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Dáil Éireann debate -
Wednesday, 20 Jul 1938

Vol. 72 No. 9

Industrial Alcohol (No. 2) Bill, 1938—Money Resolution. - Committee on Finance.

I move:—

That for the purpose of any Act of the present session to make provision for the formation and registration of a company having for its principal objects the manufacture and sale of industrial alcohol, to make provision for the compulsory acquisition of land and the construction, maintenance and operation of transport works by such company, to make provision for the transfer to such company of the assets and liabilities of the undertaking established under the Industrial Alcohol Act, 1934, to make provision for regulating and controlling the manufacture of industrial alcohol and to make provision for other matters connected with the matters aforesaid, it is expedient to authorise:—

(1) the payment out of moneys provided by the Oireachtas of any expenses incurred by the Minister for Industry and Commerce under such Act and not otherwise specially provided for by such Act;

(2) the loan to the aforesaid company out of moneys provided by the Oireachtas of a sum not exceeding £1,500;

(3) the payment out of moneys provided by the Oireachtas of any subsidies granted to such company under the said Act;

(4) the advance out of the Central Fund or the growing produce thereof of all moneys from time to time required by the Minister for Finance:—

(a) to meet payments required to be made by him to the said company in respect of any shares subscribed for or taken up by him under such Act, or

(b) to meet sums which may become payable under any guarantee given by him under such Act in respect of moneys secured by debentures issued by the said company;

(5) the advance out of the Central Fund or the growing produce thereof of such sums as may from time to time be required to meet any sums which may become payable by the Minister for Industry and Commerce under any guarantee given by him under such Act of the discharge of certain liabilities of the said company;

(6) the charge on the Central Fund or the growing produce thereof of the principal of and interest on any securities issued under such Act and the expenses incurred in connection with the issue of such securities.

On the Money Resolution, I think the Minister ought to take the opportunity—at least we would be glad if the Minister would take the opportunity—to give us as far as he possibly can a complete picture of what is involved financially in this measure, and as far as he possibly can some idea as to what this measure is intended to do. Deputy Cosgrave asked the Minister on the Second Reading of this Bill if he would tell him what exactly the establishment and the development of the industrial alcohol industry to the extent contemplated by this Bill was intended to do for the country. Deputy Cosgrave said he could understand it if he were told explicitly it was for the purpose of giving employment to 250 men even for a period of a year; that he could understand it if he were told it was for the purpose of increasing the income of agriculturists; that he could understand it if he were told it was for the purpose of putting ourselves in the position that in case of the outbreak of war we would not be entirely dependent upon outside sources of supply for petrol; that he could understand something about the measure if he were told it was for the purpose of manufacturing munitions in the country. I cannot trace in any of the statements made by the Minister since Deputy Cosgrave asked those questions that the Minister has indicated what exactly is the purpose of the industry. When in 1934 it was indicated to the House that it was desired to carry on experiments to see the extent to which industrial alcohol could be efficiently produced in the country, the emphasis which seemed to be laid on the necessity for carrying that out was that in nearly every country in Europe something like it had been done. In so far as the matter was brought home to us here, it was indicated that we might hope to bring into cultivation a large area of land with resulting benefits to the farming community in direct cash payments and in by-products for feeding stock. I am reading from the Irish Trade Journal of September, 1935. It was indicated that it would increase employment and that it would to some extent reduce the dependence of this country on foreign supplies of petrol. At that time the position was that the experiment was going to be carried out. Now, without having made it clear as to what exactly this industry is going to do in the country, and without really giving us any idea of what the cost to the country in the long run is going to be, the Minister's statement on this Bill when it was last before the House indicated that an industry was being set up here which was going to produce industrial alcohol to an extent which was set out in that official statement in the Irish Trade Journal of September, 1935, as the maximum amount of alcohol capable of blending without introducing difficulty, that is 25 per cent. All that the Minister has said in the House seems to indicate that we are embarking on financial expenditure in setting up a fabric of production here that is going to put us in the position of producing, as far as volume is concerned, at any rate, 25 per cent. of the amount of petrol used here, that is the extent to which it was thought at that particular time it could be used without creating difficulty. I think the Minister has indicated in the statement he has made here that he has now come to the conclusion that 15 per cent. is the most suitable percentage to use, at any rate, for motor fuel.

