By an Act passed in 1926, a Tariff Commission was established. That commission operated for some years, but it is no longer serving a useful purpose. No reference to it has been made for over five years. The Act of 1926 was so phrased that the commission must be kept in existence so long as the Act itself is on the Statute Book. It was not an Act to enable the Government to set up a commission; it required the Government to set up a commission even though there was no obligation on the Government to utilise the commission when established. It is desired to bring that situation to an end by the repeal of that Act which will permit of some saving in public funds.
Tariff Commission (Repeal) Bill, 1939—Second Stage.
Question proposed: "That the Bill be now read a Second Time."
The Minister has given us a first-rate introduction and a very brief summary of the Bill. The Minister for Finance in the Dáil was much more eloquent. He told us that this Bill is necessary because the functions of the Tariff Commission have been transferred to the Prices Commission, which now serves both as a Tariff and a Prices Commission. It has also been stated that the Prices Commission is so overwhelmed with work in consequence of the London Agreement that it will take three years to complete the investigation of over 100 applications from British manufacturers to review the tariffs which have been imposed by this country on their goods.
One would have thought that with this tremendous congestion of work in the office of the Prices Commission the Government would have made use of the Tariff Commission to relieve the pressure and, instead of abolishing it, have given it additional powers. Instead of this Bill for its abolition, we should have had a Bill giving powers to the Tariff Commission to investigate the complaints of any citizen or manufacturer who felt that any tariff was unfair or injurious to his business. As far as I understand it, the situation will be that an Irish manufacturer with a grievance will have to take his place in the queue and wait for three years until the complaints of the British manufacturers are investigated. But, apparently, the Government never had any use for the Tariff Commission. They never allowed it to function and, thus, the Minister for Finance could tell the Dáil that the commission had been doing nothing since 1932 and that, on the grounds of economy alone, he felt constrained to abolish it. Three thousand additional civil servants having been put on the pay roll during the past seven years, the Government is now going to economise by reducing the number by three — the three Tariff Commissioners. This is, I presume, the first instalment in the now famous £2,000,000 reduction, which we were promised.
According to the Minister, no tariffs are imposed until they are fully examined and discussed, first by the Department of Industry and Commerce and then, by the Government. We frequently hear, too, that tariffs are imposed for the sole purpose of developing and fostering Irish industry, and the Minister informed the Dáil during the debate on this Bill that there has been such a careful planning of industry by the Government that each industry fits into the other like a mosaic. Of course, the Minister is accustomed to look at things through the rose-tinted glasses of the artist but, if he viewed them through the more prosaic optics of the ordinary businessman or manufacturer he would find that his mosaic was neither as well planned nor as artistic as he seems to imagine. I can give the Minister more than one example of tariffs which have been imposed during the past seven years which, instead of helping the promotion of Irish industry, have retarded it. I can give him examples of tariffs put on goods which are not manufactured nor intended to be manufactured in this country at all, and for which no Irish manufacturer ever asked. The only possible reason for their imposition is to increase revenue. One of the results of these tariffs is the anomaly of the Minister raking in 40 per cent. duty on the raw material of a certain article which is allowed to be imported as a finished product at 30 per cent. duty.
Taxing the raw materials of the native manufacturer to the tune of 40 per cent., and allowing in the finished product of the foreigner at 10 per cent. less, is a rather curious method of helping Irish industry. Of course, this is not a Rip Van Winkle policy.
Senator Baxter may resign.
I think the policy under which this is done can be described only in the picturesque language of the Minister for Finance as the mosaic policy. The material on which this 40 per cent. duty is imposed cannot be procured here, as Irish manufacturers cannot make it, except at a loss and, consequently, do not want to make it. No such tariff would be allowed on such material if a tariff commission were properly functioning. But when the Tariff Commission is deliberately put out of action no attention whatever is given to the incidence of tariffs on established industries or to the fact that the finished product of one industry is the raw material of another. Irish manufacturers are thus penalised, and when they complain their complaints are not listened to by the Government that claims to exercise a paternal care over all Irish industries.
Apparently the Government are only concerned about new industries at the opening of which golden keys and addresses of welcome are presented. Scant consideration is given to old-established industries, industries established without any pomp or ceremony and carried on by their proprietors with their own capital before the promotion of industries became patriotically fashionable. Some of these industries are compelled to pay prices for their raw materials from 33 to 40 per cent. over the prices prevailing in Northern Ireland and Great Britain for the same materials — thus completely crippling their export trade. This is being done despite ministerial guarantees, specifically given in this House and in the Dáil, that the prices of these raw materials would, quality and quantity, be the same as the prices charged in Britain. Yet, when manufacturers drew the Minister's attention to the fact that these guarantees were not being carried out, and that no slight, but gross, profiteering was taking place, no attention whatever was given to their complaint. In fact, their communication, backed up with irrefutable proof of the profiteering, was not even acknowledged. The profiteering was allowed to go on and to hamper these manufacturers in their competition for an export trade which we are told the Government is so anxious to encourage and which is so essential for the success of any industry.
