PRIVATE BUSINESS. - CREAMERY BILL, 1928—SECOND STAGE (Resumed).

Question again proposed—"That the Bill be read a second time.

Mr. HOGAN

Only one point remains to be dealt with, and that is the point made by Deputy Moore last evening. I pointed out that under Section 13 it is provided that there shall be no unlicensed creameries or factories dealing with milk products established without the consent of the Minister. The section reads:—

(1) It shall not be lawful for any person to erect, establish, or acquire any creamery unless such creamery is erected, established or acquired under and in accordance with a licence granted by the Minister under this section and it shall not be lawful for any person to maintain a creamery which was erected, established, or acquired in contravention of this section.

(2) The Minister may, if he so thinks fit, grant to any person a licence to erect, establish, or acquire a creamery at such place and subject to such (if any) conditions as the Minister shall specify in such licence.

(3) If any person erects, establishes, acquires, or maintains any creamery in contravention of this section he shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding one hundred pounds together with, in the case of a continuing offence, a further fine not exceeding ten pounds for every day during which such offence is continued.

Mr. HOGAN

If Deputies will turn to the first section they will find the definition of "creamery." I think that is one of the most important sections, and it is certainly one of the most essential sections, if we are to prevent redundancy arising again. Deputy Moore's point is, what about a creamery that wants to establish a cheese factory? The very same thing arises. Our programme is to hand over the manufacture of all milk products to the farmers themselves. At the present moment there is only one condensed milk factory and butter factory in the country. There is little cheese being manufactured. Butter, condensed milk, cheese, casein and one hundred and one other things from milk products can be manufactured. It is our policy equally to hand over that to the suppliers of the raw material. If any creamery wants to start making cheese or any other milk product there is nothing to stop it. But there is one thing we will not allow. Suppose there is a condensed milk factory taking all the separated milk over a certain area— all the separated milk that can be turned out—and there is a row in the factory amongst the members of the Committee. We will assume that the milk factory is owned by the Co-operative Society and there is a split; one half of the members want to set up another condensed milk factory or a casein factory, or a proprietor wants to come in and set up another factory in competition, the object being to compete for the milk. That cannot be allowed, because it would be redundancy all over again.

I was rather glad to hear the Minister last night when he was explaining his Bill, and he went on to expound some interesting principles with regard to the keeping out of foreign capital in the creamery industry and preventing it from being allowed to come into the country again. We only hope that the same principle may be applied in other directions. We have heard complaints from time to time of the deal made some eighteen months ago with regard to the taking over of certain proprietary creameries. We only hope that if there are any such transactions in the near future, and if the Government is going to make regulations with regard to those transactions as they are under this Bill, that they will try to remedy those grievances. The principal grievance which it was impossible to remedy in all cases was the site of the creamery which was selected to remain. There were big complaints that certain farmers did not get fair play; that they were compelled to bring their milk a long distance and it amounted to a charge of favouritism when one creamery was retained as against another. Secondly, there was a complaint that certain employees taken over in the creameries were not treated very fairly.

With regard to the point about the distance which milk is brought to a creamery, I would like to know if the Minister has considered—I am sure there are difficulties in the way— whether there could be a uniform price given regardless of distance. The farmers who would have to send milk over a distance should be compensated for the length of transit. I have been inquiring from people interested in the creamery business whether there is any check on the cream contained in the milk, whether anybody has any check on the manager of the creamery, or whether his figures have to be accepted on all occasions as the correct figures. I believe, as regards the inspectors sent round by the Ministry or by the I.A.O. Society, neither of them makes any attempt, as far as I know, to check the figures of the cream content which is returned by the creamery manager. Some farmers do believe that the true figure is not given in all cases. Would it be possible to provide any system whereby the figures could be checked, or could there be a surprise visit from an inspector? Perhaps they could collect samples from time to time to see if the figures are correct.

The Minister has explained the Bill very fully, but even with that explanation there are points somewhat involved. Section 9 (1) sets out that "it shall not be lawful for such society to take any supply of milk from such person so long as such refusal or neglect continues." That is, that the society cannot take milk from the men who refuse to take shares in the society. If I understand the other parts of the Bill correctly, that society has nevertheless to pay the company from which it took over. It has to pay the selling society for what it got. I want to know how is the taking over society to pay the selling society if a large number of farmers who are supplying do not take shares in the taking over society? There would naturally be a difficulty to see where the money would come from. Section 13 (2) sets out: "The Minister may, if he so thinks fit, grant to any person a licence to erect, establish, or acquire a creamery at such place and subject to such (if any) conditions as the Minister shall specify in such licence." Is it necessary to have power to grant to any person a licence to carry on this trade? I thought it was the policy to confine this industry in future to co-operative societies.

Mr. HOGAN

Persons in co-operative societies.

It mentions societies in other places.

Mr. HOGAN

Yes, in a different context.

Section 14 deals with the prohibition of unlicensed maintenance of certain creameries and sub-section (4) says the section applies to any creamery erected or established between 1st January, 1928, and the day immediately preceding the passage of this Act. That seems to me to be very unfair. It is certainly unfair because there is nothing to compel the Minister. Suppose a creamery is commenced within 4 or 5 months. There is nothing to compel the Minister to give a licence to that creamery, and as far as I can understand this Bill, they could be compelled to close down actually; that is, any societies started since 1st January could be so closed. Then Section 15 deals with inspection of the records, etc., of creameries. I am not sure of the full meaning of that section. Does it mean that this inspection is to be carried out as long as the negotiations are in force, or does it mean that this is a permanent inspection of creameries?

Mr. HOGAN

No, once the transaction is completed.

Sub-section (2) of Section 16 is a dangerous sub-section. I have not had as much experience of that sort of thing as the Minister.

Mr. HOGAN

It is in order; it is common form.

The onus is on the other person to prove or disprove that the signature is genuine.

Now I might be permitted to draw the attention of the Deputies to a couple of sections in the schedules. In Schedule 1, page 10 there is this section:—

The purchasing company shall accept the title of the company to the premises, milk supply, and goodwill without search or inquiry as good and sufficient in all respects, and shall make no objection or requisition in respect of the same on any point or matter whatsoever.

I certainly would not like to see anything like that.

Mr. HOGAN

That is really what nearly always happens in a title which follows a sale for full market value. That is almost a common form in a deed of assignment which follows a previous sale for the full market value. That would be serious if it were not for the fact that usually a solicitor will begin his title with the previous sale for full market value. A sale has taken place for full market value of the Condensed Milk Company of Ireland and the Newmarket Dairy Company, and so we are really beginning our title on that sale for full market value. That is a common form. They have their solicitors on the other side.

I did not understand that. I thought this was the first purchase. Certainly, if the Bill would do what the title itself sets out I suppose it will do a whole lot. It is to make provision for the more effective regulation and control in certain respects of the dairying industry and persons and co-operative societies engaged therein with a view to the better reorganisation of that industry and for other matters connected with such reorganisation.

If the Bill is able to carry out what the title tells us the Bill is for, I think we will have done a good day's work in putting it through. It is a very involved Bill, but we cannot complain on the question of time. We had a good while to examine this Bill before the Second Reading came on, but though I have read it three or four times I do not understand the Bill nor the full import of the Bill. Perhaps it is only when we reach the Committee Stage that we will probably understand it. I would like to ask the Minister if it is his intention to put through the Bill this session?

I am in agreement with Deputy Ryan when he mentions that this Bill is very complicated and very involved. I read the Bill fairly carefully, and I presume I know something about the dairying industry and the situation which led up to this Bill, but I find it extremely difficult to understand the Bill. We had a good deal of criticism recently as to a certain type of legislation going on the Statute Book, legislation which sometimes the judges on the Bench found it difficult to interpret. I hope that this is not legislation of that kind, and that this Bill has been drafted as simply as it could be drafted, taking into account the necessity of the situation which necessitated its drafting. I sometimes wonder if it would not be possible to devise a more simple and a more easily understood form of drafting Bills of this kind, because as far as the ordinary non-legal mind can judge, a Bill of this kind may provide ample opportunities for lawyers at a later stage to make more money out of the farmers when it comes to a question of deciding what the intentions of the Bill were.