However, that is one reason why I ask that the House should be told what purpose this is for. Apart from the money sunk in the experiment, and apart from the false ideas that the Minister came before the House with when dealing with the question at first, looking at some aspects of the situation we find that in this industry, which was going to assist farmers by paying them for an increased acreage of potatoes, a considerable sum of money has been sunk since 1935. In fact, at the end of March, 1937, £183,251 had been sunk in connection with the development of industrial alcohol. The estimate was that £80,000 would have come back to the Department to the end of March, 1938, as a result of the sale of industrial alcohol. While £183,251 has been spent, of the £80,000 that it was estimated would come back to the Department, not one penny has come back. It was estimated last year that £166,000 would have come back, but we have no information from the Minister as to what amount has come back. The position is that never in the history of this country was a smaller acreage of potatoes grown than in 1937. After what was spent in developing the idea, that industrial alcohol was going to be the medium of additional potatoes being taken from farmers, and a certain amount of money put into their pockets, never was there a smaller acreage grown than in 1937. For the information of Deputies, I may say that the acreage in the year 1931 was 346,073 acres; in 1934, when we were getting into this scheme, 342,918 acres, and every year since the acreage has been going down. In 1935 the acreage was 335,000 acres, and in 1936, 326,000. Between 1933 and 1934 there was a drop of 14,000 acres, but a scheme was put before us that, we were told, was going to increase the amount of money to be put into farmers' pockets, as a result of the increased purchase of potatoes for the development of this industry.

The Minister is faced already with the fact that the use of this alcohol to replace some of the motor spirit brought in is going to reduce the income of the Central Fund, by having less money coming from the imports of petrol. The Minister has not committed himself by saying what the price of petrol is going to be increased by as a result of the mixture of industrial alcohol with imported petrol. The fact is that, at the price the Minister is charging suppliers of petrol for industrial alcohol, every gallon of petrol is going to be increased by 2½d. for the 10 per cent. mixture, as ordered. That is going to cost road users £37,500 yearly, and the replacement of imported petrol by 10 per cent. of industrial alcohol is going to cost the Exchequer £13,000. The 10 per cent. mixture of industrial alcohol with petrol, that is made compulsory on motor users, is going to cost the taxpayers, who have to keep the Exchequer refilled, £13,000, and it is going to cost motor users £37,500. That is £50,000. That money alone would pay approximately £4 a week to 250 employees for the whole 12 months of the year, but they are not going to be employed for the whole 12 months.

Then again, the amount of money the Minister is liable for under the scheme, commits the State to £1,000,000 and we are told nothing of the three or four years' experiments; nothing of the real objects of the Bill, and nothing of the real financial effects. The only thing we do know about the Minister's outlook on the financial side of the measure is the change that has taken place in his whole outlook, as shown by the price now being charged petrol distributors for this stuff. The Minister dealt with the matter in February and May, 1934, and in answer to criticisms as regards the suggested price at which industrial alcohol was going to be sold, said on the 25th February, according to the Parliamentary Debates, column 2146:

"The price at which we contemplate that industrial alcohol will be available, allowing for potatoes, labour, coal and barley will not, in our opinion, exceed 1/9 and 1/10."

On May 29th, at column 1997, the subject of the Minister's estimate of 1/10 was again under discussion, and the Minister is reported as saying:

"As I was listening to Deputy Mulcahy and Deputy Dockrell trying to prove that this alcohol was going to cost anything up to 3/- a gallon, it just occurred to me that, possibly, when they were going to school mathematics was an optional subject. They did not succeed in proving anything like what they set out to prove."

