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Seanad Éireann debate -
Wednesday, 14 May 1930

Vol. 13 No. 20

Marketing of Irish Butter. - Motion for Establishment of a Tribunal of Inquiry.

I move the following motion which stands in my name:

That it is expedient that a tribunal be established for inquiring into a definite matter of urgent public importance, that is to say:—

(1) the marketing of butter produced in Saorstát Eireann during the five years ended 31st December, 1929, with special reference to the effect of combined marketing on the demand for and price of butter produced in co-operative creameries, and

(2) the method of marketing butter in future which would conduce most effectively to increase the demand for butter produced in Saorstát Eireann and the price obtainable for such butter relative to the prices obtainable for other butters, without adding unduly to the cost of marketing.

A motion in identical terms was proposed in the Dáil practically two weeks ago and was carried without a dissentient. It is essential for the complete functioning of this tribunal that a motion in similar terms be also passed in the Seanad. The matter is one of urgency, and certainly one of public importance. I ask the Seanad to pass it, if possible, unanimously. Inasmuch as the Minister for Agriculture is present and may like to give details of the case, I do not intend to say very much in moving this motion except this: that following an investigation some few years back into the efficient marketing of butter, a selling Federation, called the I.A.C., was brought into being. This Federation had for its object the more efficient marketing of Irish butter with a view to securing, of course, a better return to the farmer. That was to be done through such methods as effecting economies in handling and freightage charges and above all things in the elimination of the competition, sometimes cut-throat competition, between the creameries themselves. This Federation, as I say, was brought into being. Whilst the idea underlying it was right and the principle was eminently sound, it cannot be said that the results have been too satisfactory. The main reason for that is that quite a number of the creameries, both proprietary and co-operative, remained outside of this selling Federation, fully 20 per cent. of them refusing to join.

At various times this 20 per cent. of Saorstát creameries have been invited by the Federation to join, but they have constantly refused. They give as their reason that they can do better for their farmer suppliers in the creameries outside the Federation than those inside it can do for theirs. Occasionally they have produced figures dealing with various aspects of the case. Sometimes they produce figures to show that some of the creameries outside the Federation had actually secured for their suppliers a better return, in terms of 3/- per hundred more for the butter which they marketed, than was obtained on behalf of creameries inside the Federation. That was their reply to the invitation to join the Federation. On the other hand, the representatives of the Irish Associated Creameries say that whilst there might be some truth in those figures they were not of any general application. Moreover, they pointed out that the happy result that was effected by creameries outside the Federation was brought about mainly through the existence of the Federation: that those outside creameries are reaping the reward due to the existence of the Federation without in any way attempting to shoulder any of the obligations incurred by the federated creameries —financial or otherwise. The matter has been argued pro and con for the last one and a half years. We have the rather unhappy position that the trade certainly is not in any way being helped by this position. It is not for me to go into the case on both sides. I take it that will be more of a matter for the tribunal, if the Seanad decides that a tribunal be set up.

May I say that, arising out of all these discussions, that at the annual congress of the Irish Dairy Shorthorn Breeders' Association held in the early part of this Spring—a congress composed of representatives of the various associations engaged in that most praiseworthy task of cow-testing—a resolution was unanimously passed asking the Minister for Agriculture to set up a tribunal to inquire into this matter. At the Congress of the Irish Farmers' Union held subsequently—a Congress to a small degree representative of both parties, the federated creameries and the outside creameries—a resolution was also passed unanimously asking the Minister for Agriculture to set up this tribunal. As a matter of fact, both parties to this dispute have asked that the Minister for Agriculture should set up a tribunal to inquire into the matters set forth in the motion before the House. Where you have unanimity to that extent, I trust that the Seanad will give its assent to the setting up of this tribunal. Very rightly, of course, the scope of this inquiry will embrace matters other than those to which I have referred, such as the questions in dispute between the associated creameries and those outside of the Federation. If, as the result of the investigations carried out by this tribunal, a solution is found for that dispute, and of any survey it carries out, the situation is explained why Danish butter practically all the time is able to secure a higher price than Irish butter on the British market—the difference in price being sometimes as much as 25/- per cwt. in favour of the Danish—if the tribunal succeeds in solving or helping in any way to solve that problem, in what is a portion of our national production, then it will deserve very great credit indeed.

