursued the result must be unemployment and emigration. Is it wise to allow these people to enter into the political arena? If they want to enter into the political arena let them contest an election and let them argue their case here and not behind the closed door of the Central Bank discharging some obscure functions under the guise of producing a report of their proceedings of which we are told nothing.

I would like to put this test to the House, the test of their ability and their intelligence. This report has created a storm in the country. It has created a storm in every part of the country, in every political Party, including the Fianna Fáil Party and other Parties. It has placed the Central Bank in a position where it is the cock-shot of everybody who makes a speech dealing with economics in the country. Does it show they have a great deal of political sense or acumen? They have put themselves in that position. They have put themselves in the position of being on the floor of this House by the Government and their position is practically untenable. It does not give one very much confidence in their judgment when their judgment on a matter of that kind is so weak in itself. Indeed, if I may come back to possibly a more contentious subject, I think the Minister for Finance has not shown a great deal of political wisdom in refusing to give me some simple information concerning the rates of interest which the Central Bank obtains on its investments in England, or refusing to give me information to-day as to the investments, if any, the Central Bank has in Ireland.

The more you refuse to give information of that kind, the more you pin-point the fact that you are hedging on it and the more you pin-point the fact that you are trying to conceal something. I am surprised that a man of the Minister for Finance's experience of political life should have walked into these traps.

The first thing that occurs to one on looking at the report is the fact that the report is silent on a great many things. It is silent, first, on the influx of money into this country from outside. The report uses a word which we are all sick and tired of hearing, a word which seems to be the principal stock-in-trade of the Central Bank—"inflation". What control have we got over inflation, inasmuch as we have no control over the volume of money coming into the country, inasmuch as if anybody in England decides to transfer £5 or £5,000,000, he can do so at will and all the Central Bank can do is pay out Irish notes in exchange? Is it not fantastic to talk about inflation, or our having any control over inflation, in these circumstances? We have no control over the value of money, besides which, apart from house property and, possibly, very occasionally bacon or eggs when scarce, there is no sign of inflation in the country.

The ordinary simple definition of inflation, which I am sure all members of the House know, is a condition in which too much money is chasing too few goods. If there is a scarcity of goods, our price is forced up because of lack of goods. It applies in the case of houses, certainly, and let me ask now in regard to houses, particularly in view of the fact that, as I understand it, one of the policies which are being implemented, probably as a result of a Finance directive, is that the amount of money made available for housing is being cut down—from an answer I got to a question to-day, we know that the amount of money made available for public housing has been cut down by £750,000 already—what is the remedy for inflation in regard to house property, if it is not to build more houses until houses cease to command a scarcity price?

We had that argument over and over again in the previous Government when we were being told that all this building is causing inflation, all this housing is causing inflation. The only remedy for inflation in house property is to build enough houses and then prices will find their level. If you want to maintain inflation in house property, keep on restricting credit and the value of house property will mount up.

The report is also silent as to the gross amount of sterling assets, as indeed I notice that an answer to a question I asked to-day also evaded it. I think it is unfortunate that evasive answers on these questions should be given. When a question is asked, one should get a full and truthful answer and not an evasive answer, in the hope that the Deputy asking the question will not notice that the word "nett" has been stuck into the answer. The position is that we do not know from the Central Bank report what the total sterling assets in this country have amounted to. We are given the nett sterling assets of the Central Bank, which probably coincide with the figure of £86,100,000. As to the nett sterling assets of the associated banks, I think there is quite a large difference between these nett sterling assets and the gross sterling assets, but we do not know that. We are given the nett amount in post office savings but I do not know whether the gross amount varies. We are not given the other sterling assets held by different Government Departments or Government agencies, which amount to very considerable sums.

I asked some questions in relation to these to-day but until I have had an opportunity of checking them I do not know whether the answers I have been given are candid or evasive. I have reached the position now of being suspicious of the figures given to me. I do not think it wise to deal with questions of financial information in that way.

There should be no hedging; there should be complete candour, whatever the facts are. In the figures given to me to-day—they were not given to me in one answer but in a couple of answers—we are told that the nominal amount of British Government securities held by Government departments, etc., on 31st March amounted to £56,751,000. I do not know whether that represents all the moneys held by Government departments or agencies. From information I obtained earlier, I thought the figure supplied to me by the Department of Finance in respect of 1949 was somewhat higher, but maybe I am wrong. I have a query in mind because I find that there is a tendency to evade on all these issues.

We were told to-day that there was no estimate available of sterling assets held by firms and individuals. That, I know, is not in accordance with the facts. I saw some of these estimates myself when I was in the Government. They may not be accurate estimates, but they are estimates. Surely the first piece of information we are entitled to have when we are being told that we are facing disaster because our sterling assets are dwindling and disappearing is the amount of those sterling assets. Why should there be any secrecy about it? One would think that that would be one of the things that would be published in the Report of the Central Bank.

The report, of course, is silent on any favourable course of expansion of the economic position of the country. It is concerned mainly with painting a gloomy picture, for whatever purpose I do not know, whether it is from a genuine belief that the only salvation of this country lies in starving the country of investment and development in order to pile up or maintain the earnings and the savings of this country in British Government securities. I do not know. We are told that the principal recommendations of the governors and directors of the Central Bank are contained in the paragraph under the heading, "General Monetary Review", beginning on page 9 of the report. The second paragraph begins with an Alice in Wonderland quotation. Possibly some of the more learned Deputies of this House, such as the Minister for Finance, will be able to interpret it at greater length and in greater detail, for the benefit of more ignorant members of the House such as myself, at a later stage. I will read it to the House, as it is an interesting piece of literature. It begins:

It is a feature of the deficit situation that it is not merely a passive reaction to the pressure of import prices but has a dynamic character deriving its momentum from elements of instability in the internal financial and economic sphere.

I would like to see that reduced to simple language—to pounds, shillings and pence, if possible. The same paragraph goes on to say:—

The following paragraphs advert briefly to some of the internal factors which now tend to impair the value of the Irish pound and to promote price inflation, either by direct action on the domestic cost and price structure or by indirect repercussion on the external balance.

Here we have again this reference which I mentioned before, the value of the Irish £, as if it were something that varied or could be varied in its relationship with sterling, as if it were the currency of the United States of America or of Switzerland or of some other country. The Central Bank is not alone, of course, in that day-dream. The Minister for Finance used that same expression at his Ard - Fheis yesterday.

Having told us that, in the following paragraphs they advert to the internal factors that endanger the national economy. They begin the next paragraph by stating presumably what those factors are:—

The volume and turnover of money have been steadily increasing——


the national income in terms of money which was estimated in terms of £158,000,000 in 1938 advanced to £352,000,000 in 1949 and to £363,000,000 in 1950.

Should it have remained as it was in 1938? Is it a sin, an economic sin, that the national income of this country should increase? Is it the desire of these people that we should reduce the national income? They go on:—

Subsidies in various forms, some of them provided by debt creation, are adding to the pressure of money——

Terrible to have subsidies, to add to the pressure of money! The people have too much money; the country is earning too much; its national income is too high. Then they wind up at the end of that paragraph, giving a summary of what they have said:—

"Expansion of money income in the circumstances here outlined has had the effect of raising domestic costs and prices and thereby retarding that development of exports which is needed in order to restore a balanced position."

The expansion of money has had the effect of increasing the cost of living. Is not the whole case of the Government here that the cost of living has increased as a result of an increase in world prices? Is it suggested that our monetary policy here is going to affect the level of world prices? The next paragraph says:—

"The most active forces of a domestic character contributing to the unbalanced expansion of purchasing power have been the constantly increasing scale of the expenditure of the State and local authorities and the continuing rise in general levels of remuneration."

Local authorities are spending too much; the Government is spending too much, wages are too high. What inference do you draw from that? Cut out labour. Cut out land rehabilitation. Cut down wages. Have a pool of the unemployed. That is the remedy for this country's problems. At least those who have to emigrate will help by sending their contributions as emigrants remittances to help to preserve our external assets.

Then they set out a table of the capital expenditure of the Government from 1939 to 1952. Is there any sense in giving comparisons of figures in money terms between 1939 and 1951?

Apply that to the figures the Deputy has just given for national income.

Certainly, by all means. Unfortunately, the Minister was away when I dealt with national income figures and the complaints which his second last predecessor received in regard to the national income. Then they go on, not satisfied with that table, and enumerate some additional factors:—

"The figures do not give a complete view of the whole field of State finance; they do not embrace, for instance, a wide range of transactions of both a current and capital character conducted by various State agencies and funds outside the ordinary Exchequer ambit, of which important examples are"

Listen to this:—

"capital works, financed by the Electricity Supply Board from its internal resources £1.1 millions,"

Of course it is inflationary. It goes on:—:

"and outlay on hospitals financed by the realisation of investment of the Hospitals Trust Fund."

Of course that money should be kept until it has perished into nothing. It goes on to mention increases in pay for State employees in respect of 1951. Those are the most active forces of a domestic character contributing to the unbalanced expansion of purchasing power. These are the things that have to be remedied.

Now we come to paragraph 17. I should mention that in every second line you will see the word "inflation" or "inflationary", or some other form describing inflation. In paragraph 17 there is a complaint about the large volume of expenditure and the means adopted to finance it. These means have been inflationary, it says, and then it gives the instances. A subscription by the associated banks of £3,000,000 to the Dublin Corporation is one of the matters they complain of, one of the inflationary acts of the last Government; also a subscription by the associated banks to our own Government's Exchequer Bonds—nothing about the millions of pounds subscribed by the Central Bank or by our banks to British Government securities—no complaint about that at all. That is not mentioned, of course—that is an unmentionable subject in this House.

Then in the next paragraph—I am afraid I will have to cut this short as it would be too tedious—we are told:

"The public works programme differs from some other elements of State expenditure in being largely discretionary."

You can increase them or contract them at will. It goes on:

"It is commonly accepted as an expedient for coping with the problems of depression, especially unemployment."

Then we have this choice phrase:

"In view of the unusually favourable state of employment for a considerable time past, there is the less need at present for the artificial stimuli provided by such a programme."

What is the meaning of that? Is not the only meaning of that: reduce capital programmes and create unemployment. There is unusually high and favourable employment in the country; let us reduce it. Let us create a good pool of unemployment—that with 44,000 people unemployed in the country.

Then in the next paragraph we get this sentence:

"It is important to notice that in present circumstances it is necessary to restrict not merely investments which give no tangible yield of the character needed by the state of the balance of payments but also investments which, while they might give useful long-term economic results, entail a disproportionate immediate pressure on the balance of payments without promise of early off-set."

Of course cut out housing. It does not build up any sterling assets for you. Cut out hospitals. Of course they do not provide an income for building up sterling assets; and also cut out any other scheme that does not give you an immediate return. Cut out afforestation; it will not give an immediate return. Cut out land reclamation, land rehabilitation; it will not give you an immediate return; it will take a couple of years. But we want to build up sterling assets quick, quick, quick before the next devaluation takes place so that we will have enough of them there to lose. That is the logic of their argument.

Then on the next page we get a homily about subsidies:—

"Subsidies are not only a heavy burden on the Budget but also constitute a disguised addition to purchasing power as the money saved through getting the subsidised article at a reduced price is set free for other expenditure.

Subsidise butter by 4d. or 5d. per 1b. and the unfortunate woman who is able to buy butter for 4d. or 5d. cheaper has 5d. to spend on something else. The effect of the subsidy, they go on to say, may, of course, be modified to some extent by an associated system of rationing and some of the disadvantages of the subsidy may be off-set by a more severe rationing scheme. Do away with subsidies but if you cannot do away with subsidies, cut down the rations. Let the people eat a little less and we will be able to save more money to build up a greater sum that will be available for the next devaluation. It is true, they go on to say, that the removal of the subsidy might tend somewhat to increase the cost of living, but what odds? Some inconvenience must be set against the compensating gains, including a reduction of consumption.

It is true that it will raise the cost of living but what odds? If it does raise the cost of living the people can eat less and that is what we want. Then if that is not enough, they go on in the next paragraph:—

There is scope also for fiscal measures to curb inflation, balance the Budget and restrict improvident spending. It would be well that they should have a bias towards taxing personal expenditure rather than earnings.

In other words, do not increase income tax. No, no, tax the personal expenditure of people, not income tax. Have indirect taxation. Of course, in that way you are hitting the lower income groups. It will be harder on them and they will have less to spend. More people are in receipt of low wages, more people earn less than £1,000 a year, than earn more than £1,000 a year. Hit them. It will increase the cost of living and they can eat less. Some people will be unemployed too as a result—that is grand. That will force that.

They go on to deal with wages. Then there is a reference to the deterioration in the value of money. Paragraph 20 states:—

While budgetary and wage policies afford the main possibilities for early improvement other measures can also make useful contributions.

Let us hear the other measures:—

The sterilising of what remains of the American Loan Counterpart Fund would serve to check the flow of new money.

"The sterilising of the American Loan Counterpart Fund"—there is a very able way of disguising what they mean. I remember that the first time I heard of that suggestion I thought it was intended to convey that the American Loan Counterpart Fund should be kept in the vaults of a bank and not used. But no, that is not what they meant.

What they meant was: "Send it to England; lend it to the British Government; do not use it in Ireland; tax the people of Ireland; reduce their income; lend this money to England." That is what that means; that is the only meaning it has. They do not say that because they know it would not be popular to say it. Not only would that be completely contrary to national interests, but it would also be contrary to the assurances which we gave to the American Government that this money would be utilised for development purposes in Ireland.

So much, shall I say, dishonest or certainly malicious propaganda has been made by members of the Government on the other side of the House as to the use of the Counterpart Funds through moneys generously provided by the United States, let me deal with it for one minute. There was pressure that this money should not be utilised now, pressure on the last Government not to utilise this money but to invest it instead in England. I had given an assurance to the American Government that it would be used for certain purposes. There was no secrecy about it. I do not know why the Ministers thought it well to suggest that we had squandered this money, that we had misappropriated or utilised it for purposes other than those for which it was provided. As Minister for External Affairs, I laid the White Paper on the Table of the House covering the period April to December, 1948, setting out the purposes for which this money would be utilised. There was not one word raised by any member of this House against it and every Deputy got a copy. It is called: "The European Recovery Programme. Report on Operations under the Economic Co-operation Agreement between the Governments of Ireland and the United States of America for the period 3rd April to 31st December, 1948." It was the White Paper P. No. 9421. Paragraph 31 of that White Paper states:

"The schemes envisaged for the utilisation of these funds include land development by way of drainage and restoration of soil fertility; a reafforestation programme based on a minimum plantation of 25,000 acres per year; the development and expansion of the fishing industry; the development of hydro-electrification and of turf-burning generators; agricultural research, training and education; the provision of credits and technicals advice for planned industrial development; the rehabilitation of farm buildings and equipment and the provision of credits for housing and health services; provision of deep-water quays."

