Before we adjourned last night I referred to the fact that Deputies had mentioned the Suez Canal crisis as having an effect on the monetary crisis that arose here towards the end of 1956 and I said that I had some observations to make on that point. First of all, according to the 1957 record of the International Monetary Fund the effect of the Suez Canal closure on Western Europe was not severe. Industrial activity was not significantly affected by lack of fuel or raw materials. I am taking that as referring generally to Western Europe and to come down to our own country I think there are no grounds for holding that the closure had a more adverse effect on Ireland than on other Western European countries.
At no time was there a serious shortage of oil supplies or any limitation of raw materials of industry. Imports of kerosene increased by 22 per cent. in quantity during the period October, 1956 to March, 1957 as compared with the period October, 1955 to March, 1956. I might mention that I am taking the six months following the Suez crisis when I take October, 1956 and March, 1957 and during those six months the import of kerosene was 22 per cent. higher actually than in the six months I have compared with it. Imports of motor spirit, other than aviation spirit, fell by only six per cent. and imports of fuel, gas and diesel oils fell by less than one per cent.
The effect of the crisis on industrial production can, therefore, have been only very slight. The depressed level of industrial production in October, 1956 to March, 1957 was mainly due to factors other than the Suez crisis, principally, the effect of the measures taken early in 1956 to redress the serious balance of payments position. The automobile assembly industry was probably most affected by the crisis because of the effect of petrol rationing on consumer demand but even in this industry the effect of the special import levies was greater. This is shown by the fact that in the six months, April to September, 1956, prior to the closure of the Canal, the number of new private motor cars registered and licensed for the first time had fallen by almost 50 per cent. compared with the corresponding period of 1955, due principally to the operation of the special import levy imposed in March, 1956. The Suez crisis had some impact on import prices, which increased by about six per cent. between September, 1956 and March, 1957. The wholesale price index rose by less than four per cent. in this period and the consumer price index remained stable.
It is clear, therefore, that the 1956-57 depression was not due to and, in fact, was hardly aggravated by the Suez crisis. It was due to the imposition of import levies in March, 1956. I am not disputing the necessity for the imposition of those levies. Something had to be done to deal with the serious position in our balance of payments. Whether that was the best method of dealing with it or not I am not going to discuss at the moment. As to what was the cause of the imbalance can be examined at another time. My only object in making these remarks at this stage is to have the Suez crisis removed from the picture.