Control of Imports Bill, 1934—Second Stage.

Minister for Industry and Commerce (Mr. Lemass)

The main purpose of this Bill is to provide for the quantitative regulation of imports to the Saorstát by the institution of a quota scheme somewhat similar to that operating in the majority of European countries and in respect of some classes of products in all countries. The main reasons why these powers are necessary are twofold. Firstly, to enable us to institute a system of protection for native industries, in certain circumstances preferable to the system of customs duties and secondly, to enable trade agreements to be made with other countries in a manner beneficial to the Saorstát. When I say that the institution of a quota system here will enable protection to be given to native industries in a manner preferable to the system of protective tariffs I must not be taken, as certain people have taken me as saying, that a system of protection by customs duties has not proved satisfactory. There are certain classes of goods in respect of which a quota system could not apply and which if manufactured here and it was decided to foster the industry could only be dealt with by a system of customs duties. There are other classes which can be more satisfactorily dealt with by a quota system —in the main these which are required in quantity by our people but which are not yet being produced here on a sufficient scale to supply our requirements. Heretofore, we have adopted a rough and ready system of imposing a customs duty and taking power to admit imports under licence. Under that scheme, we were able to regulate imports to the quantity required in an effective manner.

While that scheme has worked fairly satisfactorily it is obviously desirable there should be substituted for it a more regular system, though there has been no serious complaint made about the present system. With a customs duty and a licensing clause a wide discretion has to be taken in respect of persons to whom licences are issued, the class of goods, and the times at which imports might take place. Certain people who were refused licences either for the quantity or at the time they required them naturally felt aggrieved and are sometimes inclined to think they are not getting equal treatment to others. It has been a remarkable fact that despite the number of customs duties with licensing clauses attached and the extension of the licensing system there have been very few complaints, but whether these complaints are numerous or nil it is, in my opinion, better that we should have a system based on an Act of Parliament which sets out the persons to whom licences may be issued, the quantity of goods, and the times at which they may import, and containing an assurance that the conditions applying to one person shall be made to apply to all. I will deal later with the actual provisions of the Bill but I want to stress that fact as there appears to have been some misunderstanding in that connection.

Secondarily, and in a sense of equal importance is the intention to use the Bill for the purpose of securing arrangements where possible with other countries for reciprocal trade. Under present circumstances, in the efforts which have been and are being made to open up new channels of trade and generally to secure preferential conditions for the Saorstát from foreign countries we have found ourselves considerably handicapped because we had not got similar powers to those possessed by foreign Governments with whom we were dealing. International trade has become largely a matter of barter. One country agrees to take a certain quantity of defined goods on condition that the other country will take a stated quantity of defined goods from it. That system has been roundly condemned by many international conferences and by people claiming to speak with authority on general grounds. When however we came in contact with other Governments on trade matters we found the absence of a quota system here meant that we were unable to enter into binding commitments in respect to the volume of trade that might be secured to any one country in respect of any class of goods. The manner in which the power conferred by the Bill will be exercised under any circumstances must be one for determination by the Executive Council for the time being, but the Bill provides that the Orders made by the Executive Council under the Bill will remain valid only for six months unless they are approved of by the Dáil. The provisions of the Bill itself are quite clear. When it is decided to bring any class of goods subject to a quota system an Order is made by the Executive Council called a Quota Order the effect of which is to prohibit the importation of the particular class of goods into the Saorstát except under licence. In the period of six weeks following, licences to import are issued at the discretion of the Minister for Industry and Commerce.

It is necessary to have a six weeks' interim period of that kind for two reasons. It is inevitable that goods of the class prohibited should be in transit at the time the Order was made and it is undesirable that traders should be put into a difficult position of being unable to import goods which are actually in transit at the time of the making of the order. It may be true that in respect of certain goods six weeks may not be considered an adequate period, but when such difficulties arise they can be overcome by the manner in which the quota for the first period is fixed and the duration of that period. During the six weeks period a register of importers of the goods concerned is prepared. Any person who comes within the categories set out in sub-section (2) of Section 7 can apply and must be placed on this register. Nobody, except for the reasons set out in Section 7, can be denied the place in the register. When that register has been prepared the Executive Council makes another order fixing the duration of the first quota period and the quantity of the goods that is the quota which will operate for that period.

When that order has been made, and the persons on the register know the quantity of goods, they then make application to the Minister for Industry and Commerce for licences to import goods under the quota, setting out in their application the quantity of the goods they desire to import. When these applications have been received the following happens:—In the first place, if the total quantity of goods applied for by all importers is 75 per cent. or less of the total quota, then every person receives a licence for the total quantity of the goods applied for. If the total quantity of goods applied for exceeds 75 per cent., but is less than 100 per cent., then every person, at the discretion of the Minister, either receives a licence for the full quantity for which he has applied, or licences are reduced pro rata, so that the aggregate of the goods licensed will be 75 per cent. of the quota. If the total quantity applied for exceed 100 per cent., then the Minister is given discretion to reduce the amounts and to issue licences to the applicants for such quantities as may be considered reasonable, having regard to the interests of the person engaged in the business of importing such goods prior to the date of the Order. In other words, it is intended that if the total of all the applications for licences exceeds 100 per cent. of the quota, consideration will be given to persons who are ordinarily engaged in the business, and they will receive preference over those who are going into it for the first time. Objection might be taken to that principle on the ground that it was establishing a vested interest, but no other system is practicable where only a limited quantity of goods can be imported. It is quite clear that every person desiring to import might apply for the whole quota in the hope that they would get substantially more than they required and would be in a position to barter the licence to others for a consideration and it is obviously undesirable that that should happen.

