Appropriation Bill, 1930—Second Stage.

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

I desire to raise some questions on this Bill, and I should like to know, as a matter of procedure, whether these questions should be raised now or on the next stage. I do not know whether matters dealing with departmental jurisdiction should be raised now or on the Committee Stage.

Cathaoirleach

It has been the custom to allow full discussion on the Second Stage, and I do not propose to depart from that. If there are specific questions of which it would be desirable to give the Minister notice they could be raised on the Committee Stage.

Perhaps I should take advantage of this stage to deal with a couple of questions which I wish to raise. A year ago, on a similar Bill, I put forward certain suggestions to the Minister to which he promised to give consideration. I want to be more precise now because, although consideration may have been given them, an answer was not forthcoming. It is, perhaps, a rather small question, but it is well it should be on record that there is certain tabulated information which has been made available to certain Committees, mainly, I think, the Economic Committee, and that is at the disposal of a certain number of members of the Dáil and, perhaps, of the Seanad, which is regarded as nominally confidential. I asked whether it would be possible for the Minister to secure the publication of that information for the benefit generally of Senators, Deputies, and the public. I will give the Minister a list of certain documents, of which I have copies and which, without divulging the authority, I have used, which I think ought to be made public. I do not think that there is any privacy about them.

One is a table containing a computation of capital invested outside Saorstát Eireann by persons resident in Saorstát Eireann and not resident in Great Britain or Northern Ireland. The next deals with the computation of capital invested in Saorstát Eireann by non-residents. The third table is a summary of external trade for 1927-8 or for a later year, if such information is available. The next deals with the annual consumption of the principal foodstuffs by persons in Saorstát Eireann. The next is the estimated quantities and values of food consumed by livestock in Saorstát Eireann in 1926-7. The next document gives the food values in calories per acre of the principal farm crops. The next table deals with the number of persons who could be maintained for a year on the average produce of 100 acres growing the principal crops of the United Kingdom. These tables were presented for the consideration of the Economic Committee. There are other tables of public importance which, I think, were presented to other committees, and I am anxious that the Minister should release for public use the information contained in these tables and such other similar information as he can, without divulging anything of a confidential nature. The more precise the information of this kind that is available the better equipped we shall be to carry on the business for which we were appointed.

I want to ask the Minister to give consideration to the position of civil servants in respect to their periodical revisions of salary by way of fall or rise in bonus. There is a fairly general belief, when one sees the figure 75 as the cost of living index. and when one sees that a civil servant is paid a certain basic salary, plus the cost of living bonus, that the full amount of the cost of living index figure is added to the standard basic salary or wages of the civil servant. That is not correct, and if one takes the trouble to examine the Book of Estimates, page 3, it will be seen how the bonus is calculated. It is important we should realise that there is a very considerable gap between what is commonly believed and what are the facts. When a civil servant has a basic salary of 35/- per week, the full amount of the bonus based upon the cost of living index figure is added, but above that up to £200 per year only 60 per cent. is added. The plea which I make is that that practice should be modified, that the facts of life should be taken into consideration, and that the full bonus should be added within a much higher range of salaries than is the case at present. I take, for illustration, the position of a civil servant with a basic salary of 35/- per week. On an index figure of 75 he receives 26/3 bonus, making his salary 61/3. If he has a basic salary of 50/- a week the bonus is 31/5, making the salary 81/5. It is not true, if one makes a calculation, to say that the bonus on the 50/- is the full bonus and that such a man gets the equivalent of the increase in the cost of living added to his salary.

The effect of this practice is that, as the cost of living index figure is falling, the position of such civil servant is gradually being debased, and that is especially true if he is a civil servant living in Dublin. We know that a very big proportion of civil servants live in Dublin, and have all the conveniences as well as the inconveniences, especially the monetary ones, of residence in the city. The cost of living index figure is based on certain calculations which I think are, in the main, quite accurate for the purpose of arriving at an index of relative prices, but unfortunately in their working out they bring, in my opinion, injustice to civil servants living in the city. For instance, in the case of a man receiving £3 a week, including bonus, there is a kind of assumption, within the bonus calculation, that his rental will not be more than 3s. 3d. per week, and that if he is receiving £4 a week the rental in his case will be about 4s. 4d. That is obviously not in accordance with fact, and, as the fall comes in bonus, his actual earnings are reduced, and his relative position is much worse than the public generally imagine. The plea which I am making to the Minister, and which I ask the Seanad to support, is that there should be a suspension of the reductions in salaries at this stage, that there should be something like stabilisation of civil service salaries, pending a thorough inquiry into the incidence and the method of application of these bonuses. It is correct to say, I think, that in the fairly analogous cases of bank clerks there has been agreement that below 75 there shall be no further reductions, while most of us know that there has been a suspension of reductions of salaries in Great Britain pending the Government Inquiry which is being held as to the effect of the bonus system and the general position of civil servants in Great Britain. If the fall in cost of living which is anticipated by many—due to fall in food and commodity prices—were shown in the actual household budget of the civil servant, one might say that the case I am making is not a very strong one. If one could see a steady decline in the household expenditure of the civil servant by virtue of the fall in the cost of living index figure, then the case might be somewhat weak. But the experience of anybody will prove that in respect of a very great proportion of the civil servants— those who live in Dublin, and especially those who have come into Dublin since the establishment of the Saorstát—their household expenditure does not decline in accordance with the cost of living index figure.