Instead of encouraging old established industries trying to do an export trade, the Government treats them like step-children. They have no place in the ministerial mosaic, and their only hope of obtaining fairplay is in my opinion through an impartial tariff commission. A real live tariff commission was never more necessary than to-day. There is plenty of work for it and it would be welcomed by every business man in the country as a greater safeguard against exploitation than an already overburdened and congested tribunal like the Prices Commission. Accordingly, I submit that instead of abolishing the Tariff Commission, the proper course for a Government claiming to be anxious for what they call a balanced economy, is to retain the Tariff Commission and to-extend its powers. I am, therefore, opposed to this Bill.
I wish to offer a few remarks on this Bill without attempting to range over the whole-field of economics. The Minister has had my views so often that I think it is not necessary to do so. I have seen no reason, in the light of what has happened in the last few years, to change my views in any way. I am deeply apprehensive of his whole policy. I hope that he will not say that it is because I am prejudiced or because I do not want to see Irish industry flourish. I do not see how his present policy can fail to have adverse reactions on agriculture, if the raw materials of agriculture and the requirements of the agricultural producer are increased in cost, as they must be, by the present policy. I feel that it is a great mistake to abolish an instrument of such great potentialities as the Tariff Commission. The fact that the Government have not used it is no reason why they should not use it. I think it is most unfair to those who may come after them, if anybody ever does, to put upon them the obligation of reintroducing this legislation, should they find it necessary to do so.
I suppose one of the reasons why it is being abolished is that certain charges are entailed by the continuance of this body. I take it the members are still paid and that it is desired to save on their salaries. I think, however, that it might be provided that so long as they are not being used, no payment need be made. I believe it is a great mistake to take these powers completely off the Statute Book. I can give one instance — there may be many others — where ignoring the advice of the Tariff Commission has led, I think the House will agree, to rather disastrous results. That was in the case of the bacon industry. In the Report of the Prices Commission on the bacon industry we read that the Tariff Commission's Report, which was made on the 27th May, 1932, did not contain a provision for the imposition of a protective duty. We know that the Government imposed a protective duty with all the disastrous results which we read of in that report of the Prices Commission. I am very much opposed to the abolition of this body.
We have still rights left, however the Minister may try to intimidate us. Of course, it is understandable that the Minister must shout as loudly for his policy as he is able. He must convince everybody that it is right, whatever evidence he may see to the contrary or whatever evidence is obvious to those of us who keep our eyes open and look around. I remember that when the proposition was first made for the setting up of this Tariff Commission, I did not like tariffs. I like them less now. I shall make this concession to the Minister that, if you want to have a particular industry for the production of a commodity for which there is a potential market, where there are certain raw materials available and so on, I suppose we must have tariffs, but what we should first try to understand is whether there are reasonable possibilities for the success of the industry before we start constructing an institution that later on will not be able to stand. The Minister has put through a certain policy and what does he tell us here to-day? He tells us, with regard to boot factories, that there are a great many people who feel now that we have too many boot factories in the country. If you ask the people who are wearing boots down the country what they think about the boots, and the price paid for them, you will come to realise why many of the owners of these boot factories to-day are very perturbed about the future. People are only buying just where they must.
The Minister in his speech on the previous Bill made a statement to which we all subscribe. None of us wants to see Irish capital invested in Irish enterprise lost. We recognise, of course, that you cannot get people to invest capital in an enterprise without some hope of its paying a dividend. Nobody is expected to do that but the farmer. He is the one who is expected to put his capital into an enterprise and nobody will bother, certainly not the industrialist and evidently not the Minister, whether the farmer can get a return from his capital or not. While the Minister earlier has said that economic development in this country in his view is dependent on the success of our industrial policy, I say that the contrary is the fact, that the economic development of this country is contingent on the success of its agricultural industry.
That is not the contrary; it is the same thing.
