Seanad Éireann debate -
Tuesday, 26 Mar 1929

Vol. 11 No. 10

Finance (Customs and Stamp Duties) Bill, 1929—Second Stage.

Question proposed: "That the Bill be read a Second Time."

Mr. Bagwell

This Bill involves no new principle. It simply advances one step further the policy of protection. It does not, for that reason, afford any opportunity of saying anything particularly new on the subject, but, on the other hand, one who like myself is entirely opposed to the policy and who holds sincere convictions that, generally speaking, protection is a bad thing for this country feels, as I feel, in duty bound to oppose this measure. It seems to me to be founded on grounds quite as fallacious and open to objection as other protective legislation which I have opposed on various occasions. For that reason, I feel it my duty to oppose the measure and give my reasons very briefly. I ask the indulgence of those Senators who are already acquainted with my views on the principle involved in the question. I ask them to have patience in the event of my repeating myself once more which I am quite likely to do. Most of the House are aware that I make no claim to have made any special study of economics or to possess any special knowledge of it, but I hope they will give me credit for saying what I say from a sincere conviction and for no other reason. I have a due appreciation of the difficulty of those members of the Government who are responsible for the economics of the country, both in the matter of raising revenue and promoting a healthy state in our industries and trade. Nevertheless, I am against this Bill, as I am against all other legislation of the same character.

A protectionist in certain respects has an easier task than a free trader in arguing matters of this kind, because he can claim for protective duties that they encourage home industries and tend to cause more of our requirements to be made at home and less to be purchased abroad. They give more employment and tend to keep more money in the country. I daresay that the Government can point to some success under each or all of those heads. The free trader labours under the difficulty that his arguments against these protective measures must largely be of a negative character. Nevertheless, I claim he has just as good arguments and really just as easy to understand. The main objection to protection is that whatever improvement it may effect in the prosperity of the industries affected by protection and whatever may be the increase in employment caused by those protective measures, all that is liable to be more than counterbalanced by the increased cost to the consumer in the protected country.

Mr. Milroy

On a point of order, are we discussing the general question or the specific Bill?

Cathaoirleach

I take it Senator Bagwell is entitled, to a certain extent, to discuss the broad question of tariffs.

Mr. Bagwell

The matter is largely in your hands. I maintain, provided it does not take too much time, that one is entitled to speak on the principle involved in the Bill.

Cathaoirleach

I have ruled accordingly.

Mr. Bagwell

Modern industrial production, trade and commerce, are so complicated that there is always a danger of the benefit to the protected producer being neutralised as regards national interests as a whole by an increased burden on, and disadvantage to, producers of other things, often even in other branches of the same industry. That this is so is proved by some provisions of this Bill, because great care is taken to steer clear of certain dangerous points, which have been pointed out both before and during the debate in another place. The Bill is full of exceptions in sub-section after sub-section. All kinds of dangers surround this class of legislation.

My third and principal reason is that protection of any industry in the home market is liable to increase the cost of production. It removes, to a certain extent, the greatest incentive to cheap and efficient production, and that is competition in the home market. You can have no more effective spur than that. Producers who are protected are liable to rely on that protection, and are not quite so active as they might be, with the result that they fail to devote, as they might if they were put to the pin of their collar, attention to developing their export trade, which is the best of all means of bringing money into the Free State. I am well aware that the tendency in the world to-day is towards protection and away from free trade. There are various reasons for that. In Europe, as a result of the Great War, there is a great diminution of wealth and purchasing power. There are many new countries, and the cost of the administration of these countries tends to be more expensive than it was before. Also, as is natural with the formation of new countries, there is an increase in national aspirations and a desire in each country to show itself self-sufficient. Included in those aspirations is a desire to make money out of the other fellow. It is so easy to pass a Bill and make the foreigner pay. The result is, I claim, not good in Europe, as these water-tight compartments prove a great restriction on trade, which is not good in the main, and people are not really better off by it.

I am well aware that the United States might be taken to be the most formidable answer to my contention, but there, I would suggest, the conditions are very different—too different to make a comparison. The enormous extent of her territory and the still greater natural resources of that very large country, the pioneer spirit, the collection of brains of all kinds, from the old world, of people who are more enterprising than many at home who are not prepared to emigrate—all that is working in the United States.

It must be remembered that the United States, although a protected country, has one of the largest areas in the world, if not the largest, and that inside that territory there is no tariff whatever, but absolute free trade. These are the main causes of prosperity in the United States and not protection. There is also the fact that, at present, they are a creditor nation, owing to the fact that the great war did not fall nearly so heavily upon them as upon other countries. Many Americans, nevertheless, believe that free trade is the right policy, and that it would be better for America, but protection is a thing of such long standing and in connection with which such vast vested interests have been set up that to upset it would be doing something that nobody cares to undertake. It is far better to compare the case of people living in a country more nearly the size of our own.

England has hitherto been the nursery and stronghold of free trade. Even there, I believe, protective duties are now rather fashionable, but I suggest that this is not so much from a desire to create new industry as the result of protection as to protect existing ones from the effects of other people's protection. If I were an Englishman I should still be a free trader in spite of that, and as far as ever circumstances permitted. But, as an Irishman, I am far more strongly opposed to a protection policy in this country because I think the arguments are much stronger in the case of Ireland than in the case of England. The question is far more complicated in England, which is more highly developed as an industrial and trading country—perhaps the most highly developed in the world. And whatever advantage protection may have for England in getting over certain difficulties, these advantages apply in a much less degree in Ireland. And why?

The great difference between this country and England in matters of this kind is that Ireland is overwhelmingly an agricultural country. Wealth lies on the top of the soil, not below it. Now, the agricultural produce of Ireland far exceeds her needs, and therefore there is a large export trade, and that export trade is by far the most important Irish industry we have and always will be. It is mainly by farming in all its branches that this country will succeed or fail in being a prosperous country. Agriculture now is much less prosperous than formerly. Many of the causes of that are beyond our control. I know that the present Government has done a great deal and has done excellent work for agriculture. But that work is liable to be counterbalanced by driving this policy of protection too far. The overwhelming majority of the people live by agriculture, either directly or indirectly, and you cannot protect agriculture, for the very excellent reason that your principal market is outside your control. Therefore, it seems to me that Ireland, of all countries, should be a free trade country, because our interest lies in the encouragement of agriculture and the reduction of the cost of living. How can it help agriculture that the great majority of our people directly occupied on the land or indirectly living by it and not engaged in protected industries should have to pay more for their clothing, their boots and their furniture, and even perhaps for their food, because there are people advocating a protective tariff on flour, oatmeal, barley and I know not what? This protective policy tends to place fresh burdens on the many for the benefit of the few as regards this country. Unless and until I am converted to the protection point of view by far better results than have been secured from its working, I shall have to vote against all protective measures of this kind as I shall vote against the Bill now before us.

Mr. Milroy

I would like to reply to the speech of Senator Bagwell, but if I do so I shall have to ignore the Bill at present before the House. We are discussing a matter on the Orders of the Day entitled the "Finance (Customs and Stamp Duties) Bill, 1929." From the beginning to the end of his speech Senator Bagwell made not a single allusion to this Bill. Instead, we have had something which I thought we had finished with in Ireland. We had a rehash of the old Cobdenite theory which died when the United Kingdom of Great Britain and Ireland died, and the only reason I think it necessary to reply to this particular speech is because of the fact that it has been listened to attentively seems to indicate there are still people here in Ireland who are addicted to Cobdenism and theoretical free trade.

There were a few murmurs from our economic Casabiancas—the boys who stood on the burning deck whence all but they had fled. Senator Sir John Keane and Senator Bagwell are fighting still, or think they are fighting, a cause many years after the fight has been fought in this island. These theories of the theoretical free traders are as dead as the Dodo. It is simply beating the air to try to revive them. I said on the last day this assembly met that I wished these matters could be considered apart from party. That is not exactly what I wish. I would rather wish to see these matters considered apart from theoretical predilection. Let us consider what are the facts of the situation that we have to deal with and what are the methods best suited effectively to deal with them. Analogies are dangerous and are sometimes deadly to those who make them. Senator Bagwell spoke of America, and he said there was no comparison with this country. He said that the fact that the United States had such enormous territory and such enormous resources made it clear that there could be no analogy drawn from there to the benefit of Ireland. But the point is: if a country of such enormous resources, with such enormous territory, requires the protection of tariffs to build up its economic existence, surely a small country like Ireland, which has no vast internal resources, is much more in need of that protection? So that the analogy or comparison, instead of doing service to the theoretical free trader, is on the side of those who believe in the tariff development of economic life. I quite believe the opening remark of Senator Bagwell, that he had not made any serious study of this question. Obviously he did not. Obviously, if he did, he would never have used any reference to the United States, because I am sure he would not have referred to it if he had studied the history of America's development and realised that when the United States was established as an independent entity, or series of States, the theorists of that day were declaring that the destiny of America was what the theorists of to-day are telling us the destiny of Ireland is to be, a land of flocks and herds and grass to supply produce for the world's markets. That was the theory held by those who posed as friends of America outside America. That is the theory that is given to Ireland to-day. That is the theory that America rejected and it is because of that rejection, and because she embarked on an economic policy based on that rejection, that the United States has become a great economic power in the world to-day. I have no belief that Ireland can ever hope to emulate America in its dimensions as a world power in these directions, but I do say that if this State is ever to have a real place that counts in the life of a nation, if it is ever to be a staple State, it will have to develop an economic system that will not be entirely agricultural. It will have to develop its economic life so that the population strain on the land will be eased by the provision of alternative occupations to those of agriculture. Otherwise, you cannot have an increasing population, a population increasing not only in numbers, but in prosperity and in all the things that go to build up a strong and progressive nation.