The Minister, by way of example to prove that he was right, gave a roundabout sum like what appears in the Christmas numbers of some weekly journals. We get an answer now, and the answer is that the Minister is charging 3/- a gallon for industrial alcohol produced in these factories to the people to whom he is selling it. That is the only thing we know. That is the real kick. There is not much of a definite kick in it for any section of the people, as never before had we a smaller acreage of potatoes than we have now. There is not much of a kick coming to any particular person when he does not know exactly where this policy is leading. The motorists, even if they were paying the £37,000 a year additional, and the taxpayers, if they were paying only £30,000 additional, would not feel the kick so very much as the person who is made to feel it directly now, and that is the person who is the supplier of petrol and who has to pay 3/- a gallon for the stuff the Minister said he was going to produce at 1/9 and 1/10.

The Minister told us that he was going to have an export market for the wash. In his Estimates for the year 1936-37 he told the Dáil that he was going to put into the Exchequer by the sale by him at that time of industrial alcohol and wash, £80,000. The Appropriation Accounts now available for the last couple of months indicate that nil came in. From the Estimates which were put before us last year it appeared £166,840 was going to be received by the Department of Industry and Commerce for the sale of industrial alcohol and wash.

I do not want to interrupt the Deputy, but I would like to point out that this Bill merely provides for the transfer of the existing undertaking from the Department to a company to be established. I submit that the question of whether or not this industry was to be established was determined when the Act of 1934 was passed and a Second Reading debate is out of order on the Financial Resolution.

The matter for discussion on a Money Resolution is the purpose to which this money is to be devoted. That purpose under this particular Bill relates to two matters, the formation of a company, the guaranteeing of debenture shares and a few other minor matters. That the industry should be established was decided by the Oireachtas in the Act of 1934, which has not been repealed.

I decline to assist in any way to vote money enabling the Minister to go deeper into the mire or send the State deeper into this particular mire. The Minister is asking for power to guarantee debentures in this company. The Money Resolution, I take it, covers that. I say that this House should not spend a halfpenny to give the Minister any power to put the State deeper financially into this position until the knowledge that he has, as to where this industry is bringing the country, is, to the fullest possible extent, placed before the country. The Minister, as I say, has told us that £166,000 was going to go into the Exchequer out of the sale of alcohol and wash last year and £168,000 was going into the Exchequer this year. Is that so? Surely if this industry is so important that £500,000 worth of capital and power to commit the credit of the State to another £500,000 is desired, the Minister should give us that information. Is there any person looking for £50 or £100 to start a huckster's shop who would give less information to the person from whom he was asking a loan than the Minister has given to the House on this subject? The Minister threw ridicule and sarcasm on the arithmetic that enabled members of the Opposition five years ago to figure out that he would charge and would have to charge 3/- a gallon for industrial alcohol. That wisdom has been borne out, and the whole obscurantist attitude of the Minister at that particular time and the glib, gay array of minor figures that he had to produce the figures of 1/9 and 1/10 has gone by the board. It does not need a person with a blackboard to prove that the whole of the Minister's basis at that particular time was wrong. The people who are distributing petrol in this country to-day know it when they get the bill for 3/- a gallon from the factories. Surely, if the Minister has a case to make about that he may make it in a small or a big way but the big case that has to be made is that the Minister has put in another £500,000 or guaranteed another £500,000 in debentures. Perhaps when we have reached the point at which we will be producing 25 per cent. mixture and when motorists will be paying double the amount that I mentioned here and the taxpayer will be paying double the amount that I mentioned here, the Minister will tell us what financial or other benefits he expects this State to have.

The Minister to conclude.

I presume we are in Committee.

Yes, even in Committee, if no other Deputy offers the Minister is called on to conclude.

The Minister has not committed himself to giving us any information. If he does give us information now that it is desired to supplement by question or even in an elaborate way, I presume the House will have an opportunity of helping the Minister to give us information if he has it.

Questions for further elucidation will be allowed within reason. I submit that the proper time to discuss the policy of the Minister was on the Second Reading.

Surely, before we vote this Resolution we are entitled to the information Deputy Mulcahy asked for.

The Deputy will find it all in the Official Reports.

Would the Minister like me to give him the information contained in the Official Reports?

Seeing that this is the second time the matter has been raised Deputy Mulcahy is obviously flogging a dead horse.

