asked the Minister for Finance if he will state the total sterling assets held by (a) the Central Bank; (b) the Government (including the Post Office, the courts, the Department of Social Welfare and all other Government Departments and agencies, but excluding the Central Bank); (c) the associated banks, and (d) other persons, firms, or corporations resident in Ireland on the 31st March (or other convenient date) in each of the following years: 1938, 1944, 1945, 1946, 1947, 1948, 1949, 1950 and 1951.
Ceisteanna—Questions. Oral Answers. - Sterling Assets.
(a) The available information regarding the assets of the Central Bank is given in the annual accounts and report of the bank as presented to each House of the Oireachtas.
(b) The nominal amounts of British Government securities held by Government Departments, etc., as indicated in the question were as follows:—
|
Nominal Amount |
|
|
£ |
|
|
31st March, 1938 |
19,867,000 |
|
31st March, 1944 |
31,267,000 |
|
31st March, 1945 |
39,054,000 |
|
31st March, 1946 |
45,639,000 |
Similar particulars for the years 1947 to 1951 are given in the reply to a further question by the Deputy on to-day's Order Paper.
(c) The net external assets of the associated banks are shown in the quarterly bulletin of the Central Bank and in the reports of the bank.
(d) No official estimate is available.
As regards (d), surely the Minister must have some estimate from his Department as to the sterling assets held under that heading. I have seen such estimates.
Surely after the innuendoes which we have heard in the debate and in the Deputy's supplementary questions, he would not expect me to submit to him any estimate that the Department of Finance might make in the matter.
The Minister is trying to conceal the information from the people, because he is afraid they would find out about it.
asked the Minister for Finance if he will state the capital gain or loss sustained by the Central Bank on its holdings of British sterling assets calculated on the basis of (a) the market value of such investments or assets held by the Central Bank in Britain; and (b) the purchasing power in terms of wholesale prices of the sterling assets held by the Central Bank for each of the following years ending on the 31st March, 1947, 1948, 1949, 1950 and 1951.
The assets of the legal tender note fund of the Central Bank are valued half-yearly according to a statutory procedure specially provided for the purpose. The results of such valuations are published in the annual reports of the bank. The valuation of assets in the general fund of the Central Bank is not subject to any special statutory provision, but I understand that normal accountancy practice is observed.
The purchasing power of sterling assets is expressed by the value of such assets on realisation. Changes in the value of the pound sterling by reference to wholesale prices can be computed from the published indices.
Might I ask the Minister why he refuses to give the information which is sought? That information is available to him and to the Central Bank. Dose he decline to give it to the House?
I cannot say what the purchasing power of sterling assets will be until they are realised and neither can the Deputy.
The Minister is aware that this money is invested in British Government securities and it is surely open to the Minister to ascertain the value of these securities at the beginning of each year and to find out how much has been lost as a result of the investments?
Or how much has been gained.
Or how much has been gained. The Minister is trying to conceal that information.
The difficulty with the Deputy is that he is not a practical man of affairs; otherwise he would know that these are merely book deals.
I would suggest to the Minister, and I ask him to confirm the suggestion, that in the course of the last two years sums amounting to over £10,000,000 have been lost on the investments of the Central Bank.
Perhaps the Deputy would await my reply to his next question.
asked the Minister for Finance if he will state the capital gain or loss sustained by the Government on its holdings of British sterling assets (including holdings of British assets or securities by the Post Office, the Department of Social Welfare, the courts and all other Government Departments or agencies but excluding the sterling assets held by the Central Bank) calculated on the basis of (a) the market value of such investments or assets, and (b) the purchasing power in terms of wholesale prices of such sterling assets for each of the following years ending on the 31st March, 1947, 1948, 1949, 1950 and 1951.
It is assumed that by "capital gain or loss" the Deputy means the difference between cost price and market value. Comprehensive information is not available regarding the cost price of British Government securities held by Government Departments or agencies. Some of these holdings were acquired pre-1922 and the holdings of the courts represent, in the main, transfers of existing investments from private to public custody.
Following is a comparison between the nominal amount and the market value of the British Government securities held on the dates indicated:—
|
Nominal Amount |
Market Value |
|
|
£ |
£ |
|
|
31st March, 1947 |
49,428,000 |
52,671,000 |
|
31st March, 1948 |
49,699,000 |
50,576,000 |
|
31st March, 1949 |
53,525,000 |
55,391,000 |
|
31st March, 1950 |
56,098,000 |
53,200,000 |
|
31st March, 1951 |
56,751,000 |
53,768,000 |
Owing to the prevalence of inflation, there has been a world-wide fall in recent years in the market value and purchasing power of gilt-edged securities, from which Irish Government securities have not been exempt.
It is, of course, only when securities are sold that any capital gain or loss in fact emerges. Realisations of British Government securities under the control of the Minister for Finance in the period 1946-47 to 1950-51 yielded a net capital gain of £421,000 as compared with cost price.
As regards (b) of the question, the reply is similar to that which I have given in the case of the sterling assets of the Central Bank.
Surely the Minister could give the loss sustained in the purchasing power of this money. That information is available to him.
Surely the Deputy could explain to the House why it was that on the 31st March, 1949, he did not sell £53,000,000 worth of British securities and make a profit of over £2,000,000.
I think when the Minister asks a question he would probably like to have an answer to it: because in point of fact we would have lost approximately 25 per cent. in purchasing power.
The Deputy cannot have it three ways.
asked the Minister for Finance if he will state the total net income which the Central Bank proposes to pay for the year ending 31st March, 1951, to the National Exchequer in respect of its holding of £80,600,000 sterling assets.
asked the Minister for Finance if he will state the total net income obtained in the year ending 31st March, 1951, by the Central Bank in respect of the £80,600,000 held by the Central Bank in British sterling assets.
I propose, with the permission of the Ceann Comhairle, to take Questions Nos. 10 and 11 together.
The income of the Central Bank for the year ended 31st March, 1951, amounted to £757,910, from which have to be deducted expenses of the bank, £161,699, and various reserve provisions, £163,258, leaving a net income of £432,953 payable to the Exchequer.
The external assets of the bank vary throughout the year and were near their peak at the date mentioned by the Deputy, the corresponding figure for 21st March, 1950, being £68.7 million. The growth of the assets was mainly due, as stated in the Report of the Central Bank, to "the abnormal and temporary factor of sterling receipts by way of counterpart of dollar, loan and grant aid."
Does the Minister agree that the income received on that £80,600,000 by the Exchequer was less than 1 per cent?
I do not.
Will the Minister state how much it was?
If the Deputy knows simple arithmetic and can compute the rate of interest from the figures given for the return on capital investment he will find that it is very much more than 1½ per cent.
£420,000 on £80,000,000.
May I remind the Deputy that I said the gross income was £457,000 derived from investments?