Seanad Éireann debate -
Thursday, 15 Dec 1932

Vol. 16 No. 9

Finance (Customs Duties) (No. 4) Bill, 1932 (Certified Money Bill)—Report Stage.

Mr. Douglas

I beg to move recommendation 1:—

Section 7. To delete the section.

When this Bill was being discussed on previous stages, I expressed a certain amount of doubt with regard to Section 7. I said that, on the whole, I did not intend to oppose it. The reason I put down this recommendation for the Report Stage is because I want to appeal to the Minister to reconsider the effects of the whole section. If the House agrees to accept this recommendation, I feel that the Minister, between to-day and the time when the Bill will come before the Dáil, will be in a position to obtain representations, which he has not yet been able to obtain, from various persons who may be very seriously affected by this section. To the best of my belief this section was put in at the last moment in the Dáil and the persons who may be affected by it had no proper opportunity of interviewing Deputies or bringing the matter to the notice of the Minister. I am in a certain amount of difficulty, for this reason: I do not want to be making prophecies as to ill-effects, but I am absolutely convinced that there are very grave dangers in this section and that it is quite possible it may operate in a way very much different from what the Minister anticipates.

When Senator O'Farrell raised the matter yesterday I almost spoke in support of what he said but, on second thoughts, I felt I would like to make further inquiries. This morning I made inquiries and, as a result, I am quite satisfied, not that this is going to do a great deal of harm, but that there is very grave danger of its doing harm. I am strongly of the opinion that at least some weeks, but preferably a couple of months, should elapse so as to enable the Minister to examine the whole question. There are two sets of trades that may be affected by this provision, one of them the motor traders generally. I have already expressed doubts as to how far this will enable the chassis to be put together here. The only gain to the State under this section is that if the chassis is put together there will be a certain amount of employment as a result. I think before the Minister makes this law he should go into the question a little bit further in order to see whether the gain, as a result of the making of the chassis, is anything like equal to the risk he is running as to damage being done to other employment.

There are, of course, considerable stocks of parts here and, to put it plainly, I think I may say that the motor trade, taken as a whole, simply has not had time to think out exactly how this may affect it. Considering that this was sprung on the public only a week ago, I would urge the Minister to allow himself time to hear representations as to the exact effect on the different sections in the trade. The effect on the motor trade was not the principal ground which made me decide to bring this recommendation forward on this stage of the Bill. I had decided, though I was very uneasy and doubtful about it, to let it pass but a question raised by Senator O'Farrell yesterday impressed me very much and I made further inquiry to-day. I do not know whether or not the Minister reads the "Irish Press," but I am sure he will be gratified to know that I read that paper as well as other papers. In the "Irish Press" this morning, I found a letter from two persons utterly unknown to me but from inquiries I have made I am pretty well satisfied that what is stated in that letter is substantially correct. I shall read the letter, if I may, because it states the case more briefly than I could do it:—

"In connection with the Finance Bill at present before the Seanad, we think the public should know how it will affect an existing Irish industry and a number of Irish workers.

"The Bill proposes to remove the duty on unassembled motor parts, with a view to the development of an assembling industry in this country. Apparently no account whatever has been taken of the effect on an important Irish industry. The manufacture of motor parts and the reconditioning on engines are, however, healthy, well-established industries, and some 150 hands are employed therein. In some of the concerns, capital to the extent of £5,000 has been invested;

—I happen to know that in some of the concerns a larger sum has been invested—

up-to-date machinery has been installed, and workers have been trained to a very high degree of skill. About six exist in Dublin; two in Cork; two in Limerick, and one in Monasterevan, and there may be others. They have all arisen because of the substantial tariff that prevailed, and there is no chance whatever, in view of present conditions in other countries, that they can exist without it.

"It is stated that the Minister ‘hopes for' an assembling industry as the result of his strange action. Is it fair or reasonable to sacrifice existing industries and employed people for a hope? There will be few who will not sympathise with that hope, but it was not necessary to sacrifice us to achieve it. Whatever his revenue officials may say, there would be no difficulty in arranging for the free importation under licence of parts for assembling purposes—a course which was urged, we understand, by representatives of the whole motor trade.

