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Seanad Éireann debate -
Wednesday, 20 May 1931

Vol. 14 No. 19

Finance (Customs Duties) Bill, 1931—Second Stage.

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

In view of the considerable number of tariffs now imposed and, in my opinion, the danger of an increasing number of tariffs, I should like to make a few brief remarks on this Bill. When, in the ordinary course of financial legislation, Budget Day is approaching, there is considerable interest in and apprehension about possible taxes. All kinds of speculation takes place in the Press and elsewhere. The Minister is asked to receive deputations and, when taxes are imposed, all sorts of criticism follows. Yet, in effect, this Bill is not a Tariff Bill at all. None of these Bills should be called a Tariff Bill. They all impose taxes and they impose them in a dangerous and insidious manner, without appreciation of the true facts. That is one point which I would ask the House to consider. In this Bill, we really have— rightly or wrongly—a tax imposed on butter. The Tariff Bills should therefore be regarded as tax measures. I fear that all along we have been looking at this matter from the wrong angle. This taxation is dressed up and disguised as relief of unemployment or it is introduced because of the necessity of stimulating our national industries. On that account, we are inclined to lose sight of the fact that these taxes are no wise different from the taxes imposed by the ordinary Budget machinery. We should be just as apprehensive about them as about the taxes imposed by the Budget. If anybody came along with a proposal that we should come to the rescue of an organisation that was in difficulties, that because an organisation with a semi-public utility value as a marketing organisation was in jeopardy, the taxpayer should come to its assistance, I think we would be rather outraged—that is, if the proposal were put in that crude form. Yet that is what happened in respect of the proposals that led up to this measure. When this prohibitive tax of £5 per cwt. was placed on butter, it had the effect, at the expense of the consumer of butter, of saving the Associated Creameries from insolvency.

That was the direct effect of it. Whether it was wise or not, I am not prepared to say. I think we are inclined to view tariffs from the wrong angle, and that we should have regard to their real gravity and their implications.

I am in favour of this tax. I realise fully that it is a customs duty. Although I am opposed to the view taken by Senator Sir John Keane in regard to this tax, I think it is a good thing that the principles of taxation, as applied to tariffs, should gradually come to be understood in the Parliament of this country. This is a customs duty, and, being a customs duty, I think, in imposing it we ought to have our eye on excise duties with a view to diminishing them in like proportion, so that the burden on the consumer, speaking generally, will not be increased. I am in favour of this tax on butter, because I think that, in the end, it will be very useful to agriculture and to dairying in particular. I think that it may have some effect in promoting a type of agriculture which should be very useful in this country—winter dairying, with a consequent cultivation of the root crops and other products necessary for winter dairying.

What I intended to speak on particularly was the form of this measure. I suppose the Minister has had the advice of the ablest Revenue officials in the drafting of this Bill. For that reason I am somewhat reluctant to speak on the form of the measure, but it seems to me that sub-section (2) of Section 1 is in a form which I have never yet seen in any Revenue measure. Here is what it says:—

Whenever the Revenue Commissioners are satisfied that any butter which but for this sub-section would be chargeable with the duty mentioned in this section is imported for use by the importer in the manufacture by him in Saorstát Eireann of articles of food mainly for exportation, the Revenue Commissioners may, subject to compliance with such conditions as they may think fit to impose, permit such butter to be imported without payment of the duty mentioned in this section.

I say without hesitation that I have never seen in any revenue measure provisions of that character. They are altogether too loose.

The Minister says they are in all of them, but the proper procedure is to charge duty on all taxable commodities at the port and to give a rebate or drawback on re-exports. That used to be the system. It was a scientific system and, I think, it worked quite satisfactorily. Here there is an exemption of butter from duty not because of the character of the butter but because it is going to a certain consignee and because that consignee is going to use it mainly in the manufacture of biscuits. I venture to say that never in any customs legislation has there been an exemption based on the name of the firm to whom the goods are to be sent and never has there been a remission based on a phrase like this, "butter...imported for use by the importer in the manufacture by him in Saorstát Eireann of articles of food mainly for exportation." What is there to guide the revenue officer in that? He is to give a permit to the importer because he believes the importer is going to use this butter in the manufacture of biscuits mainly for re-export. How is the revenue officer to determine that question of "more or less"? I do not know. As I said, I suppose the Minister has got the best advice. I suppose the revenue officers are quite satisfied that they will be able to guess that nicely-balanced more or less. I suppose they have considered this question. Speaking with some experience of revenue legislation, which I acquired at a time when my mind was most receptive, I am of opinion that legislation in this form is wrong and that we, as a revising chamber, ought not to allow it to pass without calling attention to it.

There is another little matter to which I should like to refer. Another sub-section deals with farmers' butter brought across the Border from the Six Counties. I should imagine that that is a provision that the revenue officials must have been reluctant to introduce into the Bill. It will afford opportunities for evasion—evasion in minor matters. The difficulties of revenue officers are most likely to arise in the detection of trifling evasions of the law, and I think everybody is aware that, in the collection of the revenue, there must be the most meticulous attention to detail. These are two respects in which, I think, the drafting of the Bill is at variance with the principles which used to obtain a few years ago. I merely call attention to them for the purpose of showing that they have not passed in this House without notice.

Senator Comyn has drawn attention to sub-section (2) of Section 1, and the Minister interjected that this sub-section was in the usual form, or words to that effect.

It has appeared in other Acts.

Of this Parliament?

I could not say whether they were Acts of this Parliament or not, but I have seen them in Acts referring to these matters.

The Minister assures us that a similar provision has appeared in previous Acts. I think that, if that is so, it is unfortunate, because the system is clearly open to abuse. I do not know what is directly aimed at, but I assume that the making of cakes would be brought within the terms of this sub-section. I should like to have some assurance that one firm which makes cakes containing butter and which may hope to export the bulk of its manufacture of those cakes will not be placed in an advantageous position as compared with another firm making similar cakes and selling them in this country, yet because it is not making these cakes for export, will not get this remission of duty. That is a concrete instance of the difficulties that will arise for the Revenue Commissioners. Under this provision they are to become the judges as to whether the firm which is receiving this butter will sell its produce abroad or at home. I should like to have more information as to how similar clauses in other Finance Bills worked out.

The Bill we have before us deals with two matters—the importation of a duty on butter and the exemptions from duty on woven tissues of wool or worsteds. On the latter proposition, I support the Bill, and I think that it is desirable that these further exemptions should be made. On the clause dealing with the duty on butter, I want to enter a protest. I propose to vote against this clause when it comes up on Committee. The question of a butter duty was before the House on two occasions indirectly. On neither of these occasions had we the privilege of the assistance or advice of any Minister. On this occasion we have a Finance Bill and the Minister for Agriculture is present. I think, therefore, that we are justified in taking the opportunity to express certain views upon this policy of a tariff on imported butter. There is an advantage in dealing with this question in May, instead of dealing with it in January or February last, because we can deal with it detached from the complication due to the prohibitive duty which was present to the minds of many people then. In discussing this matter before, both in this House and in other places, the duty of 4d. per lb. was inevitably bound up with the prohibitive duty, which really had nothing to do with it. In all the discussions that took place, the valuable result of the prohibition duty was taken as a basis for support of the 4d. per lb. duty, which was not connected, except in a very distant manner, with the original proposition that imports of butter should be prohibited by a very high duty. The curious thing about this duty is that very little indeed has been said in its favour by the promoters of the Bill giving effect to the proposition. Undoubtedly those who supported the application before the Tariff Commission brought forward certain arguments in favour of the proposed duty of 4d. per lb., but neither the Minister for Agriculture nor the Minister for Finance—in fact, practically nobody on the Minister's side of the House in the Dáil——

Or on any other side.

I think that that is not quite correct. Practically nobody on the side of the Government in the Dáil, and nobody in this House who is normally expected to support the Government on such matters, has given any expression of real confidence in this proposal. Those who might be expected, in all circumstances, to be enthusiastic in favour of a proposal of this kind have been either opposed to it or have been diffident in their support of it. I speak now of dairy farmers. I was sufficiently interested to make a few extracts from speeches delivered in the Dáil, and I propose to give a few quotations.

