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Dáil Éireann debate -
Wednesday, 1 Jul 1953

Vol. 140 No. 2

Vote of Confidence—Motion by Taoiseach (Resumed).

Question again proposed: "That Dáil Éireann reaffirms its confidence in the Government."—(The Taoiseach).

Prior to the Adjournment last night I referred to a number of speeches made by the Taoiseach during the course of the 1948 General Election in which he referred to the weak position of the then Government, they having lost two out of three by-elections, and said that, although they had a majority of 12 or 14 over all Parties, it was not sufficient to have a majority in the Parliament but that they must have a majority in the country as well. It is difficult to understand the reasoning behind the arguments advanced here in favour of this motion when contrasted with thespeeches made during that general election.

Since last November there have been three by-elections and in each of the three the Fianna Fáil Party sustained a defeat. That shows that the electorate who were consulted, and who had an opportunity of expressing their views on the economic policy enshrined in the Budget of last year after it took effect, emphatically repudiated and rejected that policy. It shows further that if the Government's position was weak when they lost two out of three by-elections it must be still weaker when they lost as they did in the recent by-elections, two out of two, when they failed to secure even one of the two contested seats, and the Taoiseach himself admitted during the course of the recent by-elections that their position would be weakened if they did not win those by-elections. It is quite obvious from the results of these two by-elections that the Government have no mandate to continue in office.

This motion is a device to secure, if possible, a parliamentary majority in order to give a cloak of support to a Government who have already forfeited the confidence of the electorate. It is not a confidence motion, it is a confidence trick. The Government are attempting to cling on to office, to buy time at public expense, in order to continue in office and to give some extra time to those who require it. They are clinging to office against the expressed wishes of the electorate, where the electorate were afforded an opportunity of casting their votes.

It is significant that in the recent campaign every effort that the Government and the Fianna Fáil Party were capable of making was put into the campaign. Ministers, Deputies and Senators were all present in the two constituencies. A maximum effort was made to stir up enthusiasm.

Whatever was lacking in the case of other Ministers, determined efforts were made to get big meetings, to bring in supporters, to manufacture enthusiasm, at meetings for the Taoiseach, and it was quite obvious to those people in the constituencies, to those people who were local to the particular towns concerned, that inmost cases the people attending the meetings were imported. The number of cars with registration numbers other than the county in which they were then present was itself evidence of the huge effort, of the extraordinary activity, on behalf of the Fianna Fáil Party to stimulate enthusiasm and generate public interest in the policy of the present Government. The result shows that although Fianna Fáil confidently expected to win Cork, confidently expected to secure one out of two seats, to be able to say that the status quohad been maintained—that they only had one of the seats before the election and that they still had one—and it would be possible to explain away Wicklow on the grounds that a dispute had occurred on account of what was regarded as outside interference at a Fianna Fáil Convention— that the people were not deceived. The flag-waving and the bands and the efforts, the expenditure of time, money and energy failed to stimulate enthusiasm and failed to stimulate votes when the ballot boxes were opened.

During this debate, when the Taoiseach introduced the motion, I think he did not refer once to the by-elections. He dwelt on past difficulties, he dwelt on various events between 1932 and 1953 but he did not mention the by-elections, and when I heard him refer to the 38th Parallel I knew there was no hope of any reference to the by-elections in the course of his speech. The people know that this motion is a device. They know it cannot change the will of the people, as expressed in the ballot boxes. They are not deceived by it, and if it achieves the purpose for which it is designed—to buy time at public expense —it will not obscure the facts that this Government are clinging on like limpets to place and power and profit; that they are clinging on to office against the expressed wishes of the people. Some people may inquire and members of the Government find it difficult to understand why constituencies in which they could confidently in the past seek and secure amajority of the votes of those concerned have changed; but the public remember that in 1951, this time two years ago, a 17-point programme was published by the Fianna Fáil Party after the election; that in that programme, there was point 15. It dealt with the Fianna Fáil policy on food subsidies and price control, and that point guaranteed in that published programme which was prepared after the election, when the Government was seeking the necessary extra votes to give them a majority, to continue, not merely food subsidies, but to operate and regulate an efficient system of price control. The public are familiar with, and Deputies remember, how when there had been a rise towards the end of 1950 and in the early months of 1951 in the cost of some commodities—a rise of only 2d. in the price of butter in April 1951— that Fianna Fáil platforms were loud in their denunciations, loud in their anger and loud in their sympathy with the people in the burdens that had been placed upon them. The people expected, and it was reasonable to assume, that having published their programme—not only was it not published during the election but it was probably unique in political experience to publish a programme after an election—that the subsidies would be continued at the existing rate.

In less than 12 months after that Government had been elected, new taxation was imposed in the Budget of last year which was re-enacted and continued by the Budget of this year. The figures show that under the prices then existing in May, 1951, butter stood at 2/10 a lb., that in May, 1953, it had gone to 4/2; that the 2-lb. loaf had gone from 6½d. to 9¼d.; that flour had increased from 2/8 per stone to 4/9½d.; that sugar had increased from 4½d. to 7d. per lb.; that tea had increased from 2/8 to 5/- or 5/6 per lb.; that cigarettes had increased from 1/8 to 2/4 per packet of 20; that whiskey had increased from 3/- to 3/6 per glass; that stout had gone from 11d. to 1/3 per pint; porter from 8d. to 1/-; income-tax had increased by 1/- from 6/6 to 7/6; petrol from 3/2 to 3/6 a gallon. That is not the whole story. Under indirect taxation which hadbeen criticised at the time by the then Opposition, added burdens were imposed by extra Post Office charges for telephone services, for ordinary letter services, for telegrams and for wireless licences. At the same time added burdens had been imposed on motorists. A lorry owner plying his lorries for hire found the increases were as much in some cases as 50 per cent. and in others even higher. Again, driving licences had been doubled from 10/- to £1.

All these added burdens were placed upon the people who expected some relief, who expected—if they were to believe the published programme— some alleviation of the burdens, some lightening of the load they were obliged to carry. As time went on and taxation increased, direct and indirect, to such an extent that on every platform, at every chamber of commerce and almost every company meeting, views were expressed that the burdens being borne by industry and the burdens being borne by trade and commerce had reached such dimensions that the Taoiseach himself was forced to admit that the country was staggering under them.

When the Budget was introduced this year, the sections affected by these burdens, whether individual citizens in the case of some of the commodities that I have read out, or business or commerce hit by the staggering weight of taxation, found there was no relief for them. In respect to industry, a promise was given that a committee or a commission would be established which would examine the incidence of taxation as it affected industry. Anyone familiar with the work of these committees, and with the intricate problem involved in respect to incometax and surtax as applied to business, recognises that that will be a protracted investigation, that it will take time to lighten the burden, that, even if a recommendation is made that some alleviation should take place, such alleviation is not likely to occur this year and that the people concerned will be lucky if it occurs next year. When businessmen find themselves obliged to dispense with staffs and when builders find themselves obligedto lay off workers, need the Government express concern, surprise or wonder that these difficulties have arisen? Statistics published by the Central Statistics Office giving the numbers of unemployed in mid-April, 1953, as compared with mid-April, 1951, show that there have been some striking increases in unemployment. In the building industry alone there are over 5,000 more people unemployed; agriculture lost 8,000, transport, 1,800, distributive trades, 1,500, food and drink, 1,300, clothing, 600, engineering, 700, mining and quarrying, 700. In all, there were 22,000 more men and women in 25 industrial groups out of work in April last than in April, 1951.

