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Dáil Éireann debate -
Wednesday, 25 Nov 1953

Vol. 143 No. 5

Committee on Finance. - Vote 6—Office of the Minister for Finance (Resumed).

Debate resumed on the following motion:—
That the Estimate be referred back for reconsideration.—(Deputy McGilligan.)

During the course of my speech last night, I was concentrating mainly on the fact that the matter of capital development and the system of financing it only really assumed importance about the year 1949, and that when the inter-Party Government programme was produced great objection was taken to it by the Fianna Fáil Party on the ground, apparently, that the schemes were not to be regarded as development schemes and also because the proposals with regard to the financing of these schemes did not meet with their approval. I welcomed the view indicated in the speech by the Minister for Lands at the bankers' annual dinner which was held on the 23rd instant,but I also pointed out that his remarks seemed to be somewhat delayed and rather out-of-date. The Minister for Lands spoke of the necessity for having these capital development schemes speeded up as otherwise the situation would be that our national resources would remain neglected. In that context, I referred to the record of Fianna Fáil since 1932. I went through the accounts of the years they were in office. I indicated what moneys had been allocated year by year during Fianna Fáil's 15 years of office, and also below-the-line services. I indicated how much was spent to show that it was very considerably less, on the whole, than what had been proposed. It emerged from my calculations that the average amount allocated for below-the-line services was something like £1,000,000 or £1,250,000, and that the amount spent was something over £750,000, with the solitary exception of the year in which a sum of £10,000,000 was raised by the Anglo-Éire Agreement Loan for the purpose of paying that immense sum of money to Britain. I had not indicated the items on which the moneys were spent. I will come to that later this afternoon. Clearly, this matter has been the subject of some consideration by the Government since 1951. I have been interested to note how often the question of saving and of providing the money for capital development occurred in the speech the Minister for Finance made when he was introducing his Budget this year. Quite early in that Budget speech, as reported at column 1181, Volume 138, No. 10, of the Official Report, he spoke of the approach to monetary stability which he said had been secured. He accredited that—

"in large measure to the greater tendency of the community to save and to the increased readiness of its thrifty and industrious members to entrust their savings to the Government for investment in works of national importance."

He continued:—

"The record response which the saving and investing public gave to the National Loan in September last was a striking manifestation of confidence and the Government are particularly appreciative of it."

Of course, that was criticised, as it will be criticised for many years to come, in an article in The Statist,which said that that National Loan was the worst effort at mistiming that had ever been made. One looks forward with some amusement to next year to hear what the same Minister is likely to say with regard to the relative flop which the last loan turned out to be. He thought fit to boast of the record response in 1952 and regarded it as a striking manifestation of confidence of which the Government are particularly appreciative. The note struck in that Budget speech was that there was a tendency on the part of the community to save. This is what he said:—

"A closer approach to monetary stability has been secured. This has been due in large measure to the greater tendency of the community to save and to the increased readiness of its thrifty and industrious members to entrust their savings to the Government for investment in works of national importance."

Let me point the contrast at once. The loan was a £20,000,000 loan. Fianna Fáil, in their whole period of office, had never before approached a loan of that magnitude. Apparently, it was a recognition that works of capital development were awaiting completion and that some method of financing them was required. Later on in the same Budget speech, as reported at column 1192, Volume 138, No. 10 of the Official Report, the Minister is reported as follows:—

"I am glad to be able to say, and I am sure the country will be no less glad to learn, that without curtailing capital investment in any form——"

"...without curtailing capital investment in any form..." That was the capital investment that had been objected to when it was embarked upon by the Minister's predecessors in office.

"——we managed to finance it in a much less inflationary way than in recent years. For this we have inthe main to thank once more the Irish public who, despite the higher cost of living——"

No account is taken of who caused the higher cost of living but, despite that——

"——decided to spend less on consumer goods, so as to save more and have more to invest."

The Minister continued:—

"When introducing the Budget for last year, I ventured to forecast that there would be a ‘return to more normal habits of spending and saving' among the thrifty and industrious elements in the community. That prediction has been fulfilled and indeed the improvement has been even better than could have been foreseen."

This next phrase was unfortunate in the light of later events:—

"In consequence, a National Loan for £20,000,000, the largest ever floated here, was not only fully subscribed without recourse to the banks, but attracted a record number of investors, including many people of small and modest means. That the improvement has persisted——"

—that was into this year—

"——with the consequence that more money is available for investment, is evidenced by the unprecedented support which was given to the last public issue made by the City of Dublin."

At a later stage still, the Minister spoke this way:—

"But in the year just ended the greater part of the State capital programme was financed from the current savings of the community; production is on the upturn, import prices are tending to fall, money incomes all round are higher and there has been a reversion to former habits of thrift and providence."

Every one of these statements has been falsified by the event.

The Minister continued:—

"In short, people now feel that if they have more money, it is money which is worth while to save. In thesecircumstances, while our task will remain difficult, we may face it with some optimism."

He returned once more to it:—

"Last year when outlining the capital programme which we wished to finance, I said that the response of the public to the loan which I then foreshadowed would determine in large measure the Government's capacity to carry the programme through. The ultimate response indicated beyond any doubt that the public were fully behind the Government and were prepared to support in a practical way the programme of national development to which we were committed."

I made the comment on that at the time that it seemed to have a threat about it, if the public did not fully subscribe to any future loan, the capacity of the Government to carry the programme through might be limited and that they might have to have a new view on the programme. Later again, the Minister spoke in this way:—

"Taking everything into consideration, it would appear that the capital programme which I have outlined is within the capacity of the community and can be carried through without damage to our economy. Yet in that connection a certain reservation must be kept in mind."

He then went on:—

"It is only in recent years, and largely on the basis of the American Loan Counterpart moneys, that State-financed capital expenditure has reached its present proportions. While we may see our way safely ahead for another year, it is not yet possible to say definitely whether a programme of the present size can be continuously sustained, without imposing too great a strain on the balance of payments and without depriving private enterprise of its capital needs. As a general proposition it is clearly unwise to aggravate the obvious difficulties of financing the State capital programme by adding unduly to its magnitude, for the assignment of an item to the capital budget does not relieve us of the embarrassment of paying for it. Onthe contrary, to the extent that the State capital expenditure proves to be unproductive, it increases the ultimate burden on the taxpayer and reduces the ability of the community to cope successfully with economic vicissitudes. Moreover, it has to be remembered that, however desirable new capital projects may seem, the resources available to finance them are not inexhaustible and that in this realm, as in most human affairs, means are much more limited than desires. It must, therefore, be the duty of the Minister for Finance to prevent the unwarranted expansion of State capital outlay and, within the programme itself, to ensure a greater concentration on directly productive projects."

On that excerpt, it can be said that the preamble is completely wrong. It was not largely on the basis of American Counterpart Fund money that State capital expenditure reached its present proportions. The American Loan Counterpart Fund money had been used for three years sparingly and only to provide such extra money as was required after an appeal had been made to the public and resort had been had to State Department funds. It was only in respect of what was the difference between the demands of the State capital Budget and whatever these resources were that any resort was had to the American money at all.

Speaking of the previous capital Budget, the Minister said:—

"I excluded from the charge against revenue every single item in the Supply Services which had been classified as ‘capital' in my predecessor's 1951 Budget. About the capital character of several of these items I had misgivings which have not since abated. This year again, however, but for a different reason, I must postpone any reform of the procedure. If there is anything in the view that we are poised between inflation and deflation, then it follows that this is not a year for categorically assigning to taxation charges which for some years past have been met by borrowing."

I suppose we can say that at that pointwe bid farewell to all the old controversy as to whether the capital Budget outlined in the inter-Party days was good or bad. The Minister said he had set it aside although he had misgivings which had not abated, and had decided to postpone any reform but for a different reason. The fact, however, which most people would regard with some satisfaction is that no effort was being made to cut down the capital Budget, the schemes for which had been established in the inter-Party period.

Later the Minister spoke of regaining the confidence of the saving and investing public:—

"...so that we can look forward with assurance to the continuance of a well-ordered and sound programme of productive capital investment."

Later on he had two references, one of which was completely wrong and which drew groans from the people who listened to him—that the improvement in the balance of payments had been achieved without any marked or general disturbance of the country's economy. Secondly, he boasted that the reductions which had been necessitated, as he thought, had been carried through in such a way as to cause the minimum of embarrassment to domestic interests. The last phrase brought into this sort of context was that "taxation pressed so lightly on the land that there is little scope for any stimulus under that head."

I deliberately set about taking out from the Budget speech of this year all the phrases used about capital development because there was no Fianna Fáil Budget in their first 15 years of office that paid any attention to it, nor was there any question of there being a big programme which required to be carried out or anxiety as to whether there was money there to provide the resources from which a capital Budget might be financed. In the early stages of Fianna Fáil they had on an average about £1,000,000 below-the-line and they spent about half what they provided. In the end it is possible to see, from their resorts to the public for borrowing,that in the period in which they were in office they went for loans on three occasions, leaving out the conversion loan and the loan to raise the money to pay the British.

These three loans amounted to £21,000,000 and they got from the people £13,750,000. That was the whole operation of a capital nature, in so far as borrowing represents it, in 15 years. That, however, is putting it far too high as I showed yesterday from a memorandum I had been faced with when I sought to find out for what I could use the first moneys I had borrowed. I discovered that they were all mortgaged by old debts left to me by my predecessors—over £10,000,000 worth, and it was apparent from the lecture which Mr. Eason gave and the acknowledgment on all sides of his figures that there had been £10,000,000 of ordinary Budget deficits in a particular period. I have made the calculation from it all that the Budget deficits which had to be financed, apart altogether from any capital projects, were in the region of £20,000,000 towards which the last Government made certain provision, leaving me to provide the remainder. The rest, whatever it was—it was a small sum relatively—went on capital development.

However, it is a welcome change and if the speech of the Minister for Finance represents a new financial policy the country can have less anxiety because there is going to be no quarrelling about the necessity for schemes of capital development which we ourselves had investigated and approved of and going to be even less difficulty than ever before if the Government have the proper mind in the matter and know how to direct themselves on the question of securing the necessary finance.

In the years before the war, whatever below-the-line services Fianna Fáil decided to finance were items which recurred year after year. Some came in every year and some came in at a later stage and then became recurring. In the early stages, money of a capital type came under two headings, the Shannon Act or electricitysupply. It was for the development of electricity in the country but it all depended on the original Shannon development. There was no mention of any other development, other than, possibly, the Pigeon House, in relation to the putting in of new boilers. Until the war was almost on us, when there was any such talk, it was with regard to the Liffey and it was not, in itself, primarily an electric scheme but a scheme to provide Dublin with extra reservoir equipment. For years it had been understood that Dublin went through a crisis which occurred whenever a season was comparatively dry, because there was not enough water in the reservoirs to supply the city.

Money was also applied under the Telephone and Telegraph Acts. I do not regard either of these as proper for taking into consideration in this connection, because there is a return from the moneys applied under these Acts—it comes back—and a country like this would have to be gasping for financial aid before it would refuse to put money in under these two Acts. I think the same remarks can be applied to anything which has to do with electricity. There is a completely good return—a better return than could be got from investments in national loans—from investments in either electricity or in whatever equipment is required under the Telegraph and Telephone Acts.

Outside that, Fianna Fáil in its early stages put money into the Road Fund, but not very much. They had a little below-the-line service in regard to unemployment at one time. That was in the change-over from unemployment insurance to unemployment assistance. It was 1936/37 before the Local Loans Fund made its appearance as a below-the-line service. The moneys that go into that fund are mainly paid out for housing and public health services. Up to the year 1936/37, there was nothing in the nature of capital moneys or below-the-line moneys associated with Local Loan Fund services. Air matters made their appearance in 1939/40. The tourist matter made its appearance in the year 1943/44. The National Studemerges in 1946/47, and there was a new entry in regard to turf, the modest sum of £400,000. Turf takes its place as an item in below-the-line services from 1946/47. Certainly, looking back in retrospect from 1953 on these performances, I think it will be agreed that the resources of the country were neglected. It can hardly be called a programme that would cheer any man who looks back on it. Remember that these were the days before the war when capital was more freely available than it is to-day and when it could be got at a much cheaper rate than it can now. There were not the same pressing necessities on people with regard to their ordinary lives. Savings could have been more easily acquired than in these days; life was cheaper and easier than it is to-day even comparative to moneys paid for services. These were the wasted years; these were the 15 years which the locusts have eaten. These were the years following that in which Fianna Fáil came in with promises of gigantic developments. In the end, they put money into electricity —a matter which they widely disparaged when it was initiated. They carried on financing telephones and telegraph development; they added a few items such as Aer Rianta, something for tourist development, the development of the National Stud and some developments in regard to turf.

That is the situation which has been built up. In that situation, on a festive occasion the other night, the Minister for Lands, deputising for the Minister for Finance, could describe this as a country with neglected resources requiring the investment of big moneys. Associated with that phrase was the statement that, as the public had not responded in the required manner to recent loans, the banks would have to be asked to provide more money for Government purposes this year. How that is to be extracted from them, or what rate of interest is to be paid, still remains a mystery.

However, the new programme has been announced, not by the Minister for Finance at present absent from the House—one knows the reason and regrets it—and not even by the person who deputises for him to-day. A third Minister was deputed to develop thenew financial policy at the bankers' dinner and to develop it in terms that have been much commented on and to which I shall have occasion to refer several times during the evening. The results of the Fianna Fáil policy in regard to these neglected resources had been apparent to anybody who thinks. There is no doubt unless the country makes changes, unless something new is going to develop as the result of what the Minister for Lands said the other night, there must be a decision taken. The facts stare us in the face. There has been no improvement during Fianna Fáil's 15 years of office. It is a question of whether the implications, almost the necessary consequences, of their policy—the lack of developments, etc.—have been recognised and accepted or whether Ministers are now living in the hope that something will turn up, that something will come along by the sheer force of inevitability.

I should like to refer for a moment to the twin evils of emigration and unemployment. It is not very much use, I suppose, harking back to the old days when there was a great mood of enthusiasm among the members of the present Government and when they were propaganding up and down the country at an early stage before they became the Government. In these days the present Minister for Industry and Commerce was always most vociferous in regard to unemployment. He said that the outstanding fact about unemployment in this country was that it need not exist at all. When that phrase was thrown back to him in the Dáil—it was said outside, of course—he did not shrink from it. He said the problem could be solved at once. When I was timid enough to suggest that it would require some years to get rid of unemployment he said, "No. You can get an immediate solution for unemployment to-morrow."

The Taoiseach at the 1929 Ard Fheis of Fianna Fáil gave his view in this way:—

"The more I consider this problem, the more convinced I become that the problem of unemployment in Ireland is quite capable of solutionand the more certain I feel that it was a crime against the unemployed and against the nation to leave it unsolved."

I could fill this whole debate with abundant quotations of that kind.

The Minister for Industry and Commerce, now the Tánaiste, wrote of the great plans in The Nation.In one copy, dated March 1st, 1930, he detailed the Party's great plan for unemployment, and he said: “Of course there is no reason why unemployment should exist at all in this country and it is not unlikely that after some time the necessity for the Fianna Fáil plan will not arise.” That was not just something said for the sake of talking. All these things were said in that way to create the impression that there was a plan and that people were criminal who did not solve unemployment because any person of sound economic sense must understand the plan and see the solution. There must be something perverse in the make-up of certain people, it was suggested, when unemployment had not been solved and when they did not see their way to do it. During one election the slogan went out from Fianna Fáil that this country had the solution for unemployment staring it in the face and if people did not take down, from whereever it was, that solution for unemployment, it was because they were not nationally minded and were not even humane in their outlook in regard to that problem.

Much the same thing was said in regard to emigration. We had the Taoiseach on the occasion of a visit to New York—he wept here but he wept more in New York—grieving to see the Irish people leaving this country. He said: "Ireland has been a country where mothers rear their children for export." It grieved him to see the people, particularly the young people, leaving this country. This went on for years. We get a description, I think from the year 1932, in a series of excerpts from journalists talking about their discoveries all along the western seaboard and in a number of islands off the seaboard which they visited. They visited someof the employment exchanges in places like Donegal and were shocked to discover that 600 people were signing on in Ballyshannon Exchange, and the comment made was that this signing on was only a preliminary to those people shaking the dust of the country off their feet and going to live abroad. We have the statistical return that 78,000 people fled from farm work in six years, and the addition was made that the result of that ordinarily would be that people who fled from farm work passed through some temporary period at work of some kind in Dublin before they cleared across to England.

I made a calculation before with regard to what was then accepted as the emigration figure over a particular period. The figure I was then referring to was something in the neighbourhood of 300,000 and I drew the comparison that the three Ulster counties left to us had at the 1936 Census 280,000 people. Therefore, the result of the emigration that Fianna Fáil brought about in their period is the same as if every single man, woman and child in the three Ulster counties left to us had disappeared. The figure, according to the last return, shows that over 500,000 people have emigrated since 1932. According to the 1936 Census, County Galway had 168,000 people in it; Leitrim, 50,000; Mayo, 161,000; Roscommon, 77,000; Sligo, 67,000, and the tot of these for the whole of Connacht is 523,000 people. I want that to be taken as the comparison for the future. The Fianna Fáil operations in leaving the resources of this country undeveloped and neglected resulted in an export of population almost equal to the whole population of those counties of Connacht. It is the same as if these counties had been devastated of population in 1936.

I felt at the time that the Government should be asked to state their position. They always parry this by stating their aim or desire. They ought to accept that the aim and wish of everybody dealing with this country is that we ought to retain the population we have and what can be added to it by way of natural increase,provided there is a natural increase through development economically which will enable us to keep people at home to live happily in decent conditions.

Leaving aside that as an objective and wish, what about facing realities? Is it accepted, as one newspaper has often put forward, that this country cannot support more than, say, something like the 3,000,000 which the country has? Are we to take it that there is nothing in the way of development which will enable us to keep more people than, say, 2.9 million at home? Must we export the growing produce of our own population? Is it accepted that that is now facing us and that, even when we export them, we will carry roughly from 65,000 to 70,000 unemployed after we have poured out a number equivalent to the natural increase in the population year by year? That is the problem as I see it, that one must accept a situation in which people will continue to fly the country and people will continue to be permanently unemployed unless there is development on a considerable scale. We should not approach it in the timid way which comes from the phrase of the Minister for Finance, that the resources of this country are far beyond what have yet been tapped. The only thing is that they are in bad hands at the moment because the system we have inherited has not allowed the resources there are to be applied to the proper development of the country.

I always feel that it is somewhat of a menace that the person chosen by the Taoiseach for the Department of Finance in 1951 was the man who is still Minister for Finance, because in 1945, when the Beveridge full employment plan had occupied a certain amount of attention, he went to a student society in University College, Dublin, and decried planned economy. He animadverted on the Beveridge plan and he clearly had his mind made up at that time. He stated:—

"Within the legitimate province of the State they should not fail to strive to give to the people better conditions of life, better houses, schools and public services, and allthe collective comforts and amenities that their economy, founded as it was on agriculture, could afford them. Supposing that by using all the means that Sir William Beveridge proposed they succeeded, temporarily at least, in creating more jobs than men, what would be the reaction? One of two things would happen. The first and most natural would be that the too few men available would demand higher wages for their labour. Further, they would not refrain from putting their demands higher and higher until a point was reached at which those who wanted work done would have to consider either the abandonment of their projects or the substitution of machines for the men."

That was the considered view of the man who is now Minister for Finance, speaking as Minister for Local Government in 1945. I therefore regarded with apprehension the placing of that gentleman in charge of Finance. That view, of course, leads to acceptance of the view that at one time was fairly common: that, to put it crudely, to keep labour in hands one had always to have a pool of unemployment, and that any scheme which would take away from the pool of unemployment and would not leave us folk scrambling for anything they might get for some kind of work they were asked to do would be bad in the result. The then Minister for Local Government, Deputy MacEntee, accepted that view. The note at the head of this was: "The difficulties of giving effect to the Beveridge Plan." The papers had the comment that the Minister discussed the full employment plan and decided against it. That is the individual into whose hands there came the Central Bank Report a couple of years ago. There is no necessity to remind the House in detail of what was in that report. One of the things pointed to was that there had been a very high level of employment in the country and that was certainly spoken of, not in any tones of praise or encouragement or satisfaction, but was apparently regarded as something which would cause anxiety and, possibly, a little bit of terror.

That report, going to the person who had his mind made up that full employment would lead to a worse situation must have been grist to his mill. We saw the result of that in the Budget of 1952 and we have seen it carried forward in the Budget this year. I believe that it all springs from that particularly bad economic viewpoint: that it is bad to have too much employment, because you cannot keep all the people under control. Keeping labour under control was always the view which Fianna Fáil had.

This House has often had quoted to them the complaint of the Minister for Justice, Deputy Boland, when he said that what Fianna Fáil actually wanted to prevent was a certain thing. He lamented the increase in Civil Service salaries which, he said, would cost £700,000 in a full year. He also said:—

"The Army, the Gardaí and teachers are also entitled to increases, but the total cost is not yet disclosed. Local government officials will naturally expect increases also, as will workers all over the country. This was the situation which Fianna Fáil was determined to prevent, and would have prevented if three of the six lost Dublin seats had been held, for that would have given Mr. de Valera a majority on February 18th last."

That was the lament of Deputy Boland after the event. We know from an examination of the files that came into our hands when we became the Government, that the present Tánaiste had sent a minute to his Department in October, 1947, demanding a new wages standstill piece of legislation. Part of his minute was to the effect that "On the assumption that discussions with the Trade Union Congress will not result in any agreement on the stabilisation of wages rates, legislation will be required." He then gave his instructions that immediate steps should be taken to prepare a draft Bill, the main purpose of which would be to prohibit any employer from paying any worker a greater wage than he was receiving on the 15th October, 1947. This ominous paragraph followed,that the Trade Disputes Act was to be withdrawn from any strike, the purpose of which was to compel an employer to pay wages above that sum. The Minister directed, according to the note that I took, that "The duration of the Bill will be two years. Penalties should be severe." So the plan was on foot again. Of course, it had been publicly announced in October, 1947, when the present Taoiseach, speaking in Tipperary, said:—

"The Government wanted to control wages so that they could have a level set of prices, such as they had from October, 1943 to February, 1947."

