IN COMMITTEE ON FINANCE. - APPROPRIATION BILL, 1927—THIRD STAGE. – Dáil Éireann (4th Dáil) – Thursday, 12 May 1927

IN COMMITTEE ON FINANCE. - APPROPRIATION BILL, 1927—THIRD STAGE.

The Dáil went into Committee.

Question proposed: That Section 1 stand part of the Bill.

Mr. JOHNSON

As Section 1 covers everything I propose to deal now with the point that I intend to raise. I want to direct the attention of the House to a matter arising out of the subsidy in respect to beet sugar. When last I had an opportunity of dealing with this question I had not had an opportunity of seeing the agreement that had been entered upon between the Ministry and M. Lippens. Since that time the agreement has been laid upon the Table, and it is now available for Deputies. I think it requires a certain amount of attention and consideration in view of the liabilities that it involves which are greater than the liabilities of which the House was informed when the Beet Sugar Bill was being passed. There are two sections of the agreement to which I want to direct special attention. The agreement is dated the 15th October 1925 and it provides "that the company shall be granted a licence or licences for the production of sugar for a period of ten years at least from the 1st October 1926. The amount of sugar manufactured by the company on which the subsidy under Section 1 (1) (a) of the Beet Sugar (Subsidy) Act, 1925, will be paid shall be the total amount of sugar manufactured by the company in the three years commencing on the 1st day of October 1926, and shall not exceed ten thousand tons per annum in the two years commencing on the first day of October nineteen hundred and twenty-nine nor fifteen thousand tons per annum in the five years commencing on the first day of October nineteen hundred and thirty-one, provided always the total amount of sugar on which the subsidy will be paid shall not exceed one hundred and twenty-five thousand tons in all in the period during which the subsidy is payable under the Beet Sugar (Subsidy) Act, 1925." There is a further clause in the agreement which is important: "The Minister hereby undertakes and agrees with the company not to agree without the company's consent to the grant of a licence for the manufacture of beet sugar from home-grown beet within the area South 53º 25' and East 7º 40'."

I want to direct special attention to the paragraph which speaks of the total amount of sugar manufactured by the company within the three years commencing 1st October, 1926. Note that there is no maximum fixed in this agreement in respect to those first three years. There is a maximum fixed for the subsequent two years of ten thousand tons per annum, and for the following five years of fifteen thousand tons per annum. But there is no maximum fixed in respect to the first three years.

When this matter was first dealt with in the House, in the Budget speech of 1925 (April 22nd), we had a statement from the Minister for Finance telling us what the temporary provisional agreement that had been arrived at with M. Lippens contained. The House, at that time, was given certain information, including the estimate upon which the whole scheme was based. The estimate was a ten-year estimate, with a total of 86,000 tons, at a total cost to the State of £1,961,000. That estimate was built up on the assumption that for the first three years the tonnage of sugar on which the subsidy would be paid would be five, six, or seven thousand tons respectively. "It is not proposed," the Minister said, "to subsidise more than one factory at the present time. This first factory is experimental.... I hope that, after a very short experience of the running of the first experimental factory, it may be possible to obtain much better terms...." The Minister also told us, in dealing with the question of the cost of this experiment: "If it is a success, and leads to new and improved methods of tillage, improvement in dairy farming, and the finding of useful employment in the fields and in the new factories... the price is not too high, and the cost is not greatly in excess of the cost of the experiment at Kelham, in Great Britain, if capital losses there are taken into account."

April, 1925, was the date of these assurances. Then the Bill came, and was under discussion, and certain criticism was levelled at the proposal of the Bill on the score that the promise was over-generous to the company. Again, in June of that year, the Minister re-stated the figures upon which the scheme was based—eighty-six thousand tons over the ten years' period, and an estimated subsidy cost of £1,961,000. The President, in the Seanad, pointed out in reply to Senator Barrington, who was urging a longer period of guarantee to the farmers than three years: "It is impossible to spoon-feed every single contributor towards the success of this particular experiment. It is one of a very expensive character, and everything was done to make it as cheap as possible. An extension in the direction mentioned by Senator Barrington would mean still a further price, and that price we are not advised it would be wise for us to pay." As I told you, the price in mind by way of subsidy was £1,961,000, or round about that sum.

The Minister for Lands and Agriculture, who might be presumed to have a clearer knowledge of the position and prospects of this experiment than the Minister for Finance or the President, said: "... No one expects you will get 10 tons here in the first years, or exactly what they get in Holland. If you did, the thing would be a gift. There would be a small fortune in it. When I say a small fortune, I mean a real good thing in it. If you could get the same yield and the same sugar content as they get in Sweden, Denmark and Holland, and in England to a lesser extent, then of course it would be preposterous to enter into this arrangement with M. Lippens." This was the June proposition, the estimate of five, six, or seven thousand tons per annum for the first three years reaching the estimated maximum of ten thousand tons at the end of the ten years' period. The Minister for Lands and Agriculture hoped that they would be able to work up to six thousand tons in the first three years.

Then the agreement was made in October and for some unaccountable reason, while there was a maximum fixed for the two years beginning in October, 1929, upon which a subsidy would be payable, and in the subsequent five years beginning 1931, there was a blank—no maximum whatever fixed for the first three years. It is under that agreement we are working. Following the agreement the plans in regard to the factory changed. A bigger factory was decided upon and, as against the factory which was declared to be the most economical by Ministers, the factory of ten to twelve thousand tons capacity, there was built a factory which, admittedly, has a fifteen thousand tons capacity and I have a shrewd suspicion that it has a capacity for a good deal more than fifteen thousand tons.

On the 8th February, this year, the Minister for Finance said: "When the original estimate was being prepared twelve months ago it was anticipate that the area under beet would be about 7,000 acres, and the quantity of sugar manufactured would be about ten thousand tons. The area actually planted was 9,500 acres, and the amount of sugar which will be manufactured this year will be about 13,000 tons." There is a slight difference in the ultimate result. As the Minister told us yesterday, the quantity of sugar manufactured was 12,000 tons. Then the Minister went on:—"It does not really make any difference in the long run that the estimate has been exceeded as to the quantity of sugar manufactured. We thought that during the first two or three years a lesser quantity of sugar would have been manufactured this year than has been the case, but our arrangement with manufacturing companies was that the subsidy would be payable on 125,000 tons during the ten years period." I do not know what the Minister thinks about it not making any difference, but when this year it is found that you have to pay a subsidy of £24 10s. per ton on 12,000 tons and that in the last years of the ten-year period the subsidy will be at the rate of £22 per ton —if he thinks that would not make any difference, then I am afraid his watch over financial conduct in the State is not just as satisfactory as it should be.

There are other consequences. I think in formulating this agreement in the circumstances there was serious negligence, first in the omission to fix a maximum sum on which the subsidy would be paid during the first three years, and, secondly, in the neglect to give information to the Dáil and the country that the original project was being greatly increased. The cost of this experiment to the State, by way of subsidy, instead of being anywhere near the estimate of £1,961,000—let us speak of two million pounds—may be up to four millions. It is almost certain to be over three millions. I say it may be up to four millions and I say that because there is no limit to what might be produced in the two years to come.

The 9,200 acres on which beet was grown last year are to be increased for this current year to 15,000 acres. So far so good. The subsidy will be paid upon the produce of that 15,000 acres. If it happened that there was as good a year in yield this year as there was last year the factory might require to turn out 18,000 tons of sugar. While it may be said that there is not much likelihood of as good a year as last year, I think one might take into account the whether and climatic risks together with increased experience and knowledge of the requirements of the crop, and on the whole there is every possibility of the crop being as successful in 1927 as in 1926. It may be a very good thing, and I am quite willing to admit at once that it will be a very good thing indeed, if the acreage is raised to 15,000 acres as compared with 9,200 acres last year, and that the yield is still greater. Let us bear in mind that that involves greatly added cost upon the State. The essence of my complaint is that this agreement was entered into, throwing upon the State this unlimited liability, without informing the Dáil of the fact.

