It would probably suffice to say on this motion that "a Government whose position has been weakened and might be questioned could not hope to deal effectively with the conditions that may confront the country in the coming year." It might also suffice to say that, "in a democratic country, it is for the people to say how and by whom they will be ruled." These two statements are statements made by the Taoiseach in October, 1947, when he had lost two out of three by-elections, as reported in the Irish Pressof 1st November, 1947. But I think it might be well also to say that, not only would the Government not get a vote of confidence from the people, if a general election were to be held now or at any time in the future, but that the people would be slow to give confidence to this House as a whole. I do not think the behaviour of our Parliament in the course of the last couple of years has in any way enhanced its prestige or created confidence in the minds of the people. I think that the people are sick and tired of the type of Party politics we have here and sick and tired of the constant recriminations. In the final analysis, all the people wants is an efficient and competent Government. They are not interested in the lucubrations that take place in this House.They may read them because the papers publish them, but they read them with a certain feeling of irritation and in the knowledge that that is the sort of thing that is being carried on in the nation's Parliament instead of any serious attempt being made to deal with the various problems that face the country.
It was for those reasons that in 1951, after the general election at that time, I urged, as I had urged in 1948, that we should seek to establish a national Government representative of the main Parties here. I think we adopted too readily both the political and the economic institutions of the country that had occupied us for centuries. We probably did that at a time when we had not had much opportunity of considering such matters seriously. We did it at a time of revolution, at a time when the best leaders the country had and the best brains had died in the course of that revolution. Those of us who carried on were young. We were there largely by accident and reached positions in public life largely by accident. I am not saying that in derogation of any colleague who took an active part in the independence movement but I think they will themselves agree that at the time when we all joined in that movement for independence we had given very little thought to the economic and political problems that faced the nation.
It was a period of resurgence and enthusiasm. We joined in but unfortunately during that period men like Griffith, Connolly, Pearse, Clarke, all the older and wiser men, the men who had been the brains and the inspiration of the movement, ceased to be with us. We were left to carry on alone. We carried on full of enthusiasm, full of patriotism but very often with very little wisdom. In addition to that, we indulged in the luxury of a civil war, a war which prevented any kind of objective thinking. We grew up in that way with the type of assembly we have here to-day and with the type of economic institutions that exist to-day. I think there are few Deputies here who, if they were honest with themseleves, would not admit that this type of Parliament and our present type of Party politics are far from satisfactory.
This nation has tremendous tasks ahead. It has the task, first of all, of securing the territorial unity of the country. That in itself will require the united effort of all our people for its achievement. It will require the best brains in the country. Secondly, we have the task of the economic reconstruction of the country because, while we have obtained our political freedom, I do not think we have availed of that freedom to achieve our economic independence. After 30 years of independence we have 12½ per cent. of our working population unemployed. After 30 years we still continue to export 40,000 to 50,000 of our people every year.
Is that what we fought for? Does that situation comply with the ideals we had when we sought to establish the freedom of this country? One can test that very easily by reading Connolly or Pearse or Griffith, or any of our national fathers. Is it not time we took stock of our position? Let us try now to find out what is wrong. By all means let us give credit to everybody in public life. Let us not attribute ill-motives to anyone, but let us realise the problems that confront the country. Let us examine these problems objectively. Let us try to improve on the present position.
We adopted a very amorphous set of political institutions. We adopted proportional representation which is, I think, probably the fairest system of election. But, to be logical however, if proportional representation is to work satisfactorily it will have to be extended from the House to the Government itself. The best type of Government would be a representative Government somewhat on the lines of the Swiss form where most of the Parties have representation in Government and share in the responsibility of governing. Naturally the dominant policy is the policy of the Party that has the biggest majority. Naturally the Opposition is based on the minority Party, but in that way one ensures that one has the most competent public men in one's Parliament and in one's Government. Each Party naturally takes care to ensure that each representative in the Government will be as competent and as able as theycan have them. I think the time has come when we should seriously consider that position. I urged these considerations at the time of the change of Government in 1951. They were objected to by the Taoiseach. I had also urged them in 1948 and received no response.
The inter-Party Government was an attempt in that direction. It was representative of a group of different Parties and it had one element which rendered it of particular value. It represented the organised Labour movement. It represented the trade union movement. In my view a modern Government, particularly in a country such as ours where half the population is an industrial population, should always contain representatives of organised labour. I think it is essential for good government. I think it would be highly desirable if every Government we had in this country contained representatives of organised labour.
The inter-Party Government was a new departure in political life here but it worked well. I am not here discussing the political issues involved in this debate. It was a sane and sensible form of Government where representatives of the different Parties met and argued the very divergent viewpoints which often existed and convinced each other of the merits of their respective viewpoints. In this way agreement on the policy to be pursued was arrived at. I think that was healthy. It meant that each member of the Government had to work considerably harder. It meant that each member of the Government had to know what he was talking about and it meant that no one member of the Government could try either to secure positions or advantages for his own particular purposes.
