Dáil Éireann debate -
Friday, 12 Dec 1952

Vol. 135 No. 10

Committee on Finance. - Vote 52—Aviation and Meteorological Services (Resumed).

General Mulcahy

When we were dealing with this matter yesterday, I was making the point that in presenting to the Dáil the proposal which is implied in this Estimate the Minister was employing what I would describe as a method of deception. For instance, on Thursday's paper the Parliamentary Correspondent of the Irish Times was able to write, having heard the Minister:—

"Details of the transatlantic air project were laid before the Dáil yesterday and Mr. Lemass quickly disposed of one leading question which the Opposition has been asking. The Irish taxpayer, he insisted, will not be required to foot the bill either for the initial capital expenditure or for operating losses, if losses there should be."

Then the correspondent went on to say that the taxpayer would be surprised to hear that he owes his good fortune to the success of the last transatlantic air project.

The Minister might think that he was not responsible for what journalists or members of the House might pick up from his remarks, but we expect that, when a project is put before the House here, involving as it does the expenditure of public money and the committing of our people to a gamble that may involve losses which will fall on them, the Minister would paint his proposals in rather clear lines, something more on the lines of an engineer's drawing than on those of an impressionist's painting on which anyone can put his own interpretation without the artist feeling in any way responsible for it. The £457,000 that as a capital sum will be sunk in this venture is going to come from nowhere else but either the loan that the Minister for Finance has recently initiated at a cost of 5 per cent. or a further loan, whether borrowed temporarily or otherwise, from the banks—the £20,000,000 having already being spent —and subsequently covered by another loan. There is no place where the £457,000 can be got except out of the public Treasury.

The Minister makes the suggestion here that because £1,400,000 was advanced from the Government to Aer Línte originally and the proceeds of the Constellations and whatever other property was sold in 1948-49 realised £1,800,000, the profit on the capital originally advanced was put into a stocking somewhere for Aer Línte, to be used some time or another again, and that that is now being pulled out of the stocking. There was no such stocking. The first thing that the Minister has to make a clear statement about is the answer to the question: "Is not the £450,000 going to be taken out of capital moneys in the hands of the Government as a result of their recent borrowing or capital moneys that will be in the hands of the Government as a result of future borrowings?"

The Minister has indicated that that £450,000 was in the hands of the Government from Aer Línte as an interest-free loan. When the property of Aer Línte was disposed of, the whole of the capital that had been advanced to them had come from the State Treasury and the whole of it went back into the State Treasury. There was nothing left of Aer Línte but its name, and it is quite misleading, if not worse, to have the case presented by the Minister here in such a way that anyone is able to put the interpretation on it which is put on it and which the Minister no doubt wants us to put on it, that this project will cost the State nothing. It is going to cost the State at least £450,000 of a capital sum, and I want the Minister to say where he is going to get that money, if he is not going to get it from the Treasury, and what the cost is going to be to the taxpayer, in interest payments or in any other way. I want the Minister to tell us what he expects to get by way of interest from Aer Línte, if and when this money is made available to them.

The Minister has put it to us that an agreement has been come to between Aer Línte and an American company, but he has given us no information as to the details of that agreement. He indicates that a certain volume of passenger traffic would be necessary in order to make the project a paying venture, or to make it a non-losing venture. He has indicated that, so far as his outlook on the situation at present is concerned, Aer Línte will lose on the project in the first year and will lose in the second year, and he rather implied, in answer to some of the questions asked, that if he had 11,500 passengers travelling in any particular year, the company would break line-ball, and, in another part of his statement, implied that they would be secure against loss if they were carrying 16,000 passengers. We expect the Minister to be very much more clear with regard to his calculations and what he is putting before the House on that basis.

He refers to An Tóstal as an element in making a success of his venture. My recollection is that, at the initiation of the idea of An Tóstal, a certain number of airlines had their representatives here in Dublin who sat down and discussed matters, and we had a statement from the chief organiser of An Tóstal which appears in the Irish Times of 29th October, 1952, in which we get information in direct reply to a certain number of positive questions. One of the questions was: Have the air and shipping companies on the North Atlantic route any interest in An Tóstal? The answer was:—

"The way these companies have received An Tóstal is one of the most satisfactory features. During the next few months Trans-World Airlines will spend $50,000 on Tóstal publicity and Pan-American Airways have allocated half their North-Atlantic advertising budget to it. The amount is not known, but it exceeds $50,000. In addition, all the transatlantic air and sea travel companies have agreed to feature An Tóstal exclusively in their publicity campaigns for 30 days from 31st January next. A representative of one of these airline companies told me recently: `We are not doing this because we like the colour of your hair, but because we think it will be good business for us. An Tóstal could be a winner, and we hope it will be, for our sake as well as yours. We do not expect to get swamped with travellers next April. In fact, if we carry 3,500 passengers to Ireland during the festival, we will be satisfied, but we expect the organisers to play their part and make every one of these passengers happy, so that, in five or six years' time, the 3,500 will have grown to 50,000.' "

These are the hopes of one airline, and I take it that it is not Seaboard and Western Airlines. It is one of those which sat down here in Dublin when An Tóstal was discussed, so that the other airlines that are well established, Trans-World Airlines and Pan-American Airways, expect to come in at least a little on the passenger traffic that will arise if An Tóstal is so developed as to attract the western tourists.

Nobody objects to any kind of a festival being established in Ireland that will bring the Irish people together, even if only to look at one another. Happily, they are coming together in many different ways and in various societies of one kind or another for developing the economy of the country, the social life of the country, and the artistic life of the country. In religious, social, economic and other ways, our people are coming together and to a large extent they are looking at one another and overcoming all kinds of inhibitions and difficulties which they had, arising purely out of political disturbances in the past.

That is all to the good and nobody is going to question any kind of movement like An Tóstal that is going to be an additional experiment in that way, but why it should be used for the purpose of inducing us to go into a highly speculative and costly gamble is another thing. It cannot have any other effect than to diminish the power of An Tóstal to be anything reflecting the natural development of our people here. I think it unfortunate that the Minister should throw An Tóstal into the situation in the way he has.

Ample suggestion was made here yesterday that the Minister's figures as to the amount of passenger traffic he expected to have through the new company were a little on the exaggerated side. He indicated that he would hope, if not expect, to get 50 per cent. of the tourist traffic out of any number of travellers running from 17,000 to 24,000, but the Minister is surely rather tinkering with the situation and trifling with the House when he puts his figures before us in such a very absurd and skimpy way. Either these people expect something out of the present traffic, or the additional traffic that will arise out of any general attempt to develop additional tourist traffic in the air, or they do not, but the very fact that we are told by the principal officer of An Tóstal that two of the American companies are hoping to spend 100,000 dollars between them in advertising for An Tóstal shows that they at least expect to get some of the travellers who will come here and anything they get will be passenger traffic that will not be available to the new company.

However, that is part of the deceptive presentation of the case to us that makes us not only very concerned and dissatisfied with the Minister's proposal, but very sceptical and almost antagnostic to it. Without our being told about any of the details of the agreement which Aer Línte is supposed to have made with the American company that agreement has to be ratified or approved by the two Governments. The two Governments will be involved to the extent that they will have to give it approval. They will, therefore, be implicated in the arrangement in one way or another. The Irish Government will provide out of its Treasury £450,000 to start off with. It will provide, according to the declared estimate of the position by the Irish Government, that £200,000 will be spent straightaway in developments, mostly on the other side, and that the other £250,000 will be to meet the losses of the first two years. At the end of that period what will we have? What will we develop? The Minister has apparently jumped into this scheme in a hasty way. Deputy Briscoe yesterday gave some indication of one aspect of the situation that may be pressed, which is that Aer Línte has a licence from the international licensing body at the present. That will expire if some operating work is not carried out by Aer Línte.

Pressed by that or under some other impulse we are asked to approve now of Aer Línte joining with an American company to carry on a transatlantic service in a type of aircraft that is not quite satisfactory. We are linking up with a charter company that has been doing tramp service across the country in freight. We will use aircraft that is somewhat obsolete and which has been used for cargo purposes, aircraft that could be regarded as reconditioned cargo airliners. That is the type of aircraft that will be used on the understanding that in three or four years' time a better class of aircraft, Constellations, will be employed. At the end of that time and after losing for a few years, we are asked to believe that we will have a successful company operating in the middle of the most competitive type of traffic in the world. Every year that passes sees a higher quality aircraft in operation. They are being made available to such an extent that the organisation of trans-oceanic air traffic will be radically changed. It is quite clear that in the next couple of years long distance air liners of a much more powerful class will be available and, instead of doing coast to coast flights as they do at the present moment, they will penetrate more deeply into the various Continents on both sides of the Atlantic. As a result they will look for an entirely different organisation for their personnel to cope with the various routes which will require to be organised. They will require a scheme by which pilots will be available both for long distance and short distance flights in order to relieve the strain and make more easy the service that pilots will be called upon to give.

