The first five amendments on the Order Paper represent an attempt to define the phrase "public authority" as used in Section 7 (b)—"receive deposits (not bearing interest) from any public authority." It has been found difficult to obtain anywhere a satisfactory definition of "public authority." I thought that the wise course might, perhaps, be to leave the phrase as it was and, if it came before the courts, that the courts might look up definitions elsewhere and define the phrase, as used here, satisfactorily. I have had a number of discussions with people interested and I have come to the conclusion that the best course is to put our own definition into the Bill for the purposes of the Bill. The definition is in amendment No. 5. It is framed fairly widely and embraces a variety of authorities and bodies. I was anxious to give the phrase, for the purposes of the Bill, as wide a meaning as possible, and I think that the definition covers all bodies likely to be in any way interested. Amendments Nos. 1 to 4 are merely consequential on amendment No. 5.
Central Bank Bill, 1942—Report and Final Stages.
Amendment No. 6 is introduced in pursuance of the understanding arrived at last week when Senator Hayes withdrew the amendment which he had on the Order Paper. I promised then to meet the Senator's requirements in principle and I have, therefore, put down this amendment. I have, I think, met the Senator's two main points—(1) that there should be competition and (2) that there should be no doubt about there being a test in Irish.
It would shorten the debate if the Minister would explain the difference between the word "competition" and the words "competitive examination."
I am told from the draftsman that "competitive examination" would exclude an interview board. We are anxious in this case that there should be an interview board because it is not necessarily the person with the highest intellectual attainments who would be the best suited for the type of work to be done in the central bank. Every official in the bank will be handling currency— from the most junior clerk up. We shall have to be very careful about the people we recruit. It is not necessarily the person who comes out highest in the examination who will be chosen. We shall have to be certain of the character and integrity of the person concerned. These qualifications would be equally important with the other qualification. I accept the principle which Senator Hayes so strongly recommended to the House—the principle of competition in all these appointments. I have always stood for that and I stand, of course, for qualification in the Irish language as well. It has been pointed out to me by my staff that ours is the only central bank in the world, so far as we have been able to search their constitutions, which is not given full power to select its staff in its own way.
The Minister is not limiting the bank's powers much by this amendment?
The two principles the Senator asked me to accept certainly are accepted, and the Irish qualification certainly is accepted.
I think the Minister's explanation, which I accept, from the legal point of view, disposes of amendment No. 6 (a). With regard to amendment No. 6 (b), the Minister says that the entrance shall be by competition, "including a qualifying or other test in Irish". Quite frankly I do not know what "other" means. I only know of two kinds of examination, competitive and qualifying. What the other kind can be, except a humbug of an examination, I do not know. I suggest that either the word "other" should be deleted, or the bank should be given power to hold either a qualifying or a competitive test.
I accept that.
Very good, it will then be left open to the bank, and it can do whatever it likes. With regard to amendment No. 6 (c), there will be no doubt that sub-section (2) gives the board of the bank power in its own absolute discretion to reserve any position whatever from competition, and that sub-section (1) consequently applies only to such other positions of a routine character which the board would desire to fill by competition. I do not see why it should not be possible to make regulations about that rather than add to the already wide powers given to the board. They could make regulations from time to time, instead of determining it from time to time ad hoc for every examination. They would, of course, be charged with making it ad hoc for every candidate.
They would be charged with that certainly. I will, if the Seanad agree, insert instead "according to regulations to be made" and leave out "published".
"To be made by the board."
Yes.
I am at a loss to understand what the word "limitations" means in the case of 6 (d). I assume that conditions of entry and safeguards would enable the board to prescribe age limits and as, for example, in the case of the ordinary commercial banks, they could prescribe a guarantee or a personal bond. "Limitations" is a word that I am not familiar with in this context. Does it mean that one would have to get a nomination from the director of the bank? I think that is going rather too far. I put the amendment down really for the purpose of discovering why the word "limitations" was put in, instead of "in addition to the conditions of entry".
I was curious about that word myself. I thought conditions would cover it, but I was told by the drafting authority that "limitations" was essential, and that without it age limits could not be fixed or limitation placed on the question of sex.
I have not got a copy of the Civil Service Regulation Act by me, but I am nearly sure that it does not contain a word about limitations, and I am perfectly certain that the Minister for Finance makes regulations for every Civil Service examination, and that these contain provisos with regard to lower and upper age limits. I think the bank would have power under regulations to make the proviso that candidates should be under a certain age.
These were the only limitations in mind, and I asked the question myself, and that is the answer I got.
Very good; I suppose we cannot go beyond that.
I move amendment No. 7:—
In page 12, Section 22, lines 32 to 34, to delete sub-section (2) and insert instead the following sub-section:—
(2) As many of the banking directors as the Minister considers expedient may be selected from a panel prepared for the purpose by the associate banks in accordance with this Act.
The point is that the Minister should leave it to the associate banks to put up a panel. I am doubtful if the Minister will be able to obtain, by the method which he is attempting to procure it, the sort of material necessary and desirable for the proper constitution of this board. My view is that, while the bank directors will give you six names, you are going, by this method, to find yourself in the position of having, if you are going to select as many people as you say, perhaps members who are going to make a board which will not have the kind of complexion that you want the board to have. Nor, indeed, would it be a board of the nature and character that you have in your conception as being essential for the carrying out of the work which you are going to entrust to it. No one is going to say one word that one would not say of our most respected citizens; but, after all, bank directors, who are very excellent people indeed, are selected from a very narrow class in the community, and, as far as I know, the method of selection and election to the board of directors of any of our banking institutions is rather unusual. If I am wrong, the Governor of the Bank of Ireland will be able to correct me, but I think that if a death occurs on a board the vacancy is filled by co-option, and automatically the co-opted individual comes along to fill a permanent position as a director. With that sort of personnel, definitely you are confining your selection to a very narrow circle in our own community, and I feel that you are not giving yourself a fair chance.
The Minister had much to say in praise of the competence and ability of representatives of the banks on the Currency Commission. I think it is true to say that some of those people were very old men when they reached the Currency Commission. That is undesirable. There is just a possibility that the directors of our commercial banks would be quite pleased to pass on to the Minister, via this panel, some of their most respected directors, men who have indeed given great and excellent service perhaps for 50 or 60 years on the boards of commercial banks, men with a good deal of character and personality and a considerable amount of experience, men who are not active or fleet of foot, but who would still not feel satisfied to sit on a shelf. It is quite conceivable that you may have handed on to you a number of men who are coming to the end of their period of useful service on the boards of the commercial banks, in the hope that you will elevate them to the position of directors of the new central bank. That would be a great tragedy. It would be a great mistake if the Minister were to tie himself beforehand to putting on a certain definite number of people from the panel selected by the directors of our commercial banks. If I were looking for directors for this banking institution, I would not look for men of 75 or 80 years, and I think some of them had attained that very respectable age when they reached the Currency Commission. I should prefer to look for much younger men. I should like, if possible, to look for young bank directors, if there are such, with large families. It is astonishing the urge there is behind the efforts of a director of any business institution when he looks around his own table and visualises the demand that will be made in the future by the members of his own family. It somehow gives him a great sympathy with and understanding of the problems in the lives of others when he understands his own, and when his own are the sort of human problems that have to be solved in some way by the activities of the people on the board of our new central bank.
I do not know whether or not that is the Minister's conception of the kind of individual he wants, but, in view of the limitations imposed and the difficulties experienced by the great majority of the citizens of this State in reaching the very responsible position of bank directors, and in view of the many people who are prevented from giving service on the boards of our commercial banking institutions, I think it is a mistake for the Minister to tie himself definitely to taking a certain number from the group of names handed to him by the commercial banks. I do not quite know what he wants. An Taoiseach in the Dáil indicated that he wanted people competent to advise and guide the board on technical matters of currency, credit and so on. There, again, I think it will be a somewhat difficult and invidious job for the board to select the people whom they regard as most competent to advise on those matters. In fact I have a feeling that, if it were left open to the Minister to select from all the directors of all the commercial banking institutions and from all the members of the staffs, it would be much better.
Again, with regard to this question of the staffs, I should like to say a word on the way the Minister is tying his hands. He indicated that there were in the Currency Commission certain individuals who had been at one time officials of the commercial banks. Now, the truth is that those officials—it is no disgrace to any man nor is it anything discreditable to him to grow old —when they reached the Board of the Currency Commission were really old men. I do not think that is desirable, and I think it would be very undesirable that we should find this new institution manned by old men. We would lack that essential confidence in the institution. The Minister indicates his opinion that the banks will possibly put forward people from their staffs; that they will possibly put on this panel the names of members of their staff who are competent to fill this post and have the essential technical knowledge. I think it is a fact that the Board of the Bank of Ireland cannot include as a director any man who was a member of the staff.
Cannot include?
Well, does not include. I am open to correction on this matter, and should like to have some clarification of the position. I should like to know if there is such a director on the board at the moment, or if there has been any in the past. If I am right on that point, it definitely excludes the possibility of any official of the Bank of Ireland, no matter how competent, fitting into this scheme which we have at the moment. I think that would be wrong. I am quite convinced that, if you want to get people who, from day to day, have to apply their minds to the technical problems of currency and credit, you must go to the men who are doing the job technically in those institutions rather than confine yourself to the boards of directors. I should be very interested to hear just how many of those men have set out to obtain the kind of technical knowledge which we are told is necessary. If we want only their goodwill, that is an entirely different problem, and it would be well to have that stated. But, if you are aiming to get the best technical knowledge which is available, I say you are drawing your circle too narrow. The fact that the board of directors of the Bank of Ireland does not include any member who has been an official shows the position in which you stand in relation to drawing upon all the available technical knowledge. I do not intend to argue that matter any further, but I think the adoption of my suggestion would make the Minister's position more satisfactory. I do not know that the representation from the banks would be any less, but it would be a mistake to find yourself in the position of looking at the three names which had been selected and saying: "My goodness, one of those people would be enough." That is the situation which would arise under the section as it is at the moment.
I have one advantage over Senator Baxter in that I am a bank director, and I know how their minds work. I think Senator Baxter has a completely mistaken notion of what happens. The bank directors have a very wide general experience of the business community. They are drawn from a number of boards of other businesses and are people who are intimately in touch with the trade and commerce of the country. You require these qualities on a board—a general knowledge of the conditions of the country—far more than you do technical knowledge. On the board of the central bank you will not particularly want technical knowledge as to the keeping of books, discounts and minor questions of that kind. You want a general knowledge of the conditions of the country and the ability to determine whether credit may or may not be an advantage in particular instances. What is required is maturity of judgment.
