Seanad Éireann debate -
Thursday, 20 Nov 1947

Vol. 34 No. 13

Finance (No. 2) Bill, 1947 ( Certified Money Bill )—Second Stage (resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mrs. Concannon

This Supplementary Budget has been accorded a wholehearted welcome by the Opposition, for the rather paradoxical reason that it is supposed to be a rather unpopular Budget, losing votes for the Government candidates in the by-elections from which we have just emerged and causing a further reduction of Government support in the general election coming shortly. It may be that the added tax on the pint, on the cinema and on tobacco did influence voters who did not stop to think that their pennies and sixpences were going to relieve the harassed bean a' tighe in balancing her weekly budget. I hope women will recognise that this is a woman's Budget, a homemaker's Budget, and that they will come out in their thousands in the general election to give support to the Government responsible for it. As a woman, I take the opportunity of thanking the Minister for what he has done.

For my own part, I welcome the Budget for other reasons. When certain Bills were going through this House, increasing the remuneration of judges, civil servants, Deputies and Senators, I and many others felt that it was like a counsel of despair, that the Government had given up in despair any hope of controlling the cost of living and had set a sort of riderless horses' race between rising costs and rising salaries that could end only in disaster. Therefore, I welcome the Budget as the beginning of an honest and realistic effort to face up to the problem of the cost of living. It does not go very far, but the Minister has entered in spirit into the homes of the poorest of the people, to whom tea, sugar and bread are fundamental necessaries. Because he did that and asked the cinema-goers and the smokers and those who enjoy their pint —I am not saying a word about that— to help to pay the cost of reducing the cost of living, and because he has done it in such a realistic spirit, I heartily welcome the Budget.

Another reason why I welcome it is that it seems to me to be an attempt to get a balanced economy. I do not speak here as an economist. We have had very interesting speeches in this House from professional economists, but it seems to me that a balanced national economy is not merely a matter of imports and exports. We have heard of the disastrous gap in our economy in these respects, but there is something worse. An unbalanced economy comes when a nation prefers luxuries to necessaries and that is the position into which we were rapidly getting. If we are to put this nation on its feet, we will have to go back to the old rather Spartan conception of life—hard work, saving, sparing, feeling that luxuries are not necessaries but are earned only after we have provided for the necessaries. That is the whole outlook I see in this Budget and for that reason I welcome it and congratulate the Minister on having introduced it.

To my mind, however, the Budget does not go far enough. In addition to these fundamentals—bread, tea and sugar—there are a great many other things that press very hard on the ordinary family and increase the cost of living. There is the cost of clothes. During the emergency, the British met that cost by subsidising clothing and making utility clothing available. I do not know whether that could be done in our case or not, but certainly something must be done, as the cost of clothing is so high that people who need new clothes cannot afford to get them and so cannot pass clothes on to the people who have no money to buy clothing at all. Therefore, the high cost of clothing hits the poor very hard and is one of the things which should be looked into.

We have heard a good deal about the 5 per cent. on the purchase of houses. There is, however, a bigger tax, that is, the auctioneer's fees. I think that in Northern Ireland it is only after a certain figure that you get 5 per cent. Here it seems to apply at any figure, whatever figure the property reaches. If that is so, it would be a very good idea to tax auctioneers after a certain amount or else reduce this tax after the auctioneer's fee had reached a certain figure. I feel that this is a homemakers' Budget and a woman's Budget and that a woman should express her views on it.

Mr. Douglas

I did not take part in the debate yesterday and do not propose to do so at any great length to-day. I have a good deal of sympathy with the remarks made by Senator Johnston, though I am not sure I agree entirely with him. I also have a great deal of sympathy for the views of Lord Longford regarding the relative value of the cinema and the theatre, though I am not sure that I would be as enthusiastic as he is for any kind of theatre or music hall anywhere in the country.

As far as I am concerned personally, the Budget suits me all right. I do not smoke very much and the Minister will not get a lot out of me as far as liquor is concerned. I have not been in a picture house for at least 12 months, perhaps longer. So far as what some Senators call necessaries and what Senator Mrs. Concannon regards as luxuries, the Budget does not hit me. But if the Minister had taxed books to a prohibitive figure, he would have taken away something which some people call a luxury but which to me is almost a necessary. It is, perhaps, an exaggeration to say that life would not be worth living if one could only eat bread and drink tea, the things on which there is a reduction, and if I could get no books, the things which interest me in life.

The reason I make these remarks is because I recognise that any kind of subsidy, if it is not to be inflationary in its character, will have to be met by taxation. I am not quite sure that the objects which the Government apparently had in view, judging by the other speeches in connection with the Budget, are going to be extended in exactly the manner in which they have adopted them. I think it was the Minister for Finance, if not it was one of his colleagues, who said some time ago that the cost of existence was cheaper in England than it was here, but that the cost of living was cheaper here. I was astonished that his Department did not change the name of the figure to the "cost-of-existence figure" because, of course, that is all it is. It is not a cost-of-living figure in the distinction between living and existence. If we are going to get the people, especially the people who are called the working classes—I do not like that term because I think it is misleading—to give maximum production in this country, we are not going to get it simply by saying to them "we are adjusting the cost-of-living figure so that you cannot get any increase, but we are going to tax the things that you think are necessary to make life comfortable, interesting and easy." As I have said, the form of taxation chosen by the Minister is, for my part, very satisfactory. We have, however, got to recognise the fundamental fact that you will not make people satisfied on the bare logic of a cost-of-living figure based as it is at the moment. The problem is not an easy one. It will not be easy for this Government or for any other Government, and it will always be a matter for a difference of opinion.

I certainly am not going to argue, as some Senators did, that the pint is a necessity of life. I have often been surprised and puzzled to find that it seems to mean an awful lot to certain classes of people. I am still more puzzled at the pleasure which many people seem to get from going to the pictures. That is even more surprising to me than that the pint should be a necessity of life. I think there is a very grave danger that if you simply go on what Senator Mrs. Concannon regards as hard work, austerity etc., you may fail to achieve what, after all, is the first essential step towards the ending of inflation, and that is the maximum amount of work and of production in the country. We have to strike a middle line, and I think that, in wisdom, it is the line which should be taken. I am giving that personal point of view which is, perhaps, a little different from that given by any other Senator who has spoken on the Bill.