The Minister told us yesterday that the amount of subsidy paid was £181,000 for last year's crop. The estimate, it will be noted, was £194,000 It must be also taken into account that there should be added to the £181,000 a sum of £112,000 if we are to arrive at the actual cost of this subsidy from the State. That is the amount of the Excise duty, or the Customs duty, which is remitted on home manufactured sugar, so that the cost of this experiment in the year 1926-7 was £293,000, against an estimated cost of £122,000. That is a very serious departure from the position as laid before the Dáil, and I think it is of the utmost importance that the Dáil should impress upon Ministers that when a statement of the probable cost of any service is laid before the Dáil, if there is any departure from that original statement Ministers are in duty bound to inform the Dáil of the new commitments, and that they have failed to do in this case. They entered into this agreement which raised the figure from 86,000 tons, as a general estimate presented to the Dáil, to a maximum of 135,000 tons. But what is the effect of this unlimited tonnage on which a subsidy is to be paid for the first three years? We have the maximum fixed for 1929-30, and for each subsequent year, but no maximum fixed for 1926-27, 1927-8, or 1928-9. We paid £293,000 for the year 1926-7. It is not at all improbable that the subsidy cost to the State for the next year will be £450,000, and the year following, if the company decides that it is desirable still further to try the capacity of the plant, that £450,000 may even be increased.

But there is another aspect of this agreement that I think is of even greater importance for the Dáil to take note of. What I have said so far may be countered by the statement that agriculture is in a bad way, that this is a crop that is going to relieve agriculture, and that even though we have over-stepped the mark in not taking the Dáil into our confidence and are paying away double the amount we announced that we were willing to pay for these three years, it is worth the cost. That may be the line of defence taken by the Minister. But the end of this agreement and this policy of concentrating upon the extra large factory in the one area, is to make much less likely the building and the equipment of a new factory in any other area for the next three or four years. The area that has been given over as a monopoly to the present company covers half of the fair quality arable land of the Free State. If one were to take a map and draw a line on it from, say, Swords to some few miles north of Tullamore and a little beyond Tullamore, and then go right South, just touching Clonmel, he would get an idea of the area that is monopolised to this company within which no other factory can be built in the ten years' period without the consent of this company.

I have read recently appealing notices of meetings to be held in Tullamore with a view to having a factory set up there. I am sorry Deputy Patrick Egan is not here, but he probably, as a Deputy in the Dáil, was unaware, or allowed his constituents in Tullamore to be unaware, of the fact that as a director of the Irish company he had entered into an agreement which would, in effect, prevent a new factory being set up in Tullamore. When we have given this privilege to the company to turn out up to 20,000 tons of sugar per annum—I am taking that in accord with the capacity of the plant—an agreement which will cost the State so large a sum as I have mentioned — probably £450,000—the chances of a second factory are very much minimised. Tipperary, Cork, Kerry, Limerick, or even Meath and Westmeath, are almost closed up for quite a few years as places which might expect a subsidised factory, and that as a consequence of allowing this agreement to be signed with the unlimited provisions for the first three years and with this very big area practically monopolised by the existing company.

I think it will be found that the company's policy will be to make the most of the first three years, when the rate of subsidy is £24 10s. a ton, that the total 125,000 tons will be absorbed in the first five or six years, and then no subsidy will be payable according to the present agreement. The question will then arise as to what is to become of the farmers and what are they to look forward to in respect of the price for beet. The company will be in a position to say: "We are now clear with our subsidy; we have written off the cost of the factory; we have done well for the first few years of its existence, and you, the farmer, must accept a much lower price for your beet." There will be no other factory in existence to act as a check upon the existing company, and the effect of this agreement, coupled with the policy of the company to have a big centralised factory with a monopoly at the unlimited tonnage, will be to preclude the chances of any other factories being established for the first five or six years, and then the existing company will have the farmers in a cleft stick. I say that the Government are entitled to condemnation for two things in this business: first, their failure to acquaint the Dáil with the fact that they had entered into a formal agreement which increased by 50 per cent. the liabilities of the State, as explained in the plans for the sugar beet experiment, and, secondly, that in making the agreement of October, 1925, they were seriously negligent in allowing the first three years' subsidy to be unlimited in amount and in granting to this existing company so wide an area of monopoly. I think it is a matter that ought to be the subject of close criticism by the Dáil and that a warning should be given to Ministers that they ought not to enter into new agreements which in effect add to the charge upon the State without disclosing the new facts to the House and to the public.

MINISTER for LANDS and AGRICULTURE (Mr. Hogan)

The speech we have just listened to is a good example of the fact that in this country, for every ten men who can criticise after the event, we have only one or two who can do things. Deputy Johnson is another addition to that rather big battalion of wiseacres and of critics after the event. I would ask the Dáil to go back to the time when we were arranging this subsidy, when we were endeavouring to start the sugar beet industry, and to remember the debate that took place in the Dáil before the agreement was signed at all and in the course of making the agreement. I need not delay very long over what was said and what was not said here. I do not remember that we got very much support from any Opposition quarter for the agreement. It was criticism from start to finish. The whole point of view was to throw doubt on the scheme, to show that for one reason or another a sugar beet factory would not succeed here, to make suggestions, all of which tended to keep out anybody who was even thinking of coming into the country with big capital. I remember that, so far as I could gather, the scheme was disapproved by those on the Farmers' Benches, and I do not remember that we had any great support for any aspect of the scheme from Labour.

Mr. JOHNSON

Will the Minister, before he persists in that statement, look up the debates?

Mr. HOGAN

I have read them.

Mr. JOHNSON

If he has read them the Minister will recognise and admit that my line of criticism was that this scheme was too generous, and Deputy Magennis urged that there should be even a second factory on the same lines.

Mr. HOGAN

The lines of criticism all tended towards frightening capital away from the country. Difficulties were put up from every quarter, from some quarters more than others, but the sole contribution from every quarter was to put up difficulties. That is what happened in the Dáil, but that is not the most serious part of it. We began to negotiate for a sugar beet factory in 1925, when things were not anything like as secure as they are now. As far as Belgians, French, Czecho-Slovakians, or people generally were competent to do this work, work never done before in this country, I think we began in 1924. The Civil War was then hardly over, and we were proposing to these men that they should come into the company and invest huge sums of money in an Irish enterprise.

The complete equipment of the factory, as a fact, entailed practically £400,000. That is information which I believe to be correct. In spite of everything that he heard and of all the circumstances, M. Lippens put up the factory. We are told that we gave him too many inducements to that end. What were these inducements? Does any Deputy deny that our subsidy, on the average, is close to the English subsidy at present? If they do, let Deputies take the trouble of comparing the figures. That is so, notwithstanding that there had been a sugar beet industry in England for fourteen years. Surely it should be obvious, even before the event, to the so-called business-men and to the critics that it would take a somewhat greater inducement to erect the first factory than to erect a factory after fourteen years' experience. Notwithstanding that there has been a sugar beet factory in England for fourteen years, the present subsidy to the Carlow sugar beet factory is very close, indeed, to the subsidy to the English factories. Yet we are told the subsidy is too great.