From what I know of the personnel of the proposed tribunal, the Minister for Agriculture has been very fortunate in getting together a group of men who combine capacity with certain very definite experience and, if I may say so, that judicial-mindedness which will be the greatest possible asset to them in the carrying out of their investigations and making their report. These men, so far as I know them, have had experience of practical farming; they have had experience in co-operative development, and some of them, at least, are men who have been engaged in trade development. They are men who have had very considerable experience in many fields. I think, therefore, that the Minister has been very fortunate in being able to get together a tribunal with such a personnel. I understand that all these gentlemen have consented to act upon it.

Will the Senator tell us their names?

They are Messrs. Vaughan, Duggan, Dulanty, Colbert and McAuliffe. So far as I know these are the names of the five gentlemen who will constitute the tribunal which the Minister for Agriculture proposes to set up. I am personally acquainted with four of them. I consider they are men who have qualifications which will enable them to make a very full and complete survey of the whole position, and whose report, I believe, will be most valuable. I think they can be relied upon to approach the matter in a proper spirit. I hope that the Seanad will be unanimous in giving its approval to the proposal.

I move as an amendment:—

To delete in line 4 the word "five" and to substitute therefor the word "fifteen".

Obviously the object of the amendment is merely to extend the scope of the inquiry. Possibly, the Minister for Agriculture can give us very convincing reasons why the scope of it should not be extended beyond five years, but on the face of it the period seems to me to be too short. The period of five years mentioned in the motion includes about two and a half years' trading under the I.A.C., and two and a half years of non-combine selling. The history of butter selling goes back a good deal further than five or fifteen years. The period of fifteen years suggested in the amendment would include a greater portion of the time of the non-combine selling. I think that a great deal more is to be learned from non-combine selling of butter than might prove to be the case if the terms of the motion were restricted to five years. The fifteen-year period suggested by the amendment also would include a period similar in some respects to the past few years under the I.A.C.

During the war years, and portion of the post-war period, certain things occurred that aroused a great deal of suspicion in the minds of creameries and other people who are suppliers of butter. These suspicions still hold good. At all events they are still there and are the cause, I think, of a good deal of suspicion of the I.A.C. and of combined selling generally. The suspicions are like this, that during that period of almost butter famine legal prices were fixed, but some of these people have told me that butter was actually sold at a greater price than the price that was returned to the producers. They suspect that something was radically wrong. I do not know whether these statements can be proved or not, but I do say this, that if the period is extended there will be evidence to show that something was radically wrong then. These people will feel that, unless that suspicion is eradicated, the tribunal will not have done its work properly. Because of that, they are afraid of the possibility that something similar might occur again.

With regard to the facts mentioned by Senator O'Hanlon, that under the combined selling scheme of the I.A.C. eighty per cent. of the creameries are getting from 3/- to 4/- per cwt. less for their butter than the creameries which are fighting their own individual battles outside the Federation, perhaps the Minister for Agriculture would confirm those figures or give us some indication as to what the position actually is. It seems extraordinary that the individual creameries working on their own, each one having to bear its own overhead charges, are able to do so much better than the 80 per cent. in the combine, with, so to speak, only the one overhead expense. It seems rather extraordinary that the 20 per cent. creameries working on their own are able to do so much better than the 80 per cent. in the combine, and that in this matter of price there should be this big margin between the two. That is a matter that requires to be cleared up. Unless there is a very good reason why the inquiry should not extend over the fifteen-year period, then I think my amendment should be accepted. We are all very anxious to see this tribunal become a success, but most of the tribunals that have been set up have been looked upon with suspicion, and so will this one, I think. It certainly is by a number of people vitally concerned such as creamery managers.

Senator O'Hanlon told us that the setting up of this tribunal was mooted by people inside and outside the Creamery Federation. I have it as fairly definite from people who seem to know a great deal about this business that not one of the creamery committees was anxious for this tribunal at all because they feel it will merely whitewash the system in operation at the moment. They feel that that system is wrong, although the idea of combined selling is obviously a good one. At all events, I think if my amendment is accepted, extending the period to fifteen years, that a good deal of evidence which might prove useful to the tribunal would be brought forward.