That was the ominous period chosen. He went on to say:—

"We have a scarcity on the one hand and increased prices on the other, and no Government can settle that. These are things that are determined outside the country."

In the Dáil, on the 15th October, 1947, a few days before he had spoken in Tipperary, the present Taoiseach said:—

"The Government regards this temporary limitation of wage increases as vitally necessary in present circumstances, and if the trade unions cannot undertake such an agreement as I have outlined then the Government will produce proposals for legislation to the same effect."

The Tánaiste, speaking in the Dáil on the day after the Taoiseach had spoken, said:—

"I want, however, to make it clear that the Government regards it as an essential safeguard to the interests of the general community at the present time that some check upon the upward movement of wages should operate."

About the same time, the Taoiseach spoke again of the dangers and difficulties of 1947, and said they were greater than at any time during the war. The retort of the Government to all that was made through the Tánaiste, in asking his Department to prepare new legislation for the pinning of wages to what they were in October,1947, and for the withdrawal of the Trade Disputes Act. That was to force employers from paying any higher wages.

That was the idea which Fianna Fáil had over the years—that wage contracts should be kept at a certain point. That is what Fianna Fáil really intended to prevent. As Deputy Boland had said, these increases were scandalous things—they were bad in the eyes of the community. The civil servants got an increase, and it was clear that the Army, the Guards and the teachers would naturally expect that some increase should be given to them. Local authority employees would naturally look for some increase in their emoluments corresponding to what the Guards were likely to get.

The middle-class people got very little help from the Government over their whole period in office, and particularly during the period of the war and since. The recent Budget, of course, hit the middle classes harder than any other class. Among those who had suffered were people who had served the State in different ways and had gone out on pension. Professor Duncan, of Trinity College, lectured on "Fixed Incomes and Purchasing Power" to the Local Authorities Retired Officers and Servants Association in June of this year. His lecture got flash headlines in the newspapers. In the course of his lecture he said:—

"It was no longer a question of easy extinction of the pensioner or the property owner but a question of direct and savage starvation of a great number of people in a short space of time."

That statement of Professor Duncan's is printed in black headlines in the newspapers. In smaller type he is reported to have said that:—

"This financial position was not a visitation of nature or a visitation of God but a direct, immediate and only consequence of the financial incompetence of Governments."

Later he said that:—

"They could no longer hope for Government action and must try to adapt themselves to looking forward to a continuous and steady depreciationin the value of money. They could only look forward to a compromise between injustice and inexpediency."

Two people were called upon to deal with the pensioners' position. One was the deputy Minister for Finance who is now facing me. On the Superannuation Bill which was discussed in the Dáil in October, 1947, he was asked about the position of pensioners at that time when other emoluments were being raised. His reply was:—

"There never was anything in a civil servant's contract or a teacher's contract that the pension he would draw at the end of his days would be sufficient to keep him at a reasonable standard of life. What they were told was that they would get a certain pension which they could draw after a certain number of years' service. They were not told at any time that that sum of money would be able to keep them in all cicumstances."

He went on to say:—

"It is not a social service. They can draw the pensions whether they are rich or poor. We have small pensioners who have other means of income, and we have large pensioners who have no other means of income. I do not believe anybody wants to establish a means test for ex-State servants, seeing the violent objections there are to a means test in relation to the ordinary social service payments that we make."

At that point, Deputy Norton interrupted to ask:—

"Can the Minister say what the cost would be of revising the pensions of those who retired prior to 1940 to the level of an index figure of 170?"

The Minister's reply was that he did not know. The question was not discussed in the background of any information indicating that the burden was going to be very heavy on those people. Those people qualified for pensions and they were getting their pensions, and that, according to the Minister, was good enough.

The Independenthad this headingto an editorial of May 20th, 1953, this year: “Minister's Callous Attitude”. The editorial went on to say:—

"The Government will do nothing about the pensions of former officials. This decision, announced yesterday by Mr. MacEntee, Minister for Finance, will be regretted by all with a sense of fairness. Even more regrettable is the strange line of defence taken up by the Minister."

It was no strange line of defence to anyone who had heard the Minister opposite speaking here in 1947. The editorial went on to say:—

"‘After all,' said Mr. MacEntee, ‘'they are having the pensions they are entitled to.'

"The logic of this argument, if any logic were in it, would, of course, have prevented any adjustment of wages, salaries or pensions to meet the depreciation in money values. It would, for instance, have been a good argument against increases in ministerial salaries and Deputies' allowances; but we have no recollection of hearing it said on those occasions that Ministers and Deputies were getting what they were entitled to."

Later, the Independenteditorial went on to speak about the pensioners:—

"The pensioner's pound may have had 20/- purchasing value when his pension was fixed; now it is not worth half as much; he has to spend 45/- to get the commodities that 20/-of his pension secured before the war. The Government's attitude, that he is getting what he is entitled to, is both callous and inaccurate. No doubt, the pensioners have not much political or voting power, but that is hardly a reason for allowing them to live on the starvation line, as many on a low scale of pensions must."

This year, while the pensioners are being left in the background and while wage control, to the disappointment of the Government, I am sure, is no longer possible, feasible or expedient, we are going to have reliefs for certain people. We are to have a taxation inquiry by a new body. Itwas set up by the Minister for Finance and was addressed by him in October of this year. The committee is being set up under the chairmanship of a judge, as a result of what was said in the Budget speech of this year. It is expected that it will be mainly concerned with certain things such as the depreciation of plant—obsolescent plant and machinery—and with certain matters in regard to the protection of people who are running industry or who are engaged in commerce in this country. These are the folk whose plight is so precarious that a special inquiry has been set up to deal with them.

I take a certain table from the 26th annual report of the Revenue Commissioners, the one that runs to the 31st March, 1949. I add to that certain other figures that I have got from the 29th annual report of the commissioners. That report takes the figures up to the 31st March, 1952. I take Table 70, giving figures for gross incomes, Schedule D, the profits from businesses and professions, etc. In the year 1937, I have a figure written in representing the gross income at a level of about £30,000,000. That is an insertion in my own handwriting. The printed document shows that for 1943-44 that figure went up to £39,000,000; in 1944-45 it went up to £43,000,000; in 1945-46 to £46,000,000; 1946-47, £49,000,000; 1947-48 to £54,000,000; 1948-49 to £64,000,000; 1950-51, £69,000,000; and in 1951-52, the last figure I have, £76,000,000. It has risen from £30,000,000 in 1936-37 to £76,000,000 in 1951-52.

If I take a period after the war, say, 1945-46, the gross income figure Schedule D has risen from £46,000,000 to £76,000,000. It has gone up by an additional £30,000,000 on that £46,000,000 in the period since the war. It was right to say that was profits from businesses, professions, etc., and I was advised that the figure included not merely income derived by profesional people but income from investments and I was also advised that the figure for investment and for profits in the gross income remained relatively stable. Between them they would not amount to £13,000,000 andif you substract £13,000,000 you get the increase for any period. Therefore, if that £13,000,000 figure be correct, it would leave such gross income in 1945-46 at £33,000,000, and in the year 1951-52 at £63,000,000.

These, then, are the people whose needs must be catered for by a special commission to inquire into whether they are granted enough money to replace plant and machinery or look after the premises in which they carry on business.

There is one other figure comparable to that—it is really the same figure taken from a different angle. It is the figure for corporations profits tax. That is Table 80, from the similar two volumes of the Revenue Commissioners. The assessments made in each year for corporation profits tax were: in 1945-46, the taxable profits were within a few thousand pounds of £15,000,000; in 1951-52 they reached £27,000,000. They have risen from £15,000,000 to £27,000,000 over the period from 1945 up to the last period that was given. That is a figure which can be analysed and many other comments made on it. I just want to put it there in contrast to what has been done for other people.

The Budget of 1952 deprived the people of this country of the help that had been given in the subsidies to foodstuffs. It was done on the solitary argument made in the Budget that salaries and emoluments had been increased by a higher amount than the increase in the cost of living. Therefore, there was no necessity to continue these subsidies any longer. The cost of living in that speech was measured back to 1939 so that I suppose we were to take it that the Government was of the view that the standard of living enjoyed by the people of this country who were depending on wages and salaries had risen to a desirable point by way of height in 1939, and because of the difference in the increase in the cost of living and the increase in wages and salaries they had bettered themselves to some extent. Then, the Budget made provision to remove that from them because in the end theargument must have been that the standard of living had advanced beyond 1939 and that apparently was something not to be easily accepted.

It could not be said that pensioners had increased their standard of living beyond what they expected to get when their pensions were fixed. The cost of living had chipped so much off the pounds or shillings they were getting that they were reduced to a point very much below what they expected when looking forward to retirement from State service. But in contrast to that, just because there was propaganda carried on by a certain number—I do not blame all our industrialists and commercial people on this account as I know that quite a number felt that they had done very well, and a certain other number felt that whether they had done well or not they ought not to talk about it and direct public attention to their position—but there are certain people with whom the desire to have gain and profit is inordinate and they have for years been trying by propaganda to get what is called the system of dealing with machinery and plant investigated so that you could allow them more for plant and machinery because it is said that machinery costs so much more and they made the case that you should allow them sufficient to buy their own new machinery as though they had nothing in the way of secret profits accumulated since they first started business. That plan has been put up so that the position of these people can be bettered, the people whose gross income-tax and whose taxes under the corporation profits tax so increased as I have described in the extracts from the revenue tables. These are the people who have to have special commissions set up to cater for them. Of course, if there is any report in their favour, by the extent of which they are favoured the income revenue to be derived from direct taxation will drop. And if that revenue has to be maintained, then extra impositions will have to be made on the people who cannot escape or get any benefit from the matter of increased charges for obsolete or worn-out machinery.

Outside of that, the Government hasgone back to its old idea of relief schemes. It has not taken long—barely two years—to get back to the Fianna Fáil idea of pumping money into the roads because they say there is great labour content in roads: we can absorb a great many people on the roads. These are people who, through the depression that the Government by its budgetary policy has produced, have been flung out of occupations of a productive type and occupations of a much better type with better wages than they will get on the road schemes. We are back to relief schemes, because road schemes are, in the main, relief schemes. We are back to a few other schemes and I want to comment on some of these because it shows the difference between the orderly approach made to the problem of unemployment by the inter-Party Government and the chaotic, muddled sort of approach made nowadays.

Early this year a bit of propaganda started to have Dublin Castle built up again. It was started first of all, I think, by Deputy Briscoe, who used to come into this House, metaphorically, with a handkerchief before his streaming eyes thinking of the plight of the civil servants who had to accommodate themselves under shockingly bad conditions which led to inefficiency in their work. Deputy Colm Gallagher, in the intervals of his efforts in dealing with the horse trough on O'Connell Bridge, also got quite excited about the civil servants and the desperate plight they were in in Dublin Castle. Various other Deputies, mainly from the City of Dublin, took up the cry. First of all I think it is proper to recall that these people did not cry anything over the £1,000,000 arrears of payment which the Government did not give to the civil servants when it was awarded to them by an Arbitration Board which the Government itself set up. The whole idea was to get the Dublin Castle scheme going in the interests of the civil servants. Later it became a matter of getting the civil servants to work efficiently. How, it was asked, could you expect efficiency and good work from people who had to live under such shocking conditions asthose that were to be found in the Castle at this moment. It all came to a head at the Fianna Fáil Ard-Fheis in October of this year when Deputy MacEntee, Minister for Finance, said:—

"I know that certain organs of the Press were following the lead of certain politicians who had tried to create a great deal of prejudice throughout the country in regard to Dublin Castle. Messrs. Norton, McGilligan and Dillon used to talk about ‘kitchen workshops, basement workshops and sweatshops'. It would rather surprise the workers of Dublin to know that these gentlemen were prepared to allow a considerable body of human beings to be housed and to work in quarters in Dublin Castle which were formerly coach-houses. The Commissioners of Public Works had reported... in 1948 that these buildings could not be described as sound. The bulk of the civil servants came from the country and they could not be expected——"

these rural inhabitants transferred to Dublin—

"to live and work in such circumstances."

There it was. Deputy Norton, Deputy Dillon and myself were inhuman because we were condemning civil servants to work in unsound, filthy quarters in Dublin Castle. Apart from all that there is the utilitarian aspect that one could probably get more work out of these civil servants if one gives them better quarters and humanitarianism and utilitarianism, therefore, now join hands and we are all going to march together towards this grandiose scheme of rebuilding Dublin Castle.

It does not matter if the neglected resources of Ireland discovered by the Minister for Lands at a dinner the other night go by the board. It was not all of a sudden that these buildings became unsound and unhealty. It cannot be said that the three years of inter-Party Government caused any more deterioration in the condition of Dublin Castle or in the quarters in which the civil servants housed thereare working. I would imagine that problem had existed for many years before that. When I saw the plans for the reconstruction of Dublin Castle, I never saw any minute that based the necessity for such reconstruction on the safeguarding of the health of civil servants working there or on the utilitarian grounds of getting more work and better work out of the civil servants housed in those particular quarters.

First of all, what was the Dublin Castle scheme that I, with the help of my colleagues in the inter-Party Government, turned down? It was estimated in the scheme that I saw that the proposed reconstruction would cost something in the region of £4,500,000. In reply to an inquiry made by me to the Office of Public Works as to whether that would be the cost in the days when I was dealing with the matter, I was told that those costings had been applied to the rebuilding of the Castle many years before and they would have to be very considerably increased to meet the costs then operative. As far as I remember, there was a minute on the file with a manuscript note from some of the officials of the Board of Works, and my memory flicks back to the fact that either by a note added to the typescript or as a result of a telephone message, I was given to believe that I might consider the costs to have doubled. What we were facing, therefore, at that time was something between an £8,000,000 and a £9,000,000 scheme. I would ask those who are interested in this scheme to press upon the Government the desirability of putting somewhere in a public building to form a background to the pleasant Christmas decorations, or in one of the windows of the Stationery Office, the model encased in glass that we had in the council chamber for many days.

Put it in the middle of O'Connell Bridge.

It might take the place of the horse trough. If it were illuminated at night it might give the taxpayers and the ratepayers a better idea of the extravagance that is going on. I suggest that model should be produced so that people may have an opportunity of seeing the grand planthere was. This idea was not inspired by sympathy; neither was it for the purpose of trying to get better work out of the civil servants. It was just another of those megalomaniac plans that the Fianna Fáil Government had up to 1947. As far as I remember, provision was to be made for white stones, and some one remarked that they would give civil servants an opportunity of leaving no stone unturned, as well as marking out paths which would provide an excellent opportunity for leaving no avenue unexplored.

The model was there. The plan was there. And the plan was a grossly extravagant one. Now, we had other views with regard to the civil servants. I do not remember any case being made with regard to ill-health. There was the situation that some underground stream was causing a certain amount of erosion and, as a result of that, there was the possibility of buildings toppling down. I did not regard these buildings as the most modern or comfortable buildings we could have, but no plaint was ever made to me on those grounds, as far as I know. The proposition was that here was a situation in which buildings would have to be reconstructed and here was the cost of such reconstruction and we faced up to that problem in a different way from the present Government.

In those days we had the idea of making what is regarded as and still is referred to as a bus station into a building to house the civil servants, as it does at the moment to the greatest extent of its floor space and accommodation. Our view was that, according to all the calculations, that building would house something in the neighbourhood of 800 civil servants and the number we had to cater for—I am not now including Ship Street Barracks, as the Parliamentary Secretary did, to confuse the issue—in relation to the Castle proper was just 800 people. The plan we had was not to allow the Store Street bus station to be given over to what was then the bankrupt concern of C.I.E., the people who could not pay for this building, orany part of it; we intended to transfer one group of civil servants in the main into that building. They would evacuate the building known as Arus Brugha and we intended to transfer 800 civil servants from the Castle.

The plan was an excellent one and it avoided the expenditure of this vast sum of money on the reconstruction of Dublin Castle. In that way we would get our civil servants not merely housed but more compactly placed than they had been; and, in the background, was the scheme we had for university buildings and university development. We were certainly able to look forward to a situation in which the civil servants would be gathered into one central building out of all the numerous private houses they occupy at the moment. They would be housed in the main in Government Buildings as we know it, up with the Board of Works, round about Earlsfort Terrace, where the Department of External Affairs is, and in that part of the present university building which we desired to have evacuated when the new university scheme was in progress.

We had a scheme for better buildings for University College, Dublin. We had in mind the fact that University College had never been properly equipped in the way of buildings. The present buildings were not even completed because the contractor was caught in the early stages of the war and could not complete the building programme for which he had contracted. There was only a partially completed structure intended to meet the needs of 500 students. These buildings have now to cater for a student body running steadily in the neighbourhood of 3,000. We had definite plans to meet that situation and to a certain extent those plans are now seeing the light of day. Those plans envisaged the authorities moving University College out to Belfield. Belfield was their own choice. We were to provide the money and, by degrees, as faculty by faculty left University College part of the buildings so vacated would be utilised by civil servants. That was part of the bargain I made. The College of Science, a series of buildings includedin Government Buildings, would be evacuated first and the premises so vacated would be handed over for the purpose of housing civil servants and, as University College proper moved out, the whole of Earlsfort Terrace would eventually be handed over for the housing of civil servants.

That was a good plan and I suggest that at this moment if £6,000,000, £7,000,000 or £8,000,000 has to be spent on anything it ought not to be spent on the reconstruction of Dublin Castle for the housing of 800 civil servants; it should be put at the disposal of the authorities of University College so that they can make proper provision for the buildings in which they have been in need since University College was first established.

Of course this whole matter took a new slant when the Estimate for the Office of Public Works came up for discussion on 22nd October this year. Do not forget that Deputy Briscoe and Deputy Gallagher went wailing around about the necessity for housing civil servants and providing employment to make up for the decline in building generally. The plan that was then contemplated was undoubtedly the grandiose plan they knew from the files. Deputy Beegan, Parliamentary Secretary, speaking on 22nd October, at column 464 of Volume 142 of the Official Report, said:—

"Another matter mentioned here by Deputies, particularly a few of the Fine Gael Deputies, had reference to the proposed reconstruction of Dublin Castle. They protested against an expenditure, as they said, of £4,000,000 or £5,000,000 on Dublin Castle. I should like to know where they got that figure and whether they can prove that there was an estimate of £4,000,000 or £5,000,000 for the reconstruction of Dublin Castle."

I say that there is such a figure and I would ask, if there is going to be any denial of that, that the Board of Works memorandum, or some of it at least, would be produced to show what were the figures and when was the £4,000,000 figure arrived at as the cost of the buildings that were projected on to the scheme I certainly saw. I would alsoask the deputising Minister for Finance to find out if I am not right in saying that there is a manuscript note on the file dealing with that to say that these figures are out of date, that they were dated as to many years before and would have to be raised considerably. I do not know whether it goes the length of saying that they ought to be doubled but certainly that was the information I got, whether verbally or on a file I cannot say.

The Parliamentary Secretary continued:—

"It is a fact that the Government have decided to go on with that scheme, which was held up by the previous Government after they had come into office which had been envisaged by the Fianna Fáil Government before they went out of office in 1948. The present up-to-date estimate for this scheme is £600,000 for the first stage, which will be spread over five years and which will provide continuous employment for 100 skilled and 50 unskilled men. We hear a lot of talk about the relief of unemployment. For the sake of £600,000, spread over a five-year period to carry out the first stage of this work, are the Deputies who object to it going to deprive 150 men in the City of Dublin of employment and 150 households of the wages of these men?"

At that point the Minister for Finance who is now absent, broke in to say:—

"And steal a few more bus stations."

You would think it was a matter for criticism that we, as it was put, stole the bus station. We removed the bus station from a completely insolvent concern. When we came into office that building was not finished. There were certain bits of the reinforcement of the concrete sticking up like ribs into the sky and that building would not have been completed, because C.I.E. had no money with which to pay, until the plan was evolved to remove that building from C.I.E. and put it into hands that could pay for it.

They could not pay the rates on Kingsbridge.

I believe they had a cheque drawn, but it was hidden. It was in the safe.

It was one of £500,000 worth of cheques.

The safe was packed with cheques they could not issue because they had no money.

That particular structure would have remained with all the ribs sticking in the air, if it had to depend on C.I.E. getting the money with which to finance the completion of it. We stole the bus station, as it was so lightly phrased, from people who could not pay for it and we had the plan to turn it into a Civil Service building, which plan has been in the main now adopted. The so-called bus station is in the main a home for civil servants—offices for civil servants. As to all the floors, I understand, except the ground floor and the mezzanine, it is completely Civil Service. That was the plan we had but the Parliamentary Secretary, Mr. Beegan, of course said that £600,000 was going to be spent on Dublin Castle. You can think of the reactions of Deputy Briscoe and Deputy Colm Gallagher when they hear that all that is going to happen under £600,000 spread over five years. That represents whatever fraction of what I believe is estimated to be an £8,000,000 or £9,000,000 scheme.

That is the type of thing that Fianna Fáil drifted into under, as I suggest, the heading of relief schemes. If that is the line they have, then we want no more of it. I suggest the ordered plan we had, bearing in mind the conditions of the civil servants and the necessity for getting them into compacted dwelling areas was a good plan and the fact that we were able to do it without imposing any borrowings on the State for this purpose surely ought to redound to the credit of those who did so. The plan was the devolution of that building from a bankrupt concern to a concern that could pay and making room for the housing of civil servants who might be in bad conditions in the Castle.

That matter of the civil servants, ofcourse, was one of the problems that called for attention and had been neglected. That is only one aspect of the matter—the housing of the civil servants. Surely members of the present Government when they were in Government before 1947 must occasionally have had brought to their notice the increase in the numbers of the civil servants over the years. Certainly enough questions were asked about it and there were complaints in the papers outside.