As to the general intention of the Bill, I regard it as a culmination of the legislative measure which is to conclude a series of transactions in connection with the co-operative and proprietary creameries in this country. I personally happened to be in touch with the situation which has led up to this final Bill, which brings to a conclusion the difficulties which arose in connection with the Condensed Milk Company of Ireland. And while I regard this Bill in the circumstances as essential, and while I recognise that there was practically no alternative for the State in the situation that had arisen but to step in and take the action they have taken in connection with the reorganisation of the creameries of Ireland, still at the same time I cannot help regarding the situation in a sense as another tragedy of lost opportunities for the Irish farmers.

There is no doubt whatever that the situation which has arisen in connection with the Condensed Milk Company of Ireland would not have reached the present stage and would not have been so expensive to the State and to the farmers who are members of the Co-operative Societies in Ireland if in 1922 these farmers had been so well organised that they could have stepped in with the Co-operative Organisation in Ireland—could have stepped in and with the help of the State obtained the control of these creameries in connection with which this legislation is now finally implementing the position. I say that because I am convinced that in 1922 the creameries which are concerned in this legislation could have been acquired by a co-operative organisation of Ireland for a very much smaller sum than the sum at which the State was eventually obliged to pay. I was personally in touch with the situation which arose at the time and I had in mind at the time the possibility of the co-operative societies acquiring the creameries of the Condensed Milk Company. I recognised that eventually it would become necessary in some shape or form, if the co-operative societies were to exist and to hold their own that they should make some attempt to acquire those creameries. In 1922 the creameries were practically derelict. They were derelict in the sense that they were not doing any work at the time. At that time they could have been acquired at a lower price if there were any organisation of the farmers sufficiently strong and sufficiently well financed to undertake their purchase. Unfortunately, as one connected with the organisation of the farmers, I must say that the situation was lost, because the farmers were not well organised and were not well financed enough to do so, and the political situation was such that the farmers were not able to step in and acquire those creameries which have since been acquired for them by the State. This Bill is now finally to implement and validate the situation that has arisen in connection with those creameries. I sometimes wonder if the Dáil recognises the importance of this legislation. Some of us who have been accustomed more or less to the doctrine of laissez faire, the doctrine that a man has a right to do what he likes with his own must recognise that in this Bill which we are considering to-day and which will presumably pass through this House there is an immense interference with a man's right to do what he likes with his own—with the old accepted idea of a man's right to do what he likes with his own, and the accepted idea about the freedom of the subject and people in regard to private business, freedom and enterprise.

To a certain extent I regard that as not as desirable as it should be. I think it is a tragedy with regard to the organisation of the dairying industry in Ireland at present that the State has been forced to take such a prominent part. I am convinced it would be much better for the farmers of Ireland and for the agricultural industry in Ireland if the farmers themselves could have been induced and were in a position to do a great deal of the work which has been done by the State. I am convinced from the connection I have had with the farming community and the community in general that there is a persistent idea that every advance which must be made in regard to agricultural and industrial development in this country must be made by the State, and that the ordinary individual can stand up in every case where help is needed and say what can the Government do? On the other hand, in regard to every situation which arises in connection with the general interests of agriculture in particular and in connection with industrial interests, when someone makes a complaint that things are not quite as they should be, the common form of exclamation is "what is the Government doing?" This is another instance of what the Government has had to do. Because of the circumstances which have arisen and which exist, if we are to take our steps in proper time amongst the ranks of the countries which are competing for the market for agricultural produce, and if we are to hold our own with regard to the quantity and quality of our produce, it is necessary that steps should be taken without delay. For that reason the State has to step in. This Bill is not perhaps the last one necessary in connection with the organisation of the farmers. We understand there is another Bill on the stocks. I am hoping that when these Bills are passed the burden of carrying on the work in connection with the development and improvement of organised agriculture in the country will be placed on the shoulders of the farmers and that they will carry it, improve, act with initiative and independence. The very idea of State control is in my opinion opposed to and contrary to the spirit of co-operation. The two are not really compatible, and if this situation of State control is to continue and is persisted in to any very considerable extent, I am afraid it will have a bad effect and will prevent a co-operative spirit from developing in the way it ought to develop.

So far as the Bill itself is concerned, so far as I am able to understand it, it does something to serve the purposes for which it is intended. It is intended to validate what was, I think, a situation which was not, strictly speaking, legal and had arisen in connection with the purchase of the creameries. It so regulates things that every contingency which has arisen in connection with the purchase of those creameries is provided for. I do not intend to go into the different sections, because they have already been explained by the Minister, and it is not my business nor am I in a position to enter into any further explanation. It seems to me it does do what is intended by the Department, but I am wondering whether it does it in the best possible way. As I mentioned in my opening statement, the Bill is very elaborate and complex. The particular drafting of the Bill may be necessary to meet the situation which has arisen, but if it could be drafted in a simpler fashion or made more easily understandable I think it would be desirable. I suggest that the Minister, at an earlier stage if he thought of it, in regard to this Bill might have followed the idea, introduced I think in the case of another Bill by the Minister for Justice, of attaching an explanatory statement to it. I think Deputies who have no legal training who are interested in Bills of this kind ought to be placed in a position of knowing that the Bill which they are passing serves the purpose for which it was intended, and that there is not concealed in it any intention beyond what was obvious and plain on the face of it.

With regard to the general principles of the Bill I have nothing to add. The details will probably emerge more clearly as we come to the different sections in Committee. I think it is due to the Dáil, and I hope the Minister will meet us in that regard, to have a full and ample explanation of every section of the Bill as we go through it. Again I express the feeling, while recognising the necessity for State intervention in this matter to implement and complete the legal position which has arisen in connection with State intervention that it is a pity that such intervention has been necessary. I think it is a pity that opportunities have been lost, and that because of that the farmers of Ireland have been placed in a position whereby they will have to pay through the means of their association for the co-operative creameries a price for the creameries of the Condensed Milk Company of Ireland which need not be paid if the farmers were in such a position in 1922 that they could have handled the situation themselves and have prevented the intervention of outside capital. As Deputy Dr. Ryan puts it, although it is difficult to identify capital, the parties did not serve any useful purpose beyond carrying the situation over a certain period of time and did not add materially to the wealth in the concern, but of course, because of their intervention, they have probably improved their financial position. Interveners of this kind usually do it, not for the good of the State but for that of their own pockets. It would have been better if the farmers themselves had been able to take advantage of the opportunity to do the work which is now being done by the State. I am hoping that the organised farmers may, by the example which has now been shown to them by the State, begin to recognise the possibilities which they have overlooked, that they will be awake to the possibilities of the future, and that a similar situation will not be allowed to arise in connection with any co-operative movement in Ireland. I hope that the farmers of Ireland, now that the State has intervened, will advance in the organisation which is necessary for them if their products are to take the place in the world market that they ought to take and if they are to be what they ought to be, coming from this elimate and soil, namely, the best products of their kind in the world market.

I agree with Deputy Heffernan that it is most advisable that we should not have too much State control in the development of the co-operative movement in this country. Deputy Heffernan's knowledge of the co-operative movement, as was pointed out here the last day, is perhaps not of an expert character or he would understand that it is inevitable that some steps should be taken to put the movement on a better business footing than it has been on. I think that this Bill, in a sense, will be perhaps more important than the Co-operative Bill, because under the Co-operative Bill which it is proposed to introduce we will be discussing circumstances and developments of which we will not have full knowledge. We will be legislating for something that may happen in the future and it will be almost impossible to foresee these developments. This Bill comes very aptly and very properly before the Co-operative Bill. We are discussing transactions which have already taken place. As Deputy Heffernan has pointed out, the House is not in a position to understand this Bill clearly. I think that is not on account of the way in which the Bill is worded or the inclusion of the schedules at the end, but because of the fact that the Minister has not seen fit, up to the present, to provide the House with the details of this whole transaction. At the time we were discussing the last Supplementary Estimate for the purchase of creameries we, on this side of the House, pointed out that there ought to be a Committee to inquire into the purchase. The Minister seemed to regard that as a vote of censure on the Government. He refused to accept it.

Mr. HOGAN

Oh, no.

In any case it was not accepted. It was suggested that everything in connection with the purchase and transfer of these creameries had been well done. Nothing more could have been done and on the last day when I asked the Minister whether the farmers had complete cognisance of and had given their agreement to all the steps that had taken place he said they had. I have the details here of a creamery near Carrick-on-Suir, a central creamery, which was closed down in spite of the opposition of all the members of the creamery. The name is Ahenny; it is near Piltown. Deputy Heffernan was present, as a matter of fact, when the resolution was passed by that creamery society against the proposal to close down the creamery. The creamery was in existence since 1891. It had 316 cows. It had a peak supply of 3,000 gallons. It was run so well that it had actually been turned into a joint stock company, and was carried on until 1918.