I think that the people liked and had confidence in that type of Government. The viewpoint has grown up throughout the country, particularly in the course of the last year, that that is the best type of Government. However, I suppose it will be difficult in present circumstances to convince the Taoiseach that representative Government is the best type of Government,but I think we owe it to the people to behave with a greater sense of responsibility in our public life than we do here. I think we owe it to the people at least to be in a position to inform them as to the true facts of the situation. The difficulty that exists in ascertaining facts and in getting acceptance of certain fundamental facts is one of the matters that makes me despair of our political life from time to time.
Since yesterday we have heard in this House a rehash of many speeches which we heard in the course of last year and also in the course of the recent by-election campaigns with certain variations. What are the facts of the situation? How can we examine the merits or demerits of a policy until we can at least get truthfully to the actual facts of the situation?
This debate has ranged over a great many subjects but unemployment is undoubtedly the most important factor in the present situation and it has loomed large in the course of this debate.
What are the facts in regard to unemployment? At the moment, according to the latest statistics, we had on the 20th June last 64,835 people unemployed. Members of the Government have in the course of the last couple of months made a number of statements to the effect that unemployment was going down. It is quite true. Unemployment does go down towards the end of the winter and through the summer and then starts creeping up again. But that happens every year. Anybody with the slighest knowledge of statistics or of economics knows that and knows that the only way in which you can assess the employment position is by comparing one period in any one year with the equivalent period in another year. That is elementary. So that, when members of the Government say that unemployment has been going down, they are saying something which is factually true but which they know perfectly well is intended to mislead.
The alarming fact about the unemployment position is that it has been getting progressively worse since thebeginning of this year. If you compare the unemployment at the end of every month since the beginning of this year with the unemployment that existed in 1951 and 1952 you find that it has been getting progressively worse with the exception of one month. On the last Saturday in January of this year there were 21,406 more people unemployed than on the last Saturday in January, 1951. That was an increase of 34 per cent. over the position which obtained in 1951. In February there were 26,547 more people unemployed than in February, 1951. That was an increase of 42.1 per cent. On the last Saturday of March there were 25,972 more people unemployed than in March of 1951—an increase of 43.6 per cent. In April there were 29,128 more people unemployed. That was an increase of 53 per cent. over the equivalent period in 1951. In May the increase had gone down to 19,747 over the equivalent figure for the end of May, 1951. That was an increase of 41.5 per cent. On the 20th June, there were 27,814 more people unemployed than on the last Saturday of June, 1951. That is an increase of 75.1 per cent. in the figure of unemployment over the period from the last Saturday of June, 1951, to the 20th June this year.
The alarming factor about the unemployment situation is that it has shown a tendency to increase steadily since the beginning of the year and that it is becoming progressively worse. At the present figure of 64,835, unemployment is now higher than it has been any time since 1939. It should not be necessary to have to state all these facts. These are some of the facts which should be accepted, but I am quite certain that this afternoon, or tomorrow, speeches will be made here, and will be made in the country, completely contrary to these facts; or statements that have no bearing on the facts will be made to try to suggest that the unemployment position is not serious. In order that any Deputy who wishes to take the trouble to examine the position will have the facts on record, let me give the unemployment figures since 1939, at the end of June in that year and in the following years. At the end of June, 1939, the figurewas 70,470; 1940, 59,428; 1941, 56,061; 1942, 56,644; 1943, 49,901; 1944, 45,121; 1945, 43,556; 1946, 45,748; 1947, 40,843; 1948, 45,269; 1949, 45,505; 1950, 39,881. At the end of June, 1951, the figure went down to 37,125, and it is now up to 64,835, an increase of 75 per cent. over June, 1951.
What explanations have been given for this situation from the Government Benches? First of all, it was denied that there was any serious unemployment. Then we were told that it was due to the Social Welfare Act. It is quite true that the Social Welfare Act had the effect of changing the number of persons in receipt of unemployment assistance and of adding them to the persons in receipt of unemployment benefits under the Insurance Acts; but, beyond that, it had little or no effect on the figures. An examination of the figures at the time that Act came into operation shows that; likewise a comparison between the 1951 and 1952 figures shows the true position.
We were next told that it was because people came back from England, and that a large percentage of those drawing unemployment benefits were people who had fled from England and had come back here. Does that bear examination? There was a question asked in the House by Deputy Norton on the 11th February. He asked for a return of persons drawing unemployment benefits, that is persons on the live register, who had returned from Britain, at the end of January in each year from 1948 to 1953. The return showed that the figure was a constant figure ranging about 4,000 every year. In 1948 it was 4,862; 1949, 4,377; 1950, 4,843; 1951, 4,048; 1952, 3,100; 1953, 4,261. These figures explode the suggestions that were put forward by responsible Ministers, including the Taoiseach, that the present unemployment position is due to returning emigrants. He should not be allowed to make use of misleading information of that kind. The Taoiseach probably, no doubt, believed this statement when it was given to him.