Recently a seasonal decline in the numbers unemployed has received comment from members of the Government who spoke on the matter. They claimed credit that the situation had improved and expressed satisfaction that there had been a reduction, although the position still indicates that, despite what would be normally regarded as a period of the year in which peak employment is reached in a great many industries and a great many avocations, there are still 18,000 more persons on the unemployment register than was the case this time last year. There are more people seeking work, more people obliged to sign on at the labour exchanges, more people obliged to seek work abroad that is denied to them at home. At the same time, Ministers have claimed that stability is in sight so far as the cost of living is concerned. Sometimes the claim, to use the words of the Minister for Industry and Commerce, is "that there is an appearance of stability". Another time the claim is that "stability has been reached". That claim was first made about three months ago. Since then, that is since last February, there was a rise of three points in the official cost-of-living index figure and that does not include the various increases in respect to Post Office charges which had been put on before the additional burden of ½d. per lb. was placed on the retail price of sugar, nor does it include the extra 4d. in the lb. imposed in May on the price of cheese. Is it still seriously suggested, having heard the melancholylitany which I have read of the increases in prices of essential foodstuffs and of essential commodities needed by every household and by every individual, that stability has been reached? If that is "an appearance of stability" then words have one meaning for the members of the Government and another meaning for the members of the ordinary community.

Members of the Government have referred at length to the need for developing and expanding agriculture. I think it is universally recognised that the land reclamation scheme initiated during the term of office of the inter-Party Government was a good scheme and that it had in it prospects for the long-term development of our agricultural productivity. The Government's approach to that problem has been to sell the machinery or to attempt to sell the machinery operated by the Department of Agriculture. In respect to a great many private contractors who put their savings into the purchase of machinery they now find that work is no longer available. They now find that long-term prospects for useful productive work have diminished. Farmers who are anxious to avail of the scheme and who recognise the great potentialities in it now find that the Department proposes to sell the machinery that is there.

In the case of the Local Authorities (Works) Act, which provided grants under which it was possible to drain the smaller rivers and streams to supplement the arterial drainage programme, substantial cuts have taken place. The scheme now is a skeleton compared with the scheme that was in full production, geared up to a high pitch of endeavour and efficiency this time two years ago. As if these two direct blows at long-term prospects of development were not sufficient, the latest proposals embodied in the circular issued to local authorities from the Department of Local Government in May of this year, will impose an added burden not only on farmers but on other ratepayers of every local authority throughout thecountry. Not satisfied with the increase in direct taxation, not content with the £11,000,000 extra imposed in last year's Budget, not content with cutting the food subsidies and increasing the indirect and direct burdens on all sections, the proposed economies of £3,500,000 which it is expected will be made by means of savings on this year's Book of Estimates, apparently include a saving of anything between £250,000 and £500,000, roughly £350,000, in respect of the relief of rates under the Agricultural Land (Relief of Rates) Act.

The added burden on farmers and on ratepayers who have been already obliged this year to bear increases in rates, ranging from probably, in the lowest case, 1/6 in the £ to, as in the case of County Dublin, over 4/- in the £, imposes an intolerable weight of taxation on people already oppressed with the serious burden of the last two years that forced from the head of the present Government the admission that the country was staggering under the weight of taxation.

I referred last night to the increases that had been granted to workers by their employers throughout the country. A number of wage-adjustment agreements were made in order to offset the cost of living as it stood in autumn of last year but since then substantial increases have occurred for which there has been no commensurate adjustment by an increase in wages. In respect to public servants, civil servants, Gardaí, Army personnel, teachers and local authority officials, the increases which other sections of the community got as a result of the various negotiations that took place were delayed. They were cheated out of three months' money to which they were entitled.

Bad as their conditions are and serious as are the burdens they have been forced to carry, no alleviation, no increase in respect of pensions has been granted to retired public authority officials. Local authority officials, road workers, retired postmen, people who retired on comparatively modest pensions, pensions fixed on the basis of a now out-of-date cost-of-livingfigure and on the basis of service rendered over a period of years when conditions were relatively stable, find that the retirement pension they are entitled to is in no way adequate to meet the increased cost of living, which falls just as heavily on them as on any other section of the community. The only consolation they got was the statement by the Minister for Finance that they had got the pensions that they were legally entitled to. This Government may get a legal title to office; these people may get the pensions they are legally entitled to; but there is a moral consideration, the consideration of justice. There is the ordinary consideration of fair play, of fair treatment and of what they are entitled to in Christian charity; but there has been no increase, no alleviation, no proposal to lighten their burdens.

In the light of these circumstances, in the light of the results of the by-elections, the Government seek to cling on to office at a time when they have not got a majority of 12 or 14 over the other Parties. The Taoiseach said in January, 1948:—

"If it can be suggested that a Government is not supported by the people, then a Government by that very fact is a weak Government—if after these elections, a finger can be pointed at us and it is said in the Dáil: ‘You have a majority of 12 or 14 over the other Parties, the people are not behind you'—you have not a majority of the people. You know the Opposition would talk in that way and would be encouraged in their efforts by the fact that that charge could be made. We are determined that that charge cannot be made and if we are to continue as a Government, we would have to have a majority in Parliament; be able to show that that majority was reasonably given to us and that the people were behind us as well as the majority in Parliament."

The people are not deceived by this motion of confidence. They recognise that it is a device. They realise that the Government are buying time at the public expense, that they are endeavouring to give a few extra months,or whatever extra time is required, to those who need it and are endeavouring to cling on to office in defiance of the expressed will of those electors who have had the opportunity of expressing their will.

It is significant that in the light of the added burdens I have mentioned, the Government recently passed a Bill to postpone the local elections, to postpone giving the ratepayers, the farmers, those sections of the community who are bearing the burden and the heat of the day, an opportunity of expressing their view. The Government seek to cling on to office and I think that even Fianna Fáil Deputies feel a sense of shame, if they have any shame left. Yesterday we listened to the Taoiseach for three-quarters of an hour. The pained expression on the face of the Tánaiste was surpassed only by the despair on the face of the Minister for Finance. It was obvious that these Ministers recognised that they had reached the end of the road, that the public are no longer deceived by the claptrap and the flag-waving. Anybody who had the experience of attending meetings at the recent by-elections realises that the glamour has disappeared, that all the former glamour and enthusiasm, all the whipped-up energies it was possible to generate, can no longer obscure the clear facts of the situation, that the people have been obliged to bear added burdens arising out of various taxes and that people are struggling to live under the increased cost of living.

It is no argument to suggest, as the Minister for Lands suggested, that because there are new motor cars being taxed, the people are not badly off. Everyone realises that in present circumstances a great number of people are obliged to have motor cars as their means of livelihood. Apart from taximen, there are lorry owners, commercial travellers and people engaged in different occupations who must have motor cars as a means of transport and to suggest that the fact that new cars are being taxed, new vehicles being put on the road, is a sign of prosperity is a false argument. The large numbers registering atthe employment exchanges, the large numbers emigrating, of whom there are now no accurate statistics—no statistics of any kind—to seek work are ample evidence of the real situation. So great are the numbers leaving the country that at least three Bishops this year, on the occasions of their annual visit for Confirmation, have expressed alarm and concern because in the parishes they visit they find only old people and a few children, with the children getting fewer. They see before the country bleak prospects, although they know the progress that could be made and they know the potentialities in our community. They know that the natural resources not only of our soil but of our people, the ability our people have to work for themselves and the ability they have shown in other lands can be put to proper use at home if the necessary opportunity is given.

During the short period of office of the inter-Party Government, employment increased substantially, industry expanded and houses were constructed. Only yesterday the Taoiseach referred to the recent housing figures and the figures for 1951. Everybody knows that houses are not planned overnight, that houses are at present being constructed from plans made during the inter-Party Government's term of office. The houses built by the inter-Party Government, or a great number of them, in 1948, were not planned by them but by the previous Administration. The people who were employed on construction work—builders' labourers, skilled craftsmen, carpenters, bricklayers, masons—all these categories of workers who are now registering as unemployed and who have been forced to seek work abroad, see no signs of stability and no prospect of getting a livelihood in their own country, in their own cities, towns or localities.

