Committee on Finance. - Resolution No.11-General (Resumed). – Dáil Éireann (9th Dáil) – Thursday, 19 May 1938

Committee on Finance. - Resolution No.11-General (Resumed).

Debate resumed on the following Resolution:—

That it is expedient to amend the law relating to customs and inland revenue (including excies) and to make further provision in connection with finance.

Mr. McGovern

I am glad to welcome the new atmosphere in which the House can discuss matters of this kind. The settlement of the dispute between this country and Britain has made it possible to discuss those matters without members of the Opposition or members on any side of the House being suspected of destructive criticism. I think at the present moment it is admitted on all sides that whatever criticism may be offered on this or other measures it is in order to serve the interests of the country as a whole. I think that all Parties have come to understand one another on that point.

This is that most disappointing Budget we have had for the last five or six years. It is only a couple o weeks since the country was rejoicing at the prospects of improved trade between this country and Great Britain as a result of the Agreement. The people were hoping, and they had good grounds for the hope, that there would be a reduction in taxation, and that other reliefs would be forthcoming in this Budget in onsequence of the settlement. I am sorry to say that the country has been sadly disappointed. The relief whih was expected has not come. The taxpayers are still bearing the abnormal burdens whih were imposed upon them during the last five or six years. During that period there was perhaps some reasonble excuse because of the dispute between this country and Britain, but certainly that is not so at a normal time, which those outstanding disputes have been settled and the neccessity for paying very large sums in bounties has passed away. We are told there are new items which are to taken the place of those bounties. One of them is defence. Like other Deputies in this House, I am not satisfied that the Minister and the Taoiseach are dealing fairly with this House or the country, because it is evident that something is being kept back in connection with this defence question. It is turn that hints have been dropped in regard to something very important to come in the immediate or distant future. We have been warned again and again that this is not such a boon as people expected, because defence is something very serious. The Taoiseach has given us some hints; so has the Minister. I think it is about time that the Minister should take the House into his confidence. Deputy Dr. O'Higgins, speaking last evening, used medical language and said that the Minister was giving it to the House in small doses. I think the people of this country are able to take a full dose. It may be advisable in some cases to break the news gradually. The Minister was afraid that the people had weak hearts and would not be able to stand the shock.

Mr. MacEntee

The Minister is not responsible under the Constitution for giving the defence policy to this House.

Mr. McGovern

I think it is better that the House and the country should know the exact position, as far as the Minister can state it. I realise that it is difficult to arrive at the amount involved, but we are getting it pretty clearly from other sources. For instance, I think it was on 27th April last that I saw in the Daily Mail an article from the Dublin correspondent, in which it was stated that there was an understanding that at least the amount of money which was in dispute between the two countires would be spent on defence. The Minister should tell us whether that report was justified by the facts; he should tell us whether there is any such understanding. It would ease the anxiety of the people of this country to know whether there is any intention to spend so much money in the coming year. The people would like to have this information, and not to have it administered in small doses. Whatever the worst is, the people my as well know it. They would be prepared to face the facts. It would be more satisfactory at all events. With regard to this question of defence, maintaining that we are to defend 32 Counties, I do not see why a section of this country should take on a very serious responsibility the that.

An Ceann Comhairle

The Deputy is entitled to question the sums allocated in the Budget or defence, but I would remind him that the policy of defence will be discussed when the Vote is introduced in the immediate future. The Minister for Defence is responsible for that policy, not Minister for Finance. Some of the questions now being put to the Minister for Finance should be reserved for the Minister for Defence.

Mr. McGovern

This Budget is providing £600,000 for defencce and other Deputies have referred to the matter.

An Ceann Comhairle

I am not precluding the Deputy from referring to the amount et out in this Budget. The whole defence policy, however, should more properly be raised on the Vote for Defence.

Mr. McGovern

I do not propose to dwell any longer on that subject. We will have opportunities for dealing with it again I hope. In the meantime, I still think that the sooner the people know more about it the better. It would allay their anxiety. There are complaints also down the country and keep disappointment amongst people who expected relief in this Budget. If we cast our minds bak to the time before the economic war, when the country was in a much better position and when the agricultural community was more prosperous than it is now, we will recall that at that time the Fianna Fáil Party strongly advocaed deating for farmers and it was hoped that out of the savings effected by the settlement, they would be able to implement that promise.

It is matter for regret that the Minister has not seen fit in this Budget to make this provision. He has tried to make people believe that all the saving which have been effected by the settlement, if there have been any savings, are being passed on to the farmers. In page 35 of the Minister's Budget statement he stated:—

"Deputies may wish at this stage to refer to Table 6. It sets out in a compact and convenient form that manner in which the moneys that in other circumstances might have been absorbed in payments to Great Britain have been utilised. It shows that after making the necessary adjustment for the old Local Loans capital, the total sum which the stoppage of the payments made available for disposal amounted to £4,240,273. Practically every penny of this, as may be seen, has been disposed of for the benefit of the farmers. They have secured the last remnant of gain arising out of the struggle to retain the annuities, and for them at any rate the campaign begun under the Land League has ended in indubitable victory."

I wonder was the Minister serious when the stated that practically every penny of this £4,240,273 has been disposed of for the benefit of the farmers? Dose anybody agree with the Minister? I very strongly disagree with him. He refers us to Table 6 to prove it. There is no proof of it in Table 3.

Deputy Cosgrave and other Deputies have stressed the case for derating for farmers as restitution for their losses during the last five or six years. I do not proposes to cover that ground again, because it has been already dealt with better than I can do it. But I do propose to question the Minister's statement, not upon the losses of the last five or six years, but on the farmers' position at present. Suppose we never had an economic war and the farmers had not been impoverished as they have been, I am prepared to question the Minister's statement and I think I will satisfy the Minister and the House that the Minister's contention is not correct, and that the farmers are entitled to dearating now more than they were in 1932, when Fiannan Fáil promised it and claimed that the farmers were entitled to it. In the first place, in Table 6 the Minister has given amounts that he claims have been passed on for the benefit of the farmers. Nothing of the sort has occurred.

The first of these is the halving of the annuities, £1,615,000 under the earlier Land Acts, and £612,000 under the 1923 Land Act. I do not question these figures which amount to £2,227,000. The farmers have got the benefit of that. The next item is "Increase over 1931-32 in provision in the Land Commission Vote for improvement of estates—£498,050." How did that benefit the average farmer? It may go to the benefit of some individuals, but how the Minister can claim that that is any benefit to the average farmer passes my comprehension Then there is No.4: "Net increase over 1931-32 in provision under other Land Commission subheads, excepting (2) and (3) above and the excess and bonus stock contribution—£186,000." I do not think that benefits the average farmer Then we have No.5: "Increase over 1931-32 in provision under other Votes for services in connection with Land Commission—£26,500." No.6 is: "Estimated loss on sugar revenuse as compared with 1931-3 consequent upon development of beet sugar industry (adhusted in respect of beet suger subsidy paid in 1931-32—£899,610)." Will the Minister tell us what benefit that is to the farers in County Cavan or in County Donegal, County Leitrim or County Sligo, where they are 200 miles from a sugar factor and where an acre of beet has never been grown? It may be a benefit of the districts where the beet is being grown, but the people who come from these districts question that.

This really is the penalty that we pay for uneconomic production, for produsing something which cannot be produced economically. If it is a benefit to anybody, it certainly dose not benefit the farmers, because the farmers are dissatified with the price they are being paid for beet. They say it is not an economic price. I do not propose to give an opinion on that, but people who come from these districts question whether there is a proper price being paid. Even one of the Minister's own Party, Deputy Corry, stated yesterday that it is not an economic price, so that the farmers get no benefit even in the districts where beet is grown. Certainly the farmers outside the beet growing districts, which are confined to very shall areas, derive no benefit from it.

The next item is No.7—increase over 1931-32 in the provision in the Vote for Agriculture, £189,342. What particular benefit has been conferred on the farmer by that? That is probably spent in the payment of inspectors for harassing and tormenting farmers, Every activity of the farmer, and everybody else, is being restricted by regulation and by order. The farmers do not regard it as any benefit to their industry to have it controlled and directed from Government Buildings. They prefer to be let live and to carry on their industry in their own way. They do not regard that provision as affording any benefit to the average farmer.

The next item relates to the provision for turf development, £123,952. What benefit is that to the farmers? None whatever. If there is any benefit accruing to the country as a whole from that provision, it certainly can not be referred to the farmers. Then there is another mall item, an increase of £83,515 in the Vote for afforestation. That brings no benefit to the farmer unless afforestation is carried out in the form of schemes taht would suit farmers, namely, shelter belts. That has not been done. I referred to that on the Vote for afforestation, and I expressed a desire that schemes of that kind should be carried out so that farmers might derive some benefit, if not immediately, certainly in the future. There is, therefore, only £2,227,000 of a benefit passed on to he farmer, according to the Minister, but I am not accepting that part of the statement.

As against that, what are the offsets? Taxation has been increased by £4,5000,000 for the last six years, since that time that Fianna Fáil promised that they would derate agricultural lane. It is admitted by statisticians that the farmers pay 59 per cent. of all taxation. If we roughly estimate their shar of this £4,500,000 they certainly pay more than this £2,227,000 of which they are supposed to get the benefit, so that, going no further, things are just as they were. But there are a number of other items which must be taken into consideration. How much has that cost of production increased? Take one item alone, the recent increase in wages given to agricultural labourers. I want to say with regard to agricultural wages, that that increase was long overdue. Agricultural labourers are the worst paid workers in this State, and 27/- per week is scarcely a living wage, having regard to the increase in the cost of living. I do not suppose that they are any better off now than when they were paid 24/- per week with a lower cost of living. I doubt if they are as well off. I believe that are not. I do not question that they are entitled to that wage, but at the same time the increase granted to them counts up in the cost of production.

The cost of production has been increased, for every man engaged by a farmer, at the rate of 3/- per week, that is, £7 16s. per year. The number of agricultural labouters in this country according to the 1926 census was 125,161. We are tole that the number has increased since Fianna Fáil came into office, but for the purpose of simplifying the calculation, we will take the figure provided by the 1926 census. Assuming the number to be 125,161, and multipling that by £7 16s., we get £976,255 as the increase in the cost of production, arising out of the payment of labour alone and as a result of the increase in wages that has recently been put into operation. That is as far as the agricultural labourer alone is concerned. There are 550,172 agricultural workers altogether in the State. If the cost of living has been so increased for the agricultural labourer, as nobody doubts it has, the cost of living has been increased to the same extent for the working farmer and the members of his family so that everyone of these 550,172 workers employed on the land are entilted to the same increased allowance to meet the increased cost of living. I think the Minister, or anybody in this country, will not deny that the working farmer, and the members of his family who are working on the land, are at least entitled to the same standard of living as the agricultural labourer who is the lowest paid labourer in the land. I think it is not too much to claim that the farmers and their families are entiled to the same allowance as the agricultural labourers. That would make the allowance for all these workers, arising out of the increased cost of living, £4,291,341. Therefor, instead of the farmers being in as good a position as they were in 1931, they are over £4,250,000 worse. If they were entitled to derating in 1931-32 as the Fianna Fáil Party said they were, they are £ 4,250,000 worse now. That is proven by figures that can hardly be questioned, and yet that is not the end of it.

The price of feeding stuffs has been increased and the cost of these feeding stuffs adds still further to the cost of production. The cost of machinery has also been increased. The price of implements and everything connected with production has been increased. The position of the farmers, therefore, if there never had been an economic war, is much worse now than it was in 1931-32. As other Deputies have pointed out, the economic war has robbed the people of their savings. It has left the average farmer who had not sufficient savings to carry him through the depression, swamped in banks or with shopkeepers, unable to pay his debts. It has left him with reduced stocks. With all those disadvabtages, we are now starting off with an additional disadvantage of £4,250,000 as compared with 1931-32. How, then, can the Minister hope to claim that the agricultural community are in a position to get any advantage out of the settlement? Everyone in the State should give careful consideration to that question. After all, the farming community are the backbone of the State, and unless they are in the position to live independently and to pay theur debts where is taxation to come from? Who is to pay salaries and to buy the products of factories? Agriculture is our basic industry, and those who claim that it is entitled to a fair deal are speaking in the best interests of the country. Everybody, whether he belongs to the cities or the rural parts, deplores the exodus of the people from the land. They are fleeing from it into the cities and the towns because they do not want to stay on the lane. Has not the policy of the present Government been responsible for the exodus? After a few years, if the people continue to leave the land, how are they to be replaced? Even if people later returned for the cities and towns would they be of any use on the land? If they once leave the land it is very difficult to get them to return to it.

Agriculture is our main industry, and the only one that could stand by itself if it got a chance. It has not got a chance, because burdens have been placed on it for the past few years, as high in some cases as 50 per cent., in order to encourage new industries. The agricultural people are most anxious to help these new insutries to the best of their ability, but there is a limt beyond which they cannot go. If they are expected to contribute towards the building up of these new industries their own industry is also entitled to some consideration, because we cannot continue taking form that industry without putting something back into it. I strongly urge the Minister to consider the claims of agriculture and to look at both sides of this question. The Minister can make up a very plausible story and juggle with figures in such a way as to give the impression that millions of money have been given to agriculture. He should look at the other side of the account. The figures then will shoe that farmers are now in a very show that farmers are now in a very much worse position than they were before the start of the economic war because of the sacrifices they made and of the debts they incurred.

Another matter on which I think the Minister was not well advised was in increasing the duty on hawkers' licences. The amount of the duty has been doubled. I do not think any Minister should double taxation in an off-hand way without inquiry. O know that there has been a clamour by some merchants who were afraid of competition and who were afraid that these hawkers would take away their trade. These traders would not stir from behind their counters to improve their trade and that gave the hawkers, as they are called, their chance. Hawkers are not a lazy class of people, and were serving the people in he country districts. The Minister should consider the position of persons living five or six mils from a town who wanted to sell eggs a couple of times in the week. In the past the women had to take baskets of eggs to the towns. In the past they sometimes had an ass and car or a horse and car, but the roads are made in such a way now that these people are in danger of being run down by other traffic. In addition, the roads are so slippery they ar afraid to being animals on them. If they cannot dispose of their eggs people in the country will not be able to get the household necessaries that these hawkers supplied when they called. If hawkers are comelled to pay the extra licence duty it is the people in the country will eventually have to pay it by getting less for their eggs and other produce. In the last resort it is another tax on the land and another incentive to people to et away from the lane.

