Committee on Finance. - Exchange Control Bill, 1954— Committee Stage.

Sections 1 to 9, inclusive, put and agreed to.
Question proposed: "That Section 10 stand part of the Bill."

I do not know whether I am being particularly obtuse or not but I certainly cannot appreciate the meaning of Section 10. Possibly the majority of citizens who read Section 10 will be better able to understand it than I can, but certainly I cannot understand this provision which says: "except with the permission of the Minister, a person shall not issue any bearer certificate"—I will pass over the next qualifying words—"... that it becomes a bearer certificate or coupon". What does that mean? Has it any meaning or what is it intended to cover? Certainly, as it stands, it is meaningless. Maybe there is some deep, hidden meaning that nobody outside the Department of Finance would appreciate but it might be useful if we had some clarification.

The Deputy has left out the very words that make it clear.

No, I do not think so. The words "or coupon or so alter any document" present alternatives. The person shall not issue any bearer certificate or coupon or alter any document.

So that is becomes a bearer certificate or coupon.

Is that only intended to relate to the alteration of a document?

I do not think it can be read otherwise, Deputy.

Then what does it mean? Does it mean that a person shall not issue any bearer certificate?


Of any kind?

Relating to any ordinary investments?

Yes, because the Deputy must appreciate that the whole purpose of a bearer certificate is that it is the title, that the title passes at delivery and that it can be dealt with therefore in exactly the same way as you could transfer, say, a £100 note. It is for the same reason that you cannot bring a £100 note out of the country.

Then the intention is, I take it, to forbid completely the issue of any investments which are bearer securities.

Not to forbid but to say that they will be licensed, if you like to use that word. As a matter of interest, is the Deputy aware that— certainly to my own personal knowledge and to the departmental knowledge— there are no Irish bearer securities at all?

No, but there are plenty of English ones.

Is the Minister satisfied that the word "issue" there does not mean a stockbroker or anybody else that deals in it? The section is not very clear as it stands.

I am afraid I understand it. Perhaps, that was because I had some professional dealings with exchange control matters before I took this unfortunate seat.

Question put and agreed to.
Sections 11 to 13, inclusive, agreed to.

I move amendment No. 1:—

To delete sub-section (4), lines 32 to 34.

This particular section as it stands at the moment forbids in effect any person from detaching a coupon from a certificate of title of securities otherwise than in the normal course for collection. I take it the intention was to apply this only to "reserved securities."

No, not necessarily at all. It could and must refer to other bearer certificates as well. Might I interrupt the Deputy for a second? A coupon is exactly the same certificate as a bearer bond. The purpose of sub-section (4), when I was talking to the Deputy privately I had not turned up my note on it, is to ensure that you cannot make the coupons into, so to speak, a separate bearer security as you could otherwise. Without that sub-section you could cut off all the coupons for the next ten years. Those coupons would be negotiableper se and without the production of the certificate itself. Therefore, unless you had the restriction that is there you would permit negotiation of the coupon away from the certificate of title. That would mean that you would be able in that way to remove substantial funds from the jurisdiction.

That is intended to cover not only "reserved securities" but all securities?

The purpose of it is to prevent money or coupons being removed from the jurisdiction?

Yes, and to prevent illicit dealings. The ordinary person does not cut a great many coupons. In fact, he cuts only each coupon as it becomes due for collection.

Could the Minister indicate what kind of dealings he is aiming at?

The one I said. Suppose you had not got that sub-section you could cut off coupons for ten years ahead. You could post those coupons to a non-sterling area, for example, and they could be cashed there even though the certificate was held here in accordance with the Act. If you did not bind people to keep the coupons with the certificate, then the coupons themselves could be sent abroad for negotiation, and we would lose the currency in question as a result.

The intention is to prevent the coupons from being sent outside the sterling area for collection. I will withdraw the amendment.

Amendment, by leave, withdrawn.
Sections 14 to 16, inclusive, agreed to.

I move amendment No. 2 :—

In sub-section (1), paragraph (a), sub-paragraph (ii), lines 43 and 44, to delete "satisfactory in the national interest" and substitute "adequate".

Section 17 casts what I regard as a political function on the Revenue Commissioners, the function of determining what is in the national interest. I think it is a very dangerous precedent. It is a tendency which has been showing itself in certain recent legislation. The question of the determination of what is in the national interest is not part of the function of the Revenue Commissioners or, indeed, of anybody other than the Government and this House. I appreciate fully that any person aggrieved has a right of appeal to the Minister, who can override the views of the Revenue Commissioners as to what is in the national interest or what is not in the national interest. I think it is a dangerous and bad tendency and I, therefore, put down an amendment to provide that instead of placing the onus on the Revenue Commissioners of determining what is in the national interest the section will merely place the onus on the Revenue Commissioners of determining whether the price obtained for exports in this case is adequate.