That is an example of the difficulty that seems to exist in ascertaining what the facts of the situation are. The Minister for Industry and Commercehas advanced the reason that unemployment was due to stockpiling. The Taoiseach has also advanced that reason, but an examination of a breakdown of the figures of the live register disposes of that. The Taoiseach and I had some words about it in the House on the 11th February, 1953. I pointed out to the Taoiseach, at column 699, that his own newspaper had said that the unemployment figures arose mainly from unemployment in building construction and transport. The Taoiseach interjected to say that he thought it was "mainly agricultural," again showing, apparently, that very little attention had been given to the actual cause of unemployment.
The latest breakdown in the unemployment figures is one which was given in the Dáil on the 27th May last, to be found in column 3 of that day's report. It shows an increase in unemployment in practically every trade and industry. I am not going to weary the House by quoting the figures in full. They will be found in the Dáil debates for that day.
Now, in addition we have had many conflicting statements made, mainly by back benchers, as regards employment. They claim that more employment has been provided. The Tánaiste has said —and his statement was echoed by the Taoiseach yesterday—that the success or otherwise of the Government had to be judged by the amount of employment which they provided. That is the position in regard to employment. Again, it should not be necessary to have to point out these figures, to have to come here armed with statistics of all kinds. These facts should surely be capable of admission so that at least we could approach the problem knowing what the facts of the situation are.
On the 16th June of this year, at column 1251 of that day's report, I obtained the figures of the number of male farm workers employed. It showed that on the 1st June, 1950, 470,006 were employed; on 1st June, 1951, the number was 452,704; on 1st June, 1952, it was 441,256. That is a decline of 11,000 in the number of men employed on farms. On the same dateI obtained also from the Taoiseach's Department the figures also published in that day's report of the number employed in the transportable goods industries. It showed that in the first quarter of 1951 there were 139.4 thousand; by the first quarter of 1952 it had fallen to 135.3 thousand; and by the first quarter of 1953 it had fallen to 134.8 thousand.
What is the position about the building industry? The figures published in the Trade Journalshow that the number employed in local authority building works in December, 1950, was 11.8 thousand; in December, 1951, it was 11.1 thousand, and in December, 1952, it had fallen to 8.6 thousand. You will find a corresponding fall in regard to those employed by local authorities in house building. The figures, I think, were quoted by Deputy Norton yesterday.
Those are the facts of the situation established by the Government's own statistics. Here I want to take the Taoiseach to task for doing something which is, I think, unworthy of him and unworthy of the position he occupies. In the course of the recent by-election campaign the Taoiseach made use of a word which he uses from time to time when he descends from the Olympian heights where he prefers to remain usually and spoke about "falsehoods" which the Opposition were spreading about the situation. "Falsehoods" is a favourite word of his on these occasions. He proceeded to deal with the unemployment figures and to say "The fact is that the lowest figure on the live register recorded since 1933 was 34,978 for the 6th September, 1947, when we and not the Coalition were in office. "What was that statement intended to convey? It is clearly intended to convey that in 1947 when Fianna Fáil were in office unemployment was lower than it was during the years of the inter-Party Government and that that was the lowest figure on record. Of course that statement was completely untrue. I do not know whether the figure of 34,978 was actually made up—I assume it was not —but it was the figure for one day in in that year. The average unemployment figure for the whole of that yearwas 55,000 and if you turn to the figures published in the Statistical Abstractfor the month of September, 1947, you will find that it was 37,462.
Can any responsible person stand over a practice of that kind, to pick the figures for one week in a year and quote those as representative of the whole year when, in point of fact, the unemployment figures for the whole year amounted to an average of 55,000? One might forgive a back bencher for behaving like that; or might forgive a back bencher for rooting through figures to get one day in the year but surely one is entitled to expect a higher sense of responsibility from a Minister and from the head of the Government. I think it was unworthy and that this is the type of practice that should be done away with in our public life. It was particularly unworthy as it was on the basis of such figure juggling that the Taoiseach levelled his charge of "falsehood" against his political opponents which was published with great gusto by his own newspaper with the title: "Taoiseach Exposes Coalition ‘Untruths'," with two photographs of the Taoiseach showing how he scored his point. I am quite prepared to make him a present of that type of point.
I listened very carefully to the Taoiseach's speech and the speeches made by other members of the Government since this debate began to hear what remedy would be proposed. We heard of "plans", very general plans, no details. The nearest we had was to-day, when the Minister for External Affairs, of all people, proceeded to talk about rebuilding Dublin Castle. We certainly heard of no constructive plan. We were not given any information as to what steps, if any, the Government propose to take to deal with the unemployment position.
What is the cause of unemployment? Is it a disease that is spread by a germ? Is it due to the weather? Is it something uncontrollable, which is purely accidental and over which the Government has no influence, or is it something which can be controlled? What does unemployment arise from?
In olden times, possibly, the economicpolicy of a Government was limited to the collection of taxes and the payment of outgoings. It has long since been recognised that the economic policy of a Government is the all-important factor in determining the employment and unemployment position in any country and that unemployment and employment can be created practically at will by the economic policy of a Government.
