In Committee on Finance. - Control of Imports Bill, 1934—Committee Stage.
In this Act—
the expression "the Minister" means the Minister for Industry and Commerce;
the word "prescribed" means prescribed by regulations made by the Minister under this Act;
the expression "preliminary period" means the period beginning at the commencement of the quota order in relation to which the expression is used and ending at the commencement of the first quota period under such quota order.
I move amendment No. 1:—
To add at the end of the section a new sub-section as follows:—
(2) Each of the following persons shall for the purposes of this Act be a national of Saorstát Eireann, that is to say:—
(a) a person born in Saorstát Eireann or the area now comprised in Saorstát Eireann; (b) a person who at the relevant time is and for not less than five consecutive years immediately preceeding that time has been ordinarily resident in Saorstát Eireann.
As a preliminary point, I wish to raise a question about Government amendments. I think the Minister asked how did I conclude that there were to be any Government amendments. I should like to quote from col. 1339, volume 50, of the Official Report:—
Mr. Lemass: I think they should have. Deputy Dockrell referred to getting a definition of "national." There is necessity for a definition and it will be inserted in the Bill. It was omitted through an oversight. The Unemployment Assistance Act has a definition, and I think it is the best of the various definitions that we have had from time to time. It is also necessary to get a definition of the phrase "manufactured in" so as to define the percentage of value that must be added by a process of manufacture in any country to enable goods to be defined as manufactured in that country. That will be dealt with on the Report Stage.
I do not know what the Minister has in mind. Of course, if he is accepting those amendments I do not suppose there is any point in it, but perhaps he will tell us what the idea is of Deputies bringing forward amendments on Committee Stage and the Government bringing forward amendments on the Report Stage. I suggest that the Government amendments ought to come forward on Committee Stage, and be debated side by side with those from Deputies. I do not want in any way to suggest that the Government should be curtailed in bringing forward amendments on Report Stage, but I suggest that, on Report Stage, only amendments which arise out of the discussion in Committee should be brought forward. I think the more nearly a Bill emerging from Committee Stage appears in its final form the better. I should like to hear from the Minister what he thinks of my remarks.
In so far as the matter of getting a definition of "national" for the purpose of Section 6 is concerned, I decided I could not improve on the amendment put forward by the Deputy. That relieves me from the obligation to produce an amendment on that point. On the other point, I had certain amendments prepared but thought it desirable that we should have a discussion in Committee before submitting them, as some points might emerge in Committee that would involve a change in the form of the amendments. There are, in fact, three or four drafting points in respect of which changes will have to be made in the Bill, but the amendments to effect those will be brought forward on the Report Stage.
Is the Minister serious in what he is saying? He knew the amendments were necessary; then he proceeds to Committee Stage without having them drafted.
Deputy Dockrell solved my problem.
Excuse me; I am referring now to the case in which he did not solve the problem. Anyhow, the Minister could not rely for the improvement of his Bill—I am glad he has said that he is now doing so — on this side of the House; but I think it is surely not proper parliamentary procedure, and not fair to the House, that though an amendment is foreseen on the Second Reading by the Minister himself there is no opportunity given to have that amendment debated——
Oh, yes, there will be adequate opportunity.
——on Comittee Stage with Committee procedure. Surely that is very unfair to the House. The Minister will see that. The procedure is wrong. He says that points may emerge. Surely the best place for points to emerge is precisely on the debate on the precise form of amendment which he is going to submit. After that, there should be an opportunity of amending that particular amendment which he brings forward. It is quite obvious that the reason which the Minister has given is not sound. It looks more as if the Minister's mind is not quite clear, and he is rushing the Committee Stage before he has the amendment ready. It is a wrong procedure altogether.
Will the Bill be recommitted on the Report Stage?
Oh, no — not necessarily.
This is not fair to Deputies, with all respect. On the Committee Stage, as the Minister knows, we have an opportunity of speaking several times, which we are debarred from doing on the other stages. Unless the Bill is recommitted we do not get that opportunity. Would it not be more in order to have all the amendments proposed on the Committee Stage?
Apart from the amendments referred to, as far as I can see the only amendments I will have to bring forward will be drafting amendments.
The Minister has met me by saying that those amendments about the nationals were all right. That disposes of that. The next point is about the phrase "manufactured in." Does the same thing apply in that case?
The Minister is not prepared to accept that. Then there was a third point. The Minister has said that he would like to have had the advantage of the discussion in Committee in bringing forward his amendment on the Report Stage. What is sauce for the goose is surely sauce for the gander. I know we would have liked to have seen what was in the mind of the Government on Committee procedure. The Minister appears to have accepted our amendments, so that there is not very much in that, but as a question of principle it is much better if Government amendments come forward on Committee. As I say, nobody would object to points arising on Committee being again brought forward on Report Stage, or amendments moved in accordance with them. For instance, if in the course of this Bill any question arises that has not been foreseen, and the Minister has not yet brought forward amendments, it places us in a very false position.
I have no objection to intimating to Deputies the various points in respect of which, I think, the drafting of the Bill might be improved.
Would it not be better to adjourn this stage until Wednesday next?
I will go further and say that if Deputies are of opinion that the amendments are more than drafting amendments, I will have no objection to the recommittal of the Bill.
Amendment No. 1 agreed to.
Section 1, as amended, agreed to.
SECTION 2.
(4) No quota order shall apply to or affect the importation into Saorstát Eireann of articles which were (whether before or after the date of such order) manufactured in and exported from Saorstát Eireann.
I move amendment No. 1 (a):—
In sub-section (4), line 39, after the bracket and before the word "manufacture" to insert the words "to the extent of at least one-fourth of their present value bona fide.”
Is the Minister accepting this?
Will the Minister give us an idea as to what he has in his mind?