Published figures prove that not only is there no stability in the cost of living but that there has been a substantial rise and that the cost of living is going up and up. The unemployment figures have reached alarming dimensions, and, for the first time since the war, we have unemployed parades ofpersons seeking work. That does not take into account the large numbers emigrating; that does not take into account the numbers that have been and still are on short-time or part-time.

Faced with that situation, faced with the emphatic decision of the electors in North-West Dublin, in East Cork and in Wicklow, the Government seeks to cling on to office. I do not think they have any shame because if they had they would face the people as we faced them and were prepared to accept and did accept the verdict of the electorate on our stewardship during the period in office of the inter-Party Government.

This motion is a parliamentary device to conceal the truth. It is a motion designed to avoid contact with the electorate, designed to frustrate the expressed wishes of the people for the purpose of permitting the Government to cling on to office, to cling on to place and power for a few more months. I do not believe that any self-respecting Government, any Government, the head of which was prepared to say in 1948:—

"A Government is strong only if it has a majority in Parliament, because with our system, the Government depends on the majority it has in Parliament. It is a weak Government if it has not a strong majority . . . if, after these elections, a finger can be pointed at us, and it is said in the Dáil: ‘You have a majority of 12 or 14 over the other Parties, but the people are not behind you— you have not the majority of the people.'"

That was the Taoiseach as reported in the Irish Presson 20th January, 1948, speaking at Cahirciveen on 19th January. He said:—

"We are determined that that charge cannot be made."

If it was possible to make that charge against a Government that had an overall majority how much stronger is the charge, how much greater emphasis, how much greater force is there behind the charge that the Government not only has not a majority but is seeking to cling on to office andto defy the express wishes of the people, seeking to cling on to office for a few more months, or a few more days, maybe a few more hours in the vain hope that time may solve the problem, that conditions may improve and that circumstances may alter in their favour. That is the hope that Fianna Fáil offer to the community.

No Government, no Party, no group of men with self-respect or with respect for the opinion of the electorate would cling on in that disedifying fashion. It is a disedifying spectacle to see this Government, a Government that has been 18 years out of the last 21 in office here, clinging on for a few extra months. It is no wonder that yesterday, so gloomy did the prospect appear, that the Tánaiste and the Minister for Finance buried their faces in their hands and back benchers felt obliged to leave in contrast with the circumstances in which every Fianna Fáil seat would be filled and every available vote would be in to hear the Taoiseach. Yesterday those who came in felt humiliated that the Government was seeking to cling on to office, to defy the express wishes of the people and to get a few extra days or a few extra hours.

We have said before, and we believe, that the Government has no mandate or authority for the policy they are operating. They have no mandate from the people for the burdens they have imposed upon them. They have no authority to continue to operate the policy in relation to which they have long since forfeited the confidence of the people. The present uncertain position due to lack of confidence in the Government is bad for business. It is bad for trade. It is bad for the people. It is bad for the nation and the country as a whole. How could anybody in any walk of life deal confidently with the present Government?

The Government may be legally in office but they have not the moral authority or the force of public opinion behind them. They have not the confidence of the people, a confidence that any self-respecting Government and any Government that claims to represent the people and to work for them must have if it is to continue effectivelyto operate a proper policy on behalf of the people.

We do not lightly seek the burdens of office, but our duty to the people must take precedence over personal considerations. The paramount consideration in present circumstances is that expression should be given to the will of the people. The people should be consulted. If the people are consulted, whatever their verdict is we will accept it as we accepted it before. The people are entitled to be consulted. This device, this trick, this motion, this waste of public time and public expense, this discussion which should properly be conducted at the cross-roads and not in Parliament is not a substitute for an election which the people confidently hope and firmly believe cannot be long delayed.

It is interesting to hear Deputy Cosgrave and his Leader, Deputy J. A. Costello, sneering at what they call a mere parliamentary majority. According to their speeches yesterday and to-day a Government has no authority to carry on if it can only prove that it has a mere parliamentary majority. According to these speeches a Government must be able to prove any day it is challenged that it has not only a parliamentary majority but also a majority of the popular vote. They did not use to, as the Americans say; they used not to have that outlook in relation to a parliamentary majority. Time was when they were forming a Government here when a parliamentary majority could do anything irrespective of the wishes of the people and, indeed, from day to day the parliamentary majority that the Government might secure might be very small.

The old Cumann na nGaedheal Government took some strange decisions on a parliamentary majority representing a minority, a very small minority, of the people elected here to Parliament and of the popular will. If the new theory put forward by Fine Gael is that a Government cannot govern even for one day unless it can prove that it has the support of the majority of the electorate, if that is to become the lawor a part of our Constitution, a Constitution by which all Governments must abide, then the sooner we change the Constitution the better. According to the Constitution the elected Government can carry on unless it fails to retain the confidence of the Dáil.

Of course, Fine Gael fought the Constitution very strenuously when it was being put to the people. They have come to accept other portions of the Constitution and even though they now speak against the particular clause which governs the changes of Government, perhaps, they will come round to accepting that particular clause too. The Constitution does not say that when a Government is elected it is to retain office until it is defeated in a by-election or in two or three by-elections. The Constitution says that as long as the Government retains the confidence of the Dáil it is legally, constitutionally and in every other way entitled to carry on and act as a Government.

If in the old days, when Fine Gael or Cumann na nGaedheal was in power with the help of various groups, they had argued then that because the Government was defeated at a by-election it should get out, we would have had a hundred times more changes of Government than we have had. During the period of Fine Gael, from 1922 to 1932, I remember occasions upon which they were very heavily defeated. They were defeated by a three or four to one majority in Dublin, when Deputy Lemass was first elected in 1924. I remember an occasion when in Longford-Westmeath they were very heavily defeated again and another time in Kildare, but they carried on the Government because they maintained they had the Constitution with them and that a Government was elected to remain in office for five years if it continued to hold the support of the majority of the Parliament.

If we are to have the other system, that a Government carries on not from general election to general election, with the support of the Dáil, but from general election to the first by-election in which it is defeated, we will have a completely different Constitution from that which we have. Ifwe are to have the new theory put forward by Fine Gael that a Government must prove it has the popular will behind it before it can become a Government or carry on, we will have to take steps to get some authority to adjudicate upon the question as to whether, in fact, a Government does have the support of the majority of the electorate.

Take the case of the Government which was elected on the 18th February, 1948. It claimed that it had the will of the majority of the electorate. That was inferred by Deputy Costello and Deputy Cosgrave yesterday. They claimed that they had the right to carry on even though they had a Party associated with them like the Clann na Talmhan Party which, during the election, definitely swore from every platform that never would they touch a Coalition. Deputy Blowick talked all over Mayo and the West and on every platform he used the same sort of expressive language to show his disgust for the idea of a Coalition.

Do you remember Charlestown?

He spoke about the bad odour that had been left by the previous Farmers' Parties who had coalesced with Fine Gael and he swore that never again would Clann na Talmhan or the group that Deputy Blowick represented join with Fine Gael. Can it be said that a Party that pledged itself in that way to the people and that asked the people's support for that policy represented portion of the popular majority for the Coalition? Of course it is nonsense.

The thesis that Deputy Costello adumbrates in the Dáil that Fianna Fáil should get out unless they can prove they have an absolute majority of the people for their single Party is completely at variance with the action of Deputy Costello in accepting Government and carrying on for three years even though the Fine Gael Party had not a majority of the people. Indeed, it was a very small minority of the total electorate and he was quite prepared to carry on as long as he had a parliamentary majority which he sneers at to-day.

