Dáil Éireann debate -
Friday, 13 Feb 1953

Vol. 136 No. 7

Insurance Bill, 1952—Second Stage.

Minister for Industry and Commerce (Mr. Lemass)

I move that the Bill be now read a Second Time. The primary purpose of this Bill is to offer additional incentives to exporters in this country to explore market possibilities in the dollar area by providing them with a measure of protection against certain risks which are inseparable from the export trade, but which cannot normally be covered by insurance or otherwise guarded against by commercial means. The Bill, therefore, represents another step in the efforts being made to expand exports to the dollar area and on that account it would probably be desirable for me to present it to the Dáil against the background of the features of our trade with that area and to relate it to the measures already taken to increase the value of our exports to it.

The House is, I think, aware that this country has had always a very unfavourable balance of payments with the dollar area. That is a matter of serious concern and particularly so at present while sterling is not freely convertible. Imports from dollar countries, which were at the rate of about £23,000,000 in 1949, rose very sharply to £37,000,000 in 1951 and the figure for 1952 shows only a comparatively slight fall, the estimate being that expenditure on dollar imports for that year will amount to £33,000,000. Our exports from the sterling area on the other hand amounted to only £500,000in value in 1949 but they rose very considerably in 1951, their value in that year being £4,000,000. There was a slight fall last year. The estimate is that the value of our exports in 1952 to dollar countries will be £3,500,000.

These figures show that, despite the expansion in exports which has been achieved, there is still a relatively high adverse balance on visible account with these dollar countries, an adverse balance which amounts in each year to about £30,000,000. We cannot avoid imports from these countries. A substantial proportion of our essential requirements of products such as wheat, maize, tobacco, timber and machinery has to be procured from these dollar countries. It is clearly, therefore, of fundamental importance that the value of our exports should be increased as rapidly as possible and to the maximum extent, so that we may be in a position to continue to import these essential commodities which have to be paid for in dollars.

Our predecessors gave consideration to that situation and in June, 1950 a Dollars Exports Advisory Committee was set up which made a number of recommendations. In December, 1951 the Government arranged for the establishment of an organisation to promote and organise dollar exports, an organisation known as Córas Tráchtála, Teoranta, which has already considerable achievements to its credit-The primary purpose of that organisation is to furnish information concerning market prospects, import regulations, market techniques, commercial agencies and transport facilities in dollar countries for the information and benefit of actual or potential exporters. It is also in consultation with firms here to arrange for the shipment of commodities, trial consignments to explore market possibilities, to be followed by more substantial shipments where these possibilities are shown to exist. Where action of that kind is impracticable by smaller individual firms, group export schemes have been arranged. The organisation has appointed commercial representatives in key centres. It is not confining activity to the United States market. It has recently carried out a survey of Canadian markets and has reportedthat there are quite substantial possibilities of doing a good volume of business. A special display of Irish products has been arranged in Montreal and the co-operation of the largest store in that city has been secured for that purpose. Film displays and other propaganda measures are also being arranged.

The organisation engaged a team of American marketing experts to investigate the position regarding a number of specified commodities, commodities chosen by Córas Tráchtála, which appear to them to have the best prospects. A summary of the report of that team of experts will shortly be published. It is with the printers and will be available, I understand, in the very near future.

Mr. Sweetman

Can the Minister give an indication of the types of commodities and their value?

Mr. Lemass

Textiles, footwear, beer, whiskey and processed foodstuffs of one kind and another. There is quite a number.

Mr. Sweetman

I understood from him that there was only a small number of commodities involved.

Mr. Lemass

Any product which appeared to Córas Tráchtála to have export possibilities was included in the investigation. These measures are at present in train and it was considered necessary that they should be supplemented by providing here certain insurance and credit facilities which exist in other countries but which have not yet been arranged here. A scheme of insurance for exporters to the dollar area against commercial risks, that is to say, the normal risks which arise in trade due to the insolvency of buyers or to their protracted default in making payments, has been prepared by a group of home-controlled Irish insurance companies. No special legislation is required to enable that scheme to be operated.

Following discussion between Córas Tráchtála and the group of insurance companies, a scheme has been worked out and is about to be put into operation. The Government decided,however, that legislation should be introduced—and this Bill has that purpose—to provide a complementary scheme of insurance against risks of the kind which are called special risks. Political risks may be briefly defined as those which may arise because of Government action or because of political developments over which neither the buyer nor the seller of the goods has any control. The commercial insurance companies of the State consider that the contingencies which are normally known as political risks are not suitable for insurance by them. They are not to be criticised for taking that attitude because insurance companies all over the world have adopted a similar attitude. It is customary, where schemes exist in other countries for insurance against political risks, for the State to underwrite these risks.

This Bill provides that, for the purpose of encouraging exports, the Minister for Industry and Commerce may, with the consent of the Minister for Finance, give guarantees in connection with the export, manufacture, treatment or distribution of goods or the rendering of services. It provides also that the aggregate amount of the liability undertaken by the Minister for Industry and Commerce may not exceed £2,000,000 any time. The provisions of the Bill have been designedly drawn as widely as possible so that an extension of the facilities to be given to exporters may be effected later without additional legislation but the present intention is to use the powers conferred by the Bill for two purposes only, first, to give guarantees in respect of political risks—those risks to which I have already referred.

Mr. Norton

Could the Minister pinpoint a few of the risks he has in mind?

Mr. Lemass

I am going to say a little more about that later. The first purpose for which the Bill will be used will be to give these guarantees in respect of political risks. The second purpose is to underwrite certain commitments which Córas Tráchtála may undertake in connection with the expansion of exports to the dollar area.

I have mentioned that a group of Irish insurance companies are establishing a scheme which will provide insurance against credit risks of a commercial kind. The guarantees in respect of the credit risks which the Minister for Industry and Commerce may underwrite will be related to those arising from political causes. It has not yet been determined what classes of risk will be admitted as insurable under the scheme. Details of that kind have to be settled when the scheme is being framed and in consultation with the insurance companies. It is intended that these insurance companies will act as the agents by which the insurance cover would be offered.

Broadly speaking, however, the risk which will be covered will include any unforeseeable restrictions on the transfer of payments arising out of currency or exchange controls; the risk of the cancellation of import licences; the non-renewal of import licences or any similar risk arising out of Government measures for the control of imports, that it to say, Government measures which could not reasonably have been foreseen or could not be guarded against by either the exporter or the importer.

Another and, perhaps, more considerable risk which will be covered by the scheme will be that involved in the alteration of the rate of customs duty after the contract has been made or the goods have been shipped or the assessment of duty by the revenue authorities of the importing country at a higher rate than was assumed to apply when the contract was made or when the goods were imported. It is not intended, however, that loss arising from any such risk will be recouped to the exporter under the scheme if there are any other means available to him to recover the losses, such as by recourse to the law courts in the importing country.

Provision will also be made to cover the obvious risk of contingencies which might arise from the occurrence of war or civil disturbance in any of the importing countries or any similar situation of a political nature thatmight affect either the delivery of the goods or payment for them. The scheme to be introduced will apply to exports to the dollar area, that is, all those countries in which payment for goods has to be made in dollars. It will be extended later to include countries other than those in the dollar area but for the present the scheme is being confined to dollar countries.

I mentioned that the scheme of insurance against commercial risks will be operated by the insurance companies. The intention is that a group of insurance companies will act as the insurers of political risk also on behalf of the Minister for Industry and Commerce. The rate of premium that will be charged for the political risk insurance will be determined by the Minister for Industry and Commerce and the premium income will, of course, accrue to the Minister subject to the deduction of whatever percentage may be agreed with the insurance companies to cover administration costs and commissions.

Mr. Norton

What is the anticipated premium on the political risks?

Mr. Lemass

It is impossible to forecast that. The cover which will be provided by the scheme of insurance for political risks will not, of course, extend to 100 per cent. of the value of the exports involved. It is intended that the exporter will carry some part of the risk.

Mr. Sweetman

Is it 100 per cent. of the sale price or the cost price?

Mr. Lemass

Of the loss which the exporters may incur.

Mr. Sweetman

Will it be based on the sale price or the cost price? That would make all the difference.

Mr. Lemass

On the contract price.

Mr. Dillon

There is a trick in that question.

Mr. Lemass

In respect of the amount of money which the exporter would receive if the sale was completed without disturbance.

Mr. Cosgrave

That is the sale price.

Mr. Lemass

The sale price may include transport charges.

Mr. Sweetman

I agree.

Mr. Lemass

The reason why 100 per cent. risk is not covered is to ensure that to the fullest extent any claim the exporter may have against the buyer will be pursued before seeking the granting of the insurance.

Mr. Dillon

If the insurance is based on the sale price of the merchandise rather than on its cost, how could you persuade the exporter to take any part of the risk?

Mr. Lemass

That is a matter for arrangement between the exporter and the insurance company. The insurance company will presumably take measures to ensure that the exporter does not over-insure above the value of the goods or the amount of the loss to him.

Mr. Dillon

I suppose we can look into that detail more conveniently on the Committee Stage.

