asked the Taoiseach whether, with reference to his recent public statement on the matter, he is now in a position to state what practical steps are being taken, or will be taken, by the Government, to help the repatriation of sterling assets.

I presume that the statement referred to by the Deputy is the address that I delivered to the Institute of Bankers on the 19th November, 1949, dealing with the Government's policy of capital investment for productive and social purposes by means of repatriating part of the sterling assets.

As I indicated on that occasion, the repatriation of sterling assets takes place through imports of goods and services in excess of current earnings, that is, through a deficit in the balance of payments. This is, in fact, the only way in which such repatriation can take place. I added:—

"In 1947 there was a deficit of £30,000,000 in our balance of payments. In 1948 there was a deficit of £20,000,000. A temporary disequilibrium in the balance of payments is inevitable according as repatriation of capital takes place. There are greater evils, however, than a temporary deficit in the balance of payments. This Government believe that impoverished and unnecessarily infertile land, lack of housing and shortage of hospital accommodation are far worse evils, evils which we are determined to extirpate, and which would even justify short-term economic loss for the sake of social and long-term economic gain.

It is necessary to ensure, however, that the deficit in the balance of payments is a reflection of increased capital investment at home rather than increased consumption. It is also necessary that the new State investment must be in addition to, and not in substitution for, private investment which would have taken place anyway. Indeed, the Government would prefer if as much as possible of the new investment were undertaken by private persons, because it would be more likely to be productive of a proper economic balance."

I stated that such parts of our external assets as are spent should be used for the purchase of capital equipment, not unnecessary consumption goods; that money spent on productive capital investment should be spent on projects that yield the best revenue returns; that, in the case of other forms of capital investment, the projects selected should be, like housing, of prime social importance or should be potentially capable of so increasing productivity that the home investment undertaken will reduce our future dependence on imports; and that the State should not absorb capital which would be better used by private enterprise.

Since we assumed office, the Government have, in fact, been acting, in this matter, in accordance with the policy adumbrated by me in the address to which I have referred. They have taken steps, both directly and indirectly, to promote the repatriation of sterling assets for purposes calculated to raise domestic productivity and to yield adequate economic and social gains to compensate for the attendant loss of external income. The financing of the greatly enlarged programme of housing, electricity and turf development, land rehabilitation, hospital- and school-building, extension of the telephone system, transport improvements, afforestation, etc., which the Government have in hands will call for resources on a scale that could not be met from current savings and will necessitate over a period of years the realisation of part of the accumulated savings of the past now held in the form of sterling investments.

Apart from directly influencing the repatriation of sterling assets in this way, the Government will continue to aid and encourage the undertaking of capital enterprises by private concerns and individuals, and it is expected that there will be further realisation of sterling investments for the financing of imports of plant, machinery and other goods required by such undertakings.