Therefore, when a reduction takes place in the index figure a reduction takes place in the salaries, and because of the reduction in the cost of living index figure the civil servant is actually debased in his standards. I think it is unwise that the minds of civil servants should be affected by the feeling that their earnings are steadily declining. Civil servants are recruited with a genuine expectation that there will be annual increments, but the effect of the downward tendency in the cost-of-living index figure is to annul the expected annual increments and that along with other things is causing a considerable amount of misgiving and dissatisfaction in the Civil Service.

I am making the plea that at this stage there ought to be a promise given by the Ministry that the earnings of civil servants will be stabilised for the time being, that there should be a full inquiry into the incidence of this bonus system and how it affects the Civil Service in general, and that such an enquiry should be in accordance with the practice in industries; that is to say, that there should be some collaboration and consultation with the parties who will be affected by the result of the enquiry. I mean that bodies of civil servants who have made representations seeking to be heard by the Minister on this and cognate matters, should have a genuine opportunity to make their case to the Minister and have their grievances discussed. I do not want to go into details about the difference between the civil servants who are represented on what is known as the Representative Council and the great majority who are not represented thereon, but there should be an opportunity given to the civil servants who are not represented on the Representative Council to be heard by the Minister on this and other matters. I hope that it will be possible for the Minister to give a sympathetic reply to this request. It is not proposed that there should be any increase in the charge upon State funds by this action. The utmost that is suggested is that for the present a possible decline in the amount paid will be averted. But the matter is of great importance. Many thousands of people are affected and I think the Minister realises that there is an amount of unrest and dissatisfaction, not due to the agitations of a few but to real dissatisfaction with the application of the bonus method, especially in regard to the smaller incomes and such dissatisfaction is not healthy.

The only logical reply that I think can be made to this plea is that it the cost of living index figure came down to the 1914 figure, the basic salary, all would be well. I do not know what the Minister's view may be, but I think it will be generally admitted that in the class of citizens who constitute the Civil Service there has been a raising of living standards, and that it is not thinkable, even though the cost of living index figure fell to 100, the original standard, the rate of salary would come down to the basic. I do not know whether the Minister has an idea in his mind that those basic salaries would be sufficient if the cost of living figure came down to the 1914 figure. I hope he does not take that view, and if he does not then it seems to me that there can be no justification for the continuance of the present cost of living bonus calculation, because it can be shown. I think conclusively, that 35/- a week is not the whole of the household income which is spent upon necessaries or upon that class of article which went into the family budget upon which the original cost of living index figure was based. Thirty-five shillings a week will not suffice to provide a family with the commodities that are required and which are affected by the cost of living index figure. Therefore, I hope the Minister will agree that there has to be a point at which there will be stabilisation. I am asking that he should agree that that point has been reached now, at least pending a further enquiry into this whole question, and that he will agree to institute such an enquiry.

I would like to raise a matter that has been very much discussed in the country. It was discussed lately in the newspapers and in the Dáil, and was raised very indirectly in the Seanad. It is a matter of great importance, concerning the sum of £50,000 of public money. In 1924 an Act was passed called the Trade Loans (Guarantee) Act, the object of which was to give loans to industrial concerns in this country that were likely to succeed—a very proper purpose. A company called the Industrial Trust Company of Ireland was started, with which the Government came in touch in 1926. Large sums were being invested in this Company, and the Government asked leave to allocate £50,000 to it as part of its capital. I think another £50,000 was taken up by an American group, and about £50,000—or it might have been £100,000—was put in by other people and by the banks in this country. The matter is one of considerable importance, and as nobody knows what the actual position is, I am now asking for information about it.

The articles of association of this Company give a list of powers covering an immense field of action in Ireland and elsewhere. The capital was stated to be £250,000. When the matter came up in the Dáil the President stated that the directors of the Company at that time were David Telford, James Douglas, W. Lombard Murphy, Hugh Kennedy and John Mackie. He also stated that the powers of the Company covered practically every industrial and speculative investment that could possibly be made, either in Ireland or elsewhere, and he summarised them in the following way: Underwriting, financing investment of all kinds, lending and borrowing, banking trust, guarantee, title business, management, promotion, purchase and sale of companies, undertaking properties and other businesses, and brokerage, agency and commission business. That is a summary of their extensive powers, and the President himself stated that one of them covered half a page of foolscap. "The main object, however," he went on, "is to help to finance industrial and commercial undertakings in the Saorstát, and in particular to make loans, the service of which has been guaranteed by the Government under the Trade Loans Act." I do not suppose that anybody would be likely to object to that, but it is very questionable if it was wise to hand over all these extensive powers to a company which had power to go to the London Stock Exchange and invest in practically anything that they liked. Apparently they had that power from the articles of association, and I am afraid that they actually availed of it.