Mr. HOGAN

Your figures must be wrong. That would be ten gallons per cow.

In any case these were the figures that were given to me. The point is not so much the number of gallons or cows, but it was a central creamery that had been run efficiently by the local people and there was no reason for closing it down. It was closed down against the wishes of the people. It is not the only creamery in the country which has been closed down when the suppliers were forced to go to other creameries and societies that they did not want to go to. We have had no opportunity of discussing these matters. I quite realise that the Department could not possibly suit everybody's convenience in these matters. It would have helped us considerably in the discussion of this Measure if we had a detailed statement as to the number of redundant creameries which were closed down and as to the areas which had been reconstituted—if we had some particulars as to the principle which the Department had in mind when they were taking suppliers from these redundant creameries and compelling them to go to others. It may be that there is nothing whatever in all these grievances and arguments, but there is an important point for which there is no provision in this Bill. While it is a series of validations of agreements in order to help the Government, and there is no proof that the Government may not have made a bad bargain, we are called upon now to sanction these agreements and say they are good bargains, and the support of the House is to be given to one side of these agreements, while the suppliers would be called upon, in the course of time, to make these moneys good.

I would like to ask the Minister to give the House detailed information as to the basis of his calculations in regard to the amount he is putting upon the suppliers. He is charging them, for example, five and a half per cent. interest. A pound a gallon or £3 per cow. How are these figures arrived at? Are they based purely on the recent transfer of the Condensed Milk Company's creameries or have they any relation to the erection of new creameries, or is it entirely a question of milk supply and experience in the past in running creameries? This new figure that has been fixed is in excess of what has been the custom in the past, and the point I want to get at is that those people who supplied milk to redundant creameries and are now compelled to go to other creameries—in some cases they have to go six miles away—those people who at considerable loss kept the old creameries going until they were finally closed down feel that they have lost a great deal by their devotion to the co-operative movement. They stuck to their co-operative concerns and did their best to keep them going during difficult times. Finally it was impossible to keep them going, and those people lost a considerable amount of money. They now naturally question the right of the Minister to come along and fix what seems to me, at any rate, an entirely arbitrary figure upon them in order to cover his outlay on these purchase agreements. It is all a question, of course, of whether the Minister made the best bargain or not. Supposing he made the best bargain. There is no check whatever in this Bill on behalf of the supplier. He will see that the conditions of repayment will be made as easy as possible. It is all a one-sided affair, in my opinion. I think, as I said, that the Minister should have given us a great deal more information in regard to how this whole business has progressed. There is, for example, the point as to the assets and debts which were taken over. To what extent have they been realised? Does the Minister think it fair that the face value of these assets, the value that his expert valuers put upon them, and the face value of these debts should be put upon the supplier without any further examination by this House. If the Government have paid too much for the creameries and taken over these debts and assets. I think we ought to consider very seriously whether the suppliers may not have too much inflicted upon them in the repayment. The matter perhaps, would be made a good deal clearer and the path would be more open to us if he could have told us how the Central Marketing Board is progressing. I think that Deputy Ryan's point in that connection is very important. If production could be levelled up and the prices levelled up so that the supplier would get the same return, and that the suppliers who are a distance away from the creameries would not be under any disadvantage as compared to those who are near, it would be a very important matter.

He says that the whole thing is working out very well, and when the whole scheme is working it will undoubtedly be much more economical for the country and much better for the farmers than the wasteful system that has prevailed. We ought to get some information as to how the Board is progressing; what improvements they have been able to effect in getting better prices for the farmers; what are the prospects for the future; and some figures to show the extent to which expenses have been reduced. The Minister yesterday, when discussing this question of doles and subsidies, stated, as far as I understood him—I hope I am not misquoting him— that he did not object so much to expenses in connection with administration, where he felt that the legislation was necessary, and that the control was necessary. I think he ought to give the House some indication of the extent to which expenses have been reduced and some indication of how the suppliers are safeguarded in this matter. With regard to the inspection of records, that does not, I presume, apply to proprietary creameries.

Mr. HOGAN

No.

As regards the joint stock principle, it is stated in Section 11 that you are going to give members the right of holding shares in excess of £200. I think in the re-organisation of the entire co-operative movement you will be approximating to the joint stock company idea. Could the Minister give us any idea how a joint stock company would fare under this? Would it be covered, or would there be any facilities given to a society, which felt that it could conduct its business better as a joint stock company, to do so? Of course that may be the negation of co-operation, but at present undoubtedly the joint stock principle lends itself better to the Minister's idea than the ordinary co-operative society organisation.

Deputy Heffernan rather regretted that this Bill more or less amounts to State control. I daresay that State control is a thing that should not be resorted to in general, but there are certain industries that, if they are to be carried on efficiently and for the benefit of the nation, need State control. Certainly, it is necessary in the beginning. This Bill has for its object the legalising of the buying out of the Condensed Milk Company, and also aims at the complete reorganisation of redundant creameries. I am sure everybody in the House will admit that is a necessity. No industry is open to so many attacks from outsiders, middlemen and dealers of every description, as the agricultural industry. It is the one industry, I believe, that we are in a position to organise efficiently and in such a way that the consumer, who really controls all industry, can be satisfied that we can guarantee the produce we put on the market to be absolutely of the highest quality and in the most healthy and sanitary condition. Other industries, mercantile industries, have middlemen, just as there are in the agricultural industry. They are in a position to control them, and in a better position than we are to arrange what sort of commissions or fees the middlemen should get. They are in a position to be more or less the masters of the middlemen, but I fear that in the agricultural industries in general the producers are not the masters of the middlemen, but that, in general, the middlemen become the masters of the producers. There is no necessity to give details as regards prices, to show the difference between what the consumer pays and what the producer gets. That is well known in the House. I believe that this is the beginning of an efficient means to stop that.

It is rather suggested by some, that perhaps too much money was paid to Messrs. Lovell and Christmas. I suppose Messrs. Lovell and Christmas and the other parties would probably say that they got too little. It is difficult to judge. It is a transaction that is past and finished, and I do not believe that any good results can be got from regretting what is past. It may be too much or it may be too little. I am not in a position to say whether it is or not. As I say, it is past, and it is a good thing that steps are being taken so that we will be in a position to put such an important and fundamental industry on a sound basis. It is within the knowledge of Deputies, even those who do not belong to creamery districts, that hardships will, to a certain extent, occur under this reorganisation. That is bound to take place, but it is no doubt for the benefit of the nation; and although a few redundant creameries or proprietary creameries may suffer or imagine they may suffer, it will benefit the whole nation at large and the producers will ultimately find that it will benefit them. The whole object, not of this Bill, but of this particular scheme, is to ensure that the producer gets a reasonable price.

The best price.

Mr. O'REILLY

The general agricultural producers when they market their produce have to take what they get. They are not in a position generally to bargain or insist upon a price. Articles produced by mercantile industries have a standardised price. The price is marked and nothing less is taken. These commodities can be bought and sold by telegram cheaply and efficiently. Unfortunately we have not yet reached that stage in agriculture. I believe this is one step towards that result, and I am glad an effort is being made to put the agricultural community into such a position. Above all others it is the industry that we are peculiarly fitted for and for which the climate of the country is peculiarly fitted. For the products of the industry we have an unlimited market. For these reasons I welcome the Bill and the steps that have been taken, and will be taken in future, to put this industry on a sound basis. Without State control I believe that cannot be done. I believe that State control is necessary, because if we cannot, by such an industrial effort as this, get at least 100 per cent. loyalty from the members of such societies, we will not be successful. In marketing the great difficulty is supply. Without some sort of compulsion for producers we cannot guarantee supply, and if we cannot keep up supply the consumer is going to go elsewhere and we will lose our market. Most farmers will admit that during the war they benefited largely under the control system.

Deputy Derrig mentioned a point which I do not think comes under this Bill. It might come under a Co-operative Bill, that is the question of supply and distance. I believe that for efficient co-operation all the members of a co-operative society should have an equal chance, that for the men living a long distance away some arrangement should be made that would get the same price as those who live close up to a particular auxiliary or central creamery. If the State insists upon controlling their supply, it is up to the State to give something else in return. I think that that is possible and that there should be no difficulty about it.