This was a necessary service that sprang up naturally to meet the changed condidtions that have been brought about. The hawkers are as necessary to the country people to-day as the towns were ten years age. The country does not exist for the benefit of the towns—I always understood that the towns existed for the benefit of the country. If people can do their business with hawkers why should they not continue to do so? If traders find that hawkers are geetings inside their business let them send out supplies to the country. If a man can sent out a lorry and serve 40 people, is not that better than having 40 people quitting work and shutting up their houses in order to go into the towns for supplies? Only that the people found it was a benefit they would not have encouraged the hawkers to come around. I think the Minister might reconsider the position, or if he cannot fo so this year, he might restore the duty in the next Budget to what it was. The Minister should mot listen to any story without having both side concerned heard.

Minister for Education (Mr. Derrig)

An economist said that the magic of properly trurned sand into gold, but I think Deputies who are farmers do not ponder sufficently on that wise saying. All our Irish tenant farmers are looking forward to the time when they shall become owners of the farms they hold, and any work they do, or that they are going to do on them, will be for the benefit of themselves and their families who, let us hope, will be eternally in possession of the land. During the remainder of the period until their annuities have run out, the Irish tenant purchasers will enjoy a direct reduction of half the amount of annuties which they would have had to pay had the state of affairs which existed when we came into office still continued. The Minster for Finanace pointed out in his Budget speech that parctically the whole of the £2,900,000, which would be collectible as annuities, had there been no econoimc war, and no settlement, was going back to Irish tenant farmers, and about £2,227,000, according to the figures given are going back to them directly this year in the form of a reduction of the annuties by 50 per cent.

Well, I am hopeful that in the other areas the same readiness and anxiety to grow beet will prevail when the farmers in those other areas understand the crop better; when they are more familiarised with the conditions, and when they have as good a scientific knowledge of farming as a great many farmers in the Carlow district seem to have.

Deputy Cosgrave, of course, stated, with regard to derating, that his Party were not wedded to derating, and I think that is a very useful and a vary proper statement No fault whatever should be found with Deputies for suggesting means by which agriculture, or any other industry for that matter, can be made more efficient, can be helped along; but I think what we have a right to object to is a suggestion, which was delivered in a certain pontifical manner, that a certain proposal, which was turned down in the most solemm way by a commission for which a former Government was responsible, should now be sought to be dragged back again into the public view without being closely and seriously examined. I welcome, therefore, Deputy Cosgarave's statement that his Party are not wedded by any means to the proposal that there should be total derating and I would be greatly surprised if that Party which, like this one, represents the small farmers and not the big ranchers, who are confined to certain counties in this country——

Mr. Gorey

Where are the big ranchers?

Mr. Derrig

——that that Party, representing as we do the Western counties would, any more than this Party, be anxious to see in operation a policy which would, in effect, mean that the small farmer would have to pay, through increased taxation on the necessities of life, for the relief of socalled farmers, some of them with a great number of farms of land which are certainly not giving a fair return to this country either in the amount of food they produce or the employment they give.

Deputy Davin referred to a great many matters. Had the Deputy looked at the Order Paper he would have seen that a great many of the Estimates in which he seems to be interested are on that Paper for early discussion in the Dáil, and I have no great sympathy with Deputy Davin in his haste to cover such a lot of ground, such a great many points which would more properly have come up during the coming weeks on the appropriate Votes. The Deputy has the knack of taking out certain points which he thinks will be useful to him politically, and he completely forgets, as great many other critics of the Budget forget, that in order that we shall have a fair picture of our economic and financial conditions as a State, we should being everything into the picture which is relevant. We should not, for instance, seize on one or two isolated figures or other matters which have come under our observation and endeavour to suggest that because these points appeal to us personally they, in fact, represent the whole of the picture, because they do not.

One of the most amazing things about Deputy Davin is that he never, so far as I know, has admitted in this House, except when he was able to try to claim some credit for it himself or try to get credit for his Party through it, the very substantial improvement there has been in the conditions under which the workers of this country have been living, not alone during the period this Government has been in office, but since the war period, or since the pre-war period. I wonder do those people who, like Deputy Davin, never seem to see anything except the problems which, unfortunately, have still to be solved, ever look back and ask themselves what an amount of ground has been covered and what an amount of progress has been achieved? If the Deputy, and those who think with him, would only look at the conditions of the Irish worker in the pre-war period and in the period immediately after the war and look at the conditions at the present time I think they should be prepared to clap this Government or any other Government which is in office in this country on the back, because I am quite convinced that the conditions, taking all the circumstances into account in this country, so far as labour conditions hold, compare very favourably with the conditions existing in the powerful and wealthy State across the water. I am quite satisfied that the conditions of labour here are better than they are in a great many countries in Europe and possibly elsewhere.

Mr. Heron

Who made them better?

Mr. Derrig

Then we have Deputy Davin coming along telling us that there were 18,000,000 loaves of bread less eaten in this country last year or the year before than five or six years ago. If the Deputy had known anything about the principles which go to the consideration of the question whether the standard of living in a country the standard of living in a country is a fair one or not, he would know that as the standard of living goes up in a country the consumption of bread goes down. If he were examining the standard of living in the United States, Great Britain or any other country, would he measure it by the amount of bread consumed? He certainly would not. He would measure it by the amount of eggs, butter and meat consumes, by the number of motor cars, by the amount of money collected in taxation.

In this country, as was pointed out not so long ago, when this ramp which had been carried on here for the preceding 12 months was brought up in the form of a motion, and when it was sought to be proved that the cost of living had gone sky wards, it was shown conclusively that in respect of beer, spirits and tobacco there had been a steady increase in the yield of taxation. There could not have been an increase in the yield from these commodities if the people had not more in their pockets to buy these commodities. When newspapers talk of the enormous increase which admittedly there has been in the figures in modern Budgets, they conveniently forget, like Deputy Davin, to put on the other side of the picture the enormous, the staggering increase in the standard of living which has taken place in this as in great many other countries. They forget that completely. If they look back for a generation and examine the conditions a generation ago in this or any other country, they will find ample corroboration of that. We have corroboration of it in these figures dealing with the revenue returns, in the figures dealing with the number of motor car registrations, in the figures dealing with the Post Office Savings Bank and the Saving Certificates returns.

All of those things go to show there is a good deal of money in circulation.

Everybody may not have benefited, but the figures certainly go the show that in the community as a whole there has been a steady and a satisfactory improvement, a raising of the standard of living, and that is proved conclusively, as I have said, by the fact that on our taxable commodities more revenue is being collected and more of these commodities are being consumed; the people have more money and there are more of them buying these commodities. That fact should be kept in mind when the figures dealing with taxation are being stressed.

What also should be borne in mind and pointed out by the wise gentlemen in the newspapers is that this money which is being collected in taxation is going back in services to the people, and that services have contributed more than any other thing to raise the standard of living in this as in other countries. That is a fact which, of course, is completely left out of consideration by Deputy Davin and others like him, who will give no credit for what has been done and will omit entirely—I suppose it has not occurred to them—to dwell on the fact that enormous progress has been made. What we should say to ourselves is that at any rate we are progressing. If everything is not in as satisfactory a condition as we would wish, at any rate, as honest men and men who profess to have a knowledge of what we are speaking of, we should bring into the picture these very important factors.

Deputy Davin also, having already referred, on the last occasion he was here, to the fact that he anticipated certain things from the Budget, has come forward on this occasion and told us that the cost of living must not be increased; that bacon, bread, and butter must be sold here at the same price as in Great Britain. On the other hand, Sir, the Deputy asked me a question as to whether I still believe that a guaranteed price should be paid for beet. With regard to beet, bacon, butter, or any other agricultural product, if, by reserving the home market for the Irish producer, we can guarantee to the producer a reasonable and a fair price without imposing an altogether undue, burden on the community, I certainly am strongly in favour of that policy. I cannot understand, however, the attitude of one like Deputy Davin, who takes the farmers so much to heart that he even seemed to cast a languishing smile towards Deputy Gorey yesterday evening when he suggested that he was sorry that the farmers of this country had not placed their destinies in his (Deputy Davin's) hands. Deputy Davin takes a very keen interest, according to himself, in agricultural conditions. Of course, he represents an agricultural constituency, but unfortunately the same speech, or the same set of arguments, which will appeal to the workers in Portlaoighise will not appeal to the small farmers in Arles, because if you tell the people in Portlaoighise that they are paying too much for their butter and bacon, and then tell the farmers in Arles, or some place down here where they are working in bog areas and on badland, that they will have to sell their produce here at the price that holds in the British market, no matter how low that price is, you cannot expect them to be pleased, nor can you expect the ordinary observe to think that there is much sincerity or much principal behind them when you gave those two opposing arguments coming from the same source. If the Deputy is consistent in his anxiety to help the farmers, and if he believes in the policy of protecting the home market -if he his interested in the question of guaranteed prices—then, in all conscience he cannot come along and demand that the farmers should sell their produce here at low prices—particularly, as was pointed out to him by Deputy Allen, if they are actually below the cost of production—just because, according to Deputy Davin, the international price on the English market should rule here.

The Deputy also should realise, I think that it is only fair to point out to the agricultural community—apart from the question of the economic war altogether—the advantages which the dispute brought to the community for which he speaks. One of the advantages being that during the period when, according to Deputy Cosgrave —and Deputy Davin has respected his argument—there was a considerable reduction in the home consumption of bacon in this country—another argument that the standard of living in the country had seriously deteriorated and that we were in a very serious position—there were compensating factors. Neither Deputy Cosgrave nor Deputy Davin, who talked a good deal when the scheme was being introduced, and who could not so easily have forgotten it, thought fit to mention the compensating factor of the free beef and free meat schemes under which scores of million of pounds of free ment and fee beef were given to thousands and thousands of poor people in this country who never had meat before.

Mr. Gorey

Scores of millions! Take a note of that.

Mr. Derrig

They forgot to take a note of that, and I think they should note that, so far as the demand for Irish beef in this country is concerned, it has been improved as a result. Deputy Davin also forgot to point out when he was dealing with the question of food prices that between the years 1929 and 1934 there was a very serious fall indeed in agricultural prices here as elsewhere. Agricultural prices all over the would reached rock-bottom during those years. Deputy Davin conveniently forgets to point out to his followers, if they are his followers, that during those years thy reaped the advantages of cheap food. That got food at a price at which it was never got before. Then, when in the succeeding years, 1936 and 1937 there began to be an increase in food prices, we had a general ramp to the effect that the Government was in some way responsible, and that whenever there was an increase in the prices of bacon, butter, or, in fact, any commodity, whether for the purpose of eating or otherwise, the Government was responsible for that increase. Deputy Davin forgets that. He forgets also that about £6,000,000 of extra expenditure have gone each year into social and allied services; and when he tells us here and when the weeps tears for the numbers of unemployed here, or for the migration to Great Britain surely he ought to consider the fact that £6,000,000 a years of additional expenditure on social and similar services is an extraordinary amount for a Government in this country and shows extraordinary generosity, and, if I may say so, certainly proves that we are in advance of the times in our concern to see that the poorer sections of the community are looked after.

There has also been improvement in labour conditions and so on, and these improvements have mounted up to very substantial sums of money. These sums of money, paid either in increased wages or through improved working conditions, although they go into circulation here and benefit certain classes of the community—the working classed and so on—at the same time have to be provided by somebody. These sums of money have to be provided by the consumer of by the taxpayer in the long run. It would be well that Deputy Davin and his colleagues should remember that, if we are trying to secure better conditions for labour, if we are trying to secure higher wages and so on the provision or the wherewithal for these improved conditions and higher wages has to be got from the community; in other words, presumably, it has to be got from the consumer.

Mr. Heron

Would the Minister permit me to ask in connection with what he has just said whether he is contend ing that higher wages are being paid to some sections of the community out of State revenue?

Mr. Derrig

I do not see the relevance of the question, Sir.

Mr. Heron

Surely Sir, it is relevant. If the Minister is talking about higher wages having to be got from the community, is he suggesting that the State itself is paying the higher wages to somebody, or is he suggesting that the State has to find the money for the higher wages paid by private employers?

Mr. Derrig

I would say that the community has to pay in the long run, in some way, for all the increases in wages, or for anything which goes to increase the price of commodities. For example, in the case of house-building, there has been an increase in the price of materials and in labour costs, and the consumer of houses is, in this country in order to produce bread we have a system which apparently produces less units of bread per man than across the water and at a much higher price per unit which the community has to pay, people are put in a position to say that the Government is responsible there again. It has been suggested over and over again that the Government is responsible, either through the wheat scheme or through not having proper control of the flour mills, because the people have to pay more for bread, but what is entirely for-= gotten is the question of labour costs and the method of producing bread, which was only brought under public notice, after the Government had been denounced for a long time in all the moods and tenses, when the statement of comparative labour costs was made up by those responsible for the industry. It was only then it was made quite clear that there was a very heavy burden indeed placed upon the consumer.

Mr. Dillon

The burden arises from the 12/- a sack that the Government has put on flour. That is where the burden is at the present moment.

Mr. MacEntee

Will the Deputy's Party take off some part of that 12/-?

Mr. Dillon

Every penny of it.

Mr. MacEntee

And shut down the flour mills?

Mr. Dillon

Not a single one.

Mr. Derrig

Deputy Davin made the pint that the money saved by the settlement should be made available for those who suffered. I have shown, and the Minister for Finance has already shown, that the tenant purchasers have reaped, and will continue to reap, as large share of the advantage, and I think the Deputy is not unaware of the fact, no matter how plausible or simple he may seem, that many million pounds have gone into circulation here during the course of the economic war for the improvement of social services. The people who he says suffered most, certainly reaped advantages from those services.