Perhaps it is because I am getting on in years myself that I am inclined to make apologies for people who have passed the meridian, but I think there is a considerable amount of exaggeration about the disadvantages of age. I quite agree that, where physical strain is involved, such as in the fighting forces, or where there is a constant dealing with new executive problems, and especially with the unrelenting pressure of trade unions, a person requires to be young; but in dealing with the ordinary questions that will come before the board of the central bank, what is required above all is maturity of judgment. The analogy of a judge is not inappropriate in this case. I think it is the general experience that you do not necessarily require young men on the bench; you want men of experience. The same thing applies to a very great extent to the board of a body like the central bank. You must not assume that because people are of certain age they do not read. There is nothing to prevent an old man reading and studying. These men will not have to knock about, travel widely, or put themselves to great physical strain. Within limits, age should not necessarily debar a man from being appointed to a body like the central bank.
The Senator is quite mistaken as to the manner in which the directors of banks—at least it is so in the bank I know—are appointed. I think the same applies to all banks. The directors are ultimately appointed by the shareholders, as in the case of any other business. If there is a casual vacancy it is filled by co-option, but ultimately that vacancy has to be filled by the vote of the shareholders. I do not think that in that respect the banks are any different from any other business in the appointment of their boards.
What about the proxy votes?
There are no proxy votes in the case of the Bank of Ireland. We do not want this discussion, in any event, to wander into the question of proxy votes because that applies equally to all directors of commercial companies. I know, actually, that in the case of the Bank of Ireland there is no proxy voting.
I cannot accept the Deputy's amendment. By Section 5 (3), which the House has already accepted, the Seanad has agreed to the principle of these banking directors. Senator Baxter's amendment, if it were passed, could not work as long as Section 5 (3) remained in the same Bill. I think we have discussed this question of the banking directors, the reason for their being on the board and their likely utility on the board, at fairly considerable length. One of the main arguments for having these banking directors in a special position and making provision for them in the Bill, is that the community has already entrusted its savings to the banks represented by the bankers who have been on the Currency Commission and whom we propose to take over on the board of the central bank. They have the people's confidence judged by the fact that the people have given their savings, many millions of pounds, to them over long periods. It will be very useful for the central bank to have the benefit of the advice, experience, wisdom and prudence of these men who have successfully looked after the savings of the people over so long a period. Perhaps when I was as young as Senator Baxter——
That is not so long ago.
——I might have different notions with regard to old age, but I am rapidly coming to the conclusion that there is a lot to be said for venerable age. I think if a vote were taken in the Seanad, Senators would agree with me that age is no argument against putting a man on the board of the central bank any more than on the boards of commercial banks. I do not think that the Seanad would ask that any age limit should be set up, in discussing the question of who is to go on the board. I do not think it would be helpful. Senator Baxter indicated that you might get as useful men from amongst the junior members of the staffs of the commercial banks. I do not know, but, at any rate, we have a knowledge of the directors of the commercial banks. We know that they have done their job well, so far as safeguarding the people's savings are concerned. That was their main job and they did that very well. The people have confidence in them and it would be helpful to the central bank, as it has been helpful to the Currency Commission, to have on the board people who have had a share in the work of safeguarding the savings of the people. The confidence attached to them will, to the measure we have such people on the board of the central bank, attach to the central bank also. It may be, some time later, when the bank is well established, has secured a certain foundation and has already earned the confidence of the people, a wise thing to alter the Bill and to leave the Oireachtas completely free to select banking directors from any class of the community but I think at present this new institution would benefit very materially from having the assistance, experience and knowledge that these men will bring to the board of the central bank.
I move amendment No. 9:—
In page 14, Section 25, sub-section (5), line 16, after the word "Directors" to insert the words "or officials".
This is a different amendment but I am not going to take up very much time with it. I think the Minister could advisedly accept this amendment. If a situation should develop such as you are making provision for in Section 5, you ought to be free and it ought to be open to you to utilise competent officials just like the bank directors. I believe you would want to do that, but I am not going to argue the matter at any great length.
I cannot accept the amendment. I did say earlier, and it is true, that amongst the bank directors are men who have been officials. It is true that they are probably no longer young men. In order to achieve the position they have achieved they had to spend many years, the best part of a lifetime, in the service of different banks, but they did that and gained the knowledge that one must necessarily gain with such experience. I have met men since I started to discuss this question of the central bank who are directors but were officials of banks. I have met four different bankers in this city who were formerly officials of the several banks of which they are now directors. They have all the knowledge which such men gain from such experience, so that by this arrangement we have these men at our disposal. It will depend on the banks whether they are to be put on the board, but some of them have been on the board of the Currency Commission at different times. I expect that some of them will be selected on the panel for the central bank because they are outstanding men.
I move amendment No. 11:—
In pages 26-27 to delete Section 49.
I despair, of course, at this last moment of getting the Minister to meet me on this section, but I still feel that it is my duty to have on record once again an expression of the disquietude of the banks at the provisions of this section, if their operation is to be attempted. I would not like to be in the position of anybody who has to try to put into practice the provisions of this section. Ever since this debate began in both Houses, I have been looking for some convincing statement from the Minister as to how this section is going to operate. The Minister made a statement on the Committee Stage that, I am sorry to say, was not convincing. The Minister said you can operate this Bill, and you can make it effective if the banks increase their loans. Yes, in the first stage you will make it effective, but the ultimate effect depends upon how people who take these loans use the money. If the proceeds of these loans are used for purposes outside the State, that alters the proportion straight away, and whatever may be the effect in the aggregate, the proportion among the individual banks will be changed almost from day to day. The whole tariff policy of the Government affects the distribution of assets held by the banks. The effect of a Government loan is at once to alter the proportion among the individual banks. Beyond placing it on record that it is in the opinion of the banks impossible to operate this section, I do not intend to say more.
I join in protesting against Section 49 as it stands. The Bill does not arouse any deep emotion in me except for this section, which I feel is the one rather disingenuous section in the whole Bill, and I doubt very much whether it reflects any credit on the Government to have put it in. To begin with, it seems to put on the banks responsibility for the fact that sterling assets are piling up to the credit of the banking system while this is not the responsibility or the fault of the banks. It is the result of the trade position and the special circumstances created by the war. If the Government had really wanted to reduce the sterling balances they had ample opportunity during the last ten years to do so by maintaining low tariffs and encouraging the import of every kind of article, because the payment for these imports would have been automatically reflected by a reduction in the sterling assets of the banks. The Government, by their tariff policy, put every obstacle in the way of the realisation of the sterling assets when it was possible to do so and when it would have been welcomed on the other side. Now, when it is physically impossible to realise these sterling assets, we proceed to embody in this Bill a clause which seems to put on the banks the task of doing something which I feel is utterly impossible. Even in normal times, that clause might be used as a whip to scourge a bank which for one reason or another was not popular with the powers that be. Banks differ in their varying circumstances. The distribution of different types of deposits differs. Some banks have to maintain relatively large balances of quick assets in the London money market, which is the only place where such quick balances can be maintained. The banks have the duty of maintaining maximum safety for depositors as well as the duty to their shareholders of seeking maximum legitimate profits. If this clause is introduced it will probably interfere with that duty of the banks and, in fact, it might amount to a fine without judicial process of law that could be imposed by the Government of the day on a particular bank for reasons which would not bear real examination.
Now, in the working of this clause it is suggested that in certain circumstances the commercial banks might have to make deposits free of interest in the central bank. That deposit free of interest would be reflected in the balance shown by the central bank by an equal addition of sterling assets possessed by the central bank. If it is vicious in a commercial bank to hold excessive sterling assets how does it become more virtuous for the central bank to hold sterling assets thus transferred? The only thing that can happen in the first instance would be that the sterling assets would be transferred to the central bank. I have already suggested in a former connection in which I think the Minister did not take me quite seriously, that if you really want to encourage deposit of money in the central bank by the commercial banks the easiest and obvious way to do that is for the Government to borrow direct from the central bank. In that case, by a most easy process the money will find its way inevitably through the channels of circulation back to the commercial banks and from the commercial banks to the central bank, where it will be reflected in exports to the credit of the commercial banks. If you want to encourage deposits in the central bank, that is the easy and obvious way to do it. This other way is objectionable and might lead to serious injustice, if ever an attempt is made to give it effect.
I do not think I can say anything new on this subject and I am sure the House would not approve of my going over again what I said here on the last day that we discussed the matter. I know that the section is not one which Senator Sir John Keane or those for whom he speaks have very great affection, but I suggest that the central bank board will not misuse this power. The board will be anxious to work in harmony and in close co-operation with the commercial banks, and will include representatives of the commercial banks. It is that body—and not the Government— which will use that power. The Government will not have any power to operate this section. I do not see that the central bank would use this, or any other section, as a whip to scourge an unpopular bank. That possibility seems as remote as the poles are apart. The board of the central bank is there to look after the interests of the commercial banks as well as the interests of the State and the community, and the funds of the banks are an important asset of the State.
There is a not inconsiderable section of the community of the opinion that we have not taken, in this Central Bank Bill, anything like the powers we ought to take, that we ought to have machinery in the constitution and powers of the bank to interfere in a variety of ways—as has been suggested in public and in private—with the operations of the commercial banks. This Bill is a moderate Bill, and this section is one to which objection is taken in certain quarters; but, compared with the powers of central banks elsewhere, it goes very little in the direction in which a very large section of the community has been pressing the Minister and the Government to go when setting up this bank.
I do not entertain the notion that this section will be worked to hurt or injure the banks. With the type of bank board I have in mind—all sensible, prudent, experienced men—this or any other power will be used only where there is absolute certainty that it is used to the benefit of the banks themselves as well as of the community.
If, as the Minister says, the bank would not contemplate using the whip, why should they arm themselves with it? There will be co-operation, and there must be co-operation, to work this Bill effectively; and if it cannot be done by co-operation, I think these coercive powers will be singularly ineffective. The Minister has been pressed on this matter and has decided, in his wisdom, not to give way; and I do not wish to pursue the matter any further.
I move amendment No. 12:—
In page 27, Section 50, sub-section (1), line 20, to delete all words after the word "bank" to the end of the sub-section.
I am hopeful that the Minister may do something about this. I speak with the feeling that the House regards me purely as an advocate for certain vested interests; but I will be able to show them in this case that I am not that at all. To meet me in this amendment would, I suggest to the House, be very much in the interest of both parties. As the Bill stands at present, the central bank has power to prescribe a certain amount which the commercial banks must keep with the central bank for the purpose of clearances in the settlements between the commercial banks in regard to their indebtedness towards one another, as determined on each day's transactions. The banks must meet these clearances; they have to find the cash for these ordinary debts. If the banks feel that the fixed deposit which they must keep with the central bank is larger than is necessary, naturally they will regard that as a maximum deposit and they will take care, having been forced to keep that amount on deposit, not to keep any more than that; whereas, if they are given freedom in the matter, they are much more likely not to bother their heads as to how much they keep available with the central bank in the ordinary course of business and which they draw off as circumstances require.
