Dáil Éireann debate -
Wednesday, 11 May 1938

Vol. 71 No. 6

Industrial Alcohol Bill, 1938—Second Stage.

Minister for Industry and Commerce (Mr. Lemass)

I move that the Industrial Alcohol Bill, 1938, be read a Second Time. The purpose of the Bill, as Deputies who have studied it are aware, is to make provision for the formation of a limited company to take over as a going concern the industrial alcohol undertaking which was established under the Industrial Alcohol Act of 1934. It is considered that the time is opportune for making that change, and the Bill which has been designed for that purpose is similar to other measures introduced here from time to time for the establishment under State auspices of public companies for one purpose or another. The time is considered opportune, because the industrial alcohol undertaking has now passed the initial stage, and will in this year, it is hoped, commence to work on a whole-time basis. The production of industrial alcohol was commenced in May of last year at the factory in the Cooley area, County Louth, but only for an experimental run. In that year at that factory 18,000 gallons were produced in the short period during which the trial run-in of the plant lasted. Operations were recommenced at Cooley in November, and production began at the other factories in the following months. It began at Labadish in December, at Carrick-macross in January, at Carndonagh in February, and at Curroy, County Mayo, in March. So far, adequate supplies of potatoes, which are the raw material of the industry, have been forthcoming in all the factory districts except the Curroy area. In the Curroy area it has only been possible to run at half the normal rate so far. For technical and other reasons, it was not possible to start all the five factories simultaneously, and the inadequacy of the supplies at Curroy may be partly due to the delay in putting the plant into production there. As I have mentioned, the Curroy plant did not commence to work until March. At the same time, some doubt exists as to whether the supply of potatoes in the Curroy area will be satisfactory for the forthcoming season and for that reason arrangements have been made to examine the feasibility of adding a molasses plant to the present equipment at the factory, which step has already been taken at the Cooley factory. It is expected that the molasses plant at Cooley will be in operation by the first of next month and will process about 2,000 tons of molasses between that and the opening of the next potato campaign. The molasses used will be supplied by the Irish Sugar Company.

The question of the introduction of molasses plants at the other three factories is also under consideration. The total output of industrial alcohol up to 30th April was 299,000 gallons. Supplies of potatoes are still available, and it is not improbable that that figure will be increased by 80,000 or 90,000 gallons by the end of the present production period. The quantity of potatoes processed at the five factories during the campaign up to 30th April was 14,600 tons. The direct employment afforded at each factory is on an average 43 workers, including the managing staff.

Mr. Dillon

Are they all men?

Mr. Lemass

At the factory, yes. The head office is staffed by 35 hands, making a total of 250 employees. In addition, substantial indirect employment is provided in the collection, blending and distribution of the petrol-alcohol mixture.

In the original estimates submitted to the Government in connection with the establishment of the factories it was assumed that the wash from the distilling operations would be sold to farmers at a price of ½d. per gallon. There is a 13 gallon output of wash per gallon of alcohol, and the normal daily output of wash, therefore, is 13,000 gallons in each distillery. So far, however, efforts to dispose of this wash to farmers have only been partially successful. About 3,000 gallons per day is being sold in the Cooley area, but not more than that. The whole question of the utilisation of this material is at present under examination. At the moment, material which cannot be sold to farmers is being disposed of as waste.

The arrangements made with the farmers for the supply of potatoes in the current campaign were based upon a price of 40/- per ton for potatoes with 16 per cent. starch content, with an increase or deduction of 2d. per ton for each deviation of one-tenth of 1 per cent. in the starch content. There was an additional provision that, where potatoes were tendered for in advance, a payment of 1/- per ton per month would be made in respect of deliveries after the 1st January. That latter provision has been dropped for the next campaign, but representations have been made to the Department to have it restored.

Under the agreement with the technical experts, Messrs. Noury and van der Lande of Holland, each plant is guaranteed to produce 660 gallons of absolute alcohol per day. In actual practice, however, the output has reached 1,000 gallons per day. On the assumption that the distilleries operate on potatoes from November to May inclusive, approximately 875,000 gallons of alcohol will be produced annually from the potatoes. That will require about 15,000 tons of potatoes, as compared with the original estimate of 35,000 tons of potatoes producing 660,000 gallons of alcohol. The processing of 2,000 tons of molasses at Cooley between June and October will give an output of approximately 130,000 gallons of alcohol. The total production, therefore, of the plants as at present equipped should amount to approximately 1,000,000 gallons per annum, The installation of additional molasses plants at the remaining four distilleries will increase that by another 500,000 gallons.

When the initial difficulties associated with the introduction of the new industry have been overcome, the operation of the plants and the conduct of the enterprise on a purely commercial basis can better be carried on by a public company than by a Government Department because the organisation of a public Department, by reason of statutory and other obligations inseparable from the expenditure of public money, does not readily lend itself to the operation of a commercial enterprise. The nominal capital of the company which it is proposed to establish—Monarchana Alcóil na h-Eireann, Teoranta—is fixed at £500,000 divided into shares of £1 each. It will take over the undertaking as and from a day to be appointed by the Minister. In consideration of the transfer of the undertaking to the Company, shares will be issued to the Minister for Finance. The total nominal value of these shares will be equivalent to the amount certified by the Minister for Finance as having been expended out of moneys provided by the Oireachtas for the purpose of the undertaking up to the appointed day in the acquisition of land and so forth, the construction of the distilleries, the construction of rectifying plants, and other necessary works, and the purchase of machinery. plant, and equipment. The maximum amount which may be expended by the Minister for Finance in the acquisition of shares, including the nominal value of those allotted to him in consideration of the transfer of the undertaking, is limited to £500,000.

It has been agreed with the Department of Finance that the company should undertake liability for the fixed capital invested in the undertaking only. The company will not be charged with expenses which might be described as development expenses. The principal items included under this arrangement are moneys which are payable as bulk sums to the Dutch company who act as technical advisers, and salaries, wages, and other expenses of head office and distilleries up to the date of commencement of production. These sums amount approximately to £37,000, of which £20,000 is attributable to head office and other expenses.

Mr. Cosgrave

Did the Minister say that these will not be charged?

Mr. Lemass

They will not be charged. The Government has approved of the sale of industrial alcohol to petrol importers and refineries at a price of 3/- per gallon. That figure has been based on the assumption that certain items will be capitalised; that is to say, interest on the fixed capital invested in the undertaking in respect of the first year's working when production was very much below what it would be in a normal year; the excess of the production costs in the first year's working over the estimated normal production costs and the royalties payable to Messrs. Noury and van der Lande on the output of distilleries, which charge is spread over four years. The total amount of these items is £156,000. Apart from the three items which I mentioned, the total liability incurred on the undertaking, for which the new company will assume liability, amounts to £266,000, made up as follows: In respect of land, buildings, roads, etc., £156,000; in respect of plant and equipment, including royalty payable on the Melle process working in the distilleries, £97,000; rolling stock, lorries, etc., £9,000; miscellaneous equipment, £4,000. In addition to this, an estimated capital expenditure of £4,000 will be incurred during the next few months. Allowing a sum of £30,000 for working capital and contingencies, it will be seen that the immediate capital required by the company will amount to £356,000. It has, however, been thought advisable to fix the nominal capital at £500,000. The Bill provides that, with the consent of the Minister for Finance, after consultation with the Minister for Industry and Commerce, the company may issue debentures, but the amount raised by debentures must not at any time exceed the paid-up share capital of the company.

The Minister for Finance is further empowered to guarantee the principal and interest in respect of such debentures. The Bill also provides that while the Minister for Finance continues to hold not less than one-tenth of the issued shares, while any debentures guaranteed by him are outstanding, a majority of the directors, including the chairman, shall be nominated by him, and the company's auditors shall be appointed with his approval. Power is also given in the Bill to the Minister to authorise, subject to such conditions as he thinks fit, the payment of subsidies to the company out of moneys provided by the Oireachtas. That clause is in the nature of a safeguard to cover abnormal circumstances, such as a shortage of raw materials in a particular period, resulting in excessive working costs.

Part III sets out the special powers of the company in relation to the laying down and maintenance of pipe lines, and the compulsory acquisition of land, and the construction, maintenance and operation of transport works. This clause follows the provisions recently enacted by the Dáil in the Cement Act of this year, the Liffey Reservoir Act, 1936; the Air Navigation Transport Act, 1936, and also the provisions of the Industrial Alcohol Act, 1934, as amended somewhat in the light of experience gained in the operation of the Cement Act, 1933.

Part IV provides for the transfer to the company of assets and liabilities of the State in respect of the undertaking. Part V provides for the compulsory purchase of industrial alcohol from the company by petrol distributors at a price to be fixed from time to time by the Minister for Industry and Commerce with the concurrence of the Minister for Finance. It also provides for use by distributors of the industrial alcohol so purchased. In addition to re-enacting Part IV of the 1934 Act, with certain amendments for simplification, this part of the Bill provides a new arrangement, and compels purchasers of alcohol to use it solely for blending with petrol, except with the permission of the Minister. Part VI deals with restriction on the manufacture of industrial alcohol. The Bill repeals the Industrial Alcohol Act, 1934, as on and from the appointed day. That, I think is a general review of its main outline. There are, of course, a number of detailed matters which it will be more satisfactory to discuss in Committee.