A minute ago the Minister rose on a point of order. The Chairman gave his ruling on it. We are debarred from discussing the merits of the original measure, but might I suggest to the House that the inducements that the Minister offered to the Deputies of this House to support the original measure have been largely falsified? For instance, one of the inducements that the House got to support the original measure was that good alcohol would be supplied to the trade in this country at 1/8 or 1/9 a gallon.

Did the Deputy see that in the Official Report?

I am asking Deputy Bennett.

Or was he merely relying on Deputy Mulcahy's garbled quotations?

The Minister gave that definite figure of 1/8d.

I am glad the Minister is finding his tongue, anyway.

We had several warry words across the House about particular figures but the Minister stuck to his figure and it largely induced particular Deputies on his own benches to support him in his desire to set up alcohol factories in this country. We did not believe it on this side but, nevertheless, it carried the day for the Minister. It has largely, in fact it has absolutely, been proved to be a false figure. The amount is about double and, while it may have been a reasonable proposition to Fianna Fáil Deputies to induce them to support the measure at 1/8 there is a great chance they may change their minds at 3/-. We were told that there were to be certain appropriations-in-aid, if we may call them so, in the way of alcohol wash or eyewash or some wash to recoup the people for the expenditure of this money, but the main inducement offered was that this was going to be of great benefit to the agricultural community, that it was going to induce the farmers of this country to go in largely for potato cultivation. That idea of the Minister has also been proved to be false by the figures given by Deputy Mulcahy, and, mind you, on this particular point, I am taking his figures as correct because I believe them to be correct. His figures show that the acreage under potatoes has been greatly reduced instead of being increased. If there were any one argument that could have induced the country Deputies at least, and the majority in this House are country Deputies, to support the measure it would be the fact that it was going to be of great benefit to the agricultural community. It has not proved to be so. It certainly has not been a benefit to any other section of the community that I can possibly see. The Minister has not ever in this House advanced the argument that it would be of any great benefit to any other section of the community. Apparently it is not going to be of benefit to the Exchequer. It is a loss to the Exchequer of some £30,000, I believe, was the figure. It is a loss to the trade; it is a loss to the motor users; it is a loss to every other section as far as I can see. There may be other inducements. One of the inducements the Minister offered was that in a period of national crisis in this country we may be able to supplement our petrol supply. The Minister has never seriously suggested to the House that in the case of our petrol supply being cut off we could use the alcohol produced solely in this country by his factories. I believe this is the most indefensible proposition ever put before the House. I believe the House originally approved of it under a misapprehension of its possible effects and in the belief that the Minister's inducements to support the measure would prove to be correct. They have not been so proved. So far as I can learn from people in my own constituency, and anywhere else, there is an intense opposition to this measure and I, for one, could not be a party, by my vote, to the passing of this Money Resolution.

The Bill before the House, to which this Money Resolution relates, has for its sole purpose the transfer of the existing industrial alcohol undertaking from the Department of Industry and Commerce to a company to be established in accordance with the provisions of the Bill. It is the opinion of the Government, an opinion which, I think, is shared by many persons independent of the Administration, and an opinion that is justified by our experience, that the successful operation of a commercial concern by a Government Department is very difficult and that the type of organisation more usually found in business life is better suited to the purpose. It is true that in the initial stages of this undertaking, when contracts of various kinds had to be made and a great deal of experimental work done, the most suitable method of operation was through the Department of Industry and Commerce. But, now that the factories are established and about to commence production, we consider that it is better to transfer them to a public company to be set up. That is the purpose of the Bill.

Deputies are also aware of the fact that this Bill has been before the House already. It was discussed at great length on the occasion of the Second Reading. It was discussed at still greater length upon a Money Resolution similar to this one, and it was discussed even in Committee. Because of a technicality, because of the dissolution of the Dáil prior to the election, that necessitated a reintroduction of the measure and we have to go through the same procedure all over again.

And we get less information as we go along.

All the information that is required by Deputy Mulcahy may be found in the discussions that took place here six or eight weeks ago.