It is true to say that a Government which has both a parliamentary majority and a majority of the popular vote is a much stronger Government and a much more effective Government than one that has not both majorities. I think it would have been a good thing for the country in 1948 if it had given Fianna Fáil a majority and again in 1951 I think it would have been a good thing for the country if they had given the Fianna Fáil Party a majority of representatives in the House and a majority of the popular vote.

The strange thing is that seldom in history has it happened that a Government gets a majority of the popular vote in any country. I remember once looking up the various elections by which President Roosevelt was elected and only once had he a majority of the popular vote. He got the highest number of votes of any presidential candidate but when you add up the popular votes cast for his Republican, Communist and other opponents about whom we hardly ever hear anything in this country—there are always three or four presidential candidates in the United States, but we only hear about the Republican or the Democratic candidate—in only one case did he get a majority. In my recollection, for as long as I have taken an interest in politics, it was only once or twice that any Government got a majority of the popular vote in England. Although Fianna Fáil had many times a reasonable majority in the House, I doubt whether we ever had a majority of the popular vote. It may have happened on one occasion though I am not too sure of that.

If the theory is going to be accepted that a Government cannot be elected and cannot carry on unless it has a majority of the popular vote, and if that is to become the practice, how are we going to form a Government? It seems to me that Deputy Costello's theory is unworkable, and that it was merely put forward on this occasion in order to deceive the people. The fact is that his Government, or the Government which he ran here for three years, had not only not got a majority of the popular vote but his own particular Party was a very small minorityof the popular vote. In 1948, Fine Gael got 262,000 votes out of a total vote cast of 1,300,000, less than one-fifth of the total vote, yet Deputy Costello thought that he had not only the constitutional but the moral and legal authority to form a Government to carry on here for three years. Even though he represented a minority of the country of less than one-fifth, he carried on the Government here with the help in Parliament of people who had sworn that they would never join him, and who had no mandate from the people to join him but rather a definite instruction to the contrary.

It is also true to say that in May, 1951, Fianna Fáil did not get a majority of the popular vote in the country, but we got twice as many popular votes as Fine Gael. We got 616,000 as against the 300,000 odd which they polled.

The provisions in the Constitution in so far as they relate to the life of Parliament and the time at which general elections would be held are, I think, reasonable. The Constitution recognises that if a Government is to carry out a programme it must have a reasonable time to put its policy into effect. In the case of our Constitution, it allows the Dáil, by law, to give Parliament a life of seven years. Our law gives Parliament the right to carry on for five years. When we had the last general election, the various Parties were asking the people to give them the right to carry on Government for five years. On the occasion that we became the Government, it was clearly pointed out to the country and to the Dáil that this Government proposed to carry on the policy of Fianna Fáil, the policy which it had advocated and had acted upon for many years—for 20 or 25 years— and that we proposed to carry it on as long as we got a majority in the House to support us.

That was our position in June, 1951, and it is our position to-day. In recent weeks, during the by-elections or immediately after them, it was alleged that we had no longer a parliamentary majority in Parliament. This motion is put down to test that. Everybody has got long notice of it. It was notthrown in at a day's or two days' notice. We gave notice of it more than a week before it was due to be debated in the Dáil, and almost a fortnight before the vote on it was due to take place.

Deputy Cosgrave spoke about the attitude of Fianna Fáil during the general election of 1948 and during the previous by-elections in 1947. It is true to say that it had been announced officially by Fianna Fáil—by the Government —that if we were badly defeated in the by-elections of 1947 we could not carry on as a Government. It is also true to say that, in the following general election, we appealed to the people for an absolute majority in order that we could carry on.

Yesterday, Deputy Costello blamed us for having caused a great number of elections between 1932 and 1948, but in the same breath he denounced us for not having a general election now. On certain occasions, when we were previously in Government from 1932 to 1948, it was absolutely essential that we should from time to time prove that we had in this House a secure and absolute majority of Fianna Fáil members. It was necessary on occasions to have general elections in order to prove that we had the right to carry on here as a Government.

In 1947, after the Supplementary Budget, we lost two of the three by-elections very heavily, and it was because we had lost them to a Party that had not been represented in this House, a Party that claimed that not only had it a majority over Fianna Fáil but that it had a majority against all Parties in the House—that is the Clann na Poblachta Party—that it was necessary to go to the people to see whether the case that was put forward by the Clann na Poblachta Party was in fact true or not. We had the general election in February, 1948. In order to carry on the illusion which they had hoped to create, the Clann na Poblachta Party put up candidates in the majority of the constituencies, and their propaganda was "give MacBride the reins of Government". They put up enough candidates to givethem the reins of Government as a single Party. If there had not been a general election in 1948, undoubtedly that Party would have continued to rant round the country pointing to the result of the by-elections as showing how they had secured a majority in the constituencies that had been contested. They said if the total number of seats in the country were contested they would have a majority and claimed we had no right to govern here. They in that particular group were prone to use tactics that can be used by various groups outside in order to upset the Government; but it was necessary in 1948 to clear the air and the air was cleared.

When the election results were declared and the votes were totted up in 1948 it was proved that we had by far the greatest number of votes among the people and that we secured by far the greatest number of seats in the Dáil. However, the fact that we had a far bigger percentage of votes than any other Party did not prevent Deputy Costello, with less than one-fifth of the votes and about one-fifth of the seats, organising a Coalition in defiance of the popular will.

It was interesting to remember that Deputy Costello at that time not only maintained that he had the moral, legal and constitutional right to form the Government, even though his Party did not get one-fifth of the votes or one-fifth of the seats, but he claimed once he formed a Government that a mere defeat in the Dáil now and then was not going to change the Government. He was going to form the Government notwithstanding the small percentage of the votes and seats which he secured; and even if he were defeated in the Dáil from time to time he told us he would carry on, and, as we know, he did in fact carry on. After he had been defeated in the Dáil on a Post Office Estimate he came back the next day with a motion of confidence which represented more or less the same tactics as the Fine Gael Government used in 1931 and 1932. When they were defeated on an Old Age Pensions Bill they came back the next day with a motion of confidence.

I want again to remind the Fine GaelDeputies of the actions they justified by what they now sneer at as mere parliamentary majorities and to look at the Dáil debates for the 15th December, 1925, and the 8th December, 1922, just to think of what they were able to justify by mere parliamentary majorities. We know, too, that in the time of the Coalition their method of getting out of the difficulty of having a majority for a particular measure was to leave it to a free vote, but as far as we are concerned there is no free vote about this vote of confidence. Those who want us to pursue for the next three years the policy of development which we announced will vote for us. If they do not want us they should vote against us.

The central theme of Deputy Costello's denunciation of Fianna Fáil is that they have overtaxed the people to the extent of creating total misery; that we had instituted a régime of frightfulness, that we caused unnecessary pain and suffering and human misery. There were many more denunciations of that type. The easiest thing in the world for a Government to make is money. If we thought it the right thing to do we could have arranged in our Budgets in 1947, in 1952 or in 1953, instead of increasing taxation, to reduce it. We could have reduced taxation by 25 per cent., by 50 per cent. or by 100 per cent. To-morrow, if we thought it were the right thing to do, we could completely abolish all taxation in this country and substitute a system whereby funds would come into the possession of the Government which they would use for Government expenses. If we did not want to go the whole hog we could go part of the way, reduce part of the taxation, something we thought would be popular, and raise the balance of the funds in one of the various ways in which a Government can do it if they do not want to tax.

