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Seanad Éireann debate -
Wednesday, 26 Mar 1952

Vol. 40 No. 14

Central Fund Bill, 1952 ( Certified Money Bill )— Second Stage.

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

This Bill naturally follows the usual form, the form which was adopted in 1922, and which has been adhered to ever since. It authorises the issue of money from the Central Fund to cover the total amount of the Supplementary and Additional Estimates for the current financial year which were not already covered by the Appropriation Act, 1951, and it also authorises the issue of the amount of the Vote on Account for 1952-53. It also authorises the Minister for Finance to borrow, and, by a special provision, authorises the Bank of Ireland to lend the necessary money which the Exchequer may require under these two heads.

The House is aware that Dáil Eireann has already granted a Vote on Account amounting to £33,140,000 odd to enable the Supply Services to be carried on until the individual Estimates have been passed and the Appropriation Bill has become law. From the White Paper which has already been circulated to members of the Seanad, it will be seen how this total sum has been made up. The Supply Services for 1952-53 total £94,871,623. The amount which was originally provided for these services for 1951-52 was £83,036,048. It has to be remembered, however, that the Supplementary and Additional Estimates agreed to during 1951-52 amounted to £11,352,690. The increase on the revised figure for 1951-52 is, therefore, £482,885.

The larger increases over the original Estimates for 1951-52 occur in the following Votes: Industry and Commerce, £3,857,000; Transport and Marine Services, £1,698,000; Defence, £1,426,000; Health, £1,193,000; Old Age Pensions, £1,050,000; Educational Services, £1,314,000, and Agriculture, £936,000. In addition, there was a general increase in Civil Service pay which is being spread over the whole range of the Votes and is estimated to cost roughly £1,585,000. I have merely given the main heads under which these increases occur, but, as will be easily seen, the increases I have mentioned come to a substantial amount when taken in the aggregate.

The greater part of the Supplementary Estimates—which, as I mentioned already, came to £11,352,690—related to the services which I have just quoted. Two Supplementary Estimates amounting to £3,730,195 had to be taken for Industry and Commerce; a further two for Transport, and Marine Services came to £2,350,000; additional provision to the extent of £359,000 had to be made for Defence in 1951-52. Supplementary Estimates for Health and Old Age Pensions come to £835,000 and £337,000 respectively, and there was additional provision of £1,070,000 in respect of increased remuneration for teachers. Finally, supplementary provision to the extent of £1,875,000 was made in 1951-52 for Civil Service pay increases.

We come to a more desirable and more readily welcomed aspect of the Vote, that is to say, that there is a substantial decrease on one item, on the Vote for Local Government. That decrease amounts to £2,293,000 on the original provision for 1951-52. Unfortunately, I should emphasise that that decrease is merely a matter of accountancy. It does not mean that we are going to save anything for the taxpayers because, as I have explained elsewhere, this decrease is accounted for mainly on sub-head I (7) of the Vote, which provides for grants to local authorities towards the cost of housing schemes, and under sub-head K, which relates to grants to local authorities for the execution of works under the Local Authorities (Works) Act, 1949. When I was speaking in Dáil Eireann I stressed that the fall under the first head is purely notional; it is the automatic consequence of the change in the method of subsidisation, and it implies no reduction in State aid for local authority housing and, in respect of the second head under which a reduction had been shown, that is to say, the proposed expenditure under the Local Authorities (Works) Act, I am afraid that that will be more than compensated for by an increase in expenditure on works which are financed by grants from the Road Fund.

The other main decreases in the Volume of Estimates are for Forestry, £201,000, for Gaeltacht Services, £123,000, and for Public Works and Buildings, where the reduction will amount to £174,000. In each of these cases, I should emphasise, the reduction arises from the fact that it will not be necessary to make provision upon the same scale as last year for the replenishment or the building up of reserve stocks.

The total of roughly £95,000,000 for the Supply Services does not take account of additions which may have to be made during the year for new services and it must in any event be remembered that, even with such additions, it would constitute only part, though of course a large part, of the total State outlay.

Senators, I am sure, have already made themselves aware of the fact that the question of bridging the total gap between the State outlay and revenue is so urgent that the Budget is being taken on 2nd April—that is to say, on Wednesday next.

In view of the comprehensive survey of the financial and economic position of the country which I shall have to make in the course of my financial statement I am sure I will not be expected to go into any great detail on the matter at this stage.

I do not think it is necessary for me to deal with the several sections of the Central Fund Bill. The House is, of course, aware of the general purport of most of them and the custom is, I think, not to discuss these sections in particular but to have, in so far as it may be advisable or desirable, a general debate upon the general policy of the Government as outlined by the principal features of the Estimates. I should also remind the House that, in view of the fact that we have not been able to place the Central Fund Bill before the Seanad at an earlier date, it will be necessary to advise the President by special resolution to sign the Bill and to give to it the force of law at an earlier date than was originally contemplated by the provisions of the Constitution.

I think I can assure the Minister that it will come as no shock to this House that the Central Fund Bill has reached us on the last possible day and that it is necessary to pass a resolution for its speedy enactment. We could not do very much about it anyway; but successive Governments have generally given us the opportunity of holding up the Bill by refusing to pass the resolution and leaving things to the last minute. That is not a matter of any real importance, because the powers of this House in relation to finance are really limited to debate and possibly to suggestion. There can be no amendment affecting a Central Fund Bill and, therefore, the fact that it comes before us merely provides, as the Minister said, an opportunity for a discussion on general finance questions and general finance policy.

I think I am correct in saying that it has been the practice generally to deal with general finance questions on the Central Fund Bill, and to take the opportunity of the Appropriation Bill to deal with administration and details of the account, though there is, of course, obviously a fair amount of latitude under the term "general financial policy". I have been a good many years in public life and I cannot remember any year in which so much of the time of the Dáil was occupied in the discussion of general financial policy. If the making of a large number of speeches—some able, some not so able—is a criterion of our financial prosperity, we should be in a very happy position indeed. Speaking generally one should welcome discussion of general finance questions, but I am rather inclined to think that the net result of the debates we have had in the last few months has only been to create bewilderment on the part of the public. Undoubtedly they have resulted in a fairly considerable degree of uncertainty.

For that reason I was particularly glad when I read that the Government had decided to have an earlier Budget. The fact that we are having the Budget this day week does to some extent lessen the value—and may add to the difficulties—of discussing general financial policy; but we know perfectly well that the people generally are thinking with some apprehension and a considerable amount of uneasiness as to what position may be disclosed when the Budget comes.

It is just approximately a year, not quite a year, since the Minister for Finance in the previous Government made his Budget statement. He made his general policy very clear in that statement. It may or may not have been a wise policy, but at least it was clear-cut and easily understood. He added what he regarded as the current Supply Services proper to the Central Fund services, and these provided a Budget which, in his opinion, it was the duty of the Government to balance. No one who listened to Deputy McGilligan's statement could have any doubt whatever as to how the Government proposed to finance the capital investment programme. He made it clear that it would be necessary to invite subscriptions to a national loan, and he expressed the belief, certainly the hope, that that loan, together with savings from the post office savings bank and savings certificates, would meet most, if not all, of the sum which he had stated to be necessary.

He made it clear, also, that he thought that it would be necessary to have recourse to the American Loan Counterpart Fund, but that drawings from it should be only to a moderate extent. The policy of the last Government, for good or evil, definitely was to keep taxation at the lowest possible figure and to use some of our external assets, if necessary, for capital development. Deputy McGilligan made it clear, though it was hardly necessary, that large-scale domestic development of capital assets was bound to increase the deficit in the balance of payments.

Members of the present Government who were then in opposition, expressed vigorous disagreement with Deputy McGilligan's policy. The main lines of criticism, as I understood them, were that the programme of capital development was unwieldy, that some of the items described as capital expenditure should not have been so described and that the taxation imposed in the Budget was not sufficient to cover the expenditure which should have been provided out of revenue. These were matters on which surely there was room for honest difference of opinion, but such differences did not justify the wild charges of misrepresentation of which we have heard a good deal.

The new Government came into power only a matter of weeks after the last Budget. Therefore, it was within their power to make certain changes in policy. They could have altered or reduced the capital investment programme of their predecessors. When the Minister for Finance spoke in this House about the unwieldy programme of capital investment I, for one, assumed that his Government disapproved of part of the programme and that it would be cut in certain respects.

I doubt if anyone has been able to ascertain clearly what is the present Government's policy with regard to capital development, or how it is to be financed. The result is widespread uncertainty and a good deal of want of confidence. I read the various speeches made by the Minister—I did not read that made yesterday—and still I am by no means clear as to exactly how the policy of the present Government differs from that of its predecessor. Probably in the comprehensive statement which the Minister has promised us it will become perfectly clear. One thing is clear—that Deputy McGilligan intended to ask for a further loan, and that this Government decided for various reasons that that was not desirable, and as a result they had to use up most, if not all, of the American Loan Counterpart Fund. Certainly, it was not the intention of the previous Minister to use that fund to any great extent.

I think the Minister said—it was not very clear in the Dáil—that this fund had been used up almost entirely because of commitments of his predecessors. He did not say whether the purposes for which it was used were those he approved or disapproved of, but considered he had no option. I read with interest what the Minister for Posts and Telegraphs said, and one phrase I noted particularly—"if we keep our heads and do not indulge in false optimism we can continue national development in this country." I would alter that phrase to say: "If we keep our heads and do not indulge in false pessimism we can continue national development."

Undue pessimism is just as bad as, and possibly worse than, undue optimism. If I am to judge by the people I meet, there is not the slightest danger at the moment of too much optimism amongst our people, but there is danger of undue pessimism. You cannot have national development without some risks, and people will not take risks unless they have some degree of optimism. My greatest criticism of the present Government is that they have created a quite unnecessary amount of pessimism by alarmist and in many cases foolish speeches. Some of those speeches were probably intended to discredit their predecessors or their political opponents. That I would not mind in the slightest.

I have been a good many years in public life and I have observed that wild and bitter attacks on political opponents act as a boomerang and have frequently the opposite effect to that intended. I am sure that the attacks on Deputy McGilligan and his policy have only strengthened his position in the eyes of a large number of people. When wild speeches are made about our financial position, and we are told that it is on the verge of desperation, people sit up and wonder what does it mean. It has definitely a pessimistic effect and it does not hurt Deputy McGilligan but the country as a whole.

A few days ago one of our newspapers carried a large heading to the effect that £155,000,000 of our assets had been dissipated. This was based on a speech by the Minister for Posts and Telegraphs, but when I read his speech I found that he said that £155,000,000, had been dissipated, some for useful purposes and some for doubtful purposes. This is an illustration of the harm that can be done by thoughtless use of words.

The word "dissipation" suggests waste and squandering. You cannot dissipate for useful purposes. I do not accept the figure of £155,000,000, which was, presumably, arrived at by adding together the deficits in the balance of payments. I do not think that our external assets dropped by this figure over the period, but the point I wish to make is that wild statements of this kind can do a great deal of harm. If you object to the nature of some of our expenditure or of the kind of goods which were imported, by all means say so, but give the details and reasons with a view to remedying the position in the future. Most people can think of articles which we imported which they think we can do without. This occurred under both our Governments. I can think of some articles, but I do not propose to name them because I recognise that I do not know all the circumstances and I hesitate to criticise any Government for not stopping imports of goods that people wished to buy.

A very large number of our people are bewildered by the various statements which have been made. They do not understand high finance, but they are worried by the depression in trade —by the growth of unemployment and by the uncertainty as to whether or not they can keep their jobs and earn a livelihood. Business men are worried by a serious trade recession—by the difficulty of meeting expenses with a fall in turnover and of being able to find work for their employees. The costs of running a business are still increasing and with a reduction in the volume of trade this creates serious problems. Rates are being increased in most parts of the country—the increase in the bank rate may have been unavoidable, but it is bound to have an adverse effect on business generally. Demands are being made for increased wages, which may or may not be justified, but in many cases these can only be met by a decrease in employment. We have always been told that the main cause of inflation is too much money chasing too few goods. The position at present in this country is that we have too many goods and too little money. This has caused a sales resistance with short time in many of our factories and reduced production.

The Minister for Industry and Commerce has stated that the cost of Government is rising faster than the national income. This is a depressing statement but no one can question its truth. The people want to know whether the present Government has any plans which will remedy this position. No one wants to see any reduction in plans for bona fide national development, but I do not believe that the people are prepared to see these plans financed out of taxation. They will have to be financed out of savings or by borrowing. I think we have reached a point when additional taxation will impede our national development. We are therefore faced with the problem of reducing our annual expenditure. There is little use in telling the public that if they want services they must pay for them. Most people want some of the services but do not want others. Every effort to reduce expenditure will be open to criticism from some quarter. I almost despair of any genuine effort to prune our expenditure as long as all our financial problems are made matters of Party controversy. I do not believe in the Party system of Government but this it not the time to discuss this. I would like to see the question of reducing the cost of State services dealt with by joint action by all political Parties, but I confess I do not see much hope at the present time. It seems to me that the first and most important task of the Government is to restore confidence in the future.

People do not want warnings against false optimism; they do want to be convinced that the financial problems can be solved and that, at any rate by a long-term policy, the Government can put forward a plan for their solution. Probably everybody here who has spoken in public has said that what we want is increased production and increased exports. I find that outside this House statements of that kind only irritate people who are doing their best and who are only too ready to increase production but who cannot do it with falling trade. Platitudes like that only irritate people unless they are accompanied by practical suggestions. What is wanted most of all is some form of enlightened leadership. I believe that the people generally will respond to the right kind of leadership no matter what Government happens to be in power. If they are asked to put up with hardships and things they do not like they must have the reasons explained to them, but if the reasons are explained in a way they can understand you will find that, although there will be grumbling here and there the people will be prepared to accept anything that will put us in a stronger position.

The Minister for Finance has a tremendous responsibility at the present time; he also has a unique opportunity to gain the confidence of the people. I would suggest to him that he will not gain that confidence simply by attacking his predecessors, although that might be a spectacular and most interesting way of dealing with his problems. What I think he should deal with—he cannot do it here because he is going to speak in a week's time—is whether he sees any prospect of remedying the position so clearly set out by the Minister for Industry and Commerce: the cost of Government rising faster than the national income. The general impression outside this House was one of disappointment at his speech introducing the Vote on Account.

That may not have been fair but most people believed—partly because of the discussions on the other side— that they would be told some of the steps which the Government regarded as necessary. All we were really told in effect was that he proposes to adjust imports from the dollar area so that the net deficit in the balance of payments with the dollar areas would not exceed £16,000,000 in the second half of the current year and to reduce imports from non-sterling and non-dollar areas so that the deficit would not exceed £18,000,000. When he has given so few details nobody would wish to criticise that but when replying, the Minister might tell us if he is in a position to give us details. The people have been expecting a statement from the Government for a long time. It is almost a year since the Minister expressed himself very vigorously indeed regarding the deficit in the balance of payments and we have naturally been expecting him to take some action. I would ask him to give us as soon as he possibly can some details as to the way the reduction in imports will affect ordinary business people, because most business men have to plan some time ahead and it is most important for them to know some time ahead what cannot be imported.

I do not propose to make a long speech or go into many details, but there is one thing in which I am interested and on which I would like the Minister to give some information. Referring to measures which the Government believe to be necessary to correct the balance of payments, he announced the reduction in the holiday allowances to countries outside the sterling area to £25. The general feeling, as far as I can gather, is that this is regrettable, but that if it is necessary there is nothing to do but accept it and try to look as pleasant as possible. I do not know how many people will be affected, but it is bound to reduce the number of visitors from Ireland to countries outside the sterling area.

In my opinion it would be in the national interest, if it were possible, to increase the number of our people who travel in Europe particularly, because we want to increase friendly relations and increase the knowledge of Ireland among the nations of Europe with whom we have something in common. Generally speaking, I believe that foreign travel is desirable for Irishmen and women; it broadens their outlook and promotes good feeling. I am sure the Minister will agree that in general it is well-spent money.

Twenty-five pounds does not make holidays on the Continent impossible, but it means that such a holiday must be a short one. Since the cost of travel from Ireland must be taken into consideration people will feel that it is not worth while to pay the fare to France, Italy, Spain or other countries in Europe which our people like to visit if they can spend only a week or ten days there. The fare from the South of England is in most cases considerably lower than the fare from Ireland, and it seems to me that the reduction to £25 is more likely to discourage Irish people to travel than people, say, from the London area where there is a very big population.

The decision to reduce the allowance was a disappointment, but I think that it would be accepted with very little grumbling if people were satisfied. It is thought that the sum is very small indeed, and I would ask the Minister to state what the estimated savings would be by a reduction to £25. On the 1st February the Government announced that the allowance for foreign travel to countries outside the sterling area was to be reduced from £100 to £50. In view of the various statements I do not think that anyone was surprised and I heard little criticism of it. Most people thought that it would be reduced at an earlier date. It was assumed when the Government made that Order on February 1st that they had carefully considered the overall position and decided that £50 was a reasonable figure. Some people asked me—and I could not give an answer— what happened between the 1st February and March 12th; did our position regarding currency so worsen in 40 days that the holiday allowance had to be reduced? If so the people should be told.

On that point I think I can assure the Senator that, in fact, the situation did considerably worsen after Christmas and that February showed no improvement on January.

I thank the Minister for his statement, but it was the position in February which showed no improvement on the position in January. What happened between then and March? The reduction from £100 to £50 seemed reasonable and was generally accepted. I do not think that people are satisfied with £25, although I would suggest to the Minister that he could possibly give them reasons which would make them satisfied.

On February 26th, one of our leading newspapers made a statement to the effect that the allowance was going to be reduced to £25. The very same day that was officially denied. I know, then, that a very large number of people concluded that the £50 would stand for this season. It does seem to me that that kind of definite official denial shows a rather cynical disregard for people's convenience. It could have been stated that no decision had been reached, or something of that kind and that, at least, would have left the matter open.

A few days ago I was speaking to one of our most experienced travel agents. He gave it as his considered opinion that the reduction of £25 in the holiday allowance would cause a definite reduction in the number of dollars we could expect to receive from American visitors this year. He told me that since the Minister for Finance announced he would reduce the allowance to £25 a large number of persons cancelled their arrangements for holidays on the Continent and instructed him to make reservations in Irish hotels, and the result will be that there will be less accommodation avaible for foreign tourists here.

