This is a very unusual and extraordinary occasion. When the historian of the future comes to write the history of our time he will probably look at the 15th March, 1927, and say that this is where the Government took the wrong turning—the Ides of March.
IN COMMITTEE ON FINANCE. - SUPPLEMENTARY ESTIMATE.—VOTE 52, DEPARTMENT OF AGRICULTURE (RESUMED).
The Dáil went into Committee on Finance.
Not the first wrong turning.
Here is a very remarkable turning. I followed very carefully the speeches of Ministers. I have been under the impression that they were advancing to the forthcoming test under certain well-defined banners. I understood that over the host was flying the banner inscribed "The old indispensables," flanked on one side by another oriflamme bearing the words "Gentlemen prefer old hands," and on the other side by the words "Beware of a Coalition." But now all that has gone. Now we see what the Government banner is going to be. The new banner is "State Socialism." Of course, I know the reason. I know it is because Ministers are such kind-hearted men. They could not bear that Deputy Johnson, in his absence, which we all regret, should feel that his Party was at any loss or was prejudiced in any way, and as they always follow him sooner or later, they have decided in this case to follow him sooner, and Deputy Johnson can feel that he can go away with a quiet conscience because Ministers are doing as much as he would do if he were here. This Estimate is nothing more than State Socialism, State Socialism in a somewhat unusual form. I can understand, and I have heard of States carrying on industries and enterprises. I can understand the State supplying electricity, and I can understand the State running railways. But never before have I heard of a State acting as a go-between, as agents between somebody who wants to sell and somebody who wants to buy. That is the proposition to which we are asked to assent tonight. It may be a sound proposition; there may be a profit for the State; there may be a loss, but what I should like to ask the Minister for Lands and Agriculture is: What will happen if these concerns that it is proposed to purchase, or some of them, are not sold? What is going to happen then? The Minister for Lands and Agriculture is a most efficient Minister, but I am not sure that he is so efficient as the business man. To my mind, it is not good business, to begin with, to announce that the transfer of this business will be carried through as quickly as possible. When you proclaim that your intention is to buy something and then sell it as soon as possible, you do not get the same price as you would in other circumstances. In the same way the Minister was rather unguarded when he told us that the bulk of condensed milk is made from separated milk. I have no doubt that that is so, but now the State is buying the condensed milk factory and the milk will be sent out with the advertisement that it is made from separated milk. I imagine that the Swiss, and others who are competing with us, will blazon that statement on their advertisements. That is one of the disadvantages of Ministers, absolutely efficient in their own Departments, going into business matters in which they sometimes lend themselves to unguarded actions.
What is going to happen if these concerns are not sold? The bulk of them are creameries and are to be sold to creamery committees. I have been a member of the committee of a co-operative creamery for a good many years, and I have never found it possible to foretell a day in advance what that committee might do. I do not know if the Minister has any undertakings in creameries, but if he has does he know that the majority of the committees do not attend the meetings? In my experience most co-operative creameries have far too many members. The work is done by a comparatively small number, and that small number would avail of the Minister's statement. Once you have a question of buying or selling there are a number of members, who possibly have not attended more than once or twice in the year, who will come down and say: "You have made a very bad bargain. You could get that cheaper. The Minister would have to sell it whatever the price was." Of course, that is a misrepresentation, but that is the kind of attitude that a great many people will take up. Let us consider the other businesses. The Minister is buying the whole concern, lock, stock and barrel, and it includes a toffee factory. What is going to happen to that? The Minister said, I think, that the toffee factory will be sold in the open market. What happens if it is not sold? You cannot always sell things when you want to, unless you are prepared to sell at a price that is an absolute sacrifice. Is the State going to carry on the toffee factory? I have heard of State railways, State industrial undertakings, State butchers' shops, even, but I never heard of a State toffee factory.
Why not?
Because there are private toffee factories in Dublin and in County Dublin, and it is not fair for the State to assist, or actually subsidise, a competitor in opposition to these.
If the toffee industry is one of those crying out for nationalisation, if Deputy Morrissey's Party and his constituents feel that we are suffering under a load of national iniquity because of the private monopoly in the manufacture of toffee, then let a Bill be brought in to nationalise all toffee factories, but do not let one factory in Cork be subsidised and have the State competing with all other toffee factories. The factory may not be carried on in the interval, but it must be carried on; if not it will be valueless. Take it that it employs some labour. That labour is disemployed and the factory shut down. Deputy Morrissey would then be the first, and rightly, to complain. Again, if you shut it down the value of the factory lies in the connection that it had established and in the fact that people are used to buying the peculiar brand of toffee that was made there. If it is shut down for six weeks and if the shops say to any customer: "We have not any of that. We have N.K.M., Sharpe's or some other foreign toffee," that factory will be nearly valueless, because it will have lost its connection with purchasers that it previously possessed. The State will have to carry that on. That very fact illustrates the seriousness of this position. If the State is to carry on toffee factories why should it not carry on every other form of enterprise? Again, there is a shop in Cork. Is that shop to be carried on? Is the State going into the retail trade? I have no doubt the Minister will try to sell it as soon as possible. What is going to happen to it in the interval? All these are questions that the Dáil will have to consider before we pass this Estimate.
Now I come to an important and larger question, and remove myself from the sticky neighbourhood of toffee. This Estimate provides for the advance of a very substantial sum, very nearly half a million pounds, and a great deal of that money is to be repaid, as the Minister said, by advances from the Agricultural Credit Corporation. How are these repayments to be accounted for? Are they to be appropriations-in-aid of the Department of Lands and Agriculture? I suggest that we should not allow such a large sum as £455,000 to appear as an appropriation-in-aid, because the Minister has power to apply appropriations-in-aid to any excess expenditure in any of the other branches of his Department. I think the sum of nearly half a million is altogether and entirely excessive as an appropriation-in-aid, and I suggest the Dáil is entitled to some information as to the accountancy in this regard. I really think it is a pity that the Minister has elected to deal with this matter by bringing in a supplementary estimate. It seems to be just as much a case for a Bill—it is a new departure, and it is admitted to be a new departure—as the sugar subsidy was for a Bill, because if a Bill were brought in we could move an amendment with regard to that point of the appropriations-in-aid. For instance, we could secure that every transaction would be reviewed by the Comptroller and Auditor-General. I suppose they will be reviewed, but we could make it more certain and there would be an opportunity of taking a division on such an amendment. We can, of course, take a division on this, but I do not suppose it will be a successful division. We should not only have an opportunity of taking a division, but, if necessary, we could refer the matter to a referendum. It is a new departure, and I think it should have been dealt with by a Bill.
I have dealt with one or two aspects of the matter, but the Minister will be quite entitled to reproach me if I do not deal with the main purpose behind this Bill, and that is the problem of the redundant or superfluous creameries. We are only dealing with the fringe of that problem in this Estimate. These redundant creameries do not only exist in the South, but all over Ireland where there are creameries, and it is not always the proprietary creamery that is redundant, while the co-operative one is all that it should be. It is very often the case that there is unfair competition between two co-operative creameries. I know of two co-operative creameries, each of them with auxiliaries at least twenty miles away, but where the main creameries are within two miles of one another and constantly trying to cut each other out by offering better prices for milk. This Estimate will not deal with that. It is only dealing with the fringe of the problem, and it is only dealing with it for the benefit of the farmers of one part of the country, at the expense of the taxpayers of the whole country. It is a serious problem. The Minister is only dealing with it piecemeal, but though I would have preferred that he should have dealt with it in some other manner, I think that even in dealing with it piecemeal he should have given some indication of what his policy will be with regard to the redundant co-operative creameries and with regard to the creameries in other parts of the country besides the area covered by the Estimate.