Deputy Haslett, who is head of a creamery and keenly interested in the dairying business, said:

Of all the tariffs that have been introduced and of all the excuses put forward for introducing them, no case has ever been made so shallow as the case put forward for the butter tariff.

Deputy Nolan, who is also interested in the dairying industry, said:

They (all parties) are accepting this in the belief that it is going to raise the dairying industry from a slump to something very prosperous. I assure the Minister that the tariff is not going to do any such thing. The tariff on butter is not going to increase the price by one iota.

Deputy Bennett, who is also connected with the dairying industry, gave the proposal some support but said:

If this tariff is going to be a success—and I hope rather than expect it to be—to be honest.

Deputy Gorey said:

Except the tendency of the last three years is altered, it is only a joke to talk of winter dairying in this country. My advice to milk producers is not to attempt to enter into winter production of milk with the object of producing butter.

Deputy Heffernan, while giving general support to the proposal, was very doubtful of its value. He said:

The future effect (of the tariff) depends on certain contingencies which we cannot foresee at present. The tariff may or may not be helpful. If, next summer, the tariff being on, people decide to put into cold storage a quantity of butter which, added to the butter produced during the coming winter, will exceed the requirements of the country, then the tariff will be ineffective and the price of butter here will be the same as that of butter coming from outside because we will have an exportable surplus.

The Minister for Agriculture said:

No tariff is any good that does not increase production. There is absolutely no use whatever in producing the same amount of butter, holding it over and selling it in the winter. If a tariff is to be of any use it must increase production. The only way is by winter dairying. Will this tariff bring about winter dairying? I do not know. That is the question. It is doubtful, to say the least of it. A tariff of less than 4d. would not have any result other than to encourage cold-storage. Whether 4d. will encourage winter dairying can only be said definitely after the event. In my own opinion it is somewhat doubtful.

It is, perhaps, satisfactory, in a way, that even the Minister responsible for the development and progress of agriculture, in so far as a Minister can be responsible in that respect, should not express himself too confidently, but one would imagine that, speaking on behalf of a Government which is proposing to put a duty on imported butter, he would, at least, adduce some argument in support of the proposal. What arguments have been used? As was explained here before, the applicants for the tariff originally based their case mainly upon the importance of being able to cold-store a large proportion of the summer surplus for sale during the winter. Incidentally—quite incidentally—they expressed a hope that the tariff would increase the amount of winter dairying. The Tariff Commission utterly rejected the proposal on the first ground, but conceded the claim on the second ground. They, too, were doubtful of the effectiveness of the tariff as a means of bringing about a great increase in winter dairying. None of the supporters of the tariff amongst those engaged in the farming industry, who usually support the Government either in the other House or in this House, has any confidence that the 4d. per lb. on butter will lead to any great increase in the practice of winter dairying. I think it is fair to say that the general conclusion even of those people who are advocates of the tariff is that it will add to the earnings of the dairying industry because of the opportunity it will give to cold-store in summer and get a higher price in the winter than would otherwise be the case. That depends upon the amount that will be cold stored. The Minister fears, and Deputy Heffernan fears, that there may be too much butter cold stored in summer— more than will suffice to supply all the needs of this country in the winter. If that is the result, there will be no improvement in price and the farmers will not get any benefit out of this duty. The only way to prevent that result would be by introducing some kind of control. The Minister suggested—I do not know whether he has yet the power to act—the making of inquiry and the publication of the result periodically, showing the amount of butter cold-stored in the country, so that those who are interested will know how much they and their rivals have put into cold storage. Possibly that will have some effect, but I think it is not likely to have very great effect until or unless the industry is in a much better organised state than appears to be likely at the present time.

If the amount cold-stored is not excessive, if by means of regulations it is possible to obtain a higher price for cold-stored butter from home consumers in the winter, what is the net effect of this tariff proposition? I am going to assume what has been indicated in the Tariff Commission Report, and, I think, in the Minister's speeches, that the full 4d. per lb. would not be charged to the consumer. I will assume that there would be a certain amount of internal competition and a certain amount of competition from importers who might be prepared to cut prices for the sake of a new market, and that the full benefit of 4d. per lb. will not be received by the producer, but something less than 4d., say 3d. The price would therefore rise on the consumer by 3d. both for imported and home-stored butter in the winter. On the assumption of the Minister for Agriculture, on the assumption of Deputy Heffernan and most of those interested in the trade, the bulk of the butter that is to be sold in this country in the winter will be summer-produced butter kept in cold store. The Agricultural Commission told us that the average cost of storage, insurance, overdraft and so on would amount to 1½d. per lb. of butter. The net result of the duty on imported butter, even in the best of prospects, is that the farmers will get 1½d. and the insurance companies, the bankers and storage proprietors will get 1½d. The community is going to pay 3d.; the farmers will get 1½d. and the moneylenders will get 1½d. That seems to be the real result that is likely to come out of the 4d. per lb. duty.

I am not opposing this duty on the ground that it may raise the price of butter upon the consumer. For my part, I believe that in this country, in the circumstances of production and distribution to-day, it is right and proper that the consumers should be called upon to pay something more than the international price for this and other commodities if one could be assured that what the consumer is paying extra is really going to the benefit of the industries which are sought to be protected. In this case there is no assurance at all that there is going to be any real protective value to the dairying industry.

It is either going to be a help, to the extent of 50 per cent. of the charge, to the moneylending classes, or it is going to help the revenue. It remains for the Minister to prove to us before we pass this Bill without protest, that what is going to be charged upon the community is going really to benefit the dairying industry.

One also has to take into account that it is not only creameries which are owned by the farmers that are going to be interested in the cold storage of butter. If one looks at the returns of the first three months of this year, or of any recent year, one will find that in those few months the proportion of factory butter exported was much higher than the proportion of creamery butter. The facts seem to show that the factory butter is retained in storage for a longer period as a rule than the creamery butter. One would expect, therefore, that the merchants who are buyers of farmers' butter would be induced to purchase more farmers' butter at the very low prices ruling to-day and perhaps in the next couple of months for storage and sale during the winter. They will be interested in summer butter, not only for winter export but for winter home consumption. How are they going to be regulated? They possibly may be able to regulate the amount of storage at least as well as the creamery proprietors. It would seem to me a very likely thing that it would be not only the factory-produced butter but imported butter which would be cold stored. I see quotations, for instance, in regard to Polish, Latvian and Esthonian butter on the English market, and some of it is considerably below the price of Irish, New Zealand or Danish butter. I can see a likelihood of such butter, even though not up to the mark of Irish quality, being stored in the summer time and unloaded in the winter time, and they would be getting a very considerable share of whatever higher price is available for home-produced creamery butter.

The competition of the imported summer butter in the winter markets would have the effect of bringing down the price of home-produced and, altogether, there seems to be a very strong case against this proposal and a very weak case for it. I have left aside in this discussion the suggestion that the duty would lead to a very great increase in winter dairying, because most of the farmers speaking in favour of this proposal have left that aspect aside.

There seem to be very meagre grounds indeed for hoping that an increase of 2d. over summer prices for milk would lead to a great increase in winter dairying. If that is the desire, and if the object of this duty is to lead to the encouragement and development of winter dairying, I suggest, and it was suggested before, that this is not the way to assist the farmers to that end. It is a costly way. It is costly upon the consuming community. It is much more costly than is really necessary. I submit that the same results can be attained, and very much better results can be attained, by a direct bounty or subsidy on exported home winter products, and by means of direct assistance you may possibly get the result that is assumed to be in mind in submitting this Bill.