I think the House will approve generally of the transfer of the control of this undertaking from the Department of Industry and Commerce to such a public company as the Bill contemplates. During the initial stages of an undertaking, which is definitely of an experimental nature, it was, perhaps, best to have its control directly under the Department of Industry and Commerce, but, it has now reached the stage when that arrangement is by no means satisfactory, because the Department of Industry and Commerce is not suitable for the running of a commercial enterprise of this character. The company which it is proposed to set up will have the same relations with the State as other public companies, such as the Sugar Company, which was established mainly as a result of State enterprise. It is, perhaps, even yet too early to say what the outcome of industrial alcohol will be. Certain experiments upon which it was inaugurated have proved to be less satisfactory than was originally thought. Others have proved to be more satisfactory. The efficiency of the plant that has been established is beyond question. It is, in fact, of much greater efficiency than was guaranteed. On the other hand, it has been found, in order to procure adequate supplies of potatoes, that we had to pay a higher price than was originally anticipated. Of course the price of potatoes has the most direct and the largest influence on the price at which the spirit can be sold. Other costs have also been increased. I think it is recognised that the circumstances under which this enterprise was first decided upon do not now exist. At the same time it is well worth while continuing. It does provide a substantial additional market for potatoes in areas where such markets may be of real value. If the Dáil were to decide that the element of agricultural assistance should be taken out of the scheme then, of course, a much lower price for the alcohol could be secured by making it from potatoes altogether. But, in so far as the factories were established mainly for that purpose, we thought it desirable to continue to work upon potatoes and to give the advantage of that market to the farmers in the factory areas.

The position is, therefore, that we have got very efficient distilleries, as efficient as any industrial alcohol distilleries in the world. Probably they are the most efficient because they are of the most recent origin, and equipped by a firm with a high reputation for work of that kind. These distilleries have been working satisfactorily. The only circumstances that can affect the output of the distilleries is the price of the products and the availability of the companies to the raw material. Subject to the raw material being there at a reasonable price, the alcohol can be produced and made available at a cost as low as is paid in any other country. If we were concerned only with the cost of the alcohol and not concerned with utilisation of native materials, of course, a lower price would be secured but that, I think, would be bad national policy in the present circumstances. Of course, circumstances may change in the future and it will be open to the board of this company to adopt a changed policy with the consent of the Government. I do not think there is anything else I wish to say at this time except to recommend the Bill to the Dáil.

Mr. Cosgrave

Will the Minister tell the House what is the reason for the reduction in the strength of the alcohol from the previous Act? What is the reason for the reduction in strength and do I take it from the Minister that 3/- is the price per gallon or that that is the economic price as discovered by the initial operation?

Mr. Lemass

It can be produced at a profit at 3/- a gallon.

Mr. Cosgrave

A profit?

Mr. Lemass

Of course, that is in a sense an assumption, but I think it is a reasonable assumption on the basis of the output I have mentioned.

Mr. Moore

What price for potatoes would that represent?

Mr. Lemass

40/- a ton.

Mr. Cosgrave

It has not, in that case, to pay any duty. There is not 8d. a gallon duty on it?

Mr. Lemass

No.

Mr. Cosgrave

Will the Minister tell us the reason for the reduction in the strength from 55 to 40 degrees overproof? In the Industrial Alcohol Act, 1934, the expression "industrial alcohol" means alcohol which is of a strength not less that 55 degrees overproof, whether denatured or not. In this Bill it is 40 degrees.

Mr. Lemass

That is true; he 1934 Act defined it as alcohol which is of a strength not less than 55 degrees overproof. It was felt that that definition would allow of the production of alcohol which would compete with the product of the distilleries. The lowering of the strength would, however, necessitate the giving of licences to the distillers of whiskey, and the difficulty has been surmounted by the insertion in this new definition of the words "by a process other than the pot-still process."

Mr. Cosgrave

Yes, but what is the reason for the reduction from 55 to 40 degrees?

Mr. Lemass

The definition has been altered in order to get out of the difficulty to which I have referred.

Mr. Cosgrave

Not at all. Pot-still whiskey is produced at a strength of approximately 25 degrees overproof. You can get patent, as it is called, up to 65. I say it once tested, two gallons of it, at 65 degrees overproof.

Mr. Lemass

I explained that the definition in the original Act, that is "alcohol which is of a strength of 55 degrees overproof," would permit of the production by persons other than this company of an alcohol which would compete with the products of this company. It was, therefore, considered desirable to reduce that figure, but while reducing that figure we do take into account the possibility of bringing whiskey distillers within the definition and therefore the definition has been changed.

Mr. Cosgrave

Would the Minister give a reason?

Mr. Lemass

Because we are confining the manufacture of industrial alcohol to this company?

Mr. Cosgrave

This is a very remarkable Bill. In a sense it is not surprising, having regard to the previous measure. On the first point which I raised with the Minister with regard to the strenght I certainly do not accept the Minister's explanation of it. My impression, for what it is worth, is that a spirit which would be not less than 55 degrees overproof would be more potent spirit to mix with petrol than one at 40 degrees overproof—very much more potent. Now, the Bill is very remarkable in a great many ways. In the first place, power is taken in respect of acquisition of lands, properties, houses, railroads and so on, which so far, until this Minister came into office, was reserved for public utilities, for local authorities or for works which were and could be regarded as of general public benefit. This, as the Minister says, is an experiment. The right to acquire public property at a knockdown price is, to my mind, an abuse of public rights. In the original Bill that power was taken by the Minister for Finance. It is now handled over, or will be handled over, to a body of whom this House at the present moment does not know the names of the directors. In the original Bill even the Minister in the case of a temporary acquisition could not give less than 14 days notice; in this Bill he need only give seven. The Minister may say that having regard to the experience that has been derived over the last few years, that a longer period is necessary but the public is entitled in a case of this sort to protection; it ought to get it. If private company came before the Dáil and lodged a private Bill to get this right ample opportunity would be afforded the public concerned to come in and object to the seizure of property in this fashion and they would be entitled to get a larger price than is allowed, or will be allowed under this Act for any property that would be so seized. Really, it is not acquired at all; it is seized that it is in this case.

Now, what is the policy behind the production of industrial alcohol? Listening to the Minster here this evening one would think that the entire benefit that was to be derived was to agriculturists, that they had a new market for the sale of potatoes and 45,000 tons of potatoes are to be offered to these factories at a cost of about £2 per ton. Many, many years ago a Christian Brother in teaching boys sums happened to come across one dealing with potatoes and the price that was given was 5d. a stone. He was an elderly man and he said: "They must be old ones, and hey must be no good at that price." That is very many years ago. It is a much lower price now so that it must be for class of potato that is not saleable, presume. That is £90,000, and in order to enable agriculturists to get £90,000 we are going to produce 1,500,000 gallons of alcohol at a profit to the company when selling at 3/- a gallon. I take it that the company will get for that 1,500,000 gallons £225,000. I do not think there is any bargain in selling 45,000 tons of potatoes at £2 a ton. I dismiss that as a proposition. I have not heard any agriculturists claiming any advantage in that particular sale. £225,000 is going to give employment to 215 men. Do we gather from the Minister that the present staff of these five factories consists of 43 men each or that that is the maximum number that will be employed in them?

Mr. Lemass

That is the present staff.

Mr. Cosgrave

When putting out 1,500,000 gallons of alcohol, what will the numbers amount to?

Mr. Lemass

I could not say. The increase will not be proportionate to the output.

Mr. Cosgrave

Can the Minister give us any idea?

Mr. Lemass

No idea.

Mr. Cosgrave

Will the 43 men be able to put out 1,000,000 in each factory —or at least in the whole five factories. I would like to get at what the actual value of this experiment is as an employing agency. The Minister could help the House if he told us whether these 215 men are capable of producing 1,000,000 gallons of alcohol in the year. Will the Minister admit that they can do that?

Mr. Lemass

Does the Deputy want me to answer these questions now?

Mr. Cosgrave

Yes.

Mr. Lemass

I think it is better we should proceed on the other basis.

Mr. Cosgrave

We ought to know what we are considering.

Mr. Lemass

I do not propose to submit to a cross-examination.

Mr. Cosgrave

I am asking for information and I suppose we are entitled to get that. The Minister mentioned in the course of his observations that from November to May they expected to produce 875,000 gallons annually. He added that if they added molasses there would be an additional 130,000. Making in all 1,000,000 gallons. Is that the output of 215 men plus 35 on the staff? Would the Minister answer that question?

Mr. Lemass

The output is determined by the period during which the factory works. The normal employment is what I have given the Deputy but the factory has only been working for a short period in the recent campaign. Therefore, in the present campaign the factories would work very much longer. They would work much longer too if the molasses plant were installed. Then they would work all the year round. The total employment would have direct relation to the figures of the output given.

Mr. Cosgrave

There would be more than 40 men in the factory?

