Control of Manufactures Bill, 1934—Committee Stage.
Section 1 agreed to.
Question proposed: "That Section 2 stand part of the Bill."
I would like to call the Minister's attention to sub-section (3) of Section 2 which states:—
Each of the following persons shall for the purposes of this Act be qualified persons; that is to say:—
(a) a person born in Saorstát Eireann or the area now comprised in Saorstát Eireann;
(b) a person who at the relevant time is and for not less than five consecutive years immediately preceding the 2nd July, 1934, has been ordinarily resident in Saorstát Eireann.
That means that certain persons, certainly well known to the existing law to be nationals, would lose certain rights as nationals. That is to say, under certain circumstances, although nationals, they would never be qualified persons and would be denationalised and would have rights denied to them. I think any question touching upon nationality in any shape or form is rather important at the moment. There are persons who, for one reason or another, frequently refer to other persons' nationality. Twice, quite recently, in this House, Senator Miss Browne referred to the nationality of two members of the House, one of whom was myself. She said I was an Englishman. I quite understand she meant that statement as a compliment, but still, like most compliments, it was more imaginary than real, and had no relation whatever to the truth. I was born in this country, and so was my father and grandfather, and all the other paternal ancestors that I have been able to trace. But that is only a detail. Take the case of people who, for one reason or another, live abroad —people who have gone, perhaps, into the service of the State in a diplomatic position, or some other such position. I understand—though I do not profess to know—that diplomatic usage is that if your child was born in a legation or embassy, that legation or embassy is regarded as part of the country you represent. It is conceivable, however, that a child of a diplomatic representative, or of somebody else representing a country in some special way, might not be actually born on the legation or embassy premises. In that case the child would be a national of Irish parents, but, according to this, that person would have no right to be regarded as a qualified person under this Act, because he was not a person born in Saorstát Eireann, or who had not been ordinarily resident in Saorstát Eireann, for not less than five years immediately preceding the second day of July, 1934. Therefore, it seems to me to be quite obvious that the person to whom I have referred, under those circumstances, would be denied some of the rights of a national.
I was going to raise, in somewhat different form, a similar question to that raised by Senator David Robinson. I did not put down an amendment in this particular respect because, apparently, that form of amendment has been regarded as a hobby of mine, and I saw no reason why people born in the Six Counties should not be within the amendments I put down before. However, I wanted to get from the Minister some kind of assurance that, when the Bill that is promised for dealing with nationality comes in, it would be in some way or another related to this Bill, because I think there is a great danger that you will have a form of nationality defined, and a method by which nationality may be acquired under such a Bill, which, nevertheless, might not come under this Act. I am not speaking for myself here, but I should like to have some assurance from the Minister that that point would be very carefully considered. I should like to make a further plea also for the position of persons born across the Border.
Senator David Robinson has told us —and I presume that, if it is in order in his case, it is in order in mine—that he was an Irishman and for at least some generations back his ancestors were Irish. In my case, I have had my family tree pretty carefully prepared and it goes back nine generations; but as far as this Bill is concerned it is only one generation because, although I was born in Saorstát Eireann, all the other generations were born in the Six Counties. Notwithstanding that, I am not the less prepared to say that I am an Irishman. My wife is in a similar case. She can go back six or seven generations. She was born in the Six Counties but has lived long enough here to come within this section.
What I want to put to the Minister is that the change here is too confusing. I could understand the reasons for providing a particular date and changing the position with regard to the old Bill, which meant a five years' residence commencing at any time to enable a person to qualify. In the case of a person coming from another country, I approve of the change; but this is making it more difficult still in the case of a person born inside the Six Counties to become a national here. I am strongly of opinion that a person born inside the Six Counties, who wishes to put money into an industry here, should not be put into the position of having to get a licence because he did not do it within a particular date.
As things are under this Bill, they can never qualify if they were born inside the Six Counties, and that is making the position of residents in the Six Counties impossible. I do not believe that it is good policy to do that. Admittedly, the numbers may be small, but there are people—and if the Minister likes I could mention names —who, quite recently, and certainly since the establishment of the Free State, if not since the establishment of this Government, left the Six Counties and established businesses here. They wanted to get the trade of the whole of Ireland, and they had to choose between the Six-County area and this area. They chose this area. I think that the people to whom I have referred are all right, because they came in soon enough; but others may come in and I think that the Minister should consider whether or not there is any way in which this would apply to persons born inside the Six Counties, or, better still, that he should provide for a person becoming a national of the Free State who is born inside the Six Counties, and then that he would promise that that will apply to this Bill.
In a sense Senator Douglas answered Senator Robinson, when he pointed out that there is no Nationality Act in operation here. Leave to introduce such a Bill has been granted already in the Dáil and it is probable that it will be taken in the Dáil during the next session. When that Bill becomes law, it will alter the position in relation to this Bill considerably, because, presumably, it will provide machinery by which persons can become nationals of Saorstát Eireann and therefore become entitled to the rights enjoyed by nationals of Saorstát Eireann, in which case all existing legislation will have to be examined with a view to ensuring that there will be no conflict between the terms of the existing Acts and the terms of the Nationality Act when it is passed. That is a matter which, I think, we can leave over until the Nationality Act is passed.
It is not very easy to say in what form that Act will reach the Statute Book. The intention here is merely to define the type of persons who will be entitled to carry on manufacturing enterprises without interference or without a licence. In so far as that is the intention, I should prefer that the Bill should be allowed to stand as it is. If and when a Nationality Bill is enacted, however, then I think we would have to reconsider this and other Bills in respect of which definitions of nationality have been given.
I should like to call the Minister's attention to the fact that that would not automatically apply, because this would be a qualified person, and therefore a national would not necessarily be a qualified person, and unless the Bill, to which the Minister has referred as being likely to be introduced, would deal with these persons, they would not be qualified. Would it be possible that this definition would apply until a Bill is passed defining what is a national?
That would depend on what the Nationality Act would provide. If it should happen that the Nationality Act provided the machinery by which a person not born in the country, or not qualified because of ancestry to be regarded as a citizen, could obtain our nationality without, say, a residence qualification, then we would have to definitely consider whether we should not still preserve provisions in this Bill to debar that person, although legally a national, until he had a certain residence qualification. It is possible that any Nationality Act may contain residence conditions, in which case we might then take the definition of nationality therein contained and use it for the purposes of this Act. If, however, a man could become a national without having that period of residence, we would have to consider it. I do not say that we could not accept that definition of nationality, but we would have to consider it in relation to its effect upon the scheme of these Acts.
In view of the Minister's assurance, I do not think that we can do anything, but as Senator Robinson has pointed out, the position is clearly unsatisfactory. The position it that a child born outside of the area cannot qualify at any time under this Bill when it becomes an Act.
There is also the question of persons who started business here during 1931 or 1932.
They are not interfered with. They are exempt from the terms of the Bill.
Question put and agreed to.
Sections 3, 4 and 5 agreed to.
I move amendment No. 1:—
Section 6. To add at the end of the section a new sub-section as follows:—
"(2) Every regulation made by the Minister under 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."
I do not think that there is any need to labour arguments in favour of this amendment. Senator Johnson, in discussing a certain amendment, said that anything that was desirable with regard to the Slaughter of Cattle and Sheep Bill was desirable in the case of the Industrial Alcohol Bill. This amendment simply proposes to insert in this Bill sub-section (2) of Section 4 of the Slaughter of Cattle and Sheep Bill. Section 6 of this Bill provides:—
The Minister may by order make regulations in relation to any matter or thing referred to in this Act as prescribed or to be prescribed.
There is a similar section in the Slaughter of Cattle and Sheep Bill, and it is followed by a sub-section identical with the new section that I am now moving to have inserted in this Bill. Senators will remember that the Minister for Agriculture when resisting an amendment that was moved yesterday to the Slaughter of Cattle and Sheep Bill—an amendment that proposed to limit the duration of that Bill—stressed very strongly the idea that provision was being made in the Bill obliging the Government to lay all orders made under it on the Table, so that the members of the Oireachtas would have the opportunity of raising any matters that they desired to. On the Second Reading of this Bill, I referred to sub-section (6) of Section 16 of it under which the Minister is taking power to make orders subject to getting the approval of the Dáil only. The Minister, in reply, said that all that was necessary constitutionally for this purpose was that the Minister should have the confidence of the Dáil, but as regards the section I am dealing with now, it is not even necessary for the Minister to have that confidence. He is left with an absolute discretion to make orders at his own sweet will without getting the sanction of either House of the Oireachtas. I do not think that the Minister is likely to resist this amendment. The absence of this provision from the Bill must really have been due to an oversight, and I am sure that its insertion will be agreed to.
