Surely it is possible for me to speak in this House without alluding to Deputy Peadar Cowan. The Deputy's conscience should not prick him into a recognition that he was responsible. But Deputy Dr. ffrench-O'Carroll said at the corporation the words that I have quoted: "Look out of the window if you want to see the truth." A look out the window, of course, showed, presumably, some of the representatives of the unemployed marching on the street. That has now become almost a feature of city life, so we are to carry on for another four months. The country is to carry on under staggering taxation. It is to stagger on until the end of November, by which time, possibly, we will have an opportunity to discuss some of these Estimates. Possibly, by that time, we will have a Supplementary Budget, and possibly we may have another Vote on Account, and again stagger on for another couple of months if the associates cannot be relied on.
Let us, in any event, see what we are being asked to continue. We are asked for a Vote for the services that are in the Book of Estimates. The old car needs more petrol, more drivers and more oil. It needs repairs. As a matter of fact, in the couple of contests it entered recently it met with a few collisions and a few obstacles on the road. Its teams of drivers and helpers have proved to be unpopular in the country. The Government know what is required, new entrants and a new car, because they cannot attract support with the same old policy that was instituted through the 1952 Budget, and carried over by this year's Budget.
Let us have a survey of the results of that policy. I have quoted in this House over and over again with what the House must regard as nauseating repetition the phrases that marked thebright prospects this country was to enjoy when Fianna Fáil became a Government. They got into power in this House in 1932. That is 21 years ago. The children just born then are now reaching manhood. Those who were adults then are now middle-aged people. Three times, with the mystic number of seven years, a Fianna Fáil Government had control in this country. This was a Government that was concerned only with one evil—unemployment. In the phrase of the Tánaiste, there need be no unemployment in this country. There was some system to be put into operation which would give us the answer to the problem of unemployment to a greater extent than that of any other country. The Taoiseach was grieved to see young men and women leaving the country, and promised us that not only would emigration be ended but that there would be a return tide of emigrants, and that under his auspices there would not even be enough people to man the posts which the Government was going to create.
The 21 years have rolled past. The babies have become young men, and the adults of that time are now coming into their middle years. During that period, at least 500,000 of our people have been forced to emigrate, 500,000 people of a population that was to have been increased back to the figure of the old famine days. That was the Taoiseach's hope—getting back to a population of 8,000,000 people. We cannot even sustain the 3,000,000 people that we have. We could sustain only part of the community by forcing 500,000 out of the country in the last 21 years, and by breaking the spirit and destroying the temperament of another number who have remained. These represent what is called the hard core of unemployment throughout those years. The average number on the unemployment register over the years has not been less than 60,000 people. As well as the 500,000 who had to leave, these 60,000 who remained had to drag out whatever life they could on what is called the dole. Some may have been fortunate enough to get employment at some time during those years. For theunemployed the only provision made was unemployment insurance. That was to help them when unemployment could not be avoided.
This country might have on the birth records a population of 3,500,000 people. We were told that that was nothing too much to expect the country's resources to stand but hurriedly, we have shifted 500,000 of those and a turn-over of 60,000 through the years have been forced to live idle lives, to live at a rate which, according to the statistics, does not suffice for the sustenance of the human person. While all that is going on over the years, the value of our currency has slumped, our cost of living year by year has risen, with a corresponding decline in the value of the moneys that people earn by trading in their services.
Unemployment and emigration were phrased here by the Tánaiste recently as representing a painful process of lowering living standards. Three years ago he said that whether that took the form of rising unemployment or increased emigration, higher prices or higher taxation, it would represent the defeat of all our hopes for the future of the country. Whether it took one or other of these forms it represented the defeat of our hopes. Is it not the quintessence of defeatism that we should have all four—rising unemployment, increasing emigration, heavier taxation and an increase in the cost of living?
Last year, when the Minister came before us with his finance proposals, from the House, with the exception of those who were in his own Party and his bedraggled associates, the warning came that there was no necessity for these proposals of his and that, whether there was a necessity or not, the situation at the close of the year would be worse than that when he entered on it. That advice was neither heeded nor taken. We pointed out that the Minister was working under the thrall of the bankers, that he apparently had been terrified by what they proposed to him with regard to the international balance of payments. We advised him, knowing the course that events were likely to take, that there was no necessity for any such terror. We told himthat a change in the terms of trade was coming and that in itself would alleviate the difficulties. We told him that, under the control of Deputy Dillon in the Department of Agriculture, agriculture was on an up-surge and that agricultural exports were bound to rise. We said they would cross the £100,000,000 mark in the year and we thought we had general agreement that, if they did, there was no necessity for any panic with regard to the balance of payments.
