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Seanad Éireann debate -
Wednesday, 28 Jun 1939

Vol. 22 No. 23

Public Business. - Finance Bill, 1939—(Certified Money Bill)—Second Stage.

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

I propose to give a short description of the various sections of this Bill as it has been passed by Dáil Éireann. Section 1 is the usual section fixing the rates of income tax and surtax for the current year. Section 2 makes certain changes in the surtax rate for the year 1938-39, payable during the current year, and increases the amount of surtax on incomes exceeding £3,000. There is also provision to prevent the hardship which would arise if the full amount of the increased rates was applied to incomes slightly above the critical point.

Section 3 reduces the personal allowance from £225 to £220 in the case of a married man and from £125 to £120 in the case of a single man. Section 4 provides that the allowance in respect of earned income shall be one-fifth of the income and that the total amount of the allowance shall not exceed £300. Section 5 brings up to date the exemption given by Section 3 of the Finance Act of 1931. At the time at which that section was passed, all the surplus income from the sweepstakes went to the hospitals organising the sweep. As is known to Senators, the position now is that all surpluses are payable to the Hospitals Trust Board. Without this amendment of the law the strictly legal position would be that the sweepstake surpluses would be chargeable to income-tax in the hands of the organisers of the sweepstakes or of the Sweepstakes Committee appointed by them. As we already secure a stamp duty of 25 per cent. of such surpluses, it is as well to make it clear that these surpluses are exempt from income-tax.

Section 6 provides for an exemption, in respect of the year beginning on the 6th April, 1937, of allowances payable under Section 3 of the Army Pensions Act, 1937, to relatives of the signatories of the 1916 Proclamation. Section 7 alters the method of assessment of certain profits derived from stallion fees from Schedule D to Schedule B of the income-tax laws, so as to put Irish stallion owners in the same position as English owners in regard to the payment of income-tax on such fees. Section 8 imposes the customs duty set out in the First Schedule. The duties on engine cleaning waste, button blanks, flavouring essences and coffee essences are new, while the remaining ones are existing duties which are being reimposed in an amended form. Section 9 increases the rates of duty on tobacco, the basic increase being 8d. per pound. Sections 10 and 11 increase the duties on mineral hydrocarbon light oils.

Section 12 (a) exempts from the duties on films, films which are imported by societies formed mainly for the study of film technique and not conducted for profit. Section 12 (b) exempts from duty silent films not exceeding seven-tenths of an inch, reimported into this country, which have been produced or processed abroad by the reversion process from exposed undeveloped negative film. Section 13 amends the Finance Acts set out in the Third Schedule. The first amendment excludes fishing bait from the duty on sports requisites. The second amendment increases for protection purposes the duty on boot sundries, such as lasts, trees, patterns, etc., and the third amendment reduces the duty on engine blocks and certain other motor-car parts or works. The fourth amendment exempts from duty certain moulds and machines for making concrete blocks. The fifth amendment exempts from duty paper imported for use in the printing of paper-covered novels. Amendments Nos. 6, 7, 9 and 10 impose increased rates of duty for protective purposes. Amendment No. 8 extends the scope of an existing duty for the convenience of customs administration.

Section 14 of the Bill contains various amendments of the Customs Acts. Sub-section (1) abrogates the prohibition on the importation of extracts, essences or other concentrations of coffee or chicory contained in Section 42 of the Customs Consolidation Act, 1876. This sub-section is rendered necessary by the imposition of a duty on such extracts and essences as are set out in reference No. 15 of the First Schedule to this Bill. Sub-section (2) exempts from customs entry duty entries for reimported goods in respect of which a bill of store has been issued. Sub-section (3) is merely a drafting amendment and corrects an error made in a reference in Section 12 of the Finance Act, 1934, and is to substitute "13" for "12". Sub-section (4) of this section is intended to remove doubts regarding the rate of duty to be applied under Section 15 of the Finance (Agreement with United Kingdom) Act, 1938. Sub-section (5) redrafts sub-section (6) of Section 15 of the Finance Act, 1938, for purposes of clarification. Sub-section (6) is merely a drafting amendment to substitute the "Revenue Act, 1909" for "the Finance Act, 1909" in Section 24 (4) of the Finance Act of 1938.