The Minister must be already aware of the tendency for British Overseas Airways and British European Airways to amalgamate in order to reduce their overhead operational costs and prepare them for the better organisation of their staffs. There are radical changes on the horizon in so far as long distance and trans-oceanic air traffic is concerned. These will radically change the whole set up within the next couple of years. What will we be left with then? Will Aer Línte still be joined with the American company operating on the basis on which it is proposed to operate now, the American company providing the machines, the technical personnel and the flights and we providing the administrative trimmings?

The Minister suggested that would not be so. At any rate, that is the suggestion he has conveyed to the public mind outside. In three or four years' time we will be faced with substantial capital expenditure. What will be the result? The result will be exactly what happened in regard to Córas Iompair Éireann. It has been stated that the trans-oceanic transactions will not be able to sustain themselves and companies doing the main trans-oceanic transactions will do the continental ones as well. We will find at the end of the operational period of this joint company that Aer Lingus will be taken over just as the city transport service in Dublin was put into the melting pot of Córas Iompair Éireann with disastrous and disturbing consequences to city traffic.

Aer Lingus has shown itself to be a highly satisfactory and successful organisation in a limited but, nevertheless, very definite and effective sphere. It has added not only to the well-being and the development of our country's technical services but also to the prestige of our country. Aer Lingus will be thrown into the mess we are proposing to create here. On transport generally, the Minister has indicated that he stands for unsubsidised transport. When putting up the scheme in 1944 for the nationalisation of the transport service under Córas Iompair Éireann, he promised us cheap and efficient transport. Anyone who either travels to-day or faces the financial position which has been put to us in relation to Córas lompair Éireann knows what the results have been after six years. The Minister must know that he is venturing upon an absurd gamble in a world that is highly competitive and speculative. He cannot see the end of what he is going into. He must see the beginning and he ought to be quite frank about the beginning. The State is putting up £450,000. In three years' time somebody somewhere will put up the case that in order to save something from the return we should go further ahead with the gamble and that Aer Lingus should be thrown into a general air line operational service in the same way as the Dublin United Tramway Company was thrown into Córas Iompair Éireann.

We should not at this particular moment contemplate anything that would lead us in that direction. The Minister has indicated that the taxation situation has reached danger point. We know the difficulty of finding capital for our capital development purposes. We know the comments made by some members of the Government and some members of the Fianna Fáil rank and file when they get on political platforms with regard to the foundation of our economy here and the alleged stagnation of agriculture. At a time when the Minister is cheese-paring to a danger point with regard to teachers' salaries and when there are discussions in regard to teachers, the Civil Service, judges and other matters, at a time when we are cheese-paring with regard to our essential administrative services on the ground that we cannot afford further expenditure, the Minister proposes cheerfully to dip his hand into the Treasury and to take £450,000 and put it on a gamble, a gamble of which I do not know what he would like to contend would be the outcome, if it were successful, on our general foundation economy, on the one hand, or even on our political or defence prestige in the world.

If we are to look at the position objectively in order to condemn it in an objective way there is another aspect of the matter that the House must face up to.

Article 29, paragraph 5 of the Constitution is as follows:—

1º Every international agreement to which the State becomes a party shall be laid before Dáil Éireann.

2º The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann.

3º This section shall not apply to agreements or conventions of a technical and administrative character.

There is no question that this agreement is of a mere technical or administrative character. This is a definite agreement in respect of which we are told the sanction of two Governments has to be obtained.

In the Irish Press of the 27th November we read:—

"American Skymasters for charter to Aer Línte. Transatlantic Air Service Agreement Signed. Approval of Governments is awaited."

Then it goes on:—

"Aer Línte Éireann have completed arrangements to operate a passenger, mail and freight air service to America under the Irish flag. An agreement, signed in Dublin between Aer Línte and Seaboard and Western Airlines, requires the approval of the Irish and American Governments. This was sought simultaneously in Dublin and Washington yesterday. The agreement will operate for four years."

Sub-section 2º of paragraph 5 of Article 29 of the Constitution says:—

"The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann."

This agreement involves the provision of £450,000 of Irish public funds straight away. The setting up of a service of the kind contemplated implies that the day will come when it will have to be subsidised further either as a continuing matter or to carry it over another few years of fight in a very highly competitive arena. Surely the Minister for Industry and Commerce will not deny that the air services that have developed for any long-distance flights have been substantially subsidised by the Governments of the States with which they are connected, that they have been given substantial subsidies in the guise of sums for carrying mails or in some other way. The case that has been presented to us here shows that this is a proposal that will involve the expenditure of public money. I say that Article 29 of the Constitution, that the Government Party claim so much for, lays it down that this international agreement shall be laid before Dáil Éireann, because it involves the expenditure of public money by the Government.

I have put the objective side of the situation because I think the Minister has not given us any information that would warrant the House giving Aer Línte a permit to go ahead with this transaction. If the Minister thinks that his information has been wrongly interpreted or has been picked up wrongly, it is for the Minister to give us more information about that, but there is a constitutional obligation on the Minister. No matter how objective the Minister may be or how persuasive he may be or how much we may accept his proposal, there is a constitutional responsibility on the Government to put before Dáil Éireann the terms of the agreement which has been entered into and which would bind this House to the expenditure of capital moneys now and would inevitably involve us in the expenditure of further moneys in future.

Captain Cowan

This proposal has undoubtedly been subjected to a considerable amount of constructive criticism. Taking it in a general way, I think it will be agreed that the discussion has been objective. Nevertheless, there has been a considerable amount of gloom in the speeches that have been delivered against the proposal from the Opposition Benches.

I regard this project as a business transaction pure and simple. I regard it as a transaction intended to establish here an international trade. If the Minister can succeed in doing that he will have achieved something.

Now, whatever one may say about air transport, more people are becoming air-minded. More people are travelling by air day by day. There is a gradual increase in the number of people who travel by air and, in the reasonably near future, it seems to me that air transport will be the main transport for distance travel. If this nation, small and all as it is, can get established in that particular line of business, it must bring considerable benefits to the country. In my young days and since, most people have expressed their regret at the fact that we had not here a mercantile marine, and that this country had not availed of its opportunities to establish a shipping service such as other small countries in Europe had established. By such means considerable wealth was created in these countries. In the past we were prohibited from developing along the lines of shipping by hostile force, operated from the outside and operated against this country. I am quite sure that if, say, 150 years ago there was a proposal in a House such as this, an Irish Parliament, to establish a shipping industry there would be the same type of criticism and the same type of objection that we have had here in regard to this new project. We had exactly the same type of objection to the Shannon scheme when it was first launched in this House.

General Mulcahy

You got a lot more detail about it than you are getting on this.

Captain Cowan

I am not concerned about detail. I am concerned about the fact that any proposal, particularly any large-scale proposal, will be subjected to criticism. It does not matter very much, I think, to certain people who want to remain in a groove. People who want to remain in a groove are not anxious to get out of it and they always place obstacles in the way of those who would try to get them out of it. We have been pressing here on the Government, and that pressure has been maintained over a number of years, that there should be projects of this character initiated because projects of this character, if successful, can mean such a tremendous lot to the country. There is no reason in the world why a small nation like Ireland cannot be as successful in air transport as, say, Greece or some other small European countries have been in sea traffic. I think I can appreciate, and that any Deputy can appreciate, that there are always difficulties in the way, but you cannot achieve success unless you get over difficulties and obstacles. If this project is a success it must create employment in the country, good employment. It must improve conditions generally and, if it does these things, it is to be welcomed and the expenditure of £450,000 mentioned by the Minister would be money well spent.

I thought that this proposal of the Minister would be welcomed at least from the Labour Party Benches, and I was surprised, disagreeably surprised, at the criticism levelled at it by Deputy Larkin yesterday because that type of criticism can be levelled at anything that is put forward. I think it is a most destructive form of criticism to say: "You should not spend the money that way; spend it in some other way." I think that Labour Party Deputies particularly should be opposed to that form of reasoning.

I have seen it said so long in the country where an agricultural worker wanted to get an increase in wages: "You cannot do it; it cannot be given to him because if you give it to him you will have to increase road workers' wages." If there was a proposal put forward, on the other hand, to increase road workers' wages it would be said: "No, you cannot do that unless you also bring up the wages of agricultural workers." That is a form of argument that has been generally used against proposals of every kind but particularly proposals of a constructive nature advanced by people with vision and with courage.

Deputy General Mulcahy and Deputy Larkin say that we are entering into a highly competitive field and a highly speculative one. I think that that is true. I think everyone will agree that it is true but because it is highly competitive and highly speculative is no reason why we should keep out of it. I think that if that argument were pursued to its logical conclusion we should hear: "We are a small little country; we cannot do anything at all. We cannot enter into any competition with anyone. If there is any speculation about it we cannot do it." Gambling has been mentioned. I think it is necessary to gamble at times and that this is a reasonably good gamble. I do not for one moment think that the Minister can guarantee success. He cannot guarantee it but at least all our energies can be directed towards making it a success. I think that when this is launched no matter what criticism may be offered here now, it will be the desire of everyone to see that it is a success.

I have heard some criticism of this scheme on the basis that it may not make a profit. I do not think that is a sound line of criticism for a scheme such as this in its foundation and initiation. Obviously, no scheme of this magnitude can be a profit-making scheme immediately. I think it will be sufficient if, in the long run, it becomes self-supporting. I think that will be sufficient because, if it is self-supporting, and if, at the same time, it gives a considerable amount of employment, then it will be a profitable venture indeed.

