Dáil Éireann díospóireacht -
Wednesday, 13 Feb 1952

Vol. 129 No. 3

Private Deputies' Business. - Under-development of National Resources—Motion (Resumed).

Debate resumed on the following motion:

Realising that our national resources are under-developed because of chronic under-investment in our own country, and further realising that emigration and unemployment, which are destructive of family life and of the family unit, upon which Christian society is founded, flow from this underdevelopment of our resources, Dáil Éireann is of opinion that the financial policy hitherto pursued, whereby the major portion of the savings of the nation is invested in Britain, should be discontinued in order that credits adequate for the development of our resources and for the provision of housing and other necessary services for our people should be made available.

—(Deputies MacBride and Tully.)

Minister for External Affairs (Mr. Aiken)

I could have sympathy with any Deputy other than Deputy MacBride in introducing this motion. After all, he told us that the reason for asking the Dáil to pass the motion was that the policy pursued hitherto was to invest the major portion of the savings of the nation in Britain. During the two years, 1949 and 1950, the Government of which Deputy MacBride was a member invested—if you use that word—through the Central Bank an extra £33,800,000 in British sterling securities and not only did they invest that amount of money in British sterling securities through the Central Bank but they actually imposed a debt on the country of £46,000,000 in dollars in order, as was disclosed in answer to a Parliamentary Question by Deputy Davin to-day, to buy dollar maize and sorghums to sell eggs to Britain at 2/- a dozen in order to build up our external assets that Deputy MacBride complains about.

Not only did they do that but they were so much in haste to build up sterling assets that they sold our Constellations which the previous Fianna Fáil Government had purchased for dollars. The inter-Party Government would not even keep the Constellations until after the devaluation. They sold the machinery we had purchased for the building of a chassis factory. Deputy Davin, Deputy MacBride, Deputy Hickey and other Deputies were behind the Government in these three years.

Mr. Hickey

That does not mean that we agreed with them.

Mr. Aiken

During Fianna Fáil's time we said we regarded the sterling assets simply as a reserve to enable us to proceed with confidence in the development of the country. A farmer who had a few hundred pounds in the bank can start off on a development programme knowing that if the next year's harvest does not bring him in what will pay his capital development he can draw it on the bank. To assert that the major portions of the savings of the nation were invested in Britain is not true of the years during which Fianna Fáil had control in this country before the war and in which our policy could be made effective. We invested more savings of the Irish people here than the total amount of our net savings in external assets in houses alone in a few years—146,000 houses. Put them at £1,000 a house; that is £146,000,000 invested.

Deputies

That figure is wrong.

Mr. Aiken

We have not that now. We made that investment in houses in Ireland without hardly altering the level of our external assets.

Mr. Davin

What did you pay for wheat early in 1948?

Mr. Aiken

What did you pay for it—or for maize, in order to sell eggs at 2/- a dozen? The point is that we have certain assets over there. The Government here is quite prepared to take the risk in buying Constellations or machinery to start a chassis factory even though it may result in a decrease of our external assets.

There is a lot of talk at present about Britain's external assets. They have a few hundred millions. Some of that money is invested—if you like to use the word "invested"—in dollar securities, in Swiss francs or in Swiss securities—something which they can realise in order to cover a deficit if they have one. If Deputy MacBride's plea is that we should get rid of all our sterling assets as quickly as possible because they are going down the drain anyway he may be just as bad a prophet as he was before in relation to sterling. I think that the British Government acted in 1949 with the greatest foolishness in devaluing. Its only effect was to postpone the day on which they would have to make ends meet or arrange an international policy to enable them to do so.

Mr. MacBride

May we take it that that is the advice which the Minister will give to the British Government now?

Mr. Aiken

It was the advice I gave then—although I was not a member of the Government—to any Britisher I met. When there was talk about devaluation in 1949 I said it was a crazy financial proposition and I still believe it. I think the British are very much worse off to-day because they took advice to devalue or yielded to pressure to devalue. If they devalue again now, rather than take the economic steps that are necessary to balance their payments I think that their action would be so crazy as to justify their being locked up in a lunatic asylum.

Mr. MacBride

Will the Minister for Finance convey that message to the British Chancellor of the Exchequer?

Mr. Aiken

The Deputy talks about investments in Ireland. During the régime of the inter-Party Government, of which Deputy MacBride was Minister for External Affairs, we incurred a dollar debt. We incurred that dollar debt under a Government which, he boasted, he had in the hollow of his hand.

