Seanad Éireann debate -
Wednesday, 28 Oct 1931

Vol. 14 No. 35

Finance (Customs Duties) (No. 2) Bill, 1931 (Certified Money Bill)—Second Stage.

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

Minister for Finance (Mr. Blythe)

I presume Senators have had circulated to them the Report of the Tariff Commission on the application for a tariff on leather. It is out of this application that the present Bill arises. The Irish Tanners' Association applied for a tariff on harness leather, sole and insole leather. The matter was considered by the Tariff Commission and objections, amongst others, from the Irish Boot Manufacturers' Association were heard. The result of the consideration was that the applicants withdrew their application for a tariff on sole and insole leather. It became clear in the course of the investigation that the tanneries in this country could not meet the requirements of the boot manufacturers. Apart from any other factor, there was the question of variety. There is only one tannery really making sole and insole leather here. It would be impossible for one tannery to supply all the varieties required by the boot manufacturers. The tanners themselves really recognised that. They were forced to recognise that and they withdrew that part of their application. The consideration of the matter by the Tariff Commission proceeded, and the Tariff Commission finally recommended a tariff on harness leather and a corresponding tariff on manufactured harness. The smaller tanneries in the Free State have been working on harness leather solely, and the larger one in Limerick has been making harness leather principally. They have been making that harness leather without any tariff, and they have been able to maintain themselves and sell the product without the protection of any tariff. It seems to be reasonably certain that they can supply the needs of the harness manufactures of the Saorstát at a price equivalent to the outside price, or approximately equivalent to it, and supply harness leather of the quality and of the varieties required.

The tariff, in fact, is one of very little importance. The number of hands employed is very small, as Senators will have seen from the report, and the prospects of increased employment are correspondingly small. It is really, as I have said, a matter of very little consequence. It will, however, enable these tanneries to keep going, because it secures to them a market which they have perhaps been holding with difficulty. It may enable the bigger tannery, because its circumstances will be some what easier in this respect, to increase its trade in sole and insole leather. Anybody who has read the report will agree that the time clearly has not come when it would be possible to encourage the manufacture of leather for boots by means of a tariff. Even if the whole of the leather required for insoles and soles were manufactured here, the tanning industry would be a very small one as compared with the boot industry. Of course the boot industry itself is not so established that it is possible to interfere with its raw material without having the result of setting it back, if not extinguishing it.

Sir John Keane

I hope I will not be accused of being a doctrinaire if I again make a protest against the extension of these tariffs. I think the Minister rather gave the case away himself when he said that practically very little employment will be given by this, and he made no reference at all, perhaps wisely so, to the burden that it will throw on the primary industry of agriculture. After all, horses are still the main source of power in the agricultural community. Tractors have not come in to any great extent, but the House may be pretty well certain that now there will be an increase in the cost, roughly of the amount of the tariff, of harness required by agriculturists. Of course that is the principle that runs throughout the whole of this tariff legislation. What is one man's raw material is another man's finished article. Harness is the raw material of the chief industry in this country, and agriculturists are going to be mulcted by this indirect tax. I think anyone who represents the interests of agriculture should really feel very strongly about this and should protest. I do not know whether it is the accepted policy of the Executive Council practically to follow all the recommendations of the Tariff Commission, but it is only a matter of time until we get to the state from which other countries suffer very much, owing to the burden of tariffs. I certainly say that we are not being saved by the Tariff Commission, because the Tariff Commissioners have been responsible. In all this there is the point of view of penalising the majority, a larger industry for the benefit of smaller industries. For that reason I have again to protest against the principle embodied in this measure.