I agree with the Minister's general conception, that what we want in this country at the moment is more effort in the line of capital development, more projects of a big kind, and it is only by projects such as this, and other large projects, that we will be able to lift this country up, that we will be able to create more and better employment, and that, generally speaking, we will be able to create conditions which will lead to prosperity. I think this is a venture in which every one of us should be vitally concerned, and one which all of us should endeavour to make a success of.

There is one matter which I would like to mention in regard to it, and that is that during, I think, the period of 1947, when an effort was made to establish a transatlantic air service, a certain amount of advertising was done in the United States. I understand that the advertisements were of a type which should not be approved of, of a type that showed up this country in a pretty bad way. This pig in the parlour concept—the stage Irishman concept—is not one that should be encouraged by advertisements published under auspices connected, even in a remote way, with the expenditure of public funds. I have been told that there were advertisements of that kind published, and that they were objectionable. I am quite sure that no one would desire a repetition of these advertisements in the future.

I feel it is regrettable that the venture of five years ago in regard to a transatlantic air service was not persisted in. I remember that, shortly after the change of Government, when Deputy McGilligan, as Minister for Finance, was dealing with this matter, he said that he was halting it, or suspending it, for the purpose of examination. Of course, the suspension was, in fact, the destruction of the whole scheme.

Mr. McGilligan

I think the Deputy is mixing up details. I never said that about this.

Captain Cowan

That you were suspending the work.

Mr. McGilligan

The suspension was in the case of the radio station. The killing was on this thing.

Captain Cowan

Perhaps I misunderstood. I did not have time to make a check up. I did gather at the time that Deputy McGilligan, as Minister for Finance, suspended the business first, and that, in fact, the suspension entirely eliminated it. However, I do not want to go into that aspect of it, but I think Deputy McGilligan would agree now that it was an unwise step to take.

Mr. McGilligan

It was one of the best things we ever did.

Captain Cowan

That service, or any other major service of that kind, if it could be made a success, should be made a success. The possibilities in 1948 were even better perhaps than they are to-day, because if we had got going then we would be reasonably well established now. As I say, I believe that air transport is the transport for the future. I believe that more and more people will be travelling by air year after year. I believe that the resources are fairly tapped at the moment, and that there will be enough passengers to keep not only all the air lines which are at present established in this business, but many other international air lines as well. I think we would be foolish, when the opportunity is there, if we did not make an effort to get in on it. It may be that we will be unsuccessful. It may be that this will be a failure, but I think we would be unwise if we did not make an effort, because I see in this something that may turn out to be a great success. I certainly give the project my full support.

Mr. McGilligan

If my recollection serves me correctly, I think I heard Deputy Cowan say, as I came into the House this morning, that this House had voted against the Shannon scheme.

Captain Cowan

No, I did not say that.

Mr. McGilligan

I thought these were the words the Deputy used.

Captain Cowan

No. I said that when the Shannon scheme was going though this House, it was subjected to the same type of criticism as this proposal.

Mr. McGilligan

No. The only criticism made on the Shannon scheme was the criticism which came from outside by the people who are now in. When the decision was taken on the Shannon scheme, that decision was put on the records of the House, and there was not a solitary soul in Dáil Éireann against it.

Captain Cowan

Does the Deputy not remember the trouble he had with the Dublin Chamber of Commerce?

Mr. McGilligan

I do, and I remember that the Dublin Chamber of Commerce was the least of the serious troubles that I had. I remember the Fianna Fáil people who were then going around outside saying that the thing could never be a success, and that it was lunacy to start it

An Leas-Cheann Comhairle

That does not arise now.

Mr. McGilligan

I mention it only to correct the historical error made by the Deputy. The Deputy tells us that this is a project we should approve of. Let me say that I think we would be prepared to give better consideration to it if we had something more to go on, if there was something in it to consider. We do not know what the agreement is. We have been told whatever it suits the Minister to tell us, and I take it the Deputy does not know any more than that. I think he is less aware of what the Minister told us than most other people in the House. This is not a national endeavour. Let there be no nonsense about that.

I certainly thought that the propaganda around it in connection with the first proposal would have been sufficient even to kill a good venture. We killed that venture after examination. We got certain memoranda put in and the revised view of the Department of Industry and Commerce in March, 1948, was that the operating losses would reach to £309,000 in the first year. Various people connected with this service were also consulted and there was no person who could hold out any hope that within any reasonable period of years such a transatlantic service would come anything near like breaking even. The propaganda, of course, associated with the other venture was scandalous and how it was tolerated I do not know. The matter was brought up in the House and, instead of there being abject apologies for it, there was an attempt made to justify it, to say that it was what went down in America. This is the type of matter which was put out:

"Cushlamochree, and would you look what the Irish are doing! 'Tis a proud day that's coming for the Irish! It's a Shamrock that's comin' ... the likes of which ye've never seen before."

They had to be ungrammatical to show how uneducated they were. On March 6th we had this:

"And did you hear the news that's going round—the Irish are flying on St. Patrick's Day."

We got rid of that, but we are now into a new phase of nonsense. First of all, we are told that this will not cost the taxpayer anything and, consequently, it will do the country some good in prestige, if not money. It is a mixture of the symbolism that there is about an individual, that every time he intended to travel from Belfast he postponed it in order to save £5 by not pulling the communication cord. We saved money selling the Constellations and stopping a service which would go bankrupt. The Irish Independent says, with a certain amount of humour, that the new air service will not hit the taxpayers. The taxpayer was so “coshed” by the last Budget that he would not know what hit him. To say that the taxpayer will not be hit by this is nonsense.

There was a profit made on the sale of the Constellations and there was what you might call more profit achieved by not running a service that would land us very heavily into expense. The whole air service is still being subsidised, if you take the money put into the development of Shannon Airport and Dublin Airport and all the various overheads attached to these airports. An account was given to me in March, 1950, showing that there was something near £4,000,000 invested in these airports and there is no real return in the sense of making any attempt to pay off these capital costs and the overheads. We did make a saving. We sold the Constellations and brought in £1.7 million. That was to be put into the kitty against the loss and the development charges of the rest of the service. If the money for this service has to be found it is coming out of somebody's pocket. It will come out of the National Loan. If it does, it will be charged up against the State at 5 per cent. If there had been a loss in 1948 we would have been able to save a couple of points in interest on whatever was lost.

The symbolism about this matter is that we are to have an Irish service. We propose to hire some planes. The servicing of these planes will be done by this American company. I do not mean anything derogatory, but this is not one of the real American companies. This is what could be called a tramp company, the same as tramp steamers, as they are not plying on a certified route. At any rate, it is not their main business. We are taking these planes over with American technicians to service them here as well as at the terminal on the other side. Pilots and all the operating staff will be American. For something short of £500,000, this country is to supply a few hostesses, some stewards, and the booking staff in America, whom we will have to pay in dollars.

Under the licensing laws in England long ago a man could not get a drink at certain times unless he took a meal. It was found that people did not want to take a meal when they wanted to drink. Then a symbolic meal was provided in the shape of the railway room sandwich, done up in a package which no one would eat. Then they got to the point of having a dummy one, which they attached by a chain to the counter. What meal are we getting? All the hostesses, a bit of paint on the side of the airplanes and an insignia to mark that the craft is ours, with possibly a saint's name on the side. That is called an Irish service, and we are committing ourselves, possibly, to a loss of close on £500,000 for that nonsense.

What is the chance of this doing well? Does anybody know? Previously we were able to examine the matter because we had the details. We knew what the aircraft would cost, what the overheads would be, what the landing fees might bring in. We knew what the cost of the operators and the servicing would be. All that could be put together and you could estimate what number of passengers were travelling, what passengers might be induced to come because it was an Irish plane, what passengers you could get by an Irish plane instead of any other aircraft. When all these things were examined four years ago, we got a memorandum on some date in March, 1948, which stated that the revised view of the Department of Industry and Commerce was that the operating losses would be somewhat in the neighbourhood of £309,000. Nobody ventured to say; nobody would bet 5/- that that service would come near breaking even in a big number of years.

Deputy Cowan thinks we would have done better if we had gone into that service then. I thought the new case was that we were better in going in now, that there were more tourists travelling. If Deputy Cowan's prophecy comes to completion and we postpone it for ten years, it might be worth while going into. According to him, the whole world will be taking to wings then and we will be able to bring all these tourists over here and back again.

Shannon Airport has been mentioned. After the Dáil debates had concluded, the general view that was expressed with regard to that particular project was that there never was a State project about which so much detailed information had been provided as had been provided in connection with the original scheme and the expert's examination of it. Will anybody say that we have any details with regard to this? What do we know about it? Why can we not get the agreement? I understand there is an agreement actually signed. The Irish Press the other day said:—

"Aer Línte Éireann have completed arrangements to operate a passenger, mail and freight service to America under the Irish flag."

When you realise how many untruths are hidden in that nonsense, it is doubtful whether the rest should be relied upon:—

"An agreement, signed in Dublin between Aer Línte and Seaboard and Western Airlines, requires the approval of the Irish and American Governments. This was sought simultaneously in Dublin and Washington yesterday."