There is another matter which, perhaps, is not immediately concerned with the Budget, but it arises, to some extent, out of the British agreement and out of present conditions. I believe that a great real of time would be saved in the Department of Finance and in the Department of Industry and Commerce, and I am perfectly certain that a great deal of expensive time would be saved by persons engaged in business—I am equally certain that a great deal of time wasted by the banks would also be saved—if the Minister could, at an early date, issue a general list giving an indication of the articles for which foreign currency would not be obtainable. It might be difficult to say that dollars are obtainable, and then give a list, because the total amount of dollars available would, of necessity, be limited. It might be the same with other currencies. I think it should be possible, however, to indicate in the case of dollars, that there was no use applying for them, at the same time giving a general list which could be fairly well understood, as well as a list indicating that there was no use in applying for French or Belgian francs.

The position in business for a considerable time past has been that very good firms in the United States and in European countries have been offering goods here, but the position is that the buyers in the various firms have no way of knowing whether they can get currency or not. The buyer in a firm fills in a form and sends it to the bank. He says to himself that he probably will not get the currency but that he might as well apply. He is afraid that if he does not do so a competitor may get the currency for that particular article. A great many of these applications have to be rejected. If I understood the speeches made in the Dáil a much larger number still will have to be rejected. Not only does that waste a lot of time in the banks but it causes a good deal of aggravation in business. What is far more serious, it aggravates important people who want to trade with us. They can understand that we cannot buy because we cannot get dollars, but what they cannot understand is why they should get orders and then be told six or eight weeks later: "We are sorry we have to cancel the order". It may be said that firms should not place orders tentatively, but, as a matter of practical politics, that is the only way it can be done. If you do not place an order tentatively and you then happen to get the currency, it means that you have to make a second application and that causes far more trouble, so far as banks are concerned.

I suggest to the Minister that he could save a lot of unnecessary time if, at the earliest possible date, he could make an authoritative statement on this matter. I recognise there may be exceptional circumstances, but as far as general trade is concerned there should be no exceptional circumstances. I would urge on the Minister to consider this. If I were looking at this from the political point of view I would tell him not to do it. It aggravates an enormous number of people who then blame the Government for it. I am looking at it from the practical point of view, and I think there is a lot in what I say.

Mr. O'Dea

I agree entirely with Senator Mrs. Concannon that a great deal of demoralisation has set in in this country. People can see evidence of that in the different towns. Drinking, particularly amongst young people, has assumed desperate proportions, even in places near towns. I know places where, in the old days, the farmers used to rise at dawn and go to bed at dark. They were very hard workers and produced a tremendous lot of food for the country. Now, those men complain that their sons spend most of their time in the evenings in the public houses: that they remain in them until all hours with the result that they are not able to get up in the mornings to do their work. These are the kind of people that must be taxed and that are being taxed under this Budget.

I do not think that much money will be realised from the tax on whiskey or porter. I think the opposite will happen because the consumption of those drinks has been practically given up by the poorer people in some parts of the country. They have reduced their consumption to a minimum, so that they will pay less in the future because they are drinking much less than they did. Apart from the tax on drink, we have increased Customs and Excise duties, an increase in the stamp duties and in the entertainment tax. The extra road taxes are expected to bring in £200,000.

Is it not clear that when all the sums budgeted for are added together they will enable the Government to reduce the price of flour by 1/- per stone, and also the price of tea and sugar which are essential commodities for the people? It is the essentials that we must look to. If they can be obtained, then the country can be said to be prosperous. It will be all the better if people have to give up luxuries, and for that reason I welcome the Budget.

Senator Mrs. Concannon rightly said that it was the bean a tighe who has to provide the goods needed in the home. It surely will be a great pleasure to her, especially if she has a big family, when she finds that the sack of flour will cost her 19/3 less than it used to, and that the price of tea and sugar has also been reduced. It will also give pleasure to her if she finds that her husband is spending less on drink and is working harder on his farm. This is a temporary measure and it proposes to give the reliefs indicated. I think it will be admitted that most people were drinking too much and were spending too much of their time in the public houses.

I noticed that, during the by-elections, it was the consumer who got all the sympathy from the Fine Gael Party, but we see from to-day's newspapers that its sympathy has now gone to the publicans, and that it is meeting a number of them to-morrow to sympathise with them on their losses. At the elections the Fine Gael Party sympathised with the poor man who had to pay an extra 3d. for his pint, but its sympathy is now with the publican because less drink is being consumed.

As regards the essentials of life, this Budget will bring relief to the poor people. The extra charge for beer will make very little difference to the man who goes to the public house say once a week and drinks two or three pints as against the great relief the Budget gives him if he has a big family. The Budget, I think, is a very good one. There are some things in it which, I think, are unnecessary, and that perhaps go a little bit too far in the line of taxation. Senator Baxter shed tears for the poor man who cannot afford to go to the cinema at night, but he forgot to mention that the 4d. seat in the cinema is not liable to any increase in tax. That is the seat which the poor man and his family will occupy. If the scale of charges is examined it will be found that the theatre owner would be almost as well off if he were to charge 8d. instead of 1/-. In order to get in the greater number, he will reduce the price from 1/- to 8d., and so on down the list. For the extra penny he gets, he will find it much better to get the greater number into his theatre by reducing the price of the seats. Senator Baxter need have no uneasiness on that score because the poor man is left where he is, so far as the theatre is concerned.

Senator Baxter has spoken a lot about the recent agreement, but that has as much to do with the present Bill as the flowers that bloom in the spring and it is very difficult to see how he can get these matters into a debate on a Finance Bill. I do not intend to try to follow him on that irrelevant matter.

With regard to the taxation imposed, I dislike the increase in the stamp duties. I do not object to the increase in respect of foreigners who purchase estates in this country. The tax is big —25 per cent—but I approve rather than disapprove of it. I would say, however, that the stamp duty on conveyances will have a bad effect in preventing the purchase of houses and lands. The £500 limit is left as it is, but it should be borne in mind that what was worth £500 in 1910 would now sell for at least £1,500, and I am sorry the Minister did not leave the stamp duty as it was, in respect of sums up to £1,500. Senator Sir John Keane mentioned that it would also affect civil servants and others of limited means who had agreed to purchase houses. These people would have arranged the purchase of a house for £1,500, having gone to the Civil Service Permanent Building Society for a loan or to a bank, but when they find there is an additional £75 in respect of stamp duty on the deed, it will become a very big consideration and, possibly, will be the last straw which will prevent the completion of the purchase.