Let us compare the conditions for a moment. England, a settled country, no civil war, no rebellions, everything respectable, everything to induce foreign capital to come in, fourteen years' experience of sugar beet. That is one set of conditions. The other set is: The Irish Free State, the year 1924 —after everything that had occurred— no experience, good, bad or indifferent, of sugar beet. Nevertheless, we were able to make an agreement with M. Lippens which, so far as the subsidy is concerned, when everything is taken into account, including the subsidy towards molasses—every item taken into account—is very close, indeed, to the English agreement when you take averages. Yet we have done badly!

The fact of the matter is that people are merely able to criticise in this country. People will not get anything done. They will criticise—and they will criticise after the event. When M. Lippens had decided to go ahead with the factory on the strength of the representations made to him, on the strength of a subsidy, which, as I pointed out before, was a modest subsidy, taking English standards into account, he naturally said to us: "Well, if everything you tell us is true, if we can discount all that we have heard, some of which we have heard in the Dáil; if we can discount everything discouraging we have heard in the Dáil and outside; and if we are to take it that everything you tell us is true, there is just one guarantee, one piece of evidence we should like to have to show that we are fairly safe in going on, and that is a little Irish money." I am almost literally accurate when I say that not a penny was forthcoming. What was a foreign enterprising business-man to say, after not a penny was forthcoming? But he went ahead and put up the factory. Now that the first year is over, all the business-men and all the critics who would not invest one single penny in this factory, who did everything they could to discourage it, have now discovered that there is a big profit, and they are clapping themselves on the back and talking about how wise they are and how simple and foolish the Government were in going ahead.

Really, I think people should have some perspective. I can appreciate the point of view of the cautions man who says before the event: "This factory is going to cost a lot of money. You cannot afford a failure in Ireland; you have had enough of them and you cannot afford another; wait for a bit until things get somewhat settled and then try your hand." I can appreciate that point of view, but I cannot understand the point of view of the man who says all that, and who then, because the scheme is an outstanding success, comes along and says: "You should have known that the whole time; you should have known it would have been an outstanding success; you should have known you would get better crops of beet than in England; you should have known, notwithstanding that the Irish farmer had no experience of sugar beet, that he would grow a better crop than the English farmer; you should have known that there would be no strikes, and that he would get better value from the Irish workman than the English workman." That point of view, to my mind, is shameless, and, as I say, the country is full of it at present. No one can get anything done. No one will take a risk, come to his conclusions, back his opinions, and go ahead. Everybody waits until he gets both sides of the question, and is in a position then to blame the Government in any event.

Farmers are said to be conservative. We know they are, and I think they are rightly so. Supposing they acted up to their conservatism, and grew only 6,000 acres of beet the first year, what would the loss be? Deputy Johnson might go into that question. That was a likelihood. Was there a single Deputy who would get up and guarantee 6,000 acres before the factory was started, even at the price of 54s. per ton? Not one. If we were debating this question to-day in that state of affairs, with a failure the first year, I can imagine how eloquent Deputy Johnson would wax, how he would have pointed out that we should have examined this very carefully, and given some further guarantees to the farmer —how we should have done this, that and the other thing. Nobody had any evidence to show that the first year's crop would give a record content of close on 17 per cent.

As I am on that point, I might say that Deputies should not jump to the conclusion that this is going to be permanent, and this is probably a big factor in the situation. This whole debate is proceeding on the utterly false basis that you can afford to generalise from one year's experience. Any farmer, anybody who has ever thought twice on the question, would see how utterly false that is. There was an average yield last year of ten tons per acre. Who is going to say that it will be eight tons next year, or what the average yield will be over a period of three years? There was an average sugar content last year, which was a particularly good and favourable year, of up to 17 per cent. Would some prophet just give his views as to what the sugar content will be next year, so that we shall have just a sporting chance—in any event, that we shall not be always up against criticism of the accomplished fact? Will someone put himself in my position and indicate just what the future is going to be? We on the Government Benches are always in the position that we have to make up our minds as best we can as to what the future is going to be, and state that, and stand over it after the event. I should like someone to get up now—there seems to be such a terrible lot of wisdom—and tell me, for instance, the weight of beet we will get next year and what the sugar content will be next year. These are vital questions.

Will the Deputy say, if there is only a yield of eight tons next year, that the factory will make any profit at all? Will the Deputy say—because his whole case is based on this—that during the next three years they are going to make such a profit that they can afford to throw away the £400,000 worth of a factory at the end of the three years and tell the farmers to go to Jericho? That is his whole case, that is what it comes to. I presume he has examined the position, and that he knows something about farming—a good lot, if I may say so; one side of it, anyway. I daresay he has examined the figures. Will he tell me for my information—I do not know a lot about it—what is the profit going to be next year, on the assumption that there is a yield of eight tons to the acre—a very high yield—and a sugar content of 15 per cent.? Will the company be in such opulence that they will close their doors if that is repeated next year? I do not think so.

I ask Deputies not to show their utter lack of knowledge of agricultural conditions by arguing and generalising from one year's experience. I have often been asked my opinion as to what is going to happen about sugar beet. All I can say is this: The results of the first year are all to the good, but you cannot generalise about it. It would take at least three years—I do not say two years—before we can get any accurate deductions from the experiences of the Carlow factory. I do not say that we have not learned something this year. We have. So have the company—they have learned a lot. They have learned that they can change some of their processes, short circuit others, and so on. I do not say we will not learn more next year and the year after, but at the end of the three years we will have a certain amount of solid information on which we can go.

The Dáil is, forsooth, to blame the Ministry because the subsidy is so high and because there was a monopoly given over half the arable land of Ireland. Again, nothing like accuracy! That, of course, is not so. It is not anything like one-half of the arable land of Ireland. Deputy Johnson draws an absolutely unreal picture of what will happen. Supposing a company came here and said they would like to start a factory within the area, and forty miles from the present factory, at their own expense, and that they would pay a good price for the roots and do it for half the present subsidy. No factory, according to Deputy Johnson, could be placed there. That is just a little too innocent. Things do not happen like that in this world. If M. Lippens was asked, "Are you going to do the same thing," what is he to say? No? If he says "no," what position is he in vis-a-vis the farmers there? What position is he in for any contract outside his area? He has only one factory. He would like another, I am sure, on the same terms. Admitting everything that Deputy Johnson says, supposing this is going to be a great success— that it can be a great success, even with a very much smaller subsidy—I do not think the company are fools; I have no reason to think it; I think they know their business.

I assume that they would be anxious to share in that success, to extend their operations, and to get another factory. Supposing they adopt a dog-in-the-manger policy and refuse to allow anyone else to put up another factory, what position would they be in then? It must be remembered that there are greater sanctions in business than Acts of Parliament. The Deputy will have to learn that. If the Deputy means it, it shows an utter want of knowledge as to how business is done. Is it to be thought that Messrs. Lippens, or the company, could take up the attitude of saying: "We will not put up a second factory at this figure and we will not allow anyone else to do it"? We are also to be blamed, not so much that the subsidy is high—the Deputy has not argued that—but because it amounts in the aggregate to so much. That is the criticism. It is not that we have given a subsidy of 24/-, or whatever it is, per cwt., and that we should have given 20/-. It would be difficult to make that case because you would have to go into accounts. The case made was: "Well, you said it would be about £120,000, but it is £180,000." Surely the Deputy does not object to that?