If we force our people to take their vacations within the sterling area, which, in effect, means Ireland or great Britain, they must naturally feel —I suppose with some justification— that they are entitled to reserve immediately the very best accommodation they can afford. Great stress has been laid by the Government on the importance of earning dollars from the tourist trade. If the holiday allowance is maintained at £25 it seems to me that many who have saved for a continental holiday will inevitably be compelled to spend it at home, and it is almost certain that this will have the effect under present circumstances of reducing the accommodation available.

When the Minister replies I would like him to tell us, if he can, what sum of money is involved. Secondly, has this question of the possible loss, particularly of tourists from the United States who can afford the best type of accommodation and who generally look for it, been taken into consideration? I am suggesting that there is a possible danger that the gain to us by savings in francs, liras, pesetas and other European currency may be set off by a loss in dollars. Thirdly, can he hold out any hope that the £25 reduction is of a temporary nature, or is it something which is likely to be permanent, or continue at any rate until the whole balance of payments position is satisfactorily settled?

When one considers the size of the bill presented to the House and attempts to relate the seriousness of the statements that have been made recently by both the Taoiseach and by Ministers to the speech to which we have just listened from Senator Douglas, one is compelled to come to the conclusion that the chief Opposition, as we usually call it, has not taken this matter really seriously at all. Here is a Book of Estimates which demands a contribution from our people of no less than £94,000,000. There is no new service shown in that book. This money is required simply for carrying out the schemes that are now in progress, and for the maintenance of Government services as they are at present constituted.

From the statements made by the members of the former Government, it seems as if the Fianna Fáil Party has committed three great national crimes in the last six months. The first crime was to inform the people of our financial position. The issue of a White Paper was challenged. The figures and the information contained therein were challenged. The Government was taken to task for allowing the Central Bank to issue a report without it first being censored in order that something more in accordance with the wishes of the former Government might be put before the people. Another great crime was the failure of the Government to raise a loan in the last six months. The last crime to be produced out of the cupboard is that the Government has reminded the people over the past few months of the large sums of money made available for subsidies.

It was the duty of the Government to present a true picture of the present financial position to the people. Senator Douglas asks that the Government should now take the people into their confidence. In doing that, I think the first and most essential step is to let the people know exactly what the position is, irrespective of whether or not that information is acceptable to the former Government.

Statements have been made in the other House in relation to subsidies. Those who made the statements seem to have forgotten that the very first action of the inter-Party Government Minister for Finance was to reduce the subsidies on various foods by no less than £3,000,000. Now it has suddenly become a crime to remind the people of the large sum of money that is made available for the maintenance at their present price level of various articles of food. I do not want to go into a discussion at this stage as to the advisability or not of continuing subsidies. I do know from personal experience that this large sum of money spent on subsidies is not appreciated by the people. It is not appreciated by the consumers whom it is intended to serve; when one reminds the consuming public that we are spending something in the region of £15,000,000 in order to make bread, tea, sugar and butter available at a reasonable price, the immediate rejoinder is that it is not the consumer who benefits, but the farmer. When one reminds the farmer of the money made available for his benefit, he immediately retorts that it is not he who is benefiting, but the consumer.

The problem to which we must direct our attention now is to finding out how best this demand for such a huge sum of money can be met. The Government rightly reminds the people that if they require increased social services they must be prepared to pay for them. In the ordinary way if a firm decides to develop its business it is quite within its rights in going into debt for that purpose but no firm will go into debt to make particular services available to their employees. Neither should a Government.

We have had a good deal of hoodoo in relation to capital investments. It has almost been suggested that capital development first took place here on the inauguration of the inter-Party Government. I would remind the House of the great strides made from 1932 to 1948 in regard to housing, drainage, turf development, tourist development and agriculture. Moneys were provided for all these schemes but there was then none of the propaganda that we hear now in relation to capital development and in relation to industrialisation. All these developments in the past went on despite the opposition of the Parties and persons who are now loudest in asking that such schemes should be continued.

Senator Douglas referred to the appeals being made for increased production. We know from the figures supplied to us that there has been in recent years a certain increase in industrial production, but, if there is, it is due in no small way to the policy given effect to from 1932 to 1948. That increase in industrial production is due to and has been brought about by the very people who have been criticised by persons in very important positions in this country. In very recent years, we have had references by persons holding ministerial posts to these people who have put their money and their ability into industry, and in some cases they have gone so far as to suggest that they should almost all not be allowed at large, but should be behind the walls of Mountjoy Prison. It is in spite of an attitude of that kind that this progress has been made.

We come then to the all-important question of the reasons why the progress brought about in industry has not been achieved in agriculture. Senator Douglas on more than one occasion during his speech asked the Minister what is the Government's policy. The position we find ourselves in to-day, with particular reference to the lack of increased production, is in no small measure due to the person who held the responsible position of Minister for Agriculture. During the three and a-half years of the previous Government's term of office no less a sum than £39,000,000 was raised in loans from the Irish people and there was, in addition, the money provided under Marshall Aid which we were told at the time was to be used principally to bring about an increase in agricultural production and in the numbers of farm live stock.

What is the position to-day? We find that agricultural output has not reached the 1938 level. I do not wish to weary the Seanad with figures because I have come to the conclusion that in recent weeks we have had more figures than the people can digest, but we find that, because of the attitude of the then Minister in asking the dairy farmers to accept a price less than they were getting at the time for their milk and compelling them to make up their minds that the dairying industry was going to be a paying proposition no longer, there are 20,000 fewer milch cows and 33,000 fewer in-calf heifers than were in the country when he took office.

From what is the Senator quoting?

If the Senator wants the figures he can get them in the Cork Examiner.

It is the Senator who is making the speech, not I.

We have these reductions, as I say, but these are not altogether the picture. We have had a reduction of no less than 1,000,000 acres in tillage during the past three years, and this during a period when we were told that a sum in the region of £40,000,000 was being poured in to bring about an improvement in agriculture. We have been reminded of the importance of our poultry and egg industry but, here again, we find that during that Minister's term of office poultry decreased in numbers by no less than 1,000,000. If we are to ask the farmers to increase production it is not in the way in which the former Minister attempted to do it that we should do it.

More serious than anything I have referred to is the fact that we have spent millions of borrowed moneys in the importation of wheat and maize and other foods for people and live stock that we could have produced here ourselves. We heard the former Minister for Agriculture saying that if there were still any farmers foolish enough to support the Fianna Fáil policy of growing wheat, he was prepared to allow them to continue to be so foolish, and he gave that as a reason for continuing the guaranteed price at the time for wheat. We have had a reduction in the acreage of tillage and a reduction in live stock of every kind, and we have now reached the position in which we must make a very serious appeal to our farmers.

The first thing we must do is to remove from our agricultural community the inferiority complex from which they seem to suffer and take our farmers away from the people who, for political and other reasons, try to influence them in the wrong direction in the matter of national development. We must bring about as early as possible the growing of the necessary food for our people and our live stock. That can only be done by creating in the minds of the farmers confidence in the people who give the direction, which confidence was not, and could not, exist during the past three and a half years, and we have the result of it now. The same is true, as far as industrialisation is concerned. Senator Douglas remarked that he was pleased to see that there was a difference in the approach of this Government compared with that of the previous Government——

I did not. I said that I did not see what the difference was.

——in that none of the projects introduced by the previous Government had either been scrapped or put in abeyance by this Government. That is only as it should be and we must only regret—we can do no more about it—that the previous Government had not the wisdom to adopt the same policy with regard to many of the projects inaugurated by the previous Fianna Fáil Government. If they had continued these projects, things would be better and the country in general would be better off.

The first and most important thing to do is to create in the minds of our farming community a feeling of confidence that they are doing what is in the best national interest in producing the food necessary for our people and our live stock, and that can only be brought about if we assure them that they will get for the work they undertake a price sufficient to reward them for their labour. We had protests from persons on the opposite side because it was found necessary, in order to encourage our farmers to go in for increased milk production, to increase the price of milk. There were protests from the Opposition in regard to various other increases that were given to the agricultural community.

This approach might be popular in urban districts and cities but the people who try to do such national damage ought to consider it from this angle, that the best insurance policy that we can take out is to give the farmers prices that are sufficient to enable them to produce the commodities that we require. Even if we could import these commodities at a cheaper price, it is wiser national policy to encourage our farmers to produce them. Our farmers cannot be encouraged to produce while unscrupulous people, for political purposes, attempt to make capital out of the fact that increases have been given to one section of the community as against the other. It is bad national policy to engage in such propaganda. It should be discouraged by people who are in important positions in our national life.

Senator Douglas devoted a great part of his speech to the reduction in the travel allowance. When one considers the magnitude of the Bill before us and the small number of people affected by this decision one comes to the conclusion that there is very little fault to be found with the measure.

Many countries have taken action of the kind that we have been compelled to take. We all recognise that this is only the first step that must be taken. In the papers every day we see that steps have been taken by the Governments of Australia, New Zealand and other countries to safeguard their financial position. These actions will have a serious effect on us. We have been trying to build up export markets with countries that have taken the same decision as Australia has taken. As a consequence, it will be more difficult for us to export to these countries.

Senator Douglas also referred to the recession in trade and to unemployment. That has been brought about as a result of the stockpiling that took place some months ago and because of consumer resistance to the high prices that were prevailing.

I do not dispute the fact that unemployment has increased. In the rural areas the complaint is that there are not sufficient workers to carry out the various operations that are now in progress. Any increase in unemployment that has taken place has taken place in the industries that have been affected by stockpiling and by the recession in trade which was brought about by the policy of the previous Government.

Senator Douglas, like many other Senators, seems to think there is some great virtue in the manner in which Deputy McGilligan presented his Budget when he was Minister for Finance. The manner of presentation of the Budget does not matter a straw. The money has to be found and the fact is that there was no provision made by Deputy McGilligan in his Budget of last year for many of the payments that fell due, amounting to about £11,000,000. When we add that sum to the £83,000,000 for which Deputy McGilligan provided, we find it is almost the sum of the present demand.

If we are to continue the capital investment that has been undertaken in the last 12 months, the money must be found. Every time the Government borrows there is an additional burden imposed on the taxpayer. The taxpayer has to pay the interest. Then there is a limit to what you can borrow. If you are going to borrow outside the country, are you going to commit the country in some way that will not be in the national interest? These are matters which must be taken into consideration when the Government are deciding questions of this kind.

Some people think they have a cure for all our ills. They think that the great evil is our banking system and that all we have to do is to change our banking system and everything will be all right. No matter what system we have, there is only one road to prosperity and only one way of giving our people the goods or services that they require, that is, by increasing production and that means more work. If the people are to be asked to work harder, to put more into the pool in order that everybody, particularly those in need, may get more out of it, they must be convinced and the only way of convincing them is by letting them know the position, by putting the difficulties before them. If the people are left to themselves and not distracted from doing what they should do in the national interest, they will make whatever contribution they are asked to make.

Senator Douglas spoke about confidence. Does Senator Douglas or any member of this House suggest that the best method to gain the confidence of the people is by withholding the truth of the position from them?

I said the opposite.

Is it better that we should place before them the full facts and say: "Here is the position; it does not matter who brought it about or whether the fault lay with the last Government or with any particular individual in the last Government as to how he administered any particular Department; the fact of the matter is that the position is so and the Government in office must take steps to rectify it or allow it to worsen until no steps taken can rectify it." There is a limit to what we can borrow or what we can do in any direction. The best guarantee we have that national progress will be continued by the present Government is their past record in housing and all other national activities. It is much better that those who would like to be critical would in the national interest put forward an alternative rather than devote all their time to criticism.

Senator Hawkins said we had a picture presented to us of the situation. May I humbly say, as an Independent member of the House and one who has endeavoured to follow the debates in the other House, that I have not had a picture but only a series of dissolving views. It would help us very much if we had a clearer presentation of the actual implications of this Bill. I know we are at great disability by having to speak at short notice, before we have had time to follow properly the debates elsewhere and, furthermore, we are speaking in the impending shadow of what is going to be a very important and very serious Budget. It is hard to collect one's comments adequately, but the situation is one in which we should try to do so. This arises from the fact that as yet we have not divided into a Government and an Opposition on logical grounds.

When the Republic was announced to us in this House, I ventured to point out that one of the changes it would make was that, eventually, if we wanted to continue to preserve democracy and the two-Party system, we would require some new Opposition. The old cleavage, as one might call it, between the isolationist republican and the Commonwealth associationist had died overnight. What would be the new division—would it be between town and country, or farm and factory or simply, as so often happens in some local ventures, between the ins and the outs? It is lack of a centralised Opposition that has made the debates on this measure in the Lower House so very difficult to follow. A great deal of the discussion has been post mortem —why so and so happens—only towards the end of the remarks did we hear from some speakers comment on what was happening and what would happen unless we acted in a particular way.

The Vote on Account presented to us envisages the expenditure of a very considerable amount of money. That has not been questioned seriously in the Lower House: it has been accepted as a serious matter. The other thing that arises is the division of that expenditure on different items. That will provide the ultimate division of opinion. We are divided between the totalitarian, classless State and the State which still encourages individuality. We will have an opportunity of developing that later, but I stress it now because many of the items here are steps on the road to absorption of individual enterprise into State services. This may be developed fully when we come to the Social Welfare Bill. What should be borne in mind by the Minister, as representing the apprehension many of us have, is that every step in this way gains momentum and the fact that we are doing more for the general community for which we are all paying will make it harder eventually to stop doing more and more. It is not so much going downstairs as it is falling down an escalator.

In my own case I have seen classes in society, the old Victorian society represented by the railway trains, first, second and third class; and no doubt, the lower middle class is represented by the second class. The second class is gone. There is now only first and third and probably the first will go— there is no class on the bus. This gradual change is taking place in this country and the question is as to how fast we want it to happen. That is what I mean regarding the allocation of these various sums we are discussing. The other question is how to raise the money. Heaven forbid that an independent person should attempt to teach the Government how to collect ostrich eggs and extract nutriment from them. I cannot quite agree with Senator Douglas that all this pessimism is having a tremendous effect on the community. I take up the paper and see some shattering headlines about it but in the next column the news is about Hollywood and about a film star being divorced from his fourth wife. I think you can come to the stage when pessimism is not news but just becomes boring. It may affect important people in certain industries but not the general community, who just turn over to the next page.

Something more could be done about savings. They could be increased during the current year by a proper saving campaign. A picture has been painted about savings and put up near the railway stations. I have felt no particular urge from it. One poster shows a hand grasping for a not very attractive apple. In case the artist might be pained by my remarks I will not develop that. We need savings societies, which could do a great deal more. It is an extraordinary paradox that the most profitable performance is taking from the poor and giving to the rich. That is the sweepstake activity. A lot more could be done in taxing betting, games and sweep prizes. It is too much to get away with £50,000 and not be taxed on it and perhaps the Budget will consider that.

I feel that if we do not approve of the idea of the rapid development of the classless State we can only safeguard that by proceeding slowly. Again I believe we can work very much more effectively by a savings campaign. What is to prevent some income-tax arrangement in which part of the tax would go on loan, not quite compulsorily? I am sure the Minister could devise something. We could be comforted by some reflection that part of our payment had gone in loan. We could not cash it, but it would be mounting up for us and would be a little nest-egg which was being laid, if not by ourselves, then by the domestic birds in the farmyard.

I followed the debates in Dáil Éireann from the written reports and my feeling, with which I think everybody else agrees, is that the debates in the other House on this measure were carried on in a highly disturbed atmosphere. It is my belief that, on this question of finance, it should be otherwise and I hope the discussion in this House will take place in a quieter and more reasonable atmosphere.

I would like to comment on the speech of the Minister for Posts and Telegraphs, Mr. Childers when he said:—

"We do not believe we are in any danger of economic disruption. We believe that if wise action is taken now we can avoid more adverse conditions."

With that statement I am in full agreement and I believe all Parties are in agreement with it. I feel that in the political controversy which has been raging about the financial situation we find each of the political Parties declaring what they did or would do or what they did not do or would not do and about the money they are about to spend or the money has been spent. It seems to have been forgotten by all Parties that everything must be earned by the farming and business communities; that all the money that has to be spent on every piece of legislation that is put into operation depends on the ability of the community to pay for all Government schemes and expenditure. The problem is usually discussed in high-sounding terms such as "external assets,""imports and exports,""the balance of payments" and so on. All these phrases mean very little to our friend, the man in the street.

I suggest that we should examine the situation in simpler terms and in a way that the people generally will understand and realise that our national economic problem is one that concerns every one of us as individuals in the State; that everything is paid for by their work and business activities and that they, in fact, carry the whole financial burden of the State. When the problems are represented on a high plane and in high-sounding terms, there is a tendency for the people to get the idea that what is everybody's problem is nobody's problem. The fact, of course, is that everybody has a contribution to make by pulling his weight and shouldering his responsibility in whatever sphere of life he happens to work.

Mr. Lemass, Minister for Industry and Commerce, quite rightly set out the position in the Dáil. He said:

"Any development amongst any section of our people to compensate themselves for the effect of higher taxes or the repercussions of the international situation by getting a greater share of the national income —whether it is the farmer demanding a higher price, the worker striking for higher wages or the trader seeking to get higher profits— is bound again to create a situation in which trade will decline and unemployment will increase, in which the total volume of trade will contract and with it the volume of employment."

In the Irish Independent on Monday, March 24th last, there appears a report about the present slump. It is headed: “Waterford Badly Hit by Slump in Trade.” The report goes on to say:—

"General depression in trade has resulted in the creation of a serious unemployment problem in Waterford City. An additional 40 workers employed by Allied Iron Founders (Ireland), Limited at Bilberry were put on short time last week-end. This brings the total of the firm's employees who have been reduced to a three-day working week over the past few weeks to 120.

The secretary of the company, Mr. T. Fenner, said that most foundries had been on short time for some time past.

Among those who are swelling the employment exchange queues in the city are workers who were temporarily taken on last year by Messrs. H. Denny and Sons, bacon curers.

The prevailing glut of hides and a slackening in trade have already created unemployment in tanneries and boot factories and the situation is likely to worsen in the next couple of weeks.

At the Carrick-on-Suir factory of Messrs. Plunder and Pollack, 250 workers continue to work a 40-hour instead of a 48-hour week."