"It is not yet too late for the Minister to reconsider his decision. By doing so, he may avoid many a taunt and many a regret. But still more, he will avoid the bitter resentment of one hundred people who claim no more than that they should be allowed to continue in the employment that in present circumstances means so much to them and their families."

The Minister knows that I am not anything like as out-and-out a protectionist as he is, but I have always held that where an industry is protected the greatest care and inquiry should be taken before the tariff is removed. What I am asking the Minister to do is to withdraw this section for a month or two months. He can wait until the Bill comes before the Dáil or he can deal with the matter in his next Finance Bill. When the matter is investigated, he will be able to say whether there is any way by which this tariff can be maintained for this admittedly small, but not negligible, industry. Even though it is a small industry, I hold that it is dangerous to bring in this provision, which may seriously affect it. I was given particulars of one of these firms, which has doubled its trade and increased its employment very substantially since 1925 in the making of parts here.

In addition to the effect on these particular firms there is grave danger that even existing garages may be affected, because it will be possible to send over existing parts for repair to England, when—without going into the exact details of the section—the repair is concerned with welding or soldering or various other things. In these circumstances, the parts will come in free. As to that effect, I frankly do not know and I am not prepared to prophesy. What I suggest is that it should be looked into carefully. In the making of motor parts here some machinery is, of course, required, but of the total cost 80 per cent. is represented by labour. The motor trade has been so hard hit within the last few months that if these firms are crushed out the chance of the men disemployed being absorbed in any of the existing garages is practically nil. Here is the position: rightly or wrongly, by the policy carried out by this Government, the motor trade has been hit. Whether that is their fault or not, I need not argue now. Probably the Minister and I would differ as to that, but the fact that the motor trade has been hit is undoubted. This provision came to the notice of the people interested a week ago, and we are now being asked to pass it. I beg the Minister to let the matter be considered for another month. He may go on with his policy. No harm will be done. No assembling worth talking about is going to be done within the next month. He could then bring in a short Bill. That would be the proper solution. If he is not agreeable to that, let this be passed and let the matter be considered for a fortnight or whatever time will elapse before it will come before the Dáil.

I was rather uncomfortable as regards the provision at first but I decided to let it pass on the previous stages. Having gone into the matter further, I put down this recommendation because I believe there has been far too much haste and that the matter has not received full consideration. I am not attacking the Minister. I do not believe that there is any Minister who has anything like as much work to do as the Minister for Industry and Commerce. I know of my own knowledge that he is doing his best to deal with an enormous number of industries and with a great number of problems. On this matter, I think he has not got full advice. I do not think that time has been given to people who may be interested to represent their views and, as this means taking off a tariff, I ask the Minister not to rush into it. I am sorry that the Minister for Agriculture is not a member of this House because I am certain that he would support me in this recommendation. He gave us to understand that the last Government was a free trade Government and would not have protection. This is a case of having retained protection for a small industry. I am sure, therefore, that the Government will consider it carefully and will not hasten to take away that protection. I beg the Minister carefully to consider this matter. He can easily bring in a Bill in February, after he has made investigations, if he is satisfied that it is the right thing to do. I also suggest that, as stated in this letter, a way would be found by which licences would be given for the free importation of parts for assembling purposes without taking the protection away for parts that are regularly made here.

Mr. O'Farrell

I beg to second this recommendation. I do so at the earnest and urgent request of a number of workers who say that they are threatened with almost certain disemployment if this proposal is adhered to. The fact that the recommendation is passed will still leave the Dáil master of the situation. If, after further consideration, the Minister still believes that the section should stand, all he has got to do is to recommend the rejection of this recommendation to the Dáil. However, I earnestly appeal to him along the lines on which Senator Douglas went. The effect will be to disemploy a number of workers in an industry that actually exists in favour of an industry that does not exist but which may, or may not, at some future date, come into existence. Certain unscrupulous interests have, I believe, misled the Government and let down the country by pretending that they were able to do certain things which they have, so far, utterly failed to do. They have given no real or tangible evidence of a keen desire to do what they represented they could do, or of their capacity to do so. They have neither built a motor body nor assembled a motor chassis. I suggest that they have already been sufficiently spoon-fed and that the Government should not go further along the road of disemploying workers until these people give more forcible evidence of their ability to deliver the goods later on. The present conditions in the motor trade are utterly deplorable and the tragedy of it is that nobody seems to have gained as a result.

