Seanad Éireann debate -
Friday, 24 Aug 1934

Vol. 19 No. 3

Control of Manufactures Bill, 1934—Second Stage.

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

Minister for Industry and Commerce (Mr. Lemass)

This is a Bill to extend the provisions of the Control of Manufactures Act, 1932. That Act, as Senators will remember, was introduced in order to give some measure of control over the entry of foreign owned firms into industry in this country. In fact, it was designed to give the barest minimum of control, and, as it came into operation, it became apparent that some greater measure of control would be necessary in time, particularly as various methods of evading the obligations of that Act were, in due course, invented and put into operation. When that Act was in process of enactment by the Oireachtas, many members of both Houses had considerable doubts as to the wisdom of conferring upon the Minister the powers which it proposed to confer, and various amendments were proposed, both in the Dáil and the Seanad, designed to remove what members of each House believed to be dangers arising out of the form of the measure. Experience gained in the past two years has shown that the existence of these powers was very necessary and, in fact, a number of those who were most diffident about the Act of 1932 have since been associated with demands addressed to the Government that the Act should be amended and made more restrictive and that the powers of the Government should be made more effective. That is the purpose of the Bill.

Senators who have glanced through the Bill will, no doubt, be intimidated by the form of it. It is drafted in a manner which makes it not very easy to follow, but its purpose is quite simple. The operative section is Section 9. Section 9 replaces Section 2 of the Principal Act and is, in the main, similar to Section 2 of the original Act. The main change which it effects is that after the 2nd July, 1934, it shall not be lawful for any company to engage in manufacturing enterprise in this country unless not merely 51 per cent. of its issued shares are owned by nationals of the Saorstát, but also unless two-thirds of any class of shares carrying voting rights are similarly owned. That is the principal, in fact, the only change effected by that section. The other provisions of the section are designed to secure the position of companies or firms engaged in manufacturing businesses at the moment. Certain foreign-owned firms were entitled under the 1932 Act to engage in business without a licence because they were in existence before the 1st June, 1932, and were engaged in the same businesses, or businesses which were a reasonable extension of the previous businesses. The position of these firms is safeguarded by various paragraphs of the section. Similarly, firms which operated under a licence granted under the 1932 Act are secured in their position. The validity of their licence is maintained. They are entitled to continue to operate and to engage in any reasonable extension of the business for which they were licensed.

There is one other change to which I should make reference. We are changing the definition of a national of Saorstát Eireann for the purpose of this legislation. The term as used throughout this Bill is not "national of Saorstát Eireann" but "qualified person" and that "qualified person" is a person born in the Saorstát or a person who has been resident here for five years before 2nd July, 1934. Under the previous Bill a national of Saorstát Eireann was a person who had been born here or a person resident here for five years. The difference is that whereas, under the previous Bill, a person could start this five years' residence at any time, and at the end of that period become a national for the purposes of the Act— the number of such persons is absolutely indefinite—in future, the number of persons who will qualify under the five years' residence clause will be confined to those who have been in the country before the 2nd July, 1934. Non-nationals seeking to establish a business here after that date cannot become qualified because of that particular provision. It was a mistake, I think, in the drafting of the original Bill that the five years was made a continuing five years in that sense.

Power is given to revoke a licence given under this Bill, or a licence already issued under the 1932 Act where the licensee has not started to perform the process licensed within a certain time. One of the difficulties we came up against was that certain firms applied for a licence to engage in a particular process here. When they got the licence they did not proceed to manufacture the goods which they had been licensed to manufacture and the Department were in the difficulty that they could not issue a similar licence to other firms because, in these circumstances, we might have an undue number of foreign firms in the same business, to the detriment of Irish firms in the business, At the same time, we could not actually compel the original licensee to go ahead with the process. Now, we are proposing to take power requiring him to do so or, in the alternative, to cancel the licence. There are fairly elaborate provisions in that respect, but they are easily understandable. Section 13 is designed to enable information to be obtained by the Department from individuals and bodies corporate on matters arising under the Bill—particulars as to the value and ownership of the shares and so forth. I do not think there will be any difficulty arising out of that section for any member of the Seanad.

One entirely new part of the Bill is Part 3. We have been pressed from time to time by various trade and commercial organisations, and also by various labour organisations, to take power to limit the number of persons who might engage in any particular business so as to eliminate uneconomic competition which might bring about a depression in wages and various other undesirable results. We have not quite taken that power but we have considered that it is desirable, in relation to certain commodities, to limit those engaged in their manufacture irrespective of nationality. The commodities we have in mind are those that are not now being produced here at all and in respect to which there are various factors which make it unlikely that anybody will engage in their production, except they are given greater security than might be available in the ordinary way. There are two such circumstances which occur to anybody who considers the matter. One is where the whole of the market of the Saorstát is only capable of supporting one economic unit of production. In such circumstances, it would be very difficult to induce any firm to engage in the production of that commodity and to risk the capital involved in the establishment of the unit unless they were given reasonable security—not a monopoly, because this Bill does not propose to confer monopolies, but power to ensure that no additional unit will be established except there is some reason for introducing competition or that there is room for the new unit without involving undue competition.

There is also the case where it is considered desirable that new industries should be established in districts where employment is urgently needed. We have, for example, been endeavouring to induce various firms proposing to engage in new industries to establish their factories in western or southern parts of the country. One of the arguments always put forward by persons to whom such a proposal was made was that when they had established their factories in these districts, some other firm making the same goods might resist our pressure, establish a factory in Dublin or some other populous centre, thus getting a competitive advantage over the firm that had established factories on our suggestion in these other districts, and that, consequently, they could not take the risk of that.

If this portion of the Bill be enacted, we will have power, in such circumstances, to afford this measure of protection to any firm that acts upon our request and establishes itself in a particular portion of the country—that any other firm proposing to engage in the same business would be required to establish itself in a similar location and so not have any undue competitive advantage. I do not say that the powers proposed to be given in this section will be used for that purpose very frequently because I do not contemplate that many orders affecting reserved commodities under the provisions of this section will be required. It is only where it would be necessary to regulate output that that would be done. There are various industries which will never be established here unless either separate legislation bearing upon them is enacted or the provisions of this Bill are available to enable the Minister for Industry and Commerce, for the time being, to impose in these cases a certain degree of, shall I say, rationalisation or, at all events, regularisation of output. The enactment of this Part of this measure is being awaited before various projects proposed from time to time can be even considered, much less brought into operation. Any firm which engages in the production of a reserved commodity does so under certain definite conditions. In the case of one particular commodity in which we thought that an application for a reserved-commodity order would be made, the firm, having considered the matter, decided that it would prefer to go ahead without the order rather than accept the conditions which would be imposed if the order were made. I should like to emphasise that these conditions will be imposed in every case where an order is made reserving a commodity. The conditions cover the location of the factory, the employment of Irish people, the use of Irish materials in the factory, fixation of maximum and minimum output, limitation of price, limitation of the external capital invested and so forth, all of which are set out in Section 22. It will be seen by anybody glancing over the list of conditions that may be attached to a licence granted under that Part of the Bill that any firm proposing to engage in the production of a reserved commodity will do so under public control of a very definite character.

