I move the adjournment until to-morrow. The statement I have to make is not a spectacular one. It does not foreshadow any alteration in Government policy. Its object is to give a general survey of the economic condition of the country and to indicate the steps which we have taken and propose to take to deal with such difficulties as have arisen. The existence of these difficulties it is idle to deny, but to magnify them is as dishonest as it is unwise in the interests of the nation.
In these days, no cry is so loud or so popular as the cry for State assistance. If one were to judge by the note struck in certain utterances which are from time to time reported, it would be difficult to avoid the conclusion that this country has been hit by an unparalleled wave of depression; and our citizens are the victims of unfortunate circumstances which are peculiar to the Saorstát; and that the Government can and should take drastic steps which would provide a sure and expeditious cure for all our economic ills. But any such impression will not survive a sober examination of the facts.
One of the major indices of our economic position is to be found in the development of our foreign trade. Although there has been a widespread and almost catastrophic fall in the general price level, our exports have increased substantially during the past four years. The adverse balance of our visible trade has fallen from £19.3 millions in 1926 to £10.2 millions for the year ended on the 30th September last—a drop of no less than 47 per cent.
In any endeavour to get a fair appreciation of our present position, it is a matter of no small interest to examine the recent trend in the external trade of foreign countries. An analysis of the available trade returns for forty-three countries for the first eight months of the current year shows that in only nine countries besides the Saorstát has the value of exports increased as compared with the corresponding period in 1929. These countries are: Algeria, Spain, Hungary, Latvia, Lithuania, Palestine, Rumania, Russia and Yugo-Slavia. In the case of six of these countries, the latest returns available cover a shorter period than eight months, while in certain cases there are special circumstances which indicate that a close comparison cannot be made between their trade returns and ours.
In considering our domestic position, it is worth pointing out that the aggregate actual income of Saorstát tax-payers assessed for income tax purposes has increased by £4¾ million during the period 1923-24 to 1928-29— the latest year for which figures are available. When every necessary reservation is made in the interpretation of these figures and when allowance is made for the increase during the same period in the purchasing power of money, it cannot be denied that these are satisfactory figures.
Another important index is to be found in the statistics relating to unemployment. The average number of persons registered as unemployed during the current year up to the end of October is 50 per cent. lower than the average number registered during 1922. The average number of claims to unemployment benefit current is 58 per cent. lower than the corresponding number in 1922. The number of persons insured under the Unemployment Insurance Acts increased steadily from 242,494 in the insurance year 1922-23 to 284,382 in 1928-29.
Since 1923 we have floated three National Loans, the aggregate amount raised being £23 millions, of which approximately £3 millions was raised by an external loan. Net sales of savings certificates issued since 1923 amounted to £5½ millions, and deposits in the Post Office savings bank have risen approximately to £3.2 millions. Net sales of savings certificates during the period from 1st April last to the beginning of the current month, in fact, already exceed by more than 100 per cent. the sales during the corresponding period last year and are higher than the sales for any complete year with the exception of the year 1923-24 and the year 1928-29.
These facts at least suggest that during this period Saorstát citizens, after providing for current consumption, have had an appreciable margin available for savings. Our revenue position is good. Our social services in relation to our means compare favourably with services which other countries provide. Our National Debt is comparatively low and has been devoted, in the main, to remunerative objects. Our credit to-day stands as high as the credit of the strongest countries in the world. Within the past week, the quotation for external loan in New York was 3 points higher than the quotation for 5 per cent. War Loan on the same market; the latest quotation is 2¾ points higher than the quotation for War Loan. The Second National Loan, which was issued at 97, yesterday reached 105 on the Dublin Stock Exchange.
This summary, which is not and does not purport to be exhaustive, will suffice to show that so far as our general position is concerned there is no justification whatever for alarmist statements and no call for heroic measures.
Agriculture is, no doubt, passing through a period of acute depression as a result of falling prices, and this has been accentuated by the bad weather which has interfered with this year's harvest. Distress, due to bad prices, is mainly felt in the butter industry, and the low level of butter prices is, I fear, likely to continue for some time. The most serious aspect of this fall is due to the fact that dairying is, to a large extent, the foundation of our beef and bacon production.
We export, and must continue to export, nearly half our total production of butter. Our exports amounted in value in 1929 to 4½ million pounds, while our imports amounted to £360,000. If we are to maintain production, we must continue to find a foreign market for at least 4 million pounds' worth of butter, and, important as this figure is for us, its relation to total world production is so small that no action of ours can either stabilise or increase prices on this market.
There is an application at present before the Tariff Commission for a tariff on butter. I do not propose to discuss the merits of this application. It is a highly debatable question which can only be dealt with in the light of the complete information which the Tariff Commission will be able to obtain. Other methods of relieving, to some extent, the immediate difficulty in the butter trade are being examined.