The question was whether £50,000 of the nation's money should be invested in a company with such powers, and the Government, very properly, nominated two persons of integrity to represent it as directors. I presume this was entirely a commercial concern and did not affect to be a Government concern, that the Government were only concerned in so far as there was £50,000 of theirs invested in it. I presume the two directors were on the board, so that the Government could be informed if anything went wrong, or if wrong things were being done. Not very much was heard about this Company at least by me, until lately, when it turned out that it had got into serious trouble, having lost money both in Ireland and abroad. In the Dáil the Minister admitted that there had been serious losses—that there had been losses in the Free State but that those losses were not comparable with the losses abroad. I do not criticise them on account of any losses that happened in the Free State through reasonably investing to help industries, even though they may not have been very wise, because the object was good, and because investments may often go wrong, but the question is: Was it right and proper to lose large sums of money on the London Stock Exchange?

The Minister gave some sort of explanation of that. He said particularly that it was clearly understood that the money was not to be limited to gilt-edged securities, but he stated that the securities ought to have been proper industrial securities. That was a very likely and a very reasonable thing to do, because there was the large sum of £250,000 available, which very likely could not be properly and wisely placed in Ireland straight away, and something had to be done to use the money. If it had been placed in proper industrial or other securities it would not really have been so very bad, although I think that such public money should only have been invested in trustee or gilt-edged securities, and I do not think it was at all wise or right to go beyond that. However, if they did go beyond that it ought to have been put into proper industrial securities, as the Minister himself stated the other day.

There are a good many things in connection with this matter that I do not know and about which I would be glad to get information; in fact, my whole object is to get information. Mr. Smith Gordon was managing director of this Company, and he has now left it and gone to England. That has been stated, and I do not know whether it is true or not. If it is, I think we ought to know why he left. The Minister gave a reason why this money should be invested in England. He said that that should be done in order that some reserve fund should be created, that the capital should be increased by speculation, or by using it on the Stock Exchange, in order to create a large reserve fund for the Company. That would seem to lead to some difficult questions. He said that this money ought only to have been put into thoroughly safe industrial concerns, but everyone knows that fortunes cannot be made out of safe industrial concerns. You may make 5, 6, 7 or 8 per cent. in that way, but you will not earn very large sums; you can only hope to obtain good interest. But if the money was to be used as he suggested—in order to create a large reserve for the Company—that could only be done by betting and speculation—by risky methods. It might succeed, but whether it succeeded or not, I believe that it would be utterly and entirely wrong. No matter what would be lost or gained I think it would be entirely wrong to employ a person on the London Stock Exchange to buy up all sorts of non-industrial securities and lose large sums of money. How the Company could make a large fortune unless it did speculate I do not know. As the Minister said, large sums have been lost.

At first, there was some gain and then heavy losses, as generally happens in such cases. The directors may have done this and the articles of association might show that they had a perfect right to do so, but one of the directors might probably tell the Minister: "There are wild speculations going on for which we cannot be responsible and we think it wise to advise you in the matter." The object of these things originally as stated by various Ministers was that by constructing various associations in Ireland the Irish people might be induced to put money into different concerns. It seems to me the result has been exactly the opposite. Every year money has been lost over the trade loans and since lots of money has been lost over this Trust people will be all the more shy about putting their money in. It was stated by Ministers at various times that the fact that Ministers were taking, at all events, a neutral part in these schemes would give courage to people. A great many people speculated in these. The Minister stated in the Dáil that some of these securities which have fallen may go up again; possibly they may. He did not seem to be very clear about it himself. These are times when all these securities are sinking rather than going up so I am afraid it is very doubtful whether they will get right again. Possibly all this money may be lost. I maintain it is entirely wrong to use public money in speculating on the London Stock Exchange. If it is lost in trying to do good for the country there is something to be said for it but when they go off to make money on the London Stock Exchange I think they are taking a risky action which ought not to be taken by any Minister for Finance who wishes to act properly in this country. I would like to suggest that some public investigation be made of the state of this company in which such a large sum of Irish money has been placed. The Minister is not fond of investigations of any sort, but I suggest that he would be wise in inquiring into this matter and letting us know how it stands.

I wish to ask a question about income tax. I suppose all Senators know that if you are looking for a refund owing to the Statute of Limitations you cannot go back beyond six years. At present the Revenue Commissioners are asking people to go back as far as twenty years. In some cases they are going back to the time when people started in business. I need not tell you that balance sheets going back twenty years cost a fair amount of money. A friend of mine some time ago got a balance sheet made out and he told me that it cost something like £170. At a time like this when business is quiet, the only people making anything out of business are the auditors and the accountants. Between the Revenue Commissioners and the Minister they are making a very rich harvest. I would like to know from the Minister is there going to be any finality in this matter. Most people in my line of business who are overburdened with taxation find it very hard to pay their way. At present they are being asked to furnish statements going back twenty years. A great many hard cases have been pointed out in the other House of where people even lost their lives over this thing. This thing has been overdone. People who have made a few pounds have had it taken from them either by the Revenue Commissioners or the accountants who made up long statements. Very few Senators here remember what happened ten or fifteen years ago or how they spent, say, £20 fifteen years ago. If you have to employ auditors and accountants to go into these matters you have to pay those people.