So far as any case has been made there is very little justification indeed for hoping or expecting that the duty of 4d. per lb. on imported butter will have the effect of increasing winter dairying. On the other hand, if that aspect of it is left aside and if it is thought it will aid in the levelling up of the price of summer-produced butter which is held over for winter sale, then on that account nothing of this kind ought to be done until the industry has put itself into a position to manage and organise itself and generally conduct its business in a less anarchic fashion than is the case to-day. It is of extreme importance that the dairying industry shall be encouraged and put on a basis which would be at least reasonably prosperous. It is on that assumption this proposal has been presented. The onus of defending the proposition lies on those who are making it, and they have not done that. I submit it cannot be done by this means and the House ought to oppose the proposition that 4d. per lb. should be imposed on imported butter on the ground that it is not likely to have the effect aimed at; that in the search for that effect it will impose too great a cost on the community. The results can be attained at a cheaper cost to the community and with very much greater certainty of success.

I would like to say a few words in support of the point made by Senator Comyn when he was dealing with Section 1 (2). The difficulties that are presented to the revenue officers in deciding in regard to the tax as to what butter is going to be used for domestic and export purposes seem to me to be insuperable, and I think the Minister will in some way have to justify the machinery.

I would like to make an explanation. I think the Senator missed the point. It is a matter deciding whether this butter is going to a firm whose business is mainly an export business.

I was about to come to the point that the Minister has just made. The largest manufacturer of biscuits and cakes in this country sells in the domestic market as well as in the export market. How are we going to differentiate between production for domestic consumption and production for export purposes?

They do not intend to and they are not expected to in the Bill. That is the point that I have just made. The butter comes in to such a firm free of duty whether it is to be used in the manufacture of biscuits or cakes for sale either at home or abroad.

I would like to consider what the Minister has said because it does not seem to me to be equitable. Is a firm purchasing butter in the domestic market for manufacturing purposes going to be in the same position?

Then it seems that a firm catering for the domestic market is going to be handicapped, and the firm that is engaged in the export trade is going to be placed in the position that it will get butter free of duty for the manufacture of commodities for sale both in the domestic and in foreign markets and that is simply because they are exporters. That is preferential treatment and it is unjust treatment. With regard to the other points, there is one thing that I would like the Minister to clarify to some extent, if he can do so.

Senator Johnson has spoken of the likely results in regard to storage and the ineffectiveness of this measure to develop winter dairying. I would like to remind the Seanad that a very important proposal came some time ago from Senator Wilson. I think the purpose of his amendment on that occasion was to prevent what I might call cold storage for profiteering purposes. It seems to me that one of the likely results of the tariff will be to make the butter in the summer time, the time of greatest production, just as dear as the winter product because there will be such a quantity going into cold storage that there may be a big reduction in the supply of summer butter available for the ordinary consumer. That might be a levelling up process, but it might also be a levelling up process that will be very costly to the consumer. It seems to me that Senator Wilson's proposal was an entirely sane and logical way of meeting that. His amendment aimed at preventing an undue quantity of summer-produced butter going into cold storage for profiteering purposes in the winter. I do not know if that was the Senator's idea, but it certainly was my interpretation of what he was aiming at.

These are the only points that I would like to make. Our Party supported Senator Wilson's proposal. It was entirely a sane suggestion. I do not know whether the Minister would be disposed to consider any proposal of that nature.

What was the proposal?

The proposal was that the State would impose a certain tax, an excise duty, on cold-stored butter. As I have said, I think that was entirely a sane proposal. It was turned down by the Seanad. I would like the Minister to consider it as a sort of recommendation. I think that is as far as we can go in the matter, because this Bill cannot be considered in Committee like other Bills, and we have no power to propose amendments.

The object of the 4d. tariff was to rescue the dairying industry in the fall of last year when there was a considerable amount of butter being dumped in the Free State. That butter came from foreign countries and it was selling at a very low price. If imports of that butter were allowed it would have injured the dairying business considerably. Were it not for the action of the Government in putting on a prohibitive duty, and continuing the duty afterwards at the rate of 4d., large quantities of foreign butter would have been dumped here to the injury of our dairying industry. There were people who advocated the 4d. tariff for the purpose of bringing about an encouragement of winter dairying. There is no doubt at all about it that if the 4d. tariff remains, and if this butter is cold-stored, you are going right away to ruin winter dairying. That cold-stored butter will be available for winter consumption and the man engaged in winter dairying will be placed at a great disadvantage.

On another occasion I suggested here that if you want to have winter dairying you should give an export bounty in respect of winter-produced butter, and on cold-stored butter that would be taken out after a certain period, say November, there should be placed an excise duty, because that butter would have the benefit of the 4d. tariff if it were going on the home market. There should, at all events, be an excise duty of 3d. or 4d. placed on butter coming out of cold storage. The idea, I think, was to keep the butter in cold storage and then place it on the market, but that would be absolutely ruining winter dairying. The proposal was certainly not estimated to safeguard the public.

They are the last to be considered.

I do not exactly mean that. It might as well be mentioned also that there are people who are getting the food at too low a price in comparison with the wages they receive. Let us all understand that. There are people who got a rise in wages and that must be considered against the fact that our products have come down in price. I am not, however, looking at the matter from that point. I am considering the effect of the 4d. tariff on winter dairying. It is as well that we should understand what is happening. You are going to ruin winter dairying through this 4d. tariff unless the Minister will accept a recommendation that all cold-stored butter when coming out of cold-storage, should pay an excise duty. I have now in mind butter coming out of cold storage in the winter time for sale in this country. Unless the Minister imposes an excise duty, then he is going to ruin winter dairying. If he imposes an excise duty he certainly will do a lot to help winter dairying.

A 2d. excise duty?

Yes. Unless an excise duty like that is imposed you will have butter factors purchasing foreign butter in large quantities and at a low price, placing it in cold storage and then taking it out in winter time in order to secure the advantage of the 4d. tariff on imported butter. Senator Johnson is quite right when he states that this thing could have been done much more cheaply.

The original intention was to safeguard the dairying industry and keep out foreign produce. The Commission recommended a 4d. tariff in order to encourage winter dairying. Now the result will be that the tariff will ruin winter dairying unless an excise duty such as I have suggested is imposed. If you want to encourage winter dairying give an export bounty of so much a lb. on exported butter produced in the Free State. You will have money enough to do that from the revenue derived through the duty on foreign butter imported in the winter time. It will not cost the State anything; at the worst the cost to the State will be very, very little. The Minister was sick when this matter came before the Seanad on a former occasion. Senator O'Hanlon spiked my guns then. I brought the suggestion forward only for the sake of argument, but there is a good deal to be said for it, nevertheless. I really submitted the proposal for the sake of investigation. I was not confident that I was going to carry it, but I wanted the House to consider the position. My idea was to keep winter dairying alive by imposing an excise duty.

As a non-agriculturist I must say that after listening to the speeches made by the experts in these matters it appears to me that this tariff is really a fraud on the public. Senator Wilson has told us in very plain language that this 4d. tax is going to ruin the dairying industry.

In the winter time.

I would like to put forward the views of the ordinary man in the street without pretending to understand the technicalities of the situation. The case for the man in the street is that towards the end of last year the housewives in Dublin were buying the best Irish creamery butter at 1/2 per lb. There was then a prohibitive tax placed upon butter coming from other places into this country, in order, we were told, to save the dairying industry here. The result was that, adding 4d. to the 1/2, the shopkeepers worked the total out at 1/9. That is an extraordinary thing, but it is true. The tax was 4d. and, ordinarily, that sum added to 1/2 makes 1/6. That, at least, was the position when I was going to school. It was really extraordinary, however, that the price charged to housewives in Dublin after the tax on butter was imposed was 1/9 and 1/10.

It was more extraordinary still that when the creamery butter supply in this country was exhausted and when there was really nothing to protect we still had the tariff—protecting something which we had not got. Extraordinary as it might seem, that was exactly the position; we had a protective tariff on something we had not got. The result, as usual, was that the tariff hurt the people who could not afford to pay it. In Dublin and in the country generally the staple food is bread and butter; that is what we call the staff of life. The poor people in the towns and cities, but particularly in Dublin, had to pay this prohibitive price in order to protect something that we really had not got.

