Seanad Éireann debate -
Wednesday, 10 Dec 1930

Vol. 14 No. 4

Public Business. - Tariff Commission (Amendment) Bill, 1930—Second Stage.

Question proposed: "That the Tariff Commission (Amendment) Bill, 1930," be read a Second Time.

Mr. Dowdall

As far as this Bill goes I have no objection to it, but I think that the administration of the Principal Act of 1926 has revealed quite a number of faults which possibly could have been amended by this amending Bill. Of course, if an attempt were made to amend it now the preamble would have to be altered. I would like to point out that there are some clauses in it that should obviously by reason of the very nature of the subject be deleted from the Principal Act. For instance in clause 5 of the Principal Act amongst other things the Commission may certify a person who "does any other thing which would, if the Commission were a court of justice having power to commit for contempt of court, be contempt of such court."

I can readily understand the Minister for Agriculture being committed for contempt of court, and indeed a good many members of the Dáil on all sides for commenting on matters which were sub judice to the Tariff Commission at that time. Of course that is a point which is not very important, but I think some points in the schedule to the main Act could have been amended in this Bill. Indeed I think the whole schedule could be scrapped and a new schedule put in. Take the first section of the schedule. One of the matters to which the Tariff Commission should devote attention is “the efficiency, extent and relative importance of the industry in respect of which the application is made” for a tariff. If a tariff is needed at all it is needed more particularly in the case of an infant industry, and the extent and the importance of that industry at the moment would be almost negligible. For instance, it would be interesting to know what was the importance of Guinness's Brewery in the first year of its establishment. Let us come to a time a little more recent and deal with the importance of an industry which was started in Dublin which unfortunately did not continue here, but has become one of the great world industries. I refer to the tyre-making industry when Dunlop tyres were first made. The extent and importance of that industry would in the early stages be negligible. I have no fault to find with this Bill, but I am sorry that the occasion was not availed of to remedy the very obvious defects which the working of the Principal Act has shown to be in it.

Mr. Johnson

I have a certain satisfaction in noting that one of the features of this Bill is to give in set terms the Ministry power and authority to refer any question touching tariffs and imports to the Commission for examination. When the Principal Act was under discussion, and frequently since, I took the line that the limitation of power to refer to the Tariff Commission, to the people concerned in the industry was a real defect, that in fact it might be to the national interests to inquire into a proposal for a tariff quite apart from the persons who are interested financially in the business. Therefore I think it is quite satisfactory to find that the Ministry is now taking power by law to do what it has said hitherto it could only do outside the scope of the original Act—that is, to make reference to the Commission on their own account. The fact still remains notwithstanding this Bill that the Tariff Commission is restricted to an answer practically yea or nay whether the application for a tariff should be conceded. They may make recommendations as to the extent of the tariff but there is no authority given either in the Principal Act or in this amending Bill to refer a question to the Commission which might lead to alternative proposals rather than a tariff. For instance the Commission to whom has been referred the application for a tariff, examining the whole business ramifications and effects, might come to the conclusion that it is not desirable there should be a tariff, but that the industry is capable of being developed, and if it is thought by the Ministerial authority that it is desirable it should be developed, that the best way to develop it is by a subsidy, bounty or some other method. What is happening now is that people interested in an industry seek some assistance and they conceive of the tariff as the best and the only way of obtaining that assistance and they, therefore, make application for a tariff. All the ramifications of a tariff are examined, report is made, but if the Commission says "we cannot recommend a tariff," the matter is finished. And yet it is easily conceivable that the Commission may say the cost to the community of a tariff would be excessive for the value obtained, and yet more value might be obtained by much smaller expenditure than the tariff would involve, and that help ought to be given by way of bounty or subsidy or even by some other method of which there are many, whereby State assistance could be given to protect, foster or encourage an industry. That is, I think, a real defect both in the Principal Act and in this Bill.

While I do not think it is possible within the limits of the Bill to amend it in Committee Stage in that direction I would urge upon the Ministry that it is desirable that the scope of this Commission or of some similar Commission should be extended so that they would be empowered to make alternative recommendations if, in their view, an industry is capable of development and if a tariff is looked upon by them as being unnecessarily costly, and where a smaller expenditure of national wealth in fostering could be well spent by some other method. I press that proposition upon the Ministry and would urge that they should make a move in that direction at the earliest possible moment.