I am sure the Labour Party are glad to know that the staffs are making a very rich harvest. The Minister ought to come along and see if a stop could be put to this thing. If you appeal from the Revenue inspector you go up before these people in the Castle. I do not think you need expect a whole lot when you go up there. They are there for one purpose. They have to earn their money. They are out to get it and they will have it even in the case of bankrupts. You can see that these even are prosecuted. You have seen the ease of a wine merchant some time ago who was made bankrupt through income tax.

In the matter of the trade loans I would like the Minister for Finance to answer a question which I put last week to the Minister for Industry and Commerce, but which it was thought then could be more properly raised on the Bill before us. I was anxious to get a statement as to the total amount for which the Government has made itself responsible in respect of trade loans. What I wish to obtain is a comprehensive figure embracing not only the amount guaranteed under the Trade Loans Guarantee Acts but also the £50,000 paid for shares in the Industrial Trust Company, the additional liability (if any) resulting to the State from the issue last year of the £200,000 Debentures of the Industrial Trust Company and any other items of a similar kind arising by way of actual payment or of guarantee. I should be glad if, in particular, the Minister would explain the position in respect of the Industrial Trust Debentures as many people are under the impression that their issue involved prejudice to the State.

I would like to raise one point with regard to Vote 66—offices of our representatives abroad. I am only referring in this case to the office of the High Commissioner in London. I would ask the Minister if it is not possible to have some more decent equipment for the sake of the good name of the country than is to be found in that office. Some few months ago I had occasion with two other public people to call to the office in London. We were unable to see the Commissioner because he was engaged but we were shown into what I presume is the best waiting room there, where representatives from other countries wait when they call on the Commissioner. I can only say that I never saw a meaner advertisement for a country than that waiting room. It had all the appearance of decay and bankruptcy. For a start outside you had a commissionaire who from his general make up and bearing might have stepped out from the pages of Charles Lever. There was nothing of the smartness which one would expect in the foreign office of a nation. The furniture was distinctly secondhand. The rickety table too was of a very mean and cheap character, plastered with ink. The legs of the table had made very large holes through a very cheap carpet of an ancient pattern. There was a small quantity of notepaper. We investigated in order to see how the place was fitted out. There was a little notepaper but there were no envelopes; there were ink bottles without ink and there were pens that could not write. The chairs and one old sofa were such as you would expect to see in a secondhand shop.

There are at least two people in Dublin who can prove all I say. We felt thoroughly ashamed that this was the room into which Irish people coming from America or other countries would be shown and into which the representatives of other countries, visiting the High Commissioner on trade matters, would be invited. This was the very room in which people would have time to look around and observe things. I imagined that there would have been an Irish carpet and Irish-made furniture, or, at least, decent furniture made in England. I expected there would be a few Irish pictures on the walls—perhaps some samples of the work of Irish painters, or at least some sort of decent pictures. I thought there would be writing facilities supplied for people who might be anxious to write and that there would be a proper supply of literature. There were a couple of dog-cared publications that might have been handled for weeks by coal porters. There was nothing of the businesslike equipment that one would expect in a place like that; there was just that atmosphere that one would meet with in a second-rate business establishment.

I do not know what the inner sanctum was like. It may have been a bit better. In my opinion the outer offices are much more important than the inner offices from the public point of view. It is in the outer offices that a person has time to make observations. After all, the London office, from the point of view of trade, is our most important foreign office. If it is a question of finance it is very unwise economy. Somebody recently said that making goods and not advertising them was like kissing hands to a girl in the dark. Advertising badly and cheaply, as we are doing, is much worse than no advertisement at all. This is a matter in which the Minister should make available the necessary funds in order to put the office in a decent position and not leave it as it is today, with the appearance of being the office of an absolutely bankrupt country.

May I call the attention of the Minister to No. 50?

That a sum not exceeding £57,216 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for Expenses of Reformatory and Industrial Schools, including Places of Detention.

This amount is gradually creeping up, and every year it becomes greater and greater. Looking up an old book of estimates I observe that it is almost four times what it was in former years. In 1919, when prices were at the peak, when everything was at the highest, the State at the period gave a temporary increase of 5/- a week for each child, provided the local authorities did the same. The local authorities fully realised that prices were extraordinarily high at the time. Now, although the rate of living has gone down—and that is generally agreed —this sum is still being paid. The sum of £57,216 paid for the maintenance of these institutions is not all that they require. There is added to that the local grant, and I think that is 5/-, and the State pays 7/6. I hope that something will be done to reduce the cost, because 12/6 a week for each child is entirely out of proportion to what a child costs in its own home, even a well-looked-after child. Workmen's children are mostly in those schools, and in very few workmen's homes does the maintenance of the average child cost 12/6. For boarded-out children at present the average payment is 5/- or 6/- a week. They are looked after in their homes for that amount, with a very small allowance for clothes. This amount of 12/6 seems out of all proportion to the upkeep of the same class of children in any part of the State. I think that amount might now be reduced.