Absolutely incorrect. Would the Minister point to a single page on which that information is given?

I beg leave to differ with the Deputy. I do not know what information he wants, but I do know that all reasonable information which any intelligent man would require is available in the discussions that took place here.

And the reason why we are getting this company now?

We are having a great deal of misrepresentation on this subject. We had a lot of misrepresentation during the election campaign about this undertaking and the Party opposite have to justify the opposition they showed to it, opposition which was repudiated by the people.

We are not on the hustings.

No doubt they feel themselves called upon to show some cause for the attitude they adopted during the election campaign. It is rather a pity we should have had this attempt to misrepresent the position again, and particularly the parliamentary position in relation to this measure, when no useful purpose can be served. Here is an enterprise set up by an Act of the Dáil. There were many definite reasons why it was worth while carrying out experiments such as this enterprise represents. It is an experiment.

This type of industry was never previously established in this country and it was not known definitely what success or otherwise would attend its establishment here. I may say that it has been reasonably successful. Certain difficulties arose which were not anticipated; but, on the other hand, certain advantages appeared which we did not anticipate, either. It is easy to quote the figures given in 1934. In the circumstances of 1934 these figures were substantially correct. If we could purchase potatoes at 25/- a ton; if we could purchase coal or barley at the prices that ruled in 1934, a much lower price could be quoted for the industrial alcohol produced. Instead of the prices we contemplated then, we are paying 40/- a ton for potatoes, the price of coal has almost doubled, and barley has also been increased and, consequently, there has been an increase in the price which must be quoted for the alcohol which must be sold.

This price provides for every contingency; it provides the interest on the capital investment in the undertaking, with a margin over and above that interest; it provides for a recovery of all the loss on production. It could in fact be reduced, even on our present anticipation, and will possibly be reduced in the future when we get more experience. It is easy enough to say these factories are of no benefit to the farmers of Limerick, as Deputy Bennett says. They were not intended to be a benefit to the Limerick farmers. I should like Deputies to ask the farmers of the areas where the factories are located whether they are a benefit or not. We did not establish these factories in order to increase the production of potatoes.

What was the idea?

The main reason undoubtedly was to secure benefits for the agricultural community in a period when the prices of potatoes were abnormally low. We felt there was a need for the operation of some scheme, whether it was to manufacture industrial alcohol or starch or glucose or any other produce that could be made from potatoes. It was worth while instituting it, if we could fix a limit below which the price of potatoes could not fall.

Why did the Minister base the calculation on the prevailing price of 24/- a ton?

I did not base it on that. We contemplated raising that price. Deputies have frequently talked about £2 a ton and they have declared that that does not pay the farmers. When they say that, they are misunderstanding or misrepresenting the position. The average farmer will relate the price that is offered to what is offered in the market for graded potatoes. This is not for graded potatoes, but for the whole of the product of the land and the farmers of Cooley, Monaghan and Donegal find that that pays them much better than perhaps £3 or £3 10s. that they may be offered in the open market. They sell their potatoes to the factories. They do not have to sell them there; there is no compulsion; the Civic Guards do not march them to the factories and force them to sell. They are selling the potatoes voluntarily because they regard that price as better than the prevailing market price. It is true that the price of potatoes fluctuates. It has been quite high last year and this year. When this experiment was begun the price of potatoes was never lower. It had reached rock-bottom. The farmers in Donegal were at that time selling potatoes at less than 20/- a ton. That was in 1934.

You derided Deputy McGilligan for telling you that the petrol would cost you 2/11; you derided a gentleman.

Any calculation of the cost in 1934 or since was specifically stated. It was based on certain assumptions in regard to the price paid for potatoes, for labour, for coal and barley. These are the four items that go to make industrial alcohol and no figure has any significance unless it is related to certain assumed costs. If we are now paying 40/- a ton for potatoes instead of 30/-; if we are paying 26/- for coal instead of 15/-, or a higher price for barley than was contemplated, then it is obvious that the price of the article is going to be higher. If these prices go down, the price of alcohol will go down. The price of one must conform to the price of the other—that is obvious.

