Deputy J.A. Costello gave notice that he would raise on the Motion for the Adjournment the subject matter of Questions Nos. 41-46 on to-day's Order Paper.
Private Deputies' Business. - Adjournment Debate—National Loan.
To-day I asked your leave to raise on the Adjournment of the House what I can only call the impudently evasive attidude of the Minister for Finance in dealing with the 18 questions I had down in reference to the recent National Loan and the two questions put down by Deputy Rooney. I have very little time at my disposal to make the protest, the strong protest, I wish to make against that attitude. All I can do this evening is to take some of the questions I have put down and put them into groups——
Is the Minister trying to waste time?
No, no. I am going to raise a point of order.
Is the Minister raising a point of order?
I am.
State your point of order then.
When the Chair requires me to do so.
You cannot interrupt me except on a point of order.
I shall hear the point of order.
I understood Deputy Costello this afternoon to give notice that he intended to raise Question No. 41 on the Adjournment.
I said that I intended to raise the whole range of questions I had down on this matter.
No.
And your failure to answer all the questions.
I did not see the notice which Deputy Costello gave to the House and I did not have an opportunity of refreshing my memory but I had some opportunity of seeing my script.
The notice given by Deputy Costello was in reference to Questions Nos. 41 to 60 and the Minister himself grouped them in his reply to-day.
I presume that I shall get credit for the three minutes of time which the Minister has now wasted and that they will be taken off the time which is usually allowed to a Minister to reply. I raised, as you have just said, this matter of the Minister's impudent evasion of the queries I put down in these 18 questions because it is a matter of supreme public importance. I intend, as I have said, because of the limited time available to me to-night, merely to cover in broad outline only some of the matters to which I referred in the course of the questions I put down on the Order Paper to-day. Fortunately, there will be other occasions on which the matters can be brought out in greater detail and with more force and effect. The people who have to pay taxes to provide the interest on the loan, those people who have entered into commitments or who are preparing to buy their houses under the Small Dwellings Acquisition Acts, those people who invested in previous National Loans and those people who hereafter may invest in subsequent National Loans have a deep interest in every single item contained in the questions I put down to-day. May I say that these questions were put down in the fullest realisation of the responsibility I bore to this House, to the people in my constituency whom I represent here and to the people as a whole.
I have received, as I am sure Deputies of all Parties have received, complaints both from people who hoped to purchase their dwellings under the Small Dwellings Acquisition Acts and from people who have subscribed to previous loans. I received even reproaches from people who have purchased holdings in previous loans that they had been let down by the very attractive provisions of the recent loan. I have certainly received many expressions and statements calling attention to the unnecessarily high rate of interest that was given to the subscribers to the recent loan. It is for these reasons, in order to probe out the whole position so that the public and, in particular, those people who are most interested——
On a point of order.
Deputies
Sit down.
I shall count the time wasted by the Minister's interruptions. I shall not give way to the Minister unless on a genuine point of order.
If I did not think it relevant, I would not raise it. I am entitled to put a point of order. I submit that the Deputy has not directed his observations to any one of these questions. We have had, instead, a general tirade on the part of the Leader of the Opposition. He has not directed his remarks to any specific question of the 18.
That is two more minutes to which I am entitled. The Minister has now wasted five minutes. I said at the outset of my remarks that I was going to indicate the topics which these groups of questions dealt with. The remarks I am making are directed to these groups, each of which I shall deal with. I referred at the outset to the taxpayers who will have to pay interest to the subscribers to the recent loan. Questions Nos. 41 and 42 are framed in their interest and, as I was about to say when I was interrupted by the Minister, these questions are put down for the purpose of eliciting information and of probing the situation in order that the public may judge as between the case made by the Minister or to be made by him, and the case made by me and by my colleagues, in reference to the terms of the recent loan. We have stated publicly that the terms granted by the recent loan were unduly attractive and unjustifiable.