Those two things fell out as we had foretold. Notwithstanding that, we had the penalties. The people were too well off. Personal earnings had increased by more than the increase in the cost of living and the Government had decided that, under those circumstances, food subsidies had no place and the subsidies were cut.
We foretold that that would mean that those who had power through their industrial control, through their unions, would seek an increase in wages, as they did. We asked was there going to be much difference to the community if heavier costs were put upon the business community and removed from the State's Budget. Again, as it was clear it must, that happened when the workers went to the Labour Court and those who had no resort to Labour Courts suffered for a while but again made their strength and their presence felt and they all got the increase that they were bound to get in justice for the increased cost of living that had been forced upon the people by the simple cut in the subsidies of 1952.
We pointed out that the other exactions that were being made had not the object of trying to put people off the commodities that were being taxed. There was no case made in this matter that people were consuming too much either in the way of intoxicating liquor or tobacco. We pointed out that even the Budget hopes would be falsified if those who did consume these things consumed them in less and less quantities because then the revenue would fall and the chief aim of the Budget would have been brought to nought.
At first it was received withscepticism when we pointed out what the real aim of that Budget was, and that was, the expectation that people would still spend the dearer money that was required for whatever they took in the way of beer, stout or spirits or tobacco and that if these things cost them more and if wages were reduced there was certainly going to be less in the pockets of the workers for expenditure on things like clothes, all types of apparel, the furnishing of the house, the things that people living in family life need and enjoy. That was clearly demonstrated to be the aim of the 1952 Budget.
It would, of course, have the result, satisfying to bankers, that if people had not the money in their pockets to call for these goods, then such of these goods as were imported would no longer be imported and so the import list would fall and the balance of payments might in that wrong way be rectified, but a necessary consequence of that was certain to be, as we pointed out, that if people had less money to spend there certainly would be a recession in business and, if there was a business recession, those who served in the shops were likely to go either on unemployment or on half-time wages and that movement can easily continue until one gets from recession to really desperate slump.
How anybody could have believed that £15,000,000 or £17,000,000 could be exacted from the people of the community without there being the results of less spending and therefore less business activity and therefore more unemployment and possibly more emigration it is hard to believe.
In two years these results have shown themselves to such a point that the Government are now preparing relief schemes and those who support the Government, who helped to bring that about by their votes here, career off to their various local authorities to try to mend their hand and, by relief schemes, which would possibly be more costly but less useful to the country, try to put an end to the menace, the menace that terrifies even those associates of the Government, the menace of the marching unemployed.
Two years only it has taken the Government to get back to the policy that they ran for their 17 or 18 years— relief, relief to tide over the lack of ordinary employment, the only difference this year being that the deficit in the way of ordinary employment was brought about by direct Government action, deliberate as far as the members of the Government are concerned, accepted in folly by those who support the Government and did not realise what was on.
During the two years it has taken them to bring this country back to the old rut that was here from 1932 until 1947, we have had the grudging handling of the financial resources of this country, the fear that the banking channels would not permit a better disposal of the country's financial resources towards plans for development, the reluctance to embark on these plans because that system was not understood by members of the Government. When that system was started and they got their chance to interfere with it, the interference came sharp and sudden and the results have followed just as quickly. Is it right that this Government, which has clearly lost the confidence of the people, should get money to carry them over another few months? This is a policy, a relief policy in contradistinction to the policy of development started by those who immediately preceded them. High taxes, high cost of living, increased unemployment and increased emigration; these have been the bogies over the year, and the Minister, in looking for an extra £30,000,000, might at least have said that there are movements outside which we have to recognise.
The Fianna Fáil Deputies have told the local authorities, the local authorities have told the Press, and the Press have carried it through the country that the Government have plans for relief schemes which will at least carry us over until the end of summer and autumn and maybe bring us to the early winter. By that time we will have a breathing space and we can have plans for development, plans of a long-term type which fit again intothe scheme developed here from 1948 to 1951; plans that might, although hurriedly thought out, lead to some alleviation of the present situation and give the people hope that these conditions of depression brought about deliberately by Government action are over and that a new system will be adopted and tried, even with all the little understanding that the present Government have of that particular type of work.