I should also like to call attention to the fact, about which Ministers are singularly modest, that this is another boon conferred on the farmer at the expense of the general taxpayer. Hardly a day passes that you do not see in your newspaper that everything is done for Dublin and nothing for the man in the country. I have gone through the Estimates and I have found items amounting to over two million pounds for things done for the farmer from which the taxpayer in the Dublin metropolitan area derives no direct benefit whatever.
I am careful to say direct benefit, because the prosperity of the farmer is something that benefits everybody. I accept that, but the Dublin taxpayer gets no direct benefit from the expenditure of the Department of Lands and Agriculture; he gets no direct benefit from the expenditure on forestry, from the expenses of the Land Commission, from the advances to agricultural credit societies, from the supplementary agricultural grant, and from all the expenditure, amounting to over £150,000, on drainage. Here is another sum of very nearly half a million from which the taxpayer in the Dublin metropolitan area will derive no direct benefit. That is to say, two and a half millions, more than one-tenth of our whole expenditure, is expended for the benefit of the farmer and for the direct benefit of nobody else. Yet we are told that everything is done for Dublin and that the man in the country is forgotten! I think it is a sound policy; I am not quarrelling with it; I am only indicating it. Agriculture is the backbone of our industry. But I would like to see it dealt with on a more general and more systematic scale than it is dealt with in this rather piecemeal fashion of buying certain creameries in certain corners of the country.
I am not going to enter into a discussion of this Estimate in the spirit that seems to have animated Deputy Cooper. He tried to discover how much the farmer was getting out of the existence of this State indirect benefits in the matter of pounds, shillings and pence. I do not know what his object was, but he did not try to discover at the same time how much the farmer was contributing to the maintenance of the State. The Minister, in introducing the Estimate, has undoubtedly given colour to the statement of Deputy Cooper. The Minister's action may be termed, if you like, an effort at State Socialism—the fact that the Minister has set himself up to act as a go-between between a certain group of farmers and certain other interests possessing property in the country, property which is of value for the manufacture of the raw material which contributes a high proportion of our total exports. The main fact which stands out in the very lengthy and well-reasoned statement of the Minister is that there is recognition on the part of the Government that agriculture is of importance to this State; that prosperity for agriculture means prosperity for the State, and that success cannot come to agriculture or to any other industry unless it is established on a sound basis. The Minister came up against the position that one of the main branches of the agricultural industry was established on such an unsound and uneconomic basis, that its management from the point of view of its economic value to the farmer was in such a precarious position, that something had to be done. I take it that this action on the part of the Ministry is being taken because of the very serious condition in which they found the dairying industry in a particular part of the country, and that they could not blind themselves to the fact that if someone did not step in and take action very serious days were ahead for the dairy farmer over a very wide area in the South. Hence it is that we are asked to vote a sum of close on half a million.
We have to ask ourselves is this action on the part of the State requisite or justifiable under the circumstances? The Minister went to very considerable pains to give us the whole genesis of the action that he has been compelled to take, and I think the House will admit, whatever term we apply to the action taken, that there was hardly any alternative under the circumstances, and that any individual in the position of the Minister, wanting to do his best for the industry, would have been compelled to say that it was not possible by any other means to put the dairying industry in Ireland on a sound basis. I hope it will have the results anticipated. The sum involved is very considerable. I agree with Deputy Cooper when he said that agriculture over a certain area is going to benefit. If benefits are to come from the action taken, they will be conferred on a certain limited area. While that is so, and while I come from an area which cannot and does not expect to gain by this expenditure, I do feel that the Minister's action under the circumstances is justifiable. We might, in fact, say that it was courageous. In a State like ours it is necessary at times to take a bold step, particularly when dealing with agriculture.
I feel that there is a certain weight in what Deputy Cooper has urged, and I think that the Minister's own statement left the impression on our minds that a good many things which he has indicated as likely to happen are only suppositions. I confess that there are possibilities that the expectations may not be fulfilled. The Minister's policy in the matter, from what we have learnt this evening, in getting rid of redundant creameries is to pass over to existing co-operative societies the trade hitherto done by those creameries. I should like the Minister to give us an assurance that the co-operative societies in the area where some of these redundant creameries are, are prepared to contribute what is believed to be their share of the State's liability in this venture. When a creamery is dismantled and the machinery is utilised by the other creameries in the area, are those creameries prepared to pay for that machinery?
Has the Minister any evidence up to the present from the existing societies that that spirit is at the moment living in the areas which have been served by these redundant creameries? One would like to feel that when the State embarks upon an effort like this, where a considerable sum of money is involved and where the benefits are to be conferred on a limited number of people over a limited area, that the people within that area are prepared to stand up to their liabilities in the matter. I think the Minister, if he is able to give us some indication as to the outlook on the part of some of the existing co-operative societies, will do a good deal to make some of us feel that if the State is in the long run called upon to contribute something towards the efforts to put the dairying industry on a sound basis the money will not be misspent.
It is rather difficult to go through all the figures the Minister has given to the Dáil in the short time at our disposal. I should like to have from the Minister the exact figures he anticipates the State will, in the long run, be likely to have to contribute towards the carrying through of this scheme, granted that his outlook will be justified by the policy and action of the particular societies in the particular area in question. What exactly does the State stand to lose by the transaction? What will the Exchequer be asked to contribute, after putting the value on the machinery that the foreign experts calculate it is worth, and on the buildings and on the trade? I thought I understood from the Minister that he put that figure at about £50,000.
If, on the other hand, and this is something one would not like to contemplate, there was a certain disposition on the part of any of the co-operative creameries in these areas, now that opposition has to an extent vanished and the farmers have practically no alternative but to send their milk to the co-operative stores—if a certain attitude was taken up on the part of some of those creameries it would undoubtedly be a serious matter for the State. One must admit that we do not like to urge that it is the State's responsibility to come in and act as the Minister has seen fit to do on this occasion. I have no doubt that serious consideration must have been given to this before such a policy was decided upon, but if for the welfare of the industry it has been necessary to take this action, my feeling on the matter is that such action is only justifiable on the part of the State when for the sake of the industry no other course is open, and, at the same time, when the State feels that that section of the community on which the benefit is likely to be conferred shall honour their obligation and live up to their responsibilities. I hope that over the five or six counties where this killing competition has existed for years, between proprietary concerns and co-operative creameries, competition which I know has been responsible for having brought many co-operative concerns to the brink and which concerns can only be saved by the action which is now being taken, people will appreciate the fact that they have, on their part, to recognise that unless they are prepared to come along and bear their fair share of the Ministry's obligation in the whole matter, undoubtedly it must prejudice any future action by the State, even in circumstances perhaps which might be more justifiable.
Coming from a part of the country that cannot claim to have been given any great concessions by the State, a part of the country very far removed from the operations of the Shannon scheme, on which over £5,000,000 is to be spent, far removed from the beet factory at Carlow, where £3,000,000 is to be spent, far removed from the Barrow drainage, where, at least, £250,000 is to be spent, and now, with this additional £500,000 to be spent in putting the dairy industry on a sound basis—a total of nearly £9,000,000—I feel that some of the citizens of the State in those parts of the country less favoured in many ways, by nature, by situation, and by the action of the State, are entitled to plead with the Government to make things better in their districts. If a considerable number of millions is being spent in certain areas, there are other parts of the country where little has been done and where little is being spent. These districts are as worthy and as much in need of help as other regions where the people are better favoured from the point of view of things they possess in the way of land and locomotion. When the Minister stated that this action was taken so that the dairying industry might be put on a solid basis, it should be remembered that the dairy industry is not confined to five or six counties, and that it is on an unsound basis in other parts as well as in those areas on behalf of which we are asked to take action this evening.