These are the terms of reference submitted to this House with the knowledge of the Government of the United States who had kindly made these moneys available to the country. Yet, despite that, members of the Government are sufficiently irresponsible as to suggest that we made some improper use of these moneys or concealed the use to which they were being put.

Such improper use that you faked the returns; that when you made the report you faked the figures.

Does the Minister suggest that I faked any figures?

The Government of which you were a member did.

That is untrue and it is typical of the personal attacks the Minister makes. Let him stand on his own legs and fight this.

The Deputy should be allowed to proceed without interruption.

Then we come to the quotation I have already given to this House:

"Rigorous restriction of bank credit for non-essential and less urgent purposes is now imperative...."

That is the very instruction which we are told by the Deputy Leader of the Government was not given by the Government. I ask Deputies and the Minister in particular to consider the wisdom of allowing a body which is apparently responsible to nobody to exceed the powers given to it by this House by causing to be published dangerous nonsense of this kind that holds up the institutions of the State to contempt and ridicule. It is the advocacy of policies such as those which has been responsible in a large measure for the rise of industrial communism. It is that type of mentality which has been responsible, in some measure at least, for the encouragement of communism in Europe—create unemployment; the people do not matter; education does not matter; let the people have less to eat; reduce their wages; the bank balances, the paper in the banks, are all that matter. Are we told anything as to the security of these sterling assets? Are we told anything in this report as to the possibility of further devaluation? Are we told anything as to the world trends of the money markets? Not at all. Though all our money is held over there—and they have £18,000,000 piled up over there—they are silent upon that. What steps, if any, have the Central Bank or the Government taken to secure our assets and safeguard our economy in the event of further devaluation? Deputy Costello, speaking yesterday on behalf of his Party and, indeed, on behalf of all Parties on this side of the House, indicated that we would support any measures taken in order to safeguard our assets in the event of a crisis. Is it not time that we tried objectively and quite apart from Party politics to review this whole question of our sterling assets? Is it not time that the Government took power by a simple amendment of the Currency Act to vary, if needs be, the relationship of our currency with that of the British £? I do not advocate that it should be done at the moment but the Government should take power to do it should the necessity arise.

Our currency is anchored to the British £ more closely than is the currency of any member State of the British Commonwealth of Nations. The British Dominions have retained the power to vary the relationship of their currency with London sterling. Reports published in to-day's papers indicate that the gold and dollar reserves of the sterling area will run out within less than twelve months. Is it not time that our Government took power, should the necessity arise, to vary our currency relationship. Why should we remain anchored?

Would the Deputy explain how that would affect the situation?

It would not affect this particular situation.

The Deputy has suggested that we should do this. Let the Deputy tell the House the advantages in doing that.

It would have the same advantage for us as it has for every other country. Why should the value of our money be determined by a large, over-populated industrial nation whose economic interests are obviously different from those of this nation? We are a small, under-populated and under-developed nation. Britain is a large, over-populated and over-industrialised nation. Obviously the monetary and economic policies of the two Governments are not identical. Presumably if all the member States of the British Commonwealth of Nations thought it wise and necessary, though they owe allegiance to the British King, to take powers to safeguard their currency, why is it argued here that we should not do likewise?

Let us not treat this as a Party political matter. Let us treat it objectively. Let us examine it objectively. The Government can rest assured that in a matter of this kind it will receive full co-operation from all Parties. Let us work on the genuine assumption that we all want to do what is best for the country. Let us examine the position from that point of view instead of immediately reacting against it as did the Governors of the Central Bank.

I do not know whether Deputies appreciate the full import of the replies I got to some questions from the Taoiseach's Department yesterday as to the present-day value of money. I asked the Statistics Office of the Taoiseach's Department to calculate and give the purchasing power to-day of £1,000,000 in 1938 money values on three different bases: on the basis of retail prices, of wholesale prices and of import prices. What was worth £1,000,000 in 1938 was worth in August, 1951, in retail prices, £489,000, say half its original value; in wholesale prices it was worth £355,000; in import prices, which is really what matters because that is the way in which sterling assets are repatriated, £1,000,000 in 1938 was worth in August, 1951, £275,000. In other words, on every £1,000,000 kept in England in 1938 three-quarters of every million has been lost in the intervening period.

Is it really worth while inflicting a credit restriction policy and the cutting down of capital works in order to maintain sterling assets and in order to keep on accumulating them? Have we any guarantee that they will be there in 12 months' time or in two years' time? Reading the gloomy prophecies of the Chancellor of the Exchequer yesterday one has no reason to believe that they will increase in value. That is putting it very conservatively.

I am sorry that we have not had an opportunity of dealing with the motion I put down in relation to the Central Bank Report. I think the Minister should quite seriously realise the inadvisability of encouraging or permitting the Central Bank to issue a report of this kind.

I think, too, that the Minister should revise the policy which, I fear, he is implementing at the moment of restricting capital expenditure, restricting the amount of money made available for housing and restricting the amount of money made available for drainage and local works.

Emigration, in many parts of the country, has been rising steeply recently. I do not know whether the Government's attention was drawn to a statement recently made by Canon Finucane of Killorglin who is chairman of the county vocational education committee. In the course of that statement he said: "That there was a revolution taking place along the South Kerry seaboard the like of which had not been seen since the famine times; that young people were leaving the area in hundreds for England; that there was no doubt the country was dying and that the Irish language is disappearing." He asked: "is the Government doing anything about it?""I do not think they have tried very much," Canon Finucane declared. He said that more industries should be established in the areas most affected by emigration. The parish priest of Waterville advocated the granting of cheap agricultural loans to help people to develop their farms.

Obviously, if this policy is pursued, the policy upon which the Minister has embarked, emigration is going to grow. I think that the last Government made available £85,000 to the Kerry County Council for local works, for drainage and suchlike. I understand that this year the only amount sanctioned—I speak subject to correction on this as I am relying on local information—for the Kerry County Council, so far, is £23,000. The difference between £85,000 and £23,000 is a vast amount of money, the spending of which kept many people at home while the curtailment of that money of course leads to the conditions described by Canon Finucane.

I am sorry if I have hit hard at times in this debate, but I did feel that it was essential to hit hard in order to try to bring home a realisation of the position which the Minister has created. I think that the Minister for Finance is largely responsible for much of the mischief that has arisen in this situation. I hope he will learn from the somersault which his colleague, the Tánaiste, performed in order to extricate himself from the position created by the Minister for Finance.

I formally second the amendment.

I think my first duty is to inform the House that the Central Bank Report, in common with many other similar documents, is formally presented to the Government in the form of a draft proof document, and is passed for publication without the Government making any final decision as to whether they agree with any percentage of its statements. That has been the case for a number of years. In fact, during the period of office of the last Government the Central Bank presented reports of a kind which certainly Deputy MacBride must have objected to; but the reports were passed for publication in the usual way in common with many other documents. The Central Bank issue their report under a section of the Currency Act and of the Central Bank Act of 1942, which lays upon them the duty of safeguarding the integrity of the currency and impresses on them the necessity of collecting. studying and publishing data relating to monetary and credit problems. As I have said, the bank presents these reports. I have no doubt that reports presented during the period of the last Government have contained statements to which members would object. Nevertheless, as I say, these reports were issued, so that there is nothing exceptional about the fact that this report was issued in its present form.

I think it is just as well to say that many of the observations made by Deputy MacBride served purely to cloud the issue. Therefore we should remind ourselves of the problem which we are debating. We are debating the problem as to whether the Government was right in warning the country, through various speeches and through issuing information, that there were certain tendencies in regard to our finances and balance of payments which must be carefully considered, and in connection with which some corrective measures must be applied before measures which would be very unpleasant for the people at large were necessitated.

The principal points at issue are these. In the first eight months of 1951 there was a trade deficit of £92,000,000 greater than for the whole year of 1950, and £32,000,000 more than for the corresponding period of 1950. No Government could fail to take account of a financial situation such as that. The next point at issue is the fact that imports have increased in volume as well as in price, while exports have actually declined in volume. It is a matter of ordinary common sense that if a country starts to sell less in quantity than it did before and imports far greater quantities of goods, some corrective must be applied. The matter must be studied and the problem examined. The volume of imports which had been running at about a quarter above the pre-war figure in 1947, 1948 and 1949, rose to 43 per cent. above it in 1950, and it is over 60 per cent. above it this year. No country in Europe could fail to examine a situation such as that, and see what corrective steps were required.

As regards the volume of exports, the quantity of goods exported regained pre-war level in 1949 and started to decline in 1950. By 1949, we had only regained the volume which we had in the year before the war, a period following five years of an economic war dispute and world depression. Yet, in present circumstances with sky-high prices, exports only succeeded by restoring the pre-war volume of trade which, as I say was established at that level under most unsatisfactory circumstances. We should again examine that problem. We can hardly expect any improvement immediately either in the volume or the prices of our exports. There may be an improvement later on. We may succeed in expanding our trade, but the fact remains that, as far as the immediate future is concerned, say within the next 12 months, we cannot anticipate any immediate alteration in the volume or price of our exports to offset excessive imports as well as the great increase in the price of our imports which has taken place since devaluation.

Finally, we have the question of the deficit in the balance of payments which we anticipated in 1951 will reach the figure of £70,000,000. As regards that, we have made allowance for all sorts of favourable factors, and for a net increase in tourist income although that is a rather speculative estimate.

Finally, we have to face the fact that our imports show that we are not importing to any great degree a sufficient quantity of capital goods designed to increase production in this country to account for the liquidation in our savings abroad. The motions that have been moved amending the Bill show an irresponsibility of attitude which is typical of certain members of the Opposition. There are a good many nations in Europe which went very nearly bankrupt between the two wars. They suffered a change from democracy to dictatorship because in political discussions on financial questions there was no question of calm and sane debate as between one group that could be considered more conservative than another group. The debate in those countries took on the form of one group of Parties advocating a gambler's policy in regard to State finance while the other Party, which finally became a minority Party, showed a realistic attitude.

In publishing the Central Bank Report we regarded it as providing a salutary shock to the public. We see no reason why the facts should not be published. There is no need for us to accept the conclusions or to accept any, or all, of the remedies, but if the Central Bank Report can result in all the people with fanciful theories on economics getting all these views off their chests, so that the people really understand that they have no fundamental concept of the finances of this country, it will have served some useful purpose. As indicated by the Tánaiste, we in the Government intend to develop our national resources to the limit. We do not intend to allow our finances to deteriorate to the point where we cannot go ahead and develop our national resources. We do not intend to allow a situation to arise whereby when real correction is essential it is too late to apply it because the damage has been done. Therefore, as I have said, the members of the Government are bound to take a realistic as well as an optimistic view, to give warnings, as well as to express hopes for the future.

Any war produces a certain sense of false optimism among the people of countries which are underdeveloped or which have suffered damage in time of war. Everybody wants to restore the maximum consumption of goods as soon as possible. Everyone wants to improve social conditions as soon as possible and to resume national investment on the widest possible scale. It is a universal feature of all good democracies that war produces this tremendous desire to go faster than ever before towards national development and towards bringing about a state of normalcy in economic life. There is always the temptation to do too much too quickly and not to provide for savings or hard work or sufficient production to pay for the fulfilment of all these desires. Every country in Europe, where people have had aspirations for the future, has had at one time or another since 1946 to take stock of their position, so as to find out whether, in fact, the process of restoring normalcy, and the carrying out of national investment was being done at the expense of the nation's fundamental wealth, and whether some sort of corrective measures needed to be applied. One of the interesting thing about the political life of democracies is the fact that in some eight countries of the world Governments have changed in the last two years, and have changed for, roughly, the same reasons—the Governments in office after the war did not take sufficient stock of the position and did not have regard to the financial factors involved in the state of world trade. They promised too much and achieved too little. They tried to have the best of both worlds and promised their peoples that they would be able to have a sort of paradise on earth in spite of a great war and in spite of the repercussions that come after a great war. In fact, in Western Europe the only Governments which remain of those which held office after the war are the Governments of three countries. All the others have changed for the reasons I have mentioned.

The Coalition Government, which was in office for three years, was composed of Parties which had widely different views so far as economics are concerned. It is quite obvious that some members of the Fine Gael Party have been infected with the Clann na Poblachta propaganda policy, which is roughly described "eat your cake and have it at the same time"—a lot of airy phrases about having a vast amount of honey on the bread almost immediately without any effort by the people. Such statements have been made in the last three years, and have given the people the impression that they could sit back and go on just as they have been going on, and that hospitals could be built, houses could be constructed, power schemes inaugurated, and that all these things could be done without any effort on their part and without any contribution on their part. As I have said, the graves of many democracies have been dug by people who defended this kind of policy, and who said such things as: "Take it easy, we will rebuild the nation for you. You need do nothing. You need not put forward any special effort. Taxes will remain the same. We will take all the money saved up in England and we will rebuild the nation for you. We ask for no special sacrifice on your part." Such has been the atmosphere of the last three years, and it is time that it ended. These statements have been bandied around the House and around the country. We have heard of the desirability of repatriating our foreign assets. Instead of using this phrase properly and in its right connotation, it has become the magic formula for parish pump speakers. It is like giving a fellow a glass of whiskey to help him to drive you home at night, although you know he has already had a good deal of whiskey. Everybody knows that our trade is to the degree of 90 per cent. with the United Kingdom, whether we like it or not. We have been recently importing a far higher proportion of goods from other countries in the sterling area and from America in comparison with our exports. Our adverse balance of trade has grown with countries in the dollar area, and with countries in the sterling area, excluding Great Britain. The whole of the financing of these imports has either to be obtained through Marshall Aid, which has now ended, or through our holding in the dollar pool in common with other nations of the sterling group. All sterling nations have to take part in financing operations in the sterling area.