The only criticism of this Bill seriously advanced from any quarter relates to this part of the Bill, and is mainly directed to protecting the interests of persons now engaged in the production of commodities in respect of which a reserved commodity order may in future be made. I did not contemplate that position at all. The Bill says that no order can be made except in relation to a class of goods which are not being made to any substantial extent in the Saorstát. The cause of the difficulty in the minds of certain people was that phrase "to any substantial extent." That was put in as a sort of qualifying phrase to prevent difficulty arising where we wanted to reserve a particular commodity and we found that somebody, in a small way or on an experimental basis, was producing that particular class of goods. Our intention is that no reserved commodity order shall be made except to secure the establishment of an entirely new industry—that it should relate only to goods not being made here now for the purpose of getting them made here. If anybody can suggest a form of words to make that clearer than it is in the Bill, I am prepared to consider it. The suggestion that there should be compensation for firms engaged in the production of these goods, if an order is made and they do not get a licence, is wide of the mark because our aim is to secure that it will not be possible to make an order at all if there is any firm actually engaged in the production of the particular class of goods in question. If there are firms engaged at the moment in the production of any class of goods here, it is obviously not necessary to make an order in order to secure the production of those goods. The sole reason that that part of the Bill was framed and that it is proposed to the Seanad it should be enacted is to secure the establishment here of industries which, we believe, would not otherwise be brought into the country at all.

Mr. Milroy

This is a Bill which, I think, could give rise to a very useful and comprehensive discussion upon the industrial phase of our economic life in the Saorstát. It is regrettable that a Bill of such moment should be brought before us at the fag-end of a session. The sponsoring of the Second Stage of this Bill might have been utilised by the Minister to deal with something more than the mere technicalities or mechanism of the Bill. He says that the major criticism in respect of the Bill has been directed towards Part 3. Speaking in reference to that part of the Bill, might I say that much more useful consideration of the proposals could have been obtained if that part had been brought before the Oireachtas as a separate Bill. That could have been done without any disadvantage to the Minister's point of view and without any disconnection between that part and other parts of the Bill. Part 3 of the Bill raises economic issues, industrial issues, and aspects of Ministerial policy that have not hitherto formed part of Ministerial proposals. The consideration of this part of the Bill is likely to be diminished, to a certain extent, by the consideration of the Bill as a whole. If this part had been produced as a separate Bill, it would receive, I think, much more exhaustive analysis than it would in its present form.

Apart from Part 3, the Bill deals, if I am not mistaken, with the question of creating obstacles to external capital interfering with the development of enterprise backed by national capital. I think that is a good thing, and I have only a tentative and contingent criticism to offer in regard to that. The fundamental consideration that animates my mind in regard to these matters is that it is of vital importance for this State to retain, so far as it is possible, its natural growth of population, and that no matter how perfect or how scientific the development of the agricultural industry may be it will be inadequate to secure that. If the State is to retain its most valuable asset, that is the natural growth of its human population, it will have to supplement its agricultural resources by industrial development. Otherwise, I see no hope whatever of the future of this country being stable, economic and well balanced, providing for the natural, normal, and progressive development of human life here.

Assume that there is that natural development, there is a stage reached when proposals such as the present are, I think, in good order and well worthy of consideration. At the moment the consideration to my mind, in regard to this Bill, is this: have we reached that stage yet? I say that we want to ensure such industrial development as will supplement our agricultural potentialities and the retention of our population. That is the immediate consideration. Have we secured that stimulated condition of native enterprise to secure that end, and are we at the stage at which we can put obstacles in the way of securing the introduction of external capital to help us in the industrial animation that will enable us to retain our population? The Minister is probably better informed on that subject than I am. Personally, I am aware that this Bill is supported by a volume of industrial opinion outside that cannot be discounted, but I am not at all sure that we have reached the stage when it is the highest degree of statesmanship to create obstacles in the way of the introduction of external capital for the purposes of industrial development. At any rate, it would have been interesting and would, I think, have been a necessary part of the Minister's sponsoring of this Bill to have informed us as to what is the extent from the State point of view, of industrial development on the basis of native capital and enterprise, and what is the extent also of the menace to native enterprise from the introduction of external capital, because I take it that it is by reason of some such menace threatening native enterprise that the necessity for this Bill arises. If no such menace is present, then what is the justification for the proposals in the Bill which will have the effect of restraining, at this stage, the introduction of external capital for industrial development?

These considerations are intended more as interrogations than as a criticism of the Bill, because in regard to the desirability of industrial development I do not think there is any wide abyss between the position of the Minister and myself. I certainly have no intention of trying to do anything that would in the slightest degree thwart any move to promote economic industrial development. But there must be some reasons for the introduction of these provisions in the Bill, and I think we are entitled to know them. The Bill, apart from Part 3, is designed to create obstacles in the path of the introduction of external capital for industrial development here, and I deduce from that that there has been a jeopardising of the possibilities of enterprise based upon native capital. Therefore, I think we are entitled to know what exactly is the position in respect to that. I hope that the Minister, when he is concluding, will tell us.

The Minister told us that Part 3 of the Bill was the only part against which any real criticism had been directed. I think it is not to be wondered at that serious considerations should have arisen so far as that part of the Bill is concerned. It deals with the question of creating monopolies. It seems to me that the proposals contained in that part of the Bill could, with very great advantage, have been embodied in a separate Bill, when we could have considered them quite apart from the matters dealt with in the other parts of this Bill. I do not want to delay the House at any great length. I find this in sub-section (4) of Section 16—

No order under this section shall come into force unless and until a resolution has been passed by Dáil Eireann approving of such order.

I think the political soul of the Minister is at rivalry with the economic soul of the Minister in that sub-section, because in it he has been anticipating the demise of the Upper House. I take it that there is collective responsibility for the proposals that emanate from that august assembly, the Executive Council. Yesterday we were dealing with the Slaughter of Cattle and Sheep Bill. Sub-section (2) of Section 4 of that Bill provides:—

Every regulation made by the Minister under this or any other section of this Act shall be laid before each House of the Oireachtas as soon as may be after it is made, and if a resolution is passed by either such House within the next subsequent 21 days on which that House has sat annulling such regulation, such regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done under such regulation.

Yesterday we were legislating, with a recognition by the Executive Council that there are two Houses of the Oireachtas. To-day we are asked to legislate on the assumption that one of these Houses is here only on conditions of tolerance, and that before the legislation that we are asked to enact to-day becomes law we shall have ceased and passed away. I think the Minister is unduly optimistic with regard to that. John Mitchel said that the spirit of Irish nationality would outlive the British Empire, and paraphrasing that, I venture to say that the institution called Seanad Eireann shall outlive the Fianna Fáil Government.

Mr. Foran

You have a hope.