There was some sort of agreement to which signatures were affixed and, under the law of America, it has to come before Washington. If it is a treaty, then it has to go before the President and the Senate, and it has to get the approval of the Irish Government here.

I understand the point has been made as to whether or not this is such an international agreement as is governed by the Constitution. People should understand what the Constitution ties us to. Article 29, paragraph 5, subparagraph (2) says:—

"The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann."

Is it supposed that this debate is approving of the terms of the agreement? We have not got the terms. If Seaboard and Western have been acquainted with that clause of the Constitution, do they feel safe in going ahead if there is a charge on public funds, and we are now asked to vote a nominal sum of £10? Why can we not take the agreement apart altogether from this question of it being an international matter? Are we not entitled to pass our views on it? We are asked to express views on questions such as this. We are entitled to be provided with a proper foundation on which to base those views. I do not know what the terms of the agreement were. I have been told a certain few things about it, and the few things are certainly not very satisfying from the point of view of the people of this State.

Are we limited to the staffs that were mentioned, booking staff in America, hostesses and stewards? I understand that there are no longer stewards on a lot of the lines, and where there are night flights hostesses disappear. Is it a question of getting hostesses or stewards, whichever is the proper one for the flight, and when we come to that if we are going to get hostesses, why should we not carry the symbolism a bit further and provide the uniforms, the skirts, and the lipstick, and let us call that really Irish! Are we going to have the minor staff all the time, and ignore the skilled people whose departure in 1948 was the subject of so much lamentation from Fianna Fáil —the pilots, the navigational people of all types? These apparently are not under our control. They are not to be recruited from Irish people who may have talent that way. They are to be American employees; apparently we cannot insist upon their being ours.

What will these stewards amount to? At most they are to be a sort of menial staff on board the aeroplane. In the end do we balance it all up and say that Irish prestige is going to be heightened and that the name and fame of Ireland is going to be very popular and an inspiring thing because we have a few hostesses, some stewards, and a few booking clerks in the United States and we will receive this painted plane with the shamrock, some Irish insignia on it and some saint's name painted along some part of the craft? That is the project into which we are asked to put £500,000. It is a poor bargain. Certainly nobody is going to think very much along the acushla machree line about that, with the lick of paint, the green uniform and hostesses. That is the Irish service we are going to have.

What is the chance of getting out of this project? The Minister has so little assurance this time that he is putting a ceiling on the amount to be spent. He says the money is available from the profit we in the Opposition happened to make on the sale of aircraft in 1948. The difference between the money originally associated with Aer Rianta or Aer Línte and the money as their disposal accruing from the sale of the Constellations is the sum of about £467,000. The Minister says when that is finished we are finished. He adds that we may lose in the first year and we will probably lose in the second year, and it will cost £200,000 before we start at all.

Can anybody visualise what the position will be four years hence? Maybe half way through the three years we will discover that there is an expenditure of £190,000 on certain groundwork or something else and the cry will go out: "We have lost on operations." Then we will be moving up towards the third of those £100,000, four of which we have set aside for this line.

Will there not be a wail around this House when that money is expended, and if anybody comes in and says it is quite clear that this project is a failure there will be a hue and cry if somebody suggests that since we have lost the money which has already been put in we should get rid of the whole thing before we lose more money on it?

That is what happened in 1948. We were told that a worthy project had been started and that Irish money had been put into it. Would it not be wise to continue and not to spoil another project for a ha'porth of tar? Do we not know that that is a reliable forecast of what will happen in a few years' time? As one Deputy said last night, once you get into these things there is a clamour for the continuation of subsidy and that clamour will be made here and this wild gamble will result in another Department of Industry and Commerce debt. It will be like other projects which were started and which are destined to be for ever a blister on the community, things we cannot shake off because, if we do shake them off, Deputy Peadar Cowan will be saying again that another promising venture is going to be stopped because men of little faith will not go on spending the taxpayers' money for another two years or so. That is what the future holds.

The Minister talked recently to a group of Córas Iompair Éireann people and he told them that any time you got a service that is subsidised, once you went in with a subsidy you got inefficiency afterwards. You never could have a subsidy without its co-mate always with it, inefficiency. Imagine that a week after that he was signing the agreement which was recording another subsidy, and he parades this before us as something we should accept.

Think of the times in which we are asked to gamble this £400,000 for the sake of a few hostesses, the green uniforms and the lick of paint on the machines. It is a time in which if you take up this week's papers you will see what a group of Cork businessmen said and the tale of woe they had. A group of builders, reported in the paper a day ago, said that building is falling off and that a great slump is expected in building, due to the Government policy of high interest rates and the general increase in costs. We were told—a little bit far distant from us now—in the early days of November, that the limit of taxation had been reached, that the revenue from taxation was dropping off, that this year's Budget was likely to be unbalanced, but it would be nothing like the unbalance of next year's, for the yield of taxation was beginning to drop because of the terrible depression that the Government had induced in the business world this year.

We read in a bulletin issued from the Department of External Affairs that the Great Northern Railway half way through November had just finished its biggest trade and had used 29 special trains to bring sawn timber from Dublin to Belfast, Newry and Derry in the Six Counties. This morning I got a return about unemployment which is up by another 1,000, running about 12,000 over two years ago.

With all these woeful forecasts, building trade slumps, yield of taxation down, a terrifically hard year ahead for us and the prospect of another harsh Budget although the Budget this year was described as a harsh and unjust one, the present recession which is going to mean less yield from taxation, rising unemployment and emigration, we are asked to believe that this service is worth while from the point of view of expenditure.

The Minister is attempting to put across the farcical proposition that this will not hit the taxpayer and that the taxpayer will not have to find the money. Of course he will have to find the money. Part of it has been found already because we clawed it back for him out of an adventure that was certain to end in failure. Not satisfied on better maturity that that was a proper ending to that old-time project, the Minister comes forward now with this much watered-down proposal introduced, not in the flamboyant way in which the 1948 service was spoken of but in a muted key, and yet with roguery in it and an attempt to say that the taxpayer will not have to pay for it.

Finally, we are given a mixture of figures all aimed at showing that if tourists want to leave America and come to Europe in greater numbers next year than this year or the year before, and come to the extent of an increase of almost 100 per cent. over those two years, and if we can get 50 per cent. of that traffic—mark those are two tremendous "ifs"—then we may break only losing about £30,000. As against that vague guess, and certainly it is something we must treat as a guess since we have not got the material upon which we could say it is an accurate estimate. I want to put the solid estimate of the Department of Industry and Commerce in 1948. In that year people who, first of all, had said that the loss might be in the region of £80,000 a year told us on reconsideration that the loss in the first year in their estimation would be the figure I have already given, namely £309,000, and that this loss would continue for years. But the hope was, and nobody could give us any estimate or even say that the hope was a likely one, that maybe the later years would not be so bad and over a decade it might be possible, though nobody said it would be likely, to cut the losses to some figure that the community might reasonably be asked to bear.

This scheme has not been introduced with all the ballyhoo of the last scheme. The ballyhoo is quieter in tone. The proposal is introduced in a more subtle way, but there is just as much of the phoney plan about this as there was about the 1948 proposal. The country should have nothing to do with it. It is something that I personally, until such time as I have better information on it, will strongly urge against. I insist, and I would like the American company to be warned of this, that they may find themselves four, five or six months hence with another Administration which will hold strictly to the constitutional point and that, unless the Dáil has a specific agreement before it of which it can approve, we will take the point hereafter that this agreement was not properly made and is, as it stands, unconstitutional.

Captain Cowan

Is that not sabotage?

Mr. Lemass

That is what it is intended to be, but it will not succeed.

Mr. McGilligan

Sabotage to ask that the constitutional point should be considered. What do we mean by having a Constitution?

Mr. Hickey

Once again I must repeat that I resent and I protest against any Irishman accusing another Irishman here of sabotaging the interests of the Irish people. I do not care where the accusation comes from. I will tell my own comrades that they should not indulge in it. We are here as Irishmen to serve our country, and it is disgusting to hear anybody here talking about sabotaging our people.

Captain Cowan

That is what it is. It is sabotage.

Mr. Hickey

I make the Deputy a present of it. That is his own opinion. I listened with attention to the Minister's statement and to the replies given to the many questions put to him in relation to this project. I can assure him that I was not impressed. Neither am I convinced that this is a project that we should walk lightly into. I think the Parliamentary Secretary, Deputy Lynch, was treating the House very lightly when he said that this will cost the country nothing. Is it an exaggeration for me to say that we are, as a nation, paying at least £6,000,000 or £7,000,000 per annum freightage on ships bringing goods to and from this country? I assert we are paying at least that much per year. I suggest that that money and the money we are now investing in a transatlantic air service would be put to a more useful purpose if it were invested in ships to keep some of that money in our own country and give it back to our own people.

I refuse to take any notice of Deputy Cowan's remarks, because I can assure the Deputy I have more interest in the people who are responsible on the Government Benches and on the Opposition side of the House for serving our country than is Deputy Cowan. We are all of us trying to do our best. I attribute that to both sides of the House.