There are some countries which are lucky enough to have an export trade in half a dozen countries, and when their external assets run out and they owe money abroad they are able, sometimes, with great difficulty to establish loans through various agencies, such as international banks, or direct with Governments. In our case, because the great bulk of our trade is with Great Britain, we are very largely dependent on Great Britain for the financing of our trade. It is absolutely vital to our independence and vital if we ever want to restore the unity of the country that we should have a cushion of foreign assets in Great Britain sufficient to carry out these trade financing operations. If, for example, we are buying from other countries in the sterling area ten times as much goods as we sell to them, there is no other way open to us, or to any other country in the sterling area, but to make a combination in regard to the financing of those transactions which must, of necessity, relate to our relationship with Great Britain. That applies to every country in the world. It cannot be done in any other way.

If we could diversify our exports so that we would have a number of different countries to choose from in regard to financing trade, it would be a very great thing, because it would further increase our financial independence. Efforts are going to be made by the present Government to develop dollar exports, and as the House knows, arrangements have been made, through the formation of a committee, to develop dollar exports as far as we can. Every effort will be made to assist people to exports directly to other countries than Great Britain, particularly in the case of industrial goods which are scarce throughout the world. But, as I have said, any person who had the interests of this nation at heart would want to examine carefully any situation which would result in the reduction of a reasonable and essential cushion of sterling assets in Great Britain. We will always be delighted to bring back external assets to this country if, as a result, we increase the amount of machinery for producing goods which we now import. That has always been the policy of Fianna Fáil and always will be.

We do not see any use in liquidating external assets solely to increase the volume of consumer goods to this country because they are consumed, they disappear and have no financial significance for the future.

The previous Government by their general talk have been encouraging what might be called a spurious kind of high living in this country at the expense of the future and it is time that the whole of that position was examined. Deputy McGilligan, the former Minister for Finance, wrote the preface to the Central Bank Report himself in his Budget speech in 1951. Every single warning he gave has been implemented by facts and figures in the Central Bank Report. He warned the country that some of the remedies proposed in the Central Bank Report would have to be applied. He did not mention all of them but he did mention some of them. The Central Bank Report is like any other bank report in any country of the world. It contains facts, conclusions and remedies and it is possible to examine it in its three separate parts and draw a number of different conclusions. You can disagree with the whole of it or you can disagree with part of it. You can say the conclusions of the Central Bank are exaggerated or you can say they are very much out of date. You can claim that the conditions predicted will not occur for some years or you can deny the conclusions altogether and say they are false. In exactly the same way you can take the remedies advocated by the Central Bank Report and condemn them out of hand or you can say that remedy A, B and C may have to be applied in some small measure, not sufficiently to reduce investments, not sufficiently to cause widespread unemployment but simply as a corrective to bring about the desired result.

Intelligent people debating financial questions will examine the report in that light, knowing very well that they are always written in a conservative vein not only in this country but all over the world.

My own belief is that the Central Bank Report has provided a good dose of medicine for the people of this country who have been thinking that we can rebuild this nation without any special effort on the part of the ordinary man, the ordinary investor and the ordinary individual who has money in the savings bank and who has a concern for maintaining the financial integrity of this country. I think myself that the discussion on the report will have a good effect. I deny that there is such a thing as general financial panic in this country. Such a statement is ludicrous. It is not reflected in the unemployment figures for this month. It is not reflected in the bank advances for the last quarter. It is not reflected in any index of trade that can be provided. It is ridiculous to suggest that there is a panic. People may have been surprised by some of the rather extreme conclusions and the extreme remedies advocated. They now know that the Government takes a balanced view of the whole position and do not intend to adopt an extreme deflationary policy.

Half of the speech made by Deputy MacBride to-night was made on the supposition that if you pay any attention to the Central Bank Report you must disinflate and cancel all industrial endeavour and cancel all Government schemes for reconstruction. It was an all-or-nothing speech—the kind of speech for which members of the Clann na Poblachta Party have always been noted. They always have been people who are incapable of talking in a calm, sane way about the development of this country. Either you must sweep away the connecting link with sterling or you must make use of the national credit ad lib, or increase the volume of currency ad lib. There has been talk of that kind from such Parties for many years in this country. The whole of Deputy MacBride's speech could be summed up by saying you either believe in his policy or you believe 100 per cent. in the remedies which were advocated in the Central Bank Report. There is nothing in between. There is to be no quiet and careful deliberation on policy.

I think before going any further I shall have by now recorded for about the fifth time the observations of Deputy McGilligan when he was Minister for Finance in the course of his Budget speech. It would appear that Deputy McGilligan has been deserted by members of the inter-Party Government and his warnings have not been heeded. It would appear that there was some lack of collective responsibility on the part of the Government before the Budget speech was announced.

I would like to see Deputy MacBride, on some occasion when he is speaking again, telling the House whether he formally approved of Deputy McGilligan's Budget speech. There are occasions when the members of the Cabinet above all must stand together, when there should be no minor difference of policy, when there must be complete and absolute unanimity, namely, when analysis of the nation's finances is given, an account of its expenditure and receipts and announcements in regard to new taxes. I wonder did Deputy MacBride approve on that occasion of every single word that Deputy McGilligan wrote in that speech.

He voted for the General Resolution, indicating public approval of it.

At col. 1878, Vol. 125 of the Official Debates, Deputy McGilligan said:

"After a period of virtual stability import prices took an upward turn last summer when we began to experience the delayed impact of devaluation, later reinforced by the effects of rearmament and the stockpiling associated with it. There is reason to fear that we have not yet experienced the full consequences of the increased international demand for basic commodities. Concurrently with the rise in import prices there has occurred an increase in our trade deficit; the return for our exports, though it has also increased, has advanced less than the cost of our imports. When what we produce for export does not go as far as before towards paying for our import needs we suffer, as a nation, a reduction in the standard of living we can afford.

Increases in remuneration offer no escape from this unwelcome development; indeed, they can only accelerate the process of inflation and cause social injustice as between those able to improve or maintain their position and those who cannot enlarge their income and are therefore forced to assume an undue burden of hardship."

Here is the first of the Central Bank's recommendations:—

"For this reason, the Government ask for restraint in the putting forward of wage and salary claims and have taken measures intended to limit price increases to those justified by increases in costs."

There is no outcry from Deputy MacBride when Deputy McGilligan clearly advocates a voluntary wage freeze. There were no protests from Deputy MacBride or from Clann na Poblachta on that occasion. That was the recommendation, a voluntary near-wage freeze advocated by the then Minister for Finance on the occasion of his Budget speech. In column 1879 of the same volume, we have this statement:—

"That much of the new credit was spent on imports is shown by the fact that the sterling holdings of the banks decreased by nearly £19,000,000, bank deposits—including those in public accounts—going up by approximately £12,000,000. The increase in certain prices and the greater volume of transactions to be financed account for the rise in the total circulation of notes and coin from £51.1 million on 1st April, 1950, to £58.1 million, or 5 per cent. more, at the 31st March last. In present circumstances, it is desirable that the banks, while continuing to finance capital projects, and normal import requirements, should discourage any merely speculative or excessive borrowing."

In other words, the then Minister for Finance gave a perfectly clear hint to the banks that, when being requested for credit, they should select very carefully the credits they would issue, that they should use some discrimination and reserve credit for essential productive purposes and that, if a person wanted to import an undesirably large quantity of goods that would be of no service to us in time of war, and merely for the sake of having them in his warehouse, the banks might perhaps give him a hint that he had gone too far—another recommendation in the Central Bank Report.

Then in column 1880 of the same volume we have the following:

"A deficit in the balance of payments is a means of adding to our current resources—a means open to us because we have been able to finance additional imports by drawing on our sterling assets and incurring dollar indebtedness. Deficits in the balance of payments cannot, however, be sustained for more than a short period."

We may notice that the then Minister for Finance used the word "short"; he did not speak of some long period.

"They involve an initial loss of purchasing power over imports owing to the depletion of external capital and the income derived from it."

Apparently, the then Minister for Finance was interested in preserving some external capital because, as I have indicated, he thought it essential to preserve a reserve for the financing of foreign payments. He was then, months ago, warning the country that the growth in the foreign payments deficit was a matter for serious consideration.

"Unless we are building up our productive capacity to an adequate degree, so that by increasing our exports or reducing our imports we can within a few years equalise our external receipts and payments we must inevitably suffer a decline in our living standards."

The same warning is given in the Central Bank Report. The Minister goes on to state :

"It is still proper and eminently reasonable to draw on our external assets if thereby we speed up the process of capital development at home. What is abnormal and, if it persists, can be seriously damaging is to use up our external resources for consumption purposes."

Then in column 1883, he states :

"The present position on external account is by no means satisfactory, and if it continues to develop unfavourably the application of corrective measures will be called for."

Then in his final conclusion, Deputy McGilligan foresees the whole of the Central Bank Report when he says :

"The conclusion to which the analysis leads is that while the extra external disinvestment we incurred in 1950 was balanced as to roughly two-thirds by new home investment and increased stocks, there still continues to be a substantial use of past savings merely to lever up standards of consumption——"

not for capital development.

"Making all allowance for the exceptional conditions now obtaining, it is to be feared that we are not producing and earning enough to pay our way. The implication is obvious. We cannot have both consumption and capital development on the present scale unless we save more and produce more. Additional saving would ease the congestion that now exists and causes consumer demand to seek an outlet in imports. It would relieve the pressure on the balance of payments and help to confine external disinvestment—or surplus imports—to what is needed for home development or stockpiling."

I think that this is about the fourth or fifth time that portions of his speech have been quoted, but members of the inter-Party groups, the former coalition Government, appear to have forgotten those warnings or even to deny almost that Deputy McGilligan made the speech. My own belief is that if that speech had been published as a Central Bank Report by itself, and issued by the Central Bank and if Deputy McGilligan had not made any Budget speech, we would have Deputy MacBride getting up, making exactly the same observations as he has made on the Central Bank Report which, as I have said, is divided into facts, conclusions and remedies. Although we may feel that the Central Bank may have exaggerated the seriousness of the position, the main facts were predicted by Deputy McGilligan. As I have said, in truth he wrote himself the preface to the Central Bank Report, and with Deputy MacBride's approval in that he never formally denounced the Budget speech or expressed himself in opposition to any of the recommendations made therein.

I next want to deal with the question of the use to which these external assets that have been repatriated have been put. We have had a great many boastful speeches and a great amount of talk from the Coalition Parties about what they were going to do to increase the capital resources of this country. When Deputy Costello made his now well-known speech to the Bankers' Institute, he talked as though repatriation of external assets was going to bring vast quantities of productive machinery into this country. In some way or other they would be used in the way that Fianna Fáil always believed they should be used, for importing machinery which would produce the goods that we formerly imported. We said that if a man had money invested in a company making shoes in Great Britain, we would like that money to be repatriated in order that, if shoe machinery could be purchased in England with the money such machinery could be used here to make shoes that were formerly imported.

After five years of all this talk we find that of the imports into this country in 1948 and 1949 about 10 per cent. were for capital goods. In 1938, after five years of economic war and after a world depression, the imports of capital goods were 7 per cent. of the total. The sole result of all this talk that we have heard in regard to the grand new policy of repatriating sterling assets has been that the proportion of capital goods in our imports has gone up from 7 to 10.4 per cent. That is an astonishing thing. I do not believe that many people in the country know that fact or realise that the main objective of all those who talked about the repatriation of external assets has not been achieved, that they have not been in large measure used to bring capital goods into the country.

We, without talking about it at all, without any advocacy of special policies, of crank financial policies, and, as I have said, after years of economic war and depression, managed to import 7 per cent. of capital goods out of our total imports in 1938. We were doing it after a period when every time we advocated a new tariff for a new industry it was fiercely opposed by the Fine Gael Party on almost every single occasion. In spite of the economic war and the political opposition against a tariff policy, the percentage at that time was very nearly as great as it was in the case of the present Opposition in 1949-50, when they had all the advantages of our being able to sell in a world that was continually more hungry and, in addition, had all the advantages of being able to borrow money from the American Government for the purchase of capital goods. Yet that, in fact, was the final result. Indeed, if agricultural prices in this country had not reached three times their pre-war level, the policy of the last Government would have ended in a financial crisis long before. They have only been saved by the fact that agricultural prices have been rocketing all over the world and reached three times their pre-war level towards the end of their period of office.

It is an extraordinary fact that, although imports trebled in value, although there was every evidence of high consumption in this country, the ordinary commercial public were apparently unwilling either to save sufficiently to finance Government expenditure or to provide the Government with a sufficient proportion of the loans they issued. A fact to which we have to have regard, a fact which is of the utmost importance in the future is the necessity for securing the personal savings of the community for carrying out capital expenditure for developing the nation's resources.

As an example of the difficulties we face, of the capital expenditure in the financial year 1950-51, which was indicated in the Budget as being £24.6 million, only about £3.13 million had the effect of directly stimulating production and so increasing the volume of our exports. About nearly £13,000,000 were for purely social purposes. That is not to say that they were inadvisable. That is not to say the money should not be spent. The point is that the money did not help to increase exports and made the problem of continuing the financing of capital expenditure more difficult for us.

Much talk has been heard in connection with the use of the American Counterpart Fund and a great deal has been said about the land rehabilitation scheme. In that connection, it is just as well to remind the House again that the Government intended to spend in the financial year 1950-51 £3,000,000 on the land rehabilitation scheme. In fact they spent under £600,000 and of that very nearly half went to pay civil servants, showing that one of the major schemes requiring a large sum of money apparently was not prospering. Apparently, there were difficulties experienced. The present Minister for Agriculture is carrying on the scheme; the scheme is being developed, but he will have to do his utmost to see that it can be carried out more economically because, obviously, if half the cost of land rehabilitation is going to be dissipated in administration expenses the advantage to the country is questionable.

Some other schemes that might have been adopted at an earlier stage were adopted only in the last few months of the then Government's activities, such as the expenditure of the American Counterpart Fund money on the lime subsidy scheme. We were told that at the end of the war the country required a capital application of 10,000,000 tons of limestone. One of the most vital and important works that could have been carried out would have been to restore the lime content of the country but, as I have said, a scheme of practical significance like that was adopted only towards the end of the last Government's régime.

Members of the Coalition Parties seem to be afraid of the term "disinflation," as though again it was something which you had to do to the tune of 100 per cent. If ever a Government in its wisdom mentions the necessity of adopting disinflationary policy immediately everyone cries out you are going to disemploy everyone, cancel and arrest works of capital development, whereas in fact the word "disinflation" can mean the mildest corrective to overspending, an adjustment in taxation, or an adjustment in the methods adopted to finance capital projects. Anything which tends to reduce inflation is naturally disinflationary. We on this side of the House are not afraid of the term. It does not keep us awake at nights and if we say that we have to adopt certain disinflationary measures it does not mean that our policy of national development is going to be suddenly ended overnight or that the schemes that were continued by the last Government and which were the result of our imagination and our vision are now going to be stopped and put aside.