I asked in Question No. 41 if steps had been taken on behalf of the Minister or of other persons to secure that units of the recent loan would not be sold at a premium on the stock exchange and, if so, what were those steps. In Question No. 42 I asked whether any units of the loan were purchased by or on his behalf, or on behalf of his Department, or on behalf of any other Minister, Department, board or other authority under his control and, if so, whether any of such units have been sold, agreed to be sold, or otherwise disposed of since the opening of the market on the stock exchange for the sale of units of the loan.
Is it not clear to every Deputy what the purpose behind these questions was? These questions, as I have said, were directed to get information which I believed, and still believe and assert, would have demonstrated the measure of the error of the Minister in launching a loan at a rate of interest of 5 per cent.—an unduly high rate of interest and one unwarranted by the circumstances on the stock exchange or our own conditions here. It became quite apparent after the close of subscriptions to the loan, that when units of the loan would be put up for resale on the Dublin Stock Exchange, these units were going to go to a premium. It was believed that every £100 of stock would have gone to at least £103 and if these units had been allowed to reach that 3 point premium, then it would have been apparent that subscribers to the National Loan had been given at the expense of the Irish taxpayers a present of a sum of £600,000. Now what I wanted to find out in these and in subsequent questions was: Were any measures taken by the Minister to prevent that National Loan when it came upon the stock exchange from going to a premium and, if so, what was the purpose of it?
My information is that the Government stockbroker did sell portion of the stock in order to prevent the loan from going to a premium. The purpose was twofold: the purpose was to prevent the loan from going to a premium and also so that it would not be apparent, at least for the present until the storm had died down, that the Minister had given an unduly high rate of interest. If it had gone to 3 points a clear present of £600,000 would have gone to the subscribers to the loan at the expense of the taxpayers. It had gone to 1 point yesterday, which meant a present of £200,000 to the subscribers. My information is that it went to 1¼ points to-day, and if that is so it means that a present of £250,000 has been given to the subscribers to the National Loan at the expense of the taxpayers. That is where the taxpayers' interests are involved in the questions which I have put down.
Their interests are also involved because not only was that present given unnecessarily but it is quite apparent that the loan would go to a premium and will go to a premium if it is let. That interest of 5 per cent. is unduly high even in the circumstances which confronted the Minister because of his failure to go to the people for a loan last year at a time when stocks of National Loan were at par and at a premium at a rate of interest of 3 or 3½ per cent.
And because of his own blather during the last three months.
The Minister or somebody else on his behalf kept down the premium for his own purpose. Why does the Minister not answer? It is evasion to say that it is necessary to decide how far the public interest was served by the publication of detailed information which was liable to misuse in uninformed quarters. Are those uninformed quarters the taxpayers who will have to pay for his efforts? Are those uninformed quarters the people who bought National Loan, who bought any of the three loans which Deputy McGilligan so successfully launched, and who will be affected by the Minister's efforts?
If my information is correct—and I assume that my information is correct because of his evasion to-day—he has prevented it from going to a premium. Everybody knows that the previous loans issued by the Government and which had the approval of the Dáil had appreciated for a few days or for some time at all events before the launching of this loan. The capital appreciation to the holders will be minimised because the previous National Loans would go up in sympathy with the premium price payable for this National Loan. I put it to Deputies: were those two questions not relevant in the interests of the taxpayers and in the interests of the holders of previous National Loans who have the right to know how they have been let down.
There is no use in the Minister giving a long statement, such as his impudent answer to the questions I put down to-day; there is no use in his saying that the only obligation of the Government towards those people was to repay them at the end of their term. As every Deputy knows everybody cannot wait until the end of the term. They may suffer a depreciation in capital they know, but what they did not expect was this action of the Government's in coming in for another loan and by the effect of that action in itself bringing about a depreciation of the previous National Loans. That is what happened in this case. I put down a question which was relevant on that point. I wanted to know whether the Minister had been purchasing any of the previous National Loans during the period prior to the initiation of this recent loan. It would appear to an outsider looking at the movements of the stock exchange for some days or some weeks before the opening of the last loan that the previous loans were being maintained and supported. I do not suggest for a moment that it is the duty of the Minister for Finance or of the government of the day to support at all times and in all circumstances previous National Loans or any National Loan, but it is habitually done and it would appear that it was being done for some time before this loan was initiated.