There is no reason whatever why the development of that non-agricultural phase of our national life should in any way conflict with the retention of the position which we have secured for our agricultural produce and for the development of it. If it is admitted that the healthy development of this State necessitates other occupations for its people, its young men and women, other occupations than merely agricultural in an adequate degree, then it follows that, if that is to be secured, the State must utilise wisely and effectively the powers it possesses to give its non-agricultural potentialities an opportunity of developing. That is all that the modern policy of tariffs aims at. It is not to make opportunities for the few at the expense of the many. It is not to enable a certain privileged section to make fortunes quickly. It is not to impose burdens which increase the cost of living for the mere advantage of a class, but it is to give to the resources of a nation the chance of developing and to create that industrial life which will stay the tide of emigration, which will balance life between the producer and the consumer—the agricultural producer and the industrial or urban consumer, and also the industrial producer and the agricultural consumer. Every such development means an accession of national wealth. Every such development means an increase in national wealth in its finest aspect—that is, in its aspect of a healthy, progressing people.

I know that it is dangerous to generalise, and I am delivering a speech which is mainly generalisation, but there is no other way in which to reply to the speech which preceded what I am saying. Generalisations, however, are not always defective, and it is safe to say this, I think, that if we had double the population in this State that we have at present there would not necessarily be any great increase of administrative expenses, but there would be double the number of citizens to bear the burden, and the burden per head would be halved. Therefore, I say that the only way we can bring about that very desirable contingency is by a development of an industrial life for which the country is fitted and which will bring into the life of the State that increase of population living in prosperity that will be able to share the burdens of the State's expenses, thus lightening the burden generally. I am not sure that there are any other points to which Senator Bagwell referred. I certainly had no intention of intervening to discuss this general question. I thought it had been thrashed out and decided that it was irrelevant to the modern conditions of this State, but the extraordinary thing is that it is those who preen themselves upon being up-to-date business men who raise these idle generalities, these irrelevancies, to the issues that confront the people. To-day we have a State that after a long struggle has at last secured control of its own life, and after great difficulty has secured these very means by which we can organise, mould, and regulate our economic development, and we are told that it is foolish to think of doing this, that it is not only foolish, but dangerous. I wonder what those who think in these terms imagine was the objective for which the people of this country struggled for many generations? For over a century this doctrine of free trade— buy in the cheapest and sell in the dearest market—was preached to this country. We were told that it would lead this country upwards and onwards, but it led us downwards and backwards. No one can deny that. There is not a single aspect of life for which that theory and its development can show anything advantageous to the people of this country. The Bill before us now is one which deals with the imposition of a tariff on woollens, and it represents a rather historic step in our history. Only last night I read this passage in an article written by, I think, the present Professor of Economics of the National University: "The suppression of the woollen manufactures was the most important landmark in the whole economic history of Ireland." It refers to the Act of 1698. "It did more to shape the course of Irish economic life in succeeding years than any other succeeding event, and was the most fruitful source of the dreadful distress which characterised the 18th century." The most important landmark in the whole economic life of Ireland was the suppression of Irish woollens in 1698. I regard this Bill before us as having equal potentialities. I regard it as another step in undoing the conquest. I believe that in years to come some future historian will say that the Act of the Oireachtas of 1929, in assisting the development of the Irish woollen trade manufactures, was one of the most important landmarks of the whole subsequent economic history of the State, and it did more to build up the course of Ireland's subsequent economic life in the succeeding years than any other subsequent event. I believe it is quite possible that such a commentary may be made.

Senator Bagwell said that England has been the nursery of free trade. He made clearly manifest the fact that he had not studied the question. I admired the candour with which he made that confession, but I am not so sure that I admired the courage with which he then proceeded to dilate on the subject. England instead of being the nursery of free trade was the nursery of protection until, having secured command of the markets of the world under protection, she built up an enormous carrying trade, and then decided in her own interests to break down these barriers, so that she could supply these countries with manufactured articles and buy their raw materials. That is England's free trade idea. In this matter we, who have to guide and guard the interests of this young State, would be well advised not to model our ideas too closely upon what has happened in England. England's interests and Ireland's interests are not necessarily identical. In many respects they are divergent. Some people would say that they are forever in conflict. That latter idea, I hope, is no longer true. At any rate it is up to us to see that in this, at least, we should follow the idea that dominates the English mind, and that is to think of what serves our own country best and adhere tenaciously to it. We are here to-day not to consider theoretical problems of whether the price of this or that commodity was increased or decreased by certain tariffs. We are here not to consider or safeguard the interests of those whose commercial ties are bound up in the export or import trade. We are here to consider how best we can legislate to give the industrial possibilities of this State a chance. The Bill before us is directed to that purpose, and I hope it will get the unanimous support of the Seanad. I know it will not get unanimous support, but I hope it will get the enthusiastic support of all save the few free trade Casabiancas who are still lamenting at the tomb of Richard Cobden.

Sir Walter Nugent

I listened very attentively to the two interesting speeches which have just been made, but I hardly heard one word in either speech which dealt with the Bill before us. I may be particularly stupid, but it seems to me the Bill is very simple. It is proposed to impose a duty on goods which could and should be produced at home. I am entirely in favour of that policy. I was in America for a number of years and I came back a strong protectionist. My views have been modified to a certain extent since I have lived over here, but nevertheless I feel that two or three guiding principles might be applied to Ireland. As you know in America they derive revenue by imposing taxes on articles which can be produced in America and they let in free articles which cannot. The policy in England, as you know, is exactly the reverse, but the conditions in England are entirely different, and you know also that even the old cast-iron free trade traditions in England are gradually becoming modified.

Now let us turn to the policy of the Bill before us. It seems to me, if I understood the Bill, that the policy it proposes to adhere to is to put a duty on products which we could produce here. Senator Bagwell has already indicated what he considers would be the advantage of cast-iron free trade. On the other hand we are told that you will not keep goods out, that goods will be dumped. You cannot have it both ways. If they dump goods into the country, they will have to pay duty, and the Minister for Finance will derive the benefit, while if they do not dump them, the people who will produce them here will get the benefit of higher prices. For that reason I am in favour of the Bill. I do not propose to ramble over the whole ground of the theoretical merits of free trade or protection, but as far as the Bill is concerned I favour the clause dealing with woollens and clothing. The rest of the Bill simply deals with duties on parts of motors which are to be manufactured and sent out of the country. I am in favour of the Bill and I will vote for it.

Mr. Douglas

The first time I had had the pleasure of meeting Senator Milroy was close on twenty years ago, at a debate on free trade versus protection in a society to which we both belonged, and I can assure the House that the Senator is nothing if not consistent. One almost felt as though one were listening to the same speech.

Mr. Milroy

Blame Senator Bagwell.

Mr. MacLoughlin

I hope you are not going to repeat it.

Mr. Douglas

It seems to me that there is no use on a Bill of this kind in debating the abstracts of free trade versus protection. We have adopted, wisely or unwisely, a policy of selective protection. There will be occasions when the whole question can again be usefully debated. But I believe that there really are only three policies: complete free trade, which means taking off all protective duties and putting on direct taxation in their place, because we shall have to find an annual income somehow; the policy—I am not quite sure whether Senator Milroy agrees with it or not—which is very largely the Fianna Fáil policy of protecting everything that you possibly can, or the policy of selective protection, which I understand means that each case will be considered on its own merits, and having regard to its possible effect on the country—on the cost of living and on other industries at present existing.

It seems to me then, that when a Bill of this kind comes forward, the only profitable thing to do is to deal with the question as to whether, having adopted a policy of selective protection, the particular duty that is proposed in it will be of benefit. I have not got enough information to know, nor do I think anyone can really definitely say, how far this particular duty will justify itself. It has been recommended by the Tariff Commission, after a certain amount of investigation, and I do not think that the Government had any other course open to them but to bring in some such duty. My object, principally, in rising was to point out that this Bill, more than any other Bill that we had before us, shows us the extreme difficulty of any kind of wholesale protection. We have a duty proposed on woollen goods, provided that the price of the woollen goods, including the cost of carriage and packing, comes to over 1/6 per square yard, and provided that the goods are over seven ounces in weight per yard. The difficulty is for anyone who is still forced to import, owing to the fact that there are quite a number of woollen goods which are not yet made in Ireland but which could be, pretty considerably, under a tariff of this kind. The introduction of this tariff forced the Government to consider the position of the manufacturers who make clothes of woollen goods, all of which are not manufactured in the Free State, and, in order to help them, they had, as a corollary, to increase the duty on manufactured goods; in order to help these manufacturers they have to increase the cost of goods, particularly of ladies' wear, which, although the material, being under seven ounces in weight, could come in free of duty, are not manufactured here. The whole matter is exceedingly complicated. I am not at all certain that the increase from 15 per cent. to 20 per cent. is sufficient to prevent some injury to the manufacturers of ready-mades. It may be that the injury to them will be compensated for by the unquestioned gain to the woollen manufacturers, and I think there is no question but that there are a great deal of woollen goods which could be manufactured in this country as well as, if not better than, in any other country.