Mr. Milroy

The Minister for Industry and Commerce ought to accommodate himself to the restrictions which the Minister for Agriculture has accepted, and to acquiesce in an amendment which will read "No order shall come into force until such has been passed by both Houses of the Oireachtas." As a matter of fact, I thought the Minister for Industry and Commerce would acquiesce, because in the Dáil, when referring to this matter, he said that he had no doubt the Bill would leave the Seanad amended in the sense I mention, and that then he would consider it in the lower House. The Minister did not say the lower House, but I think that is the appropriate way to refer to it. Apart from the facetious aspect, the divergence of opinion between the Minister for Industry and Commerce and the Minister for Agriculture, Part 3 is of sufficient importance to warrant that there should be no precipitate haste in the granting of licences, or in the granting of such monopolies as are foreshadowed. The securing of the sanction of both Houses will help to stabilise judgement in these matters, and will in no way weaken the decisions that will eventually have to be arrived at. The granting of monopolies is a matter that requires very mature judgment, and very careful consideration. I do not think there is any necessity to recapitulate the considerations bearing upon that which were presented to the Minister in the Dáil. They were considerations of weight, and though they came from the Opposition Benches, the Minister must have appreciated their value, by recognising that time may make a change in the Government of Saorstát Eireann. He may not be always in office. He is not gifted with the attribute of political immortality. Somebody else may occupy his position, and considerations may arise for the making of some particular commodity a reserved commodity. He may then be very anxious that full consideration should be given to all aspects of a question.

Under such circumstances, he would be glad that at this stage of the Bill he agreed to the insertion of an amendment necessitating the sanction of both Houses to an order making a commodity a reserved commodity. I believe any order so classified will have the merit of meticulous and scrupulous examination by the Oireachtas. The days of monopolies should be gone except for very special considerations. I agree with the Minister that there are considerations, in order to secure the production of a certain commodity in this State, whereby some concessions might be necessary but, once you have such powers in a Statute, there is no question about it there is all the possibility of abuse of such power. I have not the slightest intention of suggesting that any would arise under the present Government, but we have to safeguard against such contingencies as might arise. I am stressing this matter because I do not want to have to argue it at length on the Committee Stage. I am expressing hope that when the Minister replies I may expect from him acquiescence in the suggestion I have made, so that it will not be necessary later to move such an amendment as I have forecasted.

Mr. Johnson

I look upon Part 3 as the main part of the Bill, and the principles embodied in it were, in fact, discussed exhaustively on the Cement Act. What seems to me to be involved here is that the principles embodied in the Cement Act shall be extended, when desired, by the Executive Council and subject to the sanction, shall I say, of whatever Houses of the Oireachtas may exist at the time. The Bill now before us, Part 3 at any rate, is intended to avoid the necessity of bringing in a duplication of the Cement Act altered according to circumstances on every occasion when it is desired that there should be a special provision made by enactment. This would enable the Government to know beforehand if any proposal arises as to the establishment of a factory for the making of, say, electric bulbs or other commodities which would require expensive plant —I do not know if electric bulbs would require an expensive plant— but any such proposal could be considered, without having to wait until the Oireachtas had approved the principle. It seems to me not to be unreasonable that the main lines of such procedure should be laid by a specific Act, and that if a definite proposal comes forward it should come forward to the House by way of an order for approval, and only if approval is given should the reservation be made. As far as I can see, without very close examination, the main lines of Part 3 of the Bill are built pretty well on the design of the previous Bill of this kind.

Part 2 of the Bill, on the other hand, as the Minister pointed out, is very largely a repetition, with some amendments, of the original Control of Manufactures Act of 1932, and the amendments, as he pointed out, are intended to stop gaps. As far as I can gather, there appears to be a number of people in the world whose special business it is to examine Acts of Parliament with a view to finding loopholes and then inducing people to take advantage of those loopholes and make financial profit out of them.

Sir John Keane

Human nature.

Mr. Johnson

One side of human nature; perhaps one of the depraved sides of human nature.

Sir John Keane

Aided by the legal profession.

Mr. Johnson

Aided by the legal profession, perhaps even instigated by the legal profession, or certain members of it.

Mr. Comyn

For reward.

Mr. Johnson

For reward, which makes it worse, but at the expense of the community, or certainly with the object of evading and over-riding the intentions of the legislature. One is reminded of the annals of criminology and of a criminal and a detective trying to counteract the activities of each other, each trying to be cleverer than his enemy. So it seems to me that you have a body of people seeking for a means of evading, for profit, certain Acts of Parliament and, on the other hand, the Minister and his legal advisers, and particularly the draftsman, having to discover how to fill the gaps that have inadvertently been allowed to pass by the observation of the Oireachtas in passing the Acts.

In the case in question, the Minister has pointed out that paragraph (f) of Section 9 was the main change in the Principal Act, apart from the question of dates. One would be surprised to think that it was necessary to insert such an amendment. Most people thought the original Act was watertight enough. The intention certainly was that it should not be lawful for a new public company to be established except that "such business is, at the time such thing is done, owned by a body corporate the issued shares of which are at that time to an extent exceeding one half (in nominal value) thereof in the beneficial ownership of a person who is or of two or more persons each of whom is at that time either a national of Saorstát Eireann or a body corporate the issued shares of which are at that time to an extent exceeding one half (in nominal value) thereof in the beneficial ownership of nationals of Saorstát Eireann." Obviously the whole scheme of that Act was to ensure that the control of manufactures should be in the hands of nationals in this country. But you have evidence in the public Press and, I suppose in all the quarters where financial persons mostly congregate, of a very clever evasion of that intention in the flotation of a company which was to all appearance satisfying the requirements of the Act, but in effect evading it completely; beneficial ownership, and certainly the control, while nominally fulfilling the clause, being clearly and definitely in the hands of people outside this country, while the business of the Oireachtas for several years past has been directed to obviate the danger which such outside ownership would involve. I am referring to the flour business.

Mr. Milroy

Will the Minister inform us what is the meaning of beneficial ownership?

Mr. Lemass

The phrase has a very distinct and clear legal meaning. I am not going to purport to say what are the various judicial interpretations attached to it from time to time, but its meaning is quite clear—that the full benefit of the ownership must attach to the individual who claims the ownership.

Mr. Johnson

I think the fact that the beneficial ownership is in the hands of Irish nationals is only part of the intention. You may have Free State nationals getting whatever benefit there may be out of the business within this country, whereas the control of that business is in the hands of people who have no interest in the country's welfare, in fact who may control that business in the interests of outside countries and outside undertakings. One thought that that was being prevented by the Control of Manufactures Act, 1932, whereas the history of the last two or three years has shown that the Act of 1932 was ineffective in preventing such a thing happening. So it appears to me that paragraph (f) of Section 9 is intended to meet that defect. I think it is a pitiable thing to have to confess that a section of the public for whom the ordinary man in the street is expected to have respect and to look up to as being rather above the average level of integrity and honesty should be engaged in the business of trying to subvert—to conspire with others for the purpose of subverting the intentions of the Legislature in matters of this kind.

