ORDUITHE AN LAE—ORDERS OF THE DAY. - CURRENCY BILL, 1927.—THIRD STAGE.
The Dáil went into Committee.
Section 1 agreed to.
SECTION 2.
In this Act—
the expression "the Minister" means the Minister for Finance; the expression "the Commission" means the Currency Commission to be established under this Act;
the expression "British Government securities" means and includes any stocks, shares, bonds, bills, notes, or other interest-bearing securities issued or made by or on behalf of the British Government and carrying the direct obligation of the British Government in respect of both capital or principal and interest;
the expression "securities guaranteed by the British Government" means and includes any stocks, shares, bonds or debentures carrying the guarantee of the British Government in respect of both capital and interest;
the word "outstanding" when used in relation to legal tender notes means notes which have been issued by the Commission and have not been redeemed by the Commission and when used in relation to consolidated bank notes means notes which have been issued by the Commission and have not been returned to the Commission for retirement;
the expression "in circulation" when used in relation to legal tender notes means notes which, though outstanding, are not held by any Shareholding Bank in its vaults or tills, and when used in relation to consolidated bank notes means notes which though outstanding are not held in the vaults or tills of the Shareholding Bank to which they were issued;
the word "director" when used in relation to a Shareholding Bank includes a member of the Board of management of such Bank,
the expression "gold bullion" includes any gold coins other than gold coins which are for the time being legal tender in Saorstát Eireann or in Great Britain,
the expression "standard fineness" means a fineness of eleven-twelfths fine gold and one-twelfth alloy or a millesimal fineness of 916.6,
the word "ounce" means an ounce troy,
the expression "the expenses of the Commission" includes all expenses incurred by the Commission in the performance of the duties and the exercise of the powers imposed or conferred on it by this Act or incurred in anywise in the performance of its functions under this Act and in particular includes the remuneration and allowances payable under this Act to the Chairman and the ordinary Commissioners,
the word "year" means a period of twelve months ending on the 31st day of March,
the expression "half-year" means a period of six months ending on the 31st day of March or the 30th day of September,
the expressions "legal tender note fund,""note reserve fund," and "general fund" respectively mean the several funds required by this Act to be kept by the Commission under those respective names.
I move amendment No. 1:—
In page 3, line 36, to delete the words "been redeemed by the Commission" and substitute therefor the words "since the last time of issue been redeemed or accepted by the Commission in exchange on the issue of other legal tender notes or called in and paid for."
It is needed to make clear that this refers to legal tender note issue outstanding—there is a definition of "outstanding" further down—not merely to those redeemed under Section 46, but to those taken in exchange for currency notes or called in under Section 45.
Does that enable dirty notes to be re-issued?
It enables notes which are not dirty to be re-issued.
I made that remark because it seems to me that it is important from the hygienic point of view that no notes should be re-issued, but that they should be treated as Bank of England notes are, and, once they come back to the Commission, impounded. If it is to provide against the possibility that notes would be issued and re-issued again until they get dirty and worn out as the present Treasury notes are issued, we ought to guard against such a possibility. We should say that when they are changed no new notes should be issued.
It is not intended that notes should be issued and re-issued, if they are dirty, but it may happen that notes may be only one day in the hands of the public and would come back and would be perfectly clean and suitable for issue as practically notes that had not been out at all. It seems to be undesirable that there should be no such thing as a re-issue of such notes. The expense of issuing notes is not very large, but it is higher than the issue of ordinary paper. They have to be specially printed by a special process and on special paper. I would certainly hope that there would be no re-issue of dirty notes or notes that show any sign of wear. But notes might be issued here, for instance, and tendered to the Commission in London and have not been really in circulation at all. I think it is reasonable that the Commission should have the option in such instances, but I agree that notes should not be issued unless their condition is perfectly good.
Question put and agreed to.
I move amendment No. 2:—
In page 3, between lines 39 and 40, to insert the following words:—"the word ‘issue' when used in relation to legal tender notes includes the re-issue of a note which has ceased to be outstanding."
This is part of the same thing; it is to provide for the possibility of reissuing notes which are in good condition.
Amendment agreed to.
I beg to move amendment No. 3:—
In page 4, immediately after line 10, to insert the following:—"the expression ‘consolidated bank note' means a consolidated bank note provided and issued under and in accordance with this Act."
This is rather a formal amendment. There was no definition of consolidated bank note issue in the Bill.
Amendment agreed to.
I move amendment No. 4:—
In page 4, between lines 10 and 11, to insert the following:—"the expression ‘legal tender note' means a legal tender note provided and issued under and in accordance with this Act, and."
This is also a formal amendment.
Amendment agreed to.
Question—"That Section 2, as amended, stand part of the Bill"—put and agreed to.
Section 3 agreed to.
SECTION 4.
(1) The standard unit of value in Saorstát Eireann shall be the Saorstát pound consisting of 123.27447 grains of gold eleven-twelfths fine.
(2) Every mention or reference in the Coinage Act, 1926 (No. 14 of 1926) of or to the sovereign shall be construed as a mention of or reference to the Saorstát pound and the said Act shall have effect accordingly.
I beg to move amendment No. 5:—
To delete sub-section (1) and substitute therefor the following sub-section:—
(1) The standard unit of value of Saorstát Eireann shall be the Saorstát pound which shall be issued as hereinafter provided either in the form of gold coin having a standard weight of 123.27447 grains of gold eleven-twelfths fine or in the form of a legal tender note or in both forms.
This amendment is really to bring the definition into closer touch with the reality of the position. The previous definition defined the standard as the gold coin, but there will be a period, and it may be of a considerable number of years, when there will not be this gold coin in existence, and it is provided that the standard shall be this particular gold coin or a legal tender note issued in accordance with the provisions of the Act.
I would like the Minister to throw a little more light upon this. Does it not raise a very big question? I do not pretend to understand it thoroughly. We say the standard unit of value which hitherto in the Bill has been a gold coin may at some time in the future be in the form of a legal tender note. What, then, is the basis of the legal tender note? I would ask the Minister to explain the meaning of this change more fully than he has done.
The definition and the arrangement in regard to the standard unit of value, so long as it is only so many grains of gold, will be, for some time rather in the air, because while they have a gold standard in Great Britain, and while we are arranging to have our own currency notes, so that there will be no exchange fluctuation, we are going to redeem our currency notes in British money at the London office or agency of the Commission. Nevertheless, the standard unit of value, so far as the Free State is concerned, would be a purely theoretical thing, because that coinage would not be in existence. There would be no actual Saorstát pound consisting of this particular number of grains of gold in existence, for some years at any rate. One cannot say, owing to the changes that take place, when it would be considered desirable to issue gold coin, but until it is issued our standard unit will be the Saorstát pound, which will be available only in the form of legal tender notes, and it is so that this definition of the standard unit of value shall not be left in the air, to the extent it is at present, that the amendment is suggested. I do not think it is, perhaps, of very great practical importance. The Bill clearly provides that until Part 2 is brought into operation there shall not be a gold coinage available, but there shall be available only as definite legal tender the legal tender note. I do not insist that it is of very great value, but it does relate this definition of the standard unit of value more closely to the actual facts as they will be if the Act is passed than if left as it is at the present time.
The assumption is that there will be a gold basis for British currency, and that there is a certain standard unit of value in gold behind the British currency. I think that is right, but if the British law, in respect to currency, changes we shall have nothing to fall back on. If there is any intention of making a gold basis for future legal tender in the Free State, we surely should have some ultimate standard. If so many grains of gold, eleven-twelfths fine, whether in gold coin or bars, were to be the ultimate standard of value one could understand it. But when one is saying that the standard unit may be a legal tender note which may or may not have a solid material basis behind it, one is immediately getting into the question of the abolition of the gold standard basis. It seems to me that it might be a matter for discussion as to whether there is not more to be said for that side of this question than has been even hinted at in this discussion.
What we propose to do in respect of this clause is what has been done already in the Bill as a whole. We really provide that, for the time being, the standard value shall be the legal tender note. We make no arrangement for the immediate issue of gold coins. We provide that this legal tender note must be accepted in payment, and that it shall be legal tender in the full sense. It is the standard of value. It is tied to the sterling, so that there shall be no exchange fluctuation. Although they have got to the gold basis in England, if they happen to slip a point or two, as the main part of the Bill stands, our £ would remain exchange at sterling with the British legal tender, whatever its value might be. We put into this Bill certain provisions about gold coinage, because by them we assert the principle of the gold standard, and we indicate a hope that, at some time, we will return to the actual use of gold. But that is simply the putting up of a sign rather than taking definite action at the present time. All through the Bill we arrange that there be equality with sterling, that there be no exchange fluctuation as between our currency and the British currency. We provide that at a future time we may go back to the circulation of coined gold, but we do not intend that that should be done immediately, or perhaps for any considerable time. The relationship we create is with sterling for our legal tender notes and not with gold, and until a time comes when we issue gold coinage our standard of value must be the Saorstát £, and that Saorstát £ can only be the Saorstát legal tender note. It seems desirable to bring clause 4 into conformity with the general intentions as seen in the Bill taken as a whole.
It seems to me that theoretically there is an objection to the wording of the section. Theoretically, I take it, that right through the ultimate basis is the gold standard, but practically what is going to happen is that the legal tender note will be the standard. The wording of the section seems to indicate that there may really be two standards. It may be one or the other. I do not think that is intended. I think it is intended to say in the section that there shall be two things treated as identical. Is the Minister satisfied that that is really what the section means, or is there any justification for what Deputy Johnson said, that there will be really ambiguity as to what the actual standard will be?
I do not think there is any ambiguity. If I were advised that there was any ambiguity I would further amend it. I think the wording, which specifies that it shall be in the form of gold coin of a certain standard weight, or in the form of legal tender note, may be regarded as identical and not alternative. That is the intention.
That is the intention, as I said, theoretically a gold standard but practically legal tender note?
Amendment put and agreed to.
Question—"That Section 4, as amended, stand part of the Bill"— put and agreed to.
SECTION 5.
(1) Whenever any person after the commencement of this section delivers not less at any one time than one hundred ounces of gold bullion at a place for the time being appointed in that behalf by the Minister under this section, the Minister shall cause such bullion to be assayed and coined into coins authorised by this Act to be issued thereunder and shall issue such coins to such person.
(2) Whenever the gold bullion delivered for coinage under this section is of the standard fineness the number of coins to be issued under this section in exchange for such bullion shall be calculated at the rate of one Saorstát pound for every 123.27447 grains of such bullion or one ten-shilling coin for every 61.63723 grains of such bullion and whenever such bullion is of a fineness superior or inferior to the standard fineness the said number of coins shall be calculated at such higher or lower (as the case may be) rate as is proportionate to such superiority or inferiority of fineness.
(3) The Minister may refuse to accept for coining under this section any gold bullion which is of such fineness that in the opinion of the Minister it cannot be brought to the standard fineness without refining some portion of it, and if he so accepts any such bullion he may impose such charge as he thinks proper for refining it.
(4) It shall be lawful for the Minister to impose such charge for the coinage of gold bullion under this section as he thinks proper not exceeding three half-pence for every ounce of such bullion of the standard fineness and so in proportion for bullion of a superior or an inferior fineness.
(5) No undue preference shall be shown to any person under this section and every person delivering in accordance with this section gold bullion for coining shall have the bullion so delivered by him coined in such priority as corresponds to the time of such delivery.
(6) The Minister may by order appoint such places as he thinks fit for the delivery under this section of gold bullion for coining and in the event of his so appointing an office of the Commission as a place for such delivery he may by the same or any subsequent order with the consent of the Commission authorise and require the Commission to exercise and perform in respect of all gold bullion delivered at such office such of the powers and duties conferred on the Minister by the foregoing provisions of this section as he thinks proper.
Every order made by the Minister under this sub-section shall be published in the "Iris Oifigiúil" as soon as may be after it is made.
(7) This section shall come into operation on such day as shall be appointed in that behalf by the Minister with the concurrence of the Commission by notice published in the "Iris Oifigiúil."
I move:—
On page 5 to add at the end of the section a new sub-section as follows:
(8) The notice under the foregoing sub-section appointing the day for the coming into operation of this section, shall, if the Commission so requires, declare that no person other than the Commission shall be entitled to deliver gold bullion for coming under this section, and if such notice so declares then no person other than the Commission shall be entitled to deliver gold bullion for coining under this section until such time as the Commission shall by notice published in the "Iris Oifigiúil" declare that every person shall be so entitled.
This is to prevent the position arising, if we brought Part 2 of the Bill into operation, of being forced to coin gold when it was not desired to coin gold, and when neither the Government nor the Currency Commission thought gold coinage should be brought into circulation. The amendment provides: "That no person other than the Commission shall be entitled to deliver gold bullion for coining." If we did not insert some such provision, once Part 2 of the Bill, when it becomes an Act, were brought into operation any person might present gold for coining, and we might reach the position when gold coins might be brought into general use, although neither the Government nor the Currency Commission thought gold coins should be brought into general use. This provision will enable the amount of coinage actually done to be controlled by the Currency Commission. It will put the Currency Commission into somewhat the same position as the Bank of England in Great Britain in regard to the coinage of gold.
Amendment agreed to.
Question—"That Section 5, as amended, stand part of the Bill"—put and agreed to.
Sections 6 and 7 agreed to.
SECTION 8.
(1) Save and except coins issued under and in accordance with this Act, no piece of gold or of any mined metal (whereof gold forms a part) of any value whatsoever shall be made or issued in Saorstát as a coin or token for money or as purporting that the holder thereof is entitled to demand any value denoted thereon.
I move:—
In sub-section (1), page 5, line 35, to insert immediately after the word "Saorstát" the word "Eireann."
Amendment agreed to.
Question—"That Section 8, as amended, stand part of the Bill"— put and agreed to.
Sections 9 and 10 agreed to.
SECTION 11.
(2) Section 42 of the Customs Consolidation Act, 1876, shall be construed and have effect as if the following articles were added to the Table of Prohibitions and Restrictions Inwards in that section, that is to say, counterfeits of coins issued under this Act and any coins or money purporting to be coins issued under this Act, but not being of the standard weight or not being of the standard fineness prescribed by this Act.
I move:—
In sub-section (2), page 6, line 10, to delete all words from the word "and" to the end of the sub-section.
This is an amendment to make it possible to import, say, light coins as bullion. If the section were not amended it would not be possible to do so.
I would like more light on this. The Minister has been very ungenerous in his explanation why the words should be deleted now. As originally drafted, the section included counterfeit and light coins. Would the Minister explain what is the effect of the amendment?