I second the amendment. Senator Robinson, in my opinion, was quite right in saying that it is highly desirable that there should be a tribunal to examine into the question of the marketing of butter. If an exhaustive inquiry is desirable, I do not see why it should be limited to five years. If the tribunal is to do good work, as no doubt it will, why should the scope of the inquiry be confined to five years as from the 31st of December last? We had some very interesting periods in the butter trade which occurred more than five years ago—some of them up to ten years ago. I think the Senator's amendment is a reasonable one. I do not know who the members of the tribunal are. The proposer of the motion has given us the names of them, but so far as I am individually concerned they might as well be numbers. I hope they are men of experience and that they are not all officials, that they are thoroughly well acquainted with the sale of butter, not merely Irish butter, but of butter of various countries of origin. As I understand it butter is blended in England now no matter where it is sold. The speech of Senator O'Hanlon rather indicated that it was a desirable thing that all creameries should be tied. I use the word "tied" in no offensive sense— that they should be all under the one board. My idea at present is that I would like to see a few free creameries and a few free farmers, if it were nothing else than to encourage competition in the quality of butter.

It is said that the free creameries get 3/- per cwt. for their butter more than the combine. I do not think that is conclusive in favour of the free creameries, but certainly it is a matter to be considered. I saw the other day a most amazing fact that a grand old farmer and his wife in Cheshire made the best cheese in England in their farm and I am quite certain that the farmers of the County Clare that I know so well and who have a great objection to creameries, make as good butter as any of these creameries. If they have an objection to creameries it is because they are interested in the raising of livestock. They make very good butter. I should be very sorry to see all the creameries that are now free and in free competition as regards the quality of their butter, tied up in a combine. I would not like that it should go forth from the Oireachtas as a sort of instruction to this tribunal that they were to make a report in favour of the tied creameries.

Cathaoirleach

That is not suggested in the motion before the Seanad.

It is not, but I am certain that it was not absent from the Minister's mind, and it was indicated in his speech.

It was stated in the Minister's speech that it was a desirable thing that there should be more of them in——

Cathaoirleach

I must ask the Senator to confine himself to the motion.

I am confining myself to the amendment proposed by Senator Robinson. I ask the Minister to accept his amendment so that the scope of the inquiry should not be limited. I would like to see this matter thrashed out. I am thoroughly in favour of the plans which have continually been thought out for the improvement of agriculture in Ireland, for the improvement of the butter trade, and for the improvement of every aspect of Irish agriculture. Anything I say is not to be taken as a criticism of the energy that has been displayed. Sometimes the policy probably is not right. This is not a party question. It is a national question. We are dealing with our own industry, the only industry in this country. Everything else is subsidiary to the agricultural industry in this country, and not being a party but a national question this should be approached as a national question. I am sure the tribunal to be selected by the Minister and the men he will appoint on that tribunal will approach it in a judicial spirit.

I do not think it would be advisable to adopt the amendment down in the name of Senator Robinson. It would add enormously to the time necessary to make the report; it would delay the findings of the tribunal, and it would deal with a period during which control was exercised in London. Nobody in this country could really give any information there that would be of any use, and even if they had got all the information it would be really of no use. It will be found that five years is a very reasonable period. If I had the picking of it myself I would say six. Five, I think, includes the number of years' experience that will give all the information necessary for the tribunal to get rationalisation, if I may call it so, the formation of a great number of selling agencies in England, and buying with co-operation and co-ordination of shops. There has been a distinct change in trade in the matter of shops. All these things have taken place within the last five years. The combined marketing is only in existence two or three years. For that reason, I really think that five years in the Bill is a reasonable time to allow the tribunal to get through its work and get the information which will be necessary for the Department of Agriculture to have.

I wish to support this motion. This whole question of creameries is developing into a very serious situation. Some people are inclined to blame one thing—to blame the I.A.C. and other people are inclined to blame the independent creameries. I believe a good deal of trouble about prices comes through the creameries that are independent. The I.A.C. lends itself to better prices and efficiency in marketing. I believe myself that the reason why the independent creameries get better prices is because of the fact that they are independent. Buyers on the other side are up against the Central Marketing Board here and they were rather reluctant to buy from the Central Marketing Board even at a lower price than the independent creameries are offering. Then the combined creameries when there is an oversupply of butter in some other places in the market, hold up their supplies for a time and the independent creameries take advantage of that. The result is that sometimes they can show a very small amount over the price paid to the I.A.C. I think that the worst thing that we are suffering from in the way of competition at the moment is the subsidy menace from Australia and New Zealand. That subsidy amounts to 1½d. a gallon in those countries. Some people may say that we are in close proximity to the British market here but nevertheless it is hard on farmers here to stand up against a subsidy of 1½d. a gallon given to the farmers of Australia and New Zealand. I believe myself that the only solution of this difficulty is to subsidise the Irish creamery suppliers. That, I think, will be a matter for the tribunal to look into and to inquire into. I wish to support the motion.