The fact that the Coalition Government in an inflationary situation reduced taxation and changed over from meeting its current expenses out of its current annual normal income through taxation was a step back to mediævalism rather than a step forward to modern finance. It was a stepback to the time when the kings clipped the coins and issued something of less value. It was a step back to Woods ha'pence.

It is right that a Government at any time should ensure that the people will have enough money to enable their full activities to be engaged in, to enable their full human and material resources to be used to increase their standard of life. But it is wrong that a Government should have more than that amount of money in circulation and it is disastrous for a country when a Government comes into office and, through fear of unpopularity or through threats of some of the minority groups associated with it, takes the step of deliberately inflating the volume of money in the country beyond that which is the right and proper amount to enable the full resources and energy of the country to be utilised.

That is what the Coalition Government did in 1949. In 1948, when they came in, they threatened and, indeed, carried out a régime of retrenchment. Deputy McGilligan, in his first Budget speech in 1948, said that wages and salaries were as high at that time as the country could afford and social justice demanded. Deputy Costello shortly afterwards made a speech in which he talked about the alarm with which he viewed the state of our balance of payments. In Volume 112, column 2146, Official Debates, he said that the adverse trade balance had gone to an extent which must cause anybody who thought about it for one moment or who looked at the figures the utmost alarm for our economic and financial stability. Further on, he said that it gave them the greatest possible cause for dismay and he said that steps must urgently be taken to redress that adverse balance of trade and to try to restore order into our disordered balance of payments.

What disorder in the balance of payments was he talking about? From 1939 to 1946 we had built up, in spite of ourselves, what is called a favourable balance of trade—£140,000,000 in those years. In 1945 it was a favourable balance of £33.5 million and in 1946 it was still favourable to the extent of £20,000,000. But, from 1939 to 1946 thetotal favourable balance of trade built up by investments abroad was £140,000,000.

Deputy Costello spoke about the utmost alarm in regard to our balance of payments, the greatest possible cause for dismay because that £140,000,000 plus the other investments we had before the war had been reduced in 1947 by a mere £20,000,000 and in 1948 they were falling—he did not know the exact figure—at the rate of a mere £20,000,000. So that he had alarm and despondency even though in the previous few years we had built up £140,000,000 of investments outside, added to our resources to the tune of £140,000,000 but, because that £140,000,000 plus the other £100,000,000 —whatever we had—had been reduced by £20,000,000 and was threatened to be reduced by another £20,000,000 in the year in which he was speaking, he was filled, as he said, with the utmost alarm and with the greatest dismay. I will come back to that.

I wanted to point out that Deputy McGilligan came in here and announced a Government of retrenchment. Deputy Costello came along in the middle of 1948 and spoke also as a man of extreme orthodoxy in questions of finance. Why did they change from that, from the point of cutting down things like mineral development, cutting out things like the chassis factory, postponing for three years the extension of cement works—why did they suddenly change from being a Government of retrenchment and financial orthodoxy of the antediluvian type of Cumann na nGaedheal up to 1932? Why did they suddenly change to explosive inflationists? Simply because they found that it suited their political book to do so. It was not progress that was in their minds; it was carrying on as a Government here.

They did not institute anything new when they embarked upon inflationary finance, when they borrowed all sorts of moneys in times when prices were rising, when inflation was around, and added to the inflation. They did it, not for good motives of modern finance but for bad motives of weak politicians who were prepared to postpone or passon the difficulties, which they should face in the interests of the people, to those that came after them and they passed them on in great style.

From 1921-1932 the service of debt was £2,500,000 When we came into office, after the first ten years or so, the accumulation of national debt cost the taxpayers £2,500,000. In 1947-48, when we left office, after a total of 16 years, the service of debt had not doubled, it had only gone to £4,820,000 and those 16 years' debt had been increased by us to the extent of £10,000,000 to make a final settlement with the British. Ten million pounds of the increase in the debt went for that. By 1951 when the previous Government left office the service of debt had gone up to £7,247,000. It took 30 years for the service of debt to grow to £4,800,000 but in three years of the Coalition it almost doubled. They had added as much in three years as had been added to the national debt for 30 years before. I am talking now about the dead-weight debt, not about the debt which is for the E.S.B. or Bord na Móna or things of that kind; and the figures I gave relate to the amount of money which the taxpayer has to pay for the service of debt in addition to what the Exchequer gets from Bord na Móna, the E.S.B., or any other organisation or the local authorities to which the Exchequer has lent money. In three years the Coalition Government doubled the amount of money which the people had to pay for the service of debt. It meant that they had spent sums collected by way of loans to an extent that far exceeded the correct amount. They added to the public debt instead of meeting their liabilities. If it was necessary to add to the public debt in time of deflation I would be altogether in favour of it, but merely to get out of political difficulties in an inflationary period by adding to the public debt is not only bad finance but it is treachery to the people, the worst form of treachery.

That is a very strong word to use, surely.

It is a strong word. In my opinion, it is the correct one. Itis treachery to the people to pretend that you are doing them good.

Is it on that level that we are going to conduct the debate?

It has been reduced to a low level already.

Mr. O'Higgins

The Minister for External Affairs is doing his best to do that.

In my opinion it is treachery to the people to endeavour to persuade them that you are doing them a good turn by relieving them of taxation at the price of inflation. Inflation is the worst form of taxation. When a Government increases taxation it can pick out the backs upon which it will impose the burden and has to justify to the people, to the electorate, as a whole, the putting of the extra burden on the income-tax payer as against the cigarette buyer, on the person who goes to the cinema rather than the person who drinks beer and so on. A Government has to take responsibility when it imposes taxation to extend or maintain the service of Government; but if to avoid the political unpopularity of raising hostility among the income-tax payers or the cigarette smokers or the beer drinkers it deliberately inflates the currency of the country it is acting, in my opinion, in the most treacherous way, because inflation clips a bit off everybody's sixpence, everybody's penny, as well as everybody's pound or thousand pounds. Inflation is a watering of the currency; if it is done in a time when there is too much money floating around it reacts disastrously upon the price level in the country or on its balance of payments.

There used to be during the Coalition's period an argument used by them that because their inflationary finance did not create a more spectacular effect on the price level, as it did in other countries, that in fact their borrowing to meet all sorts of current expenses was not in fact inflationary. There are two recognisableattributes of inflation in the modern world. One is in a closed economy when, if you pour out more money than there are goods to meet, the tendency is for the price of goods to go up. The other is where there is a rather open economy such as ours, where 80 per cent. of the goods are free to flow in without any taxation or stop. In this case the most immediate sign of inflationary finance is a large increase in the deficit of payments and that is what happened during the Coalition's régime.

The inflationary finance imposed upon us an additional cost of our dead-weight debt and caused a large deficit in our balance of payments. So large was the deficit in our balance of payments that in a couple of years the Coalition had almost exhausted half our net reserves. Deputy Costello had been very concerned, as he pointed out, because in the last year of Fianna Fáil the £140,000,000 which we had built up, which the country had built up, in reserves had been reduced by £20,000,000 or so; but by the end of 1951 he was boasting that our reserves were disappearing at the rate of £60,000,000 a year, and the reason they were disappearing at £60,000,000 a year in 1948, 1949 and 1950 was because the Government was deliberately inflating the currency of the country by borrowing when it should have taxed in an inflationary situation. They were, of course, helped to carry on that type of policy because of the coming of the Marshall Aid loans.

In order to get sterling into the Loan Counterpart Fund which could be borrowed in addition to borrowing from ordinary Government Funds, general instructions must have gone out to spending Departments of Government to spend as hard as they could. Deputy Dillon boasted that he had spent £5,000,000 inside an afternoon, that his only difficulty was to find things upon which to spend dollars. They spent the dollars, £46,000,000 worth of dollars, about $140,000,000, buying in maize and other commodities which we could very well have produced and should have been endeavouring, at any rate, to produce in increasing quantities here at home.