I am not opposed to any measure adopted for the purpose of encouraging and supporting home industry. I never required any tariff to make me do the right thing in order to support Irish industry. I want to submit the ordinary man's point of view in this matter in view of the tremendous divergence in the views of all the experts. I may say definitely that this is a question that requires careful consideration. I am perfectly satisfied that, in an agricultural country such as this, some means ought to be adopted so that we would not have to be importing butter in the winter time. Whatever are the best means of doing that, they ought to be adopted. In that way we will encourage winter dairying and we will prevent the export of our money for the purchase of an agricultural commodity which we should be able to produce in sufficient quantities to supply the home market.

I understand from people engaged in the trade that it is an absolute necessity that some attempt ought to be made to carry on winter dairying in this country if we are to have a successful butter trade. I am told that the people who are our best customers for Irish creamery butter get supplies for eight or nine months in the year. We then lose them for three months and at the end of that time our trade is gone and it has to be built up again. This is a tremendous set-back and such a condition of affairs can only be injurious to the trade. If the Minister for Agriculture will suggest some method that will encourage winter dairying without inflicting any great hardship on the poor people of this country, I for one will give him all the assistance I possibly can to carry out his intentions.

When tariffs are imposed it is a customary thing to dwell upon the effects they are likely to have amongst certain sections of the community. In certain countries, such as Switzerland, where they are so alert about tariffs, they are able to particularise between the types of boots, for instance, that are used in the country. Certain boots are forbidden to Switzerland because the people of the country can then charge something like £3 a pair for Swiss boots which are used in certain sports. The main object in imposing this tariff of 4d. on butter was really to protect a certain firm. It is as well that we would talk in very plain language on this matter. The firm to which I refer is Jacob's. It is the only biscuit-manufacturing firm of any importance in this country. In England there is the great manufacturing firm of Huntley and Palmer. Of course the firm of Jacob's is not cavilling at the quality of Irish butter, but at the same time it buys as much butter as it possibly can, cheaply, from outside countries. This is the second time that the firm of Jacob's have thrown down the gauntlet to the Free State. When we were discussing the question of a tariff on flour some time ago there was an exemption made in favour of this firm, and this tariff on butter is presumably another effort to meet their threat that they will leave the country unless they are given facilities. If they did leave the country I am sure the Republican economists would blame this Government for driving them out.

As regards the problem of winter dairying, it used to be said long ago that no country was poor that had a protective tariff. From my experience the more you go into the theories of economists, and the more you discuss with various people the value of tariffs, the more confused you get.

Senator Wilson made a dreadful revelation when he implied that the price of food should have some relation to the amount of wages a man is getting. In that case probably a millionaire would have to pay £1 for a lb. of butter. That was a trick of the English to feed the people so cheaply that they needed hardly anything else to live on. No country that has dear food has a standard of living immediately connected with the wages paid. I think that the lower the wages and the cheaper the food the lower the standard of civilisation you have in any country. I cannot see why creamery butter produced in this country should not be cold stored.

No matter what people may think, you cannot have too much food in a country. It is quite right to prevent the dumping of foreign butter or foreign butter being cold-stored here. You could make that illegal No one has suggested that this tariff of 4d. has made it possible to maintain the activity in creamery production that we ought to have in this country. We have got to such a condition that agriculture is practically our only industry. Anything that would tend to lessen activity in one aspect of it, in creamery production, would be a very serious matter for the country. We might get to the position where our people would lose the knack of producing butter and find ourselves depending altogether on dirty butter from Russia or on sterilised butter, the effect of which as a food we do not know.

I welcome the introduction of this particularising tariff that the Government has introduced. This 4d. tariff was not proposed originally by the Government. It was introduced in response to a certain amount of pressure that was put on the Government. You might easily destroy winter dairying if so much butter is cold-stored in the summer as would make it unnecessary to produce any butter made from milk in the winter. The tariff is there to prevent winter dairying being driven out of the country.

It is well known that once you lose a market a tremendous effort is required to regain it. That has happened before in the case of the creamery industry with regard to the firm of Huntley and Palmer and another big firm, the name of which I cannot think of at the moment. If we were to lose contact with the market at the other side the Danes would get in. In the case of the bacon industry, so anxious are the Danes and the Poles to recapture it that they are actually subsidising bacon to the extent of 40/- a cwt. It is quite easy to imagine that if the Danes could sell butter in this country at 5½d. a pound, that is a halfpenny a pound cheaper than margarine, they would, as soon as the dairy industry had disappeared in this country, increase the price of butter far beyond that at which our creameries produce butter now. The American dumpers put their fat bacon in here at 2d. a pound, and as soon as the opportunity offered they charged a 1d. a pound more for it than was being paid for Irish bacon. I am glad that the tariff is there. It is a matter of adjustment to see that it is not abused.

On the last occasion on which we discussed this question on the motion that was introduced by Senator Wilson, I partly opposed that motion while I agreed with the principle of it. I opposed the working of it. I held then, as I hold now, that the putting of an excise duty on butter cold stored during the winter was not going to improve the position of dairying in this country. I pointed out that if a collapse was expected in butter prices during the winter no one was going to hold over butter from the summer. I held that the excise duty would further depress the price. The position that would be created would leave us depending altogether on the foreigner for our supply of butter, and it was the policy of depending on the foreigner for anything that I opposed. Senator Johnson hit the nail on the head when he said that he had no objection to the price of butter ruling here being higher than, say, the international price. When Senator Wilson's motion was before the House I proposed that an economic price should be guaranteed to the producer even if it was higher than world market prices. In that way you could help the dairy industry by subsidising any exportable surplus you had. The Government's policy in connection with this seems to be to deal with it in a piecemeal manner. I want to register a protest against this tariff of 4d. a lb. as a solution of meeting the difficulties that the dairying industry has to contend with. If that is the only solution which the Government have for meeting the troubles and depression that exist in this industry, then I am afraid it speaks very badly for the country and does not give much promise so far as the future of the dairy industry is concerned.

It is true, of course, that prices all over the world are dropping and that competition is getting keener, but as far as I can see the position at the present time is that the competition between the Irish creameries themselves on the British market is far keener than the competition which they have to meet from outside countries. In support of that statement, I went to the trouble last week of writing to England and getting some information with regard to the price of butter. According to the information that I have received it is reported, in the case of the butter market: "There has been a good consumptive demand during the week and prices have shown a welcome advance, with, I hope, a further advance to come very soon. Cold-stored stocks in London are increasing, but quantity is much less than at the same time last year." Senator Johnson said that New Zealand prices were lower than Irish prices. I find that quite the contrary is the case. The report I have received states: "New Zealand price ruling this morning 110/-, but some sellers are asking 112/-. Unsalted, 114/-. Australian, 108/-. Esthonian—no cable offers this week. It is quite safe to say that this butter, together with other Baltic makes such as Latvia, Swedish, etc., will go to Germany, where a better price is obtainable than what is likely to be made here. Dutch, 112/- to 114/-. Danish, 112/-," and so on. The report goes on to remark: "Shipments on the way here from Australia and New Zealand consist of 601,500 boxes, as compared with 478,200 boxes this time last year." As against that, Irish supplies are considerably down this year compared with last year. To give an idea with regard to the position of our exports, let me quote the following figures: In March, 1930, we exported 2,103 cwts. of creamery butter; for the same month this year the figure is 207 cwt. In the case of factory butter, the exports for March, 1930, were 3,616 cwt., and for March this year 1,243 cwt. Senators can see from these figures the big falling off there has been in the export of Irish-manufactured butter.

Why? Surely the Senator would be in favour of that?

Because of the failure of the Government to deal with the industry as they should have. If the Government had dealt with the situation as they might have been expected to do, we would not have the present situation. The following quotation goes to support what I have stated with regard to the competition going on in the foreign market between the Irish creameries themselves: "We opened the market here Monday by asking 110/- for salted creamery, but wires immediately came through from Cork city at 106/- delivered." That shows how they are defeating, by their own competition, the prices they could get. The report goes on: "This put a stop on 110/-. There are offers coming through from Liverpool-Manchester at 105/-. Wires from Ireland vary in ideas of value." It is pretty obvious from that report that the conditions that exist here are ridiculous. The report goes on: "Supplies have been small, but creamery could be sold at prices equal to any pet brand of New Zealand ‘finest.' Prices are ruling at 110/-, 111/- and up to 114/-." Last year when we could get these prices, in reality because of competition between ourselves here at home we were only getting 105/-.