Reference has been made to the question of defence. An agreement was accepted by this house under which we have taken over, unconditionally, as was explained by the Taoiseach, certain ports. It was stated also by the Taoiseach, in the clearest manner possible, that the Government proposes to undertake certain responsibilities in connection with we were facing these new responsibilities, and that we intended at an early and opportune moment to place our policy with regard to defence before the House and the country and would ask the House and the country to accept that policy wholeheartedly. I have only to say on this occasion that, as the Minister for Finance has already pointed out, we intend to provide for our own defence out of our own resources, If that fundamental consideration is kept in mind, if that is regarded as the principle on which we are going to work, it will save a great deal of misunderstanding. Whatever others may have in view with regard to defence, that is the principle on which we are working: that we are going to undertake responsibility ourselves for the defence of our country, and that we are going to provided, ion so far as we can, for that defence effectively from our own resources.

Deputy O'Higgins referred to the amounts of money which is being provided in connection with defence. I have no wish to anticipate in any way the discussion, and I am sure there will be more than one discussion, in the House in the near future with regard to this very important mater; but I think I may say that the £6,000,000 need not necessarily or will not necessarily be all spent on the ports. Votes for the provision of that sum of money will come before the House in due course, and, presumably the House will discuss the question fully. As has frequently been pointed out by the Minister for Finance, in the course of speeches made in the house by deputy Davin and other Deputies, the Minster for Defence is the appropriate Minister under whose Vote this whole question can be properly discussed. If we were to start a discussion of defence on the Budget statement there is no reason why we should not start discussion on the question of education or on any other question.

I am rather surprised that those who vote gladly for the Agreement, having heard the Taoiseach's statement at the beginning and the end of that debate in which regard to defence, now seem to suggest either that something is being withheld or that the Government has no taken the House and the country fully into its confidence. As was explained by the Taoiseach, and as I now repeat, the whole defence policy or the Government will be put before the House in due course. At any rate, it is obvious that the elimination of Articles 6 and 7 which held such dangerous potentialities for us in the event of the international situation becoming serious—in the event of any danger of war—is a matter of the greatest moment to this country, a matter I think upon which, no matter what our views may be, we can all rejoice—that these Articles have been swept away. I think we can all recognise that the final abrogation of these Articles creates an entirely new position. We are now quit free. We always were, I suppose, so far as the Dáil is concerned. It was always made clear under the old Constitution as well as under the new Constitution, that the Dáil—the Parliament of the People—was, of course, the final body to determine what our attitude should be in connection with war. In the same way the Dáil the People's legislature, is the supreme body to deal with all questions of national defence. These never has been, and never can be, any question but that that is the case.

I do hope that when the question comes up the atmosphere will be somewhat different from what it has been whenever defence has been dragged into this debate. It is, undoubtedly, a most serious matter, one to which we would all be well advised to address ourselves in a very serious fashion, a matter to which we should give the utmost consideration. I hope, then, that when it is discussed by us as Irishmen whose only anxiety is to do that best we can for our country, to take such steps as will ensure that we shall be united, and shall be in a position to defend ourselves if the necessity for so doing arises. I hope that the good spirit which has existed for some time past in the House and the promises of co-operation which the Government has received in connection with the implementation of the new Agreement. will be followed in connection with the question of national defence, that it will be discussed as a national question of the greatest importance to each one of us and of the greatest importance to the future of our country, a question upon which it is the duty of each one of us to see that a right decision is come to.

Mr. Meaney

I hold that this is a good Budget, so far as the ordinary taxpayer is concerned, and that is the opinion I found expressed all over the country by the people who have to pay pay the taxes; but in order to justify their political existence, both Fine Gael and Labour Deputies are trying to bolster up a case against the Budget. In this respect they are more to be pitied than blamed, as the case put up by them will not bear the test of public opinion. They are relying on the agricultural community as the only straw which they can hope to grasp and save themselves from drowning in the sea of politics. The principal baits used to capture the farmers' votes are derating, the retention by the farmers of their land annuities, and cheap loans for farmers.

Mr. Gorey

Could we have a copy of the Deputy's paper?

Mr. Meaney

If derating comes by way of taxation, I am anxious to know how that will affect the small and the medium-sized farmers. I am but human, and if sonebody paid my rates and my annuities for me to-morrow morning, I should much appreciate to gift, bur if that somebody, after paying these things for me, were to take an amount of money 50 per cent. greater than what he has paid in order to finance the scheme, I should feel that I would much prefer to keep paying as I had been. To my mind, derating would only tend to make the rich richer and keep the grazier still a grazier, at the expense of other members of the community, including those farmers I speak of, and including even the farm labourer.

With regard to the suggestion of cheap loans for farmers, I want to point out that it is not fair to the farming community to say that a large percentage of them are badly off. Despite the economic struggle against Britain, the vast majority of our farmers came out of that struggle with their heads well above water. There are, of course, certain farmers, and there always were, who were not and are not now in a good position financially, but if you examine these people you will find that 50 per cent. of them are unable to meet their commitments to-day for the simple reason that they got a loan or went surety for somebody for a loan in the past. He who goes a-borrowing goes a-sorrowing, and I think you could not do a worse turn to the ordinary farmer than to encourage him to take loans.

Mr. Anthony

Where were we going to get our £10,000,000?

Mr. Meaney

I am speaking of the farming community. The Minister for Finance can arrange about the £10,000,000.

Mr. Anthony

He will go a-sorrowing then.

Mr. MacEntee

There is an element of truth in it, even for the State.

Mr. Meaney

Those are my views with regard to derating and cheap loans. With regard to the other point, according to the 1933 Land Act, the full repayment of the annuities will expire in the same number of years as it would if the annuities were not revised by 50 per cent.

An Leas-Cheann Comhairle

Unfortunatly, I am interested only in the present.

Mr. Meaney

Very well. I am coming to the present. I do no want to see a repetition of what happened then. I do not want to have our shores exoposed to whatever power likes to come along here; I do not care whether it is King or Kaiser. I do not want to have the Irish people doing what the members of Grattan's Parliament did, when they sold their country and thanked God they had a country to sell.

Mr. Brodrick

The speech of the Minister for Eduction was rather remarkable. There were a few statemants made by him to show how prosperous this country has been for the past five or six years under the Fianna Fáil Government. He tried to prove to this House that the standard of living had not gone yup in the last five or six years. In order to prove that he instanced the case of the number of motor cars that had been purchased in this country. He did not tell us bout the number of motor cars that had been purchased on the instalment system under the Fianna Fáil Government or the number that possibly would never be paid for. He also instanced the number of picture housed erected in Dublin and the attendance at these picture housed during the last five or six years. Fancy the Minister for Education derawing his conclusions as to the prosperity of the country from the fact that there were so many thousand motor cars unpaid for and so many new picture houses in Dublin! I should like to ask the Minister has he ever gone outside the City of Dublin since he assumed office except to open some school or some new housing scheme. The Minister also told us that the Government had some to the relief of the unemployed by the provision of unemployment assistance and even went so far as to mention the giving of free beef to the people. Who paid for that? Was it not the people of the country? They were giving free beef because the Government deprived the people of employment. You would imagine that no one was paying for that.

We were told about the social services that were provided. One would imagine that the money for the upkeep of those social services came from some other country. The Minister did not tell us about the increased ates necessary for the upkeep of these services. He did not tell is that the rates had gone up by at least one-thrid within the last five or six years. What value are we getting for that? As against that, Deputy Corry told us last night that there should be some relief afforded in regard to rates. He said that a man paying £10 in rates a few years ago was now paying £20. The Minister for Education practically told us that that is not a fact, that the conditions in the country are much better to-day than five or six years ago. He also said that we are a free country now—— Deputy Meaney tried to follow him in that—and added that we were always a free country. If we were a free country five or sic years ago what was the need for the economic war? What was the need for making paupers practically of every section of the community? Not alone the farmers, but the business people, the labourers and the tradesmen have been brought to that position, bur particularly the farming community. If we were a free country five or sic years ago why was it necessary to put the country to the loss of £25,000,000 inside the last six years?

My calculation was a rough one. When the Minister for Education spoke he appeared to think that the improvement in the standard of living of the working people was due to the beneficence of this Government or the one that preceded it. I do not suggest that he said so in so many words, but that was the impression gathered on this side of the House. This Government and the one that preceded it had nothing at all to do with improving the position of the workers in relation to their standard of living. That was brought about by the Great War. There is no use in either Fianna Fáil or Fine Gael telling any intelligent person that it was they brought about the improvement in the standard of living of the working—class people. However, I want to say, as the Government has been charged with doing nothing for the working classes, that at least two things stand to their credit. The only regret I have is that these things were done through political action instead of industrial action. the Government passed two measures, the Conditions of Employment Act and the Shops Act. I want to give credit where credit is due, and this Government has to be thanked for these two Acts. It is regrettable,however, that the Budget dose not give us any indication, either by way of relief of taxation or in other ways, that Budgets generally give. We have no indication whatever that relief will be given, whether by taxation or otherwise, to certain of our people who are unemployed. Emigration continues on a vary large scal. I am afraid it will continue on a still larger scale, because quite recently the Taoiseach tole us quite plainly that we cannot expect any immediate relief as a result of the Agreement.

Undobutedly, immediate relief has been given to a number of people in the cattle trade who were enabled yesterday to get their stock off to the English markets. I do not think that even these people have made any great profits out of the transaction, because it must be remembered that most of their stock was held up for 13 or 14 weeks. With hay costing £5 a ton, I do not think feeders could have made a lot of profit. It would not surprise me to hear that farmers and dealers had lost hundreds of thousand of pounds over this transaction. One thing that has emerged from the Budget is this, that we have no extra taxation worth talking about, while there are hopes of womething to come. I should like if the Minister, when replying, could throw some light on the question raised by Deputy Davin and by other speakers regarding the Banking Commission's report. I unreservedly accept the Minister's statement that he had not time to read the report because, as he explained, the evidence was so voluminous. One could quite understand that. After all, a Minister has certain responsibilites, and I could understand that he would be unable to find time to read through such a document. Bur I wish he could indicate if we are to have tat report at an early date so that any uneasiness that may exist may be removed. A good deal of uneasiness does exist in the minds of many people, and in order to remove it, perhaps the Minister could indicate the salient features of the report. If they are healthy so much the better and if unhealthy so much the worse for the Minister and for the country .

Mr. Maguire

The introduction of a Budget gives the opportunity to the Oppostion to make a many points as they can possibly conceive against it and naturally against the government. The discussion of this year's Budget has been unique, inasmuch as the Opposition has failed to being forward any critisism of a practical kind or to shoe that the Budget contained anything that is contrary to the interests of the community when it is compared with Budgets introduced in other countries about the same time. The only suggestions against the Budget that were stressed by practically all speakers were the old and hackneyed ones that are normally used at election periods. These were concerned mainly with the derating of agricultural land, and doing away with some other forms of taxation. These suggestions are hackneyed and originated many years back at election times, but they offered no useful contribuation to the Budget debate and were of no practical use. One item mentioned in the Budget attracted a good deal of attention from the critics, and that concerned a sum of £600,000. Deputy Davin waxed very wrath about that item and opposed its existence. He seemed to see no useful purpose being served by the expenditute for which that sum was earmarked, and indicated that much better service could be obtained by using it for the derating of land. Deputy Davin must know that the amount of £600,000 would not do the whole if derating, but would only do part of it. He further indicated as means by which he would go further, that he would ask the State to take control of our main roads. I think he mentioned our mental hospitals, finding employment for out unemployed and increasing the amount of unemployment assistance paid to our unemployed. i do not know how he would get this with the sum if £600,000, seeing that that sum would hardly reduce by half the first claim he made on it, derating, and that it could not do more than increase by 50 per cent. the present allowance made of the unemployed in the country, and I do not know how he would achieve the remaining purpose, to find employment for our unemployed and the mainteanance of the main roads. How he is to get all those serviced out of that sum of money would be very enlightening indeed if he explained it to the Minister for Finance.

He also advocated in that direction, and I think it is only fair that it should be known, that not merely should the main roads of this country be taken over and made a STate service, but that the State should also take over the transport services in this country, which, he stated, are at present in a state of chaos. Deputy Davin is an official of that service himself, and I do not think a higher compliment could be paid to he Government than that he should indicate that they are capable of taking countol of a service that is in a chaotic condition and put it on a right footing. I am rather surprised that Deputy Davin, having regard to the position he holds in that service, would not have brought forward the suggestion that he ha in mind to make that service a success.

Mr. MacEntee

Deputy Davin would ask us to clear up the chaos which he has created.

Mr. Davin

That is a really good joke.

Mr. Maguire

I think, instead of asking that State to take over this chaotic service, of which Deputy Davin is an official, that he should being forward his suggestions to his present board of directors and show them how they should do it.

Mr. Norton

Would you bring forward to the insurance companies similar proposals?

Mr. Maguire

If the insurance service required my advice can I had it available I would be very glad to give it.

Mr. Lawlor

The policy-holders would like it in any case.

Mr. Maguire

When I am dealing with my policy-holders they are satisfied with the position they are in and they do not ask for further improvement. That is the contribution that I listened to last night here from Deputy Davin and it was not a very illuminating criticism of the Budget. It certainly showed that if that was the amount of criticism that Deputy Davin was capable of offering on the Budget then the Budget must have been largely in a practical and sound position, that he was incapable of forming any charge against it, because he undoubtedly sought with great energy to make charges without consideration and to make a point against the standing of the budget.

This is the new battleship.

Mr. Maguire

The necessity for developing those defences is merely a matter of ordinary common-sense. No one would assume that there is any such thing as leaving open the ordinary form of defence even of farm fences. But that is an indication of the limitation of somebody's lip freedom. It is also an indication of the boundary over which somebody has a right to say the moment the fences are laid down that the fences should not be there; that somebody should say: "I should have the right to put my foot across it; I should have the right to control some part of that property." But will the fact that no fence is put up, that the place is left derelict discourage that tendency on the part of anyone who is inclined to trespass? Will it not rather be an incentive and an inducement to those who feel half inclined to do so to come in and trespass on that property.

Did anyone ever know of a house vacated, left derelict and wihout any supervision that in a very short time in come mysterious way, such a house was not prowled, plundered and carried away bit by bit? Is it not the same with our defences? If we leave these forts unprotected we may rest assured that as soon as war breaks out between any two big countries that one or both are going to say: "There are these waste forts over there; their possession by my enemy will be injurious to me; it is a question now which of us should get there first." If there is an indication given that the people who own these forts are to defend them no matter how small that defence may be, it is a direct repulse to any such approach. That is at least an indication if the sincerity of the people of this country to proctec t the freedom they have won. Failure to defend these forts; failure to build war defences would be leaving ourselves open to certain attack and certain particupation in any major war in future. Maintaining the defences of these forts is the only guarantee we can have of remaining in a neutral position when a war takes place. I suggest that the people who oppose the spending of this £600,000 have not considered this question at all from the national point of view.