Mr. Milroy

Who, for example?

Mr. Johnson

The people who promoted the firm of Ranks on the Stock Exchange within the last year or so. I judge by the prospectus; I have nothing to go on except the prospectus, which gives me the impression and the very strong opinion that it was a deliberate intention to evade the obligations imposed upon manufacturers and promoters of companies under that Act of 1932. Whether it is succeeding or not as a business concern I am not concerned. But it clearly was engaged in an attempt—shall I say in a conspiracy?—to evade and avoid the obligations which this Legislature intended should be imposed upon it.

Mr. Milroy

Did it comply with the terms of the law?

Mr. Johnson

Presumably it did. That is why the present amending Bill is required. I am drawing attention to the fact that such amendments are found necessary from time to time because there are people seeking deliberately, by finding out loopholes, to evade the obligations which the Legislature has put upon such persons. I do not think that Part 2 carries very much more than that stopping of a gap and the Minister has indicated that the other change that is made is in regard only to dates. I do not think that is very serious. In the main I believe that Part 3 of the Bill is the part which is of chief importance and that is embodying principles which have already been accepted by the House.

Mr. Comyn

I am sorry that Senator Johnson thought it necessary to use the particularly biting language which he had used in reference to the exercise of legal rights by people in this country. It is customary, you know, for well-meaning philosophers to make strictures from time to time upon people who are fairly adroit, fairly skilful in the conduct of business. But what does Senator Johnson mean when he refers to people who are subverting the intentions of the Legislature? Who can subvert the intentions of the Legislature if these intentions are properly expressed? Who knows the intentions of the Legislature except the man who construes those intentions from the statute as passed? The public have to construe laws, not by trying to define what was in the mind of Senator Johnson, but by looking at the Act of Parliament itself and judging what it means, according to the mind of the ordinary sensible man who reads it.

Lawyers are sometimes blamed, businessmen are sometimes blamed, but the real offender in all these cases where laws have not been found sufficiently precise is the ingenious client. The ingenious client is the person responsible for all the mischief and the ingenious client might be Senator Johnson just as well as anybody else. Of course he always illuminates a subject which he touches and his speech to-day has been very useful in regard to the problem which is dealt with in Section 9 of this Bill. I hope the Minister has effectually dealt with it. So far as I can see from the section, he has gone as far, I think, as human judgment can go, or human skill can go; but still there are these two words, "beneficial ownership," which have been referred to by my friend Senator Milroy.

Mr. Milroy

What do they mean?

Mr. Comyn

I wonder what would happen in a case like this? Suppose I were asked by a person who is not a qualified person to allow my name to be used as the owner of a number of shares, say, 90 per cent. of the shares in a company carrying on business here, and suppose that he was prepared to trust me and that after two, three or five years it was found that I really was not the owner, what would happen in regard to the transactions that had taken place during those years? Nothing could happen under the terms of this Bill and I think it is desirable that it should be so. Legislation could be so framed that a person who was willing to trust a national of this country, a qualified person, with his money, should lose his money in case the subterfuge—I will not call it a fraud—were discovered. I think that would be too drastic. The only parallel I can find for legislation of this kind and to an attempt at evasion of this type of legislation, occurred just more than 200 years ago when a number of Catholics who owned property agreed with Protestants that the Protestant in each case should hold himself forth as the nominal owner of the property, while in point of fact the Catholic was the beneficial owner. That happened in a great many cases and I am glad to have this opportunity of saying that the trust which the Catholic people placed on their Protestant neighbours was scarcely ever misplaced and that the Protestant neighbours were in all cases absolutely loyal to the trust. I see that Senator Miss Browne for once agrees with me. Having said so much on that point, I think in regard to Section 9 that the Minister has gone as far as it is desirable to go at the present time.

Mr. Milroy

Does that explain the term "beneficial ownership" in this Bill?

Mr. Comyn

No.

Mr. Milroy

Perhaps the Senator will explain it.

Mr. Comyn

What I say does not explain beneficial ownership. The explanation of beneficial ownership is this: that the share must be held by the person, not in trust for any other person, for his sole absolute use and benefit. That is the meaning of beneficial ownership. Is that clear?

Mr. Milroy

No; by no means is it clear. It may be my disability, but I fail to understand it.

Mr. Comyn

It means what I have said. It does not mean this. Let us suppose the impossible, that you are an Englishman and that you give me £100.

Mr. Milroy

That surely would be impossible.

Mr. Comyn

Suppose you give me £100 to invest in a company in this country in my name. Now, the statute says that if it is in my name it shall be in my beneficial ownership. That is, I am assumed to be the owner of the money, to be the person entitled to receive every money benefit such as dividends and to spend the dividends. In case I owned the money and judgment was got against him these shares could be used to satisfy him on that. It means that. It does not mean this. If you should fall out and it was proved that you lent £100 I think if you came into court and said "I gave him £100, in his own name, true enough, by that section of the Act of Parliament, he should be the beneficial owner in order to carry on the business but still the money is mine." I think the court in that case would declare that you were entitled to the money.

I pass from Section 9 and I come to Part 3 which interests me more. This is in regard to the restriction of manufacture of certain commodities called reserved commodities. I am very glad the Minister has introduced legislation. A few concrete examples will bring a thing more clearly to the mind than any number of general statements. It is a fact that industrial enterprise is necessary in this country, as Senator Milroy said in his very moderate and statesmanlike speech here to-day. His speech was very moderate, unusually moderate, and statesmanlike.

Mr. Johnson

Unusually statesmanlike?

Mr. Comyn

Yes. Unusually statesmanlike. I mean that exactly as I have expressed it and I think it is accepted as a compliment. I do not mean to be offensive of course. It is desirable that we should have industrial enterprise in the West of Ireland. I have often thought that people who contemplated investing their capital in enterprises in this country are very reluctant to go outside what I may call the ambit of the City of Dublin. They say we will not go in for heavy industries on the Shannon or the Fergus or on Galway Bay or Clew Bay. We will keep near the centres of population.

Next, they say, what about costs of transport? You cannot expect us to go to the West. We will establish industries anywhere on the East coast but you cannot expect us to go to the West because there will be no great competition for our products. I, for one, think we shall have failed, and this Government will have failed, unless it can succeed in establishing heavy industries in the West of Ireland. I certainly hope the Government will succeed and I am sure they will succeed. We must have them in the West of Ireland before this Government can write the word success at the foot of their plans. In order to do that it is necessary that they should go to the extent of absolutely reserving manufacture of certain commodities not manufactured in this country or not manufactured to any substantial extent at the present time. Therefore I agree with the provisions of Section 16.

The Minister said "that these manufactures which I reserve will be subject to conditions and very severe conditions." He said that these conditions are very severe. Perhaps a manufacturer may come along and say: "Oh, no; I will not operate under these conditions at all; I would rather be free." I am afraid that some of the conditions contained in Section 22 are altogether too severe, paragraph (g), for instance, dealing with the maximum price, paragraph (h) dealing with the nature and quality of such reserved commodities, and paragraph (i) dealing with the mode of manufacture. There are other conditions dealing with the employment of nationals, the quality of the material to be purchased, and the extent of the capital invested—"the business carried on under such licence is from time to time to be owned by nationals of Saorstát Eireann."

