Dáil Éireann debate -
Thursday, 10 Nov 1932

Vol. 44 No. 11

In Committee on Finance. - Resolution No. 3—Customs.

Mr. Lemass

I move:

(1) That there shall be charged, levied, and paid on all lubricating grease imported into Saorstát Eireann on or after the 10th of November, 1932, a duty of customs of an amount equal to thirty-seven and one-half per cent. of the value of the article.

(2) That the provisions of Section 8 of the Finance Act, 1919, shall apply to the duty imposed by this Resolution with the substitution of the expression "Saorstát Eireann" for the expression "Great Britain and Ireland" and as though the articles chargeable with the said duty were included in the Second Schedule to that Act in the list of goods to which two-thirds of the full rate is made applicable as a preferential rate.

(3) That the value of any article for the purposes of this Resolution shall be taken to be the price which an importer would give for the article if the article were delivered, freight and insurance paid, in bond, at the place of importation, and duty shall be paid on that value as fixed by the Revenue Commissioners.

(4) That where any imported manufactured or prepared goods contain, as a part or ingredient thereof, any lubricating grease and such goods, in the opinion of the Revenue Commissioners, are substantially mixtures or blends of lubricating greases or are suitable or intended for use as a substitute for lubricating grease or for use for the subsequent recovery of lubricating grease, Section 7 of the Finance Act, 1901, shall not apply in respect of the lubricating grease contained in such goods, and duty shall be charged on such goods in accordance with the Customs Tariff Act, 1876.

(5) That where any imported manufactured or prepared goods contain, as a part or ingredient thereof, any lubricating grease and such goods, in the opinion of the Revenue Commissioners, are not substantially mixtures or blends of lubricating greases and are not suitable or intended for use as a substitute for lubricating grease or for use for the subsequent recovery of lubricating grease, neither the Customs Tariff Act, 1876, nor Section 7 of the Finance Act, 1901, shall apply in respect of the lubricating grease contained in such goods.

(6) That on the exportation from Saorstát Eireann or the shipment or deposit in a bonded warehouse for use as ships stores of any goods chargeable with the duty mentioned in this Resolution a drawback shall be allowed of an amount equal to the amount of the said duty which is shown to the satisfaction of the Revenue Commissioners to have been paid in respect of such goods.

(7) That Section 6 of the Customs and Inland Revenue Act, 1879, shall not apply to any article liable to the duty mentioned in this Resolution.

(8) That any article liable to the duty mentioned in this Resolution which is re-imported into Saorstát Eireann after exportation therefrom shall be exempt from such duty if it is shown to the satisfaction of the Revenue Commissioners either—

(a) that such article had not been imported prior to its exportation, or

(b) that such article had been imported prior to its exportation but was not liable to any duty at the time of such importation, or

(c) that such article had been imported prior to its exportation and all duty to which it was liable on such importation had been duly paid and either no drawback had been allowed on its exportation or all drawback so allowed had been repaid to the Revenue Commissioners.

(9) That articles which have been imported and exported by way of transit only shall not be deemed to have been imported or exported for the purposes of the next preceding paragraph of this Resolution.

(10) That for the purposes of this Resolution the expression "lubricating grease" means any solid emulsion consisting of saponifiable oils with or without hydrocarbon oils, in which at least one component is wholly or partly saponified by alkalis or alkaline earths and of which not less than fifteen per cent. by weight of the mixture consists of unsaponified oil.

(11) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

There are two firms producing greases in the Saorstát. One of these firms has an export trade in these greases and has been able to compete with importing firms on questions of price in a most satisfactory manner. However, certain difficulties arose concerning trade in the Saorstát. One of these difficulties was that these greases were not packed in small tins here. It is now proposed that firms engaged in the industry will immediately commence packing their greases in small tins to suit that trade. There are roughly 350 tons of these greases Consumed in the Saorstát per annum and of these imports represent 200 tons. The imposition of this duty will result in increasing employment, but it is not possible to give any precise figure in that connection. It is not anticipated that the increase will be very substantial.

Mr. Blythe

One person?

Mr. Morrissey

Could the Minister give an approximate figure?

Mr. Lemass

There are about a score of people engaged in the production of those greases at present and the new market which is to be made available is more than double the amount which has been supplied to the home market in the past. I do not say that it follows that employment will be doubled, but there will be a fairly considerable proportionate increase.

Mr. Morrissey

Will there be ten more persons employed?

Mr. Lemass

About that.

Mr. Anthony

In regard to paragraph (1) does "lubricating grease" include the commodity which has the trade name of "vaseline"?