This is typical of the situation all over the country. We have a situation in which the warehouses of retailers, wholesalers and manufacturers are overflowing with goods. It will be evident that there does not exist a situation in which it is possible for business people to demand higher prices or for manufacturers to seek to obtain higher profits. It is very difficult to sell goods at present prices, not to say at higher prices.

With a slump in trade and with no possibility of raising prices, it is obvious that there will be no higher profits for manufacturers or distributors this year. In any case there exists a Government system of price and profit control. It has been affirmed by successive Governments that, given world conditions and price trends, especially prices of raw materials, the existing machinery for the control of prices and profits is as adequate as could possibly be achieved under such given circumstances. The Trades Union Congresses themselves failed to respond to an invitation by the Minister for Industry and Commerce in the inter-Party Government to submit to him a scheme for price and profit control which would improve the existing one. Incidentally, I see that Mr. Coyle, President of the Galway Chamber of Commerce, speaking in Galway yesterday, is reported as stating that:—

"Price control acts in many cases as an incentive to inefficiency and to high costs. The eventual profit allowed under price control was based on the cost of manufacture and so the higher the cost the greater the profit to the manufacturer."

I would say that the same goes for the distributor. In many cases there is no incentive to good merchandising because there is no advantage in buying cheaply where there is only a fixed marginal profit allowed. The dearer the distributor buys the better a profit he makes. According to the Irish Independent report on Monday, 24th March, a trade union official commented:—

"I am afraid we are in for a very bad time generally. The position in Waterford is much worse than at the corresponding period last year."

It only remains, therefore, for us to ask that the workers should, in the words of Mr. Lemass, refrain:

"from striking for higher wages to compensate themselves for effective higher taxes on the repercussions of the international situation".

There is a tendency to squeeze more and more out of our industries and out of our successful citizens and to put more and more penal burdens on their shoulders. There is a belief that there is a natural right to the standard of living which is deemed proper. This is, of course, a delusion. Our standard of living must, in the long run, correspond to our standard of work and our standard of trade. In other words, trade must be good as well as work being good.

If we go on imagining that we can get the standard of living we expect by political and class propaganda it can only result in unemployment, devalued currency and hardships for decent people while the few people who press forward those policies, whether they be political or revolutionary or merely economic will prosper. It would be a very happy state of affairs if the solution of our problems were to raise all wages and salaries in proportion with the rise in the cost of living figure. But this would merely be a policy of dog chasing its own tail and that is what it has shown to be by experience. If we raise the wages of certain groups of citizens it will be at the expense of other citizens and other groups of citizens. Even then it only gives a temporary relief and it is the lucky ones who get this temporary relief.

The real question is: can our economy keep wages up with the official cost of living index figure? While there existed a seller's market, which was the case up to last year, it was possible to pay to certain sections of the community a scale of wages based on the cost of living index figure. It was possible because prices could be increased and the increases could be passed on to the public, the consumer, without reducing the turnover. Even then our economy could not compensate every citizen but only particular groups which were in a position to exercise organised pressure upon industry and it was always at the expense of other citizens who had to pay the resultant higher price.

There is and there has been a frightening and growing disregard for the economic facts of life not only in this country but in other countries. In fact I think that our disregard has been copied from other countries. We are told that we must have a certain standard of living; we must have more leisure; we must have social welfare; we must have the maintenance of employment or alternatively we must maintain the unemployed on almost as good a scale as if they were employed. There are people who actually say that and that it is our duty to do so. All these things and more are demanded from our economy and at the same time there is a demand for lower prices. However desirable increased wages for workers may be and however admirable State social services may be, they mean increased wages and expenses and increased taxation and these are two of the most important factors which make up the price of goods and services.

Any increases, therefore, will have to be recouped by higher prices but the point of diminishing returns has already been reached in prices and the inevitable result of any new increases in wages or taxes must be unemployment. That has already been borne out by the unemployment figures issued by the Department of Statistics. We are now in a situation where unemployment is our critical problem and will be so as far as we can see for some time to come unless there is a change in trade conditions and the trade situation of the nation.

Of course, the State is always able to find more and newer excuses for taxation. In the inflationary period we were told that taxes were necessary to syphon off surplus purchasing power. It is to be hoped, however, that in the present difficult situation new taxes will not be introduced that will aggravate the existing difficulties and costs of business. I would suggest that instead, the State might turn its attention to cutting down its own expenditure and that as much money as possible be left in the hands of citizens and in the hands of business. There is a shortage of spending power at the present time, whatever is the cause— I am not going to suggest a cause because I do not know, to tell the truth.

Money is urgently required by both business and individual citizens to spend on their present living costs and to save for the future. Our main problem to-day is the same as in every other country in the world: to deal with deflation and unemployment. These two objects postulate the keeping going of trade and industry as a primary and priority objective. For this purpose, there must be an all-round sharing of the nation's hardships and burdens. Business's greatest handicap is that the State continues on an increasing scale to drain industry of its cash.

The raising of the bank rates is an unhappy blow to trade and industry particularly at the present time. I am not going to say that this was unjustified; it is and can be justified, but the fact remains that it is a blow to industry when so much money is sunk in stocks with the consequent high overdrafts obtaining in all the banks which were got to finance these stocks which are now more or less frozen. The additional interest imposed is an added expense to the business man's very heavy costs.

It may be of interest to mention the present position regarding bank deposits and advances. Irish bank deposits exclusive of Government deposits are about £260,000,000 by residents and £109,000,000 by non-residents. Irish bank advances are approximately £120,000,000 to residents and £44,500,000 to non-residents. Included in the advances of £210,000,000 to residents of the State is nearly every business and industry in the country and this group will now have to pay an extra interest of £1,200,000 annually. The position is that persons with money lying on deposit are now to be handed an extra £1,845,000 while people with industries and businesses giving employment and assisting national development must pay £1,200,000 extra in these extremely difficult times. These figures do not include the loans of building and finance corporations. Any increased charges to borrowers from these corporations will depress still further the already low purchasing power of citizens thereby still further aggravating the trade slump.

It would be tragic if it were made to appear that it pays people better to deposit their capital in the banks rather than to invest it in business enterprise. Business is carried on by the incentive of reward for contribution made. Practically speaking no business activity either of master or man is carried on for its own sake but as a means to an end, the end being a greater or lesser degree of personal enrichment. This end is accepted in the modern world increasingly where it applies to workers but decreasingly where it applies to work-providers. The providers of capital, manufacturers and merchants are expected to be adventurous and enterprising but when they succeed they are asked to pay for increasing State projects and schemes of all kinds. At every turn the stakes in business enterprise are raised so that it takes increasingly more capital to engage in a business venture. The raw materials cost more: overheads, materials, wages and the money engaged in financing.

We find on the one hand that while the investment of capital in business enterprise is becoming increasingly unattractive because all the risks of loss remain, on the other hand when business is successful the State and the workers take the major share, if not all of the liquid cash. Our present system of taxation, local and national, is in effect causing a steady erosion of private industrial and national assets. If this country is to be economically and industrially strong, there must be a reduction in taxation and a reform of its incidence. All Parties admit that there is under-investment in this country but if we are to attract capital for national development, there must be a reward for capital invested and there must be a realisation of the necessity for so rewarding capital. Strangely, in spite of the fact that all Parties admit that we are in a difficult financial situation, we see increasing indication of continual new and lavish spending on further extensions of social services which are already accounting for the deficit that is being deplored. Industry and business are marked out as the source of much of the revenue required by the State, and, as I have already stated, it is in no state of health at the moment to withstand new and heavier demands. Let us frame our programme of State expenditure according to our economy and not try to imagine that our economy can be made to bear programmes only limited by the fertility of our imagination.

In conclusion, I suggest that every standard of living has its price. Therefore, we should assess our standard of living, estimate the price it is worth and ask ourselves if we are prepared to pay that price. The only way of paying the price is for the individual to drop the notion that he is getting something for nothing and to satisfy his conscience that he is paying for what he gets by his contribution to the national economy whether in cash or in kind: in other words, there must be the fullest possible return in work, production and service for money paid at all levels. This in turn must involve a sacrifice, namely, some restraint in the making of unnecessary demands on the national economy.

The Vote on Account as a general rule is confined to a discussion on the Supply Services but on this occasion considerably more latitude than usual seems to have been allowed in the other House. The fact is that we are up against a certain background of crisis in this matter— if not crisis certainly an acute problem. The world seems to be turning, and this country with it, from the inflationary to the deflationary phase, and the problems of adjustment in this phase are no less trying than were the problems in the inflationary phase itself.

Looking round the world we see the symptoms of the deflationary phase in the ever-growing, mutually destructive import cuts in the various countries in the world and in the rise in money rates which has at length reached our own banking system. To use what may be perhaps a slightly vulgar metaphor in this august assembly, the world is suffering from the correction of the morning after the night before of a long career of inflation.

In this country the balance of payments is admittedly in a severe condition of disequilibrium. Everybody is agreed about that. The national finance accounts are also in a position of disequilibrium. A great deal of argument may take place as to the precise amount of our adverse balance of payments and of our Budget deficit. Whatever the actual amount is, the fact remains that both these balances are in disequilibrium. To waste a great deal of time in discussing exactly how far the balance of payments is in disequilibrium merely for the sake of £5,000,000 one way or the other, or how far the Budget is in deficit for the sake of £1,000,000 or £2,000,000, reminds me rather of the various physicians standing round a patient's bed hotly debating whether the febrile patient has a temperature of 106½ degrees or 107 degrees, when it does not seem to me to matter particularly because they are dealing with a state of high fever which needs immediate attention.

I suggest, with a great many of the speakers here and elsewhere, that a background of this kind is not a suitable one in which to indulge in a debate like this in merely polemical Party politics. The Estimates for the coming year are an accomplished fact and it is no use saying that this particular service dates back to 1949 and that to 1947. The fact of the matter is that the Government in power at any particular moment is responsible for the Estimates and for the Budget in the year in which it happens to be in power.

Many of the public services which have to be met in the current year date back to last year, many more date back ten years, others date back to 1920, others to the nineteenth century and others to the eighteenth century. The present Estimates are the confluence of a large number of public services which have grown up over a very long period. I do not think anything will be gained by debates as to who is responsible for starting any particular service which now causes the Minister so much trouble.

The question of our balance of payments was fully debated here before Christmas and I do not think there was much said then that need be repeated now. Reading the debates in the other House, together with the debate here, I think all Parties and, indeed, all intelligent people here have come to certain conclusions regarding our balance of payments. I think there is general agreement that a certain amount of repatriation of external capital assets is necessary, if not absolutely desirable, in the interests of building up the resources of the country in the near future.

I will refer to one fact to which I do not think reference was made here in the debates before Christmas: If a precedent for a policy of this kind is to be sought it can be found in a country to which we are always told we should look for an example in connection with our agricultural policy, and that is Denmark. In the 70 years from 1870 to 1940, if my information is correct, Denmark deliberately converted itself from being a creditor into a debtor country. It repatriated its external investments in order to develop its agricultural resources and it did so with great effect and great success. It is possible that those who are responsible for our financial and agricultural policy might find something to learn by a closer examination of the experience of that country to which, as I have said, our attention is frequently drawn as a model on which to pattern ourselves especially in relation to agricultural matters.

Everybody is in agreement that a certain disequilibrium in the balance of payments must at least be tolerated in the near future for the purpose of capital development. There are certain points that I think need to be emphasised and clarified. One is that the investment must be of a truly productive nature. It must be productive in not too long a run. We simply cannot afford in our present exigencies to look too far ahead and the investment which is financed by the repatriation of capital assets must be of a kind that will give a direct and not merely an indirect return, a financial, if possible, and not merely an economic return, and a fairly rapid and not unduly delayed return.

Another point that needs emphasis is that this process of repatriation of capital assets, as it has now come to be called, depends on the voluntary co-operation of the citizens of this country. That has been very clearly stated by the Minister for Industry and Commerce in the other House. These capital assets are in the ownership of individual people and firms. They are not, except to a small extent, in the ownership of the Government or public authorities. The best way in which these capital assets can be repatriated is by rendering Irish investment more attractive than the investments in which they are at the moment held. The best way for this to come about would be by the provision of suitable opportunities for private capital investment; but to the extent to which that cannot be realised, Government loans to finance public schemes of investment must be sufficiently attractive to induce private investors to exchange their present holdings for Irish Government loans instead.

The Minister for Industry and Commerce in the other House made it perfectly clear that there is no question, at this stage at any rate or in the near future, of anything approaching a conscription of Irish capital, and I think it very important that it should be publicly understood that repatriation of external capital assets is not a matter which the Government can achieve except by persuasion, and Irish investments must be made more attractive to the investor. If that is done there may be a certain healthy repatriation of assets invested abroad for more productive purposes at home. That, in its turn, depends very largely on confidence— confidence in the future of the currency, confidence in the future financial and banking policy of the country, in business stability, in labour stability and in the whole future of the economic and financial atmosphere of the country. If anything occurred to create the smallest disturbance of confidence this programme of capital repatriation would be no longer possible, so, therefore, in discussing this matter we are discussing something with very delicate implications, something which simply cannot be done by brute force and something which, unless the Government is prepared in peace time to take financial measures which are almost unthinkable, cannot be done by Government action alone. I think it important that that should be stressed.

The third point in connection with this which I should like to stress is that a policy of repatriation of capital assets depends on possession of these assets and, to the extent to which it is operated, the capacity for further operation becomes less. It is essentially a wasting policy. It is essentially a policy which sooner or later must come to an end and, therefore, it must be regarded as an interim short-term policy and, as I hope to say before I sit down, as the lesser of two evils, not as something to applaud, not as something to welcome, but as something which we cannot avoid at present without paying possibly too high a price.

That brings me to my fourth point. That wasteful process may be indefinitely continued, may go too far, may go to a dangerous length, unless, side by side with the repatriation of external assets, there is a building up of new savings at home, and therefore I suggest that the major object of financial policy in the Budget in this country should be the encouragement of new savings. The touchstone of any financial measure in this country at the moment is: Does it encourage or discourage new savings? If it discourages new saving, then we will either have less investment, with unemployment and emigration, or a further wasting of our precious external capital assets.

An event has happened in the last few days which, however, objectionable from other points of view, will encourage new saving, that is, the rise in interest rates. The rise in interest rates should encourage people to save more. The rise in interest rates which has taken place in the last week or so has given to me, as a member of the Banking Commission of 1934-38, a certain melancholy satisfaction in the realisation that this, together with other warnings which we gave at the time and which were widely criticised as being unnecessary, unduly alarmist and unpatriotic, have been proved true by the course of events. I was always given to understand, although there is no official record of it on paper so far as I know, that when the £ left gold in 1931 and when the Bank of England rate was raised to 6 per cent in September of that year, an effort was made by the Irish banks at the time not to follow the English rates upward. It was felt that it was unfair to impose a burden on Irish commercial and industrial borrowers, simply because of events which had taken place in the international financial world.

I speak subject to correction by the Minister or other people in the House better informed than I am, but I understand that, for the first time for a very long time, the Irish Banks' Standing Committee did not make an upward adjustment of rates in that month, but within a week deposits began to flow out and after a week an upward adjustment was made. In several places in the Banking Commission Report, emphasis was laid on the fact that, in the absence of measures of a corrective character, of the kind to which I have already referred, a kind which Ministers in the other House in the debate there have ruled out as impracticable in present circumstances, Irish interest rates could not be held at a lower level than English rates prevailing at the same time. The mobility of funds between the two countries is so great that the ordinary market forces would ensure that money would flow from where it was cheap to where it was dear and everything that has happened in the last month has borne out the correctness of that analysis.

There are one or two details of the recently published rise in rates of the Irish banks which seem to call for a certain question. The deposit rate on savings in Irish banks is still lower than the rate on corresponding deposits in English banks, whereas the lending rate is equally as high. I may be wrong, but, as I read the announcement, I took it that the Irish banks lending rates were raised by a greater degree than their borrowing rates, that the rates which they are prepared to charge the public have been raised by a higher degree than the rates they are prepared to give to the public. If I have misread the official announcement, a reassurance to that effect by the Minister will comfort not only me but a great many other people as well.

It will be interesting to see how long the present rate structure can hold. It will be interesting to see if large depositors will be willing to accept ½ per cent. less on their deposits in Irish than in English banks. That is for the future. It may be that a further flow of funds will cause a further jump, but, whether it does or does not, the adjustment which has already taken place should, I think, in serious discussion of these matters in public to-day, give pause to those public men who advocate widespread credits at low rates of interest for housing and other purposes and blame the banks, the Central Bank and the Government when these credits are not available.

I think the experience of the last month has shown that Irish interest rates are very sensitive to outside influences. If people believe that that sensitivity should be reduced, that the Irish rate structure should be rendered such as to be capable of providing abundant credits at low rates of interest to public and private borrowers, the gentlemen who regard that policy as desirable might perhaps perform a public service by making some practical suggestions as to how it would be carried into effect.

There is one aspect of the rise in rates which directly affects the present discussion, that is, the effect of the rise in interest rates on the housing subsidies. In Great Britain, after the rise in the bank rate, the Chancellor of the Exchequer raised the housing subsidies. This was criticised very adversely by the more conservative financial newspapers. The criticism was made that a deflationary measure had been taken on the one hand and that the Chancellor of the Exchequer had not had the courage to pursue that measure into its logical conclusions. The raising of the housing subsidies very largely offset the deflationary effect of the rise in interest rates on that particular activity. I think the Minister might perhaps indicate to the House whether a similar measure is contemplated here and, if not, what the effect on the housing programme is likely to be.

On that I want to say one thing which, I think, needs to be said. It is perfectly true that the fact that the Chancellor of the Exchequer in Great Britain has done certain things is not in itself a reason for our doing them. We are all agreed on that. But, equally, let me say, it is not a reason for our not doing them. We have now got to a stage of sensitiveness in this country that, if the British Chancellor of the Exchequer does what is right, rather than be accused of subservience to British influence, we are prepared to do what is wrong. It seems to me that both those attitudes show an equal lack of independence. Therefore, I do suggest that these decisions in this country should be taken quite regardless of criticism of that kind, that action has been taken because the Chancellor of the Exchequer has taken similar action.

