Dáil Éireann debate -
Wednesday, 25 Feb 1959

Vol. 173 No. 1

Committee on Finance. - Irish Shipping Limited (Amendment) Bill, 1959—Second Stage.

Minister for Industry and Commerce (Mr. S. Lemass)

I move that the Bill be now read a Second Time. The Bill provides for an increase in the authorised capital of Irish Shipping Ltd. from the present figure of £5,000,000 to £12,000,000; for an increase in the maximum borrowing by the company which may be guaranteed by the Minister for Finance from the present limit of £2,000,000 to £5,000,000; and for the repeal of the provisions in the Irish Shipping Limited Act, 1947, which empower the Minister for Industry and Commerce to pay subsidies to the company.

Deputies are, I am sure, familiar in some degree with what I believe we can fairly describe as the success story of Irish Shipping Ltd. The company commenced operations in 1941 during the most difficult phase of the war with a capital of £200,000. During the war the company acquired 15 deep sea vessels, which by peace time standards were obsolete and uneconomic. The company also later undertook war risk insurance and later extended their insurance business to cover ordinary marine and aviation risks. The company's shipping business was very successful and, due largely to a very fortunate claims experience, their insurance business was phenomenally successful.

The company's success in the insurance field served to place the marine insurance business in this country on a firm footing from which its success developed very satisfactorily. The company ended the war with very substantial reserves. After the war, the company set about replacing the wartime fleet with new and up-to-date vessels and now they possess a modern fleet totaling 140,000 tons dead-weight, consisting of 17 dry cargo vessels, one deep sea tanker and one coastal tanker. In addition, a second deep sea tanker of 18,000 tons dead-weight has been launched and will be delivered later this year.

Irish Shipping Ltd. have grown to be a very considerable enterprise and play a considerable part in our economy. The company now give employment to some 900 persons, ashore and afloat. The scale of their operations may be deduced from the fact that in the five years ended 30th April last frieghts amounted to approximately £9 million. The company are one of our major earners of foreign exchange and their freights are an important factor in our balance of payments. Irish Shipping Ltd. are in these respects directly comparable with an industrial undertaking of similar magnitude engaged entirely in the export market.

To facilitate the programme of expansion and modernisation, the Oireachtas enacted the Irish Shipping Limited Act, 1947, which provided for a maximum authorised capital of £5,000,000 and for borrowing, with the guarantee of the Minister for Finance, up to £2,000,000. These limits are now no longer adequate. Expenditure on the present fleet including payments in respect of the tanker under construction have amounted to approximately £12,500,000. Of this sum, Irish Shipping Ltd. have contributed from earnings some £5,750,000. Five million pounds, being the full authorised capital of the company, have been contributed by the Minister for Finance in the form of share capital. The balance of approximately £1,750,000 is covered by overdraft with the company's bankers. This overdraft, which was arranged for the purpose of financing the purchase of the two deep-sea tankers, is guaranteed by the Minister for Finance.

When a programme of expansion was embarked on after the war, the target aimed at was a dry cargo fleet of 250,000 tons dead-weight which was then considered to be the minimum size of fleet required to carry essential imports to this country in time of war. Because of increases in the size and speed of dry cargo vessels, with a consequent improvement in their overall efficiency, it is now considered that minimum emergency requirements could be put at a figure of 200,000 tons. The cost of an additional 80,000 tons required to bring the Irish Shipping Ltd. fleet of dry cargo vessels up to 200,000 tons will at present prices be of the order of £9,000,000. The Government do not intend to limit the company's growth to this tonnage, but expansion beyond it will depend on the prospects for remunerative employment of the company's vessels.

Irish Shipping Ltd. consider, and the Government agree, that the best shipping practice requires that they should replace their vessels when they become relatively uneconomic to operate. Over the next ten years or so, a number of the company's vessels will fall due for replacement on this basis. As an alternative to early replacement, the company have undertaken the conversion to diesel propulsion of two of the older vessels. They have informed me that the converted vessels will be of a size and speed particularly suitable for operation on the Atlantic and into the new St. Lawrence seaway. The cost of replacement vessels would, in the normal way, be met from the sale of the older vessels and from depreciation reserves and would not require any addition to the company's capital. The cost of new vessels has, however, risen very considerably since many of the present vessels were built. Moreover, the company's entire reserves have been applied, on Government direction, to the acquisition of new tonnage. The cost of replacements, which will over a long period ahead amount to many millions of pounds, will therefore have to be met to a considerable extent from new capital.