I wish to draw the Minister's attention to No. 19— Salaries and Expenses of the Tariff Commission—merely for the purpose of asking him if there is any possibility of a speedy decision by the Commission on the question of duty on horse-drawn vehicles, or if there will be any alteration of the tariff on private cars. The matter is one of very grave concern to the coach-building trade and to the workers engaged in that trade. I think most of them have reached the point when for good or ill they would like a decision, so that they may resolve whether it is worth while continuing or going out of business altogether. I would like the Minister to give us an indication as to when that decision may be expected. This matter has been pending a considerable time, and if there is to be no modification of the existing tariff in one respect, and if no tariff is going on in the other, then at least we in the business will know where we are. There is a considerable amount of unemployment in this trade. Many of the skilled workers have already left. So far as I can see, the dumping of horse-drawn vehicles continues to the extent that it is impossible for an Irish coach factory to remain operative. Second-hand vehicles are being dumped consistently from the other side, and the industry is in a very bad way. A number of concerns are carrying on in the hope that something may be done. If there is not, they will have to adjust themselves in some way to meet existing conditions, but at least some definite decision on the matter ought be given.

I do not remember what happened in regard to the question of the tables to which Senator Johnson referred. With regard to the bonus question I do not think I could undertake to alter the position with regard to the bonus. To allow the bonus to stand when the cost of living index figure has fallen would be equivalent to raising the salaries or wages of civil servants. I do not think we could agree to that. Senator Johnson will remember that as a result of the different weighting in the compilation of our cost of living index figure civil servants, since the establishment of the Saorstát, have been actually in receipt of higher sums than they would have been if they remained under the British Government.

Generally our index figure has been ten points higher than the British figure, the increase being mainly, if not entirely due—at any rate five points of the difference— to the conditions that obtained here when our index was established. In some cases the full effect of the fall represented by that index figure may not reach the civil servant, but I think in the majority of cases it does, very nearly if not quite to the full. If the index figure were to fall to zero, instead of being 175 or 180 and we were to get back to 100, I think before that point was reached a review would have to take place, but we see no possibility of such a sensational decline taking place. But in any decline that is likely to take place, we do not see there is any need to alter the present arrangement. I have no means of knowing why the fall in the cost of living was not given effect to in England but so far as we are concerned our figures are still above theirs, and we do not see any reason for interfering with the normal operation and the normal effect of the present system.

Senator Johnson is aware of the agitation that existed for the abolition of the bonus. That agitation did not mean a consolidation of the bonus with the basic salary. It meant simply wiping away the bonus. Of course, to have done anything like that would not only be unjust but would have been utterly impossible. It would have left the salary scales at a point at which it would have been impossible for those earning the salaries to live on them. On the other hand, while civil servants have had the advantage in the bonus of any seasonal increases which have taken place or, of increases that were the result of market fluctuations I think if there is going to be any decrease following the index figure they must bear it.

With regard to the points raised by Senators Moore and Hooper with regard to the Trade Loans Act, Senator Hooper gave me notice that he was going to raise the question. I got out certain figures, but unfortunately I cannot find them amongst my papers. I think the total amount guaranteed under the Trade Loans (Guarantee) Act was about £330,000. Part of that money was advanced by the Industrial Trust Company and part by other banks and other organisations. So far as the Industrial Trust Company itself is concerned, the total liability of the Government in respect of that Company is the £50,000 which was invested in shares. The issue of debentures by the Industrial Trust Company did not impose any liability on the State or the Exchequer and did not prejudicially affect the interest of the State or the Exchequer in the form of the £50,000 held in shares. The Company was established under the Companies Act in the ordinary way, the only difference being that a State investment was made. The directors were chosen because they were men of competence and integrity and were allowed to carry on the Company. The object of having Government directors was simply that there should be means of directing the Company's attention continually to Irish business when proper Irish business arose. It was not with any idea that the Minister for Finance, or the Government, should intervene in the business of the Company. I think that any attempt to do that would have been absurd, but when the Department of Industry and Commerce, or any other Department of the Government, came into touch with any Irish concern which seemed to be a concern which might properly be helped by the Industrial Trust Company, we wished to have the means of directing the attention of the Industrial Trust Company to that concern. Unfortunately, very few cases arose in which it was suitable to direct the attention of the Industrial Trust Company to Irish concerns. In fact, in some cases in which the Industrial Trust Company did invest in Irish concerns there were losses. As regards other losses that were made by the Company they were very unfortunate.

