Dáil Éireann debate -
Wednesday, 13 May 1942

Vol. 86 No. 15

Committee on Finance. - Resolution No. 6—General (Resumed).

Question again proposed:—

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

Colonel Ryan

From the ordinary countryman's point of view, it is very difficult to agree to the Budget. He must just accept it as a fact, without knowing the reason for this awful burden. Nobody can understand why it is that the poor man cannot find the ordinary necessaries of life while it is quite apparent that there are plenty of potatoes, oats and wheat in the country. In the mills, licensed or unlicensed, I can find plenty of foodstuffs of all kinds.

On making inquiry, it appears that the scarcity is due to want of administration by some Department or other. We hear of people being prosecuted and dealt with harshly for selling an ounce of tea but we never hear of anybody being prosecuted for storing wheat or oats, sending it to the mills and even using it as food for animals or for fowl. The Minister for Finance, when introducing this Budget, should have had regard for the ordinary man who was badly off or who might become badly off as a result of the emergency. There seems to be no provision whatever made for him. It is a kind of haphazard Budget to carry us on from this year to next year, without any thought for the people who are the worst off in the country. It is impossible to understand. I do not want to reiterate what I said last night about borrowing a few millions. Why does not the Minister for Finance, or the Taoiseach, take a bold stand and decide that, even if we had to borrow £5,000,000 more, we will place the people who are affected by the emergency in a position of some security? Why not try to create a situation in which production would be worth while? Production has been to a great extent rendered unprofitable. The small farmer has been driven into a position that he does not feel production is worth while. With the exception of those commodities for which he has a guaranteed price, production does not pay. It is only when you guarantee a price, when you guarantee practically a profit, that you encourage production.

I would say to the Minister that even though this Budget is so terribly high, he might have said to himself: "I will borrow a couple more millions; it does not matter where it comes from." I am not a financier, but a man in the position of the Minister should, at least, place the agricultural community on their feet and give them a chance of paying a decent wage to their labouring men. There should not be all the bickering about paying people for cutting turf. We are continually having strikes and bickerings week after week. In my county there have been two strikes and I think that is general throughout the country. The farmers—even Deputies on the opposite side—if they employ a man for cutting turf, pay him as a kind of skilled hard worker, but the people who were administering the £45,000,000 say: "We will not pay such wages; we will stabilise wages," but they insist on the small farmer paying higher wages than the Board of Works or the Land Commission or anybody else pays. I think that ought to stop. If there is to be any consistency whatever, I think the Government ought to lead the way in the matter of wages.

It is very hard to think that the small farmer who is badly off, who is perhaps rearing a number of children, has to pay one or two men a higher wage than is paid to men who receive their wages directly from Government funds. The Government may say: "We cannot deprive the farmers of men; if we paid more the farmers would not get men." That is the theory evidently held by the Departments responsible but the farmers are not interested in that theory. The farmers are interested only in seeing that they will get means to pay their men a decent wage. The Government should give some kind of a good example in this matter. They evidently cannot differentiate between good workers and bad workers; they have established the precedent that all men are paid the one wage. Let the Government give a good example, even though it may cost a little more taxation or may involve further borrowing.

In conclusion, I should like to emphasise that, no matter what the cost, the dairying industry will have to be kept in existence. A fair price must be given for milk. The price paid in the creameries must be relative to that paid to registered dairies whether in Dublin or outside Dublin. If that is not done, the very foundation of the whole industry is going to crumble. Every month and every year, people formerly engaged in dairying are going out of production. Farmers supplying milk to creameries find themselves in the position that they are not able to pay the wages claimed by the people milking the cows. When they look at the price for which milk is delivered by the so-called registered dairies—so-called because there is no supervision—they say: "Why should we produce milk at 7d. per gallon while somebody else gets 1/4?" If not in this Budget, in future Budgets, some provision will have to be made for putting dairying on a proper foundation, as the production of milk and butter is one of the main industries of this country. It is the foundation of our whole agricultural economy, because if the people producing milk go out of production, we shall have no calves, no cattle, and very little to export. I would draw the attention of the Minister for Finance to this matter, as it seems that the Minister for Agriculture cannot be brought to realise the position. Even if it involved the expenditure of another £1,000,000, I say that dairying should be made profitable in this country.

Mr. Cogan

On hearing the Budget statement last week a prominent member of the Seanad exclaimed:—

"What has posterity done to the Minister for Finance?"

It is clear that this question must keep cropping up in the minds of members of this House and of the people generally. What has posterity done to deserve the penalties which are being imposed upon it by this Budget? Replying to a question of mine yesterday, the Minister stated that the total indebtedness of this State has now passed the sum of £90,000,000. Added to that we have the indebtedness of the local authorities which I believe at the moment exceeds £35,000,000. It is something in the region of £36,000,000. There you have a public debt of £126,000,000 placed on the shoulders of the people. On that debt there is an annual charge for interest of £5,000,000 or perhaps something more. Now the question naturally arises if it is sound policy to borrow money to balance this Budget, or to balance budgets in general; is it sound policy to compel the working people of this country to pay £5,000,000 a year in interest charges upon this huge borrowed sum? We know, and it is now publicly admitted, that this money is created out of nothing. If the banks can create money out of nothing on the security of the State, there is no reason why the State itself should not create that money on its own security and thus save this £5,000,000 for the people. That £126,000,000 represents a debt of more than £40 on the head of each citizen in this State so that every child that comes into the world in this country has to carry a debt of £40 and to bear an interest charge of 30/- per year. How long is that policy going to continue?

We have been told that sound finance demands that Budgets should be balanced. That had been the teaching up to the period of the emergency. It had been the teaching on the other side of the Irish Sea, but it has ceased to be considered policy at the other side of the Irish Sea. The balancing of Budgets has gone out of fashion, and in this respect the Minister for Finance is very fortunate. When war was declared, when the Germans went crashing across the frontiers of Poland, we had a somewhat similar commotion in the Department of Finance. It was caused by the Minister's predecessor trying to get out of that Department as quickly as he could, because he realised, and realised very clearly, that it would not be possible, in the conditions of emergency, to make income balance national expenditure, and therefore he made his escape. Now, however, he must rather envy the present Minister, because it is not necessary now to balance Budgets. The balancing of Budgets has gone out of fashion and, as far as any ordinary observer can see, it is not likely to come back into fashion for a very long time in Great Britain and, therefore, it is not likely to come back into fashion here for a very long time either. All progressive thinkers in Great Britain declare that the high rate of expenditure which is in vogue at present must be continued after the war. They declare that they will never allow a condition of affairs to develop in which expenditure will be contracted and great numbers of workers thrown out of work as they were after the last war. We must face the fact, therefore, that for a long period the balancing of Budgets will be out of fashion, and we must ask ourselves what policy or what principles must guide the Minister for Finance, must guide the Government, must guide this House, and must guide the nation in regard to public finance.

If, as I say, it is not necessary to make revenue or income balance expenditure and if, as I say, it will be found possible in the very near future to raise the necessary money to balance the national account without having to incur an interest charge, the question then will arise: what are the guiding principles of sound finance? I believe that that is a question to which the Minister should devote his attention at the present moment. I do not think that he has got much enlightenment on that question from this House during the last three days' debate, and I would suggest that in order to solve this question, as in the case of any other question of the kind, the easiest way to solve it is to reduce the problem down to its simplest proportions. The main need of this nation is to continue to exist. We, 3,000,000 people, are, I might say, marooned in this small State. No matter what happens as a result of the present international upheaval, the people in this small State will have to fend for themselves. I do not agree for one moment with Deputy Dillon when he says that the liberties of this country are being fought out in the Coral Sea or in Madagascar or places like that. I believe that the big nations that are engaged in war at the present time are not going to bother in any way about this little country, and the best we can hope for is that after the war we will be completely ignored. If we are ignored in the future, as we are at present, what should our policy be? We have simply got to preserve the existence of this State and this nation. Now, what are the fundamentals of existence? If you want to find that out, let one man—let the Minister himself for example—place himself alone on a small island.

General Mulcahy

No such luck!

Mr. Cogan

Well, I suppose it would not help us much, but let us assume that he was in that position; what would be his main consideration, if he wished to remain alive? His main consideration would be to provide himself with the necessaries of life. In other words, two main functions would occupy his attention: production and consumption, or, rather, I should put consumption first—consumption and production.

Mr. Hickey

You have to produce first, before you can consume.

Mr. Cogan

That may be, but the purpose of production is simply for consumption, and if we take that as the guiding principle for this nation, we cannot go far wrong. The Minister should consider, not how expenditure balances income, or not even how our external payments or our external trade balance, but whether production and consumption within this State are being maintained. Now, you cannot consume without producing. Neither would it be of any advantage to go on producing if consumption were retarded. If, for example, an individual marooned on a small island were to go on consuming, as Deputy Hickey has suggested, without producing——

Mr. Hickey

I did not suggest any such thing. I said that you had to produce first before you could consume.

Mr. Cogan

——he would find himself in a very short time without anything to consume. If, on the other hand, he were to go on producing goods, but for some reason or another —because he was too busy in production or because of some physical disability—he were unable to consume, he would very soon reach the end of his life. The same applies to the nation, and if we examine our history over the past 20 years, and if we weigh up our economic and financial policy according to those two standards of whether production and consumption are being maintained at the normal level, we will find the real reason why this nation has been decaying for the past 20 years. We will find that production has not been maintained at the maximum at which it is possible to carry on production within this country. We will find, on the other hand, that the people, the plain people, have not been permitted to consume the normal amount of goods and necessaries which is absolutely essential in order to preserve the life of the community. It may be asked, why has not consumption of goods been maintained at a normal level? The answer is, simply, because a very large section of the community have not been permitted to earn a sufficient income to provide themselves with the necessaries of life, and, because of that, we have been exporting large quantities of goods which, very properly, could have been consumed within this country.

The Minister for Supplies, who has now become a favourite of the Irish Times, stated last week that the standard of living will have to be lowered in this country. I do not agree with that statement for one moment. There are some commodities which are in short supply but, on the other hand, there is at the moment a fair supply of all essential commodities. If the Minister for Supplies had said that the standard of living will have to be readjusted or altered, I would agree with him. We may have to change our standard of living to a certain extent. We may have to change from what was an international standard to an Irish standard. In other words, we may have to rely more upon goods which are produced entirely within this country, instead of upon goods which are imported from abroad, but that does not mean a lowering of the standard of living. For example, if a person has to drink slightly less tea with somewhat more milk and has to do with brown bread instead of white, or if a person has to wear clothing manufactured entirely from Irish wool or Irish-grown flax, that does not mean a lowering of the standard of living, but simply a change over to an Irish standard of living, which, I think, would be all to the good.

There is no justification, therefore, for the Minister for Supplies telling us that we must lower the standard of living because by re-adjusting or distributing income more equitably over the poorer sections of the community it is possible to raise the standard of living considerably for a very large section of the community. If, by reason of that change, other sections of the people have to do without certain goods hitherto imported, I do not think they will suffer any great disadvantage. The Irish Times, which cannot be regarded as being an extremist or a radical organ, but rather, for the most part, very conservative in its views, in an editorial in its issue of the 8th May last, said:—

"For most practical purposes the people of Ireland to-day must depend, in the first instance, on themselves. The only source of supply of which they can be sure is the productive capacity of their own soil and the skilful industry of their own producers."

There you have outlined an economic policy which must be pursued if this country is to survive. The question is: are we doing everything possible to secure the utmost production of the goods which are capable of being produced here? Have we given fair encouragement to the producers of the various essential goods? Some time ago Deputy Corry was, I think, accused of giving way to buffoonery in this House, but in the debate on this Budget he seems to me to have stressed a very important point: the fact that the total acreage under tillage last year is not in any way comparable to the needs of the country in the matter of tillage produce. I think it is correct to say that the last normal year in which we imported tillage produce was 1937. In that year we produced ourselves 926,000 acres of grain and imported 14,000,000 cwts. of cereal produce. The imports would be equivalent to 1,000,000 acres of grain crops, so that if you add these 1,000,000 acres to the 926,000 acres, you get, roughly, 2,000,000 acres, which means that in 1937 we consumed 2,000,000 acres of cereal produce, both man and beast. Last year we got only 1,400,000 acres of grain, leaving a shortage of 600,000 acres. I do not think that the increase in the minimum acreage of tillage required and the inducements offered for the growing of grain crops have been sufficient to provide that additional 600,000 acres, nor do I think there is the least likelihood that we will get the 2,000,000 acres of grain which are still so urgently required.