We come to the second part of the Bill, and we find there that it is proposed to remove duties in order to assist a manufacturer in this country, thereby admitting that wholesale protection does not always work, and that there will be cases in which you will assist employment by removing duties. I think that Section 3 of this Bill is probably a wise step on the part of the Government, and I certainly am not going to oppose it. But frankly I do not like it, and the reason I do not like it is this: It is done in the interests of a large manufacturer here—Ford's Factory—a factory which I think it is essential should be kept, and the arrangement is probably wise. But it is really setting up a monopoly. This Bill provides that if a manufacturer proves to the Revenue Commissioners that a substantial portion of his manufactured goods is for export, he can get a reduction in or a remission of the duty. But a new man could not prove that until he had started, and, therefore, the effect of this will really be to prevent anyone else from starting to manufacture for export. Personally I wish the Ministry could have seen their way to go the whole-hog, to take the duty off motor parts, because I think it would lead to a considerable amount of assembling here. The market is not big enough to have motors as a whole manufactured to any large extent inside the country, I think.

There is one other thing to which I should like to refer, and I think it is also one of the inevitable difficulties with a policy of protection. We find always that when we put a duty on a commodity we have to provide some such words as are provided in this Bill: "The duty imposed by this section is hereby placed under the care and management of the Revenue Commissioners"; or, in Section 3, which states that the Revenue Commissioners may make regulations. I am not quite clear as to how far the Revenue Commissioners are under the Minister, and I would like to say that I personally have no quarrel with them; in any small dealings which I have had with them they have been courteous and reasonable; but we are setting up a body of three persons who are legislating by means of regulations, without any reference to this House. When we put a duty on household furniture, the Revenue Commissioners had to decide what was household furniture.

Mr. Blythe

Oh, no.

Mr. Douglas

They decided that anything made of wood that was for household use was to be regarded as household furniture. I am not quarrelling with that; I think it was the only way out of it. My point is that three persons who are not members of either House have to decide what is dutiable, but I do not know any other way out of it if you are to have protective duties. My own opinion is that, having adopted a protective policy, which is unquestionably the policy of the Oireachtas at the present time, the only way is to have open, frank examination by the Tariff Commission, and unless we can put a really good case against a finding of the Tariff Commission, I think we should adopt it until some other policy is proposed. For my part, although I do not believe at all that protection is a remedy for every ill, or that wholesale protection will not be of more loss than benefit, at the same time, I think this Bill should be passed.

Mr. Comyn

It was very interesting to hear that Senator Milroy and Senator Douglas debated this matter twenty years ago. I must say that I was very much impressed by the speech we heard from Senator Sir Walter Nugent, because I think it showed that he has approached this question as a practical man, who understands the affairs of the world, and did not discuss it with phrases that were so familiar to us twenty years ago, and that are being repeated now. It seems to me that there are two questions raised in this Bill. The first question is whether it is a Money Bill. If the main purpose of the Bill is the raising of taxation I suppose it would be admitted that the Bill is a Money Bill, but if the main purpose is to encourage the industries of this country, and the collection of revenue at the ports is merely ancillary, then I submit to this House that the Bill deals with a question of national policy and is not a Money Bill. The other question which arises is this: whether import duties or tariffs on goods are suitable to the conditions in this country. Senator Bagwell suggested that it was best for the country that all manufacturers, wherever they had their place of business, should get a fair free start, that there should be no handicap, that the highly industrialised centres in England should not be handicapped as against the infant industries of this country. You might as well say that if a grown man and a child were to start in a race the child was not to have the benefit of two, three, ten, or fifteen yards handicap.

Another point that was made by Senator Bagwell was this: America, he said, is a great country, with great resources. Its wealth arises from the abundance of these resources and not from the tariff system which it has adopted. No one will deny that the wealth of America, in great measure, depends on its resources, but up to this I thought that nobody could deny that the industrial power of America arises from the fact that in years past she did protect her infant industries, as it is proposed to protect industries here to-day. Senator Bagwell used the great American Union to point to another argument. He said that within the limits of that Union there are no tariff walls while there is a tariff wall running right across this little island. My answer to him is: Who is responsible for that tariff wall that runs across this island? The majority of the people of this country are not responsible for it. We all regret a tariff wall, but so long as there is a political wall the tariff wall will remain. It has been stated, again, that these duties will increase the cost of living, and farmers have been spoken of as people likely to suffer. Now, if the farmers or farm labourers were likely to suffer I am sure the Fianna Fáil Party would consider well any tariff which might have that effect. Our policy is not what has been stated by Senator Douglas, to search out everything and put tariffs on. Our policy was clearly stated by the leader of our Party, and has been fully enunciated in the Dáil. Customs duty will not increase the cost of living, provided the internal duties are diminished to a corresponding degree, and I ask the Seanad to consider this, that it is quite possible, without raising the cost of living, to collect all the revenue necessary by means of external duties, provided at the same time that the internal duties are diminished. I think that is a matter which ought to be considered by those who are interested in this question of tariffs.

Senator Milroy was quite right when he said that it was only in a certain phase of its development that England was a free trade country. The English were the greatest protectionists in the world until they had acquired shipping and industrial development. Then they found theories to suit their peculiar position, and they did more, they sent into every University in Europe a professor as propagandist for their free trade theories. Of course the other European nations were not deceived; Bismarck was not deceived, although there were English professors in every University in Germany advocating free trade. I am sure the people of this country will not be deceived either. Free trade would have suited England; she would be the centre of the world in wealth, and power, at least five times greater than she is now, if all the world had accepted her theory of free trade. But they have not done so, and I am sure the Free State ought not to do so either. At the same time we ought to consider, if customs duties are imposed, if revenue from external sources is collected, how revenue from internal sources could be diminished, so as to secure that the cost of living for the labouring man and the farmer should not be increased.

There is one point in the Bill to which I would like to call attention as I do not think that in the Dáil it received the attention it deserved. A duty of fifteen per cent. on readymades was in existence when the present duty was imposed. The present duties are twenty-five per cent. on all cloths which exceed one and sixpence a yard in price, and twenty per cent. on readymades. At first sight it would seem that the effect of that duty would be seriously to injure the readymade trade in this country. There is only one explanation which occurs to me, namely, that the readymade clothing here is manufactured from material which does not exceed 1/6d. per yard in price. If that is so, I can understand why the Minister did not accede to the proposal made in the Dáil that there should be a further increase in the duty on readymade goods. It may be that some of the readymade clothing manufactured here is made from cloth which exceeds 1/6d. per yard in price, but I am inclined to think that most of the readymades in this country are made from a cheaper class of cloth. Of course that may be a trade secret, but whether it is or not I think that the Dáil and Seanad ought to be made aware of the exact state of affairs. Notwithstanding the fact that the Minister did not accept the suggestions made by our party in the Dáil, I am in favour of this measure.

Mr. O'Farrell

The industry to which the tax involved in this Bill applies is, perhaps, one of the most efficient industries in the country: the one that is most capable of meeting the maximum requirements of the community, and to that extent, in all probability, the tariff under discussion now is one of the most justifiable that has been imposed. At the same time a lot of wild and woolly generalities are invariably advanced in support of all and every tariff that is introduced. We hear a lot of balderdash about the indignity it is to Ireland to produce cattle, sheep and pigs and agricultural produce for the people of Britain, but it is no shame at all to produce stout, biscuits and various other manufactured articles for the same people. In my opinion, a land of agriculturists is just as dignified as a land of cobblers or a nation of tailors, and I cannot see where any indignity comes in Ireland specialising and excelling in agriculture, even though there is the absurd grievance that the people in England buy this stuff from us. It is time we got rid of the humbug about Ireland being a cabbage garden for the benefit of the English people. The theory advanced by Senator Milroy was that all that any nation that wants to arrive at prosperity has to do is to multiply its tariffs. Is it not a wonder then that there is unemployment in any country in the world when there is such a simple expedient lying ready to hand? Spain has the highest tariff wall in all Europe, and yet I do not know whether we aspire to the economic prosperity of Spain. If tariffs connoted prosperity, then the people in the Balkans would, with the exception of Spain, be the most prosperous in all Europe. I do not think that we aspire either to Balkan prosperity or Balkan civilisation. Generalities in matters of this kind are grossly absurd, and to say that all we require is to put the highest possible tariff on everything that we can possibly produce and that ipso facto prosperity ensues, is absurd.