At the present time, goods manufactured in or produced in the Saorstát, exported from the Saorstát and reimported are not charged with the duty chargeable on imported goods of the same class. That procedure has worked quite satisfactorily and there is no requirement as to the percentage of value that must be added to these goods by a process of manufacture here to bring them within the definition of goods manufactured here. The procedure under this Bill will work in precisely the same way as in respect of customs duties at the present time and I consider that it would be undesirable to complicate that procedure by bringing in the question of the percentage of value, which would involve, in relation to these goods, fairly elaborate investigations by the Revenue Commissioners, or else, the submission by the importers of them of evidence in respect of their origin which it might be very difficult for them to obtain. I think the sub-section might be improved by putting in the word "produced" as well as the word "manufactured" so that it will apply to articles which are manufactured or produced in Saorstát Eireann, because the term "manufactured" may have a narrower meaning than was originally contemplated. It might, perhaps, exclude raw materials of some kind which did not undergo some industrial process. If the phrase "manufactured in or produced in" is used in the Bill, I think there is less reason than ever for putting a percentage of value to bring articles within definition.
Apparently, the Minister has something entirely different in his mind from what we contemplated in moving this amendment. The Minister seems to contemplate goods that are walked out of Ireland, manufactured and walked back again. I submit that they constitute a very small class compared with goods that would be taken from Ireland and worked up into a still further stage. That is what I had in mind and the Minister has not dealt with that point. Take, for the sake of argument, carrageen moss. That might be brought across and manufactured into certain articles and then come back here representing 25 per cent. or so of the manufactured article. I do not think that the Minister ought to shut out something which had a very substantial amount of goods of Irish origin in its composition. That is the point I had in mind. I quite appreciate the case the Minister has mentioned but it, as I have said, is merely a case of walking manufactured goods out of Ireland and marching them back again the variations that take place in which being a very small percentage or a very large percentage. I admit that there is a certain line at which you might say: "We ought to exclude goods that contain Irish manufacture below a certain percentage," but I suggest to the Minister that if he wants to encourage the export of Irish goods, he must be prepared to agree to reciprocity. I suggest that one of the best possible means of ensuring the export of Irish goods would be to say that certain advantages would accrue to manufactured articles coming into this country which contain 25 per cent. of Irish goods manufactured or produced in this country.
It is quite clear that this amendment does not achieve that. The sub-section is intended to deal with the case of goods exported and reimported in the same form—as might well happen if a firm were sending a consignment of goods to somebody, say, in Great Britain, which were returned on being found unsuitable on delivery-and it is to prevent inconvenience arising out of the fact that goods exported might be returned that the section is brought in. In so far as there is a problem arising out of the fact that manufactured goods coming in may have Saorstát raw materials in them, there is the existing procedure which is working quite satisfactorily. The Deputy mentioned the case of carrageen moss. Irish carrageen moss is used, I understand, in the production of varnish. There is a duty on varnish, but the duty is on varnish, no matter what the materials of which it is manufactured are. If carrageen moss were sent out and came back as carrageen moss, there would be no duty chargeable on it, but if it comes back as varnish there is a duty chargeable. You could not have any other procedure. The practice that would operate under this Bill is precisely the same as that now being operated by the Revenue Commissioners in respect of customs duties. The section in the Finance Act which appears, in fact, in every Finance Resolution which is brought before the Dáil, is precisely what is there—that the duty chargeable under this Order shall not apply to goods manufactured in or exported from Saorstát Eireann on re-importation. There is no such provision as the Deputy suggests, because the Deputy's amendment, if inserted, would mean that the concession would be limited to goods which had been manufactured to the extent of 25 per cent. here before exportation. Such goods might be re-imported outside of quota restrictions or customs duties. The Deputy's aim is quite clearly a different one and it is not met by his amendment at all. It is that we might give a special concession to certain classes of goods if Irish raw materials were used in their production. That is an entirely different matter, however, and not really related to this section, nor is it covered by the amendment.
To what extent is the Minister sympathetic towards that point of view?
I think there is a lot to be said for it.
The Minister has drawn an analogy with customs duties. Surely there is a great difference? In the case of the customs, an article is let in and a certain amount may be charged, but here an article may be prevented from coming in altogether.
This sub-section relates to articles sent out.
But we are dealing with the coming back of these articles, and here they may be kept out altogether.
They will not be kept out if the circumstances are the same as those in which they otherwise would be allowed in without payment of duty.
That is not by any means clear from what the Minister said, and there is no such provision in the Bill, I think, dealing with it. Take another case. An article is sent out of this country to have certain finishing processes carried out upon it. Does that come within the quota system or not? Would that be one of the cases in which an article would be exempt from the quota system, or would it be excluded? There is no method of knowing so far as the Bill is concerned. In the other case, it is a matter on which they may decide to charge a certain duty on it, but here it is a question of whether or not we will exclude it altogether. I suggest that the two things are not analogous, as the Minister suggested.
It is a consideration that would arise when the question of the making of the order was under consideration. At the present time there is a general provision in the finance law which enables us to permit into Saorstát Eireann free of any duty chargeable articles intended to undergo a further process of manufacture here and then to be exported. That is the law at present. In so far as this Bill is concerned, these articles could come in whether we had a quota order or not. If there was no quota order, then the position would be as it is at present. If there was a quota order in force they would be subject to the quota restrictions. The particular point that Deputy Dockrell is trying to raise in relation to the Bill is the advisability of excluding from the scope of the quota order goods that might be otherwise subject to quota restrictions: goods which have in them a certain percentage of Saorstát raw materials.
Not necessarily raw materials. The Deputy merely gave that as an example.
I meant both raw materials and manufactures.