The circumstances are, therefore, that where 75 per cent. or less is applied for everybody gets what they apply for; over 75 per cent. and less than 100 per cent. everyone gets either the amount applied for or that amount reduced so as to keep the total at 75 per cent. and in cases where the total of the applications exceeds the quota then the Minister has power to reduce the quantity to each applicant, having first regard to the interests of persons ordinarily engaged in the trade or business of importing these goods. It is clear that when a quota is fixed licences may only be issued for 75 per cent. of the quantity specified in the quota order, so that there will be a certain amount of elasticity in the event of consumption or demand exceeding the quota. It is deemed desirable to have that margin so that the quantity can be increased during the quota period otherwise than by making an additional quota in respect of any quota period. The Minister will have power to increase the quota, but not to decrease it.

Mr. Douglas

If a quota was increased would everybody have to apply again?

Mr. Lemass

Everybody must apply again separately. I was going to deal with that point, but I want to mention one further matter in this connection so that I can get on to the special features of the measure. Power is taken, in the event of a person to whom a licence is issued, not being able to avail to the full of the licence in the specified period due to causes outside his control, such as a shipwreck or a strike, to grant to that person, subject to conditions, the right to import those goods in a subsequent quota period outside the quota fixed for that period.

In addition to the main quota with which I have been dealing up to the present, there are two other matters provided for in this Bill. One is the special quota provided for under Section 4. The other is the additional quota about which Senator Douglas has been asking. In the case of a special quota, goods can only be imported from a specified country. For the purpose of convenience, let us say that a quota of 100 units is fixed in respect of any class of goods. Then it may be prescribed that 25 shall come from a specified country, the remaining 75 coming from any other source. Where a special quota is fixed in respect of any quota order a separate application must be made for a licence to import under the special quota as well as under the main quota. The procedure would be that a person who desired to import goods up to a certain quantity would, no doubt, apply for a licence to import them under the open quota. In the event of his not being allotted a licence to import all the goods he required, he would then have to seek permission to import under a special quota or, alternatively, he might make application under each quota to import a certain specified quantity of goods.

The procedure, however, will be that where a special quota is made, the licence to import goods under it will confine the importer to bringing those goods from a specified country: that is, goods manufactured in the specified country or goods consigned in that specified country, or goods which are both manufactured in and consigned from that specified country. If, during the quota period, an additional quota is made, then on the announcement of that additional quota applications for licences to import under that additional quota must be made separately by persons on the register. For the importer, therefore, the procedure will be that when a quota order is made he first of all makes application to get his name on the register of importers. Having done that, he awaits the announcement of the commencement of the quota period and of the quota fixed for that period. If there is a special quota fixed, he then applies for a licence before the commencement of the quota period to import goods either under the main quota or under the special quota, or under both. He gets his licence to import goods at that stage: that is, before the commencement of the quota period. If, during the quota period, an additional quota is provided for, then he applies separately for permission to import under that additional quota.

Apprehensions appear to have been raised in certain quarters arising out of the fact that people have tried to contemplate how they will stand personally in respect to certain classes of goods if those goods were bought subject to quota orders. These apprehensions arose where the goods concerned were of a nature that could not possibly be made subject to quota orders. There are many classes of such goods, as I am sure Senators will understand. They will see at a glance that they could not be regulated quantitatively and in the manner contemplated under this Bill. Machinery, obviously, would come into that category. One cannot say that so many hundredweight or so many tons of machinery will be required within a certain period. The demand for machinery fluctuates from week to week, month to month, or year to year. There may be a demand for a particular machine which may perhaps be only procurable in one place, and may perhaps not be procurable at all except 12 months after the order for it is placed. It is quite clear that quota orders could not be made in respect of that class of goods. They can only be made where goods are imported in considerable quantities and with regularity. Obviously it is possible to apply quota orders to commodities such as flour and sugar, which are more or less standard in quality, and which came in formerly in considerable quantities. Their importation was fairly uniform all the year round. In respect of these articles the manner in which a quota system can be worked is, I think, easily understandable. There are other classes of goods concerning which difficulties may arise. It is contemplated that where a quota order is made in respect of these classes of goods the period of six weeks which will elapse before the first quota period commences to run will be availed of for the purpose of having a full discussion with all interested parties so that possible difficulties may be obviated.