Section 15 makes provision for the importation under licence, without payment of duty, of certain classes of dutiable goods in respect of which no licensing powers exist at present. The classes affected are set out in the Fourth Schedule. Section 16 terminates certain customs duties set out in the Fifth Schedule of the Bill, and Section 17 exempts from entertainments duty entertainments promoted by the Contract Bridge Association of Ireland. It will be remembered that, for some years past, we have been endeavouring to exempt from entertainments duty functions of this sort which may be of an international character and which games are played purely as amateur functions, which, as I say, may have engagements of an international character and in which the participants engage purely for sport and not for purposes of gain. In that way, we have excluded from the scope of the entertainments duty a considerable number of amusements and sports of this kind. I thought that, by a rather comprehensive amendment last year, we had cleared up all the tag ends of this exemption but, apparently, this was one case which was overlooked and did not come within the strict drafting of the section.

Section 18 provides for the setting up of more effective machinery for preventing abnormally large clearances from revenue control of imported goods, and also for prohibiting excessive deliveries of goods which are liable to excise duty whenever such excessive clearances or deliveries appear unreasonable for the ordinary requirements of trade. Section 19 (1) raises from £25 to £52 the limit for exemption from estate duty in respect of an insurance annuity payable to the widow or beneficiary of a deceased person. The present limit of £25 was fixed in 1894, and is now considered to be too low. This section will give relief in a number of necessitous cases. Sub-section (2) gives a measure of relief in the case of a first annuity, not exceeding £104, which the deceased has contracted for the benefit of any one person. Section 20 provides for the transfer to the Exchequer of £150,000 from the Road Fund. Section 21 provides for the repeal, to a limited extent, of the enactments set out in the Sixth Schedule. The repeal of Section 15 of the Finance (No. 2) Act of 1915, and Section 19 of the Finance Act of 1919, is a necessary consequence of the extended powers to refuse delivery of goods contained in Section 18 of the present Bill. Section 3 (1) of the Finance Act of 1932, relates to income tax allowances in respect of earned income, and its repeal is necessary owing to the new allowance provided for in Section 4 of the present Bill. Sections 22 and 23 are the usual sections relating to the care and management of taxes and duties, as well as the Short Title, and so on.

I ask the indulgence of the House so that I may read my contribution to the debate on this Bill. The Budget which is enshrined in the Bill gave me such a shock that my memory is seriously impaired as a result, and my remarks would, if not committed to paper, be disconnected and, perhaps, unintelligible. I should like to preface my remarks by laying down certain general principles. If any taxation is to be considered just and expedient, there are four conditions which it ought to fulfil. It should be unavoidable; it should be opportune; it should be equitable and it should be reasonable. It should be unavoidable in the sense that, on a far-sighted, prudent and judicial survery of the present and future circumstances of the community, it is necessary for maintaining the standard of living of the people. It should be opportune. It should not be imposed at a time when trade and industry are labouring in depression. It should be equitable. It should be distributed fairly and equitably over the several sections of the community according to their ability to pay. It should be reasonable. It should be within the taxable capacity of the people as a whole. Judged by any of these four principles, the proposal which the Minister has submitted to the House cannot be justified.

This Bill proposes to increase taxation and to aggravate the already too heavy burden upon our people and upon their industry. Is any member of the House satisfied that new taxation is unavoidable? The word "income" connotes to some people a bloated plutocrat and petrol is invariably associated with a Rolls Royce. But there are many weekly wage-earners, not merely pen slaves, but manual workers, now paying income-tax. Many farmers, many artisans, many labourers and many unemployed will be hit by the petrol tax. If by reasonable economies these taxes could have been avoided, the workers would have been spared. We, on these benches, feel that the ultimate incidence of any tax is very rarely restricted to the individual upon whom it first falls. We believe that the burden of it is passed down the social scale until ultimately the greater portion of it is transferred to the producers and wage-earners. If we want money for our social services, we should endeavour to secure it by cutting down, ruthlessly cutting down, wasteful and unproductive expenditure. We should rely on economies rather than on taxation. We have pointed out the wretched chicanery of segregating certain items of expenditure as abnormal and defraying the cost of them by borrowing. We have opposed borrowing because we are not prepared to mortgage the future of our country in order to indulge Ministers in their present extravagance. The principal result of such borrowing is to leave less and less of our annual revenue available for social and productive services.

