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Dáil Éireann debate -
Thursday, 17 Jul 1969

Vol. 241 No. 6

Decimal Currency (No. 2) Bill, 1969: Committee and Final Stages.

Sections 1 to 8, inclusive, agreed to.
SECTION 9.

I move amendment No. 1:

To delete subsection (2).

Section 9 is the one which makes provision for the introduction of a ten shilling piece and for the elimination of the ten shilling note. It was suggested by Deputy Briscoe on the Second Stage that the ten shilling note should be retained and I should like to support this through this amendment and to have some discussion on this point in the House. We know from the introduction of the ten shilling coin arising out of the 1916 celebrations that a ten shilling coin is not readily acceptable in this country. There may, of course, have been particular reasons why the introduction of the coin at that time and of the particular coin was less successful than might have been the case otherwise. The coin, although attractive in appearance, had certain characteristics not associated in the public mind with a coin and indeed perhaps it had been designed to look more like a medal. It certainly did look rather like a medal. This may have contributed to the fact that they were not much used. However, think I am right in saying to the Minister concerned with this that a very large portion of the total number were not in fact issued and had to be melted down. We have this evidence of public reaction to the ten shilling coin issued in those circumstances.

Knowing that is the case, while I would not necessarily object to the introduction of a ten shilling coin to supplement the ten shilling note as a further experiment—a coin perhaps designed so that it would be more likely to receive public acceptance—I feel that to proceed to eliminate the ten shilling note as proposed here is something that we ought not to do without further experiment. We do know that there is a public reaction against a ten shilling coin and at this point in time a clear public preference of a very definite character for the ten shilling note. I do not consider that it is our function to impose a pattern of currency on the public different from that which they require.

On the Second Stage the Minister suggested that his justification for the introduction of the ten shilling coin— although not of course his justification for eliminating the ten shilling note— was that this coin would be useful for various kinds of coin-operated machines. He was clearly in some difficulty when pressed from this side of the House to state what kind of machines would take these coins because most of the things which are now sold through coin-operated machines are things, the total value of which is less than ten shillings. While, of course, with the inflation of money values we will no doubt see a move towards the point where a packet of cigarettes will cost ten shillings, this is unlikely to happen in the near future, we hope. In fact, it is difficult to see what kind of products the ten shilling coin will be used for in coin-operated machines in the near future on any extensive scale. It seems that that particular argument is a very weak one.

The Minister suggested that ten shilling notes are relatively expensive. It would be useful for the purpose of this debate, if he told us something about the relative cost of ten shilling notes and ten shilling coins and made at least some attempt at an economic justification for the procedure outlined. Even if there is some saving involved, I am by no means certain that we should proceed to do this at the expense of eliminating the ten shilling note. Accordingly, I should like the Minister to reconsider this decision. I should also like to ask him to consider whether it might not be more to the point to consider moving towards a five shilling coin rather than a ten shilling coin. However, that is another matter.

I should like to hear the Minister's views on this and to hear what is the exact economic justification for his decision and how he justifies it in the light of public reaction to the ten shilling coin that was introduced three years ago.

I find that I have no option but to oppose this amendment. I should like to explain to the House that, in my view and in the view of practically everybody concerned in an expert or specialised way with this problem, the arguments in favour of a ten shilling coin as against a ten shilling note are overwhelming.

The first point I want to make is that it would be, I think, very undesirable to have a ten shilling note and a ten shilling coin. It is very bad monetary practice to have a note and a coin of the same denomination. It leads to all sorts of difficulties and inconvenience. The overwhelming response from the general public and from trade and commercial organisations was in favour of a coin rather than a ten shilling note. Therefore, if we decide, as I think we must in all rationality, that we should not have two, then the only remaining decision we have to make is whether we have a coin or a note. The response in favour of the coin was almost overwhelming.