So far as distress has been caused by the weather conditions of this season, this distress is obviously greater in poorer districts. It is in these districts that immediate relief both for farmers and farm labourers is most urgently required. It is proposed to vote a sum of £300,000 for the provision of employment, and a considerable portion of this sum will be utilised in providing employment in rural areas. In this matter we must, of course, cut our cloth according to our measure. On the one hand, we must take into account the need for relief and, on the other, the capacity of the taxpayer to foot the bill. The Relief Vote will come up for debate as a separate issue, and I do not propose to deal further with it at the moment other than to say that it is, of course, a temporary expedient to meet a temporary situation.
The problem of agricultural depression still remains, and it is important that we should all realise what that problem really amounts to. Speculation as to what our position would be if we were completely self-contained is vain. We are at present a country with an enormous export surplus which must be sold on a foreign market, and as such we cannot escape the reaction of world conditions. Already we have experienced their effect. Prices of live stock and live stock products have fallen steadily since the year 1921, and when our farmers ask themselves what does the future hold, what they really desire to know is, are these prices going to fall further? Nobody can answer that question with certainty. We can only speculate, but in our speculation we must take cognisance of the ominous fact that, with the exception of butter, the fall in prices of live stock and other products is far less than the fall in the prices of cereals. Our economy consists, in the main, in the production of live stock and live stock products; the economy of countries like Canada and Australia consists in the main in the production of cereals for sale. I am not at present concerned with politics or politicians but with farmers, and every farmer in the country knows that the price of cattle, sheep, beef, mutton, bacon and eggs, has fallen far less than the price of feeding-barley, oats, maize and particularly wheat. We are all discontented with the price of our live stock products, but what is the position of the farmer who is growing wheat or oats for sale as such? There is at least one claim which we are entitled to make in this year, 1930, and that is that the policy which we have consistently urged on our farmers, viz., to produce live stock and live stock products, and to use grain as their raw materials, has saved this country from the deplorable conditions existing in agricultural countries which, either from necessity or choice, have concentrated on the production of cereals, and especially wheat.
The consideration, however, that our condition is better than our neighbours' does not alter the fact that it will require courage, work, and understanding both from the Government and the producer if we are not to be faced with harder times. To find the best method of assisting agriculture to surmount its difficulties is one of our main problems at the moment. The De-rating Commission has been sitting for almost a year, and has practically concluded its work. Its report is being drafted and will shortly be in the hands of the Government. I do not wish to anticipate in any way that report or to suggest that de-rating in whole or in part is the most effective method of giving relief to agriculture, but it is obvious that we cannot announce our policy for permanently aiding agriculture until we are in a position to take cognisance of the facts and considerations which the exhaustive examination of that particular Commission will place at our disposal.
I do not think we need waste time in examining the various political panaceas which have been put forward for the salvation of agriculture. Our position in regard to agricultural tariffs is quite simple. So far as beef, mutton, eggs and feeding-barley are concerned, the imports of these are so negligible that tariffs cannot possibly affect the position. So far as the imports of feeding stuffs, wheat and flour, which amount to about £12,000,000, are concerned, any tariffs on these would bankrupt the farmer. The world price for wheat at the moment has reached an almost unbelievably low level, and shows no sign of an increase. Notwithstanding that a Canadian farmer and two men can produce 400 acres of wheat per annum, they cannot sell it at a price which covers the cost of production. The cost of production of the same amount of wheat in this country would be at least five times as great. In these circumstances, the people who suggest the encouragement of wheat growing, mainly at the expense of the farmer, as a means of relieving farmers, are not worth considering. With regard to imported feeding stuffs, these are our raw materials. The fact that they have fallen to such a comparatively low price has been one of the factors which have saved the country during the last three years. I cannot force myself to take seriously the organisation which suggests that taxes be imposed on these raw materials.
With regard to imported bacon, it is admitted that no tariff can increase the price of Irish bacon on the home or on the foreign market. Equally, it is clear that the effect of a tariff on foreign bacon would be to increase the price of low grade bacon to the farmers in the poorer districts and the labourers all over the country who must buy bacon. These results do not commend themselves to us as a method of relieving agricultural districts.
In industrial life, there have been developing in recent years international movements of which the importance has not been fully recognised in the Saorstát. Nevertheless, these movements are fraught with issues of much moment to countries such as ours, striving to increase its industrial activities, and deserve the close attention of all those seriously interested in the factors relating to industrial development.