Suppose the subsidy is 50 per cent. lower than the English subsidy and that on that calculation we expected that the subsidy would be £60,000, and it turned out that, because there was a much higher quantity of beet and a much higher sugar content, the subsidy increased to £80,000, would you not have the same position? Does not that mean that the scheme has been a success, far greater than we ever thought? Deputies who know so much about this subsidy, should have told us that beet in the first year would give 17 per cent. sugar content and a yield of ten tons an acre, that we need not have given anything like the subsidy, that they would vouch for this, and that they were prepared to give a guarantee to that effect to Messrs. Lippens. They kept that knowledge to themselves. Now, however, when a chemist has demonstrated with a test-tube and sulphuric acid that the sugar content is about 17 per cent., when a weighing machine proves that we get ten tons to the acre, and also when these facts are published in the Press, the experts tell us that we should have known all this beforehand. I do not think that there was ever such an anomalous position as that.

Here, after the first year, by every evidence, we have got a factory which is a great success, such a success that the Dáil is asked to pay more because there is such a large quantity of beet and such a high sugar content. Instead of congratulating us, Deputy Johnson comes along in the most formal way and sets up an indictment compared with which that of Warren Hastings was nothing. I am sorry that we have not to pay them £200,000, as that would mean a sugar content of, perhaps, 18 per cent. and a yield of eleven tons an acre. If it were £250,000, we could say that the minute this ten-year period is over there need be no subsidy as we have a better sugar beet than any other country in the world. I hope that next year the Minister for Finance will be looking for £200,000 or £250,000 for the subsidy. That would mean that sugar beet can be grown in this country without a subsidy and I think we will have discovered that fact at a cheap price. The business thing in this matter is, first, to buy the highest technical skill; secondly, to make certain that the farmers will grow; thirdly, to make it worth their while to give the greatest possible care to the crop so that an experiment, such as it is, will not be rendered useless and will not be injured by factors which should not enter into it. We could have got companies to make this experiment more cheaply but we might not have been so certain in drawing deductions from their results.

I did not think that the Deputy was in absolute agreement with the Minister for Finance. I thought he was putting up the case that this meant no second factory. What is to prevent a second factory, or rather how does this experiment prevent a second factory from going up? Is it because it was a success? If it were a failure, would it make it absolutely certain that we would have a second factory? Surely, the Deputy is not arguing that if we put up a factory with a lower subsidy, it cannot compete with this factory. I am at a loss to find a single reason that could be put forward by any Deputy to show that the success of this factory makes it more difficult to put up a second factory outside the area. People say that a second factory could not be put up at a lower subsidy because it could not compete with this factory. That is nonsense. This factory cannot take any more beet. The second factory could sell sugar against this factory. How is Tate doing it? The Deputy's point is that the company could say that no factory can go up here, and that they can take all the risk of saying that. In other words, they could say to the Government: "We will not put up another factory here, and we will not allow anyone else to put it up." Ordinary business influences and factors would compel them to put up a second factory.

Then we had the same old argument trotted out about the unfortunate plight of the farmer at the end of the three years. The farmer, apparently, is to be in a helpless position. First of all, we have it on the authority of Deputy Johnson that the next two years are going to bring forth the most pronounced success. You are going to get the same sugar content, the same yield of beets, and the factory is going to clear capital and make profit. They will then say to the farmer that they will pay him only £1 per ton for his beet—that is, at the end of the third year—because the Government neglected to fix the price over a ten-year period. First of all, that contention is based on a fallacy, which nobody has made the slightest attempt to establish. The Deputy could not prove his case, because he does not know what is going to happen during the next two years. He does not know that the factory will make the whole of their original capital and a fair amount of interest on that capital. I hope the factory does succeed in doing that, because, if it does, there are bright prospects for sugar beet in this country. Even admitting that they make £400,000 in the next two years, with from £50,000 to £100,000 as interest on that during the period, what are they going to do? Are they going to close the factory? You have here business-men with £400,000 capital in the shape of a factory. Because they have made a good deal of money during three years, they are going to close that factory. They will take in no more beets. The same argument might be used about a big wholesale establishment, or about any other factory. It might be argued that because a certain concern did extremely well in the first three years—cleared off its capital and made a big profit—the owners would be so satisfied that they would refuse to take in any more stuff for sale.

It is argued here that the factory will refuse to give a price for beets which would, on the one hand, induce farmers to go in for the crop, and, on the other hand, leave a decent profit for the factory. The factory will be in this dilemma: they have £400,000 worth of property; that property will be there, even though they make money. The mere fact that they make £400,000 cannot alter the fact that £400,000 of their good money is sunk in that factory. No business-man keeps his money idle. On the one side, the factory will have to give a price which will induce farmers not only to grow beet, but to grow the requisite amount, and, on the other hand, they will try to square that with a decent profit. Who has the advantage in the deal? It might be a very serious thing for the factory to have to close down. I put it to Farmer-Deputies who are listening to me that, when that deal comes to be made, the farmers will have most of the cards. The farmers got on without sugar beet in this country for a long time. If they wanted to bring the factory to its senses, would not one year do it? Take the loss involved by the closing of the factory at 10 per cent. on £400,000, for one year. That would be £40,000. Who are in the stronger position—the farmers or the factory? When it comes to sitting down and fixing the price, there will, of course, be differences of opinion. There will be a good deal of discontent; there always is. There will be discontent on the side of the factory and discontent on the side of the farmers. But the ordinary laws of self-interest on both sides will settle that question, as they settle every other question of the same kind. To pretend that at the end of three years the farmers will be absolutely at the mercy of the sugar beet factory is quite absurd. The exact opposite would be much nearer the truth. The actual truth would be that they will both be in a position to bargain. On the one side, the factory has to be kept going if there is not to be a big loss. On the other side, the farmers are anxious to grow beet. There are present all the elements of a deal, and there will be a deal.

Mr. J. CONLAN

I think the Minister was not warranted in stating that the farmers were critical of this scheme when it was before the House. They were critical of one provision in the Bill. That was the provision for the guaranteed price to the farmer for three years, while the subsidy to the company was to extend over ten years. I still think that that was an unfair arrangement. With regard to another farming crop which has been mentioned frequently in the House—the barley crop—the Minister, in combating the suggestion that a tariff should be put on barley, relied on the fact that the barley growers had only one customer. Does not the same argument apply here? Will not the beet growers have only one customer?

Mr. HOGAN

And the opposite will apply, too—that the factory will have to give such a price that farmers will think it worth while to grow beet.

Mr. CONLAN

That is a very weak "opposite." I am very glad the scheme has been successful. The farmers of Kildare, Carlow, Wexford, Offaly, and other counties were in a very bad position. They could grow no crop at a profit. I have myself grown no crop at a profit except beet, but beet I have grown at a profit. I think it was a great boon to the farmers—especially in the tillage districts, where their circumstances are very poor indeed. Not alone was beet a great boon to the farmers, but it was a great boon to the labourers. No crop will give more employment than beet, not alone to men, but to women and children. Women and children can do a great deal of work in connection with the beet crop. I think the Irish farmer has vindicated himself. A great many people put him down as a careless ne'er-do-well. He proved that the description was wrongly applied by his work in connection with the beet crop. He guaranteed a certain acreage and he went over his guarantee. I have been present at several field demonstrations, conducted by Belgian experts, and they told me that in nearly every case the cultivation was extremely good, and the care which had been bestowed on the crop extremely praiseworthy. I stated that nearly all the tillage crops except beet have been unprofitable. I can give an instance of what is happening in my own constituency on big tillage farms. They are running the disc harrow over the turnip crop in order to slice them on the field. They are ploughing them in because they have no stock to eat them. Notwithstanding that the farmer's circumstances are not good, they are rising to the occasion as regards beet growing, and applications for an acreage far higher than the company are in a position to deal with are being sent in this season. Having subsidised one farm crop, I wish the Minister would subsidise other crops which are badly in need of a subsidy.