We have never yet made any serious attempt to get ships to earn that £6,000,000 or £7,000,000 per annum for ourselves, to say nothing of the amount of work that would be provided for our people in the servicing of these ships in the Dublin and Cork dockyards. I think this matter should be left in abeyance. First things first ought to be the primary consideration of every Deputy in the House.

General MacEoin

I am astounded that any Deputy should be charged with sabotage who directs public attention to our constitutional position as he sees it. Deputy McGilligan and Deputy Mulcahy performed a very important duty and discharged a very important function when they directed attention to the constitutional issue. Deputy Cowan says that is sabotage.

Captain Cowan

It is sabotage to warn the company in America. That is what I call sabotage.

General MacEoin

Deputy Cowan would have us follow the example set here on another occasion of concealing from people what the true facts are. If it is a fact why should not the Americans be warned? Why should we lead them into it? Why should they not be told that the law is here?

Mr. Lemass

I hope Deputy MacEoin does not think that Deputy McGilligan has stated the law.

General MacEoin

I will take Deputy McGilligan's interpretation of the law just as quickly as anybody else's. What astounds me is that the Minister has succeeded in putting over on the people and on the Press that this scheme will not cost the country one penny. If that is true, and that is the Government's assertion, then I am pleased because it means that notwithstanding all the ballyhoo by the Minister for Finance that the last Administration spent every shilling on which they could lay their hands that Administration left on the shelf money which the Minister can now take down and utilise for his pet scheme. This is the first £500,000. How many more £500,000 have you got that the previous Administration left? The Government would now have us believe that the previous Administration instead of spending money, had left it high and dry for them to spend on any dead scheme or gamble. The Minister for Industry and Commerce has said that this development of air services can be described as a gamble. I am pleased that the Minister has now admitted that there is at least that £500,000 there. I want to know if this is only the first one. I should be delighted to see the other large sums which our policy left over. As time goes on the Minister will put his hand on the shelf and take down the other sums and spend them.

Because the people's money is being used on this proposal—which, I presume, the Government intend to implement—I wish it success. I am as air-minded as Deputy Briscoe or anybody else in the House. I have been associated with air lines and air companies for a long period. I remember the first plane in which I went up. I could look down on the ground through the linen wings. I was interested in the Bremen, the time the first east to west flight took place. I am glad to see that development has taken place more or less as it was outlined at that time in a memorandum to the Irish Government and the Irish Army of the day by Colonel Fitzmaurice. He outlined the development that would be necessary to make flying a success. I am sure that these memoranda are still available in the Department of Defence. I suggest to the Minister that, as Colonel Fitzmaurice is still in this country, his services should be availed of in an advisory capacity. He has already rendered valuable service to this country. I think he could be of great benefit to the Minister or to the company in a supervisory capacity.

At best, as the Minister has stated, this is a gamble. It may succeed. I should like to see it succeed once it is undertaken though I have my doubts about its success. I do not think it is a wise undertaking. I believe that the money could be put to better use. Like Deputy Hickey, I believe that it would be a far safer investment to develop our mercantile marine. The expansion of our shipping would be of great value to the nation. I made that statement as far back as 1938 and it is still true. Any development of that nature would be of lasting benefit to the Irish people.

Mr. MacCarthy

I hope that when Deputy McGilligan reflects on his performance here this morning he will not be very proud of it.

Mr. D.J. O'Sullivan

What a hope!

Mr. MacCarthy

With his razor tongue he sliced up innuendo, ridicule and half-truths and dished them out with vinegar and gall against a project on which the Irish nation is embarking in the ordinary course of its industrial development. Deputy Mulcahy said that the Fine Gael Party are antagonistic to the project. If their criticism rested there, one could understand it. Deputy McGilligan, however, read out a few sentences picked at random from the work of feature writers and published in America. He calls that an argument. If that be true, then the House is descending to a very low level of debate.

General Mulcahy

They were advertisements.

Mr. MacCarthy

Whatever they were, it was typical of——

Mr. D.J. O'Sullivan

Deputy Dr. Browne was right.

Mr. MacCarthy

It was just typical of what those feature writers in America do on matters of that kind.

Mr. S. Collins

They were advertisements which were paid for by us.

Mr. Sweetman

Do not embarrass the Minister too much.

Mr. MacCarthy

I am not embarrassing anybody. They were just characteristic of that type of feature writing by American correspondents. If that is propaganda in America then let it be so and let it serve its own purpose for this country. Deputy McGilligan read extracts from these advertisements merely for the purpose of trying to bring ridicule on this project.

This nation has the grandest harbours in the world but for many years they were open only to the shipping of foreign nations. The Irish flag was not flying on either the liners or the freight ships that were serving this country. We have made progress in that regard and we are still making progress. Despite what Deputy Hickey has said, I do not think that our predecessors pushed forward in that regard as they should. I think that some of the orders for ships were cancelled, just as the Constellations were sold and just as the chassis factory at Inchicore was sold. The Coalition Government sold everything they could sell. They had no regard for the progress of the industrial life of this country.

Deputy McGilligan mentioned that we cannot have our own air pilots. The air pilots that were trained for Aer Línte went to take up work in India on the Dutch airlines and in other parts of the world when the Coalition Government sold the Constellations. Deputy McGilligan said that we should wait until the number of passengers for these airlines increases and that then we shall have a better chance of success. The point is that unless we get in at the start the vested interests will come along later and crush us out. The Minister was getting in at the right time and when one should get in. The Holy Year was approaching and an immense amount of traffic would have come our way. We could have established our air service in the past few years if the Coalition Government had not sold the Constellations. I met groups of individuals and pilgrims and people from all parts of the world during the Holy Year. They could not understand why we, with one of the finest airports in the world, had not our own transatlantic aircraft operating from it.

We have heard reports from representatives of the Irish Tourist Association who went to America and consulted various Irish interests there. They reported that there was very little use in any further advertising in America for tourists to visit Ireland because they cannot get the means of travelling over here. That is perfectly correct. Very many people would like to visit this country. There are very many Irish people and Irish-Americans, who get only a few weeks' holidays in the year, who are anxious to visit this country by some speedy method of conveyance and to meet their families and friends here.

We are told that this service is going to lose, that the taxpayer is going to suffer, and all the rest. A profit was made on the previous venture and that money was lent by Aer Línte to the Irish Government. The Irish Government is simply handing that back—just as if some persons who invested in a National Loan or anything else withdrew their money from it and put it into a purpose of their own. It is being put back and devoted to its original purpose.

Mr. Sweetman

It was the taxpayers' money made the profit. It was money from the Exchequer that made it.

Mr. MacCarthy

The investment was a very sound one, and if it had been allowed to take the course that was intended, there would be a much better profit now and we would not have to be going the way we are into this venture. We would have our own planes and pilots and all the rest that Deputy McGilligan seems to be lamenting about now. He spoke not only about the loss to the Irish taxpayer, which he seems to envisage, but he spoke about the rate of interest, the higher rate of interest now. I would like to recall for Deputy McGilligan and his colleagues an answer given by the Cumann na nGaedheal Minister for Finance, as he was then, to a question by Deputy Richard Corish, Beannacht Dé lena anam, who wanted to get money for housing development. Here is his reply:—

"It is understood that some local authorities are anxious to carry out housing schemes under the Housing of the Working Classes (Ireland) Acts, 1890 to 1921——"

they had the Local Loans Fund closed against them at that time,

"and I have decided to make the Local Loans Fund available at once for the purposes of approved schemes under these Acts. The loans will be repayable on the annuity basis over a maximum period of 35 years, and the rate of interest chargeable will be 5¾ per cent."

That is given in Volume 30, column 763.

General Mulcahy

In what year?

Mr. MacCarthy

In the second last year of the reign of the Cumann na nGaedhael Government.

General Mulcahy

What year was that?

Mr. MacCarthy

I have given the volume and the column.

General Mulcahy

And the Deputy is shying about giving the year.

Mr. MacCarthy

It was during the reign of the Cumann na nGaedheal Government and that was the rate of interest they were charging.

General Mulcahy

What is the shyness about giving the year?

Mr. MacCarthy

There is no shyness at all; the year does not matter Perhaps the Deputy does not want to go back on the past.

General Mulcahy

I am only going as far as the year.

Mr. MacCarthy

You can always see what a man's nature is from his record, you can see his approach to things and then you know whether his arguments are consistent or not. In this particular case, the farce of their criticism is shown up, if anyone goes over their own record, by the fact that they actually closed the local loans altogether against housing development in those years.

General Mulcahy

Could the Deputy not tell us what years he is talking about?

An Leas-Cheann Comhairle

I understand the House has agreed that the Minister would be called on at 12.15 to conclude. The Minister, to conclude.

Minister for Industry and Commerce (Mr. Lemass)

The statement which I made in introducing this Estimate, that the Irish taxpayer is not being asked and will not be asked to provide any money for the inauguration or operation of this service, is strictly accurate. No new money is required. I thought it was desirable, in view of possible misunderstanding, to explain how that situation is possible. I did not wish anyone to think that the fact that money had been voted for such a service previously was being availed of to mislead the people as to the position. The termination of the operations of Aer Línte in 1948 and the disposal of its assets produced a surplus over the total capital expenditure in that undertaking, of approximately £450,000. That £450,000 is now being made available for the purposes of this project.

