Léim ar aghaidh chuig an bpríomhábhar

Seanad Éireann díospóireacht -
Saturday, 14 May 1927

Vol. 8 No. 29


I move:—

"That in view of the magnitude and complexity of the financial and other issues involved in the agreement between Saorstát Eireann and Great Britain for the adjustment of their mutual debts, the Seanad is of opinion that the information contained in the White Paper entitled Heads of the Ultimate Financial Settlement between the British Government and the Government of the Irish Free State, signed on the 19th March, 1926, is wholly inadequate and that a fuller and more detailed statement should be immediately issued and circulated by the Executive Council."

A few Senators have stated that this motion is merely an electoral stunt, or something to that effect, and that it would embarrass those who have certain party attachments if it were discussed now. It must be remembered by those Senators that, when the matter was brought up before, they managed to prevent the continuation of the debate which was going on some months ago by leaving the House. I think that that, at all events, cannot be brought up against me and, moreover, this matter has been postponed from day to day owing to the pressure of business. I think it more reasonable to say that the electoral stunt is forcing too much business on the House at present, and that we must get through it for party purposes. I pass from that and, although my motion is critical in every aspect, I will try to make it as little personal as possible. In this motion I have asked for more information on the question of the Ultimate Financial Settlement because it seems to me that secrecy has been the governing motive of finance, and it is only by degrees, and mainly through a study of British Government papers, that any light has been thrown on it.

The Minister resisted the appointment of a committee to inquire into the Ultimate Settlement, and he said he would not attend such an inquiry, and would not permit his officials to attend or allow any documents to be supplied to it. Efforts have been made outside, by the public at large, by the Press, and by members of the Dáil, to get a "Geddes" Committee appointed to inquire into the accounts, but the Minister opposed that strenuously, and when, more or less, pressed into doing something, he appointed a committee of officials. That does not seem to be very much to the point, considering that he has got the same officials in his own office to go into the matter. I really want to know the reason of all this secrecy. Why all this endeavour to prevent the country knowing what it is paying? Why are not the figures in the Ultimate Settlement, in several cases, given? Why are a number of items in the British White Paper not mentioned at all? The reason of this secrecy concerning things that should be made public ought, in the Minister's own interest, be explained.

The object of the motion is merely to see that Senators and the public shall be informed as to the amount of public money that is being exported from the country and the reasons for it. The importance of the exports of such enormous sums of money ought to be considered. For instance, compare it with the £3,000,000 for the sugar beet factory and the £5,000,000 for the Shannon scheme, about which there is so much commotion. These are lump sums, but in the other case it means the payment of £3,000,000 a year. There are about eleven different headings in the settlement. Article 1 deals with land purchase annuities. The amount is not stated, but I find it to be about £3,000,000 a year. £550,000 of income tax was withheld and then paid. We do not know the reason for that. We do not know if that is the full amount of income tax collected on land purchase annuities before March, 1926, from residents in the Free State and in Britain. If from Free Staters, we are not told why it is handed over to the British Government. Details are not given. Take Article 6, which deals with Kilmainham, the Hibernian School, and Tully Farm. A question concerning these items was asked here, but the Minister said he would not answer. Why should we not know to whom these places belong?

Then there is an item of £275,000, damage to British Government Departments prior to July 11th, 1921. This was explained as being mainly military property. We are paying now, so far as I can see, for the destruction of some motor cars during the war. As regards the Unemployment Fund deficit, the amount is not stated. The Minister simply said that there was a deficit. I understand from other documents that it amounts to £1,200,000. The Minister has made no claim to the assets of the Consolidated Fund, the Civil Contingency Fund, and Reparations and Inter-Allied Debts. He gave no reason for that; he merely gave the amount. As regards the payment of 75 per cent. of pensions and compensations to the R.I.C., he gave no figures. Speaking generally, why should land purchase annuities, local loans, pensions, etc., be paid to the British Government and not direct to the Free State Government? That seems to me to be a very mysterious arrangement. Why pass these through British hands at all? If the Free State has to pay them at all, and I do not admit the debt, they should be paid direct to the bond holders, otherwise it becomes a tribute. There are bond holders in both countries.