Although a professional man I have some contact here and there with business, both in this country and in Great Britain, and I know that what business men value most is freedom. Restrictions on the manufacture of commodities are probably resented to a much greater extent than they ought to be; that is human nature. The manufacturers should be as free as possible. I think some of these restrictions are too severe. That is my individual opinion. This matter has been considered by the Department of Industry and Commerce and by the Minister himself. I do not put my opinion against his, but I think these conditions are certainly severe. I will not say unduly severe.

Mr. Guinness

In his opening remarks the Minister told us this Bill was introduced to supplement the Act of 1932; he told us that it had been found necessary to do so as loopholes had been found and taken advantage of in the previous Act. He used the word "evasion." It has been talked about a good deal since the Minister introduced this Bill. Personally, I think it is incorrect to use that word. Evasion implies something illegal. If advantage had been taken of the terms of the Act by manufacturers in either introducing their goods or developing their business in accordance with the law although perhaps contrary to the spirit of the Government's intention, but within the terms of the Act, I do not think you could call what has been done evasion. They have simply complied with the law. They may be clever and ingenious, but I think it would be rather unfair to say that they behaved improperly. If they had behaved illegally they naturally would have been pulled up.

I should like to ask the Minister, when he is replying, to tell us whether there has been much of this, as he describes it, evasion, because if there has been it would lead one to think that the original measure had not been very popular amongst manufacturers, and it would be interesting to know whether that has been the experience of the Government. If that is the case, then it would rather go to show that if it was not popular there would be considerable difficulty in getting people to undertake manufactures in the country, which it would be desirable to have here, with the requirements of the Act staring them in the face. Then there is the question of what companies come within the purview of the Act. It is mainly in connection with the clauses under which it is necessary that 51 per cent. of the issue of shares should be held by nationals of the Saorstát. Is that rule to be applicable to old established businesses? I shall give the names of the businesses I have in mind, because I think it would be desirable to have this matter definitely decided.

Mr. Lemass

It applies only to businesses established after 2nd July of this year.

Mr. Guinness

Well, Sir, there are two or three issues of shares that were made comparatively recently. For instance, there was the issue in connection with the beet sugar industry. Does that come within the Act?

Mr. Lemass

That is specifically exempted.

Mr. Guinness

I see. There was also an issue in connection with the peat fuel industry. Does that come within the Act, and if it comes within the Act, is it necessary and obligatory on the Peat Fuel Company, which we hope will be a big enterprise, that half the holders should be nationals of this country?

Mr. Lemass

No. That company has received a licence which excludes it from the Act.

Mr. Guinness

I see. That is an exclusion. There was another issue which was very successful, but I think the issue took place before the date in July which the Minister mentioned, so it would not come within the Act. Another issue was referred to by Senator Johnson, that of Messrs. Rank.

Mr. Lemass

Flour millers are also excluded.

Mr. Guinness

Well, then, I am afraid the strictures of Senator Johnson were not merited in that case. I wonder could the Minister, when he is replying, tell us what companies have come within the scope of the Act. I have been worrying myself to find out.

Acting-Chairman

I think, Senator, that it is better not to mention the names of firms in a connection such as this.

Mr. Guinness

Oh, very well, I shall not press that. There is one matter, however, which is rather connected in a way and unconnected in another way. In the last couple of days, we have had two or three amending Acts —one in connection with the Cereals Bill, and another is this one here to-day. The result of these amending Acts will be that legislation and Acts in connection with them will be very confusing and complicated. Would it be possible to codify them in any shape or form and issue them in the form of an Act which would be comprehensive in regard to all that is required and at the same time would not be full of references? There was one here yesterday in which there is a page of references and I think that it would be a matter of very great difficulty for anybody who has to use the Bill to try to construe it. I am sure that Senator Comyn will be able to give us his view on that matter as to whether he would prefer to refer to two or three Acts when some question would come before him or whether he would prefer to have a codified Act. If it were possible to have some such thing done I think it would be very desirable.

Sir John Keane

I think we must all admire the optimism and persistence of the Minister. For the past two years he has been slogging steadily away at this policy of national intensification and making speeches all over the country showing the advances that have been made, but he has never really come down to brass tacks. He has never given us, in the form of returns, or even in the form of speeches, a categorical account of what has been achieved. In some cases—I do not say without provocation—he has almost resorted to flippancies, such as where he said: "They are springing up so quickly that if I gave you an account of their development to-day, it would be out of date to-morrow." That, I think, is a fairly accurate description of what he said in the Dáil on one occasion. We have been promised a directory of trades, but we did not get it. I think also that we were promised, either by the Minister or one of his colleagues, some sort of a vade mecum of these intolerable duties, but we did not get it. You cannot examine all these things apart from the general policy.

I say this with a certain amount of levity, I admit, but I will make this sporting suggestion to the Minister: let him disguise himself—put on a false beard or something like that— and come with me around the town for a day and talk to various shopkeepers and others so that he may realise what is going on. From the very nature of his office, naturally, the Minister, no doubt, is surrounded with files and papers of all kinds and with buffers in the form of civil servants between himself and reality, and I do not think that he knows for a moment what is really happening. Only this morning I was in a certain business house——

Mr. Lemass

With a false beard on?

Sir John Keane

——and I said to the proprietor: "Are you bothered with these regulations?" He said to me: "Of course we are. We cannot get our stationery manufactured at home and we have to import it; but, as things are, two months is not an unreasonable period for us to be haggling with the North Wall and filling up forms and so on before we can get our materials." That is what he said to me. Take those tin plate restrictions, for example. You see these little samples of kitchen ware, cheap articles, all of which have to be made by expensive machinery and which could not be made in this country—all caught by the duty which is put on merely to enable certain rough classes of tin plate articles to be made at home. I could mention many more but it would only weary the House if I even approached the fringe of the question. Does the Minister realise all the petty annoyances that are imposed day by day on the business community? I do not suppose he does. What is the attitude of the business community? The average man says that it does not pay him to fall out with the Government. There is an extraordinarily cynical attitude adopted by the average business man in this connection. I, perhaps, come across it in a way that other members of the House do not. The cynical attitude of the average business man is: "We will make hay while the sun shines. We are going with soft words to the Minister to get all we can and we are not going to expose what we consider the unsound features of his policy so long as we can entrench ourselves and back ourselves up with the consumer." That is the effect of the whole of the Minister's economic policy of which this is a part.