There is a psychological factor here. If there is a prescribed amount, which is not earning anything, the commercial banks may say: "We do not think we have been very well treated, as the amount is more than is necessary; we will work on the bare amount and will draw off any balances in excess of that amount." In that way, the central bank will suffer. I feel that I have a very strong point here, on which the Minister might meet me. There is no purpose to be served at all in making this prescribed deposit, other than to penalise and, perhaps, annoy the banks, as the banks always must have sufficient to meet these clearances. It is to be hoped they would keep a good deal more than they would require, and probably they would do so if they were not forced to keep more than is necessary.
The Minister would be giving way on no principle and would be taking a small step to meet the banks on this point. We have no complaint of the way the Minister has treated the banks, has consulted with them, and so on; but we have not been met on any point of substance, and I hope the Minister may see his way to give us a "consolation prize" in this case.
I really do not see what Senator Sir John Keane objects to in the words "to make and maintain with the bank such deposits as shall be prescribed by the board by or under the regulations". In this case, the deposits will be very small—a matter of some thousands of pounds.
How much? A thousand pounds?
It may be £5,000 or £10,000, for clearance purposes. In the case of the ordinary banks, requiring to clear day by day, the amounts required would not be very big at any time. Without knowing the subject, that is my impression. I do not know very much more about it than I have been told. Admittedly, Senator Sir John Keane probably knows more about this than any of us here; but it appears to me that any of the deposits referred to here will be modest amounts regarding which the banks will have no trouble whatsoever. It will not be a question of depositing £1,000,000, £500,000 or £250,000. It is probable that such sums will never be necessary for the purposes of this section. Therefore, I do not see why there should be any serious objection to allowing some authority to prescribe the amounts that should be kept for clearances. If I am right in suggesting that a remote maximum figure might be £100,000——
My information is that it varies very considerably. On a given day, it might be a much larger figure than £100,000, and on another day it might be much less. Money might, in fact, be due to the bank in question next day. On certain days it might reach a peak amount. Therefore, I think it is very unjust to fix the amounts in this way. If the Minister were to say "maintain such balances as may be necessary to meet clearances", it would meet the case.
Would the words "such balances as may be necessary for the purpose" be satisfactory to the Senator?
Yes.
I shall accept those words, if the House will permit me.
Will not the banks' representatives have their say in the fixing of the amount?
They will.
I suggest that the words which the Minister has accepted might be examined by his legal advisers.
The matter will have to be finally dealt with now.
If any discrepancy is found, the Bill can be sent back to us from the Dáil.
I ask leave to withdraw the amendment on the Order Paper which I proposed.
I move:—
After the word "such", in line 22, to delete all the words to the end of the sub-section, and substitute "balances as may be necessary for the purpose".
I should like to place on record that the people I represent in this House—the cattle trade and the agriculturists—do not want any change in our currency and do not desire any revolutionary change in our banking system. They believe that as England is the country with which we did 90 per cent. of our trade in the past and as we hope to continue that trade in the future, any alteration in the currency would not tend to the development of that trade and would not be to our advantage. We all hoped, when this Bill was introduced, that it would do something for the loosening of credit, but it has done nothing. We believed that it would contain some provision by which portion of the £300,000,000 of our money invested abroad would be utilised for the development of our own country. There is nothing in the Bill which would facilitate that. The Minister said he would provide money for agricultural credit if it were proven that there was any necessity for it. I should like the Minister to say what sort of proof he requires.
It has been stated here by representatives of the farmers and of other bodies that agriculture is starved for want of credit. The Minister does not seem to believe that. If he does not believe the representatives of the farmers, would he take some notice of the decline of our cattle, sheep and pigs, even during the past 12 months, by 250,000? I ask him to take notice of the number of applications made by farmers to the Agricultural Credit Corporation which applications have been refused. I ask him to get representatives of the banks to define what they mean by "creditworthy" in relation to farmers. If he adopts some of these commonsense suggestions, he will find that thousands of farmers could double their production but for lack of credit.
Many people say that agriculture would require £100,000,000 if it were to be properly developed. I think Senator Johnston and some others said that we would require £10,000,000 or £15,000,000. I have asked for £5,000,000 for the development of agriculture, and my request has been turned down. The Minister stated that the plan I suggested was a foolish plan. I ask the Minister to consider that plan again, and get his experts to look into it, and after his examination and consideration of the statements made here, if he still is not convinced, will he tell us how we can prove that agriculture is in need of credit for development? I know the needs of the agricultural community in practically the Twenty-Six Counties; I know their wants, and I know how they are hampered by want of credit. I have stated time and time again that agriculture is starving, and if we want to do anything we will, first of all, have to put back on the land those farmers who were ruined by the economic war. I am not asking for money for nothing; I am not asking for charity for farmers; I am not producing any revolutionary scheme by which they would get money that they could not pay back. Look at the way other Governments have treated the farming community.
If the Senator is developing the matter of credit to the farmers, it is not relevant on this stage.
We talked of banks, currency and credit, and I thought that this Bill would have something to do with credit. I was developing the point that some credit should be given to those I represent in this House.
The Senator has had an opportunity of ventilating those views on the Second and Committee Stages.
I will bow to your ruling.
Senator Counihan's trouble is that credit for the farmers is not in the Bill and therefore it is not relevant.
I have greatly enjoyed the debate on this Bill and the Minister's attitude to the House, although, with one notable exception, he has made very few concessions to the united wisdom of the Seanad. I suppose so many changes had to be made in the Bill in another place that one had to economise in similar concessions in this House. In availing myself of the opportunity to make a few general remarks apropos of Ministerial policy and the Bill, I would like to make them not in any spirit of harsh partisan criticism. I should like the House to remember that although I sit very near a prominent Fine Gael Senator, I am an independent Senator. I make them in the spirit of gentle chiding. The Minister on the Second Reading debate, when I gave him an opportunity of admitting that he had become definitely orthodox in some respects, and had shown signs of penitence for some of his past errors, definitely repudiated that suggestion, and emphatically stated that he was quite unrepentant for any economic policies pursued by him and his Government during all the years they have been in office.
I think it is part of the convention of democratic politics that leaders of Parties—I make that statement quite generally—must claim more than Papal infallibility, and never by any chance admit that they have made a mistake in the past. If I was disposed to make a purely destructive speech I would be tempted to preach, as it were, a little sermon on the text: "Woe unto them that draw iniquities with cords of vanity and sin as it were with a cart-rope." I mentioned sinning with a cart-rope on the Second Reading debate, but was somewhat wrong in the reference, because I used the term as a verb, whereas in Isaiah, Chapter V, Verse 18, it is used as a noun, and the metaphor is that of a bullock drawing a cart. In much the same way, these people whom the prophet denounces are said to be drawing their past sins behind them. The prophet must have had some foreknowledge of the Minister, because he evidently considered that a cord was not sufficient for pulling along the iniquities and sins with which he has been associated, and nothing less than a good stout cart-rope would be any good.
When I gave the Minister an opportunity of admitting that the cord was broken because he had departed from his past sins, he assured me that the rope still held good. Perhaps we will have more to say about carts and ropes on another occasion; but talking about carts, I would say, by way of summarising the error which has dominated Government policy for years, that the Government has put the industrial cart before the agricultural horse, especially during the first few years of this régime. I admit that the circumstances connected with the economic war were such that it was extremely difficult for the Government to give a fair show to agriculture, and I am not arguing to what extent the Government was itself responsible for creating those circumstances. That, I am perfectly prepared to leave to the judgment of history, or if you like, to the electorate, which has already expressed an opinion on the matter more than once. In that fundamental error the agricultural horse got less than a fair show. All the time for many years the motto was "live agricultural horse and you will get grass," but all that the poor horse has got so far has been bent and scutch grass, and not enough of Italian ryegrass, cockswood, or timothy and the other really noble grasses that we read about in the textbooks.
Those are not very relevant to the Bill.
I am coming to that as hard as I can. I am quite willing to admit that Eire, and indeed other agricultural countries in Europe, especially in central and eastern Europe, require a greater degree of industrialisation, and I am quite certain that one of the first and most important problems of post-war re-construction in Europe and the world will be how to develop a desirable type of industrialisation in countries like Jugo Slavia, Roumania, Poland, China and Eire, in which it is the unfortunate fact that there is an excessive proportion of the total population engaged in agricultural production, and industrial developments have hitherto not received adequate attention. But I would urge that, in the choice of industries for encouragement, there should be more discrimination; that industries should not be sown broadcast, but, as I said on a former occasion, should be dibbled, and, if they have been inadvertently sown broadcast, that a process of thinning should be indulged in, so as to enable those that survive to reach a vigorous and healthy life. I think I am in order, Sir?
I am afraid not. If the Minister for Industry and Commerce were here, on another Bill, the Senator might be.
Anyhow, I feel that the time has come when we should attempt to arrive at an agreed economic policy in reference to industry as well as agriculture, and one which might command the assent at all events of the two major Parties in the State. In that policy, I think we will have to give pride of place to a policy of agricultural expansion, because undoubtedly the greatest scope for productive development is in the development of our agricultural resources, and, in the matter of industrial development, we will have to try to arrive at some form of agreement as to the kind of industries that should be promoted, and the best methods that should be employed in order to promote them. If agriculture developed and expanded in the course of the next 20 years to the extent that I believe would be perfectly possible, I think agricultural production might well be increased by some £20,000,000 a year in terms of present-day prices, and, in view of the fact that the home market could not possibly absorb anything like that amount, it would be necessary to increase agricultural exports by something approximating to £20,000,000 a year. That would give rise to the necessity of either increasing sterling assets or increasing our imports of goods of all kinds from the neighbouring isle to balance the increase in agricultural exports. I should like to say in that connection that I do not think we could possibly have the additional imports of British goods of that value if we confined those additions to capital goods. The Minister, I know, is favourable to the encouragement of the import of capital goods, but I do not see the possibility of increasing, in the course of the next 20 years, the imports of capital goods in anything like the measure of £20,000,000 a year, which is perfectly feasible as the extent to which agricultural exports might, in favourable circumstances, be increased in the course of the next ten or 15 years.
Referring back to that metaphor of the horse being on the wrong side of the cart, I would say that it has been the experience of other countries, for example, Denmark and the United States of America, that they have achieved industrial expansion on the basis of a successful and prosperous agricultural export industry and, having put the prosperity of agriculture first and the development of an export market in its proper place, they then in due course attained a position in which industrial and non-agricultural economic activity achieved a greater and greater relative importance. It is a surprising fact, that, in spite of its pre-eminence in agriculture in pre-war Europe, quite a small proportion of the population of Denmark was occupied in agriculture. I think, speaking from memory, it was only some 30 per cent. Equally, in the case of New Zealand, in spite of their pre-eminence in agricultural exports, only some 25 or 30 per cent. of the population are occupied in agriculture. I think, if we followed that same general line of policy, we could, in due course, have our agricultural prosperity and our industrial development as well.
