Seanad Éireann debate -
Wednesday, 23 Mar 1927

Vol. 8 No. 13

CENTRAL FUND BILL, 1927—SECOND STAGE.

Question proposed: "That this Bill be now read a second time."

Mr. O'FARRELL

In connection with the Vote on Account for the League of Nations, I want to draw attention to an incident that occurred at the last meeting of the League Council. Sir Austen Chamberlain made a statement there arising out of a decision of the Imperial Conference respecting the form of treaties to be negotiated in future under the auspices of the League of Nations. In regard to the general statement there was very little of importance attaching to it, and very little that could be taken exception to, but a Press report, claiming to be accurate, credited Sir Austen Chamberlain with a statement towards the end that is of some considerable importance to the Saorstát as an independent member of the League and of the British Commonwealth of Nations.

He is reported as having said: "I sit here as a representative of Great Britain and the Dominions." If that be the case, if Sir Austen Chamberlain is correct in his claim that he represented at the League Council not only Great Britain but also the Dominions, including the Saorstát, then it must follow that we are bound by whatever decisions may be arrived at by the Council of the League of Nations.

At the last meeting of the general assembly of the League Sir George Foster, on behalf of Canada, claimed the right of Canada to be elected to the membership of the League Council. A candidature of the Saorstát was actually presented and was voted for by a good number of the various representatives present. If, notwithstanding that, Sir Austen Chamberlain feels he is entitled to make that claim, then it would look as if both Canada and the Free State have surrendered the claim they so determinedly maintained in the League in December last. It is desirable and necessary that a very definite statement should be made on behalf of the Government as to what our position is in this respect. It is not, I think, enough to say we must first of all ascertain whether that statement was made. I think we want to have our position made clear; that Sir Austen Chamberlain is not in a position to make any such statement, and that we are an independent member of the League; that we are only bound by decisions of that body to which we ourselves are parties by our own direct representatives, and that Sir Austen Chamberlain has no right at meetings of the League Council to bind this State to any decision that may be arrived at by that body. I invite, therefore, the Minister for External Affairs to make the position of the Government plain in regard to the matter.

Mr. JAMESON

Can a Senator raise any question in regard to duties?

CATHAOIRLEACH

There is no limit to the questions, as long as the subject matter relates to services for which votes are taken.

Mr. JAMESON

The only point I wish to raise is whether one citizen of the Saorstát should be charged a certain duty on a motor car, and another citizen of the Saorstát charged a different duty on a car of the same value. I thought that in regard to the payment of duties to the State that all citizens were alike, but as a matter of practice I find out now that the law is so interpreted by the Commissioners that, according to the price that you pay for the car you are charged duty. An ordinary citizen is charged for a car a different duty to that which one who is in the trade is charged for the same kind of car, and a car of the same value. My neighbour, who happens to be in the motor trade, can get a car in on which he will pay a duty on the price which the British manufacturer charges him—that is, he pays a great deal less duty on the car than I pay when buying a car from an agent. The matter came out rather peculiarly in my case. Holding the view that the maker's price to one Irish citizen should govern the whole case, I sent in, when I imported a car about nine months ago, the maker's invoice price — that is, the price at which the company sold the car to me. It was perfectly clear in the invoice, and it was accepted at the time. I was told at the time how much duty I should pay and I paid it.

But nine months afterwards somebody in the Department discovered that I had paid a different price to that which the manufacturer received for the car. Now, I am sent in a bill for £43 extra. Had I imported the car and had I been an ordinary dealer in cars, I would have got the car at £43 cheaper in the way of taxes, but because I just bought it from an agent here I am asked to pay £43 more. I do not know that the Commissioners have the right to increase the duty on the very same car according to the amount the citizen pays for the car. My neighbour got his car in and paid £43 less duty for it than I have now to pay, simply because he happens to be in the trade. Now, here is the letter which the Assistant Collector writes me:—

"With reference to your letter of the 8th instant, relative to the dutiable value of your car imported by you on the 26th May last, I have to inform you that the duty is payable on the statutory value, which is defined by law as

"‘the price which an importer would give for the article if the article were delivered freight and insurance paid in bond at the port of importation, and duty shall be paid on that value as fixed by the Revenue Commissioners!'...