Of course, the Minister will say that these are our old die-hard Free Trade ideas coming through. He will say: "You are too old to learn and to realise that this new economic policy contains the salvation of the world; all other countries are doing it and we are only following along their lines." All I can say to that is that what is happening in the world is not very encouraging. In England it is not being done to anything like that extent, and the only other country is Italy—and even then its finances are not so good—where very exceptional circumstances prevail. You have the same position in Central Europe where this sort of thing is going on; all along the line it is deplorable. This is not a justification for this policy of exclusiveness. I want to turn for a moment to the astonishing speech made by Senator Johnson. I wonder if the Senator were really talking with his tongue in his cheek when he made that speech. Would he suggest that as a Trade Union official he never examined Bills to find in them loopholes in favour of his Party or his organisation? If he did not examine those Bills to find loopholes he would not be a competent official. Every Party examines Bills to see what loopholes exist in them. This is not a new discovery.

Is not the whole code of income tax based on trying to stop evasion? Is not a large portion of the Companies Acts devoted to trying to stop evasion by one-man companies? If you are to place these burdens and restrictions upon citizens, hamper their business and offer rewards at the expense of the consumer to shelter a privileged few what do you expect? This is now going on. The few behind the shelter will, human nature being what it is, take all the advantages they can out of their privileged position. They will get all the benefits they can. When Senator Johnson descends from his philosophic heights and comes down to reality he will be able to make some useful contribution to legislation.

I was surprised to hear no protest from Senator Johnson as to the whole principle involved in this legislation. Possibly that was decided by the Act of 1932, which this is only seeking to amend. Now Senator Johnson is an avowed opponent of capital, but he is now consolidating capital in its worst form. He is giving limited capital privileges in a small community. The real safeguard for the community and for capital is to allow capital to operate freely. If you allow capital to come freely into business, then you will have protection for the consumer; but if you restrict the operations of capital in a small community you will consolidate the very worst features of capital. When, in course of time, we will see the harm that will ensue from this legislation, I tell Senator Johnson that he and his Party will not be able to escape their share of the guilt.

I, as an avowed capitalist, deplore these restrictions. I have not prepared my speech on this Bill because my interest has become almost academic. One is disgusted with this legislation. I am opposed to the whole principle of it. When the previous Bill was going through the Oireachtas I did forecast that there would be wholesale evasion. That was proved to be the case. If Senator Johnson only knew as I do the integrity of certain people who take advantage of that evasion he would be rather inclined to qualify the remarks he made. People of the highest integrity are now coming in and taking advantage of the loopholes in this Act.

Mr. Johnson

That is the trouble.

Sir John Keane

What does Senator Johnson say to the Opposition? I have responsibility as a member of this House. I see loopholes still in the Bill, but I do not feel any duty to tell the House or the Minister where these loopholes are.

Mr. Comyn

You ought.

Sir John Keane

I do not see that at all. I am opposed to the principle of this Bill. That is a point now of political morality. I am opposed to the principle of this measure. I see methods by which the measure can be evaded. Senator Comyn says it is my duty to tell the House and the Minister where these loopholes are. I say "No," and I leave it at that.

Mr. Comyn

As I have been referred to I would say this, that if Senator Sir John Keane sees certain loopholes in a Bill which he considers will defeat the object of the measure, seeing that it has got a Second Reading in this House, it is his duty in my opinion to bring in amendments.

Sir John Keane

The Bill has not yet got a Second Reading.

Mr. Johnson

What does the Acting-Chairman say?

Acting-Chairman

I certainly shall not rule on that.

Sir John Keane

I do not believe that if Senator Johnson himself were in my position he would act as he suggests I ought to act. I will leave it at this— that when one is opposed to a measure one is not bound to do anything in the way of helping towards its improvement. Opposed as one is to this whole policy what can one do but accept it with resignation? The Minister seems to be perfectly satisfied. He tells us that everything is going on well, but he gives us no information. Here we are old-fashioned economists and we have to turn to certain well-known statistics. I hold here in my hand a document which shows that for the last ten years our export trade has fallen from £46,000,000 to £18,000,000. Our import trade has fallen too but not to that extent. In the past year while our exports have fallen by £2,000,000 our imports have risen, so that on a total turnover of £57,000,000 our adverse trade balance is as high as it was when our total trade turnover was £104,000,000. These are figures which speak for themselves.

Against these things we have got nothing but a sort of optimistic statement from the Minister that everything is going on well; that new factories are being established, and that everybody is happy. I cannot follow that. I feel as many others that things are not as the Minister would have us believe, and that the business community naturally are not complaining because they know it would be no good. They know that it will do no good to them to get the Minister's back up. What can they do? They have got to submit to this legislation and like wise men, human nature being what it is, they are prepared to take all the advantage they can out of the privileged position that these things confer upon them.

What one must feel sorry for is the consumer and his position. As time goes on and as the purchasing power of the consumer decreases, owing to the position of the agricultural community, these things will be felt more and more. The country will find these people entrenched in a privileged position. They will find vested interests of which it will be impossible to get rid. These interests will be so powerful that no political party can get rid of them. Let me give one instance. I do not know the names and the Minister may say that this instance. I am about to give is imagination. It is a question of this kind: a person comes along to the Minister and says "I can make a certain article of clothing speciality; if you put on a duty on that I will start a factory here in any place where you wish to manufacture that article. I will get Irish capital together and in the meantime allow me to operate on an import licence." You will have things of that kind. The Minister will correct me if I am wrong in the instance I am giving. What is the position? The factory starts. They are making a special article. As improvement comes along in outside factories that factory will have no inducement to produce an improved article. It will have a monopoly of that article. What inducement is there to give the public better value? What inducement is there on the part of that firm to take advantage of new processing and improvement in their method of manufacture and in the cheapening of the price? I hope the Minister will not say that he is getting the Prices Tribunal to investigate the quality and the prices charged. What will happen is that that article and process will become sterotyped. The only possible form of competition will be from nationals who might think it worth while to go into competition. It is quite conceivable, knowing that that requires elaborate machinery and a great deal of capital, that it would never be worth while even for these people to go into competition for the limited trade that the small population of the country offers. So you get a condition where industry becomes stagnant and stereotyped, largely because you entrench production in a small community. That is a thoroughly bad prospect. It may look all right from the point of view of statistics and the Minister may regard it with complete satisfaction. I, as a capitalist, am now speaking against capitalism in the form in which the Minister wishes to introduce it. The person who is going to suffer is the consumer. The amenities of life and civilisation, as we know it, will also suffer. I know that I shall be told that this is an academic question and that the Minister is going to have his way, but I still believe that it is all wrong. I deplore the day when these chickens will come home to roost.

Mr. S. Robinson

I very seldom inflict myself on the Seanad and there is a very good reason for that. Anything I might say would probably be taken as coming from the Government. I want to state now, that what I have to say on this Bill, is purely my own personal view. I am not at all enamoured of this Bill. Owing to certain circumstances, I have had to take a personal and keen interest in the meaning of the different provisions of the Bill. Through these circumstances, I have got an impression of the Bill which seems to be altogether different from the general impression. Senator Sir John Keane seems to think that it would be better for us to allow British or any foreign capital to come in here without any restriction. We know that any foreign corporation coming in here would be much more powerful than the small Irish manufacturing concerns with which it would be in competition, and we are very naturally anxious to safeguard the mere Irish—the 100 per cent. Irish— from the activities of firms and corporations of that sort. I do not quite see why Senator Sir John Keane is so keen—to make a pun, not deliberately, but on the spur of the moment —in objecting to the restrictions which, he says, are imposed by this Bill. Is this Bill a restriction on the foreigner coming in here? Is it not rather a safeguard for him? We say to the Englishman: "Listen here, we Irish are great sportsmen; we do not like to take advantage of a poor Englishman coming in here on his own. We insist on his having allies here, as he had in most of his military fights for the last 700 years, to help him to lick his opponents." That is, in effect, what this Bill says.

