§ 45. Colonel GRETTONasked the Prime Minister (1) if payment was made by the Irish Free State for the British coinage hitherto used in the Free State; and, if so, what was the amount of payment;
(2) what amount of coinage in face value will be returned to the Treasury by the Irish Free State Government; and what sum in sterling has been agreed to be paid by the British Government to the Irish Free State?
§ 47. Sir WILLIAM DAVISONasked the Prime Minister whether any arrangement has been made between the British Government and the Irish Free State Government to take up British silver coins at present in circulation in the Irish Free State at their face value; what were the proposals made by the Irish Free State Government to the British Government on the matter; and what is the estimated sum involved?
§ Mr. CHURCHILLSome two years ago the Free State wishing to have their own token coinage made representations to the British Government that they should take back the silver circulating in Ireland at its face value. The amount of the silver in question was variously estimated at £1½ to £3 millions. We naturally demurred to this proposal on account of the cost it would entail to the British taxpayer. The Free State Government argued that it was obligatory upon us to redeem our own coinage at its face value as we had made the profits out of its original minting. We pointed out in reply that this coinage was issued before the Exchequers were divided and that the Irish and British taxpayers were both joint participants in the profits of the issue.
The Free State then represented that since the establishment of the Irish Free State British Treasury Notes have been in circulation throughout Ireland and that considerable profits have accrued to us through the printing and issue of these Notes. Of course it might be rejoined that the Free State used our notes in this interval for her convenience; but it cannot be denied that a substantial profit was made by the British Exchequer during this period from their circulation in Ireland. The Free State also pointed out 1965 that the British Government had assisted both South Africa and Australia in establishing their own coinage by repatriating the British coins at their face value, and they argued that a refusal to assist them in their turn would be invidious. Had no agreement been reached between the British and Free State Governments it would have been necessary for Parliament to legislate to prevent the repatriation of any British silver circulating in the Free State.
In all these circumstances the Cabinet took the view that a friendly compromise should if possible be arranged, and I was instructed to negotiate with Mr. Blythe fur that purpose. In consequence I have made an arrangement with the Free State for the return of silver coins to this country at their face value up to a total of £750,000. This process is to be spread over a period of rather more than 10 years: £50,000 may be repatriated by the 31st March of this year; £100,000 in April, 1929; £60,000 in April, 1930; and £60,000 every April after 1930 up to 1939. The total cost to the British Exchequer of the operation spread over these years on the basis of the present value of silver will amount to about £500,000.
§ Mr. CLYNESIs that arrangement wholly acceptable to the Free State?
§ Mr. CHURCHILLAn agreement has been made that covers 10 years.
§ Colonel GRETTONDoes this agreement close the transaction in regard to the silver now current in the Free State, or is it still open to my right hon. Friend to negotiate another agreement in regard to any surplus?
§ Mr. CHURCHILLNo, it closes it completely for 10 years. What may happen at the end of 10 years is really a more speculative matter than I can attempt to judge.
§ Sir W. DAVISONHas my right hon. Friend received any assurance from the Irish Free State of more consideration in future of British interests in connection with their tenders; for example, that British firms should have an opportunity of tendering for engineering works, and that tenders should not be given to German firms?
§ Mr. CHURCHILLYes, Sir, I think so, side by side with the other; certainly with the new currency, as far as I know.
§ Colonel HOWARD-BURYWhat happens to the remainder of the coinage above £750,000? Does that remain in circulation in Ireland?
§ Mr. CHURCHILLAt any rate, it will not be repatriated here at a loss to the British Exchequer.
§ Mr. CLYNESCan the right hon. Gentleman state whether the Irish coinage will be legal tender in this country?
§ Mr. CHURCHILLI really must ask for notice of that question.
§ Lieut.-Commander KENWORTHYCannot the right hon. Gentleman make a comparison between this arrangement, from the point of view of the Treasury and the Irish Free State, and that made with South Africa and Canada? Is it any worse from our point of view?
§ Mr. CHURCHILLNo, Sir. I think a fair arrangement has been made. We have always helped the Dominions in establishing their own currency, and I think it would have been very exceptional treatment if we had refused to assist the Irish Free State in the matter.
Marquess of HARTINGTONCan the Chancellor not assure the House at once that no coinage that does not bear the King's head will be legal tender in this country?
§ Sir BASIL PETOIs the King's head not to be used in future on these Irish coins, and are we to have instead the emblem of the fish, hen or pig?
§ Mr. SPEAKERThese supplementary questions really do not arise.