On the last occasion the Deputy took the line in respect of this section that it was setting up a body that was superior to this House and to the Minister. I am glad he appreciates that is not the position. I think the Deputy's very amendment makes it clear that it is only a question of the form of words rather than the type of argument that he used on the last day. I have not any objection to accepting the word "adequate" in place of the words "satisfactory in the national interest" if the Deputy feels very strongly about it. The word "adequate" would be narrower in the particular context than the other form of words we have used. We wanted to use the widest form of words that we could find.

I think the words, "satisfactory in the national interest", if construed from one point of view, would be quite satisfactory but they would, perhaps, lend themselves to the objection that they might be misconstrued by other people as giving to the Revenue Commissioners a function which it was not intended to give but which, of course, they could not be given. If the Deputy would rather have the word "adequate" in the two paragraphs (a) and (b) of the sub-section I am quite prepared to accept his amendment.

The context of every Bill which comes before this House depends on the form of words used. Presumably, words have certain meanings and my reading of the words in the Bill is that it casts upon the Revenue Commissioners the duty of determining what is in the national interest, which is not their function. Therefore, I am very glad the Minister is prepared to accept the two amendments.

Amendment agreed to.

I move amendment No. 3:—

In sub-section (1), paragraph (b), sub-paragraph (ii), lines 53 and 54, to delete "satisfactory in the national interest" and substitute "adequate".

Amendment agreed to.
Section 17, as amended, agreed to.
Sections 18 and 19 agreed to.

I move amendment No. 4:—

In sub-section (5), page 10, line 50, to delete "twelve" and substitute "six".

This is an amendment to reduce the period from 12 months to six months provided as a punishment on conviction.

Amendment agreed to.
Section 20, as amended, agreed to.

I move amendment No. 5 :—

In sub-section (1), page 11, line 21, to delete "twelve" and substitute "six".

This is a similar amendment.

Amendment agreed to.
Section 21, as amended, agreed to.
Sections 22 to 25, inclusive, agreed to.

I move amendment No. 6 :—

In sub-section (5), page 12, to delete lines 37 to 41.

Deputy MacBride raised a point on Section 26, on the Second Reading, and he has put down an amendment. The amendment which I have tabled, however, goes even further than that which he had in mind. I said on the last occasion—and I still feel—that in so far as this particular section is concerned the amendment is not necessaryper se. This section refers solely to authorised dealers and authorised depositories and also to persons to whom the powers of the Minister under this Bill are delegated, that is to say, civil servants and people to whom powers are given under this Bill. I think, so far as those classes of persons are concerned, it would be unnecessary to make the amendment. Deputy MacBride, on the last occasion did, however, make the point that it was a dangerous precedent to allow this to be included in case it might be transferred by some other person in the future as a precedent to some other Bill. I think that point of view has force, and as it is not absolutely necessary to keep the powers contained in the sub-section (5), I am moving the deletion of everything after the words “served on him”. In other words, we propose to rely purely on directions that we should give and serve, and having regard to the limited type of persons to whom this section is directed we will be able to keep that type of direction there and there will not be any danger, after we have deleted the lines indicated, of this being used as a precedent.

I am very grateful to the Minister for having adopted the course he has adopted and therefore I am not moving my amendment No. 7.

Amendment put and agreed to.
Amendment No. 7 not moved.
Section 26, as amended, agreed to.
Section 27 agreed to.
Question proposed: "That Section 28 stand part of the Bill."

This is a section which enables the Minister to delegate or authorise the delegation of any of his powers other than the power of making a Statutory Order to any other person. Again, on the question of constitutional practice, I doubt whether a section of that kind is desirable. The Minister is appointed by this House to carry out his functions as Minister. It is true as we know that the actual departmental work is carried on by the officials of his Department but he is primarily responsible. He is appointed by this House to discharge such responsibilities and be accountable to this House for it. I do not know whether the Minister has considered whether this is absolutely necessary. Actually in practice he will delegate his powers —at least he will not delegate powers but his duties of examining certain things—to officials but I do not think he can divest himself of his duties when he is responsible to the House by a general delegation of his functions to officials.

I must say that I was rather amused at the only power he does not delegate, namely the power of making an Order which has to be laid on the Table of this House. I would ask the Minister to reconsider that section and see if it is really necessary. Again, it is a dangerous legislative precedent.

The Deputy is well aware that there is a very old principle of law that the principal is responsible for the work of his agent and there is a vast difference between delegation and divesting.