This Bill, even though it exceeds the expectations and the claims of the applicants for the tariff, is not going to do very much for the solution of unemployment in Ireland. We must assume that the applicants did not underestimate the benefit which it was going to confer on the community. I should imagine the position was slightly the other way. The Tariff Commissioners say, at page 53 in their report:

"We asked them to give us a statement as to the probable increase in the number of workers employed and wages paid if they doubled their output as the result of a tariff, and they replied that the doubling of their output would probably raise the total number of employees to the number employed in 1914, namely, 2,801, and the total wages paid to £275,338; in short, 1,000 extra hands would be employed and £100,000 more paid in wages."

So that the sum total of this on the estimate of the applicants for the tariff would be this: that the manufacturers would be employing an additional 1,000 people at an average wage of 38/- per week. I notice that in the report of the Tariff Commission figures are given as to the numbers employed. What I want to direct attention to in connection with this is that it is the year 1925 is taken. For the Census of Production it was the year 1926 that was taken, and in that year there were employed altogether, in connection with the woollen industry, including carpets, which possibly was outside the purview of the Tariff Commissioners in regard to this application, 2,364, of whom over 50 per cent. were female workers; 8.8 per cent. of the men employed were under the age of 18 years, whilst 14.3 per cent. of the women employed were under the age of 18 years. In the same year, gard to this industry, more than half of the workers were women, and of these 14.3 per cent. were under the age of 18 years. In he same year, according to the Census of Production, the average wage paid in the industry, taking wages, salaries of managers and directors, and all concerned, was 34/- per week.

For the first year, at any rate, the cost of the tax is estimated to be £150,000, or, in other words, £150 for every additional worker employed, either male or female. Of course, if the manufacturers make the fullest possible use of the tax, unlike other industries that have been protected, then that £150,000 will lapse, and meanwhile someone is going to pay for the additional employment given. It is surprising, in view of that that the Government should come forward and, as they did in the case of the Post Office, for a saving of £42,000, proceed to dismiss 800 men. We have to congratulate them on the fact that they withdrew from that position, but there is certainly an inconsistency about the proposals.

One remarkable thing about the woollen industry is the fact that it has a very good export trade, comparatively speaking. In 1913, for instance, the home sales amounted to one and a half million yards, while the sales in Great Britain and Northern Ireland amounted to 787,000 yards, and to other countries 373,000 yards. In 1921 the home sales were 784,000 yards, and in Great Britain and Northern Ireland the sales were 457,000 yards. That is to say, that the industry has got its export trade in a competitive market without protection of any kind, showing that there are possibilities in the trade without any protection at all. We may hope that the full benefits of this tariff will be availed of for the purpose of developing the industry. There are certain phenomena in connection with other tariffs that perhaps the Minister would be able to explain. For instance, could he explain how in the case of footwear the cost of imports in 1928 was seven per cent. higher than in 1927? In the case of hosiery the costs went up in 1928 by over 11 per cent. In the case of overcoats the import duties in 1928 were over 50 per cent. more than in 1927. These are all protected commodities, and instead of the imports reducing they seem to be increasing in value. That, of course, has been the experience in other places too. Australia has been invariably quoted as an example of prosperity as a result, very largely, of tariffs. Yet I find in the debate on the Budget in the Australian Parliament in September last the leader of the Opposition said:—

"The total imports for the last six years had averaged £25 2s. per head of the population, as against an average of £19 6s. for the previous six years. In view of those figures it was not surprising to find that unemployment was prevalent, and that industries were languishing."

He further said:

"For years they had been faced with adverse trade balances, which had produced a serious financial position in Australia. In the period 1916-22 imports were valued at £606,000,000, and exports at £703,000,000; an excess of exports over imports of £97,000,000."

In other words, in the six years they had a favourable trade balance of £97,000,000. Since that period tariffs have gone up considerably in Australia. He goes on to say:

"During that period the position had been sound, but what were the figures for the next six years? For the period 1922-28 imports were valued at £894,000,000 and exports at £834,000,000, showing an excess of imports over exports of £60,000,000."

In other words, they had in that period an adverse trade balance of £60,000,000. He said:

"Their prospects at present were not bright. They had over 180,000 men out of work, and their secondary industries were crying out against the flood of importations from other parts of the world."

I think that is a reply to those who consider tariffs to be a panacea for all and every one of our economic ills. On the other hand, industries that are not protected at all, like the biscuit industry, are progressing. Our exports of biscuits in 1924 were valued at £480,000, and in 1927 they had gone up to £545,000. The Tariff Commission made some rather remarkable statements as to the attitude of the manufacturers towards the trade in Ireland. The Distributive Wholesale Association complained that the cost of Irish manufactured material to Irish wholesalers was much higher than it was to wholesalers in Great Britain and elsewhere, with the result that quite a large quantity of Irish tweed suitings was sold in Great Britain and re-exported to Ireland. This was contradicted, of course, by the manufacturers but the Tariff Commissioners say:

"The average price per yard during the same period was less in each year than the average price of cloth sold at home, except in the year 1920; and that in 1925 the disparity in prices was rather remarkable."

The report showed that the average price in Ireland for Irish-manufactured tweed was 10s. 1d.; in Great Britain and Northern Ireland 7s. 11d and in other countries 8s. 8d. There is a difference in the case of Great Britain and Northern Ireland as compared with the Free State of 2s. 2d. per yard, and in countries other than Great Britain and Northern Ireland the price is 1s. 5d. per yard cheaper. That would be called by the English people dumping—that is, selling the material at less than the cost of production, or certainly selling it at less than it is sold here. The Irish wholesalers had to pay 2s. 2d. per yard more for the same commodity than the wholesalers in Great Britain, and hence the curious phenomenon of goods being bought here and re-exported in competition with the Irish traders. The position with regard to free trade as against tariffs is this, that many other things have contributed to Great Britain's poverty as well as free trade, or such as is called free trade in Great Britain—for it is a modified form that has been the order of the day so far. One set of politicians may say one thing was the cause and another set may say that it was due to another cause. The whole-hog advocates of protection have the advantage of saying that the country is poor so far, and that it could not be much worse off, and might be better off under protection.

Under the circumstances, I think it is only fair that selective protection should get a chance. Personally, I am prepared to give it a chance so long as we do not run riot altogether in the matter. The proposed tax which we are discussing is, I think, fairly justifiable. Unfortunately a number of manufacturers have publicly stated that in some cases it may mean an increase in the price of Irish manufactured articles. Why it should I do not know. It is generally admitted the cost of the imported article will go up, but it may be worth taking the risk if it develops an ancient Irish industry, which turns out a material that in the main is able to compare in quality with that turned out anywhere else. There is a good variety of Irish tweeds. To that extent, one cannot offer a reasonable objection to the protection of that type of industry, which has shown a reasonable amount of efficiency, which gives a fairly good selection of cloth, and which holds out the hope of giving employment to another 1,000 people.

Sir John Keane

I must congratulate the last speaker in having at least tried to see both sides of the case. In that he was very different from the Senator who taunted some of us with the gibe of Casabianca— and though while we may be on the burning deck I notice that he has fied. Senator Milroy alluded to some of us being in near proximity either to a fiery or a watery grave. But I notice that he adopted the attitude of almost entirely remaining in the clouds, making occasional descents to earth when it suited him. He alternately gibed at fearless and practical men. I notice that whenever it suited his taste and whenever it was opportune, he played up what I venture to describe as totally a question-begging point. I can give one instance. He tried to arouse our national sentiment by reference to certain writings by Dr. George O'Brien, Professor in the National University, on the subject of the disabilities imposed on our woollen trade. But he does not take the Professor any further; he leaves the Professor severely alone when it comes to modern times. He altogether forgets that the same Professor was one of three or four others appointed to consider this whole question of fiscal policy. I submit that the Professor and his colleagues on that Commission were very competent judges of the implications of anything so elaborate as the question of tariffs. They were infinitely more so than a rough and tumble artist of the type of Senator Milroy. What did they do? They unanimously turned down this whole policy of protection, or even selective protection, and, with a very limited reference, I think, to motor bodies or things of that sort, said that it would be much wiser if the State continued broadly the policy of free imports. That, of course, would not suit the noisy section, and we have been gradually impelled along this course until, in the course of time, under this euphemism of selective protection, we get a full measure of poison. We are being asked to take this poison in small doses. Some of us naturally criticise the nature of the poison, and we are being prohibited from entering a general protest against the entire policy, being debilitated by poison, which some of us of the Casabianca type claim is the case.

Senator Sir Walter Nugent alluded to the policy of making in this country all that we can produce. I wish he had elaborated that so as to explain what he meant by "can," because I think you can produce almost anything if you raise the price high enough. That is the whole point. Where are you going to stop if you have import duties on all necessities? That is the danger I see from the policy of Fianna Fáil. What they want to see is the absolute policy of protection and the making of everything at home. We can make everything at home, but at a prohibitive price and to the prejudice of the community as a whole.

