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Dáil Éireann debate -
Thursday, 20 May 1943

Vol. 90 No. 4

Committee on Finance. - Adjournment Debate—Prices of Shirts.

I asked the Minister for Supplies to-day whether he is aware that shirt manufacturers in Éire are charging 108/- per dozen to the wholesalers and 126/- per dozen to the retailers for utility tunic shirts; whether that price represented approximately 100 per cent. profit on cost for the manufacturers; whether the Minister had approved these prices and, if so, would he alter his decision in this matter. He says he is not aware that shirt manufacturers are charging prices which represent 100 per cent. on cost for utility tunic shirts; that he has not been consulted about it; that he has not consented to it; that no such prices have been fixed under his authority and, if the Deputy has any particulars of the case he has in mind the Minister will have the matter investigated.

The situation is this: some weeks ago the Minister announced, in reply to a question put down by me, that he was going to introduce a system for the control of cotton textiles, linings and certain other textiles in order to ensure that what supplies were available would be used for the greatest advantage of the greatest number. He said that 75 per cent. of the linings would be directed to the makers-up. Then he came to shirting and said he had decided that 100 per cent of the available shirting must go to the makers-up as well, in order that the consumers of shirts, those who use them, would be assured of getting supplies of shirts at the lowest possible cost. He then proceeded to give effect to that policy and when he gave effect to it he discovered that the large bulk of this printed shirting suitable for conversion into tunic shirts was coming, under the British Board of Trade regulations, from two or three manufacturers of low-grade shirting in Manchester. There are technical reasons why that should have been so, into which we need not now go. It appeared most convenient that a small group of makers-up should be established, and that one firm amongst them should bring in all the cotton print intended for tunic shirts from the Manchester manufacturers and distribute it when it got here amongst the persons whom the Minister designated, and in the proportions that the Minister thought right.

Accordingly, the shirting was delivered here and the Dublin Shirt and Collar Company proceeded to distribute it, in accordance with the Minister's instructions, amongst the makers-up and a very small percentage of other persons who were entitled to quotas of the material which they ordinarily got made up on contract, though they themselves are not manufacturers.

The invoiced price of this shirting cloth was 1/0½d. per yard. Pre-war, when a shirt was made on full lines, it took 39 yards to make a dozen of tunic shirts. Under the Minister's new regulation in controlling the size of shirts, 37 yards are allowed for the dozen shirts. You can, therefore, multiply 1/0½d. by 37, giving, approximately, 38/6 for the material required to manufacture one dozen shirts. I have no intimate information of manufacturers' costings in making shirts but I do know what makers-up will charge you if you send your material to them to cut, make and trim it. There are manufacturers in this country who, in addition to manufacturing their own materials, offer a service to cut the cloth, make it up and trim it, put on buttons and collar bands, and such like, for a fixed sum per dozen. The quotation for that service up to six weeks ago, was 24/6 per dozen shirts. That is to say, if you deliver 37 yards of cloth to a cut, make and trim merchant, he will return you a dozen shirts made up for 24/6 as payment for his service. Bear in mind that when he quoted the 24/6 he had not only paid his own costs in making up the shirts but had some profit on it, as all such men have in that business.

Let us assume, however, that since that quotation was made, six weeks ago, there has been some increase in costs. Let us assess that increase at 3/- a dozen. That would mean a quotation to-day to cut, make and trim would be 27/6, that is allowing a margin. 27/6 and 38/6 make 66/- a dozen. I ask Deputies to remember that the price for making up that I am quoting to them is a price for a cut, make and trim service but the persons whom I am indicting are the manufacturers who cut, make and trim for themselves and who have to pay no profit on that service.