I do not know, of course, what it is proposed to do about the housing subsidies but I do suggest that if the amount of money spent on subsidies on housing in this country is increased, subsidies in other directions should be reduced. The food subsidies in this country are costing about £15,000,000 a year. They benefit every person in the country, rich and poor, young and old, to the extent of about 2/- per head per week. I for one cannot help feeling that subsidised food to that extent for any class except the poorer classes and the people with large families does not possess a justification in the present financial position. The tea subsidy, if it were abolished, would reduce a considerable liability on the Exchequer without imposing more than a trivial burden on the individual consumer. It would enable a freer marketing system to take place. It would enable a greater freedom of consumer choice. It might result in the provision of supplies of better tea.

The butter subsidy is admittedly wasteful. The ration is very high. A reduction in the butter subsidy would kill several birds with the one stone. It would reduce public expenditure; it would prevent us having to import butter from other butter-producing countries and to that extent would help the balance of payments; it would ease the relations between the Minister and the farmers in the dairying areas.

The bread subsidy is more complicated. There are many technical difficulties but this is widely alleged to be a fact, that subsidised bread at the present moment is the cheapest food in Ireland, that it is being fed to pigs and fed to greyhounds. I do not think that the Irish public should be taxed to provide subsidies for feedingstuffs for greyhounds at the present time.

Now, of course, everybody is prepared to agree that a reduction in the subsidies must be accompanied by something in the nature of increased allowances for the more needy classes. That is a corollary of the reduction in subsidies. It has taken place in England and, I suppose, in spite of the danger of being accused of servile copying, we can safely undertake it here.

Children's allowances could be increased. Social services could be increased. Possibly, concessions might be made in regard to income-tax to poorer groups and larger families. But, even when all that has taken place—I now want to reinforce something said by Senator McGuire, something unpopular but which needs to be said— if all these adjustments are made, some people may be worse off than they were before.

I said in the debate before Christmas on the Supplies and Services Bill—I was greatly criticised for saying it, both in the House and outside—that no level of employment is absolutely sacred. Now I am saying something even more terrible, that no level of real incomes is absolutely sacred. I cannot understand why any suggestion that an income should be reduced even to the smallest extent by an abolition of a subsidy should create so much indignation when incomes are slashed right and left by direct and indirect taxation. It may be that the taxpayer, direct and indirect, has become patient, has become resigned. We are not asking the Minister to reveal Budget secrets, but we all know that by this time next week we shall have heard many unpleasant messages from the Minister in the other House. Many people will be worse off next year than this year owing to the Minister's proposals for the Budget this day week, but people are more or less resigned. If they are asked to pay more on tobacco, more on petrol, more on beer, more income-tax, they will not like doing it, but they will not regard it as anything unspeakable, unthinkable. But reduce a subsidy, reduce the real income of any class of consumers by the smallest fraction by reducing a subsidy, and you are doing something anti-social. That is a question which I have not heard any member of the Seanad explain so far.

Subsidies produce a certain rigidity in the whole price structure. They conceal the real cost of living, the real cost of food, the real cost of labour. They make the social accounting which is making such advances to-day partly unreal. So many things are subsidised that the real cost is hard to disentangle. The Minister should consider trying to clarify our national income position by reducing, if not abolishing, most of the present food subsidies.

Even with all possible cuts in expenditure, we know that we have to endure additional taxation. We are prepared for that. This is not the occasion to discuss additional taxation. Next week the Minister will open his Budget. It would be irrelevant, improper and useless for me to offer any observations on that subject to-day. I would make one observation related to general principles—that the touchstone of a good tax is its effect on saving and investment. By that criterion high rates of direct taxation, income-tax, are objectionable. Large classes of the population to-day have so much taken from them in direct taxation that both their power and their will to save are seriously diminished. I am not going into company taxation—there are other people here more competent on that than I am—but high income-taxes on companies' profits also have a disincentive effect on the capacity to invest. That particularly is so in the case of an increase in the standard rate of income-tax which is the easiest of all increases. It is facile, but it would be very unfair and very unjust. In this country only one person out of 16 or 17 pays income-tax at all. Those people have had their direct taxation increased in recent years altogether out of proportion to the national income as a whole.

Income-tax in this country, owing to the peculiar nature of assessment that has come down to us, affects one in every 16 and affects them with great hardship. Whole classes evade tax and other whole classes are exempt. Many people evade and break the law while other people take advantage of the favourable type of assessment which the law provides. Whether it is by legal means or illegal means, 15 out of 16 manage not to pay any income-tax at all. There has been a motion on the Order Paper of this House for the last couple of months calling for an inquiry into this urgent current problem. That motion has been postponed very willingly and very properly in deference to the other urgent activities of the Minister pending the passing of the Vote on Account and the Budget. But I do suggest to the Minister on his visit to the House that when we are anxious to discuss this matter and since we are delaying that discussion very largely to suit the Minister and are willing to do so, it is slightly unfair and slightly prejudging issues to bring about a major increase in the impost pending that discussion. As long as that question is down in the formal motion, I suggest that it is to some extent sub judice. I ask the Minister not to prejudge the result of our motion more than is absolutely necessary by the exigencies of the Budget.

Here again the Minister can learn something by looking at the recent British Budget. The standard rate of income-tax has not been altered. Efforts have been made to reframe the income-tax in order to reduce its disincentive effect. In England the main effort has been to reduce the disincentive to work. In this country, I suggest, the main effort should be to reduce the disincentive to save and to invest. There are certain lessons which I think we can learn from the British Budget. There are two things which we should imitate and one thing which we should avoid. We should imitate, as I have said, the reduction in the food subsidies accompanied by an increase in social services; and, secondly, the recasting of the income-tax code to reduce its disincentive effect. The matter which we should avoid imitating is that the whole cut in incomes which was regarded as desirable as part of the disinflationary effort was a cut in private investment. Standards of consumption were regarded as sacred.

Rightly or wrongly the answer given as the official apologia for that policy in England is that, owing to the steel shortage, investment is to be limited in some respect. As investment has to be increased in the export and armament industries other types of investment must necessarily suffer. That may or may not be a good argument but it is the official apologia for making the fall in expenditure fall on investment and not on consumption. I do not think we have a similar excuse in this country, where investment in agriculture and in other types of production is so clamantly needed that anything in the nature of a tax that reduces investment rather than consumption would be, to put it mildly, very difficult to justify.

May I say, in passing, on this question that from this point of view I think there is something to be said for the form in which the Estimates were presented by the Minister's predecessor? A divided Estimate, while fully allowing as I do for the difficulty of classifying expenditure in capital and non-capital matters, at least brings it before the public mind that the Budget and the programme of Government expenditure and the Government raising of money by taxation is not the same thing nowadays as it used to be —a mere matter of balancing the Government's current account. In every country in the world the principle has been adopted that the Budget must now be made able to accelerate or retard the total amount of activity in the country and not be merely a Victorian budget to balance the Government's expenditure on essential services.

As I say, there is room for wide differences of opinion regarding what is capital investment that is desirable and what is capital investment that is not desirable. There is considerable room for debate as to where the line should be drawn, but with all that I do suggest that the presentation of the Estimates in that form does at least indicate to the newspaper reader that investment for the development of the resources of the country is now becoming to some extent the responsibility of the Government.

I have said something about the necessity for a savings drive. There can be no investment without saving. In this country to the extent that if current savings fall short we are living on the savings of the past. The repatriation of external investments simply means that we are living on the savings of the previous generation; that all the burdens, all the real costs that were incurred by the people who went without current consumption to build up these external investments and we are rightly or wrongly using that saving for current investment. Everybody is agreed that all investment depends on saving but there is something else as well. There can be good investment as well as bad investment; there can be maladjusted investment which is inefficient investment and any investment which is not good is a mistake. What I am coming at is this, that in modern times the volume of investment depends on the volume of savings but their value also depends on the amount of technical knowledge in the country. If the world is richer to-day the people who have made it richer and not only the savers of this and previous generations who have abstained from consumption in order to build up the constructive side of the nation but also the anonymous obscure and frequently unknown chemists, physicists and biologists working in their laboratories who have made the world richer by their discoveries.

I am now asking the Minister to consider whether he could not give us some information regarding the project which a short time ago roused more interest and enthusiasm in wide quarters, namely the setting up of an advanced agricultural institute? Here I am simply asking for information. As I understand it, as a reader of the newspapers, part of the Grant Counterpart Fund was intended to be used for this purpose and it was intended to endow research into agriculture in all its aspects, technical, biological and economic. In view of the slow increase in the output of Irish agriculture some research of that kind would seem to be necessary.

I would ask the Minister if he could enlighten the House of whether the Grant Counterpart Fund is still available for that purpose; if he intends to make it so available or if he intends to provide some alternative means of financing such a body? Many missions have gone from this country under E.C.A. to the United States of America to gather knowledge on improved industrial methods. One subject that was investigated formed the subject of an exceedingly interesting report which was studied with great attention in my own college. That is the question of relating university education to management and industry. I would ask the Minister if any steps are going to be taken to implement the result of these inquiries either through the Grant Counterpart Fund or through other sources?

There is one final matter to which I would like to refer even though it is a slightly personal matter. In this House and elsewhere when students of economics speak on matters such as those we are debating to-day there is a tendency for certain people to treat their contributions as being in some way or other unreal.

In a recent debate in this House in which I made a very simple contribution to the discussion and made a certain very simple suggestion to one of the Minister's colleagues, I was told that I was shadowboxing and raising hares and being "academic." In this House when my legal friends speak on legal matters and when my medical friends speak on medical matters nobody suggests that their contribution would be necessarily lacking in value, but when people, who have, if you like to say for their sins, been doomed to study these matters, attempt to put the fruit of their inquiries at the disposal of a public assembly every taunt that can be raised is raised against them. I am consoled on that question by this: since that debate in this House I happened to get the fifth volume of Ricardo's collected works and Ricardo, it may interest the House to know, sat in the House of Commons for five years as the member for Portarlington—a rotten borough which he only got by lending the local landowner £50,000; however, be that as it may. He spoke on several questions, on the corn laws, the return to gold, the Bank of Ireland and other things. He complained in his correspondence, which is now published in this volume, that no attention was paid to his remarks because they were all dismissed as being "academic," so I am failing, I hope, in respectable company.

What I want to say—and this brings me back to where I began, the balance of payments—is that I cannot help feeling that the people who have investigated economic questions in this country since the Treaty have really done quite a good job of work in the sense that everybody to-day is talking about the things which the economists were talking about a few years ago. In 1938 we on the Banking Commission were told that our preoccupation with the balance of payments was academic and unreal; everybody is talking about the balance of payments to-day. We were told that our regard for the value of sterling and the future of sterling showed something almost in the nature of a lack of proper pride in our own country. In the Dáil Debates during the last fortnight statements about the value of sterling to this country stronger than we ever made, have been made by Ministers and people on the other side of the House. The remarks of the Banking Commission about borrowing for non-productive purposes, the incurring of public debt of a deadweight character, borrowing for housing, have found echoes in what I might call patriotically the most unimpeachable quarters. In other words I cannot help feeling that the course of events has succeeded in educating the Irish people in the way they should go.

I mentioned already this evening that when certain Irish economists to-day are prepared to tolerate, to advocate if you like, the repatriation of external assets, when they are prepared to advocate a programme that allows for continuing disequilibrium in the balance of payments through a period of years, they are accused of inconsistency, compromise and failure to maintain the principles which they maintained on an earlier occasion.

Speaking for myself, and I am sure for some of my colleagues on the Banking Commission, I want to make it perfectly clear that if we are prepared to tolerate a programme of disequilibrium in the balance of payments we do it simply because we regard it as the lesser of two evils. We regard it as a lesser evil to lose some of our external balances than to suffer severe and abrupt deflation. The reason why we have had to come round to this point of view and tolerate policies and programmes which seem to conflict with what we advocated 15 years ago is very largely because the amount of saving in this country and the expansion of agricultural production have not responded to the necessities of the situation. We never hesitated to say that the true line of progress in this country is great investment in agriculture based on abundant saving and high technical knowledge. The great expansion in agriculture has not taken place. I would suggest to the Minister that that must always be kept in view as the touchstone of his policy. In the long run, unless we can expand our exports and agricultural production, we shall have an abrupt correction of our disequilibrium that will be extremely unpleasant for everybody concerned. Meanwhile, as the lesser of two evils, to be endured, to be tolerated, but not to be applauded, a continuing disequilibrium may possibly be allowed to continue for a few years.

I do not propose to follow the previous speakers into the labyrinthine finances which they have put before the House. It appears that in discussing the Central Fund Bill all aspects of our national position can be discussed; in other words the debate seems to me to assume much the same character as the debate we had on the Supplies and Services Act which was before the Dáil some months ago.

The speech we have listened to from Senator O'Brien was very enlightening indeed and it is not for me, a more or less inexperienced man in economics and finance, to refer to the things he said. With some of them, of course, I am in agreement and with others I am not. Senator O'Brien referred to income-tax and the necessity for an overhaul. There are other people in this country who have the same belief: that the income-tax code as it operates at the present time is to a great extent out of date. While many people mention that there are certain sections of the community outside the scope of our income-tax code we are very seldom told what those sections are. Possibly we may be told later on when the discussion takes place on the motion at present on the Order Paper.

I was glad to hear Senator O'Brien refer to certain difficulties with regard to the repatriation of our external assets. From the loose way in which people sometimes talk about the repatriation of these assets one would imagine that all the Government had to do was simply to give the order and the assets would be repatriated. As Senator O'Brien has stated, it is not possible to have those assets repatriated as one might wish because the bulk of them represent individual investments abroad. I doubt if there are many people either in this House or in the Dáil who would advocate the compulsory repatriation of these assets because that, in effect, would be an interference with the liberty of the individual to invest his money where-ever he likes and in whatever way he likes. We should always bear that in mind when we talk about the repatriation of our external assets.

Some people seem to think, and I notice that idea is more prominently held by the supporters of the previous Government than by anybody else, that it is not a bad thing to run through our external assets. I think the people who hold that view would be well advised to reconsider the position. I am always inclined to liken the position regarding these external assets, which, as Senator O'Brien has stated, represent the savings of the people who have worked here and found themselves in a position to invest money earned out of that work, to the position of the householder. There is an analogy. The ordinary householder, if he is a good husbandman, will do his best to accumulate a certain amount of money for his children. If some of his children subsequently run through that money without bringing about any long-term benefit to his family, will anybody say that that is good policy?

The Vote on Account this year reaches a figure of round about £94,800,000. Of that sum £11,300,000 can be accounted for in connection with Supplementary Estimates that had to be brought in from time to time during the present financial year to cover certain commitments entered into by the previous Government. This £11,300,000 must, therefore, be subtracted from the total amount and that brings the bill down to the level of last year. But there is more than that in my view. That £11,300,000 must also be added on to the figure for last year since it is in respect of commitments entered into by the previous Government during the current financial year. Had that Government intended to carry out the undertakings referred to they would have had to provide that £11,300,000. Therefore, that sum should be added to the £83,000,000 that appeared on the Book of Estimates last year and that would bring the figure for last year up to £94,000,000.

That is the position as I see it. The Minister has already mentioned the various items in this list. I shall deal with just one of them. It is not by an means the largest item but it does demonstrate the lack of sincerity which characterised certain commitments entered into by the previous régime. I remember the Social Welfare Bill that was introduced with such a flourish of trumpets. In that measure no provision was made for an increase in old age pensions. That was found to be unpopular and in order to relieve the anxiety of some of the Independent Deputies the then Minister undertook to amend the measure in order to make provision for an increase in old age pensions. What happened? The Minister for Finance subsequently introduced his Budget and made no provision for these increases, and it is as a result of that that we have this figure before us to-day.

What about your plan that you published at the time?

We will hear all about that to-morrow.

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

Before the House adjourned I was endeavouring to point out to the Seanad that the Bill which is being presented to the country for this financial year is £11,000,000 less than the Bill that should have been presented last year if the accounts had been properly squared. Senator Douglas referred to increased production from the land and to the advisability of encouraging such increased production by every means and by what he described as enlightened leadership. I submit that the enlightened leadership is already there and has been very much in evidence within the past few months especially.

Only then?

Especially. It remains for the people engaged in work on the land to respond. The Taoiseach, as everybody knows, addressed a conference in that regard a short while ago and he also gave a radio broadcast. The Minister for Agriculture himself has been very active in connection with the drive for increased production from the land. He has appeared before almost every county committee of agriculture in the country, appealing to them for increased production and I do not know what more leadership or encouragement could be forthcoming. If there is anything more that it would be desirable to do in regard to it, we would like to hear it.

There is, in my opinion, sufficient price inducement for the farmers to till more land, to produce more wheat, beet, barley and other crops and, in fact, the price being paid for wheat and beet, the guaranteed price, is, I understand, higher than that which is being offered to the farmers of any other country on the globe. I fail to understand to what greater extent and in what better way than good price inducement and good advice can the farmers be got to increase production from the land. Not merely should there be increased production from the land, but there should also be a stepping up, if possible, of production from our industries. I do not want on this occasion to refer to these in detail but I want to mention one or two industries which I think should be given greater encouragement and I would say this irrespective of whatever Government is in office for the time being.

I refer, in the first instance, to the production of turf. I think the time has come for us to examine the fuel position, with a view to ascertaining to what greater extent the use of coal can be decreased and the use of turf increased. I think that is an all-important item.

Much has been said about the balance of payments and the enormous deficit that there is at the present time in the balance of payments. If we want to reduce that gap, we must start somewhere, and I suggest that is one way in which we can do it. A lot of money leaves this country every year for the purchase of coal, and in many cases turf could be substituted for coal. I am not at all sure that the time has not come when, as was done during the last emergency, certain zones would be mapped and declared to be turf areas. That is worth considering. If the cement factories had been extended also in time it would have made some difference as regards the balance of payments, and the article would also now be much cheaper.

In other words, we must try to get back as much as possible to the policy of Sinn Féin. The circumstances in which we live prove beyond doubt, and it will became more apparent as time goes on, that the architects of Sinn Féin were not the foolish visionaries they were supposed by some people to have been, but were far-seeing, sensible people.

The overall picture at the present time is that the people are living beyond their means. It remains to be seen to what extent that can be rectified. It is a very unpopular thing, I know, to tell the people that they should make sacrifices, that they should do without things that they have been accustomed to enjoy, but the stark realities of the position will have to be faced.