On first going into my office and finding it had to do with the Civil Service establishment, I inquired whether there were any plans for changing the type of work that civil servants did in the hope that the personnel of the Civil Service might be reduced. One thing had to be guarded against in that, I was particular to state. Propaganda rumour, of course, started the moment we went into office that there was going to be a number of dismissals amongst the temporary staff and I as far as I could, certainly in speeches and in any instructions I gave with regard to this matter, pointed out—I got the figures first and then I made these the basis of certain talks, if not minutes—that normal wastage in the Civil Service runs to about 1,000 a year, between people who retire under the age limit, people who die in the service, women folk who get married and people who desire for one reason or another to leave before the ordinary time. I understood there was a wastage of 1,000 people and, if the wastage were allowed to continue, without dismissing anybody in the Civil Service, whether temporary or permanent, a new situation could easily be brought about in which the Civil Service numbers could be reduced, always provided that the work of the State could be carried on with a smaller number.

Again, I inquired whether any discussion, plan or investigation had ever been made with regard to that. I could find no trace of any. A couple of commissions had dealt with the Civil Service but certainly there had been no point made as to the type of work they were doing. I got the consent of my colleagues, certainly of a group ofthem, to investigate that matter. I cannot say, and I made this statement before, that any great plan had emerged but investigation was going on with the hope of arriving at some new scheme of administration whereby all this vast and laborious amount of minuting would be done away with, while at the same time the responsibility that must be kept about the handling of public money would always be preserved.

I felt there was a solution there. I could not say how soon it would take place, what it would mean, how it would go. In any event, it was being investigated and the point had been reached when it was quite clear that this Dáil, the Public Accounts Committee and the Comptroller and Auditor-General had been brought in to accept modification of the attitude now adopted towards public financing. If that could have been got, there was no doubt about it, quite an amount of Civil Service work could have been avoided and therefore the personnel of the Civil Service in the end could have been reduced.

I want nobody to think that anybody that I was associated with wanted dismissals. That was carefully protected against. The idea was to use not even the full wastage rate but part of it occurring year to year so as to arrive at the end at a Civil Service which could be more easily accommodated by the people of this country. The one thing we were clear about was that those who were civil servants were not going to be deprived of the emoluments that they should get in comparison with the salaries being earned outside and we showed our view in regard to that and our faith in a certain proposal that we had all accepted in Opposition when we established the system of arbitration—a real system of arbitration—for the Civil Service.

That was given no attention by the Government. A Civil Service simply grew. The only thing the Government did was, in common with other people, they stood-still their wages and deprived them over the years, even more than they deprived workers outside, of the emoluments they were entitled toin accordance with the increase in the cost of living.

In the early part of this year we were faced with a crisis in regard to the provision of butter and butter producers and their trouble. Again, that problem must have been calling for attention before 1947. What plan was there, however, for that? Nothing; the thing drifted on. There was a subsidy position at that time but then, of course, when the subsidy position got unbearable the Government avoided that at the end.

The Minister for Education is one of the most agile of the present Ministers. He goes around the country—he is hardly to any great extent in his office —he is occupied in the main opening schools. By means of parliamentary question we can get an answer, but I venture to say here that the Minister for Education since he came into office in 1951 has not opened a single school the money for which has been provided by the Government that he is associated with. He has opened schools allocations for which had been made in our time and the money put down in our time, and I would ask the present Minister deputising for the Minister for Finance to get the figures regarding the school building programme. I want those to point that particular moral.

The Minister for Education will read in some of the files of the Department of Education, for some of them came my way, that undoubtedly there were memoranda that showed the shocking condition with regard to primary schools in the country. A lot of them were 100 years old. Some of those that were 100 years old had been originally intended as stables and had been converted. A number of them had earthen floors and channels were cut into those by the youngsters' feet as they walked in and out in the mornings, with the result that they deteriorated and at the entrance to the school formed natural channels and the rain came in off the side of the road into the school-room floor. All those things were there over the years from 1932 to 1947. I would like to find out over those years, 1932 to 1947, what amount of money year by year wasallocated to school buildings, and more particularly what proportion of the amount allocated was spent in any of the years. I would like to get a contrast with both the amount allocated and the amount spent in the period, say, from 1949 on. There, again, was a problem with regard to school buildings that had been accumulating over the years, and no provision, no foresight and no forethought about it, and nothing done in connection with it.

We are now told in connection with the last National Loan that the Minister for Finance is of the opinion that the E.S.B. ought to be allowed to get its own finances. That was a move that was in the mind of some of the board of the electricity supply organisation for many years. I understand that previously when it was mooted it was turned down on a ground that it might not be very good to talk about but which certainly was one that ought to have some attention paid to it—that it was quite conceivable that the E.S.B. in a particular year might find it possible to borrow at a cheaper rate than the Government could. I felt when I read the Minister for Finance talking to the Chamber of Commerce, or some body, and saying that the rate of interest is likely to be lower if they were going to find their own finances, that it was possible that it would be higher, and that he was rather thinking that it would not happen in his own time, because he might not like a comparison between the rate at which the E.S.B could borrow and the rate at which the Government could borrow under his own particular administration.

I want to put in a warning with regard to that which I think is a good proposal and one that possibly should have been encouraged and given effect to years ago. If electricity supply is removed from Government financing do not forget that the E.S.B. is one of the few State-sponsored bodies that gives a good return for the moneys invested in it. I mentioned that fact, I think, in the Budget of 1949, when I said that the return from State investments in those companies was higher than the rate of interest in it, so from that anglethings were not too bad. From this side of the House, the Fianna Fáil side, there came the comment that I was giving away the whole case I used to make in earlier years when I said that Government-sponsored bodies were not giving good value and a good return for their money. Of course, when the figures were separated an average return was maintained at a point higher than the average rate of interest I was paying for the reason that the E.S.B. was returning about 5 per cent. and when you remove that 5 per cent. the return on State investments slumps very badly. In the new picture that will be presented, the picture will not be as rosy looking as the one that can be painted nowadays with the E.S.B. returns in. However, the E.S.B. probably has not as good a future ahead of it as its past has been. The E.S.B. is now having more and more put on to its shoulders the various turf stations. I do not think that there can be any denial of this, that as each new turf station is added in for the electrical development of this country the unit price to be paid for electricity must go up. In other words the production price per unit generated is higher, considerably higher, than it has been found in any way up to the present even with the E.S.B. and the Shannon and the Erne joined to the Pigeon House burning English coal. The future prospects of the E.S.B. are not as bright as their past has been. Nevertheless, they are, as I pointed out, a good concern and they are a concern that is going to be allowed to finance itself. I do not have to pause to say too much about past affairs, but at the same time the Minister will remember what his colleague said in connection with the "white elephant" that is now going to be let loose to lead the other electricity stations and going to bear part of the burden of the various stations and the other investments. The E.S.B. has on the whole a broad back to carry all those extra burdens that are going to be placed on it by the inauguration of these new stations.

We come back to the new programme with regard to borrowing outlined by the Minister for Finance at the dinnerthe other night. In that connection, the Minister last night tried to give me lessons in finance, and I would ask him to deal with one small matter first of all in connection with the last loan. We were told that the banks were taking up £5,000,000 of the loan. There has been complete silence so far as to whether the banks are being given the rate of interest that has been given to the ordinary investor. If they are, then it is a scandal. They should not be given that interest rate. They have not earned it and there is no case that can be made for allowing them the 4½ or virtually 4¾ per cent. the investor is getting. I want again to repeat what I have said in this House before at the time when myself and a couple of my colleagues discussed the provision of money for the Dublin Corporation with the banks, and all through a weary day they contended that that was not a proper type of investment for the lodgment of their resources. They said that the corporation stock was a drug on the market which they could not liquidate easily if they had to. It was pointed out to them—I think they were asked only to invest £5,000,000 between a whole group of them—that if they spread it out, the investment at the end of the queue to be cashed in—but only when everything else was called in—was not so very much as to hamper them. Then they turned to the point of their very well-knit series of investments, and how you could hardly segregate out or dislodge one from another of their investments—nearly all British securities, of course—that that would have repercussions here and elsewhere on the whole scheme, and they said they were going to be faced with terrific difficulty in choosing which securities they would sell in order to take up Dublin Corporation loan.

At the end of a whole lot of argument that they brought on this matter we were told that Dublin Corporation would get its £5,000,000 or whatever it was but there was a difficulty about the interest rate. Certainly apart from the interest rate they offered the accommodation. Then there was a suggestion that some of the technical officials would meet the Bank Committee in order to discuss with themcertain problems. At that point some of the directors said: "What do we want the technical people to meet us for?" It was pointed out that there would be this upheaval if their investments would be very seriously dislocated and that there was a good deal of matters therefore that required investigation, but they said that they did not want to meet anyone. In the end they said: "We are not going to sell any investments to get £5,000,000 for the Dublin Corporation. It is only a matter of a bookkeeping entry, one will balance another."

It would be well if every Deputy in this House would take note of what has been said, and every member of the Government.

I have said it several times and I will say it again, that that was their attitude. It is only going to be a matter of a bookkeeping entry.

I hope we will hear no more about the printing press.

Do not talk about disarranging investments. That was all part of the argument. The way the £5,000,000 was to be found was by bookkeeping entries. I want to know if this £5,000,000 the banks have taken up is also a bookkeeping entry. Are they going to charge 4¾ per cent. for making entries in their books? I do not think that is permissible. I believe that the banks must ask for the full rate of interest for that £5,000,000. In the first place, I believe they have lost their case. They gave away the whole case of the banking system in the discussion they had with us on the £5,000,000 for the Dublin Corporation. They may endeavour to regain lost ground. It is fundamental to their claims that they should get the full rate of interest the private investor is getting on whatever part of the last National Loan they took up. There is no doubt that they are getting a return on invisible money and certainly on created money. This is the sum I would ask the Minister for Finance to answer for me. Is there anything wrong with this statement? It is an over-simplification of the bankingsystem but there is nothing wrong with it in its essentials. I got this reduced to the simplest terms so that the deputy Minister for Finance could understand it. I have a book here but I do not intend to quote the whole of it. I am giving the full content of one paragraph. It says:—

"The process of creating modern money is as follows: Some people own, say, £1,000,000. They establish a bank. The public entrusts them with a deposit of, say, £2,000,000. Having thus at their disposal £3,000,000 in cash, the bankers grant book entries up to several times this amount (about 10 per cent. cash being the rule in the British banking system). With cash amounting to £3,000,000, about £3,000,000 credits may be granted. From this sum the bankers will draw 2 per cent.—3 per cent. net profit a year"

—that is very moderate—

"which means 60 per cent.—90 per cent. yearly interest on their original £1,000,000."

Is there anything wrong with that as a description of the Irish banking system? Are not people, when they pretend only to be drawing 5 per cent. on certain moneys, drawing the equivalent of 25 per cent. to 30 per cent. when the whole matter is investigated? What right have they to draw anything in the way of a return on whatever they took up in the last National Loan? They are entitled to get the expenses of making these book entries. There may be small additions, but, outside meeting the costs of the operation, there is no risk attached. What are they entitled to? I suggest that they must insist, if they are to preserve the banking system, on the full 3¾ per cent. It is really 4¾ per cent. at the discount rate. If they give way again—and this should be said to them openly—as they gave way on the Dublin Corporation matter, their banking system must be re-created. It is time that was done.

Hear, hear!

That is what wehave been led to by the last National Loan.

I hope everybody will read your speech.

When the Central Bank Bill was going through this House, Deputy Mulcahy, myself and others urged the points we are making now and we got little assistance from the Fianna Fáil Party, who were then behind the Government in regard to our methods of approach to the banks at the time.

Although we got encouragement in the Lobbies from some of them.

Some who were not allowed to come into this House to indicate their assent to the views we were putting forward. They were muzzled as far as the House was concerned. In private conversation with some of us they could indicate their views.

Deputy Derrig, Minister for Lands, when speaking for the Minister for Finance, told us that this country was a country with neglected resources and that it required schemes of capital development: that for those schemes of capital development money was required. He tried to get that money by offering to the public higher interest rates than should have been offered. They got it for one year but they did not get it the second year. They now find themselves with the alternative that they must get money some way, otherwise the capital development schemes they so disparaged in our time will have to be curtailed. That is an insufferable and intolerable thing to suggest in a country of neglected resources, and it would be hard to persuade the community to accept it in present circumstances when unemployment and emigration give cause for concern. For 15 or 20 years the country has been neglected. Its resources lie undeveloped. Everybody now agrees that the country requires development and there are schemes of development that could do good to the country. All they require is money. The money is in the banks.

We would be glad for the further development of this matter. But I am afraid it will break down as usual. The Government have compromised themselves very much by their attacks on the people and they talk more or less in the mood in which the Minister for Lands was the other night. They are not in a position to speak in any strong way to the folk who are in control. So far as we can we will help them in any approach to the banks. We have not compromised our situation with them. We will try to get them to lead on towards the provision of some money for the development of good schemes for this country. While I promise that, I doubt if my hope will be fulfilled. There will be too much weakness on the part of those who are entrusted with the job of serving the people to extract the money from the banks.

In introducing his Estimate last night, the Minister told us about every country on earth, but he told us nothing about our own country. In doing that he imitated in particular the Minister for Posts and Telegraphs who is particularly notorious for that line of approach. Last night, the deputy Minister for Finance followed the example of the Minister for Posts and Telegraphs. He told us what was happening in Australia, New Zealand, India, the United States, the South American countries and most of the European countries, but he told us very little about what was happening here. I wish he had dealt with such things as the effect of Government policy on unemployment and rural depopulation. I wish he had told us why the Government found it necessary to cut down on such work as afforestation, drainage and productive works in general. He steered completely clear of that and said nothing good, bad or indifferent about it. He said nothing about two and a half years of unprecedented borrowing or the huge sums of money extorted from the people. There was not a single word of explanation about it. He did not tell us where this money went to or what has become of it and what are the Government's intentions in regard to it.

If we go back to the change of Government in June, 1951, we find that on the admission of the Minister for Finance, he walked into a sum of money which the inter-Party Minister for Finance left behind him from the Marshall Aid Loan. The Loan Counterpart Fund amounted to £24,000,000 and the Grant Counterpart Fund amounted to £6,000,000, that is, £30,000,000. The £24,000,000 had vanished, according to the Minister for Finance, inside a period of six months after the change of Government. A few months after taking office, we heard the gloomy wails of the various members of the Cabinet, the Taoiseach, the Tánaiste and the Minister for Finance, that this country was living beyond its means, that bankruptcy was around the corner, that general disaster was in the offing, and that only the mercy of goodness could stave it off. They were merely conditioning the minds of the people for what they intended to do, to go back to their 1947 policy of taxation. The Budget of the following year produced the abolition of practically all the food subsidies and a scheme of taxation which involved a great many items, including a tax on tobacco and drink which we removed in February or March of 1948.

Since this Government took office no one in the community has escaped the severity of the measures taken. If there were not new taxes imposed, the old taxes were increased. To name some of the items affected: all items of food that benefited by subsidy came under the hatchet; motor vehicles of all kinds, lorries, tractors, and so on, were increased in tax; the tax on petrol was increased; drivers' licences were increased, as were radio licences, the charges for stamps, telephones, telegrams and many other items I cannot recall.

On top of all that this Government floated two loans amounting to approximately £41,000,000. Adding that to the £30,000,000 for the American grant and loan I mentioned and the £30,000,000 of taxes due to the abolition of the food subsidies, we get a total of £101,000,000. Notwithstanding the factthat £41,000,000 has been obtained by way of loan, the Minister for Lands, deputising for the Minister for Finance, told us the Government intends to apply for another £5,000,000.

We have heard a great deal of propaganda about the alleged debts the inter-Party Government left behind. We must not forget that this Government have got into their hands £101,000,000 by the means I have outlined, all apparently to pay off a debt of £500,000 this year. I want Deputies to realise that the present Government has obtained more than twice as much as would pay off completely the Marshall Aid loan. If I remember correctly the Marshall Aid loan was in the region of £45,000,000. They have waded through £101,000,000 and that by no means includes ordinary taxation.

In spite of having that money, they have succeeded in increasing unemployment to an unprecedented extent. The flight from the land is worse than ever, and the country is back again to where it was under Fianna Fáil rule in 1947. No thought at all is given to the development of the country and the relief schemes are starting again. Deputy McGilligan spoke at length on the rebuilding of Dublin Castle. Perhaps around Christmas time when the people's spirits are high the £30,000,000 House of Parliament job will be pulled out of the bag and in all probability we will hear a little more about it. There is no talk about the hundreds and thousands leaving the land. There is no endeavour to keep our youth at home to develop the country.

Coupled with that we have the interest on loans, particularly to farmers and other people who want to develop their property, increased from 4½ per cent in our time to 6 per cent. Credit has been completely restricted. Of course, we had the warning from the Taoiseach some time back that this country was living beyond its means. I take it that what he meant was that the ordinary rank and file of the community were eating too much, dressing too well and generally progressing toowell at their business, so it was found necessary to cut down.

I want to ask the deputy Minister for Finance, when he is replying, where this £101,000,000 that the present Government have got into their hands in the short space of two and a half years has gone to. If the present Government is back to its pre-1947 policy of trying to bolster up the finances of the British Government or the Bank of England, and if they are extracting money from the Irish people for the purpose of making huge investments in England to support a failing currency, at the very least, we should be informed.

The Minister tried to make a lot of capital out of the fact that our sterling assets in England had increased by £36,000,000 during the term of office of the inter-Party Government. He did not tell us that during the same period we brought home £150,000,000 of our assets that had accumulated mostly as a result of the export of agricultural produce during the war years that could not be counterbalanced by English exports. I remember that while we were still in office the present Minister blamed the inter-Party Government very much for bringing home that money. I, for one, have no apology to offer for that. At the very time Deputy Smith, the present Minister for Local Government, was threatening to drive tractors in over the ditches and threatening to fill the fields with inspectors in order to make the farmers work, the farmers were producing the world's best food and sending it across the water, for which they got nothing but bundles of paper. During all that time, the Fianna Fáil Government were content to sit back and to allow the value of that produce to accumulate. It was treason of the worst kind to attempt to bring a penny of that home, for the inter-Party Government to bring that home and to put it back into the land out of which it came originally.

If it is the Government's policy to invest huge sums of Irish money across the water for fear that the English £ would collapse or for any other reason, it is, at the very least, the duty of the Government to tell the people of this country and to tell this House thatthat is their policy. I do not think it is fair or that this Government was elected to harass the rank and file of the people for such a purpose.

At the change of Government in June, 1951, we handed over a country which was in perfect running order. Unemployment was never so low; there was complete contentment and prosperity; the youth had a definite outlook that the youth never had known before, that Ireland was a good country to live in and there were good prospects for men prepared to take off their coats and work. All that was absolutely blasted and destroyed in the short space of three months after the change of Government and there was a complete reversion to the old policy.

It has been said that we left debts behind us. Let the Minister tell us exactly what those debts were once and for all. I would love to hear them. Deputy McGilligan pointed out that when we took office we had to shoulder £10,000,000 of debts that the outgoing Government had left, when the present deputy Minister was Minister for Finance. There was £1,750,000 in unpaid cheques belonging to C.I.E. and no money to meet them. There was £10,250,000 in all, if I am correct. We also abolished the taxes on tobacco and drink, imposed a very short time before, and denied ourselves the £6,000,000 income which would be coming to us from those two sources alone.

We definitely gave the country a completely new look. We started many useful projects, arterial drainage, the Local Authorities (Works) Act, afforestation, the land rehabilitation scheme. We got the Land Commission going. We practically rebuilt the country as regards houses and schools, both town and country. We brought emigration almost to a standstill. That all occurred in a short period of three and a half years. The present Government took over office then and immediately reverted to the old policy that existed prior to 1947.

At present we have about 60,000 unemployed, a shockingly high figure and no attempt made to ease it off. The Government seems to think that if theyspend a little money on roads everything is all right. At the same time they are asking the farmers to speed up production. How do they assist the farmers? Fertilisers have gone up from £9 per ton in the inter-Party Government time to £16 now. The Local Authorities (Works) Act under which we were giving £1,900,000 a year to the various county councils to carry out small drainage works, has been reduced to £400,000.

How is this relevant to the Estimate for the Department of Finance?

Unemployment is relevant, I take it, and I am trying to show that the Government policy, the policy of the Minister for Finance in particular, has brought about unemployment.

The cost of fertilisers would scarcely arise on this Vote. That was the last point mentioned by the Deputy.

In practically every forest centre men have been laid off during the past two or three months, in a policy of cutting down. I suppose the Minister for Finance was determined to show at least on paper this £3,000,000 Government saving on administration. What we find now is that the £3,000,000 is to be got by reducing the output of productive work in various Departments. There is not a single forest centre where there are not men laid off, evidently to make a saving for the Minister for Finance.

That would be the responsibility of the Minister for Lands.

No, I submit that the Minister for Lands may not dispose of men in the various forest centres if he does not get a direction from the Minister for Finance.

The Minister for Lands is responsible for his Department and I cannot see how the Minister for Finance is responsible for forestry policy.

I hold that the Minister for Finance is responsible for the laying off of men in practically every Government Department—not in one alone. I am quoting a few that I am familiar with or that have been brought to my notice. It is the policy of the Government and of the Minister for Finance in particular, to chisel down. Regardless of what amount of money might be voted here, on a particular Estimate, to any particular Minister, the Minister for Finance may give a direction to a particular Minister to make a saving under a certain sub-head.

Mr. O'Higgins

There is just one matter arising out of that, if the Deputy would permit me to state it. The Deputy has referred to the proposal in the financial statement at the commencement of the year to effect an economy of £3,000,000 as part of the financial policy of the Government. I take it that it is open to us to discuss the effects of that policy, as part of the financial policy of the Government? Without going into detail on any particular matter, surely the effects may be discussed?

Deputy Blowick is going into details for which the Minister for Finance is not responsible. Certainly the Deputy can refer to policy in a general way, but not in detail.