"The price shown on the invoice to the consignee is usually accepted in support of the value declared on the Customs entry, provided the Officers are satisfied that the value is not incorrect and that the invoice produced represents the full amount actually paid to the consignor by the first bona fide purchaser in Saorstát Éireann."

I do not know that there can be a bona fide purchaser at one price who can get off for less than the duty that a bona fide purchaser at another price must pay for the same article. That is not the principle that is laid down here. The trade importer would pay the manufacturer's price and I do not get it at that price, and so I have to pay £43 more than my neighbour who is in the trade. Not only that, but I also incur, apparently, various penalties, because I am told I am only let off and that ordinarily very serious notice would be taken of this irregularity, "but in view of the fact that your under-declaration of value was obviously inadvertent,"—it was not inadvertent at all, it was because I believed it was what I should be charged—"the matter will in this instance be adjusted on payment of duty on the basis of the price actually paid by you for the motor car, plus freight." Therefore I am to be allowed off for the offence of having robbed the revenue. I do not see why one individual citizen in the Saorstát should pay one duty and another citizen pay an entirely different duty —

CATHAOIRLEACH

You have not been let off the £43?

Mr. JAMESON

No, I have to pay it.

CATHAOIRLEACH

But you have not paid?

Mr. JAMESON

I have not as yet. I am now raising it. I would like to hear from the Minister his views on the case.

CATHAOIRLEACH

I think it would be more convenient if each Senator raises any particular question he wants to raise and then there could be a general reply from the Minister.

Colonel MOORE

I dare say that most people will be rather surprised at what Senator Jameson said. I am not surprised at anything the Minister for Finance or his officials may do. I am past being astonished. Some months ago, it will be remembered, the Minister presented what he called an Ultimate Financial Settlement between Great Britain and the Free State. In my belief that ultimate settlement will be rejected by the ultimate authority on finance—the people of the Free State. I feel very confident about that. Senators will remember that I was very anxious to go into details on this question, to find out what the settlement meant, so that we should be well acquainted with the contents. The Minister for Finance very strongly objected to his statement being criticised. The less the public know about the details the better pleased he is. When it was proposed to appoint a Committee, the Minister said he would give them no information and would not attend, nor allow any of his officials to attend. That seems to me to be a most extraordinary attitude for a Minister to take towards the Seanad, the members of which are bound in duty to their constituents and to the whole country to find out as much as they possibly can about Ireland's finances. The attitude that the Minister adopted has been continuous and, as far as I can see, he has made every effort to prevent people knowing what is happening.

When the question was debated, I estimated that the Free State was paying Great Britain an annual sum of 4½ millions. Some Senators were very anxious about that state of affairs. They were surprised at the statement that 4½ millions was sent over to Great Britain annually. It would seem as if our people did not own this country at all, if they are to pay a constant tribute of that sort. I have ceased to be surprised. The British Government issued a White Paper, and in it I find there are a number of things quite different to those in the White Paper that was issued by the Minister. There were a number of things in the White Paper issued by the British Government indicating the amount of money that had been received from the Free State — actual sums paid and sums paid in return. As far as I can understand it, the Free State paid 6½ millions of money to the British Government last year. The Free State received back under various headings about half a million. There was a clear balance against the Free State of 6 millions. That represents about one-fifth of the total revenue of this country including Land Purchase Annuities. Senators will be astonished when I read some of the items. I am not at all astonished that the Minister should wish to conceal these facts and prevent the appointment of a Committee which would investigate them.