Senator Douglas referred to what he called pessimistic speeches. I do not regard the speeches that have been made by Ministers as pessimistic. I regard them as realistic speeches. In other words, they have been pointing out to the people what the real position is, and it is better to do that in time, than to suffer the people of the country to live in a fool's paradise. I know, as I have said, that people do not like to hear that they have to submit to sacrifices of any kind. None of us likes to hear that. We can call such advice pessimistic, but it is necessary to give it at the present time.

I said at the commencement that my remarks on the Central Fund Bill would be brief, and I must adhere to that.

When Senator Kissane referred to the enlightened leadership of the last couple of months I searched my memory to see what new political leader or political figure had crossed the Irish political scene. Senator Kissane, obviously, must be referring to Mr. R.A. Butler, the British Chancellor of the Exchequer.

He never came into my mind.

He certainly came into mine as soon as the Senator referred to the enlightened leadership of recent months because there is no doubt at all that the Minister for Finance has been playing a game, possibly a very timid one, of follow-the-leader with the British Chancellor of the Exchequer. However, I will have more to say about that later.

The Senator's mind is always concentrated on London.

This debate gives Senators an opportunity of reviewing general policy and financial policy. We had a similar opportunity on the Supplies and Services Bill some time last November or December. We are entitled to ask if the picture has altered since then or are we still in the same state as we were when we were discussing the activities, the administration and the policy of the Government on that occasion. I cannot see any appreciable change other than the discussions the Minister for Finance and the Minister for Industry and Commerce had with the British Chancellor of the Exchequer and whatever arrangements may have been come to during those discussions.

Apart from that development in recent months we are faced with the same picture as we had towards the end of last year. We are faced, although to a lesser extent, with ministerial speeches of gloom and despair, speeches which started in the Dáil with the present Minister for Finance the month after he, by some mischance, returned to office last June.

By the will of the people.

I believe that the position is this and that the real key and secret to the speeches of the Minister for Finance and his colleagues is that they know very well that they are not returned to Government by the will of the people, that they know they were returned to office, despite the will of the people, by the activities of some smooth political operators and that they were not a popular Government.

How did they get elected?

Knowing they were not wanted by the people, they decided to make an effort to discredit their predecessors, a deliberate effort, I think a dishonest effort; and I believe that the motive behind that effort to discredit their predecessors was that, knowing that this was not a Government popularly elected by the people but quite the reverse, they decided that the only chance of remaining in office was to discredit those who went before them so that they might then be accepted by the people as the best of a bad lot.

They were the best, anyhow.

I believe that was what started the speeches of the present Minister and his colleagues. The Minister knows that he is not there by the will of the people.

How did he get there?

He hopes that by discrediting his predecessors he will be accepted by the people as the best of a bad lot.

How did he become elected?

I have already described how he got there. I hope Senator Quirke will not tempt me too far on those lines. However, the month after he was appointed to office, the Minister set out in July, 1951, with a speech in the Dáil. Most of us will remember the phrases running through that speech—complaints about the spendthrift policy of the previous Government, about bankruptcy and extravagance, about dissipating external assets, and so on. The same phrases have been ringing around this country ever since, tripping off the tongues of the Minister for Finance, the Minister for Industry and Commerce, the Minister for Posts and Telegraphs and the Minister for Lands.

I remember that in this House towards the end of last year, Senator O'Donnell, who was in a much better position to speak on this particular question than I am—solemnly warned the Minister that these speeches were rash and imprudent and that they would cause dislocation in industry and would result in unemployment and emigration. That has happened, Senator O'Donnell's words have proved to be quite true and the surprising thing is the reception which the accuracy of Senator O'Donnell's forecast has had by some Ministers of State. It is another matter I will refer to shortly.

We had these speeches telling our own people and telling the world that we were on the verge of bankruptcy, that we were put to the pin of our collar to keep the Irish £ on a par with sterling, that we had barely sufficient money to pay the wages of the Civil Service. Through speeches of that type, the uneasiness which was created at home caused a very severe business depression. It caused a slump in trade, a slump which has not been remedied since we discussed this subject in November or December of last year. There are other Senators in the House who will be able to tell the Minister—because they are actively interested in business circles—the effect of that slump on the business circles with which they are connected. What I want to point out is that that slump and that trade depression was entirely unnecessary and was artificially created by the scare and panic speeches of the present Minister for Finance and his colleagues.

I do not think there is any doubt about that at all and as proof of that I propose quoting from some speeches made by the Minister for Finance and the Minister for Industry and Commerce when they were in opposition. I propose showing the House that the views they held then were diametrically opposed to the views to which they gave expression when they became Ministers in June of last year. Speaking on the 6th March, 1948, as reported in the Irish Press, the present Minister for Industry and Commerce gave his views as to how the country should be governed in the years immediately then ahead. He told the country, through the columns of the Irish Press, that one of the greatest mistakes that could be made was to think that this country should face into a policy or a period of austerity, that there was no reason why that should be so, that there was no reason why the people should have to do without any goods which they wanted to import. The actual wording of the present Minister's speech—he was then a Deputy— as reported in the Irish Press, was as follows:—

"NO NEED FOR AUSTERITY.

There was neither in our budgetary position nor in our external trade balance any justification for imposing on our people a policy of austerity. Austerity in Britain had not been the policy desired by the British Government or people, but was the unavoidable and unwanted consequence of depleted external resources. Irish external resources had, on the contrary, been enormously expanded during the war, and there was no particular level of external assets which could be regarded as sacrosanct."

Is that still the view of the Minister for Industry and Commerce? Is that still the view of the Minister for Finance? If it is, what is the explanation of the speeches forecasting doom, of the despondent attitude of the entire Government since June of last year.

What was the date of that speech and where was it made?

It was in 1948.

Where was it made?

I do not know where. It is reported in the Irish Press of the 6th March, 1948. I have no doubt Senator Quirke will accept it that it was accurately reported.

If I knew where it was made—that is the least anyone ought to say.

I am quoting from the Dail Debates, column 1065, in which the Minister's speech is reported.

What Minister?

Let me put it this way. If it is challenged, does Senator Quirke say the Minister for Industry and Commerce never used those words?

If the Senator would tell me where he said them——

That should be stated.

Is it the position that neither Senator Quirke nor Senator Yeates is prepared to stand over those words? Are they embarrassing? Is it that they do not want them to be repeated now, and do not want the Minister for Finance to have the further embarrassment of answering my question as to whether those are the views of the Minister for Industry and Commerce and the Minister for Finance to-day, that there is no level of external assets which can be considered as sacrosanct.

The answer to the Senator is that that was the position in 1948, not now.

Precisely. That is what I am coming to. What has happened since 1948?

Three years of inter-Party Government.

The Minister instead of being on the Opposition benches in the Dáil is on the Government benches and he has turned turtle.

Three years of inter-Party Government has changed the situation. If the Minister had been in office——

If the Minister were in office he would not have made that speech.

I do not like to appeal on a point of order but would the Senator tell the House who made the speech?

I have already stated the present Minister for Industry and Commerce.

I thought it was the Minister for Finance you were talking about.

No. I merely remember that on various times in the past three years the present Minister for Finance—and I say Finance—was very careful of our constitutional position regarding collective responsibilities.

May I, through you, Sir, put another question? Do I understand that the Senator is at the old game of ringing the changes in this matter?

He is at least ringing the bell.

Or playing the three card trick.

The Minister for Finance in an article in the Sunday Press on November 13th, 1949 under the heading “Diddilum Dandy; or What Is The Value Of Your Pound” by a person then described as Seán MacEntee, T.D., Minister for Finance from 1932 to 1949, wrote with presumably the full weight of that awful responsibility which falls on a Minister for Finance still resting heavily on his shoulders and said:

"Only a fool, we know, would continue to entrust his savings to a bank which in respect of every pound he had previously deposited, would force him to take the equivalent of only 14/-."

The Minister might tell the House if that position was still there to-day and if it is as true to-day as it was on November 13th, 1949. Is the position that, with a possibility of a further devaluation of the pound, only a fool and only an Irish fool would allow his external assets to rest across the water? The same man who wrote that article, when referring to the inter-Party Government said "they are dooming the Irish people to go down with the British ship," the reference being to the fact that the Irish Government had devalued the Irish pound in relation to the dollar following on the decision of the British Government to do the same thing.

The implication in this statement was that if Seán McEntee, T.D., was Minister for Finance he would show the British a thing or two and would not doom the Irish people to go down with the British ship. He would take a strong independent line. What has happened, according to Senator Kissane, is that we have enlightened leadership in the last few months and in the last few months the Minister for Finance received what is euphemistically called an invitation to meet the British Chancellor of the Exchequer. He responded to it but I do not think that the Minister has yet had the nerve to disclose to the people of this country what happened at that meeting. I think he did go so far as to say recently that no commitments were made; that there was a full and frank discussion and an exchange of views.

The Minister for Finance must have had a very difficult time at that interview. If my memory serves me right, it was necessary to strengthen the Minister's morale for his attendance at that interview by sending the Tánaiste with him. I am not surprised, and in other circumstances I could have a great deal of sympathy with the Minister for the predicament in which he found himself. The position is that whatever difficulty the Minister found it necessary to face at that interview, whatever awkward questions were asked and whatever situations arose and had to be faced, were of the Minister's own making.

The Minister spent the past number of years in shouting from the hilltops of this country that we were on the verge of bankruptcy. He artificially created a state of depression here at home. As a result of his speeches he caused unemployment and emigration and so we are not surprised that we did not get any great details of that interview with the British Chancellor of the Exchequer.

However, that enlightened leadership continued. The British decided to curtail travel allowances and cut them to £25. It was suggested in an Irish newspaper that the Irish Government was going to follow suit and that was indignantly denied at the behest of the Minister for Finance by the Government Information Bureau, but a few days later the Minister went into the Irish Parliament and announced that the Irish Government was going to follow suit with the British and cut the travel allowances to £25. The British Chancellor of the Exchequer thought it was necessary to advance the date of the British Budget and I think for the first time in our history we found the Minister for Finance here doing the same thing.

The extraordinary thing about all this is that all our information comes, not from the Irish Parliament or the Irish Minister for Finance, but through the British Chancellor of the Exchequer speaking in the British House of Commons. We were told through the British House of Commons that on a particular date the Irish Minister for Finance would make a statement in Dáil Éireann. We were told by the British Chancellor of the Exchequer in the British House of Commons that he has received a message from the Irish Minister for Finance stating that he is aware of the gravity of the situation, etc. These are all matters which require some explanation from the Minister.

There are a number of other matters which the Minister might explain to the House, and one is in relation to the question of food subsidies. Several Government Ministers, including the Minister for Industry and Commerce, the Minister for Lands and the Minister for Posts and Telegraphs, during the last four or five months continued to tell the people of the need for a cut in food subsidies. They have been making speeches which bear no other interpretation but that they have decided as a matter of policy that the food subsidies must go or be cut. I do not know whether the Minister for Finance has made similar references, but certainly the Ministers for Industry and Commerce, Lands and Posts and Telegraphs have all gone on record in speeches, not only in the Dáil but throughout the country, regarding the necessity for eliminating or reducing them.

I do not know whether that is Government policy or not. Perhaps it is not fair to ask the Minister a week before his Budget statement to give the House his views on that, but we are entitled to ask him about the speeches his colleagues have been making on the subject, when we have regard to page 272 of the Book of Estimates, and find that although Government Ministers have been going around the country warning the people that the food subsidies are practically an insupportable burden on the people the present Government have increased provision for them by something over £2,000,000 for 1952-53 as against 1951-52. Is this whole thing bluff? Is this Book of Estimates merely a fake? If the food subsidies are to be abolished, reduced or merely not increased why did the Minister provide a little over £2,000,000 extra in his Estimate? I would like the Minister to give us some explanation of that.

As recently as the 19th of this month, speaking in the Dáil on the Vote on Account, the Minister for Posts and Telegraphs further referred to this question in such a way as to indicate that the Government still had in mind in considering the Budget a reduction in the food subsidies. Despite what Senator O'Brien has said I would appeal to the Minister not to touch them, and I would give him this word of warning: There are certain Deputies in the Dáil supporting the Government who have pledged themselves to seek an increase in the food subsidies. How will the Minister stand? How can he expect to maintain their support then?

You pledged yourself to support a no means test mother and child scheme and ran away from it.

Does Senator Hartnett pledge himself to it now?

Very well. Senator Hartnett is in a position to force that policy on the Government.

As the Medical Association forced the opposite on you.

Let us see it.

The pressure group.

Everybody knows that Senator Hartnett is the leader of a pressure group who hold the present Government in the palms of their hands. Senator Hartnett says that he pledges himself this day to a free mother and child scheme without a means test.

You pledged yourself to it.

I did no such thing.

You went around the country bragging about it as one of the greatest achievements of the inter-Party Government. At the same time you were behind closed doors assuring the Medical Association that it would never be brought into operation.

All I have to brag about is that I had the necessary fortitude to put up with Senator Hartnett's company for so long.

I was never in your company.

The present Government are in office for nearly 12 months.

Thank God.

The time must seem very long to Senator O'Higgins. They are not in that long.

According to some sources a free mother and child scheme without a means test was worked out by a person supporting the Government. What is to stop it going into operation?

The inter-Party Cabinet.

There is a new Cabinet free to resurrect it. I challenge them to do it. I challenge Senator Hartnett to break with them on that.

It is time to stop challenging.

It is time to get back to the Central Fund Bill.

I would like the Minister to explain the provision for an extra £2,000,000 for food subsidies on page 272 of the Book of Estimates while, no later than the 19th of the month, one of the Minister's colleagues uttered a threat about them.

The reason is that Deputy McGilligan did not make provision for them.

Has Senator O'Higgins any views of his own?

I have plenty of views of my own.

We would like to hear them.

I dare say that Senator Yeats has, too. I have already requested the Minister not to interfere with the food subsidies.

You supported Deputy McGilligan when he reduced them by £3,000,000.

I have indicated that some of the Deputies supporting the Minister in the Dáil have pledged themselves to seek an increase in the subsidies rather than a reduction and I hope the Minister will take heed of that. Most of us will remember that the Supplies and Services Bill was discussed in the Dáil in an atmosphere of crisis. It immediately followed the speeches of gloom and despair to which I have referred by the Ministers for Finance and for Industry and Commerce and others; it immediately followed the publication of the notorious White Paper which came from the Minister's office; it followed the publication of the Report of the Central Bank and Senators will recollect the public controversy which centred around that. Senators will remember that the Leader of the Opposition took one view of that report and that the indications, at any rate up to a given point, were that the Ministers for Finance and Industry and Commerce and others took a completely opposite view.

Naturally.

Up to a given point. The Minister for Industry and Commerce walked into the Dáil and spoke on the Supplies and Services Bill. I have not got the report here; in case Senator Quirke is thinking of challenging me I will make that admission at the start. My recollection of his speech is that he most emphatically threw overboard the report of the Irish Central Bank. I think that he said that no one should think that the Government were going to allow the Central Bank Report to be tied as a weight around their necks; that the policy it proposed to operate was diametrically opposed to the recommendations of the Central Bank.

A statement to that effect was made by the Minister for Industry and Commerce.

It can be said for the consistency of the Minister for Finance that he did not publicly subscribe to that statement and there was for a time a definite suspicion that a tug-of-war was in progress between the two Ministers. We sat back to see which could pull the strongest. The Minister for Finance must have a strong arm because the Minister for Industry and Commerce threw overboard the Central Bank Report but, ever since doing so, the main recommendations of that report have been implemented and are being implemented by, I can only assume, the authority and with the direction and consent of the Minister for Finance.

If we examine the Central Bank Report we see at page 13 that one of the matters with which they dealt and one of the recommendations they made related to the land rehabilitation scheme. Obviously, the people who drew up this report did not think much of the scheme. But the people in the country did. It appeared that if that part of the Central Bank Report was adopted, that scheme was in for a slashing, and it has, of course, got a slashing in the Estimates produced by the present Minister for Finance.

If we turn then to page 14 of the report we will see that a second important recommendation made in that report was to cut food subsidies. I do not know whether or not that will be done but I have already referred at some length to the fact that the Minister for Industry and Commerce, the Minister for Posts and Telegraphs and the Minister for Lands have all been endeavouring over a period of four months to condition the people into facing a cut in food subsidies.

We turn then to page 16 of the report and we see this phrase at the beginning of paragraph 2:—

"Rigorous restriction of bank credit for non-essential and less urgent purposes is now imperative."

Can anyone seriously deny that that rigorous restriction of bank credit is in operation and has been in operation for a considerable time?

The Minister for Posts and Telegraphs has spent some of his energy in endeavouring to persuade the people that there is no restriction of bank credit. He spoke at the Institute of Chartered Accountants' Annual Dinner at the Gresham Hotel on the 19th of last November. He was reported in the Irish Times on 20th November as saying:—

"All the talk of panic and bank credit restriction was mere political flag-waving."

Is there anyone here who seriously believes that there is no restriction in bank credit? Is there anyone who seriously believes that all the talk of restricting bank credit is mere political flag-wagging? If anyone does believe that, would the Minister or someone else explain how an inspired article was written in the columns of the Irish Press just one month before the Minister's speech on 19th October, 1951, under the heading: “Banks Close on Credit. Applications Refused.”?

I will not weary the House with the terms of that article. It is there to be seen and to be read. These were three of the main recommendations of the Central Bank Report, a report which was publicly disowned by the Minister for Industry and Commerce and which, I assert, is now being implemented by the Government with all the force the Government can command.

Would the Senator tell us what Deputy McGilligan's recommendation to the banks was in his Budget statement last year?

That can be read, and I do not disagree with it in the slightest.

For those who have not got such good memories, would the Senator tell us what it was?

If people have not got good memories they have at least a sense of direction and they can find their way down to the Library, where they will be able to read the article.