Perhaps I should begin with the question of machines. There is no doubt that from the point of view of the trader the coin has all the advantages. It can be used much more effectively and efficiently in cash registers and all the trend these days is towards vending machines and towards a more and more sophisticated type of vending machine. In many countries today it is possible to get meals costing ten shillings and more out of these vending machines, and we can anticipate that this type of machine will increase. Even if the particular item which the machine dispenses does not cost ten shillings these modern machines are all geared to give change; so that, if the article costs four shillings or five shillings, the ten shilling coin is still very useful because one can put in a ten shilling coin and the machine dispenses the article in question and gives one change of one's ten shillings. From that point of view it is very likely indeed that there will be more and more machines which will be suited to the use of a ten shilling coin and for which a ten shilling note, of course, would be completely useless.

Another point is that from the point of view of familiarisation of the general public with the new decimalisation coinage there is considerable advantage in having a ten shilling coin. You will have your £1 note as your principal unit but then below the value of a £ all your new pence denominations will be in the form of coins if you adopt a 50p or ten shilling coin as distinct from a note. From that point of view there is also an advantage in having a coin.

I have already mentioned the question of expense and this is a very formidable factor. The ten shilling coin, or 50p coin as it will be, lasts approximately 50 years, and even then the metal in the coin is recoverable and can be used again. The ten shilling note has an average life of about five months and, when one bears in mind that there are about 6½ million ten shilling notes in circulation in this country at the moment, this means that about 14 million new ten shilling notes must be issued every year, and of course the old ones must be withdrawn. I have not readily available the precise figure as to what the cost of that is. I have asked to be supplied with it and I may be able to give it to the Deputy before the debate concludes. Anyway, it is a formidable factor. All in all the arguments point conclusively, as I say, in favour of a 50 new pence coin as distinct from a ten shilling note or a 50 new pence note.

There is another factor. As I said, it is bad monetary practice to have in circulation at any given moment a coin and a note of the same denomination. It does not take any great imagination to visualise the difficulties which a situation like that brings about. If that sort of thing is bad in normal circumstances, or is inconvenient in normal circumstances, it is particularly to be avoided in a situation where you are changing over from one system of coinage to another. The ordinary man in the street and the general public have enough changes to contend with in the change-over, without the additional difficulty of having two separate things of the same value, in other words, a coin and a note of the same denomination.

I am not at all deterred by the experience we had with regard to the 1916 commemorative coin because I do not think the general public ever accepted it as a coin. It was so clearly commemorative that it was never really looked upon by the general public as anything but a medal or a commemorative token. I do not think that need influence us in this particular regard. These, a Cheann Comhairle, are the arguments which compel me to oppose this amendment and I ask the House to reject it.

I can see the Minister's point in not wanting to have a ten shilling note and a ten shilling coin but he said it would be easier to segregate the money in a cash register. I disagree completely. It would be far better to have a ten shilling note than to have another coin to be added to the coins already in the register. This would be far handier and 100 per cent of the retailers would tell the Minister this.

They have not said so.

Any of them with any experience will tell the Minister this. There is no doubt that this is what they would prefer. At the moment they would prefer to get a ten shilling note than to get more coins because it can be segregated and the set-up of the machine is laid out accordingly.

The Minister also mentioned that 10s machines are used for food. In the case of any I have seen in England or on the Continent they would not be for 10/- coins; they would be for money of the same value. They are on a smaller basis. They are used with a sandwich tray. The occasional establishment has tried out dearer machines and they have not worked. I should like to see the Minister himself going into the Shelbourne or somewhere else and putting 10s into a box to get a meal from it. He also mentions the case where you put in a coin to get change but these change-giving machines are so costly they would never be used except in a gambling saloon. It would not pay anybody to install them except in a gambling saloon or something of that type. I do not think these answers can be accepted at all.

Deputy Belton has considerable experience of the retail trade and is entitled to his views. All I can say is that what he puts forward as his view of these matters is not borne out by the organisations representing the different trades and commercial interests. Of course, he is totally wrong about the suggestion that the 10s coin —from now on I must, I think, refer to it as the 50 new pence coin, since we must all begin thinking in these new terms—will not be used because this coin will almost certainly come into very extensive use in machines of all sorts. I am ignoring Deputy Fitz-Gerald's suggestion that continual erosion of the value of money will bring it into even more extensive use than we visualise at present.

