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Dáil Éireann debate -
Tuesday, 9 Jul 1946

Vol. 102 No. 3

Committee on Finance. - Adjournment Debate—Importation of Electrolytic Condensers.

I asked to-day whether the Minister is aware that certain electrolytic condensers were being imported from the United States in the Irish Alder, arriving outside Dublin on the 18th May and delivering its cargo at Cork on the 23rd May, and that it was found the customs duty on these condensers had been increased from 25 to 75 per cent. on the day they arrived outside the Port of Dublin. My purpose in raising the matter now is that I consider the case an important one and that it has very important bearings on the activities of commercial firms who, in difficult circumstances, are scouring the world trying to get supplies for this country which are urgently needed. In the particular case which I propose to refer to, an important class of people are being badly affected, namely, those who have wireless sets requiring repairs of one kind or another and who are depending upon the import of parts by the various importers to get their sets kept in order. Perhaps even more important is the necessity for an understanding in this House and among the people generally of what exactly the Government are doing in relation to certain things and for avoiding actions and practices by the Government that really outrage common-sense.

The case that I raised to-day and raised again last week is that of the firm of Messrs. L.R. Wood, Limited, Cork, who are official contractors to the Electricity Supply Board, the Department of Posts and Telegraphs, the Department of Local Government and the Department of Defence, and who deal in electrical and radio products. Before November last a number of communications were addressed to the Department of Industry and Commerce asking for shipping space to import articles connected with wireless from the United States, and on the 13th November the firm were advised, in reply to a number of letters of various dates asking for space on shipping operated by Irish Shipping, Limited, that the Department had decided that, with a view to expediting the arrangement of shipping, the application should be made direct to Irish Shipping, Limited. That was done and, on 22nd November, the Department wrote the firm saying that, before any definite commitment was entered into for the purchase of these goods, the firm should ensure, by reference to their bankers, that the necessary currency facilities for the purchase of the goods or for any incidental charges would be available.

The communication from the Department took cognisance of the fact that the firm wished to import 25,000 electrolytic condensers weighing approximately 18 cwts.; that the sellers were the Murbas Trading Company, 133-137 Front Street, New York. Through their bankers, the firm therefore applied for the necessary facilities to get dollars to make the payment and in a letter of the 10th December their bankers, the Provincial Bank of Ireland, wrote to the firm:

"With reference to your letter of the 26th ultimo enclosing application for 5,000 dollars approximately and instructions to open credit in favour of the Murbas Trading Company for the purchase of 25,000 electrolytic condensers, please note that this has been approved by the Department of Finance and we await your instructions to cable the opening of the credit in terms of duplicate Foreign Credit From herewith."

Therefore, the Department of Industry and Commerce, knowing the type of goods that were to be imported, facilitated the firm with regard to shipping space through Irish Shipping Limited, and the Department of Finance made the necessary arrangements that that firm would get the dollars necessary to finance the transaction.

The order was given on the 9th January to the firm in New York and, on 2nd April, 11,000 electrolytic condensers were invoiced to the firm in Cork. The shipping was handled by the agent of Irish Shipping, Limited, in New York and the actual shipment took place on 26th April on the Irish Alder. The vessel arrived outside Dublin on the 18th May and then proceeded to Cork and arrived in Cork on 23rd May. The position is that the firm, having intimated to the Department that they proposed to import electrolytic condensers to the number of 25,000 at a cost of 5,000 dollars and having been facilitated in every way by the Department of Industry and Commerce and by the Department of Finance found, when they went through the long process under present circumstances of getting the goods in New York and having them shipped over here, that by the time the vessel arrived outside the port of Dublin a new tariff had been clapped on.