Mr. MacBride

When did I make these statements?

Mr. Aiken

That debt was to the tune of 129,000,000 dollars. What did we spend in capital investment in this country out of that 129,000,000 dollars? Less than 7,000,000 dollars. To be exact 6.8 million dollars of the 129,000,000 dollars which this country will have to repay in the coming years was put into the purchase of machinery and capital equipment.

Mr. MacBride

On a point of order. Surely the Minister should not attribute to a member of this House a statement which he did not make or, if challenged, surely the Minister should produce some evidence that the statement was made.

An Ceann Comhairle

The Chair cannot check on everything.

Mr. Aiken

Will the Deputy confirm this when replying? There was one person in the past 20 years who had the opportunity of getting us into a savings arrangement outside the sterling area when the E.P.A. was made. Deputy MacBride was then the Minister for External Affairs. Will Deputy MacBride solve this mystery for me? This country could have entered into the E.P.U. as a separate and distinct unit by giving credit for a few million pounds, but instead of that—instead of joining the E.P.U. as a separate and distinct unit, instead of making some progress towards cutting the link with sterling—he sewed us up in the sterling bag. We joined the E.P.U. not as a separate and distinct unit, sailing under our own steam, but in the sterling area group. There was something to be said for that—but surely there was nothing to be said for it by a person who took and has taken the line which Deputy MacBride took and still takes on this matter both before and since—and particularly when he took it supported by a Government that, he boasted, on many occasions, he had in the hollow of his hand, and could make them do things. But we all know the Deputy.

Mr. MacBride

Will the Minister give some evidence in support of that allegation?

Mr. Aiken

We can give the quotation if the Deputy wants it.

Mr. MacBride

I asked the Minister to give the quotations.

Mr. Aiken

I have not got them. The fact of the matter is that we were all deafened round the country during the last general election by assertions that, though various things were done by Fine Gael, Clann na Poblachta had inspired many of them. We heard ex-Deputy Lehane saying here that, though he did not think very much of Fine Gael, Clann na Poblachta were staying in with them because they were forcing them to do things that they would prefer not to do.

Mr. Davin

Deputy Cowan is saying the same about you now.

Mr. Aiken

I wish Deputy Davin would explain to us why he is always growling about the link with sterling and why he supported Deputy MacBride in sewing us up in the sterling bag when entering E.P.U.

The Fianna Fáil Government regard our sterling assets simply as a reserve to enable us to go forward with confidence in the building up of this country. We used our sterling reserves in spite of the attitude of the old Cumann na nGaedheal Government— in spite of the attitude they adopted towards investment here and the building up of our country. We encouraged our people to invest in this country so that not only did we build 146,000 houses ——

Mr. Rooney

That figure is wrong.

Mr. Aiken

——but we built at least 1,000 factories also.

Mr. O'Higgins

How many did you knock down?

Mr. Aiken

We did that in spite of the old Cumann na nGaedheal Party. I hope Deputy MacBride will explain in his reply how it is that if he were, in fact, so much concerned with the building up of our reserves during the three years he was in office as he is when he is in Opposition, we used only 6.8 million dollars of the 146,000,000 dollars we spent on importing goods from the United States on machinery for capital development.

I think an explanation should be given as to that. I should also like him to explain to the Dáil why he joined the E.P.U. as a member of the sterling reserve instead of as a separate and distinct entity under our own steam.

Every country in the world tries to get some foreign assets. The foreign assets that we have realisable externally are some few million pounds worth of gold and some hundreds of millions or less of sterling assets. The British are very glad to get dollar assets, and indeed they are very glad to get credit in some of our banks when they can earn it. I feel that the Dáil should not pass this motion which Deputy MacBride has moved and that they should turn down the allegation that any Government here in the past, whether the Cumann na nGaedheal Government or the Government in which he himself was a member, stood for the policy of investing in England while letting our own people here go short of credit. As long as this country has sterling assets, a reserve abroad, somebody must hold them. If the Central Bank or Government Funds do not hold them, then the ordinary commercial banks or some individuals must hold them. I challenge Deputy MacBride or any other Deputy on the opposite benches to say who is better entitled to hold them than these three institutions I have mentioned. Are we to take the steps, say, that the British took in relation to dollars? Is there to be another exchange control authority, to make everybody register their sterling assets and make them sell them to the authority and receive Irish pounds for them? If we had that, how much further would we be? I think it is an operation which is not necessary. If it were necessary, it could be considered, but I do not think it is necessary.