That is a separate question which is not really related to this Bill. It is a question of general industrial policy which is not provided for by the Deputy's amendment. The Deputy's amendment has the effect of confining the operation of the concession granted by sub-section (4) to articles which were manufactured in the Saorstát: to articles which have 25 per cent. of their value created by Saorstát manufacture. The Bill, as it stands, relates only to articles manufactured here. I propose to widen it to articles manufactured "or produced" here. I think it is advisable that we should insert a section which will enable articles subject to a quota, imported under licence and subsequently re-exported, to be brought in again outside a quota order. Cases of that kind are not likely to arise frequently. One can imagine where they may arise, and I think an amendment to that effect will be necessary.
How does the Minister propose to deal with that?
I propose to make provision in the Bill to extend the term "manufactured or produced." That will apply not only to this section, but throughout the whole Bill. I propose also to provide for the re-importation into the Saorstát, outside the quota restrictions, of articles previously imported and subsequently exported.
The Minister has not dealt with the point that I raised at all: the question of how far he is going to use these quota restrictions as a bargaining counter, and of saying that articles containing a certain quantity of goods produced or manufactured in this country are going to be outside the quota restrictions. Now I quite realise that the adoption of my suggestion may complicate the procedure in connection with the quotas. At the same time it is going to introduce a very desirable precedent from this country's point of view. I suggest to the Minister that if he could ensure that everything coming into this country contained 25 per cent. of materials raised here or goods manufactured here, he would have made an exceedingly good bargain for this country.
That can be done under the Bill as it stands. You define in your quota order the goods to which the quota restrictions apply. In doing so you can exclude from that description the articles that you do not want to be subject to a quota restriction. If you want, for instance, to have a quota for varnish you can make an order applying it to varnish other than varnish in which Irish carrigeen had been used in the manufacture. The same could be done in regard to woollen cloth, and quite a number of examples could be given. The quota order only specifies the class of goods the importation of which is to be subject to quota restrictions. To avoid misunderstanding let me say that the main purpose of the Bill is to provide additional powers to protect industrial development here. Secondly, it gives us an opportunity of negotiating commercial agreements with other countries. In so far as it is likely to be operated, the main idea behind it will be to promote industrial production at home.
While I agree that provision can be made not to apply quota orders to goods, containing a certain percentage of Irish materials or manufactures, such a procedure, I suggest to the Minister, needlessly complicates the making of quota orders. I would like to point out to him that when people in foreign countries are able to read the Bill as passed, they can see that they are exempt from certain provisions of it if my amendment is inserted.
They are much more likely to see the quota orders than the Bill.
The quota orders will have to be passed one by one. I suggest to the Minister that if he inserts my amendment in the Bill, and says boldly: "We are prepared to exempt from the quota orders goods containing the following percentages of Irish materials or manufactures," you immediately open the door for outside people to consider how far they can utilise Irish goods in connection with their business. I quite agree that you can do it either way, but clearly the method that I propose will give the Minister's Department less trouble if you set out boldly in the Bill that goods containing a certain percentage of Irish manufactures do not come under the quota order.
Amendment, by leave, withdrawn.
Section 2 agreed to.
SECTION 3.
Question proposed: "That Section 3 stand part of the Bill."
I promised to mention the amendments that it will be necessary to make to the Bill. Sub-section (3) of this section provides that where an order is revoked either by the Executive Council or by the failure of the Dáil to approve of it, the Executive Council cannot make another order of the same kind. That appears to be a desirable safeguard. Otherwise, the Executive Council could just proceed to make orders every six months, and thus defeat control by the Dáil. There is, however, a class of case that is not provided for: that is where an order is revoked for some bona fide reason, and subsequently it is decided, perhaps a year hence, to revive it again. As the sub-section is drafted it would be impossible to do that without fresh legislation. It is proposed to insert some provision in the Bill, making it clear that where an order is revoked in that way, that is for some bona fide reason, it can be revived with the approval of the Dáil.
Question put and agreed to.
Section 4 agreed to.
SECTION 5.
Question proposed: "That Section 5 stand part of the Bill."
It will, of course, be necessary to insert the amendment to which reference was made on the Second Reading: that is a definition of the term "goods manufactured or produced in." The omission of the sub-section arose out of the fact, as I have explained, that this Bill and the Preferential Rates Bill were prepared as one Bill, and subsequently had to be divided. It will be necessary to insert a section which will define the percentage value that must be added in the country specified in order to make these goods entitled to the description of being "manufactured" in that country. It will be precisely the same provision as exists under the customs law at the present time in relation to a preferential rate. The preferential rate is applicable only if the goods have had 25 per cent. of their value added in the country entitled to the rate. A country may be specified in a special quota order, and in respect of the goods produced in that country there will have to be a similar provision—that, in order to become entitled to inclusion in that special quota, a stated percentage of value will have had to be added there. It is also necessary, to avoid customs complications, to take power to make the order apply to goods "manufactured in," or "produced in." or "consigned from," or goods both "manufactured in" and "consigned from." The necessity for that will appear on examination. In the majority of cases in which goods arrived here, the only information available in relation to them is the country from which they are consigned. In the ordinary course, that is the same country as the country of origin, but it is not always so. The wisest course is to take power to specify that the quota applies in any of the three cases— manufactured or produced in, or consigned from, or both conditions combined.
Does the Minister think that this is a drafting amendment?
It is a definition of the term "manufactured in."
I wonder if it is. On the point which I raised on Second Reading, I am not quite satisfied with the Minister's answer. I have in mind not the case of an importer in Dublin, but the case of an importer down the country who is accustomed to get in, say, £1,000 worth of goods. The Government declare a quota in regard to that particular class of goods. In future, therefore, he will be entitled to get only £800 worth of goods under that quota. I gather that he may be compelled to get out four quota orders if you have quota agreements with a number of countries.