Mr. Lemass

That is the first purpose of the Bill—to provide legal authority for the underwriting of political risks covered by insurance operated through insurance companies as agents for the Minister for Industry and Commerce.

The Bill is also drafted to give facilities of a more general kind—guarantees which are normally described in commercial circles as credit insurance. It is intended to provide that type of credit or promotion insurance under the Bill. One of the most serious risks which an exporter undertakes, when endeavouring to market his products in external markets and particularly in the very competitive and rapidly changing conditions of the U.S.A. market, is the risk of trading losses due to changes in public taste, changes in fashion, new developments in production or similar factors of that kind. It is contemplated that Córas Tráchtála will issue guarantees in selected cases in respect of portion of the losses which might be incurred by a firm in the dollar market over a period of years.

Joint venture insurance is anothername which applies to an arrangement of this kind. The broad principles on which the guarantee would be issued are that the guarantee would be issued only in respect of a proposal which is in itself commercially sound and agreed to in its main outlines by Córas Tráchtála. The guarantee would cover trading losses over a period sufficiently long to allow for the establishment of a product in a dollar market and for the subsequent exploitation of the original investment in advertising, stock carrying and other sales promotion measures. The guarantee would cover a proportion of losses determined in accordance with a contract to be entered into by Córas Tráchtála and the firm concerned in advance of the undertaking and there would be provision for a payment in the form of an insurance premium to Córas Tráchtála by the firm concerned. The provision of guarantees of that character, the operation of these joint venture measures in other countries has had useful results. In nothing that, I have hopes that the provision of the same service here will have a marked influence on exports in the dollar area.

Mr. Norton

Is that in regard to political risks?

Mr. Lemass

These are ordinary commercial risks. Córas Tráchtála will enter into a contract with the exporting firm whereby, in consideration of a premium, they cover part of the loss which that firm incurs over a long period because of changes in fashion, changes in public taste, changes in production methods, and other factors of that kind, which might arise equally in the home market, and which were not foreseen. These are ordinary commercial risks.

Mr. Norton

I understood that a group of private companies were going to carry the commercial risks.

Mr. Lemass

There are three headings: (1) insurance against ordinary commercial risks, the most obvious of which are the inability of the buyer to pay or his refusal to pay over a long period; (2) insurance against politicalrisks, that is the risks of loss arising from changes in import conditions, alteration in duty rates, currency restrictions, the outbreak of war or other contingencies of that kind; (3) this joint venture insurance scheme under which Córas Tráchtála enters into a contract with an individual firm to cover part of the loss that may arise not because of the inability of the buyer to pay and not because of political risks, but because the goods prove to be unsaleable on the market due to changes in taste, changes in fashion, alteration in production methods, or any of the factors that might arise in any market to make goods unsaleable. Under that latter scheme, of course, Córas Tráchtála would itself have to assess the risk. It will have to be satisfied that, on the face of it, it is a commercial proposition and that there is a fair prospect that the goods will prove to be saleable. Of course, in most cases, it will be the promoter of these export ventures. They will have carried out the market investigation and have given the firm concerned here information as to the types of goods that will sell, the market prospects, the manner in which they must be packed in order to get them sold, and other information of that kind.

Mr. Norton

Can the Minister contemplate, in that third category of insurance, allowing the insurer to insure his goods at sale prices and to dump them in a market if they fail to sell?

Mr. Lemass

I used the term "insurance" to indicate that a premium is payable and that only portion of the risk is covered. That scheme will not be operated by insurance companies. It will be based upon contracts to be made by Córas Tráchtála on the one hand and individual firms on the other hand. Following negotiation, Córas Tráchtála will agree to carry, on consideration of a premium, 25 per cent., 50 per cent., or 75 per cent. of the risk of loss arising out of these factors.

Mr. Sweetman

But the loss must be based on fact, else the scheme would be fantastic.

Mr. Lemass

When I say "loss" I mean the deficiency in the profit earned as against total expenditure. The expenditure may be on advertising or on other sales methods which have no relation at all to the production of the goods.

The remaining part of the Bill deals with another matter altogether. Under the existing insurance legislation there is no power to give licences to additional foreign companies to undertake insurance business here. A number of Irish insurance companies have been endeavouring energetically to engage in foreign business—some of them with quite considerable success. I understand one company has a premium income from external business amounting already to over £500,000 per year. The efforts of these companies to break into a foreign market in respect of fire, marine and other types of accident insurance, have, however, frequently been impeded by the refusal of foreign Governments to allow them to operate in these markets because our law does not permit of companies registered in those countries to operate here. This matter has been discussed with the Insurance Association here and it has been decided to ask the Dáil to pass legislation which will permit of the giving by the Minister for Industry and Commerce of licences to foreign insurance companies, under reciprocal arrangements. The Bill provides that the Minister may, at his discretion, grant such a licence where he considers that such a licence will facilitate the granting of a reciprocal licence in respect of the country concerned. The arrangement will apply only to fire, accident and motor insurance. As I said, it has been decided to amend the law in that regard after consultation with the Irish Insurance Association. It is not possible to forecast how that position may develop but obviously it is desirable that we should have in our legislation power to enter into reciprocal arrangements of that kind where our insurance companies think it is to their advantage.

Mr. Cosgrave

The Minister, in introducing this Bill, was not able topaint a very satisfactory picture of our export trade to the dollar area.

Since the end of the war efforts to develop our trade with the dollar area have been stepped up to the extent that particular attention has been paid to that possibility. We have had the establishment of Córas Tráchtála, with the proposals in this Bill to provide insurance against risks in connection with external trade, following on a report from the Dollars Export Advisory Committee which was established by the previous Minister and which conducted an inquiry into the possibilities of expanding trade with the dollar area. That Dollars Export Committee which had represented on it various commercial interests in this country, carefully examined the possibilities of expanding our trade with these areas.

I think it is right to say that that committee was set up because of the considerable stress which the experts sent here by the Economic Co-operation Administration laid on the necessity for developing our trade, and on the fact that they considered that the efforts that had been made up to that time were not adequate.

They felt that the granting of Marshall Aid assistance to this country was only a temporary measure to cover the difficulties which had arisen out of the war, and that any permanent remedy must be as a result of the efforts which would be made here directly by the Government and by the commercial interests concerned. The export figures which the Minister gave indicate that any improvement that took place has more or less remained at the same level. The exports to the dollar area in 1949 at £500,000 increased to between £3,500,000 and £4,000,000 in 1951/52.

It is, of course, inescapable that this country must import certain commodities or goods from the dollar area. I often feel that when alarm is expressed at the extent of our imports from these areas, or at the unfavourable balance of trade, sufficient attention is not paid to the fact that, with some exceptions and only to a limited extent, we must import certain commodities from these countriesunless we are resolved to alter entirely our pattern of life. It is true that some imports could be replaced by goods manufactured here or, possibly, to some extent by crops grown here.

Mr. Cogan

To a very great extent.

Mr. Cosgrave

But, in the main, I think, anyone will agree that, no matter how much wheat we grow, we will have to import a certain quantity from these areas. Maize imports have almost ceased, and it is unlikely, as long as the price remains as it is at present, that there will be any large imports in the future. In respect to tobacco and timber, and to the extent that there is a dollar content in the petroleum and petrol imported, these imports cannot be produced here and cannot be got to the same extent in non-dollar markets. The fact that they have to be imported imposes on the country the obligation of endeavouring to earn currency to pay for them. Time and time again, in references to this matter, there would appear to be the suggestion that because we import these goods there is something wrong in it and that we could, in some way or other, contract our economy here and so make unnecessary some of these imports.

It may be that we could reduce some of them, but the indications are that even if some of these imports were reduced, others would continue to be imported at the same level, or, if not at the same level, in some cases maybe to an increasing extent. It is, therefore, essential that we should expand our earnings in order to pay for these imports. If we can do that it will be possible for us to enjoy a better standard of living, but there is no particular advantage in reducing the import of goods that we require merely because it involves the expenditure of currency either in the dollar area or elsewhere.

I think the view that is expressed from time to time that it is possible to replace these imports from home sources refuses to take account of the fact that, at any rate in respect of some of them, no matter how greatly we expand our home production, it willstill be essential for us to import a proportion in the case of wheat, say, and certainly in the case of tobacco and timber and of petroleum and petrol. The reason is that there are no possibilities available which will allow us to avoid importing these commodities.

The purpose of this Bill, and the purpose behind the establishment of Córas Tráchtála, is to provide export incentives. I believe that the work which Córas Tráchtála is doing and will do in the future can be of considerable benefit to persons anxious to develop trade with the dollar area. That, in particular, I believe will depend on two matters which Córas Tráchtála can pay particular attention to. The first is the surveying of available markets and all that involves, such as providing advice, assistance and information on the type of goods which these markets are anxious to import, and in advising manufacturers and exporters here on changes or alterations and various other matters such as taste, quality and so on. That is essential if our exporters are to develop a trade with the markets concerned.