Mr. Morrissey

Nobody is advocating that. Do not be putting up skittles to be knocked down.

Mr. Aiken

Deputy MacBride and others are going around saying that we are investing assets at ½ per cent. and that we have to pay 5 per cent. here.

Mr. MacBride

I understand that the time for this motion concludes at 9.25. The Minister spoke at length the other night and again to-night, and I think he should give me time to reply.

Mr. Aiken

Just one more sentence. It is foolish and wrong to say that because we have liquid assets on short term in the London money market that is holding up development here or affects our ability to lend money at low rates or high rates of interest here. It would be as ridiculous to say that Britain could not increase her credit simply because she has some dollar assets in the New York money market at less than 1 per cent.

Deputy McQuillan rose.

An Ceann Comhairle

This motion is timed to finish at 9.30.

Mr. McQuillan

How long has Deputy MacBride got to reply?

An Ceann Comhairle

He has less than a quarter of an hour.

Mr. McQuillan

I should like to ask one or two questions before he replies. I intended to raise a number of matters on this motion, but in view of the short time available I must confine myself to one or two items. First of all, I welcome the motion. I think it is very useful that we should have a discussion here on the question of how our money is being invested. I am sorry that the scope of the motion is not wide enough to embrace the price that is charged for money for investment purposes in the country.

I presume there will be a division on this motion and I intend to support it. I should also like to say that I have supported this type of motion any time it came up here in the four years since I have had the privilege of becoming a member of this House. I have supported it willingly and I would be very willing to face the electorate to-morrow morning on such a motion because I think it is vital that this State should have some control over its finance; control over where the money is invested and control of the rate of investment. I think those two items are the root cause of most of our economic ills for the past 30 years.

When this division takes place I am certain that there are many Parties who will go into the Division Lobby to support it. I wonder are these Parties sincere about what is contained in this motion. Does the fact that they will walk into the Division Lobby in support of it mean that if they are returned to power they are prepared to put into operation the policy outlined in the motion, or are they only looking for another stick with which to beat the present Administration? I feel very sore in regard to this matter because I am convinced that the power lay in the hands of the inter-Party Government during the three years they were in office to put this policy into operation and they made little or no attempt to do so. I will repeat something that I have said in this House many times, that it is a case of Tweedledum on my left and Tweedledee on my right. Neither of the major Parties in this House is prepared to carry out the policy of investment at home and at the same time put a proper charge on the money for home investment. I should like to see the Government beaten on this motion. I should like to be able to go to the country to-morrow and on every platform in my constituency say that I stood there to back a policy that would invest money in Ireland and that, for the sake of national development, the money so invested should be given at a rate of interest that would not cripple the community for the next generation or two.

I feel that, even if the Government were beaten on this motion and that those on the opposite side were to come back, they would do very little to change the circumstances as they exist to-day. I want to make one further remark in connection with what the Minister for External Affairs has said about our sterling assets and to compare his remarks with those made by the Minister for Posts and Telegraphs when speaking down the country a fortnight ago. He said:—

"The controllable part of our external assets are a standing army of occupation in England, and it was treachery to the national cause to suggest that that army be brought home."

Mr. Davin

That is terrible.

Mr. McQuillan

These were the remarks made by the Minister for Posts and Telegraphs. Now listen to what Deputy Lemass, the present Minister for Industry and Commerce, said in an article which appeared in the Irish Press on the 1st February, 1941:—

"As a creditor nation, our foreign assets are mainly in Great Britain. We are now in the position that we are unable to utilise them as we would wish. For many years our economists have been preaching about the value of those assets. They measure the prosperity of this country by the rise and fall in their value. There was a Maginot Line mentality about them which prevented a sounder financial policy for the country from developing. If, instead of those immobilised sterling assets, we had real tangible assets in our own country—factories, machinery, buildings, stores of goods—how much stronger we would be?"

The Minister, on the one hand, says how much better off we would be if we had those sterling assets in buildings and factories while the Minister for Post and Telegraphs, on the other hand, says that they are a standing army in England and that it would be treachery to the national cause to suggest that they should be brought home. I support the motion even though I do not believe that, if the Government were beaten on it, and if the others were to come back, they would take any steps to put it into operation.