Power is taken under the Bill to require that goods imported under a quota order shall be consigned by a specified route. That particular section caused some misgivings, but it is an obvious and a necessary provision in a quota Bill, because if we confine importers to getting certain goods from one source we must at the same time take steps to ensure that they are sent in by the most economic route, in a manner which will involve importers in the least possible expense. The simplest way to put the matter before the House is perhaps by sketching an impossible situation in which we required importers to take a certain quantity of flour from France in every year, and that for some peculiar reason the French exporters decided to send the flour to Ireland via New York. There are a number of reasons why this provision is considered necessary. One special reason is because there is the possibility of developing an export trade with certain countries if advantageous freight rates can be secured. From these countries we are at present importing considerable quantities of goods which come here after transhipment in other countries or after they have been warehoused in other countries. The possibility of getting advantageous freight rates for goods going outwards depends on the possibility of return cargoes, and it might be deemed desirable to use the power given by this Bill to ensure that where such trade possibilities exist return cargoes will be available. It is also desirable to terminate where possible, the system of importing goods secondhand into this country. It involves us in needless expense. Where direct importation is possible there is nearly always a saving in costs. As many Senators are aware, many classes of goods from different parts of the world at present reach us through commission agents in Great Britain and in Continental countries. They are very frequently warehoused before being transhipped here so that so far as these goods are concerned we have got to pay not merely the expenses of the commission agents but also the warehousing costs. Power is taken under this Bill to eliminate, where it is found feasible to do so, these unnecessary items of expense. Power is also taken under the Bill to prescribe the percentage value that must be added to any class of goods in a country in order that they should be entitled to the description of being manufactured in that country. That is the ordinary procedure which operates in respect to preferential custom rates at the present time.

In order to be entitled to these preferential rates, goods must have a definite percentage of value added by a process of manufacture in the country enjoying the benefit of the rate. A similar provision is being enacted here. The final matter to which I desire to refer is the section concerning the persons to whom it is intended to confine registration on the register of importers to be set up. There is, first of all, any individual who is a national of the Saorstát; secondly, any partnership more than half the capital of which is owned by Saorstát nationals, any company registered in the Saorstát, no matter by whom it is owned, or any person carrying on a manufacturing undertaking in the Saorstát, no matter what his nationality. That section is necessary so as to insure that licences will be issued only to persons in business here. It is preferable that that should be so rather than that we should have to issue licences to persons who might apply from Great Britain, France, Germany or from any other countries. The intention is to confine the register to people who are in some way associated with business in this country.

Colonel Moore

Will the question of varying prices by different people enter into this at all?

Mr. Lemass

Any limitation that takes place upon the right to import goods or any order made that confines persons to import certain classes of goods from a particular country does not confine an importer to one source of supply. He is confined only to a country, but within that country he is entitled, of course, to purchase the goods to the best advantage to himself. It may be that a provision of this kind may operate to eliminate certain elements of competition and may have the effect of increasing prices. That is a factor that must be taken into account, but there is no alternative to that.

Mr. Parkinson

I welcome the speech of the Minister, particularly that portion in which he referred to reciprocal trade. There are many countries outside the British Commonwealth to which we could sell goods if we were in a position to buy goods from them. Owing to currency restrictions these countries are unable to pay cash for our goods unless we are in a position to trade with them. I gather that reciprocal trade will be encouraged under the Bill. Whatever objections there may be from others, from my point of view there is certainly no objection to anything that tends towards reciprocal trade.

The McGillycuddy of the Reeks

If it is possible to have reciprocal trade, as Senator Parkinson suggests, I welcome it in every possible way. In the light of contemporary economic history we must consider the fact that in recent times we have had two economic phases, one which arose out of and continued after the Napoleonic wars, and one which developed from the teachings of the free trade movement. Now we are only at the beginning of another phase, which has arisen out of the confusion of the Great War and the rapidly increasing mechanisation of industry. Scientific development is still gathering such momentum that measures of economic adjustment and efforts of economists like the Minister for Industry and Commerce can be little more than palliatives. At the present time these are taking the form of tariffs and quota restrictions. Having made ourselves one of these entities, naturally we have to conform in our legislation in order to trade with the others. I understand that while control has been exercised hitherto by means of licences and duties these have not proved to be entirely effective as a means of developing our industries in a satisfactory manner. This Bill seeks powers for quantitative and discriminative control. It may be useful, as a weapon for bargaining or, as Senator Parkinson pointed out, for reciprocal trade and treatment. But, as the Minister said, it is not a new phase in the so-called economic war. That is a question I have never raised in this House. I have avoided it. So far as I can see, we have come to the point that no single act of the Administration can be taken without having some bearing on the economic war. I think the Minister has been justified in dismissing that question as lightly as he did. It is hard to see how a Bill of this kind can operate in our case except to restrict British imports. As a matter of fact the Minister referred to that fact when discussing this measure in the Dáil. He said:

"The bulk of goods imported to this country in the past came from Britain. We have no favoured-nation treaty with Great Britain and, so far as the changes in the direction of trade must take place, in consequence of the operation of the Bill, they must necessarily be at the expense of British exporters."