Not only that, but we are quite concerned about the amount of capital he is going to risk. We will not allow him to risk more than one-third. I admit that to all appearances he is to have a bit less control, but where is the restriction? You certainly are not going to get the continental foreigner to come in, because he does not know anybody here. He will naturally feel that, if he comes in here he will be confronted by people who know their business as well as he does and by men who will see that the firm is run for the benefit of the Irish nation; but, under this Bill, the British will not be stopped at all, as far as I can see. If anything, it is a help to them. They can come in knowing the officials with whom they are to deal and knowing the people who were already engaged in that business. They will see to it that they are not the people whom they will ask to join up with them or, if they join up with them, they will see that they are left a voice that is very weak. In that way we shall have firms starting to compete with the mere Irish. Not only that, but no Irish firm under these circumstances will take the risk of coming into the field. It would not be a risk; it would be suicide, and I have definite cases in my mind on which I build that opinion.

I think the Bill is very little use. The suggestion seems to be that we want to restrict the foreigner in coming in but I think we should get down to something positive to assist Irish industrialists. I do not speak as one who is in any way expert or deeply versed in these matters, but, like the commonsense man of whom Senator Comyn spoke, who has to interpret all these laws as best he can, I think that an industrial committee might be set up whose business it would be to take positive action, not mere passive action such as, for example, the Prices Commission can only take. We should have some positive committee which would invite ideas from people who are interested in industrial revival, particularly in regard to definite industries that people may have in their minds. These people might be given advice and put in touch with others who could assist them and even suggest variations in the law, if necessary. They would then know where they stood.

I have actually come across, in the last few days, a T.D., a member of our own Party, who met some of his own constituents during the holidays. These men heard about this Bill, not that they had read it—probably they could not understand it, if they had read it—but they had a general feeling that we were in for a great industrial revival. They said to their T.D.: "We have a little money and we are quite anxious to have an industry going in our constituency. What about going to see the Minister and some officials in regard to the matter?" I met the T.D. afterwards and I asked him how they got on and he said: "To tell you the truth, I was surprised at the reception we got." They were told by the officials: "We do not know anything about this at all, it is not our business." These men went home and they do not now believe there is going to be any industrial revival. I know that is a wrong impression but somehow or other when I try to get down to practical business—although I must say I have always received the greatest consideration from officials— I find myself in the same street.

This Bill, I think, instead of being a Bill to exclude the British, more or less invites them. I will say, of course, that the Bill is better than no Bill at all. In the words of the old saying, "When all fruit fails, welcome haws." But even as the Bill stands, a British firm can control 33? per cent. of the capital. I understand that in France only 20 per cent. is allowed to be controlled by an outside firm, and in France industry is on a much more solid footing than in this country. Here, where native industry is not yet on its feet, a foreign firm is allowed to control 33? per cent. of the capital invested. That 33? per cent. will exercise a tremendous influence. The owners of it will see that the owners of the other two-thirds are so scattered that they cannot speak with a single voice. Furthermore, if any of the Irish shareholders think that the firm is going on well, and that it should start an export trade, the foreign element will probably put difficulties in the way of starting an export trade. They will probably point out that they can only get a certain price for the products when exported, or something else will probably go wrong, and the Irish shareholders will have to keep quiet.

As regards that word "export," what English firm is going to come here and curtail its own home activities by exporting from here? If they come over here they make sure that the home firm is not going to suffer thereby. I have in mind a case that will illustrate that point better than mere argument. The Ford car, which is assembled here, costs, model for model, about £50 more than the Ford car produced by the parent firm in England. I have asked people connected with that business to explain that difference in price, but they could not do so. They could see no reason why there should be such a disparity in price.

Having met English business men and gone into certain matters recently, I have come to the conclusion that the reason is that the price charged for the component parts—in other words, the raw material—is exactly what the car would have cost if the car had been completed and sent over here. In other words, the parent firm is not only at no loss in connection with the industry here, but is at an advantage. That sort of industry is going to be of no great value to Ireland. A foreigner will look around when about to start an industry here and will say: "I want to hold the grip I have on this market. If we do not come in, some Irish firm will come in. While we shall allow the Irish shareholders to have a good commercial return on their shares, we can secure that the advantage will still be with us." Where raw material is to be imported, it is only natural to expect that the parent firm will be the firm that will sell the raw material to the Irish firm. They will sell at their own price. The Irish firm may demur and say that they want to make sure that the price is a competitive one. The parent firm will say: "You can ask continental firms to compete." That sounds very fair, but how will it work out in practice? The continental firm will send in a quotation once and no matter what the price may be the parent firm will get the contract. The continental firm will send in a quotation a second time and the parent firm will get it still. After that, is the continental firm going to be fooled further? Then the prices will go up and you will have a repetition of the Ford car business, if what I have stated be correct.

The Minister spoke about issuing reserved commodity orders only in cases where the industry was not going in this country and was not likely to be established here because it would be uneconomic to have more than one unit of production. That is a bit astonishing, for certain reasons. Why not give that reservation to an Irish firm if they look for such a thing? It is all very fine to say: "We want to avoid this monopoly business; we do not want to appear to give our own people monopolies." But if the only alternative is to give an English firm what is virtually a monopoly, what use is that to us? In the particular case I am thinking of, the industry was not going in this country. It was deliberately intended that British firms would not come in. They refused to come in and I understand that this refusal is on the Minister's files. A number of Irishmen decided that there was an opportunity for the starting of this industry. They tried to start it and they were told that British firms could come in under this Bill. They had only to get a few Irishmen to provide two-thirds of the voting power. That firm is coming in now. It refused to come in previously and it is coming in now only because an Irish firm said it would start.

This legislation is all very fine but it is our own people who seem to get the kick. "Those whom the Lord loveth He chastiseth." I think that the Bill should be constructed differently. It is most unfortunate that I should have to get up and say this but why pull the wool over our own eyes? We know that the Minister's heart is in the right place. We know that he has got a brain that can accumulate all sorts of data, sort them out and handle them. I have no doubt that if he got down to something positive, we should get on like a house on fire.