Major COOPER

The sugar content would put them in a worse position. The fact that more farmers are growing beet and have come to look upon beet as part of the crop they will get profit on, will make it easier for the company to find farmers who will take a low price, unless there is more reason and co-operation among farmers than has hitherto appeared to be the case.

Professor MAGENNIS

I am rather at a disadvantage, inasmuch as I have not heard Deputy Johnson's speech and I have heard only portion of the Minister's speech. What I heard of the Minister's speech provokes me to take part in the discussion. I recollect well—I was sitting on the Government Benches at the time—that I took an active part in what I may style "forcing" a favourable view by the Government towards the project of establishing this new industry in the country. The case that I persistently made was two-fold. I pointed out that the possibility of the success of this industry was not problematical, that there was experiment enough with regard to beet growing to make it certain that beet could be successfully and profitably grown in this country and that a sugar factory, if properly subsidised, could be set up and would be the forerunner of many others. I maintained likewise —contra to the Minister for Lands and Agriculture—that nothing could be shown promotive of the development of agriculture, as properly understood— namely as tillage—like the introduction of the sugar beet crop. I remember that the Minister, without reference to me—probably because, at the time, we were both fighting for the same cause, the introduction of the sugar factory— said if every small farmer would put six acres more into cultivation it would do more for tillage.

Mr. HOGAN

I think I referred to an increase of from four to six acres.

Professor MAGENNIS

My recollection was the figure "six." It had been demonstrated, to the satisfaction of foreign experts, that both the land, the climate and the environmental conditions in Ireland were favourable to this crop. There was one very important sugar producer who was surprised when he came over here at the potentialities that the country presented for this crop. It is true he did not put in a tender, because of many of the things which the Minister recited—representations as to instability, the flooding of the ground, and a number of other things. Like many other foreigners interested in the exploitation of the country for sugar, he was under the impression that the farmers would not play up—that they could not be relied upon to give to the crop the requisite acreage to enable the factory to carry on. There were many tenders. The firm for which I interested myself provided the propaganda which was used by the Government at the Show in Ballsbridge and elsewhere. We provided the figures in reply to a demand made in this House by leading members of the Farmers' Party, and no one argued more strongly against the project as compared with the value of the potato crop than the leader of the Farmers' Party, who afterwards was one of the foremost men at the opening in the glorification of the factory in Carlow. It was pointed out then, and it may be repeated once more, I accept the challenge that was made generally by the Minister. The very figure that I used in the debates in the Dáil was 17 per cent. It did not require the farmers to go in extensively for this cultivation and for the chemist's test tube to be applied. We knew, beforehand, from very effective tests, that the yield would average 17 per cent., as against 15 per cent. in many continental countries, where the industry was a huge success.

Like Deputy Conlan, I am very glad that this Carlow factory has succeeded, very very glad. I was accused by the late Deputy Figgis, in the last days of the debate, that I had changed my front. My reply then and my reply to-day is identical. I am more concerned to get the industry firmly planted in Ireland than to promote the interests of any particular firm in this regard. I rejoice that the thing is a success. But let me remind the Ministry of one very important thing. The success of this particular project is largely due to accident, because one of the features in favour of rival tenders was that the firm whose claims I was pressing on the Minister—the firm of Von Rossum—was prepared to put up a factory at a cost of £400,000, and to bring over Dutch experts to teach the people how to work. When M. Lippens got the contract, having put in an estimate slightly lower than Von Rossum's, they had, as the Minister more or less unconsciously recalls, to make an attempt, through Irish financiers, to get Irish money. Other tenderers saw the land and saw its rich capacity for the purpose and were willing to put in all the capital required and give our people a proper price and teach them the industrial work. This firm, having once got the monopoly, for it was a monopoly, then proceeded to get Irish capital into the business. The Minister says they failed, but not altogether, he should have added, and then the fortunate accident happened. Those interested in sugar production on the Continent, hearing of the good thing that the Belgian firm had got hold of, a monopoly for the sugar industry in a land that was reputed to be one of the finest for the purpose of beet growing, came along to ask about the project, and by one of those accidents that happen, one would be inclined to say, only in novels or in dramas, another foreigner entered into a chance conversation with M. Lippens, and said: "If this is as good as it seems to be, don't put up a small factory, put up a very large one, and I will go into it with you." That is what happened.

I argued here repeatedly that for the success of the industry there should be, at least, two factories. Even at the time that I was advocating, most strenuously, the giving of the subsidy to the Von Rossum firm, as offering the best advantages, I maintained that the proper course would be really to set up two and have the rivalry of the two as correctors. What I feared at the time, and I put it up to several Ministers in their departments, would be that Lippens' factory would be what I styled a toy factory, and that it would merely play with the thing and get out without any loss or with a moderate profit, and that we should be left then with what seemed an experiment that was not wholly a success. Unfortunately, I am speaking ex-tempore, and without the expectation of speaking on this matter I did not look up the reports, but I remember arguing that the amount of money which the Government were prepared to spend on the establishment in this country would suffice to create the two, if one were planted in the neighbourhood of Carlow and the other in Cork, and vice versa. Now, because this foreign capital was added, M. Lippens' toy factory, fortunately, was not set up, but one on a very huge scale. What is the result? They are able to take beet from a very extensive territory, and there is the expense put on the faraway farmers of sending up beet, and anyone who knows this business is aware that the proper way to treat beet, when it has been raised from the soil, is to cut off the tops. The tops are food for cattle; they can also be dug in for manure. The beet bleaches and its sugar content is wasted if it comes considerable distances. Therefore, one of the conditions of the highest measure of success is to have your sugar factory in the neighbourhood of the beet producing lands. It would have been an immense advantage to the country to have the two factories, and we could have two factories, but now we have only one. That is really the situation. I believe what was good for agriculture in other States is good for us, where conditions are alike. Beet growing is the basis of German agriculture; it has made the success of agriculture in France and Belgium, and the sugar industry is one of the great industries of the Dutch. We might have had these. I believe we still could have them. But the Minister asks how could the success of the one factory militate against the setting up of another. Is not that obvious? Is not it obvious that the Minister for Finance cannot afford to give the same subsidy again? I do not think the Minister for Finance would dispute that. Will he then get capital? Will he get tenders again, forthcoming with the same alacrity as before, where the possibilities of profit are less? We could have had two. The two would have been in full blast at the present hour. Now entirely new contracts would have to be made and a lesser subsidy offered. Then you would have the complaint of breach of faith, that this Belgian factory on the faith of the subsidy given had secured huge capital to set up a correspondingly huge factory and embark on a big enterprise, and now a rival is set up on terms more favourable with which it could not successfully compete. Our credit with foreign countries would be impeached in consequence. The treatment given to Von Rossum had its unfortunate repercussions in making it impossible to persuade the Dutch to invest in the paper factory at Clondalkin. That is how these things circulate amongst investors and business people in other countries.

Now we had an extraordinary statement from the Minister for Finance, which in ordinary language would be called Bolshevik. He told the farmers that they could exercise control over the sugar firm by withholding their beet for a year. I know that that was one of the very fears that made Continental tenderers hold back. It was the threat that such a combination amongst Irish farmers or the possibility, in view of what had happened in other connections, that made Von Rossum ask for high terms to cover these risks, and now we have a responsible Minister in the House putting it into the minds of the farmers that they could exercise this compulsion upon the factories. I do not think that is right. I do not think it is consistent with the duties of the Minister's office.