Another point that certain uneasiness arises about is the question of butter fat content. There are cow testing associations which test the milk and find the butter fat content, or declare it to a certain amount, and when the milk is delivered at the creamery it is found to be less than declared. Some sort of arrangement might be come to under that heading. I am sure the House is satisfied with this Bill, although it is complicated and not easily understood by farmers or by many Deputies. Most legal matters are not understood by us; that is rather unfortunate, but I suppose we will have to wait for another day until we get another language or simplify these legal terms. We cannot help that at present, and we have to take what we get. Otherwise the Bill is satisfactory.

As coming from a constituency with which this Bill really deals—namely, Limerick—I wish to give a word of praise to the Minister and his Department for bringing it forward. It is a Bill that will do an immense amount of good to the farmers in Limerick. The financial deal was was made last year, and when brought forward it got a good deal of criticism from the farmers, but now that the farmers have the creameries working and have seen its advantages they have changed their opinions and the scheme is appreciated. We think it is sufficient to show that the farmers are going so far into the dairy business as to increase their dairy cows by, in some cases, 50 per cent. That is sufficient praise and thanks to the Minister. Deputy Derrig and Deputy Heffernan have spoken about the prices paid by the purchaser; that they were very high, and have compared the prices that they could have been got for in 1922. But I do not think there is any comparison, when you compare the conditions prevailing in 1922 and those of last year, because at that time it was bankrupt stock that was taken over by the Condensed Milk Company. There was great unrest in the country at the time, and of course the real value of the premises in building, etc., was very much below what they would be in normal times. The farmers really had not the courage to take them over at the time, and I do think that the men who had the courage are entitled to be paid their compensation. They did make a profit, no doubt. I will give an instance of the profits that were made out of one proprietary creamery in comparison with a co-operative creamery close by. The co-operative creamery paid one penny per gallon more than the proprietary and had a net profit of £850. One penny per gallon all the year round means for an average cow about 50s. Taking a man with ten cows that meant £25, or £25 profit to the owner of the proprietary creamery. If the farmer had that going into his own pocket what an advantage it would be. The co-operative creameries are only charging up to £3 per cow, extending over eight years. That will mean 7s. 6d. a year, or approximately a farthing per gallon. After that it is their own. Being in the centre of the area, we have taken three co-operative creameries in the poorest area in West Limerick and compared these with the adjoining proprietary creameries all over the adjoining county. That means that that other country was taxed to the extent of £52,000 last year by supplying their milk to the proprietary creameries and not having co-operative creameries there; the adjoining counties are really jealous that they are not under the Act. There are some co-operative creameries in the adjoining county, but the number of shareholders or guarantors is very small. We have some cases where four or five are guarantors in the bank for a sum of £4,000 or £5,000, and their position is very precarious.

I do not know whether Section 14 will deal with those proprietary creameries and that they will be closed down. The section is rather drastic, but at the same time it will bring so much relief to those people that they will not consider it so. Section 14 deals with the prohibition, the licensing and maintenance of certain creameries. Will the Minister say if I am right in my reading the section as such?

Mr. HOGAN

No. The section is not aimed at proprietary creameries at all. It is aimed at certain developments that are taking place in Tipperary at the moment.

Regarding the creameries that Deputy Derrig spoke of and the three hundred and sixteen cows supplying 3,000 gallons of milk, that is simply impossible. It would mean an average of ten gallons to the cow. It might be that there would be only shares to the extent of 316 cows and that other suppliers would come from outside without having any shares— that is, that they would have the benefits of co-operation without responsibility. Three hundred and sixteen cow shareholders would be responsible for a thousand £1 shares, and the other 700 cow shareholders would have the benefits without any of the disadvantages in case the creamery went bankrupt. There was another point that Deputy Ryan made as to the employees of the redundant creameries. All these have not been dealt with satisfactorily. Many of these were not in a position to get into the other creameries, but get small compensation. Many others are unemployed and have very little chance of employment.

There is a section also dealing with audit. I think that is a very important matter. Generally speaking, the shareholders are not satisfied that the audit is as complete as it should be. The auditor, they think, cannot go through the books of a creamery in four or five, or even ten, hours in an annual visit. I think it would be well to have a more detailed audit somewhat similar to that of the Government audit. If they took the particulars of butter fats and the price got for butter in any month and took the prices got for milk and compared them, it would take some time longer, and it would be worth the cost. I am not suggesting there is anything dishonest; at the same time it would satisfy the suppliers and bring a good deal of confidence if the audit was more exhaustive. In dealing with the audit it does seem strange that a very satisfactory balance-sheet sometimes is brought out at the end of the financial year, and then after three or four months you have the creamery society going bankrupt to the extent of four, five or six thousand pounds. There is something wrong there.

I suggest that the accounts of some creameries are not audited as frequently as they should be. I have received many anonymous letters— they show the mentality of the suppliers—giving the names of creameries whose accounts have not been audited. Under the Friendly Societies Act I thought that the accounts of all creameries and societies should be audited at least once a year. Such audit ought to be very detailed, and particulars should be given regarding the stock-in-trade and so forth. I thank the Minister and his Department for the detailed manner in which they have gone into this matter.

One phrase has been used here to which I take exception, namely, "State control." Some Deputies think that it has gone too far. We really never had State control in the accepted sense of the word, but we have had State help. In some cases we have had compulsory State help, because it was absolutely necessary that it should be compulsory. There has not been, as I say, State control. So far as it has been carried out, I would be inclined to say that it should be carried a little bit further. I take full responsibility for saying that, and I do so because of the experience I have in directing a co-operative concern. The difficulties which you meet in respect of ordinary suppliers are things which you would not except to meet in a reasonably educated country. I think the proper designation of it is "State help," and in my opinion it has never gone beyond that. We are not duller in this country than people elsewhere, but we are not more intelligent. Other countries thought it essential to have State control, State help, and the only countries that have come to the top are those where the State interfered. In this country, where the vast bulk of our agricultural community consists of small farmers, they do not get the same facilities as larger farmers in bigger countries. Naturally our small farmer has not the same education. It is not his fault, but it is his misfortune. Here you are dealing with a large number of small farmers, and it is much easier to have effective co-operation among a smaller number of people than to have it among larger numbers who have not the same facilities. I think that Deputy Matthew O'Reilly got very close to the question when he said that it was necessary that we should get a fair price. It is necessary that we should get the best price at the lowest expense and that we should do away with all possible overhead charges and not have a millstone around the neck of an industry which cannot bear unnecessary burthens. We are already reaping the benefit of what was done here when the previous Bill went through. What do the market reports indicate now? What did they indicate a month ago or twelve months ago? Anybody who reads them can understand the lesson.

To what markets is the Deputy referring?

I am referring to the English markets for butter. A fortnight ago we were in excess of the Danish price. Now with regard to creameries that are closed. Creameries have been closed. Deputy Derrig referred to a particular creamery which I know better than anyone here. I come from very near that district, which is a little hamlet surrounded by hills. It is in the slate quarry district between Kilkenny and Tipperary. Naturally, they have a small supply of cows, as the land is not suitable and the district is far removed from other creameries. Deputy Derrig talks about 360-gallon cows and 2,000-gallon cows in the one district. Anyone familiar with cow-testing knows that by multiplying by two the best yield of your cow you get a return in gallons. If the Deputy said twelve hundred gallons he would be putting it at a conservative figure. The reason of that is, in this case, bad location. The only way to deal with that difficulty is by organising motor lorry transport. That difficulty can be dealt with. I do not see that there is any hardship inflicted on that particular district more than any other. I want to stress the fact that in a country like this, with a lot of small suppliers dependent altogether on managers, we ought to have a very efficient auditing system and a very efficient staff of auditors to deal with that particular class of work in all its bearings. I am not going to make the charge that there is a lot of room for improvement. It is essential, however, that the best system in that respect should be adopted.

It has also been suggested that the Government valuer when assessing the value between the seller and the buyer puts on too high a price and that it would be advisable to review that price in this House. I object to that. I admit it is good politics, but it is very bad business. It will read well in the papers, but it is bad business and I object to it. One thing has been said here, with which I think all of us will agree, and that is the inconvenience caused by the peculiar forms we have in regard to all legal documents, bills, assignments, wills and so forth. I am sorry that the Minister for Justice is not here. I know that he belongs to one of the oldest and most conservative trade unions in the world. One finds it very difficult to realise the necessity for such forms, but when you get the bill it begins to dawn on you that they are made cumbrous in order to justify the amount of the bill. I wonder would the Minister for Justice, or whoever is in charge of our legal forms and formalities, ascertain what the legal forms in America are. Indeed I think it is more necessary to get the legal forms of other countries than to get copies of the Constitutions of other countries.