I am not divesting myself of powers. I am saying that I can authorise somebody else to carry them out, but if they carry them out in a manner the Deputy thinks is reprehensible I am the unfortunate person who has the responsibility of accounting for the manner in which those powers are executed. I have no doubt that if anyone to whom any of these powers were delegated behaved in an unduly bureaucratic manner, shall we say, that the Deputy would be the first person—and rightly so—to call me to account as the principal who is responsible for the work of his agent. We all know in modern times that no principal in any business does everything himself. He has to get his subordinate to do the work for him. We all know that no Minister, not even the Minister for Finance, sees everything that happens and there are many things that are done in accordance with his general policy that are done by individual civil servants.

The working of exchange control is a very detailed thing that is carried out in a detailed manner according to certain fixed general principles. This is to enable detailed work to be done. For example, there are certain things that must be done by banks, as apart from civil servants and I think the Deputy will agree that it would be undesirable to have two parallel institutions doing the same thing. The banks were given certain powers and functions during the emergency—to handle certain small currency allocations for example—and they still have those functions. They merely have to report back so that it would not be necessary to clutter up the Department of Finance every time anyone came in to get a travel allowance within the broad principles of general travel allowances that have been laid down by the Minister. As the Deputy knows, there is a maximum amount of foreign currency that you can get for foreign travel in any one year. Within that maximum allocation the duty of arranging for that currency is delegated by the Minister of the day to the banks so as to save the administrative machinery in the Department from being cluttered up unnecessarily. It is in order to permit that to be done that we have this provision in the Bill.

It might be argued by a Minister in any Department that a similar provision would be necessary in any Bill.

No, not in any Bill because in the ordinary way this would only be dealt with by the staff of the Department itself. In exchange control we have to authorise the banks to carry out certain minor currency transactions.

May we take it that this section is only intended to apply to the delegation of authority to persons other than the Minister's own officials?

The Minister already has power to delegate to officials but he has not power to delegate to the banks. That is the reason it is there.

I know that. That is why I am asking the Minister whether it is intended only to relate to banks and outside persons.

I have phrased it to relate both to officials of my Department and to outside bodies.

I do not like it; it is a dangerous precedent.

Question put and agreed to.
Sections 29, 30 and 31 agreed to.
Question proposed: "That Section 32 stand part of the Bill."

Would the Minister give us a little of the background, or so much of the background as can be made public, of Section 32? It is a most unusual section.

I think it is quite a usual line for the Department of Finance to take if it is going to bind other Departments, but it is a matter of some doubt as to whether the State is bound by statute or not. We think it desirable to put the section in so as to cover not merely Government Departments but also perhaps semi-State bodies such as Grain Importers, Limited, and so forth. Grain Importers, Limited, particularly spend very substantial sums abroad and there is another State organisation which covenanted to spend a substantial sum abroad and it would obviously be desirable that these should all fall within the general picture and pattern of exchange control, so that we might know what foreign exchange we have available and how we are to allocate it in a time of great stress.

Then, may we take it that the real purpose of the section is to extend the jurisdiction of the Department of Finance over other Government Departments and semi-State corporations ; in other words, to extend the tentacles of the Department of Finance farther than they reach at the moment?

The sphere of the Department of Finance over other State Departments is already allembracing.

That is what I should have thought, but apparently the Department must consider a section necessary in the Bill to ensure that they will have still wider and extensive powers over the other Government Departments. It is a case of the octopus spreading out a little farther.

It is not that the Department of Finance is trying to get any further power. The Department considers that it already has the power and this is merely for the purpose of letting the outside bodies dealing with exchange control, such as banks, know the pre-eminent position of the Department.

This deals with Ministers of State or authorities acting on behalf of the State. The banks are not authorities acting on behalf of the State.

No, but the banks deal with exchange control on behalf of the State.

Question put and agreed to.
Sections 33 and 34 agreed to.
First, Second, and Third Schedules and Title agreed to.
Bill reported with amendments and received for final consideration.
Question proposed: "That the Bill do now pass."

I again want to repeat that I think a measure of this kind is a dangerous legislative precedent. In my view, it is a Bill which has the effect of extending bureaucratic control. Its purpose is to give wider powers on a longer term basis to the dominion which the Department of Finance exercises on all financial matters and also apparently to extend the tentacles of the Department in relation to other Government Departments. I must say that if I had been a member of the Government when this Bill came before it, I would have eyed it with a considerable amount of suspicion. I think it is a dangerous precedent and, as I have indicated to the Minister, the powers, in effect, of confiscation which it confers are hardly constitutional. However, that is a matter for the Minister and for the law advisers to the Government, but I should not be surprised if, at some future stage, the Minister finds himself in difficulties if he acts too stringently on foot of this Bill.

Question put and agreed to.