Mr. Lemass

Not in any one day. That is the full number for the 1,500,000 gallons.

Mr. Cosgrave

That is the figure I wanted to get from the Minister. We have it now that the turnout of these 250 men is £225,000 worth of goods; that is, £900 worth of goods per man. I do not know that there could be a more expensive method of giving employment than this. That is the figure that I would like the Minister to deal with now so that we will not be making fools of ourselves in going on talking about it. Is that correct?

Mr. Lemass

I am afraid I did not catch what the Deputy has said.

Mr. Cosgrave

I say that if 250 men produce goods to the extent of £225,000, which I calculate is the value of the 1,500,000 gallons, each man there is responsible for an output of £900 allowing that the output is worth 3/- a gallon.

Mr. Lemass

These factories were not started as a means of giving employment.

Mr. Cosgrave

The Minster did not tell us what the purpose of this Bill was. Was this an experiment? If so, I want to know the nature of the experiment. If the production of industrial alcohol is for use in the manufacture of munitions I can understand it. If it is begun as an experiment in order that in time of war, when it is difficult to get petrol, we will have and alternative I can understand it. If it is introduced for the purpose of giving employment to 250 men I can understand it. If further, it is introduced for the purpose of supplying a market for 45,000 tons of potatoes I can understand that too. I can understand if it is introduced for any of these four or the whole four. Presuming that it is introduced for the whole four, I should like to know where the munition factories are. In the second place, I should like to know from some person who has experience of this fuel for motor use whether it is going to damage the machinery and whether it is going to mean great additional cost in transport. There are all classes of people using motor transport now. We do not mind about the rich because they can afford money for increased costs of running their cars. What we should be concerned with here are the people who want to make a livelihood from motor transport, from the carriage of goods and so on. I say that these people cannot stand that loss. Then if we come down to the question of employment, I presume that petrol could be bought at 1/3 per gallon so that we are paying 1/9 more for this. We are paying at least out of the £225,000, possibly £150,000 to give employment to these 250 men. That would come to about £600 a year for each man. I do not think that is good business. It is on that question I would like the Minister to give the House more information. I want to know from him whether this has been introduced for any one of the four purposes I have mentioned or for the whole four or whether there are other things in connection with the matter? So far as one can see extraordinary powers have been taken in this Bill, powers that in the ordinary course one would hesitate to give to local authorities when they want to provide the public with water reservoirs, housing schemes, or something of that kind. We are going to gat an article that is particularly costly. If I mistake not the recent impost on distributors would amount to about £75,000 per annum. It will probably be more, if they had got to pay for 1,500,000 gallons. It is an unusual power to give to the company; in this case you are giving power to fix its prices by order. It may be that the Minister would exercise discretion with regard to the making of the order. Remember people consider that it is bad enough to give power to a Minister to make an order, but giving it to n outside body merely with the consent of the Minister is an innovation and something that I would not like the House to pass. I am very much disappointed with this measure. It is disappointing that so much public money should be put into an experiment of this sort. We are committed to an expenditure of £250,000. If this Bill passes nobody can tell to what extent the public purse will be committed under this Bill. Taking it all round and considering the Minister's explanation I think we must vote against the measure.

Mr. Dillon

This is not the first Industrial Alcohol Bill we have had. We had all sorts of rosy promises when the first Bill was brought in. We had all sorts of rosy promises, too, with regard to the cement industry, and these promises took in poor Deputy Corish. We were promised that the result of the Cement Bill would be to reduce the cost of cement; instead of that it has been very much the other way. Were it not for the Cement Bill you could buy cement delivered in Limerick to-day at 26/9 a ton. The price of Irish cement at Limerick is £1 a ton dearer. Deputy Corish thought it would be only 5/- a ton dearer, but already it is £1 a ton more. In addition to that, the specification laid down for Irish cement compares unfavourably with that of other commercial cements.

Mr. Lemass

I protest against this. I object to these allegations about Irish cement being made.

An Ceann Comhairle

I did not know that alcohol is used for making cement.

Mr. Dillon

Well, the Minister himself mentioned it. I am now going to turn to the Alcohol Bill. This is the dying kick of one of the Minister's proposals for economic self-sufficiency. But since the economic war has been settled there is no shadow of justification for telling the people of this country that an annual burden of £175,000 a year to produce alcohol that nobody wants is a good proposition. This rubbish is going to be let loose on the petrol distributors of this country. In addition to constituting a very heavy burden of £175,000 on the backs of the people of this country, it is going to impose a burden on the wear and tear of every motor cylinder that is moving in Éire.

Mr. Allen

More hats!

Mr. Dillon

I sympathise with the Deputy's dilemma when he discovers that anybody else knows something more than he knows himself about this project. The Deputy should go out and try to learn something about it and then he can come back to make his contribution in this House. In the meantime he would be doing the House a service by keeping silent. You are going to saddle the people of this country with an annual burden of £175,000, if you are going to compel them to purchase 1,500,000 gallons of this rubbish, rubbish which pays no excise duty at all, and yet is going to cost the consuming public 3/- per gallon. Petrol can be purchased at 8d. per gallon c.i.f. in Dublin, therefore there is a difference of 2/4 in the cost.

Mr. Moore

Petrol can be purchased at 4d. c.i.f.

Mr. Dillon

I am deliberately understating the case. If it is true that you can get refined petrol c.i.f. at 4d. per gallon there is a difference of 2/8 in the price as compared with industrial alcohol. Remember this, industrial alcohol is rubbish for the purpose of motor car engines whether it is purchased in Éire, Poland, CzechoSlovakia or anywhere else.

Mr. Moore

Can the Deputy stand over that statement? The Deputy is not an engineer.

Mr. Dillon

Does Deputy Moore deny——

Mr. Moore

Sure.

Mr. Dillon

——that industrial alcohol will result in considerably more wear and tear in the engine of a motor car?

Mr. Moore

It is supposed to be superior to petrol for aeroplanes.

Mr. Dillon

I am not talking about aeroplanes. I am talking of the ordinary motor car. Does the Deputy deny that the conversion of industrial alcohol into motor fuel will result in additional wear and tear in motor vehicles?

Mr. Moore

Absolutely.

Mr. Dillon

Very well, them, you shall discover by bitter experience, as you did before, that this side of the House is right and that that side of the House is wrong. It cost £50,000,000 to teach you that lesson in the economic dispute, and if it takes only £175,000 to teach you the lesson in this instance, we shall regard it as a bargain wrought. It is, however, as well that you should hear the truth now, as you heard it before, five years ago, on another issue, because you will the more readily recognise it when at last it dawns upon you. What purpose is going to be served by the manufacture of industrial alcohol in this country? What farmer in this country will grow potatoes at £2 per ton?

An Ceann Comhairle

I would remind the Deputy that the production of industrial alcohol has been sanctioned by an Act. The principle of the Bill before the House is to form a company. The House has already decided that the production of industrial alcohol should be proceeded with.

Mr. Dillon

The alternative is to constitute this company and to hand over this baby to it or else abandon the whole wretched folly now. I strongly urge the Government to abandon the whole wretched folly now. The thing is manifestly grotesque and absurd and everybody knows it is manifestly grothat this Company is being formed is to take this bady over, to save the face of the Minister. Will the Minister tell us why Mr. Mass retired from the General Managership? I suggest that he retired because he came to realise that the whole thing was a "cod" and that the sooner he got out of it, the better it would be for his own reputation. He got out of it as quickly as he could: His successor is now being appointed. No rational man could stand over the expenditure of this money, in the circumstances of this country. One of the inducements apparently is that we shall provide a market for a certain amount of potatoes at £2 per ton provided they have 16 per cent. of a starch content. I suppose 16 per cent. is not a very excessive starch content but to grow potatoes at £2 per ton—

Mr. Davin

they are grown in Cooley.

Mr. Dillon

The factory situated in Donegal is not going to take potatoes form Cooley. Would it not be much better to buy potatoes and dump them into the Irish Sea than manufacture them into industrial alcohol? If you want to relieve the farmers, why not give them a dole of £2 in respect of every acre they possess and let them grow something useful on it? It was all very well to go on with this kind of "codology" when the Minister for Agriculture was blasting our market in Great Britain. Then you had to find a market for something but now that we have secured a market for practically all our agricultural produce, why proceed with this absurdity? You might as well urge the people to grow nettles to be converted into artificial spinach. Every acre of our land can now be profitably used if only this Government will get commonsense. It is a monstrous thing that having learned their lesson, and having got back the markets for us, we should now see a considerable acreage of our land producing potatoes for conversion into idusrial alcohol for no purpose except to save the face of the Minister for Industry and Commerce.

Mr. Davin

To blow up the Republic.