I would say, further, to the Minister that while we have been prepared to say that the money that the State has been spending has been in the best interests of the State, from the Government point of view, it is not justifiable to continue a policy by which all citizens of the State are to be constantly urged to contribute their mite so that certain benefits might be conferred on certain limited areas. I want to urge on the Minister the fact that the dairying industry in other parts of Ireland needs very careful and close attention, and requires State assistance just as much as those on whose behalf we are taking action this evening. It has been the policy of the Government, perhaps because of geographical situation, or perhaps because of other things, to create developments in certain parts of the country. We who speak on behalf of other parts of the country, where little has been done, and where it is necessary to do much more, would urge the Minister, in visualising the future of dairying in Ireland, to recognise, because of what it is now doing in Cork, Tipperary, Limerick and Kerry, that his statement, that the dairying industry is being put on a sound basis by what we are asked to do this evening is not justified, unless he also recognises that over the whole of the State a good deal has to be done for the industry.
I want to put it to him that if the State is justified in making the venture which it is now making, and in spending and losing money so that the industry may be reorganised over a particular area, I say that the Minister will have to ask himself whether that policy is justified in any other part of the country. I put that to him because I think it is necessary. I am prepared to support the policy which has been put before the Dáil, because I believe, in all the circumstances, there was no alternative policy. At the same time, feeling that the reorganisation of the dairying industry is very essential, I urge on the Minister not to think that he has done everything for the industry because he is doing a good deal for the best dairying districts in the country. While I am not prepared to go further into that matter this evening, I hope that, in addition to those parts of the country in which an effort is being made to organise the dairying industry, consideration will be given to those districts in which no effort has previously been made. I hope that, as a result of these operations in the south the better organisation of these new districts will be helped forward, and that the Minister will feel that it must be his policy to do for every part of the country, as regards the dairying industry, what he is now prepared to do for a few counties in the south.
I think the Minister is to be congratulated on his lucid account of the history of the events which led up to the introduction of this Estimate. Deputy Cooper, who, I am sorry to say, is not in the House at the moment, seemed to be more afraid of the name of "State Socialism" than of the actuality. His case is not singular. There are many people who applaud the Shannon scheme, or agricultural measures, like the Eggs Act, who would hold up their hands in holy horror at the very name "State Socialism." What is the Shannon scheme but an effort on behalf of the State to use the power and credit of the State in the interest of the community as a whole? After all, the State is only a collection of individuals who live in a particular area covered by the State and who work as one co-operative society. If they find important industries, especially a great national industry like agriculture, being weakened by overlapping and by duplication of overhead expenses, it is the duty of the State to step in and use its influence, power and credit to reorganise that industry in the interests of the community as a whole. If that is "State Socialism," I have no fear either of the term or of the actuality.
In so far as the State has stepped in to remove what seemed to be an obvious difficulty, an obvious clog on a very important industry, I am prepared to support it. If I were inclined to offer any criticism, it would be with regard to the wisdom of passing over, without reserving any control of, the creameries purchased to the co-operative societies. I am considerably relieved by the Minister's statement that it is his intention in the near future to introduce a Co-operative Bill, which, I take it, will regulate and control the industry generally. I would like to mention another matter, and I would be glad to know if the Minister has given any consideration to it. As Deputy Cooper mentioned, this, after all, only deals with particular districts, and with one particular, though very large, proprietary creamery. There are many other creameries throughout the country, and I would like to know if the Minister proposes to take steps to prevent a recurrence of what happened in the case of this proprietary creamery. Seeing what has happened in this case, is it not likely that some proprietary creameries might get active in their opposition where the co-operative creameries exist, with possibly the idea that eventually they will be bought out at a fairly good price by the Government in order to prevent opposition? There may be nothing in that suggestion, but I would like the Minister to make our minds easy on the point. Arising out of what Deputy Baxter said, the Minister told us that the total sum the State would have to bear in this case would be about £100,000, plus the cost of liquidation and transfer. I took the Minister to say that he estimated the losses on the redundant creameries would be about £50,000, and on the redundant condenseries another £50,000, but he did not state what additional sum it would cost the State in liquidation and transfer.
Mr. HOGAN
It would be hard to say.
Mr. O'CONNELL
I realise that it would be difficult to do so. With regard to these losses, could the Minister say whether there was any understanding with the co-operative creameries, or was any undertaking got from them before the bargain was finally completed, that they would be prepared to pay for these creameries what they cost the Government? If there was no such understanding with the creameries, it was a pity, as it would ensure that, as far as possible, there would be little or no loss in the passing over of the creameries to the co-operators.
I assume that the Minister and his Department are taking every possible precaution to secure that the State will get good value for the money expended. From the statement which has been supplied, and the Minister's explanation, as far as I can see that was done. I think on the general principle, and the fact that this is an effort on the part of the State to come to the aid of an industry and to regulate it so that there will be no unnecessary loss, no unnecessary overhead expenses, in so far as the State has done that, I think it is worthy of support, and I am prepared to vote for the Supplementary Estimate.
I congratulate the Minister on the very bold step he has taken in this matter, and I hope before long we will see other Ministers also taking bold steps to create industries, and so establish a market for the butter or the cream from the creameries. Many of these creameries are at present operating in the district I represent. In two parishes they were promised creameries, and we expected that they would be built by now were it not for the steps taken by the Department of Agriculture. When matters are being settled, I hope the claims of these parishes will be met by the Minister at his earliest convenience. There are redundant creameries in the district. We have two creameries in Mitchelstown and two in Ballindangan. I expect that some of these will lose their licences. If they are to be sold, I hope that these two parishes I have mentioned will get a chance of buying them at their market value. I notice in the circular issued this evening that there are three grain mills also for sale. I have a shrewd suspicion that one of these grain mills is in East Cork. I hope the grain mills will be retained and worked by the Ministry, because other industries, such as bacon curing, could be carried on in connection with them, as there is a splendid water supply and everything necessary for the carrying on of industries. However, I trust the Minister will place restrictions on those creameries so that the money of the State will not be used against some members of the State, that those co-operative creameries will not be the means of closing up shops in the towns and villages, so hunting a portion of the population to a foreign land. While agriculture is the staple industry, and while we will do everything possible to help it, I think it should be recognised, and many of the Deputies on those Benches do recognise, that it is not a profitable enterprise, and not a fair and square deal, that a section of the community should be victimised and beaten by a whip bought by their own money. The Minister and the Department of which he is the head, and they might well be proud of him, are doing everything possible to foster industry and help those people, but I hope, at the same time, he will see that he does not injure anybody else.
I heartily support the motion of the Minister for Lands and Agriculture. In my opinion it will place the dairying industry on a firm footing, as, at present, its overhead charges are out of proportion owing to the superfluous creameries in the country. I am well aware that the co-operative movement has been severely criticised owing to failures of co-operative creameries here and there throughout the country for some years, but that was due solely to the overlapping of the co-operative interests and the proprietary interests in competing for the raw material. Sir Horace Plunkett laid the foundations of the co-operative movement solidly, as we can see, viewing the circumstances of the industry to-day. It remained for the present Minister for Lands and Agriculture, with one bold sweep, to rear a superstructure on it. In fact, one should be familiar with the dairying industry to estimate the incalculable benefits of the project that the Minister has laid before the House. I think it would be well if I were to place before the Dáil the concrete case of a creamery working under the old conditions, which I investigated myself. The supply of this particular creamery was 4,000 gallons per day. We could accept a 50 per cent. increase in that supply, with a capital expenditure of about £200 (for one cream vat), without adding one shilling to our salary or wages bill, or one hour to the day's labour for the hands. We could, in addition, accept cream from an auxiliary handling about 4,000 gallons of milk, by installing one other cream vat—the only outlay we would require. If we increased our output without any increase in overhead charges, we reduce our manufacturing costs by a corresponding percentage. Other savings which would accrue from an increased supply, if the Minister's motion is accepted by the House, in regard to this concrete case would be that rent and rates, depreciation and coal, would be spread over a greater output.