In addition, advice is necessary as to the reliability of agents in the dollar area. One of the problems which exporters here have is that they send a consignment of particular goods to the U.S.A., and, although they get a satisfactory sale for one consignment, they find it difficult to continue to place supplies of the same goods. That, on the one hand, may depend on the fact that the trial consignment is better than the subsequent lots, or, on the other hand, it may be that there is a limited market available for a particular consignment and no prospect of expanding that particular line.

In all these matters it is desirable that the officers of Córas Tráchtála should advise exporters on the prospects of a permanent trade in particular lines, and at the same time provide advice and information on the goods which will get a market in the U.S.A., as well as on the improvements or alterations which are desirable, if not essential, in order to maintain our grip on these markets. It is commonknowledge that our trade with the U.S.A. and the dollar area which, in the main, is the U.S.A., follows a particular pattern. It is limited to very few lines. It may be that there are prospects of developing these lines and of increasing exports in the particular lines which we have already developed. It may be that there are prospects of developing new lines. I would like, however, to say a few words in regard to one or two lines for which we have already shown it is possible to secure a market for Irish goods in the U.S.A.

Over the years we have been informed that there is a market for Irish whiskey. One of the difficulties in the past has been that the quantity of whiskey distilled here was almost entirely absorbed by the home market and the revenue authorities regarded any relaxation in respect of export facilities as being likely to interfere with revenue in subsequent years. I believe it ought to be possible to get an estimate of the quantities likely to be used here and to provide the information to our distillers so that they may be able to operate a programme over a period of years. If the figures of withdrawals from bond this year are continued for any length into the future the possible effect on revenue is not likely to cause the Revenue Commissioners any serious disturbance.

The withdrawals from bond since the last Budget show that there has been a very considerable drop in the consumption of whiskey. If that drop continues the distillers themselves will limit production. In fact, I believe that if arrangments had not been made for the purchase of barley this year a number of the smaller distillers, in face of present market conditions, would not distil at all. If that is so— and it ought to be possible to get definite information as to the position of these smaller distilleries—it would benefit the country and the concerns in question if a permanent indication could be given of the export facilities which will be provided and of the market which is available if proper steps are taken to develop our trade in spirits to the U.S.A.

The Minister in introducing the Billmentioned that the Irish insurance companies had agreed on a scheme for covering exporters who wished to operate under the scheme. I should like to know from him, when he is replying, if this scheme was adopted as a single scheme by the insurance companies or if individual companies will accept application from individual exporters.

Another matter that the Minister referred to was the fact that the risk guarantee will not extend to 100 per cent. cover and he referred to the fact that it would be based on the sales price. If we understand him rightly, if sales price covers profit and all the other matters included in sales price, then it appears that an exporter will undertake no risk of loss and that he will be covered entirely in respect of certain risks which this scheme is designed to cover and which the insurance companies have undertaken in respect of the proposed arrangement.

I believe that it should be possible, if sufficient incentives are provided under this Bill and under the measures proposed by Córas Tráchtála, to develop exports to the dollar market. Certainly, the State, in so far as it is possible to do so, is undertaking something which many exporters in the past were anxious to have provided for them. They are guaranteed against certain losses which are always likely in markets such as those for which these exports are designed and which in the past caused exporters misgivings about endeavouring to enter those markets.

If this insurance cover and the facilities provided by Córas Tráchtála are availed of to the extent to which they should be availed of by commercial undertakings in this country, we should be able to develop to a much greater extent our grip on the dollar market. Many of the commodities produced here are, quality for quality, equal to and, in a number of cases, better than those produced elsewhere. If we develop the particular lines for which we have natural attributes and in which we have already displayed particular skill in developing, and ifwe proceed to develop the possibilities in these markets, it ought to be possible considerably to expand our dollar earnings. It will not be open to exporters in future to make the case that the facilities available are not adequate to cover all normal risks.

I hope, therefore, that the incentives provided under this measure and the incentives provided by the establishment of Córas Tráchtála will secure from commercial interests in the country the response that the American experts expressed as being essential if we were to develop and expand our trade with the dollar area.

Mr. Norton

This Bill follows generally the pattern of insurance which was contemplated by the previous Government. The previous Government contemplated the establishment of a dollar export board for the purpose of surveying the American markets and the dollar markets generally and giving manufacturers here all the advice that it was possible to garner as to the probability of being able successfully to export goods to the dollar market. The previous Government, likewise, contemplated the creation of an insurance fund which would cover the risks of exporters in marketing goods on the dollar market. This Bill, therefore, follows generally that pattern, and I welcome the Bill, as I welcomed the original proposal, because I think it is essential, our deficit in the balance of payments in the dollar area being what it is, that we should provide every possible assistance for exporters who blaze the trail in endeavouring to establish for us a better hold on the dollar market than we have at present.

The dollar market trading position so far as this country is concerned is the most unsatisfactory aspect of our whole international trading position. At the present moment we export only 10 per cent. in value of the goods which we import from the dollar market. In other words, we export approximately £3,000,000 to the dollar market and we import approximately £33,000,000 from that market. The immensity of that gap, relatively, shows the enormous difficulties which still confront us in getting an adequate foothold in thatparticular market. So long as our pattern of imports follows the present line, where we import enormous quantities of tobacco from the U.S.A., where we import timber and machinery, where we import substantial quantities of wheat and, for many years, substantial quantities of coarse grain, we must expect to be heavy importers, relatively, of American produced goods.

The problem for us, therefore, knowing that it is necessary to continue to import substantial quantities of the goods I have mentioned, is what we can do on the other hand to balance our payments or, in any event, narrow the gap in payments between our imports and our exports. I do not think it will be easy to do that. No wishful thinking ought to induce us to imagine that even the commendable work of the dollar export board and the insurance facilities we are providing will in a short time enable us to say that we have balanced our payments with the dollar area.

Anybody who knows the American market knows that it is a highly competitive one. America has industrial and manufacturing traditions which are probably in advance of any to be found anywhere else in the world. It has got a highly efficient industrial potential, and the prospect of selling goods on the American market has presented a problem to every country, including those with a substantial manufacturing tradition. It is in that market that we have to try to sell annually £33,000,000 of goods in competition not only with American production but with highlygeared production in other countries with a long manufacturing tradition. It would be a mistake for us to under-estimate the difficulties which confront us there.

So far as metallic goods and that kind of goods are concerned, the prospects of getting into the American market and establishing a remunerative trade are not good. I do not think anyone will attempt to say that they are. There is a field, however, to which I should like to see our greatest energies turned. I think there is a market for textile products of various kinds in the U.S.A., not merelyin the sale of homespun cloths, but the sale of poplins and embroidery articles which are peculiarly the product of Ireland. There is a sale there for that type of goods and I think that a greater return can be reaped in that field than from any attempt to export to America the metallic products of any of our industries.

Likewise there is a considerable potential market for tinned meat, not merely for consumption as meat, but for utilisation in the making of soup and various activities of that type. Having regard to the whole level of American live-stock prices and meat products, I think there is a market for our tinned meat there. There is probably also a considerable market for Irish manufactured spirits in the U.S.A. It would be under these three heads, I think, that probably the greatest measure of success might be anticipated, but it will not be easy even there to burrow into that market and hold a place there in face not only of the fierce competition of American producers but the keen competition of other producers anxious to establish a permanent trade with America.

We have to look at our dollar trade position not merely from the stand-point of exports to it but of imports from it. Certainly, in so far as we import feeding stuffs which are capable of being grown here, we ought as a complementary activity to dollar exports endeavour so to arrange our agricultural economy that we will be able to render ourselves as independent as possible of dollar imports. That can best be done by the fullest exploitation of our agricultural potential, by the production here of as much wheat as we can grow, by the production of as much animal feeding stuffs as we can grow, and the substitution of home-produced feeding stuffs for imported coarse grains for live stock. These two activities, so far as balancing our trade with the dollar area is concerned, are complementary activities—firstly, cutting down as far as we can our dollar imports, which can be done by exploiting our own agricultural activity here and by stepping up as far as we can the exportof that type of commodity which is likely to find a market in the United States.

The fact that there has been no insurance scheme of this kind in the past and that we have tried to maintain a tenuous hold on the dollar market without any of the guarantees now being provided was a serious handicap to manufacturers and exporters. That omission will now be repaired by the enactment of this legislation and I think it only right, so far as those manufacturers who are prepared to produce for a potential American market are concerned, that we ought to be generous in our approach to underwriting the inevitable risks associated with that market. There are immense risks and in this Bill we are facing up generously and broad-mindedly to an appreciation of those who produce for that market. I, therefore, welcome the legislation. I hope it will act as an impetus to our manufacturers to produce in the knowledge that the State is bearing all the risks it can reasonably be expected to bear. While I think that our manufacturers will still have a difficult time in finding a permanent and substantial hold in the American market, this Legislature is showing that it is not unappreciative of these difficulties by indicating its willingness to underwrite the main risks associated with trade in the dollar market and the Bill supplies a long-felt want.