I am only giving the figures I have personal knowledge of, but, taking these figures—and they are figures which leave the manufacturer who is operating on first costs a generous margin—the cost of the shirts manufactured from this textile which cost 1/0½ a yard, is ? per shirt, or 66/-per dozen. I have seen an invoice for these shirts from a manufacturer to a wholesaler, and the invoice reads: "One dozen of shirts, 108/-." I have seen an invoice for these shirts to a retailer and the price charged to the retailer is 126/- per dozen. The wholesaler is buying the shirt which cost ? for 9/-, and the retailer is buying the shirt which cost 5/6 for 10/6. I have seen these shirts in a Dublin shop window offered to a working boy for 14/11. So that the shirt which begins its history at a modest 5/6, owing to the economical restrictions placed upon it by the Minister for Industry and Commerce of this State, arrives at the user of the shirt for the modest price of 14/11. 5/6 from 14/11 leaves 9/5. A shirt costs 5/6, but getting the shirt from the manufacturers' premises on to the man's back costs 9/5. It would be much cheaper to buy the shirt in Valparaiso, pay the current costs of transport to Lisbon, tranship it there, bring it by the Irish Mercantile Marine to Dublin, send a brass band down to meet it, and carry it home in triumph. You would still have it at home for less than it costs to bring it from the Irish manufacturer's factory to Marlborough Street. The Minister blandly says to me that he does not know anything about it.

He should.

He says he has not been consulted about it. Now, bear in mind that that is the man who insisted on all the shirting being given to those manufacturers, and, having stipulated for that, he washes his hands of the whole thing, and says he has not been consulted. He says: "I have not been consulted about, not have I consented to, any such prices."

That is right.

Why was he not consulted?

Because the Deputy is talking through his hat.

That is the usual bluff:

Was the Minister consulted? If he was not consulted, why was he not consulted? Having insisted upon the delivery of all this cloth to the manufacturers, why did not the Minister say to them: "Show me now what the costs of producing a shirt from this cloth will be. Inasmuch as I am giving you a monopoly, show me the margin of profit you want to make, and see that there is endorsed upon the shirt a retail price which will bear a reasonable relation to the cost of making it"? Mind you, I think interference of that kind in ordinary trade is highly undesirable in normal times, but, if you take control of this cloth and place its entire disposition in the hands of a small ring of private manufacturers who are working for profit, if you are going to eliminate absolutely all possibility of competition, then you are bound to regulate the price most rigidly from the moment of manufacture to the point of consumption, and, having left a reasonable margin between the manufacturers' costs and the price to the consumer, let the wholesaler, the retailer and the manufacturer fight it out between them as to how that profit will be split up. That is the only way of reintroducing into the trade some element of competition. If five manufacturers have each an allocation of this cloth, let them fight it out between one another as to what price they will charge for it. The retailers will not sell it unless they are given some margin of profit, and the manufacturers cannot dispose of it if the retailers will not act as distributing agents for them. I affirm that the figures quoted by me are incontrovertibly true. I say that the failure of the Minister to know all those facts before I directed his attention to them is in itself a scandal. I say that the possibility of making such a profit while the Minister is supposed to be functioning as Minister is a great scandal, and, now that his attention has been directed to the matter, if he permits such things to continue I consider that it will be worse than a scandal.

My difficulty in dealing with the Deputy's question is that I cannot even grasp what he is driving at because the statements made by him are so unrelated to any facts that I know of. It is for that reason that I asked him to give particulars of the case he has in mind, so that I could find out what he is getting at. If he means by his question that the price for shirts charged to the retail trade represents a profit of approximately 100 per cent. on the cost to the manufacturers—that the manufacturers are taking a price which is twice as great as the total costs of manufacture—that is nonsense. If he means that they are making 100 per cent. gross profit, that is still nonsense. Every manufacturer of shirts in this State is working on a fixed profit margin. That margin of profit is fixed by the Department of Supplies. Every manufacturer of shirts in this State, with one possible exception, has adhered strictly to the margin fixed. Their accounts are examined. Their auditors are interviewed. The various costings shown in the accounts are examined in detail, and, on the basis of the information made available through those accounts and through the examination of their auditors, I am satisfied that none of them has departed from the fixed margin of gross profit determined in relation to each firm by my Department, with one possible exception. I say there is one possible exception because there is one firm from which we have had difficulty in getting accounts in the form that we want them. They may or may not be acting contrary to the arrangement made with the Department of Supplies; I cannot say definitely that they are. We do not fix, and obviously, could not fix, the actual price to be charged by the manufacturer for each garment, but the margin of profit which the manufacturer is entitled to take over and above the actual costs of production is fixed. That profit, of course, is nothing like either 100 per cent. on costs or 100 per cent. gross profit, whichever the Deputy means.