In the Statistical Abstract interesting figures will be found. In 1932 Great Britain took 96.3 per cent. of our total exports in value, and all the remaining countries under 4 per cent. On the other hand we only imported 76 per cent. in value of our requirements from the United Kingdom, whereas we took 24 per cent. from other countries, and incidentally 3.1 per cent. from the United States of America which only took 0.4 per cent. from us. The intention is to try to redress the disparity of the other countries' figures by bargaining, admittedly at the expense of Great Britain. Is it not quite possible, I suggest, in the light of statements made on the other side, and of ordinary human conjecture, that discrimination on our part may lead to defensive discrimination by the other side?

I am afraid I find it very difficult to distinguish between the operation of the Emergency Duties and the obvious results which will follow the working of this Bill. The arrangements with other countries are to be on a reciprocal basis, such as bargaining, but the difficulty is to see what we have to offer that European countries and America have not got already. Quota legislation to be of any real worth implies that you have a surplus of commodities and manufactures to spread over a number of other countries in considerable quantities, and that each country requires a certain type of article in exchange.

Suppose we consider the possibility of a reciprocal arrangement with the United States of America, and the effect it will have on employment here, employment in America, and in Great Britain, which at present is taking a great quantity of our stuff admittedly under the quota arrangement. The 1933 Abstract gives our import figure from the United States as approximately £1,049,000 worth of goods, made up of cereals, £272,000; tobacco, £121,000; oils, £451,000, and other items. Against that they took from us goods to the value of £42,500, so that we have to start by correcting in advance an adverse balance of £1,007,500. We are making that more difficult by objecting to the importation of cereals in order to support our wheat scheme. That wipes out a good part of the first figures, and also makes the American think that it is a case for reciprocity. You have to give away, to some extent, in that matter. Again I gathered from the well informed Labour Party in the Dáil that it is proposed to import some 2,000,000 tons of coal from the United States. That is an item which appears in the Abstract as being landed from other sources in the past at about £1 per ton. I suppose the coal will come here in American ships, manned by American sailors, of which I believe 80 per cent are of German and Scandinavian extraction; that it will give work to some 8,000 American miners for one year. Of course, we can bargain for an increased quota for the spirit trade, but from the labour point of view, the distilling and the malting industries combined employ only about 1,000 men. So far as I can see, even if the number was doubled, the advantage to labour is going to be on the American side. The remaining figures are so inequitable as not to be worth worrying about. Naturally there is a disadvantage to British labour. The more money British labour has the more likely it is to consume portion of our goods.

The other big item, the oil trade, can be placed elsewhere. The crux in every case will be the American question: "What is there you have that we want?" That is a question we shall be hard put to answer. The advantage being given to American labour is a serious thing as regards our smaller ports, but I do not want to labour the point. The coal must come to the bigger instead of to the smaller ports. If we are arranging matters we should see that the labour is distributed as far as possible and is not concentrated in one place. It may be that the Executive Council calculate on the political effect which the further loss of the trade will have on the British shop-keeping mind, and that eventually they will send a suitable negotiator, who will say: "Give us back our trade and you can forget the annuities and all your other obligations." The Bill embodies a principle that "those who trade with the many will have a fuller economic life than those who trade with the few." That is a general principle, but all these principles should not be accepted as dogmas. Rather must they be considered in the light of circumstances which obtain in a particular business in any country. In our case the circumstances are very clearly set out in Table 97.

I think the late Administration made very little attempt to face the American quota on human beings, and as a result the unemployment which must result in this country. To a certain extent I am not one of those who consider the unemployment figures here are entirely due to this Government. Of course not. The present Government realised that this is a question that had to be tackled in some way, and not in a normal way, but they seem to have entirely nullified their efforts by their unnecessary sacrifice of our export trade. The Minister can justly claim to have established, and to have got moving a considerable number of industries in this country. He has done that by means of tariffs and licences. There is undoubted scope for further development in many directions where the consumption and the return would justify the investment of capital. He seeks to accelerate that development by the use of the powers conferred under this Bill. I cannot see how this end can be achieved if the general scheme implies, as the Minister admits, a further diminution of our trade with Britain. That would nullify his argument. That is my case, that the danger of this Bill lies in the Minister's avowed intention to carry discrimination further. He is already discriminating in a matter of import permits to the detriment, in some cases, of trade and employment. If we travel that road we are going to do so at the nation's expense.

If it does not weary the House I will give an instance of how the granting of import licences works to the detriment of trade. I do not want to make political capital by bringing a case of this kind up in the House. I know that I lay myself open to that suggestion. I want to maintain the attitude that when a citizen puts his case in full, as was done here, regarding import permits it should be seriously considered. The Minister is not always in a position to consider it. I want it to be clearly understood that I am not suggesting, as was done elsewhere, that there is any political bias, any dishonesty or any corruption, but that a licensing system may cause individual hardship and national loss, and that the danger will be accentuated when this quota legislation, which can only affect Great Britain, is brought into being.