Mr. Cogan

It is gratifying to come into this House to support a measure of this kind. A great deal of our time here is taken up in wailing about unemployment and the difficulty of improving our external position in regard to the balance of payments. Here we have an effort being made to give to our enterprising businesmen and manufacturers some little State backing to strengthen their hands in extending and enlarging the export market. That is what this Bill is intended to achieve. While we cannot hope for spectacular results we must keep on fighting our way into the fiercely competitive markets of the dollar area. That will not be an easy task and nobody, least of all the Minister, has suggested that it will be aneasy task. Considerable progress has been made. The expansion of our exports of chilled and frozen meat is very gratifying. There is no reason why there should not be still further expansion in that respect.

There is still a wide adverse margin in our balance of trade. The Minister stated that for the past year the adverse trade balance with the dollar area represents some £30,000,000. That is a very substantial margin and it is one which must be reduced.

It annoys me that, while the Minister, his Department and other enterprising people are pushing forward our export trade some of us seem to be falling down on the job. We seem to be neglecting opportunities for ruthlessly cutting down imports from the dollar area. There is no reason why our huge bill for imported wheat should not be ruthlessly cut down. For many years there has been a sort of political propaganda campaign against the growing of wheat at home. Wheat, as a domestic crop, has been defamed, ridiculed and abused.

Mr. Sweetman

What has this to do with the Bill before the House?

An Ceann Comhairle

It has nothing to do with it.

Mr. Cogan

I think it is time to end that campaign.

An Ceann Comhairle

And the reference to it also.

Mr. Cogan

The fact that wheat prices are rising in the world market ought to be an inducement to us to consider earnestly whether we can expand our wheat acreage. That is true of other imports from the dollar area also. We have imported sorghums extensively during the past few years and that importation has contributed to widening still further the gap in our adverse balance of payments. There should never have been any necessity for the importation of that commodity. We can produce far better feeding stuffs at home. I think it is a pity that the officials of the Department of Agriculture are not doing their jobwith sufficient energy and drive to increase the acreage.

Mr. Sweetman

On a point of order. This Bill deals with exports and not with imports.

Mr. Cogan

I know I am hurting the Deputy slightly.

Mr. Sweetman

Not a bit, but will I be allowed to follow on the same lines?

Mr. Cogan

The Minister referred to the adverse balance of payments with the dollar area. I am replying to the point he made in regard to that wide gap.

An Ceann Comhairle

I do not think the Minister opened the question as widely as the Deputy is trying to open it.

Mr. Cogan

That is so but he did open it. One cannot help being gravely alarmed because there is an adverse trade balance of £30,000,000 with the dollar area. The very existence of the nation demands that we should try to reduce that sum very drastically. As well as expanding our exports of meat products we can also expand our textile and other manufactured products very considerably. In a world famous film, "The Quiet Man," we advertised the potentialities of Irish manufactured spirits. I think we ought to cash in on that free advertisement. Many people in the United States who have seen the "Quiet Man" ought to be looking around for Irish whiskey.

Captain Cowan

They could send it out to Korea.

Mr. Cogan

That would be a brilliant idea. A little further publicity and more drive in the export of Irish spirits should bring in additional dollars. The Government has been blamed for taking measures which resulted in a reduction in the consumption of spirits here. We should try to make up for that reduction by increasing our exports thereby strengthening the nation's finance and our economic position in world trade. "The QuietMan" laid great stress, too, on the stage Irishman with his shillelagh and his caubeen. I will not press that too far, but we should exploit to the fullest the interest that does undoubtedly exist in the Irish nation throughout the length and breadth of the U.S.A. That interest has a certain potentiality for enterprising business people anxious to push exports as far as possible.

I welcome this Bill. I trust it will have the effect of not only making this nation more solvent in relation to our external trade but that it will also provide scope for additional employment for our workers at home. Again, I would like to stress the fact that while we must push our export trade to the fullest extent in the dollar area, we ought to be fairly ruthless in cutting down our import trade from that source. We will not do the U.S.A. any great harm by so doing because they are already selling us far more than they are buying from us and it is in the interest of all nations that we should keep as near as possible to a balance.

Some years ago the U.S.A. had to lend us vast sums of money in order to enable us to continue to purchase from them. That is not an entirely satisfactory position. It is better for all concerned that the imported goods of any nation should be balanced as far as possible by exports and if we must, as I believe we must, import a certain quantity of goods from the U.S.A., very essential goods for our manufacturing industries and for the consumer market, we should be in a position to extend much further our exports.

The businessmen who set out upon that task of increasing our exports should have a certain amount of backing and support, not subsidies, grants or anything of that kind but some insurance against adverse circumstances over which they could not possibly exercise any control. No businessman can foresee what a Government of another country may do in regard to the restriction of imports into that country. It is always possible that one or other of the dollar nations might decide to curtail or restrict imports or that there mightbe some adverse change in the currency rates as between two countries. It is desirable that the State, which is the only body that can do it, should stand behind the enterprising manufacturers and exporters of this country. Apart from that there is very little the State can do. In the main, our products must sell themselves in the world market on their merits alone and it is only extraordinary and unforeseeable political hazards that should be insured against by the State.

In conclusion, I would say it is a pity we have had to have such a large import trade from the dollar area. It is a pity that some prominent politicians campaigned so ruthlessly against the production of Irish wheat and of Irish feeding stuffs. I think that campaign has broken down and I am glad of it.

An Leas-Cheann Comhairle

The Deputy seems to be getting away from the subject.

Mr. Sweetman

This is the time we are advised, for the benefit of the life hereafter, to indulge in a little self-denying ordinations. We are just coming up to that time next week but I would like to try to make this time of the year the occasion for my self-denying ordinations not to say the things I would like to say about the foolishness of Deputy Cogan.

It seems, however, that the view he has put forward, which I think, is the mainspring of certain Fianna Fáil views, is that it is more important to cut imports than to increase exports. I am glad to say that in this case we are dealing with this matter from the proper end, namely, of increasing our exports.

Mr. Cogan

We can cut unessential imports.

Mr. Sweetman

This Bill was first introduced as the follower of the Dollar Exports Advisory Committee that was set up by the previous Government and I think it will fill a useful purpose. I want, however, to take advantage of it to mention to the Minister a couple of things he has in mind, perhaps he has not, on the subject of exports ofthe type that might be visualised in Section 2.

There are certain things for which we have a possible market in America but which market will be a very long-term one. Whiskey is the main one. It is quite absurd to think of going into the American market unless we are able to go into it with reasonable continuity, on so vast a scale that any advertising scheme for it must be over-whelmingly expensive. If that advertising cost is to be treated as the overhead of a small volume of exports, it will make the cost of the exports prohibitive to the purchasers on the other side.

We all know that so far as whiskey is concerned we must wait for eight to ten years before it is sufficiently mature for sale in a proper fashion. It seems, therefore, that the distillers concerned must lay down now what will not be ready for consumption until after the year 1960 and probably after the year 1963. That means tying up a great deal of capital over a very great period indeed and one can easily see the difficulty, from a financial point of view, of the private interests concerned, and the danger that during that long period there might be a substantial change in the opportunities that would exist for developing a market in America seven to ten years hence.

There have been from time to time serious complaints made against our distillers here that they have not made any real effort to capture an export market. Let us be fair to them. Almost all of that complaint is made without knowledge of the facts and the facts are that there have been very serious restraint and restriction placed upon their withdrawals from bond for export. Even where there have not been very serious restraint and restriction there has been prohibitive delay in the announcement by the Departments concerned what the withdrawal policy would be. That has been in the past, at the behest of the Revenue Commissioners, for consideration from a tax point of view.

As Deputy Cosgrave mentioned, we are now in a position in which theexisting rate of tax has meant that the Revenue Commissioners need have no worry about withdrawals and that there will be more than ample stocks to cover any withdrawals required for home consumption, so long as the rate of taxation remains at the present level.

There ought to be, therefore, far less of the hampering that there has been in recent years. I want to make it clear to the Minister that I am not making this as a point regarding delay with one Government more than another: it occurred over the period of years when the inter-Party Government was in power also. There ought to be in the future no difficulty in allowing these distillers to make long-term plans in regard to withdrawals for export purposes. In addition, something should be done in relation to the schemes to be considered under Section 2 for ensuring that if substantial stocks are laid down for the purpose of capturing dollar markets they can be adjusted, on a cost basis but not on a profit sales basis, should circumstances such as those the Minister has indicated arise in the interval to prevent by 1960 or 1963 the sales of the stocks that are laid down at the present time.

It will also assist substantially a very difficult situation that is arising at the moment, where we have at present in my constituency a cut by maltsters of 50 per cent. in the malting barley contracts that they are allocating for next year and a cut by some distillers to as much as ? of the acreage of malting barley grown last year. There is one substantial concern in Kildare that is allotting two farmers only one acre of malting barley where the farmers concerned grew six acres for them last year. Similarly, in other parts of the county it is being cut by half. If there were a scheme adopted by which whiskey exports on a long-term view could be facilitated, that would have the effect not merely of assisting us in regard to dollars but of assisting farmers to get a market that is clearly going to be denied to them this year otherwise, by reason of thefall in home consumption and the consequent uncertainty in the trade.