Mr. Dillon

Deputy Davin know as much bout the Republic as I do myself and that is very little. The employment given in these factories is trivial—about 200 person, some of whom no doubt, in the headquarters office, are women. The employment given to the agricultural community growing potatoes at £2 ton is Congo slavery. The growing of potatoes is exceedingly arduous work. They require active cultivation and they are not a crop that can be grown exclusively by machinery, in the circumstance obtaining in this country. At £2 per ton they are not worth growing. What is maddening is that the land on which these potatose will be grown, could be profitably used. It is land on which we could grow crops that would yield us a profit in the British market and in that state of affairs, having made considerable concessions in the Trade Agreement with Great Britain to get back the markets we actually will not use the land to produce the crops that would yield us a profit on that market. We are going to sue it to produce industrial alcohol that nobody wants. Who wants to manufacture industrial alcohol? Is there anybody outside Grangegorman who wants to manufacture industrial alcohol in this country? If there is, I never met him. Hitler wants to do it but, in the special circumstances obtaining in Germany, their entire economic life is orientated towards preparing for war.

Mr. Moore

They were producing industrial alcohol before Hitler was born.

Mr. Dillon

If other people make fools of themselves that is no reason why we should do so.

Mr. Lemass

Is there any country in the world that is not producing industrrial alcohol?

Mr. Dillon

Yes, It is not one, but dozens of countries, in which it has not been manufactured.

Mr. Lemass

Only in one country— Europn in Central America.

Mr. Dillon

The Minister can look up his facts but if he wishes to persuade me that the majority of countries of the world want to embark on the production of industrial alcohol, as a commercial undertaking, he will have to produce something more convincing than has yet been put before the House. Many European States at the present time, being obsessed by the fear of war and by the fear that they would find themselves without the wherewithal to dispatch their bombers to slaughter the people of enemy nations, are no doubt engaged in the production of industrial alcohol. There might be some excuse for the establishment of these factories if we were faced with a situation here in which we had to consider the dispatch of aeroplanes to slaughter the people of a nation whose aeroplanes were slaughtering us. The Minister has never suggested that that is the purpose of those alcohol factories. Does the Minister want to establish great air fleets here, and fuel them from those factories for the slaughter of the people of some neighbouring country, or some country on the Continent? I do not believe he does. I am practically certain he does not. What does he want them for? What does he hope to achieve? Does he deny taking into consideration the amount of revenue that the Treasury will lose from the consumption of this alcohol instead of duty-paying petrol? The annual charge will amount to about £175,000 How on earth can he defend that? Does he allege to this House that it is profitable to use Irish land under those conditions to grow potatoes on it at £2 a ton?

Mr. Lemass

It is a much better return to the farmers than they get for potatoes on the market at the present time. It is £2 a ton for the whole of the crop, ungraded.

Mr. Dillon

That is the kind of statement which makes people lose their patience in this House, and perhaps sometimes use language of a more forceful character than they otherwise would wish to do.

Mr. Lemass

Go and ask some of the farmers who are growing them.

Mr. Dillon

It is pure unadulterated rubbish to say that.

Mr. Lemass

Then why are they selling the potatoes to us? They are not compelled to do it.

Mr. Dillon

To use the land of this country in existing circumstances—and to spend £175,000 a year to persuade the people to do it—for the production of potatoes at £2 a ton is a crime against the State. Now, observe what has been brought in on a side wind in the course of this statement. We were told originally that those factories were to relieve the special circumstances of the farmer in Cooley, because it was a black scab area. Then those factories spread out. They spread to Mayo, Donegal and Monaghan, my own constituency, all the time for the purpose of enriching the farmers by giving them £2 a ton for their potatoes. Now we are told that the factories are going to embark upon the manufacture of this spirit out of molasses, and that is going to account for part of the annual burden of £175,000. We are already spending considerably over £1,000,000 a year on the tomfool idea of producing sugar out of beet, and now we are going to add a further subsidy to that crazy scheme by buying molasses from the beet factories and converting them into industrial alcohol. That is further adding to the cost of that codology. Is there ever going to be an end to the waste of public money for which the Fianna Fáil Government is going to be responsible in order to finance schemes that have been discredited and blown sky high from ten to 15 years ago in other countries? Just imagine what we could do with £175,000 a year. If we had that money and endowed education, or endowed a dozen other things that are in urgent need of money, just imagine what we could do for our people. Instead of employing that money prudently, we are using it in this imbecile enterprise for no other reason than to save the face of the Minister for Industry and Commerce. If the enterprise had any prospect of surviving, or ever getting on an economic basis, one might be prepared to consider the proposition. But it never will. Everybody in this House, every Deputy on those benches, knows that this business will collapse in the course of the next five or six years, and vanish for all time, but they would not admit that now. They think that that would interfere with their pretige. They must go on father ing this piece of codology because they were in the first case responsible for it. They admit, through the Minister's mouth, that the calculations upon which they first brought the proposal before the country were all wrong, and that since they brought it before the country all the costs have gone up. That does not deter them in the least. They admit, through the Minister for Industry and Commerce, that all the circumstances which they thought justified them in embarking upon this enterprise have changed. That does not deter them in the very least. They must go on, and we have got to pay for it. Now, we are going to have a difficult time in restoring the economic equilibrium of this country after the past six years, but if these kinds of follies are going to be perpetrated over the next couple of years no Trade Agreement is going to be of any avail. We will "bust" the country. If you are going to spend on tomfoolery of this kind, the wealth which could and ought to be derived from the Trade Agreements into which we have just entered, instead of building up the country to the position which it occupied five or six years ago, then the value of the Trade Agreement will be lost, and all the concessions we have made to Great Britain in order to get those facilities in the British market will be thrown away. I remember when the Minister was introducing his first Bill he fixed the price of coal for the purpose of this enterprise at twenty shillings a ton. What is he going to pay for the coal now? In those halcyon days he was going to get potatoes at 35/- a ton. He has now raised the price to 40/-, and he certainly will not get supplies at 40/- if the farmers are allowed to trade in the normal way.

Mr. Lemass

Who is stopping them?

Mr. Dillon

I do not think they will be stopped in the hereafter. But what is going to happen then? Will that deter him? Not a bit of it. He will come trotting back here, and make a virtue of giving the farmers something more for their potatoes in order to convert them into industrial alcohol. Dr. Ryan will go down and deliver soul-stirring speeches about giving a high price for potatoes for the industrial alcohol factories. Everybody will crow about it, and nobody will advert to the fact that the higher price is going to come out of the consumers' pocket in the form of the price they will have to pay for industrial alcohol. Nobody will advert to the fact that if the farmers were allowed to use their land in the normal way, producing exportable agricultural produce, then, without putting any burden on the consumers of this country, we could get greater profit out of the land.

Mr. Allen

What about butter?

Mr. Dillon

I will talk about butter on the Agricultural Estimate, and when I have finished talking about butter I think the Deputy will be ashamed to show his face in Wexford. Why did Mr. Maas resign? Was he dismissed.

Mr. Lemass

The Deputy answered that question.

Mr. Dillon

If the Minister does not know, who does? It was between yourselves all the "cogering" and whispering went on.

Mr. Lemass

The Deputy said he was fed up with the enterprise and wanted to get out of it quickly. The Deputy said that. Why ask me questions to which he knows the answer?

Mr. Dillon

I want the Minister's answers. I think the Minister might have told us. The Minister is extremely reluctant to tell us. He is developing that feminine complex of his leader, a passion for the last word. His introductory statements are becoming more and more obscure on every Estimate and Vote for which he is responsible in this House. Why did Mr. Maas resign?

Mr. Lemass

The Deputy knows that.

Mr. Dillon

Who is Mr. Maas' successor? Has he any technical experience in this business? Has he ever been responsible for an industrial alcohol factory? Will the Minister give us the facts surrounding the contracts which were allowed out for the erection of those factories? Who got them? Who actually built those factories, as distinct from equipping them? How many Irish contractors tendered for the erection of those factories? Did their tenders become known to any continental contractor before a bid was put in from the Continent for the work? I think those are all matters which the Minister ought to explain. We are going to write off out of the public funds a very substantial sum of money before we transfer the assets of this grotesque concern to the new company. I think the Minister ought to explain to us the circumstances under which those costs were incurred. I have no doubt he will not do so. He will simply get up and say that there is no foundation whatever for any anxieties which I have expressed in regard to those matters. I have no means of finding out.

Mr. Lemass

Is the Deputy implying anything?

Mr. Dillon

I am asking questions. I am asking questions which the Minister should have answered before they were asked. I am expressing amazement that the Minister, in justifying to this House the writing off of tens of thousands of pounds of the initial expenditure in the erection of those factories, did not tell us the circumstances——

Mr. Lemass

I told the Dáil precisely every item written off—the exact amount of them.