Mr. WOLFE

It had not been tried here, at any rate. It was not known whether or not the farmers would take to it. Farmers are very conservative. They have their likes and their dislikes and stick to their opinions, and it was not known whether or not they would take to this matter, as they have done, and carry it to success. Neither was it known what the conditions of labour might be. All these things had to be considered. I think a great deal of grit was evidenced on the part of these contractors by undertaking this in the circumstances. It was only just that the guaranteed money to them should be equal to the risk they had to run, because they had to run a risk. I think everyone is glad that the undertaking has been a success. Of course everyone is wise after the event, and people are saying that the Government ought to have saved money in this way and in that, and that they gave far too much. I do not think the country will view the matter in that light. I think the people generally will be of opinion that the Government was wise in its determination that the first factory established here should be a success at all costs. If it had been a failure, we would have heard no more with regard to the growing of sugar beet in this country. No more factories would have been established here, whereas under the present happy conditions there ought to be no difficulty in the future in getting other factories established throughout the country.

As the result of the success of this factory the subsidy will be much less in the future, and probably in time to come we may be the first or the second country in the world giving no subsidy for the cultivation of beet. There is only one country at present that gives no subsidy with regard to sugar beet. The Government here have shown great courage and enterprise in this matter. I think even their enemies will not deny that they have succeeded in establishing a great industry which is bound to have a most beneficial effect on the country as a whole. This industry will give great employment in the future. It will give a great chance to the farmers who badly need it. Their position at the moment is not a very happy one, but this will have the effect of giving them a helping hand. It will also be the means of providing employment for a very large number of men out of work. That ought to be a matter of profound thankfulness for all of us. I think that when the Government go to the country the success of this undertaking will not be the least feather in their cap. They succeeded in establishing a successful sugar beet factory in the country at a time when things were in a rather perilous state.

Mr. BLYTHE

Deputy Johnson's speech was an indictment of the Government for an alleged breach of faith with the Dáil. There was no breach of faith. It is true that we estimated a production of sugar over the 10 years period amounting to 86,000 tons. When I first brought the matter before the Dáil in the financial statement I made on the 22nd April, 1925, I said: "The amount of sugar which will be manufactured in the factory here is, of course, problematical, but it has been roughly estimated that the amounts will be 5,000 tons of sugar in the first year and 6,000 tons in the second year and so on.

In the course of the debate on the Third Stage of the Beet Sugar (Subsidy) Bill, I said, in reply to certain remarks of Deputy Heffernan:

"It will be in the interests of the factory to get not merely 5,000 acres, but 15,000 acres, grown if it can. If it makes a profit on 5,000 it will make a greater profit on 15,000, because the proportion of overhead charges will be less. It will be the business of the factory to give a price which will induce the farmer to extend the area under cultivation, and it will be asked to do no more than that. They should not give one penny more than will induce the farmers to grow the necessary quantity of beet, and the farmer should be satisfied with that. It is better that the prices should be economic prices so that the farmer will give attention to the matter, be obliged to cultivate the beet properly, and try to get good crops with a high sugar content. The price at which farmers will grow beet will be one of the factors to be taken into consideration at the end of ten years when the matter has to be reviewed.

There was no suggestion at any time that the factory was going to be limited to 86,000 tons. We only suggested that figure because we thought no more could be got. The difficulty of inducing farmers to take it up in England was a difficulty which we thought would be found to exist here, and made us believe that it was no use mentioning any higher figure. The whole course of the debate indicates that this was simply a guess, and that there was no desire to limit it to this figure. What we were anxious for was to have an experiment on a sufficient scale to prove fully what could be done in the matter of sugar beet. At one time we contemplated even a 5,000 ton factory, but we were not very happy about the idea of setting up a 5,000 ton factory.

Professor MAGENNIS

That was the toy factory.

Mr. BLYTHE

We were not happy about that because that would not have shown what could be got out of sugar beet, and when we found that the firm of Messrs. Lippens was going to put up a big factory we were very glad of it. We are very glad, too, that the acreage under beet has exceeded expectations, and that, although it may cost us more during the ten years period, there will be a saving in the long run, because, as I indicated earlier, the profits which may be made in this factory will be the basis on which subsidies for any factories in the future will be fixed. I think there is absolutely no basis for the suggestion that there has been any breach of faith with the Dáil. What has happened is simply this: that the farmers have proved more willing to grow beet than we anticipated, the yield of beet has been better than we anticipated, and the sugar content has been better. Deputy Johnson asked why there was no limit to the amount fixed for the first three years. That provision is an indication that we had not as much belief in the adaptability of the farmers and of their readiness to take it up as we should have had. In the first year, about the time the agreement was signed, all sorts of difficulties were being suggested. We were afraid that the acreage in the first year or in the first and second year would be very small, and we did not want to fix a limit for any of those years that would force the factory to be below the average of 12,500 tons for the ten-year period.

I think there is no other point that I need mention. The matter was dealt with very fully by the Minister for Agriculture. When the Bill was before the Dáil we had what I might call a grousing speech from Deputy Johnson. He was full of suggestions about extravagance in the terms that we were giving to the people who were undertaking the manufacture of sugar from beet here. We had gone into the matter carefully and there could not have been a better price obtained. The firm referred to by Deputy Magennis was also offering something like the same terms. These were the only two reputable firms from whom we could obtain terms. Deputy Johnson's talk about the excessive amounts that are being given amounts simply to a waste of time of the Dáil. It would have been better for the Deputy to argue that we should have abandoned the sugar beet factory altogether. The Deputy's contribution to-day is just in the same grousing spirit that he displayed when the Bill was before us.

Mr. DALY

I was delighted to hear that the sugar beet factory is going to be a success. It will be one means of teaching our people that our country can be made almost self-supporting if only they put their shoulder to the wheel and do things in a proper manner. The growing of beet will provide employment for many who are out of work at the moment. In speaking on this matter I have a double barrel to my gun, for the reason that it was in my district, at Buttevant, that the idea of growing beet first originated in this country. They struggled hard at it for a time and got experts over from the Continent with the idea of establishing a beet factory there, but I am sorry to say their efforts were not successful. I agree with Deputy Magennis that we should have more than one beet factory in the country and for the reason that he pointed out, namely, that the beet in the course of transit, over a long journey, loses a lot of sweetness. I would appeal to the Minister for Finance and the Minister for Agriculture that in the very near future they should try to establish a second beet factory at Buttevant. Buttevant is in East Cork, and as Deputies know, all the wise men come from the East. I would like to point out to the Minister for Agriculture that in the opinion of experts the land around Buttevant, for an area of from 15 to 30 miles, is held to be some of the best in the South of Ireland for the growing of beet. As the people in Buttevant were the first in the field in this connection, I hope that when the Government is contemplating setting up another beet factory they will have it established in that district. If they do that I can guarantee the Ministers that the people there, like the people in Carlow, will do everything in their power to make the project a success.

Mr. DINNEEN

I agree with Deputy Daly that the people in East Cork made an attempt some years ago to establish this industry in their district. I have been informed that there were some French people over lately, and that they spoke very favourably of part of my district as most suitable for the growing of beet. Midleton district would provide a most suitable site for a sugar beet factory. However, we would not fall out if it was either at Buttevant or Midleton. There is a splendid mill idle in Midleton, and I believe it would be most suitable. I hope the Minister will give this matter his favourable attention. The people would be more satisfied if the subsidy were divided. I understood that there could be a second factory set up in Cork to serve Cork and Waterford and the surrounding districts. We would not fall out if there was a factory built in any part of Cork. The experts who were over lately spoke highly of Cork, and they thought it was one of the most favourable places in which to set up a second factory. If the subsidy was divided fairly it would not cost the country very much.