Deputies opposite reached a certain stage of madness when we proceeded with the experimental establishment of this industry. It is a characteristic of people mentally affected that they regard everyone else as mad and themselves as sane. Every Government in the world is doing this. They cannot all be mad. Great Britain at the moment is building one of the largest in the world at Southampton. The French Government, the German Government, the Polish Government and the Italian Government are all going in for this.

With what object?

The Australian Government, United States Government and various other Governments are doing it and they are not all cracked.

And even the Government of Northern Ireland.

Yes, Deputy Moore reminds me that even the Government of Northern Ireland is doing it. When all these Governments are doing it there must be some good reason for it.

Can we be told the good reason?

I have told the House, time and again, the reason. I do not propose to go over all that again. The Deputy can ask me where are the receipts. We cannot have receipts until we have made sales, until we have sold the alcohol. These factories were experiments and they were started towards the end of the last season. One ran for only a couple of months and one for only a month or even a shorter period. They will not commence a full year's activity until September this year and it is only in relation to a full year's working that there will be receipts of any magnitude. These receipts will not merely be sufficient to repay the cost of manufacturing but they will enable us to pay 5 per cent to the Minister for Finance on the moneys advanced and also allow for a certain margin towards contingencies. I have said all this before, within the past couple of months. I gave the Dáil all this information when this Bill was last before the House. The Bill provides for a capital of £500,000. The Minister for Finance will be issued shares to the value of the assets transferred to the company which are valued up to £266,000. In addition, another £60,000 will have to be paid before that formal business is completed. That will leave the company with fixed assets to carry on the business but without working capital. In addition to that amount of money certain working capital will be required and some other comparatively small items of capital expenditure will have to be undertaken. That is why the capital was fixed at £500,000. It probably will not be necessary to incur capital expenditure to that amount. But the capital expenditure is represented by that figure. There is a capital expenditure of £266,000 which will have to be undertaken immediately and another £60,000, amounting to a total of £326,000, the total of the value of the assets to be transferred.

On that last point, I would like to ask the Minister to what extent will the £183,251 actually spent up to March, 1937, be covered by shares issued to the Minister for Finance?

I do not know where the Deputy got that figure.

From the Appropriation Account which shows that from the moneys voted in the three years up to 31st March, 1937——

That is the amount paid out, but it is not the amount spent in the sense that one may enter into a contract with a builder to build a factory and pay him half the amount at one period and the other half some time later. The amount is much more than that but that is the amount which has been paid out of the Exchequer to those to whom it was due.

I am asking the Minister how much money was spent up to March, 1937. Whatever money was spent last year will be covered by the shares issued to the Minister for Finance bearing five per cent. interest?

All except the two items mentioned. There is the bulk sum payable to the Dutch firm who are our technical advisers in this matter in consideration of their services in supervising the construction and equipment of these factories. Furthermore, there was certain expenditure upon salaries of staff in connection with the enterprise before the factories were constructed. These items of expenditure are being carried on the Department's Vote in the ordinary way. Apart from these items, the Minister for Finance will get shares for the balance, that is £156,000; £97,000 upon plant and equipment; £9,000 upon rolling stock; £4,000 miscellaneous. That makes the £266,000 to which I have referred. In addition the following items will also arise before this is transferred—interest upon the amount borrowed in respect of the current year. That comes to £13,000. There is another £13,000 which represents the excess cost of production during the past season. As Deputies understand, the price at which alcohol is sold is calculated upon the cost of production during a normal working year. During the past season there was only part of a working year. The excess costs of production this last year have been capitalised. That is the normal operation of industrial companies. There are royalties which are payable upon the output of the distillery, payable over a period of time. The capital value comes to £30,000.

Did you not buy the patent rights?

I am explaining——

Did you not buy the patent rights—yes or no.