Mr. Sweetman

Where is it being got from?

Mr. Lemass

The money was loaned by Aer Línte to the Exchequer, and is being paid back by the Exchequer. It is quite true, as some Deputy said, that the money could be used for some other purpose. That is not contested. It has been decided to use it for this purpose. It represents the total amount of the investment in this undertaking. No additional funds will be required, now or in the future, from the Irish taxpayer.

Mr. Sweetman

But it is in the Exchequer at the present time, and is being taken out of the Exchequer for this purpose.

Mr. Lemass

I am not suggesting, and had no intention of suggesting, that this service could be inaugurated without any money at all. It was loaned by Aer Línte to the Exchequer and is now being repaid, just as any other borrowing of the Exchequer would require to be repaid at some time. The statement which I made is correct, that the taxpayer has not been asked and will not be asked to provide any funds, any new funds.

There is no question of subsidy, either. In view of remarks by Deputy McGilligan, it is necessary to emphasise that. It is contemplated that this service can be got going and put on a basis on which it will be able to pay its way, with a total investment of that amount. Of the £450,000 which will be available to Aer Línte, approximately £200,000 will be invested before the services begin to operate and the balance may be required for investment in development after that date. I have certainly no desire to withhold any information from the Dáil and I would be perturbed if I thought that anything I had said was liable to mislead any Deputy.

I think this is a good investment. I am going to give the reasons why I have that opinion. I think it will prove to be justifiable by reason of the general benefits it will confer on the people of the country as a whole and that it will ultimately prove a good investment in the financial sense also. Why should we do it at all? We know that foreign companies are quite willing to provide air transport services and shipping services to this country. Why not let them do it? Why not concentrate upon our own internal affairs and leave these matters of outside communications, transport services to other countries, to other people who are willing to provide them for us? That is the question which it seems to me has to be answered, in view of the statements made in this debate. So far as I know, the House is agreed that it is desirable that we should provide merchant shipping services under our own control. Our experience on the outbreak of war alone would point to the necessity for development in that direction. So far as I know, the House is not opposed to the idea of developing air services into Europe. That development has taken place, and various expressions of good will towards it have come from all Deputies. Is it that there is some objection to the development of air services to the West?

If it is agreed that it is desirable that we should have transport services operated by Irish companies under Irish control, and if it is agreed that these services should include both shipping and air services, why is this one development regarded as objectionable? I fear that the answer to that question is that Deputies opposite were committed to a certain course in 1948 and feel that they must justify it now.

Mr. Sweetman

Because we think it will not pay. That is the simple reason.

Mr. Lemass

I should be perturbed if my fear is well founded. The company responsible for the operation of this air service discussed this particular project with me and they gave their confident opinion that it would be a success. They mentioned one of the factors that might militate against its success, in their view— a political controversial atmosphere around the undertaking—and they urged on me that I should, in presenting the proposal to the Dáil and in my contacts with other members of the House, endeavour to prevent that impediment to the project emerging.

I strongly share the view expressed by Deputy Cowan that air transportation is the future method of travel. No doubt, shipping services will be vital to every country and particularly an island country, for many decades ahead, but looking into the future, the air will be the highway and air transportation will be the means of travel for passengers and freight. I think it will be agreed to be desirable, in view of that prospect, that Irish-owned and Irish-controlled services should be available.

We do not want to see a position develop in the air such as developed on the sea in which all the services available to this country for use by its citizens were provided by externally owned companies. We can insure against that situation arising in the air, if we act now. If we sit idle and allow developments to be initiated by foreign companies, we are going to get, in respect of air travel, into the position, the very unsatisfactory position, we were in in respect of sea travel and from which we are now trying to break out.

Air transportation is particularly suitable to an island and it has a very special significance for this country because of its geographical position. I think that anybody trying to plan national economy ahead would give a very high priority to the development of air services. If we decide to ignore these arguments and to allow the provision of air transport facilities to and from this country to be provided exclusively by external companies, we can have no assurance that these companies will operate the services in our interests. They will not be expanded at any time we think our interests require that they should be expanded, and there is always the prospect that they will be withdrawn when it suits these companies to withdraw them, however undesirable the consequences might be for us.

Again, may I remind the House of our experience at the beginning of the war? We were dependent almost entirely upon foreign owned shipping services. They continued to be available for a short time after the war started, and then, quite suddenly, because it suited external interests, they were all withdrawn and for a period of over three years from a date towards the end of 1940 not one single ocean-going foreign owned ship came into an Irish port. It was in these circumstances that we had, by frantic effort, to build up the nucleus of an Irish shipping service. We have such a service now and it is developing. There is no competition such as was suggested here between the development of air and shipping services. We are doing both, so as to prevent a situation arising in future in relation to air services such as was allowed to arise in the past in respect of merchant shipping. That is the general case for the development of air services.

There is another and, it seems to me, a special case to be made for the development of air services across the Atlantic. There is certainly no logical reason why we should develop them exclusively into Europe. We have as great an interest in transport facilities across the Atlantic as we have to Europe, and we have in America, for Irish air services, an advantage which other air companies could not buy with money, no matter how much they were prepared to spend on it—the goodwill of some 20,000,000 or 30,000,000 people living there who are of Irish origin. The exploitation of that goodwill for the advantage of an Irish air service is possible. Many other air lines would be opeating for years before they could give themselves a commensurate advantage.

The dollar revenue from tourist trade has doubled in recent years, and it is still expanding. It is a very important contribution to the national income. It is true, as was stated here, that other air and shipping companies are available to carry our tourists, but consider their interest in the matter. These other air transportation and shipping companies are operating services to Ireland and beyond. It is obviously in their commercial interest that they should concentrate upon selling transport facilities to people who are going to travel the longer distances on their services. We have frequently had complaints made in this House and outside it that these American transport organisations and travel agencies do not endeavour to sell with any enthusiasm the idea of holidays in Ireland, because the shorter distance and lower cost reduces the profits and commissions they earn. It is inevitable that the commercial interests of these companies will induce them to soft-pedal the effort to sell the idea of travel to Ireland, if they can, thereby increasing the number of people travelling longer distances.

That situation, that lack of interest, that lack of commercial advantage in selling travel to Ireland will disappear, if there is an Irish competitive service in operation. The advantage of having that service will not come solely from the facilities it will directly provide for transportation to this country but from its effect in forcing other competing services to improve these facilities also. I believe that the advantages, direct and indirect, which will come to this country from the operation of an Irish transatlantic service are quite substantial.

A query has been made as to the wisdom of developing that service in the particular form now contemplated. I have said that I would much prefer to be here with a proposition for the institution of this service on the lines we contemplated in 1947. That is not possible, first, because the equipment for the operation of that service could not be procured, I am informed, earlier than 1955. It would take at least that period of time to train again the corps of pilot officers and ground engineers required for the service.

On the first attempt the decision was taken in 1946 with a view to operating in 1948 and all over that period the training of personnel and the development of the organisation was proceeding. It is true that some of these people who were trained then are still available but not in sufficient numbers to enable the service to be inaugurated. We could not hope now to secure the re-establishment of the Lockheed factory at Shannon which was closed down in 1948 following the decision to terminate the transatlantic service in that year. Apart from those practical difficulties, I would hesitate to ask the Government or recommend to the Dáil to provide the large amount of capital required for this service if it was to be operated with Irish planes and Irish personnel in this year.

I think there are advantages in having development along this line. The service will be an Aer Línte service. Aer Línte will be getting very valuable experience in the operation of the route and very valuable knowledge about the tariff potentialities of the route. It is their intention to avail of this interim period to give their pilots experience in the operation of the route. Even though there is something to be said in criticism of the inauguration of the service in the particular way now contemplated, we must not close our eyes to the fact that it offers very substantial advantages in the commercial sense as well.

Let me deal straight away with the question of the agreement. So far as the agreement to which reference was made is concerned, I do not want to get into any false position about it. I have no objection to publication. Publication is a matter for the company. If the company think they can publish the terms of that agreement without any commercial risk, they are free to do so. I am quite certain that, even if publication in the ordinary sense of the term is likely to involve certain commercial handicaps, they would have no objection whatever to make copies available to responsible members of the House. There is no secret about it. I have, in fact, already given the House every detail of that agreement which was of interest to me and which, I thought, would be of interest to Deputies. The agreement takes the form that one would expect in a commercial agreement between two companies, an agreement for the chartering of aircraft for a period of time. That is all that the agreement concerns.

There is no question of an inter-governmental agreement here. There is an agreement between the Irish and American Governments for the licensing of air services to be operated on the Atlantic route between our territories by Irish and American companies. That agreement was submitted to and approved of by the Dáil. So far as inter-governmental contracts are concerned, all the requirements of the Constitution have been met long ago. The only point which arises is whether the particular operation contemplated here is one of a type to which that general inter-governmental contract relates.

General Mulcahy

When was Dáil approval given?

Mr. Lemass

In 1945 or 1946.

General Mulcahy

By resolution?