I am afraid that the Government have not faced up to the fact that it is necessary to have 2,000,000 acres under tillage and have been placing the requirements of tillage produce on too low a scale altogether. Because of that they have been reluctant to offer the farmer fair remuneration for his labour to produce grain. In addition, there was a complete failure last year to distribute the grain which was produced. At the present time we have a serious shortage of bread and flour for which the farmers are being blamed. I think the blame attaches entirely to the man who has been described by the Irish Times as “A bonny fechter,” whatever that may mean, and to his colleague, the Minister for Agriculture. Last year the farmers in addition to growing 80 per cent. of our requirements in wheat, provided an enormous increase in the acreage under oats and barley. A very large quantity of that oats and barley was put on the market although statements to the contrary have been made. Those statements may be true of some counties, but, as regards the main tillage counties, it is true to say that the oats and barley grown in them were put on the market. When the grain was delivered to the merchants it was, so to speak, delivered into the hands of the Minister for Supplies because every merchant who purchased oats or barley did so under licence and had to keep a record of his purchases.

Therefore, I hold that the oats and barley produced here last year were in the hands of the Minister for Supplies last October. The Minister for Supplies should have known that at least a certain quantity of the oats would be required for human consumption. He should have known that, even if there were wheat enough, there would be a very large percentage of oats required for oatmeal. But he should certainly not have estimated that there would be wheat enough to supply our flour needs. He failed to reserve a sufficient quantity of the oats which was in his hands at that time to supply human needs and, because he failed, we have a complete shortage of bread and flour at present, because there is no doubt that the oats could have supplemented our supplies of wheat and would have eliminated any possibility of a real shortage of bread. In addition, if this considerable quantity of oats had been reserved for human consumption, it would be available for oatmeal and we would have ample quantities of oatmeal at present which would have, to a great extent, offset whatever shortage of bread might exist. There you have had a complete failure on the part of the Government to provide for the essential needs of the people and, after that complete failure, an attempt to throw the entire responsibility for the failure upon the shoulders of the farmers who did make an heroic attempt to deliver the requirements of the nation last year.

It is to be hoped that now, at the beginning of another financial year, steps will be taken to ensure that production will be brought up to the point necessary to supply the needs of the community. That can only be done by making a thorough estimate of the amount of arable land which we have and of the exact acreage of each crop which will require to be sown. It may seem late to speak of this when the 1942 cropping has been finished, but the next cereal year will begin in September and the three months which will intervene are only too short, considering the progress which Government Departments make, to work out a comprehensive plan of production which will enable the complete food requirements of the nation to be produced.

The Minister for Finance stated last week that the last 100 years of this country's history have been 100 years of progress. That is the most extraordinary statement which has ever been made in this House, and a lot of extraordinary statements have been made here. One hundred years ago the population of this country was twice what it is at present and we had 3,500,000 acres under tillage. Yet we are told that the 100 years in which our tillage acreage has been brought down to little more than half that figure and our population has fallen to less than half what it was, have been 100 years of progress. If we have another 100 years of that kind of progress, I do not know what kind of Budget the Minister for Finance at that time will bring in or what kind of country he will have to budget for.

I have put as briefly and as plainly as possible to the Minister the principles that should guide him. He should ensure that every citizen of this State is in a position to consume the essential foods which are produced. A man with a family who has got 10/- or 15/- per week by way of dole or 15/- by way of health insurance, if he is sick, or even the minimum wage of 33/- paid for agricultural work, if he has a large family to support, cannot be in a position, nor can his family, to consume the essential amount of food that is necessary to maintain health. Therefore it is clear that one of the results of Governmental activity has been and is at present to compel a large section of our people to exist in a condition of semi-starvation. No Government can stand over that policy. In the same way, no Government can stand over the policy which has the effect of curbing and restricting production in almost every sphere of activity.

If we look back over the last normal year of imports into this country, we will notice the enormous quantities of unessential goods which have been permitted to pour into this country from abroad. In 1937, we imported £44,000,000 worth of goods. At the same time we exported something like £22,000,000 worth. The question which naturally arises is: if we raise the standard of living in this country by giving the poorer sections of our people the opportunity of using essential foods, will we not further reduce our exportable surplus of produce, thereby increasing, when normal times return, our adverse trade balance? I do not think that is a consideration which should weigh heavily with the Minister. We do not know what conditions may prevail in future. It is very unlikely that we will ever get back to the position in which we were importing £44,000,000 worth of goods. Even if it were possible to import that amount, I do not think any reasonable person will seriously suggest we should return to that position.

If we go over the list of goods imported, we will find that at least half of the total imports were of a luxury nature, and in order to import those luxuries our unfortunate farmers and agricultural workers were worked to death to provide the exportable surplus to exchange for those goods. Our unfortunate agricultural community were compelled to produce food for our external market at prices which were altogether below the cost of production in order that the better-off and more wealthy sections of the community might be able to have imported motor cars, imported fabrics for various kinds of wearing apparel, imported drink, etc I think I have some figures here showing the value of the goods which were imported, and very many of those items could be eliminated or at any rate drastically reduced. Here are the figures: textile goods, £4,500,000; wearing apparel, £1,250,000; maize products, £4,500,000; drink, £75,000.

Mr. D. Morrissey

How much drink did we export?

Mr. Cogan

The drink exports amounted to something like £3,000,000 at that time. I do not see why we should have those large imports into this country, having regard to the fact that we have never got an adequate price, and are not likely in future to get an adequate price, for our agricultural exports. The policy, therefore, should be to rely as much as possible upon our home-produced goods, to expand and increase the home market to the utmost of its capacity, while at the same time we would be compelled, in order to maintain our economic stability, very drastically to reduce imports. One of the smallest items on our import list is fertilisers. Only, about £500,000 worth of fertilisers were imported. If there is anything that we should import in large quantities it is artificial fertilisers. In this country no matter how we aim at self-reliance we will at all times have to import a fair quantity of fertilisers, but there are other directions in which we must drastically cut down imports. Therefore, I hold that the statement of the Minister for Supplies that we must lower our standard of living cannot be justified. We must not lower our standard of living; we must alter it from a foreign standard to an Irish standard. I believe that can be done, and in doing it lies the only real hope of national progress.

I would ask the Minister to give serious attention to those considerations. Comparing our national expenditure with national income is not always a safe guide, even in regard to taxation. That is a guide which is frequently suggested to Ministers for Finance. I think I have often heard it suggested by the Leader of the Opposition Party. The national expenditure should not exceed a certain percentage of our national income, but I think a moment's consideration would show that national expenditure can have the effect of increasing or expanding national income, and that national income can be varied according to the amount of public expenditure. Therefore, there is no safe guide for the Minister or for this House in a comparison between national income and public expenditure. Neither is it a safe guide for the Minister for Finance to compare the management of the nation's affairs with the management of the private individual's own farm or business. We know that if a farmer spends more than he earns, or if a worker spends more than he earns, he is heading straight for bankruptcy.

There is not, however, an analogy between the nation or the community and the private individual, because the private individual has to depend for his money income upon some source outside of himself. He has no money except what he gets from someone else. The community or the State is not in the same position, because the community or the State can expand its money income from year to year. As a matter of fact, every nation in the world is expanding its money income from year to year. We are told that the amount of money on deposit in Great Britain has almost doubled within the last 25 years. If that is so, there is no comparison between a private individual and the State which can guide the Minister in his difficult task. The only safe guide he has is to ensure, firstly, that the community produces enough goods and commodities to supply its own needs; and, secondly, that every section of the community has a sufficient income to enable the people to use those goods when so produced. It is by watching those tendencies—the tendency of production to increase or decline, and the tendency of the consumption of essential goods to increase or decline—that the Minister for Finance can judge whether or not the nation is making progress.

Mr. Childers

Listening to Deputy Cogan speaking on the Budget made me feel that he was rather a lonely soul in this present world, because the view that, for any reason, one should deliberately contract imports is one that is no longer held by any Party in this State, nor in any country in the world. In fact, one of the principal reasons for the war seems to be the decided belief of the two largest belligerents that they must have export trade no matter how much they might develop their internal production. The conception that we would derive increased employment from a deliberate restriction of our imports seems to have no foundation whatever. In fact, the distributors of imported goods, and the producers of luxury goods made from imported materials, might well like to interview the Deputy on the subject as to the effect on employment. The only possible reason for restricting our imports would be a desire on our part to use the money for some other purpose, and it could only be a temporary one, as in the case of the war, or alternatively because similar goods were made here. I think all of us in this House would agree that we want the largest possible amount both of external and internal trade, both of external and internal production, and that each has to be reconciled with the other.

Getting to the questions which have arisen in connection with this Budget, it is unnecessary for me at this point of the debate to comment on the Budget figures in general. We have heard a detailed statement with regard to the effect of taxation on the community, and the burdens thrown upon different sections of the population. I wish to return to the theory that I have developed on previous occasions, and to ask the Minister for Finance whether, between this Budget and the last, he has considered the question of planning for our future. I notice a very desirable unity on both sides of the House with regard to this matter. None of us, however, has any very definite ideas about it, but all of us must think of what the position is likely to be in the postwar era. We have asked the Minister, not in too critical a spirit, in many cases, whether he has considered this matter, whether the Government have in mind some plan for our future position.

I should like to remind the House, what has been stressed here so often, that the national income has remained relatively the same for many years. We have had a relatively stagnant economy. Both Governments have, in their different ways, contributed to an improvement in agricultural production. Both Governments have asked the State to bear many sacrifices for the sake of a particular political trend which they wished to follow in relation to our position in the world and in relation to Great Britain. We have developed our social services, and various schemes have been initiated for the well-being of the people. We have planned new industries and given security to our people in a time of war as a result of those industries and we have also given employment. We have contracted a very considerable volume of debt, local and national, but the individual income of the people has not been enriched very largely.

There has not been any notable increase in our animal population, or in the output of the agricultural community. We have already found it necessary to subsidise various exports. It is admitted on both sides that our grasslands are in need of very drastic treatment, in need of refurbishing. Our agricultural machine needs reconstruction on a very extensive scale as a result of the political trend and turmoil of the last 20 years.

I really believe that we have been living for many years in a fool's paradise, based on a belief that the purchasing power of the English people was a relatively changeless factor, so far as our economy is concerned, that whether it increases or decreases, we would be able, with a particular farm technique and a particular economic system to stand the decreases in prices offered to us and benefit by the increases and that there was little more we need do about it. It never occurred to us in recent years that at some date the British Government, whether victorious or otherwise in the world war, would be compelled to check and control its purchasing price to a degree far beyond that made evident in the last four or five years. True, there has been a certain check on English agricultural imports, both a quantitative check and a price check, to some extent due to the economic war and later to English agricultural policy. We have not altered our economy to suit those circumstances. We should face hard facts.

We have had a peculiar economy in this country. We have had a fearful land history, which has resulted in a tremendous volume of land resettlement. We have seen half our population emigrate and the incomes of those left at home have been very largely increased in consequence. We have seen our store cattle and sheep taken away in large numbers at prices which we could accept without ever having to make a revolutionary effort at increasing output or reducing costs, excepting the period of the economic war, which was really an abnormal time. We started to subsidise exports without realising that sooner or later the position would have to be examined as to whether we could afford to pay the huge amount involved and as to whether it was not an uneconomic proceeding. We have heard the Minister for Agriculture speaking on the matter in connection with the dairying industry.

We have the colossal advantage of saving over £250,000,000, which we have invested in British securities. That represents very nearly the capital value of our farms, with their machinery and buildings. These were valued recently by a famous economist at something like £360,000,000. That has provided a most useful cushion to our whole economic development. Whenever we felt any pressure, there was always that mass of savings to rely upon. When we were faced with the economic war, there was always the possibility of liquidating a small part of those savings. When taxation rose above a certain level, it was always possible to rely upon the savings to take us out of temporary difficulty.

