Adjournment Debate. - Tipperary Iron Works Factory.

I gave notice this evening that I would raise this matter on the adjournment, because of the very inadequate answer I received to what I regard as a very important question, important from the point of view of the individual concerned, Mr. Swann, who has lost heavily as a result of this transaction, as well as the people associated with him; important from the point of view of the town of Tipperary, which has been shamefully let down in the whole business, and important from the point of view of the country as a whole, because it is bound to suffer in a loss of confidence in the business capacity of the Irish people, as a repercussion of this unfortunate transaction. The individual prominently concerned, Mr. Swann, is a businessman in this city, a man of enterprise and initiative, who has made a success of a business which might have been paralleled with that which he proposed to establish in Tipperary. Being a man of imagination as well as a businessman, Mr. Swann saw the possibility of helping to implement the programme of the Government in building up industry by establishing a factory in the town of Tipperary for the manufacture of springs for motor cars and other vehicles. Having gone into the matter fully, as a practical man, he realised that he could not make a success of the business unless a tariff was imposed by the Government and, in conjunction with his solicitor, Mr. Joseph Dixon, they called on the Department of Industry and Commerce. After several conferences they arrived at the conclusion that if Mr. Swann was in a position to turn out sufficient articles of this kind to satisfy the market, the implication was that a tariff would be imposed. Fortified with that information Mr. Swann went to Tipperary.

It was intimated to him that it was Government policy to decentralise industry, as far as possible, and not to have it all concentrated in Dublin. Tipperary having been decided upon, Mr. Swann got into touch with a local solicitor. Articles and Memorandum of Association were drafted, share capital sufficient to carry on the enterprise was raised, a site was selected in the ruined military barracks, and negotiations were entered into with the Office of Public Works and practically concluded for the purchase of the site. Negotiations were also entered into with the Great Southern Railways to have a siding put in in order to facilitate the working of the factory. An eminent architect was brought down from Dublin to draft plans. Legal costs, and a considerable amount of money were expended and a good deal of time was lost by Mr. Swann and his colleagues in trying to launch this company. When they had reached the stage at which this work was almost completed they were informed by the Department of Industry and Commerce that another company—it is at present an English firm, although it may sail under other colours later on—was going to get the licence and, accordingly, they found it impossible to proceed any further with the scheme. As regards the town of Tipperary, the people were certainly very pleased at the thought of having a factory there, because, unlike most of the Fianna Fáil factories, it was going to be a real factory, not one that would employ a number of little boys and girls at very small wages. This was to be a factory which was going to pay good wages and to train the people employed in it. Any man who could gain experience in such a factory, after a few years would be capable of taking up a position in similar firms in any part of the world. For various reasons, that I do not wish to go into now, Tipperary is a town that suffered certainly as much as any town in Ireland during the Black and Tan régime. It suffered even still more as a result of the attentions of certain gentlemen with whose activities the Minister is probably more familiar than I am. The military barracks in the town which was, perhaps, the finest in Ireland, was burned; Cleeves' factory, which was unique of its kind, was also burned, and the business of the town was almost completely ruined. In these circumstances, the people of Tipperary felt that as a result of their sacrifices they should have some claim on any native Government established here. Even apart from that, leaving whatever claim they had on that score out of consideration, on the grounds of ordinary justice, a town that had suffered so much was entitled to some consideration. Unfortunately, Tipperary never received any consideration but was left there to mourn in its ashes, a kind of cinderella of the towns of Ireland.

Does this arise out of the question?

Indirectly, out of the portion dealing with the loss to the people of Tipperary.

Mr. Bourke

That situation remained until a fairy godmother in the shape of Deputy Briscoe came along, who induced a Prince Charming to offer to build a palace there in the shape of the Galtee Steel and Iron Works, Limited. Unfortunately, there were two jealous sisters in the shape of the Minister for Industry and Commerce, who, apparently, has no confidence in the business capacity of the Irish people, and the Minister for Agriculture, who was anxious to get a Wexford hoof, whether it would fit or not, into the silver slipper. Certainly Tipperary has been deprived of the factory and Mr. Swann and his companions have lost their cash. I will quote some correspondence which will show more clearly than anything I could say what exactly occurred. Mr. Swann went ahead in the full confidence that a tariff was going to be imposed, and proceeded to launch his company.

When was he informed of that?

Mr. Bourke

At the conferences he was told that a tariff was going to be imposed.

Mr. Bourke

I will read the correspondence. Mr. Dixon received a telephone message intimating to him that a licence was going to be given to the firm of Brockhouse and Company, Limited. On the 7th of May the following letter was written to Mr. Swann by the Department of Industry and Commerce:—

"I am directed by the Minister for Industry and Commerce to confirm the information conveyed to your solicitors on the 5th ultimo by the undersigned that the Minister has signified his approval of the issue of a new manufacture licence to a Saorstát company which is to be incorporated by Messrs. J. Brockhouse and Company, Limited, and others for the manufacture of springs for motor and horse-drawn vehicles.