At present it takes two hours to separate 4,000 gals. of milk. Another 2,000 gals. could be separated in corresponding time with an infinitesimal cost to the coal bill, as anybody familiar with steam engines is aware of. Having got up the proper amount of pressure it would cost practically nothing to keep on the pressure for an hour extra. Taking into consideration the saving in wages and salaries, depreciation, and cost of coal on the increased output, I certainly would not be exaggerating by stating that the suppliers in that particular creamery district would benefit to the amount of £1,000 a year. The particular case I have cited would be typical of 75 per cent of the co-operative creameries of the country. The acceptance of this motion will help forward the movement at present being considered by the creameries for central marketing. The output of the creamery proposed to be bought out represents about 30 per cent of the exportable creamery butter. I need not go into the benefits of central marketing as it does not arise on this motion. The motion of the Minister has been welcomed wholeheartedly by co-operative creamery committees as it practically means the salvation of the industry. I believe that practically no loss will result from the re-sale of the creameries. I have been authorised by the committee of the co-operative creamery in which I am interested to make an offer on their behalf for two auxiliaries of the company about to be bought out. In fact, the biggest difficulty will be allocating the sales of the creameries according to the demand.
There are just a few points in regard to which I would like to get some information from the Minister. At the conclusion of his opening statement this evening I put a question to the Minister as to the number of hands likely to lose their employment as the result of this scheme. The point is an important one, because I have heard it suggested that it is likely that 60 or 70 creameries are likely to be abolished. That would certainly mean that a considerable number of hands will lose their employment. There is another point that I am anxious to get information on, and I would like to know if the Minister has considered it. It is: what effect will this have on the price of butter and milk to the home consumer —this wiping out of competition and the giving of a monopoly to the co-operative creameries? Is not that, I ask, likely to lead to an increase in the price of butter and milk to the home consumer? I would like to know if the Minister has considered that, and if so, what steps he proposes to take to safeguard the home consumer against undue increases in price in the case of those commodities. I think most Deputies will agree that the Minister has taken a bold step and a wise one, and personally I am glad that the farmers' representatives in this House have come to see that there is something to be said for the protection of industries. This is essentially a measure of protection. We have been told in this House and outside of it that it was impossible to protect the agricultural industry or any branch of it.
Mr. HOGAN
By tariffs.
This is a subsidy of over £100,000 raised from the general taxpayers to put the Irish dairying industry in a position to meet competition from foreign countries.
That is not right.
That is what it is, call it what you like, whether the term be protection or subsidy. At any rate it is the State coming to the aid of the agricultural industry. I do not quarrel with that. I think that the State has a perfect right to come to the assistance of the agricultural industry, and that it would have a perfect right to come to the aid of the several other industries in this country. But, for my part, I would like to see a little consistency in the matter. I think myself that it is a wise step, but I would like to be satisfied that the Minister is going to safeguard the home consumer in the matter of the products of those creameries. I am also anxious to hear from him as to the number likely to be disemployed as a result of this scheme and what provision, if any, is to be made for them.
I think that we will have to pass over the pleasantries indulged in by Deputy Morrissey and some other Deputies. I think we may pass over also the speech that was made by Deputy Cooper. It reminded me very much of the Spanish method of making love. Listening to Deputy Cooper one could see in the window "Miss County Dublin" and outside the Deputy serenading her. I think, and I am glad to observe, that the House thinks in the same way, that the Minister's proposition in this matter bears the hall-mark of statesmanship. It was impossible for anyone outside of the Government to deal with the position that had arisen. The Government and the Minister particularly have shown their courage and their foresight by stepping in at this moment. Their action at this critical time will, I believe, tend to preserve a movement that must be the basis of the future prosperity of this country—that is the co-operative movement.
I do not view this proposition as a gift to industry. It cannot be regarded as such inasmuch as a very small portion of the country will be affected by this. It is no gift to the rest of the country. The rest of the country will be called upon to subscribe their portion although this matter will, in no way, affect them. This condensed factory, or this privately-owned creamery, only extends to a few counties. It does not touch the others. Therefore, they will be contributing as much as any other citizen in the State. The great thing the Minister sets out to preserve is the co-operative movement in the country. I admire him for that. I can visualise the position if the war between the two warring factions is carried on. It is possible that this firm, Lovell and Christmas, may win, as he stated, the first round, and I can visualise the position of the guarantors in all those areas. I can visualise the five, six, or twenty men connected with every creamery being ruined, being swept economically off the face of the country in order to meet their liabilities. I can visualise the pioneers, the best men in the country, that have stood up and favoured the co-operative movement, being swept away, and that would be a sad day for this country.
This, I think, cannot be regarded as a subsidy. My only regret is that the £100,000 will not be made good by the people whom this is to benefit. I think that is the only blot on the whole proposition. I would much prefer that those people would be able to make good the whole debt.
I regard this Vote as an effort on the part of the Minister for Lands and Agriculture to evolve order out of chaos. There is no doubt that at present the dairying industry in this country is in a chaotic condition, due, in the first place, to the depression that prevails generally in agriculture, and, in the second place, to the competition in certain parts of the State between the proprietary and co-operative systems. It has always seemed to me that in a small State like ours it is impossible for the two systems to survive side by side, and I think the Minister has acted wisely in accepting the offer made by the directors of the proprietary creameries in this country to effect a deal with them for the purchase, outright, of the proprietary system.
After all, I think one can easily visualise the condition of the dairying industry in this country in two or three years' time if competition were allowed to continue on its present lines. Competition of that kind would have a serious effect on the dairying industry, and I believe it would mean that it would retard anything in the nature of co-operative development for a number of years. Deputy Baxter complains that this will only confer a benefit on a certain limited area. I am in exactly the same position as Deputy Baxter. The constituency I represent will derive no immediate benefit from a vote of this kind. I recognise, however, that this is one of the preliminary problems which the Minister for Lands and Agriculture has got to deal with before he can put into operation a forward agricultural policy. It is necessary to get the proprietary system cleared out of the way before he can put into operation a Co-operative Act or pass legislation for the purpose of establishing an agricultural credit corporation. This is certainly one of the obstacles which must, first of all, be cleared out of the way.
Deputy Cooper referred to the fact that the State seemed to be spending an enormous amount of money on agricultural development. As a matter of fact, in comparison with other States, we are spending very little money on agricultural development in this country. Co-operation in other countries has made enormous strides, particularly since the war, and we, in this country, are at least twenty years behind countries like New Zealand, Australia, Canada and Denmark, competitors in our main markets. A bold move such as the Minister for Lands and Agriculture has made to-day I believe will have a healthy psychological effect on the country and on the agricultural industry generally. It will give a tremendous stimulus to the development of the dairying industry. I cannot see that there is any point in Deputy Cooper's remark that this venture is the beginning of State Socialism. After all, it is proposed, as the Minister pointed out in his statement, to sell the proprietary creameries to other groups of co-operative creameries, and I have not the slightest doubt that the existing co-operative creameries will be very glad to avail of the opportunity of buying out the redundant proprietary creameries and availing themselves of the milk supply which these creameries are getting at the moment.