From every point of view it is to be regretted that these losses occurred, but there is no use in trying to pillory the directors of the Company. No good will be done by attempting to do that. Everybody knows that the difference between the operation of any business by civil servants and the operation of business by business men is that the civil servant is not allowed to take risks. The civil servant passes a minute on to another civil servant, and the latter writes a letter to another department, and so the thing goes on, until everybody is covered and there is very little danger of loss; but the opportunity of doing business, if it is an ordinary business concern, has passed away. On the other hand, business men have to take risks. No business man, I think, ever made money who did not lose money at times. No business man ever made money who did not take the sort of risk that the civil servant is prevented from taking. It was intended that this Company should operate as a business concern. Business men were appointed as directors, and so far as we were concerned they were given their head. They had the misfortune to make losses. Many people engaged in similar business at the same time made losses, perhaps losses as heavy proportionately as this Company made. In the case of a business man who is the director of an ordinary company which makes losses there is no one to hold him up to obloquy. There may be stormy scenes at a shareholders' meeting occasionally, but there is nobody, at any rate, to make attacks and hold him up as a person who has thoroughly misbehaved himself or anything in that nature.

In the Dáil, rather than in the Seanad, attempts have been made to suggest that some sort of investigation should be held into the conduct of the directors of this Company, and so forth. If attacks of that sort are to be made, the result of it will be that no business man of any standing, no good business man with any respect for himself will go into any company or have anything to do with any company, corporation or concern with which the Government is associated, because it may mean that the fact of Government association will simply enable somebody who would not have the grounds or would not have the courage to do it outside, to rise in the Dáil or Seanad, as the case may be, and because of the protection they have there from the law of libel and slander, to say anything they like about that man. I am satisfied that if he were to pursue the policy of carrying on long debates here on concerns of this character, the only effect would be to make it impossible, if we wanted to do anything of the same sort or of a similar sort in the future, to get anybody who would take part in it.

As I pointed out in the Dáil, the people who were directors of this Company were people of integrity and ability and business experience. You cannot have the State while either promoting or assisting in the promotion of business concerns expecting them to be run in a businesslike way. Anything run in a businesslike way is going to be run in a way that involves a possibility of loss. If there is to be no possibility of loss, and if it is to be run in a Civil Service way, which is entirely different, it certainly will not be effective in doing what is called business, because it is too slow. Opportunities are bound to slip away, and good proposals will never be taken up if you have things done in a Civil Service way owing to the extreme difficulty of getting them through. As a matter of fact, when any big thing was done by the State we have almost always had to scrap the regular machinery and Ministers had to come in and take the risk.

In the case of the Shannon scheme, if Ministers had not come in and taken the risk that scheme would never have gone through. It never would have gone through if it had to be dealt with by civil servants examining everything with the detail that the ordinary routine of the Service requires and making sure that there was no possibility at all of anything going wrong. I have nothing more to say about that.

I would like to ask the Minister if public money was invested on the Stock Exchange in wild securities that were quite unsound?

I would not say that was so. Money of the Company was invested in shares which, of course, fell. Senator Kennedy spoke about the income tax position. I take leave to doubt that people are being asked to furnish balance sheets for twenty years back. There have been, undoubtedly, many cases in which people have been asked to furnish statements for several years past, but I do not think they were asked to furnish balance sheets since 1914.

The position with regard to income tax is as I explained in the Dáil, that where a man has been, up to date, defrauding the revenue by making false returns or by concealment of his income he renders himself liable to penalties. The Revenue Commissioners, instead of proceeding for penalties, can make arrangements with the defaulting taxpayer, but in order to make arrangements with the defaulting taxpayer they must know what is the amount of revenue of which he defrauded the State. A man who only succeeded in retaining a very small sum might be liable to the same penalties as a man who kept back a very much greater sum, and accordingly, in order to know what penalty shall be imposed, it is necessary that the Revenue Commissioners should ascertain what a particular individual has actually kept back from the State. The rule is that if a man's business will bear it they get as much of the tax as he kept back, plus a small fine.

That is, what the Revenue Authorities say he kept back.

The matter is established very clearly. Further, as I said in the Dáil, the policy is that no matter what a man owes there should not be taken from him an amount that would put him out of business. A man who owed £15,000 tax might have only £5,000 taken from him if to take more would leave him without working capital to carry on his business. The Senator referred to a particular case of a firm of wine merchants. The only thing wrong with the revenue procedure in that particular case was that they did not go hard for the tax soon enough. If they had not listened to various excuses from the firm but had taken proceedings for the tax they would have got in before he became a bankrupt, and the Commissioners would not have come in for a great deal of criticism which was entirely undeserved, and which resulted from incorrect and ex parte statements in court. The Revenue Commissioners should have been criticised, not for harshness in that particular case, but really for undue leniency, if I am referring to the same case as the Senator has in mind. I do not want to mention names.

I think the Minister for External Affairs was in the House and heard Senator O'Farrell's remarks about the High Commissioner's Office in London. I do not know what was done when the High Commissioner's Office was established. It was established a long time ago. But certainly the policy in regard to the legations which have been established recently is to furnish them with Irish-made furniture and generally to make them an advertisement for the country.