Mr. MacBride

I am sorry that the Minister representing the Government in the House on this motion pursued the course which he did. He did not refer at any stage to the motion as such. He confined his speech both to-night, and on the previous occasion, to long political tirades of abuse against his political opponents over the course of the last 25 years. He started off by criticising the policy of the Cumann na nGaedheal Party, and compared it with the policy of his own Party. I had hoped that it would have been possible to have an objective discussion on this motion without these rather cheap and antiquated jibes. I think it would be extremely easy to take many of the utterances made in other days by the Minister himself and by his colleagues on the Government Benches which would make them look extremely foolish in the light of the speech he made to-day. There was a time when he attacked the Cumann na nGaedheal Government violently for piling up these sterling assets. There was a time when he preached that a salary of £1,000 was more than any man should get, and that was put on advertisements and posters throughout the country. I do not think it is a profitable occupation to go back on these issues.

The Minister spent portion of his time seeking to misrepresent my attitude in regard to leaving the sterling area. I have never suggested that we should leave the sterling area. We are within the sterling area. It is a geographical fact. We are in it because we happen to be in that portion of the world and because the bulk of our trade is with Britain. I have advocated consistently on every platform from which I have spoken, not merely now but in the course of the last eight or nine years and while a member of the Government, that we should repatriate our sterling assets, that we should invest the savings and resources of this country, whether they be in a capital form or in manpower, in the development of our resources. If there is any sincerity in some of the professions made from the Government Benches, that should be acceptable to them, and that is what my motion proposes. I do not think there can be any doubt as to what my attitude is on these matters. I have written a sufficient number of articles and pamphlets throughout the last ten years on this question and I have made a sufficient number of speeches on these matters in the course of the last ten years. I have never varied by one iota from the policy I have advocated on this motion.

Be it said, in fairness to my colleagues in the inter-Party Government, that probably they regarded some of these views, at first, with doubts, but that they ultimately accepted those views. The then Taoiseach, in a speech which he made to the Institute of Bankers, if I remember correctly, announced the policy of the Government to repatriate sterling assets. The Minister for External Affairs has, I might say, nearly dishonestly referred to the fact that the holdings by the Government and the Central Bank increased during that period. The Minister knows perfectly well the explanation for that. He knows that that arose through the Counterpart Fund, from the Marshall Aid Funds. These money were accumulated in sterling here. Indeed, it was in order to obviate the constant transfer and investment of these moneys by the Central Bank to England that the Government decided to have them in a special account and to invest them in Ireland. That is what, in fact, took place.

Mr. Aiken

The sterling assets were up £34,000,000 in two years.

Mr. MacBride

They went up £100,000,000 while the Minister was Minister for Finance himself, and there was no question of having to find an outlet for the Counterpart Fund arising from Marshall Aid. The Minister sought to convey the impression that the only body that had sterling assets —that they were all concentrated now in the hands of the Government—was the Central Bank. That is not in accordance with the facts. At the time that the inter-Party Government sought to obtain a loan for the Dublin Corporation the commercial banks had investments amounting to £183,000,000, of which only £14,000,000 were invested in Ireland. All the rest were invested in England. Of that £14,000,000, they only had £7,000,000 in Irish Government securities, while they had vast sums in English Government securities.

That is the policy which we now want to reverse. The total amount of sterling assets held by this country in Britain is in the neighbourhood of £550,000,000, though for some extraordinary reason, the Government refuses to give the figure. They will give only the net figure which, in fact, does not represent the position.

It is perfectly fantastic that we should charge 5 per cent. to our farmers through the Agricultural Credit Corporation, while at the same time we lend money to the British Government and other British institutions at from 1 per cent. to 3 per cent. The money which we lend them is utilised in turn by them to lend it to their own farmers and to the farmers in the Six Counties at lower rates of interest than we will make money available to our own farmers. What objection can there be to altering that position? The result of this restriction of credit, and the high charges made on the extension of credit to our own people here, is to reduce employment.

Already, as a result of the credit restriction that has taken place in the past few months, 10,000 more people are unemployed. To-day I asked the Taoiseach for particulars of the number of travel permits issued in the course of the past five months, and they show an increase of 65 per cent. Sixty-five per cent. more people have left this country ——

Parliamentary Secretary to the Taoiseach (Donnchadh Ó Briain)

Not necessarily.

Mr. MacBride

——I have the figures here and I can read them. Sixty-five per cent. more people have obtained travel permits in order to secure employment abroad in the past five months than in the equivalent five months last year. True, the figures do not represent the full extent of the immigration, but they are a good index of the emigration which is taking place now and which conceals the true unemployment figures. That I charge the Government with being responsible for, through its policy of restriction of credit, by refusing to invest money in Ireland and to develop our resources.

