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Dáil Éireann debate -
Wednesday, 2 Feb 1938

Vol. 70 No. 1

Scrap Iron (Control of Export) Bill, 937—Second Stage.

I move that the Bill be now read a Second Time. This is a Bill to confer powers to control the exportation of scrap iron similar to those at present in operation in relation to sheepskins. The Bill is in no sense urgent at the present moment, but circumstances did arise during the course of last year which caused considerable anxiety to iron-founders in the country. There appeared a danger that adverse reactions would follow a rapid rise in the price of scrap iron and, consequently, a tendency to deplete stock by abnormal exportations. The situation subsequently eased and there is, I understand, no particular cause for anxiety at the moment, but it is felt that these powers should be in existence to be used, if necessary, for the purpose of preventing any difficulty arising because of an abnormal situation leading to such a demand for scrap iron that a scarcity might be produced here and difficulties created for the industries which use scrap iron as their raw material.

It is not possible to say to what extent the quantity of scrap iron exported last year may have depleted what might be regarded as the normal stocks of that material, but it does not appear as if a situation likely to cause concern has arisen yet. It is impossible, however, to say what the future may hold in that respect, and in the absence of legislation of this kind, there would be no power to act in order to deal with a situation in which abnormal exports were taking place by way of regulation. It is, consequently, considered desirable that this Bill should be enacted. While I cannot say definitely that the Bill will not be brought into operation if enacted, there does not appear from the information available to be any urgent need for its operation at present. The situation is such, however, that circumstances may change quite rapidly and, consequently, it is desirable that the Bill should be passed by the Dáil and made available for operation should the occasion arise.

Is it desirable that the Bill should be immediately passed by the Dáil? It all depends on how you look at these things. The Minister, I think, takes the view that the more control he has over industry and commerce in this country the better it is for everybody. President Roosevelt took the same view, and the result has not been very happy. He has managed to create pretty general chaos in a much greater and wealthier country than this, and I am sure he did it with the best of goodwill. I should say that for the Minister to ask for powers to prohibit persons selling their goods to the best buyer is a very drastic request. It is important to remember that there are a limited number of persons who are scrap iron merchants. They buy the scrap from the people who have it for disposal and then hawk it around to get their best buyer. The power in this Bill, if invoked, will compel them to go to the Hammond Lane Foundry or to Allied Iron-Founders in Waterford and take what those firms offer them for their scrap, or not sell it at all. We all know perfectly well that the Hammond Lane Foundry and Allied Iron-Founders have elaborate understandings between each other that they will share the business of the State between them, and that if one will will undertake not to compete with the other in certain lines, the other will not compete with the first, and vice versa. They are, in effect, a perfect ring, and we propose to hand over to their tender mercies a small number of citizens, admittedly, but hard-working men, mostly poor men, and compel these poor men to sell their scrap to the Hammond Lane Foundry or Allied Iron Founders at whatever price they will offer. I think it is a very drastic proposal indeed.

A second aspect of the question is: If the Minister does get these powers, is he prepared to give the House an undertaking that he will cause independent inquiry to be made by metallurgical experts before he imposes any prohibition on the export of scrap, or does he propose to be advised in this matter simply by the scrap users? I am told it is possible for iron founders to use too high a proportion of scrap iron in their castings with resultant losses to those who have to use the castings, and that it might be a very good thing if many of these iron founders were forced by circumstances to use a higher proportion of virgin ore than they are at present using. Would the Minister make personal inquiry into that aspect of the situation before he uses the powers which it is proposed to confer on him under this Bill? I have not heard him refer to that aspect of the case at all, so far. If the Minister asserts that for the maintenance of the foundry industry in the country, the Bill is essential owing to the peculiar world situation created by the armament scare, I do not suppose the House can withhold the powers from him, but we ought not to give him those powers without realising that we are not only giving very considerable powers in regard to this particular trade, but doing something much more—we are creating a precedent on which he is going to rely when he wants further similar powers in regard to other trades. I remember when the Sheepskin Act was going through, I pointed out that nobody was very much interested in whether sheepskins were exported or not, but that if we gave the Minister power to control these exports, he would come back to us hereafter and ask for analogous powers to control other exports. The House heard the Minister saying that the Bill is quite simple. We had the same thing in connection with sheepskins. Now it is iron. The next one will be with reference to some other commodities that the Minister does not want exported. How far does the Minister intend to go in keeping control of the right to sell our merchandise in the best market? I think he ought to tell us that before the Second Reading is passed.

While I agree with the remarks of Deputy Dillon I am acting on the presumption that the Minister does not. I should like to point out that there is no definition of scrap iron in the Bill. I do not think there is such a definition in existence. It seems to me that nothing in the Bill would prevent me from driving my car to the North Wall, if I was going across to England, and having the car refused shipment on the grounds that it was scrap iron. As there is no definition, some people might refer to it as "scrap iron," while others might refer to it as "a family heirloom." The position should be made clear.