Outstanding commitments on the tanker due for delivery in the present year amount to about £420,000, and payment of the outstanding sums is expected to bring the company's overdraft at the bank to over £2,000,000. In view of the present shipping slump, the company will not be able to repay this overdraft from earnings in the relatively short time envisaged when the overdraft was being arranged and it may be necessary, eventually, therefore, to liquidate the overdraft by long-term borrowing or by payment from capital account.

Irish Shipping Ltd., like other shipping companies throughout the world, are not immune from the present severe slump in freight rates. The company have been fortunate in that a large proportion of their fleet is modern and relatively economic to operate and that a number of their vessels were on long-term charter at rates negotiated before the onset of the slump. The company expect that in the present year they will about break even, the profit on some vessels offsetting the loss on others. Unfortunately, they have been forced to lay up two of the older and less economic vessels. The company are unable, for the time being, to devote any portion of their earnings to the liquidation of their overdraft or to the acquisition of new vessels. The extent to which they will be able to do so in the future will depend very much on developments in the freight market.

There have been many attempts by economic and shipping experts to forecast the pattern and duration of the present shipping slump, but few have committed themselves to firm prophecies. There are, however, a number of factors in the situation which suggest that the slump is not susceptible of a quick solution and that, in the absence of further international crises, there is unlikely to be any return to the extraordinarily high rates which prevailed only a few years ago. That situation can now be seen in retrospect to have been a largely artificial one brought about by the successive stimuli of the Korean War and the Suez Canal crisis. These events not only delayed the inevitable reduction in freights from the high levels which prevailed in the immediate post-war period, but served to inflate orders for new tonnage, while at the same time keeping obsolete tonnage in remunerative employment. This situation has been further aggravated by the relatively minor economic recessions in Britain and the United States of America, with their inevitable reactions on world trade.

The cumulative effect of these factors has been to change what might have been a gradual adjustment of freight rates to normal competitive levels to a precipitous plunge to levels at which only the most efficient and modern vessels can meet outgoings and the bulk of existing vessels can operate only at a loss. Since January, 1956, the dry cargo freight index of the British Chamber of Shipping rose from 144.3 to 189.4 in December, 1956, whence it fell to 62.7 in April, 1958. Since then, the index rose slightly and in December 1958, was 74.6.

In the 12 months from July, 1957 to June, 1958, the world high seas fleet increased by the phenomenal figure of 7.7 million tons, over 7 per cent., to a total of 114,000,000 gross registered tons. In contrast, scrapping of old and obsolete tonnage was relatively very small. This is due in large part to the fact that many obsolete vessels changed hands at very high prices at the height of the boom and the new owners are reluctant to face the heavy capital loss involved in scrapping them. The rate of new construction continued at a very high level and many ships continue to be delivered against orders placed prior to the slump. At the present time, it is estimated that there are some 7,000,000 tons dead-weight of dry cargo shipping laid up and any increase in freight rates is likely to bring many of these vessels back into the market. Fluctuations in tanker freight levels have been even greater than in the case of dry-cargo tonnage; from a peak index figure of 435 in December, 1956, they fell to a figure of 42 in May, 1958, and have risen only slightly since. Over 4,000,000 tons dead-weight of the world's tanker fleet is now laid up. In recent years, the world tanker fleet has grown rapidly, the net increase in the year 1958 amounting to 3.8 million tons dead-weight or 6 per cent. As in the case of dry cargo tonnage, there has been relatively very little scrapping of old vessels.

The present situation, therefore, is that there is a substantial surplus of both tanker and dry cargo tonnage, aggravated by a relatively minor recession in world trade, by a continued flow of new tonnage, and by the retention of old tonnage due for scrapping. In a normal international situation, the present position can be expected to right itself only over a fairly lengthy period in which an inevitable reduction in new building, accompanied by an increase in the scrapping of obsolete tonnage and an improvement in world trade, will bring about an adjustment to normal freight levels.