I was thinking, when Deputy Belton was speaking, of places like the RDS, racecourses and many other places to which the general public have access and where entrance fees and other things cost in the region of 10s and where coin machines will be introduced more and more extensively in future. I am quite certain, and I am fortified in this by expert opinion, that both in commerce and in trading, in shops and public houses and elsewhere, cash machines of a new, advanced, sophisticated type will use this coin to a very considerable extent and more and more vending machines and machines of the admission type will also use it. On the ground of usability, apart from any others I have mentioned. I think that the arguments are very much in favour of a coin. From some calculations I was doing a very rough estimate of the cost of the ten shilling note at the moment is in the region of £80,000 to £100,000 per year.

What is the cost of the coin—to produce the 6.5 million?

One could only average that over 20 years.

What is the original cost?

It all depends on how many you put into circulation.

The Minister said we would have to mint 6.5 million approximately. What would be the original cost of that spread over the years?

Only experience can show how many coins we would use in relation to the number of 10s notes. I would not know.

I am all on the Minister's side in this matter, but for a long time during the discussion the Minister evaded the issue. He did come to it eventually when he spoke about the erosion of the value of money. Already, this new 10s coin is worth somewhere between what a 2s piece or florin and a half-crown was worth before the war. Nobody felt that these were enormously big coins. When the memorial coin came out many felt we were not accustomed to a 10s coin, a sizeable coin, quite apart from the reason which the Minister gave and with which I also agree. The truth is— and the Minister knows it as well as I do—that, whatever merit or demerit may have been in the thought that went into this Bill, there was certainly provision for the future in regard to what will happen to the value of money. If it continues to go at the rate it is going for the past 12 months, in no time at all the new 10s coin will be only the equivalent of 1s before the war. Even before the war, a young lad felt happier with a tip of 2s rather than 1s. He did not feel he was a half—millionaire if he got a 2s piece.

On the whole, I am with the Minister. To be fair, he did eventually advert to the real reason, but in pianissimo. He did not want to over-emphasise it. We really have no option in the matter. I do not think there is much in the Minister's point that it does not serve to have a coin and a note of the same value circulating together. I do not travel abroad very much but one does meet them everywhere—notes and coins of the same value. On the whole, for simplicity, there is much to be said for the Minister's point of view. Certainly, looking to the future—which the party of reality is always doing—I am all in favour of the Minister's view on this matter.

I should like to put a couple of points to the Minister arising out of his reply. First, he mentioned that many organisations favoured this. Would he tell the House which of the leading industrial and distributive organisations either favoured the introduction of the 10s coin or favoured also adopting the 10s note? I do not think we can just take it from the Minister that all sorts of bodies are in favour of it. We should be told which bodies are in favour (a) of producing a coin and (b) of also dropping the 10s note. Perhaps he would give us a list of bodies like RGDATA, light industries and so on, bodies that are primarily concerned with this matter, and tell us what their views were. Secondly, I should like him to tell us something about experience elsewhere. It is my impression that in most other countries notes are used for units of currency of purchasing power much less than ten shillings and that we and Britain may be rather out of line in this respect in our practice. Would he tell us something about the position in other countries?

Surely the Deputy has seen these Italian waiters with wallets full of notes?

That is where there are 1,700 lire to the £. That is a different thing altogether.

I should like to know from the Minister in which countries in Europe a comparable situation exists where coins are substituted for notes of up to the equivalent value of our 10s. I should like to know from him where, in fact, the largest coin is in circulation and where there is a coin larger than the equivalent of our half crown. He has told us that what is proposed here is in line with practice elsewhere.

That is not what I said. I said that, although it was bad monetary practice, it exists in other countries.

I am talking about the proposal that we shall have no paper unit to the purchasing power of less than the equivalent of the £ in this country and that coins will run up to the value of 10s or 11s. I say that is not the case elsewhere and I should like the Minister to tell us what the practice is in relation to such countries as France, Belgium, Holland, Denmark, Italy. What is the value, in equivalent terms, of the smallest note at present in those countries, at the current exchange rates? We need that information. The Minister said it is bad monertary practice to have the two units of currency side by side—paper and coin— that it would lead to all sorts of inconvenience. Later on he said this would be aggravated by certain other matters. "Bad monetary practice" is a very impressive phrase, but what does it mean.