Senator Milroy corrected himself somewhat, I admit, to-day. The other day he asked us to take the whole of this question on a national plan, and he went so far as to suggest that those of us who are free trade by study and by conviction are really hardly honest in all this, that we are in some way leaning towards a British bias, and that we do not want to see British trade suffer to the benefit of Irish trade. I, of course, suggest that is totally unworthy. To ask us to make this a national question is the same as asking us to make religion a national question, or to make any other fundamental doctrine or belief a national question and to bring it outside party altogether. That is nothing but a mediaeval form of thought which is quite out of harmony with modern ideas. We who believe in this doctrine of free trade are quite prepared to state our case and to give fundamental reasons for it. We say that imports must be paid for by exports; they cannot be paid for in any other way. You will not buy them unless you pay for them and, therefore, the more you buy the more you must produce to pay for them. Automatically, imports produce exports. We feel that there are very grave dangers in the creation of inefficient vested interests and manufactures behind a tariff wall, for which the consumer will have to pay, to the advantage of a select section of manufacturers or operatives. There is grave danger in bolstering up inefficient industries to the prejudice of the taxpayer. That is a matter that has to be considered. It is a matter that is well known in America. Any sectional interests that see a chance to make money will not hesitate to finance any Party that is prepared to give them benefit in their own trade. That is a very grave danger, well known in America. It is one of the most dangerous forms of the graft that is corrupting the whole of the American political system.

Turning to the measure itself, there are one or two points I would like to ask the House to consider. It is admitted that the range, the variety and the choice in home manufactured cloths are very restricted, and that if people wish to follow the fashions and not be dressed rather like a lot of their neighbours, they will obviously have to dress largely on imported materials. I know it is said by a certain section: "We do not mind that in the least. If you do not like to wear Irish material, you should pay for the other. We have nothing to do with fashion or taste. We are merely patriots who want at any cost to reinforce local industries. If you want those fashions, you will have to pay for your fashions or for your luxuries." It is for this House to say whether they consider that it is likely to make for a happy and contented country. We were not all placed in this world to bolster up growths of population or to force industries. We were placed in this world to be happy and to enjoy ourselves in a decent, wholesome way. Why should we be forced to wear local clothes, be out of the fashion, and be rather a reproach to other people who follow fashion and taste? This is taking the whole thing out of the region of economics and making it political, with a strong bias to a false form of so-called patriotism. Senator Milroy, the other day, and I think also somewhat to-day, dwelt on this question of alternative markets.

Mr. Milroy

Alternative occupations.

Sir John Keane

Alternative occupations, home occupations, and presumably a home market for agricultural products. I cannot congratulate him on the prospect after six years of gradually increased protection. We have at the present moment 55 per cent., and probably a little more now, of our imports protected in some form or other. I refer to our non-agricultural imports. Yet all we have, according to the official returns, is 12,000 additional people employed, and we are going, possibly, to have another 1,000 employed now. Against that you have to set the undoubted increase—I cannot tell you how much, but it is a generally admitted increase—in the cost of living placed upon the whole of the agricultural population, which is ten, fifteen or twenty times as great. Therefore, I suggest his whole protection argument is unbalanced and shows an utter lack of proportion, particularly when he can only show 12,000 additional people employed, following five or six years of protection, as against the enormous agricultural population who receive no benefit whatever and who are being prejudiced because of this protective policy.

With regard to the making-up trades, certain figures have been laid before me by competent people which point to the extraordinary interaction and reaction of these protective duties. No doubt with the full-hearted support of Senator Milroy, this making-up trade was brought into being. We fondly hoped that what was done then would be final for some time, but history repeats itself. Even Cobdenite history is liable to repeat itself, and there is always the second-helping aspect of this protectionist policy. We see it in the effect on this making-up trade to-day. I have figures which show that before this duty on piece goods was imposed, the profit on certain making-up work—the cost for making up 3¼ yards of stuff would be 11/6 actually—was 3/8; that is, the benefit to the Free State tailor was 3/8. Since the duty was imposed that profit has been reduced to 2/5. That is not the whole story. For the purpose of simplification I followed up the prices for making-up. They are not the same in reality as the making-up prices in England, where the figure is 1/- less. The Leeds making-up trade, since the duty was imposed, made a further reduction of 10 per cent. Practically the whole of the benefit of the making-up trade to the Free State tailor has gone. My calculations are made on the new increase to 20 per cent. If the making-up trade is to be retained, you will have to give it 5 per cent. and possibly 10 per cent. more. Then we have the whole thing again—a never-ending vista of patching-up, of mending, of asking for more, of wirepulling and lobbying, which everybody knows is implicit in the damaging effect of these duties.

It has also been pointed out, and indeed it is obvious, that this has placed an additional financial strain on all the importing houses. There is one large importing house and they told me they had to find £2,000 more working capital since the duty was fixed in order to meet that duty, because the clothing trade is a trade which has to give long credit, and you cannot alter its terms. It has to give a month or more, and of course, the trade has to pay cash for the duty. One house has had to find £2,000 more working capital since the duty was imposed. I have heard also that the conditions of sampling are most unsatisfactory. In the case of a borderline cloth where it is necessary to analyse whether it is sufficiently light to be exempt from duty, a very small sample is taken, but the whole bale is retained while the sampling process is going on; a bale costing £40 or £50 is impounded while the process of sampling is being carried out. I am further told that merchant tailors are unable to obtain a preference. They buy from warehouses which sell in small quantities. The high-class merchant trade being exclusive, it is not customary to buy large pieces. The warehouses are unable to obtain the certificate of origin that the Revenue Commissioners require. Perhaps something will be done in time, but meanwhile the full duty has to be paid and they do not know when the certificates of origin necessary to obtain preference will be forthcoming.

I do not know if Senator Milroy heard the exceedingly interesting speech of Senator O'Farrell. He persuaded us that Cobdenism is not as dead as Senator Milroy thought and that there is something to be said on the other side. It may require more intelligence to see it——

Mr. Milroy

A microscope.

Sir John Keane

Yes. As I say, there is something to be said for that not so obvious but perhaps far more subtle and damaging argument in favour of free trade.

Mr. Johnson

I think that the trouble with Senator Sir John Keane, Senator Bagwell and others is that they look upon this question—I speak of the general question of protective tariffs—simply and solely as an economic question. Senator Sir John Keane quite definitely deprecated the attempt to judge this whole problem from the point of view of nationality or patriotism. If I were looking at the question solely as an economic question, in the commonly accepted sense of that word, I would plump distinctly in favour of free trade. I would imagine that the total benefit to be derived from the world's economic activity would be greater if there was a free flow of capital to those industries where the greatest produce could be obtained for the least effort and equally the free flow of labour to that capital which is being employed for the greatest production. But we are not living in an economic world alone. So far as this Bill is concerned we are living in a country where we desire to see retained a people living happily and prosperously. As things are or have been for many years, the whole of the economic tendencies which, of course, naturally appealed to the acquisitive instinct in men, have led to the denudation of the industrial activities of the country for the benefit of less productive agricultural activities and, in consequence, a declining population with the probability of a continued decline. If that is accepted, and if one does not look with any disfavour upon that tendency continuing, I think one will be forced by mere economic arguments to stand against tariffs. But if we, on the other hand, do believe it is necessary for the progress of the country and for the productive activities of the country to maintain in this country a people, making that people prosperous, then some change must be made from the long-continued economic policy. The need for change is urgent. I think the change has to be by the most rapid method possible, and I am forced, somewhat against my predispositions, to the belief that the tariff method is the most likely to be effective in the shortest time; one can persuade the community to agree to a tariff when one cannot persuade it to agree to, shall I say, a State monopoly.

I put it to Senator Sir John Keane and Senator Bagwell that the alternatives before them are either continuance of the policy which has been followed for 60, 70 or 80 years, or acceptance of the policy of tariffs, or a policy of direct industrial activity by the State and, in fact, definite State monopoly. I think the last would be the least favoured by the two Senators named. We were told that the country is agricultural and that it is by agricultural development that prosperity will be ultimately reached, though, as Senator Bagwell told us, agriculture is much less prosperous than formerly. There were no protective tariffs in operation in this country up to 1914. Let us go right back before the war. One of the facts that seem to be forgotten by speakers on both sides of this controversy is that Ireland was not prosperous in the days before the war. One hears Ministers speaking sometimes as though they imagined the whole of their ambition was to bring the country back to the state of prosperity that existed before the war. I imagine, from Senator Bagwell's speech, that his ambition is bounded by the prospect of bringing us back to the stage when men were expected to be happy, prosperous and contented on 15s. a week. That is not a state that we can be contented with, and one sees no prospect whatever out of agriculture and agricultural production alone of making an urban population anyway reasonably prosperous. We learn, and it is no doubt true, from Senator Sir John Keane that all we sell and export must be paid for by imports.

Sir John Keane

I think it was the other way around.

Mr. Johnson

Very well. I beg the Senator's pardon. I am glad he corrected me—that "all we imported must be paid for by exports." I want to draw attention to the converse of that, that all we sell or export must be paid for by imports. If we are to rely on agricultural economy, more or less, the fact is borne in upon us that the agricultural economy which is most successful and profitable to the farmer is that side of agricultural production which depends entirely on natural processes, cattle rearing and grass feeding.