Mr. Lemass

No.

Mr. Anthony

Does the Minister not consider that this tax will impose a further serious handicap on the motor industry, which uses a large amount of lubricating oils and greases?

Mr. Lemass

Lubricating greases and lubricating oils are different things. This Resolution would have been introduced prior to this but for the difficulty which arose in getting a precise definition which would include lubricating greases and exclude vaseline and every other commodity not intended to be included. It was only after technical experts had spent a considerable time in considering the matter that they produced the definition contained in paragraph (10) to meet our purpose. It refers to axle grease.

Mr. O'Neill

The Resolution refers to the production of these greases. What is meant by "production"?

Mr. Lemass

Manufacture.

Mr. O'Neill

Manufacture differs from production. Are the raw materials from which this grease is made native or are they imported in another form?

Mr. Lemass

Mainly imported.

Mr. O'Neill

Are they tariffed in that form?

Mr. Lemass

No.

Mr. Dillon

Is this the grease habitually used for lubricating hydro-dynamos?

Mr. Lemass

I do not think so.

Mr. Dillon

Has the Minister made any inquiries?

Mr. Lemass

The grease which is covered by this Resolution is mainly used for axles. No matter what it is used for, there is no reason why it should be imported. We have in this country two firms engaged in its production—one of them a firm of international repute which has an export trade and is able to keep the market for that commodity abroad while, for particular reasons, it has not been able to get the whole of the market at home. Whatever the grease is used for, there is no reason why it should be imported. There will be no increase in price, and consumers will get a first-class article.

Mr. Dillon

Did it occur to the Minister to inquire from the chief engineer of the Shannon Scheme if the greases available in this country are suitable for greasing hydro-dynamos? The reason I mention the matter is that I happen to know that lubricating grease for certain electrical machinery is being imported. I cannot imagine that any rational person would import grease from Great Britain for this purpose if he could get suitable grease from Dublin.

Mr. Lemass

You might be surprised.

Mr. Dillon

All I ask is that the Minister will make inquiries as to what exactly he is putting a tariff on. The Minister does not know.

Mr. Lemass

I do know. If the Deputy will turn to paragraph (10) he will see a precise definition of the lubricating grease to which the Resolution applies. It is intended definitely to exclude grease of that character from this market because it can be produced here.

Mr. Dillon

I know that if I turn to paragraph (10) I shall get a definition but the Minister was not able to read the definition much less understand it. I am not surprised at that because the terms are highly technical and it took experts six weeks to produce the definition. All I ask him is did he consult experts as to whether there was any particular type of grease, taking in all this, which must be imported, and did he consider whether certain persons were influenced in not buying the grease manufactured in this country because it was not suitable? The Minister admits that the tariff will only give employment to a small number of people, say about half a dozen and even that is hypothetical. All I suggest is that he should have shown the House that he has taken ordinary precautions to satisfy his mind that a suitable type of grease can be produced at home, and until he has consulted the officials of his own Department I submit he has not taken ordinary precautions.

Mr. Morrissey

Do I take it that the Minister admitted that roughly there would be about ten people extra employed as a result of the imposition of this tariff?

Mr. Lemass

I stated specifically that I could give no estimate as to the number of extra people to be employed.

Mr. Morrissey

The Minister also said that there are two firms in the country in a position to supply the whole trade, and not only that but that one firm was doing an export trade; and that for certain reasons that firm was not able to capture the whole of the home trade. I should like the Minister to tell us what are the reasons why the firm which is doing a certain part of the home trade, and, as I think he said, a very substantial export trade is not capable of supplying the whole of the home trade; in view of that statement I want to know whether the Minister will tell the House why that firm was not able to capture the whole of the home trade?

Mr. Lemass

That is information that I cannot give the House.

Mr. Morrissey

Surely it is very pertinent.

Mr. Lemass

A large part of the imports are purchased by one or two firms. I have satisfied myself, after a long inquiry, extending over the past two months, that the grease to which this Resolution applies can be produced in the quality required and in sufficient quantity, and without any increase in price to the home consumer and that it will not be necessary for anybody to import grease subject to this duty.

Mr. Morrissey

The Minister did say that the firms which are now engaged in this particular trade can supply the home market without any increase in price. Allowing that the statement is correct, that they can supply the home market without any increase in price, will he tell us whether these firms can do that, also without any increase in employment, or if not how many additional hands will be employed?

