This section deals with the rate of interest, as it empowers the Minister to borrow. The Minister raised the question as to whether, in putting up the facts I was putting before him, I considered that the Government was dealing with one particular bank. The Minister will understand that I dealt with the banking system as such. When the Government has to fall back on the banks to borrow money which it does not get subscribed by the ordinary public, it falls back on the banks as the lender of last resort.
When the Dublin Corporation were dealing with the loan they wanted in January, 1939, it was the Banks' Standing Committee as a whole that dealt with them. It was they who refused to underwrite and it was they as a whole who took up the £650,000 not subscribed for later on. So far as the banks go, they have no difficulty in standing together as a group to do business of any kind. If the banks have to stand together as a whole, to act as lender of last resort to the Government, then it should be quite easy to find a way to do it. You cannot have the banks standing together when it suits them and then standing aside individually and claiming that, on account of their individual position, they are not going to accept a reasonable approach to the rates that have to be paid by the Government for money that is practically new money.
We have a position to-day in which the Minister tells us that, from the Local Loans Fund, the local authorities are borrowing at 4¼ per cent. for housing. If we consider the income that the Central Bank is getting from the investments it has abroad, we find that the accounts of the Central Bank for the last year for which they have been issued show that the average income the Central Bank is getting, on about £28,000,000 of British securities, is 1.66 per cent. Now, as against an earning by that part of our banking system represented by the Central Bank here of 1.66 per cent. on £28,000,000 lent to the British Government, we have the earning by individual banks here of 4¼ per cent. on money lent to the Irish people for housing. There is a shocking distance between those two points and it requires to be examined. As a matter of fact, it must be examined, if we are not to have some hidden man of the sea of finance dragging the sustenance of our people from them and putting a very heavy burden on the ordinary working occupiers of houses in order to maintain idle money.
We will have to come to closer grips with that question very soon. Just as the United States has been, in the last few years, endeavouring to prevent the banks from subscribing for Government loans which ought to be left to the ordinary people, we will have to see that such loans as can or should be made available in order to give people that money who are anxious to use it in constructive ways will be kept for the people. When the people, for one reason or another, do not subscribe to those loans and when the Government has to turn to the banking system for them, we must see that the Government will not offer the banking system anything like the same rate of interest for loans subscribed in this way as they would be prepared to offer to people with genuine savings anxious to apply them to work which the Government or the local authorities intend to carry out. I do not think you can have a situation in the future in which the Government will pay the same rate of interest on money received by them or by local authorities from the banking system as they would pay to ordinary people.