Naturally, those advantages are considerable, but I think that for the future we must consider that we are likely to face a change in circumstances. We have been for a quarter of a century, relatively speaking, in a state of economic peace. We have never had to fight for trade, fight for it with our bared teeth. We have had to struggle here and there, farmers with small incomes have had to struggle, but we have never had to fight for trade as other countries have had to fight. Our standard of living has been relatively high. Other countries have had to fight for their very existence. The Germans, at the close of the last war, began a drive for external trade. It was one of the most tremendous factors in the post-war development. Their advertising technique, their currency manipulation and their propaganda in search of trade were among the marvels of the modern world. They were forced by circumstances to do that.

A great part of the rest of the world had to fight for trade, because they had contracted debts and they had to devise some means of paying them. As examples in that respect you had New Zealand and Denmark. They were forced to dump their produce on the British market at very low prices. In other countries where they had no savings they were compelled to sell one pound of goods for every pound of goods they bought. It was not possible for them to go to the Argentine and buy maize and pay for it with the money sent home by relatives in the United States. That is a thing that we have been doing literally for many years.

All these circumstances have created an attitude of mind towards output which has no relation to the future. We have seen the English agriculturist faced with the difficulty of competing with Argentine produce. They first instructed their Government to engage in a series of marketing experiments, but these failed and then they adopted a scheme, in the stress of the war years, for an intensified refurbishing of the land and an increase of tillage on a scale never before deemed possible by British agriculturists. They were forced to do it because they had no other alternative. We have never been forced to take steps of that kind. As a result, our standards of costs and technique have changed radically in relation to the rest of the world.

As I have said already on the Agricultural Estimate, it is rather terrifying for us to watch another agricultural country close to our own doing the work of 50 years in five years; to watch farmers receiving instruction in modern technique in the course of a few years which in normal circumstances would require half a century. We had a country whose agriculture had become the laughingstock of the world suddenly carrying out enormous schemes of development under the stress of war conditions, schemes that normally would require generations to perfect.

Agricultural development has arrived at a new stage. Modern machinery and the use of electricity are going to alter our standards of costs in this country in relation to the standards of costs which obtain in the country to which we send most of our exports—Great Britain. The sands are running out very quickly. We have not got much time left in which to plan our future. We are rather like an island in which the people were accustomed to collect every year a volume of produce for sale to the mainland and were accustomed to have ships in the harbour to take the goods away. One day there were no ships, the ships did not call, and then they wondered why they did not plan to have ships of their own—but, they were too late.

Unquestionably, after this war there is going to be a new order. It may not be an ideal new order. Human nature may assert itself again, but that we cannot tell. It is not an idle prophecy to state that if three States are going to dominate the future common wealth of Europe, for the first time, we may not have the same freedom of exchange that we had before in our own small nation. The first challenge of the economic war here may be the last challenge by any small State in our lifetime to a great nation in matters of trade. We may have far greater regimentation than we have been accustomed to. It is not an idle prophecy to suggest that the only method of maintaining trade will be by the quality of the goods and the price at which we can sell them. These will enter largely into how much we can sell and to whom. I would like to present these facts to the Minister for Finance. I am quite sure he has considered them already, but I would like to ask him, particularly in relation to agriculture, whether he has any intention of preparing for the future.

There will be elaborate reconstruction in Great Britain, which will limit her purchasing power very considerably. Her prosperity is based on export trade and the export trade will depend on what can be imported and her exports may diminish or increase according to circumstances. We have to bear in mind that half our raw materials and half the raw materials used in industry in this country up to now have been imported. Our future industrial development—according to the Minister for Industry and Commerce in a statement here—will be chiefly in electric power development and in the development of minerals. In any event, it is quite obvious, studying production figures in industry, that we cannot expect any great increase in prosperity from further industrial expansion. It may aid us, but it can not make a great difference to the fundamental employment in agriculture.

We have been told by the Taoiseach and the Minister for Finance that the Central Bank Bill in itself is not going to be, in any sense, something that will automatically produce prosperity. The only hope left is to attempt to conserve whatever export trade we had before the war and to stimulate it if possible. At the same time we must try to increase the consumption of foodstuffs by our own people, by reducing costs and purchasing prices. There is no difference between the two Parties as far as that is concerned. There may be differences in detail, but not in principle.

All our history goes to show that we are inclined to take a fatalistic attitude to wars and a pessimistic attitude towards the future. If we put it to the people that they have to indulge in a terrific struggle for their very existence after the war, I believe that they will be prepared for it. We have all the brains and capital necessary to complete with any country in the world, even including New Zealand, and I refuse—having made a deep study of our agricultural conditions—to think that we should bow the head to New Zealand in agricultural production. We may not reach their level, we may not ever be able to produce butter at the price at which she exported it when forced to pay her debt to England at any cost. But there is no need for us to start thinking in terms of reducing our dairying industry, which gives the highest degree of employment in any agricultural district in Ireland. We need not reduce our dairying industry, at least without further consideration.

If our farmers were given the information which the House regarded as sound as a whole, as to what they would have to do in order to preserve the dairying industry, even if that information included very drastic proposals, and even if they were told there was no chance that the dairying industry could survive in its present form unless the whole system of production were changed, unless even, for example, there was a combination of individual and co-operative farming, unless part of each area were carved out and put into a large co-operative farm, with undivided land and smaller divided farms, what would they say? If they were told there was no alternative, and that they would never become more prosperous, but probably less prosperous, unless they made a change, would they make the change, or would they accept fatalistically the prospect of never receiving one penny more income per acre of land for the rest of their lives and the lives of their children? If they really faced that fact, would they not be prepared to face the changes, as long as they were related to the fundamental beliefs underlying the economic interests of the country and of family life? As long as the conception of individual family life was preserved, would they not be prepared to make drastic changes to better themselves?

The difficulty is that we have never told the people what they may have to face. It is quite true to say that we do not know ourselves, but we do know that it will be a far more difficult life If we were told by the British Government that, absolutely and for certain, we would lose half of our English investments, that they were gone for ever, and that without any doubt we would never receive more than 75 per cent. of our prewar price for agricultural produce, would we not plan ahead? Would we not start preparing the people to face an entirely new system of economy? Would we not start preparing to face that, to modernise our whole agriculture, to produce more grass, more crops and more cattle per acre? We do not know exactly what will happen.

I believe that by planning and by hard work, and by asking still greater sacrifices from the community, we can maintain our economy after the war—if we can maintain neutrality and still be a free nation so far as our Government is concerned, as, please God, we shall be. I believe it will require planning ahead, and that we shall have to give far more encouragement to genius in this country. All our history shows that we have granted many social services to the people, which were necessary, but we have not done enough to encourage genius. It is only by encouraging genius that we can attract capital to new production. The Minister for Finance, in his Budget statement, says he does not believe in inflationary measures to bring prosperity. The only other way of attracting capital is by encouraging genius, which exists in our people as a latent factor and which never has been allowed to reveal itself properly. This may seem an absurd example: if a man discovers a disease-free strawberry plant, he might never exist so far as the State is concerned, and nothing is done to encourage him. We have to give a certain amount of encouragement by way of grants to the breeding industry and agricultural grants, but never yet have we gone in for the planned policy of intensive encouragement of genius to obtain better production. I see no way, in our present economic circumstances, of encouraging prosperity and increasing it in the future other than by doing that.

It looks to the average person that, no matter what may happen after the war, we can only sell our produce by two principles—by producing goods on the Ford motor car principle on a standardised basis, goods in large quantities at low prices, and produce manufactures on the Rolls Royce principle. This would mean better pedigree cattle, sheep and seed potatoes, for export to all parts of the world, new forms of plants, and handicraft industries. We cannot live in the present atmosphere of half-way between the two—having a certain amount of standardised products and having a certain amount of half good and half inferior quality and a very small number of high-class goods for export. We have to develop both types intensively as far as we can.

It would seem to me that the very first essential would be an agricultural planning committee. I do not care whether it is five or six persons or a dozen, as long as it consists of people who are practical men and who are experts.

This committee will examine the question of how to increase our output, and, if any pessimist gets up and says that we may have no trade after the war, then I say that that requires more planning. If we have to grow all our own wheat because we have no currency left, or if we have to kill off our cattle and live on veal, that still requires twice the amount of planning. That also will require an agricultural revolution, and maximum production encouraged by the State. It is not for me to say which it will be. I am absolutely aware that if we are to develop our industries further, and if we are to develop our minerals, our people in future will want to buy more goods and raw materials which somehow must be imported. The men who will become mineral workers in any industry will want to buy goods many of which must be imported. All of us agree that our trade is triangular, and must consist of planning for internal production and for exports. There is no reason to have any quarrel or difference of opinion on the subject.

The stress of war, it seems to me, has made us cynical. I think if the Government started planning or had a commission on agriculture that commission could make notable proposals which could be carried out when peace arrives, some of them perhaps before peace arrives. I ask the Minister once more whether he has considered that matter. I believe the whole people of this country will respond to any demands made upon it. I deprecate the cynicism we hear all round us as to the conservatism and stupidity of the farmer. The farmer has never yet received leadership from a united Government, or a united Dáil. The farmer has never yet been shocked into a sense of what may lie in the future for him. He has never been placed in the position of having no alternative, but to make a great effort to increase output. The day that the farmers of this country are informed of a proper plan that is accepted in a general way by all Parties, on that day we will see more prosperity, no matter what the result of the war will be, provided that no disaster occurs to make it impossible to maintain our trade, even if we have to accept lower prices.

General Mulcahy

I understand it has a peculiar effect to be lifted up, particularly when 20,000 or 25,000 feet have been reached, and that it affects different people in different ways. I should like to be able to describe my feelings after being lifted up by Deputy Cogan and by Deputy Childers. I feel bad enough, but I am in a difficulty to know where I am after hearing Deputy Cogan's remarks. It is certainly a sign of the times. One of the signs of the times is that the Budget that has been presented to us is accepted in the way it has been, with a kind of relief. It is a sign of the times if we get a Deputy who holds himself out as being, perhaps, the farmers' prime representative in the Dáil, proposing that farmers' exports ought, as it were, be cut off; that the poor farmers in the past have killed themselves for a trade representing £13,000,000 yearly in producing for Great Britain, and that they were not going to do it any more. That is probably a sign of the times but, if it is, I am not as well able to judge what the times are going to be as I hoped I would be. Deputy Cogan suggests that the Government should not be at all squeamish about taking or spending the national income. The only interpretation that I could put on that is that Deputy Cogan thinks the Government could take a little more, or as much as they liked, of the farmer's income and do the spending for them. That, again, suggests that times are so changed that I have not been able to recognise the type of change. I heard Deputy Childers telling us that we have to accept the situation; that what we want is imports and more imports.

A friend of mine told me that on arriving in Jerusalem on buses with a tourist party they were met by what appeared to be an Oriental guide who greeted them with the words: "Change here for Mullingar, Mullinahone and Tandragee." As it transpired that the gentlemen who looked so Oriental had seen a particular kind of active service in Ireland my friend took very little interest in the gentleman, and did not relish being taken around to the Holy Places by him, believing that he had not such a long or intimate connection with them as he would have liked a guide to have. I must say that while I followed Deputy Childers in his discourse, and in his painting of a new world, and of certain things that were going to happen, I could not but remember the things that he, as a Deputy, in supporting his colleagues on the Front Bench, has been responsible for inflicting on this country in the line of economic restrictions.

Mr. Childers

They were very valuable.

General Mulcahy

The restrictions?

Mr. Childers

The results.

General Mulcahy

If the results to Irish farmers, of ten years of Fianna Fáil economic policy, have been valuable to them I do not know what to say. If we are to take Deputy Childers' remarks about the prosperity of the Irish farmers, and what the future means to the rest of the country, I should like to have an explanation as to the particular way the economic experiments carried out by Fianna Fáil on Irish farmers during the last ten years have been of any use. Judging by what we heard from Deputy Cogan some of the representatives of the farmers have not learned anything at all from them. The two speeches have had a very bad effect on me. They may be signs of the times, but I do not recognise these times. Whatever about going into the more promising times that Deputy Childers spoke of, I hope we are not going into that kind of world that Deputy Cogan painted.