The causes of the unemployment situation that exists here and that has been mounting up for the last two years are quite simple. It is due to the restriction of credits and to the reduction in the purchasing power of people which was induced in order to reduce consumption. There is no necessity to be an economist to appreciate that. It is quite obvious that if you restrict credit and if you reduce the purchasing power of the people, the people will buy less, that in turn the shopkeepers will sell less and that in turn again the producers and the manufacturers will sell less to the shopkeepers and to the public; in that way unemployment grows in the distributive trades and in the manufacturing and producing trades. That is what is happening in this instance. The minute you restrict credits you are going to kill trade.
Walk through the streets of Dublin and you will see houses for sale everywhere just because people have not got the money to buy houses. Everybody knows that houses are built and bought on credit and the minute credit was restricted you were bound to create unemployment, you were bound to prevent the building and the selling of houses, the manufacture of goods and to prevent increased production. It is hardly necessary to elaborate this, it is all so obvious but quite apart from that, I think that these facts were fully appreciated by the Government, certainly if one can judge by the speeches made by different members of the Government in the House.
The Tánaiste gave me some hope by a statement he made in the course of a speech in the early days after the change of Government.
There had been a motion put down by the Labour Party in regard to theunemployment situation that existed in the country at the time and the Minister for Industry and Commerce, who was the principal Government spokesman on the motion, dealt with the situation. He gave me some hope at the time by his approach that he realised the problems that existed and was prepared to face up to them. On 14th February, 1952, at column 675, Volume 129, Dáil Debates, the Tánaiste said:—
"That is the situation which has begun to develop during last year. Nobody could have expected that it would come suddenly upon us. It was clearly to be anticipated that it would develop gradually and I think we must take it that the first signs of its coming are with us now and, if we are to take effective action to check that trend, it is now we have to do it."
He went on, at column 676:—
"Now, however, it will become clear, I think, that there are forces at work which will affect people in their daily lives, either through the impact of prices upon the cost of living or through the diminution of trade leading to unemployment."
At column 677, he said:—
"It is clear, therefore, that any contraction in demand, any factors operating to induce people to buy less, are bound to have repercussions upon the output and the employment given in these industries."
That was quite a correct assessment of the position. That statement was made on 14th February, 1952—before the removal of the food subsidies. He pointed out quite correctly that any factor which was bound to lead to contraction in demand and, therefore, any factor which led to a reduction in purchasing power was bound to cause unemployment. That was his assessment of the position at the time. The situation which was developing had to be dealt with urgently and the time had come when there could be no further delay in dealing with it. How was it dealt with? It was dealt with by removing the food subsidies and by still furtherreducing the purchasing power of the people so that certainly as far as the Tánaiste was concerned he knew what the effect of the Government's budgetary policy was to be. He had no illusions about it and knew the remedies which were essential in February, 1952, but a completely contrary policy was in fact pursued.
We had a completely different type of indication from the Minister for Finance. The Minister for Finance gave I think the first clear indication of what the Government's real attitude was to be because there is no way of reconciling the speeches by the Minister for Industry and Commerce in this House and the speeches by the Minister for Finance. On the 18th July, 1951 at column 1899 the Minister for Finance outlined his policy. He said:—
"Private and public spending are causing congestion that can be relieved only by a reduction of one or the other."
A reduction of either public or private spending. He went on:—
"Credit facilities are encouraging outlay on less essential goods; money incomes of all kinds are being raised irrespective of increases in output."
That was a clear statement of the old conservative Tory policy of deflation. Public and private spending were causing congestion, one or the other had to be stopped, if not both. Credit facilities were encouraging outlay, therefore credit facilities had to be curtailed. That was a completely different type of policy from the policy enunciated by the Tánaiste.
What is the position in regard to credit? Again, we had difficulty in this House in order to find out what the actual situation was in regard to bank credits. I raised the matter fairly early on in February, 1952, with the Tánaiste. The Tánaiste said to that at column 678:—
"I do not think this situation is affected one way or the other by the question of bank credit. We could have gone to the banks and have said: ‘We want you to keep on giving extended credit facilities to enable traders to retain these abnormal stocks that they are holding.'"
And then in the same column he went on to say:—
"May I say as definitely as I can that the Government gave no instruction or advice to the banks to curtail credit facilities? May I say also that while I do not pretend to be familiar with the private instructions which bank directors may have given to their branch managers, in so far as I have been made aware of them, while there was definite warning against increasing credit facilities, I did not see in them any suggestion that there should be curtailment as a matter of general policy?"
And then a little bit further on at column 696 while I was speaking, Mr. Lemass interrupted me and said:—
"You cannot say there has been a reduction in the bank advances. They may not be extending at the same rate but they have not been reducing."
Mr. Sweetman: The banks have told their customers that they must be reduced.
Mr. Lemass: The total volume of bank advances is higher than ever."
