asked the Minister for Finance how it is that the gold reserve of £28,236,000 in the Central Bank at 31st March, 1969, has been so reduced that it amounted to only £303,000 at 31st March, 1970.
Ceisteanna—Questions. Oral Answers. - Gold Reserve.
22.
The gold holding of £28,236,000 to which the Deputy refers was included in the balance sheet of the Central Bank's general fund on 31st March, 1969. Of this sum, an amount of £11.5 million was transferred to the Bank's Legal Tender Note Fund in which it is still held. A further amount, namely £16.4 million, was sold for reinvestment of the proceeds in foreing currencies and foreign securities as part of the bank's continuous task of structuring the external reserves to the best national advantage.
Does the Minister not realise that this resembles the time in 1916 when the gold reserve in this country in the Bank of Ireland was sent across to the Bank of England? Does he not realise that gold in the hand is worth four pieces of paper in the bush? Does the Minister not realise that gold is a reality and that paper assets are not the same thing at all?
In view of our application to join the EEC and assuming that we enter the EEC it is quite probable that that bloc's currency will be based on a gold or quasi-gold standard and in view of that would the Minister not consider that the selling of all our gold reserves is a very short-sighted policy?
No; the indications in regard to likely developments in the EEC—and they are by no means certain yet—are that the most likely development is that there would be fixed parity between the currencies of all of the member States. A less likely alternative is that there would be a common currency but, in effect, they would be the same thing. The question of the unit being based on gold is quite a different matter altogether. I have indicated that there was £11½ million worth of gold transferred. This was really a technical transfer arising out of the transfer from the Minister for Finance to the Central Bank of the reserve position of the International Monetary Fund under the Bretton Woods Agreement (Amendment) Act, 1969. As regards the other sales, it is the responsibility of the Central Bank to use these to the best national advantage and I am satisfied that that is what the Central Bank are doing.
Question No. 23.
Does the Minister not realise that this is much the same kind of transaction as the agreement that the British would supply us with shipping to bring in adequate supplies here during the last war and we know what happened then? It is the same kind of thing. A sell-out.
No. I do not agree.
Question No. 23. I have called Question No. 23.