Mr. JOHNSON

The Minister for Finance has spoken of the speech I made on the Second Reading of the Beet Sugar (Subsidy) Bill as a grousing speech. The Minister appears to imagine that the duty of members of the Dáil is to take the propositions of Ministers, whether connected with legislation or finance, and neither criticise nor ask questions, but simply accept those statements as absolute and unquestionable and not requiring discussion or examination. I am prepared to ask any member of the House to look up the debates on the Second Reading of the Beet Sugar (Subsidy) Bill, and consider whether the statements made by Ministers on the introduction of that Bill were in any way informative until after criticism had been levelled at the Bill. Information had to be wrung out of Ministers, as a matter of fact, by putting counter-propositions, by examining such statements as had been made and placing the results of those statements before the House. Only then were we able to get any real evidence or estimates from Ministers of the probable cost of this scheme.

The Minister also said that my speech to-day was a grousing speech. Apparently again he thinks that when a scheme is propounded to the country with the assurance that it is an experimental scheme, and that the cost is so much—two million pounds—that is sufficient. We are told that we cannot afford to make any promise about a second factory because of the cost of the first factory; we cannot afford to give an extended guarantee; we cannot afford to impose on the projected firm an extended guarantee to the farmers because it would be more expensive— even the limit of our expense. Three months afterwards an undertaking is entered into which implies an additional expenditure of fifty per cent.— one million pounds. The Minister thinks we should accept that without any question. I hope if it is ever my good fortune to be here again that that view of one's duties will not prevail.

AN LEAS-CHEANN COMHAIRLE

took the Chair.

Mr. JOHNSON

I hope it will be recognised that it is definitely and absolutely the business of Deputies to criticise and examine estimates of cost, projects of an industrial kind which are to be subsidised, or any other matter involving the State in financial responsibilities a great deal more carefully and critically, probably, than has been done in regard to this beet sugar subsidy or other matters. The Minister for Defence listened to the speech of the Minister for Lands and Agriculture, and I am fairly confident, if I can read his thoughts, that he was imagining what great assistance the Minister for Lands and Agriculture would be in the Chemical Department of the Defence Forces. In the development of smoke screens the Minister for Lands and Agriculture was very efficient.

Mr. JOHNSON

——the Minister comes along and says to the contractors: "We are prepared to pay you a subsidy on a tonnage amounting to 125,000 tons in the ten years, with a probable cost of £3,000,000," and a possible cost of considerably more than £3,000,000. That is the conflict between the story put up to us in the Dáil and the actual accomplishment which the Dáil and the country are committed to I say that that is not treating the Dáil fairly, and I hope that this course of conduct will not be repeated by Ministers.

Mr. GOREY

I wonder if Deputy Johnson adverts at all to natural conditions and the seasons. Would Deputy Johnson please imagine for a moment that if last year was a bad year, as this year probably will be, we would only have about half the tonnage, that it would not have a sugar content quite equal to what we had last year, that the subsidy to be paid this year might be only half, and that the whole thing is based on seasons, on tonnage and on sugar content. Next year we may have 15,000 acres instead of 10,000, but we may have, and probably will have, a smaller subsidy to pay than we paid last year for the 10,000 acres. These are things that Deputy Johnson and these other experts seem to forget altogether, and in making the statements they have made they ought to advert to these things that cannot be avoided and that must be taken into consideration.

Mr. NOONAN

The impression I have got from the speeches made by some Deputies is that these Deputies are surprised at the success of the Carlow factory, and in forming that opinion I do not know whether they are agreeably surprised—I fear not— at its success. It appears to me that it would suit their book better and might suit their ideas if the Carlow factory was not what it really is, such a great success, if the Government had not undertaken that industry in Carlow, and if they had not given this subsidy for building up the industry and for making it the success it is, not alone in Carlow, but in the entire Free State, on account of the generous manner in which they have treated this factory.

Another point I wish to put before the House is this, that the farmers have risen to the occasion, and that the farmers of the Free State, who have always been supposed to be lazy, slow, and not getting the return out of their land that they should get, have proved in these counties that are supplying the factory, that they are up, willing and ready to advance any industry in their own sphere, provided it pays them. If the Government did not give the subsidy is it probable that the factory would have been a success? If the factory was not a success, and if it were starved for want of the subsidy, it is more than probable that we would never again have another factory or have sugar beet made a success. As Deputy Wolfe said, when that industry was undertaken some years ago in this country it was deemed a failure. If the Government had not handled the situation as they have done it is more than probable that it would have been a failure again. I would be very glad to see another factory set up, because I think the agricultural industry must be looked upon at all times as our primary industry, and I would be very glad to support the views of Deputy Daly and Deputy Dinneen in favour of another factory. I hope that before two years pass we will have another factory.

Mr. GOREY

Where would you start it?

Mr. NOONAN

In Cork county.

Mr. GOREY

East or West Cork?

Mr. NOONAN

I did not say Midleton. I said Cork.

Professor MAGENNIS

What Deputy Gorey said is undoubtedly true, but what Deputy Gorey said is utterly irrelevant to the present consideration. It is absurd for Deputies like Deputy Noonan to suggest, even by innuendo, that we who are criticising the Government's action in this matter are hostile to the sugar industry. Does Deputy Noonan suggest that I audaciously lied when a few moments ago I joined with Deputy Conlan in expressing my great satisfaction at the success of the factory in Carlow? Does he doubt the genuineness of that? Should I not be less than human if I were to fail to rejoice over the success of a measure which I am proud to recall I had a very large part in inducing the Government to take, at a time when Deputy Gorey was full of the value of the potato crop as the basis of Irish agriculture, as against beet? Deputy Noonan spoke of generous terms. The terms were not generous. The Government, I am free to acknowledge, drove a hard bargain at the time, and there were only, as the Minister for Finance rightly says, at the end two really admirable or bona fide tenderers whose terms could be considered. The difference between them was very slight. The terms of Van Lippens were considered more favourable.

What I stand up to repeat is this: that in the Dáil—and the Official Reports can be examined to test the accuracy of my recollection—I maintained that the amount of money that the Government could afford to spend, and were prepared to spend by way of subsidy on this would suffice to secure the establishment of two factories, and at the time when the case was being made that only one should be established, because the terms of M. Lippens were so much more favourable, I made the declaration that I quoted a few moments ago, that I was authorised to say, on behalf of Von Rossum, that I would accept these terms, and I asked, steadily and consistently, for two factories, believing then, as I still believe, that all the Irish farmer required was the opportunity and the facilities for developing tillage, and that he would seize them. I had faith in the farmers of Ireland. I knew that they were not rightly represented by Deputy Gorey. I knew that there were other members on those benches who had a truer understanding of what the needs and the future of Irish agriculture require.

What Deputy Johnson has shown, and shown beyond any refutation, unless dialectic attempts are made to transmute words to other meanings, is that the Government, assured this year that the utmost amount of money it could afford to expend upon the setting up of this new industry, which has provided a new basis, in my contention, for the agricultural industry, was a limited figure; yet, because of that happy accident that I have given a recital of in my speech to-day, the Government promoted the creation of a factory on so much larger a scale that the amount of subsidy now payable in respect of it is so great that there is no possibility whatsoever of a second factory. What Deputy Noonan apparently does not realise is, that you can have a great success, over which you can rejoice, and yet wish to have a fuller success. Would it not be better for the Free State to have a smaller factory in Carlow, quite as successful as this, pro tanto, and to have another factory in Cork, equally successful in the service of that environment? The State would be very much richer for the two. It would demonstrate that the success of the Carlow factory was not due to circumstances or conditions peculiar to that locality or peculiar to the working of that particular factory. It would encourage other enterprises to set up a third and a fourth factory. Why, only a few years ago there were but three sugar factories in England. It was when Von Rossum was about to establish more that a petition was put up to him by some of us to do for Ireland what he had done so successfully for England.