I know a firm that employed 100 men up to recently. Their staff is now reduced to 46. Another little firm had 45 employees. Their staff is reduced to 12. Another firm has slightly over a third of the staff they had up to comparatively recently. I have not been able to discover that one of these men has been absorbed in any of these industries in respect of which the Government has been induced to embark upon its present policy, so far as the motor trade is concerned.

Many happy little homes, in which frugal comfort prevailed, have been irretrievably broken up, and the approach of Christmas is darkened in many other homes by the shadow of impending unemployment as the result of the proposal contained in this section. It is terribly heartless, wicked and unjustifiable to embark hastily on a policy that condemns men to what is equivalent, at the present time, to a lingering death. In all the wide horizon, there does not seem to be the slightest prospect of any of these men who are now threatened with unemployment, being able to get work elsewhere. Until there is some reasonable prospect of that, I earnestly appeal to the Minister to hold his hand, seeing that there is no urgency about the matter. A month or two for investigation is available, and that time should be availed of. He can, as Senator Douglas suggested, introduce another Bill, or the matter can be included in the ordinary Finance Bill.

A number of those firms which are affected have large stocks of parts, as the Senator has pointed out, upon which the full duty has been paid. If parts are to be allowed in now free of duty, these firms must sell their stock at a very serious loss. Some of the industries that manufactured these parts have been built up behind the shelter of this tariff. They would never have existed otherwise. Is it fair, in a night, to sweep away that shelter, to destroy the capital invested and disemploy the workers? I am concerned entirely with the workers. I am not by any means a whole-hog tariff maniac. For that reason, I feel all the more strongly in advocating the retention of this tariff under which certain industries—small though they may be—have been started and have met with a considerable measure of success, and in connection with which a fairly large number of workers have found employment. Mechanics have been trained to what was a new craft. Now we are threatened with losing the experience they have gained by wiping their industry out of existence.

One has always to reckon with the fact that when you introduce a tariff of any kind you create new vested interests and to that extent you are responsible for the people who invest their money in that case because of the tariff and you cannot without investigation and without reasonable notice repeal that tariff and throw those people to the wolves. I am not at all optimistic that we are going to have an assembly of chassis or work of that kind embarked upon on any large scale. If we are to succeed in doing it at all it is next to a miracle but we are not going to have it on a large scale for some time and there are ways and means by which parts for assembling purposes can be imported free of tax without resorting to the drastic remedies embodied in this section.

The main portion of this section was only introduced on Report Stage in the Dáil and it was passed without proper consideration. In view of the vital principles involved in connection with it, I do suggest to the Minister that he should agree to accept this recommendation and give himself at least time to reconsider the whole position. I make that appeal to him entirely in the interests of those workers who are now threatened with the horrors of unemployment and who wish that those who represent them here would make that appeal to the Minister.

Mr. Comyn

Senator O'Farrell has made a case in respect of 150 to 200 men who got employment in respect of a tariff that was imposed and in respect of which they had reasonable hope of its continuance. But I do submit to the Seanad that the remedy here proposed, to repeal Section 7, is altogether too drastic. I should think there would be another method of dealing with the question. Before I go into that, I should like to say that some regard should be paid to the reason why the section should be passed. The reason is to enable another new industry to be created. That is a very laudable object and Section 7 is necessary for that. Section 7 is subject to this objection that 150 to 200 men, who are at present employed by reason of the protection given them, may, because of that section, lose their employment. Is there any other way of dealing with it except by removing the section? I say there is and this brings another thing before us and that is that wherever you have protection you must have a system of bounties as well. I think these men are deserving of consideration and I would suggest to the Minister that he should——

Cathaoirleach

That is not before us.

Mr. Comyn

It is before you indirectly in this way—I am arguing in favour of the section as against the recommendation and in arguing against the recommendation I wish to suggest to the House that there is another and a simpler means of dealing with the matter and a means which would enable the Minister to carry out what he intends to carry out here by his legislation—namely the absolute establishment of a new industry.