We will have to pay back, and we have started to pay, that Marshall Aid loan. It is going to take us 40 years to do it and we have to pay it back in dollars. Last year we made a beginning. This year another amount is going back and our people will have to pay in dollars for the next 40 years moneys that were borrowed from America and spent in bringing in wheat, maize, nylons and everything else during the three years of the Coalition.

The result of the inflationary finance in an inflationary period of the Coalition Government was an increase from £4,800,000 in the service of dead-weight debt to £7,247,000—moneys which will have to be met out of taxation year by year by our people. If we had not to pay that, if the Coalition had not increased dead-weight debt to that extent during those years, we could have less taxation this year. In addition to that, we have to pay back the American loan, dollars which were so badly misspent by the Coalition. We have also to carry on with less external reserves than we should have in order to build up our country for the future.

There was a ridiculous campaign by some members of the Coalition about our external reserves, when it came to the point that they wanted to spend them to avoid internal political difficulty. When they reached that period, they sneered night, noon and morning at the level of external reserves and resolved that they were going to end this "national disgrace" of having reserves abroad. Deputy MacBride a couple of years ago advocated even that we should spend every penny of what the Coalition left, that we should buy wool, tin, copper and other things. Had we followed his advice and invested the external reserves that the Coalition left behind them unspent, we would have got rid of our external reserves and, if spent on wool, we would have lost two-thirds.

How much has the Government lost in the last 12 months on the fall in values?

We would have paid three times the price for wool thatwe could sell it for now. If we had bought copper it would have fallen in value also and if we had bought a lot of other things they also would have fallen. Deputy Costello joined Deputy MacBride in talking of the "disgrace" of having external assets, when the effect of his inflationary finance was to liquidate our external assets. It is not generally realised—and certainly was not by certain members of the Coalition when they started—that a Government does not and cannot of its own direct action or single action take back external assets. Their liquidation or withdrawal is largely the result of the general economic activities of the people.

If a Government has, as our Government has, £20,000,000 or £30,000,000 invested in British Funds on behalf of some of the public funds, and if the Government sells out those funds in order to invest in Irish loans or give them to the E.S.B. or Bord na Móna, the initial effect is to swell the funds of the Central Bank or the ordinary commercial banks. The cheques that it gets in London for the sale of its British securities and lodge in the ordinary way with the Government bankers here, result in sterling being transferred and that banker is left with a sterling asset equivalent to the Irish funds he gives to the Government or pays out on its behalf.

Similarly, if the law were to be changed to-morrow and the Central Bank could invest, say, £50,000,000 in the E.S.B., Bord na Móna and a few other things, and sold out its British securities in London and brought back the funds here and gave them through the banks to those organisations, the effect of that would be simply to change the holding, the ownership of external assets, from the Central Bank to the ordinary banks. The fact of the matter is, that we cannot liquidate or take back external reserves unless we take them back in the form of goods or services. If we do not do that, if we do not have an adverse balance in our payments, the result of one organisation or individual selling out foreign assets and taking them back here is to increase the external holdings of some other organisation, banking or private, within the country.

There is no one in Fianna Fáil who has any objection, or ever had any objection, to an economic use of the past savings of our people, whether they were located here in this country or invested abroad. We believe, however, that it is necessary, if our children and our children's children are to prosper, that we should have a certain amount of reserves which will help us through in case of necessity or enable us to develop some project which we urgently need to develop.

There is the question of national prestige as well as the question of financial necessity. It is an ugly thing for a country to be kicked around by its creditors. At the moment, we still have left £100,000,000 of net external reserves and we can, therefore, call our souls our own. If we want to buy some machinery for the extension of our electricity supply we do not have to go abroad to look for a loan to enable us to buy the machinery. We have our external assets which we can exchange for capital equipment. To the extent that we have certain loans outstanding abroad due to strangers—whether individuals or organisations—investing in our national loans, when our national loans come for repayment we can pay them off with our external reserves. We are different from that very prosperous little nation now—New Zealand —as she was, say, in 1938. I remember distinctly that in 1938 the New Zealand Government had to face the repayment of a loan that was falling-in in London: the amount was £30,000,000. Representatives of the New Zealand Government went to the appropriate authorities in London and asked for support but they were told: "No. Go and balance your Budget". They went back to New Zealand not knowing how they were going to meet the repayment of the £30,000,000 which was falling-in in London. When they went to the British authorities they got no support but were given a lecture on sound finance and told to go home. Only when the war clouds came on the horizon were they summoned from New Zealand and given £30,000,000. We do not want our people put intothat position so that, if a loan is falling-in, we will have to go on our knees to somebody. We want to have a reasonable reserve abroad with which to meet our commitments. We want to have such reserves abroad as will enable us to run our economy in a fairly elastic way.

If Fine Gael had continued for another couple of years they and the rest of the Coalition would have run us out of our net foreign assets. If somebody wanted to buy a machine, even from Britain, we should have to look at the accounts and say: "We have not got the £5,000. You will have to wait six months until we earn that amount". That has happened. Just take a look at the assets of other countries and consider the meas and esteem they put on them. Take, for instance, Britain's external assets. Britain has been described as a rather rich country with developed resources and great skill. Because her external assets dropped to about five hundred or six hundred million dollars a couple of years ago she upset the whole trade of Europe, and a great part of that of the world, in order to conserve what was left. In one fell swoop, Britain's imports from the Continent were cut by about £350,000,000, and that, in its turn, put half of the Continent into great financial and economic trouble. The British refused to buy from them and the British rightly said: "We cannot buy. If we do not save the £500,000,000 or £600,000,000 left, we will soon be in the position that we shall have nothing in the kitty. We have got to have a certain reserve."

We believe that we here should have a certain amount of external reserves in order to carry on our daily life in the confidence that the bills normally falling due can be paid and that we do not have to crib, cabin and confine every person engaged in business saying: "You cannot carry out that business even in England, Scotland or elsewhere in the E.P.U. area unless. first of all, you get a permit."

For the past couple of years we have been in the E.P.U. area and we have been able to carryon business with all parts of the world outside the dollar area without any exchange control and without prior authorisation from the Department of Finance. But, if the Coalition Government had continued for a further two years and had spent our sterling assets and left us with no sterling reserve, we should have had to have the same system in regard to sterling authorisations for spending as we have had, and must continue to have for some time longer, in regard to dollar expenditure. If anybody wants to know the effects on any country of being bereft of sterling or foreign reserves just let him think of what he has to do if he wants to get a few dollars to enable him to take either himself or his family to America for a few weeks or longer or if he wants to buy some American machine or even to send a subscription to an American newspaper.

The Coalition Government—at least a number of them—fundamentally knew as much about the necessity for a country to have external assets, if it is to progress, as Fianna Fáil did or as the British Government or any other Government did. If it is to have an elastic economy and some reasonable liberty in the financial field, then it must have external assets with which to meet its liabilities. The reason the Coalition Government went on a spending spree during an inflationary period was to avoid political difficulties, thus passing on to the future the difficulties that they should have met and surmounted themselves.

In Volume 124 of the Official Report, column 1620, it will be seen that Deputy McGilligan admitted to me that if all the borrowing he engaged in did not result in a large increase of output then the borrowing would be a bit of a headache, as he put it, for a future Minister for Finance. Let us examine, therefore, the extraordinary expenditure incurred by our predecessors, taking into account the effect of that expenditure on increasing production. The moneys that were spent had the result of adding about £4,000,000 to our annual payment for dead-weight debt, left us with a burden of repayment of about £140,000,000dollars and decreased our external assets by well over £100,000,000. What was there on the other side? On the other side was a decrease in agriculture. There was some slight increase in industrial production, but there was a decrease in agricultural production. Tillage was cut down by over 500,000 acres. Therefore, in the total account, they left us with an increase in the dead-weight debt, a huge American debt, a decrease in our external assets, and no corresponding increase in production.