If we are to approach our economic problem in this way, I would appeal to the Minister, and indeed to the leaders of all the political Parties, to cut the cords of vanity that bind them to their—in some cases—somewhat lurid past, and to think only of the present and the future; to put the agricultural horse right between the shafts of the industrial cart, and to let the agricultural horse draw us along to prosperity in a more peaceful world than we have at present. In the process, I would suggest that that horse should get not only the better types of grass but an occasional feed of oats, and I am sure Senator Counihan will thoroughly agree with that suggestion. If I am right in regarding that as the proper approach to the policy that should guide our economics in the future, it is of the most fundamental importance that the board of the central bank should be nationally minded in the sense in which nationally minded is to be agriculturally minded, for I do not think a body of that kind can be nationally minded in any true sense unless they have a very complete knowledge of and sympathy with the agricultural circumstances of the country, and a determination to do what is right by the country as a whole, especially by the agricultural interest, which is the dominant national interest in economic matters.
I think there has been confusion, through all the debates on this Bill, between the powers of the central bank and the powers of the Government. This Bill, as the Minister himself said, is of importance but not of very great importance and the powers of the central bank are not substantially greater than the powers already possessed by the Currency Commission. The Minister and the Government generally appear to hope that, from the central bank, they will get some leadership, some research, but, most emphatically, any member of this House or any member of the public who thinks that the central bank can be a machine for solving either our agricultural or our industrial problems is making a mistake. To that extent, Sir, I think that Senator Johnston's rather metaphorical speech was not quite relevant to this particular Bill. He said that he was an independent member. I think it was Mr. Gladstone, when he was Prime Minister of England, who explained to the late Queen Victoria, when she asked him what an independent member was, that an independent member was a member upon whom nobody could depend. I have no doubt Senator Johnston is a very dependable person in regard to banks and certain other things. He took occasion to preach a sermon to the Minister. He preached a sermon to political parties generally which independents, never having had any responsibility and not having any great hope perhaps of having any responsibility, are, of course, pre-eminently in a position to preach. He spoke of the Minister's lurid past. I leave that to the Minister but I think the Senator should not ascribe to all Ministers and to all political parties a lurid past which they draw after them with chains or cart-ropes.
Speaking for myself and for the people I represent, their past on the economic side is not lurid, not damaging, and not something to be ashamed of. In any event, as far as this Bill is concerned, it is simply misunderstanding its whole purpose to think that the central bank can do work which the Government must do. If our industrial and economic position is to be improved, and if certain measures have to be taken to create a proper balance so that we may benefit from what happens in other countries and work out our problems here, that is a job which falls in our own time to the Government. I think the Government should not put that job on to a central bank. The procedure, I think, for improving our fortunes is not to alter this Bill, but to change this Government.
I have avoided speaking in this debate so far, but I was very desirous that something might be done by this measure to satisfy the demands or to go some way towards satisfying the demands which I think the Banking Commission was set up to examine. Away back in 1923 we should always remember—it is a very pertinent matter when dealing with the question of credit—an asset upon which the credit of our farmers rested, was destroyed. The security of our farmers no longer existed. It does not exist to-day and this Bill cannot, I am afraid, do anything to meet the demands which the commission was set up to inquire into. The fact that the commission was established is sufficient evidence that the present Government were fully cognisant that there was a grievance as between the farmers and the banks to be remedied. The previous Government set up the Agricultural Credit Corporation in an endeavour to provide a solution, but it could not hope to remove the difficulty completely. It was not even a drop in the ocean.
Arthur Griffith once said in East Cavan that it should be our endeavour to provide the Irish race with an opportunity to live in this, our own land, in all the affluence which its resources are capable of providing. The Act of 1923 removed the farmers' security and nothing has been done since to improve it. I read last week, when engaged elsewhere, that the Minister himself stated that if credits were wanted he would see that they were given. At the present time it is not a question so much of credits for agriculture as credits for agriculturists —freedom to live, freedom to utilise their great untold assets, valued at times at as high a figure as £350,000,000. A golden opportunity has arisen for the Minister to find a common platform on which he can discuss with the leaders of other political Parties some method of utilising this asset which has remained so long dormant. I deny the accusation that the farmers are asking for any charity or any dole. Charity is not what they want and charity is not what will promote the prosperity of the country. Faith and hope are the qualities with which they should be inspired and the Minister has now a golden opportunity of inspiring them with feelings of faith and hope by endeavouring to meet the demands to restore the asset of which a previous Act of the Oireachtas deprived the agricultural community.
One last word on this stage as to the Minister's attitude. His defence of the measure as a reasonable measure might be summed up in Grattan's words in the old House of Commons: "Why have the masters of both resorted to rhetoric and not to logic?" His presence here has been refreshing and yet I feel that through his refusal to accept a great many of the safeguarding amendments put up by Senator Sir John Keane, from his knowledge of the banking world and with no ulterior motive, a loophole still remains through which the germs of that very distressing disorder, Kenargyrothecalgia, may, under certain circumstances, be able to attack the national economy. There is one thing in which through all this debate the Minister has persisted. He has told us what the Bill cannot do, quite rightly, but the whole time he has never given us a very clear understanding of what the bank will do over and above what has been done by other functioning bodies before.
I voted for the Second Reading of this Bill in the hope that we could prevail on the Minister to do some of the things we wanted to do. Since then I have had to face a certain amount of criticism of my action in voting for the Second Reading of the Bill, but my opinion was and is, that the Seanad is wise, as Senator Hayes has frequently stated in this House, in giving a Second Reading to any Bill if it wants to amend it. It was only by doing that that it was possible to introduce the various amendments which we have discussed here. The Bill is going out of the House in much the same form as it came into it, and while some Senators are very complimentary to the Minister, as well they might— he stood well by them and they stood well by him—I deplore the fact that the Minister did not see his way to accept some of the amendments which were tabled and which, I think, would have made this Bill much more valuable. As far as I was concerned, and I hope the Minister accepts my statement, the amendments which I put on the paper and the manner in which I tried to discuss them, were entirely devoid of any political consideration. It is not a measure at all that lays itself open to that sort of narrow discussion.
Now it is quite easy in a very difficult and complex measure such as this to make it appear that some of us stand for a kind of way of doing things which may not be a true presentation of the facts. In reply to the point made by Senator Hayes I say it is true that some people seem to believe that a Bill like this and the central bank can do all sorts of things which it is the Government's job to do, and that no Bill can give powers to the central bank which will make it possible for it to do what is the Government's job, but I would also say that it is impossible for the Government to do its job unless there are adequate powers in the central bank.
Senator Sir John Keane at times and, indeed, the Minister expressed themselves in approval of the banking institutions in such a manner as would make it appear that some of us were dangerous sort of people, and that we felt that if we had control of the banking system we would do something entirely different from what those in charge of commercial banking institutions have been doing. In praising the capacity shown by the commercial banks in preserving our savings it might appear as if they suggest that some of us had advocated a policy of dissipating these savings. I do not think any sensible person would do that nor do I believe it when the Minister says that there are people who think that all you have got to do is to turn the hand-printing press and produce notes. I do not know any of these people and I think the suggestion is a complete exaggeration. I do not believe that any amount of credit that may be made available is going to solve our problems unless we do a number of other things, in fact, some of them beforehand. We have got to make many plans before starting the mechanism working. I am not one of those who believe that you can reform society and reconstruct our social life just simply by establishing a central bank and giving it certain powers. I do not believe that and I do not know any other person who stands for the reform of our monetary policy who believes it. It is an exaggeration to present the position like that.
I am sometimes puzzled when I hear the banks praised for the way they have kept savings in their care. It is very peculiar that the directors should be applauded for caring our savings and keeping them all right when they are stuck away in the banks. But if I take some of these savings out of the bank and put them into the land, it does not matter two pins whether the banking policy depreciates savings when they are invested in the land. There is no comment at all on that. There is no doubt at all that it appreciates and depreciates the value of property and goods, and I cannot see the consistency of applauding banking institutions for keeping money safe when I suggest that that money is on the dole. I do not like the dole. I do not like the dole for men or for money. It is something which we cannot commend—having men idle and giving them something which is not subsistence in order to attempt to keep body and soul together. In my opinion money on deposit is idle money which should be doing something better.
In this measure which we are now passing the Minister had a golden opportunity. I do not think any successor of his will be in a more favourable position to get the powers that ought to be given to a central bank. The complete lack of stability everywhere and the lack of security with regard to money presented an ideal situation for the Minister to reform our whole policy with regard to money. He should have been more courageous. Even from the point of view of the banks, I say that the whole foundation of our banking institutions would be much more secure if it were based on a structure that we were convinced was sound. Senator Sir John Keane frequently mentioned that some of us suggested amendments which would create a position in which there was great danger of inflation. I think we could do with a bit of inflation here, and it would not do us any harm at all, provided it was genuine and coming from the creation of goods here by our own people. There is plenty of room for development along those lines and the creating of credit for that purpose would be money well spent.
With regard to the attitude of the banks, what puzzles me is this. No matter what the banks try to do, interest rates are going to be low for a pretty long time to come. Accepting that the orthodox system is going to continue working here when it is dead everywhere else, interest rates are going to become much lower than they are. Unless the volume of money is going to be considerably increased. I fail to see how the commercial banking institutions are going to maintain their profits. From that narrow, selfish point of view, it is essential for the commercial banks to study how it is possible to increase the volume of money in circulation. Certainly, in so far as it is possible, that is the soundest basis upon which banking policy can be developed in the new conditions we are facing.
The Minister is getting his Bill. The Minister is not making any great claim for the powers contained in it. It is indeed not much of an improvement on the position of the original Currency Commission. It is, I concede, a framework and it is going to collect a certain amount of information. But I suggest that it is going to do something more. It is going to leave a great many people very dissatisfied. Perhaps the Minister being a bit of a psychologist in his own way, and more subtle in that than the banking fraternity realises, knows that he is creating a situation in which public opinion will be dissatisfied. We are facing the prospect of an end of the war, perhaps, in 12 months, perhaps sooner; certainly before five, four or three years, with perhaps 100,000 of our people back here from the other side of the Irish Sea. These people have been accustomed to earning £5, £6 or £7 per week, and they are coming back to what? I assure the House they are not going to be very satisfied with present conditions. Perhaps the Minister knows that. I am puzzled at the attitude of the Government, and I wonder sometimes why they wait so long to do some of the things that have to be done. They waited so long before increasing the price of milk that they had to give a higher price than they might have conceded if they had met the demand of Senators Dwyer and MacCabe and myself some 12 months ago.
The Minister may have something at the back of his head with regard to the Central Bank Bill, and I suggest that the banking directors be not too composed or complacent. If my amendments had been accepted, they might have got something more revolutionary than the present measure. I feel we ought to have provision in this Bill to enable the State to rise to the situation which inevitably must confront us and every people in the world when the engines of war are turned into ploughshares again. If we think we can go on as we are going to-day, with little employment and little opportunity provided for productive employment, with no planning, with an attitude on the part of those who handle money that they are ready to advance money to credit-worthy people provided they are satisfied that rates of 4, 5 and 6 per cent. can be paid and that three times the security can be provided before the loans are obtained, if we are told that the State can get money at 3½ or 4 per cent., and at that price only, for work of national reconstruction, then we are all going to have a period of disillusionment.