Senator Mrs. Wyse Power raised a question as to industrial schools. I have not the figures before me, but I certainly doubt that the figures given by the Senator were entirely correct. It seems to me that the figures for the industrial schools are unlikely to be as high as the Senator mentioned. I am not talking about a lump sum. I am talking of the amount per child. For instance, I know there were many cases in which there was extreme difficulty in obtaining any sums at all from the local authorities. I remember a case in which it was impossible for the industrial schools to obtain any amount at all from the local authorities.

Now with regard to horse-drawn vehicles and the application on their behalf to the Tariff Commission, the report is very nearly ready. I do not know exactly just how long it will be before we get it, but it is in a very definite state of preparation, and when that report is received by the Government it will be considered immediately and such action as may be necessary will be taken.

I have indicated in the Dáil that if there is a unanimous and positive report the Dáil will be summoned before the end of the Recess to deal with it, and if there is a unanimous negative report it will be published. If there is a division among the Commissioners the matter will be considered by the Government as quickly as possible.

There is one matter to which I wish to refer——

On a point of order, I have no objection whatever to listening to the Minister for External Affiairs; in fact, I would be rather interested to hear him, but this is an Appropriation Bill, and I take it that comes within the Department of the Minister for Finance. Is it in order under our Standing Orders that a Minister not associated with a Bill should intervene in this way?

Cathaoirleach

I take it that each Department is under the management of a certain Minister, and to deal with any particular section that Minister would be entitled to reply. Therefore I think the Minister for External Affairs is entitled to deal with the point raised concerning his Department.

With reference to Senator O'Farrell's remarks about the High Commissioner's office in London, I was wondering whether he or I was seeing things. He talked about the state of the Commissioner's office. He said there were holes in the old and worn carpets, the rooms were untidy, there was no writing paper, and that there were pens that would not write. I have written letters there. I have been in the office more recently than Senator O'Farrell. I happened to establish that office, and I purchased the furniture for it. I was there at the institution of the office, and I was there not later than Monday of this week, so I have the latest and the earliest information about it. I went to the office without an appointment, so that the place could not have been prepared for me. I walked into the waiting room, and, to pass away the time while waiting for the Commissioner, I wrote a letter. There was a pen that would write, and writing paper. There is a room being used at the moment as a waiting room which is not the proper waiting room, but it is quite a good room for the purpose for which it was intended. The waiting room proper is one of the best show rooms that any High Commissioner's office can boast of, and I do not think that there is a stick of furniture in the room that is not of Irish manufacture. There were examples taken from pretty well every firm manufacturing here, including that of one of the greatest craftsmen in the country. One of the rooms was taken over later by the Trade Commissioner, as it suited his business to be at the end of the passage. The other is used by the High Commissioner at the moment, because rebuilding operations are going on at the back of the building, and the noise is so dreadful that any person doing business with the High Commissioner could hardly be heard. Hence the Commissioner moved from that room. The office looks a bit dingy, but there is a point at which we can get rid of the lease. We are considering the advisability of changing premises, and it would be absurd to repaper and repaint the place if we are going to leave within some months. While admitting that certain rooms are in occupation for purposes for which they were not intended, most of what Senator O'Farrell said about the worst of the rooms is more imaginative than true. As to the point raised by Senator the McGillycuddy of the Reeks——

The question which I asked last week, and to which the Minister said he would reply on the Appropriation Bill, had reference to disputes with other nations, as to the action taken by us as against that taken by the other members of the Commonwealth. South Africa said that finally we would find ourselves in a court where there was no defender. The Minister, in explaining this in the Dáil, said that though we had signed without any reservation we would take every possible step to make agreement before we went to the court, but it seems to me that if we cannot settle without going to court we will find ourselves going to a court which has no power to call the defendant before it. If we had a working agreement with people most in touch—possibly there is one coming along—I feel there would be no question of disputes not being settled. I think we might quite easily have a dispute with Canada or South Africa on the question of emigration. I regret to have to ask the Minister to traverse ground he has already gone over, but this is a matter of some importance, and I feel sure there is a reasonable explanation.

The point made by the Senator on a previous occasion, and to some extent made today, was summed up in the phrase which he read from South Africa. Both Canada and South Africa declared that although they thought disputes were justiciable as between various members of the Commonwealth at the International Court as a matter of policy they would not go to that Court. The Senator asked what would happen in the event of the Irish Free State, which had signed without any reservation whatever, having a dispute with Canada, which signed with that reservation. What, he asked, was the good of our going to court if we could not bring the other party? The answer takes a variety of forms. First, the Canadians and South Africans declared, as a matter of policy, they would not take certain classes of disputes to the Court. I am not sure that they would not allow individual cases to go to the Court which would fall within the jurisdiction of that Court. They have declared there is a justiciable value in that Court which will fall for further consideration afterwards. As to whether the reservation of the Canadians and South Africans is legal in effect, that will have to be decided by the International Court. Despite the reservation, there is a resort to the Court even if it is only on a point of the Court's jurisdiction.