The only detail I was going into was the way the saving was being effected in that Department. One of the ways was the laying off of men in the Forestry Section.

The Minister for Lands would be responsible for forestry policy.

I submit that the effect of the statement in the Budget speech by the Minister for Finance, that it was his intention to effect a saving of £3,000,000 on administration, covers each particular Department. I have no desire or intention to debate the details of any Department. I hold that the laying off of men in the Forestry Section, the clipping down of Gaeltacht Services, and so on, aredirectly attributable to this saving the Minister for Finance said he would make in this financial year. The same is true in land rehabilitation. Even though the figure for the year is higher than it was in the inter-Party Government time I hold it should be higher. If we wish to increase exports and agricultural production and stop unemployment, we should not do it by cutting down on these very essential projects. Land Commission work is notoriously slow. I believe that is due directly to the interference by the Department of Finance. If the commissioners and the Minister for Lands were given a free hand, things would not be so slow or so choked up as they are. I lay all that at the door of the Minister for Finance in trying to make a saving. He wants to show a saving at all costs, no matter who suffers or who falls by the wayside.

Under Vote 4, I want to ask the Minister to give us a table of the poor law valuations on holdings, as existed prior to 1937 in the Statistical Abstract.That has been cut out—I do not know why. It must be a fairly easy matter to furnish this, by getting the necessary table from the rate-collecting departments of each county council. It was a most useful table, as it showed Deputies from the congested areas what is happening, according to what trend the land is being divided up. It was one of the most useful tables we had. I cannot see any reason why it was cut out in the first instance. Also, in theStatistical Abstract, we should have some attempt made to try to determine the number of holdings and farms that are vacant all over the country as well as the number of holdings in cases where more than one holding is owned by one person. At the present time, in the whole of the West of Ireland, the number of small holdings falling derelict or at least becoming vacant and unoccupied, is increasing year by year. On another Vote which was being debated in this House I said that the work of the Land Commission for a good while past has been to relieve congestion. If something is not done soon, the whole policy of the Land Commission will have to be put into reverse and thentheir work will be to try to find people to live on the land instead of finding land for the people.

Under Vote 7 I want to ask the Minister for Finance what has come over the Government in their decision to assess income-tax in respect of ordinary workers — forestry workers, county council workers, nurses and so forth. These are all lowly-paid people. In most cases they are the sons and daughters of small farmers whose earnings are very often required to build up the home. Can it be that the Minister for Finance and his Department have gone daft or do they think that it is fair to extract income-tax from people such as these? It is absolutely monstrous to carry on a policy of that kind. Just imagine a forestry worker who is living with his uncle and aunt, and who has to help to support them, being assessed for income-tax! One would think that he had a big farm of land and a couple of motor cars or something like that. Has Government policy gone completely off the rails? Must it not be apparent to the Minister that it is a policy of spending a £1 in order to try to gain a penny? That is exactly what it is like in trying to collect small sums like this. That policy should be completely changed.

Another matter which has come to my notice recently concerns the Minister for Finance: I presume the Revenue Commissioners will not or cannot do it without the written direction of the Minister for Finance. I refer to the policy of assessing income-tax on people who have had to emigrate to Britain in order to earn a livelihood for themselves there and who, after a period of perhaps 10 years, come back to settle down in their own country with their accumulated savings and are pounced upon here for income-tax on that money. These people are very often the sons of small farmers who had absolutely no prospect of making good in their own country and who, perhaps after a period of six, seven or ten years of hard and dangerous work in a foreign land, have managed to gather together sufficient savings to enable them to come back to their own country and settle down. If you please, thesepeople, when they go to settle down on a holding, are informed that they must pay income-tax on the money which they earned in another country and which they brought into this country. That is a most monstrous thing. God knows, it was bad enough that they were driven out of their own country.

The moment they come back and try to settle down in their native land they have to pay income-tax on the money which they earned in a foreign country, and they have to pay that money here to their own Government which did not even give them the price of their train and boat to take them out of this country, when they sought to earn a living for themselves. The Minister for Finance must be absolutely daft or else he does not know what is happening in his Department. It would be well if he would wake up, even at this late hour, and see if he can bring a little common sense and justice into this matter.

With regard to Vote 25—Valuations —I want to say that rates have become a crushing burden. Some time ago, I warned the Minister and the Government that the day has come when there is a danger of wholesale non-payment of rates in this country unless some immediate remedial action is taken by the Government in this matter of valuations. The whole question of valuations should be looked into. The old system is rotten and out-dated. It has completely outlived its usefulness. I hold that it was based on a dishonest method of computing valuations 100 years ago, in the original instance. It is holding up farmers from improving their out-offices, from draining their land, and so forth. Townspeople are extremely badly blistered at the present time in that respect. Hotel owners are also very badly hit. Nobody in a town or city now dare get a tradesman to put a coat of paint on a house or carry out necessary repairs for fear of having his valuation trebled. I mentioned before the case of a hotel owner who removed portion of a leaking roof over his premises. The roof was retimbered and the old slates were put back. His premises were not increased by as much as acubic inch. Nevertheless, as a result of the repair work which was carried out, that man's valuation was increased by £50. That is another example of how we are doing our best to hunt our people out of this country for good and all.

I wish to register my strong protest against the increased rate of interest for loans, particularly to farmers. The Agricultural Credit Corporation have increased the interest on loans to 6 per cent. That is just outrageous. The ex-Minister for Finance, Deputy McGilligan, has exposed in a very able way the complete mockery and sham of this whole matter of high rates of interest on such loans. I think that it was on the debate on the Supplies and Services Bill that I mentioned some of the effects of the Government's policy of restriction of credit. It is completely stagnating the life blood of the country. It is shocking that a farmer, no matter how good his reputation for honesty and hard work may be, and notwithstanding the size of his farm, cannot get a penny of a loan to restock his land, to improve it, to drain it or to erect new buildings or anything else. That is the position, no matter what the value of his land may be.

The Government's policy of restricting credit is stopping the circulation of money and that is making itself felt in unemployment. No working man in this country to-day is sure at midday on Saturday that he will be employed the following week. As a result, there is wholesale unrest and discontent amongst the workers in this country. We cannot blame them. Anybody who is in employment to-day and who is in doubt as to whether or not he will be employed next week cannot keep his mind on his work and give of his best to his employer. It is a two-edged sword. The worker cannot give of his best to his employer while that uncertainty exists in his mind. In my view, the change of Government which took place in June of the year before last was one of the greatest disasters that has ever befallen this country. This Government took over from the inter-Party Government a countrywhose credit was sound, a country whose name was good, a country in which money was in circulation on every side, a country whose people were enjoying a good wage and a low cost of living. Since this Government came into office, the cost of living has gone up by leaps and bounds. One thing which has been puzzling me very much is how on earth the people in the towns and cities—particularly the people in Dublin City who have to pay for everything except the fresh air— are living or surviving. I do not know how they are doing it. People in the country might have some chance—the man with a bit of land, even though he has not got a penny in his pocket, will not go hungry—but how the people in the towns and cities are making out is a constant puzzle to me.

The policy of this Government has brought privation and poverty into every home almost without exception in the Twenty-Six Counties. That is their proud record. So long as they have the Irish Pressand a sufficient number of speakers to shout and blame the whole trouble on the Opposition, everything is all right, if they can ram it down the people's throats; but even these combined factors, theIrish Presson the one hand, and the henchmen who are getting their two guineas for every night they spend shouting, from the organisation or wherever they are getting it——

That does not arise.

It does not, but I want to say that it will fail.

It is financial policy, surely.

Yes, to the ranks of Fianna Fáil, but even these will fail to put it across because the bulk of the people realise exactly which policy, the policy of the inter-Party Government or the policy of this Government, is the better policy for the country.

Another matter which occurs to me —it forms the principal part of my work—is this question of delay in the payment of grants to people all over the country who are building houses. I hold that this is tied up with theEstimate for the Department of Finance.

The Minister for Local Government, whose Estimate was disposed of last night, is responsible for housing.

The Minister for Finance is the man who supplies the Department of Local Government with the money for housing grants.

The Minister for Finance cannot be held responsible for every Estimate.

I am not holding him responsible for the Local Government Estimate, but for the delay in the payment of grants, through the Local Government Department, to people who have qualified for and are entitled to get them.

The administration of local government is a matter for the Minister in charge of that Department.

Surely the Minister for Finance has responsibility with regard to the rate of interest charged for housing?

We do not seem to be discussing the rate of interest at the moment. The Deputy is referring to delays in the payment of grants.

And I hold, with all respect, that the Department of Finance is responsible for these delays and not the Minister for Local Government. While I agree that it is an administrative matter in the charge of the Minister for Local Government, I say that it is the Minister for Finance who is responsible for the delay, because during our time in office these delays did not exist. The moment a man qualified for a grant, he got his cheque, and that was the end of it. Now he has to use all kinds of influence and approach all the T.D.s in his county to get a grant paid. It is all part of the hairshirt policy indicated by the Taoiseach when he used those four simple words, that we were "livingbeyond our means," part of the policy of restriction of credit, of throwing numberless people out of employment, of making people work harder, eat less, drink less, smoke less, dress less, get rid of motor cars and so on. That is the policy this Government has put into operation. I do not say that I am right or they are right, but I am safe in saying that, when the people are asked at the next general election who was right, I have not the slightest doubt what the answer will be.

Mr. O'Higgins

It was clear to all Deputies listening to the Acting-Minister for Finance last night that he had been sent in by the Government for a particular purpose. That purpose was to announce the belated repentance of the present Fianna Fáil Government of all it has said in the past four or five years, with particular regard to the policy it has followed in the past two years. We know now that this Government is desperately endeavouring to jettison the financial and economic policy it followed since June, 1951. It is desperately trying to adopt—too late, of course—the financial and economic policy advocated by Deputies on this side. In so far as repentance is a virtue, the change is welcome, but, in so far as the lateness is apparent to us, we will continue to point to the appalling havoc caused to the people of the country since June, 1951, by the policy now being jettisoned by the Government. In the past two years, in terms of human misery and suffering, appalling and untold damage has been caused by the criminal irresponsibility of members of the Government and the policy, financial and economic, which they pursued.

Deputies will recollect that the four walls of this House were accustomed to ring with the dulcet tones of the then Deputy MacEntee, Deputy Aiken and Deputy Childers, when they were on this side of the House, proclaiming against the financial and economic policy of the inter-Party Government as stated last night and to-day by Deputy McGilligan. That policy was a sound and clear policy, now accepted by the Government and now generally accepted by the people—a policy aimed at developing the resources of thiscountry by encouraging our people to invest their money at home in worthwhile capital projects that will give a lasting return in the creation of domestic wealth, the provision of long-term employment and generally in increased material prosperity. Our policy necessitated appeals by the Minister for Finance to the Irish investor by way of loans to invest his money in Government securities. It also necessitated the gradual repatriation of this country's external credits, so that our Government, the Government of the day, could call upon current and past savings to repair the neglect of centuries and to build up a modern Ireland capable of maintaining an increasing population. That was our policy when in office and out of office, and it will be our policy, when in office again.

For three years, how was the operation of that policy met by the then Opposition? No effort was spared to ensure that the policy would be misrepresented in every possible respect throughout the country. When the first National Loan, the 3½ per cent. Exchequer Bonds, was being floated by Deputy McGilligan, as Minister for Finance, Fianna Fáil agents decorated every hoarding in this city with a poster adorned with the pawnbroker's sign, conveying the message to the Irish investor who was about to invest that the inter-Party Government was mortgaging the future of Ireland and putting the nation in pawn. That continual campaign did not succeed in preventing the Irish investor from lending his money by way of that National Loan to the then Government. That loan was followed by a second loan, equally successful, which enabled the Government to initiate a long-term capital programme.

Now I hope to remind Deputies of the things that were then said by Fianna Fáil Deputies and the kind of views they then expressed with regard to borrowing, the repatriation of external assets and a variety of matters which they now accept and endeavour to make their own policy. We can all recollect the present Minister for Finance giving the views ofthe Party opposite on the wisdom or otherwise of borrowing on many occasions in this House. I have here a speech made by him on the 10th May, 1950, when he was referring to the Budget of that year, a Budget in which the Minister for Finance proposed, as part of the financial provisions for the year, to float a new National Loan. The then Deputy MacEntee had this to say about the idea of any Irish Government borrowing money to meet the commitments, capital or otherwise, of the State—I quote from Volume 120, column 2128 of the Official Debates:—

"It is a Budget, as I have said, of despair. It is a Budget which has been introduced by men who have no faith in the people—who are afraid to face the people and ask them to shoulder the burdens of taxation that the expenditure which the Government proposes would properly justify. It is a Budget introduced by men who have no hope in their political future and by men who have no trust in their own integrity and have no confidence in the country. The gigantic borrowing about which the Minister has been so doleful and some of his more ardent supporters in this House so glib, upon which this Budget is based, would only be undertaken by men, who if they were rational and sane, felt confident they would never be called upon to repay them—at least not in money of the same purchasing power as their borrowings have. This Budget is sinister and significant. It is a Budget which, in my honest belief, looks to the future depreciation of currency and further devaluations to rid the younger generations of this country of the incubus with which it proposes to saddle them. It is a declaration of war upon the thrifty and prudent. After this Budget, and the one or two more modelled upon it that will come after it, if this Government, which, God forbid, survives, what man can say what his present savings, whether they be now in the joint stock banks, in Government securities, in the Post Office Savings Banks or in Savings Certificates willbe worth? Those who try to defend this Budget talk very lightly about passing the burdens on to the future and making posterity pay. It is not posterity who will pay. It is the present taxpayers, ourselves and our children, our young men and young women who all through our lives and theirs, will pay for the cynical improvidence of this Government. They are, in fact, paying for it already."

That very fine purple passage indulged in by Deputy MacEntee, as he then was, on the 10th May, 1950, was typical of the opposition we encountered in every effort we made to ask the Irish investor to invest his money here at home instead of dissipating it amongst foreign countries. Time and again Fianna Fáil Deputies referred to that policy as being something in the nature of the rake's progress, a squandermania, as hitting the heads of children still unborn—the phrase used by the present Minister for Posts and Telegraphs. That policy of domestic development was painted by Fianna Fáil as being something unnational and something extremely unsound. When they had tired of pointing to the sufferings that posterity would have to face by reason of Deputy McGilligan's borrowings of £12,000,000, they used to refer to what was meant by the national debt. The service of the national debt in 1950 stood at something over £5,000,000. It had increased in two years by something like £1,500,000, from the time that Fianna Fáil had been in office. That increase of £1,500,000 to any individual might be serious, but to a country embarking on a long-term capital programme it was trivial in the extreme. Yet that slight increase in the sum required for the service of the national debt became the greatest storm signal that Fianna Fáil could find.

I recollect Deputy MacEntee, as he then was, on the 10th May, 1950, as reported in the same volume at column 2129, referring to the increase in the amount required for the service of the national debt by reason of the inter-Party loans as follows:—

"In this year's Estimate the amount required for service of thepublic debt is going to be £5,128,000 or £1,869,000 more than was required for the same purpose in the last year of the Fianna Fáil administration. On the Minister's admission in reply to a question which I put to him, that figure of £1,869,000 represents almost the total yield in present circumstances from ? in the £ on the income-tax. It is somewhat less than that, but as we deal with shillings and sixpences when we talk about income-tax, it is nearer ? than it is to 1/-. That additional sum of £1,869,000 is now being paid and will continue to be paid for the lifetime of one generation. Next year, if this Government is in office, more will be added to it and still more in the following year. There is only one hope and that is that the jolt which this Budget has given to the people will make certain that this Coalition will break up as rapidly and as unexpectedly as it came into existence."

There is another example of Deputy MacEntee waxing indignant, vehemently and very oratorically because the amount had risen from £3,000,000 odd to £5,000,000 odd in 1950. According to him, ruin and desolation were to be the lot of the people. For future generations our people were to be struggling from the cradle to the grave under a load of debt imposed on them by the bold, bad inter-Party Government. There was only one hope, according to Deputy MacEntee, only one solution, and that was the defeat of the inter-Party Government and the restoration to office of Fianna Fáil.

I mention these matters because this financial discussion must be carried on with, as a background, the policy and statements of the present Government in similar discussions in the past. The service of the national debt that Deputy MacEntee was so concerned about, that was going to wipe out the country, and which can only be contained by the defeat of the inter-Party Government and the re-election of the Fianna Fáil Government, is not £5,000,000 now. For the record, it is well that Deputies should appreciate what is happening. That amount has not been reduced, as one would expect from Deputy MacEntee's speech, anddoes not even remain the same. In 1950-51, it rose to £7.2 million; in 1951-52, to £8.2 million; in 1952-53, to £10.5 million and in the present financial year to just £13,000,000.

In 1950, because it had increased by £1,500,000, immediate destruction and desolation faced this country. In the last two years it has risen by close on £8,000,000. That is the yearly charge which has to be collected to finance the borrowings of the present Government, a yearly charge which, on Deputy MacEntee's figure for 1950, would represent something like 5/6 in the £ in income-tax. If that charge did not exist, it would mean a decrease in income-tax of something like 5/6. It would mean that butter could be sold in this country at 2/6 a lb., that bread could be half the price, and tea and sugar substantially lower. But this charge will have to be faced this year and in future years owing to the borrowings of the present Government.

It is because of that we on this side of the House question whether Fianna Fáil have at any time known what they set out to do, what they have done, or what they plan to do in the future. We know that when they found themselves in office they set about undoing everything that their predecessors had been doing. They set about stopping the capital development programme and the investment programme of the inter-Party Government and, generally, turning the page on the steps which were being taken by their predecessors. The results, of course, were immediate and disastrous. The restriction in credit which followed the Government's policy when they assumed office exaggerated unemployment, brought very serious business dislocation and upset, and, generally, in the last 12 or 18 months the result of the Government's policy in unemployment, in high prices, in emigration, and in business upset has been very marked and very extreme.

It is not necessary for me to dwell upon the unemployment problem. It is now so well known that Government Deputies have even stopped trying to defend the situation. It is notnecessary for me either to refer to the burden of rising prices, or the marked and very steep increase in the last 12 months. That, too, is abundantly clear. When referring to business dislocation and matters of that kind, very often it is not easy to gauge the upset that was caused by the Government's policy in the past 12 months. Yesterday, I asked in a question to the Minister for Justice if he could say the number of judgments that were registered in recent years against defaulting debtors. I might explain to Deputies who, ordinarily, are not associated with business or matters of that kind that, generally, when a creditor gets judgment against a debtor the amount of that judgment is paid. If it is not paid, it is registered against the debtor, and that unfortunate man's name later appears in one of those licensed magazines, licensed certainly but not approved of, such as Stubb's and other magazines and productions of that kind.

The number of registered judgments in any year is a fair indication of the number of people engaged in commerce who are meeting with financial difficulties. I was interested to find out, over a period of six years, how the business community were facing up to the impact of Government policy. I asked the Minister for Justice, yesterday, in the House to state, in respect of the years 1948-53, the number of judgments registered in our courts against debtors, and I found the figures to be as follows. In 1948, the number was 887; in 1949, it was 1,146. In 1950, which was the last full year of the inter-Party Government, the number had dropped to 1,114. In 1951, the first year in which the gentlemen at the other side came into office, the number had increased to 1,317. In 1952, the number had further increased to 1,660. In the present year, that is to date, although the question covered only the first three-quarters of the present year, the figure stands at 2,277. That is an increase of practically 300 per cent. since 1948 on the number of registered judgments against debtors. I know it is not a very clearindication, but it certainly is some indication, of the havoc wrought by the Government's policy in the last 18 months or two years.

I think, like dropping water on a stone, that eventually an impression is made even on the stone. Possibly, it is the same with the Government. Gradually, week by week and month by month, the dissatisfaction, the unemployment, the high prices, emigration, business dislocation and all the bad results flowing directly from their policy, must have had an effect on their counsels, and now they have decided, at this late stage, to try to change their policy. We find the Taoiseach blandly announcing a few weeks ago, with regard to the last National Loan, that the raising of a loan is a good thing. It is not, as the Minister for Finance described it a few years ago, a cynical disregard for the future of the people.

The Taoiseach, in reference to the raising of the last loan, said it was a good thing, after all, to ask the Irish investor to invest at home, and he, accordingly, recommended that the Irish people should lend his Government £25,000,000. When he did that, Fine Gael agents were not sent around to the hoardings of this city to put up posters decorated with the pawnbroker's sign suggesting that the Government was mortgaging the future of the country or was putting it in pawn, nor did we endeavour to frighten possible investors against investing in that loan. We, in co-operation with all other Deputies on this side of the House, asked for the fullest support for that loan because we knew that it represented our policy, and was part and parcel of the methods that we would adopt to finance a necessary capital investment programme for the country.

The Government floated their loan. That loan was quite a dismal failure, a serious financial set-back for the country. The loan was not nearly subscribed and had to be underwritten by the banks. It marked a very serious consequence for the standing of this Government and of this country. I want to refer to that, because I charge the Government, particularly the Ministerfor Finance and the Minister for Posts and Telegraphs, with doing serious harm to the credit of the country when they assumed office in 1951. They suggested then that this country was insolvent, that it was living beyond its means and that it was not a safe place for Irish people to have their money in.

Accordingly, when the present Government went to seek their first loan last year they had to offer a black-market price in interest for the money they had hoped to raise from the Irish investor. They had to offer a rate of interest of 5 per cent., the highest rate of interest, within comparable financial history, ever offered for a Government loan. Of course, there was no surprise when that loan was generally supported, and, having been supported, the Minister for Finance was pleased to come into this House and refer to the support of his first loan as being an indication of the confidence which the people had in his Government and in their policy.

This second loan, for a larger amount, had a lower rate of interest. Does that indicate the confidence which the people have in the present Government or in their policy? The fact that the loan was not the success that we desired it should be can only be due to this, that real damage was done by the irresponsible campaign of the Government when they first assumed office, and by their injudicious floating of their first loan at the very high rate of interest of 5 per cent. and, of course, at the very worst time. With all the mistakes which the Government have made, we are now being asked, if you please, by reason of the speech made by the Minister for Lands on behalf of the Minister for Finance at the Bankers' Institute the other night, and of other pronouncements of the Government, to accept the new policy which they are proposing.