I am thankful that a certain relief has been given in the matter of family settlements. I did imagine that the words "voluntary dispositions" were not sufficiently wide and that they would exclude cases where a son, on getting a transfer, would have to support and maintain the assignor, or perhaps pay sums of money over to his sisters. I understand, however, that the words are to be contrued as including these amounts and I therefore make no objection to it. On the whole, apart from these objections I have mentioned, I think the Budget a very good Budget in the circumstances of the times through which we are passing, and I welcome it for that reason.

Mr. Summerfield

A lot of ground has been covered in the debate on these finance proposals, but to me—and it is a feeling shared by the community generally—its outstanding disadvantages is its terrible permanency. Obviously, when subsidies had to be provided to reduce the cost of living, the money had to be got somewhere, and on the whole the Minister is to be congratulated on the wide spread of his net, because he has brought home, by these new taxes, to the man in the street the seriousness of the position which, I think, the average man did not at all appreciate. It would be very easy, and it has already been done, to make a case on behalf of the interested parties concerned with wines, picture houses and so on, and I should be pardoned if I made a case against the very much increased taxation on motor-cars; but I do not think we should look at it in that way. I think we should rather hope that the Minister in his wisdom might indicate that he regards these things as what we all hope they are—temporary expedients to meet a temporary difficulty.

Those of us who are connected with industry on a large scale know better than the average man how serious a problem was confronting the country because of the ever-increasing demand for increased wages to meet the ever-increasing rise in prices and something had to be done to curb that vicious spiral. This is a well-thought-out scheme to reduce the cost of living to the person most concerned, the average housewife. We have heard arguments and discussions as to whether the husband of that housewife is not even worse off now than before because of the increased price of his drink and because, when he seeks entertainment in his leisure moments, he has to pay more for that entertainment. These, however, are not the necessaries of life, and it was the cost of the necessaries of life that was pressing hard on the average man's wife.

In passing, I would say—various people have already explained their own cases with regard to their own special interests—it seems unfair, and I leave it at that, that motorists should be called on to bear a substantially increased road taxation at a time when, because of the circumstances of the age, they are restricted in the use of vehicles for which they will have to pay this increased taxation. That, I think, is a reasonable statement to make, and if, as has been hinted in the other House, further restrictions on motoring are envisaged, I earnestly urge on the Minister to prevent, so far as he can do so, that further cut being anything like a substantial cut. I am convinced that it is only for some political reason that there is any rationing of petrol at all. There are plenty petrol supplies available, but the economy of England at present has dictated that the Government there, for reasons best known to themselves, should pretty well abolish what is wrongly termed private motoring. We should not of necessity take a leaf out of their book. I do not intend to dilate on that point at this stage, because I may have something to say about it on Committee Stage.

On the whole, I feel that the Minister is to be congratulated on the businesslike way in which he has tackled a very awkward problem and I believe that, if the nature of his new taxes has done nothing more than to bring home to the masses of the people the seriousness of the position, which I do not think they really appreciated before, that fact alone would justify a Budget which, in detail, can be criticised. I intend at a later stage to indulge in some of that criticism.

Minister for Finance (Mr. Aiken)

The reason for the introduction of the Budget and the proposals contained therein were explained by the Taoiseach and myself in the Dáil. Senator Baxter, however, made the allegation that the Budget was "due to reasons of which the Minister had not spoken." I once read a book on the political economy of a Polynesian island and there the people were governed, not by reason, but by hoodoo. If the people did not do the right thing, according to the opinion of the chieftain, the "bogey man would get them." We have tried always, and we are still trying—and we hope to be successful—to explain the reasons for any particular line of action that the Government takes and I think it is very foolish for Senator Baxter to think that he or any group or combination of groups can govern an intelligent people by hoodoo. Senator Baxter says that this Budget is "politically unpopular". What does he think the Government's duty is?—To produce popular budgets even though they may affect adversely the public interest?

It is the Government's duty to make financial and other proposals from time to time, which are in the best interests of the people, even though they are difficult to explain. But, at least we have this assurance, that, having honestly arrived at a policy in the best interests of the people, we can hope to convince all the intelligent people of the country that it is a proper policy. To date, and for some number of years, the people who are intelligent enough to support our policy have been in the majority and I do not think that their intelligence has decreased. Even though no individual likes to pay more for articles, or likes to pay more in taxation, I think they will accept a general policy when it is shown to them and discussed with them and when they become convinced, as I think they will become convinced, that the Government in producing this, what Senator Baxter calls "unpopular Budget", was doing its duty and that it would not have been doing its duty had it produced what he would call a popular Budget.

The action which the Government has taken in this Budget has been followed since by a number of governments in other countries. It is a type of action that any honest economist, knowing his job, would propose, but it is a type of action that governments that are not prepared to face up to their responsibilities, or that are not secure in their parliamentary majorities, would not take.

One of the greatest difficulties in the world to-day, one of the things that is bedevilling the whole situation, is that in certain countries governments have not run their affairs upon sound economic and financial lines. And when I say sound economic and financial lines I mean exactly what I say and I would not accept as sound economic or financial lines policies that would have been dictated by certain economists ten or 20 years ago.

A man can live at the standard of his own earnings. He can live at a higher standard for a time if he sells his capital assets or if he gets somebody to give him a loan. But, over a long period of time, an individual can only live at the standard of his own earnings and so it is with a community or a nation. To enable us to keep any given standard of life, we have certain resources. We have our annual output of goods and services, capital assets situated in this country, external assets and, potentially, we have foreign loans. If it can be avoided, the normal individual who has some thought for his family will live within his means. He will not sell his capital; neither will he get into debt. He will endeavour out of his annual income to meet his annual outgoings and perhaps put by a few pounds, if he can. If our community are wise, they will endeavour to act on those very same principles. We would not, even if we could, dissipate either our internal capital assets or our external capital assets for the purpose of current consumption, nor would we enter into borrowing externally for the purpose of increasing our current standard of living unless our current standard of living was something that was altogether too low from a health point of view.

In the years during the war, circumstances compelled this country to add to its capital assets abroad. We were not able to import all the goods that we desired to import to give our people their normal 1938 standard of life. We were not able to import the raw materials for farm and factory and the machinery for farm and factory that would have enabled us to provide remunerative employment for all our people. As a consequence certain numbers of our people went abroad and their earnings, in so far as they were not spent, accumulated to the credit of the community in the form of bank holdings and other holdings of, largely, sterling assets. We were not able to get during the war, currently, full payment for the goods we exported. We built up, as other countries built up during the war, foreign, external assets. Since the war has ended we have been doing all in our power to get in the capital assets, the raw materials that will enable us to increase output of farm and factory and give remunerative employment to our people at home.