A little examination into such economic facts as can be obtained—they are not yet available fully; I hope within the next year or two that we will have a much larger volume of material from which we can draw safe conclusions—shows that per head of those people engaged in agriculture, the probable output in 1928 was not exceeding seventy pounds in value. The statistics produced by the Agricultural Department in 1912, giving the Agricultural Output of Ireland for 1908 the figure was round about £45 per head as the value of the agricultural output. The recent census-of-production statistics show that even in this ill-equipped manufacturing country the output per head of the part of our industry that is manufacturing is three times that, and I am leaving out the big and highly productive industries of brewing, distilling and tobacco manufacturing. Take those numerous small industries, per head of persons occupied in those industries the output is three times as great as the output per head in agriculture. Let us relate that fact to Senator Sir John Keane's statement regarding imports being paid for by exports and my statement that exports are being paid for by imports. We are going to export such produce as embodies a small amount of human labour and import in payment for it manufactured articles which embody a large amount of human labour. Extend on those lines and the inevitable outcome is a reduction of the working population. So, we are not merely dealing with the economics of prices or money values; we are dealing with the economics of humanity, national economics, and it seems to me if we are to consider this question solely from the point of view of what is going to pay best in money values, we are going to follow a line which means national declension.

Sir John Keane

Might I suggest to the Senator that a point is very soon reached when you have to put labour into your exports? Your power of exporting goods produced naturally is very restricted and if you are going to export your goods increased agricultural production is inevitable.

Mr. Johnson

I cannot follow the Senator in his statement, because one knows, as a matter of fact, that if the agricultural owner—the farmer —is going to be encouraged to depend upon the course of agriculture which pays him best, which gives him the greatest net profit, he will follow in the future, as he has been following for quite a number of years, the buying of store cattle or young stores and the putting them on to the grass spending small sums in wages, foodstuffs and the like, and letting nature do the work. That has been the course he has followed, and will continue to follow, if we are simply to adopt the line of reasoning of Senator Sir John Keane.

The point is made—I think quite correctly—that within this Bill is an attempt to correct certain defects, or that there is an unbalancing of the process initiated when the tariff on ready-made clothing was introduced. It is pointed out how the vicious circle has begun; that there was a tariff introduced to protect apparel, and now a new tariff is to be introduced which removes some of the protection that the original tariff provided, that there must be a correction of the original tariff and that a general chain of uneconomic factors is started.

There is, no doubt, some truth in that, and I make this point in regard to it, that it is the fault of having a too selective protection. I believe that, looking at this matter rationally, one would have taken the whole process from the growing of wool to the selling over the counter, and would have considered all aspects of that economic operation; would not attempt to protect the importation of ready-made clothing alone, but would have considered it in regard to the cloth-making industry, the weaving, the spinning and, if necessary, the growing of the wool. I think a definite fault has occurred by selecting too narrow a line, and that the whole industry should have been considered when this application was first made with regard to clothing.

I am inclined to think that the ready-made clothing industry, which is a valuable one, is going to be deprived of some of the benefits which the original tariff provided. The industry has, undoubtedly, taken advantage of the tariff, and has not made, if my information and my own observation are correct, an undue charge upon the community as a result of the tariff-benefit which it has received. I think that even the Commission in its report was not quite confident that it was maintaining the ready-made clothing industry in its rightful position, but I believe that it is a duty thrown upon the manufacturers to produce evidence before the Tariff Commission and to make such representations as are necessary in this matter. I hope that the benefit which has resulted in a very great increase in the amount of ready-made clothing manufactured in this country will not be lost to the country.

On that point, I think there is a very serious situation developing in regard to the tailoring trade in general. A few thousand tailors, men and women, may not be of immense importance to some people, and undoubtedly if we allow things to pass on the tailoring industry will die. The craftsman is a comparatively trifling proportion of the population. He generally considers himself lucky if he works three days a week, and in a general way the tailoring craftsman is being wiped out. What has happened? We have established all over the country multiple retail shops from Leeds and London, very elaborately furnished. They are cutting prices; they are taking orders from men and women who fondly imagine in many cases that the work which they are ordering to be done is being done at the factory of that particular firm. So it is. But though a man is measured for a suit in these establishments that suit is made in Leeds. A person goes into a draper's shop in the country; the man in charge of the department will measure the customer for a suit and tell him he will give him a try-on in a few days. In 95 cases out of every 100, unless the customer is very observant and insistent that the work shall be done on the premises, the work is, in fact, done in Leeds and is sent back here to this country as a finished suit, subject to very slight alterations. This process is extending very rapidly indeed, and, I think, for the general welfare, it is a process that ought to be stopped. If the suits are to be made up at the factory—and I think that eventually they will have to be, and that in the main the greater part of the trade will be in the factory—the work ought to be at least under the observation of the Factory Department and the work should be done in this country. I would like quite definitely and without any question whatever, to see some stop put to that process of importing what are ostensibly made-to-measure goods from the factories in England.

There is another aspect of this which is, perhaps, worthy of attention. One hears a good deal about the cost of labour, the excessive prices that are charged by workmen and workwomen, and how large a portion of the cost of the article is due to wages. One gets a little light from these figures in the Commission's report. One can see the relative values of cloth and manufacture. We have the example of the Saorstát manufacturer, with 3¼ yards at 6/- a yard—19/6; cutting, making and trimming; trimming, of course, means a very considerable portion of the item—12/-; factory price, leaving out profits, 34/8. What is a suit which costs 34/8 sold at? What is the amount of profit one would reasonably expect added to the factory price of that suit before it is sold over the counter? We can form our conclusions as to the difference between 34/8 and what is usually charged for such a suit. One can see that such a suit, let us say, would sell at 55/-, leaving £1 as the margin of profit. The total amount due to the tailoring and manufacturing, apart from cloth, is some proportion of 12/-. Therefore a reduction of wages in the workers' and tailors' establishments would not make much difference in the cost of that suit.

I have some sympathy with Senator Bagwell when he says he is forced to vote against the Second Reading of this Bill, because, while he opposes the imposition of customs duties or protective tariffs, this Bill not only imposes tariffs but removes tariffs and makes it unnecessary for some duties to be charged upon transactions of the Agricultural Credit Corporation; so the method of presenting a Bill of this kind makes it difficult for one in Senator Bagwell's position to vote for or against the principle contained in it.

I think that the point made by Senator Douglas regarding Section 3 dealing with motor tractors is quite worth considering, but I take it that the intention here is to introduce a section which points at Henry Ford but which is afraid to mention his name. I do not know what the course of this Bill will be but I would like to draw attention to one point in regard to this clothing tariff. Reference is made in the report of the Commission to the protection of the spinning side of the industry and I want to make the suggestion that the spinning end of the cloth-milling industry is very important and should be fostered. I would like to suggest that, at least, some proportion of the revenue derived from imported cloth ought to be devoted to assisting, by way of bounty or subsidy, the manufacturers of cloth who use their own yarn. That, of course, is another source of trouble to Senators Keane and Bagwell. I think that the spinning of yarn in the country ought to be maintained at the highest possible level and that the most beneficial method of providing the means is to use some of the revenue from imported cloth to assist the yarn-spinners to continue that operation. Naturally, I support the Second Reading of this Bill and I think the Seanad might be induced to make certain recommendations to the Dáil before we are finished with it.

Mr. Barrington

Last week, in connection with another Bill, I took the liberty of drawing the attention of the Seanad to a practice—I think every Senator who was a member of the original Seanad will bear me out —against which we have never ceased to protest. I refer to the practice of holding up Bills, sending them here at the last moment, and attaching to them a recommendation that Standing Orders be suspended to enable them to be put through all their stages at one sitting. To my mind that is a direct violation of Article 38 of the Constitution which states that when a Money Bill is sent to the Seanad for its recommendation a period of no longer than twenty-one days should be allowed for its return. I think, especially in connection with this Bill, that some delay is not only justifiable but desirable. This is a Bill which, I think I am correct in saying, was passed through the Dáil at one sitting.

Mr. Milroy

On a point of order, is the Senator not discussing the motion which is down in my name?

Cathaoirleach

It looks as if he is, but I want to see what he is getting at.

Mr. Milroy

He is distinctly raising the question of the suspension of Standing Orders when that matter is not before us yet.

Mr. Barrington

I am getting at the desirability of considering this Bill to a greater and fuller extent than it could be considered at one sitting.

Cathaoirleach

We are on the Second Stage, and we cannot go much further with it to-day. It has been discussed at considerable length. I think that the point raised by Senator Milroy is a point of order. Perhaps you would defer your remarks until we reach Senator Milroy's motion?

Mr. Barrington

I have a little more to say on the subject, and I want to give my reasons for thinking that the Bill should be sent back.

Cathaoirleach

You wish to vote against the Second Reading?