I think the Senator is slightly confused by the fact that this is a Bill to amend an Act. It does not repeal that Act but merely amends it. The original Act provides that regulations made by the Minister for Industry and Commerce under any of the sections of it must be laid before both Houses of the Oireachtas. Senators will remember that that was a matter the Dáil and Seanad had a little dispute about, and that the Seanad got its way in the end.
I take it that this Bill amends and extends the original Act?
Not in this particular respect. If the Senator will wait for a minute he will see that it is not at all necessary in this case to have this particular provision inserted in the Bill. I take it that it is only required to table Orders of the kind where any matter of importance might arise and where a difference of opinion, as to the wisdom of an Order made, might exist. If the Senator looks through the Bill he will find that there are only three things to be prescribed in this Bill, and in each case they are simply forms. They are not of importance. There is first, the form of application for a licence; secondly, the form of the licence itself, and, thirdly, the form of certificate under Section 16. These are the only things for which power to prescribe is taken in the Bill. Therefore, I think it is unnecessary to have the trouble and expense of making a statutory order and of tabling it merely to regulate forms. There is nothing of substance to be prescribed under this Bill. The matters to be prescribed are of such minor importance that it is hardly necessary to have this provision in relation to them, having regard to the fact that all the regulations that are of importance are made under sections of the principal Act and must be tabled.
I only saw this amendment this morning and, having read it carefully, I came to the same conclusion as the Minister. If it were not for the provision that is made in Section 16, under Part III of the Bill, I would support the amendment of Senator Milroy. If the amendment were to be insisted on it would create an absurd position in this way: that while you were prepared to give the Minister power to grant a licence without any reference to the Oireachtas, you were not prepared to give him power as to the form in which application should be made for these licences without having those forms laid on the Table of the two Houses. That, I think, would be an absurd position to create. If Senator Milroy looks through the two first parts of the Bill he will find that there is nothing to be prescribed except the forms of the way in which a thing shall be done. It seems to me that when you give the Minister power to issue licences, which are binding on the whole State, without coming before the Oireachtas, it would be rather ridiculous to insist on this which deals only with the forms.
If it is a fact that this amending Bill is not of serious importance I would be inclined to agree with the arguments of the Minister, but I understand that certain things to be done under this Bill are regarded as of very great importance.
I did not say that the Bill was not of any importance.
I take it that this Bill extends certain functions and powers which ought to have been embodied in the original Act. What I am concerned with is the extension of those functions or powers. I do not see at all that the sections in the original Act would cover certain of the orders which deal with some new departures made in this Bill. At any rate, some new restrictions and some new orders are being introduced in this Bill, and I cannot see how the insertion of this amendment would in any way conflict with the easy and harmonious working of it.
The Minister has assured my friend, Senator Milroy, that this Section 6 refers only to the form of licence, and if the Senator will look at Section 6, he will, I think, see that that must be so.
Section 6 does not refer to the regulations.
"In relation to any matter or thing."
It refers only to regulations in relation to a matter referred to as prescribed, or to be prescribed. The only thing which is prescribed is the form of the licences, and I think the Senator ought to accept the assurance of the Minister in that respect. So far as I know anything about Acts of Parliament, I think it would be quite wrong to have the form of a licence laid before the Houses of Parliament.
Amendment, by leave, withdrawn.
Section 6 agreed to.
Sections 7 and 8 agreed to.
(f) such business is, at the time such thing is done, owned by a body corporate (in this paragraph referred to as the owning body corporate) in respect of which both the following conditions are complied with, that is to say:—
(i) the issued shares of the owning body corporate are at that time to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of a person who is or two or more persons each of whom is at that time either a qualified person or a body corporate which is a body corporate (in this paragraph referred to as a qualified holding body corporate) in respect of which both the following conditions are complied with, that is to say:—
(I) the issued shares of such holding body corporate are at that time to an extent exceeding one-half (in nominal value) thereof in the beneficial ownership of persons who are at that time qualified persons, and
(II) at least two-thirds (in nominal value) of every class of shares carrying voting rights and issued by such holding body corporate are at that time in the beneficial ownership of persons who are at that time qualified persons; and
(ii) at least two-thirds (in nominal value) of every class of shares carrying voting rights and issued by the owning body corporate are at that time in the beneficial ownership of a person who is or two or more persons each of whom is at that time either a qualified person or a body corporate which is a qualified holding body corporate; or
(g) such business was carried on continuously in Saorstát Eireann between the 1st day of June, 1932, and the time at which such thing is done and such business is, at the time such thing is done, owned by the body corporate by which it was owned on the said 1st day of June, 1932, and the doing of such thing would, if it had been done on the said 1st day of June, 1932, or within one month immediately preceding that date have been in the ordinary course or formed part of such business or have been a reasonable extension of such business as then carried on in Saorstát Eireann; or
On behalf of Senator Séumas Robinson, I move amendment No. 2:—
Section 9, sub-section (1). After the word "rights" in line 47, page 4, to insert the words and brackets "(whether immediate or to arise in certain future circumstances)".
The Bill provides that any company established after the qualifying date to be entitled to carry on in Saorstát Eireann a manufacturing operation without a licence must have, in addition to 51 per cent. of its shares held by Saorstát citizens, two-thirds of the shares carrying voting rights similarly held. It was considered that that phrase "shares carrying voting rights" was sufficiently wide to cover all classes of shares to which voting rights might attach at any time, but doubt has been raised in that connection. As Senators are, no doubt, aware, it is frequently the practice to confer voting rights upon preference shares in certain eventualities. The usual eventuality is where the preference dividend is in arrears and it is intended that the Bill should provide that such shares must also be held, as to two-thirds, by Saorstát citizens in order to qualify a company to operate their business. These words in brackets are inserted to make that clear.
This certainly clears up the doubt. I had not much doubt about what the Bill was for but there was a possibility of a position in this respect that might be extremely unsatisfactory by which a share would not be a voting share until the dividend was not paid and then suddenly becoming a voting share. I wrote to the Minister pointing out the difficulty and I think this clears it up. I presume that he is satisfied as to the wording of it but I would point out to him that the effect may not be quite equitable as between different classes of companies, but perhaps that is more or less inevitable. A large, well-known, powerful and financially strong foreign company can very easily get preference shares taken in the Free State without voting rights, the simple reason being that the guarantee of dividend of certain corporations is good enough for almost any Irishman. Concerns not so large, but which, from certain points of view, might be even more desirable in the Saorstát, as not being connected with big combines and powerful companies, will find it very difficult indeed to get Saorstát citizens to take a preference share unless there are voting rights, in the eventuality of the dividend not being paid. I confess that I only saw this amendment this morning and I cannot see any immediate way out of it, but I am not quite satisfied that the effect of the amendment, while it does clarify the position and is in that sense an improvement, is quite what the Minister would desire or what I, myself, would like to see.
Amendment agreed to.
The Leas-Chathaoirleach took the Chair.
On behalf of Senator Séumas Robinson, I move amendment No. 3:—
Section 9, sub-section (1). After the word "rights" in line 53, page 4, to insert the words and brackets "(whether immediate or to arise in certain future circumstances)".
This is the same as the previous amendment.
Amendment agreed to.
Before I move amendment No. 4, I should like to say that it is an amendment which will only be necessary in the event of No. 5 being carried. If it were moved first it would be misleading and, with your leave, I should like to deal with No. 5 first and postpone No. 4.
I move amendment No. 5:—
Section 9, sub-section (1). After sub-paragraph (ii), line 58, to insert a new sub-paragraph as follows:—
(iii) a majority of the directors of the body corporate, other than managing directors giving whole-time attention to the business, are nationals of Saorstát Eireann; or".
I should like to explain to the House, although, of course, it is quite clear to the Minister, that this amendment deals only with absolutely new companies. Existing companies are protected under the Bill as it stands. Under this Bill, a company, before it can manufacture, will have to have 51 per cent. of its total shares—it does not deal with debentures—and two-thirds of the voting shares held by Saorstát nationals. Incidentally, while I am speaking, I want to ask the Minister the exact meaning of "every class of shares" because I am not quite sure what it does mean. For instance, if a company has first preference, second preference and ordinary shares and, after the other amendment has been passed, and assuming that all these are now classed as voting shares, do you take the total of the first preference, second preference and ordinary and then take two-thirds of them all put together, or if you by any chance have a separate class of shares, for any internal convenient reason— sometimes they are divided into first and second and it is frequently done in private companies for family reasons —must you take two-thirds of each separate class? I take it that it is meant to be each separate class, although I am not quite sure. The Minister might look into the question and see if that is correct. I am assuming that it is correct for the purpose of my argument.