I should like if the Minister could give us some idea of what he considers to be abnormal shipments of scrap iron. What quantity would be considered normal in certain years, and by what amount would increased shipments become abnormal? Will he also say if the increased quantities exported have resulted in an increase in prices? Was the increase the world price and was that due to competition with outsiders for scrap iron? The Minister did not tell us what advantage it is going to be to sellers of scrap iron in this country if they are bound to sell to a limited number of buyers. If the advantage is going to be placed at the doors of local foundries is there any indication that they are not going to raise the prices of their products in accordance with the monopoly given to them?

It is, of course, very unlikely that there will be many cases in which there will be good reasons for regulating the exports of commodities. There are very few commodities exported that we are anxious to restrict. The only commodities that would come within that class are certain raw materials in respect of which there may, at some time, exist a scarcity. At the present time there is, due to exceptional circumstances, a scarcity of scrap iron, and furthermore, various international complications have made it more difficult to procure easily supplies of iron ore. At least that applied last year to some extent until General Franco's forces succeeded in occupying the northern coast of Spain. In any event, there is an exceptional demand for this material and, at any time, that demand may reach such limits that there might be difficulty in securing the supplies necessary to keep our own industries going. It is in such circumstances that the powers conferred by this Bill will be used. It is impossible to indicate what one would regard as normal output or when it is considered necessary to exercise the powers in the Bill. That is a matter upon which individual judgment must be exercised at the time. Some people may hold that these powers should have been taken and operated long ago. It was, in fact, intended to do so. It might be contended that the amount of best scrap iron left in the country was nil, and that we had been dilatory, or that these powers should not be exercised, except in circumstances of very grave emergency. Some individual judgment will have to be brought to bear on the question. The individual carrying the responsibility should be prepared to defend his judgment, but should have power to give effect to his decision if, in his opinion, a decision to restrict exports is required.

It is not altogether a matter of price. The price of scrap iron has gone up recently. It went up and then showed a tendency to fall again. The manner in which the Bill is to work is similar to the Sheepskins Act to which I referred, making it possible to control and to protect the interests of parties engaged in the export of materials. I think it will be agreed that the control of sheepskins was so regulated as to prevent any undue power being given to purchasers of sheepskins to depress prices. While one must have due regard to the necessities of scrap iron the primary consideration must be to ensure that the materials necessary to keep an important industry going are available if international conditions make it impossible to get outside supplies.

There are more iron foundries in the country than the two firms to which Deputy Dillon referred. There are quite a number of firms and there is likely to be sufficient competition between them to secure scrap iron for use in their foundries to enable a fair price to be maintained, without Government regulations at all. I do not think it is likely that many more Bills of this kind will be required. I have been pressed in the Dáil and outside to take power to regulate the export of timber. I do not think the time is altogether ripe for that. It may come some time, and that power to regulate the export of timber would have to be taken. It has been frequently urged in reference to this Bill that the powers should be there, even though not brought into use except in special circumstances. The question of the percentage of scrap iron that iron founders might use is one upon which even experts would hold different opinions. At the moment iron founders think that the percentage of iron ore in use is unusually high. In other words, the difficulty in obtaining scrap iron of a certain quality has compelled them to use a higher percentage of iron ore than would ordinarily be the case, with the result that their production costs have been increased accordingly. Whether that is so I do not know. I do not know what would be regarded as a proper percentage. It would vary according to the class of products. There is a natural limit to the percentage of scrap iron used and I do not think there is any danger that that limit will be exceeded, because quality would deteriorate very rapidly if that happened.

I would not like the impression to go out that the introduction of this Bill has been promoted by the iron founders. It is quite true that there were consultations with the iron founders, in an endeavour to ascertain what their position was in respect of supplies, and what result they anticipated the abnormal demand would have on the available stocks in the country, but the decision to promote the Bill was taken by the Government, with due regard to all the circumstances, and not for the special purpose of protecting the special interests of iron founders, or of any other section of the community. It was considered, in the circumstances which existed last year, that these powers should be there. If we had those powers in the early part of last year we might have felt it necessary to exercise them. The situation changed, however, and the urgency of the Bill became much less; but, it is felt that the circumstances which existed at the beginning of last year may be repeated, in which case the power of regulation should, we feel, be there. Even though regulation may be brought into operation in a purely nominal way in the beginning, it might become more than nominal if certain developments occurred. Every Order, of course, which is made under the Bill will be laid before the Dáil, and it will be in the power of the Dáil to secure the annulment of an Order if it thinks that the circumstances do not justify it.

With regard to the point raised by Deputy Benson, I do not think it would be practicable to get a definition of "scrap iron" which could be inserted in the Bill. The only way in which the Bill can be made effective is by leaving it to the discretion of the Revenue Commissioners to determine what is, or what is not, "scrap iron." In the case of many import duties and import restrictions a similar procedure has to be followed and the judgment of the Revenue Commissioners brought into play.

My car will not be safe then.

I doubt if the Deputy's car is likely to be mistaken for "scrap iron."

Question put and agreed to.
Committee Stage ordered for Wednesday, the 9th February, 1938.
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