I say, further, that when you make your agricultural industry successful you will be able to see how far it can subscribe to the maintenance of uneconomic industries. The first thing we must do is to have an agricultural industry that is able to stand that. That is not the position with agriculture to-day. The Minister's Party and the Minister's policy have made their contribution to its present debilitated position. We are not going into that because there is no point in going back on these things. The fact is that we have the effects of that policy. Flowing from that, you have the position, as I argued earlier, that you invite people to subscribe capital to get industries started without a proper examination of all the circumstances and conditions. You have the position alluded to by Senator McLoughlin in which a tariff is put on the raw material of industries started some time ago, that tariff altering the whole complexion of the problem which faced these industries when first established. All this is going on side by side with conditions in agriculture which are the worst in the memory of most of the people living on the industry to-day. While that is so, the Minister has convinced himself as to his own policy and he has so silenced his followers that, even when they know that that policy is wrong, they are afraid to speak out. According to the Minister, we must pin our faith to the industrial scheme of the Government. He admits that the Government is so involved in it that the fate and the future of the Government depend on how far they can make their industrial policy a success. They are so involved in the establishment of many of these industries that, if they fail, the Government could not claim to have succeeded. The Minister knows what the prospects are for some of its own schemes — the industrial alcohol scheme, for instance, in which £500,000 have been invested. Somebody has, I think, interrupted from the Government Benches that that was for agriculture. I shall not be as rash in my description of the interruption as the Minister and some of his supporters would be. If the Government wanted to spend £500,000 on agriculture, there are very few agriculturists who could not give them advice as to how it could be better spent. It may be that a few people got hold of the Minister and induced him to put up these factories because they might give a fillip to a type of development that is uneconomic, from the point of view of agriculture. If potatoes can only be produced to sell at 30/- or 35/- or, perhaps, 25/-, you will not have a prosperous agriculture. Anybody who knows anything about the growing of potatoes from year to year knows that you will have nothing but poverty and misery if potatoes are raised to yield only 25/-.
The alcohol factories do not necessarily depend on potatoes.
I was only answering the Fianna Fáil interrupter, who said the factories were established in the interests of agriculture. The Minister at times whistles to keep up his courage. A great many of his industries are passing through very trying times, not because of any criticism, but because of the conditions inherent in our history, population, planning capacity and the debilitated condition of agriculture. None of us wants to see capital invested in Irish enterprise lost but, if you want to ensure that capital will not be lost, you must be much more discriminating with regard to the type of industries you are going to establish here. What is going to happen to the capital invested in the surplus boot factories? At the end of May, the quota on boots is coming off. The whole problem is to be reviewed by the Prices Commission, and the Minister knows much better than I do the state of alarm in which the boot industry is at present. He knows that some of the biggest boot factories are working only half-time and that some of them are working less than half-time. That shows, despite anything the Minister or the Minister for Finance may say, that there has been no proper planning and no proper effort to discover what the consuming capacity of our people is. It shows that there has been no proper effort to investigate the possible output of these factories. The Minister had all these powers of restriction and restraint and he has gone on and on. Now, we are going to have surplus capital invested in that particular type of industry. That sort of thing will do irreparable damage to other people with, perhaps, quite good schemes who put their stock on the market and ask Irish investors to take it up.
We may be pardoned for attempting to look at the other side of the picture. We are not so stupid as supporters of the Minister allege. I am not sure that the Minister himself did not make some reference to our effort to go into the position. We are more concerned about the success of these industries than the Minister gives us credit for. I am quite convinced that it is a sign of nothing but racial decadence to try to build up industries which, ultimately, can only fail. If we cannot do better than that I do not know how our nation or race is going to live at all. There must be some great fault or inherent weakness in our people if that be the position. We should understand our weakness, and if the Minister is banking on the growing power and strength of the nation to build up industry, he may as well have it brought home to him at once that there can be no success for industry until he puts agriculture in a stronger position than it is. Agriculture was, perhaps, weak when he came into office. The Government did everything to make it weaker. They took its market away and said that they were delighted that it disappeared. The other day, in the Dáil, the Taoiseach argued in defence of his policy that it was quite conceivable that we might actually have to go to war if our foreign markets for our surplus produce were closed on us. Compare that with the argument advanced a short time ago. Our agricultural industry is in a very depressed condition. It was bad when Fianna Fáil came in, but they have considerably worsened it. The Minister led in the attack on it and he continues to pile up the burden without any effort to bring in relief. I pointed out on the other Bill what the Minister was doing to give credit facilities to the industrialist which he would not give to the agriculturist. We may be abused. The Minister may attempt to intimidate us and, in a slick kind of way, try to make us appear silly, but we know our own farms and our own soil. We know the condition of the people and we are quite convinced that their standard of living is much lower than it would have been if this mad policy of the Minister had not been carried so far. We go further and say that there would be greater success eventually for the Minister and his policy if he had gone more slowly. He would have built up much more cautiously and on more certain foundations, and he would not have stirred up the antagonisms that he has stirred up among his own supporters as well as among the supporters of other Parties. But the Minister's supporters will not say that. They would get short shrift if they did, and it does not appear as if many others were prepared to say it either.