I am not satisfied with the measure as it is. I think the Minister should have done better, but perhaps he has his reasons. At any rate, he is getting the Bill. I am not opposing the passing of the Bill, but I certainly regret that he did not avail himself of the most favourable opportunity that any Minister for Finance up to the present has been given, to get another type of measure. I would be sorry to think that the Minister feels—or that the complacency of middle age would create such an attitude of mind on his part—that conditions are tolerably satisfactory and that we need not worry ourselves about the times 12 months ahead. I regret the Minister did not do better with the amendments presented to him, but the obligation and responsibility was his. So far as some of us are concerned, we have acted according to our lights, and not in the desire to destroy any institution being built up in this country or to discredit anybody charged with the responsibility of managing the affairs of this country. We have not acted in the desire to dissipate any of the savings or any of the fruits of the labour of our people, but in the hope that the fruits of that labour, with the knowledge which we have accumulated in the past, might be better and more profitably employed for the benefit of the present generation and of the coming generations. The more conservative and more orthodox point of view has prevailed, and is imprinted in every section and clause of the Bill. It has had its victory, but I believe that we will have our day, too.
My complaint against Senator Baxter is not so much that he is dangerous but that he is very hard to understand. I do not know what he wants. He wants the banks in some way to be responsible for a new policy in agriculture. He has been on the board of the Agricultural Credit Corporation and I am sure he knows that banks have nothing to do with national policy. The banks' work is restricted to meeting the demands of people who come to them to liquefy their capital. A customer says: "At the present moment I do not want to turn my resources into cash: I want you, not to create credit but to lend me money to do a certain thing." If the banks are satisfied that the money will be repaid, they lend it. It may be a prosaic and restricted function, but it is what the banks do. All this talk about reorienting national policy and providing a completely new outlook on the part of the banks leaves me puzzled as to what the Senator wants.
I would like to make one remark, arising out of what Senator McGee said, and bearing largely on what Senator Counihan said. It is on this matter of agricultural credit. There again, it is a question, naturally, of the security offered. No doubt, Government policy has affected the banks' views as to the security in land. I think I am right in saying that the banks have to regard the value of land as that which the Land Commission will give for it. At the present moment if there is a free market in land prices are high. No bank will advance more on land than the Land Commission will give, and that is two-thirds, or less, of its market value. That, and the question of free sale, limit the amount of the banks' advances. Even when there is a free market, it obviously affects their attitude. The policy of the Government, as expressed by the Land Commission in fixing the value of land, places a limit on the advances—assuming there is free sale—a big assumption—that the banks can give on farm security.
It is to the credit of this House that we have heard very few of the wild statements about credit we heard in the other House. I do not think anyone has embarked on the 10 to 1 theory of banks' lending powers. I do not wish to pursue that subject any further, but I would emphasise that in practice banks do not lend more than they receive in deposits. A bank deposit made by a member of the public is analogous to the deposit in a post office savings bank or institution. In their origin, they are of the same character. The real test of that is the percentage of banks' assets which are in the form of loans. Taking the aggregate assets of all the banks, they are rarely higher than 50 per cent, and, of course, considerably less at the present moment.
Is the Senator excluding investments?
Yes.
Are they not advances?
No; investments are not advances.
Do they not create credits?
Investments are not advances.
Do they not create credits?
I am prepared to meet the Senator on a neutral platform anywhere he wishes, in order to debate this matter, but it is a very technical subject and obviously cannot be debated by question and answer in the House. I am talking of loans and not of investments. I repeat that, if you take the assets which correspond to, cover, underlie and support the total deposits of the banks, a maximum of 50 per cent. would, in practice, be in loans, and the other 50 per cent. would be distributed over investments, call money and cash. In other words, the bank does not lend more than its deposits.
The example the Senator gave the other day to this House was based on the totally impracticable supposition that there was only one bank. It ignored the fact that, if you make a loan in one bank, that loan is liable to be drawn off in another bank, which has to keep cash to meet such a withdrawal. In ordinary banking operations, there is a continual withdrawing and cancelling of the debts as between the banks, so you cannot base a theory of credit on the supposition that there is only one bank.
We have not heard much about it here, but we heard it stated in other authoritative quarters that the banks have a monopoly. They have not. It is open to the Senator and his friends to mobilise the very considerable amount the farmers hold on deposit and make that amount capital for farmers' banking operations. Not so long ago, there were indications that the cattle traders were about to form a bank. Good luck to them. Senator Counihan will, in that event, gain some practical knowledge of bankers' difficulties.
With regard to the Bill itself, I cannot quite agree with the Minister that it is mild and harmless. I agree that it does not go as far as the New Zealand Central Bank Act. Leaving aside the New Zealand example, where the bank is comparatively new and remains to be proved under more normal conditions, I think it can be said that this is well in the forefront of central bank legislation. Some of its provisions are, I think, unique and some are more advanced than any that have yet been seen. Whether they will prove practical in operation is another matter. I should like to assure the Minister that, although there has been disagreement between the banks and the Government as regards certain features of this measure, the banks are prepared, in their own interest as well as in the national interest, to co-operate to the fullest extent in making this Bill a success. They hope, just as much as the Government hopes, that the Bill will be a success.
I am sure the Minister will appreciate the compliment paid him by Senator Keane on behalf of the banks. We cannot allow this measure to pass without putting our point of view. The Minister has lauded the banking system of this country and has referred to the ability with which it has been conducted. To my mind, he has unduly praised the qualities of the people in charge of the banks. On the Second Reading, I made a statement which was incorrect and I want to take this opportunity of correcting it. We have no complaint whatever against the private banks. They are there for business, same as any other capitalist concern in the country. From that point of view, they have done their work excellently. But we believe that the banks should be more amenable to the people's representatives— the Government, if you will. In dealing with the commercial banks, I mentioned that they held unclaimed balances. I overstated the amount, but Senator Keane will admit that it is a very substantial sum and that it is capital to be exploited. I submit that this money ought to be available at some stage to the Government, which would be liable to any claimants who might turn up.
The Senator gave one figure which he has since revised in his own mind. Would he give an indication of what he now thinks this sum amounts to?
We heard about hidden assets. This is one of the concealed assets of which we know very little. I have tried to find from different publications what the total amount is. I asked Senator Keane would he let us know what it was. He told me that my figures were wrong. On the best information I could get, the amount is in the neighbourhood of £2,500,000.
If you divided that figure by four you would be nearer the correct amount.
We have before us a Bill based on the findings of the Banking Commission, and here is an important matter that never was raised before, and never was considered by, the Banking Commission. Surely, if this money is lying dormant and is available for exploitation by private concerns for their own profit, it is justifiable to urge that it be handed over to the State to be exploited on behalf of the people, the State being liable to any claimants who might turn up later. I do not want to pursue that matter further. The Minister asked for constructive suggestions in regard to the Bill. There is one—£2,500,000 that the Minister or the Government could take over and accept liability for without imposing hardship on anybody but the private banking concerns which are making profit out of this money.
On the Second Reading of this Bill, I said it was anæmic. I still consider that it is anæmic. We endeavoured to put some blood or life into the Bill and the Minister lacerated the Labour Party generally on that account. Senator Hayes epitomised the whole position when he said that the central bank could not do the things that we asked to have done but that the Government could. The Government, with a powerful central bank, will have an alternative to the private banking concerns. When a present or future Government attempt to launch schemes of social reform, they will have an alternative to the commercial banks upon which to draw. Heretofore, these commercial banks regulated the interest on the loans necessary for these purposes. We had an instance of that. Since this State was established, there was a flop in regard to one loan. The Government thought they could get money at a certain rate. The banks thought differently and the banks taught them a lesson. The Government could not get the money and, in the end, the Government had to go hat in hand to the banks.
The Senator misrepresents the position. It is not a question of going "hat in hand". The loan is underwritten by the banks and, if it is undersubscribed, the banks have to find the balance.
If the banks had to give their goodwill, there would have been more general public enthusiasm for the loan.
That is not so.
That is my experience and belief. The Minister thought fit to lacerate the Labour Party generally on their attitude to this measure. Does the Minister feel satisfied that he has a weapon or instrument to his hand which will be adequate to deal with the after-war situation? The world is at war, drastic changes are taking place, and we are faced here with the Central Bank Bill. It took weeks to discuss it in the Dáil, and a considerable time has been spent discussing it here. Is the Minister satisfied, or is anybody in the House satisfied, that we have here an instrument that is capable to any extent of dealing with the problems immediately confronting it? We will have to take drastic steps to meet the immediate situation—even the present situation—and our entire reliance will be, as usual, on the private banking concerns whose only interest is profit, and rightly so. We have still no alternative—though we have this Central Bank Bill—to the private interests of the commercial banks. I would say that we have just changed the name of the commission to the central bank, and I do not think that our labour has been well spent in bringing forth this measure.
Ní mian liom mórán ama a chaitheamh a caint ar an gcéim seo den bhille. Is maith liom go mór go bhfuil sé tagaithe sa saoghal go bhfeiceamaid an banc ceannais— Banc Ceannais na hEireann—á chur ar bun. Is fada le cuid againn teacht an bhanca seo. Tá dóchas ag a lán go n-eireóchaidh leis an mbanc rud foghainteach a dhéanamh ar son na tíre— agus is é mo thuairim-se nach dóchas i n-aisce ná dóchas gan úghdar é.
Chomh fada agus a théigheann an sgéal maidir le banc ceannais, is féidir linn a rádh gur féidir linn banc ceannais iomlán lán-chumhachtach a bhunú faoi'n mbille seo. Béidh na cumhachtaí riachtanacha ag an mbanc seo cinnte, ach ag an am céadna ba chóir a amhdachtáil go bhféadfadh seo bheith amhlaidh nach mbeadh na deiseanna ann don bhanc cheannais feidhm a bhaint as na cumhachtaí atá curtha i n-áithrid, faoi'n mbille, dó.
I just want to make a few comments on this stage of the Bill. In the first place, I want to express my satisfaction that the establishment of the long wished-for central bank of Ireland is about to be realised. A good deal is hoped for from this bank, and for my own part, I have every confidence that these hopes will not be disappointed. Senator Hayes and Senator Foran have suggested that there is not very much difference between the central bank that is envisaged under this Bill and the Currency Commission which it will supersede. I wish, respectfully, to disagree with them on that matter. There is a very great difference between the two institutions. Should the need for central bank action arise, we have here, as far as human foresight can provide it, an institution fully equipped to meet such need. Time and events probably will reveal certain weaknesses. Should weaknesses be revealed there is nothing to prevent our taking steps to remedy them. I am sure these steps will be taken. There may be a difficulty, notwithstanding the wide powers that are placed at the disposal of the central bank, in operating these powers. Should difficulty be found in operating these powers, then the fault will not be, I submit, in the central bank itself or in this Bill.