That was a categorical statement. The Taoiseach also discussed this question of credits in the course of a debate here on the 11th February, 1953, when he stated at column 723 that:—
"There was no evidence of it in any of the figures I saw before I went away—none."
No evidence of restriction of credit. And in the next column I drew attention to a circular which had been circulated by the Department of Finance in which the Department boasted of the fact that credit had been restricted by 2 per cent. Bank advances had been restricted by 2 per cent. To that the Taoiseach replied:—
"All I know is the figures of bank advances had not diminished."
I drew his attention to the fact that this circular had been circulated by the Department of Finance, and referred to the fact that the bank rate was acting as an additional credit restriction.
The Taoiseach denied that construction.
What is the position with regard to credit restriction? We now know the truth because the figures have had to be published. We know that in the course of last year the banks reduced their advances in this country by £4,750,000. The Tánaiste and the Taoiseach denied that such credit restrictions had taken place, or said that if they had taken place they did not know of it. Why are they in office? What is the purpose of a Government if it is not to find out what the situation in the country is? But in any case they knew perfectly well the advice which the Central Bank had given. They refused to reject that advice. They refused to disown that advice publicly. They were invited to do it in this House, and beyond a dramatic statement made by the Tánaiste that he was not going to allow the Central Bank Report to be tied around his neck, members of the Government refused to disown the advice given by the Central Bank in that report. The Central Bank did not mince their words as to their desires with regard to credit restriction. At page 16 of their report they advocated:—
"Rigorous restriction of bank credit for non-essential and less urgent purposes is now imperative."
The same report also advocated, of course, the removal of the subsidies, and gave its reasons, that consumption should be reduced and the purchasing power of the people should be reduced. They added this sentence, which I have always felt was ironical:—
"It is true that removal of subsidy might tend somewhat to increase the cost of living but some inconvenience in this respect must be weighed against the compensating gains including especially the reduction of consumption."
It would be pretty hard to beat that as a statement of policy, even among the most conservative economists of the last century.
It was the same report, of course, that did not put a tooth in it in regard to unemployment. They recorded that steps should be taken to remedy what they described as "theunusually favourable state of employment" in the country. The only meaning that could be taken from that report is that they advocated the creation of an unemployment pool. That is the policy which the Government has been implementing.
The Government were invited repeatedly in the course of the year to disown various portions of the report, to indicate what their attitude was in regard to credit. Instead of that, we got long speeches here lauding to the skies the various members of the Central Bank. The Minister for Finance told us that these men were the watchdogs of the people, that they were only speaking the truth and that it was very necessary to have their advice. Step by step the Government accepted their advice and implemented it; and now we have the results of that. The result is unemployment 75 per cent. higher than this time two years ago, business and trade dislocated and the purchasing power of money reduced.
I wonder if Deputies realise that although an old age pensioner to-day gets 21/6 a week nominally, he is getting only 9/4 in terms of 1938 money. He is getting now less than the 10/- a week he was getting before the war. Therefore, with all the vaunted increases we have given to the old age pensioner, and that we are supposed to have given every recipient of social welfare benefit, they are now worse off than before the war. The unemployed man gets less by way of assistance or benefit than he got before the war in terms of purchasing power —and, of course, the only use of money, the only value of money is its power to purchase goods.
We have heard the Minister for External Affairs waxing eloquent to-day about the dangers of inflation. I wish he and his colleagues would learn what the meaning of inflation is and how it can arise. The way in which that word was bandied about last night by the Minister for Lands and to-day by the Minister for External Affairs is nobody's business. It shows that they have not the slightest conception of the economic position of the country. Inso far as the purchasing power of money has been reduced, it is due principally to the action of the Government in removing the food subsidies. That had the effect of increasing the cost of every essential commodity. That is what has reduced the value of money in the course of the last year, as far as the people are concerned. Then we have the Taoiseach and the Tánaiste coming in here and saying: "Oh, we did not know that credit had been restricted at all; we had no idea of it"—though their own newspaper published articles about it and their own Department of Finance circulated documents boasting of the fact that credit had been restricted.
Another matter with which I think it is well to deal on this occasion and which has played an important part in discussions in this House and also during the by-elections is Marshall Aid. We have been accused, first of all, of having put the country in pawn to a foreign power, the foreign power being America. We have been accused of having squandered the proceeds of the Marshall Aid money. These accusations have been levelled right, left and centre in the course of the last two years. What are the facts in regard to Marshall Aid?
The first proposal in regard to Marshall Aid was made at a conference which met in Paris in July, 1947, and which was attended by no less a person than the Tánaiste, who was accompanied by no less a person than the present Minister for Local Government, who was then Minister for Agriculture. The Government had received the invitation on the 4th July from the British Government to attend this conference. On the 9th July a note accepting the invitation was actually despatched and it contained the following paragraph:—
"The Government of Ireland accept this invitation with pleasure and have nominated Mr. Séan Lemass, T.D., Tánaiste and Minister for Industry and Commerce,, and Mr. Patrick Smith, T.D., Minister for Agriculture, to represent Ireland at the Paris meeting."