Not necessarily. The procedure envisaged by the Bill is: Where a special quota is made in favour of one country, both the special quota and the balance of the main quota are considered separate quotas. Let us take the case of a person who wants a thousand sacks of flour. I mention flour because it is excluded from the Bill. It belongs to a class of goods which could be easily contemplated as subject to a quota arrangement. Let us assume that there is a quota order made in respect of flour, with a 25 per cent. special quota in favour of France. In respect of the 75 per cent. of the open quota, all importers who have got themselves registered and wish to apply, apply for whatever quantity they wish. This man may apply for a thousand sacks under the open quota. If, in the various circumstances set out in the Bill, it is possible to give him that amount, he gets it. If not, a pro rata reduction is made in his application, in which case, if he wants to make up the balance of his thousand sacks, he must make application under the special quota.
That is precisely the case I made. A man doing originally a thousand pounds worth of business may, under the general quota, be reduced to £800. By the special quota arrangement, he may be reduced further. Let us suppose that he will get more favourable terms under the open quota than under the special quota. Therefore, everybody will apply to get as much as possible under the open quota. In practice, the importer down the country will be compelled to have about three quota orders. He may be compelled, further, to open business with countries with which he had never done business before and with which it is hardly worth his while to do business. Under the general quota, he may be reduced from £1,000 to £800. Then, there may be a further reduction of 20 per cent., so that he may be reduced practically to half the business he had been doing, though that was not the intention. Otherwise, there would be unfair discrimination. It may not be worth while for small importers down the country to open up business with new countries and you may, therefore, benefit a couple of importing firms in Dublin at the expense of importers down the country. That is the case that I made and the Minister has not convinced me that, in a quota order of that kind, very great damage may not be imposed on a small trader down the country, while a big importer here in Dublin may find it easy to get into touch with other countries.
Judging by our own experience on the continent it is necessary, in every case, to deal with some individual importer. The principal cases from which our experience arises are in connection with the operations of the Dairy Disposals Board, which is a semi-Government concern. The experience derived in that respect may not be generally applicable, but in all cases in which butter, eggs or bacon were exported to any continental country, under a quota arrangement in existence in that country, they have had to designate a national there to act for them. It is to him that licences to import are issued. He receives these licences under contract between himself and the importer here. He exercises those licences on behalf of importers here. In the case of the operations of the Disposals Board, it has always been the practice to designate one man who will get the licences, bring in the goods and distribute them to the importers who require them. In the majority of cases, the same practice will develop here if special quotas are made for a large number of goods.
That is what I suggested, only in more exaggerated form. The result is that importation will have to take place through a firm in Dublin, and the person now importing direct will not be able to import direct. There will be a corresponding increase in the cost.
In the case of flour, for instance, the practice was that a small number of firms dealt with the orders, but the flour went into every small port of the country direct to the wholesaler. He placed his order with one of a small number of firms, but he got his flour direct to wherever he wanted it. The same procedure will obtain in this case. The issue of licences over a long period may be confined, in practice, to a small number, but the goods will come in direct to the person requiring them.
They will have to be ordered through a person in Dublin. That will impose extra cost on the person down the country. I do not know what particular class of goods the Minister has in mind or to what particular class of goods he may apply this special quota. Let us suppose that a quota is applied to the ordinary goods imported by a draper. The circumstances may be such that the Minister will require a quota of that kind. A number of these drapers are accustomed to import directly. Now they will have to pay the expense of an agent here in addition to everything else.
The Minister has taken the case of flour by way of illustration.
It is, in fact, excluded from the Bill.
I know that the Minister is merely using it as an analogy. He spoke of a person who had applied for a thousand sacks of flour under the open quota. Is the procedure going to be—because it is a very important point—that if they receive an application from "A" for 1,000 sacks of flour on the open quota and they find, for the sake of argument, that they can only allow him 750 sacks, are they going straight away to give him the 250 sacks on what you call the closed quota?
Well, then, there will have to be a fresh application. When the pool is closed for the applications for the open quota and you find out what you have drawn, you would then have to make a fresh application on the limited quota. Is that the position?
Of course, that will involve two transactions. At the same time, I quite agree with the Minister that I am afraid he could not work it in any other way, because some of the firms would be very glad to get the limited quota and others might not make any use of it at all.
Let us apply the illustration to constructional iron work. You can only get a certain portion of it in the quota, but what about the portion outside it? How is that to be done? It is part of a building, and every portion of it is an essential part of the whole.
I might say that I do not know how you could possibly apply a quota order to fabricated iron work.
I cannot see it. I tried to make the Minister see that point on the last day.
There are a great many articles in respect of which you cannot operate a quota. I could not specify them all at the moment. In such cases you can only have recourse to customs duties. For instance, there are certain articles of which you might want half a million pounds in one year and perhaps nothing at all for five years. You can only quota goods where quantity is the main consideration.
Of course, there is a large amount of steel coming in every year.
I could see the possibility of extending the quota system to steel girders unfabricated. Where they had been fabricated, and where each item was one part of a whole structure, then I think it would not be possible.
Either fabricated or unfabricated it could be part of the whole, because every joist would have its position.
Just illustrating the difficulties which Deputy Good, I suppose, envisages, you might have a building in which the roof would be left off by the building contractor, because he would say: "I could not get permission for any more." Of course, that is reducing the position to an absurdity, but the Minister says: "We will turn around to unfabricated steel." There again you are on very delicate ground, because in the case of most of the orders placed for stock, or the minimum that they can get along and the maximum that the manufacturer in the other country can get from the person ordering the goods in this country, if you cut down the allowance you may produce some extraordinary results. You may find that the ship cannot be loaded, that it would have paid the importer to bring the goods into Dublin Bay and there to dump 25 per cent. of his cargo. That position might easily arise where he had contracted for a certain amount of freight and was unable to fulfil it. When these negotiations are conducted by telegraph and telephone from foreign countries, it will be very difficult to tie that up and get variations from a Government Department. That is only one of the many difficulties that will present themselves in making these quota orders—to see that you do not upset a trade that is very delicately balanced.