In my opinion there has been grave negligence on the part of the Government, because not only has the loss that has been sustained a loss to the creameries and their suppliers, but it has also been a very serious national loss. We could have succeeded in getting anything from 5/- to 10/- a cwt. of an increase if the Government had done anything in the matter, as they should have. The fact that we are not getting it is because the Government adopted a passive attitude, and allowed the dairy industry to seek its salvation on its own. I see that the Minister for Agriculture is smiling. He appears to be in a hectic mood, but the present position of the dairy industry is too serious for smiling.

The Senator seems to be under the impression that I own the butter of the country. I do not.

That is the attitude that is leaving us in the position we are in. We have our Irish creameries engaging in a price-cutting competition on the foreign markets. Surely the obvious thing for the Government to do is to step in and see that the best price that can be got for Irish butter is obtained for it. The Government control 50 per cent. of the creameries of the country, and the position at the moment is that you have these key creameries buying up several of the smaller creameries in the West of Ireland. As a matter of fact, they bought up one of the biggest creameries in the County Clare the other day. The creameries are owned directly or indirectly by the Government, or, at least, are subsidised by them. The Dáil voted the money that the Government used, to buy up creameries all over the country. Surely when there is a loss of 10/- a cwt. on the butter that we export it is the duty of the Government to step in and save the country from suffering such a severe national loss.

Would the Senator say whether or not he favours the compulsory unification of creameries?

I would be very sorry to compel anyone to do anything, but here is a position where we are losing 10/- a cwt. on all our exports of Irish butter. That is a very serious national loss. That is due to the inability of the people connected with the creameries to come to an agreement as to what they ought to do in connection with the central marketing of Irish butter. In view of the serious national loss that has been sustained owing to their failure to come to an agreement I say it would be much better to compel them than to allow the situation to continue as it is.

I notice there is a motion on the Order Paper proposing to take the remaining stages of this Bill to-day. I do not think that should be agreed to. This is a very important matter and should not be disposed of in the one day. I agree that this tariff of 4d. is something, that is arguing on the principle that half a loaf is better that no bread. It has given a certain amount of confidence to the dairy farmers of the country. They are hoping for the best, and expect that as a result of this tariff they will get something out of it. I see that a deputation waited on the Minister recently to urge that the benefits resulting from it should be applied for the purpose of helping them to market the exportable surplus of butter that we have. In my opinion a recommendation ought to go from this House urging on the Government that the money accruing to the State as a result of the operation of this tariff should be applied to the development of the dairy industry. In my opinion that money should go to whatever central body is set up to organise the marketing of the produce of the dairy industry.

We are really debating an accomplished fact. The duty on butter is there, and I do not suppose anyone seriously thinks that at this stage it is practical politics to stop it, even if the House had, by itself, the power to do so. I think one may say that it was put on as an experiment. It is obvious from what has been said in the course of this debate that practically all of us are sceptical as to whether it is going to be a success or not. Personally, I would not stop it at this stage, though I do not believe it is going to be a success. The result of it, nevertheless, may be good. I think we have the belief in this country that if you put a protective duty on anything you are promptly going to save the industry concerned. I do not believe that. I do not say there are no cases in which that may not happen, but I believe they are comparatively few. If protective duties have to be put on, I think that ought to be done with the greatest care.

In the present case we have a very good illustration of the difficulty of bringing about what you want so far as protective duties are concerned. We are assured you cannot do what is wanted unless you impose, in addition, an excise duty.

I agree with Senator Sir John Keane that it is a tax in the sense that it will be added on to the cost to the ordinary community. I think that is absolutely inevitable. Another difficulty in connection with it was illustrated in the course of the debate. It was promptly found that the application of this customs duty seriously affected an industry doing a large export trade. I do not quite understand the attitude taken up by Senator Connolly and Senator Comyn. If they mean that there may be some difficulty as regards the wording of this, possibly there may be something in that, but I think if you examine it you will find that it is almost impossible to evolve any wording which will be equitable on paper. There is really only one or, perhaps, two firms which are doing an export trade which would be seriously affected. Therefore, you have got to deal with this in some way that will be practical. I have no detailed knowledge myself of the business concerned. If it be biscuits, as I think was suggested, then I think that if the proposal of Senator Comyn, that there should be a rebate on the amount of butter imported for use in the manufacture of biscuits for export, were carried out, it would be carrying the thing to the ridiculous.

A number of Senators have spoken in favour of putting an excise duty on butter in order to enable the farmer to export his butter and get a market for it outside the country and, at the same time, raising objections to the provision in the Bill which encourages another form of export and which makes that possible. I am very strongly of the opinion that it would be quite useless. Imagine this country, a small State with a population of less than three millions carrying on entirely by itself. It is essential that we should develop our export trade not only so far as farm produce is concerned but also in regard to our other industries. So far as a customs duty is concerned, what the Government must do is to see where exemptions or adjustments can be made which will enable the existing exporting firms to continue their business. A firm that is doing an export trade is in competition with conditions altogether outside this country. If they are going to be subjected to experiments, and it is admitted that this is an experiment, then in my opinion such experiments are not going to improve their export trade, but rather to seriously injure it. The result may be that they may possibly lose their export trade. If that should occur as a result of anything we do, then we are simply going to make fools of ourselves.

On a point of explanation, and arising out of what Senator Douglas has said, I pointed out that preferential treatment was given, or was proposed to be given, to an exporter who was at the same time supplying the domestic market. I understood from the Minister that no such remission of duty is afforded to the manufacturer making for the domestic market. I say that is unfair treatment so long as the other firm, being an exporter, is also catering for the competitive market at home.

I did not understand that the Senator wished to extend the exemption. I thought he objected to it.

From the educational point of view I think this tariff has resulted in one of the most useful debates that has yet taken place in this House, because it has brought the brass wall tariff reformer to realise that tariffs are not an infallible cure for unemployment, lack of prosperity and so forth. Other tariffs, previously imposed, had similar effects, but we were not able to assess their effect to the same minute extent that we are in this particular case. Senator MacEllin has indicated one of the reasons why the dairy industry, from the point of view of its export trade, is in its present deplorable condition. Notwithstanding this tariff the Senator has pointed out that in the industry there is an absolute lack of co-ordination or organisation of any kind for the purposes of selling. In other words, the policy that we have always advocated Senator MacEllin now supports, that the application of tariffs as a constructive means of organising industry in an up-to-date manner is absolutely worthless. The Senator has pointed out that you have this position to-day: that the Irish creameries are competing wildly and recklessly against each other on the British market. We know, too, that the first and only organisation that they had from the sales point of view they were wildly enthusiastic in breaking up. They smashed it up with the greatest enthusiasm because they were not allowed to compete against each other on the British market. Now we have a wail to the effect that they have no organisation at all. I think that in those circumstances, if you want to assess the responsibility and the blame, you will have to go to the creameries themselves.

I was glad to hear Senator MacEllin advocate—I do not know if what he stated is the view of the members of his Party as a whole—that if it is necessary compulsory powers should be used with a view to having united action among the creameries so far as the export trade of Irish butter is concerned.

You are never going to get that from the Irish farmer.

There is not even unity among the members of the Fianna Fáil Party here to-day on that. When that is so what will you find when you go to the farmers and the creamery proprietors throughout the country and ask them to submit to compulsory powers? What about the creamery managers, every one of whom has a separate vested interest and is not prepared to sink that in any way in the interests of the community as a whole or even in the interests of his own creamery? These are some of the problems that have to be faced in connection with this, so that the proposal to solve all our economic troubles by a tax on bacon, butter, wheat and flour, and everything else that we require, is going to land us in a thousand and one difficulties that we do not now foresee.