If I may be permitted to make a personal reference, may I say that when I was in New York last autumn I found that the knowledge of Irish whiskey was infinitesimal? I was sold what I was told was Irish whiskey and, while I do not hold myself out as any great connoisseur of whiskey, I do hope I know the difference between what is reasonably good and reasonably bad; and I found it very difficult indeed to get what I would describe as the reasonably good. I was able to get one bottle of Irish whiskey which came direct from here. It was given to me very kindly by one of our own diplomatic people in America and I brought it along one night to a party of people who the previous night had, on my suggestion, tried Irish whiskey bought in the hotel. Their view was that the Irish whiskey that I brought along was as different as chalk from cheese to what they were accustomed to get under the name of Irish whiskey over there.

That brings me to the point I want to stress in relation to this Bill. One of our difficulties is that, because of distance, because of the fact that it is such an immense market and that what we may do in that market will be a small percentage of the business that any particular person may do, it is very hard to ensure that we are able to keep to quality, that there will not be any tampering with that quality for other purposes there. I do not know whether the Minister will be able, under Córas Tráchtála or under this scheme, to ensure that some list would be compiled for the benefit of manufacturers here, not merely in regard to whiskey but for all goods—some list of really reliable agents who may be trusted to push the sale of Irish goods and to ensure that in those sales there will be no quality deterioration.

It is extremely difficult for people here to keep current contact with the standing of representatives in America in a sufficient way to build up new business in new areas and to ensure that that business receives attention. Some manufacturers have been able todo it and have been able to get excellent representatives and I want it to be clear that I am not referring to all. There is a substantial difficulty there, notwithstanding what has been done by our Department of External Affairs and by our regular consular officials and so on in America. They have done a lot but there is still a very substantial void there.

May I say now, as I have mentioned them, that I do not think it is sufficiently appreciated sometimes how much our consuls abroad do—men in the civil service or consular service abroad—in relation to facititating Irish trade and pushing Irish opportunities? They deserve the very greatest credit for what they do, but of course they are very small in number and on that account they are able to do extremely little.

I must confess frankly that I am not terribly clear exactly how Section 4 is going to be operated. However, that is a matter we can deal with more clearly on the Committee Stage than on the Second Reading. Perhaps between this and the Committee Stage the Minister might take steps to have available for us the names of the particular countries that he has in mind where difficulties have been met up to this in the way of reciprocal trade. That occurs only in certain countries. There is no difficulty in regard to reciprocal insurance trade, I know, in Denmark, Sweden and other Scandinavian countries, as there are already insurance arrangements operating quite satisfactorily in those countries.

I might also mention at this stage, for the purpose of putting it on the record for the Minister, that I do not think the provisions in Section 3 are sufficient to advise the Dáil of the information that should be available in regard to losses made by the State under this scheme. There should be far more information provided to the House about the export guarantees, when the State has to put its hand in its pocket and make good the amount of the guarantees. This also is a matter that we can discuss in detail on the Committee Stage.

From a national point of view, wemust expand substantially our dollar exports. By and large, we can say at the present time, unfortunately, that they are extremely small. With the exception of processed meat—live stock—there is practically nothing now exported to any degree worth while. If this scheme assists in the development of that market, it will be of the utmost value, as it is tackling the problem of the balance of trade from the right end, that is to say, the expansion of exports rather than the restriction of imports.

Mr. M. O'Reilly

I would like to congratulate the Minister on having introduced this measure. My main reason for congratulating him is that to me it is a sign that we are about to become emancipated. Although politically we have succeeded very well, economically we were kept in the backyard, and this, I hope, will induce people to test the world markets and get our name known.

We have every possible facility, climatically, traditionally and otherwise, for the production of extremely good meat and, strange to say, for the 100 years or more that we have been exporting to the British market, we have had about the same amount of cattle every year. There was some influence which kept us crippled and confined, with the result that from year to year, they succeeded in taking everything possible from us. They were not satisfied with the fat cattle—they had to begin to take our stores, skins, hides and everything else, and to pay us what is possibly the lowest price. It is the lowest price on the world market to-day and the price in Canada, the U.S.A. and possibly on the Continent is much higher than what we are getting from Great Britain. I hope that this measure will encourage people to export, if they can, tinned meat to the U.S.A. and possibly in the course of time, chilled meat.

I should not like to stop at that. We have a name on the Continent and we should try to keep the continental trade going, too, because it is fairly obvious that, with our rich lands, we could produce twice as many cattle in the year and cease to be summerproducing only. We produce only half the amount, over half the year. There is little middling hay cut, but then there is no more feeding for stock. The creamery industry developed into a summer business and there was a dead hand over everything. Until we can reach the stage at which we will have winter production of beef, stall feeding and so on, I do not see how we are to keep our land going. If this measure induces an expansion in the agricultural industry, it is something we should appreciate very much and should encourage in every way.

There are other things we can export to reduce the sum of £30,000,000. I do not think we should be too determined about cutting imports, provided these imports are raw materials, because they give a great deal of employment which is the reason Great Britain always wanted the skin, hides and hair of the cattle. I remember long ago when the hair was cut off the tails of the cattle going to Great Britain. Every exporter and farmer who shipped cattle to Great Britain cut the top of the tail off because hair was a valuable commodity. In the end the British demanded all the hair and they ceased to cut it off. Anybody who does not believe that can make inquiries and he will find that it is a fact. That is the kind of thing in face of which we were trying to carry on. I hope this measure will break that wall which surrounded us and allow us to extend and expand. Let us see if we cannot produce in winter as well as summer, and if we cannot enrich our land and get back to the position we were in when the British market began to develop after 1850 when every farmer sold fat cattle winter and summer. There was stall feeding; the land was enriched and manured and it gave full employment.

The whiskey end of it is also a very important item. I know quite a lot about the position of that trade in foreign countries, and, to put it in a few words, the position is that in these countries in which Irish whiskey could be consumed, they know nothing at allabout it. It would be a rarity to see a bottle of Irish whiskey in South America or any of the Americas and almost a similar rarity in France. It is certainly something to be discovered in the U.S.A. and I wonder what is wrong in that regard. I hope that this measure will also afford encouragement for the development of that trade because it is of great assistance to the farmer. The grain he grows is turned into whiskey and every effort should be made to expand this trade as it can be expanded. I have always been convinced of that, but, from information I have got recently, the position is the same as it was 40 years ago. Irish whiskey is not advertised or pushed, with the result that nobody knows anything about it and if a bigger effort could be made to get it on the market it would be a great advantage from the point of view of the static position of agriculture here, a position in which we have not increased production from year to year for the past 100 years.

I congratulate the Minister on his introduction of this measure. At one time, I had thought of trying to advise the Executive to attach some importance to the export trade and this proposal seems to do that because this insurance is to some extent a credit and should be equally as good. I wish the Minister and those who will export every good luck because I feel this will break the economic bonds which tied us and kept us from expanding. I hope it will have as good results economically as we have secured politically, that it will give us courage to get into these markets and let the world know that we have possibly the best produce the world can produce.

Mr. Dillon

So far as I know, this project for the provision of insurance facilities is a matter of common ground between us. No matter of controversy arises in regard to exports to foreign markets and the practice is pretty general in exporting countries everywhere. I detect, however, a note in discussions relating to foreign trade, not only here in Ireland but abroad, which I regard as savouring of economic heresy. I want to suggest to the Dáil that the idea in foreign trade is multilateral trade and thatit is very much of a second best to be thinking in terms of quasi-barter when dealing with foreign trade. The ideal thing is that we should sell our merchandise to the most willing buyer, wherever he may live, getting from him the best price we can for it, accepting his currency and converting it into the currency we want to use for the purposes of our requirements from the most willing seller we can find—buying to our best advantage wherever the goods we want are available, while we sell at the highest possible price we can get, to our best advantage, in whatever market most wants what we have to dispose of.

All this business of battering at the doors of a dollar market, a rupee market or a thaler market, is part of a thoroughly evil post-war situation which has grown up as a result of the inconvertibility of currency. Money should not dominate the foreign trade of this or any other country. The only thing that should affect the flow of international trade is the desire of people abroad for our produce and our desire for the produce of foreigners wherever they may be.

I should like Deputies to make up their minds to this—and I do not doubt but that the Minister for Industry and Commerce will agree with me—that we would much prefer to be trading in a world where we traded with anybody who was prepared to trade with us both as sellers and as buyers. I have no doubt that the Minister's insurance scheme is not primarily designed for exports to one country in preference to another. The insurance scheme he has in mind is to create machinery whereby a man who wants to sell merchandise in Persia, in Afghanistan, in India, America or South America, if he can find a market in these comparatively remote areas, will have insurance machinery here to share with him the risk of venturing out into a new field where trade conditions may not be familiar to our exporters and where, indeed, trading conditions may not have that atmosphere of stability and security to which we are accustomed in European countries. But I urge on the Dáil, as indeed I would urge on a great many other legislatures in theworld, to get it out of our mind that bilateral trade to the exclusion of multilateral trade is a good thing. It is not. It is not a good thing for us to brood on the fact that we cannot procure extensive dollar exports. The ideal thing is that we should be able to procure profitable exports anywhere in the certainty that the currency earned thereby can be converted into dollars or into any other currency which we require to purchase what we want to provide either amenities for our people or raw materials for our industry or our agriculture.