The case I want to quote is a very simple and short one. In December, 1933, an Irish trader applied for a permit to import free of duty a crude oil engine as a power unit for his saw-mill, as the steam engine with which he worked his saw had become practically worn out. He got back a stencil form regretting that he could not get the permit. This was one of a number of these stencil forms which were then going out. He applied again and he was supplied with a list of firms in the U.S.A., Germany, France, CzechoSlovakia, Belgium and other countries who could supply what was required. The Minister warned the trader that he would take no responsibility for the commercial or financial standing of any of the firms. The trader immediately circularised the whole of the 38 firms and stated his requirements in detail. At the same time, he wrote to an English firm, Messrs. Ruston and Hornsby, Ltd., Lincoln. From Messrs. Ruston and Hornsby he got a quotation by return of post for a crude oil engine, complete, delivered at the railway station in his town for the sum of £ 10s., subject to a discount of 7½ per cent., and 2½ per cent. for cash in one month from date of invoice. That works out at £285 3s., plus an emergency duty of 20 per cent., £57 0s. 8d., which leaves the final cost at £342 3s. 8d. Among all the others, the trader got only one firm quotation of £441 f.o.b. Hamburg. Accessories were extra at a cost of £14 13s. 3d. f.o.b. Hamburg. That worked out at £455 13s. 3d. Delivery was to be effected in from one to two weeks. The terms were 50 per cent. cash with order and balance against shipping documents. The interest on £227 16s. 7d. paid in advance at 5 per cent. per annum, for one month, would add 19/- to the item. The net cost of the engine complete f.o.b. Hamburg would be £456 12s. 3d., plus freight and carriage, £23 18s. 8d., making the final cost £480 10s. 11d.

We must remember that, whereas we all know Ruston & Hornsby, the Minister would give no guarantee in regard to the others. My point is that the Minister cannot really examine these things. The saw-mill in question is the only one in the district. It serves the wants of a number of contractors, farmers and others, and it provides employment, directly and indirectly, in the cutting and carting of timber, for a considerable number of men. About 12 men are constantly employed about the mill. The engine, in addition to providing power for the saw-mills, also provides power for crushing home-grown grain for local farmers. The trader has now been notified that his engine is no longer safe and that his insurance company will not bear any further risks. He may close down at any moment. As a result, no native timber can be utilised and, while a number of men are consequently on the unemployment register and others will be also losers indirectly, the small farmer in the district must fall back on the alternative of imported timber which gives employment to other nationals only.

I think that the position will be accentuated when we come to the quota legislation. In arriving at conclusions as to the use which will be made of the powers granted under a Bill of this kind, we are justified in taking account of public pronouncements made outside the Oireachtas by Ministers. On the 13th February of this year the Minister is reported in the Press as telling a Dublin audience that interest in his efforts was not confined to this country and that he hoped to give the other peoples of the world some guidance which might help them to solve their difficulties. On the same occasion he said that "the real test of efficiency was not the comparative cost of production but the effect which any undertaking will have on the internal organisation of the State." Where, on balance, our people are given additional employment without undue cost to the community as the result of new undertakings, I am heart and soul with those undertakings. But as they are fostered at the expense of the cattle trade, the horse-breeding industry, the greyhound trade and other exports, the balance is, seemingly, on the wrong side. Surely it would have been possible to maintain the agricultural side of our economic complex, with the employment it created, while developing the industrial side, which could be done more rapidly and easily by the use of the money earned by agriculture instead of paying out of our own depleted income for the increased 70,000 persons who are now in receipt of home assistance, as compared with the number in 1931.

The Minister made a charming speech in Cork the other day. He started off by telling the audience how delighted he was to find the optimistic spirit which, he said, obtained in the many parts of the country to which his business took him. He then referred to the report of the association which he was addressing. Unfortunately, the people of Cork had not considered their drafting as they should. They put in the report the words: "Surely the time has arrived when a real effort should be made to recover the valuable market lying at our very doors." That was quite enough for the Minister. They had given him just the jumping-off ground he wanted. If they had referred to such portion of the market as quota legislation would allow us to recover from the other side, then it would be quite different. All the Minister had to say in the circumstances was that it was quite clear to anybody who had taken even a passing interest in the development of the economic policy of Great Britain that unrestricted entry into the British market was not open to us or any other country. The Cork people had to be satisfied. It all depends on the way you jump off, and the Minister knew that very well.

The most serious part of the Minister's speech when he was speaking to the Dublin audience was the bald statement that a nation's prosperity cannot be measured by its export trade alone. Of course, taken by itself, without consideration of other income and financial reserves, a statement of this kind means nothing. Probably the majority of those who listened to the Minister took the remark at its correct value. But when considered in connection with a Bill which reinforces the emergency duty legislation and the Minister's warning in the Dáil, the obvious inference is that what is left of our export trade will be deliberately sacrificed by the Government's policy in the struggle for sovereignty. This Quota Act will be merely another weapon to help on to this finale.

Mr. Comyn

I am greatly disappointed with the speech of The McGillycuddy. That speech shows that he understands this question, but he has not said the things he could have said. He says that the quota system is one of the evils resulting from the Great War. We are, I think, the last nation to legislate in this matter of quotas. As I understand, the Minister has introduced this measure merely as protection against the quota system of other countries. The Bill is drafted with extraordinary skill. Nobody has questioned the form of the measure but Senator The McGillycuddy, and others have dealt with the policy underlying the measure. Senator The McGillycuddy said that this Bill will have only the effect of diminishing still further our trade with Britain and injuring her export trade with this country.