I appreciate the remarks of Deputy Childers that, for some time past, he, perhaps alone in his Party in this House, had been putting questions to the Minister as to what its plans were and as to what the Government plans were for the future, or even as to the present. Deputy Childers wants an agricultural planning body set up. It was only ten days after the emergency began in September, 1939, that we went to the Government without any consultation—the Army having been mobilised—and pointed to the importance of the agricultural situation, even as a base for any military strength that our people might have We went into considerable details as to the reasons why we thought it important to ask them to have a group of say, three experts holding watching briefs, not necessarily with the responsibility of interfering in any way with the administration of Government, or any aspect of administration, but watching things outside and watching things here so that we would have an appreciation of the trend of things in the world and so that such steps as we would have to take here to keep a grip on our economic administration would tend to strengthen us for the future as well as safeguard us in the present. We were told that that was not necessary, that the Government did all that. The Agricultural Commission, which was sitting at the time, went out of existence for the period of the emergency.

When the Government started out on their compulsory tillage campaign, we asked them to run it through the agricultural county committees and to give the farmers the job of looking in a responsible way after the work of agricultural production, with whatever assistance the Government could give them, somewhat on the lines of what is being done in Great Britain. But they would not do that. The Minister for Agriculture and the Department of Agriculture knew all about the matter. They were going to hold the whiphand and give the direction. We have had the spectacle of 27 county committees of agriculture accepting, during the greatest period of emergency this country has ever seen, the bottle-necking of their work and the claim that the Department and the Minister for Agriculture could stand over the whole agricultural situation and give guidance and direction. That only shows how the spirit of personal responsibility, the spirit of enterprise, energy and manhood has been, as it were, bludgeoned out of the country by the type of government it has had under Fianna Fáil. The county committees, when things have gone from bad to worse, are brought together to be lectured by either the Minister for Agriculture or an official of his Department. If we felt that the farmers sensed their own responsibilities, realised that they are the people who know their job and that they have to co-operate with one another in controlling and directing both productive work and the policy to which it is directed, then we might have a better Department of Agriculture, a Minister with a better outlook and this Parliament might be better able to assist the farmers by the work done here. So long as we accept the bludgeoning of enterprise and responsibility, as we have apparently accepted it, we shall lack the amount of production we need for our own people during the emergency and we shall lack preparation for the future as regards either catering for our own people or securing our place in a competitive market outside.

Deputy Childers has said that he asked for particulars of the Government's plans. We have systematically asked for their plans. From the beginning of financial business last year, we set out from this side to inquire what work exactly was being carried out by the Government to safeguard the people and secure their future and on what basis the security of that future was to be built. We had in mind amongst other things the education of our people and the relief of our people who were unable to find employment during the emergency. I do not know that Deputy Childers got a single answer to any question he ever put with regard to plans for the future or any aspect of those plans. I cannot recall that we ever got an answer to any question we put on that matter. Indeed, on the Central Bank Bill the other day, I had to reiterate questions I put more than 12 months ago. In nothing that any Minister has said since then, have we got any indication of the Government's plans. One of the weapons of modern welfare is noise. The Minister for Supplies came in here the other day to contribute, as it were, to this debate. He made noise. The general policy of the Government is to make noise and to try to browbeat the people into the belief that they had better keep out of things, that the Government is going to settle everything and that if they get into the Government's way it will be worse for them. If there is one thing important at present, it is that the ordinary people should be encouraged and inspired to do their work. Deputy Childers pleads for the encouragement of genius. What we want more urgently than anything else is encouragement for the ordinary man and the ordinary woman to do his or her work.

Mr. Hickey

And to give them hope.

General Mulcahy

That is not happening. If we are to have any discipline, any courage or any energy in the people, we must have some kind of order coming from the top. How can we have any sense of order coming down to our people when we have Ministers behaving in such a way in this House and in their administration that we cannot believe the things they say to us, while we know that their administration is creating more confusion and irritation than anything else? The situation becomes shocking when we have back benchers of the Government Party getting up and jibing, as it were, at the people in the same terms as Ministers do. Since last year, I have repeatedly appealed to back benchers of the Government Party to speak out in this House, to say what the facts are, what the remedies should be, and to show, what Deputy Childers suggests, that there is not much difference between the people of different sides of this House in their approach to the facts of the situation and to the real remedies. We have not heard much from the members of the Government Party. When we hear members like Deputy O'Reilly speaking, as he did yesterday, on the bread situation in the City of Dublin, we are inclined to wish that members of the Government Party would not speak at all, rather than that they should speak like that. We have had occasion for some weeks past to draw the attention of the Minister for Supplies and of this House as a whole to the shocking circumstances created in the City of Dublin by the manner in which the Department of Supplies have been acting in regard to the bread situation. We were asked to leave the situation alone for a while. We left it alone for a while. It did not improve. It is some weeks now since we discussed the matter here, but Deputy O'Reilly stated here yesterday that there is too much grousing and too much grumbling. He repeated, as his opinion, the statement of the Minister for Supplies, that much of the trouble in the City of Dublin with regard to bread was caused by the people wanting hot bread. I got this letter yesterday morning from a friend of mine who lives in Fairview:—

"I wonder if, by placing a few facts before you, you could get anything done to relieve the situation in Johnston, Mooney and O'Brien's Marino branch. I am a registered customer there, one of over 600, I believe. I never get bread except I queue for a couple of hours at lease. On Saturday week"—

Saturday was the 2nd May—

"I sent my little girl down at 8 a.m. and she got my bread at 12.30 p.m. On Monday I went down at 2.30 and I stood until 5. Tuesday, Wednesday, Thursday and Friday I sent down one of my children at 7.45 a.m. and I went down myself and relieved them at 9.30, as they had to go to school. I got my bread about 10 o'clock. My little girl was not too well on Saturday morning so I went down at 6.40 a.m., thinking I would be first, but some 30 people were before me, some arriving before 6 a.m. I was served exactly at 9.35. To-day, Monday,"—

Monday was the 11th—

"the bread I use, fancies, does not arrive until about 3.30 so I sent my little girl down at 1 o'clock, after her dinner. I relieved her at 1.30 as she had to be back in school by 2 o'clock and then I had to stand for over two hours in the bitter cold. After the long wait, I was only given 3 lbs. for a family of six, including a man on night work. They did not even give me their own allotted ration—29 lbs. per week. If one does not queue you are left without any bread, as happens some 30 or 40 people every other day. I was left without once myself after forming the queue for 1½ hours."

That is a letter written on the 11th May and it deals with this woman's experiences on Saturday 2nd, when it took 4½ hours to get bread; Monday 4th, when it took 2½ hours; Tuesday, Wednesday, Thursday and Friday, on each of which days it took 2¼ hours, and Saturday, when it took 3 hours, when a person had to be up at 6.40 outside the shop to get bread, and Monday 11th, when it took 3 hours again, and she received an insufficiency of bread at that time. Deputy O'Reilly can come into this House and say that these people, who have to queue outside the shop at 6, 6.40, 7.45, 8 o'clock in the morning, stand for hours and send their children for part of the time and believe them when the children have to go to school, are looking for hot bread.

There is as serious an emergency in the world as there ever was. We have had speeches for the last two or three years from Ministers of the Government as to the terrors and difficulties into which this country is likely to run. Appeals have gone out for men and women, people of every rank and walk of life, to join the voluntary organisations of one kind or another, to prepare for these emergencies. The whole strength of our people relies on the existence of ordered conditions in their homes and on the distribution of such resources as this country has in such a way as to avoid unnecessary hardship, unnecessary misery, in the people's homes. Yet, we cannot distribute a few loaves in the City of Dublin without men and women and children in the working parts of the city parading at these unearthly hours.

When we raise these matters here, about bread, coal, and other things, we are told we are grousing, we are stirring-up trouble, that these are fastidious people, they want their bread not. How can we carry on any kind of organisation in a country in which the Government conducts itself in this manner? It is not for want of money to get the machinery into operation. It is not for want of assurance on the part of the Minister that he knows what requires to be done and that he is able to do it. That is the manner in which the ordinary people find themselves helped to be disciplined, orderly, energetic, to stand shoulder to shoulder behind their institutions of State, institutions of State for which they are paying £41,000,000. The very first necessary of life, bread, cannot be brought to the people's tables without such hardship, such unnecessary, degrading and soul-destroying hardship as is indicated in that letter.

That is the position with regard to our people. Take our business community. A notice appears in this morning's paper that certain restrictions that were imposed by the Minister for Supplies on the importation of cotton, silk and woollen fabrics have been removed until the 30th June. Everybody knows that the commercial community in this country who have had to depend either on home supplies or imported supplies have had a very tough time of it in trying to serve the needs of the people. One would imagine, in the first place, that their difficulties would be recognised by the Government and, in the second place, that their capacity to overcome their difficulties would be recognised for what it is worth. One would imagine that Government Departments would realise that people who have been in the various trades, who have travelled, who have made contacts abroad, would know better how to gather in their supplies than any Minister or any Civil Service, even an old Civil Service accustomed to that particular class of work. The Minister for Supplies knows everything, or his Department does and, on 13th March, 1942, without consultation with any people in the trade in this country who knew anything about it, they issued an Order that a licence would be required for any cotton, woollen, artificial silk or knitted fabrics of a particular kind imported into this country after the 28th April. Following the issue of that Order, maximum prices per square yard were announced in a circular issued, I think, about the 28th March. These prices were so fantastic to those who knew the business that they were the subject of criticism. They were particularly the subject of criticism by Senator Douglas in the Seanad on the 25th March. The result was that before the 28th April arrived a new set of prices was issued and the maximum prices were increased, in some cases from 20, 30, 50 to 90 per cent. The maximum prices were substantially increased.

Firms who had placed orders in Great Britain for goods that were required for various purposes here, including dress-making, shirt-making, and tailoring, had to cancel their orders when they found that the price of the material they ware importing was above the price which the Minister for Supplies had fixed. I put certain questions to the Minister on the subject. I asked him whether there was any restriction imposed by the British Government on the export of artificial silk to this country. He said there was. I said there was not. He said again there was but there was not and there is not. He stated what was absolutely untrue and, if he had been in touch with the amount of material coming into the country, he would have known that there was no restriction imposed by Great Britain on artificial silk coming in here. He fixed a maximum price for certain stuffs that were coming in here, in the way of, say, tailoring cloth, of 6/- per square yard. Tailoring cloth cannot be got on the other side at 6/- per square yard or less. The cloth that had been ordered at the higher price, on the cotton side and artificial side, cannot be substituted by cheaper priced fabrics and there is not such an enormous amount of stuff available in Great Britain that the suppliers over there are going to be bothered meeting people here who have entered into contracts with them to supply certain types of cloth, if the people here find that when it comes to delivering these cloths that they cannot take them. There is a limited amount of material available under quota for people who have made a contract up to 4th October, and if we want material here, we have to take it as quickly as it is offered because we will not get an opportunity of taking it later.

The Minister's jibe in regard to criticisms that have been made here on the Order is that he wants to get material that will suit the poorer people and not the exclusive classes. I asked him did he realise that by keeping out certain cloths he was creating unemployment here. He replied:

"I am quite certain that the curtailment of these cloths will stop employment in many trades. That is not the issue involved here. We cannot avoid that but we can ensure that the minimum quantities available to us will be taken in the form of cloths that will be available to the masses of the people, not to the exclusive few."

When we complain of the price of coal, we are starting red revolution; when we complain of the hardship imposed on the poor by the price of bread we are simply "grousing," and stirring up disorder and disaffection amongst the people: when we complain of the keeping out of various fabrics that are required to keep some of our manufacturing industries going, to keep some of our dressmakers going and that are required to clothe our people, true to tradition and the kind of trickery he usually employs, the Minister for Supplies suggests that we are thinking of the exclusive few. On the 30th April we were thinking of the exclusive few but this morning we read the Orders have been cancelled. Why? Because in the first place the Minister could not continue to tell us untruths with regard to matters that we could not let lie because the employment of our people and the clothing of our people were at stake. He could not allow the Orders to stand because he could not allow himself ultimately to be found out when it was discovered that these cloths were not available at the prices he had fixed and that any other substitutes could not be found for them. Now he says to the unfortunate commercial community who are struggling as best they can to keep their staffs employed and to serve their customers: "You can bring these in now up to the 30th June." Why the 30th June? The very fact that the Minister fixed the 30th June, for no reason in the world that he can state in intelligible words, will further prevent people getting stuff in here that is required to maintain employment and to clothe our people.

