I pointed out last night, when this motion was under discussion, that I could understand the point of view of those who, until the different devaluations took place, considered that the wise policy was to export the savings of the nation and invest them in England. I could understand that viewpoint, though I do not agree with it, for a number of considerations to which I referred; but I do submit that the time has not merely arrived, but has passed, when that policy should be considered in the light of existing circumstances.
One of the difficulties which I have found in considering this question, or in preparing material for this discussion, is the lack of information which is available concerning sterling assets. I do not know why there should be a reluctance on the part of the Department of Finance to make the information available in the normal way, but it seems to me there is some shyness or reluctance in regard to it. The figures which are usually given concerning this country's holding of sterling assets are usually incomplete, or are what are termed by the Department of Finance the "net" sterling assets. I do not know exactly how the figure is arrived at, but I understand that, in computing the figures, the total gross assets are arrived at and that therefrom are deducted the holdings and the value of any property held by a firm not registered in the country. I understand that many large firms, which are certainly regarded as Irish firms and which carry on the bulk of their business here, are nevertheless registered in England and their assets are deducted from the holdings of sterling assets which this country has.
We have certain quite definite figures in this respect. We know that on 31st March last the Central Bank held £80.6 million. We know that the Government itself, in addition to the moneys held by the Central Bank, held £56.7 million. We know also that the eight associated banks held £252.1 million. We know that very considerable sums were held by other firms by persons and by insurance companies in sterling assets. Though I have put down repeated questions to the Government on that issue I have failed to elicit any information. I believe that that information must be available in some form in the Department of Finance. Possibly it may not be available in a very accurate form, but it must certainly be available in sufficient form to enable an estimate to be made.
From estimates that were made some three or four years ago by reputable economists here I think it would probably be an underestimate to say that "other firms and persons" hold at the present time something in the neighbourhood of another £160,000,000 in sterling assets, making a total, if that figure be correct, of £549.4 million. It is quite true that there are some British firms which have assets here. It is quite true there are certain calls that can be made. But, from the point of view of an examination of investment policy, I think that what really matters is the amount of money which we as a nation have actually invested in Britain.
What I say now is not by way of criticism of this Government in particular. It is a criticism of all the Governments that have operated since this State was established. By investing every penny of its money in England the Central Bank has, in my view, set a headline which will naturally be followed by the ordinary commercial banks. The Government, by investing £56,000,000 in British securities, has also set a headline which will inevitably be followed by the banks and other investors here.
I should point out that an interesting change has taken place in the holdings of sterling assets over a number of years. The percentage of sterling assets held by the Government and by the Central Bank has increased. I do not mean now an increase in terms of money; such an increase would take place because of the depreciation in the value of money and the increase in assets. But there has been a percentage increase in relation to the total holdings. For instance, the total holdings of the Government and the Central Bank in 1939 constituted 11 per cent. of the total sterling assets. By 1949 that had risen to 25 per cent. of the total.
The pursuit of that policy by our Department of Finance and by the Central Bank sets, in my opinion, a very bad headline and is responsible in no small measure for the fact that the country now suffers from underinvestment. I want to make it quite clear—and I trust the Minister will not try to misrepresent what I say, as has been done on several occasions—that the view I have expressed can be translated conveniently into the slogan: Break the link with sterling.
The "link with sterling" is not the one particular economic connection we have with Britain. We are a member of the sterling area. I do not think we can change that. I think that is something partly geographical and partly due to the economic and trade relations we have with Great Britain. I do not think we can alter that position at the present time. I regard as much more important than that particular connection the fact that we utilise our savings by investing them outside the country instead of at home. That is the more harmful part of what constitutes the "link with sterling."
I said yesterday that it is difficult to have an objective discussion on these issues. I do not think a democratic form of government lends itself to economic planning of a long-term nature. I do not say that by way of criticism of democratic government. It stands to reason, however, that governments are not always composed of people who know and understand economics or who have made a study of the economic problems of the country. As is inevitable in politics, persons are very often elected for reasons far removed from economic issues. Possibly they may be elected because they are able to make a good speech or because they Lave influence in some particular quarters of certain political Parties, or very often through historical accidents that place them in a position where they capture public imagination.
I am not saying that in derogation or by way of criticism of democratic government or of those who elect them, but I think we can accept it as a reasonable proposition that a democratically elected Government will not necessarily produce a set of economists or even one good economist among the lot.
