I addressed a question which appeared on the Order Paper to-day to the Minister for Finance to ask him as to the amount of the State's liability arising out of the Second National Loan, such proportions of the loan as was issued in dollars, also the amount of the Second National Loan issued in pounds, but convertible by way of interest or by way of the denomination of the loan itself into dollars on demand. I received a reply from the Minister from which it appears that the Minister is not taking any serious view of the situation and does not appear to consider it worth while to discuss this matter in any way. Since I raised this and other questions to-day and since I received that answer I was informed over the telephone half an hour ago that I was honoured with the visit of an inspector and four members of the C.I.D. who had raided my house and examined all my papers. Possibly they might be looking for the sources of my information for these enquiries. It is rather amazing that such an incident should happen while a Deputy is in this House.
Adjournment Debate. - Government Securities and Value of Sterling.
The Deputy cannot raise that matter in this way.
Why cannot he?
He cannot raise it on this question. He may find other means of raising it, but he certainly cannot raise it on this question of the Adjournment.
Foreigners can do what they like in this country.
Perhaps I should make it clear that on the motion for the Adjournment Deputies cannot refer to any matter except that contained in the question they are raising on the Adjournment.
If a Deputy raises questions in this House which are so embarrassing and which might have some connection with the raid, in his opinion, I presume he would be entitled to say so.
The Deputy may get another opportunity of doing that.
Possibly I may and possibly I may not. However, to proceed. The amount of the Second National Loan which is still outstanding in pounds and convertible into dollars on demand by holders is, according to the Minister £6,186,000. The amount of dollar bonds outstanding amounts to roughly two million dollars. The purpose of my question was to ascertain, seeing that as the pound sterling has fallen by roughly 25 per cent., whether the State's liability had not necessarily increased by 25 per cent., not only by way of liability on the amount outstanding, but also for interest and sinking fund charges. If the Minister is to provide properly for his liability that would also increase by 25 per cent. Interest is payable on this particular loan May 1st and November 1st. Payment must have been made on 1st November and certainly provision must have been made for the payment of this interest during the month of October, if not sooner. The payment of interest, in dollars, must certainly have increased the expenditure beyond that expected in the normal way, and the Minister must have had to find that payment of this interest in dollars which would be 25 per cent. more than he had calculated it would cost. What proportion of the State's liability, in pounds, is payable in dollars for this interest I do not know, because the prospectus states that holders may demand interest in dollars or the value of the dollar. They do not necessarily have to change the pound itself into a dollar denomination. I have calculated that on the basis of the present value of the pound the State liability instead of being £6,186,000 for the outstanding amount of the Second National Loan convertible has increased by £1,500,000. I also find that the interest at the rate at which the State is supposed to have been borrowed must be annually £247,000. But if the pound were to be stablised at its present value it will mean an addition of roughly £62,000 over and above the ordinary rate at which the money was borrowed when the loan was floated. The same applies in a lesser amount to the dollar denomination. I do not know if the Minister feels that this sum of £1,500,000 extra liability and the sum of £70,000 extra interest to which I have added the liability for sinking fund, and for redemption of this loan is of such small consequence that it can be ignored. The Minister should at least inform the Dáil that the matter is having the consideration of his Department and that he will make sure to protect as far as he can the interest of the taxpayers who will have to provide for the repayment of the capital and sinking fund charges.
The Minister stated that he did not know if this was going to cost more, and evidently did not think it worth while to consider this matter. Nevertheless, many people who are taxpayers are concerned about this situation, and feel that the Minister should at least give them some satisfaction by stating that he is giving the matter his consideration, and that he will secure, as far as he can, the best interest of the persons that are called to pay taxes for the provision of this particular interest and repayment of the loan.
I hope the Minister will find time to consider the situation and that he will inform the Dáil that it is receiving consideration. Whatever decision he takes, whether he decides to try and cut his losses now or allow the matter to drift for the future, he should at least inform the Dáil that the matter is having his attention and not being left run until some time we may find ourselves in a worse predicament over this liability than we are in at present. I am not going to say that I know what the pound will stabilise at; I do not know any more than anyone else, but we are entitled to our opinion, and we are entitled to give expression to our opinion, from the angle from which we see it. Some think the pound will go back to normal, others that it will stabilise at 17s. or 15s.; some think it may go lower; we are not in a position to say; we are not in the confidence of the British Treasury, and do not know what situation will arise, but I feel as we are committed in this particular way and our currency is still anchored with British securities, that whatever way the pound goes, our currency will go also, and it means that there will be an increase or a decrease in the liability, and it is for the Minister to say whether he thinks it better to hold on and take his chance of things righting themselves. If he thought that the £ was going to fall further, he should have tried to save us from the loss that might arise.
If the facts are as stated by Deputy Briscoe, the position is very serious. Nobody in the House is going to pretend that £1,500,000 is a matter of no importance, having regard to the fact that we have had all this excitement over £400,000 or £500,000. Deputy Briscoe has gone into the figures as carefully as he could and I should like to know from the Minister whether the position is as stated by him. If it is a fact that we are faced with an extra £70,000 in interest alone, without sinking fund, it is very serious and it ought not to be left to an ordinary member in the Opposition to communicate such a state of affairs to the House. Assuming for the moment that the position is as stated, it is serious enough for the Government to have dealt with it and to have taken the House into its confidence as to the manner of dealing with it, leaving aside the question whether any precautions could previously have been taken in the way of straddling our currency to Victory Bonds or something else. Assuming the Minister is entirely innocent in the matter of the present devalorisation of our money, the position which stretches out in front of us and the possibilities of further devalorisation are serious. What I suggest is that the Ministry ought to take the House into its confidence and tell it whether these are the facts and, if they are, what they propose to do in a position which might rapidly become serious. Assuming the £ went to ten shillings, the particular liability that Deputy Briscoe spoke of would be doubled. There is no limit to the possibilites if, for one reason or another, they decided to go off gold altogether. Without giving any kind of special opinion, I see real possibilities of even the sound nations in the world, having regard to the complications that are being produced by the valorisation of fixed interest charges in gold and the mere measurement of commodities in gold, taking special action. For instance, America might say to France "All right. Take the whole of the gold and do what you can with it." Such a position might arise and, in a position of that kind, we do not know where the nominal £ is going. What I am putting to the Minister, not in any censorious spirit, is that he ought to look into the facts stated by Deputy Briscoe. The Ministry ought not to say "We do not know"—and, apparently, as far as the Ministry for Finance is concerned—"we do not care." They ought really to have known of this beforehand and to have taken the House into their confidence and not allowed the facts—if they are the facts—to be disclosed in the way in which they are disclosed.
The Dáil adjourned at 10.45 p.m. until Thursday, 12th November, at 3 p.m.