Mr. Dillon

But the Minister did not tell us the circumstances under which they were spent. I think the Minister should tell us. I am now affording the Minister an opportunity of doing so, and I should be glad if he would. I want to say quite definitely that this enterprise is a thoroughly unsound and undesirable one. It is going to produce an advantage to nobody. It is going to involve the consuming public of this country in another immense lump of concealed taxation, because the taxation is going to be collected through the price of petrol. The Minister has not informed us of any technical reason from the point of view of national defence which would justify this immense anual expenditure. There can be no argument that it is necessary to employ the acreage which will be employed in the production of potatoes to produce 1,000,000 gallons of alcohol per annum, because with a free British market we ought to find adequate employment for every acre of our land in providently producing agricultural produce. I think it will be a great scandal if, having fixed 40/- a ton for potatoes and having found ourselves unable to get them at that price, we then jockey up the price and induce the people to use their land in an uneconomic way. Remember that if the Government are prepared to pay a stiff price for any product, individual farmers are entitled to grow that product and reap the harvest of Government expenditure, but it is bad from the community point of view. I know that there are some men so short-sighted and so silly that because they hope that a few of their constituents will get some profit out of this, if and when the price is further raised for potatoes, they will remain silent and say: "It would not suit me to criticise this, because the factories are going to be situated in my constituency." There are some of these factories in County Monaghan and in my erstwhile constituency in Donegal, and, in the full knowledge of that, I say that, in my considered judgment, their establishment is absolutely indefensible and, from the national point of view, disastrous and calculated to do nothing but create confusion, expense and inconvenience, and to confer no real or lasting benefit on anybody anywhere.

I strongly urge the House to reject this Bill and, by their rejection of it, to indicate clearly to the Government that, in our judgment, this whole disastrous experiment should be abandoned. It was embarked upon much as the Slaughter of Cattle Bill was embarked upon. It is interesting to look back at Volume 53 of the Official Reports, because in it you will find that the Second Reading of the Industrial Alcohol Bill was taken on one day and the Second Reading of the Slaughter of Cattle Bill on the next day. The Slaughter of Cattle Bill ended in the Roscrea factory scandal.

An Ceann Comhairle

It has nothing to do with this measure.

Mr. Dillon

I am not drawing it down or going into detail, but I think I am legitimately entitled to remark on the fact that we were in the same mood in handling these two pieces of legislation. We were moved to these pieces of legislation by the plea of the Government that it was necessary to slaughter the calves and to produce industrial alcohol in order to fortify the country against the economic assault made upon it in the war that the Fianna Fáil Party started.

Mr. Lemass

The Deputy does not know what the Slaughter of Cattle Bill is about. It deals with the circumstances in which cattle are slaughtered in Great Britain because of the outbreak of foot and mouth disease.

Mr. Dillon

The Slaughter of Cattle Bill that will be remembered in this country is the one which buried hundreds of thousands of calves that we badly require at present. It was in the same spirit that we advocated the manufacture of industrial alcohol. It was all of a piece. It was the same kind of lunacy romping around this country at that time under the guise of patriotism. That kind of dishonest hogwash has been abandoned by the Government's own supporters and by the Government itself. Why carry it over into a new era? Why carry over this absurdity in what ought to be a common-sense period of development in this country? There is no reason except to save the face of the Minister for Industry and Commerce. We have spent £50,000,000 saving the face of the Prime Minister. We have gilded that countenance wit the last penny we can afford. Why should we now start the business of putting a brazen face upon the Minister for Industry and Commerce? At £175,000 it is not worth it, and the Minister ought to be able to face the consequences and freely admit that the enterprise was a complete mistake and should never have been embarked upon, and wind up the whole wretched business before we are further committed to what is going to be a substantial national loss.

Mr. Cole

I should like to ask the Minister did he consult the Minister for Agriculture as to the cost of producing an acre of potatoes and what will be the average yield of an acre. I should like to tell the Minister that it costs about £30 to put in an acre of potatoes, and that out of that a man will get at the outside 12 tons of potatoes. That would mean that he would get £28 for the expenditure of £30 if he sent them to the alcohol factory.

Mr. Lemass

Then they are very foolish to be doing it.

Mr. Cole

The average price in my county for potatoes is 6d. per stone.

Mr. Lemass

For graded potatoes.

Mr. Cole

They were always considered to be worth 3d. per stone for feeding pigs when yellow meal was 13/- or 14/- per bag. Yellow meal to-day is 18/- and, consequently, potatoes would be worth over 4d. per stone for feeding pigs.

Mr. Moore

We have heard Deputy Dillon to-day in his most hysterical mood. He was never before so spectacular, so superlative in his condemnation with regard to any business proposition. One could not help wondering, in listening to him, how he would manage to live in an insane country like England suppose it was his misfortune to have to go there. Suppose he found the Government spending millions of money on a terribly expensive business like the distillation of coal for production of motor spirit, suppose he found that a recent committee appointed by the Government had condemned that process from the economic point of view, but had stated that if war-time conditions were to be considered, it might be worth while having it as a reserve, what would he say? How would he live in Germany, in Japan, in France, or in the United States? Have all these countries gone mad? In every one of these countries the Deputy will find that increasing efforts are being made to provide substitutes for mineral oil, and that not the least intensive efforts are in countries where mineral oil is produced in considerable quantities. Poland has a big oil industry and it is giving more and more attention to the production of industrial alcohol.

Mr. Dillon

Why?

Mr. Moore

It is remarkable, too, that Poland is able to get potatoes for industrial alcohol at 15/- a ton.

Mr. Dillon

What a glorious prospect for the agricultural community—15/- a ton.

Mr. Moore

I did not say it was a prospect here at all. I am stating facts, and I will quote my authority if the Deputy wishes.

Mr. Dillon

I did not see Deputy Allen standing up when the Deputy said that.

Mr. Moore

Poland was able to get potatoes at 15/- a ton, and, according to all accounts, it is a very progressive country.

Mr. Keating

A good price!

Mr. Gorey

Ninepence per cwt.

Mr. Moore

I think I should be entitled to say what I wish to say without interruption. Why does not Deputy Dillon pay attention to this fact, that the great bulk of our public transport is now based on oil. If a strike took place in Mexico what would happen? I think there is a strike or a boycott on in Mexico at present. Any eruption in Roumania might leave us in Queer Street as far as our public transport services are concerned, so that even 1,000,000 gallons of spirit of native production would be very useful. So far from the expenditure of £175,000 being mere lavishness or foolish waste, it seems to me that it is hardly sufficient insurance against the prospects that seem to lie in front of us. You must remember that every country in the world is at present giving attention to the prospects of war.

Mr. Dillon

Does the Deputy know the annual consumption of petrol in this country at the present time?

Mr. Moore

Somewhere between 36,000,000 and 40,000,000 gallons.

Mr. Dillon

This Bill provides a month's supply.

Mr. Moore

Even 1,000,000 gallons might be useful. If we had no other supplies, 1,000,000 gallons might mean a great deal to us. We find that our nearest neighbor, Great Britain, is actually buying wheat a year ahead, and buying oil and all sorts of things for storage in the event of war. Surely, it would be madness for this country to think that we can carry on in indifference. We cannot afford to be dependent upon Mexico, Roumania or Venezuela, in order to keep our transport running. The attitude that the Deputy has adopted in amazing, especially for one who claims to be a great realist, and who looks facts in the face.

Mr. Dillon

Why not store petrol?

Mr. Moore

I think the Deputy is the greatest romanticist in the House. He has visions of the British market being a continuous treasury, for the contents of which we have only to stretch out our hands. There is to be no thought about the instability of that market, or of depressed prices there. It is simply a question of keeping our eyes fixed on that great opening, to produce more and more, and to put everything else out of consideration.

Mr. Dillon

Even potatoes at 15/- a ton.

Mr. Moore

I think, if the country followed Deputy Dillon's advice, it would be tantamount to committing suicide. I hope I will never see this country following that advice. There is one thing in this Bill about which I am not satisfied. I notice that the Minister can fix the proportion of industrial alcohol to be mixed with petrol or hydrocarbon spirit, as he calls it, and that the company will fix the price, with his consent, at which industrial alcohol will be sold. Apparently, he leaves the retail price to be fixed by the distributors, that is, by the importing oil companies. I think he is chancing a great deal in that. Up to the present we have had this protection, that the English price was there as a standard. The price here has been always about 1d. above the English price—a difference that has caused a lot of agitation. With the new conditions, are the distributors to be given the chance of fixing a price that may not be as fair to us as the price that prevailed up to the present? They are not people that you would expect would pay a great deal of regard to public requirements, or consider the public interests. Their aim, undoubtedly, will be to get some extra profit for themselves. We know they do not like this Bill. They do not want any interference with their position. I should like the Minister, when replying, to tell us how he is going to guard against a situation where they can recoup themselves much more than necessary by reason of having to but the products of the Industrial Alcohol Company. A farthing a gallon means a great deal to commercial transport and to the public utility companies. Yet, without control, there may be an unnecessary advance of a farthing a gallon, and I do not think that would be a satisfactory development. It has happened in other countries that the Government has fixed the retail price of the mixture. Brazil, I know, is one country where that was done, and I would think that the Minister could go so far as to fix the retail price here. In arranging to grade the spirit—the imported spirit—the Minister is taking on a very interesting task. I wonder what the effect of that will be on certain illusions that the distributors have tried to create up to the present? They spend a great many millions on trying to create the illusions that there are no different grades of imported spirit. At least, very many people think that they are illusions, and it pays the companies evidently to make the public believe that there are special grades. Is he going to debunk that propaganda now by analysis and by, perhaps, announcing that there is only one grade?

In my opinion, this Bill is very well justified. I think that as time goes on we will have to do more and more of this kind of things so that, apart from war altogether, we may not be so utterly dependent upon outside eventualities as we are in our present position.