It is rather hard to expect that we should be able to give a considered opinion upon the financial problem connected with this Vote before us to-day in such a short time. I rather agree with the Deputy who stated that this matter should have come before the House in the form of a Bill. I can understand, in the circumstances surrounding the case, that the Minister is obliged, owing to the urgency of the matter, to bring it before us in this form. For that reason, I do not profess to give any criticism with regard to the financial aspects of it.
As some Deputies have remarked, this is a form of State Socialism. I do not intend to argue that point, because it seems to me that, whether we like it or not, we are gradually drifting into State interference with many of our activities. While it may not be regarded as State Socialism, it is getting away from the individualistic policy. Personally, I am inclined to be an individualist. I would like to see people helping themselves and to see business developing; but whether we like it or not, the State is going to take a larger share in the activities of the country than in the past. We have to accept that situation.
Certain Deputies are making great points with regard to protection. They are awfully anxious to insist that farmers are being protected in every shape and form, and they refer to the grants the farmers are getting. I would like to see protection of this kind given to industry; this is the right kind of protection. This is a case of the State stepping in, making a definite deal, giving a definite grant confined to a certain amount of money so as to place an industry on its feet. That is very different from giving a blank cheque, as is the case with protected industries. Once those industries get protection, they batten on the consumers of the country for all time. This is not protecting or boosting up an industry for the purpose of allowing that industry to batten on consumers, charging them an enchanced price. This is to enable an industry to compete with other industries. When Ministers ask us to make reasonable grants to enable Irish industries to compete with those of foreign countries, we should be prepared to facilitate them.
Will the Deputy tell us how the price to the consumer is controlled from the creameries?
We are not discussing protection or free trade now.
Deputy Morrissey is very anxious about the consumer. This is not going to have the slightest effect on the consumer, and I am sure, when the Minister is replying, he will confirm that statement. The question for us to consider is whether the State is getting good value for its money and whether the farmers are going to get good value in the creameries which are going to be handed over to them. We are given certain figures relating to the price paid by the State to the owners of these concerns. I am not in a position to say if the Minister is justified in paying the figure he has mentioned. Of course, the Minister may have certain information which is not in our possession and which enables him to state whether or not he is getting good value. The price paid for this concern is practically altogether made up of the sums which have been put into the business by the different parties concerned. That amount comes to £365,000.
Mr. HOGAN
No; the amount comes to £300,000.
The amounts given by you came to £365,000, made up as follows:—Cleeves, Ltd., £79,000; Messrs. Lovell and Christmas, £100,000; compensation for losses, £16,000; paid to farmers for milk supplied, £40,000; value of the Newmarket Dairy Company, £39,000.
Mr. HOGAN
£90,000.
You gave an item of £39,000 for something, and £90,000 for motor-cars and other equipment. Those were the figures I got.
Mr. HOGAN
I think the Deputy's figures are wrong. Perhaps the Deputy would like me to give them to him again. They are:—Cleeves, Ltd., £80,000; paid to farmers, £40,000; Newmarket Dairy Company, £90,000; new and additional machinery, transport, etc., £90,000, the whole making about £300,000 odd.
The figures given by the Minister at another stage included £100,000 put in by Messrs. Lovell and Christmas.
Mr. HOGAN
That is right. There are certain figures on the books, and they include £100,000 put in by Lovell and Christmas; £225,000 for the numbers of shares, and £16,000 for compensation. There are bank overdrafts appearing on the books. The question is how were they spent. Approaching it from another way, you get the figures I have just given. The moneys that appear in the books were spent in this way:—Cleeves, Ltd., £80,000; Newmarket Dairy Company, £90,000; paid to farmers, £40,000; additional machinery, etc., £90,000. There are two sets of figures; one set of figures indicates what was put into the business. The next question is how were those moneys spent, and it was in order to give Deputies an idea of that, that I went down the list.
I hope the Minister will correct me if I am wrong in my figures. The paid-up capital of the business is £240,000. Messrs. Lovell and Christmas lent £100,000. I take it the £240,000 represents money put into the business in cash by the owners?
Mr. HOGAN
£240,000 was paid up, but that does not mean paid up in cash. That includes bonus shares. The exact amount representing cash in shares is £225,000. In addition, there was £100,000 loaned by Messrs. Lovell and Christmas. Then there are bank overdrafts, moneys for compensation, etc., and those tot to £400,000, which is the total amount I estimate was put into the business.
It would appear, then, that we are getting the assets of the firm at a lesser price than was paid by the owners?
Mr. HOGAN
Less than the money put in, but £100,000 represents trade losses—trade losses in one sense, but in another sense not trade losses, because it was money spent to re-establish good-will.
How much money did Messrs. Lovell and Christmas put into the business from start to finish?
Mr. HOGAN
I could not say exactly, but the Deputy can take it the figure of £400,000 which I gave, is not far wrong.
If that is so, my ideas have changed. Then the owners are losing something over £35,000? What is the business worth at the present time and what would it be worth in a year's time? I am not in a position to say, but there are people who declare that if the Government let it go for another year they would get it at probably half the price. I do not say that is the case. There are other factors which may have made it necessary for the Government to step in. It is a question of balancing one thing with another, and it appears to me at this stage that we probably have got the business at just about its value.
I do not say we have got it at less than its value. I think we have paid sufficient for it. We agree that the elimination of this competition that was obtaining was necessary and if this elimination does not take place now it should take place some time, and in the meantime an immense amount of harm might be done to the dairying industry. Some steps had to be taken by somebody to do away with the uneconomic competition which has been taking place for some time. It undoubtedly opens the way for the development and the proper marketing of butter, which has become an absolute essential to the agricultural interest in this country. Deputy Cooper made a lot of capital out of the fact that the Government is entering into trade. As a matter of fact the Government is not entering into trade at all. It is simply taking over the factories of this company with the idea of getting rid of them to suitable purchasers at a suitable opportunity. I take it that Deputy Cooper was not really in earnest when he said this. I take it he was only making——
Mr. P. HOGAN
A speech.
Well, that he was making capital out of it. I have been asked by certain people in my county to draw the Minister's attention to a certain fact in connection with the condensed milk creameries. I have been closely in touch with the development of this particular factory, more closely than anybody in the Dáil. The matter to which I wish to draw attention is the losses which the farmers of Tipperary suffered owing to the taking over in 1922 of the creameries by what we call the red flaggers. Certain moneys in connection with the sale of butter by the Soviets who had charge of the creamery at the time came into the hands of the Minister for Finance. I do not know how these moneys were used. I think they were retained as a set-off against compensation paid by the Government. At any rate, the farmers got none of that money. Over and over again I have emphasised the fact that the Government have dealt harshly with the farmers over those losses in 1922.
The Minister has been emphasising the fact that the Government is fair to everybody. I distinctly state that in this matter the Government is unfair to these farmers who suffered through the fact of these creameries being taken over by the red flaggers. There is now an opportunity of making reparation. There are two classes of people who have claims in that regard. One is the class for whom I have most sympathy—those who supplied milk to the creameries for a short time—six, seven, ten or fourteen days, in ignorance of the real state of affairs—that the creameries were not controlled by the owners. Those people got no payment whatever for the milk supplied. In addition, there is a second class of people who are making a claim.
I am afraid this matter does not concern the Vote at all.
It is really connected with this motion.
There is no sub-head in the Vote dealing with compensation of that sort.
I call attention to it. The Minister is well aware of the fact, and I hope he will meet the case. By so doing the Minister would be purchasing the good-will of the suppliers. There has never been real good-will in connection with those creameries. The difficulties the present proprietors are in are due to the fact that they took over the creameries without the good-will of the farmers in the district.