Mr. Norton

There is one feature about this budget and that is that it has apparently impressed Deputy Maguire. I think most people will regard this a s a dull, unimaginative Budget introduced at a time when there are many problems confronting the country. The Budget deals with these problem sin a very perfunctory manner, leaving them completely untouched in many cases. Not only dose this Budget not solve but it does not attempt a solution of any of the problems which need solution. Besides this, it actually presents some new problems which, so far, have not troubled the country. Of the three main aspects of the Budget, it might be said that they contain noting to deal with the very grave prbolem of unemployment which exists in this country notwithstanding the mythical El Dorado of which Deputy Maguire has been telling us. It does nothing in a substantial way to assist the farmer and the agricultural community. On the contrary, it creates new problems, imposing upon this country what may turn out to be the crushing burdens of armaments.

Deputy Maguire tells us that we should be proud of and pleased with this Budget. He says we ought to be pleased and satisfied that all our problems have now been brought to an end, and he tells us that there was now opening up to the country a vista of prosperity which the country had never before seen.

What are the facts of the situation? Notwithstanding the glowing picture painted by Deputy Maguire, the Department of Industry and Commerce tells us that there are still 100,000 people registered at the employment exchanges in the country. There is the fact that 100,000 persons have satisfied the rigorous test that they are unable to get work and that their pitiable plight calls for relief through the medium of the Unemploy-ment Assistance Act. If we pass from that situation to the national health section of the Department of Industry and Commerce we find that taking the past three years the numbers drawing benefit under the national health insurance have increased in some cases by 25 per cent. Now that is the situation which to-day confronts us in this country, notwithstanding Deputy Maguire's belief that everything in the garden is lovely. There is in this Budget no proposal for facing up to a situation of that kind. There is no proposal in this Budget whereby the State may tackle in an effective manner a serious problem of that kind, a problem which brings misery and destitution in its train and which constitutes the most serious menace that was ever known to the progress and prosperity of this country.

We used to be told away back in the light-hearted days of 1931 and 1932 that the Government had a plan for the solution of the unemployment problem. We used to be told then that Fianna Fáil would cure unemployment, that it was merely yearning for an opportunity of introducing its proposals and these would result in the complete solution of that problem. After six years we find 100,000 persons registered as unemployed at the employment exchanges and there are no proposals whatever in this Budget for dealing with a problem of that kind. In my opinion the unemploy-ment problem is likely to get worse and not better owing to the developments within recent weeks. The London Agreement which has been signed in my opinion opens up new difficulties of an economic kind. Clause 8 of that Agreement provides that our existing tariffs, quotas and restrictions must be reviewed by the Prices Commission in such a manner as to give the United Kingdom producers full opportunities for selling their goods here. There can be only one meaning in that Clause and that is that United Kingdom producers——

Mr. MacEntee

Is this in order?

An Leas-Cheann Comhairle

The subject-matters of the London Agreement, the merits or demerits of that Agreement, do not fall for discussion on these Financial Motions.

Mr. Norton

May I submit that I am quite entitled to refer to it and it has always been the practice on a Budget discussion to deal with such proposals, if any, as may be made for the relief of unemployment? I am entitled, therefore, in accordance with the practice in the House, to refer to the problem of unemployment and, if I so desire, to show that it is a problem for which no provision has been made and that it is a problem which is tending to grow more serious and to merit much more the attention of the Government. I do not propose to discuss the London Agreement except to point out, with your permission, that in certain respects it is calculated to aggravate the problem with which I want to deal, namely, unemployment.

An Leas-Cheann Comhairle

What I want to guard against is that in discussing the question of unemployment the Deputy does not discuss the London Agreement.

Mr. Norton

I do not propose to discuss the London Agreement. I merely propose to say that, in my opinion, the problem of unemployment is calculated to get worse and the events of the past few weeks are calculated to aggravate it, because we may now be giving a portion of this market to producers in another country to supply and I submit that the fact that they are going to supply it on certain terms now envisaged for them is calculated to add to the number of unemployed in this country. During the past week I have seen the representatives of many trade unions in this country. They came to me and told me they had good reason to believe, from their own experience and from the information conveyed to them by employers, that the effect of the Agreement was calculated to slow down production in the future and that they did not think they could continue to hold their present share of the home market.

I think anybody who has taken the trouble to inquire during the past couple to months into industrial productivity and employment in the country will find that a substantial number of hands have been laid off in various factories through want of orders. He will also find that there is now a feeling of instability and unsteadiness in many industries and, in respect of some of them, they have great fears as to their capacity to carry on in view of the picture opened up to them. I think that is the experience of anybody who has any contact with industry and who has had any contact with the trade unions catering for the workers in many of the industries affected by the Agreement. If that fact were not obvious through contacts of that kind, the fact that the Department of Industry and Commerce has been stormed by deputation after deputation asking where they stand and what is the effect on certain tariffs, quotas and restrictions, would indicate a certain feeling of instability and, in turn, it must inevitably add to the problem of unemployment.

We have, therefore, apart from large-scale migration, a problem of 100,000 unemployed, notwithstanding the fact that we had assurances from the present Government that it had a plan for the solution of unemployment and only awaited the votes of the people to put the plan into operation and solve a very serious problem. In this Budget there is no proposal whatever calculated to absorb the unemployed into productive employment. There is no proposal even for increasing the low rates of unemploy-ment assistance benefit paid to them during periods of unemployment. The Government have now cultivated the mentality that unemployment is an insoluble problem so far as they are concerned. They are willing to continue to treat the unemployed by means of giving them miserable pittances each week, but they have apparently abandoned all effort to deal with the unemployment problem in the big and comprehensive way of which they talked so glibly in 1931 and 1932. Unemployment, according to the Government actions, is now an insoluble problem and the Minister for Finance does not spend much time propounding solutions for the problem or making financial provision for its solution in the Budget.

There have been discussions on this Budget as to the position of the farmers. Mention has been made of the fact that the farmers' savings have been relatively intact, notwithstanding the conditions through which they have passed for the past six years. Anybody who is in contact with the rural constituencies, with the farming community; any Deputy who has to deal with the problem of the agriculturist, knows perfectly well that the problem of the farmer to-day is a problem of having no money form any source. Anybody who makes a contrary statement knows nothing whatever about the conditions of the agricultural community. If you go through the country and take any trouble to make inquiries into the matter, you will find the farmer is suffering from the problem of having no money, and his lands are not nearly stocked to capacity. He has no means of getting new stock, having borne heavy losses through the events of the last few years.

This Budget does nothing to deal with that situation or to make available credit facilities for the farmers. It does nothing whatever to realise the enormous wealth which resides within a properly developed agricultural economy. This country has been said to be mainly an agricultural community. In recent years efforts have been made to establish an industrial arm, but the main source of wealth here has been, and for a long time must continue to be, agriculture. It is the height of economic insanity not to avail ourselves of the opportunity to develop to the full our agricultural possibilities and sell our agricultural produce in a market which is capable of absorbing a substantially greater proportion of agricultural produce than we are capable of providing for it to-day.

Everybody knows that during the past six years there have been considerable difficulties confronting the agriculturists of this country. Everybody knows that, due to the economic war, farmers were put in a very difficult position: that the market which would normally be available to them was restricted and that they were only permitted to trade in that market on terms which imposed heavy losses upon them. That period has now come to an end, and, realising the possibilities of that market and realising the wealth which is contained within the agricultural economy of this country, we ought now to take steps to exploit our agricultural possibilities to the full; but how can you exploit our agricultural possibilities, having a farming community, on the one hand short of money, an don the other hand, unable to obtain credit facilities on terms which will not impose a very heavy burden upon them? There is not a bank in the country to-day that would lend a farmer money on land—and the bigger the holding of land is, the harder it is for the farmer to get money. There is not a bank in the country to-day that would lend a farmer money on a small-holding. It may be said that the Agricultural Credit Corporation is there for the purpose of advancing money to farmers for agricultural purposes, but if one takes the trouble to inquire into the inquisitions that are held by the Agricultural Credit Corporation as a condition of granting a loan to a farmer, one will find that a very negligible proportion of farmers in this country could possibly avail of any facilities offered by that corporation. Before you have any chance of getting a loan of money from the Agricultural Credit Corporation, you must owe no rents, you must owe no rates, you must owe no traders' bills, you must have no shop debts, you must have your annuities paid up to date, and, in fact, in order to have any chance of getting money there, you must really be in such a position that almost anybody would lend you money. The very fact that such a small amount of money is lent annually, and the small sums lent to small farmers, is an indication that that corporation never can adequately finance the rehabilitation of the agricultural community in this country, and agriculture, obviously, must be rehabilitated if we have any commonsense left so far as the economy of this country is concerned.

I fear that the expenditure of this £600,000 is going to create a complete misconception of our policy in Europe. I think that there is hope and moral strength to be get by this country by constantly proclaiming our neutrality, by making it clear to the peoples of Europe that we have no imperial designs, and that we desire only to live in peace, our last political objective being to get Britain out of portion of this country in which she has no right. A policy of that kind would give us a straightforward position incapable of misunderstanding. I am afraid that the expenditure of this large sum as an instalment on a hastily-thought-out armaments policy, taking no notice whatever of the source from which an attack may be expected, is capable of doing us considerable mischief in Europe.

Mr. S. Bourke

At the outset, the Minister is to be congratulated on having introduced a Budget which reflects very accurately a Budget which reflects every accurately the subdued atmosphere which we have in the country since the new Agreement was entered into with Great Britain. I am glad to say that that atmosphere is reflected in the Dáil. At least, it has been reflected up to this evening. There have been a few ripples on the surface this evening but I am sure they will blow over and leave no trace behind. Even Deputy Corry spoke in this debate in every chastened mood. It looks as if, at long last, this Dáil is about to become what it was originally intended to be—a deliberative assembly. I hope that that spirit will inspire those who, in the future, will be responsible for our legislative programme, that the subdued tempo which we have in the country at present will have a retarding influence on our Bill-making machinery. Deputies, during the hectic years of the economic war, have been faced with the necessity of digesting and assimilating a regular plethora of incongruous and oftentimes contradietory legislation. The effect has been serious enough to Deputies but it was still worse int he case of the lawyers in the Four Courts who had to interpret this extraordinary accumulation of legislation. What the effect has been on the business community I cannot say but I do know that the farmers, as a result of this hurly-burly for many years, have been almost at their wits' ends. And is it any wonder? If the Ministers, instead of adopting the ordinary procedure, had brought into the House big drums of the Hospitals Trust, threw the various legislative measures into it holus-bolus, and then picked them out in the same haphazard way in which the sweep prizes are drawn, the result could scarcely be more bewildering or more problematical.

Nobody was driven further by this economic war that the Minister for Industry and Commerce, and we all watched, with the greatest sympathy, the extraordinary eforts he made by legislation to save the baby of economic self-sufficiency. I am sure that the Minister is pleased that this ordeal is now over and we are pleased to be in the position of watching him coming back, slowly but surely, to the policy of his predecessors—the policy of selective protection. We all hope— and it is very difficult to find out how this Budget is going to affect them— that the great majority of the industries founded by the Minister will be put on a permanently healthy basis; but we must realise that the success of those industries will depend, to a very much greater extent, on the spirit animating the employers and employees in those industries than on any artificial stimuli applied by the Minister. The people of this country in the past have heartily supported native industry and they will continue to support it in the future, but that does not mean that there is no limit to the amount of money which the people are prepared to expend in order to give a preference to native industries, or no limit to the length of time during which they are prepared to continue giving that preference. If the Irish people have been sufficiently patriotic to make genuine sacrifies to ensure the success of Irish industries without any prospect of gain or advantage to themselves the least they may expect is that those employers and employees whose profits and jobs depend on the patriotic feelings of the general public will at least reciprocate.

I agree with Deputy Dillon in the proposal he made here the other evening, that in the same way as the Minister has seen fit to take the tariffs off certain articles used by the blind, and particularly the blind in institutions, he should also be prepared to remove the tariffs from certain commodities, free entry of which into this country would greatly relieve the burdens on the very poor. Deputy Dillon gave the instance of cotton underclothing manufactured in Japan which could be purchased here for 1/- apiece. Those articles were a very great help to the poorer type of manual worker, and there are various other commodities of the same type which, if they were allowed into this country, without tax, would give great relief to the poor. Such an arrangement would not cost the Exchequer very much and would not interfere with the progress or prosperity of our native industry, and I think the Minister should give consideration to that subject. I am not, int he ordinary way, in favour of purchasing very many commodities from Japan, and not for the reason which seemed to be at the back of Deputy Dillon's mind, but because Japan purchases very little from us. I think that in the ordinary way we should make most of our purchases in those countries which purchase most from us, purely as a business arrangement. I do not agree with the view held by certain Deputies, that comodities which come into this country from Japan are produced by sweated labour. Modern factories in Japan are extremely efficient, and, in their own way, the Japanese workers in those factories are as well housed, as well clothed, and as well fed as our workers in similar factories here. I merely say that because I think it would be a bad idea to allow abroad that the reason we are not able to compete with Japan or any other country is that our conditions are better here than in those countries.

On page 23 of the Minister's statement, there is a passage which puzzles me and somewhat alarms me. So far as I can gather, it simply means that the Minister intends at an early date to increase valuations in this country. Already something tantamount to that has been done for income-tax purposes. The Minister has, and in fact, all Ministers have, a decided tendency to place on the rates the cost of schemes and services which rightly should be borne by the central Exchequer, and this expedient of increasing valuations, and, as a consequence, the amount of the rate collectible will enable the Minister to carry on in a still more flagrant manner this very reprehensible practice. The Minister in his speech went out of his way to plume himself on his generosity in increasing taxation for the purpose of extending our elemosynary services. Already it has been pointed out by many speakers, and I do not intend to follow them, that a great deal of this expenditure is not confined to social services, but is spread over such services as the Army, the Gárda Síochaána, and the Civil Service. Even if it were a fact that all this increased taxation was being expended on such excellent services as old age pensions, unemploy-ment assistance and insurance and so forth, I do not think the Minister has any reason to plume himself in that respect. It is no indication of progress or prosperity in a country. In fact, the opposite would be the case. If he were in a position to reduce the amount expended on those services, the country would be in a much sounder position.