The Deputy, of course, will appreciate that the only circumstances in which the imposition of a quota order with the intention of restricting quantity would be necessary is where home production in the particular commodity is already taking place. In so far as certain steel and other constructional materials are concerned there would be no necessity for restricting quantity, although we might direct it to a certain channel. But in such cases we would not wish to restrict quantity, but rather, the more that comes in the better we would like it.
If you will apply the analogy of tariffs, as they operate at the present time, you will realise that a great many articles are being tariffed with the supposed effect of protecting manufacturers in this country, whereas they are really not being manufactured here at all. With regard to what the Minister has said about diverting goods from one country to another, even where he says that you are only establishing quota orders where you have home manufacture, if you divert them from one country to another you may upset the balance in relation to shipping, etc. For instance, you may be able to get 100 tons of steel from one particular country, whereas another country would laugh at an order for 1,000 tons of steel.
Section 5 agreed to.
SECTION 6.
(1) Whenever the Executive Council makes a quota order, the Minister shall fortwith establish and shall, so long as such quota order remains in force, maintain a register (in this Act referred to as a register of importers) of persons engaged in the importation into Saorstát Eireann of goods to which such quota order applies.
(2) Whenever and so long as any particular register of importers is maintained in pursuance of this section, there shall be registered and, subject to the provisions of this Act, kept registered in such register every person who applies in the prescribed manner to the Minister for such registration and satisfies the Minister in the prescribed manner that he is either—
(a) an individual who is a national of Saorstát Eireann and has a place of business in Saorstát Eireann, or
(b) a partnership of which all the members are nationals of Saorstát Eireann and which has a place of business in Saorstát Eireann, or
(c) a company registered in Saorstát Eireann under the Companies Acts, 1908 to 1924, or
(d) a person carrying on a manufacturing undertaking in Saorstát Eireann.
(3) The Minister may, if he so thinks proper, remove from any register of importers maintained in pursuance of this section—
(a) any person convicted of an offence under any section of this Act, and
(b) any person who, having obtained licences under this Act for the importation of goods in two successive quota periods under the same quota order, has imported under the said licences an aggregate quantity of goods not exceeding 25 per cent. of the total of the quantities of goods authorised by the said licences respectively to be imported.
I move amendment No. 2:—
In sub-section (2), page 4, line 6, to delete the words "all the members are nationals of Saorstát Eireann" and substitute therefor "more than half of the capital invested in the business is beneficially owned by an individual who is or two or more individuals each of whom is a national of Saorstát Eireann.
Paragraph (b) of sub-section (2) reads: "a partnership of which all the members are nationals of Saorstát Eireann and which has a place of business in Saorstát Eireann." That is entirely different to the Control of Manufactures Bill, and we want to exclude the words "all the members are nationals of Saorstát Eireann," and substitute therefor "more than half of the capital invested in the business is beneficially owned by an individual who is or two or more individuals each of whom is a national of Saorstát Eireann." It happens in the case of a great many firms, particularly of the older firms, in the city that they have in individual partnership, by reason of inheritance, persons who are related and who are resident outside Saorstát Eireann. It would be most unfortunate to exclude those firms from the right of importing, which would mean practically putting them out of business. I do not know whether the Minister intends that. I am sure he does not, but I think that if he accepts the amendment, which is in the same form as the Control of Manufactures Bill, he will obviate that difficulty.
I am prepared to accept the amendment. They would get out of the difficulty by resistering a company here. A company registered here without any question as to the capital is licensed. The whole design of the section is that anybody, whether a company, a manufacturer or an individual gets a licence that it would not be possible for an outsider to get. If a Frenchman came and applied for a licence to import goods he would have to have a business in this country to get it.
Amendment agreed to.
Question proposed: "That Section 6, as amended, stand part of the Bill."
Before we pass from the section, do I take it, as the effect of the Bill as it stands, even as amended, that if for the last four years an individual from another country was doing business here, the moment the Government decides that a quota is necessary in that line he is out of business.
It will be always open to him to register a company under the Companies Act.
I gather then that such an individual is out of business. In fact, we are not dealing merely with goods so far as other countries are concerned, but practically giving people an order to quit the country.
It is quite clear that the licence should be issued to someone here. That is the practice in every country.
I am thinking of the large number of nationals we have belonging to other countries, and that if we begin to expel these people, by putting them out of business, there may very easily be reprisals.
They are not, in fact, being expelled. The only thing we would require is that these people would be established in business here, and that they would register a company or include in a partnership someone to link them up with this country.
I am taking the case of a man who has been in business for four years, and who wants to keep it to himself. In practice, if he does not want to bring other people into the business with him he must shut down and leave.
Oh, no. If he does not come within the definition and is not prepared to be registered as a company he cannot get a licence to import goods.
One individual cannot register as a company.
As the Bill stands I do not see why the office boy would not get a licence to import goods.
I understand that one person cannot turn himself into a company.
Not in accordance with the Companies Act.
I think there must be seven subscribers.
That is what I thought. To keep his business he must bring in six other people, or he may have to leave the country.
Subscribers to the extent of £1 each.
Question put and agreed to.
SECTION 7.
I move amendment No. 3:—
Before Section 7 to insert a new section as follows:—
(1) For the purposes of this section goods which are imported into Saorstát Eireann and are cleared on or after the specified day shall be deemed to be in transit if the importer of such goods gives to the Minister reasonable proof that the despatch of such goods could not be prevented on account of the shortness of the period elapsing between the making of the order and the commencement of the preliminary period on the specified day.