In the last couple of years we have tried to correct a trend in agricultural production that was becoming a habit with a number of farmers. We had to increase the price of beet and the price of wheat. I am glad to say that this year our wheat acreage will be up by 100,000 acres or so and, if all goes well, it looks as if we will have a generous harvest. Similarly, the increase in the price of beet has resulted in a very good increase in the acreage. I think that the good work done by the sugar company in educating our farmers in the proper use of lime and fertilisers will result in yet another increase in the yield per acre this year. Every year for the last couple of years the sugar company have reported an increase in the average yield of sugar beet per acre and this year I hope we will have a still further increase.

One of the things I cannot understand about those who were interested in farming in the Coalition Government was that they allowed the Coalition Minister for Agriculture to act so viciously against the liming and fertilising of the land. It was an absolutely vicious thing. It was not that he did it in ignorance, because every year during the Coalition's term of office in many debates a number of Opposition Deputies and, indeed, a number of Deputies in the middle group and on the Fine Gael Benches advocated that we should have a real campaign to restore the calcium content of our soil, to put out the phosphates and the potash and the other things necessary to bring our agricultural output up. It is a national disgrace for us that our net output from agriculture is as small as it is and littlemore than it was 50 years ago. We will not increase it until we restore the calcium content both of pastures and of tillage land. The possibility of increasing production is there but the land will not do it unless it gets the necessary nutriments.

There are other things that we could do to increase agricultural production: by improving the breeds of cattle, improving the quality of seeds of all sorts, and by various other schemes. But the best immediate way to get a quick increase in production from agriculture is through liming and fertilising our soil.

What did the former Minister for Agriculture do, with the support, of course, of the Fine Gael Party? He actually put an end to the scheme for the subsidising of ground limestone. A few days ago when I stated that in the Dáil he denied it, but Deputy Allen was able to give the day and date on which he issued the circular to county committees of agriculture putting an end to the ground limestone scheme. It was absolutely fantastic that in 1948 there should be found a Minister for Agriculture who was against the application of ground limestone to land. When we were in office it was known that it would require 12,000,000 tons to bring up the calcium content of the soil initially and, annually thereafter, about 2,000,000 tons per year to compensate for loss due to leaching. Yet, in 1948, the then Minister for Agriculture insisted on getting back from the Department of Industry and Commerce the scheme to produce the lime that the land required. He insisted on bringing it back to the Department of Agriculture and then squashing it and squashing the subsidy paid to the farmers for the spreading of lime and fertilisers. It was only in 1951, when he was kicked into it, that he agreed even to accept £1,750,000 out of the Grant Counterpart Fund for the subsidisation of the transport of ground limestone. I am hoping that the farmers in the coming year will turn to the application of science to their land rather than the application of the outworn ideas of the former Minister for Agriculture in regard to land.

One of the difficulties that the world faces in the future is how to balance its payments with the United States. The great difficulty with the United States Government is how either in goods or services they will balance their agricultural and industrial exports. We must face the situation that even though there might be plenty of wheat in the United States in the future, it is going to be difficult for the world, without some form of all-in agreement, to sell either goods or services to the United States in order to get the dollars to buy the wheat and maize and other things. So that it is more important than ever that we should have a modern outlook, and realise that if we want to have wheat the thing to do is to grow wheat rather than depend upon producing bullocks to sell for sterling in order to get dollars to buy dollar wheat. And on balance, there is a terrific amount to be said even from the point of view of narrow finance, leaving aside national security and the social aspects of employment and production within the country, for growing wheat here rather than producing bullocks to sell to England with which to get dollars to buy dollar wheat.

Take for instance the man with a number of acres. A two-acre field would with normal care give him, say, an average of one ton, or eight barrels per acre, of wheat. That is 16 barrels of wheat. Sixteen barrels of wheat would probably bring him in 150 dollars or so. I have not got the calculation, but I can make it out again. However, he gets the 16 barrels of wheat from the two acres. I remember that figure exactly. From the same two acres, if he put a bullock on them he would probably get an increase in value of about £20; that £20 would buy him in London enough dollars to get five or six barrels of wheat. But out of the same two acres, he could produce 16 barrels of wheat for national consumption. So that even from the narrow, financial point of view it is worth while to produce 16 barrels from two acres —it is not a very big crop from two acres—rather than put on a bullock to get an extra £20 to buy dollars in the London market to buy a few barrels of wheat in America.

I say we must set ourselves against this outworn idea of the former Minister for Agriculture. We must take land that is capable of growing wheat and use it to grow wheat, rather than to produce extra value on cattle in the hope of being able to buy dollars to buy dollar wheat. We must also turn our backs on the attitude that if somebody suggests to the Minister for Agriculture that he should restore the calcium status of the soil and help farmers to put the land into condition to grow pasture and crops the Minister will take up the attitude that this very suggestion makes him mad. We have to carry on utilising all our resources to improve our soil, to improve our factories, to improve our farms, so that we will be able to produce the goods that will give us a higher real standard of life. It is easy to give the people more pounds per head in terms of sterling or Irish pounds while at the same time their standard of living might go down. We must continue to live at our present standard of life unless we can get a greater volume of production from the land and from our factories. It must be the duty of whatever Government is here—if it is prepared to do its duty —to promote all activities on the part of the farmer and of all our people to support a production campaign that will give us the goods with which we can live at a higher standard.

If we are to make that progress, we must not have a Government here who will spend the money that they are not entitled to spend, that will use inflationary finance at an inflationary period and will hand over to the future the bills and headaches that they themselves should face. We can, in my belief, if we adopt a reasonable attitude to life, make progress here in this country, and as year follows year we can make progress at an increasing rate. I remember saying to somebody in 1951 when we got back into office that it was quite a different outlook and quite a different prospect we had to face from 1932. In 1932, if we went to get advice here from Irish people, practically the only expert advice available was how to handle somegoods at the ports and how to send cattle out. There were only two or three industries of any extent in the country. When we came back in 1951, if you wanted to get any suggestions of almost any kind in relation to an industrial or agricultural project, you could present them with any problem and within a week you could get a half-dozen people who could give advice as good as could be found in practically any country in the world. One of the things I resented more, I think, than anything else done by the Coalition was the stopping of the mining, the cutting out for the first year on the grounds of economy of the £83,000 devoted to mines; and the selling of the Constellations. That reduced the number of experts in the country who could be called together to discuss various problems presented to individuals or to the Government.

It was disastrous that we should have sold the Constellations for sterling, the Fianna Fáil Government having raised the dollars to pay for them. There are some Deputies who think that it is a good thing to say that we were extravagant in having purchased aeroplanes to fly the Atlantic but, as times goes on, our people will come to realise that the purchase of these planes was a sound financial proposition. They can see that quite a big percentage of the people who touch down at Shannon remain in Ireland and spend their dollars here. They certainly would spend more dollars here if flights originated and ended at Shannon.

Another very popular criticism with Fine Gael and others of the Fianna Fáil Party was that we actually had the temerity to prepare plans for the building of Government offices here in the city as against the time when there might be an easing-off in the building trade. Everybody who knows anything about building knows that at any time in Dublin not quite half the building workers were engaged in municipal house building, that the other half were engaged in building for private individuals, the restoration of shop fronts, etc. During the war, when we were looking forward to the end of the conflict and taking stock of theconditions under which civil servants were housed, not only from the point of view of their health but also from the point of view of efficiency and control in the service, we decided that we should concentrate as many civil servants as we could in a few buildings so that they could be properly supervised and that the general standard of their health might be improved. Deputies will remember all the sneering there was at the idea that we should knock down some parts of the old Dublin Castle and concentrate in new buildings there, members of the service who were in occupation of 80 or 90 private houses in the city, using them as Government offices. That idea was sneered at and laughed at.