There is one peculiar thing I notice in the Bill; it is with regard to the system of Government accounting. I would imagine that all moneys that are paid out and that are received in connection with a concern of this kind would be kept in a separate account, yet it is provided, for instance, in Section 8, that all moneys received in payment of loans advanced by the Government should be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister for Finance may direct. In other words, they are to be treated as general revenue. That is a remarkable principle and I think it could not well be defended. Suppose that the company were in the position to pay £20,000 in a year on a loan advanced to them—to treat that as ordinary revenue does not look to me defensible and I wonder why it is provided that the money is to be treated in that way.

I think, Sir, that the Bill is a very useful measure and that this experiment is one that the Dáil should support strongly.

Mr. Brodrick

I would like to know from the Minister the matter of the £2 a ton and also the period for which the five factories will work in each season. Does he hope that the five factories will work continuously from November until May—each of the five factories? I would also like to know from him what is the acreage of potatoes necessary for the supply of each factory. I do not think the Minister in his opening statement to-day has told us that. He told us all right that the farmers were supplying potatoes at £2 a ton. My reason for asking the acreage is that £2 a ton at the factory is no use. It is like slavery. The farmers are asked to go a long mileage with the potatoes to these factories for £2 a ton. They cannot be grown at £2 a ton and delivered to the factory. The Minister has not informed us as to what is the factory area or whether he has satisfied himself that the position in each county where a factory is erected is that that county is able to provide sufficient potatoes for the upkeep of that factory in each season. I believe myself that some of the areas are not able to produce sufficient potatoes for these factories and I am well aware that where one factory is situated at the present time that not later than last year, for the ordinary needs of the people of that county, they had to get supplies of potatoes from their neighbouring counties.

Mr. Lemass

The farmers were so anxious to sell them to the factory at £2 a ton. That is the reason.

Mr. Brodrick

No, what I say is that the farmers themselves were not able to produce sufficient potatoes for the needs of that particular county and the factory not working. They had to get the potatoes from a neighbouring county and, mind you, the potatoes they got from the neighbouring county they paid up to £3 a ton for them. The Minister may make capital to the effect that the farmers are anxious to supply potatoes at £2 a ton. They may for the very poor class of potatoes that they cannot export. What was the market across Channel last year for ordinary ware potatoes? Was it not up to £3 a ton? Is it not quite possible that it will be £3 10s. a ton next year? If the market is £3 10s. for ware potatoes across Channel, in order to keep the factories going, is the Minister going to stop the export of potatoes?

Mr. Lemass

They will get £2 a ton.

Mr. Brodrick

What I want to know is—if the farmers of Mayo or Donegal or Monaghan or Louth get £3 10s. a ton for potatoes and they are exported next November, December and January across Channel, is he going to allow them to export potatoes at £3 10s. a ton or is he going to stop the export in order to keep the factories going?

Mr. Gorey

A very important question.

Mr. Lemass

Any farmer can export potatoes if he does not want to sell them to the factories.

Mr. Brodrick

Suppose there is free export at £3 a ton, where does the taxpayer come in with your five alcohol factories?

Mr. Lemass

We will get potatoes all right.

Mr. Brodrick

I would like the Minister to answer how long during the past season have any of these factories been working, for what period they have been working? I hope he will answer me.

There is another question I would like to put to him, and I hope he will answer it—the factory area—because if the farmer is to supply potatoes at £2 a ton, if the Minister wants to compel him to supply potatoes, which apparently is in his mind when he is going to keep the factories open, we will want to know the factory area and the distance the farmers will have to carry their potatoes to those factories.

Now, there are some extraordinary sections in this Bill. I do not know what is the idea of such sections or why there are such powers. Take Part III, Section 23. This company will get compulsory powers for practically everything on the land. You have compulsory powers to acquire land, wayleaves, fishing rights, and other rights whatsoever existing over or in respect of any land or water. I think it is necessary that the Minister should tell us a little more why there are such rights needed by the company if the factories are erected. Whether it is that the Minister is going to acquire rights and see that the potatoes are grown in spite of the people at £2 a ton in order to keep the factories going, I do not know. He also comes along the same section, sub-section 4 (b)—in the case of the acquisition of any land give at least one month's notice, or if the land has an occupied dwelling house, three months' previous notice in writing to the occupier of the land. Three months' notice! If this company liked they have the power under this Bill to order the farmer out of his holding inside three months and what is really worse the compensation that that man will get is only 4 per cent. He will be allowed, until the amount of compensation is declared—and it need not be declared for 12 months afterwards—only 4 per cent. Now, I would say these are very drastic powers, and I think that we need some explanation of those powers— fishing rights, rights through lands, different rights, even that a farmer can be put out of his home, and his compensation not be paid, or need not be paid, for 12 months afterwards. I think that such legislation certainly needs amendment, and I hope that the Minister will see to it. I would also like to ask the Minister to answer what Deputy Dillon put forward as to whether Irish contractors were asked to tender for these works—the erection of these plants? Is it a fact that Irish contractors were asked to supply their tenders, their specifications and tenders for plant inside a very short period; that such tenders were not considered and that it was given to a foreign firm at their own price? I hope I am wrong, but I am aware that this was done in the erection of some of the cement factories. I am aware that Irish contractors were asked to tender on the basis I have mentioned, having no knowledge and no specifications and no facts before them. They were asked to give their prices and estimates on such a basis. The result was that the work was given to outside firms. That is what I have been informed; I hope it is not correct. If it is correct I say that it is most unfair to Irish business people to be deprived of State business in such a way.

Mr. Davin

I have no objection to the information of a company for the purposes proposed in the Bill. I daresay when we hear a bit more about the development of our air force and about the modernisation of the ports taken over for imperial defence we can then see the use that can be made of the manufactured article. I have however, considerable hesitation and I would say that in the present circumstances I could not possibly give a vote for this Bill because of the fact that the Minister proposed to acquire the raw material at a price, which I am sure, does not cover the cost of production. The proposed company is to carry on on commercial lines in charging a certain price for the article. If the proposed company is to carry on on a purely commercial basis it should be compelled to purchase the raw material at the ordinary commercial price and not at a figure which has unfortunately been mentioned by the Minister during the discussion on this Bill. Whether the potatoes are good, bad or indifferent it does not get away from the fact that the cost of production will be at least a certain minimum price. I do not think that a commercial concern which it is proposed to establish under the terms of this Bill should get started, especially in view of the fact that the Minister is fixing in advance the price which will have to be paid for the raw material. Unless the Minister changes his whole attitude in regard to the price to be paid for the raw material I propose to vote against the Bill.

Mr. Benson

Under this Bill, it is proposed to do certain things which are going to cost the country a certain amount of money. Whether we are going to get value for that money or not is a question of opinion. In Great Britain they are installing plant for the distillation of coal. They do not propose to instal a plant for the distillation of potatoes. Instead of using potatoes for producing fuel, they are using the cheaper kind as a sort of feed for their stock. The point that I wish to make on this Bill is much the same as Deputy Brodrick has already made —that the Minister in his speech gave no indication of the necessity for the very drastic powers that he is taking under this Bill. I am aware that some of these powers are already in the Act with which the Bill deals. I see that certainly not more than five factories will be required. At the moment there is the difficulty about the supplying of the raw material. That confirms my view that not more than five factories will be needed. I do not agree with the provision in this Bill which sets forth that land could be acquired at a month's notice. Even a local authority which is housing the poor has to have a considerable inquiry made before they can acquire land for housing. Land for housing, to my mind, is much more important than land for the production of 1,500,000 gallons of industrial alcohol. Certain powers are given in Section 30. In Section 32 it appears to me that the Minister is given power to override the courts, because the section states:—

If, in the opinion of the Minister, the company or any person operating such transport works on behalf of the company has used such electrical power in contravention of such regulation... he may by order require the company to cease to exercise the powers conferred by such transport works order...

In other words, the company may be brought before the courts and acquitted, and the Minister may say: "You are not acquitted; you are guilty." The Minister should not be given the drastic powers which he is taking under this Bill.