The suggestion to grant an exemption as regards butter used in the manufacture of articles afterwards exported is, I think, a fair one. I realise that it may create certain inequality of treatment in regard to the home market. At the same time I think it would be very foolish on our part to tax the raw material of anything that we propose to export. Our export trade is already very weak. The few firms that have, without a tariff of any kind, been able to pay fairly reasonable rates of wages and stand up to world competition should not be impeded in any way in regard to their trade and manufactures. I see that there is a chance of creating anomalies here in regard to those who manufacture for the home market only. The exemption might really be extended in that respect. I do not know whether there is a lot of butter imported for the manufacture of confectionery, etc., or whether it would mean a lot, but I do not think that manufacturers of any kind should be hampered by a tax on the raw material on which they depend.

Senator MacEllin is doubtful as to the effects of this tariff. I take it that he speaks for his Party on this. It is obvious from the silence with which this tariff was received by the Fianna Fáil Party in the Seanad, and also in the Dáil, that they are all doubtful.

I was speaking for myself.

The silence of the other members of the Party was even more eloquent than the Senator's speech, and certainly the silence with which this tariff was received by that Party in the Dáil was more eloquent still. The Senator was doubtful as to the effects of this tariff. We can carry his reasoning process a little further. I take it that the Seanad, and even the members of the Fianna Fáil Party, would be a little doubtful as to the effect of a tariff on imported eggs, beef, mutton, lamb or bacon, or any other agricultural import. If, in the month of May, 1931, the members of Fianna Fáil are still assailed by these doubts, I ask them to think over the amount of nonsense and drivel about agricultural tariffs they have talked during the last three or four years and the amount of time they have wasted in doing so; the deception they have practised on the country by advocating wholesale tariffs as a cure-all.

On a point of order, the Minister is proceeding to launch a political attack on a matter that is not under discussion at all. We are discussing a particular Bill here, but the Minister, instead of addressing himself to that, is merely launching a political attack.

Cathaoirleach

That is not a point of order.

The Minister is misrepresenting the members of the Fianna Fáil Party, including myself.

The trouble with the members of the Fianna Fáil Party is that they have come to the conclusion that they are never to be shown up. No one is entitled to answer them. Even where they are obviously found out, no one must refer to that. I cannot subscribe to that. Senator O'Farrell put the position in a nutshell when he said that if this debate served no other purpose it was well that it had taken place from the point of view of its educational value to the country. There can be no doubt whatever about that. What is the position with regard to this tariff? Senator Johnson says that I am doubtful. I am, and so obviously is everyone in the Seanad and in the Dáil doubtful as to its effect. But there is this to be said, that a tariff on butter is more likely to effect some purpose than would a tariff on any of the other agricultural items I mentioned a moment ago. What is the position with regard to butter? It is the only item of agricultural production in which there is a shortage. It is true that shortage only occurs during the winter months. There is a shortage for four months, and because of this temporary shortage there is just a chance that the tariff will increase the price of the home-produced article, and, therefore, encourage home production. But that chance is not there in regard to any other item of agricultural production. There is no shortage in our production of beef, mutton, eggs or bacon. On the contrary, we have an export stock of double our home requirements in any month of the year in regard to all these items. So that as regards these items this is the only tariff which, by any stretch of the imagination, can effect the purpose for which tariffs are imposed. I was told by Senator Farren that this duty was on butter last March to protect an article that, he said, was not there. That is not correct. We had more than one-third of our home requirements of butter in this country in the month of March.

I said in the winter period.

I am taking the worst month. That is not the position in regard to boots or various types of clothing. In regard to these there is a permanent shortage of one-fifth or one-sixth in every month of the year and in every day of the year. I do not find any opposition to these tariffs, though it must be admitted that they put up the price on the consumer and that this increased price goes into the pockets of the industrialists. The fact is, that as regards any of the articles I have mentioned there is a shortage so far as home production is concerned. We can, equally, have no doubt as to what the effect of a tariff would be on any other item of our agricultural production, such as cattle, sheep, beef, mutton or bacon. There is just a doubt as to whether we should not give the farmer, who is a consumer and who has been paying his share of the cost of all the other industrial tariffs, some small compensation by this tariff, but when we introduce this tariff what happens the parties who have advocated agricultural tariffs as the panacea and cure-all for our agricultural evils? They announce now that they are doubtful, that they think this tariff of 4d. per lb. on butter is a mistake and that the Government should take some other steps to meet the position. What are the "other steps" we are supposed to take? I notice that Senators, like Senator MacEllin, carefully refrained from pointing out what steps we should take. He pointed out that this tariff might not increase the price of butter. He does not point out what steps we should take. Senator Johnson indicated his view. He suggested control. I think that Senator MacEllin almost suggested control. Why not come forward with that as a definite policy or is it merely put forward to be withdrawn? Is that the new policy?

What about the 2d. excise duty?

I shall come to that. Is that the new policy—that we are to have agricultural tariffs, with control? Up to the present, that has not been put forward by any responsible Party. I think myself that there is very little likelihood that it will be put forward, because it would be extremely bad politics. I come on to this tariff. Senator Johnson asked me if this tariff will encourage winter dairying. I admit that I am doubtful. There is no use in being dogmatic on this question. Nobody can say definitely what the result will be. Anybody who professes to say so is merely giving an opinion which may or may not be sound. It ought to encourage some winter dairying. It ought to increase the price of milk by something over a penny a gallon in certain circumstances and that ought to do something to increase winter dairying. Of course, there are other factors operating which may prevent it. There may be too much butter cold-stored. If there is too much butter cold-stored, there will be no increase in the price of butter and, hence, no increase in the price of milk. But there will be no decrease in the price of butter. At the best—I am looking at the matter from the point of view of the farmer—this tariff will increase prices for a short time during the winter months. That is the best that can happen from the point of view of the farmers. If it does that —it may not, in fact—it will encourage, to a very small extent, winter dairying. At the worst, it will not increase prices. There will be cold storage and, at the worst, it will not increase prices, but it will not decrease them. Senator Wilson is entirely wrong when he suggests that it may ruin winter dairying. If prices remain the same, if there is no decrease, the tariff can have no effect on winter dairying. It cannot ruin winter dairying.

On a point of explanation——

Cathaoirleach

These points of explanation generally amount to second speeches.

This one will not be in the nature of a speech. My idea was that the tariff was put on for the purpose of increasing winter dairying. The increase in cold storage will not increase winter dairying. It may leave it as it was, but it will not do it any good.

That is all I am saying. I am looking at it from the point of view of the farmers. There may not be too much cold storage. We shall only know that for certain after the event. If that be so, there will be a slight increase in prices for a short time in winter. If there is an increase in the price of milk and if that is likely to continue the following winter and so on, there will be some slight increase in winter dairying, because any increase in prices will bring about some increase in production, if it is permanent. At the worst, if there is much cold storage there will be no increase in prices. The consumer will be exactly where he was and nobody will have lost anything.

It was suggested that the right way to encourage winter dairying was to subsidise exports or to put an excise duty on cold-stored butter. The subsidising of exports would require a big staff, a tremendous amount of inspection, and a big increase in overhead expenses. There is just as good a case for subsidising other forms of export as for subsidising the export of winter butter. I do not think that you can consider this question of subsidies vis-á-vis one form of export, like butter. You must consider its reactions and possible effects on other desirable forms of production both in summer and winter, and you must have some definite policy in regard to it. I do not think that it is possible to discuss this question in detail and to do it justice on a Bill like this.

Selective encouragement !

I dare say that if the matter was fully considered, and if there was general agreement on the question of subsidising exports, we would have to have some body like the Tariff Commission, whose function it would be to examine the effect of a subsidy in respect of each individual item. I am not in a position to agree with the general principle at the moment or to outline its effects on the export of butter or on the production of winter butter, which is the point at issue.