There are many Departments in which economies might be sought. Are any of us in this House certain, before we impose these taxes and make it a little harder for our poorer folk to secure bread for their children, that considerable waste does not still prevail in the Army? Are any of us satisfied that no portion of the sum which it is proposed to spend this year on the Army could be saved? Or take the sum which it is proposed to spend on that circumlocution Department known as the Land Commission. Is there any member who is not satisfied that, if there was a thoroughly business administration in charge, the work of that Department could not be done with half the staff or in half the time it now occupies? Do we really need £1,600,000 worth of police in this country? What about the £1,700,000 we provide for pensions? There are, within the State, resources out of which the Budget could be balanced without imposing an additional 6d. on income or 4d. on petrol. Is this taxation opportune? The trade returns should make us hesitate before imposing an additional burden on our declining trade, upon our farmers, our workers, our unemployed and those who will soon swell that hungry army if we do not hold back the hand of the Minister for Finance.

Competition in the British market is likely to increase and in face of this intensified competition, in the very pit of our depression, when our producers are gasping for breath, the Minister for Finance and the Government tighten their grasp upon the throats of our people. Is the House going to connive at that process of industrial strangulation? Is it going to cry halt, face up to the Executive Council and say boldly: "You are taking more than the country can give, more than industry can afford and survive." The Minister proposes to increase the standard rate of income tax but he does not propose any corresponding increase in the allowances. We, on these benches, believe that we are only at the edge of the cyclone. When we get to the real storm centre conditions will be very much worse. This thing can not go on. The country cannot bear any further increase in the burdens that are already crippling our trade and our industry.

A few years ago we could fling our millions broadcast. It was necessary that the channels of patronage should be wide and that every possible element of support that could be procured in the country should be bought or suborned. Now we are faced with a different position. The spendthrift has come to reckon with the moneylenders and the debt charges which were infini-testimal in 1924-25 have gone up year by year. After six years of the Minister's optimistic Couéism our people, this once joyous Irish nation, have been turned into a nation of pessimists without hope. How can there be hope when life's burdens become intolerable? The burden of taxation upon the people has become intolerable.

It is sad and chastening to reflect how office may corrupt even the best of men. This taxation will represent an increase in the cost of production for which the producer cannot seek to compensate himself by asking higher prices. He will be between two fires— I had almost said two thieves—his competitors abroad and the Minister's tax-gatherers at home. What will happen? He will either give up the ghost and cease to produce or he will endeavour to reduce the immediate, but not the ultimate, cost of production by decreasing wages and reducing personal expenditure. By ceasing to produce, he directly creates unemployment and becomes unemployed himself. By reducing wages, he reduces the purchasing power of his employee. The cost ought to be met, not by imposing fresh taxation, but by retrenchment in respect of services which are non-productive and some of which are parasitical.

With that advice I conclude. But in concluding this speech—the best, I modestly claim, I have ever made in this House—may I express my deep indebtedness to the present Minister for Finance, the scintillations of whose financial genius, as enshrined in the Dáil debates of 1928-30, have been my chief source of inspiration.

I am glad to have an opportunity of thanking the Minister on behalf of the horse breeders, the racing community, and the people connected with the horse trade. We are deeply grateful for the assistance he has given in this Budget to racing. We are particularly thankful to him for having removed the tax from stallions. It was really a very generous gesture on his part towards that part of the community who are engaged in this industry, and I am sure that the people who will benefit by it will feel deeply grateful to the Minister for what he has done.