Minister for Industry and Commerce (Mr. Lemass)

There is one remarkable thing about this industry that is referred to and that is the rate at which the number of people employed in it has gone up during the present week. But it certainly has not 200 or 100 people employed in it. There is no case really for asking the Government to reconsider the section. This section has been under consideration for a very long period. The original idea we had was that suggested by Senator O'Farrell, that some means should be devised by which the remission of duty should apply to the parts imported by persons who propose to assemble them into chassis. But we found that that was not practicable at all. If that device was practicable, if any means of securing that differentiation between the parts imported for one purpose and the parts imported for another purpose was possible, a section would have been introduced into the Finance Act of this year, but because of our inability to devise any practical means of achieving that we let the matter stand over and it has been under consideration during the year. Ultimately we succeeded in convincing the Department of Finance to remove the duty. Now this duty that has been removed was not imposed as a protective duty at all. It was imposed for the purposes of revenue. It was certainly a revenue device and it had only an indirect effect on employment. The sole purpose of the motor duty was to bring in revenue to the Exchequer. That was why the same rate of duty operated upon the assembled as upon the unassembled cars. The same rate operated. The idea behind it was to get revenue. It is true that certain firms were making minor parts. Now I want the Seanad to be clear as to what parts. They were making in the main parts for obsolete types of cars that could not be readily ordered from the manufacturers—grinding cylinders, the reconditioning of engines and the making of small parts. I do not think it is likely that any considerable loss of business is to be experienced by the removal of this duty. I do not think it was the operation of the duty which in the main brought the business to them as much as the matter of the convenience to persons of having their business done here. A person who wants a part of a car which he can procure from the recognised dealer is sometimes in a position to write away for that to the dealer. It is much more convenient for him to get the part here. That is likely to continue. A number of things have been mixed up in this discussion. Reference was made to the general effect of the existing duty and of the proposed modification upon the motor trade. These are entirely different matters. The only part of this section to which Senator Douglas took exception, in his speech at any rate, was the section which proposed to remove entirely the duty upon assembled parts. It is clear that all motor car parts are not being released from duty. The assembling of parts means two parts added together other than welded together. The full rate of duty will apply except they are what is mentioned in paragraph (a) of subsection (1) in which case a modified rate of duty is imposed.

Mr. Johnson

What is that rate?

Mr. Lemass

The old rate is 33? and the new rate is 22 2.9ths. The effect upon the motor duty must be considered in relation to each part. It is true that the motor traders — that is those firms who are engaged solely in the importation and selling of complete motor cars — have been adversely affected in the recent months for two reasons: First, by the imposition of the duty upon the motor-bodies designed to develop the body-building industry here, and secondly, by reason of the general slump in trade which reacted on the trade in luxury products like motor cars first. Obviously when trade is bad and when people are not in a mood for spending money it is luxury articles like motor cars that are bound to be affected and that is one of the main reasons why the motor industry is in the position it is. I am certain that if trade had been good and if there had been any demand for motor cars the difficulties would have been overcome.

Senator O'Farrell said that the imposition of the duty was undertaken because the people did not rise to their responsibilities or carry out their promise when the duty was retained. The duty was imposed most deliberately and followed on the decision of the Government, a decision which was arrived at without pressure from anybody. Let us consider the result of it. There are very large numbers of different makes of cars sold in this country but in respect of the great majority of them the numbers sold are small. There is one well-known make of car which always has sixty per cent. of the market. The bodies for that car are being assembled here and because these are the only car bodies that are being assembled in any quantity, this car's proportion of the total market has been increased and if that position continues it is likely to be still further increased. I think if we are going to get any industry based on the motor trade in this country we have got to contemplate a substantial reduction in the number of types of cars offered for sale and that is not going to be any harm.

The effect of this section is to grant a concession to those firms who have been representing to us that certain difficulties have been experienced by them in the construction of bodies. They stated that the capital equipment required for the complete reassembling of the bodies was substantial and that in respect of a number of cars the annual sale would not justify the capital outlay involved in installing machinery. In respect of this type of car we are granting a concession here. The assembling of the shell, that is shell body, unpainted, upholstered and without any fittings attached will be permitted to come in at a low rate of duty. That work can be undertaken by any firm willing to do it without any trouble and with very little addition to their machinery. No substantial addition in machinery is required and it is only a question of manual labour. Any firm that is not prepared to import bodies in that form might as well resign themselves to getting out of the business now. I say that, knowing that there will be a sufficient variety of cars assembled to supply the needs and to meet the whims of everybody amongst us. That is the position that is achieved by this section. The next thing is the possibility of getting the bodies assembled here. Again let me say that is quite possible. I have good reason for believing that the assembling of chassis will be undertaken on a wide scale by some interested firms and, if that is done, the employment given in the assembling of chassis will be much greater than the employment in the manufacture of certain parts even if it will happen that that employment will cease, which I do not think will be the case at all. I think we are to get both types of employment in the country.