With regard to the second suggestion—to put an excise duty on cold-stored butter—that would completely dislocate trade. The position is: we produce in the four months of winter about half our total requirements and we cold-store more, so that I should say we have at home two-thirds of our total requirements. In other words, every creamery makes its contract with its home customers not only for June, July and August, but for October, November and December, and every creamery, as a matter of business, wants a certain proportion of its supplies to keep its customers going during these months. That is well recognised in the trade. It is done in every business, and it would cause the greatest possible dislocation if we were to interfere with it. Some firms will not do business with you unless you are in a position to supply them over a certain period. You must suit your customers and the holding of butter, bacon and other produce in cold storage is absolutely necessary if the trade is to be carried on in the most profitable way. If we were to put an excise duty on butter, what would happen? In the event of there being such an amount in cold storage that the prices did not increase, these unfortunate people would be getting world prices and would be paying the excise duties as well. The immediate effect of that would be that there would be no more cold storing. There would be some increase undoubtedly in winter butter, but the rest of our butter would have to be imported, carrying the full duty, and the home market would have to be supplied for a long time with imported butter. Senator MacEllin seemed to think—I did not understand a lot of his speech—that cold storage would lead to profiteering. He spoke of "cold storing for profiteering purposes." I think it was Senator Connolly who said that a big quantity of butter would be taken off the market in summer, leaving a summer shortage.

For the purpose of getting the extra price in winter.

In that way, forcing up the summer to the winter price. There is not the slightest danger of that. Senators may take it that the requirements of this country in butter are practically the same for every month. 27,000 cwts. of creamery butter are required for the home market. In January we produce 6,000 cwts., in February about the same, in March about 20,000 cwts., in April about 30,000 cwts., in May about 70,000 cwts., in June about 90,000 cwts., and in July about 100,000 cwts. I think these figures are approximately right. That will go down to 30,000 or 40,000 cwts. in September or October, and in December to 15,000 cwts. There is no possibility of any quantity of butter being taken off the June, July and August supplies that would in the slightest affect the summer supplies. Cold storage in this regard can have effect only in one way. It can have no effect in putting up prices. The only effect it can have is in keeping down prices. Cold storage may lead to the winter prices being the same as the summer prices, but it cannot increase in any way the summer prices.

With regard to sub-section (2) of Clause I, that particular form of clause has appeared—I have just discovered— in other enactments. It appeared in the Finance Act of 1929, and I think Senator Douglas explained the reason for it. In the case of any importer of butter for manufacturing purposes it would be almost impossible for the Revenue Commissioners to say how much went to biscuits, as in this case, that were exported, and how much went to biscuits to be sold at home. The firm itself could say that, but it would require a very elaborate system of accounting, and it would dislocate their trade. People like Messrs. Jacob—since their name has been mentioned—cannot say, from day to day, just where their biscuits are going. I am quite certain that, in the course of business, biscuits ready to be sent to Glasgow might have to be deflected to Cork, and it would be a great inconvenience to any of these firms if they had to keep accounts and so run their business that they would be always able to say exactly what consignments of biscuits were sent abroad and what consignments were kept at home.

Does the Minister suggest they do not know?

In the end, they do. Of course, they know exactly what biscuits are exported, but then they would be required to say what butter is in one class and what butter is in the others—how much imported butter is in each. It is accepted that it would be extremely difficult for, and quite a nuisance to, any big firm to have to keep these accounts. In any event, it is a principle accepted in every country where tariffs are imposed that the home manufacturer is facilitated in every way so far as his export trade is concerned. The export trade of the few industrial firms in this country is of vital importance, and it would be the last thing in short-sightedness for us in the interest of what I admit is, and every Senator calls, an experiment, if we were in any way to inconvenience the firm concerned. The Revenue Commissioners have no doubt whatever that they can administer this Bill satisfactorily. I admit also that you have the position, in theory, at least, that a manufacturer who is mainly an exporter may import butter without duty and consequently is free to go to Esthonia, or anywhere else, for it, whereas the manufacturer who is manufacturing for home requirements must use Irish butter and hence has not the same range of choice. He does not pay any more for the butter. He can get Irish butter just as cheaply——

In winter?

Yes. In fact, it is not the best of creamery butter that goes into any of those places. It is quite good butter, nevertheless, and it can be got at home just as cheaply as elsewhere. But, as I said, the manufacturer for home requirements is at some disadvantage in not having the same range of choice. That is a good point in the abstract, but I believe it has no application in this country. The alternative is to require the firms in question to keep returns showing how much imported butter goes abroad in the export of the finished article and how much is kept at home. I am advised that that is impossible. I recommend the adoption of this tariff first of all for its educational value. Up to the present, this butter tariff has cost somewhere about £250,000. That is what a 25 per cent. to 30 per cent. tariff on an article of which there was a shortage of about half the home market requirements cost this country in three months. Senators who are good at addition, and especially multiplication, can come to some conclusion as to what the other tariffs have cost the country, even though their cost is hidden. There is one thing to be said about this tariff which cannot be said about industrial tariffs. Industrial tariffs went, to a great extent—quite rightly—into the pockets of the industrialists or private firms. They are very limited in number. A certain amount of the increase due to industrial tariffs went, through the Minister for Finance, in reduction of taxation.

A big amount?

Yes. So far as the cost went to the citizens of the country, it went quite rightly to the proprietors of the concerns. So far as any of that £250,000 went to producers, it went to a tremendous number of them through the co-operative societies. It was far more widely distributed than any possible industrial tariff could be. This tariff is never going to raise even 250,000 pence again, in my opinion. The price of butter now is the international price. In my opinion, the price of butter next winter will not be much higher. I hope it will be a bit higher and I hope that we shall have winter dairying, but the increase is going to be negligible in comparison with the increased price of other articles. Dairying is the foundation of our agriculture. Unfortunately, dairy produce has fallen in price relatively more than any other agricultural product. Anything we can do to increase prices is all to the good.

You are not doing it.

If this does increase the price, it is all to the good. This tariff was imposed deliberately, even though we were doubtful of its effect. I confess that I was brought to favour it largely because of its educational value. I do not make any secret whatever of that. It is a good thing that the country should get certain lessons in economics, even if they cost a little. I think that this tariff on butter will probably save the country a lot of money yet. It has definitely killed indiscriminate tariffs and it has definitely vindicated the Tariff Commission. That has to be said about it and that is worth a lot to the country. As to what its economic effect will be, time only will tell. We are in the middle of the experiment and we have paid nine-tenths of the cost. Let us see it out. It would be the last thing in futility to defeat this tariff now. It is in force for practical purposes for four or five months. It can have no effect over the summer. What we really want to see is what effect it will have next winter. Having imposed this tariff, having caused all the dislocation which you always do cause when you impose a tariff, and having paid more than three-fourths of the cost, it would be the last thing in futility to withdraw it now. I suggest, very strongly, to the Seanad that this Bill should get a Second Reading.

Question put and agreed to.

I move the following on behalf of Senator Milroy:—

That notwithstanding anything contained in Standing Orders 79 (1) and 85, the Committee Stage and Report Stage of the Finance (Customs Duties) Bill, 1931 be taken to-day.

I second.

I should like some explanation as to why it is necessary that this Bill should be passed through all its stages to-day. It has been hinted to me that there is some legal obligation to have it passed.

It must be passed by the 24th instant.

I want to draw the Minister's attention to the fact that this is a House of the Oireachtas and the 24th is next Sunday. On Wednesday we get a Bill of this kind—a very important Bill dealing with a very important subject—and whether we have power or not to amend the Bill, we have power to make recommendations to the Dáil in respect of it. The Minister comes along with this Bill on the 20th of the month and it is suggested that it must be passed through all its stages on the same day that it is brought to the House, thus preventing this House doing its duty, if it so desires, by making recommendations in respect of the Bill. I draw the attention of the Minister to the fact that this House is not allowed to do what the Constitution, in fact, empowers it to do. That is an illustration of the lack of regard which is shown to the responsibilities and duties of this House.