The real effect of the alteration is simply this, that supposing light coins were being imported it would be possible to consider them as bullion and import them in that way rather than to have them melted down into bullion outside the country. This is simply to provide for a particular contingency that may or may not arise. There seems to be no reason why coins that are found to be light should not be imported.
There is a question of risk of detection. If they are not prohibited there is a bigger possibility of light coins being in circulation. I take it that this Act of 1876 did prohibit the importation of light coins and that it had a purpose. Can the Minister say if the value of the prohibition has been nil, and that therefore there should be another method of treating light coins being imported? I think the Minister would be well advised to give the House and the country more information as to the reasons for these changes. I take it that the intention, when drafting the Bill, was clear, and that it had been pretty fully considered, but when an important change takes place by way of a deletion one has to assume that new facts have come to light.
What happened was that the wording which in the Act of 1876 related to silver coins was put in here in relation to gold coins. The Act of 1876 prohibited the importation of light silver coins but not of light gold coins. In the drafting this Act was worked upon, and it happened that provisions which really related only to silver coins in the past were applied to gold coins.
Amendment put and agreed to.
Section 11, as amended, put and agreed to.
Sections 12 and 13 put and agreed to.
SECTION 14 (2).
The Commission shall be a body corporate with perpetual succession and an official seal (which shall be judicially noticed) and power to sue and be sued in its corporate name and to hold and dispose of land.
Are the powers given in sub-section (2) wider than is necessary? We give the Currency Commission power to deal with and dispose of land. This is perhaps a small point but it is worth mentioning.
Does the Minister mean only in so far as it may be necessary for their own special purposes—to get buildings and so on? Is it not wider than is really necessary?
I think a corporation such as this, unless you give it power specifically to hold land, is prohibited from doing so. I remember in the case of the Irish Soldiers and Sailors' Land Trust we had to give them special powers to hold land, otherwise they would have been prohibited from doing so. I think that this is simply to remove a general prohibition, and I do not think there can be any danger in it. The Commission might want to buy a site for an office, or something like that. It is simply intended to give them power to do that, and I think it is almost a common form.
That is what I indicated—for the general purposes of its workings or something of that kind. I do not think it is necessary.
I will look into it again. I do not think it is necessary.
Section 14 put and agreed to.
SECTION 15.
(1) The Chairman shall receive such remuneration and allowances and be subject to such conditions of service as the ordinary Commissioners shall prescribe.
(2) The term of office of the Chairman (not including a person appointed to be the Chairman temporarily) shall, unless he sooner dies, resigns, is removed, or becomes disqualified, be a period of five years commencing, in the case of the first Chairman, on the establishment of the Commission and, in the case of every subsequent Chairman, on the expiration of the term of office of his predecessor or the date of his election or nomination, whichever shall be the later.
(3) A Chairman retiring on the expiration by effluxion of time of his term of office shall be eligible for re-election or re-nomination.
(4) The Chairman shall during his term of office be disqualified from being nominated or elected and from sitting or receiving payment as a member of Dáil Eireann or of Seanad Eireann and be ineligible for election as a director of a Shareholding Bank.
(5) The Chairman shall, if at the time of his election or nomination he is a director of a Shareholding Bank, divest himself of such directorship within ten days after his election or nomination, and if he fails so to do he shall at the expiration of such ten days be disqualified from holding the office of Chairman.
I move:—
In sub-section (2), page 7, line 6, to delete all words from and including the word "expiration" to the end of the sub-section and substitute the following words:—"date of his election or nomination or, in the case of a Chairman elected or nominated or re-elected or re-nominated during the continuance of a term of office, on the expiration of such term of office."
This is to deal with the possibility of a question being raised as to whether the Chairman, on his re-election. could be considered as his own successor or could be said to have been his own predecessor.
Could the Minister amplify that a little? It almost suggests that he is borrowing the terminology of the Minister for External Affairs. I suggest that we should postpone the amendment to the Report Stage, as the Minister himself is at a loss for arguments.
I am not at a loss for arguments.
The real difficulty is as to whether as I said in the first instance, the Chairman could be regarded, if he was re-elected, as being his own predecessor. I do not know whether there was any real obscurity in the first draft, but I was advised that a difficulty might be raised about it, and that the new form in the amendment leaves no possibility of dispute.
Surely sub-section (3) in the original draft covers the case?
Yes, but this has to do with the question of time, not with the question of re-eligibility.
But would not the question of time be raised in connection with sub-section (3)? However, if the Minister wants the amendment, I do not oppose it. It is only superfluous verbiage and we are used to that.
Amendment put and agreed to.
I move:—
In sub-section (4), page 7, line 15, to delete the words "a Shareholding Bank" and substitute therefor the words "any Bank whatsoever."
This is one of a series of amendments intended to prevent the Chairman from being a director or a shareholder in any bank whatsoever. Of course, it does not mean that a director or a shareholder in any bank cannot be appointed Chairman, but read in conjunction with the rest of the Bill, it is clear that he must divest himself of his interests in those other banks as soon as he becomes Chairman. Had I seen the Minister's amendments 17 and 19 when I put down this amendment, I would have put down similar amendments to them, and it will, no doubt, be possible to do so on Report.
My reason for putting down this amendment is, in the main, that there are certain large banks in England which have close and intimate relations with some of the shareholding banks, and that we would not have that atmosphere of impartiality which is almost essential in regard to the position of the Chairman of the Currency Commission if he were a director of any bank that was brought into business relations with one or other of the shareholding banks. It is known to the Minister and to the Dáil that Lloyd's Bank, in London, for instance, has intimate relations with the Hibernian Bank here. They act as agents for each other and they cash each other's cheques without payment of commission. The same relationship exists between the Ulster and Westminster Banks, and I think there are other cases of that kind. There might be a feeling on the part of some of the shareholding banks that if a director of Lloyd's Bank or Westminster Bank was made Chairman of the Currency Commission and continued to act as a director, or even continued to hold shares in that bank, that it would not be quite fair. I am arguing all these amendments at once to save time. The same remark applies, in some degree, to other banks outside the ambit of the British Isles altogether. A director of the Banque Nationale of France or a director of the Guarantee Trust Company of New York might be tempted to influence the financial policy of the Currency Commission in the direction of his own country's interests or his own bank's interests. In any event, it would be very hard for the individual to be impartial, and it would be almost impossible for other people to believe he was impartial. Therefore, I suggest that as we are imposing on a person this great responsibility—a responsibility that is bound to react on the future of the State—and as I have no doubt that the Chairman will be adequately remunerated and occupy a position of great importance and great dignity, it is not too much to ask him to give up all banking interests—not merely interests in the shareholding banks, but interests in all banks. Banking is an international business. The reactions between one bank and another bank are infinitely ramified and extremely close. I suggest to the Minister that this is an amendment worthy of consideration if we are to make our Currency Commission an absolutely independent and impartial body. If the Minister could see his way to extend the principle to his own amendments—17 and 19—I should be very glad.
I should not like to agree to the same arrangements in regard to the nominated directors as in regard to the Chairman. I quite see that it is correct that he should not be a director of any bank whatsoever. It is not at all likely that he will be a director of any bank outside—in fact, it is unlikely he will be a director of any bank. I see no great objection to these two amendments and I am prepared to accept them.
Amendment 10 agreed to.
Amendment 11—In sub-section (5), page 7, line 17, to delete the words "a Shareholding Bank" and substitute therefor the words "any bank whatsoever"—(Deputy Cooper)—agreed to.
Section 15, as amended, agreed to.
Section 16 agreed to.
SECTION 17.
(1) Every person elected or nominated to be the Chairman shall within three months after his election or nomination absolutely sell or otherwise dispose of all shares in any Shareholding Bank which he shall at the time of his election or nomination own or be interested in for his own benefit, and whenever a bank is admitted after the establishment of the Commission to be a Shareholding Bank the Chairman shall within three months after such admission absolutely sell or otherwise dispose of all shares in such bank which he shall at the time of such admission own or be interested in for his own benefit.
(2) If and whenever any shares in a Shareholding Bank shall come to or vest in the Chairman by will or succession for his own benefit, he shall within three months after the same shall have so come to or vested in him, absolutely sell and dispose of the same or his interest therein.
(3) The Chairman shall not purchase, take, or become interested in for his own benefit any shares in any Shareholding Bank.
(4) If the Chairman shall retain, purchase, take, or become or remain interested in any shares in any Shareholding Bank in contravention of this section he shall be disqualified from holding the office of Chairman.
(5) In this section references to shares in a Shareholding Bank shall be construed as including stock, shares, debentures, debenture stock, bonds, or other securities of any Shareholding Bank or of any company holding to the knowledge of the Chairman a controlling interest in a Shareholding Bank.
(6) This section shall not apply to a person appointed to be the Chairman temporarily pending the election or nomination of a person to be the Chairman.
I move amendment 12:—
In sub-section (1), page 7, lines 40-41, to delete the words "Shareholding Bank" and substitute therefor the words "Bank whatsoever," and in line 43 to delete all words after the word "benefit" to the end of the sub-section.
The Minister having met me on the main point, I do not want to press him on this point. It is very much less objectionable that the person concerned should have shares in a bank than that he should be director of a bank and at the same time Chairman of the Currency Commission. At the same time, I am inclined to think that the principle is a sound one—that he should not have any personal interests, that he should not be biased—possibly unconsciously biased—by the knowledge that he has financial interests. I believe that in the case of a scrupulous and honest man—I think we can assume that the Chairman of the Currency Commission will be a scrupulous and honest man—he would probably be biased against his own interests rather than in favour of them. I think it is undesirable that there should be any bias at all, and if it was known that there was a statutory obligation on the Chairman of the Commission to divest himself of all financial interests in banks and to rely upon the salary he obtains from the Commission, it would give the Commission a stronger place in the respect and opinion of business men and of the Saorstát in general. If the Minister sees any strong objection to this amendment, I will not press it, but I suggest that it is worthy of consideration between this and Report Stage.
I would go this distance with the Deputy—I would prevent the Chairman having shares in any bank carrying on business with the Saorstát Commission. You might have a branch of an American bank, or any other bank, carrying on business here, and he might have relations with that particular bank. You might have other banks, which might not be Shareholding Banks, doing business with the Commission, and I think he should not have an interest in any of those. I am not sure that it would be reasonable to prevent his having an interest in banks with which the Currency Commission would not have the slightest connection. I would be prepared to go some way to meet the Deputy on Report Stage.
I am very grateful to the Minister. I have learned to be thankful for small mercies. But has the Minister considered that we are not an island State? The Belfast Bank does not carry on business in Saorstát Eireann. It is not to be a Shareholding Bank. But it is carrying on business near to Saorstát Eireann. It is almost bound to be dealing with the notes of the Currency Commission in some of its branches on the Border. Under the Minister's proposed amendment, and under the Bill as it stands, it would be possible for a large shareholder in the Belfast Bank—I do not know the shareholders of the Belfast Bank, and I am not making any imputation against them—to be Chairman of the Currency Commission. If the Minister is prepared to investigate the matter further before Report Stage, I will withdraw the amendment.
I hope the Minister will go a little further than he has gone. He is prepared to meet the Deputy in respect of the banks carrying on business in the Saorstát, but, as it has been hinted at, some of the big British banks have definite and close connection with banks here, although these British banks are not carrying on business in the Saorstát. They have financial connection with banks carrying on business here, and the objection which was sought to be met by the previous amendment is just as important, and has to be met in respect to those other banks which are in close association with banks in the Saorstát, although they have no open trading activities here. If there is an evil to be guarded against, it surely goes as far as shareholding in banks which have close connection with Irish banks, but yet have no open trading operations here.
In the case of certain Irish banks which are really controlled by British bank holdings, I think the British bank would be prohibited by Section 17 (5). Deputy Cooper suggests that there is a case for going further than I did. I proposed to go as far as prohibiting shareholdings in any banks operating in Saorstát Eireann. It might be reasonable to go a little further than that but, at the same time, I would not like to prohibit altogether the holding of bank shares. because, after all, it is to be presumed that if you had a chairman who had holdings of any sort, it is bank holdings he would understand best. I would not like to make the matter unreasonably rigid. I will consider going further than I have already promised Deputy Cooper I would be prepared to go.
The Minister then accepts the principle of my argument. I do not want him to pledge himself completely, but he accepts the principle that it is undesirable that it could be alleged that the Chairman of the Banking Commission had an interest in the shares of any bank that affects our affairs?
If the Minister accepts that principle I ask the leave of the Dáil to withdraw the other amendments.
Amendments 12, 13, 14, 15 and 16, by leave, withdrawn.
Section 17 agreed to.
I move amendment 17:—
To add at the end of the section a new sub-section as follows:—
(6) A nominated Commissioner shall while he holds that office be ineligible for election as a director of a Shareholding Bank and shall, if at the time of his nomination he is a director of a Shareholding Bank, divest himself of such directorship within ten days after his nomination, and if he fails so to do he shall at the expiration of such ten days be disqualified from holding the office of nominated Commissioner.
This new sub-section is intended to prevent a nominated commissioner from being a director of a Shareholding Bank and to make it necessary for him, if at the time of his nomination he is a director of a Shareholding Bank, to give up that directorship. I think this amendment is necessary. There will be questions as between banks, for instance, and it is desirable that you should have a majority of the Commission, that is, the Chairman and the three nominated directors, who would be free from any direct interest in any particular Shareholding Bank, so that they may be able to act quite impartially as between conflicting claims.
Amendment agreed to.
Section 18, as amended, agreed to.
SECTION 19 (3).
(3) Subject to the provisions of this section in relation to the first elected Commissioners, the first nominated Commissioners, a Commissioner holding office at the pleasure of the Minister, and persons elected or nominated to fill casual vacancies in the office of ordinary Commissioner, every ordinary Commissioner shall, unless he sooner dies, resigns, or becomes disqualified, hold office for three years from the expiration of the term of office of his predecessor.
I move amendment 18:—
In sub-section (3), page 8, lines 60 and 61, to delete the words "of his predecessor" and substitute therefor the words "the expiration of which occasions his election or nomination."
This deals with a point similar to that raised on a previous section. It has reference to the question of a particular man being his own predecessor.
Amendment agreed to.
Section 19, as amended, agreed to.
Section 20 agreed to.
I move amendment 19:—
Before Section 21 to insert a new section as follows:—
(1) A nominated Commissioner shall within three months after his nomination absolutely sell or otherwise dispose of all shares in any Shareholding Bank which he shall at the time of his nomination own or be interested in for his own benefit, and whenever a bank is admitted after the establishment of the Commission to be a Shareholding Bank every nominated Commissioner shall within three months after such admission absolutely sell or otherwise dispose of all shares in such bank which he shall at the time of such admission own or be interested in for his own benefit.