The object of that is to provide that no new industry will be started here unless, as far as possible, the control of that industry is in the hands of persons who are either Irish nationals under the previous Bill or qualified persons under this Bill, unless, of course, they go to the Minister and obtain a licence. If you accept the principle of this Bill—and I said on the original Bill that I believed that with a high tariff policy some such Bill as this was necessary—and if you, therefore, accept the principle that control should be in the hands of Irish nationals—using the phrase in the general sense—it seems to me that the case for this amendment of mine is a fairly strong one. I want to add to that qualification that the majority of the directors of the company should also be Irish nationals, excluding any managing directors who give all their time to the business and who, for technical reasons, may have to be imported. The Federation of Irish Industries are very anxious to see this amendment carried and they feel rather strongly that it is desirable that this should be done. One of the grounds on which they are strongly in favour of this amendment is that they find that one of the difficulties arising at present, particularly with regard to new industries which are being developed, is the difficulty of getting one industry to support the other.
That is that you have two industries developing side by side and one will not give the other the necessary friendly facilities which will enable them to make goods that they themselves are not putting in the ordinary way on the market. If you had a fully established industrial company that would be of no importance. It would be desirable; but in the present situation here in which many industries are only being developed, there are many things which one firm could make and supply to the other if they were given, in a friendly way, an opportunity to quote but which they are not in the ordinary way given a quotation for. There is a feeling that persons who are residing here— and therefore financially and in every way interested in the company—would, if acting as directors, be far more likely to be willing to carry out this sort of co-operation than directors who reside at the other side of the water or reside in some foreign country.
It is well known that the result of the Act has been in some cases to provide a guarantee of certain shares to large concerns. As a result of that provision these firms have got over 51 per cent. of their capital here. I think with similar guarantees you may get half or two-thirds of the directors or even more who would be people who would only come over here for the directors' meetings. It is reasonable to suggest in those circumstances that half the directors of the body corporate other than the managing directors should be persons qualified in the same way as the shareholders. If you are to have bona fide Irish shareholders holding shares they ought to look after their own interests but if these are guaranteed shares they are not likely to do so. Theoretically the shareholders control the company. Very often when a company is in difficulties they actually control it but I think most persons will agree the position usually is when a company is doing well and paying satisfactory dividends the shareholders do not bother at all in the management of the company and the actual control is in the hands of the directors. For that reason to fit in with the policy of this Bill it would be a reasonable proposal that the majority of the directors of the body corporate, other than the managing directors, should be nationals of Saorstát Eireann and have the same qualifications as the shareholders under the Bill.
There is another reason in favour of this amendment and it is this—some of these companies which have been started and some of which will start are firms manufacturing products of which there has been distribution in this country before. I believe this provision would give a chance to Irishmen who have been engaged in distribution. It would give a chance to men who have a knowledge of the distribution side, which is very important, of becoming directors and of being offered directorships. I think that is a class that has been rather hit under the legislation, inevitable legislation if you like, of the present Government. I think this is a case where they would have been offered directorships had such a provision as this existed already. I suggest to the Minister that this amendment will not make it in any way more difficult to get his industries started here. Irish shareholders who put money in a company should have certain representation on the board of directors. It is sound policy to suggest that a majority of the directors should be Saorstát Eireann nationals, provided that this does not affect the managing directors to whom I would not like to see this provision apply because there would be some danger that a provision of that kind might affect the proficiency of the industries to be started here now. For a considerable time we want to have persons who are very competent to act as managing directors and that is the reason why I am making an exception in their case.
I find it very hard to argue against this amendment. When the Bill was being framed I gave very careful consideration to the advisability of the insertion of a provision of this kind. I decided against it because of a number of reasons. Any one of these reasons by itself might have seemed very inadequate for failing to make this a provision in the Bill. But I came to the conclusion that the sum total of these reasons was sufficient to make it unnecessary to require in the case of companies otherwise qualified to operate without a licence that a majority of the directors should be nationals of Saorstát Eireann. In the first place, I think Senators will agree that it is desirable that we should have the least possible amount of regulation which will achieve our purpose in relation to this measure.
The question which we are asked to consider in relation to this particular proposal is not whether the proposal is in itself desirable or not but whether it is essential to the achievement of the main purpose of the Bill. We decided it was not essential in so far as we provide for the holding by nationals of Saorstát Eireann of two-thirds of the shares carrying voting rights in every company undertaking manufacturing processes in the future. We are therefore very directly providing for the effective control, even though it may be only ultimate control in such company, by citizens of Saorstát Eireann. These citizens may use their control wisely or unwisely. They may in relation to their own company do things which some of us might consider unwise or find it difficult to understand. A company composed of 100 per cent. of Saorstát nationals might decide to appoint as directors persons who are not nationals. But they do that of their own free will and do it knowing that certain disadvantages to them and their company may follow. I am not clear why we should interfere with them. I admit that that argument is not very strong. I will admit that when certain companies constituted in such a manner as to avoid the necessity for a licence under the 1932 Act proceeded to appoint as directors persons who were in some cases entirely non-national persons, ordinarily resident outside the State, I felt that a situation has arisen in which the Government should seriously consider the advisability of adopting an amendment of this kind.
I came to the conclusion, however, that the objection to the appointment on these boards, 100 per cent. non-national was an objection which was largely based upon the fact that these boards were operating companies constituted in a manner which conformed to the terms of the 1932 Act but which nevertheless insured that effective control and ownership remained outside the country. Now that we are dealing with the question of ownership we can afford to leave the nationality of directors to look after itself. Another reason why I decided in that manner was because I felt that certain difficulties would arise in practice in operating any such provision. The adoption of this clause would, of course, mean that the Department of Industry and Commerce would have to keep itself informed of the persons appointed on the boards of new manufacturing enterprises started after the beginning of July. It might, in certain cases, have to make inquiries in order to ascertain the nationality of these directors. A certain amount of unnecessary labour might be involved in that and there might also be a certain amount of annoyance for individuals. There is not much sense in putting down a provision of this kind in a Bill unless you make sure of its enforcement; and its enforcement would mean that in the case of companies which were 100 per cent. Irish-owned the Department of Industry and Commerce would have to investigate the nationality of the directors. These are some of the things that decided us against the insertion of this provision. I admit I have been shaken in the position I took up then because of representations from many quarters concerning a provision of this kind.
The matter was argued elsewhere and certain considerations were put forward in a forcible manner which affected my mind concerning them. Consequently I am quite prepared to say that if the Seanad think that an amendment of this kind should be inserted in the Bill, I shall make no objection to their doing so. It is possible that the insertion of the amendment may involve one or two consequential amendments in the section relating to the furnishing of information, in which case I shall have consequential amendments prepared but still, I am on the whole inclined to the view that this provision is not essential. I will admit that the weight of argument on one side is very nearly as heavy as the weight on the other and that it would take very little to tip the balance in the opposite direction but if there is anybody of an opinion which thinks it desirable that we should have this additional safeguard, then I am not prepared to stand against it.
I came here without any definite opinion on the amendment but having heard two speeches, I am inclined to think that the opposition to the amendment is very weak indeed. I would imagine that it is easier for instance to make inquiry as to the position of the proposed directors of the company than it would be to inquire into the position of the shareholders. The burden thrown upon the Department would be much smaller in the one case than in the other. But, touching the whole question of policy, it strikes me as very much more important that the directors of a company should be the persons who should be qualified according to the requirements, rather than the shareholders, unless one has in mind merely the profit making capacity of the business or the investment value of particular businesses. I have always approached this group of questions from the point of view of the industrial development of the country as a whole, not particularly or primarily in regard to the possibilities of incomes to be derived from manufactures by Irish shareholders. I can very readily see—and the Minister has admitted it—that the bulk of the investing public in this country would be quite careless as to the ultimate purpose and effects of the industry if it were giving a temporary profit. The general industrial interest may be only secondary or of much later concern following the question of the immediate return. Therefore, if the purpose of this body of legislation is to develop the industrial activities of this country, as distinct from the mere dividend earning capacity of particular industries for a particular body of shareholders, it is much more important that the qualifications should be looked for on the management rather than on the owning side of the business. On that ground I would say that if the whole group of Bills, of which this is one, can be justified it is obvious that an amendment of this kind is desirable, much more so, in my opinion, than that the mere shareholding should be in the hands of nationals.