There is, of course, one immediate difficulty facing the Government. When this Government have been long forgotten, one thing they have done will be remembered, and that is their attitude towards the technical matter of finance. I have spoken in this House more than once of the situation that faced the inter-Party Government in 1948 when, having negotiated a £12,000,000 loan, they found that they had not a penny piece of that to spare for the plans they had ahead; that every shilling of that had been mortgaged and that it had all to be spent on meeting the debts the Fianna Fáil Government left behind in 1948. We did float other loans, and then we were beaten. When the present Minister came to his office he found, instead of debts, money. He also found commitments there, but he knows that in the last Budget I was permitted to bring in, I indicated that the policy of the Government I belonged to was to have a new National Loan that year and with that new National Loan, so far as it went, to finance the schemes we had ahead and, so far as what we got from the people was not sufficient, we would skim off, as we did before, some of the sterling equivalent of the American money which had been got and which the Taoiseach described as Mr. Marshall's unparalleled generosity.
Having arranged one conversion loan at a lower rate of interest, the bankers I approached before these arrangements were made advised me that the better way to do things was to run the conversion loan at one point of the year and the new National Loan almost immediately afterwards on its heels.The present Government so frightened the people with their speeches through that year about the bankruptcy ahead, about the depths of insolvency into which we were going to slip, about how production was down, and everything that was frightening was raising its head, that they could not possibly go to the country for money, and with what was called hectic or reckless Marshall Aid spending, the Minister spent £24,000,000 of the money that he found to his credit.
When later he did go to seek money from the people he still remembered his old frightening speeches through the country and he had to establish a rate of interest for us here that had its repercussions on the housing plans, the Small Dwellings (Acquisition) Act loans and everything financed out of public moneys. He is going to the country this year again. Will he tell us before this House rises for the summer recess the rate of interest at which he will repay the new loan? Does he not know well that if, instead of the trick vote of confidence, he brought in proposals for a loan at 5 per cent. or anything more than that, even those people who associate with him in ordinary matters of Government would refuse to pass or applaud that?
This House will go into recess and when there is no chance of criticising, no chance of discussing, no chance of putting another point of view before the people or the Minister, the terms will be arranged. The terms will, no doubt, be high. The Minister, in offering a 5 per cent. loan last year, said that every succeeding loan must give better terms to those who lend than the previous loan. He has to pay something better than 5 per cent. then. He must get the money, because there is no longer a fund of the type we had and which we had so cautiously used. That has been scattered to the winds. As there is no fund of resources of that type from which £5,000,000 or £6,000,000 might be skimmed off to meet whatever deficiency there might be between the demand and what the Minister might risk asking for, the moneylenders will do better this time than they did even last time and for another periodof years this country will be faced with a repayment on extravagant terms of moneys that never should have been borrowed at a 5 per cent. rate and could have been got at something equivalent to 3 per cent. if the Minister had moved in 1951.
That mark, however, has been left. The Minister disbursed those funds which were a great safeguard and which gave a Minister for Finance the confidence which enabled him to approach the people on terms that the bankers would not advise. These moneys were there and there was no question of blackmailing the Minister for Finance into accepting a higher rate of interest than he thought should be given, because there was always that safeguard in the moneys which were preserved. Those are now gone. The Government that succeed the present one must face that as reality. They must know that their plans for capital development will have to be met and the financing of these achieved in some way.
The group that I worked with as a Government had their plans that they would deal in a constructive and in a forthright way with this problem of finance. No matter what was done propaganda of a scarce type could be used against what was proposed. It was necessarily a slow process to get the finance houses and the banks to agree that certain views were old-time and that certain forward methods had to be used. Their education was not completed but it had at least started. Again, I have told this House of the time when members of the last Government met a group of bankers of this city in connection with a loan for the corporation—a loan of £5,000,000. During many hours of one day there was argument as to the difficulty the banks would have in advancing any money for the Dublin Corporation because it was not a worth-while stock and because quotations were hard to get. And when one considers the £5,000,000 in conjunction with the relatively vast amounts of money that these houses had to invest there was an unanswerable argument that the banks were not straining their resourcesvery much by filtering in £5,000,000 even if it was for the Dublin Corporation loan.
One of the great arguments that morning, and one of the points that was to be considered, was the disruption that was going to be caused in what was described as the "careful mosaic" of the banks' investments. To pick out one would upset a balance —a balance that was a nice association of profit and, of course, the matter of liquidity—and it was something that required a lot of thought. The heaviest investment considerations were involved and there was danger ahead if this particular loan was forced upon the banks. In the end, they agreed that the £5,000,000 loan should be given. And when it was suggested that certain discussions might take place to see whether the Government had any point of view as to the securities in the portfolio that might be sold to be replaced by a fraction of the Dublin Corporation loan, the last word of the bankers was that it did not matter. They said: "We will sell no securities. It only means an entry on both sides of the account."