(2) If and whenever any shares in a Shareholding Bank shall come to or vest in a nominated Commissioner by will or succession for his own benefit, he shall within three months after the same shall have so come to or vested in him, absolutely sell and dispose of the same or his interest therein.
(3) A nominated Commissioner shall not purchase, take, or become interested in for his own benefit any shares in any Shareholding Bank.
(4) If a nominated Commissioner shall retain, purchase, take, or become or remain interested in any shares in any Shareholding Bank in contravention of this section he shall be disqualified from holding the office of nominated Commissioner.
(5) In this section reference to shares in a Shareholding Bank shall be construed as including stocks, shares, debentures, debenture stock, bonds, or other securities of any Shareholding Bank or of any company holding to the knowledge of the nominated Commissioner a controlling interest in a Shareholding Bank.
This amendment follows on a previous amendment with regard to the nominated Commissioners. It is to prevent a nominated Commissioner not merely from being or becoming a director of a Shareholding Bank, but also to prevent his holding shares in any Shareholding Bank. As I have already stated, questions may arise as between banks on, for instance, the reallocation of note issue. It is desirable that the majority of the members of the Commission should not have any interest in any particular bank or group of banks, so that the Commission, taken as a body, in its relation with the various banks, may be able to act in a manner which will not only be impartial but that will be readily accepted as impartial. It may, of course, be taken that the elected Commissioners will not only be shareholders of particular banks but will probably be directors of Shareholding Banks.
Amendment agreed to.
New section agreed to.
SECTION 21 (1) AND (5).
(1) When the Minister has received from every bank mentioned in the Third Schedule to this Act an application and payment in accordance with this Act for admission to be one of the first Shareholding Banks or the period limited by this section for making such applications has expired (whichever shall first happen), the Minister shall appoint a time and place (in this section referred to as the appointed time and place) for the meeting of representatives of the first Shareholding Banks for the election of the first elected Commissioners and shall notify in writing every such bank of the time and place so appointed.
(5) If no bank applies in accordance with this section to be admitted to be one of the first Shareholding Banks the Minister shall within ten days after the expiration of the period limited by this section for making such applications nominate three eligible persons willing to act and not in the permanent service of the State to be the first elected Commissioners and the persons so nominated shall for all purposes be deemed to have been duly elected to be the first elected Commissioners and references in this Act to the election of the first elected Commissioners shall be construed as including such nomination.
I move amendment 20:—
In sub-section (1), page 9, line 51, to delete the word "section" and substitute therefor the word "Act."
Amendment agreed to.
I move amendment 21:—
In sub-section (5), page 10, lines 20 and 23, to delete the word "section" in both lines and substitute therefor in each case the word "Act."
Amendment agreed to.
Section 21, as amended, agreed to.
SECTION 22.
Not less than three nor more than ten days after the time appointed by the Minister for the meeting of the representatives of the first Shareholding Banks for the election of the first elected Commissioners or, if by reason of no bank duly applying to be admitted to be one of the first Shareholding Banks no such time is so appointed, within ten days after the expiration of the period limited by this Act for making such applications, the Minister shall nominate three eligible persons willing to act to be the first nominated Commissioners.
I move:—
In line 30, to delete the words "less than three nor."
It is felt that there is no point in prescribing a minimum period. What is really necessary is the maximum ten days.
Amendment agreed to.
Section 22 agreed to.
Sections 23, 24, 25, 26, 27 and 28 agreed to.
SECTION 29.
(1) The Chairman may from time to time appoint any one of the nominated Commissioners to act as Deputy Chairman during any temporary absence or any temporary incapacity through ill-health of the Chairman, and during such absence or inability the Deputy Chairman so appointed shall have, exercise, and perform such of the rights, powers, and duties of the Chairman under this Act as shall be delegated to him by the Chairman.
(2) A nominated Commissioner acting as Deputy Chairman under this section shall while so acting be paid such remuneration and allowances as the Chairman and the ordinary Commissioners (other than the Deputy Chairman) shall determine.
(3) A nominated Commissioner acting as Deputy Chairman under this section shall, notwithstanding his so acting, continue to hold his office as nominated Commissioner.
I move amendment 23:—
In sub-section (1), page 12, line 62, to delete the word "nominated" and substitute the word "ordinary."
The effect of the amendment is to enable the Chairman to select any Commissioner to act for him in case of his being unable, temporarily, to carry on his duties. It is felt that ordinarily the Chairman will select only a nominated Commissioner because the nominated Commissioner will have no direct connection with any of the banks. It would not be satisfactory that any nominated Commissioner who was in the Civil Service should be appointed. One of the nominated Commissioners, ordinarily, would be an official of the Department of Finance. It is not felt that that nominated Commissioner should ever be appointed. It would not be regarded as satisfactory that he should be appointed as Deputy Chairman. If we confined it to the other two Commissioners, it might happen that at some particular time both had been comparatively recently appointed, and that while they had a good knowledge of some particular business or of the general business requirements of the country, in the matter of credit and credit facilities they might not have the particular specialised knowledge that would enable them to act satisfactorily for the Chairman. It is proposed, at the suggestion of the Standing Committee of the banks, that the Chairman should be enabled to nominate any one of the ordinary members of the Commission to act for him in case of temporary incapacity, the banks recognising as I recognise, speaking generally, that it will only be a nominated Commissioner who will be appointed.
Amendment agreed to.
Amendment 24—In sub-section (2), page 13, line 5, to delete the words "A nominated" and substitute therefor the words "An ordinary."—(Minister for Finance).
Agreed to.
Amendment 25.—In sub-section (3), page 13, line 9, to delete the words "A nominated" and to substitute therefor the words "An ordinary," and in line 11 to delete the word "nominated" and substitute therefor the word "ordinary".— (Minister for Finance).
Agreed to.
Section 29, as amended, agreed to.
Section 30 agreed to.
I move amendment 26:—
Before Section 31 to insert a new section as follows:—
(1) The Chairman and every other member and every officer of the Commission shall, immediately after his election, nomination, or appointment and before he begins to act as such Chairman, member or officer, make and subscribe a declaration in the following form:—
"I do solemnly declare that I will not disclose any information in relation to the business, records, or books of any bank which may come to my knowledge by virtue of my position as the Chairman or a member or an officer of the Currency Commission except to such persons only as shall act in the execution of the Currency Act, 1927, and where it shall be necessary to disclose the same to them for the purposes of the said Act."
(2) The declaration prescribed by the foregoing sub-section shall be made before a Peace Commissioner.
(3) Every person who acts as Chairman or other member of the Commission or as an officer of the Commission before he has made the declaration prescribed by sub-section (1) of this section shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a penalty not exceeding one hundred pounds.
This amendment is to provide for the taking of a declaration of secrecy. At present officials of banks take a declaration. I do not know whether it is precisely in this form, but they do take a declaration of secrecy which, in effect, is somewhat similar to this. Deputies are also aware that officials of the Revenue Commissioners take a declaration of secrecy. It has been generally felt that the Chairman and members of the Commission should be required to take the sort of declaration that directors of banks actually take at the present time.
Amendment agreed to.
I move amendment 27:—
To add at the end of Section 31 a new sub-section as follows:—
(4) At any meeting of the Commission the Chairman may, in the event of an equality of votes, exercise a casting vote.
I think this is a desirable amendment. It is to enable a casting vote to be given in the case of an equality of votes.
I do not know whether the Minister has given any attention to a question which may arise in this connection. If important matters arise which are critical and the Chairman has a casting vote, according to this he apparently will have power to determine the policy of the Commission even if it is entering on a new policy. It is customary, of course, when a chairman has this power to exercise his casting vote in favour of retaining the status quo. That is the custom, but it is not by any means universal, and it is not ensured by this. I am not sure whether it would not be better in an important matter of this kind to provide that unless there were an actual majority any proposal should be deemed not to be carried rather than to give the Chairman a casting vote. This proposition giving a casting vote to the Chairman gives him almost final powers if he wishes to use them, and if an important matter of policy was under discussion and the Commission was divided, the Chairman's position would be one of extraordinary influence and authority, whereas under the practice, which I think would be preferable in such a case, unless a majority of the Commission decide in favour of the new policy it should be deemed not to have been passed. That will deprive the Chairman of the right to exercise this rather undue power.
I can see the point of Deputy Johnson's argument, but as the Commission has an uneven number, unless one member is absent, it may be assumed that the need for the casting vote will not arise. It is difficult to foresee what might be necessary, but it seems to me undesirable at the present time to take up the point of view that there must be an actual majority for every proposal before it can be carried.
There are provisions in the Bill which require a unanimous vote for certain things, and they are the really important things at any rate in the first period of five years. It might perhaps be better, if we were wanting to limit the powers of the Chairman, to specify that in respect of these more important matters, even after the period of five years, there should be a majority vote of the Commission rather than the Chairman's casting vote in order to effect the change, but I think that the less important matters could well be solved by the Chairman's casting vote. For instance, there might be a difference amongst the members of the Commission as to the design of a bank note or as to the class of paper it is to be printed on. That is clearly the sort of thing that might be quite reasonably decided by the Chairman's casting vote. I recognise fully that on the question of increasing the note issue or the redistribution of the volume of note issue, it might be desirable to require a majority apart from the casting vote, but I would not like at the present time, and I do not think it desirable, to provide that in respect of every matter there should be a majority before the motion could be carried.
Sub-section (1) states that the Commission may, by rules or otherwise, as it thinks fit, regulate its own procedure but we are providing that the one thing it may not regulate is the exercise of the casting vote. There is nothing, by the way, which says that the Chairman may not have an ordinary vote apart from the casting vote, or whether he may exercise the ordinary vote from the chair.
I think that that is understood, but if the Deputy feels strongly on the matter we could meet him so far as the most important functions of the Commission are concerned when we come to the section providing for the volume of note issue and the re-allocation of it.
Amendment put and agreed to.
Section 31, as amended, agreed to.
Section 32 agreed to.
SECTION 33.
(1) The Commission shall keep all proper books of account and other books and records, and shall within six months after the end of every year prepare and transmit to the Comptroller and Auditor-General a statement of account in respect of such year in such form and containing such particulars as shall be prescribed by regulations made under this section.
(2) The Comptroller and Auditor-General shall in accordance with regulations made under this section audit, certify, and report upon every statement of accounts transmitted to him by the Commission under this section and every such report of the Comptroller and Auditor-General together with the statement of accounts to which it relates shall be laid before Dáil Eireann as soon as conveniently may be.
(3) The Minister may, after consultation with the Commission, make regulations prescribing the form of and the particulars to be contained in statements of accounts prepared by the Commission under this section and regulating the audit and certification of and report upon such statements of account by the Comptroller and Auditor-General.
(4) Every regulation made by the Minister under this section shall be laid before Dáil Eireann as soon as may be after it is made and if Dáil Eireann shall, within the next subsequent twenty-one days on which it sits after such regulation is laid before it, pass a resolution annulling such regulation, such regulation shall be annulled accordingly without prejudice to the validity of anything previously done thereunder.
I move:—
In sub-section (1), page 14, line 8, to delete the words "and containing such particulars."
It is not felt that it is desirable to specify by regulation the particulars that are to be given. It is quite common to insert in various enactments power to prescribe the form of accounts but it is felt that it is not desirable to specify the particulars.
Amendment put and agreed to.
I move:—
In sub-section (2), lines 10 and 11, to delete the words "in accordance with regulations made under this section," and in line 15 to insert immediately after the word "be" the words "transmitted by him to the Minister who shall cause the same to be."
This amendment is somewhat similar to the previous amendment. It is not felt desirable to say that the Comptroller and Auditor-General shall in accordance with regulations made under this section, audit, etc.
Amendment put and agreed to.
I move:—
In sub-section (3), lines 18 and 19, to delete the words "and the particulars to be contained in" and in line 19 to insert immediately after the word "accounts" the words "to be," and in lines 20, 21 and 22 to delete all words from the word "and" to the end of the sub-section.
This amendment indicates that the Minister has responsibility for laying it before the Dáil.
Amendment put and agreed to.
Section 33, as amended, agreed to.
Section 34 agreed to.
SECTION 35.
(1) The Commission may require any person carrying on in Saorstát Eireann the business of a banker (whether solely or in conjunction with other business) to furnish to the Commission such information in regard to his said banking business and to afford the Commission such access to the books and records of such business as the Commission may consider necessary or desirable for the due discharge of its functions under this Act.
(2) Every person who fails within the time limited in that behalf by the Commission to furnish to the Commission any information or to afford the Commission any access to books or records lawfully required of him by the Commission under this section shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding fifty pounds for every day during which such failure is continued.
I move:—
In sub-section (1), to delete all words from the word "information," line 42, to the word "business," line 44, both inclusive, and substitute therefor the words "certified information, not being information which is privileged in any court of law, in regard to his said banking business."
I attach a great deal of importance to this amendment, though I admit that perhaps the amendments which have just been passed, on the motion of the Minister, recognised the point to a certain extent. I put forward this amendment not so much in the interests of the banks or bankers as from the point of view of the public generally. As far as I could find out and as far as I know, the public generally attach a great deal of importance to the privilege which has hitherto held ground as to the privacy and secrecy of their transactions with banks. I think it is above all things important that we should not, in this Bill, in any way do anything which may in the slightest degree affect the feeling of security which the public generally have. I have reason to believe that the provision in this section under which the Chairman of the Commission or some official appointed by the Commission is to have access to private accounts in banks has caused real trepidation, to such an extent, I am told, that depositors have given notice that they will withdraw their accounts if this section is passed into law in this form. I believe in all probability, if the section is passed, that that feeling will materialise still more.
I am not asking myself in putting forward this amendment the reasons as to why the public have that very keen desire for this secrecy, but I imagine there is one important reason in connection with business affairs, and that it would be very often of the highest importance to a business firm itself that a banking account should, in every respect, be kept secret. I further suggest that the amendment I have proposed, which enables the Commission to get the information which is of real importance to it, namely, the sum total of the advances made by any particular bank in a guaranteed form certified by a chartered accountant, or in any way which the Minister may desire, is really the best form in which the Commission may obtain the information it desires. The certification in that way is likely to secure to the Commission the best information it can get as to the reliability of any advances that may have been made by banks. The effect of this amendment, if adopted, would be that the banks would be bound to supply, in bulk, to the Commission on demand, such information as the Commission desires. They would not be obliged to supply any information as regards any particular account or depositor. I think that information in bulk is the desirable thing, and the proper person to judge as to the reliability of that information would be some person like a chartered accountant who has gone into the accounts separately, and decided on the reliability of advances made in a particular case. I see from the Minister's suggested amendment that he is not at all disposed to accept this amendment. Nevertheless, I urge this very strongly as being really something which will secure that very essential thing, namely, that the confidence of the public in their accounts held by the banks be maintained in the fullest privileged way in which it has been up to the present.