There are my figures. 66/- is the cost.

The Deputy says that shirts are being sold for 66/-. I am sure there are——

I did not say that.

Let me speak. I did not interrupt the Deputy. The Deputy said that shirt manufacturers in Éire are charging 108/- per dozen wholesale for shirts.

That is correct.

I am sure there are manufacturers charging 108/- per dozen for shirts, but the Deputy says that that figure represents 100 per cent. upon the actual cost of manufacture.

I said they are charging 108/- for shirts which cost them 66/- to manufacture.

I say that that is not so.

I say it is so.

In so far as it is possible to discover, by an examination of the accounts of shirt manufacturers, there is no shirt manufacturer earning or entitled to earn a profit at that rate.

My figures are incontrovertibly true.

I do not care what the Deputy says; I am telling him the facts.

These are the facts.

In the matter of controlling the price of drapery goods, it is obvious that you cannot work on the same basis as when you are dealing with sugar, cement, tea or some other commodity which is sold in uniform quality.

Varieties of qualities of those drapery goods are produced, and the price must, therefore, be allowed to vary. In so far as one deals with manufacturers, it is necessary to operate upon the basis of a fixed margin of profit—to fix the return to the manufacturer over and above the actual costs of production. That is what is done, and I am assured by the officers of my Department who have examined the accounts of the shirt manufacturers that, with the possible exception of one firm whose accounts have not yet been produced, every firm of shirt manufacturers has adhered to the arrangement made by the Department in regard to gross profit. It is possible that circumstances may arise from time to time which would require action by my Department. If the Deputy will give me the information which will enable an investigation to be made, it will be made.

There is the information.

That is not the information I want.

What does the Minister want?

The Deputy has said that, to his knowledge, a firm is taking a profit on shirts which represents 100 per cent.

On costs.

On costs. I take it that means that the price they charge is 100 per cent. greater than the actual costs of production.

Name a firm.

All the shirt manufacturers of the country.

I say definitely that is not true.

I say it is.

The accounts of the shirt manufacturers which have been examined by the officials of my Department show clearly that that has not happened.

I say it has.

The Deputy is wrong. I am entitled to make my speech without being interrupted by the Deputy. The Deputy has not got a fool's licence to interrupt everybody.

How could you get the accounts of what they have been doing in the last fortnight?

I do not know, Sir, what your authority is in this House, and whether Deputy Dillon has full liberty to interrupt. I want to speak. I am entitled to speak, and I ask you to see that I am allowed to speak. It is possible that firms that have adhered strictly to the profit arrangements for the last three years have suddenly decided not to adhere to them. In any case, if Deputies know that anything like that is happening they have a duty to give evidence to that effect to the Department to see that action will be taken. I do not believe it is happening. I believe that Deputy Dillon falls for every fool's story that he is told, and that someone has been pulling his leg. If there is anything whatever in the suggestion that he has made, why is he so reluctant to give information which will enable inquiries to be made?

I have been giving it for the last ten minutes.

The position is that shirt manufacturers are all working on fixed margins of profit determined by my Department. I will admit that there is at the present time the possibility that the margins of profit taken by the wholesale and retail distributors of shirts are unduly high. I have not evidence that that is so, but the possibility is there, and it is for that reason that an attempt is being made by an Order which is now coming into force to fix the margins of profit which may be taken by wholesale and retail distributors. Whether that attempt will be as successful as I hope, I cannot forecast. It is clearly very difficult to operate price control measures effectively in relation to this trade, but the attempt is being made. It is, however, based on the assumption that the manufacturers of shirts and of other apparel are at present effectively controlled in the margins of profit that they can take, and I believe that they are being effectively controlled. I believe that any story to the contrary told to Deputy Dillon is just nonsense. If he thinks otherwise it is open to him to produce whatever information he has so that it can be examined. If he does produce it—I do not believe he will because I do not believe that he has any information—I promise him that it will be examined.

I have done it.

The Dáil adjourned at 9.25 p.m. until 3 p.m., Wednesday, the 26th May, 1943.

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