In other words it is suggested that the Dáil and the country should give them a fool's pardon. That pardon might have been given were it not for the fact that very serious harm has already been caused by the things which the Government has done. I have no doubt that were it possiblefor people outside to listen to our debates here in this House much of the trouble caused by bad Governments could be avoided, because the people could very quickly see on which side of the House lie consistency and rectitude in policy and outlook. Could it be denied that no disinterested person who heard last night and to-day the contributions offered by the Government and by Deputy McGilligan to this debate would have any doubt as to who has the correct policy and outlook on financial and economic matters? I think it is correct to say that Deputy McGilligan, his policy and his methods, have now been amply justified more particularly since he left office and especially by the recent efforts of the Government to adopt the things that he has always been advocating.

The Minister for Lands was sent in to terrify the banks the other night. The banks were told that if they did not stump up the money which the people would not give to the Government, they could look out for trouble. There is a good deal of sense in that outlook, but it is not a Fianna Fáil outlook, and it is not Fianna Fáil policy, and it does not represent the point of view advocated by Fianna Fáil in this House and outside it over a number of years. The country will remember—I think it was 1950—when the Dublin Corporation required a loan of £5,000,000 to finance essential housing in the city, they went to the joint stock banks and their application for a loan was refused.

Thereupon the Government intervened and the Government informed the banks that they regarded it as prudent and necessary in the interests of the banks themselves that that loan should be made immediately available. By reason of Government intervention a loan of £5,000,000 was given to Dublin Corporation and houses were built for the people of this city. Lo and behold, what happened? The Fianna Fáil Party took up the matter here in this House and they criticised what they termed the unfair intimidation of the banks by the Government. They said that the Government, inforcing the banks to give £5,000,000 to the Dublin Corporation, was unfairly terrorising a section of the community into giving money which the people generally would not give. Does anyone doubt the attitude of Fianna Fáil in 1950? I have here again Deputy MacEntee, as he then was, reported at column 2122 of Volume 120 of the Official Reports dealing with this matter of what he regarded as an unwarranted interference with the banks. His reference, which I am about to quote, arose in a debate after the Deputy had been referred to a speech he had made outside the House on 3rd May, 1950, and reported in the Irish Pressas follows:—

"‘The screw' said Deputy MacEntee ‘is to be put on the banks to do what Mr. McGilligan has admitted the public are not prepared to do. That is the explanation of the cold war which Coalition spokesmen have been waging on the Irish banks. But the banks had a personal responsibility to their depositors and it would appear from Mr. McGilligan's own statements that they had been impressing this point of view on the Government. The banks naturally, and because they had certain traditional standards of conduct in these matters, were apparently refusing to become the instruments whereby the cautious thrift of their customers was to be fully explored and exploited. Unless the banks stood firm', said Mr. MacEntee, ‘and the people support them, the State was heading for financial chaos"'.

And in this House on May 10th, 1950, in referring to that speech of his, the then Deputy MacEntee said as follows:—

"Therefore, though a public man places himself in great danger of being misrepresented when he criticises the financial policy of the Government and the relationship of the Government to the banks and through the banks to the depositors in the banks, to the people who have their savings in the banks: though a public man, as I say, places himself in grave danger of being misrepresented,as I have been misrepresented in this House by Deputy O'Higgins, I hope that there will always be men to stand up and lift their voices to ensure that the banks will not be exploited in the manner in which they are being exploited now."

Is it any wonder now if I say, as I do say, that the speech made by the Minister for Lands on behalf of the Minister for Finance the other night is not Fianna Fáil policy and does not represent it and would not have been made by the Minister for Finance if he were restored to the health to which we all wish him to be speedily restored? The Minister for Finance held the view consistently that anyone who suggested that the Irish banks owed a duty to Ireland was a fool and an incompetent and an irresponsible person.

Three years ago, when in the interests of housing, the Government got the widow's mite from the Irish banks, we were held up by Deputy MacEntee and the Fianna Fáil Party as being something in the nature of the sans culottesof the French Revolution trying to bring about a new orientation of financial policy in this country. Now, lo and behold, the banks are being held up by a couple of Government Ministers, with a pistol pointed at them—“Pay up or else——”

We, on this side of the House, and the people generally are entitled to know what is going on. Who is laying down policy? What are we to believe the policy of this Government to be? They were against borrowing three years ago. Now the Taoiseach says: "We are going to have a National Loan every year." They were standing pat with the banks, being the welcome guests of the bankers, up to last Tuesday night and now a change—and what a change—has come about. What is the reason? Is it because the Government think that a little bit of revolutionary talk will sound better at the crossroads in the general election that must come very shortly? Is that the reason for the change?

Or is there some sounder and perhaps more sincere reason why theynow recognise that the things they have been doing in the last two years have been very grave mistakes? Perhaps, not being men enough to admit they could be wrong, they nevertheless now recognise that the things we have advocated on this side of the House, and while in Government, have been right all along the line. Mark you, it is very hard for people outside to follow the Government and to understand the speeches made by members of the Government. It is very hard for us to understand what exactly their opposition was to our financial policy—the policy they are trying to adopt now.

In regard to financial and economic questions, the policy of Fianna Fáil has been doubtful in the extreme. They have tried to put faces on every side of the clock, faces to the fore and faces to the aft; they have tried to face in every possible direction. Last night we heard the Acting-Minister for Finance squirting abuse, financially speaking, of course——

Mr. O'Higgins

——on Deputies on this side of the House. He accused us of increasing this country's external assets. I thought there was one thing abundantly clear over the last three years and that was that we had been held up to ridicule and contempt by Fianna Fáil because we had dissipated this country's external assets. But last night the Acting-Minister for Finance said: "No. You never got rid of this country's external assets; in fact you increased them." That statement will once more provide a problem for our people, because they will find it difficult to understand what exactly is the correct Fianna Fáil charge. If one intends to indulge in political propaganda—I know I need not give advice to Fianna Fáil in this regard—it does not matter whether the charge is right or wrong; the only thing that matters is to be consistent in the charge one makes.

Fianna Fáil has spent three valuable years of time and effort, of wind and throat-wear, in accusing us of dissipating this country's external assets. Now, according to the Acting-Ministerfor Finance last night, that has all been so much wasted effort because the charge now is that we increased this country's external assets. It is a pity that the Minister for External Affairs and the Acting-Minister for Finance when making that speech last night did not have regard to some of the statements he himself made in the past about our external assets. I remember him in 1951 accusing the inter-Party Government in February of that year of having allowed the country's external assets to be reduced. At column 791, Volume 124 of the Official Report he said:—

"Our external assets have decreased by £60,000,000 over the years 1948, 1949 and 1950."

Which is correct? Did we throw them away or did we increase them? Remember, the important thing from Fianna Fáil's point of view is not which is right for that does not count; the important thing is to be consistent in the charge that is being levelled.

The present Government need not think that that kind of playacting, saying one time that our external assets were dissipated by an improvident inter-Party Government when perhaps the occasion might be an address to bankers, or others of that ilk, and then going down to the crossroads and saying that we increased them will carry weight with the people. That kind of double-dealing is not a deal at all and the Government will find that out very, very quickly.

The fact is, of course, that while we were in office, not accidentally, not foolishly and not improvidently, but by a deliberate decision of the Government, supported by Deputies now in the Fianna Fáil Party, it was decided to make use of this country's external assets in the interests of the country.

It was necessary to do that in order to house our people, drain our land, build our hospitals and provide these hospitals with the necessary supplies and equipment and do a variety of things of urgent importance to our people. Because of that policy our external assets in the three years mentioned by the then Deputy Aikenwere reduced by some £60,000,000. Had we remained in office it is possible they would have been reduced still further. If we return to office, as I am sure we will, they will no doubt be reduced still further, but in their place there will be an increase in our own domestic capital through the medium of more land producing more crops and giving a worthwhile return to our people in the number of houses provided throughout the country and in the various projects to which our Government was committed.

Whatever may be the outcome of the belated repentance of the present Government in relation to whatever actions they take in the near future, I have no doubt that the people outside will not be impressed by the carry-on of the Fianna Fáil leaders. The ordinary Fianna Fáil supporter down the country is often a dense and stupid individual; otherwise, he would not be supporting Fianna Fáil. He is slow-thinking. He is an individual that has to get things dinned into him before he can understand what is going on. For quite some time he listened to Fianna Fáil propaganda; he read the Party news sheets, the Party editorials and all the rest of it, but at last he is beginning to see the light.

It was said that it was wrong to borrow for borrowing would be sorrowing; any Government that borrowed was an improvident Government. He learned that lesson because Fianna Fáil leaders told him not once but time and time again, each week, each month; and every morning when he ate his porridge what was told to him by his leaders was refreshed in his mind in cold print in the editorial of the Irish Pressso that he knew morning, noon and night that Fianna Fáil believed that borrowing would be sorrowing and that the inter-Party Government was selling the country by floating two National Loans. Having learned all that, he said: “Now I know what was wrong with the inter-Party Government's financial policy.” I have no doubt that he went out heartened on his mission to get more votes for Fianna Fáil by spreading this new article of faith that loans were wrong, that to borrow was tosorrow and that any Government that financed its capital programme by floating loans was an improvident, bad Government for the country.

I would have regarded it as a kindness on the part of the Leader of the Government and the Minister for Finance, if they had shown a little more understanding for their own followers before the Taoiseach made the historic announcement a few weeks ago that the Government proposed to float a new National Loan each year. It is a very hard strain on the intelligence of Fianna Fáil supporters if they must now say: "Ah well, of course, what the leader of Fianna Fáil meant in 1951 when he talked about borrowing is that it is wrong for the inter-Party Government to borrow but it is right for Fianna Fáil to borrow."

That is the new gospel that is being spread by Fianna Fáil throughout the country—it is right for Fianna Fáil to have a National Loan every year, and every week if they choose; it is right for them to hold the banks up to ransom, to throw away the savings and the deposits of our people; it is right for them to skim our external assets and to throw them into rebuilding Dublin Castle and a variety of schemes of that kind. All that is right as long as Fianna Fáil do it but, if the inter-Party Government do it, it is wrong. That is the kind of stunt that Fianna Fáil think now they are going to get away with. I have no doubt that they will find that our people are not to be fooled so easily.

In the last three or four years an attempt has been made to discuss matters relating to financial and economic policy in a more realistic manner. That has been largely due to the fact that the Leader of the Opposition, when the present Government came into office, countered suggestions that the country was insolvent and heading for bankruptcy by a determined appeal to the people not to listen to that kind of cant and nonsense. Ever since the famous Central Bank Report in 1951, which was swallowed lock, stock and barrel by the present Government, the Leader of the Opposition has consistentlypreached that Ireland is the most creditworthy country under the sun, that our people should be encouraged rather than discouraged to invest their savings at home and that our banking system should recognise that it is wrong for any group of people controlling credit here to invest the savings of the people abroad.

That has been our policy, not to-day, not yesterday but consistently all the way through. It was opposed by Fianna Fáil. We can say now that we welcome the change of attitude on the part of the Government. We do not entirely approve of the means adopted. We are more concerned now with what it is proposed to do with any money that is raised. We will examine very carefully and very critically the nature of the investment programme proposed by the Government. We will not recommend to the people as worthwhile investment of their savings the expenditure of £8,000,000 or £9,000,000 on rebuilding Dublin Castle. We will not support that kind of expenditure because we regard it as non-productive and as not in keeping with the requirements of our people.

Generally, we welcome the recognition by the Government now of the soundness of Deputy McGilligan's outlook as Minister and in opposition. We welcome the fact that all the cant and nonsense of the last three or four years can now be forgotten, that all the talk about this country being led into bankruptcy because in one year £12,000,000 was raised by National Loan, can be left behind us and that we can now expect from the Government when they are in opposition, as I believe they shortly will be, wholehearted support in an effort to build up this country by utilising not merely our latent, undeveloped resources, but our resources in wealth and material at present being used abroad.

That is our policy. That is what we set out to do in 1948. That is what we had almost achieved by 1951. That is what we would have achieved by now were it not for the unhappy circumstance which brought the present Government into office. That is what I believe we will shortly be called upon to achieve. We welcome the expression of views by the Government whichindicate that with regard to matters of that kind we have a common financial and economic policy.

I doubt very much if academic discussions on finance will make this country more prosperous. I am afraid that up to the present very little contribution has been made to a solution of, admittedly, very serious economic problems. I will not condemn or criticise the Government for altering the policy which they have pursued for the past two years. On more than one occasion I sincerely asked them to do so.

I said on former occasions that I would not blame any Government for embarking on a certain economic policy or experimenting with it, but I would blame them for continuing on that road once they had discovered that it was not in the national interest. I believe that the present Government has now discovered that the policy which they pursued since 1951 was not in the national interest. They may make excuses for that policy. They may convince the people that the policy which they pursued was not through their choice but as a result of conditions which existed when they came into office. They may succeed in convincing some of the people of that, but I, at any rate, am gratified to know of the change and I look forward to a period of prosperity on their admission that they are now going to change their policy. I do hope that they will be successful in their efforts, for nobody can examine the economic situation here with equanimity and nobody can deny that something must be done, and done quickly, to deal with our very serious economic problems.

Immediately on that matter the question of unemployment springs to the mind and I cannot see why, in a country of less than 3,000,000 people, in a country almost totally undeveloped, there should be any unemployed person who is prepared and willing to work. I believe that it would be possible in this country to continue its prosperity over a long period if the right steps were taken, and initially from its very nature thosesteps should be taken in the sphere of agriculture.

The land of this country being the source of wealth in the country—in fact one might almost say the only source of wealth—should be maintaining a far larger population than it is, and it is due to the policy which exists that it is not doing so. For a long period, I might say 1932 to 1948, governmental effort was directed towards the expansion and the development of the industrial arm with total neglect of the basic industry, agriculture. I believe and I have never denied that the development and the expansion of the industrial arm is an absolute necessity, but it can never be achieved successfully or will never result in increased national benefit if it is done at the expense of agriculture.

People wonder why it is so hard to get people to work the land to-day, notwithstanding the fact that in any other form of employment in the country life is far more attractive and far more remunerative. No intelligent young Irishman is going to spend his time on the land endeavouring to eke out an existance if by leaving that land and going into some town or city he can earn twice as much money, have all the amenities that a civilised person would like to have, and all the recreation, added to much shorter hours of work. That is not to be construed now as a denunciation of the life to be found in non-agricultural employment, but rather to focus attention on the conditions which obtain in the pursuit of agricultural employment. Our economic prosperity here would be much higher than it is if more people could be attracted to work on the land. You would of necessity have increased production and increased production must bring prosperity.

There has been much talk, and to my mind much uniformed talk, on this whole question of high finance, and I doubt very much if there is any member of this House, no matter where he sits, who could be regarded as an authority on high finance. Even those who are regarded as authorities on high finance differ as widely as the poles. To me finance means fourthings—food, fuel, clothing and shelter —and money as such is only a medium of exchange and only in so far as it can procure those things has it any real value. If by the possession of external assets we can provide those things for our people, then only are they valuable.

I have no hesitation in saying—it does not make sense to me, at any rate —that to maintain over £40,000,000 or £71,000,000 in external assets whilst straving economic national development is an unwise policy. Whether the Minister may argue that you are transferring money from the Central Bank to the commercial banks or vice versaI say that the value of the wealth which we possess, whether it be in the commercial banks or the Central Bank, can only be measured by the provision of those four items which I have named, and the provision of those four items can only be done properly, morally and legally, by the provision of employment. Whatever Government exists here will have to realise this, that there is a fundamental obligation on a Government to provide employment for the people but there is no fundamental obligation on a Government to provide money for the man who is able to work and willing to work. My view of it at any rate would be that the Government of the day would provide first facilities for employment, and, having provided them, that any able-bodied man or woman who refused to make use of the employment provided will not be further regarded by the State. I do recognise that there are amongst us, and will always be amongst us, people who are not capable physically of work, and there, I say, there is an obligation on the State to provide them with a livelihood when through no fault of their own they are unable to make one themselves; but if a man or a woman is physically able to work and the Government of the day provides the means of employment, governmental responsibility ends there. With our financial resources it should be possible for any Government, whether it is Fianna Fáil or the inter-Party Government—I do not care which—to ensure that there would be full employment available for every man and woman inthis country who wished to have it. When our population was considerably higher than it is to-day full employment was possible. After 30 years of native government surely we should not have a Minister of the Government saying that our economic development has not reached to the heights we would expect.

I recognise as well as anybody here the responsibility of the commercial banks to their depositors. I fully recognise that the banks are merely custodians of other people's money and that they have a duty to those depositors to see that that money is properly expended. There could be no risk involved to those depositors engaging in national development here. For the life of me I fail to see in what country money could be more safely invested than in Ireland.

I know hard things have been said about the banks. They have been criticised for charging a very high rate of interest to those who wish to borrow money. I think that is not fair criticism because we have in this country what you might describe as a State body called the Agricultural Credit Corporation from whom practically no farmer, unless he is in very good circumstances, can borrow money at all and, if he does, he must pay 6 per cent. If there was a serious intention to develop agriculture along proper lines, would an organisation, established for the purpose of giving financial facilities to farmers, charge 6 per cent. interest for the money and wrangle for six or 12 months before they would advance a penny, and then only with absolute double security?

If you make any reference to this matter the Minister for Agriculture will say that he has no function in the matter. I say he should have a function. It should be possible, in view of the importance of agriculture in this country, for any creditworthy farmer— and every farmer who has a farm ought to be creditworthy—to be in a position to borrow reasonable amounts so that he might fully engage in the development of his land. It is no lie to say that agricultural production is low simply and solely for the lack of capital to develop it. Agriculture is lowbecause the land has been starved of fertilisers over a considerable number of years, fertilisers which the farmer would apply were he in a position to do so.

There is no use talking about increased social services and providing social amenities of different kinds until you have the farming community enjoying a high state of prosperity. When you have such, other lines of economic development will automatically follow. If it is now the intention of the Government to induce the banks and organisations like the Agricultural Credit Corporation to realise that financial assistance is necessary and will be safely given, I welcome that change on the part of the Government. I welcome it because I fail to see how any bank, central or commercial, can be justified in investing money belonging to the country in schemes outside this country providing employment for people outside this country, in many instances across the water in Britain. Young Irishmen have to follow that money and try to earn it back and bring it over here.

I do not know anything about the ethics of high finance but it does not make sense to me that we should invest £71,000,000 in Great Britain and have young Irishmen from Donegal to Kerry going year after year as migratory workers to try to bring that money back. There must be something wrong with the system which perpetuates that. I say it is high time the matter was examined.

I do not think the commercial banks are to be blamed for following the example of the Central Bank. That has been going on for years. I welcome the statement of the Minister for Lands that the Government of this country expects the banks here will finance sound undertakings for national development. When that is done, then I believe you will have some modicum of prosperity. I do not wish to speak at any length on this Estimate because I think that anything that could be said has been said not to-day or yesterday but several times in this House. There were several debates which gave the Housean opportunity of dealing with this matter.

I hope the Government, if they can induce the banks to invest in native development here, will embark on common-sense projects. That is essential. Wild cat schemes should not be encouraged. I know the argument will be that employment must be provided but if employment is to be provided let it be productive employment. Let there be something left to the nation in exchange for the money that will be spent, something that will benefit the nation. I do not want to make political capital but I am sure that the Fianna Fáil Party have sufficient common-sense members in its ranks to realise that the expenditure of millions of pounds on Dublin Castle would not be a project that would commend itself to the Irish people. Apart from any other consideration, it is a place of evil memories in this country and the sooner it disappears altogether the better. Other opportunities will be provided for staffing whatever members of the Civil Service are there. Let us have housing for the people by all means.

You cannot get away from that. The first thing a man must have is a roof over his head. Then he must have a meal to eat. Develop agriculture and the farmers of this country will guarantee him a good breakfast, dinner and supper at a reasonable price. Let him have a fire to sit at or let him have some other method to keep him warm. Let him have clothes to wear. With those things he will be as happy and contented a citizen here as he would be in any other part of the world and he will remain here. That might ultimately stop the cancerous sore of emigration.

I admit there are people in this country who will emigrate under any circumstances and that no Government can be blamed for their going but there are many in the West of Ireland—I do not confine myself to Connacht alone; there are many in Donegal and Kerry—who leave this country for no reason but economic reasons. As they grow up they go until only one remains. That should not be allowedto continue. There should be alternative employment for them at home.

I am a firm believer in manual employment. I believe that so long as a man works with his hands and produces something of benefit to the nation all is well. I make no apology for saying that we have not enough manual labourers in this country. We have too many people who wish to shirk manual work and use their heads or the fountain pen. Many of our schools are educating in that direction. I for one am glad to see that—it might not be appropriate to mention it on this Estimate—we are going to spend more on vocational schools so that the boys and girls will be trained to use their hands and produce something that will benefit the whole country. Education is a desirable thing. It is a very nice thing to have but if we are going to survive as a nation we will have to depend on the men and women who produce something with their hands rather than with their brains or the fountain pen.

I want very briefly to compliment Deputy Finan on getting away from the dreary discussion which we have heard last night and in the early part of to-day on what Deputy Finan described as high finance. There has been far too much wearisome discussion here on those questions, those accusations on the part of the Opposition against the Government and those on the part of the Government defending their position. That has been going on back and forward across the House during this entire session. We would all like to get away from it and to get down to the fundamental problems of trying to ensure that our people, particularly our young people, would be able to find a decent livelihood and decent homes in Ireland. That is much more important than the kind of discourse we had from Deputy McGilligan in which he made all kinds of charges against the Government and in which he completely contradicted practically every statement he had made. In his charges against the Government, going back to 1922, he told us the Government had only borrowed about £2,000,000 a year for national development work. Then he went on to saythat they had left a debt of £11,000,000 which he had to find.