I join with the other Deputies in congratulating the Minister on the scheme he has formulated. I think it is a marvellous and wonderful tribute to him to say that he has received from all parts of the House congratulations on this scheme. The reason I say that is that at the present period, on the eve of a General Election, to find that any scheme put forward by the Government is having the unanimous approval of the House, certainly looks as if the Minister for Agriculture had the four-leaf shamrock.
The other parties are broadminded.
Though the scheme does not in any way benefit my constituents; I am not narrowminded enough to say that we should not contribute our portion to the other counties that are benefiting by it. I am sorry that Deputy Cooper is not here, as he complained, on behalf of the people of Dublin, that they were obliged to contribute for what the various counties in the country areas were receiving from Dublin. My complaint is the very opposite. I say on behalf of the country towns that there is entirely too much centralisation of authority in Dublin and too much benefit coming to Dublin. I am not at all in agreement with Deputy Cooper's complaint that Dublin has to pay for a considerable portion of whatever benefits may be obtained.
I think we ought to be just to Deputy Bryan Cooper, who is away. He never complained. He only pointed it out.
I understood Deputy Cooper to say that Dublin would have to pay a portion of whatever taxation would be required to carry through this scheme in the country.
He expressly said he did not complain.
I am in complete agreement with Deputy Baxter in appealing to the Minister on behalf of the other counties which do not benefit under this scheme, and there are many others. There are six counties benefiting under this scheme. The other counties do not benefit. I would say that schemes on a smaller scale, that could be formulated in the various other counties, should receive some financial assistance from the Government to develop them. I believe that this step that has been now taken might be followed up all over the country in the other counties which are not benefiting under this larger scheme.
This debate seems to have developed quite an atmosphere of mutual admiration, and I will not embarrass the Minister by adding to the very many compliments that have been paid to him. Undoubtedly he was confronted with a very grave crisis, and it was really a case of a desperate disease requiring a desperate remedy. I am afraid it is rather late in the day now for us to be talking about taking a step in the direction of State Socialism or of not being true to our ideals about free trade or protection, or anything of that sort. I fear that Deputy Heffernan and myself and others, by our votes on more than one occasion, have laid ourselves open to the suggestion that we have not always been, perhaps, consistent. The main point about this proposal is that the State will be paying a sum of about £100,000 to re-establish one of the premier industries in the country. I do not consider that a very extravagant figure, because, although Deputy Heffernan suggested that the State might get a better bargain by waiting a little longer, the Minister was obviously confronted by a condition of affairs that could not afford to wait. The two interests were mutually destroying one another. Competition was gradually eating a hole in the trade, and if the Minister had waited any longer the whole industry would have been in such a precarious condition that he would have found it very difficult indeed to resurrect it and put it on a firm basis.
One of the benefits I can see as a result of the Minister's action is one that has not been emphasised as it should have been, that is, the gradual combination of the creamery business into one large unit, because I can see that that is the ultimate aim that the Minister has in view. That will give the Irish butter industry an enormous advantage from the marketing point of view. Unquestionably, one of the greatest difficulties that the Irish butter industry has to contend with is the marketing difficulty. There is too much internal competition, too much competition between small lots going to the London and other markets, without due regard to the time when they appear there and the quantities which may be available at certain times. Undoubtedly in this respect the bigger the unit of butter placed on the market and the more control there is over the time at which that butter will be placed on the market the better the Irish industry will be able to meet the very severe competition which comes from Denmark and other countries. To my mind, that is really the very greatest solid advantage which will arise from this proceeding.
As one or two Deputies said, it is difficult to give a reasoned criticism of this proposal at such short notice, and I must confess that there are one or two parts of the proposal on which I am a little bit cloudy. I think one was referred to by Deputy O'Connell, that is, the question as to what extent the Minister can guarantee that the creameries which he is going to take over will be absorbed by the co-operative creameries which will be left, and as to whether he has any understanding with these surviving co-operative creameries with regard to the terms on which they are prepared to take them over. I was very glad to hear from Deputy Hogan that the creamery with which he is associated is now prepared to make a definite offer for at least two of these creameries. That is a matter on which, perhaps, the Minister would give us a little more information. Another point about which I am anxious to know a little is as to the extent to which the existing managentent will be taken over. What is to become of the existing management? There must be a great many skilled men, managers and so forth, and are their services to be at the disposal of the new combine, or is any provision to be made for taking them over? On the whole, I think that the Minister has dealt in a very courageous fashion with what was, undoubtedly, a very serious crisis, and it is really refreshing to find such wonderful unanimity of opinion on this matter in the House.
took the Chair.
I appreciate the way this matter has been received by all Parties. It will make a very big difference in the difficult work of disintegrating and transferring the property. I daresay that Deputy Cooper did not mean himself to be taken seriously. He talked about State Socialism. People should not use these terms loosely. There is no use, in fact, using them without first defining them. But I do not think there is any necessity to go into the question as to whether or not this is an essay in State Socialism. We do not propose to run a toffee factory, or mills, or creameries, or anything else. We propose to get rid of these as soon as feasible. Deputy Cooper, apparently, did not listen to what I had to say in the afternoon and, apparently, knows very little about the condensing industry, whatever he may know about the creamery industry. He regretted the fact that I was not a business man. It appears to me that business men are a kind of caste. They need know nothing about business, provided they belong to that particular caste that is known as business men.
I am afraid in this respect that Deputy Cooper is not a business man. He made the point that I had been most unwise, from the point of view of the future of the condensed milk industry, in announcing that the bulk of Irish condensed milk is made from separated milk. If he knew anything about the business side of the organisation he would know that they advertise that fact themselves. Equally he would know that everybody on the market is aware that unless condensed milk is advertised as made from whole milk it may be taken for granted that it is made from separated milk. Deputy Cooper spoke about redundancy amongst co-operative creameries, and he asked me what I intended to do about that problem. He, apparently, did not listen to what I had to say on the matter this afternoon. He regretted that I was so foolish as to state that I proposed to transfer immediately these properties which we intend to sell, not to the creameries but in the open market. Again he misunderstood what I said, and I think I was quite plain. I said that we proposed to transfer the creameries as soon as possible, not the other property. We can hold the other assets, and we do propose to hold them until we get their value.
There is just one point that I would like to clear up. It was stressed by a few speakers—Deputy Baxter, Deputy Heffernan, Deputy Cooper, Deputy Roddy, and others. The point was made that this transaction will be a benefit to a limited area, that it will not affect other districts, and I have been asked what we are going to do with them. I think that that is a complete misconception. I would not delay five minutes on this transaction if it merely meant purchasing a certain number of creameries and handing them over to certain other creameries. If the significance of this particular transaction was confined to the effect it would have in the limited areas where the company competed with the co-operative societies it would have very little significance indeed. I did point out that even from that limited point of view the transfer was really good business to the limited number of societies concerned, that they would be saving in overhead expenses about £40,000 to £50,000 a year, and that that would more than pay twice over the interest and sinking fund on the total price of the creamery. But that is only incidental. If this particular transaction has any justification it is only that it enables us to go ahead with our policy for the dairying industry as a whole, and that policy is to pass the Co-operative Act, containing all the provisions which I outlined this afternoon, and put it into operation, and, secondly, to pass the Agricultural Credits Act and to establish the Agricultural Credit Corporation. That is the policy. The other is a mere preliminary, a necessary preliminary, a vital preliminary, but nevertheless a mere preliminary, with only a very limited significance, except for its significance as being a preliminary to the policy itself. That policy will affect districts where dairying is carried on directly, and indirectly, of course, it will affect every other district, because Irish agriculture is interlocked. Dairying is carried on all over the South, even into the Midlands, to some extent in the West, and all over the North. But even where dairying as such is not carried on there is the live stock trade, the pig trade, which in turn depends on dairying. That policy must, if it is put into operation, affect every district in the whole country. I think Deputies should not approach any problem from the point of view of "What is this district to get, and what is that district to get?"