Those in this House who have gone through the debate on the Central Bank Bill know that many hours were spent on that point as to whether the banks had it in their power to create credit or whether they merely took in the customers' money and loaned it forth again. Even on the morning that argument was conducted about the necessity for selling, in the end the confession was made: you do not need to sell, it is simply an entry on both sides of the books.
The present Minister may take this credit to himself that he at least has done part of the development. Any new Minister for Finance must get money for the development that must take place in the country. When a new Minister for Finance surveys the scene he must make up his mind that certain things are called for. In this House years ago when the Central Bank was in dispute, one of the points that divided the House was this question of credit, particularly the questionof whether export credit could be created, and who was to control it. Secondly, who was to say what would be paid for the resources that were manufactured? And thirdly, who was to allocate among the different sections of the community whatever credit of that type could be provided? In certain parts of this House certain people claimed all the time that there was a public duty there, and that it should be in the hands of public representatives. Certain more conservative people claimed that that was dangerous and that this was clearly a function of the banks; that it always had been their function and should be left to them. I doubt if hereafter there can be any discussion on that point.
In the trade union document sent out this morning, from the discussions at Killarney and from the other trade union there emerges one point in common, that one of the things that has helped to devastate this country over the last year and a half was the restriction of credit operating in two ways—the restriction to which the Minister gave in and which forced him to pay more dearly for what was called money than what he should have; but more particularly the bank money and bank credit was harmed and was very rigidly restricted. In particular, there appears to have been a set on the building industry in this country, and many builders who had not their plans complete found themselves cut short in their operations and found themselves with insufficient credit to carry their schemes to completion.
It has been said that the Government was behind that restriction of credit, that they advised it, and if they did not, then the banks have done it on their own. But hereafter there should be no dispute on these matters. That should be a public function, and it should be possible hereafter to pin the responsibility on the Minister for Finance in all matters affecting credit. In these days of somewhat advanced economics, it is completely wrong that a group of private proprietors should own such a thing as the credit of the country, that it should be in private hands either to restrict or to extend, andthat it should be a matter for private judgement to decide in whose favour it should be extended and against whom the restriction should operate. If—I do not believe this can be the fact—the banks this year have done that, they have certainly given the people justification for action.
The bankers control the credit of the country and the Government will tell you they do not interfere. I think they did interfere in their own way. But with relations not firmly established and certainly not publicly known, it is not possible to bring the Minister for Finance to book for what has happened in that connection. But if the banks have done it, the banks stand condemned by the public opinion in this country for what they have brought about. Even if relief is to be granted in the form of relief schemes it is still the duty of the Government to see that whatever money is used in this way or for that end is not dearly bought and the Minister should not tolerate or accept the fact that the banks are merely lending out customers' funds and because they have got to pay the customers for those moneys they therefore ask to be paid some addition of remuneration based on that theory. Again, those who were in the House when the Central Bank Bill was discussed will remember the argument as to whether it was right that bankers should be allowed to have any rate of interest at all on money that was not backed by savings deposits.
Again, one group took the view that they should not and the conservative view, accepting the bankers' point, made the opposite case. Will anybody here argue soberly that when the bankers have £1,000,000 of what is called real money in their possession, and extend that to £10,000,000 credit, which they do, that they are entitled to charge on the £9,000,000 which they manufacture a rate of interest which they can argue to be appropriate to the £1,000,000 which they have got from their customers? Yet that is the banking performance and that is the banking system to which the Minister has agreed over the years, only adding toit this extra, that under their persuasion he gave even for that accommodation, a rate of interest that was in no way justified even on bankers' theories.
We have now at last reached the point where development in this country is regarded as essential. The only question now is at what rate is that development to proceed? How is it to be financed? We cannot go on in the old way. The results of the old way are clear—that resources are not developed, that people are not employed while resources are undeveloped, that even the drain-off of emigration does not stop hardship to the 50,000 or 60,000 people who formed in this country over the years the hard core of unemployment. There is required a radical change. There is no sign of any change, radical or slight, in the proposals that have come before us. There were few pivotal or basic or seminal things in this country since 1922. There were some, however. This country in the early days saw the sugar-beet industry established. It is now regarded as a natural growth in this country. The disappearance of the sugar factories would now be regarded with dismay.