Mr. Lemass

I have already stated that it is not possible to give the figures because these firms are making other articles as well as grease, and it is not possible for them to pick out the particular employees engaged in the production of these goods. It is not possible to give the precise figures because this is only one range of goods. Consequently it is not possible for me to say definitely how many are employed at present in the production of these goods, and how many extra people will be employed if this import duty is imposed.

Mr. Morrissey

Is it possible for the Minister to say definitely whether or not the firms engaged in this industry can meet the requirements of the home market without any increase in the price of this lubricating grease?

Mr. Lemass

Yes, definitely.

Mr. Hogan (Galway):

What guarantee has the Minister of that?

Mr. Lemass

An assurance from the people engaged in the industry and the additional fact that we have an exportable surplus.

Mr. Hogan

Have we an exportable surplus?

Mr. Lemass

Yes.

Mr. Hogan

That is nonsense. The Minister says we have an exportable surplus even though there are imports of these goods.

Mr. Lemass

There is a substantial export trade.

Mr. Hogan

That is a different matter. There is an import trade also. Is the Minister committing himself to the statement that there is an exportable surplus of this lubricating grease?

Mr. Lemass

There is a substantial surplus of productive capacity.

Mr. Hogan

Oh!

Mr. Blythe

I should like to say that the suggestion that there would be ten people extra employed in the production of this lubricating grease is a gross exaggeration; because I am sure that in the manufacture of this grease from imported materials there is machinery employed. There should be probably a considerable output per person engaged in the industry. If there were going to be ten extra people employed as a result of this duty it would mean that about eight cwt. would be their output. My estimate that it would mean one extra person is much nearer to the truth than the Minister's.

Mr. Anthony

I am accepting the Minister's statement that there will be increased employment as a result of the imposition of this tariff, but the increased employment will not take place in the firms manufacturing the lubricating grease. That extra employment will undoubtedly take place in the number of customs officials who will be required to deal with the imposition of this duty and to interpret matters like this:—

That for the purpose of this Resotion the expression "lubricating grease" means any solid emulsion consisting of saponifiable oils with or without hydro-carbon oils, in which at least one component is wholly or partly saponified by alkalis or alkaline earths and of which not less than fifteen per cent. by weight of the mixture consists of unsaponified oil.

I submit, sir, that the customs authorities have sufficient worries already without asking each and every officer of customs to interpret this paragraph as it should be interpreted and as it can only be interpreted and explained by a very expert analyst. I would suggest to the Minister that in future appointments to the Customs and Excise Department, instead of the ordinary clerical examination that is customary to be set for these appointments and the papers that are usually set for this examination, that there should be included in them a highly technical examination for chemical experts. Does the Minister seriously suggest that if a consignment of anything that may be labelled "lubricating grease" brings in its train an examination of that "lubricating grease" on the part of the excise officer, that he may in turn have to refer it to some expert in the Department of Industry and Commerce and that, in the meantime, the wheels of industry will cease to go round for want of this lubricating oil? It is a very Gilbertain situation indeed. I know that there are certain classes of machinery, and I have acquaintance with the type of machinery referred to by Deputy Dillon that requires a very high standard of lubricating oil. Even the ordinary Deputy who has no technical knowledge at all recognises the fact from the numerous advertisements appearing in the papers in reference to lubricating oil for motor cars and for other means of transport in the country, and especially for machinery used in the consuming of electricity.

I am rather amazed that the Minister, because of the fact that he thinks the imposition of this duty would give some little extra employment in the making of lubricating grease, should involve an already harassed staff in further embarrassment and ask each and every one of these officers to become expert analysts as to what is saponified oil. It requires a good deal of effort even to pronounce the word. If the House is going to add to the worries of the excise officers, we will certainly have increased employment in that quarter, but so far as production in the country goes, we are not going to increase employment except, as I say, in relation to the employment given in the Customs Department. I wonder is this tariff an indication of what the Minister and his Party told us they were going to effect—"very rigid and drastic economies."

Mr. Hogan (Galway)

Who are the two firms making this class of goods?

Mr. Lemass

The two firms are the Greenmount Oil Company in Dublin and the Eclipse Company in Cork. Deputy Anthony is worried about the interpretation of saponifiable oils and the stopping of the wheels of industry. There is no necessity to stop the wheels from revolving because of this tariff. If the Deputy fears there is any danger of that he can go to an excellent firm in his own constituency which can supply all the oil required for high-class machinery. Grease is not used for high-class machinery. Oil is used in such cases. Grease is used for axles, cart boxes, etc.

Mr. Anthony

Oh!