Notice taken that 20 Deputies were not present; House counted and 20 Deputies being present,

I only intervened briefly in this debate to compliment Deputy Finan on getting back to ordinary practical questions with which the country is chiefly concerned. Deputy Rooney, I know, is disappointed that I stood up to speak. He is bursting to tell us all about the dual purpose hen——

I wanted you to have an audience.

——that lays eggs in the morning and produces milk in the evening. I am not going to disappoint him. I will give him an opportunity of telling us all about that wonderful bird. I do think this debate should be directed towards practical questions, towards the question of providing increased employment for our people. The work of national development to which Deputy McGilligan referred over the years from 1932 to 1939 was work calculated to provide employment for our people. It was work calculated to provide the food, clothing and fuel to which Deputy Finan referred. Yet all that work of national development was fiercely attacked by Deputy McGilligan, by Deputy Dillon and the other members of the Fine Gael Party. We were told the wheat scheme was cod, that the scheme for the production of sugar beet was also a cod scheme and that the peat industry should be destroyed. I must say these great industries were developed not with an enormous amount of capital investment. As Deputy McGilligan pointed out, the capital investment over these years was only of the order of £3,000,000 or £4,000,000. I am not disputing any of these figures but I am contesting the deductions he drew from them.

Deputy McGilligan gave certain figures which appeared to be low in relation to expenditure at the present time. Nevertheless, that expenditure did produce good results. In the earlydays of the war I visited some of the peat bogs that were developed under the Turf Development Board prior to the establishment of Bord na Móna. I was astonished and impressed by the amount of valuable work that was done there. That was capital investment of the very best kind designed to make our fuel resouces available to the people for industrial purposes, for household requirements and for the development of electricity for the use of the community.

All those schemes were fiercely denounced from the very outset. There has been criticism of the Government on the part of Deputy McGilligan for not having borrowed more money in the pre-war period. Perhaps the Government should have borrowed more money at that time and put more money into the development of turf, wheat-growing, afforestation and all those other things but if they had they would have incurred more ruthless opposition, abuse and attack from the very eloquent men on the opposite benches. Notwithstanding that, I believe that useful work was done then even though it did not require as enormous an amount of capital investment as would be required for similar work to-day. That work must be continued and there is every indication that it is being continued all along the line. Over the last few years there has been an expansion in afforestation, in the provision of means of generating electricity; generating stations, both hydro-electric and turf-fired, have been established. There has been a very considerable amount of development work and it is useless for Deputies to talk vaguely about repatriating external assets. The only way to repatriate external assets is to get down to the task of developing our resources. If we do that, we can bring back the money and invest it in those industries and State enterprises, but we cannot do it merely by writing figures in ledgers. It has to be done by work. I know that a lot of Deputies on the Opposition side do not like the idea of work or the idea of intensive national development. They prefer to talk about the Central Bank and others investing money abroad.

The real task of our people is to plan and to design new works of a productive nature and put the money into them. It is not as easy a task as some might say: it is a task that requires concentrated effort all along the line. The arterial drainage work should be intensified. Land reclamation should be increased; it has been increased five-fold in the last three years and that increase should continue. Afforestation must go on until every inch of land unsuitable for agriculture has been planted. All that is national work of intense improvement. It is gratifying to find, in spite of the gloomy speeches from the Opposition, that this year our farmers produced a greater output of wheat than has been known for a great many years. The acreage has been increased and the output per acre has been stepped up. In the same way, we have not had ever in living memory, I think, a bigger acreage of beet or a greater yield per acre. It is not true to say that this country is in a state of decay. In rural Ireland there is an active stirring amongst the young people. They want to get on with the work and need only reasonable encouragement. The things denounced for years by the Opposition —guaranteed prices for certain products—have been vindicated completely in the last year more than ever. It has become clear that if the farmer is given the incentive, a sure market and a fair price, he will produce everything the country requires. His response in wheat and sugar beet proves that beyond question. That is the way to solve our economic problems.

It is idle for the philosophers, who have never done a useful day's work in their lives but spend days poring over figures and statistics, to talk about the solution of our economic problems—as they do not know even where to begin. There are 15,000,000 acres of land in the State and there are 3,000,000 people. That means there are approximately five acres to every citizen, young and old, and it means that for every family of five people there are 25 acres of land. Does anyone dare to say that in such a position we have economic problems that cannotbe solved if we go about them? In the ordinary course of events, a family can eke out a middling fair living on 25 acres. There are 25 for every family of five people. Our economists and those who spend their lives fiddling with statistics have never got down to that fundamental fact, which shows that we can solve our problems of production and give the people a reasonable living.

We have not only the land but the industrial resources, which are capable of considerable improvement. The Department of Finance should always be ready to give the maximum encouragement to everyone who sets out to establish a manufacturing industry, whether it is for food, clothing, implements, the cultivation of the soil or anything of use to our people. Anyone who tries to produce a factory for such work is doing a national service. It should be clearly understood that that man is not to be pilloried or denounced from the housetops, but is to be applauded as a person who is helping the nation to get on its feet. If our friends in the Fine Gael Party would give up groaning and moaning, they would see that we have a good country here which is capable of development and worthy of development. In our young people we have the greatest potential asset a nation could possess. Our young people are repeatedly sought when they go to other countries to seek employment. They should be given every encouragement to remain here and help to build up our own country. All that is required is a measure of goodwill on all sides.

Whether a Party is in Opposition or in Government, its members should not decry any effort that is being made to add to the wealth of the nation. They should not denounce some scheme that will provide employment, whether it be in building or in work of development. They should not denounce or ridicule any new industry that may add to the productivity of the State.

A lot of time has been wasted by Deputy McGilligan and by those who tried, by wearisome repetition of figures, to imply that the Government have not been consistent, that they have in some way failed to carry out aconsistent financial policy. If we had less talk about finance and a little more about economics, we would be doing far better.

If we had a little more clear thinking about finance, we might get somewhere.

Deputy Hickey has certain views on our financial problems. I sympathise with anyone who holds those views and I would like to see them put into operation, on a small scale, perhaps, as an experiment, to see how they would work. It is not too easy to experiment with an entire nation with all its resources. If Deputy Hickey and myself could find some uninhabited island and try out our ideas in regard to finance there, we might then try to apply them to our own nation; but until the theory Deputy Hickey suggests is proved, it is ridiculous to try it on 3,000,000 people. I would very much prefer to see practical efforts being made. Such efforts have been made, for example, in regard to the growing of beet. There we have the land and the labour and we have the need for an essential foodstuff. We guarantee the farmer a price for his wheat and he produces it in adequate quantities. If the same thing occurred with other things that are essential, we might solve our problems without delving too deeply into high finance or low finance.

Would the Deputy define for me what high finance is? I would like to hear it.

I will leave that to Deputy Hickey. As Deputy Finan said, we have had too much talk about financial problems. I think it would be far better to get our men working and to get the land utilised to the fullest extent. Land will not produce food if it is left idle.

They will not be let work.

Labour and effort must be applied to the land. If we got down to that work in a practical way we should get over some of our difficulties. Take sugar beet and home-grown wheat as examples. During the past year, home-grown wheat wasdenounced as something that was detrimental to our very existence. Even to-day a question was raised about it from the Opposition Benches. There were suggestions that the moisture content of our wheat is excessive so that it is unsuitable as a human food and that we must get our wheat, as well as other commodities, from the farthest ends of the earth.

As far as possible, we should reserve the home market for our own producers. If we do that, our farmers will have the security of a certain market for a large portion of their produce and they will be able to send their surplus produce to other markets and compete successfully there. If a farmer is guaranteed a fair price for half the produce of his farm, or if he is guaranteed a fair price for the produce of half the acreage of his farm, he can utilise the other half of his farm for produce which he can sell on the export market.

The Deputy seems to be getting into a discussion on agriculture now.

Deputy Hickey was responsible for bringing me into the agricultural field.

I should be very sorry to bring you anywhere.

I am glad of this opportunity to put these points to the House. I think we are inclined to concentrate too much on central financial problems —problems which no nation has solved. No nation on earth has solved every financial problem in relation to banks, investments and so forth. It would be remarkable if this little island succeeded in solving all our financial problems because that is something which no other nation on earth has so far succeeded in doing.

I believe that the only real solution of our economic problems lies in the utilisation of our agricultural and industrial resources to the maximum extent, thus providing the maximum opportunity for our people to work in field and factory for the benefit of the nation as a whole. In addition to that, I believe we should provide our peoplewith the necessary educational facilities. I have in mind, in particular, the technical and vocational instruction which is so essential to industry and agriculture. If we provide these opportunities for our people I believe that they have the ability and the energy and the will to work together for the common good.

I think that what is required is not a breaking away completely from the old Sinn Féin policy of producing the maximum within our own country. We do not require a breaking away from that policy or from the policy of expansion which operated here between the years 1932 to 1939. We require an intensification of that policy. I think that is the true solution of our difficulties. Everything that men such as Arthur Griffith and Fintan Lalor recommended——

Do not quote Fintan Lalor as being responsible for your utterances.

Surely I can mention that he and Arthur Griffith did suggest to our people that we should not depend for our existence on the importation of goods from every other country in the world and then hope, by some means or other, to sell our surplus produce in a far-off country. These men did preach, to a certain extent, the policy of self-sufficiency. They preached the policy of relying upon our country's resources and upon the ability of our people to make use of those resources. I understood, from my reading of Arthur Griffith's writings, that that was the message he tried to give our people. I believe that that was the policy which was pursued by the Fianna Fáil Government in the pre-war years. It was obviously impossible to operate that policy during the war years as extensively as it could be operated in peacetime, but that policy was resumed by Fianna Fáil in the immediate post-war period.

We are all aware that a national housing drive was embarked upon whereby very large sums of money were voted for the erection of over 70,000 houses. In the same way, very large sums of money were voted for rural electrification, for thedevelopment of Bord na Móna, for the production of turf and for the generation of electricity. All these undertakings are in keeping with the teaching of Arthur Griffith and with the policy which was pursued by Fianna, Fáil in the pre-war period. They are in keeping also with the policy which was announced by the Fianna Fáil Government immediately after the termination of hostilities. I hope that that policy will be intensified to the fullest extent and that nothing will be said or done to obstruct its implementation. I hope that we shall never again hear beet denounced as "codology", or anything like that I hope we shall never again hear these denunciations of attempts to utilise our native fuel for the generation of electricity.

I suppose the Deputy will never again be able to denounce the Minister for Finance as "a senile delinquent".

I know I shall never have the opportunity of denouncing Deputy S. Collins as a senile delinquent.

You would not chance that.

Deputy Cogan is advocating the Fianna Fáil pre-war policy of cutting calves' throats.

Deputy Fagan should not intervene in this debate. At one time, he was a member of the Fine Gael Party. Then he left it and then rejoined it. I do not know whether he is in or out of that Party at the moment. Deputy Fagan must, however, be aware that that Party was, all along, anti-national and anti-progressive in the sense that they sought to obstruct every effort to improve the lot of our people. As an Independent Deputy, I had many occasions to rebuke them for their attitude to our economic and our national questions. I had to rebuke them for their anti-industrial policy, for their anti-homegrown wheat policy and for their anti-beet-growingpolicy. We are all aware of their attitude to the four sugar factories. I am sure that Deputy Hughes would not like to see the sugar factory at Carlow blown up.

Who started the Carlow factory?

However, it was not done, and I do not think that it will be done. We are now in a position to look forward to a more intensive development of all our resources. I may say that I am particularly concerned with the development of our agricultural resources. As I have already pointed out, you might compare this country to a small farm. Our population is relatively small in regard to our total acreage and it is hardly necessary for me to say that, in the main, agriculture is our most important industry.

We can develop it to the fullest extent, but it can only be developed, as I was pointing out when I was interrupted, by the utilisation of the plough, the cultivation of the soil and the growing of crops. The land will never produce its maximum, unless it is under cultivation and it is in that respect that the Opposition have been mainly wrong. Their opposition to tillage and tillage crops has been one of the things that have contributed in large measure to our failure to increase the volume of our agricultural output. Fortunately, in the past year, there has been a considerable expansion in the volume of agricultural output and I think this increase is going to continue.

The question of credit was mentioned, as it would naturally be in the debate on finance. I believe that at a time when the prices of agricultural produce are relatively high, credit should, in the main, be on the lines of short-term credit— the kind of credit the Minister for Agriculture has advocated and put into operation last year for the growing of wheat. Short-term credit to be repaid within the season in which the crop is grown is more beneficial to the farmer than borrowing large sums of money to buy cattle at high prices, regardless of what the future may hold. These creditfacilities for the growing of crops which carry a guaranteed price, and the guarantee associated with them, are the best security the farmer has. With them, he can take his chance upon the export markets and has some background upon which to rely, if prices in these external markets are not as good as he hoped for.

From some of the speeches we heard, it is evident that the Opposition are inclined now to get away from the sterile programme they have followed over the past two years, of demanding lower taxation and higher expenditure, two absolutely irreconcilable objectives. You cannot have higher expenditure and lower taxation, but members of the Opposition, from every platform on which they could get a footing, have demanded that the Government should increase expenditure and, at the same time, reduce taxation. There is a reasonable chance that they now see the folly and futility of that kind of argument and a reasonable chance that they will abandon it. Deputy Finan's speech opened up a prospect that there are on the Opposition side of the House some people who are a little more clear-sighted than members of Fine Gael who are concerned about the practical questions that affect our daily lives. He complimented the Government upon their policy, and, in so doing, dissociated himself, very properly, from the Fine Gael Party and the futile Fine Gael policy. He ought to be congratulated on that, and that was my principal reason for rising to speak.

I must apologise to the Minister and his colleagues for calling them in to listen to that fantastic drivel. Deputy Cogan claimed that the Government had created a stir in the usual areas. That is true, but the stir was amongst people who wanted to emigrate, because the figures show that, in 1951, there were 453,000 farm workers, a number which had fallen to 419,000, according to the recent figures.

Give us the figure for 1946.

I will give you anyfigures you want. There was a stir in the rural areas because 34,000 people left the land and they did not go into industry because the number of persons engaged in industrial employment has fallen by 4,000. In addition, the number of persons employed in building operations has fallen by a further 4,000, so that 8,000 people have disappeared, in addition to the 34,000 who left the land. We can only assume that at least 42,000 people have emigrated in the past two years, in consequence of the financial policy being pursued by this Government. It is hard to believe what we have heard from Deputy Cogan, the politician-mendicant who knocked first at Fine Gael headquarters and then found an entry into the Fianna Fáil Party rooms.

It is not relevant on this Estimate.

No, but it is very relevant all the same. In his speech last night, the Minister used the phrase "chipping off", but I want to remind the Minister that the principal chipping done by this Government is the chipping off of 2/6 from the purchasing power of the pound. The purchasing power of the pound to-day is 2/6 lower than it was only two years ago and that fall in the purchasing power of the pound has caused many of the difficulties which exist at present, including the credit restriction and business recession. Obviously, if we are to have a Government in office which persists in debasing our currency, we will have a position here in which persons advocating drastic monetary reform will be well justified, and in which, without deliberately breaking the link with sterling, we will have done it, by reason of the fact that the purchasing power of our pound here will be so much below the purchasing power of the British pound in Great Britain. We had a very valuable contribution from Mr. Colbert in The Statistin which he indicates that our position, so far as the Central Bank and our investments are concerned, is unparalleled. He was obliged to comment on it particularly.

The Minister, speaking for the Minister for Finance last night, covered avery narrow field. He restricted his comments to the Central Bank, to the operations of the bank and the relations of the bank with our internal economy. He did not dwell on the wider aspects of the financial policy being pursued by the Government at present. Apparently he did not want a wider debate and was anxious that the Opposition should direct the debate towards the Central Bank, rather than to the destructive policy of the Government in relation to the finances of this country.

It was remarkable to hear from Deputy McGilligan last night that the Fianna Fáil Government borrowed to meet deficits in various years since 1932 to the extent of something like £16,000,000. It was remarkable, because, when the Fianna Fáil Party wanted to blacken the policy of the inter-Party Government and the efforts it made during its years in office, they alleged that there was borrowing to meet Budget deficits, when, in fact, the inter-Party Government adopted a system whereby there was one section of the Book of Estimates devoted purely and simply to items of capital expenditure and the other to current expenditure, a system which made it easy for the simplest child to understand what the national financial position was.

We have the position now where general taxation has been increased to nearly £110,000,000. When we relate that very high general taxation to our national income, we can see that a very considerable amount of our people's earnings is being taken up by the present Government in the form of taxation. The figure in the matter of general taxation now exceeds 6/- for every £1 earned by our people at the present time. That very high level of taxation is in no small way responsible for the difficulties confronting us at present, particularly in relation to the restriction of credit and the business recession. We have an example of the attitude of the Fianna Fáil Government in the statement which was made by the then Deputy Lemass a couple of years ago when he complained that the inter-Party Government were collecting only 5/6 in the £ in relation to the national income in the form ofgeneral taxation. He asked at that time why would the inter-Party Government not consider increasing taxation to 6/-, 6/6 or even 7/- in the £ and let the Government do the spending for the people. That is one issue on which the Opposition Parties differ from the Fianna Fáil Party. We believe in giving the people the opportunity to spend their own earnings instead of taxing their earnings and spending the money for them.

In addition to the very heavy burden of national taxation carried by the community, we have local taxation considerably increased as well. It has been increased in consequence of the policy of the Government which compels the various county councils to finance various services and projects which are initiated by the Government and which the ratepayers must pay for, whether they like it or not. The result is that the rates on the average have been increased by more than 5/-in the £ within the last two years. That increase is in addition to the general taxation exceeding £100,000,000 which is being taken from the community at present.

We had from the Taoiseach, a few months ago now, a remarkable change of view in relation to the financing of projects of a capital development nature. He stated, at some meeting or other, that it was desirable that this country should have an annual national loan. This followed the campaign of the Fianna Fáil Party in previous years when the inter-Party Government was in office, in which they alleged that we were putting this country in pawn because we were borrowing money for the purpose of financing capital projects. During the three years of the inter-Party Government the total amount borrowed for capital development, such as E.S.B. works and other projects, amounted to £39,000,000 but the last two loans which the Fianna Fáil Party floated amounted in all to £45,000,000— £20,000,000 in the case of the first loan and £25,000,000 in the case of the second. Although they did not get the full amount they sought, they did try to get £45,000,000 from the community. That all happened within two years but the tragic part of it isthat they did not pursue the policy and follow the line set for them by the inter-Party Government. It was clearly indicated by Deputy McGilligan when he was Minister for Finance that he intended to float a loan of approximately £15,000,000 in August or September of 1951 after other financial adjustments had been completed.

The Fianna Fáil Party at that time were too fresh from the campaign against borrowing for capital development, and they saw also the £24,000,000 of American money that had not yet been used. They decided to use that American money instead of continuing the very successful financial policy pursued by the inter-Party Government in relation to annual national borrowing for the purpose of financing capital projects. The result was that although that £15,000,000 could have been got from the community at 3, 3½ or at most 3¾ per cent. in 1951, we had a bribe of 5 per cent. in addition to other facilities offered for the £20,000,000 raised in 1952. Of course, the community will be paying for the next 20 years for that bribe of 5 per cent. interest on the £20,000,000 secured at that time. We find now, in consequence of the fact that the Fianna Fáil Party departed from the financial policy of the inter-Party Government in relation to national loans, that people will each have to pay an extra 12/6 per week for the homes they have built for themselves for the next 25 or 30 years. That in many cases amounts to an extra burden of £1,500 on each of those people, many of them fathers of families who find it difficult to make ends meet. That penalty is necessitated by the fact that the Fianna Fáil Party did not go for the loan of £15,000,000 in August of 1951 instead of waiting until the end of 1952 when they floated the national loan of £20,000,000.

It is clear that the policy of the present Government has dissipated the financial buoyancy that existed amongst the community in general. Proof of that is to be found in the fact that, in spite of the very attractive terms of the recent national loan,when the Government asked the people to subscribe £25,000,000 they subscribed only £16,250,000. It is obvious that they had not another penny to subscribe to that loan, although the terms were very favourable.

Now we have had an announcement from another deputy-Minister for Finance, Deputy Derrig, although the bottom of the barrel was scraped by the Government in the last national loan, that they will attempt next spring to raise a further national loan in connection with the financing of capital development projects.

It is obvious that whatever the Government have been doing in the last few years they have created a situation in which there is a scarcity of money so far as savings which would be available for investment in these national loans are concerned. Apparently, a number of holders of small amounts of money considered that it would be safer to keep their savings in the Post Office than to put them in these national loans, because we find that not many people took their money out of the Post Office to invest it in these particular loans.

The deputy-Minister for Finance last night restricted what he had to say to a commentary on the activities of the Central Bank. He did not refer to our finances and trade in general. I should like to remind him that attempts being made by his Party to confuse the public mind in regard to the adverse trade balance can be exposed from our ordinary statistics. If we take the position that existed in 1947, we will see that the adverse trade balance in that year was £30,000,000, although the total value of agricultural produce exported from the country was only £38,000,000. In 1949, when the inter-Party Government were in office, that adverse trade balance had been brought down £10,000,000 and the value of agricultural produce exported from this country was almost doubled. Then in 1950 the adverse trade balance went up again to £30,000,000, but there was nothing dangerous about that £30,000,000 when compared with the £30,000,000 adverse trade balance in 1947, because there was only a margin of £8,000,000 in relation to our agriculturalexports in 1947 while the value of agricultural exports in 1950 was more than double the amount of the adverse trade balance.

The year 1951 was an exceptional one. The inter-Party Government were in office only for the first half of that year and it was only during the first half of the year that they had control of the finances of the country and of the trade balance between this country and the other countries. When the present Government came into office they allowed the situation to get out of hands. They allowed the panic which they had created towards the end of 1950 to run riot, which caused many traders to anticipate a national emergency and a world war and to fill their shelves with all kinds of goods which might become scarce in the event of a war.