When this Dáil was first established, I remember that one of its earliest activities was to set about devising a scheme for getting rid of the workhouses which advertised the poverty of the Irish people to the world, but the Minister does not scruple to boradeast from this House the social disabilities of our people in a much more effective way than was ever done by the old workhouses. Ministers are becoming very sensitive about the £2,000,000 reduction in taxation that they promised us when they were out of office. When the Ministers were out of office there was not a weapon in the armoury of political warfare which they did not use, and use unscrupulously, against their predecessors in office. They did not care whether they hit above the belt or below the belt, or what the effect was on the nation, so long as they could have a crack at the Government. Now, when the shoe is on the other foot, they expect that no weapon should be used against them. Possibly, the Ministers may find that we on this side of the House are not ready to pay them back in the same coin. They may find that we are not going to continue taunting them with their reckless promises in the past, and their still more reckless incitements to a credulous public, but they will probably find that there are people outside this Dáil, in the country, with long memories, people who will continue to ask awkward questions and who will not forget as readily as we do.

This Budget will prove a very serious disappointment to the farmers, who have borne the brunt of the economic war. Many fo the most progressive and industrious of those farmers have gone with the wind of that war, and it is up to the Minister to see that so far as possible the survivors are put on their feet. Money put into the land, particularly in an agricultural country like Ireland, is never lost. The farmers of this country have submitted to something which I might compare to a transfusion of blood operation in order to save the rest of the community during this ordeal. It would be only common justice, as well as very good business, to see that the strength of this industry is restored. Of course, there will always be a difference of opinion as to how you can best assist the farmers. It is generally held by economists that the soundest way in which you cab help them is by reducing their overhead charges. That naturally leads s to derating. Derating has been criticised on the grounds that it helps the larger farmer to a greater extent than the smaller farmer. I think that is a very unsound and very mean sort of criticism. I have always regarded the agricultural industry in this country as a unit. I think it is right that it should be so regarded. If you help the farmer in Dublin and Koldare. In the same way, in helping the bigger farmers in Kildare and Dublin you are helping the smaller farmers in Donegal and throughout other parts of Ireland. I believe the Minister should give derating, and along with that I believe the tariffs should be taken off agricultural implements and artificial manures unless, of course, in exceptional cases where some of those implements are manufactured here at approximately the same cost as the imported article, and where you turn out just as good an article. But in the present state of affairs in the country. I do not think that is sufficient. A great number of farmers here are just hanging on to their holdings by the skin of their teeth. At the present moment, as a result of the depression not only during the economic war but some time before that—because world depression had hit this country even before the present Government got into office, but certainly it was greatly intensified during the economic war—a great many farmers are in a very serious position. Their capital has gone. Not merely that, but their land has run down; they have taken successive crops of hay off their land, and they have not been puting manure into it. A great many of the farms in this country are under-stocked or not stocked at all. Something drastic will have to be done in order to remedy that situation, and I think the Minister would be wise if he granted a moratorium to annuitants for two years until the farmers get on their feet.

The Minister for Education has reminded us that the proper way to help agriculture and the proper way to reduce the overhead charges in the agricultural industry is to increase production. There is no good in preaching about an increase of production if there is no capital or no other means of increasing production. If a moratorium were granted, the credit of those farmers would immediately go up. They would be able to purchase the stock required for their land. They would be able to purchase manures, and in all respects bring their land into heart. They would then be in a position to avail to the full of the new conditions which result from the re-opening of the market in England. I think it should be the Government's policy to see that every acre of land which has been divided in this country, at a considerable cost to the taxpayers, is utilised to its fullest capacity. That is the only way in which the people can be reimbursed for their very heavy expenditure on the acquiring and division of estates in this country. I do not intend to say any more on that matter. The important item in the Budget, the £600,000, has been very well debated. Deputy Norton in particular has dwelt on it with great and pungent effect. It is really a very important item. I think everybody in the country anxious to know whether this £600,000 is to be a recurring charge; whether it is going to remain as it is or be increased; whether, as Deputy Norton said, it is merely the thin end of the wedge, and whether we may expect something much bigger to follow. Most important of all, everybody would like to know thether this expenditure on defence or imperial defence. The answers to those questions will, to a very large extent, decide how good was the settlement with Great Britain. I am not criticising that settlement, because we all realised that anything which would bring the economic war to an end of a reasonable basis would be a good settlement, but we should like to have answers to those questions so that we may know exactly where we stand.

Mr. O'Neill

This Budget has been a very disappointing one. In fact the keynote of the whole Budget has been disappointment for every class of the community. Naturally, taking into account the amount of money raised on taxation last year, an amount which approximated to the whole productivity of the country, those who had studied the position felt that with the new settlement the Minister should have at least some millions of money at his disposal to bring relief to certain classes of the community. Last year the whole productivity of the agricultural industry amounted to something like £43,000,000. Adding up the impositions on the people in the form of supply services, central fund services and Supplementary Estimates, and including local taxation, you will find that the aggregate of taxes and rates borne by the people approximated to that sum of £43,000,000, so we may well ask ourselves what did this country live upon. We have one basic industry—agriculture. The whole of it was absorbed in taxation, and what did the country live on? Somebody said we lived on the change out of the Civil Service salaries. That probably was only a joke. We produce nothing else in this country but agricultural goods. All the other industries are really a form of change from one kind into another, because we have no raw materials in this country. As I said, this Budget has been very disappointing. We felt that when the economic war was over there would be at least £4,000,000 at the Minister's disposal to bring relief to the taxpayer who had been paying this enormous sum of £43,000,000. What do we find? The Minister, instead of telling us that there is going to be any relief brought to us tells us that we are already enjoying reliefs, that the farmer is already enjoying half the annuity. But he has been enjoying that for the last four or five years. The Minister brings in no positive relief in this Budget. This Budget does not bring any relief to the farmer directly in any possible way.

In connection with this debate, one or two things have suck me very forcibly. ONe was, that the manner in which the Budget was approached from the Fianna Fáil Benches showed us how thorough, practical and effective has been the political education of Fianna Fáil during the last five years. Then, again, when I heard Deputy Norton capturing the whole Fine Gael policy with regard to helping the farmers, I thought we had at last reached the political Elysium in the splendid form of unity, that we had Labour, Fianna Fáil and Fine Gael united in one splendid effort to help the farmers —a magnificent state of affairs.

I have heard so much about the farm ing community this evening, that I should like to part from the farming community for a moment and turn the Minister's attention to some other portions of the community where help would also be expected and where great disappointment arose because help was not forthcoming. The farmer, at all events, has been left with his capital. His chief asset in his land, and that is still left to him at all events. It is his chief capital and land cannot be burned up or destroyed; it remains there. But the person who, I think, has borne the greater brunt of the economic war, and who has come less into the limelight than the farmer, has been the unfortunate town dweller. When I say town dweller, I include every class of person in an urban community who pays rates, whether a trader, shopkeeper, professional man or worker. I think the people in these little urban towns, which I have particularly in mind, have been hit the hardest of any section of the community, and if any relief should be forthcoming it should be to those persons who have suffered in silence and whose capital is gone, whose business connections have gone, whose credit has gone, and whose whole fabric of commercial connection that they had built up has been absolutely frittered away while the war lasted. They went, first of all, when the fairs faded out, when the weekly markets came to an end, when the farmer's credit went down. The farmer then had no business coming to town to do anything. He had nothing else left but his monthly cheque at the creamery, and the whole commercial business of the farmer was thrown back on the co-operative trade concerns. In this way there has arisen, I am sorry to say, a sort of feeling that the co-operative concerns attached to creameries have run away with the whole business of the towns, while it has been by sheer force of economic pressure that the farmer has been thrown back on his monthly creamery cheque because he had no other asset to buy the necessary goods for his household and farm.

As to the question of derating, I am in favour of it for the farmer. It will give him a start, at all events, although, as I have said, his capital is unimpaired, as he is in the possession of his land. Less than £1,000,000 will derate the whole agricultural land in this country. That is not a very big sum when we can afford to raise £43,000,000 in national taxation and rateable charges. It was said this evening that the farmer pays 95 per cent. of the taxes. We all know that is not true. How many farmers, big or small, pay income tax of any kind? Does not everybody in this House realise that the greatest portion of the taxes come from the town dwellers in the consumption of exciseable goods and in every other way? They do not come out of the farms. I think it is wrong that the House should be misled by persons saying that the farmer pays 95 per cent. of the taxation. That is all wrong.

The amount collected in rates last year in this country amounted to nearly £6,000,000. When you take into account that less than £1,000,000 will derate the whole agricultural land of the country, you will see how much is contributed by the town dwellers of the £5,500,000 or nearly £6,000,000. Less than £1,000,000, as I say, will derate all the agricultural land, therefore, I conclude that the remainder of the burden falls on the town dwellers. In the towns, everybody, including the unemployed man drawing the dole, has to pay his proportion of the local rates. In any town to-day, no matter how small it is, or how big it is, the local rates are at least 25 per cent. more than the rates collected off the county. There is no such thing as relief for the town ratepayer in the form of an agricultural grant. There is no help given to the urban employer who pays labour. I employ about 34 men myself, and I get no help whatever in the form of relief from the local council for employing these men. But, because I employ one man on a bit of land, I get a certain amount of reduction in my agricultural rate. There is no help, no relief, for the urban ratepayer.

There was one form of taxation from which I thought the Minister this year, in the exercise of, I was going to say, his discretion, but, rather, I would say by a prick of his conscience, should have given relief, and that is the terrible taxation under Schedule A, where he raised the taxation by 25 per cent. He raised the valuation under Schedule A of the Income Tax to five-fourths. In fact, by one stroke of the pen, the Minister in one night raised the whole urban valuation of the country by 25 per cent.

Look how this works out compared with what previously prevailed. UP to the time the Minister did that very iniquitous thing by raising the urban valuation by 25 per cent., a person owning a house valued £12 did not pay income tax on £12 valuation. He got an allowance of one-sixth for repairs. That meant that he got £2 off the £12 and paid on a valuation of £10. Now what happens? Instead of paying on £12 valuation, there is 25 per cent. added, and he pays on £15 valuation, so that actually, in effect, he is paying on a 50 per cent. higher valuation than he would have before the Minister did this very iniquitous thing. I thought we would have got some relief on that point. I am driven to talk about the town dweller because I heard so much about the farmer. I do not want to put one against the other, but I believe the town dweller has been the worst sufferer in this war. He is the person who should get any little relief that is coming out of this Budget. As a matter of fact, there is no relief for him, but I emphasise these things as points on which he should get relief.

As Deputy Norton said this Budget is remarkable in the way it impinges on certain social problems and passes them by. He has dealt very effectively with the question of unemployment. The Minister ahs been boasting about how many unemployed we have and the steps the Government were taking to relieve that unemployment. I would point out that that unemployment problem is another town problem. There is not such a big unemployment problem in the country. In the country, especially in the poorer districts lke West Cork, with valuations round about £4, we have not got that big unemployment problem like that which we have to face in the towns. The unemployment problem is principally an urban question.

There is then this great increase in the cost of living to be considered. The cost of bread is one of the things that should be affected by our Budgetary considerations. The price of flour should not be, say 52/- in Cork and 38/- in Belfast, simply by force of economic conditions. Everybody knows that that discrepancy in the price of flour is due to a certain Government policy, to a certain fiscal policy propoundd and carried into practice by the Fianna Fáil Government. I maintain that the cost of living, particularly the cost of bread and of flour, is not due to any profiteering, but is due to a certain fiscal policy forced on the millers and the baking community by the Fianna Fáil Party. The same thing applies to bacon. Why should I have to pay 145/- per cwt. in Kinsale for bacon which is sold at 95/- to 98/- per cwt. in England? Why should I have to pay 1/5 per lb. for butter which I can buy in Birmingham or in Cardiff at 10d. or 11d. per lb? These are some of the things which call out for relief. These are the hidden taxes that do not appear in the Budget. I may not be in order in referring to them on the Budget, but they are a natural consequence of the fisal policy of the Government. They are matters which demand the serious attention of the Government and on which we have a right to demand relief.

The Minister has told us that according to British standards of public finance we have a surplus of £629,042. I do not think we should run our finance on British standards. At all events, we ought to have some regard for the actual state of affairs amongst ourselves here. It has been stated that derating could only be carried out by scrapping such schemes as wheat and beet growing. I do not think that that was ever advocated on this side of the House.

Mr. Derrig

It was advocated by Deputy Dillon.

Mr. Brasier

Deputy Dillon did not advocate that. He put it forward as a possible suggestion.

Mr. O'Neill

I am expressing my own views and I say for myself that I do not want any policy that ahs been carried into effect by Fianna Fáil and which has proved successful done away with all of a sudden. Certain vested interests have grown up out of these policies and people have got into certain habits. These habits cannot be done away with, especially if their abolition would mean the creation of unemployment or a diminution in the circulation of money.

Mr. Smith

What does "all of a sudden" mean?

Mr. O'Neill

I leave it to the Deputy's own intelligence to understand what it means. Another question was raised with regard to the farmers. There was a plea not to put into effect the tax of £20 on hawkers. If there is one thing more than another that has done harm in this country, both from the point of view of lessening the resources of the town and disemploying labour, it is the travelling shop. So far from having that tax abolished, I have heard the view expressed that instead of £20 it should be £200, if indeed there should not be a total prohibition of these travelling shops. The bringing of goods for distribution from larger centres into big regional areas has done away with the small regional areas in which goods were distributed formerly by the local merchants. In that way, our towns have suffered very severely by the practice of these travelling shops going to the farmers' houses and selling practically everything that the farmers need. They work by a system of barter, because they are prepared to exchange bread and tea for eggs and other agricultural produce which the farmer has to sell. This system of barter has practically wiped out the towns. It has wiped out not alone the trade of the local merchants but it has done away with the weekly market, because it prevents the farmer from coming into the town to dispose of his goods.