Senator Johnston pointed out the consequences of a certain monopoly with regard to a particular trade in the country. Senator Quirke will remember that, when the Pigs and Bacon Bill was going through, we pointed out the dangers and risks in the Minister's scheme, hut we did not get our way. There is no great pleasure to any decent-minded individual in coming in and saying, "I told you so." I get no pleasure whatever out of it. Ireland would be a much better place for all of us if there were a fair crack of the whip all round and if it were recognised and admitted that those of us who differ from the Minister have some sense and honesty and a desire to do what is beneficial. The Minister wants co-operation, but it must always be on his own conditions. We have to reject everything in which we believe and swallow his nostrum, to find later that it is poison for all of us. I do not think that there is wisdom in what the Minister is asking the House to do. I am convinced that, for the future, a go-slow policy, with a more exhaustive and careful examination of the possibilities of industries and what is involved in their establishment, would be much better for the country. It would be much better for the Minister, too, because, in the last analysis, if his industries go down, he will have great difficulty in rescuing his reputation from the ruins brought about by his rashness and excessive enthusiasm.
I hesitate to inflict myself on the House a second time, but I notice always that when I speak the Minister for Industry and Commerce excels himself in the eloquence of his reply. I look forward with some interest to his reply to my less eloquent speech. The general attitude of myself and other Independent members of this House is that we do not care a hoot which Party governs the State, so long as it is reasonably well governed. If I were to take up definitely a partisan attitude to the Minister's policy in this and in other matters, instead of speaking up and saying what I think, I would be doing the Minister a real disservice by remaining silent and allowing him to continue in his way without criticism of the kind I give. I find it necessary to speak even with the hope, if you like, of the Minister learning something from my remarks that may enable him to prolong his own political life and even the period of office of his Party. With regard to the proposed abolition of the Tariff Commission I do not like it. I would dislike it less if a particular recommendation of the Banking Commission Report was likely to be carried out, that is the recommendation in paragraph 376:—
"That the monetary authority should take the necessary steps to establish a research department which would not only provide it... with the information necessary for the execution of its own monetary tasks and the giving of reasoned advice to the Government."
In paragraph 352 they point out:—
"...it is clear that important measures with a very distinct bearing on currency and credit have been introduced in the Free State without any thorough examination of their wider implications from a monetary point of view..."
For example
"...the pledging of Government credit for the pursuit of the land settlement and housing policies, or the various interventions in the structure of costs and prices...."
The commission, in particular, refers to the kind of interference which it would be the duty of the Tariff Commission to investigate, from the point of view of national welfare as a whole, including monetary and credit reactions. If I had any assurance that a research department, associated with the Currency Commission or its successor in title, would undertake work of the kind hitherto capable of being done by the Tariff Commission, or if there were a great expansion of that particular kind of work, I would be inclined to agree offhand to the abolition of the present Tariff Commission. The Tariff Commission, whatever it may have been in fact during the last four or five years, has been always in theory a possible machine for investigating proposed new tariffs, not only from the point of view of the particular interest affected by the imposition of tariffs, but from the point of view of the general economic situation in the country as a whole, and its investigations would take place before either the State or private interests had undertaken financial commitments that would prejudice the matter once they had been undertaken. In other words, the Tariff Commission was in a position, with reference to the proposed infant industries, to make what might be called a pre-natal examination of proposed infantile industries, so as to ensure that nothing but lusty industrial infants would be born, which would grow in due course to be a credit and a source of real economic wealth to the nation.
