Adjournment Debate. - Licences for Import of Cotton Thread.

At question time to-day I asked the Minister for Industry and Commerce why it was, in view of the fact that he had issued 51 licences to import cotton thread free of duty, he had refused to recommend the issue of a licence to the applicant addressed in his letter of 5th February, 1936 (T.I.D. 1294/3046). The Minister said that he had no reason to believe that that particular merchant had any right to such a concession. The facts are shortly these: The Minister, in order to set up the Irish Sewing Cotton Company, made cotton thread a reserved commodity and gave a monopoly of that business to the Irish Sewing Cotton Company. First, the Irish Sewing Cotton Company were only to put thread on reels, and they were to get a licence to import thread free of duty to put on reels at Westport. So far as that went, they found considerable difficulty in reaching the requirements of the country. Apparently, the Minister had some discussions then with a number of drapers. I drew his attention, and the attention of the country, to the fact that it was becoming increasingly difficult to get deliveries of thread from Westport. He proceeded to give licences to certain individuals to import thread free of duty. It is important to bear in mind that one of the conditions of the monopoly licence granted by the Minister was that the Westport factory would charge the same price for thread that was being charged by external suppliers before the Westport thread factory got under way. The Westport factory issued one price list shortly after they entered the business, and then they prepared another price list dated the 1st November, 1935. On that thread price list it is set out that they were prepared to supply black and white reels, six-cord, Nos. 10 to 60— an average assortment—at 16/9, and No. 10 only at 18/9. That is to say, unless you were prepared to take the assortment of thread that would suit the Irish Sewing Cotton Company, you would have to pay 2/- a gross more for it.

In the West of Ireland comparatively few people use sewing machines, simply because the ordinary small farmer's wife cannot afford one. Nearly all the sewing is done by hand, and the result is that people in business in the West of Ireland distribute far less No. 40 and No. 60 thread than they do of No. 10, which is the ordinary thread used for hand-sewing. Suppose that a man engaged in the wholesale distribution of thread in County Mayo or the County Sligo—the merchant referred to in the letter quoted in my question finds that 95 per cent. of his customers want No. 10 thread and nothing else—finds that the small shopkeepers who deal with him have no customers for machine thread at all, he has got to stock No. 10 for which there is no demand. The Irish Sewing Company say to him: "If you only want No. 10 thread you must pay 18/9 for it." That wholesale distributor in the country is in competition with the wholesale centre of distribution in Dublin which, of course, has an abundant market in and about Dublin and in other districts where sewing machines are readily available for the other numbers of thread. The Dublin distributor sells the No. 10 thread where it is required, and because he has a dual kind of market he buys his thread at 16/9 per gross, whereas the distributor in the congested area has to pay 18/9. That means a difference of 2d. per dozen. Surely that must and, in fact, does result in grave inconvenience and injustice to the small distributor. Suppose a shopkeeper buys direct for retail distribution from the Irish Sewing Cotton Company, he has to pay this extra money and may be in competition with a retail distributor in another town who is so circumstanced that he can buy this thread cheaper, so that you have merchants all over the country paying two prices for thread to a monopolist, because there is no other source of supply. These two merchants are trying to compete with one another.

The last point that I have to make is this, that I understood that the terms and prices of the Irish Sewing Cotton Company were to be the same as those which applied before the monopoly was created—before foreign thread was excluded. At no time did any of the firms associated with the Central Agency — J.P. Coats, Alexanders and Clarkes—or, I think, the British Thread Company, ever ask you to take any thread but the thread you required. None of these companies ever stipulated that a merchant should order No. 10, No. 30, No. 60 or No. 40. Whatever a merchant wanted they were willing to supply at the list price. This is a completely new departure, and in view of the fact that the Minister was prepared to facilitate the company by allowing them to bring in the cotton free of duty, I cannot conceive what reason they have for compelling a merchant to buy what he does not want. The present situation is that you have some people getting licences to import cotton thread free of duty, while other people are refused a licence. You have some people able to get thread at 16/9 a gross, while others have to pay 18/9 a gross. That has given rise to grave dissatisfaction, and, in my opinion it is a grave injustice. The matter was brought to the attention of the Minister, and it was only after he declined to accede to a request for a licence that it was raised in the House. In my opinion an improper and unfair situation exists, and one that urgently calls for rectification.

I do not think it will take long to dispose of this matter. In fact it would be of little importance were it not for the fact that the Deputy framed his question in a manner which conveyed that licences were issued for the importation of this class of thread to other merchants and were refused to the firm in the application of which the Deputy is interested. That is not the case. The application was based on the ground that the Westport Thread Company declined to sell this thread at the price of 16/9 unless certain quantities of other threads were purchased as well. If the thread were purchased separately, a higher price was charged. The conditions, however, under which such thread was offered to this particular firm are the same as those at which it is offered to all firms, and in no case has a licence been issued on the ground on which this firm applied.

I am informed that the manufacture of this No. 10 thread is more difficult and more expensive than the manufacture of other classes of thread, and that if it were to be sold alone, at the same price as that charged for other threads, that in averaging out the price so as to effect a price reduction in the No. 10, the price of the other threads would have to be increased. The Westport Thread Company is required by the conditions of its licence to charge a price for sewing cotton produced at Westport not in excess, quality for quality and under like conditions of sale, of the price charged for sewing cotton produced by the British Thread Mills, Limited, of Leicester. That condition of the licence of the Westport company has not been violated in this case. The thread is being sold at the same price and under the same conditions of sale as those imposed by the British Thread Mills, Ltd., of Leicester. That has been ascertained. The thread is available to all firms in the country under the same conditions and at the same price, and under these circumstances the application of this firm could not be entertained. I think it would be undesirable that we should modify the conditions of the licence of this firm in a manner which would enable this particular class of thread to be sold cheaper at the expense of increasing the prices of other classes of thread. For the purpose of enforcing the conditions of the licence, it is desirable that the prices and conditions of sale in operation at Leicester should be reproduced here. That is being done. There has been no violation of the conditions of the licence and no variation in the conditions under which this thread is offered for sale to one firm as against another, and under these circumstances a licence could not be issued.

Does the Minister think it desirable or fair that the thread normally used by owners of sewing machines, who might be said to be comparatively prosperous people, should be subsidised at the expense of thread which is used only by hand sewers, who might be said normally to belong to the poorer class of people?

That is not the case. The No. 10 thread is being sold at the same price as the other thread is being purchased at the same time; but if it were to be sold separately, it would have to be sold at a higher price.

The Minister says that it cannot be sold separately except at a higher price. Surely, that is as much as to say: "We will give you No. 10 thread at a certain price if you will buy a couple of elephants and a couple of baboons with the same lot." But we do not want elephants or baboons; we only want thread. It means that you are subsidising No. 40 thread at the expense of No. 10. The Minister has mentioned the conditions imposed by the British Thread Mills of Leicester. I am not sufficiently familiar with their practice to be able to speak definitely on the matter so far as they are concerned, but if that is the practice there, they are the only thread firm in Great Britain that made that stipulation. All firms in Great Britain gave it at the same price.

I only want to say that I am not in a position to reach any conclusion as to what is the most suitable practice with regard to the sale of thread in the country. I am concerned only to see that the conditions of the licence in the case of this firm are being observed and that, in the issue of licences to import thread, there is a uniformity of practice in the matter.

The Dáil adjourned at 10.45 p.m. until Thursday, 27th February, at 3 p.m.