I have covered I think most of the ground so far as the economic war is concerned in so far as it affects the town dweller as distinct from the farmer. The farmer, of course, has our first claim as he is the only amn who produces anything. Al the wealth we have comes out of the soil. It is transmuted, of course, afterwards into other forms of activity, but I would suggest that the town dweller deserves some consideration as well as the farmer. We ought to help in some way to solve the social troubles that have arisen without leaving all these troubles to the bodies who administer local affairs. I see all around me in this House men who are connected with corporations and urban councils and wo are therefore fully aware of the problems existing in our towns. So far, we have got very little consideration from the Government with regard to these problems. The capacity of the people of the towns to pay these taxes is getting less every day while the taxes themselves are mounting up so that the problem so far as the towns are concerned is becoming very acute indeed. The population of the towns is declining. If you go into any small town to-morrow, you will see that shops are idle, that in every street there are houses closed up and houses to let. You will, of course, also see many new houses that have been built to replace some of the houses demolished under the Slum Clearance Orders but, generally speaking, there has been a decline in the population of these towns. For instance, in the town in which I myself was born the population has declined from 6,000 to 2,000 in the last 50 years and the 2,000 are left there simply because they have not the bus fares to get out of it.

This Budget has been praised in some quarters simply because it is so characterless and colourless. That is the most that can be said about it. It gives no relief in any positive way. We are thankful that it does not impose any new taxation, but I think the Minister instead of saying that he hoped to hear no more about the £2,000,000 should have availed of the great opportunity which this Budget gave him. I thought he would have availed not alone of the possibilities but of the actual facts of the situation to come along with his Budget and shout triumphantly: "At last, boys, I have been able to reduce taxation by £2,000,000." He has not done that. I am very disappointed that the Minister has not embraced this opportunity to introduce his Budget with that triumphant shout: "Boys, you will be glad to hear that at last I have been able to reduce taxation by £2,000,000."

Mr. P. Daly

I think this is the most disappointing Budget that has been yet introduced by Fianna Fáil. It is the seventh Budget brought in by the Fianna Fáil Government and it is the most disappointing of the seven. It is all the more disappointing because this year the economic war was ended. We were all delighted with the Agreement that the Government made with Great Britain and hope that its good effects will soon be seen in the country. The Taoiseach has stated that we cannot expect the good results of the Agreement to be made manifest in the near future. I agree with that. I believe that it will take a few years before the good effects of the Agreement will be seen. But in the meantime I would say that the good effects of this Agreement will never be seen unless the Government is prepared immediately to put the farmers in a position to produce agricultural products for the British market and to produce them even more extensively than they did before the economic war.

Every Deputy knows what the farmers have gone through in the past six years. During the economic war a great many of their homes were wrecked, and their sons and daughters were forced to seek a living in the land across the water taht this Government and its supporters stated was our only enemy. In fact, conditions were so bad with some of the farmers that the money to send young men and women away had to be borrowed. We are glad that that state of affairs has ended, and we all hope for prosperity, not only for the farmers but for all the people. However, we cannot expect that prosperity if we are not going to help the farmers immediately. I believe good prices were secured for cattle in the Dublin market to-day. I hope that the increase will be greater in the future, but meantime the farmers must be helped financially immediately. A plea has been made from this side of the House for derating. The Government does not agree with that now, although at one time they approved of it. I believe it is possible to derate agricultural land, and that it is possible for the Government to float a loan at a low rate of interest, so as to enable farmers to restock their land and carry on their business as they carried on before the economic war started. Under the Agreement the Government here has been relieved of payments to the British Exchequer totalling over £4,250,000. One of these payments concerns the land annuities. When the economic war started the Government, after some time, brought in a measure reducing the annuities by 50 per cent. With the settlement of the economic war this country has been relieved of payment of the full annuities, but the farmers are still paying half the annuities to the Irish Government. I believe that the Government here was only an agent for the collection of money that was paid by the British Government to the stockholders. Now that the agency has ceased, I cannot see that there is any moral obligation on the people to pay the annuities any longer. The only amount for which the farmers are liable is their share of the £10,000,000 payment to be made.

Mr. Brasier

They will put you in jail if you are not careful.

Mr. Daly

The £10,000,000 payment can be met by the £1,750,000 yearly that was paid to the Government up to the present as half the annuities, and the balance can be given to the farmers in the form of relief from paying half annuities. If that is done, and if a loan is raised at a very low rate of interest, I believe that within the space of two years we will have a prosperous agricultural community, and when we have a prosperous agricultural community we will have a prosperous country. Deputy O'Neill remarked that we had heard a lot about the farmers recently. A great deal more will be heard about them, because they are the most important section of the community. They are the producers of wealth. Another section, the business people, has got no relief whatever under this Budget. These people have been very hard hit. I am very anxious about a statement the Minister made when speaking about the low rateable valuation of the country. He seemed to suggest that something should be done about that in the immediate future. I hope he is not going to raise valuations on business people in the towns who were so hard hit by the economic war. The only money the people had to fall back upon, as Deputy O'Neill mentioned, was the monthly cheque for milk, and that was eaten up by the co-operative stores. It will be no pleasure to farmers if, owing to the operations of the co-operative stores, the grass grows at the doors of shopkeepers. I believe in co-operation for farmers to a certain extent, but I do not believe it is good business on the part of any Government in this or in any other country to help co-operation for the agricultural community to such an extent as to drive out the ordinary business people and to have grass growing at their doors.

Another item in the Budget statement to which I wish to refer concerns a payment made to Great Britain for Local Loans. Reference to that payment of £600,000 caused some confusion. I hold that the local authorities combined to make that payment of £600,000 for Local Loans each year. That item has been wiped off under this Agreement. The biggest part of the amount was raised for the building of labourers' cottages during the past 40 or 45 years. Some years ago, in 1933 and 1934, the present Government claimed that they were the Government of the poor man. If they are really the Government of the poor man they have now an opportunity of relieving the workers of a certain amount of their payments. There is an opportunity to relieve the cottiers of a certain amount of rent and also to relieve local authorities now that that payment of £600,000 yearly for Local Loans has been wiped out. Deputy Corry asked me yesterday for my views concerning Deputy Dillon's suggestion to do away with the four beet factories. My answer is that I agree with the growing of beet. I spoke in favour of it, and I believe the growing of beet will continue. I hope it will continue, and I will do everything in my power to see that the four factories that have been erected at public expense will not, as Mr. Corry and some of his friends said some years ago about the Carlow Beet Factory, become white elephants. If public moneys have been expended on industries during the past five or six years I think it is the rightful duty of the Government and of the people of the country to protect them and to see that they will not go out of production.

I do not know that there is anything more I have to say on this, Sir, except that this is the most disappointing Budget for the past seven years. This year more than any other year the people of the country, owing to the Agreement arrived at between this Government and the Government of Great Britain, were expecting great reliefs from this Budget. They have got none. Instead of that, after seven years, the people of this country to-day find themselves taxed to the extent of over £4,000,000 extra taxation since 1931. They are paying over £4,000,000 annually more than they did prior to the advent of Fianna Fáil. I want to know, Sir, how are the people of the country going to keep paying? If we are going to keep us the present standard of social services in the country, the only way it can be done is by increased agricultural production. We must increase our agricultural production a thousand-fold. The only way you can do that is for the Government now, after six long years of the economic war, to go to the assistance of the farmers of the country and put them in the position that they will be able to produce agricultural produce for the market that we have across the water, next door to the borders of our country.

Mr. Corish

It is true, I think, to say that a great many people in this country were this year expecting a reduction in taxation in consequence of the close of the economic war, but those of us who were listening to the Taoiseach when he was introducing the Bill which implemented those Articles of Agreement did not expect any relief so soon.

I think it is time, as Deputy O'Neill pointed out, that something should be said on behalf of the town dwellers. We all know that the farmers have suffered and have suffered considerably during the economic war. Deputy O'Neill expressed himself as being surprised that Deputy Norton, on behalf of the Labour Party, had advocated in the course of his statement to-day that something should be done immediately to re-establish the farmers and to help them to re-stock their lands. There is nothing new about that, in so far as the Labour Party is concerned. That can be found in the printed policy as outlined by the Party to which I belong. In so far as the town dwellers are concerned, Deputy O'Neill has rightly indicated that no relief whatever has been given to town dwellers. Business people in towns suffered considerably during the period of the economic war because the farmers were not in a position to pay their debts in a great many cases; they had to receive extensive credit and, of course, the shopkeepers did not refuse them that credit. Now the economic war is settled and the farmer will be able to re-establish himself on the British market and we all hope, and hope sincerely, that he will be in a better position than ever he has been before. It is time that something should be done to help the town dweller. Not along has the town dweller suffered during the economic war by reason of the fact that the business person, above all, could not get in certain moneys that were due to him, but his rates and the rates of town dwellers generally have been raised considerably in a great many case in order to help to implement the policy of the present Government. I have only to refer to the position in so far as the relief of the unemployed is concerned. Members of the Dáil are aware that certain urban areas over a certain population have, since 1933, been paying 1/6 and 9d. in the £ respectively. In the Cities of Dublin, Cork and Waterford and places of that kind they pay 1/6 in the £. That has been increased recently, as a matter of fact. In urban centres like Wexford, Sligo and Clonmel they have to levy themselves to the extent of 9d. in the £. That really is an impost of 10d. in the £ because the Minister insists on getting the gross amount which that rate would bring forth. The rural population have not been called upon to pay that levy, although the people in the rural area get advantage of it. I do not want to set one section of the community against another, but I do suggest seriously that the Minister should divert his attention to the urban centres now in order to do something to help. Together with the fact that 1/6 and 9d. in the £, respectively, have been levied on certain urban and county borough areas, urban authorities have been called upon to levy a rate in order to supplement the grants given by the Government for the relief of unemployment. This Government, when it went into power, stated very definitely that it had a plan to deal with the unemployment problem, and nobody ever dreamt when they set about to relieve unemployment that both urban and county areas would be called upon to levy the rates that they have been asked to levy within recent years. In the town which I come from we are at the moment levied to the extent of about 2/9 in the £ in order to supplement grants for the relief of unemployment. We do not begrudge doing that, but, at the same time, it is a big impost upon the urban ratepayer, and not alone on the business man, but the ordinary man, even the man who is unemployed, because we all know that the moment the rate is increased the landlord will immediately adjust the rent in order to secure that the increase in retes is paid through the medium of the rent.

Deputy Daly has referred to the question of local loans. As he indicated, up to 1933 there was an amount of £600,000 paid to the British Government as repayment of loans which had been given for the building of houses and the laying of sewers and watermains and things of that kind. That has entirely disappeared in so far as the payment to England is concerned, and I would suggest that some relief should be given to urban areas in consequence of the fact that those payments have now ceased.

Immediately prior to the War certain urban authorities had committed themselves to certain housing schemes. Those schemes did not materialise until the years 1915 and 1916. During those two years we all know how the value of money decreased and how much more had to be paid in order to secure loans at the outbreak of the War. Not alone was the War responsible for making money dearer, but it was also responsible for making houses dearer. In consequence, houses cost a great deal more than they had been costing two years previously. The result was that the local authorities were faced with the problem of not being able to charge an economic rent for the houses they built in those years. The local ratepayers were asked to pay a goodly sum in order to enable working-class people to occupy those houses. I suggest to the Minister that in cases of that kind relief should be given, especially in view of the fact that the Government has been relieved of £600,000 a year which up to now they had to pay under the head of local loans. In that connection also I suggest that a good deal of that £600,000 was money on foot of which labourers' cottages were built. I suggest that here again some relief should be given to the county boards of health to enable them to adjust the rents of the labourers' cottages.

Again we come back to the farmer and to the farmer's burden. That burden has been lightened by reason of the fact that the land annuities have been decreased by 50 per cent. I suggest to the Government that it is not too much at all to ask that instead of the 25 per cent. reduction set forth in the Act to enable the labourers to become owners of their own cottages, there should be at least a reduction of 50 per cent. now that this sum of £600,000 has been struck out and that we have not got to pay it to England. After all, it will be agreed that while the farmers were fighting the economic war the agricultural labourers were also fighting and that the interest of the agricultural labourers suffered considerably during the period. I submit that it would be a very wise gesture on the part of the Government to amend that Act and to fix the reduction at 50 per cent. instead of the 25 per cent. As was indicated by this Party during the progress of that Bill through this House, 25 per cent. reduction means very little. The position created by the passage of the Act would impose a very serious burden on agricultural labourers because of the fact that they would have to accept liability for the repair of the cottages.

To come now to general matters, Deputy O'Neill referred to the increase which is supposed to be imposed on hawkers for their licences. I agree that if it is at all possible hawkers should be prohibited altogether, and certainly travelling shops should be prohibited altogether. These create a very serious menace to shopkeepers in urban areas. Week after week and month after month we have people squatting in the market-places of our towns and setting up stalls in competition with the ordinary shopkeepers who have to pay rent, rates and taxes. The shopkeepers are handicapped very much by the fact that they have to pay heavy rates to keep up the town, while these people can squat down there, sometimes leaving the place in a state of litter after them. The people who are in competition with them have to pay rates in order to have the streets cleaned up after the travelling shops. Something should be done to prohibit this class of trading which is unfavourable to the business people of those urban areas.

While Deputy Séamus Bourke was speaking he suggested that one way of helping the farmers would be to remove the tariff on agricultural machinery. As a Wexford man, I cannot sit here and listen to that proposal. I hope the Minister will turn a deaf ear to it. The town which I represent is practically entirely dependent upon the production of agricultural machinery. There are 400 to 500 men employed in the foundries there, and if that tariff were removed it would be very serious for their industry. As far as competition is concerned, the Wexford firms do not fear it; but prior to the imposition of the tariff there was a good deal of dumping by agricultural machinery manufacturers from the other side of the water. I do hope the Minister will not take any serious notice of the suggestion made by Deputy Bourke. If any tariff were proposed to be taken off an industry in his district he would very much resent it. That is all I have to say on the Budget. I earnestly invite the Minister's attention to the suggestions I have made. If these suggestions were adopted they would be very helpful to large numbers of people.

Mr. M.V. O'Reilly

I do not intend to delay the House very long for the discussion on this Motion has been already long enough; quite a number of the Opposition have spoken at length and I do not include the Labour Party in that.

Mr. Davin

Not all of us.