Mr. Lemass

It is, of course, inevitable that Deputy Dillon should take the attitude where anything which the Government has done or proposes to do is wrong. He informed us that this was a mad scheme to start with, and that it is a still madder scheme to keep it going. I think Deputy Moore replied very effectively to that point. If this is a mad thing to do, we are mad in good company, because practically every other country in the world is doing the same thing not, perhaps, for the same thing, not, perhaps, for the same reason as we are doing it, but they are doing it. France, Germany, Poland, and a number of other States are engaged in the production of industrial alcohol and they require their national compulsorily to use such alcohol in combination with petrol for a number of years. It may be that it is correct to say that the primary purpose behind that idea was strategic, that they were anxious to lessen their dependence on foreign fuel and to secure an alternative source which could be utilised in times of national emergency. That was not the sole idea. They also had the idea of assisting agriculture, and they were not concerned with the uneconomic use of land. Deputies are aware that the land in France, Germany and Poland is more intensively utilised than the land in this country has been utilised or is ever likely to be utilised. In those countries they have taken to the manufacture of industrial alcohol. Their reasons for doing this may be lunacy, as Deputy Dillon has told the House. The British Government has established plants for the production of industrial alcohol. It is true that they are not using potatoes, but molasses. The Australian Government is working on a plan whereby they produce alcohol from molasses because the material is available. The British Government may be mad, as Deputy Dillon said. The Australian Government may be mad, as be asserted. We suggest that there is possibly another explanation, namely, that it is good policy and that the production of industrial alcohol is useful for many reasons. Not merely is there an element of national security possible. They may have some other reason than their wish not to dependent on imported fuel. It is desirable to take into account that the use of industrial alcohol as a raw material in industry is rapidly increasing, and the market for it is likely to be larger in the future. Furthermore, there is an advantage in securing for the agricultural producers of the country another market for one of their products, and particularly for one of their products in respect of which there has been a most violent fluctuation of prices in the past. I will deal with the price of potatoes at the moment. I would like to mention, however, that when the first factory was started the prevailing price for potatoes, for which Deputy Brodrick says now he could get £3 10s. a ton, was 25/- a ton, and in the case of Donegal the price was £1 per ton.

Mr. Davin

When was that price of 25/- per ton in operation?

Mr. Lemass

It was in operation in 1934.

Mr. Davin

In what part of the country?

Mr. Lemass

In the Cooley area, in County Louth.

Mr. Davin

Certainly, in the Cooley area.

Mr. Lemass

And in Donegal it was less than £1. The prevailing price was less than 20/- per ton. The same applied in Mayo.

Mr. O'Leary

I should like to ask the Minister what was the price at that particular time of the Indian meal mixture.

Mr. Lemass

It does not make any difference. I am not going to discuss agriculture. I am drawing attention to the fact that, as Deputies are aware, the price of potatoes fluctuates considerably and that, at the commencement of this season, the farmer has no idea of the price that is going to prevail for potatoes when he has to market them. That is due to circumstances of which many Deputies are aware and which I do not propose to elaborate.

Mr. O'Leary

What is the value of potatoes as compared with the Indian meal mixture?

Mr. Lemass

I do not care a rap what it is.

Mr. O'Leary

The Minister should know before he speaks on this question.

Mr. Lemass

When we decided on establishing these industrial alcohol factories, we had regard to the fact that other countries had decided to establish such factories for reasons of national safety.

A Deputy

America.

Mr. Lemass

America, in particular, even though there are very large oil-producing areas in that country. We had also regard to the fact that it was an industrial raw material, the importance of which was growing considerably. We had further regard to the fact that employment would be provided in the manufacture of it but none of these factors constituted the real reason why this experiment was decided upon. It was principally decide upon because it was considered desirable, in the interests of potato growers that this additional market should be made available. It is quite true that the circumstances have completely changed since then and that the market price for potatoes which, in 1934, when this scheme was started, was so low as to be ruinous to producers, has since increased to a point that is the highest reached during the last ten or 20 years. In these circumstances, it is open to us to call this thing off and to ignore the possibility that the price may go down again but I do not think that is a wise thing to do.

We can, of course, produce industrial alcohol from materials other than potatoes. We can afford to pay the same price for starch content whether it comes from beet, molasses, or any other product but it is in the interests of the producers in the areas in which the factories are located that we should continue to use potatoes because in these areas they produce not beet. If we want to turn over to some other product, we can do so. We are told that it does not pay farmers to grow potatoes and sell them at £2 per ton. Deputy Davin announced it was his intention to vote against this Bill unless the factories are going to pay a competitive price. Deputy Davin said he did not——

Mr. Davin

I said it was not your duty to pre-judge the question of price.

Mr. Lemass

Nobody is compelling the farmers to sell their potatoes to a factory. The fact is that they have to pay a competitive price and nobody is compelled to sell to them.

Mr. Davin

That is a changed attitude.

Mr. Lemass

It is not a change of attitude. Nobody suggested that the farmer was going to be taken before Civic Guards and made to sell his potatoes to the factory or be threatened with imprisonment if he did not do so. The factory manager will go to the farmer and ask him: "Do you want to enter into a contract for the sale of your potatoes to the factory?" The farmer can say, if he wishes, that he does not think the price good enough, but as a matter of fact, the farmers have said that they will enter into these contracts. They find in Louth, Monaghan, and Donegal that £2 per ton, in the circumstances in which the potatoes are sold to the factories, is a better price than the prevailing market price. They can sell their potatoes ungraded to the factory at that price. It does not matter to the manager of the factory whether they are big potatoes or small potatoes provided they yield the requisite starch content. When potatoes are sold in the market for human consumption they have to be graded. The small potatoes and the bad potatoes have to be separated from the remainder of the crop. For these graded potatoes there is undoubtedly a better price than £2 per ton prevailing at the moment, but the farmers think it pays them better to sell the whole of the ungraded crop at £2 per ton to the factory.

Mr. Davin

We know well why they had to sell them in Cooley at that.

Mr. Lemass

The farmers in Cooley were growing potatoes long before these industrial alcohol factories were started.

Mr. Davin

And they could not sell them.

Mr. Lemass

They could not sell them in this country because it is a black scab area and they had to export them, but they have been exported.

Mr. Brodrick

Is that £2 per ton delivered at the factory?

Mr. Lemass

Yes. That is the price offered. With the exception of the Ballina factory we have got an adequate supply of potatoes in all cases. The Ballina factory only commenced manufacture in March of this year and it is yet too early to say what our experience is likely to be there. It is, of course, easy to talk about the price of this spirit being a "cod." It is quite true that industrial alcohol costs much more than we could buy imported petrol for. It costs much more in every country but I should like to inform the House that Deputy Dillon's statements concerning the value of industrial alcohol as fuel, merely showed his complete ignorance on the whole subject. In Great Britain, last year, without any compulsion, the alcohol mixture sales were several hundred per cent. greater than the sales in 1936. In fact, the highest type of motor fuel is a combination of petrol, industrial alcohol and benzol. That is the highest grade of motor spirit used for aeroplanes doing record work and engaged on similar activities. Industrial alcohol mixed in particular proportions with petrol and benzol is much the better kind of motor fuel. Deputy Dillon's statement that it would damage motor engines merely shows that he did not take ordinary trouble to enquire into the facts of the situations. On its merits as a fuel, ad without compulsion, millions of gallons of this mixture were sold in Great Britain last year.

We have got to take into account the fact that the petrol-distributing companies here are hostile to this development, that they have no interest in this country execept in so far as it can be exploited as a market for imported motor fuel. We could not rely on their co-operation in marketing this industrial alcohol, and that is why we have taken power to compel them to do so. That is the sole reason why these compulsory powers are necessary. Deputy Cosgrave raised some questions, which I could not quite follow, regarding the definition of industrial alcohol. The definition has been changed, and I have explained the reason for that change. I do not think it is necessary to elaborate it. It is, of course, correct that this Bill provides for compulsory powers to acquire land and to perform certain other operations. It is necessary that these compulsory powers should be there. It is the experience of all Governments that when land is being purchased by some Government Department, or by some organisation acting for a Government Department, it is impossible to get it at a reasonable price, unless there is power of compulsory acquisition at the back of it. It is for that reason that powers of compulsory acquisition have always to be given to public authorities, whether national or local, when there is necessity for the acquisition of land or other property. This is a Government company, financed entirely out of Government money, and the same circumstances apply there. In fact, of course, the powers provided for in this Bill have been in existence for the past four years. They have been used on behalf of this undertaking for the past four years. Most of the land which it was necessary to acquire has been acquired. Most of the work which it was necessary to do has already been done, and the Deputy cannot produce one person who can contend with reason that he was unfairly treated.

Mr. Gorey

For what purpose has the land been acquired?

Mr. Lemass

To put the factories on it.

Mr. Gorey

Only as a site for the factories?

Mr. Lemass

Not merely has it been the experience of Government Department that when they are engaging on the business of acquiring land the prices become exhorbitant against them, but it has even been the experience of purely private companies acting under statutory authority. I mentioned here in this Dáil only a short time ago that it was my wish that the additional cement factory which is to be established should be located in a particular part of the country. The directors of that factory have found that the price of land in that part of the country has become so high that one would imagine there was a gold mine under every acre of it.

Mr. Davin

It is so near Wicklow, I suppose.

Mr. Lemass

Well, Wicklow happens to be within the area specified. Directors of this enterprise, that is those who are now acting on the board which has been constituted by the Department of Industry and Commerce, are as follows: Chairman, Dr. T.J. Nolan; Managing Director, Dr. van der Lee. There is also on the Board Dr. O'Reilly of Cork, and the other members are civil servants— Mr. E.M. Forde, Department of Industry and Commerce; Mr. Almond, Department of Finance; and Mr. Whelan, Department of Agriculture. The secretary of the Company is also an officer of the Department of Industry and Commerce.