One of the difficulties we face is the fact that the previous Government had been assisting in the creation of an inflationary position by issuing money that did not originate through the savings of the people. When counterpart money is used and introduced into circulation in the country as a method of financing schemes, it is inflationary in effect, it is money being spent for which there is no production backing. The same thing is true with other types of transactions effected by the last Government in trying to meet their obligations.

One of the strangest things about the whole business is the fact that there is no country that has had any kind of sound financial history where the policy of saving for borrowing is not fully accepted. You can examine, as I shall indicate later, the financial systems in the whole of Scandinavia, in Holland, in the United Kingdom, in Switzerland and Belgium. They all admit the necessity of borrowing for capital development. They all agree that the cost of carrying out capital projects must be borne in part by the next generation. But, they all admit also that the money provided in the way of loans by the people to their Government must be met out of savings, that there is no other way of providing the necessary funds and they all of them in their different ways, when savings are insufficient, apply the necessary corrective measures to ensure that savings are found in one way or another, either by an increase in savings by the people in their savings institutions or by increased taxation.

One of the difficulties we face in connection with Deputies like Deputy MacBride is that he never will tell us exactly what he believes in regard to the use made of the national credit. He will always talk vaguely and airily about making use of the national credit for developing the country but he will never say what he means. Yet you will have the impression from some of the people who have already spoken in this debate that the Fine Gael-Clann na Poblachta policy is in some way different from the policies of sane normal countries such as Scandinavia, Switzerland and Belgium, where these financial axioms are well understood and accepted by the people. I am going to go into that in very great detail later because it is just as well that people in this country should learn what other small nations in Europe have done since the war— the difficulties they have faced and the measures adopted—to get them over the problem of post-war inflation.

In the financial year 1950-51 £22,000,000 of Exchequer Bonds were issued to the public. Only £12,000,000 were obtained from the public, showing that there was reluctance on the part of the people to assist the Government in their capital expenditure schemes. One of the causes for this disinclination to lend has been the propaganda of every Deputy opposite, who for years past has been telling the people they can go about their ordinary tasks and need not make the slightest effort, while the nation was being rebuilt around them. As soon as you get that kind of atmosphere it is natural that loans will not be successful and that savings will not be sufficient to carry out costly development projects—and, in particular, development projects that do not result in increased exports and trade.

Hospitals and housing are very desirable projects and we are going on with that work, but they do not result in an increase in exports. The land rehabilitation scheme will not result in an immediate increase in exports, even if it eventually succeeds and is based on sound financial principles. It will be years before land which has been drained will produce an actual increase in exports. The same remarks apply to a great deal of Government capital expenditure. The actual fact is that the Central Bank Report simply repeats Deputy McGilligan's statement that the public must surrender some of their purchasing power if the investment campaign is to continue, that the Government cannot do without this resource, that the investment campaign cannot continue using the thin air, that there must be a greater volume of savings and that if there is not a sufficient volume of savings there will have to be increased taxation.

We have heard far too much in the past three years of a policy which can be well represented by the well-known American verse :

"My candle burns at both ends,

It cannot last the night,

But oh, my foes, and oh, my friends,

It gives a lovely light."

As has already been indicated by people on this side of the House, bank restriction was not ordered by the Government or the Central Bank. I ask Deputy MacBride to tell the House what he means when he says that there has been a severe restriction in bank credit. Bank advances in the March quarter of this year totalled £111,000,000. In the June quarter the bank advances totalled £114,000,000. In the September quarter the bank advances were £122,000,000. Where does the bank restriction lie? Whose credits have been restricted? The figures can hardly be denied as being accurate. The banks may have restricted credit to people who wanted to stockpile excessively, who wanted to bring in consumer goods, who, perhaps, wanted to open retail establishments in areas where there were already rival retail establishments, who had insufficient security to finance their transactions or to guarantee that they could exist profitably with other competitors in the area.

There are all sorts of applications for credit which, at a time of inflation, must be considered seriously by the banks. The figures show that there has been no alarming or considerable restriction of credit because, as I have pointed out, the advances for the September quarter were greater than those of the March quarter by no less than £11,000,000.

We should like to ask members of the Opposition Parties what their attitude is towards general banking policy. Although there has been an iron authoritarian régime in Great Britain since 1945, although the Bank of England was nationalised, although the national income of the people of Britain is taxed to the degree of 42 per cent., although every Englishman and woman works half the day for the Government—although there has been every known kind of control to direct the flow of English trade, the general policy of the commercial banks of this country resembles that of the British banks in almost every particular in regard to their conservatism in issuing loans. There is no notable difference between the attitude of the banks of this country and that of the banks which have been under Socialist administration in Great Britain since 1945. I should like to hear from the members of the Opposition Parties to what extent they would like the Irish banks to go beyond the prescriptions given to the English banks by the nationalised Bank of England under a strictly authoritarian Government. In Britain, as here, there are other institutions designed for special purposes, such as the Industrial Credit Corporation and the Agricultural Credit Corporation, and arrangements are made to provide farmers with grants if they find difficulty in securing credit from the banks. There are arrangements here, just as in Britain, to overcome restrictions in credit of a kind which are contrary to the immediate interests of national policy, but there is very little difference as regards ordinary borrowing and lending.

We should like the Opposition Parties to tell us what changes they think should be made. We should like them to tell us how much the Irish banks should change their ordinary attitude towards lending and anything in the direction of becoming less conservative than the British banks. I think it would prove an interesting discussion. I do not believe anybody would dare give any kind of reply to that observation.

Deputy MacBride, in the course of his speech, adverted to a statement made by the Minister for Finance of the present Government that either public spending or private spending must be reduced. That is the cry of half the countries of Europe who have faced post-war difficulties. There is nothing exceptional or conservative about it. It has been uttered by violently Socialist Ministers for Finance who like to organise their whole community, who believe in a degree of interference with the private individual which would never be tolerated here. Socialist Ministers for Finance all over Europe whose finances are still holding together, have said that if there is to be greater public spending there must be greater savings or taxation. It is the simplest phrase in the world and it has been used by Ministers for Finance in every country.

I do not think I need say very much about Deputy MacBride's vague hints in regard to an alteration in the currency. We have heard from these gentlemen in the last 20 years grandiloquent statements about a change in our currency. Yet not one member of the Clann na Poblachta Party or any person who holds their view has ever dared to deliver any kind of address lasting for even three hours in which they could really indicate to us whether the Irish £ should be greater in value than the English £ or less, or the advantages or disadvantages of either of these alternative policies.

We have never heard from them precisely what they wanted to do and why they wanted to do it and what advantage this country could have from a change. We have never heard them argue the point properly that if 90 or 95 per cent. of our trade is with Great Britain, and if there are Six Counties in the North separated from us we should hesitate before we alter our present relations with the £ sterling in Great Britain, particularly as there is a free flow of sterling, at least, if nothing else between the two parts of this island.

Some members of the Coalition have made a deliberate effort to confuse the public mind by failing to relate our dollar liabilities to our sterling assets. I do not think there is any need for me to go into this question in detail. A statement has been made that in 1949 and 1950 our sterling assets actually increased for a period and the argument was adduced that, because those sterling assets increased, there was no general external disinvestment. The speakers concerned forgot to mention the fact that we had borrowed money from the American Government and until the money was used up it was made available in the Central Bank in the form of sterling and that created temporarily new sterling assets of an unusual kind for us in that they were the result of an American Loan. Once the loan is spent, these external assets will disappear in the ordinary way. They had absolutely no fundamental effect on the main balance of payments position in this country, which is a thing to which we have to give attention above all else. They were merely the result of an accounting position, the use of dollars converted into sterling and its subsequent use by the Government. The Government, through the Bank of Ireland, spent the money. The money appeared in circulation and the commercial banks held these assets temporarily. Those assets were the result of the American Dollar Loan. The fact that the particular assets went up for a time has no significance in the present situation. Indeed, this was mentioned one or two years ago by Deputy McGilligan, the former Minister for Finance himself.

We heard a great deal about the glory of the double budget. Other countries have double budgets besides ourselves. It can be a very convenient method of illustrating the investment plans of a Government, of separating their capital expenditure from their current expenditure. It is a very convenient method of illustrating their investment plans. Of course, the plan can be demonstrated in another way. The double budget has no very special significance. It can be used as an effort at window-dressing, designed to make it look easy to spend money without sufficient saving, or it can be used to illustrate what the position is in regard to capital investment. There are some countries in Europe which have a different kind of capital budget statement. They put into the plus and minus accounts the exact amount of domestic and Government saving that will be effected during the year including the extent the people will save money to provide the Government with loans towards capital development and the investment they intend to make. There are some countries in Europe which provide that kind of double budget for the public to examine. Such a budget illustrates exactly and precisely whether the country is living above its means or whether it is not.

We have heard a great deal about the domestic capital formation effected by the last Government. I was interested to notice from the report published by the Statistics Office that the figures for 1949-50 have apparently not enormously increased. Domestic capital savings in 1946 and 1947 were £91,000,000 and in 1949-50 they were £99,000,000. There did not appear to be any great change in regard to the formation of capital domestic investment. I noticed also that, again in connection with the import of capital goods, the figures have increased but so have prices. Without any talk of miracles or any dramatic announcement of a new policy and when the war had only just ended and goods were still scarce, we imported what seemed to be the miserable sum of £19,000,000 of capital goods in a world which was almost exclusively a sellers' market for capital goods and machinery.

The amount went up in 1948 and 1949 to £29,000,000 and in 1949-50 it went up to £31,000,000. I am not ashamed of the figure of £19,000,000 for 1946 and 1947. Anyone who is a machinery agent in this city would know very well that you would have to wait months to meet replacements in machinery of that kind. If we had gone on with our policy of national development without any airy phrases or the announcement of any special policy the import of capital goods would have increased.

Deputy MacBride made various suggestions in regard to restrictions effected by the Government in connection with development schemes. He mentioned a reduction in the number of Local Authorities (Works) Acts schemes. The Estimate for these works was reduced this year a reduction by several hundred thousand pounds and effected by the last Government. The Estimate was reduced because the number of useful works that could be effected had diminished or else the Government reduced the Estimate out of a desire to save. I do know that the Minister for Local Government is sanctioning grants for useful schemes up to the limit of the Estimate. It is essential to make sure that if money is spent it will be spent wisely on useful works.

Deputy MacBride complained that we reduced the annual target of afforestation from 25,000 acres to 20,000 acres. We intend to plant 20,000 acres a year in the course of time and it will be done. There will be a sufficient planting reserve left—a reserve which is essential in connection with afforestation work. The former Minister for Lands was never given evidence by the department of afforestation that he could, within the next few years, have a sufficient planting reserve to enable 25,000 acres to be planted yearly. With all the caution and care that was required in such circumstances a target of 20,000 acres is based on what we believe is the amount of plantable land that can be made available and drained in that time. We make no excuse for having reduced the figure.

The figure of 25,000 acres was a figure promised by the Minister for Lands in a speech made in Cork as long ago as two years after the Government was in office. It will not be possible to plant 20,000 acres in the coming year. The yearly acreage, we hope, will be increased provided the land can be obtained and provided we get a supply of the necessary protective wire and seedlings.

So far as unemployment is concerned, if there is any increase this October as compared with October, 1950, we are given to understand that three-fourths of any increase is due to a temporary depression in the clothing and textile trades which has taken place not only here but in Great Britain and is due to circumstances in connection with the price of wool which is well known to everybody. There has been no noticeable increase in unemployment judged by the figures which will be issued in the course of the next few weeks. I discovered that the increase is very small and is almost entirely confined to those trades. If there is any suggestion that there is now a widespread increase of unemployment it is not true.

I thought I would take the opportunity on this occasion of dealing with the position in which other countries find themselves. When one goes abroad, one finds only too frequently that we hear far too much of what is going on in Great Britain and America, and that the people of this country who are concerned with national development, with the development of our resources, have all too little information about the efforts made by some of the small countries in Europe to restore their position, to improve their production, to develop their wealth and to provide a happy life for their citizens, and so I made a study of the credit history of four countries in Europe since the ending of the war—Sweden, Norway, Denmark and Holland.

The facts I ascertained varied from one country to another. Some countries have fuller documentation than others. They are all countries with a relatively high national income; they are all countries in which there have been advanced liberal administrations. In most of them there have been at times Socialist, or partly Socialist, administrations, where people with advanced views in regard to the utilisation of credit have had their say and their effect on the life of the community. They are all democratic countries and all of them have had a longer history of independence, with all the advantages thereof, than we have. During the war, two of them, Norway and Holland, suffered physical destruction on a considerable scale. Two, Denmark and Sweden, suffered little or no physical destruction but considerable trade dislocation. They all have the same post-war history—a tremendous impetus to buy goods to restore the normal consumption level of goods, to sell goods abroad to pay for imports, to invest money in national economic schemes, to rebuild their economy to the degree to which it had been shattered.

They are all in a position in some way more advantageous than we are in that, in the case of at least three, they have very large industrial exports which can be immediately increased, provided the machinery and capital are there because they have all the experts. They have traditional industries, together with the experts and the managers. They have not got to develop new industries from scratch. In the case of industries such as those related to paper, pulp and timber, the raw materials are immediately at hand. There is an immediate and vast demand for the goods and exports can be stimulated very rapidly. In the case of Denmark, only 27 per cent. of her workers are occupied in agriculture, industry now playing a very large part in the Danish economy.

They also have a certain advantage over us in that they have a very high tillage level. They are able suddenly to stimulate the production of agricultural produce for export more quickly than we can where the level of tillage has never been so high. They have all these factors in common and I thought it would be a very good thing if I were to give the House some account of their history since the war, principally in order to show and to indicate the difficulties from which we must escape by carrying out corrective measures now instead of having to take more drastic action later as most of these countries did, to their immense disadvantage.

It is a curious thing how one can accumulate vague ideas about countries, to the point that one can actually exaggerate their efficiency and capacity to manage their own finances. I do know that these four countries have always shown intelligence in their economic development. They have never suffered financial disaster and they have never engaged deliberately in wholesale inflation, with the continuing evil result, but nevertheless every one of these countries has been too anxious since the war to invest money and to spend money without taking regard to all the circumstances of the case, and they ought to provide an absolute warning to us of the difficulties we shall get into, unless we overhaul the national economy now instead of listening to the vague expletives of Deputy MacBride and vague accounts and descriptions of fantastic financial policies which can lead us nowhere.