I think the Minister in introducing this Bill if he were in a generous mood might have gone into the story of the efforts of the Department of Agriculture in opening up a carcase meat trade in the U.S.A. That is a story in which I think we are entitled to take a certain amount of pride. Talk of carrying coals to Newcastle! When we were faced with the task of carrying meat to Chicago, I must say the assignment was one calculated to daunt the most valiant heart. As I have no doubt the Minister knows, the officers of the Department of Agriculture were able to secure the very valuable help of a good friend in Mr. Stanley McClean of the Chicago packing industry. With his co-operation and the assistance of many good friends in the U.S.A., we tapped a very valuable trade in boxed meat as the raw material of the open packed food and soup industry of the U.S.A.

I think in this experience there is a valuable lesson for us because a great many people were dazzled by the temporarily attractive price available in America for prime carcase meat. We in the Department of Agriculture, right from the beginning, tried to warn people that we could see no permanent future for a profitable market for prime carcase beef in the U.S.A. and that those engaged in it should walk warily, lest they make an investment out of all proportion to the prospect of an enduring and permanent market for that commodity whereas for boxed frozen manufacturing beef we felt there might probably be a permanent profitable market. I think the event has proved us right.

I read with amusement Mr. Stacey May's report reminding us that we might develop more rapidly a market for prime carcase beef. Before that report was published, the market had become utterly unprofitable which shows how much value we should place on Mr. Stacey May's opinion in regard to the export market for beef about which he knows as much as my foot or rather less. There is that danger to be faced in a foreign market unless it is very carefully studied. You are likely to find a temporarily vigorous demand for a particular commodity but you have got to investigate seriously in that situation, whether the demand is going to be of a permanent character. It is not fair to urge people to invest large sums of capital to supply a market which more careful investigation would reveal to have no enduring permanence.

We had no hesitation in the Department of Agriculture in recommending people to equip themselves to engage in the carcase meat trade for prime beef because we were certain, as a result of trade negotiations with other countries, which we had carried to a successful conclusion, that even should the U.S.A. market collapse, we had other alternative markets where the product could be profitably disposed of.

I should like the Minister sometime to explain to me this dilemma which I have never been able to solve and which has worried me. When my colleague Deputy MacBride was Minister for External Affairs, he was always zealous to establish in every embassy in other countries trade attachés to promote foreign trade. Some of his colleagues did not take such an enthusiastic view about it but let it be said to his credit that his views prevailed. He seemed to stock the whole face of the earth with trade attachés who are concerned to push our foreign trade. But the Department of Industry and Commerce or nobody else was able to explain to me how it could be that an industry which demanded a 75 per cent. tariff on the ground that if it did not get a tariff of that size it would collapse overnightand would be unable to sell its products at its own backdoor, could sell its products in San Francisco where it had no tariff to protect it but, on the contrary, where it had to get over a tariff to enter the United States, and furthermore where this product had to travel not from Dublin to Mullingar for distribution but from Dublin to San Francisco. Would anybody resolve that problem for me? Is there a single industry operating in Ireland to-day which has not the protection of a tariff or quota? Am I right in saying that the reason it gets that tariff and quota protection is because it has satisfied the Department of Industry and Commerce that without that protection it could not reasonably be expected to survive or prosper? If that has been proved to the satisfaction of the Trade and Industries branch of the Department of Industry and Commerce how could you prove to the Foreign Trade section that you not only want a tariff for the goods you are going to export from the same factory but are prepared to jump another tariff and transport those goods 50 times as far and still sell them at a profit?

This is not the case at all in regard to agriculture. I have often pointed out in this House that the unfortunate farmer has always faced the fact that his surplus production must be sold in conditions of furious competition from the four corners of the earth. If he is not prepared to meet that competition he has no prospects of disposing of his surplus production. He has always done that and has always paid the tariffs which are levied in order to protect the domestic industries. Surely to God, it is time we asked ourselves, if it is necessary to levy the cost of tariffs and quotas on our agricultural community who are selling their output in the furious competition of an entirely free trade market, how do those industries which claim as an indispensable perquisite tariffs and quotas for their own protection make the case that they can profitably sell their products in foreign markets where they themselves have to climb over tariff walls and transport their goods the great distances contemplated?

I wish every branch of our foreign trade success but I do not think we do anything to help it by minimising the technical difficulties that every person engaged in foreign trade has to grapple with and try to overcome. I do not think we do our prospects any service by talking—as it is on the eve of the Lenten season I will be charitable—glibly like Deputy O'Reilly. There are difficulties in foreign trade but the difficulties are no greater for us than for any other people. They can be overcome provided we have the right goods to sell.

The practice of protective tariffs which we have here has created a mentality amongst our industrial producers very unsuited to foreign trade because almost every industry in this country is concerned with equipping itself to supply the protected market available and when they reach the limit of that market they do not want to produce any more.

I told the House before the story of the paper bags when I actually got a customer to get an offer for 2,000,000 paper bags for an Irish manufacturer for the packing of Dutch superphosphates. At first the Irish manufacturer said he did not want the business because he had an agreement with the Dutch firm that he would not trespass on the Dutch firm's preserves nor the Dutch firm trespass on his preserves. The superphosphate manufacturer went to the Dutch people and asked whether it would waive the arrangement, that they were going to sell 100,000 tons of superphosphate in Ireland. The Dutch firm wrote to the Irish firm and said:—

"We deeply appreciate your honourable observance of the understanding between us but in this case we are quite free to regard it as suspended and you can handle this order".

The Irish firm wrote and said they would not take the offer.

The Minister has full particulars of that in his office. I said to my colleague the Minister for Industry and Commerce and to the Taoiseach that there seemed to be evidence of a refusal by industrial interests toexpand production. One of the principal difficulties under which our export trade labours at the moment is that people do not appear to want to expand production. They are doing very nicely as they are and they do not want to do any more. I think they would want to know what inducement would be held out to them as they were making a comfortable living on the protection they were enjoying and if they expanded production any more the Government might take 19/6 in the £ off them. That is one of the primary difficulties which confront the whole development of our foreign trade.

I intervened mainly for the purpose of suggesting that it might be expedient for the Minister for Industry and Commerce to go on record and say that he does not agree with me on this whole question of bilateral quasimultilateral trade but so long as we have to proceed on that basis we must do the best we can. The desire on the part of every Government is to turn to multilateral trade and the convertibility of currency. The Minister for Industry and Commerce cannot do much about the convertibility of currency but I want to suggest that our influence should be thrown on the side of the convertibility of currency as the most constructive method that could be taken in the world for the promotion of international trade.

Deputies of this sovereign Republic of Ireland ought to face up to the fact that trade cannot flow in one direction if they say in the one breath that we must put our shoulders to the wheel, and open the doors of every foreign country so that our goods may flow in, while the Minister for Industry and Commerce bars and bolts every door more effectivly than they have been barred and bolted heretofore so that the import of goods from outside may be further restricted. To do or say that is just talking nonsense.

If you want to sell you have got to buy and, in the name of Providence, what is the purpose of selling if you are not going to buy? What is the use of everybody in this country sweating to send meat, boots, clothes and wool to the ends of the earth if we do notwant to get from the ends of the earth the things we have not got here? I often feel that there is an idea in the minds of some people that there is a virtue in sending our goods to foreign countries and getting an entry put in a book in Nagasaki, New York and Calcutta crediting Ireland with £2,000,346 and saying, "Look what we have," but if anybody wants to bring a chest of tea or a bale of goods from these quarters there will be a revolution. Eventually we will reach the stage when, like the miser in the Dickens novel, we will be sitting shivering beside one diminishing coal fire or a cold blast glorying in the fact that we have a growing credit balance here, there and elsewhere—but let nobody bring anything into the country because the less we bring in the better off we will be. The only object I know that we could conceivably have to export is to enable us to import more.

My suggestion to the House is that the very essence of a successful export programme is that our imports should grow proportionately. I should like to see all the produce of our own land— that is the only natural asset we have —exploited to the full, our domestic requirements satisfied and a growing surplus accumulated for export. When the resources of our land have been taxed to capacity to produce, we should not hesitate to bring raw materials from the four corners of the earth and set our own people in their own country to process these raw materials so that they can be exported in a finished condition at greater profit. In that way, more and more of our people would enjoy a higher standard of living in their own country.