Mr. Lemass

Yes, by resolution. There were a number of different agreements at that time brought to the Dáil.

Mr. Cosgrave

Was it after the Chicago Convention?

Mr. Lemass

Yes, one of the resolutions then approved related to the International Convention negotiated at Chicago. The inter-company agreement is nothing more than what I have said—an agreement by Aer Línte to charter Seaboard and Western aero-planes on what is technically known as a "wet lease" basis for a period of years. I hope that it will be possible for this service ultimately to develop in the way that most Deputies would prefer, involving the operation of Irish owned aircraft manned entirely by Irish operating crews.

We could have another type of agreement no doubt and the House will, I am sure, understand that various possibilities were investigated before authority was given to Aer Línte to enter into the negotiations which produced this agreement. Of all the possibilities which were revealed by these inquiries, this seemed to be the most attractive line upon which to proceed because it gave us the prospect of an earlier development than any other suggestion and involved the minimum capital commitment at the present time.

Reference has been made to the type of aircraft with which the services will start. I have already mentioned to the House that I was hesitant in deciding that it was better to begin the service in 1953 with Skymaster aircraft than to wait until 1954 when the Constellations would be available. Deputy Mulcahy seems to be under some misunderstanding in that regard. It is contemplated that the Costellation aircraft will be available in 1954, in the second year of the operation of the agreement. If they are not available, the agreement falls. The company is not committed to continue the service with Skymaster aircraft beyond 1954. The Skymaster aircraft has many favourable characteristics.

General Mulcahy

The Minister says "the company". Does he mean the American company?

Mr. Lemass

The American company are committed to provide Constellations for the operation of the service in 1954. If they fail to do so, Aer Línte is released from their obligations.

Mr. Cosgrave

Is there any provision for damages in favour of Aer Línte if the American company fail to keep their agreement?

Mr. Lemass

No. The Deputy will appreciate that in the course of negotiation in connection with this contract Aer Línte had to take cognisance of the fact that this company had a number of Constellation aircraft due for delivery in 1954. They leased these aircraft to Aer Línte, thereby depriv-plane ing themselves of the opportunity of leasing them to anybody else so that, so far as they are concerned, it is not unreasonable to leave the position as I have stated. Failure to get the aircraft will not be due to Seaboard and Western Airlines but due entirely to the manufacturers of the aircraft. Seaboard and Western Airlines have a contract with the manufacturers which, in fact, makes them entitled to get delivery of the aircraft on the 1st January, 1954. The Deputy will appreciate that aircraft manufacturers in America are subject to Government direction. Delay in getting delivery is, I understand, due to priority given to the Army orders.

Mr. Sweetman

There might be provision in such a contract by which Seaboard and Western Airlines would get damages and we might be in the position that we would not get damages.

Mr. Lemass

That is most unlikely in the circumstances where delay is due to Government order.

Mr. Sweetman

It could be due to other reasons, too.

Mr. Lemass

I was referring to Skymaster aircraft. It has one very considerable advantage. It has a reputation for safety in operation that practically no other aircraft, except the D.C.3, which is its smaller brother, has established. It is very safe and reliable. It is not, as was mentioned here, pressurised. It cannot fly at altitudes as high as the Constellation type will fly. It is slower. Against these disadvantages of non-pressurisation and slower speed there is this reputation for safety and reliability.

Deputy Norton asked me if these aircraft were, in fact, being operated on the North Atlantic route by any other lines. They are. They are being operated by K.L.M., Sabena and Swiss Air, all of which are companies of high repute engaged on transatlantic operations.

Mr. Sweetman

Operating for passengers as apart from freight.

Mr. Lemass

Passengers, yes. I stated already what I think is correct, that the Skymaster aircraft was originally designed as a passenger-carrying plane.

Why was it considered desirable to start in 1953 with Skymaster aircraft rather than wait until 1954 and start with Constellations, in fact, the latest model of Constellations, which would give the company an operating advantage? The reasons advanced to me by the board of Aer Rianta, the reasons which convinced me that we should start in 1953, were numerous. First of all, they referred to An Tóstal. I think Deputy Mulcahy misinterpreted what I said in that regard. I mentioned An Tóstal in introducing the Estimate merely in reference to the date of commencement of operation. The company believe that there is an advantage in commencing the operation at Easter of next year, because they will be able to combine their publicity with the publicity undertaken by Fógra Fáilte and the other transport-operating companies in connection with that festival.

It would be clearly in the interests of the company if they could start at that period rather than at a later period. They argued that their information was that the volume of traffic on the North Atlantic route will be greater than the existing transport operators will be able to cater for, at any rate during the peak period of the season, and that, therefore, there will not be any intensification of competition because of their appearance on the route.

Inevitably they must face the likelihood of losing money in the first year. I will be very pleased, and so will everybody else if they avoid that, but I would not like to think that they set out to avoid it and that, by doing so, they jeopardised their future prospects.

Any transport organisation of this kind beginning to operate must initially explore the traffic potentialities on its routes. It must provide services in excess of the immediate apparent need, hoping to build up a traffic potential which will justify this service later, and only when they have fully explored the possibilities of the route and fully exploited every chance of developing traffic, begin to trim down their service to the business that they have secured. That is why every air-transport operator always faces the certainty of a financial deficiency in the early years of its operation. The process of trimming down the service to the size of the traffic can only be done over a period of time and should only be done when the directors of the undertaking are satisfied that they have not neglected any possibility of development that may exist.

For that reason, I think a deficiency in revenue is to be anticipated in 1953. For the same reason, a deficiency may reasonably be expected in 1954, particularly if in that year there is a switch over to Constellation aircraft. The Constellation aircraft are larger in size and faster in flight than the Skymaster and, clearly, the frequency of service that may be shown to be justifiable in 1953 with Skymasters would not necessarily apply when Constellation aircraft are available and so the process of trimming the service to size will have to be repeated to some extent in 1954.

It would, I am certain, be regarded as a considerable achievement if this company could begin to break level by 1955. The directors of Aer Rianta, who, with the assistance of its technical advisers, have gone into this matter fully, say that that is a reasonable prospect. They cannot, any more than I would attempt to do, guarantee that the situation will work out in that way.

I do not think that the idea of getting for an Irish air service half the expected traffic between America and Ireland is unduly optimistic. Again, remember that these other companies operating services which pass through Ireland and beyond are interested in selling tickets for the longest journeys and will not necessarily be in intensive competition with the Irish airline for the shorter distance traffic.

Mr. Sweetman

Did the Minister get a breakdown of the figures as between first-class and tourist traffic?

Mr. Lemass

The big increase in this year was in tourist-class traffic. May I say that the intention is that the Aer Línte services will be operated exclusively for tourist-class traffic, that the charge made will be the lowest charge which any of these companies have agreed to make for that class of traffic?

Mr. Sweetman

Was not it true that certainly not more than two-thirds of the figure would be tourist passenger flights?

Mr. Lemass

That would be right. What is likely to be the situation next year, I do not know. This is a trade which is developing very rapidly.

Mr. Sweetman

As a proportion rather than as a figure?

Mr. Lemass

I think it is true to say that the airline operators were themselves astonished by the response they got this year to the plan for inaugurating tourist flights and are now quite optimistic as to the course of events in future. It is quite true that all these companies have agreed to co-operate in the propaganda for An Tóstal and are looking forward to getting increased traffic by reason of the inauguration of the festival. There is no suggestion that Aer Línte will have a monopoly of these services. On the contrary, we hope that the development of An Tóstal over the years will not merely bring business to Aer Línte, but will increase business for both the airline and shipping line operators connecting this country with America.

It is difficult to give precise estimates of probable operating costs for which Deputies have asked. I have indicated that these aircraft will be leased on a mile charge basis. For each round trip a flat sum of money will be payable to the owners of the aircraft. That sum, may I mention, is not greater than would have to be charged in its accounts by an Irish company operating its own aircraft. It represents actual outgoings on fuel, landing fees, salaries of crews, and so forth, plus interest upon capital invested. An Irish company operating with its own aircraft and its own crews would have to regard some such figure as the minimum charge necessary to be recovered in fares before it could break level.

The present tourist charge is £80 per flight and on that basis a reasonable percentage of seat utilisation will enable the company to break level. It will be the aim of the company to relate the service to traffic available. That is why it is difficult to estimate. The figures which I gave assumed a certain number of flights per week at different periods of the year. Naturally if the traffic is not available, the company will cut down on the frequency of flights and thereby avoid incurring unnecessary outgoings.

Mr. Sweetman

What is the guaranteed number of yearly flights?

Mr. Lemass

The minimum is two per week, and it is contemplated that actually six round trips per week will be undertaken during the peak season.

General Mulcahy

Does that mean that the minimum guaranteed will not be less than 104 flights per year?

Mr. Lemass

Seaboard and Western have been guaranteed that their aircraft will be used to a not lesser extent than is involved in two flights per week.

Mr. Sweetman

If you have six flights in one week that does not absolve them from having at least two the next week? It does not mean that you might have none the next week?

Mr. Lemass

There will be at least two every week. There is a provision in the agreement that if for any reason the aircraft are not utilised by Aer Línte they can be sub-leased to other operators, and anything earned thereby is set off against Aer Línte's financial obligations.