I want to deal now with ministerial speeches in relation to the solvency of our country and the effect those speeches must have on the problem of Partition. The Minister and the Government must know, as must those sitting beside and around the Minister and those who are associated in any way with any of the anti-Partition associations, the difficulties which are being created on the anti-Partition front by the speeches made by members of the present Irish Government. These speeches are providing the Government of Northern Ireland with ammunition and providing Sir Basil Brooke and his colleagues with every argument to answer every case made for the unity of our country by the Nationalist members in Stormont Parliament. They are creating serious difficulties in connection with the anti-Partition drive. Not alone are they doing that but they are causing a considerable amount of amusement in Unionist circles in the North. No later than this morning the Irish Times carried a report of a speech made by Sir Basil Brooke in which he refers to the arguments put up by the anti-Partitionists and the propaganda produced by them: “Nothing is said by these one-track partisans about the effect of world conditions on finance, trade and employment on the other side of the Border.... They well knew all the political leaders in the South have been shouting of these matters. They are aware of the repeated warnings uttered in Dublin concerning the country's budgetary position, the inevitability of higher taxation and the continuing exodus of workers to Great Britain and overseas countries.” This is the ammunition manufactured for Sir Basil Brooke by the Irish Minister for Finance. Under the subheading “Amused” the article continues: “Some people in the South would like to have these things hushed up. I was amused to read the complaint made in the Dáil by one member who said it is time that some protest would be made against the spectacle of Irish Ministers parading the alleged insolvency of their country to provide ammunition for Sir Basil Brooke.”

He is being provided with more amusement now.

I have no hesitation whatsoever in registering my protest. In all sincerity I ask any member, sitting behind the Minister and supporting him, who has any concern in seeing the country united to ask the Minister to stop making this kind of speech and stop endeavouring to paint a picture of bankruptcy and insolvency merely for the purpose of discrediting his political predecessors.

Senator Douglas, at the opening of his speech, suggested that certain people here did not consider themselves qualified to talk of high finance. I make no apology for it—I count myself amongst that number, and when I hear some of the people who get up here to talk of high finance I am tempted to say: "Thank God I am not like that man." We have just listened to a speech from Senator O'Higgins and I was truly amazed at some of the statements he made. I am surprised that any man carrying such a bundle of papers as he had in his hands could not make better use of them. He was apparently, if not very well briefed, at least elaborately briefed. But he found himself in some little difficulty and I would like to take this opportunity of helping him out.

When he was asked what the previous Minister for Finance said in relation to the banks he was not able to find the paper, a thing that often happens to fellows when they have too many papers. I will help him out now. In his Budget speech in 1951 Mr. McGilligan is reported as saying:

"In present circumstances it is desirable that the banks, while continuing to finance capital projects, the laying in of essential stocks and normal import requirements, should discourage any merely speculative or excessive borrowing."

Does the Senator disagree with that?

"Or excessive borrowing."

Does the Senator disagree?

No, but Senator O'Higgins disagrees with it, because the banks now take what might be regarded as a conservative attitude. I do not approve of the attitude the banks take, but I am quite prepared to say that anybody who tries to attack the Minister without any reference to what the previous Minister said is merely fooling himself or trying to fool the people. The one thing I cannot understand is that anything the previous Minister did should be regarded by members of the Opposition here as having been all right but that the present Minister, in following the example of his predecessor in any way, lays himself open to the most virulent criticism by the same people. That is beyond my understanding.

The Minister is criticised because, when he came back from London, he did not immediately make a public statement as to the various things that happened during his discussions there. So far as we have heard, or are likely to hear, and so far as we can judge from the record of the Minister and the Party he represents, it is by no means likely that he or any of his colleagues would be dictated to by the Ministers of England or any other Government if the advice being tendered was detrimental to the interests of this country. It is no secret, however, that when Ministers of the previous Government went across on a similar mission, they accepted the American loan on the orders of the British Government. That is common knowledge.

What is the Senator reading from?

The Senator is reading from his own mind, and, thank God, he has a mind, unlike some of the people on the other side. In the same way, the Minister is criticised because he does not spend money lavishly in this, that and the other way but if he did spend it, he would again be criticised. He is criticised because there is a suggestion that he intends to raid certain funds, but Deputy O'Higgins, who was a rather prominent member of the Coalition Government at the time, is well aware that the previous Minister not only raided the subsidies——

The Minister's writing is hard to read.

——but raided the widows' and orphans' fund, the Post Office funds and the Road Fund. I cannot understand the inconsistency of some of the people on the Opposition side, some of whom, I must say, would have made fairly reasonable speeches, if they had not gone a little over the line of reasonableness.

Senator O'Higgins referred to the Minister's speeches and the damage which they did to the interests of the country. Senator Douglas spoke on pretty much the same lines, but they both seemed to forget that the row, if you care to call it a row, was started by the speeches made by ex-Ministers of the previous Government in the Dáil and by the various irresponsible speakers who were turned loose on the people and whose speeches were fully reported in the Press of the country. Any damage done to this country has been done by the people I refer to and not by Ministers of the present Government. The statement of Senator O'Higgins which he repeated time after time that the present Minister was not in his present position by the will of the people needs scarcely any notice whatever. If it came from somebody who had not belonged to the Coalition Parties, one could probably understand it, but his suggestion that the Government was not elected by the votes of the people, the will of the people, is complete nonsense.

You can test it out any time.

That is what you are afraid of. The man who would be responsible for a general election to-day would need to have his house guarded, because what is left of the Blueshirt movement would be after him. I tell you that the members of the Coalition do not want an election, and, so far as the general opinion in the country is concerned, there is no doubt that, if we had an election, the result would be an overwhelming victory for the Fianna Fáil Party.

Surely you should try it then.

As a result of the speeches made by Ministers of the present Government industry has been dislocated, according to speakers on the Opposition side.

I should like to know what industries have been dislocated as a result of the speeches made by these Ministers? Certain industries have been dislocated —very few, thank God—but the same industries, for some reason I do not understand, have suffered a similar fate in practically every country in the world; but because certain industries in this country got the knock, the only thing Opposition speakers can do is to lay the blame on their own countrymen rather than lay it where it belongs, far away outside the borders of this country.

There is one thing which the present Minister ought to be very pleased to hear—that he is regarded by the members on the Opposition side as the best of a bad lot. I take it that when they refer to him as the best of a bad lot, they refer to him as the best of all the Ministers who were offered to the people at the last election. The people made no mistake in the last election. If there was anything clearer than the issue of the realisation of the people of where their interests lay and the need for doing something to check the ridiculous administration of the country's finances by the previous Government, I should like to know what it was.

With regard to the suggestion made by Senator Kissane that we have had, since the change of Government, responsible leadership, I think the leadership we have to-day will stand any investigation. We are in the position that we have a team, with one definite captain, whose orders the members of the team carry out. That did not apply to the previous Government and it was because they could not agree amongst themselves that we had the unfortunate exhibitions of Ministers going across to London, going to Canada and various other countries and making statements over which even their own colleagues could not stand. That has not happened so far as the present Government is concerned and it is not likely to happen, so long as we have the intelligent leadership we have at present, a leadership which, I believe, will last for a very long time.

The previous Administration spoke a lot about the industries they started during their three years in office. They probably started a few but not very many, and they put a few out of commission which were going well when they went into office. I will admit that they started an industry removing the rocks from the mountains in Connemara and sowing grass seeds there. I hope I live a long time but I do not hope to live to see the grass growing on the land from which they removed the rocks.

The Minister for Finance and other members of the Government have been criticised by the Opposition because they have told the truth; they have told the people exactly what the position is. Even the speakers from the Opposition Benches now admit that the people have believed the Ministers and that the people realise now that they have been saved just in the nick of time. There is one industry that the previous Administration should have set up while they were in office: they should have set up an industry for the manufacture of rose-coloured glasses. If they had done that they might have been able to cod the people a little more of the time than they were able to do.

As a back bencher I must deplore the continued atmosphere in this House of Party politics. Senator Quirke is one of the chief offenders. He referred continually to what he described as "the Opposition" and "the Coalition Parties."

This is Coalition tactics. You are supposed to take all the attacks and not to answer back. I hope somebody will knock me down the day I listen to rubbish in this House and do not reply.

Senator O'Donnell is insisting on the constitutional rights and the constitution of this House. This is not a Party Chamber and Senator O'Donnell is doing a service in emphasising that.

Senator O'Donnell's rights are not being contested.

I stood up to create peace not to create disorder. I do hope that we will bring back to the debate some semblance of decency towards one another. We are discussing something that is of very vital importance to the nation. We are discussing in effect our whole economic future. The past and the present are being brought into it as well. It is deplorable that no reference can be made from any part of the House without trying to score Party points. They even go back in those references to 1916. When all these invidious comparisons are made on a matter of very vital national importance, is it any wonder that people outside are becoming tired of this Oireachtas? Democracy is being made a laughing stock and neither House is respected.

Does the Senator approve of what Senator O'Higgins said and his quotations?

When I am as apt to take offence as the Senator and as long in the Seanad as he has been I will probably be able to interrupt just as adroitly as he can. I am talking as one new to this House, bringing a new point of view and not trying to put a Party point of view. I would again suggest that we are discussing our whole economic position. That is a matter that should be discussed calmly and without bitterness and without attributing motives to one another for what was done in the past or is being done at present. There should be an examination of our affairs, as to how we stand, as to how our position may be improved or worsened and how we can solve any problem that may be facing us. It seems to me that we are like Nero, fiddling while Rome is burning.

I am an industrialist and I can assure the members of this House that industry was never in such a bad position as it is at the moment. The country is facing serious unemployment. This unemployment is growing daily. And I think I am better fitted to speak on this matter than most other members of the House. Factories are closing down daily. I am not blaming the present Government for the position. I am saying that it is a fact. I am saying that there is grave and growing unemployment. I am not saying who or what caused it, but that it is up to all of us to try to find some solution.

We know that there is a general fall in trade. We know there must be general unemployment in the distributing trade very shortly. We know the shopkeeper is finding it nearly impossible to carry on and I know as a supplier of the shopkeeper that it is impossible to get paid my accounts.

That is the position. Let us get away from all this rodomontade, this political bickering. Let us face the fact that the position in the country is bad and that we must do something to solve the problem. Otherwise, the people will find another group of people to direct their destinies.

When we are discussing our economic affairs we must discuss in what way existing policy affects or reacts upon the position. We should not speak on these things in a Party political way. Senator Professor O'Brien has given us an object lesson on how to talk on economics without being in any way political. He has given us a point of view with which we may agree or disagree. He has a perfect right to say it and he says it well. The debate on this Bill gives us an opportunity of discussing economics generally. There should not be any political bitterness expressed by anybody in the House.

I would suggest that the dearer money policy which has been put into operation by the banks recently must receive the serious consideration of the Government and must receive either its approval or disapproval. I would ask for the Government's disapproval of that policy, despite Senator O'Brien's argument, to some extent a while ago, for dearer money. Dearer money will cause increased prices. It will reduce the standard of living and create unemployment. Unemployment is increasing and anyone familiar with industrial areas will know that I am not painting a bleak picture for the purpose of scoring political points when I say that. If this dearer money policy is continued, if it is going to be made more and more impossible to get money at cheap rates for industry, industry must close down.

Senator McGuire indicated the ironic position that you get a higher rate now if you put your money on deposit than you do if you put it into productivity. In other words, you are getting paid for leaving your money idle. If you put it into productivity and borrow money, you pay more for it. If this dearer money policy is continued it will have very serious reactions on the country generally. I would suggest that the Government ought to advise the banks that it is a policy that is not wise to apply or to continue.

We all agree that the country is under-developed and that there is under-investment. I do not see how investment can take place while a dearer money policy is operated. How are you to continue with afforestation, how are you to continue with inland fisheries if this policy of dearer money is allowed to be put into effect? It is the duty of the Government, irrespective of who is in power, to see that the money policy and the credit policy in the country is finally controlled by the Government.

On a recent occasion here I had a colleague of the Minister for Finance telling me that I knew nothing about money or credit. He is probably right. I remember the time when that particular person was just as ignorant as I am on these matters. He mentioned that the Government has power at the moment through the Central Bank to control credit and the issuance of money generally. Assuming they have that power in the Central Bank Act, it is their duty to implement it. The continuation of the dearer money policy of the banks, with the approval of this Government, will have serious national reactions.

In discussing this Vote on Account we are really discussing our housekeeping account. The outlook of the majority of the people is that it is costing us too much to run our house. I sympathise with the Minister for Finance and all Ministers for Finance, past and present, by reason of the fact that there is continuous pressure by all sorts of groups for all sorts of services. Even in the industrial groups you find pressure for benefits of one kind or another which directly or indirectly put an extra charge on the nation. This continued giving in to people for the sake of politics or otherwise, this continuous taking of more and more from the general population to add on to heavier State charges, must stop at some point. If our expenses in running this house continue at the present rate, we will shortly find ourselves doing nothing else but continuously working for the Government and, as Senator O'Brien pointed out, you have this extraordinary position of one in every 16 giving practically 50 per cent. of their incomes to sustain these high charges for running the country.

I am sure the Minister remembers those early days when we said that if we had charge of this country how well we could run it, how advantageously we could run it, how cheaply we could administer it; and now in our old age we find we were so wrong in our prophecies. And we try to defend ourselves because some of the people outside, believing some of the things that were said in the 1900's as to how well and how cheaply and how beneficially we could run the country, find now that that is not so. The time must come when we must relate our national income to national charges and all this prodigal spending by Governments on non-productive sources must cease.

I am entirely in favour of the industrial development of our national resources by the State in cases where private enterprise is not prepared to do it or cannot enter into it, but this continuous passing over of our money, because of the pressure of some political pressure group or Party or some group of manufacturers, cannot continue, as we cannot stand it. The proportion of our national income running away in administrative charges is what is euphemistically described as "the disequilibrium in the balance of trade." It is one of the amazing mysteries of the new world that we have come to use these extraordinary phrases and Senator Professor O'Brien will forgive me if I smile cynically and ask what Macaulay would have thought if we had used those phrases in his time? We also hear it said that "we are spending more than we are earning." It does not sound right. If we are spending more than we are earning, we would have just gone "bust." I would like to know how a country goes "broke." I do not understand it, since fundamentally our wealth has remained there all the time. We have the land, which is the basis of our wealth and we have our people, an integral portion of our wealth, and we have great potential developments. I do not accept the pessimistic outlook, the talk of crises and the remarks that because certain things are done with our money this country is "broke" and finished for ever.

The Minister never said this country was "broke" or that we were finished for ever.

He said we were heading for disaster if we had not a change of Government. Everyone knows that.

I know that Senator Quirke has been saying it for quite a long time. It is quite true that an atmosphere of pessimism has been created. We have heard the Minister and the Minister for Industry and Commerce and the Minister for Posts and Telegraphs. I do not say they are wrong to say it but I do not agree with it. It is a matter of the definition of our real wealth. If you use up the existing external balances in England and that finishes you for ever, you have cause for pessimism; but my assumption is that the real wealth is your country—the land and its people and its potential development, and you are not broken and have no cause for pessimism. I am not going to be pessimistic about that. I am pessimistic only because I see that in our present economic system we are being faced with a very serious rise in unemployment. I do not know whom to blame, as I cannot see that there has been any great fall in the national income or that the purchasing power of the community has fallen. In every phase of industry and trade, from publican to tobacconist, you find a continuous fall in trade. That is going to cause unemployment and will cause suffering eventually and a very grave problem to be solved in the near future.

I would like to quote what an English Chancellor of the Exchequer has to say on this dearer money policy.

Mr. Hugh Dalton, writing in Reynolds News on March 16th, 1952, said:—

"This is a policy of deflation which must lead—and is deliberately intended by some of its most influential supporters to lead—to increasing unemployment, and then, they hope, to wage cuts, lower consumption and a lower standard of life."

If that is what the dearer money policy means in England it must have some reactions here. It is to be deplored and it is something which the present Government must face.

I was wondering a while ago, when I heard the discussion on the higher bank rate, why it is necessary for some types of people who charge prices to vindicate their dearer prices before a tribunal but the banks can arbitrarily do so with the connivance of the Government and we do not get any Prices Tribunal to investigate the increases to see what justification there is for them. One thing that controls our whole life is this money matter and it is one thing which is completely out of our control—whether or not it is a question that we are afraid to interfere. As far as I can see, as long as we do not get back down to the basic control of credit and money issuance, we are not going to solve any of our problems.

I hope this Vote on Account will bring forward some more speeches like that we have had from Senator O'Brien to-day. Whether you agree or disagree with his solution of our economic difficulty, at least he has given great thought to it and I hope what I have said, too, will have some effect. If the Minister does not face up to the position as it is and to the fact that unemployment is growing, we will find not thousands but hundreds of thousands disemployed in the very near future. If something is not done about that by the Minister, this House and the other House will be able to do nothing to save the Minister in the future.

There are a few points which I would like to put briefly to the Minister. The first is in regard to the food subsidies. I would appeal to the Minister especially not to cut the food subsidy on milk. In fact, instead of cutting it, which would be very undesirable, he should make every effort to increase it. We must remember that £2,000,000 had to be paid for imported butter during the past year, although of course there was a set off on the butter that was sold. Now, if butter had to be imported owing to a scarcity then, the same quantity would cost much more this year, if it can be got at all. If the production at home can be stepped up sufficiently to provide for our home needs, these imports will be unnecessary. Dairying is the foundation of our agriculture and it is only in the dairying industry that cattle can be produced economically. Furthermore, if we had enough cattle in the country to-day, we might find that we could easily rectify the balance of trade on account of the demand there is for canned beef throughout America and Europe. It is for that reason that I speak now, not as a farmer but in the general interest, in asking that the subsidy on milk should be increased.

I was struck with what the previous speaker, Senator O'Donnell, has said in regard to the increases in taxation. I have often felt that with the way taxation is mounting year after year it is hard to say where it is going to end. It was not the fault of any Government but every class of the community has been contributing to the increase by calling for increased services and for Government interference in business and so on. In a small country this load of taxation was bound to have a very depressing effect on trade and agriculture in the long run. It is very difficult to remedy these things in a democracy and it would require nothing short of a dictatorship. The only way it could be done would be for reasoned men in all Parties to get together and devise some means of simplifying Government administration and reducing the load of taxation. There is no reason why such agreement should not be possible. We sometimes hear of cases in the country where husband and wife are always fighting and blaming one another and when the money has run out and the sheriff is at the door they join up and put their heads together. We should not wait until that happens in the political scene.

The whole question of taxation is a matter requiring the careful consideration of all sections in the country. Taxation has been mounting year by year and the people are now asking will there ever be any end to it. It is a matter for which no Government in particular can be blamed and every section of the community has to make its contribution to the increases in taxation and the rise in costs of administration. Every section is clamouring for more and more services with the result that costs are mounting and we have to ask ourselves if the stage has not arrived when something will have to be done to call a halt to it. This country cannot afford the great costs of administration and government which richer countries can afford and I think that in the interest of democracy it is time that action was taken to remedy these matters.