Recently we entered into negotiations with the British to see how best they could co-operate with us and how best we could co-operate with them to increase our production and that we might give them further supplies of the goods of which they were in short supply. One conclusion that the government came to was that if we could get certain raw materials and machinery from Britain we would save on our dollar expenditure. Senator Baxter, in the course of the debate, said that we were going to cut our dollar expenditure to the bone. It is no harm to have a look at the exact amount of United States dollars that the Government proposes to spend during the nine months ending next June. In order that Senators may realise what exactly is meant by the number of millions of dollars we propose to spend, I will give them figures of our dollar expenditure in past years. In 1936 we spent 3.3 million pounds' worth of United States dollars. In 1937, we spent 3.1 million pounds' worth; in 1938, 4.8 million pounds' worth. That was pre-war. Now in 1945, we spent £5,000,000 worth and in 1946, 11.3 million pounds' worth, and for the first nine months of 1947, £25,000,000 worth. For the next nine months we propose to spend about £12,000,000 worth of dollars plus £6,000,000 worth that we earn by our visible and invisible trade with the United States. That is a total amount of about £18,000,000 worth of dollars and if we cannot get about £2,000,000 worth of sterling wheat we may have to spend up to £20,000,000 worth of dollars in this period.

Mr. Baxter

Does this apply to United States dollars?

Mr. Aiken

United States dollars only. I have been referring all the time to United States dollars. During the last nine months we had to spend a very large amount of American dollars on wheat and coal and on other commodities, a large amount of which we used to purchase in England for sterling. We hope as a result of the agreements that were reached in London to get the coal we require in England rather than in America and to save dollars and also to get certain other raw materials and equipment from them that will also save dollars. We also hope with the coal we get from England and the machinery and raw materials to step up our output from farm and from factory. Apart from the raw materials and equipment we can get with the United States dollars and with British sterling we hope also to get, wherever they can be bought, the raw materials and equipment that will increase our output. I think that if the goods are available at a reasonable price the £18,000,000 or £20,000,000 worth of United States dollars that we propose to expend in the next nine months, that is, the nine months ending 30th June, will enable our people to import the essentials of life and at the same time import a fair amount of capital machinery and raw materials. No country in the world to-day, with the terrific hardships that large numbers of peoples are suffering, wants to live at a millionaire's standard even if they could do so. I think that in the present circumstances of the world, if we are in a position to import the basic essentials of life and the basic essentials for increasing our production our people should be satisfied.

Business suspended at 6 p.m. and resumed at 7 p.m.

Mr. Aiken

Before the adjournment for tea, I dealt with the question of our United States dollar expenditure for the nine months ending June 30 next year, and I stated that, having regard to the state of most countries in the world, I felt that we would be able to have in comparison with them a reasonable standard of life. Even if we could at the moment translate our external assets of all kinds towards the purchase of machinery, raw materials and finished goods, I think we would be doing a disservice to mankind if we used our power of purchase and took from the world pool more than a reasonable share of consumable goods which are in such short supply. I think also, if we were to buy, or to attempt to buy, more than our reasonable share of raw materials and equipment we would simply help by our competition to drive up to a still higher level the small supplies of these things.

One of the difficulties in the world to-day is that prices of all kinds are tending to rise. We have taken certain steps in order to offset the 10 per cent., or thereabouts, rise in the cost of living over the last 12 months. Other countries are faced with still more difficult problems. Anybody attempting to buy out of past savings, from current earnings or out of the proceeds of loans everything that is still available for sale, would bring about as a result an intensification of the competition, which is driving up not only prices of consumable goods all over the world but also of capital equipment and raw material. It may look to our people, who take a general view of the world situation, and who do not examine the details, as if the Government here, in the proposals they made in the Budget, were cutting down in a ruthless fashion, the people's expenditure, or threatening to cut down, on essentials.

In the last couple of weeks, since our Budget was introduced, other Governments have been examining their situation, examining rises in prices, and inflationary price pressures, and those of them that are stable, that know their own minds, and that are in a reasonable political situation to do what is right by their people in their long-term interest have taken, or are about to take, steps somewhat along the lines that the Government here proposed on October 15. About October 15, or a week or two before that, having the cost-of-living index figure, which was calculated from figures collected on August 15, we saw that commodities here and the cost of living had risen by 10.8 per cent. in the previous year, that is, from August, 1946, to August, 1947. We made proposals to collect a certain amount of money by taxation, £4,750,000, and to add to that another £1,000,000 which would have been surplus in the year's Budget and apply the total amount to the reduction of the price of certain essential articles of food. By those means, we were attempting to forestall a demand for increases in salaries and wages which would have resulted in a further increase in prices and a consequent demand again for a further increase in wages and salaries.

We attempted to break the circle, by collecting £4,750,000 and adding it to the £1,000,000 out of an expected Exchequer surplus, to reduce the cost of living by about 13 points and ensure in that way that the people in the wage and salary-earning class could, if their family conditions so necessitated, buy the essentials of life cheaper and avoid paying the cost. Take a wage earner who has been accustomed to giving his wife a couple of pounds weekly to run the house. If there is a family of four or five children, they will save by the subsidies on flour, bread, sugar and tea, somewhere between 3/- and 4/- a week; and if the father wants to leave that saving with his wife to take care of his family, he can, by avoiding paying anything more for his drink and tobacco, ensure that his family will be no worse off than they were on the wages they received last May.

In other countries, during the same period that our cost of living rose by 10.8 per cent., the cost of living rose very much more. The President of the United States indicated that he was making certain proposals to Congress to deal with the situation over there in which the wholesale index had risen by 40 per cent.

Mr. Baxter

Since when?

Mr. Aiken

In a year. In order to show that our situation here is not just standing alone in the world, I propose to quote President Truman's words, as reported in the London Times of November 18th:—

"To-day inflation stands as an ominous threat to the prosperity we have achieved. We can no longer treat inflation with spiralling prices and living costs as some vague condition we may encounter in the future. We already have an alarming degree of inflation. And, even more alarming, it is getting worse.

Since the middle of 1946, fuel has gone up 13 per cent., clothing prices 19 per cent., retail food prices 40 per cent.; and the average cost-of-living items has risen by 23 per cent. The cost of living is still climbing. In the past four months it has risen at the rate of 16 per cent. a year.