I refuse to answer yes or no. I was explaining that there are two royalties involved—the royalty due to the owners of the processes which have been operated in these factories. That is not the royalty to which I am referring. I am referring to the royalty to the technical advisers to the Government who are responsible for the conduct of the factories. The remuneration for their services is being calculated by a royalty which will have direct relation to the amount of the alcohol produced. That royalty will vary from 2d. to 1d. a gallon over a period of four or five years. The capital value of the total amount is £30,000. Then there are some small items of capital expenditure. All these items represent the total expenditure. That will be the value of the shares issued forthwith to the Minister for Finance. Over and above that the new company will require capital for working purposes.

The Minister said that the Dutch firm got a lump sum. How much was that?

£16,500.

And they are getting a royalty also?

Do not mix up the two things. There are services which were rendered in connection with——

The same firm, is it?

Well, if the Deputy is going to interrupt, I shall not answer.

I only want the information.

The Deputy will get it if I am allowed to go on without interruption. There are services which were rendered, such as advising the Government in connection with this industry, advising as to the process to be utilised, advising as to the purchase of machinery, and actually designing the machinery and the buildings—all that work which is normally done for an ordinary commercial undertaking by architects and engineers; and all that work was done for the Government by Messrs. Noury & Van der Lande, and for that work they have been paid this lump sum. In addition to that, they are responsible for running the undertaking, and their remuneration for that is based upon a royalty basis.

There are just two questions I should like to ask the Minister. Has there been any valuation of the property as it stands?

It is now worth about twice what we paid for it.

About twice?

Yes; it has to be insured for double the amount.

Yes, I see. I will take that.

The Deputy can laugh if he likes.

I cannot help it. It is impossible to do anything else.

We are advised that the construction and equipment of these factories to-day would cost double.

That is another matter. What I am at is the question of the value as distinct from what somebody advises you about, from an authoritative source. The second question that I want to ask is in connection with this 5 per cent. to the Minister for Finance. Does that include sinking fund, or does it include interest on the money?

There is 5 per cent. interest on the ordinary shares of the company, but the company, in calculating its working costs, will make the usual provision for the depreciation of plant and machinery.

If, as the Minister says, the Minister for Finance wants to get 5 per cent. on the money he put in, obviously he is getting a profit on the money he put in.

He is getting 5 per cent. on his investment.

It does not cost him that, does it?

I do not know.

The Minister does not know what it costs the Minister for Finance?

No, and I do not suppose anybody else knows either, except it was possible to make calculations over a number of years.

The Minister has not paid more than 4 per cent. in recent years, and, as a matter of fact, did not borrow money at more than 4 per cent. The last money he borrowed, I think, was at 3½ per cent. Is the Minister making a profit in respect of the money he has advanced on this enterprise?

He would have to make allowance for the cost of administration in the Department of Finance.

Well, naturally, we would all like to see this thing a success, but the more expenses are added on, the higher charges for money, and the higher costs for anything, are all against the interests of the company.

Quite so, but I do not think that 5 per cent. return on capital is unreasonable.

Is it going to be guaranteed?

If a person goes out looking for investment, he looks for a return of 5 per cent.

Is it guaranteed?

Yes, in the sense that the price we have fixed provides for that, and the price, whether raised or lowered, would always have relation to that.

That is, the business would be so arranged that it would have a 5 per cent. profit. Is not that a guarantee?

And to that extent the Minister for Industry and Commerce is agreeable to giving, in all these circumstances, 5 per cent. on the money to the Minister for Finance.

It is not guaranteed completely, except of course that we will start forthwith selling this alcohol at 3/- a gallon. If delays should occur this year or if other factors should arise to make the actual cost of production higher than we anticipate, then that 5 per cent. may not be available, but the price will not be increased on that account.

It will not?

No, but we have a margin of profit for that contingency.

If it should not pay 5 per cent., will the prices be increased so as to pay 5 per cent.?

I could not answer that.

Before we pass this Money Resolution, Sir, I should like to say a few words. I followed the debate as closely as I could, but not being a member of the House when the original Bill was going through, I am not very familiar with it. What I want is that everybody should know now that you are going to charge 3/- a gallon for the petrol which you manufacture and that, if that does not pay the 5 per cent. dividend which has been talked about here, it is likely that you can charge more than the 3/-.

We can charge any price that I can fix.