That was in July, 1947. The Tánaiste and the Minister for Agriculture, ashe then was, flew to Paris by special plane. They had five or six officials or more. Any Deputy interested in seeing the officials who accompanied them and seeing the photographs of the arrivals and departures will find them in the Irish Pressof the period in detail—a world-shaking event.
A committee was set up as a result of that conference, to prepare the Marshall Aid agreements, the details of the Marshall Aid plan. Mr. Boland, who is now our Ambassador in London, was the chief Irish representative on that committee. The committee sat from then until September. On the 20th September, 1947, the Taoiseach, accompanied by about ten officials, took himself off on a special plane to Paris and signed the first Marshall Aid agreement. Again if Deputies are interested in getting the background of the situation at the time, they can look up the Irish Pressfiles in the Library of the House for the period. They will see the moving description of how the Taoiseach at 5.32 p.m. on the afternoon of the 22nd September signed the preliminary agreement and they will also see plenty of photographs of it.
The Taoiseach was questioned in this House in regard to Marshall Aid and in regard to this conference. The documentation was laid in the Library of this House in the month of October, 1947. One of the first tasks which I had as Minister for External Affairs was to review the list of commodities that were to be imported under Marshall Aid by this country and to eliminate from that list a number of goods which had been included in it previously by the then Minister for Industry and Commerce and to cut them out. If Deputies want confirmation of that, they will find the confirmation in the Official Debates of the House. They will also see a statement from the Tánaiste that every single item in that list of goods should be imported and was necessary. It was the list of goods prepared by himself and the Fianna Fáil Government of the day. It included many things which I considered unnecessary at the time—railway carriages, coal and various goods of that kind. That list was prepared byFianna Fáil in 1947 or the beginning of 1948 and was handed in.
Is it honest, in these circumstances, for members of the Government Party to go around the country saying that Ireland should not have participated in Marshall Aid? In addition, every single transaction relating to Marshall Aid was brought before this House. The agreements, the loans and everything else were brought before this House, discussed in this House and approved of in this House. Speeches were made by the Taoiseach saying how necessary it was. But, of course, that did not matter, in the game of Party politics. If you have a newspaper, the more blatant the lies spread the more likely some of the mud is to stick. That was used to full account in regard to Marshall Aid.
At the same time, while all this propaganda was going on, the Minister for Finance proceeded to set up a cry of desperation. He told the Fianna Fáil Árd Fheis that "the Government were being put to the pin of their collar to maintain the value of the Irish pound on a parity basis with the British pound." Utter nonsense. I shall quote now from a speech made by the Minister for Finance on 21st May, 1952, as reported at column 2163 of the Official Report, Volume 131, No. 14:—
". . . the Coalition during their three years in office, reduced our net external assets by almost £150,000."
Figures do not matter, of course.
". . . not only did the Coalition Government squander our net external assets but they have further impaired our economic independence by loading us with foreign debt—at the instance, let this be borne in mind, of a foreign power."
He repeated it again, to be quite certain that people would understand what he was saying and that it would get its full publicity:—
"We have been loaded with foreign debt at the instance of a foreign power."
—on foot, let it be said of the agreements that they signed, on foot of the agreements which were passed by thisHouse without a word of disapproval from any single member of the Fianna Fáil Party. As reported at column 2165 of the Official Report of 21st May, 1952, Deputy MacEntee, the then Minister for Finance, asked a question:—
"Why they pursued a policy which has impaired our economic independence, has put the country in pawn and has jeopardised its political future."
A couple of columns further on, he said:—
". . . they have compromised seriously and dangerously the economy—and, therefore, political independence—of the State that was committed to their care."
At column 2168, he declared that the country was on the edge of a precipice. I could give the House many further quotations of the types of irresponsible statements made by the Minister for Finance—statements that were particularly irresponsible as they were untrue and as they were calculated to damage the credit of this country from an economic point of new and to damage our relations with America.
I should like Deputies to bear this in mind. The alternative to our having relations with the outside world is to be dependent on Britain. The only way in which we can balance and develop our economy is by balancing our relations with countries other than Britain. Every time anybody pursues an anti-American line on economic matters in this House, he is, in effect, urging our complete dependence on Britain. But it suited the game of Party politics at the time to suggest that this country had been put in pawn as a result of American pressure and that the future political and economic independence of the country was in jeopardy. Even during the course of the recent by-elections, we have seen the Taoiseach's paper come out with headlines calling for independence—"The Independence of the Country is at Stake." It suited the game of Party politics to suggest that America was jeopardising the political and the economic independence of this State. Some of the Independent Deputies who supportedthe Government had strong anti-American views which they did not omit to voice in this House. In order to curry favour with them, it was then quite all right to suggest that the country had sold its political independence to the United States. It did not matter whether or not that damaged our relations with the United States so long as the game of Party politics was being played in a way that ensured that the Government would remain in office. The welfare and the future of the country did not matter. Our relations with America did not matter. Nothing mattered. Declarations of that kind enabled propaganda to be made by some of these Independent Deputies who were not slow to avail of the occasion to stir up muddied waters in order to draw attention to themselves.