Mise le meas."

Mr. Dixon, having received that intimation, wrote, on the 9th of May, to Mr. Briscoe, who had interested himself in starting this company. That letter was as follows:—

"My dear Bob,

Re: Galtee Steel and Iron Works, Ltd.

"I am very disappointed that the interview you had arranged for today is not to take place. At some inconvenience to myself I had altered arrangements so that I could meet you. That I do not mind so very much, but it seems to me a matter of vital importance to the Company that something should be done immediately with a view either to preventing the issue of the licence to Brockhouse and Co. Ltd., or to limiting them in such a way that they can be of no harm whatever to us.

"I gather you are crossing tonight, and will not be back until Monday. I do not think a delay like this is likely to be of any benefit to us. If you cannot attend personally to it perhaps you would be good enough to get in touch with the proper parties and explain the position.

"As you know, the suggestion for a tariff on springs came first of all from Mr. Swann. In point of fact with you, Mr. Swann and myself attended at the offices of the Ministry in Lord Edward Street, when it was first mooted. It does seem perfectly absurd that an Englishman or rather an English firm could be entitled to use the benefit of our common efforts to our own exclusion.

"As you know, our Company was formed with purely Irish capital and purely for the benefit of Irish nationals. I think if you insisted on this sufficiently, with the Minister responsible, he would probably alter his views.

"I have accepted every suggestion you made in respect of the location of the factory, etc., and I must ask you now to insist that as a result of that our position is not going to be prejudiced.

Yours faithfully."

Now, at the same time that Mr. Dixon wrote that letter, he also wrote a letter to the Minister himself. The letter to the Minister is rather long, but it gives the whole position and, for that reason, I intend to read it. I shall not read any more, although I had intended to do so. The letter to the Minister, which was also dated the 9th of May, reads as follows:—

"The Minister for Industry and Commerce,

Government Buildings,


A Chara,

Re: Galtee Steel and Iron Works, Ltd.

"I am acting for the proposed Company. To give you an indication of the present position perhaps it might be as well if I told you the history connected with its formation.

"Some 12 months ago Mr. John P. Swann of the Dublin Spring and Sheet Metal Works of this city, for whom I have been acting for many years, approached me with reference to the formation of this company, to manufacture springs for motors and other vehicles. For a number of years previous to this Mr. Swann had been carrying on this business himself. We interviewed Mr. Robert Briscoe, T.D., and with him had some further conversations with your representatives at Lord Edward Street, before whom we placed our proposition.

"Our proposition roughly was that a tariff should be imposed on imported springs or the parts thereof. Some considerable time was spent over this. Ultimately some of your representatives at Lord Edward Street intimated to Mr. Swann and myself that if we could satisfy you that we were in a position to deal with the demand, then a tariff would be imposed. The actual amount of the tariff was specified. May I here add that I myself suggested to your representatives in Lord Edward Street that we should not like to ask to have a tariff imposed unless we were in a position to deal with the demand. You may take it that the pros and cons of the matter were fully discussed between your representatives and ourselves.

"Having got the intimation as to the imposition of a tariff I again got into communication with Mr. Briscoe. He intimated to me that the policy of the Government rather was that factories should be established in what may be called country districts. He suggested to me that Tipperary was an available place and referred me to Mr. Dan Breen and Mr. James F. D'Arcy, solicitor, of Tipperary.

"As a result of conversations in which Mr. Swann, Mr. Briscoe, Mr. Breen, Mr. D'Arcy and myself had part, it was agreed to promote a company to be called the ‘Galtee Steel and Iron Works, Ltd.,' with headquarters at Tipperary, to carry out this project. It is but right to say that I myself had communications and, indeed, an interview with Mr. Brockhouse, one of the firm of Messrs. J. Brockhouse and Co., Ltd., to see if they were interested in this project. I was concerned with them only because of what assistance they might be in an advisory capacity. They have now approached your Department behind my back—having had the advantage of our activities.

"To my amazement, I was informed that Messrs. Brockhouse proposed to start in this country a company to deal with the very objects which we had in view. Again, I was amazed to be informed by telephone that it was proposed that a licence should be given by you to Messrs. Brockhouse for the manufacturing of springs for motors and horse-drawn vehicles.

"May I suggest that it does seem strange, that my client (an Irish national) and others (all Irish nationals) having got themselves together to establish a company for this purpose, having brought before your representatives the possibility of it, and having convinced your representatives that the demand could be met with by manufacturers here in this country, should now have to face possible opposition from Englishmen or, at all events, an English firm. I am now officially informed in writing that this firm may operate here under a licence from you.