Yes. Now, only this day week you had a strike here in this city of the drivers of motor taxis. Whether they were justified or not, they had that strike because the running cost or the upkeep of their vehicles had been increased.

They are not using any of this.

Well, who is using it or where is it going to be used?

It is being used at the moment. Whatever variation in the price of motor spirit was occasioned by the establishment of this undertaking has taken place already and, in fact, the price of motor spirit has been reduced since then, gone up since then, and been reduced again since.

I understand from the Minister—of course, I suppose I am dense——

I am not responsible for that.

——but I understood a moment ago that production had hardly started at all yet. Is not that true? Is not that the impression that was left on members of the House? Yet we are told that the motor industry through the country is paying the increased cost at the moment. I do not understand this. However, what I want to elucidate is this: that you are going to sell petrol at 3/- a gallon, and if it is necessary, you will get 4/- for it in order to pay that dividend. I only want to make that clear in connection with the whole matter. I think there is sufficient overhead taxation in the motor industry already without adding to it by means of this matter of industrial alcohol.

In connection with Bills of this nature introduced by the Minister in recent years there was generally a provision for fair wages to be paid, and I should like to know is he prepared to do the same so far as this Bill is concerned?

The workers are employed in the factory at present by me as Minister for Industry and Commerce, but so far as the company itself is concerned, when they are transferred, I propose to leave that company in precisely the same position as any privately-owned company so far as the conduct of its operations is concerned.

Question put.
The Committee divided: Tá, 56; Níl, 23.

  • Allen, Denis.
  • Bartley, Gerald.
  • Beegan, Patrick.
  • Boland, Gerald.
  • Brady, Brian.
  • Brady, Seán.
  • Breathnach, Cormac.
  • Breen, Daniel.
  • Breslin, Cormac.
  • Briscoe, Robert.
  • Cogan, Patrick.
  • Cooney, Eamonn.
  • Corish, Richard.
  • Derrig, Thomas.
  • De Valera, Eamon.
  • Dowdall, Thomas P.
  • Everett, James.
  • Flynn, John.
  • Flynn, Stephen.
  • Fogarty, Andrew.
  • Fogarty, Patrick J.
  • Friel, John.
  • Fuller, Stephen.
  • Gorry, Patrick J.
  • Harris, Thomas.
  • Hickey, James.
  • Humphreys, Francis.
  • Hurley, Jeremiah.
  • Kelly, James P.
  • Kelly, Thomas.
  • Keyes, Michael.
  • Killilea, Mark.
  • Lemass, Seán F.
  • Little, Patrick J.
  • Loughman, Francis.
  • McDevitt, Henry A.
  • Moore, Séamus.
  • Morrissey, Michael.
  • Moylan, Seán.
  • Munnelly, John.
  • Murphy, Timothy J.
  • O Briain, Donnchadh.
  • O Ceallaigh, Seán T.
  • O'Loghlen, Peter J.
  • O'Reilly, Matthew.
  • O'Sullivan, Ted.
  • Rice, Brigid M.
  • Ryan, James.
  • Ryan, Martin.
  • Sheridan, Michael.
  • Smith, Patrick.
  • Traynor, Oscar.
  • Victory, James.
  • Walsh, Laurence J.
  • Walsh, Richard.
  • Ward, Conn.

Níl

  • Beckett, James Walter.
  • Bennett, George C.
  • Benson, Ernest E.
  • Brasier, Brooke.
  • Broderick, William J.
  • Esmonde, John L.
  • Giles, Patrick.
  • Gorey, Denis J.
  • Hughes, James.
  • Keating, John.
  • Lynch, Finian.
  • MacEoin, Seán.
  • Browne, Patrick.
  • Coburn, James.
  • Cosgrave, William T.
  • Curran, Richard.
  • Doyle, Peadar S.
  • Mulcahy, Richard.
  • Nally, Martin.
  • O'Sullivan, John M.
  • Reidy, James.
  • Rogers, Patrick J.
  • Ryan, Jeremiah.
Tellers:—Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.
Question declared carried.
Resolution reported and agreed to.
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