That is a very extraordinary state of affairs. The Minister has explained that he will allow a remission of duty to certain classes of firms and has indicated that the type of firms to whom he will allow a remission of duty will be firms undertaking the manufacture of electrolytic condensers here or who are assembling wireless sets. There are some hundreds of thousands of wireless sets in this country, many of them requiring repairs of one kind or another. Assuming that a substantial wireless assembly industry is to be set up here and that electrolytic condensers are to be manufactured here—anybody with whom I have been in touch and who has any knowledge of the wireless business declares that will not take place because they say that even in Great Britain there are only about two firms manufacturing these condensers—why, under the present difficult circumstances, should those people who have old radio sets and do not want to go to the expense of purchasing new ones have the repairing or keeping their sets in order made more expensive? But why, particularly, should firms who are giving the service that these people want, and who, in difficult times, have tried to get the necessary parts, be served by the Department of Industry and Commerce as they have been served? They were given certain facilities and then they found as soon as the goods arrived at the port, or a couple of hours before that, an increased tariff was clapped on them. The tariff was raised from 25 per cent. to 75 per cent.

I think some explanation is required from the Minister. Before the 18th May he had already received intimation from firms throughout the country that they desired to import certain parts for wireless sets. He gave them all the facilities for doing so. Why, when these transactions are completed, does he not extend to them the facilities that he is apparently prepared to extend to people who, at some time or other, are going to manufacture wireless sets here? I suggest that a very clear explanation should be given as to why, knowing that these people were trying to bring in these parts and were getting facilities from the Minister, they were not allowed in free of duty.

Certain circumstances arose in the meantime, because I take it he did not give these people facilities to import these articles, knowing before they were going to come in that he would raise the tariff. I ask him, in the first place, to waive the customs duty in respect of people who gave him full notice beforehand that they were trying to import these things and whom he did not stop before they did so. In the second place, I ask him to take into consideration the people who require their wireless sets mended as against the people who require new sets. If it is outside the scope of the question to-night, I suggest that on some other day the Minister ought to tell us the policy he is pursuing in raising the customs duty on wireless parts to the extent to which he is raising them in order to encourage a wireless manufacturing industry here. We should get some kind of information as to the prospects before that industry.

While we would all like to see a wireless manufacturing industry developed in the country, we feel it is really outraging common-sense and leaves a bad impression on one's mind when we observe the way people, who have been putting their cards on the table for the Minister in the past, telling him they wanted to import certain things connected with wireless apparatus and having had extended to them facilities for so doing, were treated. As soon as the ship was sighted outside the port of Dublin, the tariff was increased. If the tariff were delayed for 24 hours the supplies would have come in under the smaller figure of 25 per cent.

On the question of policy. I have explained to the Deputy that the scale of duties upon wireless sets and wireless parts was revised immediately there were signs that the production of wireless sets here was about to be resumed, so that those proposing to engage in that business would understand clearly the degree of manufacture which they would have to undertake in order to get the components of sets and the other materials required for production free of duty. It is true that certain of the components of wireless sets which we consider should be manufactured here are not yet being produced and the temporary arrangement is to give to those engaged in the production of wireless sets facilities to import these components free of duty until their manufacture here is practicable.

The position regarding traders is different. Wireless sets and wireless parts have been subject to duty for revenue purposes for a long time. The duty was originally imposed 20 years ago and the effect of the new scale is to increase the duty on some components and take the duty off other components altogether. Components which are much more frequently in demand than electrolytic condensers, such as wireless valves, which were previously dutiable, are now free of duty. It is quite obvious traders engaged in the importation of those parts will have suffered variously in fortune with the change. For instance, as regards a trader importing wireless valves, the valves which arrived after the change were free of duty. Traders importing electrolytic condensers who got them prior to the change were able to import them at a lower rate of duty, but traders whose deliveries arrived after the change had to pay a higher rate.

There might be some case for adjusting the rate of duty over a limited period in respect of goods clearly shipped before the change. The practical difficulty in this case is that I have no power to reduce the rate of duty payable. I can remit the duty altogether, but to do so would be to give this firm a very substantial advantage over other traders who imported these goods and paid the 25 per cent. on them. Having regard to the general situation, I do not think that would be desirable.

Surely, the Minister has power under the Emergency Powers Act to do that. These are emergency circumstances; they arose out of the emergency. Emergency circumstances were responsible for this delay.