This proposal is not a proposal of giving a dole here and a dole there, to give a certain amount of compensation in one direction and to make, so to speak, an equivalent grant in another. You get nowhere on that line. That is not a policy; it is simply a system of doles you carry out for the want of a policy because you have no policy, in fact, to carry out. That is not the idea. The idea is to reorganise so far as it is possible the dairying industry, by passing these Acts and establishing that institution. Again, I want to emphasise that this reorganisation must be carried out by the creameries themselves. We must give them the means but they must do it. It is not for the State to do it, and so far from this being an essay at State Socialism or an attempt to initiate an era of State interference in all industries, it is an attempt on the part of the State to disentangle itself from interference in industry. The idea is to do the necessary once and for all, to provide the means for the industry itself and then let the people concerned solve their own problems.
It was mentioned that there was a problem of redundancy even amongst the co-operative creameries. I adverted to that in my opening statement. There is such a problem, but it is a problem which can be easily solved by a co-operative system operating within the limits and with the aid of the Co-operative Act on the one hand, and with the assistance of the Agricultural Credit Corporation on the other. These two factors will enable them to solve that matter of redundancy, to solve their marketing problems, and any other problems they may have. It would be quite impossible for the State to interfere, for instance, in marketing. It is purely a business, a commercial transaction, and such interference would be both costly and unsatisfactory to the State and to the people concerned. It is equally improper and wasteful for the State to interfere in the way of attempting to solve some of the other problems which are facing creameries. They are akin to the commercial problems that face every other business. Our duty consists, as I see it, of putting means at their disposal, of putting them in the position to solve these problems, to give them the responsibility, and I have not the slightest doubt that once they get that responsibility and the means, they will rise to it. Responsibility is a great educating force. I have no doubt whatever that once you have a big organisation with the requisite means, with requisite credit, the big man will appear. It will attract him everywhere. There will be work there that is worth while, and in that way, apart from the material benefit, it will be of great educative value to the country.
There was another important point raised which I would like to deal with. It was raised by Deputy O'Connell, and again by Deputy Egan. I was asked had we any guarantees that the creameries would do their part, had we any consultation with the creameries— in a word, could I indicate in any way what the attitude of the creameries concerned would be. Would they be anxious to take these creameries over and would they be willing to pay what we purchased them for? As to their anxiety to take them over, there is no doubt about that. They will be extremely anxious to take them over, and, as Deputy P.K. Hogan pointed out, there will be two or three looking for the milk supply of the same redundant creamery. There are twenty-four million gallons of milk to be divided, and that means a very big advantage. Somebody is going to do really well out of it. In so far as the creameries are concerned, you can take it for granted that every creamery within the area and on the borders of it, will be anxious to get its share of that supply, and the real trouble will come when the supply is being apportioned to the creameries, because that, in fact, is what the closing of the redundant creameries really means.
Then, there is the other question— will they take up the purchase money? Before I answer that, perhaps I would say something on the point raised by Deputy O'Connell as to whether we have consulted them. We have not consulted them. We have no definite guarantee, and for this reason. Perhaps I would say again what I said this afternoon on this point:
In considering the application it was obvious that in normal circumstances the attitude of the Minister for Finance would be that if the co-operative creameries concerned purchased, he would lend the money required to supplement local capital, provided he approved of the price and was offered sufficient security.
There was nobody in the country that you could easily put your hand on who would negotiate and act as a carrying body and who would be willing to offer £350,000 worth of security. There was no concrete body to be had round about except a body set up for the purpose who would offer security for £350,000.
This attitude, however, could not be adopted in this case. It would be merely another way of refusing to have anything to do with the matter. It is obvious that the Company could not negotiate on the basis that, if and when a price was fixed as between the negotiators, each and every one of the creameries involved should agree to it. Any small proportion of the suppliers could prevent the sale by disagreement, and the Company would then be in the invidious position of having offered to sell, having revealed its exact position, and to some extent, its trade secrets, and nevertheless having to carry on because the ultimate purchasers had refused to agree amongst themselves. This was out of the question in this particular case. The farmers concerned had learned a very bitter lesson as a result of the liquidation of Cleeves.
It would be, in my opinion, out of the question in any case; in this particular case there was no question about it.
In these circumstances, the Company could not afford to allow a feeling of insecurity to grow up amongst their suppliers. If the Company attempted to negotiate in such a way as to make it necessary to consult the suppliers to co-operative creameries all over the area, within which its operations were carried on, the inevitable result would be that at an early stage after these consultations became public, the Company would begin to lose its own suppliers.
I think everybody from the district will appreciate that.
If a large number of the suppliers thought that the creameries which they were supplying were likely to be closed in the near future, rightly or wrongly, they would come to their own conclusions, and they would see what they regarded as very good reasons for being amongst the first to transfer their milk supplies.
There are obvious reasons why they should do that which I need not go into. That point of view was put up, of course, by the Company, and there was no answer to it. Deputies have to remember that a committee of a co-operative society cannot commit its members to a financial transaction of any magnitude—there must be a general meeting. Imagine trying to negotiate with general meetings all over the country! The first few general meetings held would mean that the Company would have to sell at whatever price they got. They could not draw back from it. If they did a feeling of insecurity would have developed. It would be known that the Company was anxious to sell, and they would simply be in the position that they could not draw back.
On the other hand, the Government could not consult the creameries for that reason until the price was fixed. If the Government insisted on the creameries being consulted before the price was fixed, Messrs. Lovell and Christmas would be absolutely entitled to say to us: "Even if the creameries do not agree, you must fix the price, you must pay the price." They could not allow any representative of the Department of Agriculture or the I.A.O.S. to go down and consult all the creameries and broadcast it all over the country and at the same time give them the option of withdrawing from the bargain on the question of price. It would be out of the question. The difficulty was this: There were bodies to carry on negotiations. In fact, the negotiations were carried on by the solicitor to the I.A.O.S., and he had at his back the advice of officers of that organisation and of the Department of Agriculture. There was no difficulty about conducting the negotiations. But there was no body that could take over and put the Government in the position that I suggest is the normal position; that could say to the Government: "We will speak for the creameries; without consulting them; without going round to the co-operative societies, we speak for the creameries. We have bought these at £365,000; we want the money from you, and we are in a position to offer security." There was no such body, and hence we had to do it ourselves.
Deputy Baxter made some very useful suggestions and expressed a point of view that I was extremely glad to hear. He pointed out that we were to some extent taking some risks and asked what my views were as to the eagerness of the creameries to shoulder their liabilities now. He expressed the view that it was their duty to cooperate; to rise to the occasion and to do now what they would have gladly done three weeks ago if they were approached by a private individual, namely, to take their fair share. He asked, quite rightly, and so did Deputy O'Connell and others, what we proposed to do in the event of the creameries taking another attitude. All these difficulties were present to me from the beginning, as I tried to indicate in my opening statement. We have to some extent cast our bread upon the waters, but I believe that it will be returned. We are carrying the baby, and when the Government is carrying the baby it is only natural that people should endeavour to make all they can out of it. I will make a prediction and it is this: That in all the circumstances we will experience very little trouble from the creameries. I have been able to consult certain prominent men who have interests in the co-operative creameries, and I know their views. I believe that if left to themselves, if not interfered with, so to speak, the creameries will rise to the occasion, and that we will be able to place far the greatest portion of this money voluntarily and with very little trouble. I anticipate there will be some trouble. There will always be some minorities who will make some trouble—that is quite inevitable. Of course, I am not in a position to speak firmly on this. I know the weakness of the position. We have to a great extent, for a voluntary agreement, to trust to the good-will of the creameries. I am ready to do that, and I believe we will not be disappointed, because I am satisfied that we are in a position to give them good value.