Mr. Lemass

With regard to Senator Robinson's observations, I should like to say that, while it is the function of the Department of Industry and Commerce to father industrial development, it is not undertaking to mother it as well. Irish industrialists have got to be prepared to take whatever risks there are in investing their capital in industrial development. If they want to have nothing but gilt-edged security, if they want everything handed to them on a silver salver without any risk whatever involved, I think we had better stop this attempt to get industrial development by Irish money. We are loading the dice in favour of the Irish firm. We are giving the Irish firm reasonable protection and we are not going to give it more. As regards Senator Robinson's anecdote concerning certain Deputies, if any persons come to my Department with a report that they have money they want to invest and desire advice as to what they should invest it in, they will get no such advice. We shall not take the responsibility of advising people as to what industry they should put their money in. My advice to them would be to put it into the industry they know. If they do not know any industry, then they had better risk it in Hospitals Sweepstakes tickets or something of that kind, which will be an easier way of losing it than putting it into an industry they know nothing about. When Deputies or others ask Senator Robinson for advice as to the industry in which they should invest their hard earned savings, I suggest to him that he should tell them to invest in an industry they know something about and, if they do not know anything about any industry, then not to touch any of them. That is advice which he might well give to those who approach him.

Nothing of particular importance bearing upon the measure arose in the debate. Senator Sir John Keane gave us a résumé of his antiquated and old fashioned ideas on economics. We have had that before and I do not think that any purpose would be served by exposing the fallacies behind the Senator's theories.

Sir John Keane

Do not trouble to do so. I had to get them off my chest.

Mr. Lemass

Senator Guinness asked if we had much evidence of evasion of the intentions of the earlier Act. There were, so far as we know, no evasions of the provisions of the earlier Act. Certain firms may, however, be evading the Act and getting away with it. Attempts were made to evade the intentions of the Act. I do not say that a large number of these attempts were successful. In fact, I think that only in three cases, at the outside, did firms establish themselves in industry here in circumstances which we would have prevented their doing so if we had had the power. The effect of even these two or three cases upon industrial development generally was that the average body of investors were slow and reluctant to subscribe to the shares of companies formed to engage in any industrial enterprise when they felt that it was possible for these companies to be brought up against very intense opposition by highly capitalised outside firms. Although that timidity on behalf of investors is, I think, rapidly disappearing, nevertheless it is necessary to secure that position so that the intentions of the Government can be given full effect to before it will be finally removed and a public issue of shares for industrial purposes here can be made with a reasonable guarantee of success if the project is a good one. Senators will have noticed that the most recent industrial issues were very well taken up, and that there is in that regard a much better position than existed some time ago.

Sir John Keane

Would the Minister say how the public can know whether an issue is taken up or not?

Mr. Lemass

I am afraid I cannot undertake the responsibility of answering that question.

Sir John Keane

You remember all the obscurity we had about the loan.

Mr. Lemass

The Government has a certain responsibility in connection with the loan, but it cannot undertake responsibility in respect of the issue of shares by a private concern. It is only from hearsay that we ourselves know what the results are in the case of private concerns. As regards the points raised by Senator Milroy, these were all debated, more or less, at considerable length on the main Act, and, in fact, the acceptance of it by the Oireachtas indicated approval of the principle of regulation. We are only by this Bill improving, as we consider, upon the method of regulation. In the main, I think it is correct to say that industrial development is taking place here with Saorstát capital. External firms coming into industry here generally get a bit more publicity than native firms, but by far the greater portion of the capital invested in industrial concerns here is owned by Saorstát residents, and the tendency of the times would appear to be moving towards an increase in that proportion. Even where foreign firms are sometimes associated with industrial enterprises here—and it is often very desirable to have them associated with them because of the technical knowledge and experience required— the tendency is to induce as large a subscription of local capital as possible, and I think that is all to the good. The menace to which Senator Milroy referred——

Mr. Milroy

Lest there be any misunderstanding, I should like to explain. The phrase the Minister has used suggests that I implied that there was a menace. The point that I put was this: was there a menace?

Mr. Lemass

There is no menace really of the whole of the industrial life of the country being controlled from outside in the sense that the capital invested in industrial enterprises would be foreign owned. There is the menace to which I referred, that local investors will not take the risk of going into industry here unless they are given reasonable security against the possibility of having all their capital lost in an intense trade war with much stronger foreign competitors. That is a situation that exists with us and that does not necessarily exist in other countries. We are a small country in the early stages of our industrial development, side by side a much larger country that is highly industrialised, producing most of the things that we require here and in every way fully equipped to compete against our products in our own market.

That situation does not exist in the case of other countries in Europe in relation to Great Britain. Because of the existence of that situation, having regard, of course, to the fact that there are very direct links between two countries that have been politically associated under one Government for a long number of years, it is necessary for us to have legislation of a type not contemplated elsewhere except perhaps in a country like Mexico, which is up against a somewhat similar situation as regards the United States. Canada is finding in relation to the United States exactly the same development that we are finding here in relation to Great Britain.

As regards Part 3 of the Bill, the purpose of it is to secure that we can have in relation to particular industries the degree of regulation which, as Senator Johnson explained, we have taken by a specific Act in relation to the cement industry. In fact Part 3 of the Bill is a reproduction of the relevant sections of the Cement Act, with the words "reserved commodity" to be put in wherever the word "cement" occurred. The intention is to secure that we will have the power to bring a particular industry subject to regulation, in a manner which will be much simpler than would be involved in the preparation of a new Bill and of its introduction and passage through the Dáil and Seanad. As this Bill stands we propose that that power may be secured by order made under a certain procedure, involving the publication of certain notices and the consideration of any objections that may be made by members of the public concerned.

As the Bill stands a vote of approval by the Dáil is all that is required to make the order effective. The reason for that I explained on a previous occasion when a similar proposal was put into another Bill. Here the Government has to enter into negotiations very frequently on matters relating to industrial development to be carried over a long number of years and of improvements in industrial organisation. The Government under our Constitution is only required to have the support and confidence of a majority of the Dáil. It is not required constitutionally to have the confidence of a majority of the Seanad.

Mr. Milroy

Is it not desirable that it should?

Mr. Lemass

Very desirable, I agree. In fact it is very extraordinary that it has not under present circumstances. Under the Constitution all that is required is that the Government should have the confidence of a majority of the Dáil. If it ceases to have the confidence of the Dáil it must go out of office. It cannot dissolve the Dáil. In these circumstances we think it desirable that the Government should be empowered to enter into negotiations knowing that in making an order it can feel certain of getting that order approved so long as it retains the confidence of a majority of that one House which, under the Constitution, it is required to have. That is a matter, of course, we can argue further on the Committee Stage. No doubt I will have some difficulty in convincing members of the Seanad to accept my view in that regard.

Sir John Keane

Did I understand the Minister to say that the officials of his Department were authorised to advise investors with regard to investments?

Mr. Lemass

No. I said that when people approached the Department for advice as to what industries they should invest their money in the officials of my Department invariably refused to give them advice. They might try to put them in touch with people who have ability to conduct industry, but we could not undertake the responsibility of advising people as to the industries in which they should put their money. If we were to do that, and if anything went wrong, we of course would get the blame.

Question put and agreed to.

Committee Stage ordered for Thursday, 30th August, 1934.