I take first a report entitled "An Economic Survey", dated December 15th, 1946, and March 15th, 1947, issued by the Svenska Handelbanken, which is one of the very large commercial banks in Sweden. It says :—

"The predominant feature of Sweden's economic development during the period under review has been a steady deterioration of the foreign exchange position. The drain on the exchange reserves that has been going on since the middle of 1946 has continued at an increasing pace during the past few months, and the necessity of taking countermeasures to protect the country's international liquidity has accordingly become ever more urgent. On March 15th, the Government imposed a general ban on imports as a preliminary step towards the introduction of a system of quantitative import control.... As a link in the chain of restrictions, the consumption of coffee is to be cut down, and this has involved the reintroduction of rationing—though not only of coffee but of tea and cocoa as well. The imports of motor cars will also be reduced, which will involve certain restrictions on private motor traffic."

It goes on to give the reasons :—

"For the whole of 1946, the import surplus rose to 842,000,000 kroner as compared with an export surplus in 1945 of 674,000,000 kroner. It is true that the increase in imports may be regarded partly as a natural phenomenon, now that the scarcity conditions on the international markets have been gradually relieved. There is no doubt, however, that imports have reached an excessive scale under the pressure of the considerable excess purchasing power in the country and have to an alarming extent come to comprise goods of a luxury character."

In other words, they began to go through the same sort of difficulties as this country. They did not balance their trade, and, as a result of Government policy built up excess purchasing power. Then a year later, the Svenska Handelbanken issued another warning:—

"The economic situation in Sweden continues to be characterised by extreme boom conditions and by an ever-increasing inflationary pressure. The widening ‘inflationary gap' and the pressure of consumer purchasing power has entailed a serious deterioration of the balance of trade, imports being stimulated and part of the goods normally exported being retained for domestic consumption. This, in turn, has led to a heavy outflow of foreign exchange from the Riksbank on such a scale that it cannot be allowed to continue without seriously impairing the country's international liquidity."

We now come to the remedies that were applied:—

"Such, then, was the background of the import control introduced on March 15th of which an account was given in the preceding issue of this review and of the subsequent efforts on the part of the Government to work out an anti-inflationary economic programme. Such a programme is now crystallising——

mark these words——

"though unfortunately at a rather late stage. Its main points are : a reduction of the volume of real investments down to two-thirds of the 1946 volume, a tightening up of price controls, measures to increase exports of paper and timber at the expense of domestic consumption; and certain steps—of a somewhat platonic nature —to encourage savings."

It is precisely in order to escape that kind of disinflationary policy—adopted by one of the most modern and intelligent Governments in Europe, with a long record of developing natural resources, developing State forests, developing shipping and other State companies on a huge scale, a Government that went much further in interfering with everybody than even Clann na Poblachta would like to do—that we suggest the corrective measures be taken in time. Because they did not attend to their foreign exchange difficulties, they had to reduce the volume of their real investments to two-thirds of the 1946 volume. As I have indicated, we in Fianna Fáil do not wish to be forced to do that. But if a country with the intelligence of Sweden —because they were too optimistic, because they had pressure groups just like those of Clann na Poblachta—was forced to take action of that kind, the public will forgive us if we issue warnings in time so that corrective measures can be applied that need not be in the nature of cutting down our real investments to two-thirds of the 1946 level. I may add that this was done by a social democratic Government that believed more in authoritarian Socialist policy than the present Labour Party here.

Christian Socialists.

I do not think I need read the whole of a very long article issued by another bank, as it almost so completely resembles the Central Bank Report that it is hardly worth reading. For some reason or another, in any of the intelligent countries of Europe that have gone through inflationary difficulties, reports almost exactly similar to that of the Central Bank have been issued. Wherever there has been a growing deficit in the balance of payments, there appears to be nothing unusual, even in banks fully controlled by Socialist Governments, in issuing the same warnings. Even banks with far more rigorous control than the commercial banks in this country have issued these warnings to their people, that there are limits in regard to the amount that the balance of payments can be allowed to become adverse.

The Minister will qualify for Churchill's Government.

Gaitskell did exactly the same.

I perhaps should abbreviate my analysis without quoting any more documents. The House will appreciate that if I were to quote freely from them it would take another hour and a-half. I have read some documents to indicate that my information is based on documents received from the countries concerned and is not based merely on vague interpretations of my own of what has gone on in Sweden and other countries since the war, and of the difficulties they experienced. I think I should summarise what actually did happen without giving the dates but just a picture of the general position in Sweden.

They managed to raise industrial production by 45 per cent. over 1939; real wages, too, showed an increase of 26 per cent over 1939. They started to develop new housing schemes, partly with a view to ensuring full employment. They increased or developed social welfare schemes of various kinds in 1946. Then they devalued the Kroner in 1946, and as a result the outflow of foreign exchange began. The Governor of the National Bank of Sweden resigned because his Central Bank Report was not listened to at all at the time. No action was taken, so apparently the Socialists in office at the time were much too happy with what was going on—the beautiful spending of money, the full employment, and so on. Then, since he resigned, the Government realised they had to take action; and the Minister for Finance increased taxes all round. He issued a very stern order for the control of imports. He cut down investments. He cut down the production of houses as the years went by. In 1947 there were 58,000 houses produced; in 1949 they were reduced deliberately to 43,000 houses, by a Socialist Government, solely with the object of checking inflation which had not been checked in time or by reasonable and sane methods before.

Again, because of the excessive post-war optimism which it is so easy to inspire in a people when a war has ended—so easy to inspire in any people, including ourselves—they froze wages. In 1949 there was still a gap in foreign payments. The Korean crisis began and they realised that things were going to be still more difficult. Then the price of goods went up. They took off their wage ceilings and allowed a burst of increased wages. They introduced price subsidies. They subjected the banks to still further credit control. The Swedish Minister for Finance announced that for the year 1951-52 he intended to produce so much of a surplus on the Budget by taxation that he would be able to pay for some of the capital outlay in regard to Swedish national development projects. He intended, he said, to have so much a surplus of receipts over expenditure that more of the capital development money would be discharged by taxation than by borrowing. He did it, he said, because the money turnover induced by it was having the effect of increasing the amount of consuming spending power with the result that the difficulties of the trade balance were getting worse.

Then conditions became much worse and there was another inflationary burst. They allowed wages to go up; they allowed prices to go up. The wage freeze was lifted, the subsidies were removed—all in an effort to try to see whether they could not correct the situation. Then the last thing that the Swedish Minister of Finance did —after reducing investment by Government Order, reducing the building of houses by Government Order, freezing wages and allowing them a rise at various times— was the unkindest and cruellest thing of all. The Socialist Minister of Finance in Sweden, for the current Budget, announced that he was putting a tax of 10 per cent. on such investment as was permitted by the Government—in other words, a 10 per cent. capital levy.

As I have said, we do not want to do these things. We have no desire to impose restrictions of that kind in this country, but it is just as well that the public should know what has been taking place in other countries where relative to a great many countries in the world, they were governed by the most intelligent administrations. We can take an example from them by applying corrective measures now instead of having to face cuts on investment and other such remedies later on.

Take the case of Holland. My report was published in September, 1951. Holland suffered a great deal of physical destruction. They have carried on since then and have made tremendous efforts to restore their economy, to rebuild the dykes, to reconstruct factories and ports, to build ships for foreign trade. They suffered the added difficulty of losing Indonesia. They suffered many difficulties of various kinds. In January, 1950, prices had increased because of devaluation. They increased further as a result of the Korean war and a wage freeze which they had in operation was relaxed. They had various schemes to ensure a sufficient investment of money in reconstruction, such as price control, rationing, subsidies and so forth, but they allowed wages to go up by 5 per cent. and quadrupled subsidies. In September, 1950, 5 per cent. more was allowed on wages and it is interesting to note that there was a prolonged political crisis until March, 1951, because the combination of Socialists and Catholics in the Government were unable to decide or be united with regard to an anti-inflationary plan. It is interesting to note because, as I have said, we have had such different interpretations by members of the Coalition Government of financial policy and one wonders what would have happened if they had remained in office and had to promote anti-inflationary plans.

Which coalition?

The previous Government.

Cowan's coalition.

You are not denying you were a coalition are you?

Mr. O'Higgins

You are a coalition.

The Minister for Posts and Telegraphs.

This was the Dutch plan—to cut consumption by 5 per cent. and to cut investment by 25 per cent. The plan was produced by a combination of Socialists and Catholic Party members—to cut investment by 25 per cent. so as to offset the deficits arising in foreign exchange and the widespread inflation. They decided to impose a higher purchase tax on nonessential commodities, and to restrict consumption. The Dutch Coalition Government, composed partly of the Socialist Party and partly of the Catholic Party apparently combined together to carry out nearly all the remedies in the Central Bank's Report at once. And why? Because they were so anxious to restore their country's economy. Since then wages have gone up by another 5 per cent. and higher taxes were imposed. That represents nearly all the remedies proposed by the Central Bank Report. There is one ironical element. The trade unions in Holland, realising the difficulty of their position, realising that the 5 per cent. cut in consumption might cause a reduction in the standard of living and employment, said that they would agree with the 5 per cent. cut in consumption only if they were convinced that investment would genuinely be cut by 25 per cent. The trade unions agreed with one form of restriction provided only that they were convinced that investment had been genuinely cut by 25 per cent. So much for Holland.

Have you anything about Belgium?

Belgium is rather a different case as the Deputy knows.

I hope that he does not want me to deliver a homily on Belgium. It hardly applies to this case.


Spare us.

We, unfortunately, have not an empire in Africa from which to sell uranium to the American Government and build up enormous gold reserves. We are not able to produce warlike materials which the whole world is seeking. The whole world owes so much to Belgium that countries are wondering how they can buy more from her. Belgium is different from other countries. These circumstances apply to Belgium and Switzerland, as the Deputy knows, and to one other country, perhaps, but in general that is the position. It is just as well, perhaps, that we do not have uranium to sell to the world, although it has been a magnificent advantage to the Belgian people.

One experience which I had in Belgium myself might illustrate some of these arguments. I met incognito four Belgian workers. They were ordinary building workers — unskilled workers in the building industry. Two were Socialists and two belonged to the Catholique Party, which now has an absolute majority in Belgium and which has a kind of liberal development policy more or less like Fianna Fáil's—that kind of policy. I asked them to what they attributed the great prosperity of Belgium in comparison with other nations besides their uranium deposits, their textile and steel industries and the other industries they have, all items on a seller's market during the war.

We could export Wicklow gold.

One of the Belgians threw up his hands and said "Nous travaillons!”“We work.” They did complain about low wages and high prices. But that was the reason they gave for Belgian prosperity. There is a great lesson there for this and other countries. There is a story which they tell to illustrate this: If a Belgian were dropped naked in the middle of the Sahara desert, in three weeks' time he would be wearing a suit of clothes, he would have a hat, a stick and even an umbrella.

Who was incognito?

The story relates to the kind of attitude we need here.

I have dealt now with Holland and Sweden. I should now come and give Deputies some account of the position in Denmark. A report was issued by the Institute of Economics and History in Copenhagen, April to June, 1946, entitled "Economic Conditions in Denmark." Here is a repetition of the same story. The report says:—

"In the survey of economic developments during the first month of the year emphasis was laid on the importance of the change that occurred in the balance of trade at the turn of the year, a change which involved an increasing import surplus and a continued deterioration of the balance of foreign exchanges. The second quarter has shown a continuation of that development, and at the middle of the year the economic situation brought the country's legislature and administration face to face with a number of serious problems. Foreign exchange was still scarcer, the purchasing power of the population was growing as a consequence of wage increases and the rise in public expenditure, and the disproportion between the prices of exports and imports became more and more conspicuous. The passing of certain increases of taxation and excise dues was intended to make the Government budget balance, and during the next few months the collection of a considerable ‘capital levy' will bring about a sorely needed reduction in the volume of idle money."

That was the first report. Already, in April-June, 1946, the Danes had suffered the delights of a capital levy in order to reduce inflation. The National Bank of Denmark played the same warning rôle as the Central Bank here and in the report of the same institute for July to December, 1947, we have this:—

"Shortly before New Year the national bank, therefore, found occasion, in a public approach to all banks, to point out that the economic conditions in the country had turned into a development that was marked by inflation and to recommend that the banks, although commercial considerations called for the maximum of lending, should exercise reticence with regard to granting new loans which, by strengthening the demand for labour and raw materials, would contribute towards reinforcing the inflationary movement still in progress; it was stated that, owing to the abundance of money available, trade and industry were capable of financing themselves to a greater extent than normally and, therefore, had less need of loans."

Therefore, we find, as early as 1946, a warning being given by the National Bank of Denmark on more or less the same lines as the Central Bank.

With regard to the planning of Danish development, there was for some time a Government of a social democratic character in office. That has since been replaced by a Government of conservatives and agrarians. But the conservatives, as one examines their policy, are found not to be conservatives in the ordinary sense, but rather to the right of the Social Democratic Party in their attitude towards the economy of the country. The Danes make an effort every year to predict agricultural production in advance. It is easier for them to do it than for ourselves because they have a tillage economy.

They estimate their total investment of all kinds, private and public, and then every year they make an effort to provide sufficient savings, through private savings, through Government savings, to enable investment to be carried out. The facts of the case were that most of their predictions were exaggerated and the prediction of the amount of increase in export trade was exaggerated through ordinary undue optimism. They were able to obtain very large Marshall Aid allocations and yet during one period they were unable even to cover the foreign deficit with the maximum amount of Marshall Aid offered to them during the whole period since the war.

In 1947 and 1948 they managed to continue to develop their economy because there was a very sharp rise in the personal savings of the community enabling them to find money for national investment. They also found that their farmers were investing a very large proportion of their profits in developing their farms and in purchasing agricultural machinery. As time went on, as I have said, investment policy continued, but the difficulties remained. In a report issued by His Majesty's Stationery Office, in a study of overseas countries called "Overseas Economic Studies", published in January, 1949, they reported about Danish economy:—

"Although the story of the last three and a half years has not been one of uninterrupted success, there has been very substantial progress in most fields, as is recorded in more detail in the various sections of this report, and the general situation at the end of 1948, though not without its difficulties, is one which on the whole must be regarded as very creditable. Perhaps the principal difficulties at the moment are the internal financial situation, where the battle against inflation has not yet been decisively won, with the result that the high level of prices may create difficulties to the successful maintenance of an adequate export trade, and in the balance of payments, particularly the dollar deficit.