When I hear some members of this House talk of the folly of bringing in raw materials wherewith to produce bacon or to increase our live-stock population, I often wonder if they realise that—would I be wrong in saying?—Great Britain imports 60 per cent. of the raw material for her entire output from the other ends of the earth. Do Deputies realise that significant fact? Nobody demurs at bringing in cotton from Carolina and processing it here into thread andcotton textiles for sale at home or for export abroad: on the contrary, everybody is clamouring that we should do that. Is there any reason on God's earth why, if we can increase the production of live stock beyond the capacity of our land to produce feeding stuffs for them, we should not bring in maize from the same State of Carolina and, instead of converting it into textiles, convert it into leather, pigs' bristles, bacon, pork and even the hair of cows' tails of which we heard Deputy O'Reilly speak? Process them not only on our farms but in our meat processing plants, in our brush factories, leather factories, tanneries and so forth, and every-where else. Having consumed all of that produce that we want for our people, we can then export the rest. If we export a pig or a bullock or a brush, or the hair of a cow's tail with which to plaster a wall, which has been produced with imported maize, and if we make a profit out of it and keep more of our people in profitable employment in their own country, is there anything to be deprecated there? The Minister for Industry and Commerce should try to preach to his own supporters a little elementary economics on these matters so that we would find some common ground for common effort in this connection.

I think the Bill can be made a very useful adjunct to the promotion of foreign trade. No scheme can be brought forward to promote foreign trade if, at the back of the mind of the Minister's supporters, there is the rooted belief that, while it is evidently meritorious to export, it is crazy and criminal to import. The policy of the Fine Gael Party is that there is no future for Irish trade on the basis of the restriction of imports. The economic future of this country is bound up with the expansion of exports and we would export whatever our people are competent to produce profitably to whatever market is prepared to purchase it at a fair price. Our idea would be to send merchandise to the most willing buyer who is prepared to pay the best price under a system which will enable us to get for it a medium of exchange which will enableus, in our turn, to go to the most willing seller who will provide the best materials of the kind we require at the lowest possible price. I cannot but believe that, fundamentally, the present Minister for Industry and Commerce shares that view. He would do a service to the country if he availed of this occasion to state that view in the presence of his own supporters so that a little economic light might illumine the perennial gloom in which they ordinarily live.

Mr. Burke

I am surprised that the previous speaker tried slightly to misrepresent the spirit of this Bill, which I welcome.

When he was introducing the Bill, the Minister for Industry and Commerce explained its purpose. I am speaking subject to correction, but I understood him to say that our present dollar export market is worth only about £3,500,000. In other words, we have an adverse trade balance of £30,000,000. Deputy Dillon's argument conveyed the impression that, in fact, it was the other way around. The present Minister for Industry and Commerce has sought to establish industries, to create employment and to build up the wealth of the nation so as to improve the standard of living of our people. Under his guidance, this Bill seeks to promote foreign trade and to lessen our dollar gap. I believe that this measure will encourage our enterprising manufacturers and traders to go into the foreign market. That is the aim of this Bill. It is the efforts of individuals in all countries which have succeeded in making those countries worth living in. If we go back in history, we know that, prior to the Act of Union, this country had succeeded in building up a great export trade, but then, following the Act of Union, due to the jealousy of manufacturers and others in England, that export trade was to a large extent destroyed. We are now endeavouring to build up a big export trade for our country. Our manufacturers and exporters are to be given every encouragement in that direction under this Bill, and we all hope it will be a complete success.

The Minister has explained how thisinsurance policy and the provisions in this Bill will help in that direction. Exporters will get every help but will have to take a certain amount of risk themselves. If they make the full effort that is expected from them, then we can look forward to this Bill bringing great prosperity to the country by the building up of a valuable export trade. We are breaking completely new ground in this Bill, and in my opinion the procedure adopted by the Minister is a wise procedure. I welcome the Bill very much because I think it is a step in the right direction. I hope it will do the things that we require to have done in the building up of that export trade.

Deputy Dillon said that our mentality here appeared to be to export all we could and to import nothing. That, of course, was contrary to the facts. He knows very well that we have to import things which we cannot manufacture ourselves. Every trading and civilised nation in the world has to do that. They find that it is necessary to import many things in order to build up and develop the resources of their own nations. All nations have to import and barter in trade with other nations. I was sorry to hear Deputy Dillon develop that point because it seemed to imply that we are greedy here. That, of course, is not so. There has to be trade between all nations, and that is the policy that is aimed at in this Bill. We, like other nations, have to barter and bring in the things from other countries which we are not able to produce ourselves. That applies to every country in the world, and that is how nations build up their industries and their agriculture. I hope, with the assistance which will be given under this Bill, that our manufacturers, who are people of enterprise, will take full advantage of the help and encouragement to be afforded to them under this measure and so help this nation to reduce its adverse trade balance. If we succeed in doing that we will be able to improve the standard of living of our people.

Deputy Dillon also spoke about the position in England. I do not want to go into that question this morning,but surely we all know why the people in England are rationed in so many directions to-day, and have to do without many of the things which we here are able to enjoy. The fact that they are in that position is due to this, that their adverse balance of trade is such that the country is not capable of providing them with a higher standard of living. If we were to have, year after year, a big adverse trade balance we like them, would not be able to maintain the standard of living which we are enjoying. That is the answer to Deputy Dillon, and he knows that it is the truth. This enterprising effort on the part of the Minister will be of great advantage to the country, to its traders and manufacturers, and I congratulate him on its introduction.

Mr. Rooney

I, like other speakers on this side, welcome this Bill. It is the logical outcome of the policy that was evolved by the Dollar Advisory Committee that was set up by the inter-Party Government. That committee tried to find means of equating our trade with the dollar area. My view of the Bill is that it will encourage exporters to go into trade not only with the dollar area but with other countries.

With regard to statements made by Deputy Burke, I would advise every Fianna Fáil back bencher to study every word that was spoken here to-day by Deputy Dillon because I think that the view that he expressed is the correct one. I feel sure, too, that it is the view that will be taken by the Minister concerning our international position in relation to trade. I believe that the real advantage of this Bill, apart from the protection and encouragement that it is designed to give, will be to encourage manufacturers, who enjoy a great measure of protection at the present time, to try and make their goods saleable at a lower price. Owing to the limited market which exists here, it is necessary for them in many cases to take advantage of a high measure of protection, but if this Bill enables them to expand their business, to increase their production and reduce their costs the benefit to this nation can be very great. Onething it could mean is that they may not require the high level of protection that is available to them at present owing to the limited market they have here. If the Bill does that, then I believe it will bring great advantage to this nation by a reduction in the cost of our manufactured goods.

This Bill is not designed to give 100 per cent. cover to the manufacturers of our various goods. I would like to have an assurance from the Minister that it will be nearly 100 per cent. of the cost price as well as of the reasonable expenses incurred in connection with those exports. The Bill will enable exporters to participate in international trade. If they are to do that, it will be necessary for them to produce goods at a price which will enable them to cross any tariff wall which they may meet in trying to get their goods into those other countries. Emphasis was placed on the value of our dollar trade. It was also emphasised that the Bill would help us to counteract the disadvantages of high dollar imports vis à visour dollar exports. If we could get goods from outside the dollar area, it would be of no great advantage to us to export into the dollar area unless we were able to convert the dollars into a currency which would enable us to trade with whatever country we were exporting our goods to. Therefore, we must first find out whether in fact we will be in a position to trade with advantage in the dollar area.

Reference was made to the meat trade. I was very sorry that Deputy M. O'Reilly took the line he did take —I do not think it is a line that would be taken by the Tánaiste—in relation to the British market and the value of our live-stock exports. It is well known that Great Britain have been taking more than 90 per cent of our exports, despite the fact that we have been searching for markets elsewhere. This Bill may enable exporters to experiment in their search for markets outside Great Britain. It may succeed in expanding trade elsewhere but we must remember that in most places the meat trade in the past was easily met. Argentina was able to send meat acrossthe ocean to Great Britain and to compete in price with the meat exported from this country which had only to cross the Channel.

There is a possibility that this Bill will bring advantage to those engaged in the manufacture and export of whiskey and to the various sections of the community connected with that trade. Similarly we may be able to expand our trade in tweeds, leather, boots and textiles. All that has to be examined and the real value of this Bill is that it will enable exporters to explore the possibility of starting trade with other countries that will be conducive to the expansion of industry and the creation of employment at home.

This Bill, inasmuch as it provides a measure of protection against losses, whether arising from a commercial situation or a political situation in the country of destination, is valuable. The guarantee contained in it will provide a measure of stability so far as the manufacturer is concerned.

In the world to-day there is keen competition in all sections of trade and I would like to know from the Minister, when replying, what classes of goods he considers it will be possible to export and in respect of which this Insurance Bill will be of advantage. The emphasis that there has been on the dollar trade is not, I think, really justified because it is up to us to seek trade anywhere we can get it on the best possible terms. If we do that we will be able to convert whatever currency we get in respect of goods in order to secure dollar goods.

Mr. Lemass

It is not contemplated that, as a result of the enactment of this Bill or of any other measures that we may apply, it will be possible to wipe out the deficit on dollar payments in any foreseeable time. It is important for us, however, that we should expand our dollar exports, first, because any extension of exports is important and there are definite potentialities in the dollar market which can be availed of and, secondly, because there are currency difficulties in financing dollar imports. These difficulties may disappear in time. We would all like to see the situation whichDeputy Dillon referred to in which every currency would be freely convertible into any other and in which all restrictions upon the movements of funds would disappear. So long, however, as we are in the position that the bulk of our exports go to Great Britain and earn sterling, then our ability to finance trade outside the sterling area depends largely upon the success of the British Government in maintaining the value of sterling and working towards a position of convertibility. What the prospects of success of the efforts which the British Government are making to that end may be is a matter upon which opinions will differ.