On the other side of the picture is the fact that the world's population is increasing by about 1,000,000 per week, that world trade always tends to expand in the long-run, and that more competitive conditions will eventually force uneconomic ships out of trade. A well-managed company with modern ships can hope to see a gradual expansion of its operations.

It is in the light of these considerations that we must consider the prospects for the future trading and development of Irish Shipping Ltd. I have every confidence that the company will, with wise direction and able management, ride out the present storm and, with the return of better trading conditions, forge ahead once more towards and, in due course, I hope, beyond, the target of our minimum national requirements.

It is not possible in present circumstances to estimate with any degree of precision what the gross capital requirements of the company may be for a considerable number of years ahead, or what contribution the company may be able to make from earnings to future replacements and expansion. Such estimates must depend, to a considerable degree, on developments in the world shipping market. The Government consider, however, that adequate statutory provision should be made to meet whatever developments may be found practicable and desirable in the light of future experience.

It is proposed, therefore, that the maximum authorised capital of the company should be increased from £5,000,000 to £12,000,000. This latter figure is, in any case, more in keeping with the present value of the company's assets which amount to £13,000,000. It is also proposed to increase, correspondingly, from £2,000,000 to £5,000,000 the amount which the company can borrow with the guarantee of the Minister for Finance. Taking into account the prospects for a return to normal conditions in the shipping industry within some reasonable time, the provisions now proposed should be sufficient to meet the company's requirements on capital account for some years.

It is also proposed to repeal the provision at Section 10 of the 1947 Act which empowers the Minister for Industry and Commerce to pay subsidies to the company. When that Act was passed, Irish Shipping Ltd., were beginning to meet, for the first time in peace, the brunt of competition from established shipping companies. It was expected that competition would become more acute and that the company would have to face the discriminatory practices operated by some Governments to protect their own shipping, and unfair competition of some combines of private shipping concerns. We were then, perhaps, too fearful for the future and Irish Shipping Ltd. have since proved beyond all doubt their ability to compete successfully in the international shipping market. The provision for subsidy is therefore no longer necessary, and the retention of legislative powers to pay a subsidy could give rise to misunderstanding.

Since 1947, also, Ireland has become a member of the InterGovernmental Maritime Consultative Organisation, known as IMCO, one of whose aims is the elimination of discriminatory and restrictive practices in the shipping industry. While it is not to be expected that a consultative organisation such as this can succeed in eliminating these practices entirely, it is to be hoped that it can bring about some mitigation of them in due course. In our particular circumstances, discriminatory action in favour of our own vessels would be impracticable, even if it were desirable. Our national interest, both from the narrow point of view of the success of Irish Shipping Ltd. as well as from the broader aspect of the freight levels which affect the cost of our imports and exports, is best served by supporting the abolition of discriminatory and restrictive practices in the industry.

Deputies have suggested, from time to time, that Irish Shipping Ltd. vessels should be used to a greater extent in the carriage of goods to and from Irish ports. I am sure the company would be anxious to use their vessels as far as possible in this way. It would simplify the task of management and would, no doubt, be welcome to the crews. I am sure the company have never missed, and never will miss, any opportunity to trade profitably with home ports. To compel the company to trade with home ports exclusively, or to any particular extent, would mean uneconomic use of vessels, with resultant heavy losses, unless, by compulsion or otherwise, regular remunerative cargoes were guaranteed. Official measures to channel trade to our own vessels would involve a breach of the international principles to which we adhered when we joined IMCO.

The international shipping market is one in which no tariff or similar means of protection are available to us, but it is also one in which we need meet no serious handicaps in fair competition with others. The task of Irish Shipping Ltd. in peace time is to pursue an aggressive commercial and expansionist policy; it is in this way that the company will best be able to acquire the resources with which to serve the nation in any circumstances which may arise.