A classical example is Woods halfpence.

Is it the suggestion that if we had a 10s note it would debase the value of our coins?

I was being jocose— I very rarely permit myself to be jocose.

I press the Minister for an explanation of what he means by "bad monetary practice". Perhaps also the Minister would list for us the sorts of inconveniences that would arise. I cannot see them. It has been said that it would be a bad thing if the changeover to coin from note coincided with the change in currency. Of course, we are familiar with noties at the moment and what the Minister is proposing to do is to substitute for existing coins a new coin of the same value in certain cases but with a different denomination. The change to the equivalent of the 2s piece will not create any problems for us but it would be very helpful in the changeover if during the period of the changeover we kept the orange-coloured 10s note as being equivalent to the 50 pence piece. The familiar orange-coloured note would link our minds with the 50 new pence. My suggestion is that, although you would have the coin as well, you would still keep the old paper 10s note. Otherwise the change will be difficult for people to take. I should like the Minister's comment on that.

You would not need to have a few holes in your pockets.

I never carry money.

The question of vending machines has been dealt with adequately by Deputy Belton. I smiled a little at the Minister's comments in this matter—at the thought that places where coins are mostly in circulation are at rececourses, the RDS and so forth. The Minister may have occasion to visit such places.

I have not been at the races in five years.

He got his fingers burned.

I gave up going to race meetings 20 years ago because, having no car, I got wet and I lost money, a very unpleasant experience. My point here is that our coinage should be related to the ordinary needs of ordinary people—the people who do not go to the RDS except, perhaps, once a year to the Spring Show or the Horse Show, and who do not go to racecourses.

Exactly what I was talking about.

Therefore, the Minister's reference to racecourses is an irrelevancy and a red herring. On the question of the erosion of money values, though I sympathise with Dr. O'Donovan's views, this is a continuous process which has become more rapid in the last couple of years. However, on average it takes from 18 to 20 years for the value of money to be halved. I was fortunate enough to get married when the cost of living index was initiated in 1947 and it does not require any great mathematical calculation for me to estimate the decline in the value of money. The index was then 100 and it is now 210. At the present rate of inflation, it takes from 18 to 20 years for the value of money to halve. Therefore, for the 10s to reach the value of half a crown would take 30 years. Therefore, though I sympathise with Dr. O'Donovan, what we must consider is the value of money now, not in a generation hence. Perhaps I am being hopeful in thanking that the Government may be able to slow down the rate of money erosion because in the past few years they have let it get out of control.

There is another matter which we must consider while dealing with the question of simultaneous use of notes and coins. We cannot dismiss the reaction there has been to the 10s coin during the past couple of years. It may be said that it was because it resembled a medal, but if it had the merit the Minister attributes to it, it would have been more widely used. The emphatic rejection of it should be considered here.

In this matter, it is not so much my opinion that its important. Rather is it the expert evidence which has been gathered together by those whose responsibility it is to study these matters. As I said earlier, the overwhelming opinion both of monetary experts and those engaged in trade and commerce is in favour of the coin. I have been asked to indicate from what source this opinion derives in the main. Perhaps I should, first of all, satisfy Deputy Paddy Belton by telling him that the two main bodies in the public house trade—the Irish Vintners Federation and the Irish Grocers and Vintners Association—are in favour of the coin. Other large bodies such as the Dublin Chamber of Commerce and the Council of the Federation of Trade Associations, are also in favour. Not alone are the Federation of Trade Associations in favour of a coin but they have assured us that their inquiries indicate clearly that the whole distributive trade strongly favour a coin rather than a note. I should qualify that by saying that they did not say all the trade were in favour but that the distributive trade associations definitely were. There is no argument as to what the trade wants. People engaged in commerce and industry want a coin. They are sensible, practical people. With all due respect, Deputy FitzGerald is rather like a small pinkeen trying to swim against the great flowing river of public opinion.

It sounds a very tiring exercise.