Wholesale prices are rising, too. They affect every industry and trade and they are soon translated into retail prices. Since the middle of 1946, wholesale textile prices have gone up by 32 per cent., metals by 36 per cent. and building materials 42 per cent. Wholesale prices, on the average, have gone up 40 per cent."

As Senators are aware, the President of the United States indicated that he was going to put before Congress a programme for dealing with the inflationary situation there. His first proposal, as he indicated in the speech from which I have quoted, is the restoration of controls on hire purchase and the restraining of inflationary bank credit. The second is the regulation of speculative trading on grain and other commodity exchanges. The third is extension and strengthening of export controls which under present legislation are due to expire next March. The fourth is extension of the Government's present authority to allocate transport facilities and equipment to ensure delivery of goods for export. The fifth is the passing of measures to induce the marketing of live stock and poultry at weights which would mean conservation of grain. The sixth is empowering of the Department of Agriculture to expand its programme of encouraging conservation practices and the authorising of measures "designed to increase production of foods in foreign countries". The seventh is authorisation of allocation and inventory controls of scarce commodities basically affecting the cost of living and industrial production. The eighth is the extension and strengthening of rent control. The ninth is authorising of consumer rationing on products in short supply basically affecting the cost of living. The tenth is the reimposition of price ceilings on critical products, as well as the reimposition on wage "ceilings", although Mr. Truman said "I believe there will be few occasions" when the imposition of wage ceilings would be necessary.

Now, in that particular country you have a situation in which production, in terms of dollars at any rate, has more than doubled since 1939. Out of over two hundred billion pounds worth of national income there is a net export of about eight billion pounds worth of goods, and yet in that country, which is so fabulously wealthy, which has such a strong tradition of industrial enterprise, and which has all sorts of skills, knowledge and trained population they find themselves to-day in the position when the President proposes that these drastic measures should be taken in order to cure the situation existing there.

Everyone knows how our people here react against Government control and how the Government has, on all occasions, to prove beyond the possibility of doubt that the control is necessary before it is accepted with any sort of goodwill. But the American people are, if anything, even more individualistic, and for a President to propose measures such as these to Congress within a year of a presidential election, indicates, at least, that he believes he can prove to the people that it is in their own interest that such measures should be adopted.

Another country which, like ourselves during the war, accumulated a large volume of external assets was Sweden. Sweden's stock of gold and foreign exchange at the end of 1945 amounted to 650,000,000 dollars worth. At the end of this year of 1947, her gold reserves had fallen to 92,000,000 dollars worth and her holdings of United States' dollars, Swiss francs and other hard currency had practically disappeared, so that her liquid balances had decreased from around 650,000,000 dollars worth to 92,000,000 dollars worth. As Senators are aware, at the end of the war Sweden was in such a strong position in regard to her production and was earning such large amounts for her timber and other essential commodities which she exported, that she considered it right at that time to appreciate her currency. In July, 1946, she appreciated her currency to the extent of 16.6 per cent. As I pointed out to Senators before, an appreciation of a country's currency is, from one point of view, a subsidy on imports, and a tax on exports. However, in recent weeks Sweden has taken stock of her situation and has not only viewed the deficit in international trade which caused that big decrease in her external assets, but viewed the trend of the cost of living which increased very greatly during this last year. In order to cure the situation, she has taken the following steps: imports since early September have been limited to essentials—food, fuel and raw materials; the buying power of the people is being reduced and higher taxes are being put into effect this year.

Excise taxes on tobacco, liquor and other luxuries may be increased again. The Government is aiming for a big Budget surplus to drain off money. A determined effort will be made to prevent further wage increases. New building and plant expansion are being deferred by Government edict. Paper use is being cut. Assets of Swedes in hard currency areas, including the United States, have just been requisitioned by the Swedish Government. Private holdings of currencies as well as securities are to be taken over by the Government. Tourist expenditures abroad are severely restricted and Stockholm sources report, according to the paper in which this appears, that measures even more severe may be expected and these may include much heavier income-taxes and complete control of investment. That is a second example of a country which was neutral during the war, which, like ourselves, extended its external assets during the war, which has a reasonably stable Government and which was forced by the situation to take the steps I have outlined, steps which are more or less along the lines of those the Government propose for dealing with our situation.

Another country, a short account of which I should like to give, is Canada. Canada during the war changed from being, so far as I remember, a debtor nation to being a rather large creditor nation, and at the end of the war her United States dollar reserve stood at £311,000,000 worth of dollars. That figure is related to January, 1947. By the 13th of this month, the £311,000,000 had decreased to £11,000,000.

Mr. Baxter

Did the Minister say that Canada was a debtor nation before the war—to Britain or to the United States?

Mr. Aiken

My recollection of the figure for British investments was about £500,000,000, but the Senator should not tie me to that figure because I have not read for a long time. The United States investments in Canada were very much more. There are some very big organisations which have plants there, like Ford, General Motors, the General Electric Company, many of the oil companies and so on. At any rate, Canada's external assets have fallen from £311,000,000 to £11,000,000 in the past nine months. Prices there, too, have risen very steeply. Between December 1946, and January, 1947, they rose by 14.4 per cent., which is 4.4 per cent more than our prices rose in a year. Canada, by the way, as Senators will remember, just before the Breton Woods Agreement came into operation, the last date by which a nation could unilaterally appreciate or depreciate its currency, appreciated its currency by 10 per cent.

Canada has been taking stock of the situation, and, according to an evening paper report of November 18th, sweeping emergency proposals to correct Canada's foreign exchange position, including a total ban on imports of many luxury and nonessential products, were announced by Mr. Douglas Abbott, Canadian Minister of Finance. He announced these major steps as follows: (1) an immediate total ban on imports of motor cars, jewellery, radio sets, refrigerators, washing machines, furniture, sweets, novelties, and typewriters; (2) the completion of negotiations for a 300,000,000 dollar loan from the United States Export-Import Bank; (3) a limit of 150 dollars on the amount of money Canadians may take in U.S. currency for pleasure travel; (4) special provision will be introduced at the next session of Parliament for a subsidy of seven dollars per fine ounce on gold production—I think the official price of gold in Canada is 35 dollars per fine ounce; (5) quota restrictions on imports of fruits, vegetables, leather goods, clocks and watches, games, toys, sporting goods and smokers' supplies; (6) an excise tax of 25 per cent. on sporting goods, outboard motors, pleasure launches, firearms, oil burners, motor cycles, musical instruments, cameras, radio sets and most types of electrical appliances. The Minister said that these restrictions were unavoidable and temporary. The new measures became effective at midnight, November 17th.