Mr. Barrington

I think it is an outrage passing these Bills through without giving them the consideration that is necessary, especially, as I said before I was interrupted, as this Bill received very little consideration in the Dáil, where, I think, it was passed at one sitting. I am in favour of encouraging, either by tariffs or otherwise, every industry which can be encouraged, but I think it is most desirable and most necessary to select such industries wisely. I should like to say a word with reference to that much misunderstood gentleman who is generally alluded to as the man-in-the-street. His objection to tariffs is that they increase the cost of living. Undoubtedly, when a tariff is placed on certain goods, the manufacturers have a great temptation to avail themselves of it. I would like to suggest to the Minister that, in cases where goods are manufactured, as indicated by Senators O'Farrell and Johnson, outside the country and are sold at a lower price here than outside, some steps ought to be taken to compel the manufacturers to sell at the same price inside as outside the country. There is another matter about which I would like to get some information. Sub-section (7) of Section 1 provides that the duty imposed by the section shall be placed under the care and management of the Revenue Commissioners. Perhaps the Minister would tell us the exact meaning of that. Is it proposed that these duties shall be left in the hands of the Commissioners to do as they like with them?

Mr. P.W. Kenny

The discussion on this Bill, so far as it has gone, has largely been concerned with the respective merits of free trade and protection as general policies. In my opinion, neither free trade nor protection is bad or good in its application to any particular country. It all depends on the peculiar conditions and circumstances of the country. Free trade may be a very advantageous policy for a country to adopt under certain conditions at certain periods. England, for instance, notoriously established herself as a free trade country by means of a highly protective policy, but when she got to a certain position and could defy all the nations she dropped that policy and openly declared herself free trade because it suited her. Australia in the early days had certain things such as wool, timber and hides to export, but had no manufactures like the ordinary necessities of life, clothing, foodstuffs, and so forth. The English trader sent out all the requirements of the Australian settler, his furniture, food and clothes, and brought home in the same English ships large cargoes of timber, wool, hides, and so forth—the raw materials which suited England. In time Australia had to set up a protective policy otherwise she would never have developed economically and would never have manufactured her own requirements. I had experience, while in Australia, of the various States adopting from time to time both protective and free trade policies—that is, inter-State, between themselves. New South Wales was at one time a free trade colony. Victoria, the adjoining colony, had a protective policy, and there were barriers set up between them. Similarly with Queensland. In my time some of these States broke away from one policy to adopt another. Why? Because conditions altered. That is a factor that must be borne in mind when one comes to discuss the merits of free trade and protection.

Free trade is a good policy in itself in certain conditions and if applied to a particular country and possibly only for a period. In time owing to altered conditions—there is nothing static, things are always changing—some country will find that it will answer and contribute more to its development to drop protection in toto or in part and widen the door for imports. If we follow any one of those policies, as some of the speakers have dealt with them, this state of things might arise: If free trade could be taken as the panacea for all our ills well and good; if you get from other countries what you require well and good; throw down all barriers and let there be inter-play of supply and demand. and let each particular article find its own legitimate natural market in any part of the world. Then you have a state of things that may be quite ideal, but that state of things will not last. That would not be even free trade. You may think that that would be the nearest approach you would get to free trade; yet it would not be free trade, because you would have other factors intervening. You would have the factor of transit. Take Ireland's position under conditions such as that. How would the Irish manufacturer benefit as against the English manufacturer? We had free trade in this country when it was united with Great Britain as the United Kingdom. There was free trade in England and free trade here. Did it benefit Ireland? No; it was ruinous to Ireland because there was the factor of transport which favoured the English manufacturers. Apart from their capital and ability to enter on a scale of mass production, the transport interests intervened and, of course, they catered for their best and largest customers, with the result that differential freights were offered by the transport companies, and both the shipping and the railway companies combined. The English manufacturer could send an article from the centre of England to the centre of Ireland at a price much less than the Irish manufacturer could bring it to his own coast. Therefore, though it may be said that you have free trade for all countries and that apparently on the surface each country can take advantage of this inter-play, when other factors of this sort intervene, free trade is found to be a mockery and is not free trade.

There are other factors such as wholesale advertising which a poor country like this would not be in a position to embark upon. You may say that that would not matter very much, but we find in our ordinary experience what a force advertising is. Take Beecham's pills. I do not know if any of you have a high appreciation of the intrinsic worth of Beecham's pills, but there is the fact that by a process of advertising and propaganda that commodity has developed into a commodity of very great profit to the promoters and manufacturers. I say that when you come to study free trade conditions, other factors intervene which largely undermine the principle of free trade and its logical working. If we were to adhere to free trade, as suggested by certain sections of this House, what would be the position of this country? We are "down the course" from a manufacturing point of view. Our industrial arm has never been developed. It has been crippled by England. England supplied all we required in years past. Suppose those who advocate free trade were right in their contention and that we should not try to manufacture any article in this country which could be imported at a lesser price than it would cost to manufacture here. If that is sound economics what would be the logical outcome of it?

We are a poor country, and we are relatively unskilled from a technical point of view for the establishment of these various manufactures. What would the logical result be if through mass production, the advantage of capital, hereditary skill and other things, everything we want in this country, could be sent in here cheaper than any individual manufacturer or combination of manufacturers, unskilled and untutored as they are, could produce these articles? It would follow logically that we should not attempt to set up any factory in this country at all because of that state of things. Of what benefit would it be to the individual here in Ireland then to purchase the imported article in this country more cheaply than it could be produced in his own country? Where would he get the money to buy the article no matter how cheaply it was offered? Where would the money come from to enable that worker to purchase anything when the manufactures of his own country were sterilised and at a standstill? Where is he to get employment which would provide him with money to buy these very cheap articles? When you work these things out to a logical conclusion you find that they are very hollow. The principle on which we proceed in this country, the Government policy of "hasten slowly," by this selective protection, is, I think, a thoroughly sound one.

If you have any natural advantage for the production of an article in this country, by all means develop the production of that article, because even though at first you may not be able to compete in the markets, yet those natural advantages, geographical, climatic, the nature of your soil for the growth of an article, or the genius of your people to produce it above those of your rivals, will enable you to wear them down. Nurture the product, and while you may be handicapped in the markets at the outset, later you will wear down your rivals. Just as in the case where a person is depending on a national supply of power, if that is available, as in the case of the Shannon scheme, it will be possible to triumph over rivals who depend upon steam and motor power and other sources for their power. We must produce cheaper power, and in that way, in time, we will wear down our rivals. If you have natural advantages, they of themselves will not be sufficient to enable an industry to be started. The Government must come to their aid. It is a question of national development. It is a proper thing for the Government to come to their aid, and it is proper that the Government should subsidise and nurture the tender plant, knowing that eventually it will succeed, and will stand on its own feet in the markets of the world. That, at least, is the hope and the prospect. This is where I come to the point. The woollen milling industry was natural to this country. It grew of its own accord hundreds of years ago, and was prosperous, so prosperous that it was a very serious rival to the woollen merchants in England, on whose representations a policy was introduced whereby the industry was killed. There were grades of that industry. the growth of the wool, the herding of the sheep, and all that. The people found they had a particular genius for cloth manufacture, and the industry grew. We have it on record that it was a highly prosperous industry. That is a reason why it should be revived. It is an industry which has proved itself, that requires no experiment in reviving, and because of that I give my wholehearted support to this Bill.

Mr. Robinson

I wish to support this Bill upon the broad principle that protection does give a chance to increase employment, and that seems to be admitted all round. Even Senator Bagwell admits that. In this case, I happen to know that it will certainly increase employment. A company is being formed which is anxious to open a woollen mill here which will employ up to 60 hands. The one fly in the ointment is this— and I would like the Minister to lend me his ears, as Mark Antony would say—that those interested in the company find that there is no expert dyer to be had so that they would find it difficult to have the dyeing and shrinking of the cloth done here. It would be necessary to have the cloth sent across to England to be dyed and shrunk, and I would like to ask the Minister if he would agree, for some time—at any rate, until the industry is well on its feet—to allow the cloth to be re-imported free. The only difficulty that occurs to me is this, that it might be hard to identify the cloth on being re-imported, but I think that could be easily got over by the simple process of having an identification mark on every yard. There is only one argument that would appeal to me, on a measure of this kind—it seems to be the only argument against the Bill and against all protective measures—that it tends to increase the cost of living. Now the cost of living, as we all know, is merely a relative matter. It is much easier, I think, for a man to pay an increased price when he has got employment than to pay an increased price when he has no employment.

To get down to the point in a common-sense way, after all, I think the Dáil and the Seanad should regard this matter in the light of a pater familias and should be inclined to help the family, as it were, not to be wasteful. I have seen readymade suits advertised in shops in this city for 70/-. I do not know what the current price is. Take the case where these suits are made entirely out of the country. The working man may not know when he goes in and buys a suit that the only thing that remains in this country, as it were, with regard to the money at any rate—the suit will remain, of course—is the profit that the shop gets. The rest goes out of the country so that it is useless to this country. Under the protection of this Bill, we can keep that money here, and every penny saved is a penny earned. Supposing the suit was made entirely here, and that it was necessary to increase the price to 75/-, remember that we are paying the extra 5/- to our own people, that the whole of the 75/- remains here and the greater proportion of it is absorbed in wages, which is the thing that really causes circulation of money. It seems to me to be the merest common sense to say that an increase in the price of a suit of clothes under those conditions is no loss at all. I do not want to go into the arguments that were so exceedingly well put by a number of Senators, particularly by Senator Kenny, but I think that the price of clothes as an argument against protection is absurd.