Roughly, that is the history of political events here in the course of the past year or so. I should also have adverted to the fact that, while we were in office, and since, we endured a very considerable amount of criticism in regard to the trade agreement we made with Britain: (1) because it was a trade agreement that favoured a ranching policy and (2) because there was a limitation in the agreement which prevented the export of more than 10 per cent. of our total cattle exports to countries other than Britain. Certain Deputies on the Fianna Fáil Benches will remember clearly the speeches which they listened to—and some of which they probably delivered themselves—attacking me and the members of the last Government on foot of that agreement. The present Government have now made a fresh agreement with Britain. Not only does it include that limitation of 10 per cent. but it applies that limitation of 10 per cent. to carcase meat as well and it enunciates the policy of the Government in regard to the beef trade. The first article of the annex reads as follows:—
"It is the desire of both Governments that the production of live stock in Ireland should be increased and that the trade in live stock and meat between the two countries should be developed."
Then Article 3 provides:—
"The Government of Ireland undertake that exports of live cattle and carcase beef to countries other than the United Kingdom shall not in any year exceed 10 per cent. of the total exports of live cattle and carcase beef from Ireland."
References were made by the Taoiseach yesterday and by the Minister for Lands to O.E.E.C. reports. The Minister for Lands, in reply to an interjection from me, quoted from a report published in 1951. That is not very much help in regard to the condition of things which exists in 1953.
I should like to take this opportunity, however, to refer to one or two statements contained in the O.E.E.C. report published in December 1952. At page 184 of that report we have a statement as to the position in regard to prices. The Taoiseach stated that the situation was as bad in other countries as it was here in regard to prices. At page 184 of that report there is this statement:—
"The cost-of-living index in almost every country during the first nine months of 1952 did not move by more than 2 per cent. in either direction. Generally speaking, therefore, there is at the moment no inflationary pressure."
Is it fair to come to this house and misquote reports and juggle with figures in order to maintain your side in a Party political game? The same report is interesting in some other respects. It points to what has been happening generally and suggests some remedies. At page 186 it deals with the question of wage policy:—
"The restraint of wages is more difficult in countries where the fiscal system allows the incidence of taxation to be passed on to the consumer; in such countries any increase in taxation, particularly if this is already high is likely to raise the cost of living and would lead to new wage claims."
That is a warning against a system of taxation where the incidence of taxa-is passed on to the consumer, and ofcourse the removal of the food subsidies had the net effect of passing on taxation to the consumer. Then at page 88, this report deals with the question of bank interest:—
"In the United Kingdom the bank rate was raised by ½ per cent. in November, 1951, and was made effective at the new level, this being the first increase in 19 years, except for a very temporary rise in 1939. A further 1½ per cent. rise to 4 per cent. in March, 1952, induced a major movement in the Treasury Bill rate and the rates for other short-term securities. Steps were taken by the United Kingdom Government at the same time to prevent the higher interest rates from adversely affecting the housing programme."
Of course no such steps were taken here. We copied them, but did not take any of the steps they took to ensure that the increase in interest charges by the banks would not halt the housing or public works programmes. The report goes on:—
"In Germany, the Netherlands and Belgium, the official discount rates were raised during the early phase of inflation following the outbreak of the Korean war, but were subsequently lowered to meet changing conditions."
Of course we did not lower our bank rate of interest. It would not suit the Central Bank or the Bank of England. We maintained the same level of interest charges and did not follow the example of other countries who lowered them. The report goes on:—
"Increases in official discount rates not only made credit dearer but also tended (apart from the controls examined below) to make it scarcer since they were interpreted by the banking system as an indication of the Government's determination to obtain a more restrictive lending policy.
In the last few months, there has been a moderate relaxation of restrictive monetary policies in some countries. Apart from a few reductions in bank rates (mentioned above), the Netherlands have suspended the commercial bank reserverequirements and Germany has reduced them. Denmark, Sweden and the Netherlands have taken special steps to prevent credit restrictions or high interest rates from adversely affecting housing construction."
We did not take any of these steps. We followed willy nilly the policy laid down for us by the British Treasury. Indeed I was surprised to see some articles published recently, written I think by Professor Busteed of Cork University and by the, until recently, chairman of the Industrial Credit Corporation, in the Government's own Sunday newspaper, complaining that our Central Bank and the commercial banks accepted dictation willy nilly from the British Treasury—surprised not at the views but surprised that these views should be published in the Fianna Fáil paper.