Minister for Agriculture (Mr. Hogan)

With regard to the points raised, I think Senator Johnson is under a misapprehension. The Tariff Commission as such under existing legislation is not asked to say whether a tariff should be recommended or not. I think that question is not specifically asked under the Act. In fact, they do in their report, and I think it is in the nature of the case to indicate whether in their opinion a tariff should be imposed or not, but they are not asked that question specifically. It is quite open to them to bring in a report, neglecting that question. They are, however, asked certain specific questions; they are asked to consider the effect of tariffs from a number of points of view; what employment the industry is giving, their capital expenditure, and the state of efficiency—in other words, they are asked to get the facts. There seems to be a complete misapprehension with regard to their functions.

Mr. Johnson

It must be in the minds of the Tariff Commission, because they specifically state in their reports: "We do not recommend."

Mr. Hogan

I made that point, that in fact in practice they did give their opinion. Under the Act they are asked a number of questions—I forget how many, but for the sake of argument say ten. They are not asked to answer the question, should a tariff be recommended. In fact, of course the whole trend of their report gives their opinions on the matter, and in practice they say whether in their opinion a tariff should or should not be recommended. That is not the question they are asked. We welcome their recommendations on that point. The main purpose of the Tariff Commission is to get the facts. They are to say what labour is employed in the industry, what is the capital, what is the state of efficiency, and what the effect of a tariff would be on the consumer. They are asked to get a number of facts of that sort which are absolutely relevant and absolutely vital for whatever body has to decide whether a tariff should go on or not. The body that is to decide whether a tariff is to go on or not in the ultimate is the Executive Council. It is open to the Executive Council to agree with the Tariff Commission in the event of the latter recommending a tariff; it is equally open to them to disagree with the Tariff Commission, no matter what their recommendation may be. Whether they agree or disagree, when a recommendation is made it is absolutely essential for the Executive Council to get the facts in regard to the various points from the Tariff Commission. It is vital for them to find out, for instance, what labour is employed and what are the prospects of increased employment if a tariff is imposed, what capital is employed in the industry, and if more capital is required. It is vital that the Executive Council should find out what the effect on the consumer will be. The natural way they can find that out is by a judicial examination such as only the Tariff Commission can give the subject, because the Tariff Commission is the only body that has a right to get information from the trade concerned.

It is wrong to think that the Tariff Commission had any right to decide policy. The body that decides policy is the Government. They get the facts, and anyone who opposes the Tariff Commission must oppose it on the lines that the facts should not be got. If they are to tackle a problem squarely there can be no argument against getting the facts as to the amount of labour employed in the industry, as to the effect on the consumer, as to the extra labour that a tariff would ensure, and as to the amount of capital necessary for development. That is the function of the Tariff Commission, and anyone who opposes the Tariff Commission must be against getting the facts on these points. It is open to the Executive Council, after they get these facts, to take any line they like.

Take Senator Dowdall's point as to the importance of an industry. The Tariff Commission is asked to say what is the efficiency of a particular industry the representatives of which have applied for a tariff. Why should that question not be asked? Senator Dowdall points out that new industries could possibly be established in this country by means of a tariff or that when established could be developed by means of a tariff. Of course that is quite true but it is irrelevant. Even if that were so, it is necessary that the Executive Council should find out in the case of an industry that has been established for a long time whether in fact that industry is well organised and efficiently run. They should not be prevented from getting that information. It may be that a tariff would help to start a new industry or to develop an industry started quite recently. On the other hand the Executive Council, if they have any sense of responsibility, should take into account whether a long established industry is badly run or is in a moribund condition, and from that point of view it is only right that they should put it up to the Tariff Commission to see that the facts are obtained. I think that also answers another point made by Senator Johnson.

I may say that personally I regret that the Executive Council are under the necessity of referring any tariffs to the Tariff Commission. I believe in the long run the Government cannot unduly interfere with business. I believe if every industry in the country was organised as it should be organised, it would be possible for industries to take care of themselves and to apply for tariffs if they think they must be of use to them. We are in the unfortunate position in this country that there are a number of industries, notably certain aspects of agriculture, unorganised and that you have got for that reason confusion throughout the country on relatively and completely unimportant matters.

You can get the country deceived, stirred up and agitated on such relatively unimportant matters as a tariff on oats. There are a number of people —if they are farmers they are really bad farmers who do not hope to make a decent living out of farming—who can talk a lot about a tariff on oats, who can excite other people on the question, but you will get no organisation of farmers who would think it worth their while to put up the proposition for a tariff on oats. It is in fairness to the country and in view of the fact that these unreal agitations can be stirred up that we make provision by which the Executive Council can refer to the Tariff Commission a subject which is so unimportant that no organised body can put it forward but which at the same time can be used for the purpose of deceiving the people or causing agitation or contention through the country. They can refer it to the Tariff Commission to examine it dispassionately. If they examine it dispassionately the country will be able to judge for itself. Personally, I regret very much that we were under the necessity to insert that particular clause. I believe there would be no necessity to insert any such clause if people were better organised economically.