At the time it astonished me to find that half the members of the Seanad, who ought to be, at least, as favourably disposed towards Ireland as any other country, deliberately voted against any investigation. I wish those Senators would be as Irish as those on this side of the House and look after the interests of Ireland without necessarily opposing the interests of any other country. Apparently, such is not the case, if I am to judge by the vote that was taken. We were always told that these people wished to look after the finances of Ireland. Apparently that is the last thing they want to do.

Amongst the items on the White Paper are some that reached enormous sums in 1925-26. I find that the R.I.C. represents £1,304,000, which was sent over to the British Government. I dare say that was on account of the Treaty. It is an enormous sum of money, but I do not criticise it because, possibly, they were entitled to it. The Land Commission contributions towards Bonus and Excess Stock came to £183,000. On the Local Loans Fund the payment on account came to £735,000. Land Purchase Annuities came to £3,995,000 or nearly 4 millions, which were sent to the British Government. Then there is an extraordinary note: Public Office Sites (Dublin) Act, 1903. I looked up the Act of 1903 and, to my astonishment, found that £13,222 was being paid to the British Government on account of the very office in which the Minister for Finance is doing his work. Apparently the offices do not belong to the Free State at all, unless the Minister can give some explanation to the contrary. Maybe he would be able to clear the matter up.

The next item concerns the Irish Railways Act of 1896, and the Marine Works Act of 1902. As far as I could interpret them, these deal with narrow gauge railways and piers that Mr. Balfour built when he was Chief Secretary. The piers are not very good, but the money was spent on them. We have been paying £28,878 in annuities to clear off that debt. The next item is in connection with a Telegraph Act. I was not able to find the date of the Act, as it was not given. I presume this refers to the railways. Last year we paid on that account to the British Government £43,237. Another item concerns the Military Works Act. I cannot say what these works were, as the date is not given. I presume they were works or buildings put up by the military in the past. We have to pay for them. There are a number of other very interesting items, one being minor claims in respect of miscellaneous services, £15,000. I was under the impression that this country belonged to the Irish people. Apparently it is heavily mortgaged to the British Government for all sorts of services. I see that paragraph of the Minister's ultimate statement says:

Subject to the provisions of this Agreement the British Government undertake to make no further claim in respect of any portion of the value of property taken over by the Irish Free State belonging to British Government Departments whose administration and powers were under Article 9 of the Provisional Government (Transfer of Functions) Order in Council of 1st April, 1922, excluded from transfer to the Irish Free State Government.

I cannot say whether any of the sums I have mentioned are being wiped out by the settlement, as these things are never explained by the Minister. A sort of cloud is thrown over them. Whether they are wiped out or not it seems extraordinary that we should be asked to pay for them at all. The Transfer of Functions Order of April, 1922, was provisional for handing over the services to the Provisional Government, and was to last for only twelve months. I do not know why we should continue paying for five years afterwards. The Minister may possibly be able to explain that. If so I hope that on this occasion he will be illuminating.

A question also arose concerning Haulbowline. As far as my information goes, the British Government claimed 4 millions for it and our Government was prepared to pay it. Fortunately they sent down an intelligent person who, very much to the astonishment of the British officer, declined to pay anything. When an intelligent person is sent to look after these things they are generally cleared off. I hope the Minister for Finance will be able to clear up in the same way the matters I have mentioned. I would also like to ask the Minister for a definite statement about the Hibernian School. It was mentioned in the ultimate settlement, but in such a way that really I do not know to whom it belongs. A statement made in the Dáil was equally cloudy. Perhaps the Minister will say now if the school belongs to the Free State Government. I also wish to ask to whom Kilmainham and the National Stud Farm belong. These questions are being asked through the country. The Minister refused to give any explanation when I asked him before. I can assure him that attitude is not doing him any good in the country.

