I am afraid I cannot deal with all the questions that have been raised in the discussion on the Second Reading. This Bill is an attempt to put into operation a policy which it took me four hours to state in the Dáil. I stated that policy at great length when I was introducing the estimate for the purchase of the Condensed Milk Company. I realised then it was only possible to defend the estimate by stating the dairying policy which is really a synonym for the agricultural policy of the Government. In that lengthy statement I was not able by any means to cover the whole ground. The statement got a considerable amount of publicity and it is fairly well known through the country—for instance, to members of organisations such as the Dairy Shorthorn Society, the co-operative societies themselves, and generally to the agricultural organisations in this country. I certainly would expect that in a debate on this Bill Senators who have, or take, an interest in agriculture should debate the Bill in the light of that policy. It is too much to expect a number of Senators who are not directly concerned with agriculture and do not profess to have any technical knowledge of this subject or any detailed knowledge of it to do that. I would expect Senator Sir John Keane, Senator Dowdall from another angle, and other Senators who have agricultural interests—I do not say whether they approve or disapprove of it, but who know the general policy and as to how a scheme fits in with that policy, to discuss it from that point of view.
Senator Sir John Keane raised a dozen points I cannot answer now, and that he knows I cannot answer now without going into other questions that are implied in those issues, and which would take a tremendous amount of time to deal with. I cannot understand the point of view, may I say, of one who approves of the objects but disapproves of the means for carrying out that policy, and cannot suggest any other means at this hour of the day. We must assume that anybody who does not suggest another method has no other method. When we get into the middle of a big policy anybody who criticises the methods of that policy should suggest other methods in their place. What I cannot understand is that Senator Sir John Keane assuredly approves of the objects of this Bill, and that we were absolutely right in buying the Condensed Milk Company. He has never said otherwise. I would like to hear him say otherwise. He agrees that we were right in transferring the creameries of the Condensed Milk Company to the farmers. If he does not agree with that he has taken great care not to say that he does not agree. He agrees with me that we should stop redundancy. I am sure he would go on a platform down the country in the area of his own co-operative society, or at a meeting of the Dairy Shorthorn Society, and say it is not good business to see two creameries side by side, both owned by the farmers.
So we were right to stop redundancy. Equally, I am sure, he agrees that it is a correct policy not only for the dairying industry but for the farmers themselves. These are the objects. He agrees with them, but deplores the methods. He dislikes the methods, but there are no other methods suggested. Arguing in that way is a sheer waste of time. The same applies to the Agricultural Produce Act or the Dairy Produce Act. But the Senator will not say on any platform in Ireland that the objects of the Dairy Produce Act are not absolutely sound. He would not suggest that we could attain those objects by any other method. No. That is all right. These are simply a peg on which to hang a dissertation of abstract principles with which we could all agree, but which takes us nowhere. It reminds me, if I may use the illustration of the old lady who loves meat, but who hates to hear of a bullock being killed in order to provide it. Deputy Bennett was quite right— either be with me in this Bill as it stands, or you are not with me. Then I should have been stopped on the day we went into the matter of buying up the Condensed Milk Company. Let us have it one way or the other. Remember this is, in fact, to give validity to what is now an accomplished fact. This Bill does deal to a certain small extent with transactions about which there have been no agreements or in only about five per cent. of them. This Bill will deal with 95 per cent. of the agreements made where the arrangements have been completed and the cases dealt with. This Bill will give validity to them so far as they require to have validity given to them by law.
I can understand Deputies or Senators taking up that position on the day that I announced our policy, the Government policy, in regard to the dairy industry of the country. They might have taken up that position on the day I announced that it was our intention to buy up the proprietory creameries of the country, to hand them over to the farmers, to prevent redundancy in future, and to say that no proprietary concern was to have a chance to manufacture milk or milk products or by-products in this country without the consent of the Co-operative movement. The day that I announced that it was our intention to hand over the manufacture of the by-products of milk to the farmers themselves I can well understand on that day how this argument that has been used now by Senator Sir John Keane might have been used. I can understand if he said "No. You cannot stop private enterprise." But no one could argue in that way in the light of what was happening between the Condensed Milk Company of Ireland and the farmers in Tipperary, Limerick and Cork. It would not have been a good policy to argue in that way. It would be a bad policy for any Senator or Deputy. I must certainly say that farmers would not stand for any Deputy who stood up that time and said: "Do not buy and do not transfer." Such a Deputy would get short shrift from the farmers. Deputies who would take up that policy at the time would not remain long in public life if they represented an agricultural constituency. Now we have done it, and have carried out complicated arrangements. I appeal to be allowed to carry out this policy to the end. Then we will have the satisfaction of knowing whether it is good or bad. But do not stop it now in the middle or disintegrate it. In this country the idea both in politics and economics is never put yourself in a position of being found out. I want to be found out. Let the policy be tried to the bitter end, and let us judge it afterwards, but do not stop it before it is tried out. Let us find out whether the policy will prove to be successful or unsuccessful. We will not know whether the policy is good or bad until it has been tried out to the end.