The only way in which the cost of administration could be reduced would be by getting agreement between the various Parties in the State and a realisation that the costs have already soared too high. There could be some agreement between Parties to reduce some of the Departments of State and thus help towards a solution of the problem. One finds that when there is trouble in families in financial matters they will usually come together to try and find a solution for them, and why could the State not do likewise? There is a limit to the burden which business, farming and other interests can bear. Increased taxation tends towards an increase in the cost of living and creates the vicious spiral which has affected the country so much.

I deprecate the suggestion of Senator O'Donnell that we should not talk politics, Party or otherwise, in this House. What else do we have to talk about if politics are excluded?

The constitution of this House is on a vocational basis and when Senator O'Donnell says that we should not talk politics in the House he is correct.

There is nothing in the Constitution which prohibits us from talking politics in the Seanad and I hope no one will suggest that we are prohibited. As I said, if we do not talk politics what else can we talk about?

Sometimes there is logic in the politics of some of the Parties, but we cannot find any logic in the policy of the Government. Senator Quirke had asked Senator O'Donnell if he agreed with what Senator O'Higgins had said. Senator O'Donnell did not feel equal to saying whether he did or did not. If it will be of any information or any interest to Senator Quirke, I will tell him that I agree with practically everything that Senator O'Higgins said.

That makes things worse still. I did not think there were two people who could agree in that way.

Most reasonable and sensible people will agree with what Senator O'Higgins said. The Minister for Finance, Senator Quirke was suggesting, was not elected a member of the Dáil by the people. Of course he was elected as a Deputy by the will of the people.

Senator O'Higgins said he was not.

No. He was not suggesting anything of the sort. Nobody would suggest that the Minister was not elected by the will of the people of Pembroke and district as a T.D., but I will suggest the Minister was not made a Minister by the will of the people. He was made a Minister as a result of the operations of a number of people in another House. Nobody for a moment will seriously suggest that the people of this country in the election of last year wanted a Fianna Fáil Government. We have a Fianna Fáil Government by accident and not by the choice of the people. Senators and everybody else should not forget that.

What about the Constitution? Does the Senator not give notice to that?

The Constitution provides for all these things and we all accept the Constitution.

Has the Senator any suggestion as to how Ministers could be elected?

I am not making any suggestions as to how Ministers should be elected but I am trying to make quite clear that the suggestion must not come from this House that Fianna Fáil were elected the Government of this country by the will of the people; they were elected by accident.

And the other Government went out by accident?

Not by accident.

The King-maker, Senator Hartnett, will tell you who elected the Government.

An Leas-Chathaoirleach

If we came to the Central Fund Bill now there would be no need to elect Ministers.

I have been interrupted.

An Leas-Chathaoirleach

I would appeal to Senators to stop interrupting.

And bringing in those skeletons—it is not fair.

We are being attacked.

The matter of savings deserves the Minister's earnest and serious attention. It was referred to by Senator O'Brien. We cannot stress this matter too seriously. The position to-day is really deplorable. In this country there is no savings instinct, no desire to be thrifty, no desire as there was years ago to put money by for the rainy day. Strangely enough, the Governments which we have had have not dealt realistically enough with this problem. The last Government made a real effort to deal with it and make savings a real issue. The Departments of Posts and Telegraphs and Finance really made an effort to get the country savings conscious. I would appeal to the Minister to get the people interested in savings movements with a view to getting the country savings conscious because it is most important that the people should realise that they should make some effort of their own to provide for the future. I am afraid that this lack of desire to save is due perhaps to belief in the welfare State idea. People say: "We do not mind, we do not have to worry, we can have a really good time to-day and when we are unable to make money of our own a benevolent and kindly State will look after us." As has been proved to us here to-day, saving is a real need and of considerable importance to the country and I would ask the Minister to see that a proper savings campaign is initiated and conducted.

Savings reminds me of the banks here. "The bank rate" is a fine phrase; everybody uses it to-day but a number of people do not pay full attention to what it means. There are a number of bank rates: there is the rate at which my bank manager will lend me money—generally the highest rate he can get; there is the rate the bank manager will charge a person if he produces security for the loan, Government or gilt-edged security; there is the rate that a bank manager will charge, say, a charitable institution. Then there is the rate which the bank manager will pay me if I am fortunate enough to have £100 to lend to him, so that he may charge the person to whom he lends my £100 six times what he pays me.

The Minister should consider the interest payable to and by the banks. I am not suggesting that he can dictate to the banks what they may charge me, but as he has indicated to the Banks' Standing Committee, not perhaps directly, that certain things might not be done, I would suggest that he might indicate similarly to the banks that whereas they raised the rate at which they will lend me money by 1 per cent., an explanation would seem to be required why they are then adding only ½ per cent. to the rate at which money is being lent to them. We are told through the Dáil that the bank rate, the rate at which banks will lend money, has been raised by 1 per cent. principally to prevent our being exploited by capital from outside but strangely enough they raised the rate on the other side only by a ½ per cent. and in order to qualify for the maximum rate you must lodge a very considerable amount.

I see that it has been stated that the Minister is to take steps to save dollars. That is right and I would urge him to save dollars as far as he can. I would urge him to prohibit the import of American films, certainly if they cost us dollars. There is no reason why we should spend dollars on such things as films and there are other dollar purchases on which he might also save. I know that he may have some difficulty in cutting down on the import of raw materials from dollar areas.

Again, if I may, to the pleasure of some Senators, speak perhaps a little Party politics, there is no doubt, it cannot be disputed, that great trouble, worry and serious upset was caused to the business community by the speeches of our Ministers. Nobody can deny that. The position was only saved when the Leader of the Opposition in the Dáil put down a motion which brought about a complete change of front as evidenced by the changed attitude of the Minister for Industry and Commerce. This pessimism is greatly to be deplored. The Government must learn to stand up and face their responsibilities even though they may be serious. The financial position to-day is not perhaps as everybody would like it to be, but that is no reason why we should become so afraid as to transmit that fear throughout the country. That did happen. I think that following the change of attitude by the Minister for Industry and Commerce in the Dáil the position improved slightly but it is not exactly as it should be to-day and that is due to the attitude of our Ministers. There can be no doubt about that.

I had no intention of intervening in this debate, but I feel impelled to support some of the remarks made by Senator O'Donnell. Indeed, I think he was supported to some extent by Senator Professor Stanford and misinterpreted to a certain extent by Senator P.F. O'Reilly.

For three years prior to the change of Government I sat on the Opposition Benches—as we call them—and I think it will be agreed that at that time we were a fairly happy family. Unfortunately as a result of the change of Government this Assembly became somewhat turbulent. The members from the Dáil who have come in here seem to be inclined to bring with them the tactics of the Dáil. I would appeal to Senator O'Higgins to rid himself of that idea; that sort of thing is not done, as the Englishman would say. Indeed, it would be better for us if it was not done.

In connection with the remainder of Senator O'Donnell's statement, I can only say it was the most doleful speech I have heard for many a long day. According to him we are on the verge of bankruptcy. We all admit that the position is not as we would like it to be but personally I am quite satisfied that we have a Government that will carry us successfully through our present difficulties. There can be no question that the present position was not created in the past nine months. I believe it is the result of what I describe as the "Rake's Progress" of the last Government which simply went ahead and had no concern for the future. I suppose they felt they would not remain very long in office and they might as well do all they could while they were there.

Once and for all, I want to scotch the idea that the Fianna Fáil Government is not representative of the people. I think it is much more representative than the Coalition Government was. I know the inner story of the setting up of that Government. I think the present Government has nothing to be ashamed of and nothing to regret in being the Government of the country. Their Party has lasted since 1932, with a short break of three years, right up to 1952—a period of 20 years. There must be something in it.

I do not think anyone mentioned income-tax in this debate, though it used to be a subject upon which we were always ready to talk. It seems to have been side-tracked in the debate to-day. I have a definite grievance in relation to the present incidence of income-tax. People have to pay income-tax to-day, people for whom that particular tax was never intended. I am sure I will be told, as we are always told, that if concessions are made the money will have to be found in some other direction.

I am a trade union official and our members have a very definite grievance. We have a superannuation scheme under which a weekly subscription of 9d. is made by each member towards the fund. Generally the fund runs for 40 years and members join when they are 21. Sometimes they are not finished at 60 and they go until 80. When they come to retire they get the superannuation benefit to which they have subscribed but, as a result of that benefit, they are deprived of the old age pension. I hold that that is putting a premium on thrift. The thriftless man's philosophy is, as Senator P.F. O'Reilly has said, that there is no use in worrying about tomorrow because the State will look after him; he does not therefore make any provision for his old age. The thrifty man on the other hand who subscribes 9d. per week, and 9d. may be a considerable sum to him, is deprived of the old age pension as a result of his thrift and foresight.

I think the Minister should make some concession with regard to the payment of old age pensions to trade union members who are entitled to superannuation benefit. Any such concession would be much appreciated.

Recently a Parliamentary Secretary approached me and told me that there was certain work to be done but he had failed to get the men to work overtime on it. I understand the work was urgent. The men will not work overtime because most of the overtime earned will go in income-tax. The Minister should realise that income-tax is a two-edged weapon. He gets the tax admittedly but the country loses in the long run.

I do not believe the present position is as difficult as it appears to be. Senator O'Donnell, and to a lesser extent Senator McGuire, appeared to suggest that we are heading for disaster unless something extraordinary happens in the very near future. We have a Government in power. I am perfectly satisfied that that Government is quite capable of carrying us through. The present situation is not merely the concern of the Government. It is the concern of the country as a whole and it is up to each of us to do all we can to bring the country through what I believe is a temporary crisis. In that way I think our difficulties will be solved very quickly.

Speaking some months ago on the Supplies and Services Bill I said that a Government could not continue discharging their duties unless they were prepared to stand up to their responsibilities. "Prevention is always better than cure" and "Forewarned is forearmed". It is essential that we should cut down imports and increase production here in order to increase our exports. Following on the change of Government in 1948 that policy was dropped. The best mineral resource we had, turf, was pushed aside. Every shilling earned on turf was earned by the Irish people. Our bogs are situated in the poorest parts of our country. The policy of turf production was dropped and we were told there would be plenty of coal from Great Britain. There was no coal and we had to go to America and the Continent of Europe for it. That coal had to be paid for in hard currency. If there had been sufficient turf production we could have done without that coal.

Reference was made to subsidies on housing. In that respect, if there was a real seriousness and genuineness of effort on the part of the Government at the time in office with regard to the building of houses and their subsidisation, so far as the national purse could afford it, the one thing they would have done would have been to take up the job where it had to be left off by reason of the change of Government in 1948 and extend the production of cement. During their three years, the directors of Cement, Ltd., the Minister for Industry and Commerce, his Parliamentary Secretary and various officers of the Department met and met, and still a decision could not be reached, with the result that to keep up the rate of building by both private individuals and public authorities, it was necessary to import cement, which was costing much more than the home-produced article. The result was that there had to be an over-all increase in the price of cement which had to be added to the cost of houses which were already costing too much, as all taxpayers and ratepayers will agree, as being the people who have to occupy them and find the rent for them.

Reference has been made to the Central Bank's condemnation of the land rehabilitation scheme. Whether the Central Bank condemned it or not, I maintain that they were justified in doing so, because there was a definite waste of money in very many cases of land reclamation. Upwards of £50 and £60 per acre was spent on land, the market value of which ranged from £10 to £15 per acre. Of the cost, £12 is the amount charged to the occupier of the land and the balance has to be made good by the taxpayer. An effort was made, in the interests of increased production, to induce the Minister responsible in the inter-Party Government to give a subsidy in respect of artificial manures so that the better land could be put into the first line in the battle for extra production.

Our imports were approximately 250,000 tons per annum and a subsidy of £4 would have meant £1,000,000 which would have been very little out of the amount of money we got under Marshall Aid. The House can see how very few acres it would deal with at the rate of £50 per acre. A subsidy of £4 would have reduced the price of artificials to approximately £6 per ton at that time and it took £48—£60 less £12—to reclaim an acre of very bad land. That £48 would have bought eight tons of fertilisers at £6 per ton and those eight tons of fertilisers could have been used to treat 40 acres of land and perhaps more than 40 acres. Which would have given the better yield? I maintain that the latter would have given a better yield and we would be in a better position to pay back to-day because we would be paying back money, the borrowing of which we had got some return from.

We also had references to businesses being inclined to close down, but in Limerick I do not see any businesses inclined to close down. Even the "pubs" were referred to, but the "pubs" in Limerick are going strong. I know that the hardware business is going very well, but there is one business which seems to have suffered a hold-up, that is, drapery. The situation there is easily explained because, when there was an armaments race between the Soviets and the Yanks, in respect of the 1951 wool clip, the price was driven to £1 per lb., and immediately the announcement appeared in the papers, months before the wool could appear in the form of cloth, there was a jump in price and it is the reaction to that unjustified jump in price that has been responsible for the falling off in drapery purchases. I am quite sure of that, and I stand over it.

We had references also to the small number of people who pay income-tax, but that is understandable in a country which is mainly agricultural. If you take a square mile of certain parts of Britain, what population will you find there industrially employed compared with what you will find in perhaps a whole county here? Senators are aware of the huge number of valuations in this country—from £20 down to 1/-. There are very many under £5 valuation. These people are called farmers because they live on the land, but surely we will never have the land so flowing with milk and honey that a person in Mayo on a 50/- valuation holding will be caught by the revenue people. None of us can see that day and it is only natural, on the basis of the number of industrialists here compared with the numbers on the land, that the number paying income-tax should appear small.

With regard to savings and the attack that has been made because there is not sufficient saving, I say that if the Government were to provide money for every scheme for which they are asked to provide money, the Minister would be looking for much more than £94,000,000 for the current year and if every local authority were to say "yes" to every appeal made for the spending of money on various schemes throughout its area, their bills would be much higher, despite the fact that everybody agrees that they are high enough. Everybody here who is a member of a local body will agree with that.

I am not prepared to agree for a moment with those Senators who said that the ordinary people are spendthrifts. They are not. People with small means, whether earned or otherwise, put money week after week into the post office and there are more people with insurance policies than ever before, although the amounts may not be large. Were it not for them the number of people engaged in insurance at fairly remunerative rates would not be in that business. I see them in my own county going into the cottages and collecting the few shillings week after week. Some of the better-off people may have larger policies, but we need not go into that. That, however, is definitely saving in their case.

In the case of the person who is able to make very large profits, if these are taken away in income-tax, he maintains that his savings have been taken but I maintain that they are not his savings but something over and above which he has managed to extract from the people who buy his products. If that man gave the benefit of a certain percentage of his profits to the people, although it might not amount to very much, the claim of the Minister for Finance would be less, but whether it would be better for the country is for the country to judge. It is probably better the way it is done. That may be good business but it is definitely not saving and these moneys should not be called savings as compared with the couple of shillings the workingman puts into the post office or into insurance.

It is wrong to suggest that everybody in the country is saying: "The State will maintain us." It is not true and it is not fair to our people and I would not like to allow any such suggestion to go unchallenged. There will always be spendthrifts in every walk of life. There have always been people who inherited the equivalent of £1,000,000 and who were able to go through it and end in poverty, and there always will be. It would be a dull community without them, despite the fact that their occupation is not a very admirable one.

Everybody is prepared to agree that we have reached the peak point of taxation, but we know that certain taxation will be necessary to make up the deficit which has been given over to us. The Budget last year did not provide for all the services in existence and a certain amount is needed for each and every one of them. The previous Administration did not provide 100 per cent. of the money necessary and that situation passed on to us. We had to take it as we found it and carry on. The duty now devolves upon us of facing the unpopular task of having to ask the people to make the necessary effort. I hope the necessary effort and the final effort will be made to get us straightened out once and for all and that we will never have to face a position like it again.

I would like to make it clear that it has never been seriously suggested —I have never read, heard or seen— that the country is bankrupt. It is not bankrupt and it will not go bankrupt if the people heed the sound advice that they have been given and follow it, that is, to buy less from abroad and to produce more at home.

I have heard adverse comment—not here to-night about the importation of butter. The position about that is that if the standard of living in this country had not gone up as it has there would be surplus butter for export. The shortage of butter is due to the fact that the standard of our people has increased and more of them can afford to have it on their tables. That is only as it should be.

It occurs to me as a newcomer to this House who does not quite understand debating procedure as yet that there is a curious air of unreality about this whole debate. From the time I came here this afternoon I have been trying to discover what exactly it is we are debating. So far, I have been unable to ascertain it. It is a good thing, nevertheless, that it should be possible for Senators to come on a few occasions to the Legislature and that each of them should have the opportunity of letting the bee in his own particular bonnet buzz to the maximum extent. So far as I can hear this afternoon, quite a number of bees have been buzzing but one of my difficulties is—if Senator Stanford will pardon me in referring to the opposite benches—that there is curiously discordant buzzing coming from a few benches over there. It leaves me rather in a quandary as to what Senators over there are thinking about.

I listened with great interest to Senator O'Higgins quoting views of various Dáil Deputies expressed over a number of years. Of course, it is easy to take up the statement which a man made 10 years ago and to say that he has changed his mind to-day. I would think very much less of the Deputy or Senator who would take the point of view that because he had said one thing at one time in a particular context he must adhere to that for all time. That would be a very stupid attitude indeed.

What we require at the moment is that each of us in this country should decide where exactly we stand, whether we are on the right or whether we are on what is called the left; whether we stand for an extension of social services or whether we think the social services should be wiped out completely; whether we believe in the charity which Christianity enjoins upon us or whether we do not; whether we believe in protected industry or whether we do not. I have heard from Senators across there to-night attacks upon the welfare State, particularly from Senator P.F. O'Reilly.

I think I am being misinterpreted. I do not think I attacked the welfare State. I said that because of the welfare State, the possibility of the welfare State, and all that it meant, the people felt that they should not save any money. I did not comment at all upon the welfare State.

I accept Deputy O'Reilly's correction. I think what we should do is go around to the agricultural labourers in the country and suggest to them that they should save more and more. Surely the Senator who talked so much for the last eight, nine or ten months with his friends about the increasing cost of living, which was not very much noticed for three years, is not going to suggest to-day that the vast majority of people in this country, who have not got enough to subsist on decently, ought to save? What are they going to save? I admit that for the people like—I do not want to be personal about it— many people in this House, it is possible to save but at the same time we have had from Senator O'Higgins—I do not think he will rise to correct me on this point—attacks on the welfare State. That is becoming a slogan.