Because of the Minister's support the loan was being maintained and suddenly it flopped and disastrously flopped. It has somewhat righted itself recently but it has been prevented from fully righting itself by the action of the Minister in selling the last loan for the purpose of preventing that loan from going to its fullest premium. I can deal with that only in very short outline in the time I find at my disposal.
I put down Questions Nos. 45, 57 and 58 in order to find out how many foreigners took advantage of the taxpayers of this country in order to get this extremely attractive loan.
Hear, hear!
I was told by the Minister in his impudent observations in reply to supplementary questions that we were envious of the loan's success. Last July in Cork before I knew what the terms of the loan were going to be I publicly asked support for any National Loan in the interests of this State because that was our policy. It was not our policy or the policy of any Party on this side of the House to do what the Minister and his colleagues did at the time of the Second National Loan issued by Deputy McGilligan—to plaster the walls of this city with the sign of the pawnbroker, the three golden balls, saying that the credit of this State had been put into pawn. That was not our policy.
We wanted to maintain the credit of the State and we did not want to damage it if we could help it. "Very attractive" were the words I used at Mountmellick on the 26th September when I knew what the terms of the loan would be. We did not want a disaster to the State. That loan was gilt-edged and if it failed the credit of the State would be destroyed for many years. I said in Mountmellick— I quote my exact words from the Cork Examiner of the 27th September, 1952:
"The terms of the loan were more than favourable and the stock was such a great bargain that it would be well if ordinary Irish investors saw to it that it was taken up by them."
To-day I asked Questions Nos. 45, 57 and 58 to see how many foreigners had taken possession at the expense of the Irish taxpayers of portions of the loan. I emphasised at Mountmellick that I hoped that the Irish people would take up the loan so that the foreign investor should not come in, take it and scoop the pool.
I put down Question No. 53 in order to expose the fraudulent policy of the Minister when he said that it was the policy of the Government to repatriate our external assets. I put down the question to see the estimated amount of realisation of British stocks, shares or securities by Irish nationals or Irish corporations for the purpose of investment in the recent National Loan.
The Minister to conclude.
I claim that the Minister did me out of at least four minutes.
It is a convention here to call on the Minister to reply at ten minutes to 11.
It is not yet ten to 11. I have one more minute at least.
Three minutes at least were wasted by the Minister.
I want to make one more point, although I have a very great deal to say on this subject: I hope I shall get a chance of saying it on another occasion. I asked Questions Nos. 47, 48 and 53 for the purpose of directing attention to the matter of overdrafts. Did the Minister direct the banks not to give or to give overdrafts to their customers for the purpose of purchasing units of this stock? When Deputy McGilligan launched his three loans he definitely instructed the banks not to give an overdraft. I assert that millions were given by way of overdraft to customers of Irish banks to enable them to invest that overdraft in this National Loan at a time when the business people of this country are suffering from the severe credit restrictions imposed upon them by this Fianna Fáil Government.
I should like to remind Deputy Costello as Leader of the Opposition that the eating of sour grapes in public is not an edifying spectacle and is not pleasant to behold.
The Minister is again dealing with a serious matter in an impertinent manner.
I have seldom heard a speech in this Dáil which was so careless of and so indifferent to the credit of this State and adverse in its reactions on the public finances as the speech which Deputy Costello has just delivered.
After the loan was launched.
I answered the Deputy's questions in the fullest measure possible, with due regard to my responsibilities, and I took occasion to remind the Deputy of the precedent that had been set me by his own Minister for Finance, Deputy McGilligan.
There is no precedent for refusing to answer Questions Nos. 41 and 42.