Motor traders have represented that the removal of the duty upon the parts is going to lose business to them. A deputation of motor traders admitted to me that they came into my predecessor's office ten years ago and they said to him that if the duty were to go on then it would ruin them. Well the duty went on and it did not ruin them. Now they tell me that it will equally ruin them if it is taken off. They were wrong ten years ago and they admit it and I think it will be found that they are equally wrong now. It is said that if there is no duty upon parts people will send away for the part and repair the car themselves. I do not think so and I do not think that anybody who knows the position believes that is likely to happen. The tendency always is to get the car repaired by a competent firm and the importation of the cars and parts will be in the hands of these firms.

It is true that a difficulty exists arising out of the fact that these firms have now in stock parts on which duty has been paid and that as these parts will be imported free of duty after the Bill is passed they have got either to contemplate a substantial decline in the sale of parts or reduce the prices below what they cost them. That is not entirely the situation, however. I understand that representatives of the motor traders have been in consultation with the Government Departments concerned and they have been ascertaining the facts of the matter. These firms are all entitled in law, upon re-exportation, to a rebate of the duty paid if they can establish proof of the payment of the duty. Re-exportation may involve certain difficulties but I am quite certain that these difficulties will be overcome, and it is naturally our desire to facilitate traders in this matter. It is quite clear that the concession applies only in respect of unassembled parts. I think that the motor traders will find when they come to examine their stocks that the stock, from the point of view of value, will in the main be assemblies of one kind or another in respect of which the full duty operates and in respect of which no rebate will be payable. In so far as they have any stock of unassembled parts upon which duty has been paid and is now being remitted, they are entitled to get a refund of the duty on re-export. It is possible for the Revenue Commissioners to arrange with them in regard to that re-exportation.

Mr. Johnson

What is the effective rate of duty? Is it the difference between 22 2-9ths or the difference between 15 and 33??

Mr. Lemass

There are three classes: 33?, 15 per cent., and nil. The first applies to completely assembled chassis or assemblies for those, specified in paragraph (e). They pay the full duty of 33? or 22 2-9ths, the preferential rate. The assemblies mentioned in paragraph (a) are subject to 15 per cent. or 10 per cent. preferential.

Mr. Johnson

There is no reference here to a preferential rate.

Mr. Lemass

There is a section which deals with that.

Mr. Comyn

Will the re-exportation to which the Minister refers as creating no serious difficulty be actual re-exportation or constructive re-exportation?

Mr. Lemass

It is a matter entirely for the Revenue Commissioners, who will be dealing with the matter. I have been asked is the gain equal to the risk. Even if we were to assume that there was a risk of loss in employment in certain firms in the manufacture of parts, these firms are not solely concerned with the manufacture of parts. They are concerned with repair work on cars generally. I say that if this does involve any loss of employment, the additional employment to be secured by the assembling of chassis here is much greater in volume. More than that, it is quite capable of leading to much greater employment in future. We contemplate at the end of a period of years, after the assembling of chassis has been established here, the setting up of workshops to get chassis parts manufactured here on a consistent scale.

Senator O'Farrell referred to employees of motor traders who had lost employment in consequence of the slump. I have, of course, naturally enough, every sympathy for these people, but again I want to state that some of these people would have been knocked out of employment, anyhow, because of bad trade. Others undoubtedly went because of the fact that sales were being held up, due to the fact that certain parts were not being assembled here and that the duty on the complete cars was high. Although I have got no reliable figures as to the number employed, we have got to put against the tariff the fact that in one firm alone, to which I have already referred as building bodies for the most popular make of car, that the number of people employed on that work alone is just short of 200. These people are employed on building bodies for that one type of car for sale in this country.