Mr. Cosgrave

There is general agreement, on both sides of the House, on the policy of encouraging the development and expansion of Irish Shipping Ltd. On that matter, there is no conflict of policy between the present Government and the previous one. Both Governments have encouraged the modernisation and expansion of the shipping fleet and, as the Minister remarked, it is satisfactory that, despite the present worldwide slump in shipping, Irish Shipping Ltd. has probably been less affected than many other companies, because, in at least two cases, satisfactory charter arrangements on a long-term basis were made before the drop in freight rates. It is sound national policy for this country to have a modern shipping fleet. The fact that we are an island makes it obvious that we should have a shipping fleet of our own to meet our own requirements. Leaving aside ordinary commercial considerations, events like the Suez crisis of a few years ago brought home to all sections of the community the importance of having adequate shipping facilities and, in particular, adequate tanker facilities.

However, in present circumstances, in view of the very substantial drop in freight rates, I should be glad to hear from the Minister what the policy of Irish Shipping Ltd. will be, while these conditions exist. In present circumstances, a certain amount of caution is necessary. The company has displayed very considerable foresight and ability in running its affairs and I have no doubt that it will display those qualities in facing the present difficult situation. It is well known to those who study these matters and it was clearly shown by the figures read by the Minister a few minutes ago that shipping generally is facing a difficult time. That, also has been the experience for the past 12 or 18 months. The fact that Irish Shipping Ltd. modernised its fleet enabled it to meet that situation on more favourable conditions than otherwise would be the case.

There are one or two matters I should like to raise on this measure. Could the Minister indicate what the prospects are of having ships for Irish Shipping Ltd. constructed in this country in future? One ship was built for the company by the Liffey Dockyard Company. I understand that that dockyard is capable of building ships of a certain size only. Can the Minister say at this stage what the prospects are of ships being built in the new dockyard in Cork and is it possible to indicate now what State contribution will be made to that new venture? On the other hand, apart from these shipyards, does the company consider the possibility, other things being equal, of orders being placed with the Belfast shipyards?

Another matter on which I should like some information is the extent to which the company has considered entering the cross-Channel trade. This matter was under consideration some years ago but, so far as I know, no definite decision was taken. The other matter that arises in that connection is the question of providing passenger ships for the transport of passengers between this country and Britain. At present, companies outside this country have a monopoly of that trade and while, in the main, the service is satisfactory, very serious inconvenience has been caused on many occasions, at peak periods, particularly during the summer holiday period, to passengers returning to Britain after spending holidays here. Efforts have been made by this Government and by the previous Government, through representations to the companies concerned, through the provision of better facilities at Dún Laoghaire for persons awaiting transport, but on occasion, all these efforts have failed to prevent hardship, disappointment, delay and unnecessary inconvenience. For that reason, I should be glad if the Minister would indicate if the question of providing passenger ships has been considered.

So far as we are concerned, we welcome this proposal. Irish Shipping Ltd. has been a very satisfactory undertaking. It is one of the examples of State enterprise succeeding where it would not have been possible for the development and expansion which have taken place to have been achieved by a company other than one operated through State auspices.

Mr. Larkin

The Minister, in moving the Second Reading of the Bill this evening, painted a somewhat gloomy picture. He has told us of the very significant increase in the size and speed of dry cargo vessels. He has told us of the falling off in trade. Even though the picture painted by the Minister is gloomy in this particular regard and at this particular moment, nevertheless, in the light of the record of Irish Shipping Ltd. since 1941 in building up a minimum national fleet that at one period was able to provide essential shipping and, in the event of some future emergency, would be capable of providing essential shipping, all sides of the House should agree with the Minister as to the desirability of increasing the capital of the company.

The Minister has indicated that no expert of world standing has been able to indicate the duration of the present slump in shipping. Nevertheless, if in the course of years, the situation was rectified and there was an increase in demand for this type of fleet carrier, Irish Shipping Ltd. would require at that stage modern economic vessels. Their fleet is growing old and replacements will be required. I think we would agree with the Minister if he would say that you do not get replacements very easily in peak periods of demand for shipping: the cost of replacement is going up and the demand on the various shipbuilding yards is also there.