"Although I have got that official information, I can scarcely assume it to be correct. I do think, if I may say so, that before a licence should be given to non-Irish nationals at least the opportunity should be given to Irish nationals of showing whether or not they were capable of dealing with the requirements of the country for the supply to which it is now proposed to give non-Irish nationals a licence.

"In the interviews which Mr. Swann and myself have had with your representatives in Lord Edward Street, we have always affirmed that we did not desire a tariff to be imposed on the commodities until we were in a position to supply the demand. Now it seems to be that, having first mooted this project and then having gone to considerable expense both in time and money to achieve our objects, we are faced with the possibility of a licence being granted to non-Irish nationals, even before the tariff is imposed. I do think it might be well if an opportunity of discussing this with you were given to us. Accordingly, I await the favour of your early reply."

I may say that that letter was never properly answered. I have several other letters here but, in order to give the Minister an opportunity of replying, I am not going to quote them. All I say is that, if the Minister has made up his mind to knock this Irish company on the head, he should at least make some effort to compensate Mr. Swann, who has been at very considerable expense over the whole matter, and that, secondly, he should make some effort to see that whatever company is allowed to carry on, whether it be an English firm or not, should start in Tipperary, the place where it was originally intended that the factory should be situated.

First of all, I should say that as regards the general question of the development of industry in the town of Tipperary, I have every sympathy with the claims of the citizens there, and I think they are aware of the fact, and that they have intimate knowledge of the efforts made by the Department of Industry and Commerce to get persons, intending to engage in industry in this country, to locate their proposed factories in that town. These efforts were not always successful. One particular project for that town is developing although slowly. However, I think I can say that that particular project has now reached the stage where it is likely to be proceeded with. In any event, anything that the Department of Industry and Commerce can do to assist in the development of plans for industry there, will be done.

So far as the particular project to which Deputy Bourke is referring is concerned, there is no reason whatever why it should not be proceeded with, and, really, that is all there is to say on the matter. Deputy Bourke mentioned, quite correctly, that Mr. Swann was informed that, if he reorganised his business in such a way as to enable him to produce these springs in a competent way by up-to-date methods and in adequate quantities to supply the home market at prices comparable with the prices prevailing for the imported article, I would be prepared to recommend an extension of the existing duty to cover the unassembled parts.

Mr. Bourke

There is not room in this country for more than one factory in this connection.

There was no suggestion to the Department of a monopoly. There was not any suggestion from Mr. Swann, at that time, that he was looking for a monopoly. It was not mentioned. There was no question whatever raised upon that point. So far as we are concerned, Mr. Swann came to the Department with a proposal to engage in the manufacture of these laminated springs, and he was told that, in certain circumstances, a tariff would be imposed. Mr. Swann said that he was satisfied. He expressed himself as quite satisfied with that on 9th February of this year and stated that he would go ahead with the preparation of his proposals. There was no suggestion raised by him at that time that he wanted to prevent anyone else coming into the industry and that no licence under the Control of Manufactures Act was to be issued in respect of these commodities. So far as we are concerned, the undertaking that was given to Mr. Swann in February last stands, and if he wants to proceed on the conditions enunciated then, he can do so.

I may say that it is always necessary for the Department to be careful when people come with proposals for the establishment of new industries, where there is any doubt in our minds as to their ability to operate these industries successfully. I am not saying that these doubts existed in relation to Mr. Swann, but there was on him an obligation to show that he had got the financial resources and technical competence to run that industry successfully. He was engaged in the manufacture of laminated springs on a very limited scale in Dublin, and, at various times from 1932 onwards, he has made application for a tariff upon the parts of those springs. That application has been refused.

Mr. Bourke

He made a success of his business.

The business, however, was a very small scale business in relation to the market he was proposing to supply and the question which that raised for us then was whether he had experience of manufacturing these goods by mass production methods and the financial backing and technical skill to make the industry a success. Because we had reason to question whether the imposition of the tariff would result in the development of the industry on proper lines, it was not granted. The application was made on many occasions in 1933 and 1934. In January of this year, he was informed, as has been stated by the Deputy, that if he satisfied the Department that he was in a position to reorganise his business so as to enable him to produce springs by up-to-date methods, in adequate quantities and at a price comparable with the prevailing price of imported springs, I would be prepared to recommend an extension of the tariff.

Mr. Bourke

They did not give him a chance.