In the case of any fairly substantial order it normally takes four, five or six weeks to get the articles prepared, finished and delivered here. There is one large firm in the City of Dublin which has already been advised in regard to a fairly substantial order that it has placed with an individual firm, that that firm will not hold itself to carry out that contract unless it can get a guarantee now that, on whatever day the order is completed for the firm here, the goods will be allowed in. I say that the manner in which these Orders have been issued reveals ignorance, trickery, face-saving, and utterly incompetent administration. That is the way some of our commercial people are being treated at this moment, but it is only a sample of the manner in which various classes of people upon whom many sections of the community are dependent for the ordering of their industry and their employment, have been suffering for, I might say, the full three years of this emergency.

It is in circumstances like these, where the people on whom we are depending for the carrying on of our commercial and industrial life are suffering not only these irritations but obstacles and difficulties created by the Ministers and their actions, that we are expected to carry on through the greatest crisis that our people have ever been up against, economically at any rate, and to prepare for a future that is practically unknown. It is essential that every one of our people whom we can possibly reach by an inspiring word and a helping hand will be reached, and when we provide this Government here with every possible power that can be given by Parliament over the resources of this country, over the machinary of administration, over the administration of this country—when we provide them with £42,000,000 to carry on over the 12 months, we expect them to be an inspiration and to be a help to our people, and, if they cannot be, then they should, in all honesty and honourableness, clear out, because our people will have to make their way through the present difficulties and will have to prepare for the future or else suffer very much both in the present and in the future because of the lack of preparation.

Again, I ask the Minister: what aspect of the expenditure of this money is strengthening our people's unity or strengthening their economic position so as to enable them to go through the present emergency or to prepare them for the future? In June, 1937, when my constituency failed to return me in the general election of that time, the Minister for Defence, at the declaration of the poll, stated in my presence, to his listeners and to the country at large, that if I had not been so interested in Great Britain and had been a little more interested in my own country I would not have been rejected by the constituents of NorthEast Dublin. I thought it was simply a piece of political impertinence at the time, but I am almost beginning to feel now that it was a prophecy, because if there is reaching me any spark of inspiration that would either quicken my courage or quicken the courage of our people here, any spark that would inspire me with hope, that would show me how things should be approached, how men's energies can be loosed, how their minds can be directed, how they can be brought into co-operative movement to work for their country, it is reaching me from Great Britain. When I look for these things to-day, I have to look to Great Britain for them. Can anyone in this House recall any day since the emergency started when we got an inspiring lead from the Government Front Benches? Can anyone recall any of their public pronouncements in the country from which we got an inspiring lead on any aspect of the work being carried on by Government administration at present, that is quickening the pulse of our people, strengthening their minds, or enabling them to work better together?

The International Labour Office met in New York in October last. One of the principal matters that they met to discuss there was the report of the acting-director of the International Labour Office, a very distinguished Irishman, Mr. Edward J. Phelan. That is an organisation where representatives of Governments—both the Government and Opposition sides of Governments—representatives of employers, and representatives of workers, meet to discuss general social improvement, and they have had a very considerable record of planning and achievement to their credit. I wanted to know whether any representatives were being sent from Ireland to New York, and I was told that we were being represented at the International Labour Office Conference in New York by two of our officials in that city. One of the most stimulating things that have been issued in any report of a director of the International Labour Office has been that part of Mr. Phelan's report on future policy. As I indicated before, he placed before the conference an outline of a social mandate that might be made the basis, in all the countries associated with the International Labour Office, for a further betterment of the peoples' conditions, for their economic security, and their general economic and spiritual well-being.

The report of that conference, attended by representatives of various nations throughout the world—some, happily, not engaged in this war, and some who have felt the ravages of the war—has been placed in the Library to-day, and while men, representing Governments, representing employers, and representing workers, have raised their voices there and expressed their hopes and their determination to work along planned and definite lines for the betterment of their peoples, and have exchanged words of hope and of courage with one another to inspire them to struggle through their present difficulties—even the difficulties of the war-ravaged countries—to better times, not one single word in that assembly, lasting for several days and covering much ground: not one single word of hope, not one single word of determination to plan, not one single word of appreciation of what the International Labour Office was trying to do, was expressed by either of the two representatives from Ireland.

We claim that we are blessed by Providence that we have been able to remain free from any of the ravages of war. We accept the difficulties that the war has brought us. We call to our past to range our men in military organisations of one kind or another in order to show that we are going to defend this country against anyone. But we malign our past when we put our national heroes and our national prototypes into uniform and hold them there as soldiers. The men who most distinguished themselves as soldiers in this country in the past, the men who most distinguished themselves in the achievement of the liberties of this country, were in uniform simply because there were things that they wanted to defend. They turned aside from their major work to do what soldiering was required of them. If you go back to Pearse, MacSwiney, MacDermott, Connolly, Collins—any of those whose names we reverence to-day—you will find that they were soldiers last, and constructive workers for Ireland first, with ideals that they painted in their words and showed in their deeds, but all the constructive, strenuous, planning work of the people to whom we are supposed to look back as our leaders and inspirers is forgotten, and we think that we are following their tradition to-day when we organise an Army and say that we are going to fight whomsoever comes our way.

We are blessed with peace in this country and should accept the responsibility that it puts on our shoulders to show by what we are doing here that the peoples who are struggling under war, and under the difficulties of war, can have faith in the hopes that are burning in them for a better future, and that it can be realised. There is no country in the world that, at the moment, can create that happy picture for the future if this country cannot do it. The position, however, in this country is that we still find thousands of our young people leaving the primary schools of our city every day at the age of 14, thus becoming almost wasted human material by the time there is any chance of their getting work. Nothing is being done at the present time to strengthen our educational foundations or to systematise throughout the country the work that is necessary to be done. There is no concentration, in a systematic way. on any kind of a social plan. On page 98 of the acting-director's report to the International Labour Conference in New York, Mr. Phelan sets out a number of headings which he considers would constitute a general declaration on international social policy and would give the international labour organisation a programme to implement, completing it with any necessary detail. He says:—

"It is not difficult to outline in a certain logical order the main points and principles which such a mandate should cover. They are: (1) the elimination of unemployment; (2) the establishment of machinery for placing, vocational training, and retraining; (3) the improvement of social insurance in all its fields and in particular its extension to all classes of workers; (4) the institution of a wage policy aimed at securing a just share of the fruits of progress for the worker; (5) a minimum living wage for those too weak to secure it for themselves; (6) measures to promote better nutrition, and to provide adequate housing and facilities for recreation and culture; (7) greater equality of occupational opportunity; (8) improved conditions of work; (9) an international public works policy for the development of the world's resources; (10) the organisation of migration for employment and settlement under adequate guarantees for all concerned; (11) collaboration of employers and workers in the initiation and application of economic and social measures."

Can we take anyone of these and say around which one of them is any serious work being concentrated at the present time, work that would strengthen both our social fabric on the one hand and the capacity to employ our people on the other? We have only to look outside to see how far other people are progressing. Deputy Dillon spoke yesterday about family allowances. The London Times the day before—on May 11th—dealing with the report on family allowances which had been published a few days before in Great Britain said:—

"The principle of raising the economic status of the family and of mitigating poverty due to the insufficiency of earnings to meet the responsibilities of parenthood has already won general, if not universal, acceptance."

Again, it says:—

"Political circles, following the lead of enlightened opinion throughout the country in every class and every occupation, appear now to have reached the point of agreement to extend this principle to include the wage and salary earning population as a whole. The principle has been virtually accepted...."

And again:

"The wise as well as the courageous policy will be to apply this scheme from the outset to all children, whatever the size of the family, and not to restrict it to children in excess of one or two. It will be recognised that this expenditure would impose no additional burden on the national income or the national resources. What it involves is the transfer of a fraction of the resources of those who have no dependent children to those who have such responsibilities. Equity and national interest combined to justify this transfer. This is an issue where progress towards building the healthier society of the future need not await the end of hostilities."

In the issue of The Economist for the 9th May, the general position is subscribed to also. It says:

"But the ultimate aim is to ensure that no family shall fall below a minimum standard of subsistence, by reason of its size or of its breadwinner's low-earning capacity, or of his or her sickness or disability. The object, therefore, should be to lay down a minimum family income below which no household in the land should fall; and, although allowances for children are an indispensable step towards this end, more is needed to bring above the same lower line the sum of all the various kinds of income through wages, insurance, pensions and allowances which make up the revenue of the working-class household."

Again, it says:—

"The time is opportune to work out an immediate programme which, leaving the industrial bargain unfettered except by the widest laws against sweating, will make certain that no families fall into destitution."

These are some of the problems which people, burdened by the biggest burdens that war can impose upon a people, are thinking of. They are approaching some fundamental aspects of their social problem in that way. They maintain that they can only get through that work, and other more urgent work, by the full and complete use of the democratic machinery. They do not appeal for special consideration and respect for genius. They realise that they cannot maintain themselves or do their national work unless the ordinary men and women and children are safeguarded economically.

Sir Stafford Cripps, speaking on the 8th May, as reported in the Times of the 9th, of the importance of the part played by Parliament and the members in maintaining the democratic institutions, said:—

"Democracy would live or die by the way we conducted our Parliamentary institutions in these difficult times and through the interpretation of that conduct, whether it might be good or bad, by the Press Gallery to the people."

How are we, with our better opportunities but, you might say, with the same problems, using our democratic institutions for the solution of these things? We have Ministers whose word we cannot believe, who brazen out their administrative mistakes even when their administrative mistakes inflict losses on the commercial community and suffering, through lack of employment, on our workers. We have Ministers who jibe at the people with such jibes as that of the Minister for Supplies about their hot bread, when people have to stand in bread queues at 6, 7, 8 and 9 o'clock in the morning and for three or four hours in the day to get bread for their families. We appealed week after week and month after month to Minister, on the one hand, and to their Party, who control the votes of this House, on the other hand, to discuss our national problems and their solution intelligently and with a full exposure of the facts here in this House, but we have looked in vain, I might say from the very beginning of this emergency, for any facing up to their responsibilities either by the Ministry or by the Party which sits behind them.

Deputy Cogan advised the Minister the other day to go on to an island. Everything he said indicates that we can no longer hide ourselves on this island, even when people in the world outside want to ignore us, from the impact of political and economic affairs outside, and those who accept responsibility for mastering and controlling Parliamentary institutions in the interests of the people should stand up to these responsibilities and make the Parliament a Parliament, or clear out and give the people a chance of seeing whether they cannot send somebody else in to use the Parliamentary machinery that so many generations of our people have struggled to get and to build up so that it may serve the country.

Mr. Fitzgerald-Kenney

I feel in a way that I owe a certain apology to the Government, because I used to think that greater inefficiency could not be displayed by any persons than was displayed by the Government in this emergency, and especially by the Minister for Agriculture and the Minister for Supplies. But I have found that I am a little wrong in that, because I have discovered another place in which greater inefficiency can be found. I had the pleasure of spending 19 hours in a train yesterday and of arriving in Dublin at 4 o'clock in the morning 12 hours late, and I have come to the conclusion that, under its dictatorship, the Great Southern Railways Company has fallen a great deal away from the efficiency which it had under its representative government, and that it has shown an amount of inefficiency in the management of this detail that even the Government have not shown in the present crisis.

Now, the result of that was that I was unable to be here to listen to yesterday's debate and, especially, I was unable to listen to a very remarkable speech which I read this morning at very considerable length which was made by Deputy Dillon last night. I also read the leading article in the Irish Times to-day, and reading that leading article I came to a very definite and very specific conclusion. Granted that it be true, as Deputy Dillon stated, that the Irish Times has absorbed some of the views of the Irish Press, it is not impossible that the Irish Times, too, might take up some of the mannerisms of the Irish Press, because evil communications do corrupt good manners. But, at the same time, I consider that the habits acquired during many years cannot easily be departed from, and when I consider how that extremely suave and urbane writer who edits the Irish Times, or, if I might drop into what the late Kevin O'Higgins once described as the compulsory Latin of the Irish Times, and consider how that man ad unguem factus homo suddenly indulges in personal abuse, and when I think of the French proverb, “Ce n'est que la verité qui blesse”—“It is only the truth that wounds”— I must come to the conclusion, though I had not the pleasure, as I say, of listening to that speech, that round No. 1 has ended in a very great triumph for Deputy Dillon, and that it is only Deputy Dillon's inability for the moment to reply to the Irish Times that has prevented a knock-out in that first round; in other words, that the bell has saved the Irish Times.