Mr. O'Farrell

That same firm had several thousand employed a number of years ago.

Mr. Lemass

Not in the manufacture of car bodies.

Mr. O'Farrell

They are a very uncertain element.

Mr. Lemass

That was, of course, due to the fact that the manufacture of motor cars had ceased there entirely for a number of years. The firm was engaged in the manufacture of tractors and, of course, we know that the trade in tractors was very badly hit by the world slump in agriculture. Some revival has taken place in that respect but the assembly of cars involving the employment of these 200 men is an entirely new branch. The employment given by that firm may, no doubt, fluctuate and be very uncertain, but that particular section has taken fairly well and has been extended. I consequently find myself unable to accept the recommendation.

I think that we can face the fact that the adverse effects of the passage of the section would be very small. The only possible ill-effect may be in respect of the entire remission of duty upon unassembled parts. I take it the other remissions are not considered in any adverse light by anybody and that they cannot produce any adverse reactions. The only question that arises in relation to the change, therefore, is in regard to the duty on unassembled parts. That has reactions in two directions. Firstly, upon traders who have got parts in stock and who are likely to be met under the existing law to a considerable extent. The other point relates to firms who are engaged to a certain extent in the manufacture of these parts. I do not think these firms are likely to lose their trade to any substantial extent. Apart from that we are arranging to have a conference of the representatives of these firms in the office to try to get them additional business of a new kind. I think it will be possible to get them new business following the passage of the section.

Mr. Douglas

To what firms is the Minister referring?

Mr. Lemass

I am talking of the firms engaged in reconditioning engines and manufacturing obsolete parts.

Mr. Douglas

The speech made by the Minister is of two characters, one of which is based on "I think." The other indicates that everything is going to be officially decided. Between these two points of view, I find it almost impossible to know what to do. In so far as the Minister says "I think," he should at least agree to hear representations, which I am satisfied now he will get within the next few weeks. He can then make up his mind. If, of course, nothing can change his mind—I do not believe that because I do not think that is the character of the Minister—of course, it does not matter whether he hears the representations or not. He is now in the position that he went to considerable trouble to discuss the matter with the body-builders, but he does not seem to realise that a week afterwards is not sufficient time to allow to other people who want to make representations to him. If the letter in the "Irish Press," which I suppose the Minister had seen before, does not convince him, the Minister should wait for another few weeks, during which he can challenge these people to prove their case or not. That is all I am asking. He says that he is aware that firms in the motor trade have a large stock of parts. I know that these stocks represent a very large sum of money in many cases, some thousands of pounds. When he is asked by Senator Comyn whether they can re-export these stocks and get a rebate of the duty, he says that is a matter for the Revenue Commissioners.

Mr. Comyn

The question which I asked of the Minister was whether it would be an actual re-export or a constructive re-export for the purpose of getting the drawback, in other words, whether there would be any export at all. That is the meaning of the term "constructive re-export."

Mr. Douglas

The Minister's reply was that that was a matter for the Revenue Commissioners. Senator Comyn was quite quick enough to see that the question whether it was an actual re-export or not might make all the difference in the world, but he was not quick enough to see all the difficulties in the matter. Apart altogether from the question of the expense to the State, if there has to be a refund under drawback, it is necessary to provide particulars such as the date on which the duty was paid, the name of the ship, and all the actual details, with the receipt for the duty. It is well known to any trader who obtained an agency for any car of repute that the central agent must carry these parts. Under the terms of his agency he must carry a very large stock of parts. He must carry these parts for a number of years to serve his customers. The agent must keep up his stock of parts for obsolete cars. Some will be used and some will lie there for three years or more. Others will be sold and replaced. The Minister does not know whether a firm will be allowed to re-export them, whether nominally or otherwise. In many cases it is going to be almost impossible because there will be a very large number of small parts. If the Minister will give me an undertaking that, when he is satisfied that the parts are there, the money paid in duty will be refunded I shall be satisfied. All I am asking him to do is to wait for the next fortnight to see how the matter stands. If he finds out that the Revenue Commissioners cannot allow the rebate of duty re-export to these firms, I can tell him that a large number of small firms are going to be put out of business. They have already had a very bad year.