Mr. Hogan

Will the Minister tell us what these two firms have done to entitle them to get 37½ per cent. more than their rivals? Has the Minister any machinery to enforce guarantees from manufacturers here? If he has I would like to know what it is.

Mr. Lemass

To come before the Dáil.

Mr. Dillon

The Minister has stated to the Dáil, on his own authority, that the principal use of this lubricating grease is for cart boxes. That is what I thought was in his mind. He is thinking of donkey axles and horse carts. It makes one blush for shame that the Minister for Industry and Commerce should come out in public with such a declaration as that. I believe that the vast bulk of common axle grease that is sold in one-pound tins for 6d. and 1/- is manufactured in this country. That is of no consequence, because everybody knows that almost any grade of grease will serve that purpose. The Minister seems to be unconscious of the fact that nearly every bearing of high speed in an electrical power house, or at all events a great many of them, requires grease and that oil will not serve. I am not putting up as an expert on this, but am simply placing that information in the hands of the Minister so that he may consult experts. Secondly, I want to ask the Minister whether he has consulted officials of the Great Southern Railways Company to ascertain what reactions this will have on their supplies for rolling stock. Does he know? I do not think he does. It may be that when he puts this question he will get reassuring replies. I shall be perfectly content when he is in a position to say that he has looked into the principal channels into which this axle grease usually goes and is satisfied that no inconvenience or at all events no undue inconvenience, will arise, and that no additional expense will be caused by the duty he is asking the House to impose.

Mr. Lemass

I do not think there is any Deputy who can talk more ponderous nonsense than Deputy Dillon. He comes in with a little knowledge, which he throws about him recklessly without having made any attempt himself to verify his statements.

Mr. Dillon

How can I verify them until I see the facts that I have asked for?

Mr. Lemass

I suggest to the Deputy that he should consider the advisability of verifying his facts.

Mr. Dillon

Is not that the Minister's job, to give the House the facts?

Mr. Lemass

Yes, and I am doing so. The purposes for which the grease, the subject of this Resolution, is mainly used are: motor grease, car grease, gear grease, waterwheel grease, railway wagon grease and for similar purposes.

Mr. Morrissey

What would the Minister use oil for?

Mr. Corry

Palm oil?

Mr. Morrissey

The Minister has used a lot of that.

Mr. Lemass

Oil is used only for high-class machinery.

Mr. Morrissey

As one who knows a little about this, may I say that in my opinion the Minister is badly advised in this matter. For ordinary high-class machinery, as we know it in this country, the Minister will find, I think, if he makes inquiries from his experts, that for one part oil there are seven parts grease used.

Mr. Lemass

But that is no reason why we should import it if we can make it ourselves.

Mr. Morrissey

The Minister's statement was that oil-grease was used for all high-class machinery. I think Deputy Dillon was giving a fair interpretation of the Minister's speech when he said that it amounted to this: that the grease was to be used only for axle-boxes and ordinary common carts in the country. Anybody who knows anything about machinery knows that so far as practically all machinery is concerned it is grease that is used and not oil. May I point out to the Minister that there are different classes of grease, grades of grease that are quite different to ordinary axle grease. For instance, there is a special grade that is put in cups for the most expensive and most technical kind of machinery. There is a special grade used, too, in the pistons of engines, in which there is what is called an oil cup, with a drop coming from it. That is regulated so that it will work down to the different parts of the engine. This particular grease is fixed in cups and by a suction process works its way down to the different parts of the engine.

Take any particular machine you wish, whether it be a motor car, a motor engine or machinery used in an electrical power house or in a gas house, it is grease that is used for seven-eighths of the lubrication required. I might point out too to the Minister that there are different grades: first, second, third, fourth and fifth grades of grease. The Minister is absolutely wrong in suggesting to the House that this Resolution covers only the grease to be used for axle wheels.

Mr. Lemass

I did not suggest that. It covers the entire range of greases, the classes that I specified, including ball-bearing grease.

Mr. Morrissey

I submit, therefore, that this Resolution covers practically all the purposes for which lubrication is required in the country.

Mr. Lemass

No, it does not cover lubricating oil.

Mr. Morrissey

So far as oil is used, it is used only to a very small extent. I am not putting myself forward as an expert on this, but I do suggest to the Minister that if he consults the experts in his Department he will find that so far as the lubrication of modern machinery is concerned, either stationary or mobile, nine-tenths of it comes from grease rather than from oil.