Mention has been made by Deputy Cosgrave of the prospects of Irish Shipping breaking some new ground, so to speak, and he asked in particular whether or not the Minister could give the House an indication of the prospects of Irish Shipping Ltd. taking an active part in the cross-Channel trade. I would echo his remarks in that regard, but I should be inclined to ask the Minister to deal in particular with the cargo trade.

We in this country are very much aware of the difficulties which arise at peak periods—the Christmas period and the August period—when passengers experience extreme difficulty in travelling between this country and England. One difficulty any shipping company would have if they entered the passenger-carrying trade between here and the neighbouring country would be whether, if ships were built for the specific purpose of carrying passengers, they would be in a position reasonably to ensure that the ships could be utilised throughout the year.

Not even the most optimistic person would suggest that it would be a good venture, national or otherwise, to have passenger ships constructed if they were to be used and could only be used profitably for two or three weeks, or for two or three months in the whole year. We should like to see Irish Shipping extend their activities. They have been successful in obtaining charters for carrying goods to various remote ports of the world. We should be happy to see them extend their activities to the carriage of goods between our ports and cross-Channel ports. I think we would welcome their incursion into the passenger-carrying trade, provided that was a practical possibility.

Much as we might deplore the difficulties experienced by travellers at the peak periods, I think we would wish to be assured that there was a possibility that, if the shipping company were thinking of entering that line, they would be able to keep up a regular scheduled service which would not result in a very severe financial loss. Can the Minister indicate whether or not Irish Shipping, Ltd., have any programme in relation to entering a little more into the tanker business? For a number of years, the desirability of having some tankers in the ownership of Irish Shipping, Ltd., has been adverted to both inside and outside this House. We have reached the position where there are two and, I think, one in construction. We wonder whether it would not be advisable even to extend into that line in a greater measure.

I should like to echo a point made by Deputy Cosgrave. In the matter of repair, alteration or construction of Irish ships by Irish Shipping Ltd., will any very serious effort be made to endeavour to ensure that, where possible, contracts for the repair, reconstruction, or construction of ships for the company will be placed with Irish dockyards? The Minister has indicated that employment is provided directly and indirectly—I think directly—for some 900 persons in all, both afloat and ashore. I have no doubt that, where Irish Shipping, Ltd., place their orders for ship repairs and reconstruction or construction with Irish dockyards, the benefits to the economy are not inconsiderable.

I feel this Bill should be approved by this House on the basis that, since its establishment, Irish Shipping's record has been good and, even in times of slump, it is possibly best to endeavour to build for the future and to try to ensure that if the position does improve, we shall not be left with out-of-date and outmoded ships flying the Irish flag.

Mr. T. Lynch

It is obvious that this Bill has the approval of the whole House. From the establishment of Irish Shipping, Ltd., the idea was that we would have ships of our own to carry cargoes in times of war; in fact, the Minister said that here this evening. If that be so, then it did not matter whether or not Irish Shipping, Ltd., was a paying proposition. What mattered was that we should have the ships and maintain them. It is creditable that Irish Shipping, Ltd., were able to earn £5,000,000, out of which they were enabled to build more ships.

With regard to the policy of Irish Shipping, Ltd., I consider it is not good policy to build very large ships. About two months after I came into this House, I asked the Minister for Industry and Commerce, how many ports in this State could accommodate a ship of some 10,000 tons fully loaded and dischargeable. The answer was Dublin. It is important that we should not have all our ships of a size that they can be accommodated only in the port of the capital of the country. In time of war, it is very important that the cargoes should be spread out all over the country.

The Minister should examine the possibility of re-entering the coasting trade. I realise that there is great competition from the Dutch. However, now that we have Dutch shipbuilders coming to Cork, I am sure they would be able to build the type of ship that would be suitable for the coasting trade here in Ireland and maybe other countries. That type of ship would be a great reserve for us in time of war. I would agree with Deputy Cosgrave and Deputy Larkin, and I am sure all will agree, that we should, if possible, build our ships in our own shipyards. If we have to go outside our own yards for a certain type of ship, then we should give substantial preference to the Belfast shipyards and pay more than lipservice to this matter of being on good terms with our fellow-countrymen in the Six Counties.

