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.