It is well known that a number of them are not very strong financially. They have to carry their stocks as a security against overdrafts or against capital. If they are compelled to write down their stocks by 15 per cent., 22 2-9ths per cent. or 33? — there are quite a number of firms who supply foreign cars and who are compelled to pay the highest rate of duty — the effect is going to be that these firms will have no capital on which they could possibly assemble chassis. It is a really serious situation. I am satisfied that the matter came about hastily. I am not at all satisfied that the members of the motor trade—I am not a member of the association myself and I have not got an intimate knowledge of the trade—who went to discuss this matter with the Minister were at all able to speak for the whole trade. They could not know what is going to happen. I suggest to the Minister before he takes the risk of putting out of business a number of manufacturers of small parts, he might very well allow the recommendation to be passed and wait for another week or fortnight. Most of the things in the Bill have come into operation already, so that he will not be prejudiced. During that time he can discuss the matter with the Revenue Commissioners, the motor trade and the people who are making these small parts. If he does not believe then that there is anything in these representations he can ask the Dáil to refuse to carry the recommendation.

I suggest to the House that I have made a good case for this delay, and that the Minister has not fully answered me. I appreciate what he is aiming at, whether I fully agree with it or not. I do not question the honesty of the end he is aiming at. Was one week quite sufficient for the people interested to put their case? I am not certain that these people are going to make a case or that the Minister will be satisfied with it. He may be able to satisfy them, but in fairness and in reasonableness this should be delayed for the period I suggest. There are a number of other points which the Minister dealt with. My case at the moment is for delay. I think it is the wisest course to adopt in order to give a chance of representations being made. I am not doing this in an unfriendly way, and I am certainly not actuated by Party motives. I am satisfied, from what was put to me by the people concerned, that there is a case, and I want delay. If this House has any function it is to provide such an opportunity.

Mr. Wilson

When the duty went on in 1922, was not the value of these parts written up to the extent of the duty, and did not the companies concerned earn the 22 per cent. immediately? Was not the value of their stock to that extent increased by the imposition of the duty?

Mr. Douglas

That is a question that it is very difficult to answer without notice. To the best of my belief the motor duty was carried over from Great Britain, and in the case of British companies some firms may have got that advantage. In a number of cases I know definitely that the parts were not British parts at all, and that no such advantage would have accrued. I cannot speak intimately for the motor trade, but in this particular case I can do so. The duty was an increased duty, and a trader who would get the advantage would be extremely clever. What is usually attempted—and I have no reason to believe that it was different in the motor trade—is that an averaging takes place. We always adopt that method in my trade. Competition in the motor trade is always sufficient to adopt it. What happens is that, if 100 articles are free of duty, another 100 is ordered, and the two are put together and an average price and an average profit is fixed. By that means you get a greatly increased price. Where you have a substantial duty on an article it is not possible for the trade, except in rare cases, to get the full benefit of the increased profit. If Senator Wilson thinks that the the traders got that benefit I think he is under a great mistake. As a matter of fact, a number of traders, particularly the smaller ones, were not in business at the time.

Recommendation put.

The Seanad divided: Tá, 14; Níl, 9.

Tá

• Bellingham, Sir Edward.
• Brown, K.C., Samuel L.
• Costello, Mrs.
• Counihan, John C.
• Desart, The Countess of.
• Douglas, James G.
• Fanning, Michael.
• Johnson, Thomas.
• Keane, Sir John.
• Kennedy, Cornelius.
• O'Farrell, John T.
• O'Hanlon, M.F.
• Staines, Michael.
• Wilson, Richard.

Níl

• Comyn, K.C., Michael.
• Duffy, Michael.
• Farren, Thomas.
• O'Doherty, Joseph.
• Phaoraigh, Siobhán Bean an.
• Quirke, William.
• Robinson, David L.
• Robinson, Séumas.
• Ryan, Séumas.

Tellers:—Tá: Senators Douglas and Sir John Keane; Níl, Senators S. Robinson and O'Doherty.

Recommendation declared carried.

Mr. Douglas

I move Recommendation 1:—

Section 8. After the word "standard," in line 51, to insert the words and figures "or 16 millimetre."