Lastly, I agree with the Minister that it is better to get out of ships before they get very old, just as it is with cars. He mentioned that diesel engines had been put into two ships and that they were particularly suitable for the Atlantic trade. It seems to me that that is a policy which is being carried out by most of the shipping companies throughout the world. They are all switching over to oil. If we are switching over to oil, we should bear in mind that the building of one tanker is not sufficient and the Minister should examine the possibility, when increasing the fleet, of having more tankers.

To sum up, our target is 250,000 tons and 200,000 tons are the emergency requirements. I say to the Minister that it is very important that not all of these ships be big ships, but that they be built to go into the main ports and the ports I have in mind are Galway, Limerick, Cork, Waterford, Drogheda, Dundalk, Wexford and Sligo. I hope we will not live to see it happen, but if war broke out and all our ships were big ships, it would be a great expense for us to have all the cargoes discharged at Dublin and then sent by road or rail to the various centres all over the country, when they could be discharged at various ports here and there. I welcome this Bill and I hope it is an earnest of something that we had hoped would be brought before the House. It is a good thing to see a Bill being brought in for the improvement of Irish Shipping, Ltd. I hope the Minister will have more Bills like this in the near future which will be for the improvement of industry and commerce and the various branches of his Department.

Mr. Corry

Irish Shipping, Ltd. are to be congratulated on the advances which they have made in the few years since they started. Unfortunately the bulk of our grain imports are still arriving in foreign vessels and fertilisers are also coming in in foreign ships. I think that a timely word from the Minister to the importers is necessary in the matter of these imports being carried in our own shipping. Some time ago, I had occasion to help one coaster which was looking for its share of the imports of grain and fertilisers which are coming in here and I shall send the correspondence to the Minister, because it is very enlightening. The man in question was referred to an agent in Dublin and in turn that agent referred him to an agent in London. He ended up with an agent in Denmark. If instead of getting their goods f.o.b Cork, or f.o.b. Dublin or Waterford, the importers brought them in themselves, or hired the ships for those imports, we would do far better and get more trade.

I agree with Deputy Cosgrave in connection with cross-Channel traffic. We have two services working in Cork in that line, but very little, if any, of the repair or overhaul work ever finds its way into an Irish shipyard. Rushbrooke is passed up two or three times a year and when repairs or overhauls are to be done, they are done over in England or in Belfast. The whole business of at least two of these vessels is at Cork, coming and going, and at least we might get some of that work. Unfortunately we are not able to "ginger" up those in charge of the harbour, the Cork Harbour Commissioners, to take any action in the matter.

I am very glad to see that we are advancing in the line of getting more shipping and in that regard I hope that Cobh dockyard will be in a position to build some of those ships as quickly as possible. I am glad that they are catering not only for repair work but also for building. I hope that we will see a more prosperous period being enjoyed by our ship repairers and shipbuilders. There is a big opening there and if we are to have ships, let them, if they can, be built in our own yards and repaired in our own yards. We will then find employment for some of our people who unfortunately have to go abroad. I welcome any advance in that line and in the line of further Irish shipping being made available.

Mr. Kyne

I should like to join other Deputies in expressing admiration and appreciation of the position of Irish Shipping Ltd., as indicated by the Minister. All of us are anxious that Irish Shipping Ltd. should improve in every way. It will aid the country materially in the provision of essentials for commerce and as well as that, there is the fact that employment will be given to Irish seamen, which is of the utmost importance.

When people are put into well-paid employment, under the Irish flag, it is the same as if another factory of some sort had been established. Because of that, any effort to improve the position is sure to meet with a welcome from the Party to which I belong.

I would concur with Deputy Cosgrave in sounding a note of warning. I am sure the Minister is aware that I have connections with shipping on the other side through my family, and only this week I received a letter informing me that one well-known shipping company, with its modern ships and lifelong connections with trade in Britain, is finding this the worst period in many years. A charter has been secured for a particular boat in that company of a type that has not previously been handled as a means of keeping the ship going during the slump. I know that Irish Shipping are to be trusted to foresee how long that situation may last, but it is well to sound some note of caution.