In connection with land purchase annuities we pay double for the collection. First, we pay the collectors, and, secondly, we pay for the collection to the British Government. In that way the British Government is better off than before. Formerly the British Government had to pay for the collection, but now we pay them. It seems extraordinary that the British Government should be better off in this matter now than before the Treaty. A strange thing is that when I turn to the British White Paper, Command 2798, issued in 1927, I find that during the years 1925-26 and previously a large number of sums were paid which are not mentioned in the Ultimate Financial Agreement. Such sums include: (a) Public Offices Sites (Dublin) Act, 1903—£13,000; (b) Irish Railways Act, 1926, and Marine Works Act, 1902— £28,000; (c) Telegraph Acts—£43,000; (d) Military Works Act—£40,000; making a total of £124,000. What was the authority for these payments? Were they passed by the Dáil? Where did the money come from? Does the Ultimate Settlement end these payments? We are told nothing about them. They may be going on, or they may be stopped, but there is not a word about them. That seems a curious method of doing business. In addition to that, the loans for some of these purposes were not raised as bonds from individuals like the land purchase annuities. They were departmental loans from the Government of the day from funds in its hands, such as the Savings Banks, etc., and lent to departments. Much of this money was, of course, Irish money, from Irish Savings Banks, and the repayment should be to the Irish Government, which inherits the funds from which the loans were made. That whole machinery is explained quite clearly in the "Encyclopædia Britannica" article, which shows that the Government holds in its hands the funds for the Savings Banks and other things, and that it acts in two ways as the holder of these sums, and it lends the money to departments to be paid by annuities. Now, why should the British Government, who hold those funds (the Irish Savings Banks Fund) have that money paid to them? Surely the Irish Government is the inheritor of all that money, and the annuities should be paid to the Irish and not to the British Government. The Minister seems to me to be playing the three card trick with the Chancellor of the British Exchequer, a game usually played between an expert and an innocent.

Speaking generally, I find by the Ultimate Agreement and British White Paper that a balance of over six millions was paid last year to the British Treasury, and that about five millions a year will be paid in future under the Ultimate Settlement. Adding the land purchase annuities and local loans to ordinary taxation, about thirty millions a year is extracted from the people, and from one-fifth to one-sixth is exported to Britain. This is a sum the country cannot bear. It represents a taxation more than twice as heavy as that of Britain, considering the taxable capacity of the two countries (1.5 to 100 as estimated by the British Treasury and agreed on by Mr. Blythe) and also a relatively heavier debt. It is grossly misleading to say, as Ministers have been saying, that the Free State has a negligible debt. Considering the engagements of the Ultimate Financial Settlement and our own national debt, it means about £140,000,000 placed on this country by Mr. Blythe during his three years of office. Now, I come to the question whether the sums mentioned are morally or legally due by the Free State. The Commission which the Treaty proposed to set up to decide the financial relations of Britain and the Irish Free State having been cancelled by Article 5 of the Treaty, Mr. Blythe took over the responsibility, and we were told by President Cosgrave that a capital sum of five million pounds would be the sole debt of the Free State.

The arguments relating to this matter may be summarised under the following heads:—(a) moral, (b) constitutional, (c) legal, (d) diplomatic, (e) economic. On the moral question Britain owes Ireland reparation for centuries of conquest, massacre, confiscation, material, financial, and economic injury as evidenced by industrial and commercial restriction and religious and racial repression, i.e., the mercantile system of the eighteenth century and the Penal Laws. Nothing has been asked under all these heads. No credit was claimed under these headings. At least they ought to have been the reasons for a clean sheet.

Now, I come to over-taxation since the Union. No claim was made on the subject of over-taxation, and no claim was agreed under this heading, though the Minister said that if a Commission had been set up, such a claim would have been made. The only answer he gave why it was not made by himself was that Mr. Churchill would not look at it, and therefore he withdrew it and left it so. Surely this shows that Mr. Blythe was not a very good substitute for the Commission. No Commission could possibly have made a worse arrangement than the Minister made in paying over five millions a year to Britain.

Now, on the constitutional side we have it that Ireland was a partner from the year 1800 to 1921 in the United Kingdom, with certain special rights under the Treaty of Union. Ireland was a partner also in the ownership of the British Empire. As a partner she had a right to a portion of the assets of the United Kingdom and of the Empire. There must have been some assets, great or small; if not, the United Kingdom and the Empire were bankrupt institutions, which few people would admit. There was no division of assets made. The only division was a division of debts. We were called upon to pay certain debts amounting to about five million a year. Article 5 of the Treaty lays down that the Free State must be responsible for a portion of the public debt of the United Kingdom and the pensioners of the Great War. Article 10 makes the Free State liable for the pensions of police, of the R.I.C., etc., and Article 5 of the Treaty has been cancelled. Article 10 has not been cancelled. It still remains. I am not disputing the question of whatever may be due under Article 10, but Article 5 and Article 10 of the Treaty were the only Articles in the Treaty which dealt with any debts due by the Free State to Britain. Now, as I have said, Article 5 has been cancelled, and we do not know what it means.