Send him away for five years.

We could not send a more intelligent man than Deputy Corry, and I think we would be unanimous in sending him there. I do not think it is possible that the committees or a council of committees of co-operative societies could do the same good or do it in the same way as has been done through the assistance of the Department. In my opinion the Department which is responsible for that particular end of our national life is the only body to deal with it effectively. Other countries found that out. Although we have gone a long way to meet other countries in competition, we may except keener competition in the future. They will not sit still. They reached a point which we afterwards reached, and they seem to be sitting there, but they will advance from that point, and we too will have to advance from ours. I think we can put absolute trust in the Department to carry on that side of the work.

I do not propose to have an accurate or intimate knowledge of the subject matter of this Bill, but I have helped to do what I could to bring to the notice of people in areas where there are no creameries the advisability of establishing co-operative creameries. In the course of discussion with various people on the matter, there was one question which always cropped up. That is the question of control and the audit of accounts—the measure of control held by the Department or the I.A.O.S. When I saw Section 15 in the Bill I looked upon it as an advantage, but a remark which the Minister made in replying to Deputy Dr. Ryan led me to believe that this Section 15 is not of general application.

Mr. HOGAN

Section 15 does not deal with that point at all. I would have to explain that.

Mr. O'CONNELL

I take it that Section 15 is of general application?

Mr. HOGAN

It is. I intended to make that clear. I was wrong in my remarks to Deputy Derrig. It would apply to any creamery.

Mr. O'CONNELL

If it is of general application it meets the principal point that I would look for in a Bill of this kind, because I have received complaints from people, who had knowledge of the matter, to the effect that the system whereby the accounts of creameries are audited is not at all satisfactory, and that if a staff of auditors were appointed by the Department or the I.A.O.S., who would be responsible for auditing the accounts, it would be much better than the present system whereby the Creamery Societies appoint, sometimes, I am informed, on the recommedation of the manager, a private firm to audit the accounts. If that is the system it is essentially bad, because private auditors will be competing for the business, and if they feel that the manager may have the power of recommending their appointments they are not going to be particularly hard on the manager when it comes to the question of auditing and they will be very careful in their criticisms. They will overlook things which an independent auditor, who does not depend upon the manager for his appointment, would not overlook. I would like to ask the Minister for an assurance on that point.

I would like to know if it is proposed to take any steps towards federating creameries either in a local federation or in a national federation. I think it will be found that federation will be necessary. The section that has struck me and that is most interesting to me is, Section 15 by which competition is prohibited. In my opinion that will inevitably lead to compulsion on the part of the State. I think that once you have changed the character of the industry in that way there is no longer any competition between co-operative creameries and instead of having the whole of the country linked up under one proprietorship, you have each individual creamery as a self-controlled unit, and you have a new problem altogether to face. It was from the private enterprise of Cleeve and people like that that the manufacture of condensed milk started. I think that the same remark applies to the manufacture of casein and other things. At any time it may be desirable to have powdered milk for instance turned out here. I wonder if it would be possible for an individual creamery to take the necessary steps to fulfil that requirement or would it not have to be done through a federation? Similarly we might find ourselves in the position that the article required abroad— and, of course, all this Bill is, unfortunately, based almost entirely on the prospect of a foreign market—if at any time it may happen that the demand on the foreign market may be altogether different from the demand on the home market, in that case I think the people will not be content to see creameries producing entirely in response to the foreign demand. I observe the Minister is impatient to get on but I just wanted to ask him a few questions from that point of view.

I think the Minister should be pleased at the general tone of the discussion on the Bill. This might have developed into a very acrimonious discussion, and I think it is satisfactory to the agricultural community generally to find that a better spirit has been, if I might say so, fertilised in the House in dealing with matters agricultural. I do not propose to criticise the Bill in detail, except to re-echo many of the minor details that I heard discussed by other members. I do say that in taking this, what I might describe as the first step in the proper organisation or control of one of our most important industries, we must bear in mind that many other problems arising out of this dairying industry will have to be overcome before we can say that we have evolved a really perfect system of control, or fostering, if you like, and also a system of marketing. Deputy O'Reilly brought me back a few years when he spoke about the conditions of control in war times. It reminded me of a little incident that occurred in my own career, when I had the privilege of being pelted with eggs which cost 5d. each. I had that privilege on a certain occasion. I do not think that any Deputy in this State will ever have to say or will ever have to complain again that he was pelted with eggs which cost 5d. each.

They were probably worth 5d. each about three months before you were pelted with them.

Oh, no, they were quite fresh. Fortunately, they were not genuine election eggs.

Mr. O'CONNELL

Then what are you complaining about?

I am complaining that we are not able to sell them at 5d. at the moment. Many questions have arisen in this debate, amongst them the question of control and the question of audit. I think these are rather important. If any laxity has occurred in the work of the creameries in the past— and certainly some of them have not got on very well—I think it is entirely due to improper auditing of the accounts. That is a matter that should be attended to: it is most important to the industry. It has been universally admitted in the House that State control is necessary. It is necessary that the State should take a strong hand in fostering the industry and in marketing the produce. No matter what measures are necessary, it is in the interests of the individual as well as the State that the best prices should be obtained for our produce.

I will conclude, without further criticising the measure, by saying that it is a measure of such importance that I think the further stages of it should be left over until after the Summer Recess, so that each of the Parties and individuals in the House—unfortunately I belong to a Party where I can only read one sheet of paper at a time, and I cannot deal with all the Bill—would be able to consult those intimately connected with the industry and be guided as to what necessary amendments, if any, are required. That is all I have to say on this matter.

I had hoped that the discussion would have, more or less, followed the line of analysis given by the Minister last night. It seems to me that the discussion has been more on the details of the Bill, minor matters, instead of on the big aspects of it, following the Minister's analysis. I think he dealt fairly fully with two of the sub-divisions. He says that this Bill is meant to meet three classes of cases: one the case where the disposals company had acquired as a going concern both the plant and the milk supply; two, where the milk supply was acquired, where certain creameries were closed down—redundant creameries—and the milk supply of these taken over; and three, a situation which I would like to have heard more about. I think the Minister passed rather lightly over that, if he touched it at all. That is the case where the milk supply was bought over and where some individuals whose supply had been given previously to one of the creameries closed down and bought over—where that is going to some other creamery, to somebody else.

Mr. HOGAN

The third case is where a creamery buys a milk supply and some of the suppliers, instead of supplying the creamery that bought the milk supply, supply milk to a neighbouring creamery.

It might occur that the whole plant was bought over.

Mr. HOGAN

Quite so. That is a distinction that cuts across the two.

It is proposed to make the persons who get the supply pay just the same as they would have to pay if they were a society?

Mr. HOGAN

Exactly.

Except that they get nothing back from the suppliers.

Mr. HOGAN

In such a case they must pay £1 a gallon per year, and they have a right to issue shares to the extent of £1 a gallon to the suppliers.

That is the point I wanted to be sure of.

Mr. HOGAN

Section 2 provides that in a case where creamery "A" buys a milk supply from a redundant creamery which has been closed, and where the suppliers of that redundant creamery or some of them send their milk to creamery "B." it is creamery "B" that will be held responsible. That section deals with suppliers who, instead of sending milk to creamery "A," send it to a creamery that has not bought it at all. It is provided there that they shall pay a certain amount, and under paragraph (d) "the said principal sum payable by such person to the company shall be calculated by the Department at the rate of one pound for every complete gallon of milk in the peak day quantity." That makes the arrangement that the creamery that gets the milk supply without agreement shall pay £1 per year for every complete gallon of milk. Section 5 provides that they shall issue three shares per cow. The section relates to the issue of debt shares by societies.

My difficulty is this: suppose you have a proprietary company getting the supply, what shares will the farmer get? What is the position suppose the supply formerly given to a co-operative society or a redundant creamery was bought up?

Mr. HOGAN

There is no such case. This deals with specific societies. It would be wrong to say there is no such case. There are one or two cases where there are small supplies that were diverted, and when we have bought them we can deal with that matter.