My appeal in opening this motion was that we should approach the whole problem on a non-Party basis and should seek to establish an economic council or, as Deputy Costello suggested recently, an investment board, that would undertake the task of investing our money in Ireland. That could be done on a non-Party basis and could be approached objectively. We have the task not merely of mending our economy but of rebuilding the economy of this country, which was never undertaken before, and indeed I should like to draw attention to this point: if there is any unbalance in our trade or in our payments position vis-à-vis the rest of the world, it arises from the fact that this country is partitioned. This is one of the factors to which the attention of the British Government might well be drawn by the Minister for Finance if any question arises as to the unbalance of payments.

Motion put.

The Dáil divided:—Tá: 55; Níl: 67.

Tá

• Beirne, John.
• Belton, John.
• Blowick, Joseph.
• Browne, Patrick.
• Cafferky, Dominick.
• Cawley, Patrick.
• Coburn, James.
• Cosgrave, Liam.
• Costello, Declan.
• Costello, John A.
• Crotty, Patrick J.
• Crowe, Patrick.
• Davin, William.
• Desmond, Daniel.
• Dillon, James M.
• Dockrell, Henry P.
• Donnellan, Michael.
• Esmonde, Anthony c.
• Everett, James.
• Fagan, Charles.
• O'Donnell, Patrick.
• O'Gorman, Patrick J.
• O'Hara, Thomas.
• O'Higgins, Thomas F. (Jun.)
• O'Reilly, Patrick.
• O'Sullivan, Denis.
• Palmer, Patrick W.
• Redmond, Bridget M.
• ffrench-O'Carroll, Michael.
• Finan, John.
• Flanagan, Oliver J.
• Giles, Patrick.
• Hession, James M.
• Hickey, James.
• Hughes, Joseph.
• Keyes, Michael.
• Lynch, John (North Kerry).
• McAuliffe, Patrick.
• MacBride, Seán.
• McGilligan, Patrick.
• McMenamin, Daniel.
• McQuillan, John.
• Madden, David J.
• Mannion, John.
• Morrissey, Daniel.
• Mulcahy, Richard.
• Murphy, William.
• Norton, William.
• Reidy, James.
• Reynolds, Mary.
• Roddy, Joseph.
• Rogers, Patrick J.
• Rooney, Eamon.
• Sweetman, Gerard.
• Tully, John.

Níl

• Aiken, Frank.
• Allen, Denis.
• Bartley, Gerald.
• Beegan, Patrick.
• Blaney, Neil T.
• Boland, Gerald.
• Bourke, Dan.
• Brady, Philip A.
• Brady, Seán.
• Brennan, Joseph.
• Brennan, Thomas.
• Breslin, Cormac.
• Briscoe, Robert.
• Buckley, Seán.
• Burke, Patrick.
• Butler, Bernard.
• Carter, Frank.
• Childers, Erskine.
• Cogan, Patrick.
• Colley, Harry.
• Collins, James J.
• Corry, Martin J.
• Cowan, Peadar.
• Crowley, Honor Mary.
• Crowley, Tadhag.
• Cunningham, Liam.
• Davern, Michael J.
• Derrig, Thomas.
• de Valera, Eamon.
• de Valera, Vivion.
• Duignan, Peadar.
• Fanning, John.
• Flanagan, Seán.
• Flynn, John.
• Flynn, Stephen.
• Gallagher, Colm.
• Gilbride, Eugene.
• Hillery, Patrick J.
• Hilliard, Michael.
• Humphreys, Francis.
• Kennedy, Michael J.
• Killilea, Mark.
• Lemass, Seán.
• Little, Patrick J.
• Lynch, Jack (Cork Borough).
• McCann, John.
• MacCarthy, Seán.
• McEllistrim, Thomas.
• MacEntee, Seán.
• McGrath, Patrick.
• Maguire, Patrick J.
• Maher, Peadar.
• Moran, Michael.
• Moylan, Seán.
• Ó Briain, Donnchadh.
• O'Reilly, Matthew.
• Ormonde, John.
• O'Sullivan, Ted.
• Rice, Bridget M.
• Ruttledge, Patrick J.
• Ryan, James.
• Ryan, Mary B.
• Sheridan, Michael.
• Smith, Patrick.
• Traynor, Oscar.
• Walsh, Laurence J.
• Walsh, Thomas.

Tellers:—Tá: Deputies O'Donnell and Tully; Níl: Deputies Ó Briain and Killilea.

Motion declared lost.