Mr. Dillon endeavoured to imply by means of a number of questions that there was something peculiar about the manner in which this enterprise was started or run, or something shady about the manner in which the contracts for the construction of the factory were given. I do not propose to deal with the Deputy's questions. If he wants to throw mud be has got to take the risk of getting some of it on his hand. He has got to state matters more specifically. I will merely say that the contracts for the erection of the factory were given on the lowest tender. There were in fact two firms associated with it, one a local firm and one an external firm. The contract for the supply of machinery was also given to the firm who submitted the lowest tender. In fact, we have got industrial alcohol factories built, which are as I have said the most efficient in the world, and which could not be built to-day at double the price we paid for them.

Mr. Brodrick

That is the question I wanted answered in order to clear up the matter.

Mr. Lemass

Deputy Dillon also suggested that the retirement of the Managing Director, Mr. Maas, was due to the fact that there was something wrong with the enterprise, something which he was not allowed to put right, and that he was getting out before this thing was discovered. There is no foundation whatever for that. In fact it would be incorrect to say that Mr. Maas's dissociation with the enterprise was a retirement.

Professor O'Sullivan

Does that mean he was dismissed? Perhaps the Minister would not indulge in innuendos. He might say quite definitely whether the man was dismissed or not.

Mr. Lemass

The appointment of a managing director rests with the technical company which is advising the Government. They choose the managing director. He is, it is true, appointed by the Minister for Industry and Commerce, but he is their nominee. They choose to change their nominee.

Professor O'Sullivan

The Minister has just said that to describe his departure as a retirement would not be correct. I put it to him whether that means that he was dismissed?

Mr. Lemass

The Deputy had better discuss the matter with Deputy Dillon. He told us not merely that he retired but why he retired.

Professor O'Sullivan

I am asking the Minister to explain the statement he has just made to the House.

Mr. Lemass

I mean what I said, that the firm on whose nomination the managing director was appointed changed their nominee.

Professor O'Sullivan

Had he been appointed?

Mr. Lemass

He had been appointed.

Professor O'Sullivan

And, therefore, he was dismissed?

Mr. Lemass

He was then substituted by another person.

Professor O'Sullivan

Can the Minister not say he was dismissed? The Minister has been objecting to innuendoes.

Mr. Lemass

Deputy Dillon says this business will disappear in the course of four of five years. I doubt that very much. It is, of course, open to the Government to pursue in relation to this enterprise one or other of two policies. We can regard those factories as a relief scheme for potato growers, operating them when potato prices are low, taking surplus potatoes off the market and consequently fixing a price which will prevail all over the country, or we can keep them going year after year working on potatoes when we can get potatoes, and on molasses when potatoes are not available. The latter I think is the better course, but it is possible that the board of the company when established or some subsequent Government will decide to adopt another policy. It is open to it to do so. I do not think it would be a wise policy, but ther is undoubtedly a possibility of the policy being adopted. At the beginning, I myself considered very carefully along which line to work, and we decided upon working towards getting the maximum possible production from the existing plants, utilising potatoes when potatoes are available, and continuing to work on molasses when potatoes are not available. That is why molasses plants are being installed at the different centres, because it will enable production costs to be kept at their minimum, and the price of industrial alcohol to be reduced. But there is an alternative policy which is quite defensible.

Mr. Larkin

Is that imported molasses or molasses from the sugar factories?

Mr. Lemass

It is molasses from the sugar factories. If we were to use imported molasses, which could be purchased much more cheaply, we could of course reduce very substantially the price at which industrial alcohol is being made available. I do not think there is anything further which I need say at this stage. Some of the points raised by other Deputies could I think be more conveniently discussed in Committee.

I think that this industrial alcohol scheme is one which is worth while maintaining. It is true that the price at which the alcohol is made available looks high when compared with the price of petrol. It is not high compared with the price at which industrial alcohol can be purchased, but it is high as compared with the price of petrol. Of course industrial alcohol is not substituted for petrol gallon for gallon. It can be utilised as a motor fuel only in mixture with petrol. The effect of the production of 1,500,000 gallons of motor spirit and its utilisation and sale to the petrol distributors has already been experienced by petrol consumers, who have had the price of motor spirit increased by a halfpenny per gallon. On the basis of 35,000,000 gallons per year, that involves an increased charge of £75,000 per year. But it is difficult, of course, to determine precisely to what extent the present price of petrol is justified by the charges which petrol distributors have to meet. That may be a matter for inquiry at some time.

I merely draw attention to the fact that the advantages which are being secured by way of direct employment for a number of workers, utilisation of native materials, the payment to the producers of these materials, and the lessening of our dependency on external sources for an article which has now become a necessity of life will exceed the cost of the additional charge. It is on that account, I think, that not merely is it good policy to maintain this industry, at least to the extent of its present development, but that any future Government will come to the same conclusion. There is, in fact, the possibility that it may prove at the same time to be good policy to extend this industry substantially and to aim at the production, not of 1,500,000 gallons, but of a much larger quantity. I do not think, however, that it is desirable to contemplate any such expansion yet until we have completed the experimental stage in respect of the five distilleries we have. They will only commence working in full production in the coming season. Perhaps it may be found possible to overcome some difficulties that still remain, such as the difficulty of disposing of the by-product. If that is done, then of course a substantial saving in costs may be produced.

Mr. S. Brodrick

Do I understand that contracts for the supply of potatoes are now signed by the farmers?

Mr. Lemass

Some farmers have contracted to supply potatoes; other farmers have not contracted, but nevertheless will sell their potatoes to the factory if they find it in their interests to do so. It is, however, a practice which the company is endeavouring to establish of getting farmers to contract to supply at the beginning of the year, and a number of farmers in various areas have made contracts for the coming season.

Mr. Brodrick

These will be contracts at £2 per ton. Supposing the market price of potatoes goes up for next season, will the Minister consider allowing farmers in these areas to sell their first-grade potatoes?

Mr. Lemass

The farmer will have to take his chance as well as everybody else. If he contracts to sell at a particular price, he may have reason to regret having done so if the market price goes up, but he may have reason to be very glad if the market price goes down. The average farmer considers it much better to be certain of a sure market at that price year after year than depending on the off-chance of a higher price and a possible sale in the open market. It is because the commonsense of that has appealed to the farmers of Cooley, Monaghan, and Donegal, that the factories have no difficulty in getting all the potatoes they want.

Mr. Brodrick

I do not want to hinder the factories in any way. In fact, I would like to induce people to grow potatoes. My point is that if people have signed contracts, and the market price goes up to £3, will the Minister not give the farmers a concession by allowing them to grow what is known as first-grade potatoes and sell them at the market price?

Mr. Lemass

That is a matter for the company anyway. I do not know sufficient about these things to offer an opinion on the matter.

Mr. Davin

Who fixed the price at £2 per ton?

Mr. Lemass

I fixed it.

Question put.

The Dáil divided—Tá: 48; Níl: 33.

Tá

• Aiken, Frank.
• Allen, Denis.
• Bertley, Gerald.
• Beegan, Patrick.
• Boland, Gerald.
• Brady, Brian.
• Brady, Seán.
• Breathnach, Cormac.
• Breen, Daniel.
• Breslin, Cormac.
• Briscoe, Robert.
• Colbert, Michael.
• Corry, Martin J.
• Crowley, Fred Hugh.
• Derrig, Thomas.
• Flynn, John.
• Flynn, Stephen.
• Fogarty, Patrick J.
• Friel, John.
• Fuller, Stephen.
• Gorry, Patrick, J.
• Harris, Thomas.
• Kelly, James P.
• Kelly, Thomas.
• Kennedy, Michael J.
• Killilea, Mark.
• Larkin, James.
• Lemass, Seán F.
• Little, Patrick J.
• Meaney, Cornelius.
• Moane, Edward.
• Moore, Séamus.
• Morrissey, Michael.
• Moylan, Seán.
• Munnelly, John.
• O'Briain, Donnchadh.
• O'Grady, Seán.
• O'Reilly, Matthew.
• O'Rourke, Daniel.
• Ruttledge, Patrick J.
• Ryan, James.
• Ryan, Martin.
• Sheridan, Michael.
• Smith, Patrick.
• Traynor, Oscar.
• Victory, James.
• Walsh, Richard.
• Ward, Conn.

Níl

• Bennett, George C.
• Benson,Ernest E.
• Bourke, Séamus.
• Brasier, Brooke.
• Brodrick, Seán.
• Byrne, Alfred (Junior).
• Cole, John J.
• Cosgrave, William T.
• Davin, William.
• Dillon, James M.
• Dockrell, Henry M.
• Doyle, Peadar S.
• Esmonde, John L.
• Everett, James.
• Fitzgerald-Kenney, James.
• Giles, Patrick.
• Gorey, Denis J.
• Keating, John.
• Linehan, Timothy.
• McFadden, Michael Og.
• McGowan, Gerrard L.
• Minch, Sydney B.
• Mongan, Joseph W.
• Murphy, Timothy J.
• Nally, Martin.
• O'Higgins, Thomas F.
• O'Leary, Daniel.
• O'Shaughnessy, John J.
• O'Sullivan, John M.
• Pattison, James P.
• Roddy, Martin.
• Rogers, Patrick J.
• Wall, Nicholas.

Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Question declared carried.

Committee Stage ordered for Wednesday, May 25th.