The Prices Commission in its functions is not organised to provide that-kind of necessary pre-natal advice. On the contrary, its functions are more in the nature of supplying postmortem examinations after the industry has overreached itself, or its success in fleecing the consumer has given rise to such complaints that an appeal is made to the Prices Commission to investigate charges of profiteering. In my view, the Prices Commission does not supply a service-of the same desirable kind as the Tariff Commission was capable of supplying. It has been urged elsewhere that in the period in which the Tariff Commission was operating, which was more or less from 1926 to 1931, industrial development scarcely took place, and that, in fact, industrial stagnation was the rule. I had the curiosity to look up the report of the Census of Industrial Production on that matter, and it appears that between 1926 and 1931 the net output of industries increased from £23,000,000 to £25,500,000 and the personnel engaged in industries from 102,000 to 110,000. The returns in the subsequent period from 1931 to 1936 showed that the net output of industries increased from £25,500,000 to nearly £34,000,000 and the personnel engaged from 110,000 to 154,000. The facts remain that during the early period, 1926 to 1931, there was a slow but sure industrial expansion and, in my view, that slow, gradual expansion of industry had in it the promise of greater permanence and prosperity, more so than the flatulent expansion that took place since 1932. If we examine more closely the elements that constitute the sum of £8,000,000 increase since 1932, we find that in the case of sugar the net output is something in the region of £1,000,000 in 1936, whereas it was only £32,000 in 1931. The net output of nearly £1,000,000 in the case of sugar is an entirely artificial creation, and the result of rigid restrictions on imports. If the sugar produced by the sugar industry were valued at world prices that value would be deflated by something like £1,000,000.
If you make the necessary adjustments you will find that there is much wind and water even in the officially reported net output which took place in the years since the Tariff Commission ceased to operate. My objection is to the whole method by which the Minister imposes tariffs, and gives industrial privileges. On that point, I may say that when I spoke of monopoly dangers, I spoke rather loosely of industrial privileges in general, of which monopoly is only a particular case. My objection to the whole procedure of the Minister, in his hit or miss methods of imposing tariffs, is that no guarantee is provided that the national economic welfare will be taken into consideration with reference to the tariffs which he imposes. His attention is concentrated too much on the circumstances of a particular industry, or locality, and not enough on the general economic situation in the nation as a whole. He sometimes twits Senator Baxter with irrelevance, when he speaks in reference to the agricultural situation, and maintains that his measures have as little to do with the agricultural situation as they have with to-morrow's weather. In fact, Senator Baxter is the sounder economist of the two. Anyone who knows anything about economics knows that you cannot touch the economic situation anywhere without affecting it elsewhere. Everything the Minister does in his limited Departmental outlook has most unforeseen and sometimes most disastrous reactions on other parts of the country, and especially on agriculture, which are beyond his imagination or power to understand. Hit or miss tariffs involve certain dislocation of an existing production economy in relation to an existing consumption economy in the country as a whole.
That sounds a big phrase, but I will try to make it a little more clear. In my view, one aspect of a sound credit situation is that there should be such adjustment between consumption economy as a whole and production economy as a whole, that all production facilities — all reasonably efficient — capital and labour are in full employment, and that everything which proceeds from the productive mechanism should achieve complete consumption. In such a case there is adjustment between the production economy as a whole, and the consumption economy as a whole, and the final absorption of the output of the mechanism is the ultimate guarantee of the soundness of that credit situation. Violent disturbance in the way of tariff changes and quota changes disturb that adjustment between the production economy and the consumption economy, and are liable to have most unforeseen results, not only in the immediate limited field, but on the national position and on the credit position of the nation as a whole. You may, by a stroke of the pen, wipe out all imports of foreign bacon, but you cannot guarantee that the disposition of consumers, with regard to the expenditure of their incomes, will be such as to produce a desirable adjustment between the new production economy with reference to bacon and the new consumption economy.
What do we find in fact happened with reference to bacon? Whereas in 1929 the people of this country consumed 734,000 cwts. of bacon, since 1932, when the imports of foreign bacon were absolutely wiped out, the consumption of bacon at home fell to 573,000 cwts. The unexpected fall in the consumption of bacon apparently necessitated the expanding of exports, which took place to a considerable extent at the expense of the native consumers and native tax-payers. These violent dislocations of the production economy may disrupt consumption production relationships, and may have effects on the general credit of the nation which are unforeseen, but there are other aspects of the credit situation that can be more easily appreciated. From the point of view of people outside our country, the credit of a nation, in the long run, depends on such an adjustment between costs and prices in the nation concerned and other nations as will enable the nation in question to maintain a suitable volume of exports. Only by maintaining a suitable volume of exports can such a people build up those external short-term assets which are the immediate guarantee of the stability of the national currency, or a kind of cushion on which it may rest during temporary dislocation or shock. In the long run, anything which undermines export capacity is liable to undermine national credit and even threaten the stability of the nation's currency.