Mr. Farren

We heard a good deal this afternoon about the theory of free trade and protection. I venture to suggest that if we had a little more common sense amongst the people, not to speak of a little more patriotism—I mean practical patriotism—there would be no necessity for the Minister to introduce such a Bill as we have before us. If there was common sense amongst the men and women of this country they would wear good clothing of Irish manufacture. For that reason, while the theories are all right, I think that if we were a little more practical it would be much better for the country. From the information I have with regard to woollens and tweeds. I understand that 25 per cent. is added to the cost of Irish manufactured woollens and tweeds before the retailers in Dublin get them. That seems an extraordinary statement, but it is true. It appears that the whole output of the woollen mills in Ireland is bought up by wholesale firms on the other side of the Channel, and that they send the goods back in small lots to the business people in Dublin at an increase of about 25 per cent. on the original cost. To start with, Irish woollens and tweeds are handicapped by that 25 per cent. before the proposal that the Minister introduces in this Bill takes effect at all. That is an extraordinary state of affairs. It appears to me, as an ordinary man in the street, as if there was a lack of common sense and business ability amongst the people engaged in this trade. I think Senator Sir John Keane stated that the tailors in Dublin were not able to buy the whole of a piece of cloth, as the customers did not like to be all clothed alike. That does not hold, because there is nothing to prevent a combination of merchants in Dublin from agreeing to take the whole length and divide it amongst themselves.

Sir John Keane

Not at all.

Mr. Farren

If they had the tremendous business abilities that we are always hearing Senator Sir John Keane talking about, they would have done so. I do not profess to be a business man, but, if I was in the position that I had to pay 25 per cent. more for raw material, I would try to get in touch with a few other people in the same industry, instead of paying that 25 per cent. to a handler of the goods across the Channel, and paying the freight to Manchester or Leeds and back here again.

It seems to me that there is something wrong somewhere. Senator Bagwell referred to the man in the street. My experience of the man in the street is this: that he is a whole-hog protectionist as far as the industry in which he himself is engaged is concerned, but he is a free trader for everything else. I think that is largely the mentality of the man in the street. I am not a whole-hog free trader, nor am I a whole-hog protectionist; I am in favour of everything that is good for the country at large. But I do say this, that I believe what would be better than tariffs are subsidies, if you like to call them that, that could be given to manufacturers so that they could equip their works with proper up-to-date machinery and be able more efficiently to carry on their industries than under present conditions. I believe that that would be much better than imposing tariffs. I remember some years ago, in the early days of the Gaelic League and Sinn Fein movements, seeing a number of young men and women going out as active propagandists in support of Irish manufactures and doing a great deal of good for them. It was delightful some years ago to see young men and women going about dressed in Irish homespuns. I am sorry to say that, with all the patriotism that is going about at present, it is very seldom that you see anybody wearing Irish manufactured goods.

Sir John Keane

Why?

Mr. Farren

I cannot say. Perhaps it is because they want to be dressed in the fashions about which Senator Sir John Keane spoke. I may be old-fashioned and conservative, but I say that the fashions that come from Paris and other places like that are not becoming to the young men and women of this country, and I wish that they would go back to the Irish homespuns.

Mr. Blythe

I do not propose to enter into a general discussion as regards free trade and protection, but will confine myself to dealing with one or two points of detail that were raised. It was questioned as to whether the increase in the tariff on readymades up to 20 per cent. would be sufficient. The matter was examined by the Tariff Commission, who took evidence in regard to it, and they were satisfied that an increase of 5 per cent. would, on the whole, prove sufficient to leave the readymade manufacturers in practically the same position as before. Certainly the readymade manufacturers might be worse off. Any manufacturer would be worse off who made his clothing entirely from imported material, but in so far as the readymade clothing manufacturer got Irish-made material at a price equivalent to the price which he had been paying for the imported material, or in so far as he got imported material which was not subject to the duty, either owing to being cheap or light, he would have obtained a definitely increased advantage. A great deal of the cloth used for the manufacture of readymades has, up to this, been imported, and the Irish manufacturers were not able to make it. But now, with the advantage of the tariff, I believe that a great many of them will be able to make it, and while they may not be able to make it quite as cheaply as the overseas manufacturers, they might make it with, say, not more than a ten per cent. addition.

In the case quoted on page 56 of the report, if the person buying these 3¼ yards at 4/- per yard bought Irish material at 10 per cent. more than he had paid for the imported material heretofore, and if we take into account the increase in the tariff on readymades up to 20 per cent., he would be practically in the same position as he was before; he would only lose about 2d. on the cost of the suit. From the examination I have been able to give it, I think that the Tariff Commission were correct in deciding that, taking the manufacturers as a whole, and having regard to the prospect that they would be able to get a substantial proportion of cloth from Irish manufacturers, the increase would be sufficient. If it does not prove to be sufficient they can make their case before the Revenue Commissioners. At any rate, I believe that they ought to be in the position of having to try to get Irish-made cloth; that is, that we should not push tariffs on readymades up so much that they will not need to make any fight to get Irish-made cloth. On the whole, I think it is right to adhere to the recommendations of the Tariff Commissioners, at any rate until some argument can be adduced to show that they are wrong. There has been some discussion between the manufacturers and the Department of Industry and Commerce, and if it proves necessary to adjust the matter, I think it will be possible to deal with it fairly quickly, especially as we have been able to induce the present members of the Tariff Commission to continue in office for another term of two years, so that we will have men who have studied the whole problem to deal with it, if it is necessary to deal with it, and they will be able to deal with it more quickly than a new body. But I do not think it will be necessary.

Senator Douglas said that the Revenue Commissioners decided on what sort of article they would impose the furniture tax. I think he was labouring under a misapprehension there. The Revenue Commissioners take legal advice on any case of doubt as to whether an article which it is proposed to import is liable to tax or not—whether the courts would hold it is covered by the words of the Act. If an importer is not satisfied with their view he can test it in the courts. But there is no such thing as the Revenue Commissioners arbitrarily deciding that this article will be classed as furniture and this other will not be. It is, in the ultimate resort, a matter for the courts, as indeed the interpretation of any statute must be. It was asked why the tax was put under the care and management of the Revenue Commissioners. That is done under the sub-section which puts the administrative machinery, as it were, in motion, which enables the Revenue Commissioners to direct prosecutions, remit penalties, and do all the ordinary things they have to do in connection with any customs duty.

I think that Senator O'Farrell was entirely wrong in suggesting that the £150,000, which it is anticipated will be collected in the first year, has anything at all to do with the cost to the community of promoting this industry. For instance, if the tariff were not 15 per cent. but 100 per cent., I think it is quite likely that a great deal less revenue than £150,000 would be collected, and yet the cost to the community of helping the woollen industry might be greater becaue increases in price would probably be greater. When we are dealing with a tariff the amount collected in revenue has absolutely nothing whatever to do with the cost to the public, and is no guide at all to the cost which the tariff involves the public in, because so far as the money comes into the Exchequer it is not a charge to the public. It enables some other tax to be remitted or prevents the imposition of some other tax, and the only cost, therefore, is the cost of collection. In so far as the public are charged, it is what they pay extra for the home-made article that decides what the additional cost is.

The question of certificates of origin in regard to certain goods which was referred to by Senator Sir John Keane is being dealt with, and the Revenue Commissioners hope to be able to reach a satisfactory arrangement. Senator Johnson referred to multiple shops through the country where people go in and get measured for suits which are made up in Leeds. A great many shops in this country get their suits made up in Leeds. On the other hand, I understand that quite a large proportion of the home clothing manufacturers are getting an increased proportion of that trade. I understand that they are getting well into it, and steadily into the better end of it. I do not say that a great proportion of these suitings are not still made up in Leeds, but I understand that the home manufacturers are eating into the Leeds trade.

Senator Robinson referred to the difficulties of a particular mill which was about to start operations. He wanted to know if it could get leave to send out its cloth to England to have it dyed and shrunk and then be able to import it free. If the cloth were reimported in the same condition as that in which it went out, then under the ordinary customs law the Revenue Commissioners could allow it to come in free. As the law stands, the Revenue Commissioners could not allow cloth which had been dyed and shrunk to be re-admitted free. During the past couple of weeks discussions have taken place between the Revenue Commissioners, the Department of Industry and Commerce and representatives of the woollen manufacturers. They have come to the conclusion that it is best not to make any alteration in that respect. There is a firm of shrinkers here in Dublin. It does not manufacture cloth, so that a mill, such as that referred to by Senator Robinson, could get its cloth shrunk here. The quantity that could be dyed would not be great. Most of the dyeing would be done in the yarn or in the wool. Consequently the question of dyeing would hardly be a serious one. Dyeing only relates to plain cloth. On the whole, I think we ought to encourage the dyeing to be done here, as well as all the other processes. These, I think, are the only points of detail that I need refer to.

Question put and declared carried.