Senator The McGillycuddy might have said that Great Britain was the first to introduce a quota system against the cattle trade of Ireland. Senator The McGillycuddy might also have said that while tariffs on one side and the other side were fair, a quota by Great Britain against Irish cattle is unfair. Senator Sir John Keane, who will speak after me, will, I hope, say that. Senator The McGillycuddy and Senator Sir John Keane know that it is unfair. We all know that the most profitable trade Britain has is the trade with her Crown colonies and her mandated territories. The profits of that trade come into English ports and, through English ports, filter through to agriculture. Hitherto, they have penetrated to the help of agriculture in Ireland. We do not object to their tariffs in the course of the dispute which is not yet settled. They have made no objection to our tariffs, which were really protective and defensive. But they introduced a quota in respect of Irish cattle which they know to be unjust. It is unjust for this reason: the trade they have with their colonies and dependencies was acquired as much by Irish blood and treasure as by British blood and treasure. We have no alternative but to introduce a measure authorising quotas.

The Minister rightly said that this is not a measure arising out of the economic conflict between Great Britain and the Free State on the question of the annuities. It is not. It is a measure of protection, introduced in order to defend ourselves as well as we can against the unjust quota imposed by Great Britain against Irish cattle. Now Senator The McGillycuddy knows that. Why did he not elaborate it? It lies in his mouth to say the word and the same applies to Senator Sir John Keane. They say you will further diminish British imports into this country and they say we are endeavouring to injure British trade. They know we are only doing this in self protection. Why do not men of their ability and knowledge on this question stand up and say something against Great Britain?

Sir John Keane

It is unreasonable that I should be condemned before I have spoken and especially by a man of judicial attainments.

Mr. Comyn

Senator Sir John Keane can always speak well. Senator The McGillycuddy has spoken but he has not said what he might say. Senator Sir John Keane can say it and I hope he will.

Mr. Counihan

Your Party does not want them.

Mr. Comyn

Of course we want markets to develop our industries and our export trade to pay for the imports that we receive. We must pay by way of exports—our cattle amongst other imports not merely by tariffs. Tariffs are fair in an economic war, but if Great Britain imposes upon us not merely tariffs, but a quota, how can we pay for our imports unless we endeavour to find markets elsewhere? These quotas were first established on the continent, and the object of them is to keep within the territory of an empire or a nation all the products or all the advantages derivable from the resources of that nation; that is what it is. It is a new idea. The next phase will be that nations will be reduced to a system of barter, and the third phase is this, that the interests of the various nations will become so individualistic that wars, and great wars, must inevitably result.

Sir John Keane

I quite agree.

Mr. Comyn

Senator Sir John Keane agrees with me. Therefore neither Sir John Keane nor I can look upon quotas with a friendly eye. They are here. We have introduced legislation of that kind as a measure of self-defence. I hope Senator Sir John Keane will recognise that this is a matter of self-defence, and that it is a necessity owing to the quotas imposed on us by Britain, and I hope he will say so when he comes to speak. If he does so he will be doing a good act for the country.

Mr. Douglas

The Senator who has just spoken has not told me what I might say, and, therefore, the Seanad will have the advantage of not knowing what I might have said if I followed his advice. I can assure the House I do not propose to say many things that I could say or the Senator might think I ought to say on this Bill. If he had gone further, as he might have done, into the realm of prophecy and told us what would happen if there was a war it would be more interesting still.

Mr. Comyn

Senator Sir John Keane agreed with my forecast.

Mr. Douglas

He is an excellent authority, and if Senator Comyn finds himself backed by Senator Sir John Keane one would require considerable temerity to express a different view. I am not very convinced that in spite of all that has happened we are going to get into the calamity of war. I think it is possible that this country might be just the one party to keep out of it. I do not regard this Bill as part and parcel of the economic war. I do not think it was so intended. Incidentally I do not agree with Senator Comyn that tariffs are fair in an economic war. I think they could be more unfair than quotas. If quotas are to be used for purposes of antagonism or hostility between two countries, then I pity the small country that started the war of quotas. Nothing but disaster could occur, especially to the smaller of the two countries. But where you have conditions that we have to-day, and the conditions in this country, it may well be that judiciously used we may obtain some benefits from quotas. But if they are to be used as a weapon of hostility, if they are used in that way, Britain would regard them as hostile, and if a war of that kind came on between us and Great Britain we would come off very much the worse. I have seen nothing whatever to indicate what the Minister has in mind.

One thing I am certain of is that this Bill is going to mean an extraordinary amount of trouble for the Minister and his Department and for a very large number of people in this country. Partly from the present policy of the Government, and partly from world conditions, the difficulties of trade are very great indeed and very heavy expenses are involved. This Bill will inevitably add to these difficulties, and in the case of the smaller traders the difficulties will be greater still, because of their small staffs, and because of their inadequate opportunities to deal with the problems in volved.