There is no doubt, however, that the stockpiling which took place on the part of the inter-Party Government has proved very useful, because many of the goods which were brought in have gone up in price and the community now have gained advantage from the fact that the goods were purchased by the inter-Party Government at lower prices than those at which they have been available since. On the other hand, private persons and traders bought large quantities of goods at inflated prices owing to the Korean war and the buying that took place at that time. But, as far as the purchases made by the Government are concerned, they proved to be a wise investment and to be of great value to the nation.

I tried to make out what argument Deputy Cogan was trying to put up. He did complain that the inter-Party Government had not a policy which encouraged tillage or the cultivation of land. I will ask him what extra land was cultivated last year for wheat growing. Is it not a fact that every acre of land which was drained under the Dillon scheme was ploughed up and wheat put into it? Is it not a fact that a lot of land which was mere swamp before the Dillon scheme was put into operation grew wheat last year? That is where the extra acres of tillage came from. People who hadcut trenches in their land for the purpose of having this drainage carried out considered that the first thing that should be done was to cultivate that land, grow crops on it and carry out rotation on it. It is probable that in a couple of years time there will be a good crop of grass on those fields and that in the ordinary way they will be used for rotational cropping.

Wheat cannot be grown for any more than two, or, at most, three years on any land and it is obvious that the extra land which was used for tillage this year was land that had been drained under the Dillon scheme. Therefore we can see the advantages which that scheme is already bringing to the country. We can also see from the increased volume of our exports the advantages which the Dillon policy brought to this country by the provision of credit for agriculture and the application of scientific methods.

There was one remarkable phrase used by the Minister for Finance, I think it was last year, which will always be quoted against him namely, that he was pursuing a policy which would restore order in the public finances. We can now ask him to examine the finances of this country to-day and compare them with the position in 1951 when he resumed responsibility for the management of the finances of the country. He will find that his attempts to restore order in the public finances have, in fact, created considerable confusion and brought down the stability of our currency.

We have a situation now in which the Government cannot think up relief schemes quickly enough to absorb the large pool of unemployment which has been created by the adoption of the "Butler" Budget, the Budget which the Tánaiste and the Minister for Finance brought back here rolled up in May, 1952. While that "Butler" Budget might be suitable for an industrial nation such as Great Britain, certainly it was not and is not suitable for a nation which depends for its prosperity mainly on agriculture. The sooner the Minister for Finance realises that the "Butler" system asoperated in Great Britain is not suited to this country the better.

Whether the financial policy which is being operated by the Government is right or wrong can be judged if we compare the state of the country at present with the prosperity which it was enjoying at a time when the people got a Government for which they had not voted.

We can also measure the achievements of the Government by the number of people who have emigrated. I presume that my experience has been similar to that of other Deputies. I have come across quite a number of people who are planning to leave the country at the turn of the year. Many of them, I think, intend to go to Canada. They are not just young fellows or individuals. Families are packing up to leave because they consider that there are no prospects here. They can see that the purchasing power of the £ is falling, while it is gaining strength in Great Britain, particularly. That is the peculiar situation we are in. We are supposed to be tied to sterling. We have heard people say "break the link with sterling", but whatever we do we find that while the £ is growing stronger in Great Britain it is growing weaker here.

We have had speeches from the Minister for Industry and Commerce trying to pacify the community, to create a kind of optimism amongst them by telling them that the country is rounding the corner. I do not know who is going to believe that when they see that the number of unemployed persons is increasing rapidly and that our people are flying from the country. In two years 34,000 people have left. In the building trade the number of people employed in it has been reduced by 4,000, although something like 30,000 houses are still required.

We see that the number of people engaged in industrial employment has fallen by 4,000, in spite of the fact that we have the Minister for Industry and Commerce and others coming in hereand telling us that they have turned the key in so many factories, hundreds of dozens of factories, in the last 12 months. Even if they did turn the key in dozens of factories, the plans for these factories had been made before they came in. Now the factories are open, with only skeleton staffs, instead of the staffs for which they were designed. Many of them were designed to provide hundreds of persons with employment. Instead of that, they have just skeleton executive staffs waiting for something to happen; some orders to come in which they may be enabled to fulfil.

I hope that the present Government will, first of all, examine the picture in general and will not be content to pin their attentions on the Central Bank. The Minister for External Affairs, when speaking on behalf of the Minister for Finance last night, tried to restrict the scope of this debate by his references to the Central Bank. It was remarkable to read in the Report of the Central Bank that during last year this Government had used borrowed money to meet current expenditure. We should have an explanation of that from the Government. We find that, although the Government got £45,000,000 during the last two years they are going to look for probably another £10,000,000 or £15,000,000 next March. The people ought to be told what is being done with all these millions of pounds. It has been argued that the expenditure of money on capital projects has been greater than it was, that it has been stepped up and increased, but if we examine the figures for last year we will find that there was less money spent on capital development than the estimated figure. It was several million pounds higher than the actual amount spent on these capital projects.

Deputy Cogan, particularly, in anything that he had to say, tried to relate it to agriculture. He did not, however, make any attempt to explain why he supports the attitude of Fianna Fáil in relation to the annuities. The Fianna Fáil Party claims that it bought out the annuitiesfor £10,000,000 in 1937. But the farmers are still paying 50 per cent. of the annuities which they were paying at that time. They are going to go on paying them for ever, although the annuities, which were being collected by Britain, were only for a limited period. We have these annuities being collected from the farmers one year after another without any hope of their collection being discontinued.

The Deputy knows that statement is not true.

I know that they are being collected.

You know perfectly well that the statement you have made is not true.

If Deputy Killilea would stop talking I could hear the Minister.

You heard me all right.

Finally, I want to say, on that matter, that it is just one more of the many taxes which are being put on the land, and sooner or later the Fianna Fáil Party will have to face up to the question of collecting the annuities one year after another. An annuity is usually for some defined period. But here we have a situation where the farmers are paying 50 per cent. of the annuities which they had heretofore been paying although the Fianna Fáil Party boasted that they had bought out the annuities for £10,000,00 from the British Government.

I think that the most deplorable policy that is being pursued by the Government at the present time is in using the money of the general taxpayers, and the money subscribed by the people to these national loans, for the purpose of hiding the unemployment situation deliberately created by the Government themselves. That money is being used in connection with temporary relief schemes.

You have dozens of men dabbling at the Dodder, or at some other kind of relief work, without any prospect of getting constant employment, and thatat a time when we have a large number of dwelling houses to be built in Dublin City as well as the thousands of houses which are needed throughout the country. It would be better for the Government to abandon the policy of hiding that large pool of unemployment, which they have created, by these relief schemes, and give to these able-bodied workers a measure of constant employment on work that would bring benefit to themselves and to the nation.

The policy of the present Government has been a series of stop-gap measures, but there is a limit to that type of policy and the community in general are fed up with this Government. They have shown that at several by-elections. Even in the case of the Galway by-election, they indicated that not all is well with the Government. There are more elections to come. We got a very encouraging call from Dublin City this time last year.

The Deputy cannot discuss elections on this Vote.

What I want to say is that the financial policy of the Government was put to the test this time last year in Dublin City, Limerick City, East-Cork, and, of course, in Wicklow. And in each of these cases the Government was turned down by a very large majority of the voters and I have no doubt that when the financial policy of the Government is put to the test again that they will get the same answer from the people again. In spite of the call from the people in each and every one of the by-elections we have the situation here that the Government is continuing to sit tight in spite of the vast majority of the people who voted against them in 1951 and who are continuing to oppose the policy of the present Government.

The recent effort of the Government to strengthen its position by bringing within its Party Deputies Cogan, Browne and ffrench-O'Carroll—

That has no relevance to the Estimate.

The point is, Sir, that these three Deputies were brought in to make sure that the financial policyat present being pursued is going to be pursued in the future.

The Deputy cannot make that point relevant by just mentioning financial policy.

Well, Sir, I feel that it is relevant.

The Chair feels it is not.

I accept your ruling on this matter, Sir. I want to say finally that there is a great measure of anxiety amongst the great body of the community. At the present time the position has become worse. Many traders and shopkeepers are complaining that things were never so bad. In the normal way it is expected that there would be a quietness in trade approaching Christmas, but the business people say, in general, that it was never like this before. The position in relation to credit is the same. Credit is being withdrawn from people who depended on a measure of credit to pursue their business and we have a situation where we have more bankruptcy cases in the courts than there have been probably for the past 12 or 13 years, since pre-war, when the Fianna Fáil Party had reduced the country to a very low position in consequence of the national policy being pursued by them in those years.

On a point of order. I understand it is intended to put this Vote to-night? It is intended to give the Estimate to-night?

Is it not necessary to give the Estimate before the Appropriation Bill can be taken?

The Estimate will be given but the discussion will not be finished on it.

The point I want to make is that I have a motion down to refer back Vote 22, and it looks as if the Estimate for Vote 22 is going to go through the House to-night andthe motion to refer back will not be dealt with.

I thought the Tánaiste gave some sort of assurance this afternoon that there would be a token Vote in regard to it.

I do not know exactly what was settled but there will be a token Vote for the Department of Finance if the Finance group of Estimates do not end to-night, and what I suggest is that, in moving that token Vote—if it has to be done in that way —I will deal with the question of the universities particularly, and then Deputy Lehane might come in.

Yes, but by that time Supplementary Estimate 22 will have been passed.

The Deputy will have an opportunity of making a statement.

I suggest that Deputy Lehane could move to reduce the token Vote by some sum in respect of the universities. That would be a way out of it.

But the House by that time will have passed the Supplementary Estimate in respect of it.

That is the proposition— that we pass these Estimates to-night and have a token Vote on the Finance Estimates later.

So that we can talk about it when it is done?

It was rather amusing to listen to Deputy Rooney, particularly when he had the neck to mention something in this House that we have not heard mentioned there for a number of years from that Party opposite. He was the first Deputy who had the neck to come into this House and speak about the land annuities. Fancy any Fine Gael Deputy, any of the blue-shirted team who gave their support to Britain and tortured the agricultural community of this country for a number of years, having the neck to get up in this House and mention the land annuities and demand that something or other be done! The landannuities are reduced 50 per cent. now. Why? Because we succeeded, in spite of Fine Gael, in holding that money in the country. That is why we are able to reduce them by 50 per cent., and the 50 per cent. that is at present being paid was the amount that was paid over to the landlords for the land that was unpurchased in that period. That 50 per cent. that is being paid now goes to pay the landlords' share of the unpurchased land.

It is an added tax.

You are as thick as him.

The Deputy may not make such a remark towards another Deputy.

I withdraw it, but the Deputy should try to conduct himself seriously.

Will you allow a discussion on land annuities?

The Deputy is entitled to reply to the remarks made by Deputy Rooney regarding the land annuities but beyond that, he is not entitled to go into a discussion on land annuities.

I know it is a very tender spot with the Deputies opposite. The next thing that Deputy Rooney did was to state here that the land annuities are now to be paid for ever. He knows—or at least if he had the intelligence to read he would know —that that statement is not correct. He would know that the self-same period that was agreed to at the start of those annuities is to be the period for which the annuities are to be paid. There has been no extension of the period of payment at any time. That will show you how ridiculous Deputy Rooney's statements are.

Deputy Rooney then went on to tell us about capital expenditure. I wonder would any Fine Gael Deputy tell us what capital industry they started with the £90,000,000 odd they borrowed in three and a half years? Would they tell us what they did with the money? That is the interesting thing the people of this country would like to know, the people who are at presentbeing taxed to the extent of £7,000,000-odd a year to pay for that spree that the Fine Gael Party had here for three and a half years. When we hear about the cost of living going up, would those Deputies always remember that £7,000,000-odd of that taxation which is increasing the cost of living was caused by the indiscriminate, foolish borrowing of the inter-Party Government in its period of office? That was money which was not expended on works of a capital nature to provide future potential employment for our people.

He went on then to tell us about the increase in local taxation. Certainly there has been an increase in local taxation. Why? This Government had the pluck to bring in here and pass social legislation for which money had to be allocated to provide the social services that were the price of the support given to the inter-Party Government by the Labour Party for three and a half years, and in relation to which the Fine Gael Party welshed on their guarantees and left Deputy Norton, then Minister for Social Welfare, holding the bag, and the bag was empty. Was not that the true position? Did Deputy Rooney oppose any of these social services when that Act was going through the House? Did any Deputy oppose them?

Deputy Rooney went on then to talk about the bribe of 5 per cent. given to the people who lend money. If anybody should be shy and nervous of mentioning bribes it is the members of the inter-Party Government, the people who came along when they were only in the position of caretakers and issued letters to the local authorities ordering increased salaries for local authority employees amounting in all to some £2,000,000.

How does that relate to the Estimate?

It is wrong, anyhow.

I do not think there is any need to withdraw that. I will prove my statement as I proved it before when I read the letters from Deputy Keyes, Deputy J.A. Costello and all the rest of them.

That bears no relation to the Estimate.

It is portion of the extra money which has to be found in taxation now, £825,000. The balance of over £1,700,000 fell on the local authorities and had to be raised by way of increased rates. These letters were issued by these people when they were acting as caretakers after the dissolution of the Dáil. Within the past six months some Deputies have come in here and issued another bribe to people who one would expect to be entirely non-political, namely, the civil servants. A bribe was offered here to the civil servants: you help us to get Fianna Fáil out of office and we will give you six months back pay, amounting to over £500,000.

Let us look facts in the face and see on what side the corruption lies. Deputies in the Opposition Parties have the neck to get up here and speak of bribery. Deputy Rooney told us about the stockpiling that has proved so advantageous. It certainly proved very advantageous down in my town of Midleton and in the town of Youghal, very advantageous indeed. The 2,500,000 yards of foreign shoddy that was shoved in here under the guise of stockpiling meant that the factories that were giving decent employment had to close down or could only employ their workers part-time for two or three days in the week. I am sure that the employees in the Midleton cotton industry and in Youghal appreciated the inter-Party manoeuvre of stockpiling. As a result of it they had six months of starvation, walking the streets.

Then the Opposition talks about unemployment. What was the reason for that unemployment? Deputy Rooney gives some rather peculiar reasons for the increase in tillage and the increase in the wheat acreage. One would think that Deputy Rooney never heard of the rural improvements schemes, of the Arterial Drainage Act or, indeed, of land reclamation until Deputy Dillon came in here to tell us all about it. All this is rather a joke. With all the land reclamation schemes and all the restof it why did the tillage acreage drop each year during the inter-Party régime until we were in a position that tillage had almost ceased? We had to import foreign sugar and pay the foreigner £12 per ton more than we paid our own factories.

This year the position is reversed and all four beet factories are working full speed. Deputies on the Opposition Benches should try to broaden their outlook a bit. I would love to take Deputy Dillon down to one of our beet factories and let him see things there for himself. I am sure he would not then be telling us about the beet that went up the spout. This year there has been an increase in the acreage of beet to the tune of 10,000 or 11,000 acres despite the Fine Gael campaign launched against the production of beet last year. We had one Deputy here stating that he used to grow 20 acres every year, but he had reduced that 20 acres to one acre. If ever anybody wanted proof of the endeavour to provide employment, there was definite proof!

Consider the extra people who are employed this year on beet alone and compare the gloomy prospects prognosticated by Deputy Rooney in relation to rural prosperity. The farmer is a tough man and he will grow nothing unless he sees some prospect of a profit. Why has he increased his beet acreage this year by 10,000 acres? We were told it was a slave crop. We were told it was a laborious crop. Why, then, is there such an enormous increase in the acreage?

Why is there such an enormous increase in the acreage of wheat this year? If that wheat is not grown here the foreigner will have to be paid to grow it for us. All these millions are being kept at home and distributed amongst our own people and our own agricultural community. They are giving employment to everybody, employment to the man with the lorry, to C.I.E., to the miller, to the worker in the sugar factory and increased employment all around because of a certain agricultural policy, instead of the nightmare that the agricultural community suffered for three and a half years while Deputy James Dillon wasmasquerading as Minister for Agriculture. Now people know exactly where they are. Next year there will be a further increase in the acreage of wheat and beet. I do not think that is due to any policy of the man who stated in this House that beet was gone up the spout after the wheat and the peat and God speed the day. Then a Deputy had the neck to say here that it was on account of that person's policy that there was an increased acreage of wheat and beet this year.

Let us examine these matters soundly and on a solid basis. Money has been got for capital expenditure. I have invited Fine Gael Deputies to tell us how much of the £90,000,000 that was borrowed during their term of office was borrowed for capital expenditure. If it was borrowed for capital expenditure, will they tell us on what it was spent? These are two very simple questions. Let us hear where the industries or factories are situated that were to employ the hundreds that Deputy Rooney spoke of. Let us hear what form they took. Let us hear how many were built up to May, 1951. The people would like these facts brought out.

Side by side with the agricultural programme which is going ahead, I am anxious to see an industrial programme going ahead. I am hoping, as a result of the work of the Minister for Industry and Commerce and the Minister for Finance, for definite results this year in the extension of the steel industry. That was held up through the manoeuvring, dodging and excuses of the inter-Party Government. It is time we went ahead and got things straightened out.

I understand that the time for the debate is limited. I do not wish to delay the House further.

I do not propose to follow Deputy Corry because I do not believe that a rehash of previous debates will do any good. Various speakers have mentioned the Central Bank and the banks generally and have made certain criticisms. Speakers in this debate and in debates over the last couple of years have gone out of their way to dissociate themselves from the views and sentiments expressed in the CentralBank Report, especially the report of 1952 and to some limited extent have adopted the same attitude towards the Central Bank Report for the year 1953. The Minister for Industry and Commerce, Mr. Lemass, in particular, last year repudiated the sentiments expressed in the Central Bank Report and this year more or less made the same repudiation. It is true that we did not have repudiation by the Acting-Minister for Finance who gave tacit approval to their recommendations and general observations. At least, he did so by default.

The whole tragedy of the Central Bank and of the banking system is that the Government—and I include all Governments—are powerless to prevent the Central Bank and the banks generally from pursuing a certain financial policy and arriving at a certain situation. We had ample evidence of that arising from the Central Bank Report, 1952. Whether by design or otherwise, the Government that is now in office gave the utmost help to the Central Bank in their idea of financial policy in the Budget proposals of April, 1952.

In nearly all circumstances it is a good thing that a Government can exercise control through one of its Ministers over the price of various commodities. They can exercise control over the price of food, materials, services and various other things but the one important thing that they cannot control, have not attempted to control and it does not seem as if they ever will attempt to control, is the price of money.

I do not claim to have any detailed knowledge of financial matters but it is obvious to me and it must be obvious to everybody that the majority of our ills are due to the fact that, no matter what the power of the Government may be, no matter what the good intentions of the Government may be, the people who determine things in the long run are the people who control money, in this case the banks. As has been admitted by the Minister for Finance, Mr. MacEntee, the Government cannot say at what price money will be available this year, next year or the year after, for the purpose of financing housing. The banks had thepistol to the head of the Minister for Finance about this time two years ago with regard to the price which the Government would be forced to pay for financing works of a capital nature. The price of money determines the extent and the rate at which we can develop the country.

We have seen a pretty good example of that in recent times in the matter of private house building. No matter what the protestations may be from one side of the House or the other the fact remains that the natural consequence of the fact that private builders and people who wanted to build their own houses could not get money at a cheap rate was that there was less building in that particular category.

Because people could not get money cheaply many people decided not to build their own houses but to depend on the local authority to provide houses for them. The price of money at that time and even at the present time for local authority house building has meant a reduction in that type of building. The price of money has determined the speed at which houses are being erected, the number that are being erected and the rents that are to be paid. Especially, may I say again in respect of the housing industry, as you may call it, the control which the banks exercise over the price of money has an effect, and in this case an adverse effect, on that particular industry?

We have criticised the Central Bank report; there have been many criticisms of the banks and the banking system and the general financial structure in this country, but there does not seem to be any suggestion from any side of the House that we ought to do anything about it. I am making my remarks on the assumption, and in the belief, that the banks have the pistol to the Government's head. Inasmuch as they, in my opinion, can pursue or make the country pursue a certain financial policy they can set the rate at which this country can develop and progress. I think we ought to take particular note of the sentiments that are expressed in the various reports by the governors or directors of theCentral Bank. Some parts of their report to me seem amusing. In page 15 of the report for 1953 they say:—

"Despite the enlargement of their revenues the Central Government and local authorities are forced to borrow on a large scale to cover their commitments. Total indebtedness, including the contingent liabilities of the State, has been mounting at a rapid rate and the annual cost of servicing the debt now runs to considerable figures."

Is it not obvious that the fact that the cost of servicing the debt is running to considerable figures is on account of the policy that has been pursued by the banks in the raising of the rate of interest and in keeping the price of money as it stands to-day? As I have said, the price of money determines the rate at which this country can be developed. As far as I can see from the sentiments expressed by the governors or directors of the Central Bank, they do not want to see this country developed. They have complained here about the money that has been spent by this Government and by previous Governments on works which would be described as public works, capital development, such as the building of houses, and they complain that for the money that is spent on these capital projects there is no return. One would imagine that the money spent by Governments on public works consists of nothing but relief schemes. I do not subscribe to that view. I believe that the moneys that have been spent by the last Government and by the present Government in many respects go for better production in this country. From my reading of that report I would say that the Central Bank has taken exception to the expenditure of money on the E.S.B. and rural electrification that does something for production in this country. The expenditure by the Government on Bord na Móna could not be regarded as money spent on a nonproductive venture. Production of fuel in this country is a very good and desirable thing. Money that is spent on transport, whether it be on roads or on C.I.E. in present circumstances, is money spent to improve production.Money spent on afforestation in this country can be described in a similar fashion. It is true to say as well that the big bulk of the money which was borrowed and which is now being borbrowed is money which has been invested in the primary industry of the country, the agricultural industry. Millions of pounds have been spent on the land reclamation scheme, on the provision of fertilisers and on other different methods of helping the industry.