I quite agree with what Senator Johnson has said. If there is to be effective industrial development in this country it is essential that people who are in control should be of the right character. I am connected with some companies which are doing well and, as Senator Douglas has pointed out, our great difficulty at the annual meeting is to get a sufficient number of shareholders to form a statutory quorum to attend. In fact we had to put certain shares in nominees' hands so as to carry through the statutory requirements at our annual meeting. It does not matter, even if 75 or 80 per cent. of the capital were owned by nationals, if the technical skill and knowledge of the managing directors are such that you will have no effective control of the throttle valves, these men can keep their processes and their technical knowledge to themselves.
I was rather disappointed at the opening part of the Minister's speech but when he said that if there was any substantial volume of opinion in favour of this amendment he would be prepared to accept it, I was prompted to rise to let him know that I hoped he would accept this amendment and introduce any consequential amendments which may be necessary.
I should like to point out to Senator Douglas that the difficulties of establishing a new company are very great. I would like to impress upon the Minister also that the fewer obstacles put in the way of people who are trying to develop industries, the better. I think in all human probability that the directors of both of these new enterprises will be Irishmen but there are many cases in which it is not possible to get such men. Frequently the only qualified men available have not been born here —that is outside the managing director altogether. I would suggest to the Minister that the less impediments he puts in the way of organising and starting new industries, the better.
I am glad to see that this question has no political colour whatever. This amendment is in favour of a certain class of men, a small class of men, men who hope to become managing directors, who hope to be on more than one or more than two companies. There is an objection, I think, to this amendment, adverted to by the Minister but I think not very much stressed, and it is this. You take power under this Bill to secure that two-thirds of the money—to put it in general terms—should be Irish money. When you establish a company it is very essential in the interests of trade and industry that there should be no official interference in the internal management of that company either by legislation or otherwise. Here now is an amendment which prohibits the members of a trading company from selecting whom they wish to be directors of the company. No doubt, in the ordinary case, the men resident in Dublin who are well known will be selected before strangers. It is only in the case where the stranger is known by the shareholder to be the most competent man that he will be selected for a directorship by Irish votes, so that you are now preventing a company from selecting the best man to conduct the business in which the shareholders have invested their money and, that, for a reason which I think is not adequate.
The only reason put forward by Senator Douglas is that if there are a number of men directors of a great many companies—in London they are called, I think, guinea pigs—there is a greater chance of co-operation amongst the various companies. In a new State like this, where we are in the infancy of industrial development, independence is a great thing—independence of one company as regards and as against other companies. Individuality will promote that feeling of rivalry which is so good for trade and so good for the people engaged in trade. I have dealt with Senator Douglas' reason. Senator Dowdall had another reason. He says that the managing directors control the nerves of industry and that it is essential that the managing directors should, as far as possible, be Irish.
Read the amendment first.
Senator Dowdall forgets that the amendment proposed by Senator Douglas excludes managing directors altogether. There is a great deal to be said against this amendment. I mention these matters merely for the purpose of having the matter thoroughly thrashed out and that the Seanad may have an opportunity of seeing the matter in all its bearings. I do not think that the arguments in favour of the action the Minister took are weak. He has, probably, a great many arguments in his mind which he has not expressed here to-day. He wants to make it appear that Senators decide this matter for themselves. He is a very reasonable and moderate man, gets on very well with Senators, and allows them to do little things. I think the Minister had very sound and shrewd ideas when he left this provision out of his Bill.
Objecting, as I do, to the whole principle of this Bill, I do not think that this additional blister matters very much. I cannot help feeling that, whatever the Minister may have said, the supporters of this amendment have not told us all that is in their minds. I hope I am not doing an injustice to those responsible for these proposals when I say that they want to make industry as close a borough as they can and to exclude all light, zeal and competition. They want to stabilise inefficiency. They do not say that, of course, and I do not blame them. If I were in industry and engaged in competition I should probably feel the same as they do but, not being in that position, I have much more regard for enterprise, development, progress, and what I may call the interests of the consumer as against the interests of monopolists. I object to this further restriction on freedom.
There is, of course, the argument— I am glad to find myself in agreement with Senator Comyn—that the control of industry should be left in the hands of the shareholders. He said that we should tell shareholders how to do their business. That is being done by this amendment. The shareholders will, I presume, be reasonable people who understand their job and I do not see why they should not be allowed to be masters in their own houses. We have done enough by providing that two-thirds of the shareholders be nationals without putting a limitation on how they shall vote. There is another aspect of the matter. There is a strong bias not only here but all over the world towards insularity and exclusiveness. The argument against that aspect will hardly appeal to some Senators but I suggest that it is a practical one. I think I am right in saying that the people who occupy the position of directors will also come into the net of the Minister for Finance. It is possible that a number of these people will possess very substantial incomes. Under the present arrangement, the Minister for Finance will get practically half the tax on their incomes.
Only on what they get from the directorship here.
That depends entirely on the extent that they come over here. If they have a residence of any kind, even if they only occupy it for a week, they are brought within the dual residence status. That is a consideration. It may not apply to all, but it would probably apply to some. I do not believe that we are being told the true reason behind this or any of these other Acts. It is to maintain a close borough in industry. That is done, of course, with full lip service to nationalism. I do not like it at all and I shall oppose this amendment.
I do not see the necessity for this amendment at all. If the majority of shareholders are nationals, I presume they are competent to elect a majority of directors in sympathy with their outlook. To impose this statutory obligation on them is, to me, indicative of distrust. It seems to assume that the majority of shareholders are not going to do what is expected of them and that they must be bound by statutory obligation. My view in regard to this matter is very radically different from the view expressed by Senator Sir John Keane. One thing I dislike is the doctrinaire mentality as expressed by Senator Johnson in regard to industrial development. He seems to think that the question of whether an enterprise should or should not bear profits is a consideration that should be entirely lost sight of in relation to economic development. I venture to say there has not been a single enterprise started since the industrial movement began that has been instigated by mere altruistic considerations and that has succeeded. The only business that succeeds is the business that is going to bring a profit to the people engaged in it.
The Senator must not develop that argument too much.
Well, I will leave that aspect of the matter. I take it that once you have secured that the capital in an enterprise is national and that the control of the enterprise is in the hands of a majority of national shareholders, the next consideration is that those who direct such an enterprise shall be efficient in their jobs. I take it that will be the dominating consideration in the minds of the majority of the national shareholders in any enterprise. I say that the selection of the directors should be left entirely to their discretion.
In the amendment, quite apart from its merits, a proportion of the directors require to be nationals of Saorstát Eireann, whereas in the earlier portion of the Bill the shareholders are qualified persons. Is it intended that a qualified person shall have the same qualifications as a national of Saorstát Eireann?
The Senator will have to read the previous Act in order to be clear on that point.
Then it would seem that the directors shall answer to one qualification and the shareholders shall answer to another?
I should like to make my position more clear. Senator Milroy thinks that I was decrying the establishment of industries having a profit for the shareholders in view. That is not my point. I am assuming all the industries will be expected to pay a dividend to the shareholders. This question is bound up with the general policy of this Bill and its predecessors, measures whose purpose is the development of manufacturing activities in this country. We know that manufacturing activities have been held back; they have been undeveloped. And we know, too, that many of those that have been developed in recent times are branches of businesses across the water. I am not by any means disinclined to approve of the establishment of industries as branches or off-shoots of established firms who know how to do the job. They are probably going to be of very great benefit to the development of industry here. But this whole scheme is to prevent businesses being formed here nominally in the interests of industrial development while, in fact, retarding the development of industries in this country, probably for the benefit of the parent business in Britain. It is no use pretending that business enterprises do not quite frequently establish blocking branches, branches where they may operate in reality, but with a policy subsidiary to that of the parent company. I take it that that is one of the real causes of this type of legislation.