The central bank's work as far as I understand it will be done in a quiet way. The central bank will do its work in an unobtrusive manner, and my own opinion is that the more quietly and unobtrusively the bank fulfils its functions, the more will the people of Ireland have reason to be satisfied. There is little scope, as far as I understand central banks and their functions, for spectacular action. Indeed, I hope the needs or the occasions for spectacular action on the part of the Irish central bank will be very few and far between.
Economic stability and social progress are matters about which we are all concerned and rightly so—these are the things we all desire. Reference was made here the other evening to the results of revolutions, and the opinion was expressed that very little good ever came out of them. I am not going to discuss that point; but I would like to say that with regard to economic stability and social progress, if these conditions are to be sound, they must, in the light of inquiry and experience, emerge in a calm and steady manner.
Following the debates in the Dáil and in this House I was, at times, inclined to the opinion that a good deal of what was said was not said in all sincerity. If I had expressed that opinion I would feel now that I should have to apologise for it. Looking back over the debates and thinking as hard as I could over what I have heard both here and outside, I have come to the conclusion that what was wrong was that most of the people who took part in the discussions had not made themselves as familiar as they should with what might be called the three C's of the problem—they did not make themselves as familiar as I think they should have, if they were to take part in the debates, with such subjects as currency, credit and capital. There was also considerable looseness in regard to the use of terms like "wealth" and "savings". I think that is where the main trouble arose.
Some people seem to visualise the boardroom of the central bank as a kind of cockpit—with a small group of banking representatives ranged on one side, and a somewhat larger group of challengers ranged on the other. I hope such a board will never be constituted, and I hope the scenes which some people visualise will never take place in the boardroom of the central bank. A great deal will depend on the board of the central bank. I expressed that opinion on the Second Reading. The constitution of the board of the central bank is what is all-important. The qualifications for membership of this board will be, I hope, very exacting. I do hope though that not the least essential qualification for membership of that board will be a burning desire on the part of members to do all they possibly can to serve the interests of this country, not merely as a people, but also as a nation. I hope that the work of the board of the central bank will be characterised, every day of its life, by a spirit of harmony and co-operation, by a spirit of patience and constant vigilance.
Senator Douglas, on the last evening, mentioned the need for some kind of co-operative effort on the part of responsible people in this country to dispel some of the notions that have been propagated in regard to banking and finance generally. He instanced the notion that we are the pawn, in financial matters, of some outside authority. I should like, on this occasion, to endorse that appeal. Some of those notions, as far as I have been able to follow them, are not alone untrue and misleading, but I should say that they are positively dangerous, socially as well as politically. It might be no harm if an effort were made to dispel some of the notions that are current regarding what are called our external assets. It is quite true that much of those funds was placed abroad by the banks in the course of their business. It may be that the banks were over cautious in their efforts to secure liquidity for their assets, but, whether they were over cautious or not in that regard, in the light of inquiry I think reasonable people will agree that it is very hard to blame them for their action.
Taking the total of those external assets, it is quite true to say that the greater part of them was placed abroad not so much by the banks as by the Irish public. In view of the conditions obtaining in the past—the possibility of outside industrial powers being in a position to torpedo Irish efforts, and so on—it is very hard to blame the Irish public for placing their assets abroad, but, if the Irish public had the mind to do so, and if it had had confidence in Irish effort, then there is no reason why industrial development, and economic and social development of different kinds, should not have proceeded apace, notwithstanding any action taken by the banks.
I think, in fixing the blame, if blame must be fixed in regard to those things, that we ought to give up this policy of banker baiting; that we ought to give up this mad hunt for scapegoats, and, instead, let us face realities and fix the blame fairly and squarely. There is another thing which I think it would be no harm for us to remember and it is that, whatever we may think of the banks and of the public in the past, investment in this country was not neglected. I should not like to name any figure as to the value of home investments, but I think if the matter is examined it will be found that the amount of money invested in this country is far greater than the amount that has been placed outside it. We should also remember that the total amount of our external assets does not represent the amount of earned income that this country has placed abroad. The great bulk of our external assets was accumulated during the last war and in the immediate post-war years. My own conviction is that a great portion of those assets might be regarded as unearned increment. If the term is not too hard or too harsh in the case, they might indeed be regarded as undue profits made by the Irish people out of the difficulties of another people, but, whatever the sources of those assets may have been, they certainly have proved to be of great value to us in this country. In normal times, it can truthfully be said that the existence of those assets or reserves ensured our financial independence, in so far as any country trading with other countries can be financially independent. Should this country lose those assets, then we will very soon realise the truth of the statements I am making. The income from those assets has played no small part in enabling the standard of living in this country to be raised to and maintained at a level among the highest in the world. I agree that the standard of living is not, nor has it been, as high as I should like to see it. I might say it has not been high enough, but let us realise that, whatever its level may have been, it was and is certainly amongst the highest in any part of the world, even in war time.
I should like to agree with Senator Douglas that we should endeavour to dispel many of the ignorant notions that prevail. It is certainly a very ignorant thing to say that should these assets depreciate very considerably or be lost, it is merely a case of "devil mend the owners". Whether these assets be in the countries of the Allies, in the countries of the Axis or in neutral countries, should they be lost or suffer any serious depreciation, then every member in this community, even though it may be in varying degrees, will suffer as a result.
The piloting of this Bill through the Oireachtas, I think we will all agree, was not a very easy task for the Minister concerned. I should like to say for myself that I appreciate that whenever the Bill itself was discussed, the Minister showed a fine grasp of its various aspects, on many occasions very technical aspects. I think we would agree, too, that his patience must have been very sorely tried by the raising of so many issues not directly related to the Bill. I think, too, that it must have entailed no small mental and physical strain for the Minister to keep track of the many matters he felt called upon to treat of, in the course of the discussion. He had, I am sure, the sympathy of every reasonable Senator and of every reasonable Deputy. Now that this Bill, which in my opinion marks so important a step in our national and economic career is about to receive, as I believe it will receive, the assent of the overwhelming majority of this House, I should like to take this opportunity to congratulate the Minister on his work.
I should like to feel as optimistic about the benefits this Bill is supposed to confer on the whole community as the last speaker does. He welcomed it as a charter of financial liberty. He said that the long-looked-for Bill had come at last, and suggested that the Currency Commission was only remotely related to the body which this Bill will establish. He said that it would be an institution fully equipped to meet every emergency and every crisis that arose. One would expect that, in making such a statement, the Senator would point out some of the long-wished-for gifts that the bank would confer on the community or how it was fully equipped to meet every emergency. I should like now to ask the Minister to avail of the opportunity in replying to the debate, to tell us, seriatim, the great benefits that this Bill will confer on the community which do not exist already under the Currency Commission. What steps can the bank take to relieve an emergency? The Senator said further—and this is the key-note of the whole situation—that should difficulties arise in the taking of those steps, it would not be the fault of the central bank. He should have told us whose fault it will be, or whether it will be due to any flaw in the provisions of this Bill. Where would the fault lie, if not inherent in the bank itself? It must exist somewhere within the nation or outside it. If it be in the nation, he should have pointed it out. If it is in the structure of the Bill or if it is outside the nation, similarly he should have indicated it. He said that the central bank will do its work quietly and unobtrusively, and he believes that the best way to do such work is quietly and unobtrusively. I do not think anybody would suggest, as was mentioned here in the House earlier, that the board room of the central bank should be a cockpit with the different interests ranged on opposite sides, but the Senator did not make any attempt to indicate the character of the quiet unobtrusive work which he said the bank would carry out.
We, on these benches, have been attacked for not making constructive suggestions, but such constructive suggestions as were made seem to have had little weight with the Minister. He has, it is true, produced some amendments, but the suggestions made from these benches seem to have had very little weight with him. To our minds, this Bill could not affect the structure of our national economy to any appreciable degree, and could not be of any great advantage to the nation. Acting on that belief, we could not see that it was capable of much amendment while such difficulties as the last speaker indicated existed. To my mind these difficulties exist outside the nation, and I think this central bank can be a central bank only in name. I think it has not any of the primary functions we commonly associate with a central bank. Somebody has used the word "re-orientation" in connection with its function, but to my mind it lacks the main function of being in a position to deal directly with the national requirements, and it lacks the powers over currency and credit that such an institution should possess if the best interests of the people are to be served. The public will eventually demand a bank having these functions, but I do not think that even within the framework of the central bank contemplated by this Bill there can be raised such a structure as will meet all these national requirements.
If it contains inherently the framework of a true central bank then I think we have got one step forward, but I fail to see where it has within its framework the structure or basis of a true central bank. There is one hope, however. The Minister suggested somewhere that this was not the last word on banking so far as the State was concerned. I hope it is not the last word. Our grievance here is not, as Senator Foran said, against the banks as such. The commercial banks are doing their job in their own way. We do not ask them, and we cannot claim that they should be called upon to do the job of the nation. That ought to be done by the central bank. It is a lending bank, the lender of last resort. Now, I wonder do the commercial banks regard it seriously as the lender of last resort. It can pay currency to its London agent against every pound that it asks the commercial banks to lend, but it has first to pay currency through its London agent into another bank before issuing currency notes on the credit of the State. That I submit must be a roundabout process and must embrace paying into another bank all those moneys necessary for the issue of these currencies. That cannot be done in an emergency. It may take days and weeks to get through that process, and I cannot see how it is helpful.
Perhaps it is the ignorance that the Minister ascribed to some of the Labour members that obscures our vision on these points. We would be glad to have enlightenment. I should say that sterling is the crux of the whole situation. As long as we remain legally bound to pay sterling for every £ we pay the central bank so long, I submit, will we be in difficulties here. There is no power vested in the Minister to relieve the bank of its liability. If power were vested in the Minister to relieve the bank, even temporarily, of the obligation of paying sterling into another bank, then I should say he would have power to meet an emergency. That might be done by a permissive clause for the issue of currency on the credit of the nation without having first to pay sterling into another bank.
Leas-Chathaoirleach
It cannot be done at this stage of the Bill.
I am only giving reasons for the position we have taken up in regard to this Bill. I think our wishes have not been met. That would not be a complete satisfaction but it would be something to go on with. I suggest that it would confer great power on the bank and ultimately great benefits on the country, if the Minister were vested with the power, even temporarily, of relieving the central bank of the obligation of paying cash into a London bank for every currency note issued here. We did not see anything in the basic structure of the Bill that would enable us to put forward helpful amendments, except perhaps that one.
There are a few words I should like to say in connection with this Bill, and particularly with the statements made by Senator Baxter. As a representative of the agricultural community I would like to protest in the strongest possible terms against farmers being used by any political party or for any political stunt, either inside or outside this House. A couple of weeks ago we had a statement by the Leader of Senator Baxter's Party to the effect that if and when his Party returned to power they would give loans free of interest to farmers. That statement was followed by Senator Baxter protesting in the strongest possible terms in this House that no provision was made in this Bill for giving money at a cheap rate of interest to the farming community. If we had not such long memories we would probably be inclined to say that Senator Baxter, who is also a farmers' representative, but not a farmers' representative in this House, was a very good man, and that he was quite sincere in his statement and in his appeal for credit on easy terms for farmers.