On the 23rd March, 1949, Deputy McGilligan refused——
Will the Minister quote the precedent to justify his refusal to answer Questions Nos. 41 and 42?
——to give me the simplest possible information in regard to the loan. I said this afternoon that I was prepared to go further than he did, and I did go a great deal further in this matter than had ever been done before. However, I am not prepared to discuss the financial operations of the Exchequer in such detail as, in my view, would be injurious to the public credit. Details of administrative arrangements incidental to the making of public issues by the Government are not revealed or disclosed— much less made the subject of review —in Parliament in other countries. Indeed, elsewhere I may say—and the Deputy must know this well—the minimum of information is given. The business of settling the terms and the timing of public issues and the securing of a favourable atmosphere for them is a delicate operation.
It is more honoured in the breach than in the observance.
It could not be conducted successfully if any Party in Parliament were to pursue the policy embodied in the series of questions which were addressed to me to-day by Deputy Costello, the Leader of the Opposition.
The people can be the judge of that.
In any event, it is very difficult to say—even after listening to Deputy Costello this evening—what the Deputy is driving at. One part of these questions was directed, I think, to criticise——
No. They were put down by me for the purpose of getting information.
I think they were intended to criticise the fact that the loan tended to go to a premium. Others of the questions were drafted to blame me because, in fact, the previously existing issues had not been kept at a premium. Deputy Costello was trying to face both ways. It was easy for him to take out an insurance in advance and to go down to Cork and recommend this loan in the terms in which he recommended it because, after all, he could have it both ways. If it were a success he could pursue the policy which he has adopted since its success has become apparent to everybody, that is, he could go out and say that we have given the investors too good value. Let us, however, consider this question a little further. What is Deputy Costello really driving at? Does he favour the establishment of a premium on a public issue—as some of his questions on the Order Paper to-day seems to suggest that he does? Does that mean that he thinks that investors should get a special reward for their courage in investing in an Irish Government issue? If, on the other hand, as Questions Nos. 41 and 42—to which he has made some, reference—would seem to suggest, he regrets that the new loan is standing at a small premium. If he criticises us for that and regards it as blameworthy, why did he not flagellate himself in public in 1948 when the first issue of Exchequer Bonds established itself at a premium of three points?
It was a 3½ per cent loan.
We heard a lot of talk about giving presents at the taxpayers' expense. I think I am correct when I say that the first issue was for £12,000,000.
£10,000,000 at 3 per cent.
The first issue of Exchequer Bonds was for £12,000,000. Three points on that, according to the Deputy's method of calculation, would mean a present of £360,000.
And after 12 months of Fianna Fáil Government it is down to £80.
But, of course, nobody can hit the bull's eye just exactly. All we do know is that within a comparatively short period, the credit of this State, while it was under the control of Deputy Costello, so declined that when next he issued at 3 per cent. an Exchequer Bond loan it failed to fill—so that Deputy McGilligan, who was then Minister for Finance, for that reason, refused to give me the information which I asked for in March, 1949. Deputy Costello's conduct in this matter may have serious repercussions on the credit of this State and he ought to reflect more deeply before committing himself further in his attempts to belittle the success of the loan. The series of questions to which he put his name—I do not know whether or not he is responsible for them—has given rise to serious apprehension elsewhere.
The other day I received a letter from a well-known nationalist, a staunch republican and a courageous opponent of Partition. He wrote:—
"Dear Mr. MacEntee,
The State has no duty to either the public or the Dáil to disclose ‘identity of subscribers' as requested in a query of Costello's at opening of Dáil. Irish people are opposed to such disclosures."
I asked no such question as to identity, whoever your nationalist correspondent may be.
I commend that observation to Deputy Costello's consideration. The loan has been a striking success, not so much because of the favourable terms of the issue but because public confidence in the credit of the State and in the management of the public finances has been re-established.
At 5 per cent. If that is the best the Minister can do, then it is very poor indeed.
Let Deputy Costello and Deputy MacBride and the other members of the Opposition be content with that and make the best of it.