Mr. Connolly

I purpose opposing this Bill for a number of reasons. One is that the personnel of the Tariff Commission that has been selected does not in any sense inspire any confidence in those who have been interested in tariffs or protection in this country. I do not want to go into details with regard to that. We know that at least one if not two of the members of the Tariff Commission are doctrinaire free traders, and that their whole attitude as regards protective measures for the industries of this country shows that they are not likely to be favourable to the development of industry. The Minister has pointed out that the Executive Council will pass to the Tariff Commission such matters as they think ought to be considered by it. I feel that that attitude is simply a question of shelving the responsibility from the Executive Council on to the Tariff Commission, so that they will be able to say to the agriculturists and others interested in protection for their industry: "Oh, the matter is now being considered by the Tariff Commission." We have had some experience of Tariff Commissions. We know that in many cases the decision of the Tariff Commission has been shelved for periods running into years and in the meantime certain industries have been practically crushed out of existence. Not only that but it would have been decenter in some of these cases to have given a decision after three or four months instead of three or four years. They kept the industrialists hanging on keeping skeleton organisations going, maintaining certain overhead charges, in the hope that a tariff would be introduced but at the end of one, two, three and four years they find no hope of any such thing occurring. I have no hope that we will get favourable reports from the Tariff Commission that has been nominated. I do not want to labour the matter because it is a delicate thing to criticise or attack the personnel of such a Commission as this particularly when the people involved have no opportunity of making any defence. We have got to be frank on a matter of public interest like this. I say that we have no confidence in the Tariff Commission appointed by the Government.

The Minister also referred to the fact that it would be the Executive Council that would decide, and that the Tariff Commission itself would only examine the evidence and report accordingly. We know how that will work out in practice. We know that the Tariff Commission's opinion will be expressed, and as far as we have seen in the past that weighed very considerably, if not entirely, with the Ministers. We know at all events they abided by the decisions of the Tariff Commission. The Minister can correct me if I am wrong. At no point that I know of has the Executive Council run counter in its decisions to the recommendation handed over to it by the Tariff Commission. I feel that this Bill is really a move to shelve responsibility from the Executive Council and to place it on a Tariff Commission that may or may not move quickly. From our experience in the past we have no indication that it will move quickly, if at all. In the meantime, industries are going out of existence. I have one particular industry in mind where a considerable amount of money was lost by the carrying on of skeleton organisations in the hope that something was going to be done. I say that it would have been much better to say three years ago: "No, we are not doing anything with regard to a tariff in your industry; you had better quit and let the foreigner import."

Mr. MacEllin

I endorse in the main what Senator Connolly has said regarding the Tariff Commission. My reason for opposition to the Tariff Commission is because of the cumbersome methods employed and long drawn out negotiations in order to reach conclusions. I will say this much in their favour, that they have started off with a good headline and, without waiting, they recently came to the definite conclusion to put a tariff on butter.

Mr. Hogan

They did not. They recommended an interim prohibition, which is entirely different from a tariff.

Mr. MacEllin

That is only a petty point.

Mr. Comyn

There is a tariff on butter. They could not possibly impose prohibition.

Mr. Hogan

You can call it what you like. The Tariff Commission recommend an interim prohibition on butter. There was no machinery to put on prohibition; therefore there was a prohibitive tariff.

Mr. MacEllin

The fact is that no butter can come in without a tariff being paid. That was done with the unanimous approval of the people of the country. It was considered a very desirable thing. I believe, without waiting any further, that there should be a further development on these lines and that a tariff should be imposed on bacon. The bacon industry is falling into the same position as butter.

Mr. Hogan

I think Mayo is the place to say that.

Cathaoirleach

The Senator is getting outside the scope of the Bill.

Mr. MacEllin

It is very desirable from the farmers' standpoint that a tariff should be imposed immediately on bacon, because that industry is falling into a terrible state. I think it is most important that the Commission should act there as they did in the case of butter. I could quote figures to show that we are falling into the same position in that industry, and that in a short time we will be out of the bacon industry. Our exports have fallen by 20 per cent., and the actual price by about the same amount. Irish bacon is sold in England at the present time at almost the same price that the Irish people are paying for foreign bacon that comes here. It really means that there is a nett loss to the pig producers of almost £2,000,000 a year, which is going out for foreign bacon. That is a national loss. To a certain extent I would support the Bill if I got an assurance that the Tariff Commission would act in the case of bacon as they did with butter.