The Minister for Finance is in this position, that the subsidy agreed upon for the Lippens factory, and the opportunity for full development given to it on a bigger scale than was anticipated, means that the Free State could not afford to pay as much of a subsidy to a second factory. It is idle for Deputies representing Cork to stand up here and say: "We look forward to another factory for Cork." They might as well look forward to a slice of the moon to save them the cost of electricity, because the Minister for Finance has told them again and again in the House that it is out of the question. If we are to have another factory it will be with a lesser subsidy, and the Lippens factory can then, as I have pointed out already, complain of a breach of faith. If this House had known at the time when Ministers were contending that there was only sufficient money available for one factory, that the Government would proceed to extend the scope of that factory and increase the amount payable to it out of the taxes of the country, it would have voted for two factories.

The Ministry turned away the offer of a factory for £400,000 proceeding from the Dutch Sugar King. That advantage could have been secured for Cork if M. Lippens selected Carlow or for Carlow if M. Lippens selected Cork. I cannot quote, unfortunately, after more than two years, the exact words used. But I remember pointing out that if this chance were not taken full advantage of, if the colossal offer were not accepted, it would not be available later and that the time would come when the country would realise that it wanted and could make use of a second factory and that there would be no offer forthcoming. That, I think, is a strong ground of indictment against the Ministry. They deceived the House—they declared themselves in favour of what they called an experiment. It was pointed out repeatedly that the proper experiment was in the form of two factories, because the only thing experimental was not whether Ireland was suitable for the growing of sugar beet, but whether or not farmers would have sufficient enterprise and sufficient courage and inducement to do what. after all required from them —let us not forget—a somewhat courageous venture, because the nature of the beet crop was such that they should break up a huge amount of arable land. that it should be very heavily manured and very heavily and expensively worked, and that there should be a rotation of crops for four or five years. So that the moment the farmer committed himself to the beet adventure he committed himself for a series of years to a certain line of farming operations. Therefore it would not have been wholly unnatural, and certainly not proof of sluggishness, backwardness or any other kind of inertia on the part of the Irish farmer if he held back. The point was to give them the inducement. I remember arguing against Deputy Gorey at the time when he was eulogising the potato crop that we had before us the sad spectacle of a huge potato crop unsaleable, whereas the provision of two sugar factories, each demanding ready supplies in a year, would offer an assured market and a fixed price—the very ideal that the farmer wants. Not only that, but it would have been possible, once the crop was certain of being available for the factory, that an advance price by way of instalment would be paid for it—it was a cash crop. It is quite clear to demonstration from the argument of Deputy Johnson in his last speech that the Government have committed the country to an expenditure on a single factory which would have amply sufficed to provide two—not toy factories but admirably equipped, efficient factories, working the beet upon a fairly large scale. The country has lost that advantage through the Ministry's action. Yet they boast about the success of their enterprise. The thing has succeeded, no doubt, partly by accident and partly because farmers played up and exhibited that capacity which we, who believed in them, knew that they possessed.

Major COOPER

Before we dispose of Section 1 I want to point out to the Dáil that in my opinion we are authorising the appropriation of something like £700,000 more than is likely to be needed for the services required. I base that plea on the Appropriation Account issued to Deputies about three weeks ago. Deputies looking at it will find a table showing the excess of estimates over expenditure for the year 1925/26. They will find that we voted then £3,800,000 more than was actually required, and that that amount was returned to the Exchequer. For two millions of that I will not charge the Minister with any error in accountancy. Two millions of that excess vote was due to the fact that the Property Losses Commission was not functioning as quickly as had been anticipated. The Minister had no control over that Commission, and he, no doubt, did rightly in providing an adequate sum of money in case it worked more quickly. But there still remains £1,800,000, which, after all, is a very substantial sum, the equivalent of more than 1/6d. on the income tax. If Deputies will look at the report in detail they will see that there prevails throughout the public service a practice of over-estimating. Take a few sample items:— The vote for the Revenue Department was over-estimated by more than £36,000. The vote for Public Works and Buildings was over-estimated by more than £250,000, though that is in part due to a paper transaction. Still, when you have a total vote of £894,000, and find £252,000 of that amount not spent, it makes you think the Estimates should be scrutinised more closely. The Gárda Síochána Vote was over-estimated by £68,000, and the Prisons Board, which was even more remarkable, by £31,000. These are services in which you cannot estimate with absolute accuracy, but I suggest that they might easily be estimated more closely than has been done in the past.

The Department of Local Government and Public Health over-estimated by £44,000 on a total vote of £564,000. The office of the Minister for Education was over-estimated by £17,000. I should have thought that the commitments of that office could easily have been foreseen. The Department of Agriculture over-estimated by £42,000. The Land Commission over-estimated by £92,000 on a vote of £731,000. In the two big spending departments—the Department of Posts and Telegraphs and the Army—there were over-estimates of more than £200,000— in other words, more than 8 per cent. on each vote. It is impossible to estimate absolutely accurately, but I suggest that for estimates to be habitually from 8 to 10 per cent. more than is required is placing an unfair and undue burden on the taxpayer. I know that in his present Budget the Minister has made an allowance of £650,000 for over-estimating, but, judging by the experience of the past, I believe he might have allowed £2,000,000 for overestimation, and have given relief to the taxpayer.

We find in these days Deputies more prone to make speeches outside than inside the Dáil, and in those speeches outside there are promises of great savings and great economics and frequent suggestions that the income tax can be abolished and expenditure reduced on a large scale. I confess that the only possibility of any substantial reduction in expenditure amounting to millions lies in checking the practice of over-estimating, because it constantly happens when the money has been estimated for—the Minister knows it as well as I do—a new subhead is opened and it is spent, not for the purpose originally foreseen by the Dáil. The Minister may laugh, but this is an indictment on the efficiency of his Department, which is supposed to overhaul estimates. If we have to face an over-estimate of £1,800,000—I am allowing for the two millions which is over-estimated on the Property Losses Vote and which I do not think he was to blame for—it is not desirable from the point of view of financial administration. I am not approaching this in a spirit hostile to the Minister. I realise as much as the Minister does that a great many of the claims of power to reduce expenditure on election platforms are fallacious, but I do suggest that a tighter system of financial administration, a tighter check on estimates, would be a sound, a constitutional, and, I think, an effective method of procuring economy.

There is a general tendency to over-estimate. The Minister has admitted it by making allowances for it in his Budget, but the difference between us is that I think he has under-estimated it.

The Minister for Defence over-estimated by about 8 per cent. There is a tendency in all except a few Votes—not in old age pensions, not in Supplementary Agricultural Grants, because these are fixed by statute—but in the current working of public departments there is a general tendency to over-estimate, and I believe it would be far better to cut those estimates more closely and if necessary to come to the Dáil with supplementary estimates later. The Dáil has never been churlish in dealing with supplementary estimates. As a rule they are granted readily the moment a case is made for them, even when they touch on matters of substantial importance. I suggest that the sounder and wiser way is to limit the spending departments rigidly, and, if the limit has been drawn too closely, to come to the Dáil and ask for supplementary estimates. Therefore I take this opportunity of suggesting that past experience has shown that the demands made in this Bill are likely to be excessive and consequently to impose an undue burden on the taxpayer.

Section agreed to.

Sections 2 and 3, Schedules (A) and (B) and the Title agreed to.

Bill ordered to be reported without amendment.

The Dáil went out of Committee.

Bill reported without amendment.

Report and Final Stages ordered for to-morrow.

Dáil Éireann debate - Thursday, 12 May 1927