(2) Whenever the Executive Council has made a quota order the Minister shall issue to any person who applies in the prescribed manner therefor a licence expressed to authorise such person to import into Saorstát Eireann during the said preliminary period the specified quantity of goods to which the said quota order applies which were in transit on the specified day for his account.
As the Minister is aware, a considerable time elapses in certain trades between the ordering and the delivery of goods. Usually the manufacturers prepare their stock sheets and send them to customers in other countries. Protracted negotiations are then conducted in cases where there is difficulty in selling. In other cases it may be that if a person has not sent a written order, he will not get the goods. Sometimes six months, and perhaps longer, might intervene between the ordering and delivery of goods. Importers may not be able to tell to a month or two when goods will arrive. That is all the information they could give the Department. The Minister will realise that there is a difference between ordering goods from a country where the ports are only open at certain times, and ordering from a neighbouring country. A good deal of latitude would have to be allowed in cases where people bona fide ordered requirements a long time ahead. I hope the Minister will take that position into account when making out the quota, because it will avoid a lot of agony amongst manufacturers who had raw materials ordered, if they knew definitely that they were protected so long as they could prove that the transaction was a bona fide one.
The purpose of the Deputy's amendment is to secure that goods in transit can be imported any time after the making of a quota order; in other words, that they would not be subject to the quota order.
While in transit or where a definite order was given.
The Deputy has seen one side of the picture, but very clearly there is another side to it. It may be precisely because goods are in transit, or have been ordered, that a quota order is made. Perhaps the best way to illustrate that is to give a specific example. Arrangements are being made for the establishment of a pottery works in the Saorstát. A Press correspondent got hold of that information and it appeared in the newspapers. Within the course of a couple of weeks it was quite clear that a huge quantity of pottery was being brought to this country, in anticipation of a tariff being imposed, when the new works came into production. Evidence was submitted to my Department that such transactions were taking place, with the result that we had to move quickly. We imposed upon all classes of pottery imported a duty of 100 per cent., with a licence provision under which we licensed the importation of the normal quantity of pottery goods until the home product was available. If this Bill had been law at that date we would have acted under it in preference to an open licence clause, because one purpose of the Bill is to get rid of open licensing provisions and to substitute the more regular procedure under this Bill. In that case a quota order would be made to effect the stoppage of goods in transit and ordered. Power would have been required, because if we could not effectively stop these goods from coming into the country industrial damage would be definitely done, in so far as there would be sufficient to meet our requirements for a couple of years, and a project of considerable value would have been postponed until these stocks had been cleared.
It is precisely because this Bill may be used for that purpose that a general section exempting from the scope of the quota order goods in transit or ordered could not be accepted. There is a six weeks' period. The Deputy will say, in relation to certain imports with which he is familiar, that the six weeks will not be sufficient. Ordinarily it will be sufficient in respect of the greater number of goods in respect of which quota orders may be necessary, that is to say, six weeks will be more than sufficient to bring any goods in transit. It is intended that the more extensive powers possessed by the Minister to license imports during the first six weeks will be exercised to prevent hardship or difficulty arising because of sudden stoppage, in the case of goods in transit, or where orders may have to be filled or particular contracts carried out.
In so far as that six weeks is insufficient, the difficulties which the Deputy has in mind can only be met by the issue of licences under the quota. There is no reason to assume that that will not happen, particularly having regard to the fact that the classes of goods which are likely to require more than six weeks in order to clear themselves in transit, are not likely to be restricted in quantity under any quota. The quantity is not likely to be limited, only the source. In so far as an order from one particular source is concerned, the quantity coming from that souce may be limited but it is only reasonable to assume that the powers in respect to the importation of articles of that kind will have to be exercised in such a manner that any difficulty could scarcely arise. The Deputy may reasonably assume that these powers will be exercised in a reasonable manner. In fact, as the Deputy is aware, in respect to licensing powers that were acquired under an order, restricting for a period with a view to their ultimate prevention, the import of certain classes of goods, they were exercised in a manner designed to meet any general difficulties that might arise and even individual cases of difficulty, where the circumstances appeared to justify it. They were exercised after the fullest possible consultation with the organisation speaking for the body of traders concerned in each case. That is precisely what would happen here.
The procedure that I contemplate would be: An order would be made; there would then be six weeks within which there would be a wide discretion as to the issue of licences to cover goods in transit, to keep up the ordinary supplies in the country or for any other reason. During these six weeks, wherever consultations are necessary, will take place between the officers of the Department and the representatives of the trade likely to be affected. Following these consultations, at the end of five weeks, the quota for the first period and the length of the period is announced. In the meantime a register of importers has been prepared. In every case that is likely to arise where goods of that class are involved, the first period and the quantity to be admitted during the first period will be probably fixed on a normal basis so as to ensure that no difficulty will arise. It would be only when it comes to the operation of the second period that you might begin to restrict or to divert the imports in the manner decided upon originally. It may not be possible to have that procedure in every case, but that will be the ordinary procedure. I think the Deputy can be reasonably assured that these difficulties in so far as they arise can be met under the Bill, either during the six weeks' period or the first quota period. There is no way of guaranteeing, by way of an amendment to the Bill, the admission outside the quota of goods in transit so as to meet the difficulty that the Deputy has in mind without at the same time defeating the main purpose of the Bill in every case which I have mentioned.
The Minister did not deal with the question of an order being placed. He limited himself to the question of the first six months. I am sure he realises that the six weeks' period does not dispose of the question of goods on order. There is one peculiar phrase used by the Minister which I could not follow. He said that in a large number of cases there was no restriction in quantity, but that there was in origin. I do not see how you could have one without the other.