Mr. Comyn

It would be a great pity if what Senator MacEllin said ever came to pass, that the production of bacon and pig products in this country should come to an end or be diminished, because I think the great hope of this country depends on the development of the trade in pigs. Let us not be at all afraid of the simile of "Paddy and his pig." The pig is Paddy's best friend. I do not mean Paddy Hogan, but still I do not think Paddy Hogan would be ashamed or afraid——

Cathaoirleach

May I remind the Senator that we are discussing a Tariff Bill.

Mr. Comyn

I am referring to the observations made by Senator MacEllin and to his experience. As regards the Tariff Bill, my objection to it is, without making any reflection whatever on the personnel of the Commission, that it is a Commission of civil servants. I would like to have a development board set up in this country whose function would be the establishment of tariffs and not merely the recommendation of tariffs, the recommendations as to the machinery by which tariffs could be put into operation and recommendations as to the machinery by which the consumer should be protected in regard to these tariffs. That is our objection. The Tariff Commission is one of these miscroscopic, mosquito Commissions that are appointed by the present administration. This country needs one great organisation of men who would be entrusted not merely with agricultural but industrial development and which would be in touch with the Minister. The Minister for Agriculture should, if required, be one member of the Commission. They should look after not merely the tariffs but the application of the tariffs, the revenue from them, and in what respect each section of the community would be benefited or prejudiced by these tariffs. Therefore, I say this Tariff Bill is not sufficiently comprehensive in its scope, and the Minister for Agriculture, who is here, should have procured or endeavoured to procure a measure of much wider scope than the one which is now before the House.

Mr. O'Farrell

Frankly, I cannot see the basis of the opposition to the Tariff Commission. When any matter comes before the House in which it is necessary for the Dáil to vote money we have demands from all quarters for expert examination as to the purpose for which the expenditure is to be incurred. We demand expert advice before we are prepared to vote for expenditure of that kind or embark upon any new policy. The question of tariffs is one that affects every single branch of the community, and surely it is not seriously suggested that a question of that kind should be left to an exceedingly large body of people from different political parties, each with its own political aspirations and ambitions, and each anxious to make the most for his own political party out of the particular question under discussion.

Speeches on tariffs, as on most other questions that are before Parliament, are made with one eye on the subject and another eye on the public gallery or on the public Press. A man having a particular idea as to what may suit certain interests in his constituency is tempted very often, human nature being what it is, simply to voice the views that he considers will appeal to a particular section of the community. He afterwards sends a copy of the Official Report to the local newspapers and has his speeches published in extenso, and he has, therefore, served his political party in the way he is expected to serve it. Surely we cannot approach the question of our whole economic life by that type of examination. I personally would feel that we would serve the needs of the country best by allowing a board of intelligent people who have no axes to grind in regard to these subjects to examine in detail into every application for a tariff that may come before it.

Senator Comyn spoke of setting up a board for the purpose of imposing tariffs. He is taking for granted that the great majority of the people in Ireland have already declared in favour of unrestricted tariffs. That has yet to be decided. I think in his wildest imaginings he would not suggest a tariff should be put on every commodity used in this country. Then somebody has to decide what are the commodities on which tariffs shall be placed, the amount of the tariffs and the manner in which the consumer is to be protected. In his speech last week Senator Comyn gave as an explanation of the rise in the cost of living to the agricultural community the imposition of tariffs as one reason.

Mr. Comyn

What I said was the wrong application of them.

Mr. O'Farrell

I have the Official Report which I can show to the Senator later. He certainly gave that as one of the reasons. In any case, it is an undoubted fact that tariffs have increased the cost of certain commodities to the farmer. I am not condemning tariffs because of that, but I do quote that as an instance of how necessary it is to be careful so that in trying to do good we may not do a considerable amount of harm. It is unfortunate that this question should be approached from the viewpoint of politics. I think the most effective way of trying to get rid of the political element in it is by way of a Tariff Commission. I cannot subscribe to the doctrine that because any board is composed of civil servants it must of necessity be a bad board.

Mr. Comyn

I never said that.

Mr. O'Farrell

That has been charged, that this is a board of civil servants and that consequently you cannot expect anything broad or intelligent from them. After all, civil servants perform very important functions and you will find amongst them the most intelligent citizens in the country. Their training is of a national character and against taking the viewpoint of a narrow section or of one industry only. How are we to compose a tariff board? Is it to be of business men who must have interests in some one or other of the industries that are to be tariffed? It is very difficult to pick out men who have not an interest in one industry or another. Are we to have it composed of lawyers?

