§ Order for the Second Reading read.
§ Mr. A. M. SAMUEL
I beg to move, "That the Bill be now read a Second time."
Under the Bankers Act, 1845, six Irish banks were given the right to issue private notes. The Free State has now passed legislation to set up its own system of note issue. Therefore, we must legislate for Northern Ireland. Otherwise, the fiduciary issues applicable to Ireland would be applicable to Northern Ireland and be excessive. The banks have agreed the future fiduciary issue as in the Bill.
§ Mr. DAVID REID
I think it is right that some points on behalf of Northern Ireland should be put before the House. [Interruption.] The first point to which I want to call attention is with regard to Clause 3 of the Bill, which provides that:For the purposes of the provisions of the Bankers (Ireland) Act, 1845, which relate to the issue of banknotes against gold and silver coin, there shall not be included any gold or silver coin held by a banker at any office outside the United Kingdom.In order to understand this Clause, it is necessary to consider what is done by the Act of 1845. That Act laid down that banks in Ireland which claimed to issue notes should, before a certain date, obtain from the Commissioners of Stamps and Taxes a certificate of authorisation showing the amount of the note issue authorised and the proportion of gold 826 and silver coin held in respect thereof; and in some cases the banks so certified had only one office in Northern Ireland. It is, therefore, necessary that some Amendment should be made to this Bill which would give a second choice, enabling hanks to be selected which have more than one office at which stocks of coin may be kept for the purpose of the note circulation.
As to Clause 2 of the Bill, which prohibits the putting in circulation of any bank or other notes forming part of the currency of any country outside the United Kingdom, that, I take it, is intended to prevent Free State currency notes from coming into competition with Treasury or currency notes in Northern Ireland. I should like some assurance that some provision will be made to cover such cases as that of a dealer in Northern Ireland going to a fair in Southern Ireland, when it will be necessary for him to draw money in Free State currency in order to make his purchases there. There is another and much larger question which must be dealt with under this Bill. The amounts of the fiduciary issues of the banks are very much reduced, and all of these banks, except the Bank of Ireland, have their head offices in the United Kingdom. They remain subject to the Bank Act, 1845, under which the whole of their issue, in addition to their fiduciary issue, must be covered by coinage. As the fiduciary issue is very much reduced, there will be an immense gap and the banks will have to add an enormous sum of coinage to the amount they already hold to cover what is outside the new fiduciary issue. To take one example, the old fiduciary issue of the Bank of Ireland is about £2,700,000. Under this Bill it is going to be £4,100,000. If no provision is made in the Bill the Bank of Ireland will have to find a sum of over £2,000,000.
827 There is a further point. The Act of 1845 remains in operation, except as slightly modified by this Bill, and covers the note issue applicable to the whole of Ireland. Under the Free State Currency Act, part of the issue is to be allocated to Southern Ireland, and it is necessary to make some provision by which that amount can be deducted from the amount outstanding, otherwise the banks will be compelled to raise a very large sum of money, and large quantities of Government security must be thrown by the banks on the market. All these are points which have not been adequately considered, and before the further stages of the Bill are taken there should be some consultation between the representatives of the Irish banks and the Treasury and some attempt made to meet these points or enormous inconvenience will be caused. Under the circumstances it is impossible to take the further stages of the Bill until some definite agreement is arrived at. It is obvious that many points must be settled before the Bill can be made to apply to the state of affairs brought into operation by the Free State Currency Act. I do not oppose the Second Reading but I ask that some further consideration should be given to the matter.
§ Major ELLIOT
I can assure my hon. Friend that full consideration will be given to these points when the Committee stage is reached. Some of them are 828 obviously Committee points. Not only that, but the Chancellor of the Exchequer and the Financial Secretary to the Treasury will be glad to see any representatives of the banks, or the hon. Member himself, to discuss the points before the further stages of the Bill are taken. With that assurance, I hope he will allow us to have the Second Reading.
§ Bill committed to a Committee of the Whole House for Tomorrow.—[Mr. A. M. Samuel.]