As I understand it the motion is in two parts. One is that the tribunal would inquire into the marketing of butter produced in Saorstát Eireann for the past five years. Then there is the suggestion that instead of inquiring for five years the tribunal should go back for fifteen years.

Cathaoirleach

That is not in the motion. That is the amendment.

It seems to me that five years would be long enough for the tribunal to go back to inquire into the marketing of butter. The second part of the motion deals with the best method of marketing Irish butter in future and how the demand for Irish butter could be increased. That underlies the whole motion. That was not very clear in the beginning.

Perhaps it would be convenient for me to ask the Minister for information on one point. I am anxious to get his opinion on this —the motion refers to the marketing of butter. I would like to know whether that includes, in addition to creamery butter, factory butter, farmers' butter. At the Congress of the Farmers' Union the resolution asking the Minister for an inquiry was confined to creamery butter, that is, to ascertaining what really is the dispute between the free creameries and the combined creameries. It was felt at that Congress that it would be inadvisable to do anything to interfere with the home manufacture of butter by the farmers, especially so in districts where no creameries have been established, and where it is not likely that there would be any creameries established. I take it that this tribunal will report on these matters and that before any steps are taken to hamper or prevent the export of farmers' butter legislation will have to be brought in here. I see by a report or statement in a paper issued by the I.A.C., called the "I.A.C. Bulletin," that the cessation of the export of farmers' butter in a very short time is anticipated. This is an extract from that paper: "It is true that until the end of last year nearly 25 per cent. of the butter exported was factory and farmers' butter. But in view of the new export regulations which we understand are to be put in force next year, and owing to the progress made by the new creameries which have been established in districts that were the principal feeders of the Cork butter merchants, it is reasonable to expect that in a few years the only butter exported from the Free State will be creamery butter." That makes it a very serious matter for the farmers who have to rely on home-made butter. I would like to hear from the Minister if it is his policy to shut out farmers' butter from all chances of export— on its merits, of course. If it is sold as home-made butter and not as creamery butter, this butter should not be prevented from being sold on its merits as farmers' butter.

As Senator O'Hanlon and Senator Guinness pointed out, this tribunal is to inquire into the marketing of butter produced in Saorstát Eireann within the five years ending 31st December last and report how it should be marketed. With regard to the amendment this tribunal will inquire into the marketing of creamery butter only; it will inquire into the marketing of any other butter only in so far as that reacts on creamery butter. The amendment before us suggests that a term of fifteen years, instead of five years, should be inserted in the motion as the period to which the inquiry of the tribunal would apply. If we intended to control butter again there would be some point in that amendment. But there is no intention to go back to war regulations and to control butter here. There would be no point in inquiring now into how the butter was marketed during the war unless we wanted to gain experience from that control. But as there is no intention to control the butter, that matter does not arise. Therefore, there is no point in making that. The experience as to how butter was marketed during the war will give us no information whatsoever as to how butter should be normally marketed. Further, it would be quite out of the question to extend this period for seven, eight or nine years, not to speak of fifteen years. As Senator Dowdall said, it might be better to have it extend over a period of six years instead of five, but there is not much in the difference. The fact is that the motion must be passed in identical terms with a motion which was passed in the Dáil. It would be most inadvisable to extend the period to eight years. This tribunal will be under the necessity of getting information voluntarily from a number of creameries, voluntary bodies, societies and business men, who will not be paid for any information they give. They will supply the facts that they get from their books. The tribunal, for instance, will call possibly for a considerable amount of statistics and trade information from co-operative creameries which will entail on the secretariat looking up their books for five or six years and the making out of quite exhaustive returns. There is no reason why the difficulties of all these bodies should be added to. It will be a severe enough strain on the creameries and business men to make the examination for five or six years without our asking that they should go back over their books for seven or eight years. We are satisfied that if we can get the information we require with regard to the last five years that the tribunal will have sufficient data to go upon in order to make their recommendations. I do not think it is necessary to deal with a number of the points raised, except to say this—I understand from Senator Robinson that he really wants the inquiry to go back to the war period, because he suspects there was something wrong in the matter of prices, that full prices were not paid, and he suggests that something is wrong.