We then come to the question of effective control. It is said the shareholders are the effective controllers. It is quite impossible to speak with knowledge at the moment, but I would venture to say that even to-day the shareholding, the investing public in this country are not very much greater numerically than the shareholding public in 1921. The people who actually hold shares in limited companies are probably not very much greater in number. The same people will, perhaps, have a greater variety of holdings, but it is the same body of people who hold the shares in limited companies. They are a comparatively small proportion of the total population. The initiation of most companies of a public character comes largely through the directors, and it is the investing public to whom they appeal. They hold out hopes of making a decent profit, of paying a decent interest on the investment. I am not finding fault with that, but I say that the impulse of the shareholding public is to see that the business brings a return on the capital invested. That may or may not be in the best interests of the country, but if it is desired by legislation to secure that the industrial development shall be furthered, in my opinion it is more likely to be developed by legislating in respect to the directors rather than in respect to the shareholders. I am assuming that the purpose of this Bill and its predecessor is accepted by the House. Having that purpose in mind, I ask myself whether it is more likely that it shall be effected by limiting the choice of directorships rather than by limiting the choice of shareholders. I think the greater argument lies in the limitation of directorships rather than in regard to shareholders.
If it is a choice between making the majority of the shareholders nationals or the majority of the managers nationals, I wonder what would Senator Johnson's wish be?
I would say the management.
Perhaps I should say in that matter that I agree with Senator Johnson. In this amendment I am speaking for myself and not for any group. Incidentally, I might mention that when the proposed amendment was considered by the Federation of Irish Industries and certain persons connected with it, I expressed the view—which was not shared by them—that the change from 51 per cent. to two-thirds of the shareholders was not worth anything without Irish directors. That is still my view. I am not dealing with it now because of Government policy. My own view is that control, certainly as far as 95 per cent. of companies are concerned, is exercised by directors. Both Senator Comyn and the Minister are visualising a whole lot of shareholders looking for directors. That is not the way companies are formed. A prospective board gets together and looks for shareholders. When a company gets into difficulties I admit that it is sometimes a question of looking for better directors. The Minister knows as well as I do that at present it is very largely a matter of a few people getting together with a view to having a certain commodity manufactured here and the difficulty is to get shareholders. If Irish control was effective I would not mind if the money was all English money. I could never see that it mattered where the money came from if the spending and the control was here. I admit in practice that you could not maintain that except in a private company, unless you had a very substantial amount of the shareholders Irish nationals or qualified persons within the meaning of the words in the Bill.
I had a note of the matter dealt with by Senator Johnson and agree with him that the amendment should not add to the work of the Department. The average number of directors is from three to seven but in the case of shareholders it will vary from say 100 to a couple of thousand. The question of increasing the figure from 100 to 103 will not be a very serious obstacle. The enquiries can be made at the same time. I venture to suggest that the Department will have a pretty good idea when making enquiries and that in the case of directors it will not be difficult to find out the facts. I suggest that if the Department does not know there will be other competitors ready to tell them about the directors and that they will soon get all the information. That will not be as easy in the case of shareholders. Senators are assuming that the shareholders always control a company. It gives me very considerable satisfaction to see Senator Comyn agreeing with Senator Sir John Keane and Senator Milroy. Senator Comyn is a lawyer and presumably knows considerably more about company law than I do.
Perhaps I am mistaken, but I do not think I am wrong when I say that as far as private limited companies are concerned you can set them up, and even though the shareholders might have voting rights, they might not have the right to vote for the directors. The directors may be elected for life at the beginning of the company. I am not certain that if outside companies are going to form branches and to get Irish people to subscribe that they will not take some such steps in the original articles of association if it suits them. There are definite limitations if there are subscriptions from the public but, in private companies, almost anything can be arranged.
I am not pretending that the amendment will solve all the difficulties, but I agree with Senator Johnson regarding the basis of control. The most effective control in most cases lies in the directors of the companies. I do not understand the position taken by Senator Comyn. I understand Senator Sir John Keane's position. He is perfectly logical and reasonable. I realise that this is an amendment upon which there is plenty of room for honest differences of opinion. I am not much worried whether it is Party political or not. Senator Sir John Keane does not believe in this type of legislation at all. There is a great deal to be said on his side, I admit. I would point out that I have given this question a considerable amount of personal thought, and although I am not attracted by this kind of restrictive legislation, I cannot see how it can be avoided. We have adopted a definite State policy of developing certain industries here. We are either going to have these industries developed by the State or by private persons. We will not get things done by private persons even under high tariffs in a country of 3,000,000 people if as soon as the market has been created a big combine from some other country can walk in and take all the advantages. That money would be immediately lost. If that danger was there Irish nationals dare not put their money into new industries here. Senator Sir John Keane believes in developing only such industries as are suitable to this country. That may or may not be sound, but everyone who does not believe that thinks there ought to be restrictions. The question is, "Are you going to have complete restriction." There are manufacturers here who would like to have a provision that there could be no manufacturers without a licence from the Minister. Some of these persons would like licences to be granted automatically to persons who are nationals, but some would like the Minister to have complete control of all manufacturers. I am opposed to that. I want a measure of competition.
The policy of the Government is to endeavour to get industries here. While that is so, the right course is to leave competition among Irish nationals as free as possible. That has been made more difficult in some respects by the Bill, but the alterations are such as have been found necessary in practice. The Minister is in a happy position. He does not mind about the amendment and leaves it to the House. Therefore I have not directed my arguments to him to any extent, but I intend to press the amendment on which there will be a free vote and I hope the House will accept it. If it is accepted there will be one or two matters to be considered on the Report Stage. One is the question raised by Senator Guinness. The difference between an Irish national in this Bill and a qualified person is that a qualified person must have been residing here for five years prior to the given date in July. A national must be born here or must have resided five years at the relevant date. I am in favour of the principle of raising employees to the position of directors, and I wish to make it easy for employees who may have come here in connection with the industry to become directors. For that reason I prefer the term "national" to the term "qualified person" and I deliberately put in the provision dealing with nationals for that reason. I do not think it matters if a person has resided here for five years and is working in the business, and I would like to make it easier for such a person to become a director. I put down the amendment after consultation with the Federation of Irish Industries, and I may say that some members of the federation would like to have 75 per cent. of the shareholders and 75 per cent. of the directors. I did not feel that I could go that far. I feel that the proposal I make is moderate and suitable to present circumstances.
Bearing in mind the object of the Bill, can the Minister say why a person who was merely born in Saorstát Eireann becomes qualified? There is a tremendous loophole. If I want to nominate I can get hundreds of servile people who were born in Saorstát Eireann to represent my interests any way I like to dictate.
I think I can answer that question. The Senator would have to give them the money and trust them to act for him. It is made clear that shareholders must have a beneficial interest unless they are so docile that they will take the money from you and own it and, nevertheless, pay you the share, in which case it will be all right under the Act. Personally, I would not care to trust even a docile person by giving him the money.
The Senator is very innocent if he believes that.
Amendment put and declared carried.
I move amendment No. 4:—
Section 9, sub-section (1). To delete in line 58, page 4, the word "or" and to substitute therefor the word "and".
This is a necessary amendment in view of the carrying of amendment No. 5, because it connects it up as a definite part of (f) and it separates (g) from it.
Amendment put and declared carried.
Section 9, as amended, put and agreed to.
Section 10 and 11 put and agreed to.
I move amendment No. 6:—
New section. Before Section 12 to insert a new section as follows:—
12.—(1) Where a new manufacture licence is granted after the date of the passing of this Act, the Minister shall, within one month of the granting of such licence, cause a notice to be published in the Iris Oifigiúil giving the name of the individual or body corporate to whom such licence has been granted and the article, material or substance specified in such licence and stating whether such licence is to manufacture, to alter, repair or finish or to adapt for sale.
(2) Within three months from the date of the passing of this Act the Minister shall cause to be published in the Iris Oifigiúil a list of all manufacture licences granted before the passing of this Act, giving the particulars specified in the immediately preceding sub-section of this section.
This amendment is put down after consultation with the same persons. I am not at all certain that the wording of it is perhaps the best form and absolutely correct, but if the amendment is passed it can be amended on the Report Stage. I shall give you the reasons definitely for the amendment. At the present time there are a number of persons operating as manufacturers here, and I hear it again and again discussed whether they are Irish nationals or breaking the law and all sorts of things. There is no method by which you can ascertain whether or not these persons are working under a licence from the Minister or whether they are breaking the law. It may be that it is entirely a matter for the Department and that persons outside should have complete faith; but, strange though it may seem, the particular Federation with which I am concerned is rather anxious to watch these things itself and has no way of ascertaining the facts. Apart from that, without going into the question of publication of other kinds of licences, as to which I know the Minister says there are certain administrative difficulties, in this particular type of licence, while this kind of Act is in force, while this is the policy of the country, I see no reason why any person who obtains a favour—because it is a favour while this is the law—or any company outside which obtains a favour, should have any objection to the name appearing on a list. I do not much mind whether that list is published in the official Gazette, which very few people read, or made available at the office of the Minister for Industry and Commerce, so that a person can go and see it. My point is that the list should be made public within a reasonable time after the licence has been granted.