I do not want to keep on saying where 10s coins would be used. It does not require much imagination to see where things are going in this matter. The use of coins in vending machines, cash register machines and so on will be coming more and more into public use. Very recently I remember seeing about a pump where petrol was dispensed on the basis of a coin vending machine, and, of course a 10s coin would be quite useful in a case like that. Deputy FitzGerald and I could keep swopping debating points, but the technical expert opinion is in favour of a coin, the trade associations are in favour of a coin, I am in favour of a coin, and I think that ends it.

The Minister is now talking about a coin versus a note, whereas this dilemma is one which he is forcing on the House, not us. We are not proposing that you must choose one or the other. The representations he has told us about appear, if I understood him correctly, to relate to a false dilemma: "Look, boys, you can have a coin or a note. You cannot have both. Which will you have?"

But the Deputy's arguments is not to have a coin.

It is quite possible I made a mistake, but I do not think so. What I put down was an amendment to delete subsection (2) which says: "Upon the issue under this Act of coins having a denomination of fifty new pence, the Central Bank shall cease to issue under section 45 (1) of the Currency Act, 1927, legal tender notes having a denomination of 10s." I have said nothing against coins at all in the amendment. I have made certain arguments here to probe the issue, but fundamentally the amendment we are discussing is one to drop the 10s note.

I thought the Deputy's whole argument was against the coin. I am sorry if I misunderstood him.

The amendment is that we should not drop the 10s note and in justifying the amendment I was arguing that the coin was something with which we might experiment. I agreed the original experiment carried out was, perhaps, defective in some respects and, therefore, there was a case for another experiment but that while it was going on we should not drop the 10s note.

I am confused. What does the Deputy want? Does he want a coin or a note or both?

If the Deputies on the other side of the House would read the amendment—

No, we are listening to the Deputy.

The amendment proposes not to drop the 10s note.

Does the Deputy want the coin, the note or both?

The Minister wants the coin. I do not wish to prevent the Minister having the coin to play with. All I am saying is: "All right, have your coin. I have doubts about it, but while you are experimenting with it for the second time, the first experiment not having worked, do not give up the 10s note."

The 10s note simply will not be issued, but it will still be in existence for some time.

That is a great help. The Minister is, therefore, not going to give us very long to enjoy having both. We are talking about the decision to have no more 10s notes. That is what the amendment is about. I am sorry if the debate has gone on to a different subject altogether on the other side of the House. That is not my fault. I made my position clear from the beginning. What we are talking about is whether the note should be kept and it is relevant to that to say whether we think the coin will be a success. Let us decide to keep the 10s note for an experimental period; if the public change over to the Minister's coin all will be well, and if the note shows sings of going out of use and the people prefer the coin, then after an appropriate time in the future the note can be withdrawn.

Most people were in favour of a coin; some people were in favour of a note; not a single group were in favour of the two.

Were they asked?

It was open to them——

What was the question put to them?

There was no particular question put to them.

When I hear someone has given an answer of a certain kind I always ask what was the question.

Their views were invited on the whole matter.

What was the question put to them on the issue of the 10s note?

No particular question was put to them.

If no question was put to them I cannot see that their answers would matter very much.

The Deputy, I am sure, has read the relevant papers. He knows all the arguments put forward. People were invited to put forward their views on the whole issue.

It is very odd when people are asked to put forward their views on a board issue of this kind that they should all suddenly decide: "Let us drop the note and have a coin." I cannot help feeling that the question put to them must in some way have related to a choice having to be made between the two; otherwise such unanimity in favour of having one or the other would be very odd.

On this matter the Deputy is the loneliest man in the country.

It does not worry me very much. It is a peculiar kind of loneliness, because I still have not established what question was put to the people to elicit their views.

I am still confused. Does the Deputy want the two?

I want this House not to require that, upon the introduction of the 50 new pence coin, the 10s note shall then be withdrawn. I do not see why we must drop the 10s note immediately the coin is introduced, and nothing the Minister says convinces me of this. He said it is bad monetary practice. I asked him what is bad monetary practice, and he has not answered. He said all sorts of inconvenience would result from the continued issue of the 10s note for a period following the introduction of the coin. I asked him that what sort of inconvenience and he has not named one. I do not understand why the Minister is against the 10s note. Surely in any coinage system it should be possible for people to have a choice; to continue to issue the note for a period of months. If it is seen that the coin is preferred then the note can be withdrawn.