What is the Public Debt and what has been cancelled? Is it synonymous with the National Debt or is it something broader or narrower? Up to now it has always been spoken of as synonymous with the National Debt. Everybody has discussed it under that heading, and nobody, up to quite lately, ever disputed the question that the public debt was the National Debt. In the Dáil and Senate both words were used as synonymous words, and the Public Debt had been taken as synonymous with the National Debt. In Mr. Blythe's speech on the Boundary he explained how the British Government officials calculated their claim against the Free State. The Minister has given us very good reason to think that he did not differentiate between the Public Debt and the National Debt. In the debate on the Boundary, President Cosgrave used both words as synonymous, too. In one statement he used the words "Public Debt" and in another statement he used the words "National Debt." In the same debate Mr. Blythe was asked how the British Government estimated the sum that was claimed against the Free State, and he did it in this way. He put down the National Debt as being so much, and the officials calculated their claim and capitalised that. He said they took 1½ per cent. of the National Debt and of the capitalised value of the War Pensions. The result being £170,000,000 as the Free State Share. Why did they use the word "National" and not the word "Public Debt"? He talks about the National Debt as being included in Article 5. If he considered it the Public Debt why did he not say so? Why did he not use the words "National Debt"? Apparently nobody disputed the question that the National Debt and the Public Debt were the same. As far as I can find, and as far as Mr. Blythe himself stated, there is no difference. In that matter very high authorities have made no differentiation between the two. Mr. Adams and Professor Nicholson, two eminent authorities, regard them as the same. They talk of the Public Debt or the National Debt. Therefore they regard them both as the same thing. In the Senate on the 1st April I asked Mr. Blythe to define the phrase "Public Debt." He replied that there is no definition, and that it would be useless giving his opinion, as people on the other side might give a different one. He added, however, that the word "public" had been inserted in the Treaty with design. If he is correct in this statement, the Minister had as much right to state that every debt claimed by Britain is included in the Public Debt. He has as much right to say that as the British have to say the opposite. This would be the more reasonable interpretation. I think that there could be no doubt that his claim that the Public Debt was the same as the National Debt, or at all events that it included the National Debt, would be a much more reasonable claim than could be put up by the other side.

It was the duty of our representatives over there to make the definition as wide as possible, using the moral, constitutional, and economic arguments to emphasise the claim. Is his statement correct that the word "public" was introduced into the Treaty at a midnight meeting without definition, and without the attention of the signatories being called to it before or after? It can reasonably be assumed that the British wished to make the phrase as wide as possible. It was in their own interests to do so. What was this mysterious phrase? Why was an indefinite word used? There must have been some basis of argument, some analogy. Was it guess work? It seems Mr. Blythe settled it according to his own conscience. Surely some sort of argument would be raised about it?

It was the object of the British Government to make the words "Public Debt" as wide as possible, but now the matter is reversed. It is in the interests of the Free State that the words "Public Debt" should be as wide as possible. I think I have shown that Mr. Blythe had a perfectly free hand. His own statement was that nobody knew what the Public Debt was. It was his business to find out what the words meant, and it was his business, also, to make the words "Public Debt" as wide as they could reasonably be made. As it is, he has not read the words "Public Debt" as synonymous with National Debt.

What exactly is the situation? If the phrases are synonymous we have to search for some interpretation of National Debt. There are several authorities on this matter. Among them, Lord Halsbury's "Laws of England" may be considered the most important. Under the general heading of National Debt he mentions the land purchase annuities, differentiating them only by stating there are securities prior to the British Government. In case anybody wishes to know what he says on the matter I will quote him. Under the heading of National Debt, Lord Halsbury places (1) funded debt of the United Kingdom, (2) terminable annuities, (3) unfunded debt, and (4) certain capital liabilities incurred by the State in respect of undertakings authorised by recent Acts of Parliament. Then he goes on to refer to contingent liability in respect of loans guaranteed by the British Government not at present involving any charge on the National Exchequer. Among these he includes loans to South Africa and land purchase annuities. He definitely included them in the National Debt.

There is, however, a more appropriate authority, that of the British Government itself. The Act of 1920 authorises the collection and retention of the land purchase annuities and local loans by the Governments of Northern and Southern Ireland respectively. If these items were entirely separate from the National Debt the matter need not have been mentioned again. But to show that was not so, Schedule 6, which purported to enumerate the items to which Ireland should contribute, named the National Debt, and classified under that heading land purchase annuities and local loans, which sums were excepted from payment, having been already allotted to the Government of Ireland. For what reason were these named under this heading if they were not part of the National Debt?

It does not matter now whether the Act of 1920 is in force or not in the Free State, though Judge Meredith decided in the affirmative. We have it recorded definitely in the most authoritative way—an Act of Parliament—as the opinion of the British Government that these items are part of the National Debt. It cannot have it both ways. I may mention that the Act of 1920 has a sinister influence. It is the origin of the boundary, and it is in force in Ireland against the Free State, and has been used lately by the Privy Council to overrule a decision of the Free State Courts. It is clear, then, that if National and Public Debts are synonymous terms, land purchase annuities are not payable, and it is quite clear that is wiped out by Article 5.