The effect of a tariff policy on national credit and on the stability of the national currency is not sufficiently realised. Australia in the years preceding 1930 maintained a policy of encouraging the import of capital, while at the same time maintaining high tariffs. The effect of these persistently-maintained high tariffs was to create a situation in which the Australian pound, although nominally equal to the pound sterling, no longer bought a representative parcel of goods in Australia of the same weight as the English pound bought in England — in other words, the real purchasing power of the Australian monetary unit was depreciated mainly in consequence of what had happened previous to 1930. The fact that the Australian currency was on a par with the pound sterling did not indicate its real purchasing power. It may be said, of course, that that kind of thing cannot happen here, and it is perfectly true that the cushion, so to speak, that guards us here is very much more substantial than the cushion with regard to Australia and so on. For instance, there is, I believe, some £66,000,000 of sterling assets here which affords a guarantee of our currency. At the same time, if there should be a long-continued position in this country by which prices are artificially raised in consequence of tariff policies and so on, and if the situation exists for a long period of time during which the Irish pound, as a result of these kinds of measures, will not be able to buy the same typical representative parcel of goods as the English pound, then the time will surely come when, in one way or another, you will be faced with currency devaluation or depreciation. That happened in Australia. In our case it will take a longer time.
What has this to do with tariffs?
It has everything to do with tariffs. I am pointing out what the effect of such a policy has been in other countries with regard to the monetary system, and I am referring to the report of the Banking Commission with regard to the monetary situation. Now, in our case, we are not likely to fall from stability of currency as soon as Australia and New Zealand fell, because as I say, of our large volume of external reserves, but if the general tendency of things is such that we are falling at any rate, then the only difference in the long run will he the difference between falling out of the 20th storey of a building or out of the second storey of a building — we being somewhere near the top storey—and I suppose that, in the meanwhile, the optimists may congratulate themselves that nothing has happened to them so far.
I do not want to be excessively alarmist on this matter, but I do want to insist that a tariff policy, among other points of view, should be considered from the point of view of monetary policy and credit in every sense of the term, and it would give me the greatest hope and confidence if I could be assured that the particular recommendation of the Banking Commission with regard to the setting up of a research department could be carried into effect for the fulfilment of functions that the Tariff Commission would not be available to fulfil. In general, I am not a defeatist on the economic future of this country, although in other ways I sympathise with many of Senator Baxter's views. I think that the best guarantee we have of our ultimate survival is the fact that we have been able to survive so well the onslaught of the Minister and his colleagues during the last five or six years, and if we have been able to stand that, I think we can stand anything.
Senator McLoughlin commenced his remarks by paraphrasing the speech made by the Minister for Finance in introducing this Bill in the Dáil. I do not think the Senator can have read that speech himself.
I have the Official Report here.
Well, I think that if Senator McLoughlin will re-read the speech he will find that the Minister for Finance did not say what Senator McLoughlin has attributed to him. He did not say that we were abolishing the Tariff Commission because the functions of the former Tariff Commission were being transferred to the Prices Commission; there is no question of transferring functions that they had not got.
What were their functions for the last five or six years?
Yes. Now, Senator Fitzgerald is asking the question that Senator McLoughlin should have asked. Clearly, those who have spoken on this matter so far did not trouble to find out for themselves what were the functions of the Tariff Commission which is being abolished by this Bill. I think Senator McLoughlin said that the Tariff Commission was a safeguard against exploitation. It had no such function.
Why should the Tariff Commission not be given additional powers?
The Senator, of course, wants to get out of his difficulty by asking that question. The Tariff Commission, which we are abolishing by this Bill, ceased to exist, as a matter of fact, quite some time ago, and it will be formally interred by this Bill, but the fact remains that it had none of the powers of doing the things which Senator McLoughlin has attributed to that commission. That commission had no powers except that the Minister for Finance for the time being received an application and accepted that application and sent it on for consideration by the Tariff Commission.
What I said was that, instead of abolishing the Tariff Commission, a Bill should be brought in to extend its powers.
Well, the Senator did not make his point very clear. He started off by saying that the Minister for Finance had explained in the Dáil that this Tariff Commission was unnecessary because its functions had been transferred to the Prices Commission.
The Prices Commission was both a prices and a tariff commission.
The Minister said nothing like that. There was no question of transferring the powers of the Tariff Commission to any other commission because it had no powers to transfer.
What I said was that the Prices Commission had power to investigate complaints of Irish manufacturers, and that the Tariff Commission should have the same power.
Not the Tariff Commission. Does the Senator remember which body he is speaking about?
My point is that the Prices Commission is so overwhelmed with work that it cannot deal with such points.
Does the Senator seriously contend that there are no means of having a complaint investigated except by the Prices Commission? Let him come to the Department of Industry and Commerce with complaints, as he very often has done, and his complaints will be investigated there.
At any rate, I am aware of one complaint that was sent to the Department of Industry and Commerce two years ago and was not even acknowledged.