Mr. O'Reilly

In case there is any doubt a Deputy indicated quite clearly that it was a very featureless Budget, that there was nothing alarming but that there was nothing in it it encourage the people in general. I am quite sure if this economic war had ended at another period and if the Minister for Finance had been given a little time to judge what was going to be the result, he would possibly have been more generous. I hold that, unquestionably, it is a wise and sensible Budget and I think, notwithstanding what has been said here, that the business community have accepted it as such.

Mr. Linehan

With a sigh of relief.

Mr. O'Reilly

Many members of the Fine Gael Party advocated what was just and right and what I would agree with. They advocated some form of compensation to the farmers who have suffered quite a considerable amount. Their capital has been diminished. Many of those Deputies advocated that farmers should be derated. Some Deputy stated that the land annuities should be entirely forgiven. He followed that up with a demand for a very cheap system of loan in order that production could be increased. Deputy Dillon, who is supposed to be a fairly sensible men——

Mr. O'Reilly

The real facts of the situation are that these are ports which will be handed over to us on a certain date. We may occupy them or we may leave them unoccupied. If they are unoccupied, any of these great fellows from Europe, these swashbucklers, may come along and occupy the forts, and perhaps it is just as well that there is someone there to tell us that they are about to be occupied or are actually occupied. I submit it is essential that some provision should be made for the taking over of these forts and their occupation. Personally, I believe they should be occupied properly and fully equipped. There were lamentations for generations over the loss of these forts, the great loss they meant to the country and the control held over us by a foreign country. Now that we have complete control, surely we are not afraid to shoulder responsibility, because there is a responsibility, and everyone of us knows that perfectly well. Freedom gives responsibility; it imposes responsibility on the people of this country. I am satisfied that the members of this Party, and, I am sure, the members of the Party opposite, are satisfied to shoulder that responsibility. It cost us a great deal to get that responsibility. It cost a great deal in blood to get that responsibility, and I am quite satisfied that almost everyone on the opposite side is prepared to shoulder that responsibility.

Captain Giles

After all the enthusiasm of the past few weeks in connection with the Agreement, I think this Budget comes as a great damper and tends to lessen very considerably that feeling of enthusiasm. I know that the people at the present time are more or less disgusted because they were told by responsible Ministers here that they had won the war. If they have won the war, they certainly, and quite naturally, expect to see some of the fruits of their victory. I am sorry that they have not been offered very much in this Budget. We all know the people who bore the brunt of the economic war on their shoulders. The people who form the agricultural community were the soldiers of the economic war. Every decent country after a war tries to compensate its victorious soldiers in some manner, and I wonder the Minister for Finance did not come to the aid of the wounded and disabled soldiers of the economic war. I think it is very callous and unnatural that he should be so indifferent.

If we want to gain the fruits of victory from the Agreement we must put the agricultural community on their feet. When I say the agricultural community, I mean the workers and the farmers. This is unquestionably an agricultural country and our only hope is to get agriculture properly on its feet and then let the farmers work out their own salvation. We must first of all get a prosperous agricultural community, get people on the land who will be able to give employment, who will be able to buy and sell and become quite independent. I am sorry to say that at present our agricultural community are in a bad plight. They are in the position that, Agreement or no Agreement, they are not worrying one way or the other. The fact is that in most cases they do not own their land at all. The bank or somebody else has a big interest in it and the farmers are in the position of being little better than herds on the land.

The Minister for Finance having got this Agreement—and it is a fair Agreement—should at least arrange to devote a few millions for the purpose of assisting the agricultural community. One of the most serious problems in the country at the moment is the amount outstanding in arrears of annuities. Some small farmers owe annuities over a period of three to five years. They are quite willing to pay, but they are unable to do so. They do not want to have the arrears wiped out. All they want is that the Government should give them some idea how they are going to start paying on a proper and ordinary basis. I think there should be some indication, with regard to the men who owe arrears over three to five years, that there will be some way of funding that, or at least telling the farmers that they will have a space of 12 months or so before they are asked to pay up the arrears. The Government could indicate to them that if they paid the current annuities they would be given a year or two in which to pay the arrears. If that were done, I think the agricultural community would be satisfied and it would be a great help to them.

We hear a great deal about derating. I quite agree that it is a great front plank in the platform of any Party, and it is needed, because derating will mean immediate benefits, not to the farmer alone, but to the unfortunate unemployed. The Government should be able to initiate a plan whereby the money saved to the farmers when they would not have to pay rates would be spent in giving employment. The Government could see to it that the money was spent in that way, and that would mean perhaps 30,000 to 50,000 unemployed men getting work on the land and producing the necessaries of life for themselves and the people generally.

For the last 20 years almost we have had an Irish Government. I am one of those who sacrificed a fair amount to bring an Irish Government into being, but I am not satisfied that we should be for 16 or 20 years trying to get to the position of running this country in a business-like way. The present Government have almost brought the country to the edge of despair, when they should have it at the peak of prosperity and on the high road to become a proper Irish nation. At the moment this country is poor and impoverished and all through our own doing. There is no use in attributing it to John Bull; it was all done by our own hands.

It is time the State realised the need for something like an emergency call. I think there is an emergency in the present year, and that the nation should be called together to see how we are going to get out of our difficulties. I certainly think that a Council of State is needed, and that the resources and the brains of the State should be put together in order to see how we are going to make this a proper and a prosperous nation. I think that it can be done, because up to the present moment our economy plans were not plans at all. We were just blundering along from day to day, hoping to see if anything would turn up to help us out of our difficulties. A little did turn up, of course, such as the Agreement with England, but that will not help to procure employment for the 100,000 unemployed men who are at present on the dole. If we are to provide employment for most of these people, we must concentrate on one thing, and that is to get back the people from the towns and cities, to which they fled because they could not get work on the farms— to get them back and working on the land—and to do that the only hope for us is to try to ease the burdens on the people who own the land by taking off some of the overhead charges that are on the land at the moment. I think that if that is not done, we will not get the fruits of this Agreement.

Some of the Deputies on the Fianna Fáil Benches did not either praise the Budget or anything else, except to talk about all that had been done during the last so many years for social services. I quite agree that they did a fair amount for social services, but when they talk of such services they ought to bear in mind what has been done for social services in other countries, in Europe and so on. I think it will be found, on examination, that other countries have increased their provision for social services by about 100 per cent. more than we did in Ireland. We have only been tinkering with the matter here, giving widows and orphans pensions and so on, but we have been really doing nothing to get our country on its feet properly, and we should not talk at all about what we did for social services, because actually we did nothing; we did not even scratch the surface yet.

Now, one of the burning problems of the day—with men of my type at least—is concerned with what I call the old soldier in the republican army, and in that connection I should like to know where we stand in the matter of defence. We have certain sentimental ideas with regard to the independence of our country, such as that we fought for, and are prepared, if necessary, to fight for, the full independence of Ireland, as we did in the past, and we only accepted the Treaty as a stepping-stone to the full independence of our country, just as we accepted the Agreement of 1926 as a stepping-stone, and just as we are now agreeing to the Agreement of 1938 as a stepping-stone to our ultimate freedom, but I am afraid that, the country being so low in itself up to the present moment, and the Government being so glad to get some agreement or another with England, there is a danger that they think this is the final settlement. Well, I am satisfied that further generations will arise to proclaim and to fight, if necessary, for the principle that Ireland must be free from shore to shore, that it should be no Crown colony of England, that it should be absolutely independent and free to make agreements with any country that it likes to make an agreement with, and I say that until that day comes we will not be free or cannot regard ourselves as being free.

There has been a good deal of talk about the amount of money that is being spent on social services. Deputy Corry said that the last Government, during its ten years of office, did nothing. I do not like to be ripping up old sores, but everyone in the country knows that the last Government, when in office, had to establish constitutional government in this country. Even the Minister for Finance complimented the Leader of our Party on that, and said that he had to admit that the last Government established constitutionalism, and that the present Government were there to maintain it. Everyone knows what it cost to repair the damage done by those associated with the Party now on the Government Benches. I am not saying that out of any spirit of vindictiveness, but I think that, when we on this side are attacked, we have the right to reply.

I was not sent here to speak for myself. I am here to speak for the majority of the people in West Cork who elected me. If I believe in a certain thing I will express my views on it, and am prepared to take responsibility for doing so. I did not go into politics for the sake of getting anything out of it. Deputy Corry says that I am not dependent on this subsidy. I want to tell him that I am no millionaire, but I have not benefited as much as he has by the change of Government! If he wants to hear any more about that I will tell him.

An Ceann Comhairle

The Chair has no desire to hear it.

Mr. O'Leary

Probably it is just as well. I ask the Minister to take responsibility now and say that the Government are prepared to go into the question of the cost of feeding stuffs—to do something that will help to bring relief to the people in the poorer parts of the country who are so urgently in need of it. The markets are now open, and why should not the people who can grow feeding stuffs do so, and feed them on their own land? Why do they expect the people down the country to pay £2 or more to subsidise them? I was opposed to that when my Party was in power. I am opposed to it to-day and I am going to continue my opposition to it as long as I am in the House.

I want to say a few words with regard to the position of the small farmers as a result of the having of their annuities. I want to compare the position of a farmer as regards both rates and annuities in 1932 and in 1937. The valuation of the man I have in mind is £9 10s.—£2 for the house and £7 10s. for the land. Nobody will say that the valuation of the house is too high. His annuity in 1932 was £5 11s. 2d. and his rates £2 6s. 6d.—total, £7 17s. 8d. In 1937 his annuity was £3 1s. 4d. and his rates £3 12s. 6d.—total, £6 13s. 10d. As a result of the halving of the annuities, he benefited by £1 3s. 10d. That does not take account of his contribution towards the £10,000,000 extra taxation imposed on this country. Taking the population at 3,000,000, that would work out at £3 per head, including every member of his family. Reference has been made to the position of the farmers and to the lightening of their burden by 50 per cent., I say that their position has not been lightened to the extent of 50 per cent., taking rates and annuities into account, which, in justice to them, you must take into account.

Deputy Corry spoke about the subsidy on eggs and butter. I ask Deputy Corry, or any Deputy on the Government Benches, to explain why people went out of egg production. Is it not the truth that the price of feeding stuffs drove them out of egg production? Deputy Corry said that the cow population had gone up by 100,000 since 1931. I do not know what the figures are, but I am not sorry to see the number of cows increasing. As long as you have cows there will be more employment. There was a time when a great many people went into milk production as a result of the position created by the economic war. People who were engaged in rearing calves and producing cattle went out of that business and into milk production. Will Deputy Corry deny that?

Mr. Corry

I will grant Deputy O'Leary this—that a lot of them who were keeping their land for dry stock did go into milk production, and it was a good job, because it gave more employment.

Mr. O'Leary

Will Deputy Corry agree that milch cows give more employment than tillage?

I was not.

Mr. O'Leary

I am not an expert on English—in fact, I know the Irish language better than the English—but I do not think there is any difference between one and the other. I should like to quote Deputy Davin before I conclude. He said that the agricultural community were in the front line crenches, and he said that he was speaking for men he knew. I am also speaking for men I know, and I know that some of the most industrious people in this country have been brought to the verge of ruin, and I challenge any Deputy to contradict me in that. Deputy Davin asked if the Government would, even now, set up a commission to investigate the conditions of these people and find out what hardships have been imposed on them in the last six years. I think that is a reasonable demand. Commissions have been appointed for other purposes, but I think I had better keep off that subject for the present. I shall have another day for that, too, and I will have some quotations from the past. I hope to spend some time showing the views of these people at that time as compared with their views now.

I appeal to the Government to set up some kind of commission to investigate the position of the agricultural community and to try to find some means of helping them out. I have always maintained, and I maintained it before we got the Treaty, that agriculture was and would be the main industry of this country, that on agriculture depended the prosperity of the whole people, and that, instead of destroying production, as was encouraged by the Government in the past six years, production should be encouraged and an effort made to secure a market. We have the market, although we were told at one time that that market was gone, and gone for ever. Now, however, we have had the experience of seeing the people who held that view going across to England and negotiating. At last they have come to their senses and have found out the real position in the country. I agree with Deputy McGilligan that were it not for that realisation the Taoiseach would never have crossed the Channel to negotiate with the British people.

Mr. MacEntee

The discussion on this Budget has ranged around two matters—the question of derating and the question of national defence. I do not intend to indicate how far I think a discussion in regard to questions of defence policy was strictly relevant to the debate but, in any event, a large part of certain Deputies' speeches concerned itself with that issue. I do not think that the question properly arises for detailed discussion on this Resolution. An opportunity to discuss this question of national defence arose when the Agreements with the United Kingdom were under discussion a few days ago, and the House was then told, in no equivocal terms that, in the Government's view, large sums of money would thenceforward have to be provided for the purpose of national defence. Deputies were informed that this was the considered view of the Government, and that after the Agreements were ratified by the House, the Dáil, in due course, would be asked to vote large sums of money for that purpose. Deputy Norton, Deputy Davin, Deputy John Marcus O'Sullivan, Deputy O'Higgins, Deputy Bennett, Deputy Giles—in fact practically every Fine Gael Deputy and every Deputy from the Labour Benches who has spoken—who referred to this matter were well aware of the fact which I have mentioned when those Agreements were before the House. If they differed from our view in regard to this question, they could have taken the opportunity to make that clear by voting against the Agreement.

They were told in the debate by the Taoiseach that it was the Government's intention, first of all, to take over these ports at the earliest possible moment, at the moment at which we had the skilled and trained personnel to take them over, and that when they were taken over, they would be modernised. If Deputies and, in particular, those who have responsibility for leading Parties or for sitting on the Front Benches as representing the guiding and leading lights of Parties, felt that that was an unwise policy, they could have expressed their dissent from that policy in the way in which it is open to every member in this House; in the way, for instance, of which Deputy Larkin availed himself, by not voting for the Agreement. When these Deputies who have been so vocal to-day, so full of protest against money being raised for the purpose of Imperial defence, as they term it, who to-day are questioning the wisdom of modernising the ports and equipping this nation to defend itself against whomsover may attack it—for that is the sole purpose for which the country is being asked to provide this money—had an opportunity to give practical expression to those views by voting against the Agreement, which proposed to take over these ports, and by voting against the policy which was announced when that Agreement was put before the House; that is to say, that it was our intention to modernise those ports, and not merely that but to strengthen and extend every provision which hitherto with our limited resources we had been able to make for the purposes of national defence, they should have had the courage, they should have had the honesty, they should have had the honour, to get up here and do so then. They had not the hardihood, Sir, to do that. Therefore I suggest that if they want a full statement of our policy with regard to national defence they should have to wait, and I respectfully suggest that the Chair should have compelled them to wait until that policy was unfolded either by the Taoiseach——

An Ceann Comhairle

The Chair does not require from Ministers nor from Deputies suggestions or directions as how to direct the business of this House.