I think it is absolutely wrong for the Central Bank to suggest, as they do suggest in their report, and to give the impression to the people at large that money that has been raised by this Government, that was raised by the last Government, is spent for anything but not alone to develop the country but to try to increase production.

It is wrong to say as the Central Bank tell us on page 15:—

"At the same time the outlay in the public sector has been largely in urban areas and has helped to attract workers from the rural districts, thus accelerating rural depopulation and tending to create a simultaneous scarcity of labour in rural, and a surplus in urban areas."

Most of the money borrowed, as far as I know, has been spent on rural electrification, on afforestation, on the land reclamation scheme, on roads, and to an extent on the provision of houses in the rural areas. It must be obvious to anybody that the depopulation of the rural areas cannot be blamed on the expenditure of moneys borrowed in the urban or in the city areas because the situation at the present time is that a lot of people are leaving the land because the agricultural industry is very rapidly becoming mechanised, and, as I have stated here on more than one occasion, the introduction of machinery on the land of Ireland has meant in a lot of cases that where a farmer would employ three men five or six years ago now because he has certain machinery he employs only one man. That has resulted, in my opinion, in certain of the depopulation of therural areas and the consequent flight to the towns and the cities or the flight to other countries. I would say, therefore, and still make my remarks general, that until such time as we can control the issue of credit, credit facilities, until we can as a Parliament or the Government can control as a Government, the price of money, we cannot develop this country as I believe every Party in the House wants to develop it. As long as there is a certain group, the banks in this case, saying to the Government: "You shall have money at this price or that price" I say that the banks have a pistol to the head of whatever Government may be in power. I do not suggest that the Central Bank should be subject to parliamentary control in the matter of day-to-day administration, but the fact that the banks can say it is to be 4 per cent. or 5 per cent. or 6 per cent. or 7 per cent. creates a situation that we in this country should not tolerate for much longer; and the sooner the Government or all Parties in this House come to an agreed policy in regard to the functions that the banks should perform in relation to the development and the general welfare of the country—the sooner that day is arrived at, the better.

I would merely, in concluding, like to ask the Minister a question on a particular subject. It is something that has been raised here before, but I regret to say that particular attention has not been paid to it by the Minister for Finance—that is to consider the introduction in any respect of the pay-as-you-earn system of paying income-tax to the Revenue Commissioners. It is true to say that many thousands of workers have, over the past few years, come into that category of income-tax payers in present circumstances. I refer to, say, a single worker for the sake of an example, who earns £5, £5 10s., £6 or £6 10s. a week. He receives a demand as a single man for an amount of anything from £10 to £15. He is not yet, I may say, used to the idea of paying income-tax. That is, I suppose, a human failing. He has only been paying for a certain number of years, and it is rather unreasonableto expect that he himself would put aside a few shillings so that when the demand might come he would have the total amount to pay to the tax collector. It is very unfortunate for him, when it comes near the 31st December, that he is required to pay £10, £12, or £15 in one sum. In the month of November, say, when the Revenue Commissioners see no sign of the man paying the money, they proceed to direct the employer to deduct instalments from the employee's wages and refund the total amount so collected then. I would suggest that the Minister ought to try, as an an experiment, the pay-as-you-earn system. He could try that in State Departments and local authority offices. I know the Minister has got a lot of broad questions to reply to, but I think that the method of the payment of income-tax is a question which besets the minds of a lot of workers in the country at the present time.

I should also like to ask the Minister if he would consider the question of the remission of tax for cinema charges up to and including 6d. per person as the price of admission to a cinema. In my home town, Wexford, the charge in respect of the lowest-priced seats— I do not know if I am in order or not on this——

I will be very brief. The Minister may or may not reply to it. It may be more appropriate to raise the matter on the Budget. I merely suggest that the Minister ought to consider the remission of the tax up to and including 6d. By adopting that method he would, in respect of the town I represent, enable the cinema owners to reduce the price of the lowest-priced seats from 8d. to 6d.

Last evening, when the Minister introduced this Estimate, he dealt at some length with what occurs in the financial system when a sale of foreign assets takes place, a sale either by a private individual or a sale by the Central Bank of its sterling holdings. I think it was unfortunate that the Minister did not go a little further in the financialdiagnosis of the capital account of our balance of payments in order to make clear to the House and to the country generally the manner in which this country can repatriate sterling assets. I think it is important that the financial analysis which he carried out last night should be carried a step forward so that we can fully appreciate what is meant by a policy of repatriating sterling assets and how that policy can be brought into effect.

The Minister was, of course, quite correct in stating last night that a person who sells his sterling holdings of any form does not, therefore, repatriate those sterling holdings and that merely what happens when there is a sale of, say, £100 British Government stocks is that the Irish person has got to his credit this £100 in his Irish bank but that his bank holds the value of the £100 which he had held heretofore. That is quite correct.

It is quite correct to say—it is axiomatic—that a sale of our foreign securities does not mean repatriation of foreign securities. I would just like very briefly to carry the argument a step forward. When an Irish exporter exports, say, £100 worth of cattle he gets paid £100 worth. Suppose his exports were to England. He gets paid £100 by cheque drawn on an English bank. He refers it to his Irish bank and is credited with £100. The Irish bank in its turn presents it to the English bank on which it was drawn and the Irish bank's credit of £100 is put to its account.

The opposite procedure takes place when an Irishman imports £100 worth of goods. He pays the English vendor with a cheque drawn on his bank and the English bank credits the English vendor with £100 and presents it to the Irish bank. The Irish bank's indebtedness to the British banking system goes up by £100.

I think it is important to carry the argument that step forward so as to appreciate that, other things being equal, if our imports, visible and invisible, balance our exports, visible and invisible, then there can be no repatriation of sterling assets because the payments will have cancelled each other out. The argument can be carrieda further step forward. If there is an increase in our exports over our imports, there will be an increase in our external holdings. If there is an increase in imports over exports, there will be a decrease in our external holdings.

I make this argument in order to demonstrate what I think is generally accepted and what must be a fundamental aspect of financial policy and that is that the only way that this country can repatriate sterling assets is by a deficit in the balance of payments.

If we decide on a policy of achieving equilibrium in our balance of payments position we will not repatriate sterling assets. If, on the other hand, we wish to follow a policy of repatriating sterling assets, then we must deliberately plan deficits in the balance of our payments. If imports and exports, visible and invisible, balance each other there will be no increase in our sterling holdings. There will have to be one qualification, however, to that statement. It is necessary to take into account the movements on the capital side of our balance of international payments.

It is necessary to take these into account for the reason that we in this country for a number of years have been having a quite substantial large inward movement of capital. It was £12,000,000 in 1948; £15,000,000 in 1949; £13,000,000 in 1950 and £15,000,000 in 1951 with a reduction to £12,000,000 in 1952 and a net increase in 1952 of capital coming into this country of only £9,000,000 approximately. It is necessary to mention this inflow of capital because, if the balance of payments is in equilibrium, the fact that we have the inflow of capital will mean that we will increase our sterling holdings by the amount of the inflow of capital.

That position very nearly obtained last year. Last year, there was a deficit of £9,000,000 in the balance of payments. That did not mean, however, a decrease in sterling assets by £9,000,000 because there was a net inflow of capital of a little over £9,000,000. In fact, last year we increased our sterling holdings.

The Minister, speaking at the bankers' dinner the day before yesterday,stated that the deficit on our trade balance had been reduced in the first ten months of this year by £8,000,000. It is true that imports in the last few months have been increasing and equally true that exports have been increasing. It is not possible to give an accurate estimation of what the outcome of the trade balance for the year will be but I think it is correct to say that our trade balance this year will be down by £7,000,000 or £8,000,000. If our surplus on invisible account is the same as it was last year then it is quite clear that the deficit on our balance of payments from being a deficit of £9,000,000 last year will be reduced to £1,000,000 or £2,000,000 this year. If we have the inflow of capital of £9,000,000 to £12,000,000 per annum which has been the normal position for the last number of years we will increase our sterling holdings this year. I would go so far as to say that it is almost certain that we will increase our sterling holdings this year as a result of the fact that our deficit on the balance of payments will be practically nil.

A couple of weeks ago, when speaking on the Supplies and Services Bill, I said I was in favour of a policy of planned deficits in the balance of payments, and I said I was against a policy of having an equilibrium or near-equilibrium in our balance of payments. The reason for that statement was that I am in favour of repatriating sterling assets and that the only way you can repatriate sterling assets is by having a deficit in the balance of payments. I do not wish the House or the Minister to take me up as being in favour of dissipating our sterling assets; I am not. What I am in favour of is deliberately taking the opportunity of repatriating sterling assets when the opportunity arises and when we have expanding exports as we have at the moment. That can only be done by encouraging and increasing investment at home.

There is a very fundamental economic equation which has to be borne in mind when planning Government policy, that is, that the amount of investment each year always equals theamount of current savings plus the amount of past savings which are used to finance investment. If investment in any given year is increased that investment must eithar be financed out of current savings or, if they are not sufficient, by drawing on past savings by means of disinvestment.

I believe in increasing domestic savings as much as possible. However, domestic savings need not be the full extent of investment in the country. I believe in increasing home savings and in increasing investment. If home savings are not sufficient to meet the required investment, then we should operate a deliberate deficit in the balance of payments in order to finance home investment.

If we keep this economic equation in mind, that investment equals current savings plus the amount of past savings that make up the difference, I think our policy should be this: to increase the equation all round, to increase investment, increase current savings and, if necessary, increase disinvestment, the using of our past savings.

The Dáil should appreciate what has happened over the last two years. It should appreciate that last year we increased slightly our holdings of sterling and that this year those sterling assets will very likely be increased by anything between £10,000,000 or £12,000,000. These are very rough estimates. I am not going to be bound by these figures in any way; I am just pointing out the trends that exist at present, and I think they demonstrate clearly that last year there was certainly a slight increase in our sterling holdings and that this year there will be a marked increase in them.

The fundamental misconception that has bedevilled the thought of the Government on these matters has been to take the view that every deficit in our balance of payments automatically means a reduction in sterling holdings. When this alleged financial crisis was brought to the notice of the country in the autumn of 1951 we were shown deficits that had occurred in thebalance of payments in the year before. We were asked to believe that because of these deficits our sterling holdings had declined.

I do not wish to interrupt the Deputy, but I think the point was made in connection with our net sterling holdings.

The Government went much further than that and stated that we had now reduced our holdings to such an extent that they would purchase only two years' imports.

I am talking about last year.

I am talking about last year, too. We were led to believe that as a result of the deficits in the balance of payments there was practically no money left in England. At column 2093, Volume 119, of the Official Debates on the 21st March, 1950, the Minister for External Affairs said:—

"We have been, for the last few years, going through our external assets rather rapidly. During the war we built them up, but that was no fault of ours, because we could not get the goods or the services. The result was that our external assets increased. Since the war our external assets have been decreasing rather rapidly and, while that trend was all very good for a couple of years while we were restocking our shops and giving our people the supply of commodities which they could not get during the war, I think the time has come when we should see that if we are going to expend our external assets we should do so for the purpose of creating internal assets. In the present situation we should see that these internal assets will be immediately productive."

The point I wish to make is that the Government took the view that these deficits in the balance of payments were automatically reducing our holdings of sterling. It is interesting to see the figures over the last six years. If Deputies will turn to page 16 of theCentral Bank Report they will see that the decrease in the sterling holdings of the Central Bank, commercial banks, private holders and the Government in the six years from 1947 was only £30.3 million. For the period of six years we had deficits amounting to £160,000,000 and for those six years our £400,000,000 or £500,000,000 worth of external assets were reduced only by something like £30.3 million. The financing of the deficits in the balance of payments for those years was covered by this inward flow of capital amounting in those six years to £75.6 million and by the Marshall Aid Loan and Grant receipts amounting to £46.9 million.

In discussing financial policy, we have to get clear—and the Government has to get clear—whether the Government is in favour of repatriating sterling or whether it is not, whether it is in favour of an equilibrium in the balance of payments or a deficit. It must have clear in its mind that, in present circumstances, an equilibrium in our balance of payments in any year means an increase in our sterling holdings. I am against that policy and I reiterate that I am in favour of a policy of planned deficits in our balance of payments. It should not be too great a strain on the ministerial advisers to watch the manner in which, over the year, the trade balance is going; it should not be very difficult to estimate whether there will be a deficit, an equilibrium or a surplus on the trade balance; and it should be possible to plan the amount of deliberate trade deficit it is intended to bring about, by increasing or decreasing as the case may be the amount of investment directly under the control of the State.

I think it was a pity that the Minister did not take the opportunity which a debate at this time of the year on the Department of Finance Estimate would have given, to discuss the position on the current Budget. That position was discussed at great length in the autumn and winter of 1951. It was alleged then that a large deficit was appearing on the current Budget. There has been no discussion on the current Budget this year and we have heard nothing but a slight passingreference by the Minister's colleague at the bankers' dinner a couple of nights ago. Apart from that, there has been no reference to the manner in which the current Budget is running at present—and I think I know the reason why. It may interest Deputies and it may interest the country to know that there is a very substantial surplus in the revenue at the present time.

The revenue over the first six months was running at a rate of £5,000,000 greater than last year and that increase has been maintained up to the last figure that I have been able to find, to 7th November this year. In budgeting last year, the Minister estimated that there would be an increase in customs over the year of £2,000,000. Already—and there are still many months of the financial year to run— there has been that increase of £2,000,000. The increased imports we have seen in the last few months and the prospect of further increases in the next few months, clearly show that there is going to be much more than an increase of £2,000,000 in customs revenue this year. He estimated that excise revenue would remain practically the same. In fact, the excise revenue has increased already by £1,000,000. He estimated that there would be a reduction in the yield from income-tax. In fact, the income-tax yield up to 7th November has increased by £100,000 on last year's yield. It is quite clear that the revenue this year is running in substantial surplus to what it was last year and that, instead of bringing in £101,000,000 as was estimated in the Budget, we are going to see revenue this year, if the trends continue, bringing in £106,000,000 or even £107,000,000 or £108,000,000.

As Deputies know, the current Budget this year was to have been balanced at £101,000,000. That was to have been done by this reduction in expenditure of £3.5 million in the Supply Services, which the Minister called economies. If the expenditure side of the Budget this year is running at the estimated figure and if expenditure is going to be as the Budget said it would—round about £101,000,000— we are going to have a substantialsurplus on this Budget. They are the indications at the present time and it is very important that the trends should be pointed out.

Now, this country had to face a Supplementary Budget in 1947 to increase taxes. It was threatened with a Supplementary Budget in 1951 but it was not thought politically expedient to bring it in. If it is clear that there will be a substantial surplus on the Budget this year, I can see no reason why a Supplementary Budget should not be brought in now, giving tax relief of some form or other. I know that the position may be different from what I have stated it to be. It is not possible to judge with any degree of accuracy the amount of expenditure which will be incurred in the next three or four months, and it may be that expenditure will increase over the figure of £101,000,000 estimated in the Budget. If it does not increase and if the Budget estimate of expenditure is the correct one, I think the Minister and his advisers should be in a position now to say whether it is estimated there is going to be a surplus on the Budget or a deficit. Certainly, this time two years ago it was easy for them to estimate that there would be a substantial deficit. I suggest it would be just as easy for them to estimate now if there is going to be a substantial surplus this year. If there is, I can see no justification—in fact, I can see the contrary—for running a surplus on the current Budget. I suggest that a Supplementary Budget, giving tax relief, should be brought in. I should be glad to hear from the Minister, when he is replying to this debate, what is the position on the current Budget and what is the estimate of the surplus in regard to the current Budget.

In the past few weeks, we have been discussing the effects of Government policy in various spheres of economy. To my mind, there have been seven striking results from Government policy over the past two years as shown by the figures available for last year and for a portion of this year. They are as follows:—

"(1) The increase of 14 per cent. in the cost of living.

(2) The startling reduction in industrial production which only recently reached the figure at which it was in 1951.

(3) The decline of 14 per cent. in gross physical capital formation last year.

(4) The flight of capital which occurred last year, amounting to £3.2 million.

(5) The increase in emigration last year which, admittedly, it is possible to estimate only very inaccurately. Nevertheless, it is possible to estimate it to some degree by the increase in passenger movement out of the State last year over that of 1951.

(6) The decline in consumption by 6 per cent. which occurred last year when the figures for consumption are related to the 1938 figures.

(7) The startling decline in employment."

These are things that have come in the wake of the financial policy which the Government have put into operation in the past two years.

I have already pointed out one of the apparent conflicts in Government thinking in the matter. They are striving for an equilibrium in the balance of payments and, at the same time, they say that they are in favour of the repatriation of sterling assets. There is a startling conflict in Government speeches over the past two years and a startling change has occurred in the past two years in their attitude towards Government borrowing. That point has already been dealt with by other speakers during this debate and I do not propose to dwell on it now.

If anybody asked this Government two years ago what their policy was they would be told that they were against increasing the State debt and that they were against extending further Government borrowing. In speech after speech by the Minister who introduced this Estimate, and by his colleagues, we hear complaints of the large growth of the State debt and of the large growthin the financing and servicing of the State debt. One would think that the logical consequence of such a policy would be to reduce the State debt. We said that an expansion in State debt was justified when we were extending State assets. We were in favour of extending Government borrowing to its limits for the purpose of putting the money into houses, hospitals, schools, the land, harbours and roads. When the present Government took office two and a half years ago, it was possible to see that they were against that policy and there seemed to be an issue there between the two sides. Seemingly, the Government have now changed that policy of two and a half years ago. They have borrowed just as freely as their predecessors.

They have increased the State debt and the amount of taxes that are required to service the increase in the State debt. But there is this remarkable change in the two policies. The last Government were able to borrow money for their capital development schemes at 3 per cent. and 3½ per cent. This Government had to pay 5 per cent. and 4¾ per cent.—and we do not know yet what they intend to pay the banks for the money they hope to raise.

I am in favour, and the Party to which I belong have for years been in favour of large-scale Government borrowing and large-scale governmental capital expenditure. I am not against Government borrowing, but I am against paying 5 per cent. for Government loans, and I am against a policy of dear money which puts up the rates of interest, which puts up the rates of taxes to pay for the servicing of the loans and which raises the price of a house, in respect of which people wish to borrow under the Housing Acts, by as much as 12/6 per week. I am against a policy which results in a reduction in the willingness of people to invest in that way as a result of the high price which they have to pay. I think that Deputy Rooney has pointed out the corner which the Government took in the autumn of 1951 and which led them into the position in which we are now—a position in which the Governmenthave to borrow at 4¾ per cent. and 5 per cent. The fundamental mistake that this Government made was their failure to raise a loan in the autumn of 1951 when they could have borrowed up to £15,000,000 or even £20,000,000 at 3½ per cent. Instead of doing that, they resorted to the American Loan Counterpart Fund.

We have heard a lot of talk about the expenditure of the American Loan Counterpart Fund. The Taoiseach has stated that the money had to be spent. He shifted his ground from saying that there were debts, incurred by their predecessors, which were due for payment and he substituted the word "commitments" instead. There were commitments. There were commitments in the form of building programmes, houses, hospitals, schools, road works, harbour development and the land rehabilitation programme. These were commitments because that was the policy of capital development which the last Government had set in progress and which it was a fundamental plank of their policy to maintain. When the Government which took office in 1951 were faced with what they called these "commitments," they had either to meet them or to reduce them.

Very wisely, they did not reduce them. However, instead of financing that capital development programme as Deputy McGilligan in his Budget speech of May, 1951, said it would be financed—by going to the country for a loan in the August or September of the year 1951—the Government of the day, who had declared themselves in many speeches against extending the State debt, took the easy way out and dipped into the American Loan Counterpart Fund to the extent of £24,000,000 in six months. That was the fundamental error that this Government made in their borrowing policy. There is no doubt but that interest rates increased after December, 1951, and that this country could not help but see some increase on long-term Government bonds in 1952. However. it was madness to borrow £20,000,000 at the very peak of the dear money period in the autumn of last year. If the Government had borrowedat 3½ per cent. in August or September, 1951, they would have had the American Loan Counterpart Fund available to meet the period of high interest rates which this country had to face. Even granted that interest rates increased in 1952, our criticism of the 5 per cent. National Loan of last year has been fully justified. It was at an exorbitant rate of interest, and one that should never have been fixed for a long-term Government loan. This year, we are again faced with the fact that the Government had to offer 4¾ per cent. interest for £100 stock at 97 in order to induce persons to lend to the Government—and they were not able to fill their loan.

I want to reiterate what Deputy McGilligan said this evening. There is a fundamental difference between borrowing from the public and borrowing from the banks. I said here a couple of weeks ago that I was in favour of a policy which would mean that the commercial banks would hold a larger portion of Irish Government stock in their portfolios. I think we are quickly coming to this position, that the Irish banks are going to have to hold the Government debt as the banking system in most other civilised countries in the world has to do, and we are going to be faced with this problem of whether we are in favour of paying to banks who create credit for the purpose of financing necessary Government schemes 5 per cent. or 4¾ per cent, or the same figure as we would pay to the person, who has probably gone to a good deal of trouble to save, for the money he invests in Irish Government stock. I want to say that I am against a policy which results in the Irish banks investing in Government securities and in the Irish Government paying them 5 per cent, for such securities. It seems to me that we are quickly getting into a position in this country where the relationship between the Government and the banks will have to be very carefully examined and I think we will have to get into a situation in which the Irish banks are holders of the Government debt as the banks in other countries are holders of their Government's debts.

Motion:—"That the Estimate be referred back for reconsideration"— withdrawn.
Votes 6, 1, 2, 4, 5, 7, 11, 12, 13, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 68, 60, 61, 62, 3, 14 and motions for reduced sums in respect of Votes 29 to 37 (inclusive), 39 to 46 (inclusive) 47, 48, 54, 56, 57, 58 and 59 (in substitution for Resolutions passed prior to Second Vote on Account)—agreed to.
The Resolutions passed to-day, together with those passed in Committee on Finance on 20th, 22nd, and 27th October and on 4th, 11th and 24th November—reported and agreed to.
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