There is a tendency for criticism of rationing and of all kinds of controls, including currency and trade restrictions, to become more vocal. Opinions may vary as to the necessity to-day for this or that control, but there can be no doubt that many of the restrictions have justified themselves hitherto by the economy they have made possible in scarce foreign currencies or by the contribution which they have made to the maintenance of vital exports."

In the financial years 1947 and 1948, the Danish owed very large sums of money to the Swedish Government, the Dutch Government and the Swiss Government. They had borrowed as much as they could from four different international agencies. Their foreign debt had risen to the enormous amount of 1,501,000,000 kroner in 1948. That was the total volume of their foreign debt.

At the end of that time they were still in some considerable difficulty. They had rationing on articles like coffee, textiles and clothing. They still have rationing to-day of many of these commodities. As I have said, they have faced those difficulties because at the end of the war they were anxious to expand and to go ahead. Previous to the war they had already difficulties in financing foreign transactions because they were always a country where farmers owed large debts to the banks and faced foreign trade difficulties.

The position in March, 1951, was as follows: The Government planned to impose further price controls, further wage controls and further restrictions on profits, and at that time their visible deficit with the U.S.A. alone was $427,000,000 and was 40 millions more than the dollar aid made available. They have had to impose controls on consumption of a number of articles. At one time, they had a very high purchase tax and a bachelor tax. It is curious to note that apparently the Danes in their wisdom thought it wise to impose a bachelor tax as part of the anti-inflationary campaign. I am not saying that we should recommend that here, but it is interesting to note that it was one of the solutions of their difficulties.

I think I have given the House some fair indication of the position and I recommend Deputies who think the Central Bank was talking absolute nonsense in regard to its facts, as distinct from its conclusions and relevancy, to study the financial history of these four countries and to realise that it is the duty of the present Government to prevent any crisis from occurring which would necessitate drastic remedies such as I have indicated. We have no wish on this side of the House to control investment, to tax imports, to control quantitatively the value of imports, to impose purchase taxes or capital levies. But every one of these things was done by these very intelligent countries with, in some cases, a Socialist Government in full command of the situation. The time to avoid doing these things is when one can see the tendency at work and can correct it by measures which we hope will be mild, which we hope will be largely related to asking people to save, to such a measure of taxation as is required to finance capital development, an expansion of exports and an increase of production. It is impossible to say now what policies will be advocated because the situation will have to be studied. But, as I said, we hope on this side of the House to avoid all these difficulties.

There has been a great tendency on the part of members of the coalition Parties to give the impression that capital development was first thought of by them. It is very good propaganda for young people who have reached the age of 21 since 1939 and who do not happen to read the newspapers and do not know of our efforts in developing the national resources. As to the idea that the Coalition Government first thought of borrowing money for capital development, of going in for large schemes involving the use of national credit, we in Fianna Fáil provided most of the ideas for the Coalition Government. Most of the schemes which they did put into operation had been prepared by us. It was Fianna Fáil that, from 1932 onwards, inspired by Thomas Davis and other great leaders, put into operation a plan of national development.

I should like to remind the House of some facts in regard to our capacity to plan national development. On the 31st March, 1948, we left schemes ready for carrying out or under construction in connection with rural electrification, power stations and turf production——

Mr. O'Higgins

And the new Parliament House.

——involving an expenditure of £12,000,000.

And new Government buildings.

They were our schemes. Many of them were under way. Some of them were held up during the war for lack of material and equipment. They were large schemes and they required a very large capital expenditure.

What about the palace for the civil servants?

It is a bus station.

Will both sides of the House please allow the Minister to proceed.

For years and years we spent money on turf production, power stations, electrification. We developed air services and shipping. We did more than that. We induced the raising of a very large amount of private capital for industry. From 1932 to 1948, at the then value of the £, £21,000,000 were invested in industries of various kinds. The direct Government holdings were £750,000 of this total. Of this large sum, a Government lending agency, the Industrial Credit Corporation, provided over one-third of the money by lending £8,000,000 of that £21,000,000 for the development of Irish industry. That was all capital development. It was money very wisely spent and most of the ventures were highly successful. Tariffs to protect and foster these industries were opposed by the Fine Gael Party at that time. That was the position. We had the vision to plan capital schemes and to-day one cannot walk a mile in any direction without finding evidence of the work of Fianna Fáil. One cannot walk a mile without finding evidence of Fianna Fáil capital development. One cannot walk a mile outside any village without finding evidence of the drainage schemes planned by Fianna Fáil under the land improvement scheme and buildings reconstructed under the farm buildings improvement scheme. The land rehabilitation scheme of Deputy Dillon has been admitted to be an extension of a Fianna Fáil scheme. Houses were reconstructed under our Government. Sewers and water schemes were prepared. A great number of houses were built for local authorities. There are enduring monuments to the work of Fianna Fáil in every square mile of the country. And it is ludicrous for members of the Coalition group to go around now boasting as if they were the only people who ever thought of capital development or the development of our national resources.

We heard the suggestion made recently that the last Government were responsible for all the houses built during the period they were in office. These are the actual facts and it is just as well that the House should know them. They were 17,000 houses built by local authorities from 1st February, 1948, to 30th June, 1951. On 1st February, 1948, work was in progress on 3,000 of them. Tenders had been invited or accepted for another 3,000 and sites had been acquired for 6,000 more. In other words, 12,000 of the 17,000 houses built during the inter-Party Government régime were planned to a greater or a lesser extent by the Fianna Fáil Government. Going around the country one would imagine that the last Government was responsible for the planning, building, development and financing of all those houses.

A great deal has been said about the employment given in industry under the last Government. Most of the industries were either started or stimulated by Fianna Fáil. We were able to give employment under conditions of the most exceptional difficulty. We had no boom agricultural conditions during our term of office. We had to face a world depression of tremendous severity and magnitude in which farmers had not organised themselves in any way to protect themselves against a decline in prices. We had to face an economic dispute which enabled us to settle our constitutional issues with Great Britain in their entirety with the exception of the unification of our country. We had to face a world war in which all capital development had to close down because materials were not available. In spite of that at the end of our period in office there were 116,000 more people in employment and purchasing national health insurance stamps than there were when we came into office. For every three employed in 1932 there were four employed in 1948. That was a notable and remarkable achievement under enormous difficulties because it was far more difficult to employ men under our economic circumstances than it has been in the last three years when our agricultural prices were three times what they were before the war and when there was an unlimited market all over the world for our major industry and export, namely, agriculture, and when we have benefited very largely from the enormous influx of tourists. That is one of the things we must take into account.

The last Government based a great deal of their financial policy on the assumption that Marshall Aid would continue; now it has come to an end.

Most of the last Government's plans for capital development were based on Marshall Aid. One of the difficulties with which the Minister for Finance is now faced is the fact that Marshall Aid has ended. That will make a very serious difference in our plans for the future. We shall have to finance from other sources expenditure incurred by the last Government using a Marshall Aid loan—a loan which will have to be repaid from 1952 onwards.

The last Government were faced with exceptionally good circumstances. We were faced with the triple difficulties of our own economic dispute, a world depression and a world war, and the amount of work and effort and inspiration required to put one man into employment in our time was three times that required to put one man into employment during the period in which a Coalition Government was in office.

I mention these things because facts like these are very often forgotten. We left the last Government 76 separate plans for the development of the nation. Any new plans they conceived were largely extensions of Fianna Fáil plans, using Marshall Aid money for their operation—money which we did not have available to us during our term in office. The land rehabilitation scheme was an extension of our plan. That was a scheme about which much was said up to the time the last Government left office but very little was achieved. Theoretically the basis of the new scheme was an extension of the old Fianna Fáil land improvement scheme, which was immensely popular and which resulted in tens of thousands of acres of land being drained, and on which we spent over £3,000,000. The new extended scheme was, of course, based on Marshall Aid assistance.

Why did you try to sabotage it in the last three years?

There was no effort to sabotage it. The actual fact is that the present Minister is doing his best to carry it on in its original form.

In a modified form according to himself.

We have yet to see proof that it will be an effective scheme. We are very anxious to carry out the drainage of the country. We are faced with one very difficult problem. There are three types of drainage—arterial drainage, the Local Authorities (Works) Act and the land rehabilitation scheme.

Do not tell us that was your idea.

It is very necessary for the Minister for Agriculture to ensure proper co-ordination between all those schemes or our last state will be worse than the first. Drainage requires the most careful consideration. There are certain counties where land has been drained under the Local Authorities (Works) Act. As a result of that some rivers are flowing more swiftly into other rivers which have not yet been surveyed under the arterial drainage scheme. These rivers are overflowing and for every farmer who has benefited there is another farmer adversely affected because he is subject to more flooding.

Does not the Minister think he is digressing?

He is because he has forgotten that he voted against the Local Authorities (Works) Act eight times.

We did not.

Of course you did.

We did not. Look up the records. Only we amended it, it would be a worse mess than it is.

May I submit that it is hardly a digression. The Local Authorities (Works) Act was a scheme involving the expenditure of several million pounds. I think the announcement was made that it was to be financed from American money. I think that was one of the schemes that was earmarked for E.C.A. financing. In respect to a large number of works carried out, I want to say again that there has been absolutely no arrangement made for their maintenance. There is no law by which they can be maintained, and no principle by which they can be maintained. We have to face the difficulty now of seeing how they are going to be maintained and what money we are going to find for their maintenance. As everybody knows, a newly drained river about five or six yards wide, when drained for the first time is more vulnerable than ever before to sudden floods.

That is one more example of the difference between planning a new policy carefully and just rushing ahead without thinking of where you are going and how you are going. I have no doubt that the various members of the Government who are responsible for the different types of drainage will work out a co-ordinated scheme, and will see that a reasonable amount of drainage of every kind continues to be done in the country. There is a vast difference between carrying out properly co-ordinated drainage schemes and spending large sums on drainage for which no arrangements have been made for maintenance.

I think the House has been very patient in listening to my observations on the general financial position. I want to conclude by saying again that I think that on the whole the Central Bank Report is going to prove a very useful stimulant for the consideration of our financial position. The facts in it provide a salutary shock for the nation. There is no possible way out of the difficulties we are facing except by the application of the normal financial principles accepted by intelligent countries throughout the world.

One of the main principles is this, that if we are going to borrow for capital development and ask the children of the next generation to accept the burden, there must be sufficient savings provided for that borrowing. The money cannot be provided by switching Government funds. It cannot be provided by making use of the Marshall Aid Counterpart money which very soon will not be in existence. In most of the advanced countries in the world, capital borrowing for capital development is approved, understood and accepted. It is no novelty in this or any other country, but it must be met from the savings of the people. Nations which tried to finance expenditure otherwise, in many cases became distatorships before the war, and the value of their currencies declined. That is the lesson which the people of this country have got to learn. It can be learned now before it is too late, and before we have to institute drastic measures, many examples of which I have given and have been adopted by other very intelligent small nations with economies more controlled and in some cases far more socialistic than our own.

I must say that I thoroughly enjoyed the speech delivered by the Minister for Posts and Telegraphs. My only regret is that the Minister for Industry and Commerce was not present to hear the speech, because now, quite clearly, we have not one Government in office but we have got two Governments in office. The Minister for Posts and Telegraphs represents one section of the Government and the Minister for Industry and Commerce represents an entirely different section. The Minister for Posts and Telegraphs is going out as audaciously as he dare in support of the views expressed in the Central Bank Report. He made it perfectly clear, I think, that so far as he is concerned, the Central Bank Report is a document which impresses him and that it is a document which is going to inform and guide his policy in the future.

I said nothing of the kind.

Last night we had the Minister for Industry and Commerce saying that the views expressed by the Central Bank and its suggestions for solving our problems were diametrically opposed to his views. He had no use for the views of the Central Bank last night. He had less use for their suggested remedies, and, in fact, last night the Minister for Industry and Commerce definitely took the stand that, so far as he is concerned, the Central Bank Report was just waste paper. The Minister for Posts and Telegraphs came in here to pay tribute to the Central Bank Report. Quite clearly, he is very largely in the same boat, in his approach to our problems as the Chairman of the Central Bank and the authors of the Central Bank Report.

Now, it would be interesting to see where the Minister for Finance stands between these two rival Governments. We have the Minister for Industry and Commerce leading one section of the Government and we have the Minister for Posts and Telegraphs leading another section. The Minister for Finance has yet to say where he comes in in this matter. When all that is finished with, Deputy Cowan will probably tell us towards what section he is gravitating as regards the problems which now confront the nation. If this Coalition Government which is now in office, buttressed by Deputy Cowan and some of his friends and ex-friends, can remain together, and if the present Ministers can sit in the same council chamber together, then somebody has got an india rubber conscience, and somebody has got a very good system of digestion because they are going to swallow a lot of the words that were used here yesterday and to-day and during the past few months around the country.

I must congratulate the Minister for Industry and Commerce on his speech yesterday. I do not agree with a lot of it, but it represented, in my view, the great conversion of the Minister for Industry and Commerce, because for weeks the Minister had spent his time going to banquets and dinners and, in the midst of these sumptuous meals, he delivered himself of weary, dreary and gloomy speeches. In fact, one would think that, in the financial sense, the world had come to an end, that is if one were to pay serious attention to the speeches made by the Minister. Quite clearly, his speeches were motivated by the Report of the Central Bank, and quite clearly he had the Report of the Central Bank in his possession when he started making those speeches. Quite clearly, too, the Central Bank set the pace and pulled the Minister after it while he was making those speeches around the country.

We were told that we were consuming too much, that we were eating too much, that we were wearing too much clothes, and that we were enjoying a standard of living such as we ought not to aspire to: that, generally speaking, we were living beyond our means. Who is living beyond his means? Is the agricultural worker, who is getting £3 11s. a week, living beyond his means? Is the industrial worker who is not getting the same real wages that he had in 1939, living beyond his means? We ought to have from the Central Bank and from the Government Benches an indication of the sections of the community who are living beyond their means. The outstanding fact remains that, in this country, profits and dividends have risen many times more than the real wages of workers.

The rich people of this country have got richer during the past 12 years and the workers of the country have not been able to maintain their real wage standard of 1939. We were told, and used to believe at one time, that our low standard of living was caused by and was, in fact, the outstanding characteristic of the oppression and exploitation of this nation by a foreign occupying authority. We were told then and believed then that political freedom would mean a better standard of living and that poverty, idleness and low living standards were merely the characteristic of that foreign oppression.