I have been seeking an opportunity to pay tribute to the efficiency of the Mercantile Marine Section of the Minister's Department. I had occasion to visit the section in connection with a boy undergoing an eyesight test before going to sea. The courtesy, efficiency and kindness with which he was met and the assistance given to him by the Minister's officers to overcome various difficulties deserve special tribute. It is well to see a service carried out as efficiently as that was done. I welcome the Bill and trust that Irish Shipping will go from success to success.

I should like to be associated with Deputy Lynch's remarks concerning the building of boats of a tonnage which would enable them to use lesser ports outside Dublin, such as those in my constituency, Waterford and Limerick and others. It is a pity to see much business that could be done by Irish boats being secured by foreign boats coming into our ports. It is important to have all our goods conveyed by Irish ships as far as possible.

Sir Anthony Esmonde

I join with other Deputies who have spoken in support of the Bill. The more we have our national flag on the high seas, the better it is for national prestige and for any commercial ventures we undertake to assist our commerce. It will help to put us before the world, one of the most desirable things for any country to do in the competitive world of to-day.

As I understand it, the aim of Irish Shipping appears to be to go in for the bigger type of ships. That is a good idea and it is also good to have modern, up-to-date ships, because if you run your shipping on economic standards, you are better able to compete with world conditions. You must bear in mind that at the moment there is a very heavy glut in the shipping world. It is a fact that most of the big shipyards are faced with cancellation of orders and there is a great deal of unemployment in industrial shipbuilding areas in other countries, due to these cancellations and to lack of orders.

It is desirable that our shipping tonnage should be kept steady. I think we have something in the neighbourhood of 140,000 tons at present. We have about 19 or 20 ocean-going ships—19, I think is correct. We have a big tanker on order which will not be delivered for another 12 months. Most of the ships envisaged in the Minister's speech seem to be the bigger type of ocean-going craft which, from our point of view when we have so many interests to consider, such as unemployment and other factors, have two disadvantages. I think I am right in saying we are not able to build the bigger type of ship ourselves and—a matter referred to by Deputy Lynch— we have only three or four harbours in which big ships can dock because of the draught required. Outside Dublin, Galway, Cobh and perhaps Waterford to a lesser extent, we are confined to a tonnage of some 2,000 to 4,000 tons or at the very maximum, in some cases, 5,000 tons.

One of the reasons given for keeping our shipping up to date was that we might be prepared to meet any emergency. That is very desirable, but it makes it even more imperative that ships of our fleet should be able to get into the smaller ports. It would be very much easier in the event of any world conflagration—which we hope will not arise—to protect our shipping in isolated ports than in the major ports. If we are to use only about three ports to bring goods into the country, we lay ourselves much more open to enemy attack. For that reason, although it might possibly be desirable from an economy point of view to do otherwise, perhaps the Minister would give further thought to those boats we are to have built and perhaps it would be possible to construct them in our own harbours and provide a faster and lighter type of vessel from 2,000 to 6,000 tons. These would, perhaps, be of greater service to the country than the big ocean-going vessels the Minister envisages. I may be entirely wrong and may have misunderstood what the Minister said in his opening statement.

Reference has been made to passenger-carrying steamers. There is something in that suggestion. I doubt if it is possible for us to set up an individual link, operating as a shipping company over and above all those already existing, between ourselves and Britain where there is such heavy traffic, but I think if we had ships available that we could charter— naturally, with our own Irish crews in them to give employment afloat to our seamen—it would be worth considering. It is a fact that on the cross-Channel routes the shipping companies always maintain the delay and trouble caused to passengers is due to the fact that they are unable to procure replacement ships. That state of affairs is largely paralleled in countries everywhere. It might be worth considering building passenger ships with a view to charter and use not only for cross-Channel work but also for other services when these are overburdened in the rush season in any part of the world. I am suggesting something like one of those middle-grade coastal steamers up to about 5,000 tons.

There is also a lot in the suggestion of one or two Deputies who spoke here with regard to our concentrating more on the actual shipping around our coasts. We all know that at the beginning of this century, we had quite a lot of cattle boats going out of this country. In those days, say, 40 years ago, we had not our own Government and our own flag was not flying on the high seas, but those ships were leaving our ports. I remember in my own constituency, at Rosslare harbour, the cattle boats went regularly with cattle to Britain. That is one of our major ports and it does seem wrong that most of our live-stock freightage is conducted by other shipping companies under other flags.