Yes, the Senator referred to that already. I remember the particular matter the Senator has in mind. It was a complaint as to prices being higher than they should be in a certain case. The complaint was made but, on investigation, it was found that the complaint was unsustainable — in other words, the complaint was incorrect.
The Minister says it was unsustainable, but I can give him facts certified by the Manchester Chamber of Commerce.
Well, later on I shall explain to the Senator the precise procedure in these cases.
You cannot adapt your procedure to the fact of not answering a letter at all.
Surely that is not so?
Yes, it is so.
Well, at any rate, the point I have to make is that if a person has a complaint to make he does not have to wait for the Prices Commission to deal with it. If it is a matter of tariff adjustment, prices investigation, or anything of that nature about which an Irish manufacturer has a complaint to make, there is adequate power to deal with that without having to go to the Prices Commission. The Prices Commission deals with what it is asked to deal with by the Government. It has no initiatory powers, but it has powers to deal with matters that are sent to it. The old Tariff Commission had no initiatory power. It had no such function at all.
I think the Minister will agree that before his Government took office the Tariff Commission dealt with such things pre-natally?
No.
I think so. When people came before the Tariff Commission they had to put their case.
The Tariff Commission, of itself, did nothing and had no power. When people applied for a tariff they applied to the Minister.
And the Minister referred the application to the Tariff Commission.
Yes, and if he did refer it to the Tariff Commission nothing happened either. I think that Senator McLoughlin would remember the functions of the Tariff Commission much better than Senator Fitzgerald. It took, on an average, about three years between the reference of an application to it and a report by the commission.
Yes, but it saved the people from harm afterwards.
What harm? Have not about 56,000 people got employment? What harm did it save these people from? These thousands of people who have been put into employment will not be harmed by abolishing that commission. What is all this balderdash that is talked now about the harm that might be done by the abolition of this commission and the setting up of another commission when so much employment has been given to people in this country and when there is so much diversity in the nature of employment?
What about the national income?
It has increased, of course.
It is lower than it was in 1929.
I think somebody must have been pulling Senator Baxter's leg. However, I shall deal with Senator Johnston's point in a few moments. I could not follow him very well. He got into deep water in which, I am afraid, I cannot swim. In the meantime, however, I want to inform Senator McLoughlin that the Tariff Commission proved to be an unmitigated nuisance, that it could do nothing and that it has long since ceased to be operative. There can be no question of transferring powers from a body that had no powers, and I must say that the restoration of that body is very unlikely. Certainly its restoration is very unlikely, even with such very limited functions as it had. In answer to Senator Sir John Keane's point, I can only say that if any succeeding Government want to resurrect that body they will have to introduce another Bill. I see no reason for continuing such a body with a new staff costing, perhaps, £2,000 or £3,000 a year, merely because of the possibility that some future Government might want to restore it. If some future Government should want to restore that body they can pass an Act for that purpose.
Senator Johnston asked for an assurance that a research institution, such as the Banking Commission recommended, should be established, and I understood him to say that, if we did intend to establish such an institution, his concern about abolishing the Tariff Commission would be much less. I can give no such assurance. I am afraid that the Senator has a very child-like faith in commissions, but I can assure him that commissions are very fallible and that they often make most grievous mistakes. You cannot safeguard yourself against the possibility of error by setting up a commission. Everything that Senator Johnston said, however, seemed to lead inevitably to a recommendation that a commission should be established. He read one paragraph, which I remember, of the Banking Commission Report, regarding the bearing that legislation might have on costs and prices, and so on, to the effect that legislation had been introduced here, including land and housing policies, without any thorough examination of their wider implications from a monetary point of view, or without due regard to the reactions on prices and conditions generally. I admit that I was pleased with certain paragraphs in the Report of the Banking Commission, but there were other paragraphs that irritated me and that I should like to burn, and particularly that paragraph. They had no right to assume that no consideration had been given to these aspects of the matter, and I think it was damned cheek on their part to set down that paragraph. Of course, what they meant was that we did not come along and ask a couple of bankers for their views on the matter; but, certainly, they should not have said that we did not give due consideration to these aspects of the matter. I do not think Senator Johnston did much to support his case for the setting up of a new commission in quoting that particular paragraph.
What I suggested was that the Currency Commission should have a research department associated with it which would deal with this matter from certain points of view.