If we are to believe in the views expressed by the Central Bank and if we are to believe the gloomy speeches which have been made in recent weeks by Ministers of the Government, then quite clearly that was a foolish impression for us ever to have cherished. We are told now, in effect, by the Central Bank and by the gloomy speeches of the Minister for Finance and the Minister for Industry and Commerce that you create wealth and prosperity by cutting down expenditure, by consuming the barest minimum, by getting back to rags, poverty and slums, with large-scale unemployment used as a means of avoiding State investment in capital schemes of expenditure.

I reject that viewpoint because, in my view, it constitutes a vicious philosophy. It has been discredited in every country in the world and there is nobody now so intellectually poor as to pay honour to that 18th century philosophy. The Central Bank Report clearly indicates that the directors of that bank who signed that report and who agreed to that report are living in the 18th century. In fact, as I read the report I would be inclined to say that even Queen Victoria herself was a Radical compared with the directors of our Central Bank in the year 1951.

What does the bank report mean if adopted? Anybody reading the bank report can have come to no other conclusion but that, if adopted, the report of the bank means wage freezing, a lower standard of living, mass emigration, fewer homes, fewer houses and dearer houses. It means a curtailment of expenditure on electrical development, on drainage, on land reclamation, on the building of schools, hospitals, sanatoria, on afforestation and all the other worthwhile schemes of work which require to be undertaken in this underdeveloped country of ours. In short, the Report of the Central Bank plumps strongly for a deflation policy, which is an advice to the people of this country to get back to free trade, to get back to grass and bullocks and to restrict industrial development and to regard ourselves as the producers of cheap beef in order to create sterling assets in Great Britain. I reject the report because, in my view, it will encompass slavery and economic devastation in this country which not even foreign occupation over a period of 700 years has been able to inflict on our people.

We have heard, and I suppose before this debate ends, will continue to hear, sermons from the Government Benches about the disequilibrium in the balance of our payments. We knew there would be a gap in the balance of payments once we undertook large-scale schemes of capital development and once we told our people to stockpile, because nobody could foresee the future, because nobody knew when goods would be available or what goods would be available. It is better to buy now at the prices you can to-day rather than hold your money and take the chance of buying the goods when, perhaps, they would not be available or perhaps when the price might be substantially higher than they were being offered at the time we told our traders, our manufacturers and our merchants generally to stockpile.

What is wrong with having a disequilibrium in the balance of our payments if we have utilised our foreign assets for the purpose of buying goods to put into our own granary for the use of our own people instead of allowing our money to remain under British control and British domination depreciating there in accordance with Britain's current economic and military fortunes? If we were ever to effect a repatriation of our foreign investments we could only do that by permitting a disequilibrium in the balance of payments to continue for a substantial period, because that is the only way we could ever effect a repatriation of our capital. The people who talk about wanting to repatriate capital and still hold their hands up in horror at the prospect of a gap in the balance of payments do not understand the economic forces which go into action once you try to get your foreign investments out of another country. I am not worried about the gap in the balance of payments so long as it is a controlled gap, so long as we can see it and can measure it, and so long as we have resources to keep that gap under control. We have an abundance of resources.

The Minister for Posts and Telegraphs talked through his hat this evening when he was telling us of the experience of certain European countries. What he did not tell the House was that every single one of those countries had foreign debts, that they had no foreign assets, that they had nothing to draw upon and that they had nothing left except what was on their own kitchen dresser and that they were war-ravaged countries. When he was invited by Deputy Davin to quote the case of the country nearest our own in its economic setup, Belgium, he ran away from that and said:—"Belgium has money invested, Belgium holds foreign assets and she has got goods in her own colonies which she can sell to the United States."

We were never in the position since the war of those other European countries quoted by the Minister for Posts and Telegraphs. We are in a far better position, we are one of the biggest creditor nations on the face of God's earth to-day, and when we are talking about our poverty and our crises we must not forget that every one of those countries in Europe to-day would give a lot if they could have got their hands on our foreign investments. What is the use of talking to the Dáil as if everyone was a simpleton and did not know the facts of the economic situation of those countries which have no relation to our circumstances whatever. We have got £400,000,000 invested in Great Britain to-day and it is permissible to use those funds to buy goods for our own people, to use that sleeping money, on which we are getting practically no interest in present circumstances, for the purpose of putting goods into the homes, on to the tables and into the wardrobes of Irishmen and women throughout the country.

I think our advice to the people to stockpile was wise advice. It enabled us to get goods at a cheaper price than we could get those goods now and it enabled us to make sure the goods would come into the country and be under the control of our people. Apparently, in the view of Fianna Fáil and in the view of the Central Bank, what this country wants is a hair shirt policy. According to them, we should live from hand to mouth. It is the view of the Central Bank, and it seems to be the view of the Government, that it should be the privilege of the Irish race to eat as little as possible, to wear as little as possible, and to have as few of the pleasant things of life as possible. Should one demur from that point of view one is told that such is the privilege of living in Ireland. I reject that philosophy. I do not think the Irish people would stand for that philosophy. So far as the Directors of the Central Bank are concerned, they are living in cuckoo land if they imagine the people of this country will stand for the policy advocated in their report.

Probably one of the biggest mistakes which we made was that we did not use our external assets to a greater extent in the years immediately before the war. If we had held less sterling assets in Britain during the war, by reason of the fact that we had repatriated them for goods, even consumer goods, we would have got more value for our money, and these assets would have not have deteriorated in British hands from 1938 to 1948 to the extent that they did. Let us take an example, according to the information supplied in answer to a parliamentary question yesterday: every pound which Britain owed us in August, 1948, every pound they had written into their ledger as being due as a debt of honour to us, had shrunken in value to 10/11 by February, 1948. Therefore, every pound which we lent Britain in the years before 1939 would buy for us to-day goods to the value only of 10/11. Still, some simple-minded folk say we ought to continue to keep our money in British banks which cheat our people of the value of their deposits. Is it not, therefore, sheer lunacy to leave the money which we could profitably expand on goods in an institution where its value has been depleted from 20/- in 1938 to 10/11 in 1948. Nevertheless, the directors of the Central Bank say: "You ought to be privileged to be allowed to be a customer of the Bank of England. You lend them your money and they will dole you out 10/11 for every pound which you deposit." If one gave such advice to the ordinary person in the street, one would be prosecuted for ringing the changes. Yet, we accept it as a correct practice when dealing with the Bank of England. There is this further consideration that, because every pound is now only worth 10/11, Great Britain has halved the value of our sterling assets because of her desire to go her own way in the matter of war, economics, and her general fiscal policy. Should she be engaged in another war or should the crisis hit her with the impact she now thinks possible, we may discover that every pound we have deposited in the Bank of England will buy only 5/- worth of goods by the end of 12 months. Still, people say that our destiny and our well-being are bound up with leaving our money under the control of an institution which has caused such a shrinkage in the purchasing power of our deposits. If anybody believes in these theories on economics, he is welcome to them, but I think they are the economics of the mentally deficient. So long as we want consumer goods or capital goods, we should use our sleeping money, which is being lent to Britain, at practically no rate of interest so far, to buy goods, consumer and capital, for the use and benefit of our own people.

Both the Minister for Industry and Commerce and the Minister for Posts and Telegraphs have clearly indicated in their speeches that they believe our well-being to be bound up with our anchorage to sterling and with keeping our money in the Bank of England. The Minister for Posts and Telegraphs chided Deputy MacBride for his views on sterling, or rather Deputy MacBride's views on the matter of the abandonment of sterling. Deputy MacBride, however, had good companions on the philosophy which he was postulating this evening, because, at one time, the present Minister for Finance gave utterance to his views on sterling and on banking. These views were expressed in the Irish Press of 29th September, 1931, and are as follows:—

"Even before that Party (Fianna Fáil) went into the Dáil its members had directed public attention to the dangers to which our people were exposed by reason, not only of our attachment to sterling, but of the short-sighted policy of the Anglo-Irish bankers in investing their depositors' funds in British securities. The Free State Government under President Cosgrave has been on the side of Britain; the anglo-Irish bankers have been on the side of Britain; the Currency Commission has been on the side of Britain."

No more worthy brave ever stood firmer on the side of Britain in this matter than did the present Minister for Finance. Let us turn now to the present Minister for Industry and Commerce, Deputy Lemass, who was the radical in those days but who is the ex-radical to-day. He delivered a speech at a meeting in Dublin in which he foreshadowed the establishment of the Central Bank in Dublin and the creation of a currency on an independent basis with a view to saving Ireland from the dangers of a British financial crisis. Deputy MacBride may well blush for the kind of men who support his own point of view. Another speech delivered by the Minister for Industry and Commerce and reported in the Irish Press of 14th September, 1931, is well worth reading. He used the following words:

"It was a very long time since the Irish people had experienced circumstances so bad as those now existing and this was due to our financial subjection to England. When the Free State Government decided to tie up this currency with British currency and to permit Irish banks to maintain their English entanglements, it destroyed with one blow the greatest benefit secured by the Treaty. When the Irish people struggled for independence it was not merely to enjoy the spectacle of green pillar boxes and uniforms and payment of taxes to an Irish-speaking Minister for Finance, but also that the forces which had produced depopulation and poverty in the country in the past could be checked and harnessed for the public good. Poverty persisted and depopulation continued because in financial matters the same conditions prevail now as before the Treaty...."

That is the Minister for Industry and Commerce. He held himself forth, when he uttered these views, as one who was going to throw sterling to the winds. He would have nothing to do with British pound notes. He would not corrupt himself by taking a pound note in his hand. This pure-souled gentleman would not a touch a £10 note issued with British backing. Yet to-day we are in precisely the same position as we were at that time and the Central Bank Act of 1942 copper-fastened our anchorage to British sterling. We are now in the position in which our money is interchangeable with British money but before we can issue a £1 note through an Irish bank, we have got to put into the vaults of that bank £1 of English money as a guarantee for our £ note. Yet the British £1 note is no longer covered by gold; it is doubtful even if it can now be covered by galvanised iron. If we do not get a British £1 note and put it into the vaults of an Irish bank, in order that we may issue an Irish £1 note, we have got to get British securities as backing for the Irish £1 note. What are British securities to-day? British securities to-day represent bonds which Britain has issued to people who lend the British Government money which will be repaid, perhaps some time in the sweet by and by when Britain is in a position to repay it, perhaps in a depleted currency. That is what we are anchored to to-day. That has been done by the worthies who made these speeches to deceive simple Irish folk at the crossroads. Later, having power in their hands for 16 years to change our anchorage to sterling, and to establish the financial independence which the Minister for Industry and Commerce pretended he wanted, they refused to do anything of the sort and instead riveted this country more firmly than ever to British sterling.

We have heard the Minister for Posts and Telegraphs' lamentations about what would happen if our sterling assets were dissipated but wait until the Minister for Finance who, in this matter of prophecy, is the ace purveyor of gloom, gets on his feet. I bet you you will cry at the picture he will paint of the plight of the £1 note and the rough time it is having these days. I ask the House can it place any reliance on the views expressed by the Minister for Industry and Commerce or the views of the Minister for Posts and Telegraphs or whatever we are going to hear from the Minister for Finance, having listened to what they told us in years gone by and knowing, as we do, that they completely turned their backs on the remedies they then suggested as a means of deliverance from British bondage? Anybody who likes to follow them can do so but I warn them that they will experience the same disillusionment as the simple-minded folk who believed in these speeches when they were made by Fianna Fáil speakers.

If the Central Bank Report ever had a brother, or could have one, that brother is surely the White Paper issued by the Minister for Finance. The White Paper is the twin brother of the Report of the Central Bank and what a pretty set of twins they are! If there was never a cover on the White Paper, one would know from whence it came. There was the smell of the Department of Finance about it. It did not need a cover; you just knew where it came from. I have been reading documents I got for three and a half years from that Department and I can say that one would want to be made of granite to withstand the gloom which these documents generate. There are some people in that Department who could cause more gloom and devastation in an acre of land than a volcano in South America. We saw these documents from time to time but I was never impressed by them. I have got nothing but admiration, personal admiration, for the officials of the Department of Finance as officials, but the manner in which they can develop a deep financial melancholia and recover from it so speedily causes my blood to tingle and always convinces me that there is no limit to human endurance. Ordinarily, they are the most charming set of people one could wish to meet. They are just like ordinary mortals, just like ordinary people——

Except that they tell the truth, which is more than you do.

Would Deputies have a look at George Washington?

They are, as I say, like ordinary mortals. They enjoy life and the amenities and frolics of life and act generally like ordinary human beings when they are dealing with any other subject in the world but get them on to a Budget or on to Estimates and every scrap of humanity evaporates from their minds and bodies immediately. Figures and statistics replace all the humanity which they ordinarily possess. They cultivate a language entirely their own and, speaking from experience, I can say that nothing will produce depression in weak minds more quickly than the vocabulary they use. They have got a most forbidding vocabulary——

I do not like to interrupt the Deputy but I think there is a convention that officers of a Department may not be attacked in debate in this House. The Deputy is quite welcome to say anything he likes about me because my turn is coming to say what I like about him.

I am not attacking any individual. I am just explaining to the House a condition of affairs that other Deputies have also experienced. Deputy Costello also saw these documents and his reaction to them was the same as mine. Even Deputy Lemass made a speech from these benches on one occasion and told us beware of the kind of folk one met in the Department of Finance. "They will scotch everything you want to do," he said. That reference to the officials of the Department of Finance was apparently in order and will be found in the records of the House. As I have said, I have nothing but admiration for these officials as officials and colleagues but I do not agree with their philosophy or their outlook in financial matters and I shall not allow them to depress me by the use of such words as "deficits,""inflation,""disequilibrium,""interest charges," and all that general jargon of gloom. I shall not take the slightest notice of reports couched in language of that kind by people whose training possibly leads them to see the worst side of life and to use such terms to prevent radical or liberally-minded people from getting on to prosperity and security as quickly as they would like.

This White Paper is a disgraceful document, a thoroughly disgraceful document, quite unworthy of the expenditure of any serious time upon it. It is like an obituary notice, so far as the Irish people are concerned. There is about as much enthusiasm for the future of the Irish nation in it as one would find in an obituary notice. It displays the same mentality, the same fears, the same doubts, the same inhibitions as are revealed in the Report of the Central Bank and, quite clearly, this was issued to cap and to give governmental approbation to the report issued by the Central Bank.

Of course it was.