But, if I lost the advantage of listening to Deputy Dillon last night, I did gain the advantage of listening to a very remarkable speech made by Deputy Childers this afternoon upon which I should like to make just a few comments. I am always interested in listening to Deputy Childers. Deputy Childers always thinks; he does not always think rightly, but it is something at any rate to find a person in the Fianna Fáil Party who does not blindly re-echo what is said from the Front Bench, but has the courage to think for himself. Deputy Childers talked about trying to find a man of genius. I think Deputy Childers, talking about agriculture and in the same breath crying for a man of genius, had something very much in the back of his mind. I think, if he could have put the matter into plain and simple English, Deputy Childers would have said: "For God's sake let us get rid of Dr. Ryan, and for God's sake let us get genius in his place, because we want it, and want it wretchedly badly." For that reason, I was tremendously interested in Deputy Childers' speech. It showed that, when Fianna Fáil Deputies do venture to think, they can see the faults and the follies and the failings of their own Ministers just as well as we on this side of the House can see them. But they lack one thing; they lack the courage—they lack more; they lack the patriotism— which would make them speak out their minds. Even Deputy Childers has not quite reached that stage. He talks rather by innuendo now, but he is coming on; he is learning; he is gathering courage; he will speak out more freely, I hope, in times to come.

There is one thing which he did say. He expressed his hope about co-operative farming, and about the Irish farmers handing up their land and joining in a co-operative society, each man giving up his own individual ownership. When Deputy Childers talked like that, I said to myself: "What an awful pity it is that people will confine themselves to books and will never think of realities." Anybody who knows the Irish farmer, anybody who knows how deep down in the Irish farmer's heart lies the love of the land which is his, and how proud he is of his ownership, will realise that to talk of even the possibility of that man surrendering his land to a co-operative society is to display a complete ignorance not merely of the Irish character but, I think, of human nature itself. I do think that Deputy Childers, coming on as he is, would come on a great deal faster if he would bear in mind that there is a certain amount of truth in Pope's adage: "The proper study of mankind is man." If Deputy Childers regarded a little less the theory and a little more the human element on which he must work, then I think Deputy Childers' education would proceed even faster than it is proceeding at the present moment.

Turning to the Budget itself, I do not think that anybody could reasonably say that it is anything else except a Budget of despair. This Budget, if it is to be justified at all, is a Budget which must be based on the assumption that at the present moment this country is taxed up to saturation point. In no other way can this Budget be justified. If there was a reasonable possibility of raising more money fairly by taxation, this is the very time at which extra taxation ought to be imposed if we are to look to the future. It is one of the accepted views, I think, of every political economist that the true explanation of how countries ravaged by war recover so quickly is that goods are being rapidly consumed and rapidly reproduced. The whole process of the world in peace time or in war time consists of the consumption of the entire wealth of the world—I am speaking of wealth now in the true sense of the word—and its reproduction in a very short period. For that reason the wealth of a country, consumed in war, can be very easily reproduced in a few years.

Having gone through some years of suffering, a country at the end of a comparatively short period is just as rich again as if that suffering had never happened. That is the view, I think, which is taken by every political economist—certainly every political economist of standing whose works I have read. It is taken by more than political economists; writers on political science—certainly Sir Henry Mayne—have borrowed it also. Applying that to the present situation, it shows that some of those extra charges which could be fairly borne out of taxation, ought to be borne out of taxation, because if money is borrowed for them, it is making far more difficult the task of reproducing after the war a condition like our pre-war condition. If you pay as you go along, you suffer, but you have a chance of recovering. If you do not pay as you go along, or do not pay as much as you could, you are making your task of recovery after the war far and away more difficult, and it is a staggering thought.

Twenty years ago this was a country without 1d. of national debt. What is it now, at the end of 20 years? It is a country which, I believe, when this financial year is over, will owe something like £100,000,000. Is that not correct? That is a staggering thought. I am granting that some of that money has not gone into mere air. Some of it has been very well and very wisely invested. It has not all been spent. I remember the tremendous attacks which were made upon Deputy McGilligan when he was carrying the Shannon scheme through; he was told how he was wasting the money of the country, how he was wasting the farmers' money especially. That has turned out to be a very wise and a paying investment of public money, as well as a scheme that has done more service to the State than any other scheme which has been started since we obtained our national freedom.

Very little, comparatively, of that immense sum which we owe has been invested. The bulk of it has been spent. The £5,000,000 which the Minister will have to borrow before this financial year is over does not represent borrowing for investment. It is borrowing for expenditure. How long can the country keep up a process of that nature? How long can a country that in 20 years has borrowed practically £100,000,000 keep up that rate of retrogression? It is a thought that should occur to every person in this country. We must look to the future. We have seen Minister for Finance after Minister for Finance informing the House that he feels justified in borrowing for certain purposes because it was not recurrent expenditure. If I am permitted to use a bull, I would say that the most recurrent item in the Budget is non-recurring expenditure. Every year there is something fresh. "This is not recurrent expenditure and we will borrow for it"— that is what we hear. But if you borrow for non-recurring expenditure this year and non-recurring expenditure next year and so on, you will have that non-recurring item the whole time.

It is the greatest fallacy to say that you are entitled to borrow for non-recurring expenditure when non-recurring expenditure has become the normal thing. You should budget for every year. Every year will bring its own particular items and these should be met in that year. There is no justification whatever for borrowing. During the last ten years, nearly all of them peace years, there have been abundant harvests. If the finances and the general policy of this country have been so mismanaged that extra taxation cannot now in fairness be put upon the people, because it is a time of emergency, and therefore borrowing must be resorted to then I say that the Minister's Budget is the most terrible criticism that could be passed upon any Government. It is the most deadly and damning criticism of Fianna Fáil administration for the last ten years that could possibly be made.

I know it is said that this is a popular Budget. Of course, it is a very popular thing not to increase taxation and I know that at certain periods, especially when elections are not very far off, it is a very good thing to provide what the people like. But what the people like and what is the right thing to do in times of emergency are very often entirely different things. It was pointed out by a well known writer on representative government that one of the great difficulties about such government is that representatives are elected by the people to do what the people think is best for them, but that the people in bulk do not always know what is best. As a matter of fact, some writers think that the people very often do not know what is the best thing for them, and very often in representative government it is necessary for the individuals whom the people have elected to be their Government to do the thing which temporarily, in the eyes of the people, is unpopular but which ultimately will make for the prosperity of the nation.

Perhaps I might put it in this way. The Minister for Finance, in dealing with the people, is very much in the position of a father dealing with his son. In one sphere of life a son may go to his father and ask him for a shilling to enable him to go to a cinema, and the father, looking at the state of the family finances, says he cannot give it. In another sphere of life a son may go to his father and ask for a motor car, and the father, considering the state of the family finances, tells him he cannot give him one. In the first case, the boy anxious to go to the cinema would be very pleased with his father if he gave him the shilling. The second boy, possibly a university graduate, would be very pleased with his father if he got the motor car. The fathers, considering their family finances, found that they could not do what would please their sons.

Very often in popular government the Minister for Finance must put himself much in the position, with reference to the people, of the father with the son. Taxation is always unpopular. Not increasing the amount of taxation and adopting the idea of borrowing is always popular and it will always be liked. The son in the instance I have given would like his father very much better if he gave him the motor car, but the father would be very wrong to give it if it was going to lead to bankruptcy or create trouble in the family finances. The same thing would apply to the Minister for Finance in relation to the people. He must not do everything that the people might like. The people consider that it is his duty to look after their finances, just as the son thinks it is his father's duty to look after his finances. If the Minister refuses to look after the national finances, then that Minister is not doing what is right.

When you discover that a Budget is framed on the basis that it will just please the people, and when it is framed on no other ground, you may think that policy very facile, very easy, the easiest thing in the world so long as the credit lasts. It is the easiest thing in the world to borrow. There are two things that are very easy— increasing income-tax and borrowing. They do not require one moment's thought. Certainly, as far as borrowing is concerned, it is considered very dangerous, by anybody who is looking to the future. Therefore, if taxation could be imposed honestly and without danger to the future, it would be the duty of the Government and of the Minister to impose it. He has not done so. I accept that the Minister is endeavouring to do his duty and, therefore, by this Budget he has brought in the most damning accusation against himself and his predecessor in office.

Turning from the general proposition to one particular detail—the tax I mentioned a moment ago, income-tax, and its incidence upon agricultural land, there is a matter which I never have been able to understand and which I would ask the Minister in his reply to deal with very specifically. If a farmer has land and farms it, and sends in his profit and loss account at the end of the year showing that, on the land—say, with a poor law valuation of £100—he has made £100 profit in the year, that is his income and he pays income-tax on it. One would think the tax ought to stop there, but it does not; the Revenue Commissioners come along and say: "Ah, yes, you paid on all the income you made, but remember Schedule A—you have to pay for the ownership of land." In the instance I have given, he has to pay on his profit of £100 and also for the ownership of the land. It is quite true that, if he loses in his farming, he can reduce the assessment under Schedule A., but if he makes a profit he has to pay under both, thus paying double. I cannot understand why one must pay under Schedule B on the actual profit out of land and then pay under Schedule A as well, and I would like the Minister to explain that.

Income-tax is a very heavy burden on the farming community, especially now, when farmers want all the capital they have; and if they are paying income-tax on more than they are really making out of the land, it is very far from just. Of course, income-tax is no indication at all of the wealth of the country. The same income occasionally pays tax many times over. A farmer may sell a cow at £20, and that £20 may pay tax to the State many more times than one. He pays 7/6 in the £ on it now, leaving him about £13 10s.; if he pays £13 10s. to a doctor who has been attending him, the doctor must pay 7/6 in the £ on it; then the doctor may buy from a shop and pay for goods, and income-tax must be paid on that, and so on. The real wealth of the country pays income-tax on some occasions many times over, so it is not a real guide to the income of the country, and must always be larger than the actual amount of wealth in the amount assessed, as the same item is recurring in the income-tax of different persons. Regarding the farmer's income-tax case I have mentioned, I would very much like the Minister to explain it to me, and if there is no explanation I would press upon him that, in simple justice, when a farmer has been assessed on his farming profits, Schedule A should be wiped out altogether.

Mr. Norton

The Minister for Supplies delivered a speech on this motion last week which was more remarkable for its abuse and vulgarities than for any sound contribution to the problems with which that Minister should be more vitally concerned than any other Minister. Of course, misrepresentation is the stock and trade of the Minister for Supplies. If there is any possibility of anybody being misrepresented, nobody is more capable of getting over the misrepresentation than the Minister for Supplies. If anybody's statement is to be distorted, the Minister for Supplies is the expert for the job, and in the creation of Aunt Sallys there is no one able to manufacture them with such lightning rapidity as the Minister for Supplies. But that is about the only thing the Minister can produce in these days, and they are very intangible assets, so far as this country is concerned.

The Minister said that, in my earlier speech on the Budget, I stated taxation had reached the limit and that borrowing was unsound. I did not say that taxation had reached the limit, nor did I say that borrowing was unsound. What I did say was that this Budget was imposing very heavy taxation on the people. I made no reference whatever to the unsoundness of borrowing money. What I did say was that, at a time when taxation was extremely heavy, we had to consider the ability of people to pay taxes, when national productivity was rapidly decreasing, and that taxation at all times must be related to production. If we have reached a stage when productivity has declined, obviously that is not the time at which to burden the people with heavy taxation. Taxation is only a relative thing. A Budget of £43,000,000 might mean very little if it were imposed on a people whose national productivity was at a high level, but when imposed at a time when national productivity is at a low level, it can impose on the people a burden which, if productivity were greater, they would be better equipped to bear. The Minister was compelled to admit that the national income was stagnant, that, in fact, there was no increase in the national income.