Remember this Bill is to validate agreements already made, transactions that have already been carried out, cases that have already been put through. I say that in view of some suggestions that have been made to-day that it ought be amended in Committee. It is really a Bill to carry out these agreements already made. It is essentially a Bill that ought be beaten on Second Reading or let go through. Business men will realise what a terrible nuisance it is to re-open agreements once you have agreements made and entered into. It takes a long time and many arguments to make agreements. You do not make agreements on scientific principles. You do not sell a cow on scientific principles. You do not sell a cow on any such basis. Neither do you sell a creamery. There is always a bit of give and take. You will have to give way a little bit, and the other side has to give way a little bit. Now, if these agreements are to be re-opened, the same trouble arises. If you re-open one you must re-open the others. Nobody will be satisfied. People are generally satisfied when the bargain is made. If a man buys a cow he may give a little too much for it, but he is ready to put up with that when the transaction is closed. In the same way the man who sells a cow may think that he should have got more for the cow, but once the cow is sold he is satisfied to put up with it. It would be tantamount to destroying the whole scheme now if any changes were made in it. It would mean that we would have to re-open agreements that were made, in some cases with considerable difficulty. These agreements took considerable amount of work to carry through; to the extent of 95 per cent. they have been carried through with the goodwill of everybody. There is only one society where we would not have that goodwill. I believe that the majority of the suppliers have been honest with themselves. The only exception was the case of a certain number of individuals who have got rather into a strong position. For certain reasons these are opposed to the scheme, but these are really not a co-operative society. They are really proprietary as against co-operative, and that, I believe, is the reason for their opposition. That particular case in Tipperary is the only case in the country where we have got any trouble of that kind in carrying through this scheme, which is bristling with difficulties. The butter trade of the country is £5,000,000. The purchase of the Condensed Milk Company cost £365,000.
It is proposed to purchase the proprietary creameries in the country, and it is proposed to transfer them to the farmers in the country. Now, there are bankers and business men here who realise what a tremendous task that would be in a business house or a company, and they would realise also that it could not be done on Civil Service lines. You cannot put through a transaction like that on Civil Service lines. It may be wrong for the Department of Agriculture to undertake this matter. It may not be the work the Department of Agriculture should be doing, though that was not said at the time when this matter was brought in first —and no one said it now except indirectly. It may have been wrong for the Department of Agriculture to undertake the work, but then there was no one else going to undertake it. We did undertake this work, which is really commercial work, and if we are to get a chance, then we must, even though we are a State Department, be allowed to carry it out in a commercial way. Take it that it was a company that was carrying out this transaction, there would be some one in the company who would have to make up his mind as to what was to be done. He would not be prevented by a series of checks and delays. He would not be compelled to insist upon holding meetings of the suppliers and all that sort of thing. If you do that you would never get the matter put through. If you hold a general meeting of the suppliers in order to get agreement, and if you are to be bound by the cranks amongst the suppliers—and there will be always cranks amongst the suppliers —you will never get the business done. I would ask that, first, you would be allowed to carry this out to the end, so as to justify it or to prove that it is wrong. Up to the present it has been justified; and secondly, I say that we should be allowed to carry it through in this way, in other words, let us have all the advantages that a commercial house would, if it were being reorganised in its own business. It is rather a tall order to ask for that, but it is rather a huge thing. It is an attempt, not to nationalise, but to rationalise the dairying industry of this country. When that is done, then we will get out of it. The Department of Agriculture will get out of it. We will have established the dairying industry there in the hands of the farmers. They will be able to look after it. From the year 1880 up there have been powerful interests in the dairying industry and the farmers have beaten them. They have beaten everyone of them. I am not going to say now what would happen if we allowed the battle to go on between the proprietary and the co-operative interests. In that process there was a waste.
There was tremendous waste in this organisation, and the creameries themselves were absorbed in the interests of the fight and they were unable to give their attention to what the Danish, New Zealand, Canadian and other farmers in their countries could give attention to, namely, the making of butter, cheese, casein and condensed milk, doing it well and marketing it properly. All that was neglected because of the struggle between the proprietaries and the co-operative concerns.
When we hand over this to the farmers we will hand it to a body with experience over forty or fifty years, a body that has had all sorts of vicissitudes, a body that has forgotten a lot and that has learned a lot. There will be here a Co-operative Act such as they have in Denmark, and it will be administered by the farmers and not by me. All that will be handed over to them, and then we will clear out. But when we clear out, we will have left something after us. We will have left a powerful body controlling the most important phases of agriculture, with proper legislative regulations within which they are quite free to act.
With regard to the detailed points raised by Senators Keane and Dowdall, this Bill should be really divided into three parts. We bought creameries, we closed some, and we left others open. Where we closed a creamery because it was redundant, we sold the milk supply to the nearest co-operative creamery. That milk supply is a goodwill. We sold the goodwill, in other words. Undoubtedly, in private enterprise, it is quite common for people to buy goodwill; it happens every day in the year. There is an intangible thing known as goodwill which is of immense value. There are many enterprises, I suppose, where the goodwill is worth all the fixed assets. It is easy to criticise our method of selling it. As Senator Dowdall has said, the goodwill was 95 per cent. but not 100 per cent. of the milk supply, and we realise that. For the purpose of computing a price for the goodwill, there is a simple rule, that the purchaser will accept £1 a gallon on the milk whatever that milk may be. That is a rough and ready way of computing the goodwill, but if the creamery that is buying is agreeable, why not compute it in that way? It is a business matter, and that is the way we did do it.