I cannot express an opinion on that matter at all. If Senator Johnston has got the idea that some such research department will never again make a mistake in any aspect of monetary policy I think he is living in "a fool's paradise." An investigation can produce facts. Senator Sir John Keane mentioned that the Tariff Commission, in its report on bacon, did not recommend a tariff on bacon. They did not. Neither did they recommend a tariff against it, because they were instructed by me not to. The Tariff Commission Act of 1926 provided for the setting up of a Tariff Commission for the purpose of carrying out an investigation into certain specified things, but there was nothing in the Act which empowered the commission to make a recommendation. In fact, I remember complaining in the Dáil, when in opposition, that the Tariff Commission had not merely made recommendations but had made a report. They stated:—
"As we are not recommending a tariff we do not think it is necessary to deal with this aspect of the matter."
I contended that they had acted illegally and had failed in their statutory duty when they submitted that kind of a report on a tariff application to the Dáil. I urged then that it was not the function of that particular Tariff Commission to make any recommendations but merely to ascertain the facts and to publish them.
When I became Minister for Industry and Commerce the Tariff Commission was about to submit a report to me on bacon. I said to them it was their duty to report the facts and not to make recommendations on the facts, because I hold it is for the Government to come to a decision on the facts as presented. The function of any bureau or of any research body is primarily to ascertain the facts, but decisions on policy must be taken by the Government. The Government have to stand over their decisions and cannot shift their responsibility by referring to the report of some commission. Commissions are as liable to error as any body of Ministers. It would be utterly foolish to put upon commissions the responsibility of determining policy.
I was not advocating that. Commissions would be supposed to present the facts and a certain comprehensive point of view in the national economic interest.
Did I understand the Minister to suggest that the Government does not, in certain conditions, welcome or seek advice on matters of policy?
The Government, on the contrary, seeks advice on matters of policy, and always welcomes it when it can get it. That is different to assuming, as Senator Johnston undoubtedly does, that the mere existence of some body of experts is going to prevent errors being made.
I did assume that Ministers are less likely to commit errors if they had more light, and I am only advocating that they should have more light.
The Minister seems to have forgotten what he said a moment ago, that when the Government sets up a body, such as a commission, it does so to get it to report the facts but never to make recommendations. That is quite contrary to what the Taoiseach said a few days ago.
On the contrary, many commissions have been set up, in fact some are in existence at the moment, which have been given terms of reference asking them to report on various aspects of administration and policy.
That is not what the Minister said a short time ago.
The point that I was making then was that the Tariff Commission which we are now abolishing had no such duty. The obligation was not put on it under the Act to make recommendations or to report. The fact that in the case I referred to they not only made recommendations but wrote a report around them meant, in my opinion, that they had departed altogether from their statutory duty. The duty cast on them under the Act was to ascertain the facts and publish them.
And yet you kept them there for six years doing nothing at great cost to the State.
One of the criticisms that might have been advanced on this Bill and that has not been advanced is this: why was not the Tariff Commission abolished a long time ago? The description of "hit and miss tariffs" is completely inaccurate. You have to approach this question of a tariff policy from one angle or the other. You have got either to proceed on the assumption that Irish industry needs protection and should get it unless a case can be made against it, or else proceed from the opposite point of view that free trade is the ideal arrangement: that no industry should get protection, and that there should be no infringement of the policy of free trade unless an over-whelming case can be made for it—the tariff policy of our predecessors was a free trade policy—that there must be no variation of the free trade policy unless the Tariff Commission, after a long, solemn examination of the whole position, recommend the contrary to the Government. Our predecessors proceeded to act on that principle. They never imposed a tariff unless they were forced into doing so by a report from the Tariff Commission after an investigation carried out over a long period of years. They assumed that free trade was the best policy until the contrary was shown. We reversed that position entirely. We assumed that protection for Irish industry, and for its development, was good for the country, and, consequently, we operated what can be conveniently called a protectionist policy. In every case in which a tariff was imposed it was kept in operation unless and until it was shown that the national interest would be better served by the contrary procedure. That is why the Tariff Commission ceased to serve any real purpose once this Government came into office. The Prices Commission took its place. This is a body whose powers and functions are fully in accord with Government policy. It has got the job of recommending a reduction in tariffs if it thinks that the circumstances warrant it, or an alteration in the basis on which protection is afforded to any particular industry if, for instance, it thinks an industry is making excessive profits due to the absence of reasonable competition or any other cause. The whole framework of the Prices Commission Act assumes the maintenance of a tariff policy modified only to the extent that the Prices Commission recommends after due investigation. Clearly the particular body which we are dealing with here serves no useful purpose in present circumstances, and, therefore, it is high time that we should abolish it.
Question put and agreed to.
Committee Stage ordered for Wednesday, 15th March, 1939.