I very much suspect that figures would show, in terms of real goods, that the national income had substantially decreased during the past two years. We may be told that it has increased by inflating prices but, in terms of real goods and productivity, it will be found that the national income has seriously declined. That is the situation at a time when we are imposing on the people a burden of £43,000,000 by way of taxation. The total taken in taxation is increased, while there is declining productivity, so that what is left for family needs is considerably diminished. What we are doing in this Budget is this: we are taking from the people taxation to the extent of £43,000,000 at a time when they were never so badly equipped to meet an imposition of that kind. That is the characteristic of this Budget. There has been no increase in national income, but there is a very heavy inroad made on their income by asking them to pay heavy taxation when the national income is dangerously low.

While we have the position in which the national income is stagnant, we get at the same time a most extraordinary statement from the Taoiseach and the Minister for Finance, to the effect that there is such an abundance of credit available that it makes the control of interest rates of a central bank almost impossible to regulate. We were told on the Central Bank Bill that there was an abundance of money for worth-while schemes, but when you come to policy, where is the abundance of money so far as the ordinary income of the people is concerned? When you come to ascertain where the abundance of credit is, so far as the ordinary people are concerned, you find that far from there being an abundance of credit to finance essential schemes, and so far from there being available to the people liquid assets in the form of cash or credit to purchase the necessaries of life, the struggle for life to-day is harder and sterner than ever during the past 20 years.

This Budget takes from the people £43,000,000 for State purposes alone. The demand of local authorities for rates reaches a total of another £7,000,000, so that, as far as the people are concerned, approximately £50,000,000 is taken in the way of State revenue and local authorities' revenue during the coming year. That represents, roughly, one-third of our national income. That seems to me to be a position which is highly unsound and uneconomic, a position that should cause grave concern to those concerned with the raising of taxation, and grave concern to those who should be interested in increasing productivity and national wealth. I am inclined to doubt very much whether this Budget is based on sound estimates. For instance, we were told that customs duties will realise £10,250,000 in the Budget. If we assume that ad valorem duties would be an average of 25 per cent., then, in order to raise £10,250,000 in the form of customs duties, it will be necessary to import £45,000,000 worth of customed goods, bearing an average ad valorem duty of 25 per cent. I think he would be a very cheerful man who imagines that during this financial year we are likely to be able to import, with present indications, anything like £45,000,000 worth of goods bearing in the average 25 per cent. ad valorem duties.

There is one disgraceful aspect of this Budget that reflects our economic laziness, and that is that in the Estimates which are financed by the Budget, we are making provision for the expenditure of approximately £8,000,000 on poverty which is due solely to our incompetent and wasteful economic policy. If the election promises of the Government to find work for all had been accomplished, vast sums of money need not be at present spent on home assistance, on unemployment assistance, and on similar types of pittances which are doled out by the State, as an excuse for its incompetence in the economic field. If the Government had only attempted to plan to develop our economic resources, planned to the fullest our agricultural possibilities, and generally had accepted as a basic principle in the economic field, the urgent necessity to utilise every unemployed man and woman we might to-day not be obliged to make provision for an expenditure of £8,000,000 on what is mainly avoidable poverty. That money might be made available for much better services, and in giving our people a different mode of life to that which they are compelled to tolerate to-day, because we are too lazy to plan in the economic field, too indolent to plan in the agricultural field. Apparently we prefer to give the people miserable pittances to keep them alive while allowing our economic, industrial and agricultural development to drift along as if it was nobody's business to arrest such a policy. In this State to-day we have 100,000 men idle who, if put to work in expanding the national wealth, and consequently the national income, could create a huge pile of wealth for all the people. As far as the State is concerned such reserves would be available for revenue-raising purposes.

But we adopt an economic policy which apparently blinds us to the existence of that criminal waste. There can be no more criminal waste in the economic field than to see 100,000 men and women idle, willing to work and willing to create national assets, and yet not organised so that they might contribute to national productivity their quota of what good citizenship demands. Apparently this Budget indicates to all and sundry that we must continue to make provision for poverty on the present miserable scale, because we simply refuse to face up to the need for economic planning. Instead of planning we prefer to indulge in a riot of muddling, and one would imagine that our responsibility to these workless citizens was then discharged. If you take a look at the economic picture the whole position is truly disturbing. There are 100,000 registered unemployed after 40,000 have emigrated to Britain and the Six Counties, and after another 30,000 have joined the Army. Even then that sea of poverty does not adequately portray the economic position, because we have also 100,000 persons in receipt of home assistance, and a substantial number drawing national health insurance benefit for diseases definitely attributable to malnutrition. Any State that starts with an employment problem of these dimensions, and a small State such as ours with less than 3,000,000 of people is under-populated and under-developed, surely must view with horror a continuance of an economic state of affairs which is represented by that ocean of poverty.

That is not the only danger or the only evidence of the weakness of our whole economic position. We have to consider the low wages which obtain for very large sections of our people. We have to relate that to the low incomes upon which many of our people, who are not wage earners, are compelled to exist. Although we have land which is the envy of many other countries in Europe, we can only pay our agricultural workers, for the production of a vital commodity for the people, 33/- a week. A man is expected to be able to keep himself, his wife and four or six children on a wage of 33/- in 1942. Has anybody ever attempted to work out the standard of living which is that man's lot? It only needs to be attempted to realise the appallingly low standard of living we are forcing on a very large section of our people by the payment of a wage of 33/- a week to agricultural workers.

We pass on from agriculture to turf production, which is a new and widespread activity in the State. We find that the most we are able to pay our turf workers is 32/- and 33/- a week. One might ask what standard of living is possible on the part of those engaged in the production of fuel supplies on a wage as low as 32/- and 33/- a week. If we pass from our internal economic position and take a look at our external activities, we find that we are developing, with the utmost complacency and with a smoothness that would be charming if it were not so tragic, a one-way foreign trade. We are not satisfied with giving away our man-power for nothing. We must give away a substantial portion of our produce to another country in exchange for bills of credit which, after this war, may not be cashable—which may be worthless from the point of view of producing goods. We are giving these goods to a nation which may not sell us goods for those assets which she is now chalking up to our credit. The Government seem to be quite unconcerned with that development and with the fact that we are giving away our food for vouchers which may be of doubtful value. That food our own people ought to be encouraged to consume, and they should be put in an economic position to consume. Apparently, it is nothing to the Government that good beef and agricultural produce—goods that our own people need —are being exported in exchange for credits which may be of very doubtful value when this war is over.

If we look at the rural areas, we find a most unhealthy symptom developing. There are fewer people in the rural areas than there were at any time during the past 40 years. There are fewer marriages there and our population is declining. The economic position of our people is such that marriage is regarded as a thing which cannot be contracted in the present economic conditions in many of those areas. What is happening in many of those areas is that the young and virile men are leaving the country. Where they are not drifting into the city, they are going off as emigrants and a very disturbing picture would be portrayed by an examination of the number of young people and the number of elderly people in the country. That examination would, I think, show that, in respect of old people vis-a-vis young persons, we have a most unhealthy position which is not equalled by any other country.

Advertence to these factors—I think they are incontrovertible and rightly cause concern to everybody interested in the welfare of the country—reveals at once a very bleak and disturbing picture. The worst aspect of the picture is that nothing whatever is being done to grapple with the problems which have brought about the condition of affairs which I have described. It does not seem to me that we can continue for many more years providing a sum of £43,000,000 for Government services—for the services of a Government who have refused to put idle men to work and who prefer a policy of economic drift and trying to keep people on miserable pittances under various types of social services, so called. During the past 12 months, the Government have been endeavouring to whistle to the tune of "equality of sacrifice", that rich and poor must suffer and that there has got to be a sharing of the burdens. So far as the workers are concerned, Emergency Order No. 83, which has been enforced by the Government with wicked efficiency, has compelled workers to make a very substantial contribution—one which they ought not be expected to make—to whatever economic difficulties may be encountered. I am not so satisfied, nor are the workers satisfied, that the wealthy classes are bearing anything like the sacrifices they ought to be compelled to bear in a situation such as that through which we are passing.

The Minister for Supplies was quite enthusiastic regarding the £2,500,000 in excess corporation profits tax which are to be raised by the Budget. That only refers to excess corporation profits, or war profits, and not to normal profits. Apparently, industrial undertakings, and undertakings generally, will be permitted to make excess profits out of the people's necessities so long as they are prepared to share their excess profits with the Government. The Government is raking off £2,500,000 from industrialists under this Budget. It would be interesting to learn what sum in excess profits—in other words, war profits—the industrialists are themselves pocketing. I venture to say they will profit another sum of £2,500,000, because I think the level of taxation will probably show there is only a 50 per cent. rake-off on the average. The industrialists are to be allowed to get away with millions in the form of war profits, and the Government appear to be quite content with that development so long as they get £2,500,000 for themselves. The Minister for Finance and the Minister for Supplies endeavoured to show that industrialists were being made pay. This Budget has been welcomed by industrialists, generally, because, in it, the Minister has shown quite a tender regard for people who, at least, are in a substantially better position to bear burdens than those upon whom they have been imposed in heavier degree— the workers.

A prominent business man who is associated with many industrial activities in this country recently stated that the minimum rate of profit to attract capital to industry was generally accepted to be 15 per cent. In the Budget of last year the Minister imposed a 6 per cent. standard profit. That brought a howl from all the industrialists, the bankers, the financiers. The Minister was compelled, apparently, to listen to deputations from these people, and it was not long before we realised that these people were apparently going to get away with a substantial modification of the taxation which was imposed upon them in last year's Budget. Under this Budget they are going to get a present of £150,000. Not only are they going to get £150,000 back, but they are now going to have substituted a standard of 9 per cent. profit, not merely on the ordinary capital of the companies but on the whole resources employed in the development and in the conduct of these companies and corporations. Up to the present, the 6 per cent. was allowed on ordinary capital. Now, these firms are to be allowed to make a profit of 9 per cent. on all the capital employed in the industry, which means that they can make a profit of 9 per cent. on their ordinary shares, on their preference shares and on their debentures. This, I think, is the first time that debentures have ever been regarded as stock or capital for the purpose of ascertaining the capitalisation of any particular company, but it is interesting to examine what will be the likely effect of a revision of the standard profit from 6 per cent. to 9 per cent. and treating the preference and debenture stock as ordinary stock for the purpose of profits.

I took the trouble to look up one particular case. It is not an isolated case; it represents many firms in industry to-day. This particular firm has a capital of £200,000 6½ per cent. cumulative preference stock; it has £400,000 ordinary stock, making its total capital, therefore, £600,000. It also has £450,000 in 5½ per cent. debentures, making its total employed resources in this particular industry £1,050,000. This firm, under this Budget, is entitled to calculate the 9 per cent. exemption on the whole £1,050,000. In other words, it is entitled to get away with, as an exemption standard, £94,500 as profits, but they pay only 6½ per cent. on the preference shares, that is, £13,000; and 5½ per cent. on the debentures, which amounts to £24,750. If we deduct these two sums, which total £37,750, from the £94,500, the balance is £56,750, and this balance is the sum left with the company for payment of profits on its ordinary capital. That balance of £56,750 may be paid on the ordinary capital of the company, which has an ordinary stock of £400,000. The position is that that company can get away not with the 9 per cent. exemption limit, but with 15 per cent. exemption limit because, apparently, under this Budget, it is being allowed to make a profit of 9 per cent. on preference shares and on debentures when, in fact, its own Articles of Association require it to pay substantially less than 9 per cent. to the owners and holders of those shares. The profits thus made, by giving them a 9 per cent. exemption limit in respect of debenture shares and in respect of preference shares, will enable them to distribute that profit, it seems to me, on their ordinary stocks.

Under the Finance Act, that firm was allowed to make only a profit of £61,750. When the Budget is given effect to by means of the Finance Bill, that firm will be entitled to make a profit of £94,500. So that, so far as this Budget is concerned in respect of that particular firm, it represents a present to the firm of £32,750. Can the Minister tell us what condition of affairs in respect of industrial development in this country permits him, in these circumstances, to hand back to that firm a nest egg of £32,000 and permits that firm, by utilising its preference stock and its debentures as capital employed in the development of the company, to net a profit of approximately 15 per cent. on its ordinary capital, and that at a time when the ordinary workers throughout the country are not able to get a decent wage, and when very large sections of the workers are compelled to tolerate a condition of affairs in which no increase on the 1941 wage levels is permitted.