Mr. Dillon

What the Minister has said does not alter the fact that I did not attempt to suggest to him that I had any scientific or technical knowledge in the matter. I did offer the advice to him that there were certain matters that he should inquire into by having a consultation with technical people. He knows that he has not made those inquiries, though he ought to have done so before coming to the Dáil and asking it to pass this Resolution. I again ask him to inquire from technicians whether grease is available from Irish producers that will be suitable for the lubrication of high-powered machinery where grease is requisite. I also asked him whether he had consulted the Great Southern Railways Company as to the reactions that the imposition of this tariff will have upon the supplies they require for the lubrication of their rolling stock. When he has that information, then I think he can rightly come before the Dáil with his Resolution.

Mr. Morrissey

I would like to know from the Minister whether he is satisfied that the Irish producers of this commodity are in a position to manufacture the different grades of There are many different grades of lubricating grease required. I can imagine that there are factories in this country which can produce grease of a certain quality or standard, but is the Minister satisfied that they can produce all the different grades of grease required for the different machines in the country without any increase in price or any lessening in quality?

Mr. Lemass

Yes. I am satisfied that they can produce all the grades of grease that are being made the subject of this duty. I am also satisfied that there will be no increase in price. With regard to Deputy Dillon's point, of course he assumes that no inquiries were made. In fact he stated definitely that no inquiry was made.

Mr. Dillon

I asked if the Minister had made any inquiries.

Mr. Lemass

Certainly, and I have already explained that the introduction of the Resolution was delayed for a long period while these inquiries were going on.

Mr. Dillon

As to the appropriate description of lubricating grease?

Mr. Lemass

As to the purpose for which grease was used and as to the effect which the imposition of the duty would have upon those concerned. We are satisfied that, so far as the Great Southern Railway or any other body are concerned, the only effect that the passing of this Resolution will have is that henceforth they will use Irish-made grease.

Professor O'Sullivan

I understand that the Minister is not in a position to give any definite information as to the increased amount of work that he expects from the imposition of this duty. He grasped rather eagerly at, I think, the figure of twenty, so that we may take that as his most optimistic figure.

Mr. Lemass

I said nothing of the kind.

Professor O'Sullivan

When asked to give an estimate the Minister pointed out the difficulty of doing so owing to the fact that firms engaged in this business do other work as well, and that it would be impossible to segregate the work of certain men engaged on this and on other work as well. I think that is the position of the Minister. Is he able to say definitely that twenty more people are engaged?

Mr. Lemass

I did not say that. I stated definitely that I had no precise information and could give no exact figures as to the number of people engaged in the industry. I think there might be twenty but it is not possible to give an exact figure.

Mr. Hogan (Galway):

Any imported grease must carry 37 per cent.?

Mr. Lemass

If there is any, we will, if necessary, double the duty.

Mr. Hogan (Galway):

In the meantime, any imported grease will have to pay 37 per cent.—37½, but we will not mind the half. That means that they will have to put up the price. Why not put it up? We are all in business in a small way. In view of the fact that it must carry 37 per cent., and in view of the fact that even if they only increase their prices by 20 per cent. that gives the two firms an opportunity to put up their prices by 20 per cent. It would be perfectly legitimate for them to do so, and why will they not? Would the Minister answer that question? They are entitled to the best price they can get. If any portion of the 37 per cent. is passed on to the consumer why should not these two firms put up the price?

Mr. Lemass

Because I assume that there are still some elements of honesty left in the country.

Mr. Hogan (Galway):

There is no dishonesty in putting up the price to what you can get.

Mr. Lemass

I disagree. I think it is dishonest. I know that the Deputy disagrees with me in that, but in my opinion it is wrong—it is dishonest.

Mr. Hogan (Galway):

You do not believe a word of it!

Mr. Lemass

Secondly, we have got an assurance as to that. Let the Deputy read precisely what was said when the tariff was under discussion. Thirdly, in case such a thing should occur, we expect to get machinery by which we can correct it, and if the Deputy will withdraw his opposition that machinery will be all the more easily rendered effective.

Mr. O'Neill

I would suggest to the Minister that he should withdraw paragraph 10. I think that the term "lubricating grease" is sufficiently clear. The paragraph, as it stands, sins against all the canons of what such a definition should be. I suggest that the Minister should leave it out because I think we all understand what lubricating grease is. I think it is unfair to the House to bring in such a thing as this. Is the definition necessary?

Mr. Lemass

Yes, it is—absolutely necessary.

Mr. Blythe

Is it the Minister's intention to bring butter under this?

Mr. Lemass

No, but margarine could be used.

Resolution No. 3 agreed to.