Sir JOHN KEANE

I would like to draw the Minister's attention to circular 30a, that has been issued by the Revenue Commissioners, dealing with the drawback on home-manufactured sugar. It appears to me that duty is not paid on home-manufactured sugar. I thought the price, £23 a ton, was fixed on the understanding that extra duty was paid by covenants. The fact that the duty is not paid necessitates that the drawback is not permitted, and then follows a most extraordinary complication which I am sure the Minister must realise, if he saw the circular. Separate accounts have to be kept by manufacturers for goods, of which sugar is an ingredient, differentiating between home-made sugar and imported sugar. Separate stores have also to be kept for home-made and imported sugar. The Customs authorities are insistent upon that requirement. I suggest to the Minister that that is a very irksome and embarrassing regulation on manufacturers, and not in the interests of production. It is what must be expected, I am afraid, when we embark on the slippery slope — protection of industries. I suggest to the Minister that that duty might be avoided in this case by fixing the subsidy on home-grown sugar so that the excise duty would be paid. I submit that if manufacturers, especially those in the export trade — which is of such importance — are hampered by restrictions of this kind, it is very damaging to production in this country.

MINISTER for FINANCE (Mr. Blythe)

In reference to the question raised by Senator Jameson, the position, I am afraid, is as the Revenue Commissioners have stated to him, that is the ad valorem duties are charged on the value to the importer — on the price he paid, the costs of transit, insurance commission, and so forth. The duties are charged in that way, and I am afraid Senator Jameson has no option but to pay the £43. One can make the argument for some other arrangement in the case of motor cars, but the Senator, I think, will see, on the whole, considering the other articles that are obliged to pay ad valorem duties, like boots or wearing apparel, it would be impossible to do anything else than to take the value to the importer. It is necessary to include everything, because you would have all sorts of devices resorted to for the purpose of evading duty by having special invoices prepared. I think the system we have is the system that is in operation in Great Britain. I believe there are slightly different systems in operation in other countries, but the system we have is certainly the system which, on the whole, is simple and fairly satisfactory to work. I would not undertake to the Senator that any other system would be adopted. I have not heard a great number of complaints, because, as a rule, most purchasers are practically in the same position. As a rule the car is imported by an agent here, and if there is anything added to the manufacturer's price it is added by the agent here after importation, but, in fact, the duty that is charged in the ordinary way is on the manufacturer's price to the agent plus the cost of transit here.

Mr. JAMESON

Might I ask the Minister to keep us out of jail by allowing the Commissioners to publish the conditions necessary to be complied with, because apparently I was running very serious danger by doing what I believed was the legal thing, whereas if there were clearer regulations laid down by the Commissioners to guide anybody buying a car, there would be no such trouble.

Mr. BLYTHE

I think the majority of the people are aware of the position but I would certainly be agreeable to having words inserted in any fresh issue of the regulations that would make perfectly clear what the position is. Senator Keane raised a point in connection with the non-payment of the excise duty on sugar. The position is that the excise duty is not paid but the customs duty on imported sugar is taken into account in deciding how much of the £23 10s. or £24, that is provided for by the Sugar Beet Subsidy Act shall be actually paid to the manufacturer. The manufacturer is not paid the total of the subsidy in cash. He is paid the total of the subsidy minus the duty on imported sugar. He has the advantage over imported sugar laid down in the Act, but he is not actually paid the full subsidy in cash. If we were manufacturing all or nearly all the sugar required for home consumption, the point raised by Senator Sir John Keane would undoubtedly be an urgent point. We only manufacture a fifth or a sixth of the requirements of the country. It does not seem to me that it is in any way urgently necessary at the moment to adjust the matter. The manufacturer using sugar who is exporting his goods and for whom the question of the drawback arises, ought really to use imported sugar, and the matter will be entirely simple for him. The home producer can find a market. There is no question of supporting the home manufacturer. The home manufacturer can only supply a small portion of the market.