I am not suggesting it personally, but people are saying that there were many things wrongly done.

It is a pity we cannot hold an inquiry in this country without putting some people in the dock, because that is how it strikes me. There is no intention to put anybody in the dock. This is not an inquiry into the operations of the I.A.C. Neither is it an inquiry into the operations of those outside the combined creameries. It is an inquiry into the marketing of butter. We would be glad if the I.A.C. can give us the benefit of their experience and the information at their disposal. We would be glad if the outside creameries do the same thing. But I want to make it quite clear that we are not in any way making any implication against either the I.A.C. or the outside creameries. This is solely an inquiry into the marketing of butter. I am not in a position to give the Senator information with regard to prices. I do not know if the prices obtained by the outside creameries were, in fact, higher than the prices obtained by the I.A.C. It is to find that out, definitely, that we are setting up this tribunal. I do not want to express any opinion on the merits one way or another until this tribunal reports.

Will the tribunal be empowered to call for papers and to administer oaths?

Yes, that is the point of this resolution. That is why we want a resolution passed by the Dáil and Seanad.

I am not quite convinced that it would be better to confine the inquiry to five years, but there is one argument used by the Minister that the terms of the resolution must be identical with that passed by the Dáil, and that the amendment would spoil it. As we are all most anxious not to delay the inquiry, or to upset it in any way, I beg, with the leave of the House, to withdraw the amendment.

Amendment, by leave, withdrawn

The amendment in my name is:—

2. To add at the end of the motion a new paragraph (3) as follows:—

"(3) At least one member of the tribunal shall be solely engaged in the marketing of butters of various countries of origin."

In other words, that a butter merchant should be a member of the tribunal. I put down this amendment on the last day, and I expressed the hope that the Minister here would accept it. Since then I have had the advantage of an interview with the Minister in connection with this, and he very fairly put it to me that if one or two representatives of that kind were on, possibly it would make those who had useful information to give to trade competitors rather reluctant to give it. Again if one sectional interest were represented another sectional interest would seek to come in, which is not what he desires to have, and I see his point of view. The information that I think would be usefully disclosed to the tribunal by such a man or men as I have indicated can be given in evidence before the tribunal. With the leave of the House I beg, therefore, to withdraw my amendment.

Amendment, by leave, withdrawn.

I would like to draw attention to two points, rather of form. The Minister pointed out that it is necessary to have the motion introduced in identical terms in both Houses, and the motion reads:

That it is expedient that a tribunal be established for inquiring into a definite matter of urgent public importance.

If the facts are that it was passed in the Dáil a couple of weeks ago, and that it was on the Order Paper there for a week before being passed, there is nothing very urgent about it. It is well to point out that that is a pretext, a form so that the Act under which the Order will be made will enable the tribunal to call for sworn evidence. My point is that it would be desirable to get some amendment of that Act so that tribunals of this kind can be established without having to use this kind of phraseology which is not, on the face of it a fact or is not correct.

The second point is that paragraph 1, and in fact paragraph 2, refer to the marketing of butter. I take it once the tribunal is set up it is settled under the terms of the resolution that the Minister's authority over the tribunal will only exist so far as the scope of the inquiry is concerned. If we say in the resolution that the inquiry shall be into the marketing of butter and the Minister here states that it shall only be into the marketing of creamery butter, it is rather a contradiction. I think if the Minister desires that it should only be an inquiry into the marketing of creamery butter, the resolution should have stated that. The Minister hopes and intends that the tribunal shall only inquire into the marketing of creamery butter, but it will be still within the province of the tribunal to inquire into the marketing of all butter provided they pay special attention to the marketing of creamery butter. I think if that was the intention of the Minister it should have been embodied in the resolution and the wider possibility should not have been allowed.