I have never suggested, or charged, that in the Department the Minister is concerned with there has been any discrimination at all. My experience is entirely to the contrary. I have said so before, and I have nothing to suggest and I have not heard anything, not even the vaguest rumour, to suggest the Department has acted in any way but scrupulously fair. But I think the Minister will find a considerable difficulty when, with the best possible intentions, and acting absolutely fairly, he is dealing with applications which are in excess of the quota. I would like him to indicate what steps he proposes to take in order to ascertain what business was done heretofore by applicants. The matter is causing some uneasiness and I would like to ask what kind of test or proof he will require so that applicants may satisfy him or his Department so that they should get preference in this matter. For instance, you can take the import of similar goods for a year or the previous year. That would be unfair or might be unfair. It would certainly be unfair in the case of firms who are buying larger portions of Irish products in particular commodities that others, who are perhaps increasing their business find themselves unable to do. The Minister knows there are certain commodities that Irish firms cannot supply at the present time. It would be unfair to take the imports of the previous year because that would give a benefit to the firm that had bought nothing from the Irish manufacturer in that period. It also would be unfair in many cases because in the last years it is extremely difficult to get anything of what would be regarded as regular evidence. Perhaps that is an exaggeration. At any rate, business is not done regularly. A person has to purchase certain quantities of goods, to get a price at certain markets, and instead of being able, as one did 20 years ago, to place an order for an approximate amount, taking delivery each month over a year—that has become quite impracticable. Therefore, I think it would not be fair to depend solely upon the imports of the previous year. I am not suggesting that the Minister said so. If that were done it would not be sufficient.

I would like an indication how the Minister intends to discriminate. I am satisfied he and his Department will be scrupulously fair, but I think their difficulties will be very great. If this was for the Minister a whole time job and that he could give his whole time to the Department and to confine himself, say, for instance, to the shirt trade, then I think probably he, as well as anyone I know, could manage it. But added to the duties that he has already in hand, this inevitably will have to be carried out by officials and they will have to have an indication as to the grounds on which they will discriminate.

With regard to the possibility of reciprocal trade with foreign countries, I am not very sanguine about that. I agree it is the duty of the Government to try it. I go further and say that should have nothing to do with the economic war. It would be a good thing for this country to have done more trade in the past with other countries outside England. I say that without the tiniest hostility to England or any suggestion of hostility. It is a good thing to develop other markets not as a matter of retaliation, but as a matter of practical policy. But I would point out to the Minister, though I think he knows it, although it is not recognised in other quarters, that very considerable difficulty arises in doing a foreign trade as against doing an English trade. It may be that the Government may have to get a considerable amount of expert advice to assist the manufacturers here in their foreign trade if as a result of this Bill he is able to make reciprocal arrangements in foreign countries. This applies both to purchasing and selling goods manufactured here not sold to England, and, therefore, to be paid for with foreign money. It varies with the countries which generally require long credits on foreign trade. In every country other than England you have the uncertainty of the exchange, which makes business rather precarious. If paid in three months' time you may not get anything like the money you expect and you may lose. Many countries have restricted quotas; the amount of money is limited and you may find many difficulties. On the other side in connection with purchases from England there can usually be credit for from one to three months. Trade with other countries must be cash with orders or immediately that the goods arrive at the port. With solvent firms that is all right, but with those with limited capital it is difficult. I am not suggesting there are insurmountable difficulties, but there are difficulties that will have to be solved.

I would like to hear from the Minister if anything is to be done, as has been done already in some other countries where there are exchange restrictions, to try to make reciprocal arrangements between those purchasing and selling in the country. That, I believe, is done elsewhere. If a firm here is selling goods where there are Government restrictions on the amount of currency sent out of the country they could arrange to exchange the credit so that there would be the minimum exchange of currency. That would be of great advantage and would reduce the number of credit on both sides.

In his speech to the House, Senator Comyn said he believed the Bill was admirably drafted and that nobody could find any fault with it. After that statement I feel a certain amount of temerity in venturing to find any flaws in the drafting. I am, however, rather puzzled by the provision that

"for the purposes of the Act, importation shall be deemed to take place when the importing conveyance is reported under the Custom Acts."

If anyone smuggles dutiable goods into the country it can be shown that they have not been imported within the meaning of this Act and therefore they would not have broken the quota. It would seem the goods have not been imported unless the forms are filled and handed in. That provision does not seem to be perfectly clear. Then again, I think a difficulty may arise from another section inserted by the Minister in the Dáil. Section 5, sub-section (2), brings us back to the Customs Consolidation Act, 1876. Section 42 is applied, as amended and extended by subsequent Acts. I have not read all the British Acts which might apply to Section 42 but I have read Section 42 itself and I find that it reads:

"The goods enumerated and described in the following table of prohibitions and restrictions inwards are hereby prohibited to be imported or brought into the United Kingdom save as thereby excepted and if any goods so enumerated and described shall be imported or brought into the United Kingdom contrary to the prohibitions or restrictions contained therein such goods shall be forfeited and may be destroyed or otherwise disposed of as the Commissioners of Customs may direct."

It seems that entering the papers is importing the goods and that therefore the goods may then be forfeited or shall be forfeited—there is no option in the matter. The insertion of that section is introducing something really far too drastic and I suggest to the Minister he may find himself tied afterwards by it. That is the reason I mention it at this stage.