The Federation feel rather strongly on this and they believe that to make this Act effective and satisfactory it is essential that some such publication should be made. As the total numbers, I gather from the Minister, are comparatively small, not running into thousands or millions or anything like that, as in the case of licences for the individual importation of goods, there should be no serious administrative difficulties. The suggestion in this is that a new licence should be published immediately, or within a reasonable time, and that the licences previously granted—because it is no use without them—should be published in a list within three months. I do not mind much about the details as to how exactly this is done. If the Minister wants six months I do not mind.
I should have said that in introducing this Bill the Minister drew attention to certain difficulties he had in administering it—the difficulty in obtaining information, etc. I am not at all certain that one of the difficulties at present is not due to the fact that it is not obvious who are working under a licence or who are operating within the provisions of the Act as Irish nationals. I have heard long discussions about certain firms. It is not desirable, nor is it a thing any firm would like to do, that minute inquiries should be made about competitors unless they have good reason for doing it. It would be extremely unpleasant if inquiries were made as to the operations of certain firms. The Minister knows—I do not want to go into details—that there are some about which there has been a good deal of complaint. It is not very nice or desirable to be doing that, if you discover after inquiries are made and, perhaps, unpleasantness caused, that the firm had received a licence. Apart altogether from these reasons, which are the reasons mainly in the mind of the Federation of Irish Industries, my own reason is that I believe this kind of thing ought to be done above board, that it is good policy that it should be, and that the Minister, in the long run, will find it easier to administer if, when any firm from outside the country asks for a licence, it should be part of his duty to publish the fact that that firm has obtained a licence and to say the goods they are entitled to manufacture, and whether they are going to manufacture or repair, or whatever it is they are going to do.
I have, of course, advocated publicity in the matter of other licences, but that does not arise under this Bill. This is solely for the class of licence which this Bill provides, that is a licence to a non-national to come in and manufacture. Personally I cannot think of any good argument against the publication of this type of licence. I think it would be healthier and do away with that kind of underground charges which the Minister knows as well as anybody else that I have never made, that I do not make, and do not believe in. This is, however, the sort of thing that you get whispered round and I believe that a good way to avoid that is by publishing the names in an open way. Whether it is done in the official Gazette or simply put in the Bill that they are available at the Minister's office or in the National Library or anywhere else, I do not much mind. The whole point is that somewhere there should be a list which a person could see if he wanted.
Of course publication in the official Gazette, publication in a register in the Minister's office, and publication in the newspapers are the same things. The average citizen may not read the Gazette, but the newspaper editors do and you cannot have confined publicity of that kind. I am quite satisfied in my own mind that it is unwise to pass this amendment. I am satisfied that it is not in the best national interest that this publication of the list of licensees should take place. At the same time, I am reluctant to argue against the amendment for the reasons which Senator Douglas mentioned in the concluding portion of his remarks. For various reasons, the reluctance shown on the part of the Government to supply certain information relating either to particular industrialists or a body of industrialists has been represented as a desire to cloak something which has to be cloaked, which the Government are ashamed of, which is indicative of proceedings which might have political reactions against the Government. Those who are familiar with the facts know that that is not the case. Where we have tried to avoid publicity we have done so in the interests of industrial development and the desire on our part to avoid publicity in the matter referred to in this amendment has that aim in view.
Licences are issued to various firms that, in the opinion of the Government, it is desirable should be allowed to undertake manufacture here. The circumstances may be such that it is not possible to get the particular class of goods manufactured by a firm that can operate without a licence. Consequently by various methods, whether by invitation on the part of the Government or otherwise, a firm, not owned by Saorstát citizens, is permitted to undertake the manufacture of these goods here and gets a licence under the Control of Manufactures Act. It is quite clear that that licence is not issued except the Minister for Industry and Commerce, and the Executive Council, are satisfied that it is desirable to issue such a licence. A licence is issued, and the publication of the fact that such licence is issued to a firm is an advertisement that it is a foreign owned firm. On that account its operations here may be prejudiced as, in some cases, these foreign owned firms are in competition with nationally owned firms. There were quite a number of industries established, owned by Saorstát nationals, and given an opportunity of vastly developing their operations and showing greater enterprise; but they showed no initiative and took no advantage of the opportunities given them, and were not showing any great activities until one, two, three or more licences to foreign firms were issued.
These foreign firms came in undoubtedly to make profit, but they have given us a very definite national advantage. I would not like to put them at a disadvantage as against their competitors by the State advertisement of the fact that they are not nationally owned, but that they are foreign owned corporations. But, I say again, that if there is any feeling that the publication should take place, if there is any feeling strongly expressed by persons in a position to exercise impartial judgment, I may be prepared to undertake the publication. I think it is not quite fair to the firms or desirable in the national interest, but I am prepared to undertake it rather than have any strength given to those who are using the Government's natural reluctance to undertake this publicity for the purpose of spreading the idea that there is something to be cloaked.
Our concern in this matter is purely disinterested. We think it best that this publicity should not take place, but if there is an insistent demand from impartial sources for it, it may be different. I am not inclined to take the Federation of Irish Industries or any kindred body as impartial. Some of them have an interest in the publication of the names of those licensed firms in competition with themselves, and, consequently, their attitude in relation to questions of this kind is naturally different from what the action of impartial persons would be. However, that is as it may be. Senators have heard the point of view expressed by Senator Douglas—and there is a lot in it—and they have heard a contrary opinion from me. But I am quite prepared to accept the decision of the Seanad in the matter.
The Minister has stated that it would not be fair to firms invited to come in to carry on certain businesses in this country that he should publish broadcast the fact that they are foreign firms. Some of them have been invited in because existing firms in this country have not shown that industry, or that desire for extension or development, that they ought to show. Now if there are any of that class, and I am afraid there are many, they are the very people who, through motives of jealousy, would be inclined to start a boycott against the people who came in here and showed them their business. I think there is a certain amount of responsibility upon the Minister to see that people who have been invited in, or allowed in, for national purposes should get protection from the malice of their competitors who were not able, or who had not the energy, to conduct the business of the country themselves.
That is one aspect of the case. There is another aspect. It may be that in some industry it will be still desirable to get foreigners to come in and establish business here. Now should that happen, it would be very hard to get people to come in. You have such people here already. If you expose them to a boycott, or to reflection after they have come in, it will be very difficult to get other people to come in and face a situation of that kind. I can see what the Minister has in mind. He wants to avoid the unworthy suggestion that the Government has some indirect motive in failing to publish these things. He wants to avoid that. It is natural that he should, but I think people who were invited in here to establish industries should be protected, and, further, that people who may hereafter come in on our invitation should not be dissuaded from coming in by the treatment their predecessors have received. This is a question in which I think the Seanad ought to exercise that sound judgment which in many cases I think it has shown.
The Minister has given the answer that I expected he would give in this case. I think it was one that most of us thought he would have given. When it comes to balancing publicity and the danger of losing somebody who is coming in to establish a business here against the implication which may be made against the Government for not publishing the name of such a firm, I think the Minister is very wise in keeping himself clear of those things. At the same time I think that the position is better supported by publicity than by secrecy. I cannot see that any firm coming in here, if the whole of their business depends upon secrecy, are not worth much attention. In all cases where licences are given by the Government I think they are a necessity. In the line of business that I know most about we have our premises licensed and I never found that putting statement of the licence over our premises did any harm. The same applies in this case. Secrecy is a bad thing. I cordially agree with the Minister in his determination to leave this matter to the Seanad.
I support very strongly what Senator Jameson has said. Secrecy in all these matters is very wrong. On the Second Reading I asked for some information on the subject, and was rather sat upon, to use a common phrase. I was really in the dark. I asked about three companies and whether they came into the purview of the Bill and I was told not. I asked could the particulars of companies that did come within the purview of the Bill be given but I did not get the information. There is a further point. The Minister has drawn a picture of the national, and of the foreigner coming in. Is it the intention of this Act that this shall only apply to foreigners coming in and that only foreigners shall obtain a licence? Is it not intended that a national shall obtain a licence?
Only in respect of reserved commodities.