I put it again that if the Senators examine the type of reservation allowed and the conditions which may be imposed, they apply only to a certain number of things, and certain categories of things were declared to be matters for the Court, and States could agree to go on one, two or all of those categories. They might reserve on the question of reciprocity and for a period of years, and it is doubtful whether any other reservation on the face of the Article is possible. I contended previously, and I contend again, and I have also the opinions of people not merely here but on the Continent most conversant with League matters, that the reservation made by Canada and South Africa is not a reservation within the terms of the Optional Clause itself. As to the other matters, those who have read the report of the recent Conference of the Dominions will notice that a suggestion was put forward as to a Commonwealth Court, and the Conference simply wrote down the point of view that it was considered a further exploration of this matter was desirable. That is all that was said about it. It has advantages in some ways, and, it may have disadvantages. A great deal would depend on the composition of the Court suggested, but the whole matter is sub judice and I do not want to go into it. On the net point raised, there is a reservation. If that reservation is sound, our signing without reservation is of no avail. If it is unsound, their attempt to put in that reservation is of no avail against us.

I would like to take this opportunity of asking the Minister what is his policy towards civil aviation. The position is this: There is an expenditure at present roughly of £80,000 yearly for army flying. There is no money being expended on civil aviation. In nearly every other country the army, instead of leaving its pilots in a blind alley, passes them into the civil air service, and in time of war these men are available, as they have been kept in training. This country, in spite of the fact that there is no endowment of the air services, has produced the finest airmen, as witness that the only two successful crossings of the Atlantic from east to west were helped by Irishmen. The only Irish civil aviation club is the Irish Aero Club, which, up to this, has had one machine available. That machine is no longer available, and only for the bounty of one of its members it would not exist. In every other country there is not only endowment for civil aviation, but there are arrangements whereby military aviators become pilots of civil machines. In the service from Buenos Aires to Valparaiso, the longest air service in the world, and in the different South American Republics, there are military pilots. We do not ask much, only enough to employ a wholetime teacher, because behind this lies far more than would be generally supposed. It may seem when at the moment aviation is at the mercy of the elements that it is an extravagant form of sport.

This is an important point: if within a certain time between now and the date of the Imperial Conference we do not stake our claim to approach Croydon, Croydon can declare Ireland part of the Imperial Airways. That is to say, England can do what the London, Midland and Scottish did to the Dublin Steam Packet Company. The policy of Croydon is safety first, with the result that there is practically no approach from England to Ireland. The safety first scheme has made it impossible to get from Croydon to Dublin except at a cost of £98. If you do not stake a claim with some sort of Irish service it will be impossible for us to go out of Ireland to the Continent. In return for allowing our machines to use Croydon for a jumping off place for the rest of the world we only ask the Croydon people for permission to fly over from Ireland. The next parish from the West of Ireland is New York. I think we can get a better bargain if we offer Croydon the advantage of that in return for the facility of reaching the Continent by air. That opportunity will terminate in September. It is rather urgent that some form of arrangement should be made, and some endowment given so that we can say the civil air service exists. Otherwise we will be shut out from the Continent as we are shut out in the ocean in ships. That is the reason I ask the Minister to give the matter his attention, and not because I am a member of the Aero Club.

Ireland ought to have access to the rest of the world by air, and considering that Irishmen have succeeded so well in the two great flights from east to west, where France and England and other countries went down, I think it is only fair that some encouragement should be given to aviation in Ireland.

Civil aviation has been getting a lot of attention, and the result is that we have taken over certain duties under the International Aviation Act, and certain regulations have been made in accordance with that. I am carrying on through the agency of the Army service in one respect with regard to regulations. The matter of a subsidy for the Irish Aero Club was definitely brought forward, and I had hoped before the Estimates were passed that we would have arrived at a decision, but there is no subsidy at the moment. I hope to bring the matter forward again, and perhaps with favourable results. It has not been dropped. The difficulty about civil aviation in this country is that there does not seem to be any public demand for air services, certainly not such a public demand as would warrant the spending of any money on it. If money can be saved from another Vote and could, with successful results be applied to civil aviation it will be done, but that is the only avenue of approach to a subsidy for civil aviation.

By way of personal explanation, lest the House may think I had been drawing on my imagination, as the Minister said, I have to repeat that I had two responsible persons with me on my visit to the London office. One was an assistant secretary to one of the departments, and his language in regard to the office was very much stronger than I would attempt to use here. The Minister claimed that he furnished the office, but if that is the best he can do in the way of furnishing I would hate to live in a house he would furnish.

I have often been in that office, and I never found anything such as the Senator has complained of.

You were in a different waiting room.

It is a plainly and simply furnished office and quite clean.

Question put and agreed to.
Committee stage ordered for June 26th.
The Seanad adjourned at 7.40 p.m. until Thursday, June 26th, at 3 o'clock.