This is the Government's method of flanking the Report of the Central Bank, to indicate: there is the red flag put up by the Central Bank and here is the confirmation of it and now all get ready to consume less, all get ready to depress your standard of living, all get back to your rags as quickly as you can, for 12 o'clock has come and Cinderella must get out of her glass slippers and get back to the cinders. That is the philosophy about this report.

I was glad to see the Tánaiste repudiate the Central Bank's Report yesterday. I want to ask him now one question. Does he repudiate the White Paper, because you cannot repudiate the Central Bank's Report and stand for the miserable gloom that enshrouds this report. If the Minister for Industry and Commerce says he supports the White Paper and the pointers given in the White Paper, then in fact he stands for the Report of the Central Bank. We are entitled to know from the Minister does he repudiate this document in the same way as he repudiated the Central Bank's Report and we will be interested in hearing the reply from the Minister on that matter.

At all events, we will be glad to know how far he is going to travel on the road with the Minister for Finance and how long he is going to travel on the road with the Minister for Finance because yesterday's speech by the Minister for Industry and Commerce clearly indicated that he has got some political graphs from the country about the gloomy speeches he was making. He sees that the country will not wear this mantle of gloom and, like the artful politician that he is, he trimmed his sails yesterday and said: "I am not going to ride into what may be a hurricane. I will trim my sails. I will alter course and, in the long run, I will convince the people that I never meant these gloomy speeches at all and I am the leader of the attack on the Central Bank Report." Quite a clever piece of manoeuvring.

It will be interesting to see how far the Minister for Finance will let the Minister for Industry and Commerce get away with his denunciation of the Central Bank's Report. If the Minister for Finance runs true to form and I have my own experience of seeing him running in this House, I will wager that before another week is over the Minister for Finance will come out with one of these crisis speeches which will be a complete cancellation of the speech made by the Minister for Industry and Commerce yesterday.

The Minister for Posts and Telegraphs has already set the pace, making it clear that one section of the Government is prepared to render obeisance to the report and ready to accept whatever philosophy, outworn though it may be, is contained in it.

Reference has been made to price control and price freezing. In that connection I want to put my point of view and the Labour Party point of view on what we think was, and is, a responsible approach to the whole problem of price control. We were faced last December with a situation in which sheer uneasiness and anxiety and a scare atmosphere were operating to increase prices. There was abroad a general atmosphere of yeastiness in which people felt they did not know what was going to happen next.

That was what the Government felt.

In such circumstances, quite clearly, the people were going to get a very raw deal if everyone was allowed to charge whatever price he thought the circumstances justified. We imposed then a price freeze, as wide a price freeze as we could manage to devise. The purpose of that price freeze was to hold commodities at that level, not for all time, but until such time as we could make an individual maximum price Order for the various articles caught within the freeze. It might well be that articles were caught in the freeze that it was not worth while freezing or controlling. If you caught tall hats in the freeze, you need not bother or if you caught walking sticks you need not bother. We wanted to freeze all prices until such time as we got a chance of making a maximum price Order in respect of every commodity, so as to make sure that there would be an increase in price only if a public tribunal, the prices tribunal now sitting, and the Minister were satisfied that there was justification for an increase in price. I think that was a sound approach to the problem of prices. We decided to freeze them, to hold them there in a group and take them out one by one and make maximum price Orders and then take steps to enforce these maximum price Orders and prevent the public being exploited by any real or artificial scarcity that might be created.

Now, Cinderella, that is a good fairytale.

We created at that time a prices tribunal. It is no fairytale and if the Minister has such faith in the officials of the Department of Finance they will confirm the truth of what I have stated and, if he likes, I will put down a question to ask him will he do it. It is well known that that is what we intended to do and the officials of the Department of Industry and Commerce were told. I challenge him to deny that that is what they were told and that that is what our intention was. We created a tribunal, the first prices tribunal that was created here, with wide powers, for the purpose of hearing in public any application for an increase in price.

If workers had to go before the Labour Court and make a case there in public for an increase in wages, we wanted to end the star-chamber methods by which those who had goods to sell could go into the prices section of the Department of Industry and Commerce and, with no public examination of whatever case they made, could get an increase in price which the public could not understand and which was never explained to the public. We set up that public tribunal with the right to hear applications in public with a view to creating an informed view on the whole problem of prices. We took the view that if there were claims for increases in prices, those who wanted the increases would be dragged out in public and told: "Go before the Prices Tribunal. Make your case there. Tell the public what the facts are. Let a competent tribunal assess the merits of the claim. Let them report to the Minister and let the Minister decide whether, in the circumstances, he would approve of an increase in price."

The butchers.

The butchers? What about the butchers? You will hear about the butchers, I take it, in due course. I am telling you my view about increases in prices, my view about examination of prices, and I want to ask the Minister for Industry and Commerce has he any better machinery now to suggest than the machinery which was given to him? The one thing I do say is that, in any case, from the point of view of the public, they got far better protection from a public Prices Tribunal than they ever got or ever would get from the prices section of the Department of Industry and Commerce.

The tribunal had some strange experiences when they came to deal with applications for increased prices. They had experience of one group going in to make a claim for an increase in the price of jams—and yet they did not know what the jars were costing. That group did not know what the jars were costing and yet they tried to show that their costs were going up. Then there were coal merchants who could not be precise on what their particular costs were in certain aspects of the coal trade—but they would have another guess. Then we had the famous case of the laundries. They went before the tribunal and asked for an increase in prices. The Prices Tribunal turned them out. They gave them no increase whatsoever because they were not satisfied that they were entitled to an increase. They told the laundry people that they got far too much previously from the Prices Section of the Department of Industry and Commerce. If the laundry people had gone on the beaten track to the Prices Section of the Department of Industry and Commerce they would have come out rubbing their hands and looking happy. However, they went to the Prices Tribunal—and they got no increase from them. In addition, they were told by the Prices Tribunal that they got far too much when they were allowed to charge an increase of 5d. in the 1/- to those who sent their clothing to the laundry.

My only regret is that the Prices Tribunal did not do its job in a different kind of way. Many of the applications which the Prices Tribunal hear are heard in public. To that extent, and to the extent that the Press report the proceedings, one can get the general trend of the factors which influence price movements in a particular trade or industry. Many applications were dealt with by the Prices Tribunal and subsequently an increase was recommended.

By reason of the fact that the Prices Tribunal were, apparently, for some reason or other not allowed to make an explanation, the public did not understand the reasons why many of those who sought an increase in prices came out with only a fraction of what they hoped to get when going in. To the extent that the Prices Tribunal cut substantially the demand for increased prices and gave only a fraction of what was claimed, they rendered very valuable service to the consuming public.

When the Prices Tribunal have considered an application which has not been heard in public, they should issue a summary with their recommendation indicating that X industry applied for X increase per lb. or per yard in respect of the commodity which they produce. They should indicate that they have considered the claim and have decided that they could not award X increase because the industry did not make a case which would justify an increase in price to that extent. They should then say that, instead, they have awarded 20 per cent. of X increase in price and that, to that extent, they have saved the public the difference. If the Prices Tribunal were allowed to issue a report or make a statement of that kind—indicating the precise claim presented, how they dealt with the claim and what they finally awarded—I think you would get a still greater measure of public confidence in the tribunal which is functioning to-day.

I do not think it can be contested that the greater the likelihood of an increase in prices the greater need there is for a public examination of every claim for an increase in prices. Of course, it may not in present circumstances be possible to keep certain prices down, particularly when there is a substantial import content in the manufactured article, but at least the public ought to be allowed to hear the case for the increase. They ought to have an opportunity of going to the tribunal and they ought to be allowed to know—and it should be our business to inform them—the factors which make for an increase in prices in present circumstances.

We should make sure that because a commodity is scarce it will not be sold to the public at an exorbitant price. The greater the scarcity and the greater the tendency for prices to increase, the greater the necessity for a public tribunal and for a public examination of the factors which are brought to bear on the fixation of prices. I have nothing but admiration for the work which the Prices Tribunal have done. My only regret is that, in that particular sphere to which I have just adverted, the tribunal were not allowed to tell the public more in connection with the valuable work which they performed. I hope a way will be found of enabling them to tell the public of the problems which confront them and to explain to the public by their statements the manner in which they protect the public against increased prices.

What this Government or any other Government has to do is to convince the public that an increase in price is not given merely because it is asked for. It has to convince the public that a case has to be made and proved, and more than proved, before an increase is granted. So far as this Party is concerned, we stand for a policy of a Prices Tribunal on which the consumer is adequately represented. We stand for a policy of having applications heard in public. Give the public, if they want to exercise it, the right to go there and make whatever case they may desire to make. Inform the public of the factors which make for increased prices and show the public, by a careful sifting of the applications and by a curtailment of price increases or a rejection of applications for price increases, that the Government in office is endeavouring to protect them against any rapacity on the part of those who have an interest in getting the highest possible price for any goods which they supply or any service which they run. Any policy which will do that will have the support of the Labour Party. We want to make sure that prices will be kept as low as is economically possible. We want to ensure that the public will be protected against high profit-taking in scarce commodities and that an international situation will not be used in such a manner as to exploit the consuming public by failing to put at their disposal the protection afforded by a prices tribunal.

The Minister for Industry and Commerce, when speaking on this Bill yesterday, referred to the necessity for industrial expansion. The Report of the Central Bank clearly indicates that in their view the crisis—because to them it is a crisis—is to be dealt with in a variety of ways, all of which lead to deflation. We are to stop capital expenditure. We are to restrict activities unless they yield dividends or an immediate return and, generally, we are to retrace the steps which have been taken in recent years to develop our resources to the utmost. I do not believe and this Party does not believe in a policy of cutting down consumption of necessary articles of food and the purchase of clothing and of the other thousand and one things which have come to be recognised as the rightful possessions of people who are entitled to a decent standard of living. Do what you like with the luxury commodities. That will not worry us. Do what you like with the £1,000 mink coats which are advertised in Dublin and all the other varieties of animal coats which are likewise advertised there. You can do what you like in that way. This country would not be a bit the poorer if it never saw one of them for the next 20 years. So far as consuming food, wearing decent clothes and enjoying the commonplaces of a civilised life are concerned, I reject completely, as an economic fallacy, the views of the Central Bank and the gloomy speeches of Ministers that there is a remedy to be found in cutting down our consumption. There is no remedy to be found there. That is an illusion. The Minister for Industry and Commerce said yesterday—how long he will hold the same point of view I cannot say until the Minister for Finance speaks—that in his view— and this was a conversion from the gloomy views which he previously expressed—the best way of dealing with whatever problem exists—and he called it a problem yesterday but in his previous speeches it was a crisis— was by increased production.

I agree with that. It is an archaic notion to imagine that in 1951 in our circumstances with £400,000,000 invested across Channel we should ask our people to do without the decencies of a civilised life. We should not do it and they are fools to listen to a philosophy of that kind. Let the people who are consuming and using the excessive luxuries start on the cutting down but so far as the masses of the people of this country are concerned, they are entitled to the attributes of a civilised life. Living in Ireland should not always mean living in poverty and penury. Our people are entitled to a decent standard of living and political or financial whacks ought not to induce them to take any other road but the road that will lead to a decent civilised life.

I agree that whatever problem that has to be dealt with can be best dealt with by an expansion of our industries, our agriculture and by the fullest development of our national resources. We in this Party believe and will stand for and have always stood for a policy of the fullest industrial expansion. We ought to produce everything that is capable of being produced in this country within reason. We ought not to try to produce commodities where the machine which makes them will produce in a week all that we need for a year, but in so far as we can at all approach economic production we ought to produce these commodities to create wealth for our people and to provide expanding opportunities of employment for our people. In that policy of developing our industries I would use tariffs, quotas, exclusions and everything else that would be effective.

A word of praise for those who start.

Instead of abuse.

Particularly for those who deserve the praise. I would publish their names annually but I would do something else with some other boyos. I will come to them in a minute. I would use every resort possible to protect the home market and give those who invest their capital a fair chance of training green labour to produce the goods. I would ask the consuming public to stand between them and unfair foreign competition until they got a chance of coming out of infanthood, passing through adolescence and making a reasonable progression towards manhood. However, the State, in my view, will have to do much more than it has done in the past in this respect.

I hear statements being made from Government Benches about the necessity of doing something to industrialise the west, north-west and south-west. Nothing will ever be done in these areas at all unless the State plays an active part in creating conditions in which industries will be able to establish themselves and in which the State will establish State-owned industries. Approximately 35 per cent. of the people drawing unemployment assistance benefit live in four counties, north, midland, and south-western counties approximately. Their normal industry is unemployment. There is no other industry in the place capable of absorbing their energies. Unless we are to permit that condition of affairs to grow the State must intervene by afforestation and land reclamation. These in time will produce results but the most enduring results will be produced by establishing factories in these areas in which our people could get employment and which could be looked forward to in the future as providing an outlet for the adolescent boys and girls who come to seek employment instead of consigning them to British cities in order to get employment. That can only be done, in my view, if the State will take a hand in the building of factories and let, lease or lend these factories to any group of people who will be prepared to establish an industry. It is only by the State doing that that you can hope to make an adequate impression on the deplorable unemployment which is endemic in these particular areas.

If I said that we should use tariffs, quotas and exclusions to protect industries, I do not think we should do that in any blindfolded fashion. If we impose tariffs, quotas and exclusions to help manufacturing industries, we ought to insist that there will be some dividend for the public. We must insist, firstly, that the tariff is used to enable the factory to become as efficient as it possibly can in the shortest possible space of time and, secondly, it must produce high-class goods, it must be a decent factory building and the workers employed there must be paid decent rates of wages. Every week, every month and every year that tariff continues, I would impose on the manufacturer the obligation to show that he was doing better as the weeks, months and years rolled by.

I would not allow him to sit down secure that he had now reached the optimum of his affluence when he had produced 20 per cent., 30 per cent. or 40 per cent. of the demands of the home market. Is it not true to-day that we have imposed tariffs in respect of the importation of goods where the home factory after many years is still not supplying even 50 per cent. of the home market requirements? We should insist that these people if they get a tariff will be made produce for the entire home market. They should not be allowed to go to sleep and to feel comfortable simply because they are making a certain rate of profit or have a certain income. They should be told that there is more in this than personal profits, that the nation's wellbeing and the national needs are at stake. If they are to get tariffs then they should be tariffs of a supervised kind by which they would be compelled to reciprocate in increased production for the protection which the nation affords. I move the adjournment of the debate.

Debate adjourned.