When I said that there would be no restriction in quantity, I meant that there would be no attempt to reduce the quantity as against the other period.
The Minister talked of the case of a pottery manufacturer starting in this country and he said that that probably would be an instance of the principal justification for restricting imports. I think everybody can see the justification for the Minister's saying, on the announcement that a new industry is going to be started which would involve some increase in the cost of the goods, that he is not going to allow three years' stock of these goods to be dumped into the country. I think there would not be much argument about a case of that kind but you might have a person who, bona fide, in the ordinary way of trade, has placed a fairly large order for pottery, just before that announcement was made public. I do not know how the Minister would deal with that matter. He has suggested that really the only case where a restriction of that sort would come about would be where the Government were protecting native manufacturers. I took quite a different reading from this Quota Bill, that it was to be used as a bargaining counter. That opens the door very much wider than merely considering the case of people who have, bona fide, started making goods in this country and who want protection.
The Minister suggests that a manufacturer, contracting a long way ahead, need have no fear in contracting for his raw material but I should like to get an assurance from the Minister that that is not intended to interfere with contracts entered into by manufacturers with their sources of supply. Remember it is a terrible upset to a manufacturer to find, when certain classes of raw materials suit him and when he has been accustomed to deal with certain people, that he has to take up his roots, as it were, the minute a new quota order comes out and take his business to another country. I should like to suggest to the Minister that there are certain cases where really 18 months' notice of a change would be required. I can give him a case of, say, certain goods which embody design and where various catalogues have to be made up showing these designs. The order is placed for a considerable supply of these goods four or five months before the goods arrive. Then the merchant, manufacturer or distributor in this country is practically tied to trading in this class of goods for a whole year. I should like to point out to the Minister that he may well destroy the livelihood of his own nationals if he is going to try to change a merchant or a manufacturer in this way during an intervening period. I quite realise that there is something to be said for the manufacturer who is starting here but between his case and the quota system, or what appears to be contemplated under the quota system, there is a very wide gap. Certainly, I am afraid that if the Minister cannot indicate what he means precisely, in a lot of cases people will be unable to embark on larger transactions with far distant countries, and will content themselves with merely ordering from hand to mouth from nearer neighbours. In that way the country will inevitably pay more for the particular goods which are imported freely at the present time. I would like the Minister to consider that aspect of the question. As I have said there are a number of businesses which would practically require about 18 months for the change. When I say that I mean, 12 months' business to be done and a preparatory period in businesses of different sorts, for different trades. I would like the Minister to consider that aspect of the case because it it is a very vital issue for the country.
These are considerations that would be discussed with the parties interested in the preliminary period, before the first quota would be determined.
As to one point raised by Deputy Dockrell, I thought it would be clear from the start that this Bill is as much a protectionist Bill as it is a bargaining Bill. In fact, it is an effort to complete legislation that we thought was complete two years ago when all these varieties were introduced.
We were given that impression at the time. Now by this Bill, notwithstanding the statement made by the Minister that there are not going to be restrictions on quantities, there are to be practical embargoes——
This Bill does not attempt an embargo——
If it is desired to embargo goods it cannot be done under this Bill.
You can reduce rates to 1 per cent. under this Bill.
That can be done, but we can impose customs duties up to 100 per cent.
You can do that under this Bill. Deputies will bear in mind that this Bill contains no regular bargaining clause; that is to say, that no more than 10 per cent. can be taken from some countries, though it is positive that from some other countries we will take 25 per cent. or 30 per cent. I think it will be apparent that this is much more of a protective measure, and in no sense can it be said that it is a bargaining measure when it comes to practice.
The Minister assured us that really while he was in sympathy with the amendment it was not necessary. He told us it was in the interests of trade to do all we ask for. But good Minister as he is, we cannot hope that he will last for all time. Another Deputy may occupy his place and may take quite a different view. Now I think it is necessary, and I think the Minister agrees, that these licences will have to be given, but it is necessary to embody them in the Bill. The Minister asks that they be left to him, and that there will be no trouble. That is not business. We want some assurance that it will be done, and that is the object of the amendment that has been moved. The Minister probably is aware of the serious situation that has arisen on the other side. On the 12th January last the importation of oats and oat products was practically prohibited. What is the situation? We have all the newspapers in England full of protest as to the situation that has arisen amongst the traders. I will not bother the Minister to read all the lengthy letters I have here, but I shall read a few extracts, the first of which is from the Liverpool Daily Post. It is from the issue of 8th February, 1934, and it says that: “A Liverpool firm, when the additional duties were suddenly announced, on January 12th, had 111,900 cwts. of oats afloat and 28,660 cwts. contracted for, but not yet shipped. It had also 4,280 cwts. of oat products afloat and 51,100 cwts. contracted for, but not shipped. Here is a statement of a Liverpool firm: ‘We have open contracts made prior to the 12th January for 120 tons of oat products on a basis of £4 10s. per ton, c.i.f. Liverpool, all of which are still unsold. We are now called upon to pay £7 10s. per ton on this—a total of £900. There is no possibility of our being able to recover more than 25/- per ton of this amount, as the price of those commodities has only been increased by that amount since the increase of the duties. It is beyond all reason that we should be called upon to pay £7 10s. on an article costing only £4 10s. Our loss on this comparatively small quantity would be something like £600.”’
Another Liverpool firm has reported: "From the date that the duty was imposed up to February 6th we have not been able to deliver any of our arrivals of oat products which are still lying on the quay, duty unpaid.... if no remission of duties made, the potential loss on our open contracts would be at least £3,750." Another firm with a branch in Liverpool declared that it would have to pay a duty of about £3,000.