I take leave to doubt that there has been any trepidation. I do not believe in the least that there has been trepidation. I think that is a sort of scare that some people get up occasionally, but the people who might have cause for trepidation are not so stupid as to be intimidated, because the only people who could have cause for it have been the people who have succeeded in evading payment of income tax. I believe these people are intelligent enough to know that this action would cause them no danger. I doubt there has been any trepidation experienced anywhere. While I have no particular respect for the evaders of income tax, I recognise they are an important section of the community, unfortunately, and that their wishes must be respected, as far as we can do it, but I do not think Deputy Thrift's amendment would meet the case. We are adopting a new form of note issue, which is elastic, which is based on credit requirements, and, primarily, on the advances of the banks, but not on them only. There must be a knowledge of the assets and liabilities of the banks, in order that the Commission may properly determine, at any particular time, what the volume of note issue is to be.
In this Bill we make no provision for having the reserves of the bank bear a particular proportion to the note issue. We do not provide that their cash holdings must bear a particular proportion to the note issue. We leave that vague. What we do is this —we do not provide for a note issue that can be extended at any time. We provide for a note issue to be fixed for periods, to remain constant for those periods, and then to be increased, or decreased, at the end of the periods. We are really setting up a new type of note issue, and in order that the functions of the Commission may be properly discharged, it is necessary that the Commission should have full opportunities of getting to know what the position of the banks is. I take it that no difficulty will be raised on the question of advances that the people who profess to be troubled about any disturbance of the secrecy which has hitherto existed are the people with deposits. It is necessary that the Commission should know what kind of deposits the bank holds, whether they are time or call, and whether the call deposits are, nevertheless, in their nature, long or short term deposits, because a call deposit which has remained undisturbed for years, and is likely so to remain, is quite a different thing from a call deposit with the bank for a month, which may be removed at any time. It is necessary to know whether the deposits which the bank holds are deposits ordinarily used as security for advances.
It is necessa that the Commission, in order to discharge its functions properly, should know what the business and position of the banks are. I do not think it is desirable that the veil should unnecessarily be drawn between the Commission and the facts. If a chartered accountant can see the facts, there is no reason why the Chairman of the Commission, who has made a declaration of secrecy, who is an independent officer of the Commission, should not be allowed to see the various accounts. I think the people who will allow practically any chartered accountant to see them, and who would object to the Chairman of the Commission seeing them, are not taking any reasonable point of view. You may say a return certified by a chartered accountant would be good enough for the Commission, but really it would not, because the returns of the different banks would be prepared by different chartered accountants, and anyone knows that where you try to divide say, advances or deposits into different categories, a great deal will depend on the view of the person preparing the returns. There will be a great many borderline cases which one man will put in one and another into a different one. When decisions have to be taken, when one bank has to have the amount of notes allocated reduced, and another bank to have the amount increased, it is desirable that the returns should reflect the same point of view.
It seems to me to be quite essential that the Chairman of the Banking Commission should have access to the information necessary for carrying on the work of the Commission directly. In many cases he may examine it; in many cases he may accept certified returns, but he should be able to see whether these returns are prepared on a uniform basis, and he should be able to get the information that sometimes cannot be put into statistical form but which may be important in deciding what is to be done. I believe when it has been provided that not the Commission or all the members, but simply the Chairman of the Commission shall see them, I am going really quite far enough to meet the case Deputy Thrift has made, but I am prepared to go somewhat further.
Further, I am prepared to provide that the Chairman, or the other officer acting on his behalf, who examines the accounts and records of a particular bank shall not disclose, even to the Commission, any information which could be identified as referring to the account of any particular customer of the bank. I think that amply safeguards the position of everybody, and it leaves us in the position that it is much better for the Commission than a certified return by accountants. It secures that the accounts of the banks are looked at with the one eye, that the statistics are prepared on a uniform basis, and that they are at any rate vouched for, if not prepared, by somebody who is accustomed to look at the currency aspect of things, whereas the ordinary chartered accountant would not. The amendment I have already put down, with this further amendment I have suggested prohibiting the Chairman from disclosing information which could be identified as referring to the accounts of a particular customer should, I think, more than meet the reasonable requirements of any section of the community.
The Minister naturally thinks first of all of the people who are evading income tax. I congratulate him on having no knowledge of the even more numerous and equally respectable class of people who have overdrafts from their banks. They are people who set great store by the secrecy of the banking business. The Minister's experience of overdrafts may well be less than mine, but I ask him to take the position of a small individual trader in a country town who is carrying on business against the competition of a multiple shop, and who is able to carry on by reason of the fact that the bank has given him a fairly substantial overdraft. If it is known he has that overdraft the multiple shop will be encouraged to carry on in cutting the prices until the competing trader's credit has come to an end, and then they will be in the position of monopolising the market. There is no doubt that the trader and farmer attach importance to the secrecy of the banks. I have known accounts to be transferred from one bank to another simply because the manager of a particular bank had either been too convivial or too conversational. It remains to be seen how far the Minister's suggested amendment will meet the case. His amendment 26 makes it clear that the chairman or officer of the bank must not disclose particulars to any person except to those who act in execution of the Currency Act, 1927. Under Section 33 the Comptroller and Auditor-General shall audit, certify and report upon statements of accounts transmitted to him by the Commission. It is well within the bounds of possibility that in carrying out his duties he might insist, and I think the Minister knows that to a certain extent he probably would insist, on the fullest information as to the financial position of the various banks, the validity for any advances they make, and the security on which they make them. While I am anxious to see the Comptroller and Auditor-General vested with all proper powers in the matter of public expenditure I am not so anxious he should carry sway into the domain of private expenditure. I suggest that the Minister should ask the draftsman to bear that point in mind, and to make it clear that neither the Comptroller and Auditor-General nor any other person should disclose the particulars of private accounts, whether they are deposit accounts or overdrafts. That is the sole object we want to secure, and if the Minister can give an assurance of being able to secure that, I think Deputy Thrift would be well advised to withdraw his amendment.
With reference to my remarks on note issues based on advances, I do not want it to be taken for granted that that was a good basis for a note issue. It seems the Minister has more sympathy with note issue being based on assets and reserves. Further, I think I was right in saying that all information of real importance to the Commission, including the different kinds of information the Minister specified, could be got in bulk. In my opinion, the Minister is right in stressing the point of uniformity, and that there would be an advantage in having this information looked at so far as possible from one standpoint. There was something in what the Minister said, that if information can be disclosed to a chartered accountant it could be disclosed to the Chairman or his officer. That is, perhaps, the same thing from the public point of view, because I do not think the public will ever regard the Chairman of the Commission or his officers as anything but Government officials. As I stated before, I was thinking of no special reason for this publicity being disliked by the public, and particularly I was not thinking of those who are attempting to evade the income tax. I recognise that the Minister has made a very important advance in the concessions which he has offered to-day, and this further binding of the Chairman or officer that he shall not disclose, even to the Commission, individual matters would, I think, very nearly meet the case which I believe does exist. Without prejudice to our judgment on the amendment which the Minister will bring forward on Report, with Deputy Cooper's permission, and with the leave of the House, I withdraw this amendment for the present.
I do not think that the Comptroller and Auditor-General could possibly ask for the information Deputy Cooper suggests, but I will look into the matter again.
I suggest to the Minister when he is considering the further amendment to this section to bear in mind that there is very considerable alarm on this subject. The Ministers in this House appear to me to live with their heads buried in the sand. Passing up one of our principal streets in the city yesterday I was stopped by a leading commercial man, and the one question he asked about this Bill was in connection with this section.
Will the Deputy give me his name?
That is a matter of secrecy and I will not disclose it. I only want to ensure that the public shall have the same confidence in our banks as exists elsewhere. That confidence is absolutely essential in order to carry on the ordinary trade and commerce of the country, and anything that strikes at that confidence ought to be the subject of very serious consideration on the part of the Minister responsible. I am particularly anxious, knowing something of the circumstances connected with this, that the Minister should give very serious consideration to the form in which the amendment he now suggests will appear. The Minister has been good enough within the past few days to express the wish that the reduction he has brought about in taxation in his Budget should produce certain results.
But if, within a couple of days after that very desirable reduction took place, we introduce into this House Bills that cut right across the confidence that is essential in order that that increase of capital may flow, then we ought to consider very seriously the introduction of such measures and the form in which they appear, so that we shall ensure that they will not destroy the good intentions expressed in connection with the Bill I refer to. One would like to see, before this Bill leaves the Dáil, the amendments the Minister proposes to put forward. I suggest that this clause should stand over until we see these amendments and have an opportunity of considering them carefully. This is a matter of the very greatest importance to commerce and trade in the Saorstát.
The amendments will come up on Report, and I hope Deputy Good will not press me too much or I may not move any.
Amendment 31, by leave, withdrawn.
Amendment 32 is as follows:—
In sub-section (1), page 14, line 43, to delete the word "Commission" and substitute the words "Chairman or an officer of the Commission specially authorised in that behalf in writing by the Chairman."
This is to enable the Chairman to depute an officer of the Commission specifically to do some work that the Chairman is unable to do. I think Deputies will see that it is necessary that the Chairman should not be compelled to do every part of an investigation himself and he should be enabled to authorise an officer.
I do not know if this amendment, to a certain extent, depends upon the amendment the Minister proposes to bring forward in connection with the first portion of this section. Would it not be better to leave over all the points connected with this matter until we see the Minister's amendment?
This, at any rate, brings us one stage in the direction in which we wish to go, and it is better to go stage by stage.
Amendment agreed to.
Amendment 33 is consequential:—
In sub-section (2), page 14, line 49, to delete the word "Commission" and substitute the words "Chairman or such officer as aforesaid."—(Aire Airgid.)
Amendment 34 not moved.
Section 35, as amended, agreed to.
SECTION 36.
(1) The Minister, if he thinks fit so to do, may make such arrangements as he thinks proper to enable the Commission to issue on his behalf to any bank such amount of such coins provided by the Minister under the Coinage Act, 1926 (No. 14 of 1926) as such bank may require and to enable the Commission to redeem all such coins issued under the said Act by the Minister or under this section by the Commission on his behalf as shall be presented by any bank to the Commission for such redemption.
Amendment 35 reads:—
In sub-section (1), page 14, line 60, to delete the words "all such," and in lines 61-62 to delete all words from the word "as" to the end of the sub-section.
This amendment is to provide that some coins, but not all coins, may be redeemed.
Amendment agreed to.
Section 36, as amended, agreed to.
Section 37 agreed to.
SECTION 38.
(1) Any bank may apply to the Commission at any time after the establishment of the Commission to be admitted to be a Shareholding Bank and the Commission may in its absolute discretion grant or refuse such application.
(2) Whenever the Commission grants an application by a bank to be admitted to be a Shareholding Bank, such bank shall as on and from the date on which such application is granted become and be a Shareholding Bank for the purposes of this Act.
(3) The Commission may require a bank applying under this section to be admitted to be a Shareholding Bank to furnish to the Commission such information in relation to its business and to permit the Chairman to make such inspection of its books as appears to the Commission to be necessary for the due consideration of such application by the Commission.
Amendment 36 is as follows:—
In sub-section (1), page 15, line 23, to add at the end of the sub-section the words: "but no such application shall be granted within five years after the establishment of the Commission otherwise than by unanimous vote of the Commission."
This is in accordance with the recommendation of the Commission. As Deputies will see elsewhere, it is provided in the Bill that changes may not take place in the volume of note issue or the allocation of note issue during this first period of five years except by unanimous vote of the Commission, and it is felt it is not desirable there should be further admissions during that period.
Amendment agreed to.
Amendment 37 reads:—
In sub-section (3), page 15, line 31, after the word "Chairman" to insert the words "or an officer of the Commission specially authorised in that behalf in writing by the Chairman."
This is the same as the previous amendment. It allows an officer to act for the Chairman.
Amendment agreed to.
Section 38, as amended, agreed to.
SECTION 39.
(1) The Commission may in its absolute discretion on any of the grounds expressly authorised by this Act or on any other ground which appears to the Commission to be sufficient expel any Shareholding Bank from being a Shareholding Bank.
(2) Any Shareholding Bank may at any time apply to the Commission to be expelled from being a Shareholding Bank and whenever such application is so made by a Shareholding Bank the Commission shall forthwith expel such Bank from being a Shareholding Bank.
(3) Whenever the Commission expels under this section a Shareholding Bank from being a Shareholding Bank, such bank shall forthwith cease to be a Shareholding Bank for the purposes of this Act, but such expulsion shall not prevent the subsequent admission under this Act of such bank to be a Shareholding Bank.
(4) Except when a Shareholding Bank is expelled on its own application, the Commission shall not expel under this section a Shareholding Bank from being a Shareholding Bank without giving such bank a reasonable opportunity of being heard.
(5) No ordinary Commissioner shall vote on or otherwise take part in the expulsion under this section of a Shareholding Bank of which he is a director or by which he is employed.
I move amendment 37a:
In sub-section (1), lines 35-36, to delete the words "or on any other ground which appears to the Commission to be sufficient."
I think sub-section (1) gives the Commission quite unnecessary powers. The powers given by the Bill are extremely wide, and practically make the Commission, through the Chairman, dictators in this matter. To say that the Commission may, even on grounds which are not specified, but which appear to them sufficient, take certain action, seems to me to be putting into the Bill something which is quite unnecessary. We should specify in the Bill what is expected of the banks, and what they may, or may not, do; but that we should make the Commission absolute autocrats, and, simply, because they conclude that, in their opinion, such and such a thing should be done, permit them to do that thing, is not a reasonable proceeding. I think they should specify their grounds, and, consequently, I move the amendment.
I agree that the words in the Bill are, perhaps, not suitable. I do not know whether they should be eliminated or whether it would be possible to qualify them in such a way as to give the Commission power to deal with situations which we cannot clearly foresee, but, at the same time, limit them. If the Deputy will let the matter stand over I will promise to consider it between this and Report, and see if I cannot get a more acceptable provision.