I see. Well, be that as it may, I certainly think that it is inadvisable that secrecy should be observed in these matters. With regard to publication in the Official Gazette, you have only got to read it to see the mass of publications in it, some of which are necessary and some not. It is advisable, however, when the Government enters into these matters, that the fact that they issue a licence, and to whom and in what circumstances they issue the licence, should be available to anybody who is anxious to know that fact, and more particularly to those in competition with the person or firm to whom the licence has been issued. I certainly support the amendment.
I also support the amendment. Senator Jameson yesterday put up some very cogent reasons as to why publication of this kind was necessary and the Minister for Agriculture, I think, in somewhat parallel circumstances, agreed with Senator Jameson. The Minister said that this country is, happily, free from graft; but you have to look at these things in the big way, from the point of view of the future. I do not suppose that we have any less original sin in our composition than other people, and all countries have found very grave dangers in placing powers such as these in the hands of Governments. I think that, in the interests of the future of the country, we have to look upon those things from a broad point of view and that we have to balance the advantages against the disadvantages. I cannot help feeling that publicity of this kind forms a very big protection against the possible dangers of corruption. I do not consider myself any the less patriotic for mentioning that as a possibility.
As Senator Jameson said, what firm, coming in to do business is unable to do business because of publicity, and who is going to boycott a firm manufacturing under licence because they are British? The consumers want value for their money, and, really, the whole of this business of Irish-made goods—whether they are good or bad —appeals very little to the consumer. It is not a question of sentimentality. The consumer wants value for his money—especially as he is getting less and less money every day, which is the case with many of us. If foreigners can give them better value there are going to be no reactions on the foreigner. This amendment is a very limited application of the principle of publicity which should also obtain in connection with all those licences which have resulted from the tariffs.
I should like to say that the position the Minister has taken deserves sympathy, because I should rather judge, without any knowledge except that which I have gained here, that the pressure for publicity in regard to licences has come from those who, it may be feared, are going to use it for mere trade competition purposes—not fair competition as to the merits of the article, but merely on what might be called sentimental grounds. It is to be used as an instrument of trade attack. On that ground, I think that the Minister was well justified in refusing that importunity. On the general principle that where licences are issued for privileges there should be publicity, I think that the general principle is sound, and I should be inclined to support the amendment on these wider grounds; but I think it would be well, instead of having publication in the manner suggested, to have a register where a person who seeks information can obtain it by paying a small fee. I think that that would be better than obtaining the information by publication in the Official Gazette.
With regard to the two points made by Senator Johnson, I should be inclined to agree with the second part; but as the Minister says, he cannot very well prepare a register without consultation with the Departments concerned. If the Minister would bring in an alternative amendment providing for the preparation of such a register I should prefer that course. On the one point made against this amendment, if I agreed with the Minister that this would be unfair to firms to which it was thought fit to give a licence, it would be different.
The firms that would get licences are those we want.
Yes, but if I believed for one moment that the provisions of this amendment were going to be unfair to them, I would not press this amendment. However, I want the House to consider what the case is. Very few of these manufacturers deal directly with the public. In certain parts of the country there may be a certain amount of sentimental feeling in favour of Irish manufactured goods, but, to be honest, I am afraid that that feeling is worth very little. My own experience has been, and my own case is, that we put our own goods in our window but do not mark them Irish now, and we can sell a greater proportion now than ever we sold because, with the operation of tariffs and all the rest of it, they are better value. There is a considerable number of people still, however, who believe that a thing is better if they think it is English. I am not at all convinced that this amendment would work against the manufacturers. They are not dealing with the public. They are dealing with the wholesalers and sometimes dealing directly with the retailers. Does the Minister find that there is a tendency on the part of the wholesalers and retailers to give the preference to Irish goods? The general experience is that the preference is given to English manufactured goods. There might be something to be said if there were a question of the retailers dealing with the manufacturers, but I am convinced that publication in this case will not do them the least bit of harm. I believe that the principle is right. I belong to the federation and I agree with the Minister that it is unbiassed. At the same time, I have given thought to this matter for a very long time and I have not yet heard an argument which would change my mind as to the advisability of publication being made or of a register being kept. Accordingly, I ask the House to accept the amendment.
Amendment put and declared carried.
The Cathaoirleach resumed the Chair.
Section 12, as amended, agreed to.
(1) The Minister may from time to time serve a notice in writing on any individual, who appears to him to be the owner or part owner of or in control of a business which appears to him to be carried on by way of trade or for the purposes of gain and to be one to which this section applies, requiring such individual, within twenty-eight days after the service of such notice ....
I move amendment No. 7:—
Section 13, sub-section (1). After the word "individual" in line 9, page 9, to insert the words "to state if he is the owner or part-owner of or is in control of such business, and if so".
Might I mention, before speaking to this amendment, that the section will have to be amended in view of the carrying of amendment No. 5? I would like to know from the Minister if he would be willing to undertake that for me on Report.
This amendment is not one about which there need be much discussion. I have put it down because I think that its insertion in the Bill would clarify the position. As the Bill stands, it says that if a person "appears to be the owner" he must give information. I want to provide that where a person appears to be the owner but, in fact, is not, that he need not give the information.
I am accepting the amendment.
Amendment agreed to.
Section 13, as amended, agreed to.
Question proposed: "That Section 14 stand part of the Bill."
There is just a question that I want to ask the Minister on the section. Can he tell me whether, without any provisions in this section, the staff are bound to secrecy under some other Act? It is very important that where there is an investigation of premises under this measure in the case of manufacture, and where there are secret processes——
If the Senator means inspection by Government officials, they are undoubtedly bound to secrecy.
I was asked the question, and said that I believed there was another Act under which they were bound to secrecy, but at the time I could not turn it up. It would be well, I think, if the position were made clear by the Minister on Report Stage, and if he were to state under which Act officials are bound to secrecy.
There is the Official Secrets Act.
That is not the Act that I have in mind. There was another Act passed some years ago in which a specific penalty was laid down. As well as I remember it was the Control of Prices Act, under which an official——
They are officials of the Commission and not of the Government.
I am pretty sure that the position is all right, but it would allay a good deal of uneasiness if we had an assurance from the Minister, and perhaps he might give it on the Report Stage.
Sections 14 and 15 agreed to.
(6) No order under this section shall come into force unless and until a resolution has been passed by Dáil Eireann approving of such order.
(7) Every order under this section which has been approved by resolution passed by Dáil Eireann shall come into force on the date of the passing of such resolution or, if a later date has been specified in such order as the date on which it is to come into force, such later date.
I move amendment No. 8:—
Section 16, sub-section (6). To delete in line 60 the words "Dáil Eireann" and to substitute therefor the words "both Houses of the Oireachtas."
Amendments Nos. 8 and 9 are identical, and I think it is unnecessary to dwell on them at any length. I argued this question on the Second Reading of the Bill and, therefore, I think it is only necessary to formally move the amendments unless the Minister intends to resist them.
I think that there is a stronger case against this amendment than against any other amendment on the Order Paper. I am not so optimistic as to think that I am going to get my case accepted in the Seanad, but it is there. I think that if it were possible to get an impartial consideration of this problem here that the strength of that case would be admitted, but I realise that in present circumstances such an impartial consideration of the case is very unlikely. As an earlier attempt to preserve a similar provision in another Bill was unsuccessful I assume it is going to be unsuccessful in this case also.
Is the Minister accepting the amendment?
Amendment agreed to.
I move amendment No. 9:—
Section 16, sub-section (7). To delete in line 63 the words "Dáil Eireann" and to substitute therefor the words "both Houses of the Oireachtas."
This is the same as the last amendment.
Amendment agreed to.
Section 16, as amended, agreed to.
Sections 17, 18, 19, 20 and 21 agreed to.
(1) Whenever the Minister grants a reserved commodity manufacture licence in respect of a particular area, the Minister may attach to such licence conditions in respect of all or any of the following matters, that is to say:—
(a) the manufacture of the particular reserved commodity to which such licence relates within such area by the holder of such licence at one specified factory only;
(b) the extent to which materials for the construction or adaptation by such holder of any factory within such area and the plant, equipment and apparatus of such factory shall be materials, plant, equipment and apparatus produced or manufactured in Saorstát Eireann;
(c) the time within which such holder shall commence to manufacture such reserved commodity within such area:
I move amendment No. 10:—
Section 22, sub-section (1). Before paragraph (c) to insert a new paragraph as follows:—
(c) the compensation which is to be paid to persons or bodies corporate who were manufacturing for sale to the public such reserved commodity in Saorstát Eireann at the time the order made under Section 16 of this Act came into force and who have not been granted a licence under this Part of this Act.