What is the present position with respect to proprietary creameries? Are there many in existence now that are not bought, and is it the purpose of the Department to buy them all out?

Mr. HOGAN

With regard to this Bill, I agree that it is complicated. This Bill has been in preparation for four months, and if it has been altered once it has been altered half a dozen times. It was found extremely difficult to draft the Bill. Undoubtedly it is difficult for the layman to read it, certainly without some explanation. The question of whether it is possible to simplify drafting is one with which I would like to deal. There is a famous case of attempting to simplify drafting, and that was the first Workmen's Compensation Act passed in England. That Act was passed while Mr. Chamberlain was Chancellor of the Exchequer. He had charge of that Act, and he announced before its passing—it was very revolutionary at the time— that he proposed to draft it himself. It was a most concise piece of English. He announced that he would draft it himself, and he had taken considerable care and he promised to draft it in such a simple way that any workman sitting by the fireside with his wife would know perfectly what every clause meant. He did, in fact, draft it himself in non-legal and non-technical language. As a piece of English, concise clear English, it is certainly regarded as a masterpiece. But the results of the Act were that the English Law Courts were in arrears for at least three years after the Act was passed dealing with compensation cases. The lawyers of England made a fortune out of it, and they held up the English Law Courts. That is a very notorious example, and it is an example often quoted for the people who talk about simplification. It is an Act which is interpreted by decided cases. There is hardly a clause in the Act that is not now interpreted with reference to decided cases.

That is an example of the fact that you cannot get away from the parentheses and qualifications that are necessary when you are drafting an Act of Parliament. An Act of Parliament is supposed to cover all possible future contingencies, and it is a strange thing that in fact it is the contingencies that one thinks will never arise that do arise in practice. It is impossible to simplify what is essentially complex; it simply cannot be done. We believe ourselves, and it is generally believed amongst people who are very competent to judge, that we are particularly lucky in the drafting of our Acts of Parliament. The drafting staff we have is extremely good. There is a school of drafting. The English Acts are not drafted quite on the same lines from the point of view of technical drafting, but it is considered here and in England, where there are really great equity lawyers and where there is a very big Chancery Bar, that the drafting here is really first-class. I do not think it would be possible to simplify very much more than is done. The main thing in drafting a Bill is to see that it will not give rise to endless litigation afterwards in the course of its administration. That is often more important, and Deputies will have to put it out of their heads that it is possible to draft a highly complicated Bill in simple language that will cover every possible contingency and be at the same time easily understood by everybody. In other words, it is impossible to simplify the essentially complex. I agree, therefore, that it is a very complicated Bill.

There was another point raised here. It is the second important point. It was a point raised in connection with the purchase of the Condensed Milk Company of Ireland. There is a difference of opinion about that purchase. Some venture the view that the creameries were bought too dear; others think that they were not too dear, and others say that, whether they were bought cheaply or dearly, they are likely to confer benefit on the country as a whole.

Deputies will remember this when they are speaking of the purchase of the Condensed Milk Company, that you cannot say that they were paid too much or that the premises were bought at too dear a cost, or that they could have been bought cheaper. I believe they could have been bought cheaper if we were content to wait a year or two and if we were content to take the consequences of waiting for one or two years. When the Condensed Milk Company was purchased it was highly capitalised, and it was not making a profit. On the contrary, it was making a loss. It was in the middle of a big trade war with the co-operative societies of Limerick, Cork and Tipperary. On the one hand you had the Condensed Milk Company, the biggest shareholders of which were Messrs. Lovell and Christmas. On the other hand you had the majority of the co-operative societies of the counties of Limerick, Cork and Tipperary. These were bodies that had not anything like the same amount of money as Messrs. Lovell and Christmas, but they had very special advantages in view of the fact that the suppliers of the raw material were shareholders in the co-operative societies. Consequently the position was that, while they had not the same advantages in money as the Condensed Milk Company had, they had other advantages which enabled them to carry on the compettion for two or three years with the Condensed Milk Company.

If that competition had gone on it is hard to say what would be the outcome. You can only make a guess. So far as that competition had advanced it had landed the co-operative societies in very great difficulties. The competition had not bankrupted them, but it brought some of them into the position that they had no further credit; it brought others of them into the position that instead of being free of debt, they had mortgaged their securities, but still they could carry on. On the other hand the Condensed Milk Company were making big losses, but they were putting up a first-class fight. But in this company, with a capital of £300,000 to £400,000, the largest shareholders were Lovell and Christmas. Messrs. Lovell and Christmas, I might mention, is a firm that has a turn-over of £23,000,000 to £24,000,000 per annum. They are the biggest grocers in the world, and they control one-third of the grocery trade in England. The whole butter trade in Ireland could pass through their shops. They are the biggest buyers of New Zealand, Danish and Australian butter. They had a special interest in holding a certain amount of control over the butter-making business in this country, and while they were making a big loss, say, £100,000 a year, it was only a small thing to them. They could afford to take very long views, they could afford to wait and to finance the proposition themselves and afford to lose £200,000 on it until the co-operative societies would have stopped paying the money. They could have continued until the inevitable happened, until the co-operative societies in the district who would then have to go out of business, and then they would control the bigger butter supply from Ireland. During all that time I would be receiving deputations from the proprietary creameries and from the co-operative creameries looking for money and everyone would be asking, "What will you do about it?" It is not a question perhaps so much of comparing the prices at which it was bought with what it might be bought at, but it is a question of the terrible waste that would have gone on in those two years and with the grave uncertainty of what would happen at the end of those two years.

Remember it is not to our interests to buy any proprietary concern at too much of a loss to that concern. The State can buy any proprietary concern at any price it likes; at any price that it puts into an Act of the Oireachtas. The price that the Dáil fixes for the compulsory acquisition of any concern is the price which the State must pay. But the State has to take other things into account. This is not a country of very great enterprise. You have to encourage enterprise so that people who start proprietary enterprise in this country should not get the impression from the action of the State that they were not wanted, and that this was not a place in which to invest money. Such enterprise should get encouragement, and if they were to be bought out they should get a fair price. It was not to our interests at all to put pressure on Lovell and Christmas because they are an English firm. They are an English firm with tremendous influence in the English market, and while we do not go out of our way to cultivate English firms, and while we must have such organisation here that they must give competitive prices for what they buy from us, it is not at all to the interests of this country because a firm is an English firm to treat them unfairly. They must be treated in the same way as any other firm.

Anyway it is a bed of roses, roses all the way up to the present, because nobody has paid anything yet except the State, and the first payment will not become due until next November. I believe myself that the payment will be honoured. Of course, it will be a question of whether we can get through such a transaction without some trouble. Most of the societies will honour their obligations and make no attempt to get out of their obligations. Whether they will or not, it depends entirely on what the butter market will be like in 1929, 1930 and 1931. This business is a bit of a gamble. There is not a fortune in the dairying industry. But its success is essential to this country, because dairying means not only butter but pigs and calves. We must help and foster the dairying industry. There is no fortune in it. If the times are good all the creamery societies will pay up and look pleasant and they will not say what a fine transaction this was. But if the times are not good they will not pay up so easily. That is human nature. If there is any encouragement to the odd creamery that wants to take advantage of these obligations and get out of them, they will do it. The experience up to the present is that with one or two notable exceptions the creamery societies have not tried to blackmail.

In answer to the question that I have been asked I will give some figures now. When I come to the final balance sheet everyone will have a chance then. It will be pointed out that this scheme costs so much in liquidation, that it costs so much to transfer, all sorts of losses will appear in the balance sheet and will be commented on in the Dáil in a sort of detached way without any reference to the general advantages of the purchase scheme, without any reference to the general conditions of this particular scheme. The Deputies will have to remember that this is a commercial proposition. a very big commercial proposition done by a very big firm, namely the State. When carrying out a very big transaction it is always a question of having to carry some big disadvantages and some big advantages and weighing up the situation and pointing out which outweighs the other. There are undoubtedly aspects of the purchase of the Lovell and Christmas transaction, that can easily be criticised. Everybody could point out how the firm was losing £100,000 a year for three years previously and they could point to the fact that £365,000 was paid for it. Everybody could draw the moral from that, and point out how foolish we were and how young we were and that it is a pity we did not know more about business. It is not easy to defend that sort of thing by pointing out the advantages generally to the farmers of the country from such a purchase. By pointing out as I think Deputy Nolan and Deputy Gorey pointed out that, possibly a penny a gallon in any county would amount to about £40,000 a year. In Limerick it would amount to more, but in Kerry it would amount to about £40,000 a year. Undoubtedly the closing of the creameries, the establishing of big solvent creameries which could afford to put in proper equipment and plant which could market their butter properly, and do other things well and the re-organisation generally all mean far more than a penny a gallon to the farmers in the country, and in fact the amount that the creameries of these districts, Cork, Tipperary and Limerick, saved as a result of that transaction would be round about one hundred thousand pounds which should be 33 per cent. say, on £350,000.