Will the Minister also take into account that this is one of the matters which should not be decided by the casting vote of the Chairman?
Amendment, by leave, withdrawn.
I move amendment 38:—
In sub-section (1), page 15, line 36, to delete the word "expel" and substitute therefore the word "remove."
This is one of a series of verbal amendments. I am rather glad the Minister did not accept Deputy Thrift's amendment because it seems to me under the present scheme of the Bill there is no machinery by which a Shareholding Bank which wishes to discontinue from being a Shareholding Bank can be removed without doing some act sufficient to get it expelled. I think "removal" and the promised new wording of the Minister will meet the case. Those interested in the banking world dislike the word "expel"; it conveys some suggestion of moral turpitude. I remember as a boy at school the boy who was extremely wicked was usually expelled and the boy who was not quite so bad was removed by his parents at the end of the term. I think there would also be required a drafting amendment for Section 41. Amendments 39 and 40 are also verbal amendments:—
In sub-section (2), line 39, to delete the word "expelled," and substitute therefor the word "removed," and in line 41 to delete the word "expel" and substitute therefor the word "remove."
In sub-section (3), line 43, to delete the word "expels," and substitute therefor the word "removes," and in line 46 to delete the word "expulsion," and substitute therefor the word "removal."
I am prepared to accept these amendments.
Amendments 38, 39 and 40 agreed to.
I move amendment 41:—
To add at the end of sub-section (3) the following words: "nor relieve such bank from liability to pay on due presentation the amount of every consolidated bank note outstanding with it at the time of such expulsion or from liability for payments on consolidated bank notes in respect of consolidated bank notes outstanding with it whether before or after such expulsion."
The purpose of the amendment is to ensure that a bank which ceases to be a Shareholding Bank would continue to be liable until it complies with the provisions of Section 56, which enables it to make certain deposits for bank notes which are outstanding at the date of its cessation.
Amendment agreed to.
AMENDMENTS 42 AND 43.
In sub-section (4), line 48, to delete the word "expelled" and substitute therefor the word "removed," and in line 49, to delete the word "expel" and substitute therefor the word "remove."
In sub-section (5), line 53, to delete the word "expulsion" and substitute therefore the word "removal."
Amendments agreed to.
Section 39, as amended, agreed to.
SECTION 40 (6).
Every Shareholding Bank which maintains in pursuance of this section a local register shall in every month of January while it so maintains such register furnish to the Registrar of Companies a copy of such register as it stood on the first day of such month with a statement annexed thereto of the several places in Saorstát Eireann at which it carried on business on the said first day of such month, and any Shareholding Bank which furnishes in any month of January to the Registrar of Companies in accordance with this sub-section such copy of such register with such statement annexed thereto shall thereupon be relieved from making in such year the return required by Section 6 of the Bankers (Ireland) Act, 1825, or in such month the return required by Section 22 of the Bankers (Ireland) Act, 1845.
I move amendment 44:—
In sub-section (6), page 16, line 28, to delete the words "in such year," and in line 29 to delete the words "in such month," and substitute therefore the words "to be made before the then next 25th day of March and from making," and at the end of the sub-section to insert the words "in such month of January."
This is an amendment which is not intended to alter the sense of the section. It is an amendment which has been suggested by the draftsman for the purpose of making the meaning of the section clearer.
Amendment agreed to.
The phrase "resident in Saorstát Eireann" presents, I believe, legal difficulties. The Minister does not define anywhere in the Bill what he means by "resident." I do not know whether it is possible to consider the desirability of defining it.
It was considered, but it was thought that any difficulties that would arise would be less in practice than what would arise through any of the suggested definitions.
Section 40, as amended, agreed to.
SECTION 41 (2).
(2) It shall be the duty of every Shareholding Bank to observe and conform to the regulations made by the Commission under this section, and any contravention (whether of commission or omission) by a Shareholding Bank of any such regulation shall be a ground for expelling such bank from being a Shareholding Bank.
In line 50 the word "expelling" occurs, and it will be necessary to delete that word and substitute the word "removing."
Amendment agreed to.
Section 41, as amended, agreed to.
SECTION 42.
42.—(1) It shall be lawful for the Commission to provide and issue in accordance with this Act notes to be known and hereinafter referred to as legal tender notes for the following denominations namely ten shillings, one pound, five pounds, ten pounds, twenty pounds, fifty pounds, and one hundred pounds, and such legal tender notes shall be current in Saorstát Eireann in the same manner and to the same extent and as fully as gold coins to be issued under Part II. of this Act will when so issued be current and shall be legal tender in Saorstát Eireann for the payment of any amount.
(2) Every legal tender note shall be of such form, size and design and printed from such plate and on such paper and numbered and authenticated in such manner as the Commission shall, with the sanction of the Minister for Finance, prescribe.
I move:—
Before Section 42, but in Part IV., to insert a new section as follows:—
"(1) The Minister may, with the concurrence of the Commission, make regulations prescribing the times and intervals at which and the form in which Shareholding Banks shall publish their respective balance sheets.
(2) It shall be the duty of every Shareholding Bank to observe and conform to the regulations made under this section, and any contravention (whether of commission or omission) by a Shareholding Bank of any such regulation shall be a ground for expelling such bank from being a Shareholding Bank."
This is for the purpose of enabling the Minister, with the concurrence of the Currency Commission, to make regulations prescribing the times and intervals at which, and the form in which, Shareholding Banks shall publish their respective balance sheets and to conform with certain other regulations. It is the practice in Great Britain to publish monthly an average of the weekly balance sheets of the banks. The Cunliffe Commission, which was sitting at the time that the banks voluntarily adopted this procedure, recommended it as the proper procedure to be followed. It probably will be desirable that there should be the same procedure here. There is also the question of the Saorstát deposits and the Saorstát advances. Our banks operate over the Border, and when the deposits decrease in the banks we do not know whether the decrease is a decrease of deposits in the Saorstát branches or not. It might be that there would be a decline in the deposits outside the Saorstát, while the deposits in the Saorstát branches had gone up. The same thing applies to advances As this country is a fiscal and financial unit, it is desirable that the banks operating here should, in their balance sheets, show the figures for the Saorstát —they should differentiate between the figures relating to the Saorstát and the figures for the other portions where the banks operate. It will be possible to prescribe a form which will cause that information to be shown.
I presume in that section, the word "removal" will be substituted for the word "expulsion."
I would like to suggest to the Minister that he should still further consider the form of his amendment. In its present form, I understand, it is very much disliked. Nevertheless, I think it is quite possible that what the Minister desires to gain, namely, definite information for the State, could be secured. In this form all the accounts throughout the different banks might, if demanded by the Minister, be a thing to which I think great objection could be taken by all the banks in the State. I do not think there is any such recommendation made by the Banking Commission's report. I do not think such a point was recommended by the Commission. I think the Minister could secure the thing in a more acceptable form to the banks than he has framed it here. I would ask the Minister to consider the matter further with the banking interests before the Report Stage is reached and before he presses this amendment finally.
I do not know the grounds of the objection to this amendment. In the first place, the Minister cannot make regulations himself, and I think that is desirable. They can only be made with the consent of the Currency Commission, on which the banks will be very largely represented. The Commission will be independent of the Minister.
The regulations might be made with the concurrence of the Chairman.
Well, I do not quite see what the Deputy is at.
The casting vote perhaps.
If the Deputy thinks that could be provided for, I would consider it. I do not, however, see why this matter should not be decided by the casting vote. I have before me the Cunliffe Commission Report. That report concurred in the idea of the monthly balance sheet. It also appended a proposed form of monthly statement. As a matter of fact, the banks in Great Britain do publish information along the lines of that recommendation and in the form set out in the appendix to the Cunliffe Commission Report. I would be prepared to consider, if it were put to me, any restrictive words which might be thought to be necessary, if these restrictive words were reasonable, but I have not had that suggestion put to me. I think as they stand the requirements set out in the section are reasonable enough, and I would be inclined to add a section to the Bill on that matter. Meanwhile, between this Stage and the Report Stage, I would consider any representations, and if I might say so, I do think that I would be just as likely to get representations, and reasonable representations, if the section were added to the Bill now, as if the whole matter were deferred to a later stage.
I am sure the Minister will receive representations and have it properly discussed. That is all I really wanted. I have no form of restrictive words to suggest at the moment.
Amendment, as amended, agreed to.
New section ordered to be added to the Bill.
I move amendment 46:—
In sub-section (1), page 16, lines 55 and 56, to delete the word "hereinafter," and substitute therefore the words "in this Act."
This is to correct an error.
Amendment agreed to.
I move amendment 47:—
In sub-section (2), line 65, to delete the words "from such plate," and substitute therefore the words "in such manner."
This is an amendment upon which the Minister and I, for once, are agreed. I think we are agreed on this Bill more than we are usually, and I hope the result may be to our eventual happiness. I believe that bank notes are not invariably printed from plates, and the words "in such manner" render it possible to print bank notes in other manner than from plates. Therefore it is a desirable amendment which, I take it, will be acceptable.
On this amendment, I am not satisfied as to what the Currency Commission are likely to decide upon as to the designs of the new notes. The Minister appointed a committee to advise him as to the designs of the new coinage and, if report is true, they have decided on all kinds of bulls, cows, pigs and other things to be put on the coins. I notice in Section 6, dealing with the gold coinage, the Minister is to decide the designs, presumably on the advice of this committee. There is nothing in the Bill to direct that the Commission will take any advice as to what the designs of the notes are to be. I noticed, when travelling about Europe generally, that the countries with the most magnificent designs for notes are the countries whose notes are worth least, and that the ugliest notes are generally the ones which are worth most. I do not know if the Minister has arranged that the Commission will take advice as to the design of the notes. The same thing applies under Section 48, to the bank notes.
As the Deputy has raised the matter, might I ask the Minister to give us a solemn undertaking that he will not put a picture of the Dáil on the back of the notes?
I can give a solemn undertaking not to agree to the Commission doing any such thing. I think as the Commission will be handling all the arrangements in connection with the note issue that they should be directly responsible for this question of form and design. It is provided that the sanction of the Minister for Finance shall be required. I am sure the Commission will take advice, and it is a matter that may be left to them. I do not know whether Deputy Esmonde's suggestion is that we should have the ugliest possible notes, so that there might be complete confidence in them.
Amendment agreed to.
Section 42, as amended, agreed to.
SECTION 43.
Legal tender notes issued under this Act shall be deemed to be bank notes within the meaning of the Forgery Act, 1913, and any other enactment relating to bank notes which is for the time being in force in Saorstát Eireann and to be valuable securities within the meaning of the Larceny Act, 1861, the Larceny Act, 1916, and any other law relating to stealing which is for the time being in force in Saorstát Eireann and to be current coin of Saorstát Eireann for the purpose of the Acts relating to truck and any other like enactment.
I move amendment 48:—
In line 3, to insert immediately after the words "relating to" the words "offences in respect of."
These are words which should have been in the Bill. It is really the application of enactments relating to offences in respect of bank notes, not the enactments relating to bank notes.
Amendment agreed to.
Section 43, as amended, agreed to.
SECTION 44.
(4) The Commission may, whenever after the appointed day it thinks fit so to do, issue in Dublin to the general fund or the note reserve fund legal tender notes in exchange for any equal nominal amount of Saorstát gold coins or of British money.
(10) Whenever after the coming into operation of Section 5 (which relates to the coining of gold bullion on request) of this Act the Commission issues under this section legal tender notes otherwise than in exchange for Saorstát gold coins or legal tender notes previously issued, the Commission may require the person to whom such legal tender notes are so issued to pay therefor to the Commission such charge corresponding to the charge for coining for the time being made by the Minister under the said Section 5 as the Commission shall think proper.
The following amendments were agreed to:—
49. In sub-section (4), line 37, sub-section (5), line 41, and sub-section (6), line 54, to insert in each case immediately after the word "whenever" the words "on or."
50. In sub-section (10), page 18, line 13, to insert immediately after the word "whom" the words "or fund to which."—Aire Airgid.
Section 44, as amended, agreed to.
SECTION 45.
The Commission may, subject to such conditions as to time, place, manner, and order of presentation as it thinks fit, call in any legal tender notes issued under this Act on the terms of paying for such notes on presentation at their face value in gold coins which are for the time being legal tender under this Act in Saorstát Eireann for unlimited amounts or in money in any form which is for the time being legal tender in Great Britain for unlimited amounts or in legal tender notes issued under this Act or, if the person presenting such notes so desires, by a draft on London.
I move amendment 51:—
In line 29, to delete the word "desires" and substitute therefor the word "agrees."
This is to make it clear that there must be agreement both by the Commission and by the person presenting the notes that if it were inconvenient for the Commission they should not be obliged to do so.
Amendment agreed to.
Section 45, as amended, agreed to.
SECTION 46.
(2) The Commission may, if and whenever and to such extent as it thinks fit, redeem in Dublin in gold coins which are for the time being legal tender under this Act in Saorstát Eireann for unlimited amounts or in money in any form which is for the time being legal tender in Great Britain for unlimited amounts or, if the person presenting the notes so desires, by a draft on London, any legal tender notes presented to it for such redemption at the place in Dublin appointed in that behalf by the Commission.
(4) The Commission may make by regulation or otherwise such arrangements as it thinks proper for the cancellation by it or on its behalf of such redeemed legal tender notes as it does not think proper to preserve for reissue.
The following amendments were agreed to:—
52. In sub-section (2), line 40, to delete the word "desires" and substitute therefor the word "agrees."—Aire Airgid.
53. In sub-section (4), page 18, line 50, to insert immediately after the word "cancellation" the words "and destruction."—Aire Airgid.
Section 46, as amended, agreed to.
SECTION 47.
(1) All moneys required for the redemption of legal tender notes by the Commission (whether at the London Agency or in Dublin) in pursuance of this Act shall be provided by the Commission out of the legal tender note fund, and, if that fund proves insufficient, out of so much of the note reserve fund as is available for that purpose under this Act and, if such available portion of the last-mentioned fund proves insufficient, out of moneys advanced under this section to the Commission out of the Central Fund.
I move amendment 54:—
In sub-section (1), page 18, line 57, to delete the words "so much of," and in lines 58 and 59 to delete the words "as is available for that purpose under this Act," and in line 59 to delete the words "available portion of the," and in sub-section (2), lines 62 and 63, to delete the words "the available portion of," and in sub-section (3), lines 11 and 12, to delete the words "available for that purpose under this Act."
This is necessary, because no special part of the reserve fund is earmarked for meeting any deficiency in respect of legal tender notes.
Amendment agreed to.