I have given these examples of countries which have stable Governments and which would be regarded by the normal country in Europe as fabulously wealthy, in order to show the steps that they have been forced to take in order to deal with what is a general world problem of inflationary price pressures, and I did it in order to emphasise what I said at the outset, that Senator Baxter need not be looking for some hoodoo on the Government, some sinister secret force that compelled them to act in the unpopular way in which he says they acted, but that if he opens his eyes, and if any sensible and intelligent citizen of this country opens his eyes, he will see that the action that the Government propose here has been taken by other stable Governments to right a somewhat similar situation in their own countries.

Senator Lord Longford said one very true thing. Talking about the increased price of goods, he said: "more goods is the way to cheap goods," and if we want to get cheaper goods than we have at the moment without this cumbersome way of collecting taxes in order to reduce their price, the only way to get them is to produce more. That is our problem here and it is the problem in other countries. The problem here is somewhat more difficult owing to our history than in long developed countries like the United States of America or Canada or some of the industrial countries of Europe that have a fair proportion of land.

I hope that our people will realise that the steps the Government have taken were the only sensible steps that could be taken by a Government which realised its responsibilities and was prepared to act up to them. We could, of course, have got this money by an increase in the national debt, by an increase in bank credit or Government debt rather than have taken what Senator Baxter declares to be the unpopular steps of raising it by taxation, but that would not have been fair to the people. That is a type of step that is taken by Governments who either do not know or who knowing are not prepared to face the political consequences of doing the right thing. In some countries it is impossible for the Government that is in power for a few weeks to take these rather drastic steps that have been taken by us in this Budget. I do not like mentioning individual countries but it is no harm to point out, and I do not think any person would resent it, that the political situation was so unstable that the various Governments that have been responsible for the government of France in this last couple of years have endeavoured to get out of their economic difficulties by an increase in the volume of money rather than by an increase in the rates of taxation. The result has been that prices have risen catastrophically in France. In one week about a month ago the Government added a few billions of francs to the volume of money and the next week or so prices rose 25 per cent. Prices are still rising in that country and the economic situation has reached such a stage that I must say that I am glad I have not either to think out or to apply the correct remedies. All we can do is to hope that France, with whatever assistance she can get from outside will be able to weather the storm.

A proposition has been made recently by a number of speakers—one speaker in the Seanad made it yesterday or to-day and it has been made by speakers in the other House and by speakers outside—that the only way to cure this situation and to make our people happy is to reduce the cost of living by 30 per cent. right away. Senator Johnston dealt with that yesterday and I, before he spoke about it, was making my own calculations. From the calculations I have been able to make, to carry the recommendation to reduce the cost of living by 30 per cent. into effect, would require somewhere between £54,000,000 and £60,000,000.

It has been indicated by some speakers that that money should be found, not by taxation, but by an increase in credit, an increase in currency. If this country wants to go the same way as France, that is the right way to kick off but, if it wants to keep on its feet and to keep the volume of money somewhat in relation to the volume of goods, the 30 per cent. decrease in the cost of living will have to be met by an increase in taxation to the tune of somewhere between £54,000,000 and £60,000,000.

Now, there is no use in telling me that we can meet that amount of money by dropping the purchase of a Constellation or even by abolishing the Army. Drop the Constellation and abolish the Army and you still have £50,000,000 to meet. I think that the people who make that proposition should tell the country by what methods they propose to meet that amount of money. Some people may suggest that we should leave the Army alone and even buy that Constellation, but that we should get the £54,000,000 or £60,000,000 by soaking the rich. Let us see what we could get by soaking the rich.

Mr. Baxter

Did the Minister say that that statement was made in this House?

Mr. Hawkins

Yes, it was.

Mr. Aiken

In 1943 the rich with over £1,000 per year had £21,000,000. If you come down and take the rich with between £500 and £600 a year, they had £15.4 millions and the rich with between £250 and £500 a year had £23,000,000. So far as I can see, in order to get money by soaking the rich you would have to regard a man as being rich with £5 a week and take it all from him. That is, you would have to take into the Exchequer the total income of everyone with £5 a week or over and when the rich were soaked thus they would be all on the dole and you would have to tax the poor in order to keep them alive. Again, I think that Senator Lord Longford and the other Senators who said that the proper way out of our difficulties is to produce more goods are correct. The proper way to get cheap goods, an abundant supply of cheap goods, is to produce more goods. Senator Sir John Keane had one suggestion to make in order to make the Budget balance. It was an old favourite of his, to reimpose the excess corporation profits tax. I have discussed this matter here and in the other House on many occasions and I do not want to go over all the ground again but I think that Senators should suspect that the excess corporation profits tax was abolished for a good motive, for the motive which was stated, that was, as an incentive to increased production. I think that Senators should be convinced that this was the real motive when they see other countries similarly circumstanced to ours doing the same thing.

A Labour Government in England that has not a great love for capitalism announced the abolition of the excess corporation profits tax in England before we came to that conclusion here. I remember that one of the excuses that was made for blaming my predecessor in regard to the excess corporation profits tax, and for blaming the Government as a whole, was that they connived at greatly excessive prices being charged because they were getting back three-quarters of it in excess profits tax. I believe that it would be a bad system of taxation to reintroduce on its own merits and it certainly would be a disastrous system of taxation to introduce it here when it is not in operation in our neighbouring country and in the portion of our own country which they still have under their control. In regard to stamp duties, Senator Sir John Keane and Senator O'Dea said that the increase to 5 per cent. was hard on people who were looking for a house. Now I hold strongly that it is not the purchaser who will pay the 5 per cent. The increase in stamp duty will have the effect of decreasing the amount of money which the vendor will get. If we can think of an auction in progress when this new duty came into effect and can imagine that in the auction room there were several people who were there to compete for a house or a piece of land, the price at which the house would change hands would be determined by how far the man with the most money would be prepared to go. When the tax was 1 per cent. and one man had £2,020 and another £1,900 and another £1,800, the man with the £2,000 would have another £20 to keep in view to pay in stamp duty and the price he would pay would be £2,000. The man with the £1,900 would be out of it. If we imagine the new tax coming into operation, the 5 per cent., the man with only £2,020 would have to find another £80 to cover his stamp duty on the house he was buying for £2,000, so that he could not give the £2,000 and his last bid would be about £1,920. Again the man with the £1,900 and the man with the £1,800 are out of it. Their last bid would be £1,900 and £1,800 respectively, less 5 per cent. tax in each case. The competition is not altered as between purchasers but what the duty will do is to ensure that the vendor will get 5 per cent. less than he otherwise would get. That is not to say that the price of houses may not go higher.