With regard to Senator Colonel Moore's tale of woe, the only thing I need say about it is that in the case of the sites, for instance, the Public Offices sites, the position is that here is an asset handed over to us at the change of Government which was not fully paid for when handed over. The site of Government Buildings was purchased by means of money raised by terminable annuities, and these annuities have not been completely paid. The position is, therefore, that we are completing the payment for this asset. I do not think it is necessary, and I do not propose to go into it at any length, but one can say there is no reason why the British Government should pay for this asset of which we are in possession, seeing that we assumed no share of the British National Debt. If Article 5 of the Treaty had been acted upon, and if some share of the British National Debt had been apportioned to us, then a new position might have arisen in regard to this matter.

The same thing applies to the annuities under the Telegraph Act. They are in repayment of money expended on telephone extensions, and in fact the repayment of portion of the money paid to the National Telephone Company. We have got the assets and the debt was referrable to a specific asset. The debt was raised for the purpose of acquiring a specific asset which we have got and consequently we are paying for it. I do not propose to go any further into the matters raised by Senator Colonel Moore.

Colonel MOORE

I would like to ask is it not a fact that these sums were raised out of the United Kingdom Funds, and if the British Government is entitled to recover from us for buildings, telephones, and other things in this country, are we not entitled to a share of those things that were acquired by the United Kingdom Government in England? Ireland was a part of the United Kingdom, voluntarily or involuntarily, and, I presume, is entitled to a share of the assets as well as the debts. I think if there are debts for these things in Ireland there must be dividends from these things in England, and why should Ireland have to pay and England not pay us for our share of the assets over there? I have no doubt that it would be extremely difficult to come to any such arrangement. The only way would be to wipe out the two items and put one against the other.

Mr. BLYTHE

I despair of getting any facts home to Senator Moore, but the position is that we are not paying for any asset in England, and we are not asking the British to pay for any asset here which remains to be paid for and which we have in our possession.

MINISTER for EXTERNAL AFFAIRS (Mr. Fitzgerald)

With reference to the point raised by Senator O'Farrell, the Senator spoke on the strength of a Press report. I am exactly in the same position. I have not any sure knowledge of what statement was made at the meeting of the Council by the British representative, but as we have it in the Press and in a semi-official minute, the statement does appear to have been made: "I sit here as representative of Great Britain and the Dominions." The British representative does not sit on the Council as a representative of the Dominions. In the same statement prior to that, Sir Austen Chamberlain had taken care to say that he made this statement at the express desire of the Governments represented at the Imperial Conference, which, I think, is almost a recognition of the fact that he only can speak in the Council in our name when he is directly requested by us to do so.

The right of the Dominions to a separate representation in the Council has been made abundantly clear. If we possess that right, obviously the British representative who sits there and has a permanent seat, is not elected by us and we have no control over him as a member of the Council. Therefore he cannot ipso facto claim to represent us. At the last meeting of the assembly, the Canadian representative — I think the Senator referred to his statement — in the course of his speech said "I think it is right at this stage to say to this assembly and to the League that we consider we have equal rights of representation on the Council and otherwise, with every one of the 56 members of the League and we do not propose to waive this right." The only way we can be represented on the Council of the League of Nations is directly by ourselves or in the case of an election by mandating power to an individual member of the Council directly. As the British representative is there permanently and is not elected by us, obviously he would not represent us. He can only represent us to the extent that we expressly request him to make a statement on our behalf.

Mr. O'FARRELL

Am I to take it that when Sir Austen Chamberlain made the statement "I am here representing Great Britain and the Dominions," he was for the time being representing them at the request of the Minister himself or was it a slip or a mere mis-statement?

Mr. FITZGERALD

The statement "I sit here as representative of the British Dominions" was not a justifiable statement and is not in accordance with facts. The previous statement "I make this statement at the express desire of all the Governments" was a correct representation of the facts. The British representative is a representative of Great Britain and does not sit in the Council as the representative of the Dominions. As far as I can understand the statement in the form I have got it, it is incorrect.

Question put and agreed to.