The Government talk about equality of sacrifice, but it is extremely difficult to say where the equality of sacrifice is as between workers and industrialists, taking the case which I have quoted as an example, and it is by no means an isolated case.

Mr. O Ceallaigh

If this concession is to cost me £100,000, how many cases of that kind could we have?

Mr. Norton

I did not hear what the Minister said.

Mr. O Ceallaigh

I estimate that this concession will cost £100,000. We will get £50,000 back in income-tax. The Deputy considers that the company which he says will be handed back over £30,000 is not an isolated case. How many such companies could there be, if the concession is to cost £100,000?

Mr. Norton

I am making the reference to the £100,000—£150,000, I understood from the Minister for Supplies——

Mr. O Ceallaigh

£100,000 net. The £150,000 will be reduced by £50,000 which we will get in income-tax.

Mr. Norton

Is the Minister saying that in the case of the firm which I have quoted it is not possible to pay a dividend of 15 per cent. on their ordinary stock?

Mr. O Ceallaigh

I would have to know the firm and see the figures and facts for myself before I could say.

Mr. Norton

I will give the Minister the name of the firm.

Mr. O Ceallaigh

Thanks. The Deputy says it is not an isolated case. I take it he thinks there are many other cases similar. How can there be, if the concession is only going to cost £100,000?

Mr. Norton

I do not know, but it seems to me that on the figures which I have quoted it is possible for that particular firm, being permitted to make 9 per cent., only having to pay 5½ per cent. and 6 per cent. dividend on certain types of capital, could then throw on to its ordinary shares a profit of 15 per cent., the profit being only 9 per cent. on all the capital employed.

Mr. O Ceallaigh

I would have to get the facts.

Mr. Norton

It seems to me at all events—and I do not think the possibility of that company making such a profit can be challenged—that it is nothing short of a scandal that people should be able to get away with profits of that kind at a time when ordinary men and women in this country are hungry and when thousands are being compelled to emigrate to find elsewhere the livelihood they cannot get here.

Mr. O Ceallaigh

There cannot be many, if any, other such cases.

Mr. Davin

On the Minister's own statement in the Budget, the State will lose £150,000 by this arrangement.

Mr. O Ceallaigh

Can the Deputy not accept this? I said, and I am not attempting to deny it, that we shall lose £150,000, but we shall get £50,000 in income-tax, that is we lose a net £100,000.

Mr. Norton

Suppose we take this one case.

Mr. O Ceallaigh

One swallow does not make a summer.

Mr. Norton

This firm will make a substantial profit. It will be a summer for it.

Mr. O Ceallaigh

To quote another old proverb: "It is an ill wind that does nobody good."

Mr. Norton

I can imagine this firm cheering the Minister on that basis. I want to pass from that remarkable generosity on the part of the Minister to deal with some of the statements made by the Minister for Supplies in the course of his speech last week. The Minister treated the House to a display of kindergarten economics on the last day. He was obviously more concerned with displaying his temper than he was with displaying his knowledge. He told us that price control did not mean stopping prices from rising. Everybody knows that the Minister never believed that such a thing was possible because, of course, he has permitted prices to be increased with the most complete impunity. He does not appear to have any power of control, or any willingness to exercise any type of rigid control, over the rise of prices during the past two years.

The Minister told us that, because of the increase in the price of raw materials and certain other types of costs, the position now was that the price of certain types of goods had to be increased. One could understand that. One can understand a position in which certain commodities will increase in price because of an increase in the price of the ingredients, but what one cannot understand is the Minister pretending to keep prices at a certain level and failing to do that while being remarkably efficient in keeping wages at a low level. Must it not be obvious to everybody that if prices have risen as between 1939 and 1942, as they have risen by about 37 per cent., even taking the general average—and it is a low average—revealed by the cost-of-living index figure, working people cannot buy the same quantity of goods when their wages are pegged down to the 1939 level? The Minister admitted the other day that prices had risen to a war-time level, and when I asked him to explain how workers were expected to buy commodities at a war-time level on pre-war rates of wages, the Minister undertook to explain that at a later stage, but although he spoke for an hour and a half he never once did attempt to explain it.

My criticism of the Government in respect to its economic policy vis-a-vis wage earners is that it has permitted prices to rise by 37 per cent. in the last two years, and that notwithstanding the fact that large sections of workers have secured no increase whatever on the pre-war level of wages, and that the Government will not, in fact, permit them to get any increase over the pre-war rates, the Government still expects these people to be able to purchase commodities which are now beyond their purchasing power. It requires only a moment's reflection to realise that an ordinary wage earner with £3 a week—and, taking the average, that is a high figure—cannot buy the same quantity of goods as he bought in 1939. What is he to do? He has got to do without goods which were considered necessaries in 1939. He might, if given an increase in wages, be able to buy the same quantity of goods which he bought then, assuming the goods were available. But if you peg down his wages to the pre-war level, as has been done by Emergency Powers Order No. 83, then in effect you say to that worker: “Buy very much less, eat very much less and wear very much less than you did in 1939, no matter how inadequate your standard of living in 1939 was.”

When the Minister made his speech on the Supplementary Budget in November, 1940, we had a declaration that prices were going to be controlled and wages pegged down to a certain level. Nobody was going to get any compensation for the increase in prices as a result of the war. We see now that industrialists are getting away with it. They may not be able to distribute their profits but they will be able to make profits and to store up profits in the hope that some other twist of the wheel may come, that some other ill-wind that does somebody good will blow, which will enable them to distribute the profits later, if indeed, commercial machinations being what they are, they have to wait for that ill-wind.

The Minister for Finance in his Supplementary Budget as I say indicated that the Government would endeavour to keep prices and wages at a certain level, to maintain the then existing relative stability of wages to prices and prices to wages. The Government must realise by now that it has failed hopelessly to do that, that the price of commodities has risen and risen with Governmental approbation. The Government is perfectly satisfied to allow prices to rise. While permitting prices to rise, the Government has shown no inclination whatever to appreciate the difficulties which workers experience in trying to purchase goods at the present war-time level. They have shown no inclination to appreciate the difficulties of workers on a low standard of living being compelled to deny themselves commodities which enabled them to enjoy perhaps a tolerable standard of living in pre-war days. I think the Government's whole policy in respect of that vicious spiral, as it is described, is based on an economic fallacy. It was not an increase in wages that drove prices up, and if you permit a rise in prices while you compel wages to remain static, then inevitably you force down the standard of living of workers generally. That has been the result of the Government's policy here. Their whole economic policy has been: "Let prices rise: let the ceiling for prices be as high as possible but keep wages low". The consequence of that policy is that the workers have less money to spend which means that there is less demand for goods and a lesser demand for goods means a lesser production of goods and consequent unemployment. That is just one of the evils which have flown directly from the operation of Emergency Powers Order No. 83.

The Minister for Supplies was quite indignant the other day about the black market. He called a whole variety of people criminals because they were compelled to buy in the black market, but the black market exists, in a very large measure, because of the Government's failure adequately to control the whole supply position, and because of the disorganisation which has arisen out of the muddling of the Department of Supplies. I quoted a case the other day— I sent the letter to the Minister—of a man in my constituency who went to work in a certain place and could not get any trader to take his tea ration card. That was that man's position for four months. He still could not get a trader to take his card, nor could he get the Department of Supplies to tell him where he could find a trader to take it. The result was, as he said in his letter and as he authenticated, that he was compelled to buy tea in the black market at 18/- a pound. The Minister, however, woke up recently to the fact that there is such a thing as a black market in existence and that the public will not stand too long for the operations of the racketeers in the black market. The Minister is just beginning to bestir himself about that matter, and he makes threats as to what he will do with the manipulators of the black market, but, of course, nobody minds the frothy utterances of the Minister as to what he will do with the black market racketeers. They can always be perfectly satisfied that the Department of Supplies will move with the greatest possible ease and caution in respect of those who exploit the consumer.

I have a case here where a Deputy of this House complained to the Minister for Supplies that a sum of 1/2 was charged for a 2-lb. packet of oatmeal. He reported the matter to the Department on the 16th February, and it took them until 1st May to come to a decision on it. The Department then informed the Deputy that they considered 11½d. to be a reasonable price and that the firm concerned had reduced their price to that level. Then, with a great, generous gesture, the Department said to the Deputy: "I am to say that Messrs. Blank are prepared to refund the over-charge of 2½d. to the purchaser, and in order that application may be made to them, the receipts accompanying your letter are returned herewith."

After three months of investigating a case of over-charging, the Department find that a firm is guilty of over-charging by 2½d. on a 2-lb. packet of oatmeal and, instead of taking some punitive action against the firm, no less a person than the Controller of Prices is put down to write this kind of silly letter to a Deputy and tell the Deputy that nothing at all is going to happen to the firm, but "Here are your receipts; go back to the firm and get the 2½d. that you were over-charged." Does anybody believe that that kind of nonsense is the proper way to control prices, or does anybody believe that you can ever get effective price control by methods of that kind? If that firm was in the dock and its ramifications exposed, and if it were made clear that there was over-charging, you might then get a very much healthier public opinion with regard to price levels in this country, and you might get very much more co-operation from the public in respect of prices. But when a person goes to the trouble of reporting a glaring case of an over-charge, such as in this particular case. and is merely told, after three months' investigation by the Controller of Prices: "Take back the bills to the firm and you will get back the 2½d. you were over-charged," there is certainly no inducement to the public to cooperate. There is a premium on over-charging so long as matters are dealt with in that lazy kind of fashion; there is no encouragement to anybody. As a matter of fact, the person concerned is out of pocket on a transaction of this kind, because what really happens is that the person makes the complaint to a Deputy, and that costs him 2½d. for the purchase of a postage stamp, as the person who wrote to the Deputy did in this case.

Mr. O Ceallaigh

Not to the Department?

Mr. Norton

No. He wrote to the Deputy, and the Deputy wrote to the Department. Then the Department wrote to the Deputy and the Deputy sent it back to the complainant. Of course, there is no inducement there to make complaints, and I am sure that that person will not waste time or money in doing that again. If, however, that person were able to see, with some satisfaction, that he had rendered a public service by bringing about the prosecution of that firm, I think he would be encouraged to cooperate more effectively with the Department in exposing the exploitation of consumers in that way. The Minister has every reason to feel concerned about the black markets, and notwithstanding the Minister's declarations about the black markets and his threats to deal with black market racketeers, I venture to say that the Minister will continue to find himself confronted with the black markets unless he is prepared to take drastic action against them.

Mr. O Ceallaigh

Even then, they may still exist.

Mr. Norton

Yes, even then, they may still exist, but you will get a much greater public co-operation and much greater public support if you will put those who are manipulating the black markets into jail, and, for once, I find myself in sympathy and agreement with Deputy Dillon in saying that they should be left there for a substantial period, and until such time as they learned that this nation will not tolerate the exploitation of its poor people in a time of crisis such as this. We are asking young fellows to join the Army. We are asking them to become soldiers at 14/- a week. We are asking them to leave their homes, perhaps to leave aged parents behind them and to serve in the Army for 14/- a week. We are asking these young men to put up with all the rigours of Army life and to accept that low standard of remuneration for assisting the nation in this time of crisis, while at the same time we are letting another bunch of people operate in the black markets and make profits that were formerly undreamt of. Unless the Minister can come to this House and take wide powers of inspection and wide powers of arrest, and unless he can make provision for summary jurisdiction in respect of those people who are operating in the black markets, then I venture to say that the black markets will go on, and the Minister had better realise that, unless he is prepared to take powers of that kind, he is likely to have a continuance of the black markets with all the undermining of public confidence that goes hand in hand with the operations of a market of that kind.

Mr. O Ceallaigh

I understand that they shoot such people in Italy and Germany, and there is still a black market there.

Mr. Norton

Maybe they do, but there are 84,000,000 people in Germany and there are only about 3,000,000 people here.

Dr. O'Higgins

There must be so many less manipulators every day in Germany.

Mr. Norton

I wanted to make reference, Sir, to the social service aspect of this Budget, but as it is almost seven o'clock, perhaps it would be better if I were to move to report progress.

Progress reported; the Committee to sit again.