If Senator Hartnett wants to make a point, may I just say that I did not attack the welfare State but that had I remembered I would have done so?

I am very glad the Senator did not remember it because he bored me sufficiently as it was. I would have had to listen for quite a long period. I have heard him attack it in other places where we both had the privilege to stand as speakers.

What exactly does the welfare State mean? Does it mean that the Government elected by the people every five years, sometimes, happily, more frequently, is to neglect the interests, pay no regard to the interests, of the very young, of the old, of the sick, of the poor, of the workers? Is that what the Senator means by attacking what is popularly described as the welfare State? If it is, I have no hesitation in saying that the Senator is being quite true to form and I would admire the Senator if he had the courage to go to his constituency or his ex-constituency, or to any constituency he likes and to make a speech in those terms, that he does not want benefits to be given to people who are, through no fault of their own, unable to look after themselves.

The Senator who has stood up here and said that if he had remembered to attack the welfare State he would have done so, has been endeavouring to get a preview of the Budget statement of the Minister for Finance. He has been pressing on the Minister for Finance that, no matter what the circumstances are, he should in no circumstances reduce the food subsidies. Apart from the constant reiteration by the Senator of one or two sentences on that matter—I am not saying whether I agree with the Senator or not at this stage—I would like to have heard the Senator's reasons for that—the Senator who objects to the welfare State. I think the two things are curiously contradictory but, then, the Senator has had some experience in another House of dwelling amid contradictions, dwelling happily amid contradictions, dwelling comfortably amid contradictions.

I wonder would Senator Hartnett mind, before he gets off this point, answering a question? Will the Senator say whether he will stand over a cut in food subsidies or not?

Mr. O'Reilly

He is not bound to answer that.

An Leas-Chathaoirleach

It is better that there should be no cross-firing.

When I make my view on that matter clear I will stand over it subsequently.

The Senator will not make it clear until the Minister has spoken.

It is a pity Senator O'Higgins made his view clear when the Minister had spoken in 1951. But this Senator who ran away from the mother and child scheme which he had been praising when he was standing up on the ditches in Offaly and in Laoighis and when he was out around Crumlin——

At least he had the courage to contest a constituency— which is more than some people had.

And he got a hell of a whamming, if I may use the expression. However, he will, no doubt, live to fight another day on some new issues which may then, in the Senator's view, be more popular.

Do not leave the mother and child scheme.

If the Senator likes to discuss the mother and child scheme I will do so in detail. I suppose this is as relevant as many of the issues that have been discussed.

An Leas-Chathaoirleach

I do not like aspersions on the Chair. During the whole debate the Chair has allowed Senators an opportunity of debating the issues very widely. I would like that Senators would keep from firing across the House these questions and answers. The Chair does not like that and hopes it will not continue. Perhaps the Senator would now deal with the Central Fund Bill.

I very readily bow to the ruling of the Chair, but if the questions are allowed I must be pardoned if I supply the answers. To get back to the point where I was before I was interrupted by Senator O'Higgins—it would be a good thing if we made up our minds where we stand. I do not know what views some Senators take—whether they take the view of the rank and file of the Labour Party, with which I would for the most part have the very greatest sympathy, or whether they take the very peculiar view held by the Leader of the Labour Party in the other House, Deputy Norton. I do not know whether the Senator takes the view held by Deputy McGilligan or the view sometimes expounded by the lesser lights in his Party or perhaps the view expounded by Senator F.H. O'Donnell. It would be a good thing to have some consistency so that we could at least divide according to our social outlook. If we had that, some real progress would be made in the country.

There is no denying that the problem of unemployment is a grave one and has been so ever since the foundation of the State. The same applies to emigration. It is evident that if we are to survive as a nation these problems must be attacked in a bold, daring and imaginative way. I have the confidence that they will be so attacked. It is easy to say that the present or the past Government is responsible for the very remarkable decline in agricultural production. That is a pointless argument. There is no use in shouting accusations from one Party to another about these matters. They must be examined very carefully and remedial measures must be applied as soon as a possible solution can be decided on. In this House particularly the Government should have the benefit of persons who are in touch with agricultural problems and who may have fine ideas. There is in the agricultural community a rigid conservatism. We have to recognise that as a real factor. In my view, that rigid conservatism will have to be removed if genuine progress is to be made.

I have said something about savings. The vast majority of the people are unable to save. I feel sure that the Minister will do everything possible to attract to the Post Office Savings Bank and to Savings Certificates any money which is available for investment outside industry as a short-term investment. I would recommend to the Minister that steps be taken to make it easier for persons to withdraw money from the Post Office savings accounts and perhaps—as I think has been suggested to him in the Dáil—it would be wise to increase the present rate of interest on Savings Certificates. I think the Government should compete with the banks to attract the small and medium savings of the community. It would be a very great relief to the Exchequer if they could do so and efforts in that direction would certainly bear fruit. It is not enough to carry out an advertising campaign. The question of incentive will have to be there. It is a mistake to reduce the interest in any way. Of course, when the interest on the Savings Certificates was reduced, I understand that the amount which an individual could hold was increased very substantially. It might be increased further still. The interest might be brought back to the old level—I understand it was reduced some years ago— and perhaps the date of maturity of the certificates should be postponed. In that way the State would attract to itself a good deal of the money which is now pouring into the coffers of the banks and on which the depositor gets only one or one and a half per cent.

I did not hear the whole of Senator O'Donnell's speech. I heard him say to the Minister that it was an impertinence on the part of the banks to have increased the bank rate without leave or licence from anybody—if, I think he qualified it, that were the position. I certainly hold no brief for the banks. Indeed, I held no brief for the banks at the time when there was some controversy about the Central Bank during the régime which ended somewhat abruptly last year. I held less brief for the banks on that occasion than perhaps Senator O'Higgins held. Again I find myself in a difficulty because a few weeks ago I heard Senator O'Donnell complain here very bitterly that industrialists were being obliged to submit their private documents and private accounts to the Prices Advisory Tribunal. The Senator felt that that was an unwarranted invasion of the rights of the individual, that it was a scandalous piece of—I think the Senator used the word — socialism and something that should not be tolerated in a self-respecting community.

If the Senator takes the view that the Government has not got the right to protect the consumer against the industrialists or producers in regard to prices, why does he say that that should apply to the banks? Why does he say that what he resents in the case of the industrialists is all right in the case of the banks? I think it should be applied both to the industrialists and to the banks. I can see no difference between an inquiry into how much any industrialist is losing on his business and an inquiry into the affairs of the banks. Both are private enterprises as they exist at the moment and the Senator is, I think in all other respects excepting banking, a strong supporter of private enterprise. Perhaps I am misinterpreting him.

I merely made a small interrogation and not a statement.

I do not always understand this either, but I try to follow him as best I can. Several matters have been raised here with regard to the writ, if I may so describe it, of the present Government. That has been discussed at some length and in particular was mentioned by Senator O'Reilly who dignified me with the title the "King-maker". I do not think that in the short period which has elapsed since last June we should get our history mixed up. I think Senator O'Reilly, when I recall it to him, will remember that the Independents who voted for a change of Government last June were, with one exception, the same Independents who had supported the previous régime up to a few weeks previously. That being so I do not think that anybody will have illusions as to the view these people were going to take when they changed their allegiance.

The previous Government were never voted out.

They felt that discretion was the better part of valour and they ran before they were hit.

They were never voted out.

I am accepting that.

The Independents did not disclose that they were going to change or vote the Government out otherwise they would not have been re-elected.

The Independents did not disclose it. It is suggested by some Senators that they were going to vote against the present régime and that if they had disclosed that they were going to vote against the then régime they would not have been re-elected. I think it was common property that they were going to vote for the agricultural Estimate at that time.

An Leas-Chathaoirleach

You are getting a long way from the Central Fund Bill.

I am only following the interruptions.

An Leas-Chathaoirleach

The fact remains that the Senator is getting a long way from the Central Fund Bill in dealing with matters relating to some general election of which the Chair knows nothing.

I was only following along that line because the matter was discussed for such a long time in the House. I was interested in the statement by Senator O'Brien who stated that if the British Chancellor of the Exchequer does something from which we could benefit that we should not refrain from following on similar lines, but that if the British Chancellor of the Exchequer does something with which we do not agree, then there is no reason why we should feel ourselves constrained to follow his example. I think that that is a valuable point of view. I think that the essence of independence, freedom and nationhood is that we should be able to do what we like irrespective of whether we are classed by others as following servilely the things of other States or communities.

I will admit that there are some Senators who have become so rabidly anti-British that it is hard for them to accept the point of view of Senator O'Brien. It is a curious phenomenon that we in a political financial sphere seem to become more anti-British in certain circumstances. That I think is the atmosphere in this House on a number of questions.

I agree that it would be very wrong of Senators to supply Sir Basil Brooke with arguments which could be used against the reintegration of the national territory. I am at one with Senator O'Higgins. In fact I prefer to go further than Senator O'Higgins on that matter because in the recent past the Senator and myself disagreed with regard to the tendency to provide ammunition for Sir Basil Brooke which might be used against the reintegration of the national territory. I do not think Senators consciously do this but I am sure it is well for the people of the North—of the six severed counties —to know that there are so many alert watchdogs constantly looking after their interests. On the other hand, one cannot blame them perhaps for having lost faith since the days of "the damn good bargain".

That does not refer to the Senator, of course.

If the Senator is making a personal reflection the Chair does not recognise it in that sense. But I want to refer to the title of King-maker which has been conferred on me, but I trust Senator O'Reilly has in mind another would-be King-maker not in this House who is a secretary of an association with which the Senator is associated.

An Leas-Chathaoirleach

I think that is out of order, referring to anyone not a member of this House.

If you rule me out of order, Sir, I will not pursue the matter further. I feel sure everybody in this House will do their best to give their particular views on what is best for the country. It is rather a pity that there is so much Party politics regarding this matter. It is a pity that there is so much political dishonesty in these matters and it is a pity that "Simon out of office has taken different views on the matters to that which were taken by Simon in office".

That kind of thing, I think, is now seen through by the people and accordingly it does not pay electoral dividends even of a most temporary nature.

The remark is constantly being made and bruited abroad that this Government is counselling the banks to restrict the issue of credit to the maximum extent. That has been denied in the other and in this House. The Minister for Industry and Commerce in the other House said that there was undoubtedly a restriction of credit but if the banks thought that they could act so as to defeat the policy and the intentions of the Government then the banks would be taught a lesson. He used some such words. In that view I think every Senator with a progressive outlook would entirely concur but I wonder how many Senators who now criticise the Minister for Finance would support him if he took action of that kind against the banks. I certainly will but I wonder how many Senators would. Similarly, with regard to devaluation it was suggested by a Party now defunct or almost defunct that the link with sterling should be broken. I wonder do Senators who criticise the Minister support that policy and feel that the link with sterling should be broken or do they believe that the sterling areas should be preserved and the value of sterling kept up to the highest possible limit.

On all these fundamental matters it is the duty of Senators to make up their minds. It is not enough to take slogans out of one's pocket and hurl them ad hoc at this Minister or any other Minister. It is the duty of Senators to decide what policy they themselves would pursue if they themselves happened to be members of the Cabinet; what they would suggest at the Cabinet table; what they would advocate in the councils of the Government. If that test were applied at the moment I do not think that there would be the same kind of superficial unanimity that seems to prevail in this House at the present time. If that be the case, if what I have said is true and Senators are taking up slogans, taking up this, that or the other point, in order to score politically off the Minister or any other Minister then they are acting unworthily and are certainly not acting in the interests of the people whom they are here to serve.

It is time that we decided where exactly we stand on the important issues which do exist to-day. If the Minister increases taxation in order to extend social services, is the Minister going to be criticised? If he is, is it not the logical conclusion that we do not want social services extended? I do not think that we can have it both ways. If we are to have a Christian State, a welfare State—call it what you like— it has got to be paid for by taxation. Perhaps if we were all Christians we would readily yield up to the Minister the wherewithal to do the just and the Christian thing by those who, for any reason, are incapacitated and unable to provide for themselves to the fullest extent but, seeing that the Minister must take the view that we are not all Christians to that extent, taxation must be forced upon us. It would be fantastic, dishonest, unchristian and against the interests of democracy that Senators or public representatives should stand up and say if taxation is to be increased: "You have increased taxation; how dare you do it? We will go to the people who have to pay that and make you unpopular by misrepresentation." That is mean, that is contemptible; that is the kind of attitude that will bring democracy toppling in this country if it is persisted in because it is a deliberate endeavour for political or Party ends to mislead the people and if you keep on misleading the people they will develop political migraine and if they develop political migraine then they are an easy prey for totalitarian theorists.

I think that it is very difficult to make up one's mind on social and economic matters, very difficult to decide that this policy rather than that will prove to be of benefit. Indeed we have only to listen to the professional economists to realise the extent to which they disagree. It is not really a matter for the professional economists; it is a mater for the representatives of the people. Quite a long time has passed and there has been considerable misrepresentation on all these matters. People stand up nowadays and talk about credit like Senator O'Donnell who does not know anything about it. I understand from people who do know something about it that it is a very intricate and difficult subject. I feel myself that a better system is desirable; I wish I knew what it was. I am prepared to listen to anybody who will give me a reasoned argument for the system which he would substitute for the existing one and if it satisfies my mind, my reason, I will gladly grasp it.

Most important of all is that there should not be this loose talk about the welfare State. You have Senators going around the country saying that during the last three years they did far more for the poor and suffering than the Government which preceded them. Well, there may be all kinds of views about that and I will not at this stage state mine—I am sure that I would bring the wrath of the Chair upon me if I did—but if you are going to boast of that, then do not stand up and say that you oppose the welfare State, oppose additional taxation, oppose a social security scheme, oppose extended health services and oppose old age pensions. Now the difficulty is that nobody in public life in this country will stand up and say publicly: "I oppose an increase in old age pensions, I oppose an increase in children's allowances, I propose that public assistance should be reduced, I propose that a stricter means test should be imposed in the granting of social benefits." They will not say that because that will be unpopular, that would lead to political ruin.

They stand up in an airy way and say: "We condemn the welfare State." They stand up in an airy way and say: "We condemn these fantastic theories in relation to redistributing the national income." What does it mean? It gives the lazy fellow what the industrious fellow has earned. That is surely not the position where the agricultural labourer is living below subsistence point as things stand to-day. That is surely not the position when so many people for generations past have had to flee from the country in order to earn their living elsewhere. It would be much better if we would only get together and decide that, instead of trying to score Party points, we would do a little hard thinking and some concentrated reading in order to try to devise some solution for our country's economic difficulties. The nonsense of these people who say that there were no economic difficulties in the last three years and that on a certain day in June the Garden of Eden began to wither. That is completely unreasonable. That is not based on fact to any extent whatever. Agricultural production was dropping steadily over the last year or, indeed, over more than the last year of the last régime.

That is not so.

That is absolutely and unquestionably so. A great deal of hot air was being circulated on the subject here and at the airports in other countries and at Press conferences.

Senators opposite, in my submission, do not believe that. If we could only get Senators opposite to realise that the people generally know that they do not believe it, then there would be a far more realistic approach to the problems of the country. All I can say in conclusion is that I trust that very soon we will have evidence of the development of a sense of responsibility; in order not to be offensive to other Senators, may I say a sense of greater responsibility with regard to the social and economic problems of our country.

Damage is being done by people who try to confuse issues. Damage is being done by people who say that the existing machinery is perfectly all right but the man at the top—the Minister—does not know how to work it or that he is being controlled by his officials or that he is living in the mid-Victorian atmosphere of the Department of Finance. There has been no change in the atmosphere of that Department since last June. As we know—some Senators certainly do know—there was a marked affection for the Department of Finance prior to last June. How could that change overnight? I do not think it is a breach of secrecy to say that there was almost a crisis at the time of the devaluation because the major Party in the then Coalition clung so affectionately to the personalities and to the policy of the Department of Finance. Now they turn round quite airily and insult these people and bash them around and make all sorts of unwarranted attacks upon them.

Nobody in this House has insulted any official of the Department of Finance. That should be made quite clear.

My difficulty is that I read.

Nobody in this House has insulted any official of the Ministry of Finance.

An Leas-Chathaoirleach

The Chair certainly did not hear anything like that.

I am referring to the kind of malaise which has come over the public life of the country in general.

The Senator is not entitled to say that people on this side of the House, about whom he is talking in his 17th peroration, have insulted members of the Department of Finance. That is not true.

I was not referring to Senator Professor Hayes.

No one on this side of the House, or in any part of the House, made any insulting comments about the officials of the Department of Finance and the Senator should not be allowed to get away with it.

An Leas-Chathaoirleach

The Senator should withdraw that statement.

I will make it quite clear that I was not referring to Senators on that side of the House. Quite clearly I did not make the statement. I was referring to the malaise which is affecting the public life of the country generally.

We all know a fair amount of English and that is a complete misrepresentation of what the Senator was trying to say. I do not accept it for a moment.

The Senator is an expert at misrepresentation but if he says that, I will be bound to withdraw. If the Senator says I was misrepresenting anybody I will take that as an expert opinion.

He is now misrepresenting his own opinion.

An Leas-Chathaoirleach

The Senator has stated that he was not referring to any member here. The Senator may continue with his speech.

I was about to begin my 18th peroration. I think I have said everything I can usefully say.

I am glad I had the effect of stinging some Senators into retorting so vigorously. I think it is a very good sign that the somnolence of some people here should be disturbed.

Mr. P. O'Reilly

On a point of order. I want to draw the attention of the Chair to the fact that Senator Hartnett when speaking referred to a Senator and subsequently referred to Senator O'Reilly. It dawned on me that perhaps he was referring to him as a kingfisher. I do not believe that he was referring to me but I want to draw the attention of the Chair to the fact that I did not make any statement except to retail for the benefit of Senator Hartnett something which he himself apparently did not catch. I did not intervene in the debate at all.

An Leas-Chathaoirleach

The Senator has made his point and he need not make a further speech.

I did not call Senator Hartnett a kingfisher. I called him a King-maker.

The Seanad adjourned at 10 p.m. until 3 p.m. on Thursday, 27th March, 1952.

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