I should like now to refer to the question of our sterling assets. We had a long lecture this morning from the Minister for External Affairs. He made use of strong language and emulated his colleague the Minister for Posts and Telegraphs. He said that it was treachery for anyone to increase debt, that inflationary finance was treacherous. He said that anyone who advocated the pursuit of such a policy was guilty of treachery. That reminded me of a statement made by the Minister for Posts and Telegraphs recently, that anyone who advocated the repatriation of sterling assets was guilty of treachery. It amounts to the same thing, because the policy which the Minister for External Affairs was advocating in this House to-day was a policy destined to accumulate sterling assets, to prevent the utilisation of these sterling assets here. Certainly it is a new definition of "treachery" to suggest that anybody who says that we should use our own savings and earnings in this country instead of lending them to Britain is guilty of treachery. If I were inclined to want to use the word "treachery" I would be more inclinded to use it in regard to people who persistently pursue the policy of exporting the earnings and savings of the people instead of utilising them in Ireland. That seemsto me a nearer description of what amounts to treachery. I do not apply the word treachery to the Government or to the Minister for External Affairs but I do apply the word stupidity to him and to him probably more than to the other members of the Government.
I wonder do members of the House ever ask themselves what the British Government does with the money borrowed from us? What do they do with this £300,000,000 or £400,000,000? They are not stupid people. Our Central Bank lends them something like £70,000,000. Our Government Departments about £40,000,000, and our commercial banks lend them about £100,000,000. What do they do with them? They use them for the very purposes for which we should use them ourselves, for afforestation, for farms, for subsidies, to build new schools, new hospitals and to provide employment for their people. They are used, incidentally, in order to pay for the occupation of part of our country. That is the use which is made of our money.
Coming to this question of sterling assets I have met the usual difficulty as to the ascertainment of the facts and getting these facts accepted. The Taoiseach in a speech in the course of a recent by-election said they had dwindled down to £120,000,000 as a result of the profligacy and waste of sterling assets indulged in by the inter-Party Government and that we now had only £120,000,000 left. Of course, again that is untrue—completely untrue—and can be proved to be untrue. Most of the figures can be obtained— not all of them but most of them—and they show at the moment, this year, that our Central Bank holds £71.4 million; the Government Departments hold £41.5 million and the commercial banks hold £246,000,000—that is £358.9 million. The only statistics that are not available, at least in respect of which no official statistics are available, are in regard to holdings of sterling assets by private persons and firms but these are usually accepted as amounting to approximately £160,000,000, based on an estimate made a number of years ago and accepted by the Department of Financeat least for the last few years, and I think it can be taken that they are still not less than £160,000,000. In fact we have well over £500,000,000 invested in England. I would say it is simply untrue for the Taoiseach or any member of the Government to say that our sterling assets have dwindled to £120,000,000. The facts are as I have stated. Deputies can check the figures. They will obtain them in replies to questions I asked from time to time.
The Taoiseach in proposing his motion yesterday placed a lot of emphasis on the need for making progress with prudence and caution. He emphasised the words "prudence" and "caution" on many occasions in the course of his speech. I wonder is it prudent and cautions to export our money and lend it to another Government? Have Deputies ever asked themselves how much we lost last year by doing so? In a reply to a question the other day I learned that as far as the Government holdings by themselves are concerned, we had lost by reason of depreciation in the value of British Government securities something like £6,000,000 in the course of last year. That was on the holdings by Government Departments themselves. That is only, of course, a very small proportion of the sterling assets held. If you apply that percentage to the total you will find that in the course of last year this country had probably lost well over £80,000,000 by reason of the fall in the value of British Government securities. That is quite apart from the fall in purchasing power of money, because every year that money has been reducing in purchasing power.
In reply to a question recently the Statistics Office informed me that in terms of import prices, £1,000,000 in 1939 was now worth £278,000—in other words, our money has lost three-quarters of its value in terms of import prices. In addition to the actual loss in value of British Government securities which has taken place in the course of last year we have lost also in terms of the purchasing power of money. It seems to me that there can be no more incautious and imprudent policy to pursue than to pursue the policy whichleads to exporting the earnings and savings of our people and their investment in another country where they depreciate and lose value incessantly.
I do not propose to weary the House longer by dealing with many of the other things said by the Taoiseach. I think I am not being unkind to the Taoiseach when I say that the speech he made yesterday was not one of his best speeches. I think it even failed to impress members of his own side of the House. He repeated on a couple of occasions one statement which I think was to a certain extent typical of his speech. He stated that they in "Fianna Fáil had always held that the proper way to deal with unemployment was by the provision of employment." Of course, unless we are going to put the unemployed in gas chambers I do not know how else you can deal with unemployment otherwise than by providing employment. Statements of that kind are just platitudes and do not mean a thing. We did not have the slightest indication of any principle to deal with unemployment. We received many indications that the Government denies dislocation has occurred in the relationship between prices and wages and denies even the existence of unemployment. If they will not face up to these questions it is quite impossible to expect them to deal with these questions. I think this Government never had the support of the people from the word "go". It came into existence, to say the least of it, under most peculiar circumstances and it never had the support of the people since. It is quite clear that it has not got the support of the people now and that it has lost the support of a large percentage of its own former active supporters. The last three by-elections, one after another, are the clearest indication of that. In these circumstances it is indecent and undemocratic for the Government to seek to remain in office.