Part III of the Bill provides for reserved commodities, and that these may be declared by order. It also deals with the case where the Executive Council are of opinion that such a commodity is not being manufactured—in that case this amendment would not arise—in Saorstát Eireann to a substantial extent. I think the Minister on one occasion stated that his idea was that the words "to a substantial extent" would apply generally except in the case of manufacturing experiments or something of the kind. There is a feeling, I think, in this case—a very reasonable feeling on the part of certain manufacturers— I do not want to pretend that they are unbiassed—that if an opportunity should arise for making something in a small way as a sideline in connection with their business, and that the Government should decide to make that a reserved commodity, then the person who gets the monopoly of making that reserved commodity should be asked to pay some reasonable compensation. The Minister says that is not likely to happen, in which case there is no objection to my amendment.
Secondly, the amendment does not go as far as I would like it to go because it does not force the payment of compensation. It gives the Minister power, in the conditions under which he will grant a licence to manufacture a reserved commodity, to provide compensation for the persons from whom he has taken the manufacture of that reserved commodity, provided, of course, that those persons were making it for sale to the public. That does not force him to provide for compensation, but it does give the Minister for the time being power to provide that there shall be such compensation. I contend that he ought to have that power. It is reasonable, I think. If people have been selling to the public or manufacturing for sale to the public—the matter will not arise if they have not been manufacturing for sale to the public—and he is not satisfied that there is any substantial loss, he will not put that condition in the licence, but if by any chance it should seem desirable at some time to make a certain commodity a reserved commodity, and that somebody was manufacturing it, then under this amendment he can provide for compensation.
My strongest argument in support of the amendment is this: it is not desirable to have any manufacturer who might make some commodity here, whether in a new concern or, more important still, as a sideline to his present business, afraid of spending some money on it for fear of the provisions of Part III of the Bill. The Minister says that there is no substantial ground for thinking that the people are nervous. My information is that he should take power to provide, not by the State but by the person who gets the monopoly, compensation in the circumstances I have indicated if he thinks it is desirable that it should be done.
Would the Minister give the House some examples of what are reserved commodities?
Senator Douglas referred to the case of the man who might develop some kind of a manufacturing business as a sideline to his present business. Would such manufacture be regarded as a reserved commodity? I know one or two businesses in which the development of a sideline to them is possible. Such a development is made possible by the existence of the business that is now being carried on. If such a development took place would it necessarily follow that a licence to manufacture would have to be obtained, and would the manufacture of some particular article in such circumstances be regarded as a reserved commodity? There may be many people anxious to develop sidelines to their present business. If such developments are to come under the description of reserved commodities, these people may find themselves in considerable difficulties.
Any article may be made a reserved commodity subject to this: that no article can be made a reserved commodity if, upon the date of the order, that article is being manufactured here to any substantial extent.
Might I correct the Minister? If, in the opinion of the Executive, it has been.
It is the same thing. They are usually right.
Does that mean that if it is made in the Saorstát that is all that is necessary?
If it has been made in the Saorstát to any substantial extent, it cannot be made a reserved commodity. It is that phrase "to any substantial extent" that has caused the uneasiness to which Senator Douglas refers. In drafting this Bill, it was intended that power should be taken to make a reserved commodity only a commodity which was not being manufactured here, and an order to make it a reserved commodity would not be made unless it was considered an essential step towards securing that it would be manufactured here, but in order to allow a certain amount of elasticity and for purely drafting purposes, the phrase "to any substantial extent" was considered necessary in the Bill. That has given rise to apprehension in the minds of some people, that an article now being made by them might be made a reserved commodity in the future, and that they might be prevented from continuing their manufacturing industry in consequence of a refusal of a licence under Part III of the Bill. If there is apprehension in the mind of any person which might prevent him from engaging in industrial development of one kind or another, I think we should take steps to remove it.
I think the apprehension is not based on any reality, but if it is there, it is something we must take into account, but I am strongly of opinion that the way Senator Douglas suggests, of providing compensation for such persons, is the wrong way. My idea of dealing with the situation would be to provide that any person who is manufacturing that commodity in the Saorstát must get a licence. It is easy to say that, but it brings in complications immediately you say it, because if there was any person manufacturing the article to any substantial extent—and my interpretation of that phrase is to an extent which made it commercially profitable to do so—an order making that article a reserved commodity cannot be made at all, and therefore we have really to deal with the case of a person who was, or who claims to have been manufacturing the article concerned on a very small scale—to an extent which, in the opinion of the Executive Council, was not a substantial extent. Nevertheless, I still say that the way to deal with that person, if he can establish his claim, is to give him a licence.
The establishment of a claim of that kind is obviously not a matter for the determination of a Minister. Questions of fact arise for decision and in any event, the Minister might not be an unprejudiced person in relation to a claim of that kind where he had already in fact decided against it in determining to make an order at all and therefore, the provision should be one which would enable such a person to appeal to the court. If Senator Douglas will withdraw his amendment at this stage, I will undertake to endeavour to frame an amendment for Report Stage which will provide that where any person who has applied for and has been refused a licence under Part III of the Bill, appeals to the High Court and gets from the High Court a declaration that he was, in fact, engaged in the manufacture of the article which has been declared to be a reserved commodity, a licence must issue to him and the Minister will be given no discretion in the matter. I think that is by far the most satisfactory way of dealing with it rather than by making any provision for compensation, because it is more in accord with the general idea of the Bill, which is that if anybody is manufacturing that article at all, power to make that article a reserved commodity should not exist.
That means practically forcing a person to go into the High Court to prove his claim. If people are to be forced into the courts in that way, it will be very disagreeable and expensive.
The Senator should bear in mind that the case is most unlikely to arise. We provide that he shall make application to the Minister for Industry and Commerce for a licence. If the Minister refuses the licence— and the Minister, knowing that he has this power of appeal, will not refuse the licence unless he thinks there is good ground for doing so— the applicant then has an appeal from the Minister to the High Court and I think it is a necessary provision.
I am not uneasy about the appeal to the court because I think it will only be in very rare cases that the situation will arise. If the law says that he must get it if he is manufacturing to a small extent, I shall be quite satisfied. I think the Minister knows that I am not manufacturing uneasiness. There is a perfectly genuine feeling of uneasiness and the case which impressed me, apart from uneasiness that may not be reasonable, is that there are certain business—and when I used the word "side-lines" previously, I, perhaps, did not make myself clear—in which the owners from time to time consider experimenting with a view to making something. They may never go on with it and if they are afraid that these things may become reserved commodities, they will be extremely unwilling to make experiments in the early stages. I think that what the Minister proposes will not completely meet the position but I agree that his suggestion is the better way than the method proposed here and, with the leave of the House, I shall withdraw my amendment.
I should like to put a concrete case to the Minister because I am not quite clear as to the position. Take a firm or body manufacturing cricket bats and balls for a long time. I know of a firm actually doing that— not in this country but elsewhere—and they have recently gone in for the manufacture of tennis bats, squash racket bats and badminton bats. Suppose that company were over here and suppose they made up their minds to go into this side-issue, if I may so call it, would they have to go to the Minister and get a licence to take up the manufacture of the tennis bats and squash racket bats which they were anxious to manufacture?
There are several assumptions in what the Senator says.
I am giving an actual case which I know of—not in this country but elsewhere.
The Senator assumes that the firm comes over here. If it is a foreign firm operating under a licence——
I am assuming that they are in the country already.
There are two circumstances. If they are a foreign firm manufacturing cricket bats and balls under licence, they would require a new licence to manufacture anything else, but if they were a Saorstát firm, manufacturing, not under a licence but by virtue of their right to do so without a licence, they could manufacture anything else they liked, except some article which has previously been declared to be a reserved commodity.
Amendment, by leave, withdrawn.
I move amendment No. 11:
Section 22, sub-section (1). Before paragraph (o) to insert a new paragraph as follows:—
"(o) the extent to which the directors of the company shall be nationals of Saorstát Eireann."
This simply gives the Minister power in a certain case of a company which is going to be allowed to come in here to provide for some Irish directors. It does not make him do so, but I think it is desirable that he should have the power.
Amendment agreed to.
Section 22, as amended, and Sections 23, 24, 25 and the Title agreed to.
Bill reported to the House; Report Stage fixed for Wednesday, 5th September.