General Mulcahy

There are to be two round flights per week?

Mr. Lemass

Yes.

General Mulcahy

Then 104 round flights per year is the agreed minimum?

Mr. Lemass

Yes. I mentioned that some proportion of the payments due by Aer Línte to Seaboard and Western will be made in sterling. The obligation is to pay in dollars, but against the dollar payments will be offset any charges incurred by Seaboard and Western in the operation of their aircraft which they can legally pay in Irish currency or sterling. The board of Aer Línte assume that approximately 85 per cent. of the revenue will be in dollars, and that is based upon the calculation that even the great majority of passengers travelling from Ireland to America will be American citizens who will have bought round tickets.

Some suggestion has been made here that Seaboard and Western were not the most suitable company with which to enter into a charter arrangement of this kind. It would obviously have been undesirable to make such an arrangement with a company that is already operating these services across the Atlantic. There were some discussions with the representatives of some of these companies, but they did not lead to a suggestion that any arrangement was possible with them which would be attractive to us. Any such arrangement for the leasing of aircraft had to be made with a company that was not itself engaged in the operation of scheduled passenger flights over the Atlantic.

Seaboard and Western was the obvious company to select for an arrangement of this kind in that it was already operating charter services on the Atlantic route and secondly because it had considerable experience in the operation of transatlantic services. The company was established in 1947. Since, it has flown over 50,000,000 freight ton miles. Of that traffic, more than half was carried in 1951, indicating the rapid growth of the company's operations. It carried 11,000 passengers 55.5 million passenger miles and made last year 960 transatlantic crossings. It operated the business with considerable efficiency. It earned a net income of $500,000 in 1951 and its operating revenue to date in 1952 shows a very substantial increase, an increase of approximately 10 per cent. over 1951. Having regard to the known performances of the company, its special place in transatlantic operation, and the obvious interest of its management in this scheme, it seems to me that no better concern could have been contacted in this connection.

I want finally to remove one further misunderstanding on the part of Deputy Mulcahy. There is no question of a joint company. This will be an Aer Línte service. Aer Línte will operate and control this service. It is leasing aircraft for that purpose just as Irish Shipping Limited have at various times chartered ships from other companies to carry on these services. It is leasing these aircraft until such time as it hopes to have aircraft of its own to operate this service. Any goodwill created will be for this service and any organisation that is established for its operation will be entirely an Aer Línte organisation. There is no question of a joint company such as exists in the case of Aer Lingus and the British European Airways. Aer Lingus is a joint company between British European Airways and Aer Rianta. That was established specifically for the purpose of operating services between this country and Great Britain. I could not agree, and would not agree, to Aer Lingus having any connection with the transatlantic service. The transatlantic service will be controlled by Aer Línte and British European Airways will have no part in it.

Mr. Sweetman

The Minister said that £450,000 was being taken out of the Exchequer to put into this undertaking as an investment. I take it that all the moneys held by the Exchequer are utilised and that such further moneys as are required are drawn into the Exchequer by ways and means advances to the Exchequer. This £450,000 has to be paid out of the Exchequer for the purposes of the scheme. Is it not a fact that the Exchequer must borrow that £450,000 somewhere, that it must get it by way of ways and means advances or out of the proceeds of the loan to make up for the money taken out?

Mr. Lemass

That will depend on the other calls on the Exchequer. It is true that the Exchequer engages in short-term borrowing. It is continuously repaying one amount and borrowing other amounts. This money loaned to Aer Línte by the Exchequer is equivalent to any other form of short-term borrowing.

Mr. Sweetman

What I mean is that the Exchequer obviously has not this £450,000 lying there unemployed and idle and that it will have to borrow from somebody to make it up.

General Mulcahy

I should like to ask whether, under the constitutional provisions that were quoted this morning, the Minister agrees with this thin idea that, instead of Aer Línte owing money to the State, having borrowed money from the State originally, the State owes this money to Aer Línte.

Mr. Lemass

That is the legal position.

General Mulcahy

That is the thin line.

Mr. Lemass

Of the money which it owes to Aer Línte, £450,000 is being paid. The other £1,250,000 is still there.

General Mulcahy

That is the thin line that we have mentioned.

Mr. Lemass

This is not an agreement entered into between two Governments. It is an agreement between the two companies to lease aircraft. It is precisely the same type of agreement as the Electricity Supply Board has entered into with a French company for the construction of a power house. The authority for operating a service is in the intergovernmental agreement that has already been referred to.

Mr. Cosgrave

But it is the State that will have to pay the money.

Mr. Dillon

Is it not true that there is a constitutional ambiguity as to whether this agreement is caught by the terms of the relevant article in the Constitution?

Mr. Lemass

There is no question of that.

Mr. Dillon

I assure the Minister there is a doubt about it. If only for that reason, is there not something to be said for bringing the agreement before Dáil Éireann even if we object to it in principle and think it a bad agreement? I submit that any agreement to which the Irish Government puts its name ought to be put through in the right form under our law.

Mr. Lemass

Aer Lingus has a whole string of agreements with various companies for the purchase and renting of aircraft and in relation to pooling arrangements. There is no suggestion of coming here to give authority to Aer Lingus to enter into these agreements. That authority is derived from an Act of the Oireachtas. In this particular case there is an intergovernmental agreement relating to air services between ourselves and America which has been approved.

Mr. Cosgrave

Can the Minister say if Seaboard and Western were refused a licence by C.A.B. to operate a transatlantic service?

Mr. Lemass

No. The only application was to operate a scheduled freight service, which they got.

Question put.

The Dáil divided: Tá, 63; Níl, 56.

Tá

• Allen, Denis.
• Bartley, Gerald.
• Beegan, Patrick.
• Blaney, Neil T.
• Boland, Gerald.
• Brady, Philip A.
• Brady, Seán.
• Breen, Dan.
• Brennan, Joseph.
• Brennan, Thomas.
• Breslin, Cormac.
• Briscoe, Robert.
• Buckley, Seán.
• Burke, Patrick.
• Calleary, Phelim A.
• Carter, Frank.
• Childers, Erskine.
• Cogan, Patrick.
• Colley, Harry.
• Collins, James J.
• Corry, Martin J.
• Cowan, Peadar.
• Crowley, Honor Mary.
• Crowley, Tadhg.
• Cunningham, Liam.
• Derrig, Thomas.
• de Valera, Vivion.
• Duignan, Peadar.
• Fanning, John.
• ffrench-O'Carroll, Michael.
• Flanagan, Seán.
• Flynn, John.
• Flynn, Stephen.
• Gallagher, Colm.
• Gilbride, Eugene.
• Harris, Thomas.
• Hillery, Patrick J.
• Hilliard, Michael.
• Humphreys, Francis.
• Kennedy, Michael J.
• Killilea, Mark.
• Lemass, Seán.
• Little, Patrick J.
• Lynch, Jack (Cork Borough).
• McCann, John.
• MacCarthy, Seán.
• MacEntee, Seán.
• McGrath, Patrick.
• Maher, Peadar.
• Moran, Michael.
• Moylan, Seán.
• Ó Briain, Donnchadh.
• O'Reilly, Matthew.
• Ormonde, John.
• O'Sullivan, Ted.
• Rice, Bridget M.
• Ryan, James.
• Ryan, Mary B.
• Sheridan, Michael.
• Smith, Patrick.
• Traynor, Oscar.
• Walsh, Laurence J.
• Walsh, Thomas.

Níl

• Beirne, John.
• Belton, John.
• Blowick, Joseph.
• Browne, Patrick.
• Byrne, Alfred.
• Byrne, Thomas N.J.
• Carew, John.
• Cawley, Patrick.
• Collins, Seán.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan.
• Costello, John A.
• Crotty, Patrick J.
• Davin, William.
• Desmond, Daniel.
• Dillon, James M.
• Dockrell, Henry P.
• Dockrell, Maurice E.
• Donnellan, Michael.
• Norton, William.
• O'Donnell, Patrick.
• O'Gorman, Patrick J.
• O'Hara, Thomas.
• O'Higgins, Thomas F. (Jun.).
• O'Leary, Johnny.
• O'Reilly, Patrick.
• O'Sullivan, Denis.
• Doyle, Peadar S.
• Esmonde, Anthony C.
• Everett, James.
• Finan, John.
• Giles, Patrick.
• Hickey, James.
• Hughes, Joseph.
• Keyes, Michael.
• Kyne, Thomas A.
• Larkin, James.
• Lynch, John (North Kerry).
• McAuliffe, Patrick.
• MacBride, Seán.
• MacEoin, Seán.
• McGilligan, Patrick.
• McMenamin, Daniel.
• Madden, David J.
• Mulcahy, Richard.
• Murphy, Michael P.
• Murphy, William.
• Palmer, Patrick W.
• Reidy, James.
• Roddy, Joseph.
• Rogers, Patrick J.
• Rooney, Eamon.
• Spring, Dan.
• Sweetman, Gerard.
• Tully, John.

Tellers:—Tá: Deputies Ó Briain and Killilea; Níl: Deputies Doyle and Mac Fheórais.

Question declared carried.

Vote reported and agreed to.