In the Times newspaper of the 9th of February there is another letter upon the subject. A merchant there writes: “In anticipation of this seasonal trade we booked our requirements ahead and at the time the new order was put into operation we had 820 tons of oat goods on contract for shipment to the end of March, when the demand normally ceases ... We are bound to honour our contract with foreign shippers, and in doing so we shall be forced to pay a duty representing 150 per cent. of the c.i.f. value of the goods which in our case amounts to £6,150, an increase of £5,330 over the duty anticipated.”
That only gives an illustration of the enormous injury done to trade owing to want of knowledge as to the nature of these imposts. If licensing duties are not to apply to goods in transit, there is no possibility of the merchant getting paid for them. Supposing goods are ordered from one particular country and the quota order says they should be obtained from another country, the merchant has to pay for the goods ordered from the first country, and he is not allowed to bring them in. That is the situation in which trade becomes impossible. The Minister's reply to that is that it will not arise, and that he will see that it will not arise. But there should be some definite undertaking in the Bill that it will not arise, and that is what we are asking for in regard to these licences.
There is no undertaking in the Bill, but there is power to deal with such a situation, should it arise. Deputy Good, having read these letters, should suggest to the British Government that they should copy the legislation introduced here, because if they took the same powers that we are taking, then they could avoid the danger of all hardship.
In so far as goods in transit are concerned, the oats that were afloat or the other goods in ship to which the Deputy referred, there is a period of six weeks before the quota order becomes effective during which these goods can be imported into the country unless there is a clear case for stopping them, as in the case I mentioned where goods were being brought in for the purpose of stocking up here in anticipation of some development at home, and the order was made for the express purpose of excluding them. In the other case, the case of a contract, there are two things I want to say. One is that, so far as my limited knowledge of the law goes, it tells me that if the importation of the goods is prohibited by law, not prohibited by a customs duty which can be paid, even though very large — that it actually cannot be done — the contract cannot be held to be binding. Secondly, there is the consideration that the fixation of the first quota period and the first quantity would take place after consultation with the interested parties, and having due regard to these considerations and for the purpose of meeting the representations that might be made to prevent any hardship arising.
The sole reason why an amendment of the kind which Deputies Dockrell and Good have suggested cannot be put in is because, while that amendment would undoubtedly cover certain cases they have in mind, it would defeat the whole purpose of the Bill in respect of other cases that might arise. I think, therefore, it is much better to leave the Bill as it stands, giving a sort of six weeks' period of grace in respect of all articles, and that will be more than sufficient for most, and relying upon the reasonable administration of the powers of the Bill during the first quota period to cover exceptional cases which might possibly arise.
It is all very well to say to business men that they may rest assured that this will be interpreted reasonably, but they want something more than that, and they are entitled to something more. I am sure as regards the Minister that it will be worked equitably as far as possible, but there is no guarantee that that will be done in future.
The Deputy knows that the answer to that is that if my successor happens to be an unreasonable man and wants to act unreasonably and exercise powers for the purpose of destroying trading interests he will not be stopped by the absence of an Act of Parliament. If he has a majority here which put him into office he will have a majority which will give him the powers he wants. The fact is, therefore, that you cannot guarantee against some future Government acting in an irrational manner. If that Government has a majority, it can get whatever power it wants, and you will not prevent it getting that power by putting in an amendment to existing legislation.
Would the Minister say that the matter will have his consideration and that he will see how he can meet us?
I would be very glad, but I should like the Deputy also to consider the particular case I mentioned where it is, in fact, essential in the national interest that goods in transit should he stopped. If the Deputy will consider that and see whether he can produce an amendment on Report I shall consider his also.
Then it will come up again on the Report Stage.
Amendment, by leave, withdrawn.
Section 7 put and agreed to.
Question proposed: "That Section 8 stand part of the Bill."
In accordance with my undertaking to give an indication of amendments that may be introduced, I may say that one of the matters under consideration is the advisability of inserting a sub-section giving power to require that goods imported under licence shall come by a specified route. It is desirable for some reasons, and it is regarded from the point of view of administration as likely to facilitate the working of the Act. The main purpose is to ensure that if a special quota order is made on behalf of, say, France, in respect of some class of goods, it will not mean that French goods lying in stock in some other country can be shipped in here under that order; in other words, to ensure that France will get the benefit of it. A number of firms have made representations in favour of taking some power under the Bill which will end a rather peculiar position that certain continental firms will only sell here through agencies in Great Britain. The fact that they will only adopt that procedure means an increased cost here, because those agents in Great Britain charge commissions on the sales. I have not been able to devise any means by which this Bill could be used for the purpose of requiring those continental firms to establish direct agencies here, but if Deputies can make any suggestions on that point I shall be glad to consider them on Report.
Is the Minister dealing with the international cartel system?
Question put and agreed to.
Question proposed: "That Section 9 stand part of the Bill."
On that section it is also, I think, desirable that we should have certain powers to impose conditions in respect of licences issued. Licences under the section will be issued as it were ex gratia, and it is possible to have somewhat wider powers than this gives. It may be necessary to have powers to impose conditions where the goods are coming in a manner that supplements the quota determined upon for the subsequent quota period.
Question put and agreed to.
Remaining sections and title put and agreed to.
When will the amendments be circulated?
I hope to have them circulated to-morrow or Saturday morning. They should be in the hands of Deputies not later than Monday.
I should like to ask the Minister a couple of questions. Take a case like the following: I have a quota order and import goods from France under the order. They are not satisfactory and I send them back.
The French also have a quota system and you might not be able to send them back.
Take a country that I can send them back to, and that I order other goods in exchange for them. Am I debited with these two deliveries of goods in my quota order?
That was the case I mentioned when I referred to the advisability of amending Section 2 so that goods imported under licence, exported and re-imported again would not count against the quota. That is precisely the case that I am trying to devise an amendment to meet.
Report Stage to be taken on Thursday, February 22nd.