So long, however, as difficulties exist, so long as currency restrictions have to be maintained, then our position in the world is considerably weakened by reason of the very big deficit upon our dollar payments and our freedom of action is also to some extent curtailed.

I do not want, however, to put the case for special effort to expand dollar exports solely upon the basis of currency difficulties. The investigations carried out to date show that there are possibilities there, that these possibilities can only be fully availed of if there is an organisation created to explore them and to ensure that measures are adopted here by our manufacturing and trading firms which will enable them to be taken up.

Any expansion of exports, as I said, is of benefit, not merely in so far as it avoids a deficit arising in international payments, but of benefit to the whole productive organisation of the country and of benefit to the home consumers of our own goods as well.

We can expand exports of manufactured goods provided we give certain facilities to exporting firms and that the aids which industry normally requires for expansion are made available to it but particularly if we can get our people export-conscious, and that is not merely a matter of bringing to the notice of manufacturers the possibility of external trade; that consciousness of the importance of exports to the whole community must go beyond the directors of firms right down through all their workers and beequally strong amongst those who are responsible for the leadership of our trade unions. If we can get that attitude of mind developed in our industry, then a number of production methods and labour utilisation practices which are not conducive to the reduction of costs but which it is possible to maintain in an industry operating solely on the basis of a protected home market will be reconsidered and, if altered, will not only open up export possibilities but will produce equally important benefits at home.

I would not like to attempt to forecast the classes of manufactured goods for which export possibilities in the dollar market may be found to exist. The report of the Córas Tráchtála team of experts will shortly be available. These experts dealt with the commodities which, in the opinion of the directors of Córas Tráchtála, offer the best prospects but since then other firms have indicated other possibilities which Córas Tráchtála are also explor-ing.

This Bill, it is true, will operate for the time being to provide these insurance and credit facilities only in respect of dollar trade. The Bill does not limit the provision of these facilities to dollar trade only. The view is that we should start in on the dollar market, first, because of the possibilities there and, secondly, because, if we can overcome the difficulties in penetrating that market, get the production and marketing organisations established which can do it, other export possibilities will develop independently and the facilities provided by this Bill can be more readily extended to other markets later. It is, of course, desirable, as Deputy Norton said, that we should not underestimate the difficulties of expanding trade in goods to dollar areas. It is equally important, however, that we should not overestimate them. Substantial expansion in dollar exports has been achieved already and further expansion is undoubtedly possible. Most European countries have already provided for their exporters the facilities which this Bill will create. We should have had them in operationbefore this. They are being provided now. If they produce expansion here to the extent which is considered possible this will be one of the most important measures which the Dáil has ever been asked to consider.

The Bill, of course, is largely an enabling Bill. It does not give the House much room for discussion of its terms. The aim is to empower the Minister for Industry and Commerce, on the one hand, and Córas Tráchtála on the other, to bring schemes into operation which have not yet been worked out in detail. A group of insurance companies are themselves establishing arrangements for the provision of insurance against commercial risks. They can, of course, do so under existing law without any fresh powers. They will work as a group. That question was addressed to me and I want to answer it.

It will not be a case that a number of insurance companies will go separately into this business. A group has been formed and that group will share the risks and the premiums amongst themselves. The group will also act for the Government in the operation of the insurance scheme against political risks. The Government will fix the premium rate and get the premium income, but the contracts will be made between individual exporters and the group of insurance companies.

Mr. Cosgrave

Will they set up a separate organisation?

Mr. Lemass

No, it will be part of their ordinary operations. I do not contemplate that the State will lose money on this. Taking the experience of the British export credit scheme, losses are not anticipated. The British scheme has operated for a number of years. It was operated during a time when there were great political risks in the world and covered goods forwarded for shipping over a much wider area than Irish goods are likely to be sent. The scheme has been operated there in such a manner as to ensure that the premium income was adequate to cover outgoings, and has, I think, even shown a profit. It will be the aim to get a similar result here, if we can. It will be only in the event of somesudden and widespread emergency arising that the possibility of a loss will be there. I think the British had some such experience last year but, taking one year with another, they are able to keep their outgoings and income in balance and we hope to do the same.

The joint venture scheme is of a different character. It is intended to be a long-term scheme. Under the commercial and political insurance scheme an exporting firm will enter into a contract to insure a particular consignment of goods. The insurance scheme contract will provide cover for a definite amount against payment of a premium fixed in accordance with known rates. The other scheme is to provide cover against long-term commitments involved in opening up a new market. The firm may expect that in the opening up of that market it will have to incur losses over a particular period, losses for publicity, for building up a sales organisation or by making changes in the quality or packing of the goods in order to get the best results. They will not know to what extent that expenditure will pay off in profits three, four or five years hence. This scheme is to encourage them to make the effort, realising that if it does not pay and losses are incurred, a proportion of the losses will be recovered under the scheme.

I do not know that I need to go into all the more general questions raised. It is perfectly true that the aim of all exports is to find the wherewithal to pay for imports. It is equally true, as I pointed out on a number of occasions, that for the expansion of Irish industry, in so far as it depends on the importation of increased quantities of industrial raw materials, we must increase imports in certain categories and that expansion is, therefore, conditional on our being able to develop the export trade to cover these additional supplies that we will have to purchase.

The ideal situation in any country is to get its international payment in balance. We have been shown in the past two years all the difficulties which may arise when income is less than outgoings. There are also difficulties where income exceeds outgoings. Theideal situation is to get them to balance, not necessarily to balance every year but to have a balance over a reasonable period. At present we are rather out of balance. For us, that is perhaps less serious than for others because it does not necessarily involve incurring foreign debts as we have resources upon which we can draw to make good deficiencies. But these reserves should, if possible, be retained for capital investment purposes. Capital investment here must necessarily involve an increase in imports and therefore deficiency in the balance of payments is not necessarily something to be concerned about, provided it is possible to show that that deficiency arose out of increased imports of capital goods which will in the course of time extend production here and enable us to wipe out the deficiency.

With regard to the part of the Bill dealing with the granting of reciprocal facilities for the carrying out of insurance business, Irish companies have reported to me that they have encountered certain difficulties, particularly in France and the Netherlands. In both of these countries there were prospects of businesses being opened up for Irish insurance companies but permission to operate was refused because of a provision in our law which prevents French and Dutch companies operating here. There is a possibility of similar difficulties arising in other countries although the actual effort to get business by the Irish companies has not been made. The Irish companies represented that we should amend the law so as to give us power to make reciprocal arrangements as they are satisfied that it may be in their interest. The enterprise of these Irish companies, which developed mainly towards the end of the war and in the post-war period, to extend their insurance activities outside this country was fairly satisfactory. It has already shown substantial results and we do not now need to preserve the position in the 1936 Insurance Act to the extent we thought necessary then. With the growing strength of the Irish insurance companies and their capacity to get business in competition outside the country we can contemplate relaxing the restrictions in the 1936 Actwherever, on balance, it appears to us desirable to do so in the light of whatever reciprocal advantages will be secured in return.

As I have said, the provisions of the Bill are mainly designed to enable certain things to be done: to enable the Government to devise and operate a scheme of insurance against political risks in respect of exports to the dollar area, to enable Córas Tráchtála to undertake this system of joint venture insurance, and to enable reciprocal agreements under Section 4 to be made in fire and accident insurance business.

This is an enabling Bill and its passage will not of itself do anything. It merely empowers the doing of certain things which, however, I have indicated it is not intended to do to the full extent permitted by the Bill in the immediate future. To the extent that it is intended to use these powers, arrangements to do that have been made and the passage of the Bill is all that is required now.

Mr. Rooney

The Minister says this is an enabling Bill. Has he contemplated yet what methods or what machinery will operate between the individual firms who will do this export insurance?

Mr. Lemass

The Irish insurance companies have formed a group. They will act as a group. The individual seeking insurance will go to a particular company but the risk will be carried by the group as a whole.

Mr. Rooney

It will be distributed over the group?

Mr. Lemass

Yes.

Mr. Sweetman

As I understand it, the exporter will go to his own insurance company and that company will lay off amongst the rest of the group, so to speak, and the individual contract will be between the insurer and his own company.

Mr. Lemass

That is not quite certain yet. It may be that the contract will be with the group. It is a matter for the insurance companies themselvesand it is for them to state what their intentions are. So long as they operate a scheme of commercial insurance and so long as that can be integrated with the political insurance scheme I am satisfied.

Mr. Sweetman

It is not intended there should be free advertisement of the group organisation?

Mr. Lemass

The arrangements of the group will be decided between themselves.

Question put and agreed to.

Committee Stage ordered for Wednesday, 18th February.