What has been the Minister's defence up to the present? At first he founded his case on the point that the land purchase annuities were private loans, and not part of the National Debt. Driven from that position by the authoritative statement of Lord Halsbury and the Act of 1920, he said in one of his speeches: "Even if a case can be made to show that they are part of the National Debt, we (he and Mr. Churchill) agreed that they should not be so considered." In other words, he gave away one hundred millions of the country's money in a secret agreement without considering the law.

Senator Mrs. Wyse-Power on the 15th December last asked Mr. Blythe where in the Treaty it was stated that the land annuities should be paid to Britain. He said he had no reply to make; that he had never disputed the liability, and did not dispute it now; that he could have prepared a legal argument, but believed it to be a just debt. There was no specific reference to it in the Treaty, he said, but it was one of those matters to be worked out in detail. What did a Minister state some time ago? He said that a Minister was a trustee for the State. Suppose Mr. Blythe had been a trustee for a private person and had acted in this manner, and suppose he had handed over a large sum from the trust money to pay some claim for which there was no legal right, merely because, in his opinion, it was a just debt, what would have happened? He would have been charged with a breach of trust; he would have been ordered to pay it back, and, if he could not, he would have been made bankrupt. Perhaps he would have been put in prison.

Mr. Blythe is trying to mend his hand. On the 1st April, 1927, when I asked him to define the words "Public Debt," for the first time since the Treaty he said it was a totally different thing from the National Debt, but he did not know what it meant. If he did not know that, he did not know what was due under Article 5 of the Treaty or what was gained by its cancellation, much as the Ministers boasted of it. That seems to me to be a very extraordinary position. Whatever legal decisions might or might not result from an appeal to law, it seems quite clear to me that as between two negotiating nations, the Free State has a sufficient case, and as it collects the money, it can and should hold it. The British Government holds the Lane pictures although it admits morally it has no right to do so.

Behind all these arguments there are the economic arguments. The people of the Free State are taxed two and a half times more than those of Britain in proportion to taxable capacity—1.5 to 100. Compare the Free State with Northern Ireland, which sent only £158,000 to Britain last year against the Free State £6,000,000. Northern Ireland depends on the 1920 Act for its very existence, and it does not dispute it. It was there laid down that Northern Ireland should pay £8,000,000 a year. What do they pay, as a matter of fact? Last year they paid £158,000. We in the Free State, who have the great advantage of the Treaty, pay £6,000,000. That seems to me to represent a very strange state of affairs, and it also represents a strange difference between the negotiators on both sides.

Sir James Craig was very clever. He said "not an inch," and he gave not an inch. He did not lose an inch, because he was a good negotiator. In this case he said "not a penny," and he paid only £158,000, instead of £8,000,000. That represents a great difference, indeed, between the negotiators on both sides. Sir James Craig looks forward to the time when he will pay nothing. What a contrast!

It ought to be quite clear to anyone that the Free State cannot afford to pay five or six millions a year, being one-fifth of its present taxation (including annuities which are extracted from the people). The attempt to do this is the first cause of the present pauperised state of Ireland. To pay these unlawful sums the people are harassed by the tax-gatherers.

I will read a statement made by a district justice the other day in Letter kenny:—

"A man named Byrne asked for time to pay a Land Commission decree that was granted against him in January. Mr. Walsh, the district justice, said the case illustrated the way in which the unfortunate poor were harassed by improper extortions. The decree, he said, had been granted for £4 4s. 10d. and the costs were £1 3s., but off this sum of £5 7s. 10d. defendant appeared to have paid to the State Solicitor 16s. 1d., being one half year's instalment on account."

He must have been a wretchedly poor man when the annuity was only 32s. yearly.

"The man alleged, however, that the bailiff had demanded payment of £6 9s., and had threatened a seizure if this was not paid. He (Mr. Walsh) could see no justification for such a demand, especially as the decree had not been yet executed, and he believed the case was typical of many others all over the country. There seemed to be no effective check on the fees charged by bailiffs and court messengers, and the most defenceless section of the community, the small congests, being unable to employ legal assistance, were at the mercy of these men. He would report the case to the Ministry of Justice."

Anybody who goes about the country knows that it is in a state of great pauperism. I was in Tipperary Town the other day, and I was told that nobody there had any money, and that is in the centre of the Golden Vale, perhaps the richest land in the world. I was also in Limerick, and I was told that the people of the Golden Vale were as poor now as the people who received outdoor relief before the war. I travelled in a train in the west the other day with an official who knows the west intimately for the last thirty years. He said the condition of the people in the west was about the same as those who had died of starvation in Cork. The country is pauperised, and pauperised because we collect from the people and send out of the country £5,000,000 or £6,000,000 a year. I think that is a matter that ought to engage the attention of Senators a great deal more than it seems to do.

Motion not seconded.

The Seanad adjourned at 12.15 p.m. until 3 o'clock on Wednesday, 18th May, 1927.