I move amendment 55:—
In page 19 to add at the end of the section a new sub-section as follows:—
(4) For the purposes of this section any payment under this Act (otherwise than in legal tender notes) on presentation of legal tender notes which have been called in shall be deemed to be a redemption of such legal tender notes.
This amendment is necessary in order that payments for called-in notes under Section 45, otherwise than the issue of new notes in exchange, may be treated as redemption of legal tender notes.
Amendment agreed to.
Section 47, as amended, agreed to.
SECTION 48.
(3) Every consolidated bank note shall be of such form, size, and design and printed from such plate and on such paper and be numbered and authenticated in such manner as the Commission shall prescribe.
(4) Consolidated bank notes shall be deemed to be bank notes within the meaning of the Forgery Act, 1913, and any other enactment relating to bank notes for the time being in force in Saorstát Eireann and to be valuable securities within the meaning of the Larceny Act. 1861, the Larceny Act. 1916, and any other law relating to stealing which is for the time being in force in Saorstát Eireann.
The following amendments were agreed to:—
In sub-section (3), line 23, to delete the words "from such plate" and substitute therefor the words "in such manner."—Aire Airgid.
In sub-section (4), line 28, to insert immediately after the words "relating to" the words "offences in respect of."—Aire Airgid.
Section 48, as amended, agreed to.
SECTION 49.
(2) The total amount of the consolidated bank notes at any time outstanding with a Shareholding Bank shall not exceed the total amount of the liquid sound advances by such bank to persons in Saorstát Eireann proved to the satisfaction of the Commission to exist at that time.
(3) Proof for the purposes of the foregoing sub-section of the existence of liquid sound advances by a Shareholding Bank to persons in Saorstát Eireann shall be given by such bank to the Commission in such manner as the Commission shall direct or allow and for the purposes of such proof the Chairman may inspect the relevant books and documents of such bank.
I move amendment 58:—
In sub-section (2), line 39, to insert immediately after the word "outstanding" the words "(otherwise than on an extraordinary issue)."
This is necessary because for extraordinary issues, under Section 52, the requirement of holding liquid sound advances may be waived.
Amendment agreed to.
I move amendment 59:—
In sub-section (3), page 19, line 47, after the word "Chairman" to insert the words "or an officer of the Commission specially authorised in that behalf in writing by the Chairman."
I should like to point out that what happens in connection with Section 35 will also govern this.
Amendment agreed to.
Section 49, as amended, agreed to.
SECTION 50.
(1) In this Part of this Act—
the expression "maximum limit" means the maximum amount of consolidated bank notes which may under this Act be outstanding otherwise than on an extraordinary issue made under this Act at the time in reference to which the expression is used and the expression "initial period" means the period of two years from the day appointed under this Act for the commencement of the issue of consolidated bank notes.
(4) At or within one month before the expiration of the initial period and of every period of three years thereafter, the Commission shall consider the maximum limit and may, on such consideration at or before the expiration of the initial period or the first triennial period thereafter, by unanimous vote and, on such consideration at or before the expiration of any subsequent triennial period by majority vote fix the maximum limit at such amount as it considers proper having regard to the total amount of liquid sound advances by Shareholding Banks to persons in Saorstát Eireann then existing, and such other matters as it considers relevant, and if the Commission on the occasion of any such consideration so fixes the maximum limit, the same shall be the maximum limit for the ensuing triennial period, and if at the expiration of the initial period the Commission does not so fix the maximum limit the maximum limit for the first triennial period shall be six million pounds and if at the expiration of any triennial period the Commission does not so fix the maximum limit the maximum limit for the then ensuing triennial period shall be the same as the maximum limit for the then expiring triennial period.
I move amendment 60:—
In sub-section (1), line 10, after the word "from" to insert the words "the 31st day of March or the 30th day of September, whichever first occurs, next after."
This is to simplify the various provisions of the Bill as to dates and periods in the event of the issue of bank notes commencing on a date other than 1st April or 1st October.
Amendment agreed to.
I move amendment 61:—
In sub-section (4), line 25, to delete the words "or the first triennial period thereafter," in lines 26 and 27 to delete the word "subsequent," in line 34 to insert immediately before the words" the expiration" the words "or before," and in line 37 to insert immediately before the words "the expiration" the words "or before."
This is to enable the maximum limit to be revised by a majority vote of the Commission at the end of five years from the establishment of the Commission. This is simply due to a defect in drafting. The six million limit might run for eight years unless it was altered by a unanimous vote. It was intended that the unanimous vote should only be required at the end of the initial two-year period and at the end of the first triennial period, but that thereafter a majority vote should suffice.
Amendment agreed to.
I move amendment 62:—
Before sub-section (5) to insert a new sub-section as follows:—
"If the average amount of legal tender notes outstanding during any half-year which expires during the initial period is not less than six million pounds the Commission by unanimous vote may, if it so thinks fit, fix the maximum limit at such amount as it considers proper having regard to the total amount of liquid sound advances by Shareholding Banks to persons in Saorstát Eireann then existing and such other matters as it considers relevant and if and whenever the maximum limit is so fixed the same shall be and continue to be the maximum limit until the expiration of the initial period or the fixing of a maximum limit under the next following sub-section whichever shall first happen."
This follows certain representations that have been made by the banks since the Bill was issued. As Deputies are aware, the basis of the report was that twelve millions of notes altogether would suffice for the currency requirements of the country; that is, six millions for legal tender and six millions consolidated note issue. Of course, it is provided that at the end of the transitional period of two years the Commission, by unanimous vote, may fix another limit than the six millions for the consolidated note issue. The Commission recognised that these figures, which they adopted, were not founded upon sufficient information to make it absolutely sure that they were correct. Nevertheless, they felt satisfied that ample provision was made for the currency requirements of the country. Since that time it has been represented to me by the banks that the Commission did not take sufficiently into account the present privileges that the banks have in regard to "till money." They are able at present to send unissued bank notes to their branches, where they are held simply as stationery until they are issued. When they are issued returns are furnished and they count as notes in circulation. It will not be possible, as under the old system, to hold bank notes as stationery. The fixing of a limit makes that impossible, because the various branches of the banks would be issuing notes without knowing what the other branches were doing, and the limit fixed by law might be easily exhausted.
The banks, following their statement that sufficient account was not taken by the Commission of the "till money" privilege, have asserted their belief that twelve millions of notes would not suffice for the currency requirements of the country. It is always possible, of course, for the banks to get additional legal tender by putting up security. But if it proved to be necessary for them to get more than this six millions of legal tender while they can only issue six millions of consolidated notes, it would be in the nature of a hardship, and this amendment is a concession. It enables the Commission to increase the maximum limit of consolidated note issue, provided that for the half-year up to six millions of legal tender notes have been in circulation.
It is the reverse of the other provision in the Bill which provides that if the amount of legal tender notes in circulation falls below four million, certain steps may be taken by the Commission to reduce the amount of legal tender notes in circulation. Now we are providing that if for the half-year the amount of legal tender notes in circulation exceeds six millions, there may be an extension of the limit of consolidated notes issue. It simply means that the rigidity that previously existed in the Bill for the first two years is removed. I think it is reasonable that it should be removed, because, while the Commission expressed their opinion that twelve million of notes would represent the currency requirements of the country, they said they had not the data which would enable them to be certain of that, and they specifically stated that the whole question of the amount of consolidated notes that would be required for the country could only be determined after a period of working by the Commission.
As the Minister said, this is complementary of the present sub-section (5), and I agree it is a real concession. But I want to put forward two points, in order that he may make the concession real indeed. The first is that I can see no reason why this should be confined to the initial period. It says, "which expires during the initial period." I would urge him to consider whether it is not possible to take out these words. If that privilege is one which they are entitled to in the first two years, it is one they will be entitled to at any time It is always by the unanimous vote of the Commission, so it can be only obtained if there is real consent. Further, he must read this new sub-section (5) as it stands at present in connection with sub-section (7) as it stands at present, and if the Minister wants to make the concession one of real meaning he should limit the present sub-section (7) to a certain extent. I suggest this, "The Commission shall not at any time except as provided in sub-section (5)"— that is the one we are now considering —"fix the maximum," and so on. Otherwise sub-section (7) will entirely overrule this sub-section, and the concession given in the new sub-section will not be a real one. I would like the Minister to consider these two points, because I think there is substance in them.
I wish to ask the Minister this: Is this amendment one put forward by the banks?
No, I did not say so. I said it was put forward following representations made by the banks in respect of certain matters, particularly their contention that a sufficient account was not taken of the banks' "till money" privilege in fixing the limit.
Might I ask the Minister whether this amendment was put forward in substance in agreement with the banks? They are, after all, the people most affected in this matter in so far as they deal with their customers, and we would have a good deal of confidence in it if they were satisfied.
I would not like to say they are satisfied, because this is not all they are asking for. Consequently they would not say they are satisfied, but they might be satisfied for all I know. This amendment goes in the direction, and substantially so in my opinion, of meeting the case they made. In reference to what Deputy Thrift said in the first place, the Commission should be able during the two years' period to make up its mind in regard to the note issue requirements for the subsequent period of three years. It was all along intended that there should be a definite revision at the end of each three years of the note issue and that there should not be any change in the volume of the note issue in the middle of any of those three-year periods. It seems to me it is reasonable in respect to the first period to enable a change to be made, simply because the fixing of the amount of consolidated notes at six millions is something of a guess. The Commission itself recognised that it could not be sure whether six millions was or was not a reasonable figure. It was the best they arrived at, and it is reasonable that in circumstances where the circulation of legal tender notes reaches the limit anticipated by the Commission and it is felt further notes are required, that the Commission should be allowed, with the consent of the Minister, to increase the maximum of consolidated notes. It is quite another matter that in the middle of a subsequent period it should be enabled to alter the limit of notes. That certainly is a matter I would not like to agree to without some further consideration. As to the consent of the Minister, I think that the position must be accepted that if this clause is put in it should be allowed to be operative.
If the full amount of legal tender is in circulation the Commission will be allowed to increase the consolidated note issue by some reasonable amount. I do not know that we should take the power of assent altogether away.
The point I want to have made clear is: What is the actual maximum cash value of this concession over and above what was recommended by the Currency Commission? As I read the Currency Commission's report, it was fairly evident that the banks, which were well represented at that Commission, got pretty well all they required in the way of recommendations, and there is the definite privilege given the banks in respect to this consolidated bank note issue. Now it is proposed to increase that gift. I would like to know if the Minister can make any estimate of what is the maximum value of that additional gift to the banks.
There might not be a single note issued. It might turn out that the Commission's view was entirely correct and that £12,000,000 will suffice. If it proves that the twelve millions was an under-estimate, then simply we do not compel the banks to wait until the end of the initial period for a revision, but that the revision of the note issue in the same circumstances as it would have taken place at the end of the two years' period may take place before it, was subject to this fact that the total amount of legal tender notes which the Commission anticipated would be required is actually out in circulation. As I say, this is simply to remove a certain element of rigidity. What it means to the banks I could not say. I think it is a matter of speculation.
I would like Deputy Johnson to remember that this is only in operation when the full six million legal tender notes are out, and it can only operate by the unanimous vote of the Commission, and presumably when there would be a full demand for the operation of the concession. My point is this: that not alone at the present time will the amount of note issue actually required be something of a guess, but that at any period for the succeeding three years the amount of note issue will be still something of a guess. There may be a demand, which will not be met by the proposed issue at all, due to certain trade activity, or something of that kind, for something more than a note issue in the ordinary way. This would give a valuable loophole for that in view of the rigidity laid down, as the Minister pointed out. This can only operate when the full six millions are out. I do not think it is at all too much to ask that it should be something that could operate at any time. I think the Minister is giving very little. I would be satisfied if he further considered the matter. I think it is worthy of further consideration. There will also be the point about sub-section (7) tending to prevent this concession coming into operation. The Minister will be satisfied, perhaps, if revenue is coming from the full six millions, but another Finance Minister, or himself at a later time, might be glad to get what would come from seven millions instead of six millions. There is always that temptation to the Minister to refuse the concession. I think the concession, for what it is worth, might be left to be granted by the full vote of the Commission when the full six millions legal tender is out. If the Minister will consider the point further I will not press it now.
I will promise to look into it. I do not want to be taken as agreeing, but I will consider it. I think it is going a great deal further than I proposed. It is one thing to make provision for a transitional period, and it is quite another thing to agree to an amendment that will remain permanently.
The Minister recognises that there might be such an occasion as I mentioned?
If a special occasion arises it would be reasonable to expect that the banks would make provision for legal tender in the same way as they provided secured notes in the past.
Amendment agreed to.
I move:—
In page 21 to add at the end of the section a new sub-section as follows:
"If the period commencing on the day appointed under this Act for the commencement of the issue of consolidated bank notes and ending on the next ensuing 31st day of March or 30th day of September, whichever first occurs, exceeds three months such period shall for the purpose of this section be deemed to be a half-year, and if such period does not exceed three months such period and the next ensuing half-year shall for the purpose of this section be deemed to form together one half-year."
This amendment is required by reason of the advance of half as covering the full period of six months. In the present section it would be unsuitable if a large part of the half-year preceded the commencing date. It is impossible to say at what date the Bill will actually be passed, at what date it will be possible to set up the Commission, or at what date precisely it will be safe to commence any of its operations.
Amendment put and agreed to.
Question—"That Section 50, as amended, stand part of the Bill"—put and agreed to.
SECTION 51.
(3) At or within one month before the expiration of two years from the day appointed under this Act for the commencement of the issue of consolidated bank notes (in this section called the initial period) and the expiration of every period of three years thereafter the Commission shall consider the quotas of the several Shareholding Banks and may vary the amounts of all or any of such quotas (including the fixing of the quota of a bank which has become a Shareholding Bank during the then expiring initial or triennial period and the distribution of the quota formerly belonging to a bank which has during such initial or triennial period ceased to be a Shareholding Bank) in such manner as the Commission may think proper having regard to the relative volume of the liquid sound advances of each Shareholding Bank and to any amalgamation, partition, transfer, or other change which may have occurred amongst the Shareholding Banks, and such other matters as it considers relevant, and the quota which is on any such occasion fixed by the Commission for any Shareholding Bank shall be the quota of such bank during the ensuing triennial period and if on any such occasion the quota of any Shareholding Bank is not varied by the Commission, the quota of such bank during the ensuing triennial period shall be the same as its quota during the preceding initial or triennial period.
I move:—
In sub-section (3), page 21, to delete all from the word "two" in line 16 to the word "called" in line 18, and also to delete the closing bracket after the word "period" in line 19.