I did not make the proposal in the Finance Bill of a 5 per cent. tax on our own citizens and 25 per cent. on foreigners in the hope that it would have the effect of reducing the price of houses. I made the 5 per cent. proposition in order to sweep in for Exchequer purposes 5 per cent. of the very much inflated prices that houses are fetching at the present time. Everybody knows that houses are making three or four times their prewar value. Where they are bought by citizens resident here the Exchequer gets 5 per cent. of the inflated value, while the 25 per cent. on non-nationals will have the effect of putting our own people in a better competitive position when they go to auctions which foreign buyers attend. Just as the proper way to get cheaper goods is to get more goods produced, so the only way to get cheaper houses is to get more houses.

The Minister for Local Government made a proposal to me a couple of months ago, to increase the subsidies for houses built by owners for their own occupation and, after the usual tussle about the amount, the Government approved of the amount that the Minister for Local Government announced in his new Housing Subsidy Bill. I believe that the Bill will have the effect, if building materials are available, and if a sufficient number of workmen are available to use them, of reducing the price of houses. The prices at which houses are going now, new and old, are ridiculously high. Old houses are making almost twice and sometimes three times their replacement value.

Mr. Baxter

That applies to small farms too.

Mr. Aiken

It does. Let us take one thing at a time. New houses are changing hands at present in some cases at nearly 100 per cent. more than actual building costs. I am a believer in the profit motive. I cannot see how anybody could control the price that builders will get for new houses without stopping that particular activity. I know that the position is very hard for a man who undertakes to build a house, and that he has to be up early and late trying to get bits of materials and equipment in order to build. However, he is getting very well recompensed, and the fact that there is a profit in that particular line of business is attracting more people. I hope that competition will help to reduce the margin of profit to a reasonable level.

Suggestions that have been made from time to time, that the Government should take direct control over the price of new building seems to me not to be workable. Supposing the Government fixed the price per cubic or square feet, say £2,000 for 1,200 square feet of flour space, if 100 or 1,000 or 50,000 came forward to buy at £2,000 how could the Government determine who should get the house? I think it is better to let competition go on between purchasers and between speculative builders, rather than to take the extraordinary steps that would have to be taken in such a situation. Meanwhile, the Minister for Finance will sweep in 5 per cent. of the builders' profits in stamp duties. In addition, he will get a bit from income-tax and if it goes too far, from supertax.

A complaint was made about the price of beer. The Leader of the Opposition in the Dáil complained about the price of beer. He also strongly complained of how unfair it was to licensed vintners not to give them the same gross percentage on the increased cost of stout and porter. I pointed out that to give the licensed vintners the same gross percentage would mean another extra penny on the pint of stout. I stated in the Dáil, and I state here again, notwithstanding some letters that have appeared in the newspapers that, according to calculations made by my officials, and checked by me, from statistics furnished by representatives of the licensed vintners, the profit on the pint of stout stands at slightly over 3d. The profit of the man who bottles stout is also 3d. Of course, that is the gross profit, and, as I emphasised in the Dáil, out of the 3d. on a bottle of stout or 3d. on a pint gross profit, publicans have to meet overhead expenses, staff, licence fees, rents, heating, broken bottles and all the rest. I think that is a reasonable profit. Any Minister would be foolish to accept the proposal made by the Leader of the Opposition to allow another penny profit on the pint.

Senator Johnston spoke of the increased taxation on cars and suggested exemption for cars owned by clergymen. The normal clergyman that I know uses an eight to ten h.p. car on which the extra tax would be from 1/6 to 2/6 a week. If we accepted the suggestion that clergymen's cars should be exempt from the extra couple of shillings a week, we would undoubtedly have a suggestion that doctors, nurses and other deserving people should have their cars at lower taxation than the rest of the community. It would be very difficult to operate and I do not think the benefit to any individual who might get it would be worth the cost to the State in adminstering such a scheme.

Senator Johnston made a diagnosis of our particular financial and economic troubles here and pointed out that they were not due to internal inflation, rather that we have been in the past few years importing inflation from other countries. That statement is true. The Government debt over this last six or seven years here has increased by not more than about £17,000,000. Against that increase in Government debt, we have to offset the increased assets which the State owns or against which it has a claim. We have all the capital development of the Electricity Supply Board, the telephones, the very large and useful capital invested in Bórd na Mona, in the air companies, in improvements in our airfields, and so on. During that period, not only did the Government debt not increase except when covered by an increase in State capital assets, but we had no fiduciary issue here. Every pound note issued by the Central Bank was covered by a £1 of external assets or gold.

The third source of an increase in the volume of money is the commercial banks. Their accounts do not, or did not, show up to a year ago that there was any increase in their advances or investments within the State. Rather they showed the contrary. During the last year or so, the commercial banks' advances have gone up to a certain degree, but to a large extent in any event the increase in advances is offset by increases in stocks held by traders and others.

That survey of the possible sources of inflation here shows that domestic inflation has been nil—that is, if we are to define inflation as an increase in the manufacture of money. There has been a slight decrease in our capital assets, particularly during the last year or so, and our external balance has shown a deficit. In normal circumstances, if our supplies of goods had not been so short, if our shelves had not been so bare, a deficit in the balance of international trade might be regarded as an inflationary trend and would, if it existed for any length of time, prove an inflationary trend. However, I think that, on all grounds, we can say that there has been in this country little or no inflation.

There has been, however, as President Truman pointed out, an inflationary trend in America. Indeed, I was looking at some figures of the increase in bank credit that occurred there during the last 12 months and if one takes into account the balance of goods that were exported and adds to it the increase in bank credit that was advanced for hire purchase, for the purchase of real estate and for advances for personal expenditure, it is no wonder that wholesale prices have risen there by about 40 per cent. in these last 12 months. But we were very badly affected here by that increase. The 40 per cent. increase has meant that we have had to pay more for our wheat, for whatever raw materials we imported from that country and for whatever finished goods we imported. I trust that the steps taken by the American Government will have the effect of reducing prices in America, not only for the good of the American people but for the benefit of our people as well.