He has not yet produced proposals. So far as I am aware, no proposals have yet been produced to us, nor at that time was there any question of the industry being established in Tipperary. The first thing I heard about the industry being established in Tipperary was when I read it in the newspapers, and that was after an announcement had already appeared in the newspapers that the other firm was about to establish a factory in Wexford. We have got to be careful in these matters, because it is not unknown for people to put forward proposals in the hope that they will get a tariff imposed, not with any serious intention of developing the industry in question, but in the hope that they will be in a position to strike a deal with whatever larger and more experienced company comes in to undertake manufacture. We have always to make sure that that danger does not exist. I am not saying that it exists in this case, but we have to be certain that it does not arise, and that is why we told Mr. Swann that before we were prepared to consider the question of the tariff, we wanted him to produce evidence of his ability to establish this industry on a proper basis, and of the financial backing for his proposals. That was on 9th February. We heard nothing more from Mr. Swann until 5th April.

Mr. Bourke

You should have given him a chance. He had the money and was incorporating a company, but you came down on him like a ton of bricks.

That may be so, but he kept the information to himself until 5th April, when he came to the Department and verbally informed the officers whom he met of his general intention to form a company with certain capital, and to establish works in Tipperary; but the information which would enable us to judge whether he was carrying out the conditions which were mentioned to him in January as necessary for the imposition of a tariff has not yet been adequately supplied at all.

Mr. Bourke

Has the factory definitely gone to Wexford?

No. There is no monopoly for Wexford either. Any company that wishes can engage in the production of these goods and Mr. Swann can engage also, if he so desires. I merely want to make it clear, in case there would be any suggestion of a breach of faith on the part of the Department, that no undertaking was given to, no understanding come to with, and no promise made to Mr. Swann, that he would in any way get a monopoly of the business and that any other person would be restricted from engaging in it. The only undertaking that was given to him was that if he satisfied the Department in respect of his ability to establish the industry on a proper basis, we were prepared to consider an extension of the duty upon laminated springs to cover the parts of those springs. In the meantime, on 18th February to be exact, an approach was made by another group, which was associated with the British firm to which the Deputy has referred. That firm put forward proposals for the manufacture of a variety of products, including these laminated springs, all of which had been previously imported; and it was after full consideration of their proposals that they were approved and the promoters informed that, subject to various conditions, including the formation of a Saorstát company in due course, they would be given a licence under the Control of Manufactures Act to undertake the business of manufacturing these various articles, including springs.

Mr. Bourke

Is there any advantage given to Irish nationals in regard to the formation of companies of this kind as against outsiders? In the ordinary way, an English firm is bound always to be able to get in before an Irish firm. The Irish firm generally has not the capital and it takes them some time to get started. Unless you give some advantage to a native firm, there is not much chance of starting Irish industry.

That is why the Control of Manufactures Act was passed; but the position is that, once a decision has been made to issue a licence to a company that requires a licence under that Act, it comes in on the same conditions, with the same privileges and subject to the same obligations as a company which does not require a licence. On the general question, the only thing I have to say is that there is no reason why Mr. Swann should not proceed with his proposal. So far as the Department is concerned, we have no objection. We would much prefer to see other manufacturers engaging in the production of these goods.

Might I ask the Minister what was the urgency of granting the licence to the English firm, in view of the fact that steps were being taken by an Irish firm to start the industry?

I should say that the proposals of the other firm in question are of a much wider scope than the proposals put forward by Mr. Swann. Their proposal is to manufacture a fairly considerable range of commodities previously imported, including these springs. In fact, their project is of much larger scope, as I understand it, than was contemplated in the other case, but in any event, we are under no obligation whatever to anybody not to consider any proposal of that kind that came before us on its merits. This proposal was considered on its merits, and on its merits it was decided to encourage the promoters to proceed with it. If Mr. Swann is not prepared to go ahead with this project in County Tipperary, I hope somebody else will, but if nobody else will, the Department will endeavour to induce some other industrialists to establish some other industry there, and if the situation is such that it would be desirable in the national interests that no Control of Manufactures Act licence in respect of the commodities to be manufactured should be issued, it will not be issued. After all, the number of such licences issued is remarkably few, having regard to the number of new projects which are either established or in contemplation. There are a number of industries in respect of which all the firms engaged in them are Saorstát firms, and in any event the majority of the firms to whom licences have been issued have, in due course, become Saorstát firms—as much Saorstát firms as, perhaps, this firm in Tipperary would have been, because, according to Deputy Bourke's statement, they were in negotiation with Messrs. Brockhouse before they put forward their plans.

Only for technical advice.

I do not think that Messrs. Brockhouse would come in on their project merely as technical advisers. However, that may be so. It may be that their company would have been above criticism in that respect. The main point we considered was that the other proposition was a better one in the national interests. It was a larger proposition and much more likely to yield employment here, and the undertaking to issue a licence in respect of that did not involve in any way a breach of any undertaking given to or any understanding with Mr. Swann.

The Dáil adjourned at 11 p.m. until 3 p.m. on Wednesday, 19th June.