I stated yesterday that the 9 millimetre film is processed in this country while the 16 millimetre film is not and that there is no prospect of its being processed except by one firm. They are not doing it now. They only process a film of which you can buy the negative, the charge for which is 25/-. Any society using the 16 millimetre film would want to buy the negative at a cost of 10/-. It is not processed here and there is no prospect of its being processed. This does not affect the ordinary user at all because he has to pay duty. It only affects people who may produce a film in which they can have people all of whom are Irish nationals.

Mr. Brown

I second.

Mr. Lemass

I have no objection to the Recommendation but I have an alternative which I suggest instead.

Section 8. To delete the words "full standard size" in lines 50-51, and in lieu thereof insert the words and figures "a width of 16 millimetres or over."

Mr. Douglas

I withdraw my Recommendation and move the alternative suggested by the Minister.

Mr. Brown

I second.

Alternative Recommendation agreed to.

Mr. Douglas

I move Recommendation 2:—

Section 8. To delete in line 61 the word "employed" and to substitute therefor the word "engaged."

This is purely a verbal change. I wanted to be clear about the meaning of the word "employed." I saw the Minister for Finance when I was coming to the House and he told me he was inclined to agree to "citizen" but the staff thought that "nationals" would meet the case. I am quite satisfied that there is no legal definition of "citizen," except a general definition in the Constitution. There are three definitions of "nationals" according to three different Acts. Probably, that is owing to a mistake. I imagine this is not going to be operated until the Nationality Bill is here, and I presume whoever drafted it had in mind some future Bill to define a "national." In that case, I am either prepared to move this Recommendation or withdraw it.

Mr. Brown

I second.

Mr. Lemass

I would prefer it to be withdrawn. There is a slight difference between the words "employed" and "engaged." I had an examination made of all the standard dictionaries and I think the word as it stands in the Bill is the better.

Recommendation, by leave, withdrawn.

Mr. Douglas

I move Recommendation No. 3:—

Section 8. To delete in line 63 the word "nationals" and to substitute therefor the word "citizens."

Mr. Brown

I second.

Mr. Lemass

I will ask that to be withdrawn also. The term "citizens" necessarily refers back to the Constitution, where that term is used. But under the present law citizens in the Irish Free State are a strictly limited class not growing in numbers. To accept this would, I think, be ultra vires and it would extend and increase the duty. It is contended that the phrase in the Bill will convey the desired meaning of nationals and any other Bill will not affect that. The purport is to make clear to what class the exemption refers.

Mr. Douglas

Will the Minister tell us what the meaning of "nationals" is?

Mr. Lemass

Persons who, in the opinion of the Revenue Commissioners, are nationals of Saorstát Eireann.

Recommendation, by leave, withdrawn.

Recommendations 4 and 5 not moved.

Mr. Douglas

I formally move Recommendation No. 6:—

Third Schedule. Reference No. 6. Third column. After the word "blankets" to add the words "or rugs."

Mr. Brown

I second.

Mr. Lemass

I am prepared to accept that.

Recommendation agreed to.

Mr. Douglas

I formally move Recommendation No. 7:—

Third Schedule. Reference No. 12. Third column. After the word "rubber" to add the words "nor on unfilled quilts of any description."

Mr. Brown

I second.

Mr. Lemass

I am afraid I cannot accept this Recommendation, though it is true there is a difficulty to be met.

Mr. Douglas

Perhaps I shall save time by saying I will not press the Recommendation if the Minister will agree to look into the matter between this and the next Finance Bill.

Mr. Lemass

The matter is being examined and we hope to devise means of exempting such articles as the Recommendation wants.

Mr. Douglas

If we inserted this Recommendation here we might make it possible for the Dáil to accept this Recommendation subject to amendment, whereas if we did not insert it here nothing could be done.

Mr. Lemass

Since the Recommendation was made and accepted in the Finance Bill, which exempts Alhambra and honeycomb quilts, the matter is still under consideration, but we have not yet got a definition that would exempt the quilts the Senator refers to and protect quilts manufactured in this country. The Revenue Commissioners think they will be able to apply the present definition effectively.

Recommendation, by leave, withdrawn.

Cathaoirleach

I think we might take the Final Stage of the Bill this afternoon.

Ordered accordingly.

Question—"That the Bill do now pass"—put and agreed to.

The Seanad adjourned at 7.50 p.m. until Wednesday, 11th January, 1933.