On the other hand, if things do go wrong, and if there are difficulties, we are in a position to meet them. We have not given away all the cards. The Co-operative Bill has to come; the Agricultural Credit Corporation has to come. These are essential to the dairying industry—this is merely the preliminary. The Co-operative Bill will contain a condition that all suppliers must be shareholders. That gives us an obvious way to deal with the suppliers to the Company's creameries who will go over to the co-operative creameries, but who at the same time will not be willing to take their liabilities. There is an obvious way to deal with them if necessary. I do not anticipate it will be necessary, but if it is the means are there. On the other hand, there is the Agricultural Credit Corporation, which will be dealing with the finances of creameries in future and helping to deal with all those problems that I have indicated. And money talks. If necessary, the operations of the Agricultural Credit Corporation can be so used as to make it worth while for the creameries to take their fair share of those liabilities. As I said, I do not anticipate any real trouble. There will be some; there will be confusion; there is bound to be in the liquidation of a big company like this. There will be mistakes made; some things will be done too quickly; some things will be delayed; there will be some waste, some extravagance—there is always bound to be in the liquidation of a big company like this. But, on the whole, making allowance for all that, I do not anticipate that there will be a lot of trouble.
I anticipate that practically all the shares for the non-redundant property will be taken voluntarily and without finding it necessary to invoke the Co-operative Act. In any event, the committees of the creameries—and I am sure we will be able to deal with the committees without very much trouble —will be in a position to know that, so far as they themselves are incurring liability, they will have the help of the Co-operative Act afterwards to see that any recalcitrant minorities honour their guarantees. In that way it can be put through. Trouble means delay, but it only means delay. In the end, the whole thing can be put through. The sooner the better of course, as time means money. The longer this is in liquidation the more it will cost; the quicker it goes through the less it will cost, and the better it will be for everybody. My only regret, like that of Deputy Gorey, is that the whole price cannot be carried by the people getting the property. I believe that even the whole price would be good value to them. On the other hand, it is a plain simple proposition that people should be asked to pay for what they are receiving and no more. We are asking them to pay for everything they get. We are asking the creameries to pay for everything they receive, everything that is not redundant, and grants will only be made in respect of redundant property, and, of course, only in respect of that part of any property which is redundant.
The total grant I anticipate between the condensers and the creameries will be round about £100,000. I would not like at this stage to make a guess at the cost of this transaction. Now about the other proprietors, I am in communication with them and I shall leave it at that for the moment. Deputy Morrissey raised a very important point as to the staffs, and that is the last question I have to deal with. I calculate that the staffs on the redundant property number about 180. No question arises so far as the staffs of the other properties—the non-redundant creameries, of which there are —are concerned. They will be all required. Now the staffs of the redundant creameries, of which there are about 50, are not big. It takes but a small staff to run an auxiliary, and although 50 are being closed, the total staffs will only be about 150. To begin with, these are to be closed at once. It will take some time, and in any event, the staffs are entitled to full consideration and they are entitled to consideration on the basis that this is an unusual transaction.
They have, of course, no fixity of tenure. Their legal position is undefined, or rather, I should say, their legal position is that they have no fixity of tenure. But, on the other hand, we must realise that for State reasons we have stepped in and suddenly closed up 50 institutions and we must take that into account when dealing with the staffs, and we will do so. But I must be taken to mean no more or less than what I say. I anticipate that we can do justice to those staffs in many ways. There are new creameries going to be set up. There is Government money going to be spent; there are demands every day for new managers, and, so far as I know, as far as the I.A.O.S. and the Co-operative creameries are concerned, not to speak of our attitude, they are all anxious to do the fair thing by the staffs.
I do not anticipate very much difficulty will arise, with good-will on all sides and with the position we are in to make conditions when giving Government money to the new creameries, that there will be much trouble with the staffs. I think these are the only questions that have been raised.
Will the Minister answer the question about the home consumer?
Mr. HOGAN
This is not going to affect the price of butter to the home consumer, but it ought to mean that more butter of a first-class quality ought to be made, and, therefore, will fetch a higher price, but not in the sense Deputy Morrissey wants. Further, it ought to mean that the overhead expenses will be much lessened, and between those two you have the measure of the advantages. As we are at present the price of Irish butter is really ruled by its price in the English market. The price will, I hope, be higher for the Irish creameries, because they will turn out a better butter, but it will leave more profit apart from that, because there will be less expense, but this is not going as such to affect the price of butter on the Irish market. There is just one way it would. The advantages in favour of a tariff on butter have been pressed on me, but I have always pointed out that a tariff, no matter how high, on butter would not affect the price of butter one iota. But there is a good time coming.
When the creameries are owned by the co-operative societies then a tariff will make itself felt, at once, and it will become at least practical, and I shall be anxious to see if all the people who are now so anxious to press a tariff when it is not going to effect anything will be so anxious for a tariff when it is really going to mean a rise in the price of butter exactly corresponding to the amount of the tariff put on. That will be the acid test.
Will the Minister for Finance state whether he will have a tariff this year?
Mr. HOGAN
I have nothing else to say except that the statement made by various parties in this House will make it easier undoubtedly—I had some qualms on the matter—to put this transaction through. What really would make it difficult would be if the creameries got a wrong lead and it would be easy to give them a wrong lead. I do not believe that they would succumb to it, but it will go through if everybody faces it with peace and good-will. It is in quite a delicate condition, and the debate here has made the prospects of putting this transaction through efficiently much brighter.
Mr. O'CONNELL
There is one question that I would like to ask; it is rather a technical question. What was the point of making the purchaser an unnamed individual rather than the Minister himself and his Department? Will it be the case when the agreement is completed that this individual will be the real owner of the property?
Mr. HOGAN
The legal position is that this individual is a trustee for undisclosed principals.
Mr. O'CONNELL
Does that appear in the agreement?
Mr. HOGAN
You can take it that that is the legal position. So I am informed by the lawyers, and I have to depend on them. The principals are undisclosed because they have not yet been decided upon. It is not yet certain who the holding body will be; it will require some consideration.
Has the Minister considered the position of farmers who suffered loss under the red flag régime?
Mr. HOGAN
They were paid £40,000 by the company.
I am afraid that is not so. That sum was paid for milk supplied to Cleeve's creamery and for its requirements before it went into liquidation, but no payment has been made for the milk taken under the red flag régime.
Mr. HOGAN
I may be wrong, but I am certain that £40,000 was paid by the Condensed Milk Company of Ireland, which was not a legal liability at all, to the farmers who supplied Cleeve's creamery before the liquidation and during the events to which the Deputy refers.
I think the Minister is wrong. I am sorry Deputy O'Shaughnessy is not here, for he could throw light on the subject. It was a liability of the old company. The new company were not legally liable, but it had nothing to do with the red flag régime.
I think also the Minister is wrong. The farmers to whom Deputy Heffernan referred, were not paid.
The original claim would be a matter of about a quarter of a million.
Mr. HOGAN
Unfortunately, earlier in the discussion the Leas-Cheann Comhairle ruled this matter out of order, and I was not able to go into it.
Vote put and agreed to.
Resolution ordered to be reported.
The Dáil went out of Committee.
Resolution reported.
Question: "That the Dáil agrees with the Committee in the Resolution"—put and agreed to.