The resolution was deliberately framed in these terms. The point which Senator Johnson has in mind was thought of. The intention was to inquire into the marketing of creamery butter, and a resolution for that purpose had to be drafted. It is quite clear that when we have an inquiry of that sort, into the marketing of any product, especially into the marketing of butter, a product of which there are three or four classes, that possibly you may have at some stage of the inquiry to make some inquiries into the manufacture of factory butter to find out its reactions on the marketing of creamery butter. It was deliberately drafted in that way. It is quite possible that evidence will be given that factory butter or home-made butter had some effect on the price of creamery butter in special instances, at a special point, or on a special market. That matter should be investigated, and it was to enable the tribunal to make inquiries like that which were relevant that the resolution was drafted in these terms. It would be absurd, in my opinion, to draft the resolution so rigidly that afterwards when the tribunal itself came to examine the complexities of the case, it tied up the tribunal in such a way that they could not make whatever inquiries they thought were essential.

Would it not be within the province of the tribunal to interpret their terms of reference?

That is not likely, that is not business. We all know how these things are done. We do not appoint men to the tribunal without first asking them will they act or without first discussing the matter with them. I say that although it might be said that I was trying to prejudice the judges. That is not so. When you come to the conclusion that a certain individual would be quite a good man to act on such a committee, you discuss it with him. You tell him what the scope of the inquiry is to be and you consult him in regard to the terms of reference. To a great extent the terms of reference were drafted in consultation with the Committee, on their advice and on suggestions from them. I would like to see, if Senator Johnson thinks there is anything in the point, a resolution which would be as rigid as he wants it and at the same time give the tribunal all the powers which they have.

I do not want it to be rigid. It is you who made it so rigid.

I am in favour of setting up the tribunal, but I would be more pleased if the people at variance, that is the outside creameries and the associated creameries, were satisfied that the personnel of the tribunal will be impartial, one which they will obey when the results of their investigations are made known. Supposing the report of the tribunal is to the effect that they should all combine, will it mean that the Minister will come forward with a measure to force these people who are unwilling to-day to join the combine into the combination? Is not the object of the motion to force these people by ministerial interference into whatever the tribunal recommends?

It is not.

Cathaoirleach

That is not in the motion.

The motion is for the purpose of setting up a tribunal. The tribunal has to inquire into the marketing of butter. Why is the marketing of butter to be inquired into? Because there is a dispute between the two parties. The Minister cannot have any legislation without having a motion of the kind passed. If the tribunal has to use the big stick on the 20 per cent.——

Why should I be blamed for doing wrong until I actually do it?

There is a motive in setting up the tribunal—to inquire into the marketing of butter. We are told that the genesis of the motion is the resolution passed by the Farmers' Union and the Cow-Testing Association. Who knows whether that resolution was not engineered by the Minister himself, that he was not merely looking for an excuse upon which to hang the idea of setting up a tribunal? He could not set it up without some reason. The reason for bringing forward this motion is that a resolution was passed by the Farmers' Union. Probably he engineered the resolution, as there has to be a tribunal, and a report from that tribunal, on which to base legislation. That is the reason I say that the two parties should agree that it is an impartial tribunal, that they should agree beforehand on that matter.

May I ask what the name of the chairman of the tribunal is?

Mr. Dulanty. Senator Comyn stated that he did not know any of the members of the tribunal. If he were in the butter trade he would have known them. Mr. Dulanty is our Chief Trade Commissioner in London. Mr. Vaughan, another member, is well known as a member of the Feenagh, County Cork, Creamery Committee. He is well known amongst dairy farmers. Mr. Duggan is connected with the Two-Mile-Borris Creamery. Mr. McAuliffe is an officer of the Department of Agriculture. He is our special expert in dealing with creameries and in the matter of marketing of butter, and he is well known to the people interested. Mr. Colbert is the Chairman of the Agricultural Credit Corporation. It would be impossible to get a body on which all parties would agree. I would not set out to do it, and it would be a very bad body if I did.

I would like to know if either of the gentlemen mentioned by the Minister is in any way connected with a free creamery?

I could not say.

I would suggest Mr. Deasy as a man of great experience, who is outside the combine.

I am actually unaware whether Mr. Duggan or Mr. Vaughan belong to creameries inside or outside. I have no personal interest in the creameries inside or outside. I have no views on the question at the moment. But when the facts are investigated and presented to me, I will probably have very decided views.

Motion put and declared carried.
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