I agree entirely with what Senator Johnson has said. I imagine that the Minister for Agriculture is not responsible. I do not know who is responsible, but it is not the first occasion on which the powers that be on the other side have trusted either to the good-nature or to the good sense of this House not to insist on their full rights, which would cause a certain amount of dislocation. It is obvious that this House, not wishing to interfere with this tariff as it stands, will give effect to the Bill. Otherwise, an extraordinary position would be created in a few days. But some time or other there will be no course open to the House, in justice to itself, but to insist on its right. It may be that that would be the right course to take, but I am sure that it would not be the desire of Senators on either side here to take that course in the present instance. Sooner or later, however, it will be the right course to take.

So far as I understood, Senator Douglas agrees with Senator Johnson and yet does not agree with him. I am opposed to this resolution for a wholly different reason. I am opposed to it because—with great deference to the Minister's close study of economic subjects—I think he has not given sufficient consideration to the suggestion made by Senator Wilson in reference to an excise duty of 2d. per lb. on cold-stored butter in winter. Apparently he has not read the debate which took place in the Seanad on Senator Wilson's motion. Therefore, I think it would be desirable that a substantive motion should be brought forward for an excise duty of 2d. on cold-stored butter in the winter months so as to make certain what the Minister considers is probable—that this tariff will, in some way, improve winter dairying. The Minister made a very clear speech on this question of tariffs and he endeavoured to suggest that in some way we, as a Party, have receded from the position which we took up in relation to tariffs. The Minister made one or two statements which I consider are wild statements. He said that the tariff on butter was supported by him partly because of its educational value. It is a very curious admission for a Minister to make—that he was in favour of this tariff because it would teach his country a lesson. I will do the Minister the justice of saying that was not the motive he had on the occasion the tariff was passed, although, looking back at it now, he may consider that it is a very good debating point to make. I tell the Minister that the tariff has not cost the country 250,000 farthings.

Is the Senator in order in discussing the merits of the Bill now?

Cathaoirleach

The Senator is entitled to show reason why this motion should not be passed.

The Minister is well able to defend himself. He is a first-class swordsman and he does not want anybody to come in with a blackthorn.

The Senator is leading up to a discussion in which some of us may have to engage afterwards.

I do say, with the greatest confidence, that this tariff is not costing the country, as a whole, 250,000 farthings, because what the consumer has lost in increased price the co-operators, for whom the Minister is naturally very much concerned, have gained. Although the Minister's speech sounded very well as a debating speech, there was really nothing in it so far as that point was concerned. I come back to the question with which we started this debate. I do again wish to impress upon the House that the plan of this Bill is wrong from a revenue point of view.

Cathaoirleach

Could you confine yourself a little more to showing the undesirability of suspending Standing Orders?

I want to have an opportunity of introducing a recommendation in the form of a suggested amendment to this section which will be more in conformity with the plan of revenue legislation than this section is. For that reason, I wish to have an adjournment of this question. I think it would be quite feasible to introduce an amendment which would enable the revenue authorities to collect the revenue at the port and give a rebate, or what is called a drawback, on the amount of butter which is re-exported in the form of an ingredient in biscuits.

The Minister, in the course of his statement here in defence of this section, demonstrated clearly that these exporting firms are getting a distinct advantage over other traders in regard to their internal trade—an advantage to which they are not entitled and which is dishonest in its present form. I think that Senator Wilson's suggestion should be thoroughly considered. I am sure that it will be carefully considered by the Minister. We are opposed to any haste in the consideration of this measure, first, because we believe the suggested excise duty of 2d. on winter butter should be thoroughly investigated, and secondly, because we think that this section should be properly drafted.

Can the Minister inform us on what date exactly do the Financial Resolutions expire? Is it not a fact that these Financial Resolutions must become law before a certain date?

Yes, the 24th.

In spite of what Senator Douglas has stated we must remember that this Bill has only come before us to-day for consideration of the Second Stage. We must make a stand somewhere. I will oppose the taking of the other stages to-day and I will call for a division, if necessary.

Possibly the difficulty we are in might be met if the Seanad agreed to meet to-morrow, provided that there was some assurance that there would be a substantial amendment put upon the Order Paper for consideration. That would be the only purpose for which the House would meet to-morrow. If the matter is of such importance as some Senators attach to it, that might be the better course to adopt.

Since the Seanad was established I have on every occasion objected to this practice of rushing Bills. I believe my remarks in reference to the way in which these Government Bills are brought before the Seanad met with the approval of other Senators. Government Bills are brought here at the last moment. I think the Cathaoirleach himself is aware that that has been the constant practice of Ministers and it has been as constantly objected to by Senators. We should endeavour to put an end to that practice as quickly as we can.

The Minister made some remarks about this Bill which practically would, in themselves, defeat the Bill. He admitted he gave particular facilities to one manufacturer over and above all other manufacturers. He said he wanted to instruct us as to what was good finance and what was not good finance. He more or less taught us our lessons, as a schoolmaster. He said that was the only reason why he put forward the Bill. This measure should really not be rushed. The Minister stated that Fianna Fáil members were particularly sinful in these matters and particularly ignorant. Every member of the Seanad who spoke to-night objected to the Minister's Bill, most of them in the same way as we objected to it. That being so, every member of the Seanad is then, according to the Minister, one of the Fianna Fáil Party.

God forbid!

That is what the Minister thinks. I do not know what Senators over there think. The Minister believes they are all Fianna Fáil because they one and all opposed this measure. We should get more time to consider this Bill.

I suggest that there are only two courses open. One is to meet to-morrow, and that, I think, is reasonable if anybody desires to have amendments considered. Of course, it would be a mere waste of time if there were no amendments. The alternative is to postpone the consideration of this Bill until next Wednesday. That will mean that there will be no butter tax after the 24th or 25th. Of course, that would not worry me in the slightest, but the members of the House may as well understand that by postponing the consideration of this measure that is exactly what they would be doing.

And there would be no worsted tax.

Oh, yes, a much better tax; it would be 2/6.

I suggest that we should take this opportunity of teaching the Minister and Ministers generally a lesson on how they should approach the Seanad when they are submitting Bills for consideration.

Arising out of the statement made by Senator Moore, I would like to point out that I do not think he is quite accurate. He stated that the Minister admitted that one of the clauses in the Bill was for the benefit of one special firm.

Of course, I never admitted any such thing.

The Senator also remarked that that section put that particular firm in a position of advantage over any other firm in the country.

I never said anything like that.

Of course, what the Senator said was wrong. If one firm had any advantage, other firms similarly engaged would have the same advantage.

The Minister for Finance was in charge of this Bill, but, unfortunately, it came under the consideration of the Dáil immediately before the Budget. The Minister who had charge of the Bill had also to take charge of the Budget and other important financial measures. It was just at that time that this Bill came before the Dáil and it was held up there for that very reason. That is the real explanation why it was so late in coming to the Seanad. I regret very much that it has been such a long time coming to the Seanad.

Question put.
The Seanad divided: Tá, 20; Níl, 9.

  • William Barrington.
  • Samuel L. Brown, K.C.
  • Miss Kathleen Browne.
  • R.A. Butler.
  • Mrs. Costello.
  • John C. Counihan.
  • The Countess of Desart.
  • James Dillon.
  • Michael Fanning.
  • Cornelius Kennedy.
  • The McGillycuddy of the Reeks.
  • James MacKean.
  • Joseph O'Connor.
  • M.F. O'Hanlon.
  • L. O'Neill.
  • Bernard O'Rourke.
  • Siobhán Bean an Phaoraigh.
  • Michael Staines.
  • Thomas Toal.
  • Richard Wilson.

Níl

  • Michael Comyn, K.C.
  • Joseph Connolly.
  • Michael Duffy.
  • P.J. Hooper.
  • Thomas Johnson.
  • Seán E. MacEllin.
  • Colonel Moore.
  • John T. O'Farrell.
  • Séumas Robinson.
Tellers:—Tá: Senators Mrs. Costello and MacKean; Níl: Senators Comyn and Connolly.
Question declared carried.
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