What seems to be clearly desirable is that where there is any doubt, there should be no penalty whatever on a firm who imports goods not knowing that they are to come under the quota system. We know that under the tariffs this is extremely difficult, and with the best will in the world you may make a false or inaccurate description or one that is not applicable. I think, therefore, the provision inserted in the Dáil is, as far as I can see, much too drastic. There is a danger of its interfering with the Minister's power to give licences. He proposes, I take it, that where goods are in transit or have been ordered the importer will be given a licence under this section for something which ought to be forfeited. There is probably an explanation there, but as sometimes happens when new sections are added to a Bill, errors may creep in. I suggest that the Minister might have it looked up in his Department. I would like to ask the Minister is there no way of meeting the fears of traders with regard to bona fide orders for goods which may come in almost immediately after the fixing of a quota order. When you are buying from a manufacturer outside this country it is almost impossible to fix an absolute date for delivery even if you had reason to fear a quota, and traders often find goods consigned to them a month later than they expected, and also they all know from experience that you almost always have some goods in transit on which you have to pay a considerably high rate of duty. If you are aware of the coming of the new duty the goods would not be imported.

In the case of goods which it may not be possible to sell elsewhere or which the manufacturer refuses to take back, it might, as well as involving a loss of profit, be ruinous. I think if anything could be done the Minister ought to take steps to give that kind of relief under the Bill before it passes into law. I know that the Minister's answer is that he will do his best and he will give every reasonable help in cases of hardship. A promise from the Minister in my experience is given in good faith, and I know he would endeavour to carry it out, but people cannot always have the same confidence in every Minister that happens to be in his position. If some amendment could be inserted which would provide as a right that where a bona fide order was made before a quota order, there might be some provision made by the Minister which would remove a great deal of apprehension and a certain amount of uneasiness and hostility to the Bill.

I want to ask the Minister two specific questions. In the first place, I have tried to discover the meaning of the expression, "a person born in Saorstát Eireann, or in the area now comprising Saorstát Eireann." He did not know when I asked him on a previous occasion. I have been asked what it meant, and I have been unable to say clearly, but I want to ask him does it mean this: From the time the Treaty was signed until the Six Counties opted out, about a year elapsed, and is it an effort on the part of the Government to allow persons born during that year to come in? If that be so it seems absurd, but if it is not so I wish he would tell us what it means, because it is absolutely beyond me.

On previous occasions I have endeavoured to secure that a person born in the Six Counties might be treated as a citizen, but it is quite plain that the Minister's Party and about half of the Party opposite do not agree with me. I am going to ask him to consider a different provision, which is this: Where an Ulsterman comes to reside here he should only have to reside to qualify. He should not be asked to wait five years. I came across a very interesting anomaly in connection with that point. One person likely to take shares in a concern here was born in the Six Counties and was not residing here. He was willing to come and reside here, but he would have to wait five years before he would count as a shareholder. This man has resided in Ireland all his life and was unable to participate, but we found a person who has resided in London since he was two years of age. He was born in the area now comprised in the Saorstát, and under the one head or the other he will be quite right, but the person who has resided here does not count. That is not only an anomaly but an absurdity. I cannot see why a man born in Belfast should be excluded while a person who likes to live anywhere else should be included. This matter, I think, should be remedied, and persons in the Six Counties who are willing to come and reside here ought not to be obliged first to reside here for five years. The other question I wish to bring before the notice of the Minister is the question of branches. I was to-day asked by a firm, registered in Belfast, who have carried on a branch business in either Drogheda or Dundalk for something like 15 years, if I could explain their position. They think they would be excluded, in the event of a quota, as a wholesale business. My reading of the Bill is that they will be excluded, but I may be wrong, and I would be glad if the Minister will look into it.

Sir John Keane

I move the adjournment of the debate.

Cathaoirleach

There is no seconder to your proposition, Senator.

Sir John Keane

It is rather unfortunate that an important matter of this kind should be debated at such a late hour and with such a small House. I was impressed by the buoyancy—the studied conviction of the Minister for Industry and Commerce in his speech on this measure. His attitude always is, if I might paraphrase: "The times are out of joint, O happy fate, but I was born to set it right." He seemed almost to enjoy getting into the metaphysics and the quagmire of all this newfangled economics, and to hear him speaking to-night it almost looked as if he had assumed the position of economic dictator. He has got, one way or the other, the powers of a dictator, but he talked to-night in relation to transport and other advantages that we got from adopting certain routes in terms of "we.""We will find an advantage in getting return freights"; "we will find advantage to prevent the warehousing of goods in Great Britain." Apparently he has completely overreached the ordinary attitude of mind to trade, but people in trade are far better judges of the methods of transport and the other business connected with carriers than any academic dictator even with the editorial "we."

Mr. Counihan

In view of the small attendance I move that the debate be adjourned until to-morrow.

Cathaoirleach

Senator Sir John Keane moved a similar motion and he got no seconder.

The Seanad adjourned at 7.45 p.m. until 3 o'clock on Thursday, March 15th.

Seanad Éireann debate - Wednesday, 14 Mar 1934