It is true that the power of the Minister to make an Emergency Powers Order cannot be successfully questioned, but, in fact, the Minister has to declare that the Order is required for the preservation of the safety of the community or the safeguarding of supplies essential to the community. I would have no reason to make that declaration in a case of this kind. I have carefully considered this case and weighed in the balance the arguments in favour of granting a concession to this firm. It would be regarded as giving them a considerable advantage over other firms, which would suffer a disadvantage through having received deliveries prior to the change. It is probable there are other firms that are benefiting by the change in respect of other parts that are now free of duty.

If I were to take any course other than to allow the duties to apply as from the date when they came into force, I would be faced with demands from firms which imported wireless valves prior to the change, firms which have to carry a loss of duty on them when selling in competition with the firms that got them in free of duty. I decided that the only practicable course to take was to allow the duties to come into operation on the date prescribed and to be chargeable, no exemption being granted to any traders other than those engaged in the manufacture of wireless sets. The intention of granting duty-free licences to manufacturers was announced at the time the duty came into force.

Will the Minister say if there are other firms importing such a very large number as this firm— something in the neighbourhood of 25,000?

The argument Messrs. Wood, Limited. advanced in support of the claim was that there were such substantial quantities of these goods imported that they would have difficulty in disposing of them if they had to pay the higher duty. In other words, there is clear evidence that there was a substantial number of firms which had imported these condensers and paid duty on them.

Mr. Morrissey

Does the Minister not see the effect such action is likely to have on firms who have gone to extreme trouble over a long period to place an order for a big number of articles which can be disposed of only over a long period—an order involving a big sum of money—and who then find in what I might term the middle of the transaction that a big tariff like this is clapped on, a tariff involving an increase of 50 per cent?

It is a substantial imposition no doubt.

Mr. Morrissey

And inevitably it will have to be borne by the consumer.

I should like to ask the Minister if he realises that he is now pushing a particular class of repair work out of the hands of people who have been carrying on that work up to the present into the hands of some other parties who are going to establish a wireless factory?

The Deputy misunderstands the position. The firms which are going to get the right of free import are being allowed to import condensers only for incorporation in sets which they manufacture here. They are not allowed to supply condensers for replacement purposes. In so far as there is free import of these parts, that will apply only to sets manufactured here. The net result of the change in the duty will be that far less duty will be paid because the number of wireless valves imported would far out-weigh the number of condensers. Under the new scheme, sets manufactured in accordance with our requirements within the country will pay no duty at all. This will be the first time in this country that wireless sets will be free of duty. I believe the effect should be in the course of time to make wireless sets cheaper in relation to the general level of prices than previously.

Does the Minister hope to be able to make a statement soon with regard to the manufacture of wireless instruments?

The statement is contained in that scale of duties.

And there are a number of firms prepared to engage in this business?

There are a number of such firms who propose to engage in the work but the number of firms who are preparing to engage in the manufacture of sets to the degree that we desire is less. What they have been told is that subject to their undertaking the degree of manufacture indicated by the range of duties, they will be in a position to sell these sets with no excise duty attaching to them.

It is an astonishing thing that with all the machinery we have, our machinery is so inadequate that we cannot leave people who have been in contact with the Department, such as Messrs. Wood, in the position that they could get the benefit of a 24 hours' notice of the imposition of these duties.

If I gave Messrs. Wood a concession to import a consignment of condensers to-day at the old rate, I would be compelled to give some other firm the same concession to-morrow.

What I am asking is that people who made their arrangements, financial and otherwise, to import some of these parts when there was no proposal on the horizon, such as the Minister saw on the 18th May, should be allowed to import under the same conditions of customs duties as obtained at the time they entered into negotiations with the Department.

Mr. Morrissey

May I gather from what the Minister said in regard to the facilities that are being given to people who are setting up factories for the manufacture of new sets, that they will also manufacture parts.

If they say they will manufacture the specific parts we name including these condensers——

Mr. Morrissey

The position is that you are not going to get any duty on them.

All the parts were subject to duty, even parts that could under no circumstances, such as valves, be manufactured here. We have taken the duty completely off the parts which we have no hope of getting manufactured here and increased the duty on parts that can be and will be manufactured here.

I am told that electrolytic condensers will never be manufactured here.

The Dáil adjourned at 10.25 p.m. until Wednesday, 10th July, 1946, at 3 p.m.