But let us carry ourselves back to 1927, when the Agricultural Credit Corporation was set up by the then Government, by Deputy Cosgrave, and fathered by a Party of which Senator Baxter was, if not the most prominent agriculturist, one of the most prominent agriculturists. Deputy Cosgrave said time and again that he was not an expert on farming. I understand he is a farmer to some extent, but I am quite sure that when he has to deal with agriculture he would consult a man like Senator Baxter. Senator Counihan is looking at me frowningly, and perhaps I should also say he would consult Senator Counihan.
But between them they set up the Agricultural Credit Corporation, and in doing so they actually regulated by statute the rate of interest at which the money should be made available to the credit corporation. They stipulated by statute that the rate of interest would be 5 per cent. Incidentally, I think I am right in saying that they there and then regulated the price at which that money would be made available to the farmers. That was in 1927. The years that followed were 1928 and 1929, and I think I am also right in saying that the farmers then needed money and easy credit far more than they need it now. I am not saying that they do not need it now. They do need it now. I would go as far as Senator Baxter or anybody else to help farmers, but what I protest against is the use that is being made of farmers by people who themselves were largely responsible for putting them in their present position. While Senator Baxter was a director of the Agricultural Credit Corporation, I am not aware that he ever did anything whatever to lower the rate of interest. I have looked up his public statements here, there and everywhere, and I cannot find that at any time he made a public statement to the effect that farmers ought to be given money at a lower rate of interest than was regulated by him.
On a point of explanation, I think Senator Quirke was absent when I made my statement on that point. I do not think that he ought to misrepresent me.
Leas-Chathaoirleach
I have allowed Senator Quirke to speak on this matter because it seemed to be by way of a reply to something that was said by another Senator. But the subject matter seems to have very little at all to do with the Fifth Stage of the Central Bank Bill.
I should be very sorry to be out of order and I submit to your ruling. I merely wanted to point these things out. I am not disputing what Senator Baxter has said, but rather am I, as a representative of the agricultural community, protesting against farmers being used by political stunters inside or outside this House.
It seems to me that nearly every speech being made on this stage is made because the speakers have read the Short Title instead of the Long Title. Many people have felt that there was some extraneous, external, artificial, automatic machine that could be invented to solve everybody's difficulties and make life better than ever before in history. In every case, to this completely notional scheme, they have attributed the words "Central Bank." I think that much of that is due to reading the Short Title instead of the Long Title. I admit that it takes longer to read the Long Title, but Senators who wish to make speeches should read it. In general, though not in every detail, every speech has been irrelevant, on this stage. Therefore, I would suggest that, if any other speech is to be made on this stage, the speaker should follow the reading of the Long Title and keep within the ambit of it.
In reply to Senator Fitzgerald's statement, I do not think the Minister should be debarred from replying to statements made here.
Leas-Chathaoirleach
That is a matter for the Chair.
Business suspended at 6 p.m and resumed at 7 p.m.
I suppose it would not be too daring to assume that the Seanad will agree to the passing of this Bill to-night.
You will carry it whether we agree or not.
I am glad to have that assurance from the Senator. That being so, I think that, without presumption, I can say that we shall have passed an important milestone, not alone in the legislative history of this State but also in the financial and economic history of this State. Without claiming overmuch for the measure we have been discussing and in which so much interest has been displayed by all sides in this House and the other House and by the public outside, I can say that there are powers contained in the measure that can affect the economic, financial and social history of this State for many years to come. As I said more than once, it is not a revolutionary measure. Nevertheless, it is an important measure. Important new powers are contained in the Bill that rightly, carefully and prudently used, as I am sure they will be by the board to be set up, can materially help to improve the social and economic conditions of our people generally. That much, I think I can claim, can be done under the measure as it stands.
Revolutions are sometimes necessary in States and countries. We have no necessity for them in this instance. We have seen revolutions in our time that, probably, were necessary, but in matters so vitally affecting the rights of our people as finance, credit and the whole economy of the nation, revolutionary methods are not the wisest methods to remedy evils that are not of a fundamental character. We have social evils in this country. We are not alone in that regard. Is there any country in which there are not social evils of one kind or another? In many countries, there are much graver social evils than there are here and they exist to a wider extent. Where there are very grave social evils, revolutionary methods in economics might be defended. Here, with the situation as we know it, we can go as near to curing the social evils which, we know, exist around us, by prudent reform as any country in the world. I do not think that, if I lived to be as old as Methuselah, I would ever see this State without the necessity for some social reform. In that sense, I hope that we shall all be reformers as long as we live.
I would like to be regarded as a reformer, in this matter even. I think I am a reformer, but not a revolutionary. Not that I would object to revolutions for good objects at proper times. I think that the social evils that we know exist in this country to-day—the part of the country that we have control over — cannot be completely remedied, because that would be too much to expect. That is an ideal to work for. But to expect that we would, with any measure of monetary reform in this House or in the Oireachtas, cure all these social evils, is something that we should not ask the people to expect of us. There are unemployment, poverty and destitution—some— but not anything like what I was conscious of when first I entered public life a long time ago. Any man, even the youngest man or woman in this House, must admit—and I can speak for the City of Dublin at any rate— that social conditions have changed vastly in the last 30 to 40 years. We have, even in the short history of this State since it was founded, raised the standard of living and of the people very considerably. You do not now see the awful tatterdemalion people walking the streets or the lanes or alleys of our towns that were a common feature of our capital city—without talking of the country towns and villages—30 to 40 years ago. That is creditable to everybody in the State, to every citizen and public representative who had any part in bringing about the laudable change that has taken place in the people's standard of living and social conditions. But it is not right, I suggest, for people to encourage the public to believe that any kind of central bank or any kind of a constitution of a central bank is the organisation further to reform and lift up the social conditions of our people.
I hope that all in this House interested in the subject of social reform —and I think mostly everybody is, some more vocal on the subject than others, but all interested as Christians and as charitable men in the welfare of their fellow-beings—will work with all their power, energy, ability and intelligence to improve the social conditions of our people, and make our country a more prosperous and happier place for everybody to live in.
All I claim for the central bank in that connection is that it is a useful instrument in the hands of a Government, a useful instrument that may be not alone useful but essential in times of crisis. Without the central bank, in the crises that may occur when this war comes to an end, or perhaps before it, any Government here would be without the help of a very valuable instrument to control the financial, economic, and generally the monetary affairs of the State and of its people. It can, prudently used, assist quite materially to ward off dangers and difficulties that are almost certain to come upon us, arising out of the probably big changes, economic and financial, that may result from this war, as they resulted from the last war. We were then without a Government, and we were subject to a Power that was not particularly interested in our social or monetary welfare. We were a very small item in the sphere that they had to deal with after the last war. We have a national Government here now for the greater part of the country—alas, only for the greater part of the country—but we have it, and in addition, we have the machine that will be, I hope, set up in the Bill, and it can be used—and I am sure I may take it, will be used— not alone for the benefit of the farmers, but for every other section of the community. It will not be used for one section more than for another, but for all sections and for the State and for the community as a whole, for their benefit and their greater happiness and prosperity.
I would like to emphasise the fact that no comprehensive solution of social problems can be expected purely from monetary manipulation. Monetary action alone cannot offset, and has not succeeded in any country in offsetting the other forces which operate on the economic system. Central banking can make its contribution towards solving the monetary aspects in a way best suited to the nation's economy, but we would be foolish to expect it, of itself to bring about a Utopia here or indeed anywhere else.
Agricultural credit is a subject that many people are interested in now, and some are not interested in it for the first time to-day. Senator Counihan rode his hobbyhorse as gaily this afternoon as he did ten years ago or more. I am interested in agricultural credit too. I do not think it is true to say to-day that agriculture is starved for want of credit. There was a time—and there may come a time again—when that would be true. I think it is a gross exaggeration for Senator Johnston or Senator Baxter to say that £100,000,000 could now be usefully used in agriculture.
Not now—over a long period, was what I said.
As Minister for Finance, I am vitally interested in the welfare of agriculture. I emphasised before, and I repeat, I hope without boring the House, that it is fundamental to the welfare of our whole economy that agriculture should be prosperous. I should like to see it prosperous, but I have not yet had it proved to me that there is an urgent need at the present moment for large sums in credit to agriculture. Senator Baxter wanted to know what will satisfy me. There was one body which privately examined into the matter, and the report I got from them was that the case which was attempted to be made there, as to the demand for credit to be given in a certain way, was not proved. There is now this new commission on agriculture. I have asked that that body should take this matter up as first business, and let us know their views with regard to the necessity for credit. Those people know a great deal more about agriculture than I do. They are men whose lives and interests are mixed up with agriculture, and if they satisfy me that a reasonable sum is required —Senator Counihan suggested in his speech here the other day a figure of £5,000,000; I do not think that is an unreasonable sum; I think if £5,000,000 was urgently needed to-morrow for agriculture it should be got, and got at a reasonable figure—I hope it will be got at a reasonable figure. I listened with interest to Senator Counihan and Senator McGee this afternoon. Senator McGee, speaking with feeling and with force about the position of agriculture, admitted—if I did not misunderstand him—that there is no such urgent need now, but that after the war there would be, or perhaps before that. As I say, I listened with interest to his feelingly expressed denunciation of those who had offered charity to the farmers; they did not want charity. Senator Counihan said the same. That is interesting from those two gentlemen, considering the recent speech made by Deputy Cosgrave in Cork. What was that but charity, charity handed out very generously at the people's expense, for, I am sure, a mean political purpose.
Charity is something you do not pay back.
It is something for nothing.
If the farmers get loans, they are going to repay them.
Speaking for this Government, I am prepared to go as far as any man can, prudently using the people's money. We will ask the people to pay for it if it is proved to us that the farmers cannot pay all the cost of that money. If it is proved to us that the farmers want money and cannot pay all the cost of it, we will ask the taxpayers to bear part of it for the sake of agriculture, and, in that way, for the sake of the nation.
Senator Johnston said that the board of the central bank should be nationally minded, and by that he meant agriculturally minded. I am with him there. Every man in this house who has the welfare of this nation at heart must be of the same mind. I think that is enough about agricultural credit. I am quite prepared to speak on the subject at any time, anywhere, because I believe it is a vital subject. I do not know that I need follow the involved Biblical allegory of Senator Johnston. I am not as well qualified as he is to quote the Bible, I am afraid. That is my loss, I am sure. I do not think I am as good a preacher.
Question. The Minister is doing very well.
The Minister has been most successful.
I do not know whether I can even claim to be one of the leaders of Parties that he referred to as claiming Papal infallibility. God knows, infallibility of any kind, Papal or otherwise, is the last of my thoughts.
The Minister is too modest.