Supposing we left the creamery open instead of closing it down after we had bought it, we would sell the creamery to the suppliers and they would have to put up more money for the purpose of buying that creamery; it would be probably more than three shares per cow. They would not supply milk to the creamery. Instead of that they go to the neighbouring creamery that has been established and that has a bigger milk supply and they really take shares in that new business. Why should they not? These shares are £3 per cow. Again, that is not an invention of mine. For the last thirty or forty years, whenever a creamery was established, it was built up by the rough and ready rule of £3 per cow. We were able to do good business in the country on that basis. It generally covered the price of the new creamery, and on that simple basis we were able to build up the creamery. Most dairy farmers will agree that their interest in a creamery is roughly to the extent of £3 a cow. For £3 a cow each man gets an interest in the new creamery, in a creamery that has a very much bigger turnover and milk supply and a very much better chance of profit than the creamery they have left. That is a perfectly reasonable and fair transaction.
Senator Sir John Keane points to one difficulty which may arise in practice. He says that your new suppliers come to the creamery and shares are issued to them. They are asked to pay £3 a cow, while the old suppliers are asked to pay nothing. Under the co-operative scheme which we propose to introduce it will be necessary for all suppliers to be shareholders. That is the way in every country that is properly organised. It will be necessary for all suppliers to have shares. Let us assume that the creamery the new suppliers are coming to is completely out of debt. It cost £7,000 to put up, and there is no debt due. Who paid that? The old suppliers, either by shares or by deductions from the milk, paid that sum. They bought and own that concern, and they paid for it out of their own money. Why should they be asked to pay again? Of course they should not. Let us suppose that a creamery is in debt, and let us suppose that it costs £7,000 to buy it and run it, and that there is a bank overdraft at present of £7,000. Obviously the new suppliers have got nothing and they have simply borrowed the money in the bank. They have to take shares, and it is found that £3 a cow can wipe out all liabilities. Perhaps the amount might be less than £7,000, and perhaps three shares per cow, with five shillings paid up in each case, would suffice. In that way the transaction is perfectly fair.
The same applies to buying a creamery which is not closed. There will be some trouble. There will be suppliers who will not see why they should take shares. There will be others who will see that it is perfectly clear they must take a small number of shares. If there is to be trouble, we will have to meet it. If this Bill is passed there will be very little trouble. There are only a few recalcitrant parties who will stop out, and they must realise that they are part of the co-operative movement, and that in 1928 there is no room for this extreme form of individualism in co-operation. No one co-operative society is going to be allowed to stand out and to bar the progress of the movement as a whole.
It is stated that this Bill is to legalise retrospectively and prospectively breaches of the law. No, it is not. There is only one possible breach of the law. The agreements are all quite valid and normal. There is only one possible breach of the law inferred, and I am not quite clear that it is a breach of the law. It is not quite clear whether co-operative societies have a right to mortgage their uncalled share capital. At least, I am told that that is so. We wanted to make sure that they have that right. We are not sure whether the co-operative societies that have entered into agreements to buy certain premises for certain sums of money and have given as security a mortgage on the uncalled share capital, can do so legally or not.
I am told that it is not clear that it is within the law. That is the position, and it is the only one. When people speak about prospective and retrospective breaches of the law that are going to be legalised, Senators will have a better idea of what these prospective, retrospective and, generally, sinister breaches of the law really were if it were stated in that way. That is really the only illegality, and it is the one that we have provided for. Of course, we alter for the purpose of the Bill the number of shares a shareholder may hold. Under the Industrial and Provident Societies Act a shareholder may hold only 200 shares. Under this Bill a man may hold more than 200 shares; they would be farmers who would hold more than 200 shares because they would have more than 70 cows.
Senator Sir John Keane spent at least five minutes pointing out the enormity of allowing this new principle of deduction from the monthly milk sheets to be included in the Bill. But is not that all ancient history? At the present time has not a committee a perfect right within the law, a right which they can enforce, to meet and decide that they will pay a certain price for the milk? They can decide what that price will be, taking into account the overhead expenses. the monthly outgoings, the fact that an individual owes them money, and so on. They have that right already. We are not conferring it by this Bill; we are merely saying that they will pay us back by deductions from the milk cheques or otherwise. We are enshrining no new principle and giving no new legal right to anybody, because they have that right already.
On the question of redundancy, I must disagree with Senator Dowdall when he says that redundancy has been caused by the activity of the co-operative creamery societies. From one point of view that is true, but from another it is not. It always takes two to make a quarrel. The sequence is in favour of the Senator's statement. A proprietary concern is established, and after two years the farmers, rightly or wrongly, come to the conclusion that they are getting a very small price for their milk, and they put up a co-operative creamery. Assume that they are right, then who starts the quarrel?