I have no doubt myself that the transaction is a good one and that it will prove to be a good one. I will give Deputies recent figures with regard to that transfer, but will only deal with the creameries. In a case like this it would complicate matters to deal with the condensers and other assets. The creameries cost £210,000, and we have already sold twenty-nine creameries, of which six would be centrals, for £44,165. That is the full price, including the subsidy, wherever there was a subsidy in connection with the turning of a central into an auxiliary. Actually 48 redundant creameries have been closed. I say on an average—it is a conservative estimate, but it means a saving of £560 a year to a farmer, and for milk supplied will be £38,451. Another creamery property amounts to about—I will not say what it is in order to leave a little doubt. It is a small amount of money, and I do not want purchasers to be able to calculate it exactly. There is more creamery property sold amounting to a few thousand pounds, but we have sold total property up to the present valued for £95,190. That total property consists of 48 redundant creameries and 29 creameries actually sold as going concerns. We have on hands about five centrals and 30 auxiliaries, and they are easily the best creameries to-day. They are New Market, Tipperary, Knocklong, Coachford, and Terelton. There are no co-operative societies in those areas at all. They control the whole areas. They are magnificent concerns. They control a huge market supply. They are the best of Lovell and Christmas's, and we have those on hands. There are about five centrals and 30 auxiliaries, and they certainly are worth more than the balance.

You should have been a shopkeeper.

Mr. HOGAN

Why?

You are a great salesman.

Mr. HOGAN

Time will tell. I hope it will. The operative creameries sold are 29 and the redundants 48. We hold 35. That is a total of 112. So far as creameries are concerned I have no doubt, provided something extraordinary does not happen in the future, such as a complete collapse in the price of butter, or something like that, that we will be better than I anticipated. I have no doubt that we will be able to sell creameries at a figure which I indicate. All those sales took place voluntarily. I want Deputy Derrig and others to realise that. They were all voluntary, and not carried out by the Dairies Disposals Boards to any extent. They are carried out in conjunction with it. The people who sold them were the I.A.O.S. The I.A.O.S. run the creameries of the country. This is an agreement between the Dairy Disposals Board and the Society. It is a voluntary thing which they signed and were advised to sign by their own organisation, which acted as a go-between and carried out the transaction. There was no compulsion as far as that was concerned.

Condensers are a different problem. They have been all re-organised. Four or five condensaries have been closed and four or five left open. We are not in a position to hand them over. They will require further re-organisation. There is not a terrible lot of money, I have come to the conclusion, in the condensers. There were big losses in condensing while the Condensed Milk Company held them. We have re-organised them and made them four times, at least, as economic. We have closed the uneconomic condensers and we have increased the turn-over. But they are yet not in a position to be able to be handed over to the co-operative societies, and it would take a considerable time and perhaps some money to put them absolutely right and in a position to be handed over to the co-operative societies. I do not want to go into that any further.

Now to come back to the Bill. I agree with the point of view of Deputy Heffernan, that the sooner these societies take charge themselves the better. Once we have this Bill and the Co-operative Bill through, the societies and the I.A.O.S. will have everything they want. If it is considered desirable, for instance, to organise federations they should have all facilities for doing it; it should not be the business of the State, as it was not the business of the State to organise a federation for the sale of butter. That has been organised by the creameries themselves, and it is going on very well, but it was not the State organised it; the State has nothing to do with it. It is an organisation built up by the farmers themselves for the purpose of marketing their produce, and if afterwards for some other reason the societies decided to federate for the manufacture of condensed milk, casein, or milk powder or any other purposes, let them do so. They will have an Act of Parliament within which they can operate, so creameries will be in a position, but Deputies must remember there is a tremendous amount of federation already. Remember we have closed 48 creameries, and that there is a number of amalgamations. The ordinary creamery in Limerick is able to take a big quantity of milk, and is a federation of three or four others. When this Co-operative Bill is passed it will contain a provision to the effect that every creamery must affiliate with the I.A.O.S. That would be the beginning of federation, and further federations can follow that, but Deputies should not come to the conclusion on the face of it that the bigger a creamery grows the better it is. That might be very dangerous, as such a creamery might become top-heavy. There are certain creameries which are very big, and which may become bigger, but to merge them in others would be very wrong. I say the Irish Associated Creameries is an example of successful federation. They are doing extremely well. When I hear talk of the price of butter, I happened to get a Danish trade paper to-day. It is called "Smor-Tidende." It is a Danish paper. It is printed in English and Danish, and I happen to read this, which is the first time it ever appeared in print.

Weekly report, 29th June, 1928:—

"We had a fairly good market for butter here this week, but in the absence of any further demand for storing purposes, the supplies were fully sufficient to meet all the orders, and prices ruled much the same as last week. In Great Britain both Irish and New Zealand butter seem to command prices equal to those of Danish, or even higher, but there is a steady outlet for the Danish article in the Northern districts and in Scotland, where Colonial qualities are more or less neglected."

I hear so often that our butter and eggs are so good, and so on, and hear that contradicted, and I see quotations in the papers which do not often bear out some of the most extravagant demands made for our produce. Here is a Danish trade paper, and in it we see: "In Great Britain both Irish and New Zealand butter seem to command prices equal to those of Danish or even higher."

If the Danes were told that three years ago they would not believe it. This is the first time that it has appeared in a Danish paper. It is really a very significant statement. For twenty years we never touched the Danish butter.

Is it not a fact that the Central Marketing Board has to hold up butter in order to get a price?

Mr. HOGAN

No; they never held up butter.

I think they did.

Would the holding up make any difference?

Mr. HOGAN

Not the slightest. To hold up half the supplies in one week would not make the slightest difference in a market where there is £50,000,000 worth of butter marketed.

The Marketing Board are boasting of that.

Mr. HOGAN

That is tall talk. They could hold it for two months, and it would not make a huge difference to the market, but in fact they are not doing it, and it would be very foolish to do it. They may hold it over for a day or so to get it in good condition. It shows how well they are doing, considering the disadvantage they are at by reason of the fact that there are certain creameries outside their organisation. There are certain creameries on the ditch who will not come in. They say: "We wish you well. If you do well, we will come down on your side. If you do badly we will not." It is a great pity. I quite understand the point of view of the big creameries that have been doing extremely well. They say: "We are taking no risks; we are selling our butter very well." On the other hand, it shows that there is very little class consciousness amongst a small section of the dairy farmers of the country. It is not our business to intervene in the matter. It certainly is hard if there is not to be some class consciousness amongst the dairy farmers of the country, and if they have not sufficient pluck to come into this thing and put their backs into it; anyway to make a real attempt to make it a success. If they went into it and it did fail, while it would be most unsatisfactory there would be some results, but if by any chance it failed and there were good grounds for believing that it was because a minority stayed out, then you would have got no conclusion of any kind. Anyway, as it happens, the associated creameries are doing very well. Unless the market is manipulated and if the weather is not against them. they ought to have an extremely good year. It is an example of the federation that should take place, and should take place without the help of the State. I was asked to help, but I simply refused. I said this is not a matter for us; our business is to see that good butter is produced. We consistently refused to do anything in the way of giving money. We will help them every other way, by giving them information supplied by our own inspectors, and in the way of seeing that the butter produced in the creameries is good butter. On their own they have done this and, apparently, they are making a big success of it. They represent about 80 per cent. of the creameries, and it is a pity that they are not getting the support of 100 per cent. I believe they will.