If we want to get away from the present slump in the building trade, and if the corporation cannot go ahead any more quickly with their housing activities, we have to turn to some scheme of public building that will give the greatest return to the country. I do not know of any scheme of public building, outside the erection of hospitals and schools—and that work is going ahead as fast as Government finances can help to drive it—that will take up the slack in the building trade as quickly or as effectively as the erection of a block of offices for civil servants in the Castle, thus releasing the houses which they now occupy for other uses.

The Coalition Government, however, were not prepared to take the responsibility of building modern offices or of preparing plans for the erection of these offices as against a building slump. The result was that when they wanted increased accommodation for the Civil Service, they stole it from C.I.E.—they stole the bus station. Under plans prepared, C.I.E. intended to concentrate a number of their staffs, scattered throughout the city and working under bad conditions from the point of view of administration, in this new building. But the Government, not wanting to take the responsibility of building themselves, even though they knew that the apace was necessary for these 1,200 civil servants whom they wanted to accommodate, stole the bus station. That is the type of practicethey pursued all during their time. They made excuses of one kind or another for various actions which they took, excuses such as they made for taking over the bus station.

One of the great arguments with which Fine Gael defended themselves for all the borrowing in which they indulged, was that they were increasing the capital assets of the country. The amount by which they are shown to have increased capital in their last year was £24,000,000. Last year we spent £33,000,000 on capital projects and this year we propose to spend £39,000,000. The truth of the matter is that, for all their extravagance in putting this country into debt, the Coalition Government had at the end of their period very little to show either by way of an increase in capital wealth or output. They not only increased the annual charge for dead-weight debt, decreased our sterling assets and made a big addition to our foreign debt by way of the 140,000,000 dollars which have to be paid back, but they also brought about a disastrous decrease in agricultural production, a disastrous reduction of over 500,000 acres in the ploughed land of the country.

Notice taken that20Deputies were not present; House counted, and20Deputies being present,

I thank Deputy O'Higgins for giving me an opportunity to look up my notes. Deputy Cosgrave had the impudence to-day to talk about expanding agriculture under the Coalition. He spoke about the land rehabilitation scheme initiated by the Coalition and of its great production potentialities. I have described how agricultural production contracted by over 500,000 acres of tillage. The former Minister for Agriculture refused even to put lime on the grass he so loves and we know that his offer of 1/- per gallon for five years for milk had quite a disastrous result on the number of cows and heifers in calf and on butter production.

I must say it requires a certain amount of impudence even by Coalition standards for anybody to claimthat the land rehabilitation scheme was initiated by the Coalition Government. For years, we had had the land improvement scheme under which we gave money to the farmers for the improvement of their land, up to £300,000 or £400,000 per year. The first thing the former Minister did when he came into office was, in conjunction with Deputy McGilligan, to put an end to that scheme. They did not start it again until Marshall Aid came along. We were prepared to tax the people to the tune of £400,000 for land rehabilitation, to give our farmers half of the cost. The Coalition stopped it and the former Minister did not start again on land rehabilitation until he got dollars from America. He made a speech here on the Agriculture Estimate, in 1948, in which he said that unfortunately they could not go ahead with these schemes but what could they not do, if only they could get a free grant from America?

Deputy Cosgrave was completely and absolutely wrong when he talked about the land rehabilitation business being initiated by the Coalition Government. The Fianna Fáil scheme was stopped until they got dollars to do the work. Instead of increasing production from the land they decreased it, very disastrously, and I have no doubt that if Deputy Dillon had his way again he would embark upon the same system of agricultural production and financing as would have the same result. Instead of producing 16 barrels of wheat from two acres of land, a bullock would be placed upon it, the sterling value of which could be increased only to the extent of enabling us to buy a few barrels of wheat.

The Coalition Government, when it left, was bankrupt of ideas and, in addition, had almost driven the country bankrupt. We hope this Dáil will be wise enough to give the vote of confidence this Government asks, in order that the wise and progressive policy of Fianna Fáil may be pursued during the next three years. It is very essential, in the world as it is, that we should be making progress in our agricultural production and ourindustrial production. We should also be making progress in our social solidarity. It was very bad for this country that Fine Gael should have strung its life out for three years without having put into operation the Act regarding social security that Fianna Fáil put into operation a very few months after they returned to power. We believe that, under a Fianna Fáil Government, this country will make more progress than under any alternative Government available to our people. We hope our farmers within the next few years will take advantage of the opportunities open to them to increase production from the land, so that not only will they themselves have a higher standard of life but they will be able to give a better standard of life to those who work with them on the land and to the people as a whole.

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.

It must sound to most Deputies slightly odd to hear the last speaker, the Leader of a political Party, deprecating the existence of what he contemptuously describes as Party politics and boosting the idea of the multi-Party conception of government.Possibly Deputy MacBride might give us an answer to the question: with whom did he intend to coalesce on the occasion of the election in which he put forward over 90 candidates, if 75 or 80 of these candidates were returned? It seems to me that this idea of the Swiss form of government must be a relatively new idea. We, Independent Deputies—of course I class myself as one of them—are in a particularly responsible position at the moment because we in effect, due to an accident, are in the position of being asked to choose between the present Government and an alternative Government. That is in essence what is intended by the vote of confidence put forward by the Taoiseach and naturally it will be the main consequence of our actions when the vote is taken. I should like to put forward considerations which have weighed with me and which are weighing with me in my approach to the problem, the considerations which will determine the way in which I shall vote when the division is taken. It is not simply a matter of a vote of confidence or of voting the Fianna Fáil Government out of their present position. We must consider what Government is likely to replace a Fianna Fáil Government.

Will that not be determined by the people?

No, it will be determined by Deputy Dr. Browne.

The repeated assertion of Opposition speakers is that the alternative Government will be a multi-Party form of government on the lines of the old Coalition Government.

If the people so decide.

It is a reasonable assumption, though a rare possibility, that we might get, if there was a general election and if Fianna Fáil were not returned to power, such a form of multi-Party government.

If the people so decide.

Consequently before I, at any rate, as a responsible Deputy, cast my vote I must examine to the best of my ability the likely pattern which that alternative form of government will take. It is quite obvious that it will follow broadly the pattern of the old Coalition Government. It is quite obvious that it will be largely a coalition of the extreme Right in political life in Ireland—the extreme Right or the extreme Conservatives as represented by the Fine Gael Party— and the Left as represented, unfortunately for many of us, by the members of the Labour Party. Before it is decided to see the end of one Government and before it can easily be accepted that the multi-Party type of government on the lines of the old Coalition Government should be returned, there are some obvious outstanding questions which must be solved. It is quite futile for leading and senior members of the Fine Gael Party to fling the silly epithets that they have levelled at the Independent Deputies and to describe them as disreputable members of this House. These are not tactics that carry any weight with me.

Mr. O'Higgins

We know what carries weight with you.

I shall tell you what carries weight with me.

Mr. O'Higgins

The fear of an election.

There have been few interruptions in this debate so far, and I trust that we can keep the debate free from interruption.

Deputy Dr. Browne is entitled to speak without interruption. I hope that right will be conceded to him.

Leading Deputies, leaders of the political Parties and, in particular, what might be called the shadow Cabinet in such a Government, must accept their responsibilities in a more mature and more considerate way. I move the adjournment of the debate.

Debate adjourned.
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