That is a matter towards which Irish Shipping might direct their energies, to see if they can capture that trade. The major portion of our exports is live-stock and even if these ships have to come back empty, it being a short trip, it would be economical. There are ocean-going ships carrying goods to the Western Hemisphere even from as far off as Australia, and very often those ships are in ballast going back. They have nothing to export from here. Our ships should be directed towards where our exports are sent.

In the Haulbowline Dockyard, we have one of the best repair yards in these islands. There are always emergency shipping repairs to be conducted and we ought to concentrate— I am not clear how one does that but I think by advertisement and I suppose by an effort on the part of Irish Shipping—on securing all the repair work we possibly can.

I notice the Minister is raising the capital of the company to £12,000,000. I take it that is just for the general expansion of the shipping company as a whole. I presume he does not intend to go into an extensive building programme, although I took a note of the beginning of his speech where he said they had envisaged that we should increase our dry cargo fleet—I presume that includes oil tankers as well—up to 200,000 tons. He also said that some of the money towards that increase in our production would be offset by sales of ships. I think he indicated that replacements would be made by sales of existing ships that had become uneconomic. However, it might be a little bit of wishful thinking on the part of the Minister with the glut that exists at present.

I am wholeheartedly behind the expansion of Irish shipping. It is one of the things that for a variety of reasons, we have neglected in this country but I would sound a note of caution to the Minister. We are passing this Bill and I am glad we are doing so. It is very necessary and a step in the right direction, but there is no reason why, at this moment, although shipping is a long-term business, we should rush too far ahead. We must bear in mind the fact that ships are being produced ad lib. They are being produced up to and above the maximum demand. It is difficult for established shipping companies and established maritime nations such as Denmark, Norway and Britain, who have been on the high seas for a great many years before us, to get trade. Therefore, if we spend all the money producing new ships straightaway, it might be a rather risky policy. We should concentrate more on the type of ships we can actually use ourselves. As well as that, we should concentrate on trying to get, whatever way we do it, as much work as we possibly can in this country.

Mr. Rooney

I should like to pay a tribute to the enterprise which Irish Shipping have always shown. From a small beginning, they have built up a fleet of which we can be proud. This Bill proposes to increase the capital from £5,000,000 to £12,000,000. It may not be regarded as a very substantial increase, having regard to the very high cost of shipbuilding and repairing at the present time. We have a total tonnage of around 140,000 and it is estimated that the target at which Irish Shipping should aim would be around 200,000 tons. That, I assume, on average, would mean a further eight or nine ships, in addition to the 20 vessels, or thereabouts, which are under the control of Irish Shipping at the present time. There is a tanker under construction of approximately 18,000 tons for Irish Shipping.

When we are considering this matter of shipbuilding and ship repair, we must take into consideration the capacity of our ports to handle ships of a certain size. It was pointed out earlier by Deputy T. Lynch that it is unlikely that any of our ports would be capable of handling a very large ship. I wonder whether, in fact, any of our ports would be capable of handling a tanker of 18,000 tons. I assume that has been considered already, but the figure of 10,000 tons was mentioned by Deputy T. Lynch in this matter.

In relation to building new ships and repairs we must look across the water to see the position there. There are nearly 1,000,000 tons of shipping tied up in the docks, owing to a slump in the shipping trade. However, as far as Ireland is concerned, we have a situation where we are importing goods to the value of approximately £200,000,000 and exporting, I suppose, something around £125,000,000 worth. I believe Irish Shipping can direct their efforts towards carrying exports which are carried to a great extent at the moment by charter ships and also use their ships for the importation of goods to the extent of £200,000,000 in value. The market is there for Irish Shipping to that extent. Possibly, when they have met those needs, they can consider the question of going into the international trade and competing there, but I think there is a greater opportunity for Irish Shipping, if they concentrate on setting up a repair yard in Dublin and Cork.

Debate adjourned.

The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Thursday, 26th February, 1959.