In regard to U.S. Government financing, as far as I can see there was no increase in the volume of money due to Government action, because the Government debt did not increase. Rather the Government had a Budget surplus and paid off a certain amount of State debt in the United States during this last year. In the neighbouring isle during this last couple of years, the Government debt increased by £2,200,000,000. As far as I can see, about £810,000,000 of that came from the banks and the rest came from the general public, or is represented by the expenditure of dollar loans or the increase in sterling balances held in London by other countries. That particular inflationary trend, as everybody can see from the papers, has been worrying the British Government. They took steps in their May Budget and in their recent Supplementary Budget to correct the situation. In addition to that, they have drastically decreased their rations and very drastically increased their exports. They took away the goods they were making for their own people, in order to export them to redress their deficit on their international payments. We trust, too, that the British people and the British Government will be able to correct the balance of international payments not only again, for the good of the British people, but for the good of our people here, too.

I would like to point out to Senators that the amount of money which this State is spending on subsidies is very large indeed. At the rate at which we have been subsidising over the last five months of this year, it will cost the Exchequer £15,000,000 should it continue for a full year. And, by the way, I think that £15,000,000 is enough to spend on subsidies without spending £54,000,000 or £60,000,000. It is hard enough to get £4,750,000 out of the taxpayer and the man who drinks an odd pint. I certainly would not like to have to impose the taxes that would be required in order to get £54,000,000 or £60,000,000.

It is interesting to note what the unsubsidised price of certain commodities that we are subsidising at the moment would otherwise be. The 4 lb. loaf at the moment is selling for 1/-. Its unsubsidised price would be 1/7½. Butter is selling at 2/8 per lb., and its unsubsidised price would be 3/2. Sugar is selling at 4d. per lb., and the unsubsidised price would be 6d. Tea is selling at 2/8 per lb., and the unsubsidised price would be 4/10. In addition to the subsidies that I have mentioned, Senators are aware that we are also subsidising fuel, fertilisers, seeds and lime. The total cost of our subsidies, in a full year at the present rates, would, as I have said, amount to £15,000,000.

Senator Summerfield asked me was this Budget to be a permanent feature of our national life. All I can say is that I trust it is temporary, and that the £15,000,000 will disappear by a decrease in the cost of production: that, as Senator the Earl of Longford has said, we will get more goods in order to have cheap goods.

Mr. Baxter

Senator Summerfield and his people will help you to get prices down.

Mr. Summerfield

I will do as much as the Senator.

Mr. Aiken

I hope that Senator Baxter will help and will not be growling when we are giving the greatest price in the world for wheat and asking us to give another few shillings. Another way that Senator Baxter could help is this——

Mr. Baxter

It is to the foreign country that you give the greatest price and not to the home producer.

Mr. Aiken

——that he should try to realise that our people who remain here to work get a higher standard of life here than they would get in England—and if he would say that.

Mr. Baxter

Why do the others go?

Mr. Aiken

That would help to keep our people at home, and it would save them the expense of going over to see the El Dorado that Senator Baxter paints of England, and then after a bit coming back.

Mr. Baxter

Are they coming back?

Mr. Aiken

A great number of them are coming back and, if it were not for the ordinary human hesitancy to admit of having been fooled by Senator Baxter, a lot more of them would come back.

Mr. Baxter

I am not sending them. The Minister is.

Mr. Aiken

The Senator and his friends have done their utmost to paint the conditions in this country as being the lowest Kaffir conditions in the world, and those of the working people in England as representing the highest standard of life in the world.

Mr. Baxter

We repudiate any such suggestion.

Mr. Aiken

The Senator can repudiate it, but the people of the country know well that that is a pretty accurate statement.

Mr. Baxter

The people who are going must be the judges.

Mr. Aiken

I do not want to repeat again the difference as between wages here and in England. The artisan gets 4d. an hour more here than he will get in big English cities such as Liverpool and Manchester, and even a penny an hour more than he will get in London. He has less income-tax to pay; he can get a packet of cigarettes here for 2/-, even yet after this swizzing Budget, while he would have to pay 3s. 4d. in England; he can get a pint for 1/1, instead of 1/7 in England, and the pint that he would get there would be pretty watery stuff at that. He can get a good meal of meat here, instead of the small slice of meat that he would get in England.

I believe that, by and large, this country is in a good position to increase its production if our people will realise that it is a country not only worth fighting for but one in which they should remain at home working. There are ample opportunities for men of ability and men of initiative to start out in business here: to go to work and get a few pounds together so that they may make a start on their own. People did that here before. They started to work for somebody and then when they had some money saved they were able to start work on their own. There are opportunities here for every man who has energy and initiative, for every man who is prepared to study and train himself in order to be able to do a productive job of work. I trust that our people will do that. If they do, then we can get moving together so that goods will become so plentiful that they will fall in price. In that way a lot of the taxation that we have to impose in order to collect money to reduce prices by the payment of subsidies would be unnecessary.

Mr. Baxter

I do not want to take the Minister over a number of the questions that I raised. He did not answer practically any of them. I raised a question which was raised in another form by Senator Douglas. I asked especially with regard to our purchases in the Argentine. I asked what that money was spent on, and if the Minister would indicate the quantity of maize that was purchased or that was available or likely to be available. Senator Douglas raised a question as to what purchases Irish citizens could not make with dollars.

Mr. Aiken

With regard to maize, as the Senator knows the purchase of maize involves a more difficult question than the provision of foreign currency, hard or soft. It cuts into the purview of the International Emergency Food Council, the international organisation dealing with food allocations.

Mr. Baxter

How much have we purchased?

Mr. Aiken

I am not a walking bluebook and I cannot answer the Senator's question.

Mr. Baxter

I asked the question yesterday.

Mr. Aiken

I know, but I have other work to do besides looking up the answer to every question the Senator can fire at me in half an hour. We have spent some money on maize. It has been imported and a certain amount has been distributed. In regard to dollars, we will announce from time to time if there are things which are definitely prohibited on the dollar list. We want to interrupt business as little as we can, and, as every Senator knows, one very difficult question to answer is what one can import even if one had the dollars. We have told business men to go ahead with the ordering of machinery from America, from Sweden, from Switzerland, from Britain and from various other countries, and they come to us for currency saying: "We have been promised this in six months' time", and it is sometimes 18 months and two years before the machinery is obtained. It is impossible to answer the Senator's question with any accuracy, and I propose to delay making any statement about it, until we can do so with some security.

Question put and agreed to.

Committee Stage ordered for Wednesday, 26th November.