There are too many of my own mistakes on record against me. I have not been in public life, and a member of all sort of public bodies, making pronouncements that are on record, without putting my foot in it sometimes. I have done it, I am sure, as often as anybody else. There is no claim to infallibility there. But I am not, and the Government is not putting either one or two feet in it in asking this House to accept, and I would say to accept even enthusiastically, this measure that is before us to-day. It is a valuable measure; it is a useful measure; it is one that will be productive of much good. I have no need to do what Senator Johnston suggested I did, that is repudiate my political past; speaking not for myself but speaking of the movement and the Party with which I have the honour to be associated, that Party has too honourable a record, too successful a record, a record that is not equalled during this period by probably any Government in any country I know of for successful achievement for the State and nation. I have not a bit of hesitation in standing up anywhere, particularly before my own constituents, the people who are entitled to judge, and telling all my sins of omission and commission. If I did not tell them myself, they will be told for me, so I will make sure to tell my own tale——
Putting the best face on it.
——putting the best gloss I can, of course, on my own sins of omission and commission, but telling all the story, the good and the bad. This Government has a proud record of achievement for Ireland, a glorious record, one of which is that we are sitting here in peace in this legislative Assembly, in this House and in the other House. That would not have been possible but for this Government, led by Eamon de Valera. It would not have been possible without his wise forethought. That is the truth. A newspaper stated the other day that the whole country stands for neutrality. Of course it does, but it did not, and all members of political Parties did not, in the first year of the war. They do now, more credit to them, but it would not be possible for them or for us, were it not for the wise and prudent statesmanship of de Valera and his Government.
It would not have been possible——
Senator Hayes said: "Change the Government; that is the way to improve the fortunes of the country." That is his view but it will not affect many people now, or in the course of the next 12 months, if we must have a general election. I have my views and Senator Hayes has his, and I shall meet him and his colleagues anywhere in the City of Dublin, put the two sides of the case to the people, and abide happily by the result. "Change this Government; that is the way to improve the fortunes of the country". Nous verrons. Well, we shall see. The country will be the judge and we shall abide by its decision. Senator Johnston was critical about our industrial and economic past. I want to emphasise that we stand for every item of it. We shall go before the public with that record, political, social, economic and industrial, and I, at any rate, have no doubt of the result. Senator Hayes and I stood on the same platform for long enough.
Long enough is right.
It takes Senator Foran to hit the nail on the head every time. We had the same ideals then and the same policy to achieve them. We parted company. I found I had to modify my views, admittedly, in different directions. I could not get all I wanted.
None of us could.
No.
The Minister is getting quite a lot of latitude in his speech.
Leas-Chathaoirleach
Even the Chair cannot get relevancy at all times.
I beg your pardon, Sir. I know what I want now definitely and it has not changed very much, if at all, from the days when Senator Hayes and I were together on the one platform with the one policy. He knows where the change of direction came. My direction and objective are still in the same line—a straight line, wherever this may now be. Senator Baxter and some other Senators were rather critical of me for praising the banks. Senator Foran also objected to my praising the banks. He said that I praised the banks unduly. I praised the banks for having safeguarded the people's savings. I hardly went beyond that. I gave them high praise, as strong a praise as I could for doing that successfully. I, at other times, said other things about the banks, that they might have done other things, but I do say they are entitled to praise for safeguarding the money left to them for their care, very prudently and carefully. They did not lose it, at any rate. I need not go into the matter in detail, but we know what happened in France and in Germany, due to the war, in the United States, probably due to reactions after the last war, and in every direction that one can mention all over the globe. There can be no comparison between what happened in these countries and ours. At any rate, the banks safeguard the people's money and, having regard to their prudence—they may have been too prudent for some people; if they had been more enterprising it might have been better, but then we might not have the money now—I think I did not give too much praise to the banks for their achievements in that direction. I think they were entitled to everything said about them here and in the other House.
I am glad to know that, despite the strong objections he has taken to certain sections of the Bill and the constitution of the new bank, Senator Sir John Keane has stated on behalf of the banks that they are prepared to co-operate and do their best to make the new organisation successful. I did not expect anything else from him or his colleagues. I know they held strong views in regard to certain sections of the Bill upon which I felt obliged to insist. I was not able to meet him, except very slightly indeed, with regard to the many amendments he and his colleagues elsewhere put down. I feel satisfied that the helpful co-operation and good service that the commercial banks and their directors gave from the time the Currency Commission was set up to date, will be continued and expanded under the patronage of the new organisation. I believe that much we are assured of, and will get, I think, even with enthusiasm from the banks and bankers under the new system.
Senator Baxter thought I should be more courageous. I think we went very far in this Bill. I have studied central bank constitutions. I do not pretend at all to know everything about central banking. I do not, but I did a fair amount of hard work on this Bill since I was given the post of Minister for Finance, and out of the knowledge I have gained studying constitutions, reading books on central banking, credit, monetary reform, and a variety of matters of all kinds and comparing the constitution of one central bank with that of another, I think ours should be regarded as a progressive constitution. Senator Baxter thinks it is too conservative. Perhaps Senator Sir John Keane, although he has not said so in so many words, thinks we are much too extreme. Senator O Buachalla expressed the view that we have taken the wise course. I think we have. I said at an earlier stage that, of course, this is not the last word in central banking. It is the first word, and for many years to come there will be new ideas, new thoughts on this subject arising out of the work of this organisation. Probably it will not be long in existence until the board comes along and says to us: "This Bill is defective; we need power here and there." They will come to the Minister if they find the machine is inadequate and point that out. I hope we will come to the Oireachtas and get the additional power that is necessary. Certainly this is not the last word on central banking. When I and many others of us are dead and gone probably there will be amending Bills coming up here for discussion. A Senator said we could do with a bit of inflation.
Senator Johnston talked the other day about controlled inflation. There is no such thing as controlled inflation. If you once start allowing inflation, or even permit it without encouraging it, you cannot stop it. There is no machinery known to man that can successfully stop it until the burst comes. That is my experience and the result of my reading. There is no such thing as controlled inflation. We are trying to control it here, but there is a certain amount of inflation going on all the time. We cannot avoid it, and all the machinery the mind of man can conceive here at present, could not stop it. That is the fact. We will do our best to try to control it for the benefit and welfare of the whole community. If it once gets going, or the brakes were taken off, then God help the poor. That would be the upshot of it.
How much better off will the rich be?
They could survive for a good while according to the measure of their resources. They will be able to survive for a time, but it will be limited according to their resources. But the poor who have only their wages to live on from week to week, would be very soon in the bread lines. That is the reason for all this legislation by order relating to salaries and wages that Senator Foran and his colleagues so very strongly object to. I hope that I am not complacent or self-satisfied. I hope that as long as I am in public life I will not be properly and truthfully accused of that. As long as there are social ills to cure, I hope that unless I go out of public life, or get put out of public life, I will never fail to lend a hand, voice or pen to help to spread new ideas, new suggestions and new thoughts that may help to improve the lot of our less well-off brethren. I hope at any rate that I have not suggested here in these discussions that all was lovely in the garden, that we had nothing to do but sit down and let the machine move along quietly, without trying to get it well oiled and move along without disturbance. I hope that I and others in my position who have responsibilities will not be truthfully charged with complacency and self-satisfaction. It would be an ill day for public life if that could be charged truthfully against me or any of my colleagues.
Senator Foran was deeply interested in the question of unclaimed bank balances. The Senator wants to know why the Banking Commission did not deal with that. The Senator had colleagues of his own Party on that commission. Why did they not raise the subject? They had the responsibility as well as every other member. If it was not raised there whose fault was it? I do not know what the amount of unclaimed bank deposits is. I have no idea except a very rough one. I asked for information the other day and the only information I could get was that a Select Committee was set up by the British House of Commons, I do not know how many years ago, but long before this State was set up. That Select Committee established that the amount for the United Kingdom of Great Britain and Ireland was about £3,000,000. That is not a very big sum, but it was the total for the United Kingdom of Great Britain and Ireland according to the information I received. We have asked for and tried to get information from Great Britain and the United States. Recently we have been making inquiries as to what is being done in these places about unclaimed bank deposits. We know the matter is under investigation in Great Britain, but so far as we are aware in these two countries nothing has been done.
I do not say nothing should be done here. The Research Department might be able to get some information. The first thing would be to find whether the sum is worth going after. I do not know whether it is, because although there are unclaimed balances there are nearly always claimants turning up 50 or 60 years after they have been lying unclaimed. Of course, as has been pointed out, if the sum had been made available to the State for credit purposes, the State would be responsible for the unclaimed balances. At any rate it does not seem to be as serious or anything as serious as the Senator would suggest. I do not know that I need say any more on that matter.
Senator Cummins questioned the powers of the bank and said that it was nothing but a glorified edition of the currency body which is already in existence. I suggest to him again to get another copy of the Bill and to get a copy of the Currency Acts and look at them. In Section 7 alone, which I will just quote, the Senator will find wide powers of national importance that do not appear in any of the Currency Acts. I know the Senator would not wish seriously to misrepresent the facts, except in so far as is done in ordinary course of political debates. But if he looks again at the Bill and looks again at the Currency Acts, he will find that there are powers in the Bill that are very similar to the powers in many constitutions of central banks. The Senator suggested that this Bill contained none of the primary functions which we generally associate with central banks. That is not true. Many of the vitally important functions that central banks generally possess are contained in this Bill. It is not true to say that those functions the Senator has in mind—the primary and important functions in other central banks—are not here. They are not all here, but many of them are. Senator Foran and Senator Cummins objected to the way I criticised the Labour Party.
Oh, no.
The Senator did not object to that?
He would like more of it.
Well, I do not think it is necessary to-night, but any time I find it necessary again I will administer the same kind of castigation and I think it will do the Labour Party a lot of good.
Provided it is relevant.
Provided it is relevant. Relevant or not, I think it would do a lot of good. What I object to in Senators Foran and Cummins, if I may say so respectfully, was not the amendments put up. They were not the constructive amendments I hoped to get, but there was one important amendment which enshrined a new kind of philosophy for a central bank and which wanted the central bank to do things I maintained it could not do. It enshrined a certain philosophy and I think that amendment was the most important one to the Bill, from the larger political philosophical aspect and not on questions of machinery. That amendment was confided to a Senator member of the Labour Party to recommend to the House. The Senator did not produce one solitary argument to back up that amendment. That is what I object to. The Senator fell down on the job. That amendment merited a first-class debate.
I am afraid the Minister was tripped.
The Senator cannot get away with that. There was a 25-minute talk and not an argument used to back up the amendment. That is mainly what I object to. What I said on the occasion may have been a bit strong, but probably it will do good. I would like to see the Labour Party acquit themselves well. I would like to see every Party that has an ideal to expound put it up and debate it, get their biggest and best guns to orate on it. They did not do it this time, and that is my complaint against them. There will be other opportunities and, as a result of the lambasting I gave the other day, probably we will have a better Labour Party and better arguments, if they have anything of value to bring to the House.