Is the Deputy's amendment only a temporary one?

The amendment simply deletes the requirement that the Minister must withdraw the 10s note immediately upon the issue of the coin. I would be quite prepared, if the Minister would prefer an alternative amendment, to change the wording of his subsection to read that "the Central Bank may withdraw the 10s note subsequent to the issue of the coin" and leave it open to them to have an experimental period. All I want is to ensure that they would not be prevented from issuing a 10s note for an experimental period after the coin has been introduced. I think the Deputy will agree that that is a reasonable proposal.

I take the Deputy's silence as consent.

I said: "I do not."

I thought his silence indicated something more favourable. I would like the Minister to tell us in what way is it bad monetary policy to have both for a period and why he thinks this would aggravate the change. It seems to me it would facilitate it. I also want the cost of the two. The ten shilling notes are costing us £80,000 a year. What would the coins cost averaged over a period of years? It may be less, but let us not condemn without knowing what the coins will cost. What is the initial cost of the coins and what is estimated to be the annual cost of issuing thereafter? Presumably someone has made an estimate. I can hardly believe that the Central Bank and the Department of Finance have made this change in policy without finding out whether it would cost more or less. I would ask the Minister to give us that estimate of cost and explain to us the bad monetary practice involved in having for a period the ten shilling note as well as the ten shilling coin.

I have nothing to add.

Amendment put and declared lost.

Could I be clear——

The amendment is defeated. I have put the question.

May I ask a question?

I have put the question. The amendment is defeated and the motion is carried. There can be no further discussion on the amendment.

I want to raise a point of order. What I wished to do, but you would not let me intervene——

Not while the Chair is putting the question. There are some rules of order in this House.

I was waiting for the Minister to reply to the questions that I put to him. I did not observe you were on your feet.

There is nothing further the Deputy may say. The amendment is defeated.

But I wished to Withdraw the amendment and put down another amendment on Report Stage. Is it now in order for me to do that?

The Deputy may not now withdraw an amendment which has been put by the Chair and defeated by the House.

I rose at the first opportunity when I saw you on your feet, and not the Minister, to ask you for permission to withdraw the amendment and you would not hear me.

The Deputy had ample opportunity to withdraw the amendment before the Chair stood up.

I did not know you were on your feet. I was waiting for the Minister to reply. He did not stand up and next, out of the corner of my eye, I saw you on your feet and I rose to ask you for permission to withdraw the amendment and you would not hear me. I should like now to ask for an opportunity to withdraw the amendment.

What the Deputy has just said is not correct.

There is a normal procedure in this House.

How could I have withdrawn the amendment when I was waiting for the Minister to speak?

On a point of order, the Deputy can put down an amendment on Report Stage.

The Deputy may not put down an amendment defeated on Committee Stage on Report Stage.

He can get one in with much the same idea.

Question "That section 9 stand part of the Bill" put and agreed to.
SECTION 10.
Question proposed: "That section 10 stand part of the Bill".

Has the Minister considered the question of issuing a 25 new pence coin?

It will be considered.

Question put and agreed to.
Sections 10 to 24, inclusive, agreed to.
First and Second Schedules agreed to.
Title agreed to.
Bill reported without amendment.

I understood we would get all Stages now.

I see. I was unaware of that. I would not wish, an any event, to hold the Minister up. Perhaps, I might put amendments as we go along, if the Chair will indulge me.

The Chair will allow the Deputy to do that.

But I give no guarantee that I will accept them.

I should like to give notice of amendments on sections 9 and 10.

Would the Deputy indicate the amendments he has in mind?

In section 9, subsection (2), line 40, to delete the word "upon" and, in substitution, use the word "after" and in line 41, the following line, I propose the deletion of the word "shall" and the substitution of the word "may" so that the subsection will read:

After the issue under this Act of coins having a denomination of 50 new pence, the Central Bank may...

This is merely to give the Central Bank power to do this, without absolutely requiring the Bank to do so, so that there may be an experimental period during which they will have this option.

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