A series of International Conferences has been held in Geneva, in which the ruling purpose has been the removal or reduction of obstacles to the interchange of commodities within European States. The most active parties at these Conferences have been the countries which, having attained to a high degree of industrial expansion, must enlarge their markets for the output that improved methods of manufacture have, in recent years, so greatly increased. Needless to say, any concerted action with this object involves possible dangers in every State holding the ambition of securing for its people a better balance between secondary and primary production. On the other hand, a sufficient increase in secondary production is necessarily dependent on opportunities for export trade, and countries like the Saorstát stand to gain, as well as to lose, by any common endeavour to facilitate entry into foreign markets.
I mention these considerations in order to show that any doctrine of self-sufficiency in industrial policy is inevitably too facile, and too short-sighted. Such a doctrine may indeed amount to recklessness if based on neglect to study world conditions. There are at present at least five clearly marked groups of States discussing and negotiating economic agreements among themselves, to the effects of which we cannot be indifferent. Economic forces are deploying on the international field which, if their bearing on our interests were not constantly and carefully studied, might go far to stereotype these activities by which we live. They might nullify the best-meant efforts to widen the scope of these activities and broaden the basis for the exercise of our industrial and commercial abilities.
So much skill, experience, and persistence are being devoted to the object of retaining and expending existing markets for secondary products that it is essential for us to admit to our minds, and communicate to the people, no conception of our possible achievements that is not founded on a sober consideration of all the available facts. The Government believes that in creating a whole-time Tariff Commission it will be greatly facilitating industrialists in procuring consideration of that kind for their immediate problems. When first constituted, the Commission had adequate time and experience for the work on which it had to engage. But circumstances have recently undergone a radical change. Conflicting economic interests throughout the world, working under conditions of crisis in many countries, are bringing about changes in fiscal and trade policy, kaleidoscopic in their nature. It becomes imperative for the protection of our interests that the body to which we must entrust the examination of new fiscal proposals should be enabled to come to more prompt, but no less carefully-reasoned, conclusions. The members of the new Tariff Commission will be freed from all other duties and thus will be in a position to concentrate not only on the precise applications before them, but also on the study of all the surrounding and constantly altering factors that must be taken into account.
The Executive Council will be newly empowered to refer proposals to the Commission for examination and report. But it should be understood beyond any possible ambiguity that the Executive Council has no intention of using this power in any case where industrialists themselves can reasonably be expected to prepare and advocate their case. In this connection, I must repeat the axiom, which cannot be too well or too widely appreciated, that it is utterly futile to expect, or pretend to expect, that industrial development can be founded on anything but the requisite measure of skill, initiative and judgment among industrialists themselves. It is so easy to speak of Governments or Departments starting an industry somewhere, but to do so betrays a dangerous indifference to the fundamental necessities of the problem. To start, operate and maintain any substantial industry under the conditions with which the State is now confronted requires a concentrated energy, a width of technical knowledge, and a soundness of judgment such as were not always demanded of the manufacturer in the past.
I have stressed the difficulties and the dangers before us, because if they are not known and honestly appreciated, we shall make no real contribution towards overcoming them. But I do not hesitate to say that if we are not mere political partisans, we are justified in drawing comfort and encouragement from our present circumstances. Many other countries envy our condition. The advance our producers have made during recent years has been maintained and secured. Employment in our tariffed industries remains satisfactory. The register of unemployed is practically the same this year as last, notwithstanding the termination of the great Shannon works, and is much lower than in previous years.
Our exports have substantially increased, notably in manufactured goods, and up to September of this year have exceeded in value the total for any similar twelve months in the last five years by from 1½ to 5¾ million pounds. Contemporaneously, our imports have been reduced, and while an estimate of some invisible items in our trade is not yet practicable, there is little doubt that that trade approaches a satisfactory balance. Taking all circumstances into account, we have no reason for depression over what has been accomplished.
It is recognised, however, that, so far as we reasonably can, we must lighten the present burdens on industry so as to encourage and support the essential initiative of those engaged in it. With this object, the Government has decided on a very substantial reduction in the contributions paid by employer and employees under the Unemployment Insurance Scheme. The total contribution payable for a man will be reduced from 1s. 7d. to 1s. 1d., and the reductions for women and juveniles will be in proportion. The result will be to relieve the employer and employee in industry and commerce to the extent of some £225,000 per annum, while the taxpayer, who has to find the State contribution and the cost of administration, will also be relieved to the extent of about £64,000. These reductions have become possible owing to the approach towards solvency of the Unemployment Fund, the debt of which is now relatively small. They will, undoubtedly, afford a very substantial relief to industry, and facilitate it in meeting pressing competition.
It gives the Government a special satisfaction, in taking this step, to know that there are few other States in the world to-day where it would be possible, and that a country where it can be done, and done without risk to the Unemployment Fund, shows an essential soundness and stability in its economic life which we should openly prize and need not habitually depreciate, or, by recklessness, endanger.