As well as that, democratic Governments are not everlasting. They change from time to time, sometimes frequently; sometimes they can remain in office for a long period. Therefore, it is very hard to evolve a carefully planned economic policy unless it is agreed to by all sides, and unless some system of ensuring continuous development of that policy is established.
It has always struck me that we should aim at reaching agreement upon certain fundamentals of our economy, and that we should entrust a national economic council with the task of implementing that policy in conjunction with the Government of the day. The economic council would be a continuous link, if you like, in the development of our economic policy.
I know, of course, that a proposal of that kind has difficulties, but I think that the difficulties could be overcome if we could reach agreement on the absolute necessity of pursuing a vigorous policy of investment in the country, and if we could rid ourselves of this chronic desire, I may call it, that there has been to send all the savings of this country for investment in England.
The Tánaiste, in the course of a speech recently, referred to the inadvisability of allowing this country to be the pet of any other country, or to place itself under the economic domination of any other country. I am sure we can all readily agree with those sentiments, but I could not help wishing at the time I read that particular speech that it was not aimed at the fact that our economy had been kept subservient to the British economy. I feel that it is very hard to consider that we have economic independence so long as we are in effect a pawn in the British financial machine, so long as all our assets are tied up and we are so dependent on the British economic machine. My only regret was that that particular statement was not an indication that the present Government intended to alter their course in that respect.
Whether we want to increase agricultural production or whether we want to increase industrial production, the first essential is to be in a position to invest the amount of capital necessary in order to increase production. In the case of land it is a question of enabling the farmers to acquire the necessary machinery, fertilisers, grain, seed and so on that they need for their farms. In the case of industries it is a question of providing the capital necessary in order to create new industries or to expand existing industries.
There is not very much to be gained by talking about the need for greater production output unless we are prepared to have sufficient self-confidence to invest our own resources in the country and invest them fully in the country. Undoubtedly, it would have been much simpler if this process had been carried on more vigorously and with more determination in the course of the last 30 years, but it would be better to start putting such a policy into effect now than to wait until we have no capital left.
I hope that the Minister, in dealing with these matters, will approach the whole problem objectively. I know that a great many arguments can be put in favour of maintaining large sterling balance in England. I think that most of these arguments have practically disappeared in the course of the last few years.
I may avail of this opportunity to say that we all hope that the Minister for Finance will be successful in the course of his visit to London. It occurred to me that he has a number of cards in his hand which are of value. One of the very real factors contributing to the present unbalance in our trade is the fact that Britain failed in her deliveries of coal to this country, failed to carry out the letter and the spirit of the trade treaty into which she entered. As a result of that failure, this country was forced to expend vast sums of hard currency, principally dollars, in order to purchase coal elsewhere. There would be some justification if Britain's failure to deliver coal was due simply to the fall in her coal output, but on examination one finds that while Britain failed to deliver coal to this country she was exporting vast quantities of coal, far in excess of her treaty obligations to us, to other countries with whom she had no comparable treaty obligations.
She exported that coal to the Argentine, to Brazil, and to a number of other countries throughout the world in return for hard currency, and in some cases for commercial advantages. In other words, she supplied the coal which she had undertaken to supply to this country to other countries in return for hard currency, and forced us into outside markets, as a result of which we have had, over the last 12 months, to haul across the Atlantic coal at very high prices. It occurs to me that that is one of the matters to which the Minister for Finance in his forthcoming discussions with the British Chancellor of the Exchequer, might refer on the question of the balance of payments.
Another cause for the present unbalance of payments arises from the practice of dual pricing pursued by Britain for a number of years, as a result of which we have had to pay a higher price for coal than is charged on her home markets, while we get a lower price for our agricultural exports than the price she pays to her own farmers. I think I might also draw attention here to the vast sums of money which we accumulated in Britain during the war—accumulated by reason of our supplying goods to Britain. Now we have little or no prospect of ever securing the full value of those goods by reason of the depreciation in the value of money since. I feel it is no exaggeration to say that the money accumulated during that period has since depreciated by at least 50 per cent. in purchasing power. Therefore, in effect, we shall receive only half payment for the goods which we supplied to Britain during the war, when she needed them badly. I merely mention these matters as I am sure that every Party in the House would like to feel that the Minister for Finance will receive the backing of the country in any steps he takes to ensure that we secure complete freedom of action in regard to our sterling balances. There is not very much more which I could add to what I have already said. I hope it will be possible to continue this debate in an objective atmosphere.