The initial period is already sufficiently defined, and it is redundant to have these words.
Amendment put and agreed to.
Question—"That Section 51, as amended, stand part of the Bill"—put and agreed to.
SECTION 52.
Whenever a Shareholding Bank is for any reason temporarily unable to fulfil the conditions imposed by this Act precedent to the issue to it of consolidated bank notes and also whenever a Shareholding Bank has outstanding the whole of its quota and temporarily requires a further issue of consolidated bank notes, the Commission may if it so thinks fit by unanimous vote and with the consent of the Minister make to such bank an extraordinary issue of consolidated bank notes in lieu of or in addition to (as the case may be) such bank's quota, but such extraordinary issue shall be subject to the conditions imposed in regard thereto by this Act and also to the limitations that such extraordinary issue shall not continue for more than twelve months and may be terminated by the Commission at any time during such twelve months and that the amount of consolidated bank notes outstanding at any one time on such extraordinary issue shall not exceed the amount at that time of the accumulated profits in excess of capital of such bank.
I move:—
In lines 49 and 50, to delete the words "fulfil the conditions imposed by this Act precedent to the issue to it of consolidated bank notes" and to substitute therefor the words "comply with the provisions of this Act in relation to the issue to it of consolidated bank notes or the having such notes outstanding," and in lines 56 and 57 to delete the words "in lieu of or in addition to (as the case may be) such bank's quota," and in line 59 to insert immediately after the word "Act" the words "and also to the condition that the Commission may, in addition to its powers under any other section of this Act, require such bank to give or provide to the Commission such extraordinary security as the Commission shall direct."—Aire Airgid.
This amendment is proposed because the wording of the original section is too narrow. It would not cover, for example, the case of a bank which after putting out its full quota in the proper manner subsequently allowed its advances to diminish below the proper figure. The latter part of the amendment is to enable the Commission to insist that in the case of an extraordinary issue the normal security should be supplemented if necessary by security such as the personal security of the directors, or the like.
This is only a verbal criticism, but I think it is an important verbal criticism, and I would like to make it. The Minister suggests extraordinary security. I think that is not the right word to use. "Extraordinary" means something that is not ordinary.
Perhaps not. I will see if there is not another word that would convey the same sense.
Would "additional" meet the case?
I understand the draftsman is particularly proud of the word "extraordinary."
Amendment agreed to.
Question—"That Section 52, as amended, stand part of the Bill"—put and agreed to.
Section 53 agreed to.
SECTION 54.
The Commission shall make by regulation or otherwise such arrangements as it thinks proper for the retirement by Shareholding Banks of consolidated bank notes issued to them under this Act (including the retirement of any such notes which have become worn or damaged and the issue of new notes in lieu thereof) and for the cancellation by or on behalf of the Commission of such retired consolidated bank notes as it does not think proper to preserve for re-issue.
I move:—
In line 18, to insert immediately after the word "cancellation" the words "and destruction."
Amendment agreed to.
Question—"That Section 54, as amended, stand part of the Bill"—put and agreed to.
SECTION 55, SUB-SECTIONS (2) AND (6).
(2) No Shareholding Bank shall pay out to any person (other than the responsible bank) any consolidated bank note in respect of which it is not itself the responsible bank.
(6) Whenever a consolidated bank note is duly presented to the Commission under the foregoing sub-section the Commission shall, at its own option, either—
(a) pay to the person who presented such note or his legal representative all moneys recovered from the responsible bank by the Commission on foot of such note and, if such moneys are less than the amount of such note, pay the deficiency to such person or his legal representative out of the bank note reserve fund, or
(b) as soon as may be convenient after the presentation of such note, pay to such person or his legal representative the amount of such note out of the bank note reserve fund and pay all moneys recovered from the responsible bank on foot of such note into the note reserve fund.
All moneys paid under this sub-section by the Commission to a person or the legal representative of a person who presented a consolidated bank note shall bear interest payable by the responsible bank to the Commission at such rate as the Commission shall appoint and recoverable by the Commission from such bank as a civil debt.
I move the deletion of sub-section (2), which prohibits any Shareholding Bank from dealing in the notes of any other Shareholding Bank. I fancy that there will be a good deal of difficulty in working this sub-section in country districts. Take a fair at which the branch offices of two banks are working. It is quite obvious that the manager of one bank cannot foretell exactly the number of his clients—cattle dealers—who will attend that fair, and neither he nor they can possibly foretell the amount that they will have to pay for cattle. Consequently the manager estimates, and, under existing circumstances, with all the hold ups and raids that there have been, his estimate is, on the whole, a conservative estimate. If there is an exceptional demand on that bank the manager is able to send across to the other bank and get the manager there to meet his needs. The Minister, of course, will say: "Why should he not meet his needs with legal tender notes?" I believe that there will be some difficulty in securing at every fair all over the country that the banks should finance themselves with legal tender notes, to see that every branch in a country town has enough legal tender notes to enable the manager to take out what may be required to a fair, and, unless there is a very strong argument for this section, I suggest that the system at present in operation is not an injurious one, and might be continued. It meets the convenience of the public and of the banks, and I do not think that there is anything in the Banking Commission's report that requires such a change to be made.
This is in accordance with the Commission's report, and it is referred to at the top of page 24 of the report, but I am prepared, as I have amendments down, to meet any difficulties that might arise. First, there is the insertion of certain words in this sub-section, and then there is a new sub-section as follows:—
The Commission may, if special circumstances appear to the Commission to render such course expedient, by unanimous vote authorise a Shareholding Bank to pay out consolidated bank notes in respect of which it is not itself the responsible bank during such period, to such extent and subject to such conditions as the Commission thinks fit.
I think that that would enable the Commission to issue certain regulations governing this matter. It is, broadly speaking, undesirable that the banks should be paying out each others' notes. Undoubtedly, if a bank has not its own notes it has got to pay out legal tender notes. Then there is the special question of what would be done, say, in the North of Ireland, and what facilities would be given for Saorstát notes circulating there. The question of the facilities which we will give for other notes will perhaps depend on that, and there are reasons, which I do not want to elaborate very much, in favour of keeping this section with the amendments I suggest myself.
I am afraid that the Minister's amendments will do very little to meet the case of a country bank manager finding himself running short of notes at a fair. He can hardly get special regulations in order to meet such an emergency.
Not for particular emergencies.
There are other emergencies, to which I did not refer, that the Minister's amendments do nothing to meet. If I had the support of the Farmers' Party I would take a division on this, but as it is I will rely on the Minister, if he and I are in a future Dáil, to defend me against they appeals of the farmers because they cannot get money for their cattle.
Amendment put and declared lost.
I move:—
In sub-section (2), page 22, line 27, to insert immediately before the word "No" the words "Save as authorised by the Commission under this section."
This is what I have already referred to.
Amendment put and agreed to.
I move:—
In page 22, immediately before sub-section (3), to insert a new sub-section as follows:—
(3) The Commission may, if special circumstances appear to the Commission to render such course expedient, by unanimous vote authorise a Shareholding Bank to pay out consolidated bank notes in respect of which it is not itself the responsible bank during such period, to such extent and subject to such conditions as the Commission thinks fit.
Amendment put and agreed to.
I move:—
In sub-section (6), paragraph (a), page 22, line 67, and paragraph (b), page 23, line 3, to delete in both cases the word "bank."
This is a drafting amendment, to correct a clerical error.
Amendment put and agreed to.
I move:—
In sub-section (6), page 23, line 7, to insert immediately after the word "paid" the words "out of the note reserved fund."
This introduces a necessary limitation, that a bank should not have to pay except on any amount already recovered from the bank under paragraph (a).
Amendment put and agreed to.
I move:—
In page 23, to add at the end of the section a new sub-section as follows:—
In this section the expression "Shareholding Bank" includes a bank which has ceased to be a Shareholding Bank but with which consolidated bank notes remain outstanding and not covered by a deposit of Saorstát gold coins or legal tender notes with the Commission in accordance with this Act."
This follows the lines of the previous amendment.
Amendment put and agreed to.
Question—"That Section 55, as amended, stand part of the Bill"—put and agreed to.
SECTION 56.
Whenever a Shareholding Bank ceases to be a Shareholding Bank it may deposit with the Commission such amount of Saorstát gold coins which are legal tender under this Act for unlimited amounts or of legal tender notes as shall be equal to the amount of consolidated bank notes outstanding with it at the time of such deposit and thereupon
(a) such bank shall cease to be liable to pay the amount of any such consolidated bank note or to pay any payment on consolidated bank notes in respect of any such note for any period subsequent to such deposit, and
(b) the Commission shall surrender to such bank all securities then held by it from such bank in respect of such consolidated bank notes, and
(c) all such consolidated bank notes shall be payable by the Commission on presentation at its principal office in Dublin and the amount so deposited by such bank with the Commission shall be held by the Commission in trust to provide the moneys for so paying such consolidated bank notes.
I move:—
In line 41, page 23, to delete the word "may" and substitute therefor the words "shall within six months after such cesser."
This amendment is required so that a certain and definite method of terminating the liability of a cessed bank of note issue may be available.
Amendment put and agreed to.
I move:—
To add at the end of the section a new paragraph as follows:—"and
(d) such consolidated bank notes shall not for any purpose relating to the maximum limit or to the quota of any Shareholding Bank be reckoned as consolidated bank notes outstanding."
This provision is because the notes concerned will be virtually part of the legal tender issue note being covered by the deposits of legal tender notes.
Amendment put and agreed to.
Question—"That Section 56, as amended, stand part of the Bill"—put and agreed to.
SECTION 57.
(1) When and so soon as the Commission is in a position to issue consolidated bank notes the Commission shall by notice in writing sent to every Shareholding Bank and published in the "Iris Oifigiúil" appoint a day (in this section referred to as the appointed day) not less than fourteen days after the sending and publication of such notice on which it will commence the issue of consolidated bank notes in accordance with this Act.
(2) On and after the appointed day it shall not be lawful for any bank whether it is or is not a Shareholding Bank to issue or pay out, save as authorised by the Commission under this section, any bank notes other than consolidated bank notes and if any bank shall issue or pay out any bank note in contravention of this section such bank shall be liable to pay to the Commission a sum equal to one-tenth of the amount of such note.
(3) The Commission may in its absolute discretion authorise any bank to issue and pay out or to pay out after the appointed day such bank notes (other than consolidated bank notes) during such period, to such extent, and subject to such conditions as the Commission thinks fit, and the Commission may if it so thinks proper impose as a condition for such payment out of bank notes that the bank paying out such bank notes shall pay to the Commission a sum equal to one-tenth of the value of every bank note so issued by it.
(4) The Commission shall determine, in such manner as it thinks fit, in respect of every Shareholding Bank which is at the passing of this Act a bank of issue the proportion of the notes of such bank outstanding (including notes in the tills or vaults of such bank) immediately before the appointed day which appertains to Saorstát Eireann and such proportion of such notes shall on or as soon as may be after the appointed day be redeemed and cancelled in such manner as the Commission shall direct and so much thereof as is for the time being not so redeemed and cancelled shall for the purpose of payments on consolidated bank notes and for the purpose of the issue of consolidated bank notes to such bank be deemed up to the quota of such bank to be consolidated bank notes outstanding with such bank otherwise than on an extraordinary issue and beyond such quota be deemed to be consolidated bank notes outstanding with such bank on an extraordinary issue.
(5) Every sum payable to the Commission by a bank under this section shall be recoverable by the Commission as a civil debt in any court of competent jurisdiction and every such sum when received by the Commission shall be paid by it into the Exchequer in such manner as the Minister shall direct.
I move:—
In sub-section (1), page 23, to delete all from the word "not" in line 64 to the end of the sub-section and substitute the following words: "on which it will commence the issue of consolidated bank notes in accordance with this Act and the day so appointed shall not be less than fourteen days after the sending and publication of the said notice and shall not be earlier than the day appointed under this Act for the commencement of the issue of legal tender notes."
It is desirable that legal tender notes should be issued before the consolidated bank notes, as this will facilitate the withdrawal of the present secured notes and so simplify the solution of the problem that is presented by the existing fiduciary notes.
Amendment put and agreed to.
I move:—
In sub-section (3), page 24, lines 12 to 16, to delete all words from and including the word "and" to the end of the sub-section.
These words are regarded as unnecessary.
Amendment put and agreed to.
I move:—
In sub-section (4), page 24, line 18, to delete the word "shareholding."
This is really necessary, although, of course, I do not think it is likely to happen, in case any existing bank fails to become a Shareholding Bank.
Amendment put and agreed to.
I move:—
In sub-section (4), page 24, line 23, to delete the word "and," and in line 24, after the word "cancelled," to insert the words "and destroyed."
This is in conformity with previous amendments.
Amendment put and agreed to.
I move:—
In sub-section (4), page 24, to delete all from and including the word "so," line 24, to the end of the sub-section and substitute therefor the following words:—"in the case of a first Shareholding Bank so much of such proportion as is for the time being not so redeemed shall for the purpose of payments on consolidated bank notes by such bank and for the purpose of the issue of consolidated bank notes to such bank be deemed up to one half of the quota of such bank to be consolidated bank notes outstanding with such bank otherwise than on an extraordinary issue."
The object of this is to permit an existing bank of issue to get half of its quota of new notes without waiting for all the existing notes to be withdrawn. The remaining half of the quota will be offset by the existing notes outstanding. Certain banks have stated that it will take some time to get in their existing notes, and it is not desirable that the new consolidated notes should be available in certain banks and not be available in other banks. This will give a period during which the banks may provide, at any rate, some of the new consolidated notes while they are getting in their existing notes.
I suppose this is to be taken in connection with amendment 90?
Of course, it does meet the position and the difficulty, which I think will be a very real difficulty, to a certain extent, but it is very hard to say whether it meets it sufficiently. I am sure it will be extremely difficult to secure the withdrawal of existing notes.
I think that the banks concerned regard this as satisfactory, although I do not think they would use so strong a word.
Amendment put and agreed to.
I move:—
In sub-section (5), page 24, lines 35, 36 and 37, to delete all words from and including the word "and" to the end of the sub-section.
The words that are proposed to be deleted are an inadvertent survival from an early draft of the Bill. They are superseded by the provision of Section 60 (2), whereby moneys not otherwise dealt with pass into the general fund.
Amendment put and agreed to.
Section 57, as amended, agreed to.
SECTION 58 (2).
(2) All gold bullion, moneys, securities, and funds paid or transferred to the Commission by any person or from any fund for legal tender notes issued by the Commission to such person or fund shall be carried to the legal tender note fund.