Mr. Jameson

I think what Senator Sir John Keane has complained of should be listened to very carefully by the Seanad. We have not got a voice in stopping these things, but we have a right to criticise them. These are times when every tariff that we put on may presently be used as a weapon against us. There is no doubt that Great Britain is going to alter her policy. Our trade with Great Britain is of vital importance, and if the British Government when they come to settle their tariffs find out that the Irish Free State is putting sundry tariffs on small things like leather and against the importation of goods from Great Britain, this sets an example to them, and gives them an excuse for putting up tariffs against us which may be far more damaging. If they were to protect sundry small industries which import their materials from the Free State, by putting a tariff on against the importation of raw material, Ireland would suffer to an extent that, I am sure, the Tariff Commission did not consider when recommending tariffs on little things like this. I think our Government should be very careful about what they do at the present moment, and should have an eye on the future, because undoubtedly one of the things which will require most negotiations, probably in the immediate future, will be the question of tariffs that will be put on by Great Britain on sundry goods. Whether we will come into the matter or not I do not know. Every little tariff of this description that is put on means handing over a weapon to the other side to be used against us the moment they want to put a tariff against anything that we produce. Senator Sir John Keane was quite right in his view that, although these are things of trival importance, behind them is a principle that our Government should seriously consider. I doubt if it is a wise thing to do at the moment. Another tariff was imposed the other day on oats, but, not being Scotchmen, I suppose we do not mind what we pay for our porridge. All the same, it means a tax on goods that can be imported and it can easily be used against us later on. I hope the Seanad will bear these things in mind, so that we can criticise these changes that are being made. I hope that we will not have any more tariffs until we have to consider the taxes put on our goods going into another country.

Mr. Comyn

While the last two Senators were speaking it occurred to me that a man's ideas in some measure depend upon the sod he is standing on, because if the Senators had been in England within the last fortnight I think they would have been protectionists.

Sir John Keane

I was in England until yesterday.

Mr. Comyn

If you were there yesterday and if you were a candidate with Mr. Henderson and Mr. Clynes you would have been snowed under like them. It is perfectly obvious that Great Britain is going to have a general tariff. Of course it is a matter for the Executive Council what they will do in face of that general tariff. I think there is food for thought and reflection on the part of the Executive Council, and on the part of every member of the Dáil and Seanad in the results of the elections in England which are being announced from hour to hour, but that is another day's work. I am in favour of this tariff on leather, even on harness leather, and even for the reason that was so ably suggested by Senator Jameson. If the British have a general tariff, and if we impose a tariff against England, will they use the tariff weapon against us? Probably they will, but still, has it never occurred to Senaton Jameson that when they arm themselves with a tariff weapon it would be just as well for us to have a few tariffs to go on with, because it is easier to keep a tariff on than to put it on? When the Minister for Finance is negotiating with them about tariffs it will be much easier for him to say: "I have a small tariff on leather. It does not matter very much and you do not want me to take it off." But if he were to say: "I want to put on an extra duty on shoe leather" I think he would find his task somewhat more difficult. For that reason, in order to be first at the fair, I am in favour of this tariff, even on the argument adduced by Senator Jameson.

Colonel Moore

I am not in a perpetual state of tremor as to what is going to happen to us from the people across the water. As far as I know of them, and as far as history tells, they imposed whatever tariffs they liked on this country and took them off as they wished without the least regard to our opinions or interests. All the industries of this country were ruined by the manipulation of the people across the water who pursued a certain line with regard to Free Trade and other matters, because it was in their own interest to do so. Undoubtedly, they did that looking to their own interests and not to ours. Now we are expected to be shivering and shaking. We are told: "You must wait and see what the people over there are going to do for fear they may stick another knife into our backs." We know what is happening at the other side of the water. The two Senators who have spoken undoubtedly take—I do not suppose they deny it—a great interest in what happens on the other side of the water. But the people at the other side, whom we have always followed humbly and meekly, have now decided that their policy was all wrong. I would have expected that these Senators would follow suit and not tell them to stick to their old policy. A change has taken place at the other side. The whole world is changing. We must fight our own battle as hard as ever we can without too much regard for the interests of other people, because they take no interest whatever in us. They are no more likely to put a tax on us because we impose certain tariffs than if we did not pursue that policy.