Mr. Comyn

I think they would be the best.

Mr. Brown

I don't.

Mr. O'Farrell

They certainly would not be the cheapest. The Senator complained that there were 53,000 people in this country who are engaged in non-productive work. I think he was referring to those in the Civil Service. It is not always the fault of men that they may be engaged on what is termed unproductive work. The work of a lawyer is surely work of a non-productive and costly character. The very essence of a good lawyer, from the viewpoint of income, is always to take three days with one day's work. We have all experience of that.

Mr. Comyn

We are good at distribution.

Mr. O'Farrell

A man may be engaged on distribution work of a very important character. It is not productive work, but it does not follow that it is not of value to the community. This question of a tariff as a cure for every ill has reached the borders of farce. If the unrestricted imposition of tariffs were a cure for unemployment and a secret for prosperity, is it not marvellous how much misery and unemployment, general lack of trade and prosperity there is in practically all countries at present? If the imposition of tariffs were the cure for unemployment and the secret for prosperity, surely there would be no unemployment in any country in the world to-day. Yet we find that in the highly-tariffed countries distress is just as great as in the free trade countries.

Mr. Brown

Worse.

Mr. O'Farrell

In some cases it is worse. I was reading recently a speech of the Minister for Finance in CzechoSlovakia, which is regarded as one of the Republics that have been most successful and which is partly an industrial and partly an agricultural country. He boasted of the fact that they were in such a sound position, taking into consideration the worldwide depression in trade, that their unemployed represented only three per cent. of the total population. Even that is bad enough. Three per cent. of the population of the Irish Free State would be about 90,000 people unemployed. Yet that is the position in what is looked on as a successful and prosperous country. I think we have got to realise the fact that there is world-wide depression, and that we have got to take the conditions here and deal with them with a long point of view. I entirely agree with the Minister when he says that the effective and scientific organisation of the agricultural industry is the first and most essential step towards permanent prosperity. I do not know of any other industry that could survive for so long a period as agriculture has survived with the lack of organisation of any kind that exists to-day. As a matter of fact, they do not exist on agriculture; their children in America are very largely responsible for helping them to carry on in many cases. It is not at all to be wondered, when one considers the small holdings on which they are—and the number of uneconomic holders is growing, through the small parcels of land that are being allotted.

This, of course, is not the question at issue, but I was tempted to ramble away from it by other speeches that were made. I only want to say in regard to the composition of the Commission and the manner of its procedure that I think it is a more scientific and statesmanlike way of dealing with the question of tariffs than leaving it to a House of 150 or 160 members to hammer out in the presence of the Press the pros and cons of every little industry that might look for a tariff.

Colonel Moore

The Minister began by stating that it was not the business of the Commission to recommend tariffs. Apparently they are not asked to do so, and if it is not their business they ought not to do so; they ought to leave it to the Executive Council. The Minister went on to complain that industries in this country are unorganised. Whose fault is that? Of course, when we look at the Constitution we find that a clause in it states that Vocational Councils should be set up. The Ministry turned down that from the beginning and refused to establish Vocational Councils, which really means the organisation of industries and agriculture. Having deliberately turned down the establishment of Vocational Councils, they complain that industries are unorganised in Ireland.

Some Senator talked about expert advice. Expert advice surely is not to come from civil servants, whose training is in the making up of documents and so on. They are not experts in anything, but they are "jacks of all trades." If you want expert advice you should go elsewhere than to civil servants. Vocational Councils would be made up of persons who are well acquainted with each particular industry and who would be in a position to give advice on any particular subject. That has been turned down, and the question of expert advice has been handed over to civil servants who have no knowledge of these subjects. My opinion is that Vocational Councils ought to be established and some organisation arranged by which they could give their advice as to whether or not a particular industry ought to be protected. I do not say that they should be given sole control as to whether each industry should be protected or not. But they should be in a position to give advice to the Ministry and advice with knowledge. For that reason I also will oppose this Bill. I must say that this is not done through any Party purpose. It is merely a question of private opinions about certain things. Our Party have taken a different view on these matters altogether. In fact, if it had not been for the pressure of the Party to which I belong no taxes on imports would ever have been imposed and nothing would have been done. The whole efforts of the Ministers have been to avoid the subject and to postpone it by appointing Committees that take four years before they report. The Minister here has constantly announced the fact that he is an out-and-out free trader and that he only gives into certain things when he cannot help it.

Question put and declared carried.

Committee Stage ordered for Wednesday, 17th December.