I move amendment 81:—
In sub-section (2). line 43, page 24, to insert immediately after the word "funds" the words "(other than legal tender notes and other than moneys paid by way of a charge for refining gold bullion or a charge corresponding to a charge for coining)."
This amendment has reference to the issue of new legal tender notes in exchange for the old ones as provided for in Section 44 (7) and Section 45, and the possible changes under Section 44 (9) and Section 44 (10). Any receipts in respect of such charges would go to the general fund which would in turn bear the cost of any coinage of gold bullion presented for the purpose to the Commission.
Amendment agreed to.
Section 58, as amended, agreed to.
SECTION 59.
(2) The capital of the note reserve fund shall be held by the Commission or at its disposal in such one or more of the following forms as the Commission in its absolute discretion shall think proper and in no other form, that is to say:—
(a) gold bullion;
(b) gold coins which are for the time being legal tender in Saorstát Eireann for unlimited amounts;
(c) money in any form which is for the time being legal tender in Great Britain for unlimited amounts;
(d) British Government securities:
(e) Securities guaranteed by the British Government;
(f) sterling balances on current or deposit account at the London Agency or any bank in Great Britain or Northern Ireland.
(3) The Commission shall in its absolute discretion determine from time to time as occasion requires the allocation of the capital of the note reserve fund amongst the several forms mentioned in the foregoing sub-section or any of them.
(6) At the end of every half-year the Commission shall value in accordance with current market values the capital assets of the note reserve fund and shall ascertain the extent of the net deficiency, if any, of such capital assets as so valued (less by the capital amount of any temporary borrowing under the foregoing sub-section and the value of any capital assets then transferable to the legal tender note fund, but with the addition of any capital assets then transferable from the legal tender note fund) below one-tenth of the maximum amount of consolidated bank notes which might under this Act be outstanding (otherwise than on an extraordinary issue) on the last day of such half-year and, if on any such ascertainment any such deficiency is found to exist, shall as soon as may be transfer to the note reserve fund from the general fund in any of the forms mentioned in sub-section (2) of this section an amount equivalent to whichever of the following amounts is the less, that is to say:—
(a) the amount of such deficiency, or
(b) the total amount received by the Commission during such half-year on account of dividends and interest in respect of the capital of the legal tender note fund and the capital of the note reserve fund less by any interest payable during such half-year on any temporary borrowing for the purposes of either of such funds.
I move amendment 82:
In sub-section (2), page 25, at the end of the sub-section, to add a new paragraph, as follows:—
"(g) legal tender notes."
This amendment is proposed for the purpose of enabling the note reserve fund to carry the supply of legal tender notes necessary for the purpose of redeeming the bank notes under Section 55 (6), if it should be necessary to redeem any notes.
Amendment agreed to.
I move amendment 83:—
In sub-section (3), page 25, line 40, to insert immediately before the words "the Commission" the words "Subject to the restriction that not more than one-tenth of the capital of the note reserve fund may at any time be held in the form of legal tender notes."
This amendment is desirable so that no undue proportion of the legal tender note issue may be immobilised in the note reserve fund. It does not, therefore, add anything to the security of the note reserve fund, as any legal tender notes thereafter would, of course, be fully backed in the legal tender note fund.
Amendment agreed to.
I move amendment 84.
In sub-section (6), page 26, to delete paragraph (b) and substitute therefor a new paragraph as follows:
"(b) one-fifth of the surplus of the total amount received by the Commission during such half-year on account of dividends and interest in respect of the capital of the legal tender note fund and the capital of the note reserve fund remaining after deducting from such total amount all (if any) interest payable during such half-year on any temporary borrowing for the purposes of either of such funds."
This amendment is in accordance with the statement I made on the Second Reading of the Bill. As the section stood all these earnings would go for the immediate building up of the reserve fund. I do not think it is necessary that this note reserve fund should be built up so rapidly as would have been required by the existing draft. It is proposed that one-fifth of the surplus should be devoted to the building up of that reserve until it has reached the required amount. I myself regard the existence of this reserve fund as something that is not very necessary. It is in the nature of a security which could very well be dispensed with, but it may add somewhat to the confidence of the public, and consequently may facilitate the working of the scheme.
Amendment agreed to.
Section 59, as amended, agreed to.
Sections 60 and 61 agreed to.
SECTION 62 (1) and (2).
(1) Every Shareholding Bank shall pay to the Commission in respect of every half-year the following sums (in this Act referred to as payments on consolidated bank notes), that is to say:—
(a) if during such half-year the maximum amount of consolidated bank notes which might under this Act be outstanding did not exceed six million pounds, a sum calculated at the rate of one and one-half per cent. per annum on the consolidated bank notes outstanding (otherwise than on an extraordinary issue) from day to day with such bank during such half-year, and
(b) if during such half-year the said maximum amount exceeded six million pounds, a sum calculated at the rate of one and one-half per cent. per annum on so much of the consolidated bank notes outstanding (otherwise than on an extraordinary issue) from day to day with such bank during such half-year as bears to the whole amount of consolidated bank notes so outstanding the same proportion as six million pounds bears to the said maximum amount, and a further sum calculated at the rate of two per cent. per annum on the residue of the consolidated notes so outstanding, and
(c) if any consolidated bank notes were during such half-year outstanding with such bank on an extraordinary issue, a sum calculated during the first month of the continuous existence of such extraordinary issue at the rate of five per cent. per annum on the amount of consolidated bank notes so outstanding, and during the second month of such continuous existence at the rate of five and one-half per cent. per annum on such amount, and during the third month of such continuous existence at the rate of six per cent. per annum on such amount, and so on, such rate increasing by one-half per cent. per annum for every month of such continuous existence, and
(d) such share of the expenses incurred during such half-year by the Commission in providing consolidated bank notes as the Commission shall by regulation prescribe.
(2) Whenever owing to a change in the quota of consolidated bank notes issuable to a Shareholding Bank or from any other temporary cause, the amount of consolidated bank notes outstanding with a Shareholding Bank otherwise than on an extraordinary issue exceeds such quota, the amount of consolidated bank notes so outstanding in excess of such quota shall for the purposes of the foregoing sub-section be deemed to be outstanding on an extraordinary issue.
I move amendment 85:—
In sub-section (1), page 27, line 26, to delete the words "if during such half-year" and substitute therefor the words "during so much, if any, of such half-year as."
This is necessary to cover cases where the total issue does not exceed six millions for a part of the half-year and exceeds it for the remainder.
Amendment agreed to.
I move amendment 86:—
In sub-section (1), page 27, in lines 30, 36, and 43, to insert in each line immediately before the word "consolidated" the words "amount of," and in line 43 to insert immediately after the word "consolidated" the word "bank."
Amendment agreed to.
I move amendment 87:—
In sub-section (1), page 27, line 33, to delete the words "if during such half-year" and substitute the words "during so much, if any, of such half-year as."
Amendment agreed to.
I move amendment 88:—
To delete sub-section (2), pages 27 and 28, and substitute therefor the following sub-section:—
"(2) Whenever for any reason the amount of consolidated bank notes outstanding with a Shareholding Bank otherwise than on an extraordinary issue is in excess of the amount permitted by or under this Act to be so outstanding, the amount so in excess shall for the purposes of the foregoing sub-section be deemed to be outstanding on an extraordinary issue."
The reason for putting down this amendment is that the original sub-section was too narrow. For example, it did not cover a temporary excess issue arising from the contraction of the maximum limit which may take place at the end, say, of two years, or at the end of any triennial period. The new form is in more general terms so as to cover every contingency.
Amendment agreed to.
I move:
To add at the end of the section, page 28, a new sub-section as follows:—
"For the purpose of this section the period commencing on the day appointed under this Act for the commencement of the issue of consolidated bank notes and ending on the next ensuing 31st day of March or 30th day of September, whichever first occurs, shall be deemed to be a half-year."
Amendment put and agreed to.
Section 62, as amended, agreed to.
I move:
Before Section 63 to insert a new section as follows:—
"(1) Where the Commission has determined under this Act in respect of any bank which is at the passing of this Act a bank of issue the proportion appertaining to Saorstát Eireann of the notes of such bank outstanding immediately before the day appointed for the commencement of the issue of consolidated bank notes there shall be payable by such bank to the Commission in respect of every half year a sum calculated from day to day at the appropriate rate per cent. per annum on so much of such proportion of such notes as after the day so appointed is for the time being not redeemed in accordance with the directions of the Commission and is not deemed under this Act to be consolidated bank notes outstanding with such bank otherwise than on an extraordinary issue.
(2) For the purpose of the foregoing sub-section the appropriate rate per cent. per annum shall be three per cent. per annum for the period of twelve months from the day appointed for the commencement of the issue of consolidated bank notes and five per cent. per annum thereafter.
(3) At the end of every half-year the Commission shall ascertain in respect of every bank which is at the passing of this Act a bank of issue the amounts of the payments payable under this section by it in respect of such half-year and shall send to every such bank a certificate showing the said amount so ascertained in respect of it and how such amount is made up, and every such bank shall within fourteen days after receiving any such certificate pay to the Commission the amount stated in such certificate to be payable by it.
(4) Every sum payable by a bank to the Commission under this section shall be recoverable by the Commission from such bank as a civil debt in any Court of competent jurisdiction and the non-payment of any such sum by any such bank which is a Shareholding Bank within the time specified in this section for payment thereof shall be a ground for expelling such bank from being a Shareholding Bank.
(5) A certificate under the seal of the Commission stating the amount payable on any occasion by a bank to the Commission under this section and that such amount or a specified portion thereof is due and unpaid shall in any proceedings by the Commission to recover such amount be evidence until the contrary is proved of the said matters so stated in such certificate.
(6) For the purpose of this section the period commencing on the day appointed for the commencement of the issue of consolidated bank notes and ending on the next ensuing 31st day of March or 30th day of September, whichever first occurs, shall be deemed to be a half-year."
This amendment follows amendment 79. Section 57 (4) of the Bill, as introduced, charges the existing notes in excess of the quota on the basis applicable to the extraordinary issue. The present amendment charges the existing notes in excess of half the quota at three per cent. for the first year and five per cent. thereafter. Most of the notes should be got in by the end of the first year by the use of the powers in 57 (2), which prevents the re-issue of any notes which come into the hands of the banks.
Amendment put and agreed to.
New section ordered to stand part of the Bill.
Section 63 agreed to.
I move:—
Before the First Schedule to insert a new section as follows:—
(1) The composition duty on promissory notes on unstamped paper issued by a licensed banker or on such notes of such banker in circulation shall be paid in respect of the period to which this section relates at that rate which bears to the rate in force at the passing of this Act the same proportion as the number of complete weeks in the said period bears to the number twenty-six.
(2) The conditions of every bond given by a licensed banker under Section 7 of the Bankers Composition (Ireland) Act, 1928, shall apply to promissory notes issued by such banker during the period to which this section relates with the modification that, in lieu of the account required by that section to be delivered half-yearly, an account duly verified in accordance with that section of the promissory notes issued by such banker under that Act and in circulation within the meaning of that Act on the Saturday in every week during the said period shall be delivered by such banker to the Revenue Commissioners within fourteen days after the last day of the said period to which this section relates.
(3) This section relates to the period commencing on the 1st day of January or the 1st day of July, whichever shall be the later, next before the day appointed under this Act for the commencement of the issue of consolidated bank notes and ending on the day so appointed for such commencement."
This section will enable the duty to be collected for any broken period between the end of the last preceding half-year and the date of the commencement of the issue of the consolidated bank notes.
Amendment put and agreed to.
FIRST SCHEDULE.
ENACTMENTS REPEALED.
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Session and Chapter.
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Short Title.
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Extent of Repeal.
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Date of Repeal.
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***
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***
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***
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****
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16 & 17 Vic. c.
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The Stamp Act, 1852.
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Section 20 so far as it relates to promissory notes on unstamped paper issued by a licensed banker in Ireland or such notes of such banker in circulation.
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The day appointed under this Act for the commencement of the issue of consolidated bank notes.
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I move:—
In page 29, to insert immediately after the words and figures "16 & 17 Vic. c." the figures "59," and to delete the words and figures "The Stamp Act, 1852," and substitute therefor the words and figures "The Stamp Act, 1853."
Amendment put and agreed to.
First Schedule, as amended, agreed to.
SECOND SCHEDULE.
PARTICULARS OF GOLD COINS.
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(1)
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(2)
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(3)
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(4)
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(5)
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Standard Weight
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Least Current Weight
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Remedy Allowance
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Denomination of Coin
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Imperial WeightGrains
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Metric WeightGrains
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Imperial WeightGrains
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Metric Weight
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Standard Fineness
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Weight per Piece
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Millesimai Fineness
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Imperial Grains
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Metric Grains
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Pound
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123.27447
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7.98805
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122.50000
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7.93787
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Eleven-twelfths fine gold, one-twelfth alloy, or millesimal fineness, 916.6
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0.200000
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0.01296
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2
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Ten Shillings
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61.63723
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3.99402
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61.12500
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3.96083
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0.15000
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0.00972
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I move:—
In page 30, in column (2), under the words "Metric Weight" to delete the word "Grains" and substitute therefor the word "Grams" in column (3), immediately after the words "Metric Weight" to insert the word "Grams," and in column (5), under the word "Metric" to delete the word "Grains" and substitute therefor the word "Grams."
Amendment put and agreed to.
Second Schedule, as amended, agreed to.
Third Schedule agreed to.
FOURTH SCHEDULE—RULE 21.
The election of the first Chairman shall be conducted in the like manner in all respects as the election of an elected Commissioner subsequent to the first elected Commissioners is required by these Rules to be conducted and accordingly the Rules applicable to the election of an elected Commissioner subsequent to the first elected Commissioners shall apply to the election of the first Chairman with the substitution therein of the Commissioners for the representatives and the modification that the statement prepared at the conclusion of the election shall be sent to the Commission.
I move:—
In rule 21, page 32, at the end of the rule to delete the word "Commission" and to substitute therefor the word "Minister."
Amendment put and agreed to.
Fourth Schedule, as amended, agreed to.
May I say that I had intended to raise a rather important question on Section 53, but perhaps it is best to leave it over now until the Report Stage.
I intended to say that on the Report Stage I shall move an amendment to Section 53.
Title agreed to.
Bill ordered to be reported with amendments.
The Dáil went out of Committee.
Bill reported with amendments. Report Stage ordered for Tuesday, 10th May.
The Dáil adjourned at 6.10 p.m. to 3 o'clock on Wednesday, 4th May.