Mr. Douglas

I do not see how the Oireachtas can decline to pass a recommendation of this kind as long as we have a Tariff Commission and maintain our present system of imposing tariffs after a full and careful examination of all applications has been made by that Commission. The only grounds on which the Oireachtas could refuse to pass this would be if the Executive Council were prepared to take the responsibility of saying that there were specific reasons why this particular recommendation could not be carried out. What brought me to my feet was the two speeches we had from the Fianna Fáil Benches. These speeches, I presume, may be taken as being more or less representative of the point of view of the Party. I am not at all surprised that Senator Colonel Moore, a retired military gentleman, is not at all alarmed at the possibility that tariffs may injure exports from this country. I am not for a moment suggesting that the Senator is callous, but rather that he does not appreciate the fact that a general tariff policy in Great Britain is not a matter to play with. It is not a matter to be regarded as child's play, but is a very serious problem, perhaps the most serious which this country has had to face since the Free State was established.

I am not convinced that the method suggested by the other Fianna Fáil spokesman of having a few little tariffs to play with is going to make any difference in dealing with the serious situation which may arise, but to my mind such a method is childish. The reason the Senator advocates this tariff on harness leather is that he could go along with a piece of harness and with it, no doubt, would be able to prevent, by bargaining, any tariff being placed against exports from this country. I do not think that the question can be dealt with that way. I do not think that we are in a position to deal with it that way.

Senator Colonel Moore says that we know what is happening at the other side. The Senator may know, but I certainly do not, and I do not think that the huge Party which apparently at the moment is being elected at the other side, knows itself what is its policy. I believe that the Executive Council of the Free State will have to watch the situation very carefully from the point of view of this country, to see how far it may be within their power to prevent damage being done to such exports as we have. I do not think that we have any great reason to be alarmed if there is a commonsense policy followed, but if we think that we can meet that situation either by the Fianna Fáil policy which we heard expounded here to-day of having a few little tariffs to play with, or by the other Fianna Fáil policy which we read of in this morning's paper of putting a tariff immediately on everything, and seeing what we can let in, then my opinion is, that if either policy is going to be employed to deal with the situation, we have excellent reasons to be shivering in our shoes. The situation that may develop on the other side is, I think, bound to be reflected in this country, because although we are large purchasers from England we are also exporters to England. As purchasers from England this Parliament is not concerned very much as to how that situation will develop, but we are concerned to maintain our trade with England, and that can only be done by making a certain amount of purchases.

Mr. Blythe

I do not intend to discuss the very big general matters that were raised on this little tariff. The tariff was imposed in pursuance of the general Government policy of having all proposals for tariffs investigated by the Tariff Commission. Generally speaking, we act on the report of the Tariff Commission. The Government are satisfied that tariffs are necessary here. They are satisfied that it is necessary to develop manufacturing industry here, and that cannot be done without tariffs. We believe, on the other hand, that there are industries in respect of which tariffs would be applied for, but in respect of which tariffs should not be granted because the industries are not suitable and cannot be economically carried on. The Tariff Commission has been appointed to investigate all applications for tariffs, and to report whether in any particular case the granting of a tariff would be in the best interests of the community at large. So far every recommendation of the Tariff Commission has been adopted. We have pursued the same policy in regard to this tariff, even though the effects of it will be very small. It cannot cause a great deal of employment. On the other hand, I do not think that it can impose any appreciable burden on agriculture. A great proportion of the harness requirements of the agricultural community are manufactured here, and will continue to be manufactured perhaps to a somewhat larger degree. I do not think that any appreciable burden will be thrown upon the agricultural community.

In the near future we may very easily have very difficult negotiations to conduct with the British Government, but meantime there is no reason at all why we should not go on with our policy in the ordinary way. If we are going to strike any bargain with Great Britain, then we can strike that bargain and abide by it, but I do not think that we need fear that anything that we may have to do, any negotiations which we may have to carry on in the future, will be prejudiced by our proceeding in the ordinary way with our tariff policy. After all, the tariffs that exist in the Free State are very low compared with the tariffs that exist in Canada, Australia, and South Africa. If we have reasons for desiring good commercial relations with Great Britain, I think that the British people have equally good reasons for desiring good commercial relations with us, and while I would not impose tariffs to spite any British Government or any British industry, on the other hand, until it becomes a question of striking a bargain, I would not refrain from imposing any tariff because of any considerations affecting the people on the other side.

Question put and agreed to.

Committee Stage ordered for Wednesday, 4th November.