Mr. MacEntee

——until that policy, as I was saying, is unfolded either by An Taoiseach, who is responsible for the general policy of the Government, or by the Minister for Defence, who has been charged by this House with responsibility in the first place for national defence. I, Sir, am not in that position; the responsibilities of my office, my particular duties, do not call upon me to state on an occasion such as this what the policy of the Government is in regard to that matter. Therefore I do not intend to deal with it further.

Deputy O'Higgins informed us yesterday that the Budget had been received in some quarters with rather acute disappointment, and in other quarters with a certain amount of relief. The Deputy said the relief was felt in places in which a big increase in taxation had been expected, and that the disappointment had been felt elsewhere. I must differ from the Deputy when he suggests that the country has been accustomed to expect a big increase in taxation every year for the past six years. I am quite sure that the Deputy, in making that statement must quite accidentally have overlooked the facts of the matter. They are quite simple, and I think they are within the recollection of most of us. In any event, if the recollection of any element in the House is at variance with what I say, they can substantiate the truth of my statements by looking up the records of the past six years. When we took office in 1932 we had not only to make up the heavy deficit on the Budget of the coming year which then confronted us, but we had also to begin to provide the people with certain social services which had been withheld from them during the preceding ten years. This involved for that year in our first Budget a heavy increase in taxation, but in 1933 there was no change in the rate of taxation, and in 1934 there was a reduction. In 1935, again on account of the increased provision which had to be made for certain services, particularly for that of unemployment assistance, some rates of taxation were increased. In 1936 and in 1937, however, there were heavy reductions in those rates, so that, so far from its being true that in every year for the past six years there have been increases in the rates of taxation here, such increases in fact took place only in 1932, when we had to make good the deficit which we inherited from our predecessors, and when we had to provide for the people the social services which had been so much in demand but which they had withheld from them during the preceding ten years.

In that year 1932, and again in 1935, when we had to provide the heavy sums required for unemployment assistance, there were increases in taxation, but in most of the other years— notably in 1934, 1936 and 1937, there were heavy reductions in taxation.

But, of course, the members of the Opposition have hypnotised themselves into believing that there have been heavy increases in the rates of taxation over the past six years. Naturally, they have now come to judge a Budget not from the point of view of the benefits or advantages which the country can be expected to reap from the services for which the Budget is to provide, but merely on the narrow issue as to whether or not it is proposed to increase the rates of taxation. There we have rather a paradoxical situation. Most people would hold that a Budget which did not increase the rates of taxation, or even did not change the rates of taxation, should be regarded as a good Budget, but that is not the view of the Opposition. If it does increase the rates of taxation, then from the point of view of the Opposition, as it is customarily expressed here in this House, it is a good Budget because it affords them an opportunity of making the utmost Party capital out of that fact. If on the other hand it does not increase the rates of taxation, then it is—as this Budget has been described —a bad Budget, or at best a disappointing one. But though, as Deputy O'Higgins had to admit yesterday, the ordinary citizen is relieved at this Budget and thinks it a good one, we need not be surprised if the members of the Opposition, certain members of the Labour Party, and every other Deputy in this House who had hoped to make capital out of the fact that some one other than himself has had to take the odium of collecting taxes in order to meet the costs of the services which they, in common with every other member of the community, demand, should find this a bad and disappointing Budget. It is a bad and disappointing Budget indeed from the point of view of its effect upon their political fortunes, but I think, and I believe the country will agree with me, that this is a good Budget and a sound Budget, and one which in present circumstances will be extremely advantageous to the country and the community as a whole.

But when an Opposition bases all its hopes in regard to a Budget upon the expectation and desire that it will provide for increased taxation, it is hard for them to adopt an attitude consistent with their own pasts. We have had that difficulty fully exhibited in this debate. Prior to this day week, the clamour of the Opposition, heightened by the thin, piping note of Deputy Davin, was for a reduction of taxation. But to-day they are demanding that taxation should be increased, mind you, not by £100,000 or £200,000, but by £2,000,000, for that is what this demand for the derating of agricultural land involves—an increase in general taxation of not less than £2,000,000 per annum. And the Party which up to a week ago was clamouring that taxation should be reduced, is now equally clamorous that it should be increased by no less than £2,000,000. For, as I said, that is what the derating of agricultural land would cost, except in one eventuality, which is that, if those who are crying out for the derating of agricultural land are prepared to surrender the concession which was afforded to them in the Land Act of 1933 and to agree that the Land Acts shall be so amended that henceforward every person who is buying out, or who from this time onwards buys out his land, will agree to pay for it, not even at its full market price, but at something less, and at the same time, something very much more than he is paying for it now. That is to say that those who are clamouring for derating should agree that the purchase of their land should be completed not upon the terms of the 1933 Act but on the terms of the 1923 Act. In that way we can have derating without extra taxation. Indeed, I might say that if those who want derating can see their way to concede that condition, not merely would we be able to give derating without increased taxation, but we would be able to give derating with a reduction in taxation as well.

Now let us look at the figures. Derating, as I have said, would cost £2,000,000 in round figures. The reductions granted in the pre-1923 annuities cost the State approximately £1,615,000 a year. In respect of the post-1923 annuities, the reductions already granted are expected to cost this year £612,000. But that is not the whole story. There still remains land to be bought out and divided. It is expected that in order to complete the redistribution of the land of the country in economic holdings, further issues of land bonds to the amount of £7,750,000 must be made. Of this capital sum, no less than £3,750,000 is expected to fall as a direct responsibility on the Exchequer, and in respect of that an annual charge of £184,000 will have to be met, and met, of course, out of taxation. So that when land purchase is completed within a comparatively few years from now, the total benefit which agriculturists will derive from the reduction of the land annuities, which was granted under the 1933 Act alone, will amount to £2,411,000 per year, or almost £400,000 more than would be required to derate agricultural land.

Mr. Keating

Johnny, you hardly know yourself.

Mr. Gorey

The devil a bit were you in the trenches, any kind of a trench, except in a rat-hole, where you belong.

An Leas-Cheann Comhairle

That is an expression that should not be used towards any Deputy in this House. Deputy Gorey will withdraw that expression.

Mr. Gorey

If it is, in your opinion, a disorderly expression, I withdraw it.

Mr. MacEntee

Let me go back over this again, because I think it will be seen that what is really responsible for the condition of deep melancholia which seems to afflict the Opposition, and particularly the farmer members of it, is that they still think that, not merely are they living in the last six years, but that they are back again in 1931. Let us remember, however, that the plight of the Irish farmers in 1931 was not an enviable one, and I want to bring home to the members of the Opposition the difference between 1937-38 and 1931. First of all, they pay only one half of the annuities they were paying in 1931. The beet growing which then cost the Exchequer £57,000 has now been so developed that it is costing £900,000. In 1931, farmers were being driven out of tillage; to-day, tillage has been made profitable. Deputy Gorey himself had admitted that, because he told us that, in his view, 50 per cent. of the farming community which had done well out of the economic war were those who were engaged in growing wheat and beet and, in general, those who had adopted and followed the tillage policy of the Government.

Mr. Gorey

And in smuggling.

Mr. MacEntee

I admit that, possibly, we might be something worse off in that regard than we were in 1931, but I think that, on a calm examination, when he reads his statements in regard to that phenomenon the Deputy will agree that his arguments are not tenable. However, let me go on. I said that in 1931 the farmers were being driven out of tillage, and that now tillage was profitable. In 1931 the dairying industry was in a state of collapse; to-day it is thriving. In 1931 foreign farmers were competing with the Irish farmer for his own market in practically every commodity which the Irish farmer produced. To-day, that cutthroat competition no longer exists, and the Irish market belongs to the Irish farmer, and he has as good a place in the British market, as I said before, as he ever had. In short, in every way the position of the Irish farmer to-day is much better than it was in 1931. I do not say that it is as good as it should be or as it will be, but, at any rate, it is very much better than it was in 1931. Every impartial individual whom you meet in the country to-day will admit the truth of that statement. There has been talk of derating, as I have said, and yet in 1931 the Derating Commission reported that it could not find any justification for derating. How much less justification is there for it to-day. I had intended to go more into this subject, but I have been talking longer that I had meant to.

Mr. Keating

It would have been better if the Minister had said nothing.

Mr. MacEntee

Well, I shall talk only a little longer. I was going to say that I wished to discuss one proposal which was made by a Deputy which, I think, was even more outrageous than that proposed by the leader of the Opposition, and that was a proposal to derate urban property. I understand that that proposal was made by a Deputy in this debate, and I think it could only have been made because those who advocate derating in one form or another do not realise the fact that, however we may look upon the question of derating, one thing that must be kept in mind is that rates are borne, in the main, by the owners of property, and that a demand for general derating simply means that you lift the burden off the backs of those who are fortunate enough to have property, whether in the form of land or houses, and transfer it, or a very large part of that burden, to the backs of those who have no property.

However, as I said, it is later than I had anticipated, and I do not intend to examine at length this problem of urban derating, but there is one proposal that I think I should not sit down without touching upon, and that was the proposal that credit should be provided in some way for farmers at low rates of interest. I wonder has anybody ever considered what that would entail, and whether it could possibly be administered. I would like to have a practical scheme discussed here in the House as to what its effect might be. I heard a farmer say to-day, and I agree, that the great majority of hard-pressed farmers—the farmers who are virtually down-and-out—are in that condition by reason of unwise liabilities which they contracted, either on their own behalf or on behalf of other people, in regard to loans.

Mr. Gorey

Bosh!

Mr. MacEntee

I said "unwise", and the Deputy can call it "bosh" if he likes to do so, but everybody knows what a millstone it is for a farmer to have raised money on loan in times of comparative prosperity, as the great majority of Irish farmers did in the years 1919 and 1920, and then to have to carry that liability through the depression. The only ones who came through that depression were those who were wise enough in their generation not to over-borrow on a boom. However, in this connection, are Deputies aware how much money was advanced on loan to the Irish farmers? I had some calculations made in that regard before the last election, as a matter of fact, so that I might be in a position to examine some of the proposals in the Fine Gael programme. The amount cannot be much less than £15,000,000—that is, the amount which the banks have advanced to Irish farmers. Now, that is money advanced to credit-worthy farmers. Of course, some farmers are not so credit-worthy now as they were at the time when advances were made and, as a result, some of these advances might be regarded as frozen loans. There might be about 70,000 farmers who were able to get loans but there might be another 15,000 who have not been able to get loans. Then again, there are many other farmers who have not wanted loans, because they have been in a prosperous financial position and have been able to finance their farming all the time—farmers who, if they could get their money out of their farming and invest it, or take a turn on the stock exchange, could make money and get even. With the way markets are going at present, one might make money even when there is a fall, as well as a rise. At any rate, you would have the 70,000 to consider in the first place, and then you would have an additional few thousand—I do not know how many it might be—of people who have not been able to get money from the banks. Then there are others who, if they thought they were able to get money, at, say, 3 per cent. or 3½ per cent. from the Government—and what a temptation that is, for we all know how difficult it may be on occasions for the Government to enforce its rights in regard to loans as, for instance, our experience in regard to the fishery loans—might come along and say: "Why should I sink my money in my farm, when I can get money at 3 per cent. from the Government, and can put my own money into an industrial investment, and even though I might be getting 5 or 6 or 10 per cent. on it in the farm, in any event, if I can get money to replace it at 3 per cent. from the Government I can make a 3 per cent. profit on my own money by investing it in this way."

This, then, would be the problem: that every man who had been able to get money from the bank, and every man who had not been able to get money from a bank, and every man who did not want money from a bank would come along and want a Government loan. And how could anybody be refused? Are we to have a whole corps of investigators? We have heard, on some of the Estimates here, the complaint made that too many officials are poking their noses into the farmers' business. If we are to avoid that, we cannot make fish of one and flesh of another in regard to this matter of Government loans. Every man who came for a loan would have to get one. He would have to get as much as he demanded, and we could not make too many bones about an investigation. What would be the financial problem which the Government would have to face, and what would be the financial problem which the banks would have to face when this money was thrown back into them? What was going to be the problem of the bank depositors when this money was thrown back on the banks, and when no use could be found for it? First of all, you would be in this position, that the Government would have to find an enormous sum and suffer a very heavy continuous loss for a considerable number of years—a loss that I could not put a price on, but it might be £1,000,000 or more. And, remember, you could not refuse any person a loan under these circumstances. Deputy Gorey, who would not want a loan in normal circumstances, would have to get it if he demanded it, and even the person whom I have heard Deputy Gorey describe as a wastrel—the person who, he says, neither works nor wants work —he would have to get his loan. How are you going to discriminate? You could not discriminate between sections of farmers. And, further, who is going to administer it? We hear a lot of talk about the number of officials. We have heard it said that the cost of the Civil Service has gone up by nearly £1,000,000. How many officials, do you think, would you require to administer a scheme of that sort if the Government was going to stand up as the milch cow for every man, who owned a bit of land in the country, to come and have his draw out of it?

The fact of the matter is that the first people to clamour for a cessation of that state of affairs would be the honest working farmers of the country, because they would very quickly realise that where there was easy money to be got, once people got it, they were not going to use it properly. That conclusion is based upon the experience of every person who ever had to deal with money. If money can be got easily it will be wasted and misused, so that when we talk about loans for farmers we might as well say gifts for farmers. That means taking the money out of the farmer's right-hand pocket and putting it into his left-hand pocket, because, as we are so often told, the farmers bear a very large share of the cost of government. I have kept the House at great length, but I am grateful for the patient hearing which I have had, even from Deputy Keating, under great provocation.

Resolution agreed to.

Resolution reported and agreed to.

Report Stage ordered for Wednesday, 25th May.

Dáil Éireann debate - Thursday, 19 May 1938

Committee on Finance. - Resolution No.11-General (Resumed).

Dáil Éireann debate -
Thursday, 19 May 1938