As to the point about closing redundant creameries, the Department did not close them. The creameries themselves closed redundant creameries. As has been pointed out, this transaction has been really carried through by the I.A.O.S. in conjunction with the Dairy Disposals Board. Where a creamery has been closed it has been closed after consultations with the organisation of the creamery itself and the I.A.O.S. Of course, there is bound to be dissatisfaction every time a creamery is closed amongst some section. Men who are living within a mile of that creamery are dissatisfied if they have to go two miles to a new creamery. It would be quite impossible to have uniformity of prices in the sense that Deputy Ryan mentioned. At the present moment everyone is paid the same price at the same creamery. Deputy Ryan suggested that they should be all paid the same price, after deducting a certain amount for transport. You rule your price, say, at 6½d. a gallon. If you decide to deduct a different amount for each district according to the transport, it would be a job for the Creamery Committee as to how they could do it. I do not know how it could be done. If I send my milk from three miles away with a horse and cart to the creamery and another man sends his from four miles away with a horse and cart, how are you going to decide what is the extra cost? In fact it is nothing very much. I do not see how the Committee could do it. You would not get uniformity. In fact there is very little difference now between the prices at the creameries in Limerick. Tipperary, Cork and Waterford. All creameries are standardised; they produce the same article and get the same price for it, and the overhead charges are about the same. I do not anticipate that there is going to be any joint stock organisation. Joint stock organisation was attempted often in various countries in connection with agriculture and it always failed. There will never be one in this country. Co-operative organisations are the ones for the farmers, and will go on increasing. The co-operative society will always be controlled by a committee elected by each member. It does not matter how many shares the member has. The suppliers take shares according to the number of cows they have.

The point about the audit is a very important one, but this Bill does not deal with it. Up to this the position has been most unsatisfactory. The Registrar of Friendly Societies has power to compel societies to make returns, but then, as Deputy O'Connell suggested, a creamery manager could get a friendly auditor to audit his accounts and present the balance-sheet.

Mr. O'CONNELL

It was not even necessary to get an auditor. Two members signing the return would be sufficient.

Mr. HOGAN

I think that is so. That is quite unsatisfactory, and that point has to be dealt with in the Co-operative Bill that is to be introduced. It will be about four times as complicated a Bill as this one, and it will take a very long time to prepare.

That point has to be dealt with. It is undoubtedly a fact that proper auditing is absolutely essential to the success of these societies.

Could the Minister give any idea as to when the other Bill will be introduced?

Mr. HOGAN

It is being prepared by the I.A.O.S., the Dairy Disposals Board and the societies, but there are various questions in connection with it on which they cannot make up their own minds. It would be impossible for me to get something drafted which is not in a concrete form—until the interests concerned tell me what they want. When they put their proposals before me I will have to criticise them, agree with them, or disagree with them, but I cannot do anything until they have cleared their minds on every point as to what they want. After that there will be the question of drafting, and then I come in. Deputy de Valera asked what was the present position in regard to the existing proprietary creameries. We are trying to buy them. The position is that if the existing proprietary creameries sell to the co-operative creameries, we will consider the question of financing that transaction, if we approve of the price. I have told them that we are not buying, but that the I.A.O.S., which represents the creameries of the country, is buying, and that they have got to deal with it. If they do succeed in selling, in coming to a conclusion, we have told them that the money will be all right, provided the Dáil agrees to it. They have been in negotiation for the last six months.

These negotiations are extremely slow. One reason why the negotiations are taking so long is that they have enough in hands, in trying to liquidate the Lovell and Christmas transaction. But we must make the attempt to buy. It is in the national interest—I do not want to put it further than that—that the existing proprietary creameries in Kerry should be bought. Farmers in Kerry who are supplying milk to these proprietary creameries are getting 1d. per gallon less for their milk than farmers in the County Limerick who reside near the North Kerry border. That is a state of affairs which must be ended. With regard to cream content, that matter hardly arises. An Order is being issued under which the cream has to be kept for a certain time so that it can be inspected and tested by the Department's inspector when he visits each creamery. It would be quite impossible to arrange for a test of a sample other than the sample that was taken for test by the creamery manager. Any other method of carrying out a test would simply lead nowhere. Suppose, for instance, you were to take a sample and that it worked out at 3.45, and that from another bucket of the same milk you took another sample and that it worked out at 3.6, what does it prove?

But suppose that it was from the same bucket?

Mr. HOGAN

It might occur, but still I think it could hardly occur. But how could you have an inspector of the Department there at the time to do that? The milk goes into a tank in the creamery and a sample is taken there. If an inspector arrives at the moment when the milk is in the tank, and simultaneously takes a sample from it with the creamery manager he could take it away and test it. We consider that the most satisfactory thing is to make the creamery manager hold the milk that he has taken for test to enable us to test the same sample again if we wish to.

The farmers do not understand the process of testing milk, and they always mistrust any process that they do not understand, and maybe they have a reason for it. The real business of the Committee of the society will be to keep that right. I would be anxious to get this Bill passed. I realise it is a difficult Bill. In any event I would be anxious to get the Second Reading to-day. With regard to the point that was made by Deputy Ryan, I suggest that there is nothing in it. If a man refuses to take shares, what happens is, you simply cut off his source of supply. Take the case of a man with twelve cows. If he does not take shares and you refuse to take his milk supply, well, all he can do is to spill it if he does not supply it to the creamery. In that case the Department would not charge him. We are arranging that we shall pay a pound per gallon for the peak day quantity. When you are making your calculations, if you are told that such a fellow rather than sell his milk to the creamery and take shares in the society prefers to feed his pigs with the milk, well, you do not include him, and that is all that happens.

You will let the society off then?

Mr. HOGAN

You would, of course. With regard to Sections 13 and 14, Section 13 prohibits the establishment of unlicensed shops. It prescribes the manner in which factories dealing in milk and in milk products shall be set up in the future. Section 14 deals with the situation where attempts have been made to set up factories during the last six months in spite of the Department of Agriculture. After we had purchased the Condensed Milk Company a certain firm that would not touch this country with a forty-foot pole came along and became extremely interested in milk and milk products. It wanted very badly to set up a factory in the Co. Tipperary to compete with the Condensed Milk Factory which we had bought. Unfortunately it was helped by a certain co-operative society in the neighbourhood suffering from a grievance. We have to stop that. That is redundancy over again. There is only a limited milk supply there. The Condensed Milk Factory is owned by the suppliers themselves, and is able to handle all the milk it can get.

For some reason or other these philanthropic Germans came in—of course, I know the reason, but I do not want to state it—and professed to be deadly anxious to spend their own money in putting up a casein factory in a certain place in Tipperary. I put it to them that they were going against national policy as outlined in the Dáil. They said nothing; they remained polite, but went ahead. I have informed these people, and all whom it may concern, that I will try to get the permission of the Dáil to stop their activities, and if they are foolish enough to spend their money in this way, that is their own look-out. I do not believe that it is philanthropy exactly that is behind it. There was no great anxiety to come in and start factories in Tipperary until we bought the premises of the Condensed Milk Factory.

They thought perhaps they would make a good haul.

Mr. HOGAN

They are making a mistake, they will never get the chance. There was no one very anxious to come in and start factories in Tipperary until we started to buy these factories and hand them over to the suppliers. Now there are all sorts of Continental people anxious to take a hand and help. I think there are a great many people in this country and in other countries who know that there is a very big and dangerous experiment from their point of view going on, and they are anxious to come and get certain blacklegs amongst the farmers themselves to help them and to smash this in the beginning. Section 14 is aimed very specifically at this, and if I get this Bill through the Dáil it is my intention to tell this particular firm that it is to build no further and that it is to leave the field to the Condensed Milk Factory.

With regard to the 48 creameries closed down, and for which someone paid £38,000 for the milk supply. I presume that the farmers paid that for their own milk supply. That would be like buying their own goodwill.

Mr. HOGAN

No. The existing co-operative societies paid that and the farmers took shares to that extent.

They are paying, then for their own milk supply?

Mr. HOGAN

No. That is not the value of the milk at all. First of all the farmers are coming into a creamery that has all the advantages of a big milk supply from another source, and that is what they are paying for. If you organise a creamery it costs a certain amount to build it. It generally costs £1 a gallon to get the plant and equipment to handle the milk, and the more milk you have the more equipment you want. Three shares per cow will give it to you. Additional equipment is necessary to handle milk in a big way and leave a decent profit. They will have the advantage when they take out these shares that at the end of eight years they will own that creamery without owing one penny to a bank.

Why did they send the milk from Tipperary to Limerick to be manufactured?

Mr. HOGAN

That is another question. If I went on to that question it would take hours.

That is not giving fair play to Tipperary.

Question put and agreed to.
Committee Stage ordered for Tuesday, July 17th.