There is another question, namely, that of alternative markets, into which, although it may not come within the scope of the Minister's Department, I should like him to look, and perhaps, give us the benefit of his sympathetic interest. In the various countries, outside Great Britain, with which we trade, we spent last year £20,000,000. In return these countries bought a little over £2,000,000 worth of goods from us. Except the trade agreement that we have with Germany, there is not another agreement with any of the outside countries worth anything. I think that if the Minister were to handle that £20,000,000 himself he would certainly spend it to much better advantage than it has been spent in these various countries. I do not want to tax the Minister's memory or to put him to the trouble of looking up various documents to quote the adverse balances in our trade with these various countries but take just one country which the Irish people would regard as being friendly towards us, the United States. Last year in the United States we bought goods to the value of £4,704,000 odd, which shows an adverse balance of £4,591,029. That is a country in which everything which we want to sell is taxed on import, whereas very little tax is imposed on the amount of goods we take from the United States. Certainly if the Minister were in a position to propose that he should spend £5,000,000 in the United States, and if he could deal directly with the American Government, I am sure that we would have a very much better arrangement than spending so many millions there and getting so little trade from them in return. There are various other countries in which a lot could be done. Much could be done to develop home industries. The main things we have to export are agricultural produce and it would be a great help to the farmers if they could secure alternative markets to Great Britain.

I was disappointed with the Minister's statement because it was a mere dull explanation of the rather technical clauses of the Finance Bill. We thought and hoped, in view of the limited opportunity this House has for discussing the broader aspects of public finance, that the Minister would have explained in some way why it is necessary to place on the country this heavy additional burden of taxation. I remember talking to the late Minister for Agriculture, Mr. Patrick Hogan, very shortly after the present Government came into office. He said to me, what was afterwards borne out by his own conduct, "I am not going to take much practical interest in politics from now on. I know the Government have got to learn by bitter experience and nothing will stop them. As long as there is money there to spend it will be spent, and it is only when the time comes that the money is running short that it will be much good taking an active part in public life." I cannot help feeling that that is somehow borne out by events and that if Mr. Hogan were alive this would be the time that he might be disposed again to take an active part in public affairs because the country is undoubtedly faced by a very serious financial position. Let us cast our minds back to the days of another great Irishman, who did much to found this new State— Michael Collins. I remember very well, in the early days of the Provisional Government, when he said there would be a great inducement for the North to join with the Free State because our income-tax would be so low. I have not got the document here but I recollect that very clearly. I also remember, not very many years ago, when the Parliamentary Secretary to the Minister for Finance said that it would be a great move on the part of the Government to have no tax at all on income arising in this country. We have reached the stage now when, personally, I do not think it is any good going into all these niceties of tables and figures. There is only one thing to do and that is clear. Someone once said that he could see a parish church by day-light, and I think we can see pretty clearly what should be done. There is only one sound thing to be done and that is drastic retrenchment all along the line. That is, perhaps not in so many words, but practically what is implicit in the Report of the Banking Commission. I think it is serious and ominous that with this report before the public for well over a year there has been no serious suggestion on the part of the Government that they intend to apply the remedies which are contained in that report.

I was very disappointed by the Minister in the Dáil. He takes the line that it is really no concern of the Government. He first of all suggests that the people want all this expenditure and that the Government are their servants and have to give it to them or, alternatively, that it is the business of the Opposition to suggest economies; that they have suggested nothing; all they have suggested is more expenditure; therefore, the Government are justified in doing what they have done. I do suggest that that is entirely the wrong attitude. There is a serious responsibility on the Government to face up to the situation. I do not think for a moment that the Minister himself is happy. His Budget speech did not suggest he was at all happy about the State finances. That being so, it being perfectly clear that we cannot go on the way we are going, it should be the duty of the Government to tell the country it cannot go on, that something must be done. It is for them to suggest the remedy. There are doctrinaires who say that it is quite easy to go on spending gaily and nothing happens but I cannot believe that the Minister will say that. As far as one can see, in the light of sound commonsense, there is only one remedy and that is drastic retrenchment all along the line, unpleasant though it may be, and recognition of the fact that the country cannot afford all these social services, generous or otherwise. The money is not there. It would be gratifying to the House and to the country if the Minister would say that the Government has under consideration a means of examining in detail all our public expenditure by a special committee composed of people in no way connected with politics, concerned solely with sound finance, who would suggest what can be done.

Does anybody suggest for a moment that nothing can be done? Does anybody suggest that it is necessary to spend £1,000,000 more on the Land Commission than we did seven or eight years ago, or that it is necessary to spend another £1,000,000 more on relief schemes than we did seven or eight years ago? The country really cannot affort it. It is very disconcerting to find the Minister for Finance suggesting that it is not the duty of the Government to tell the country about it and to take steps to check this alarming growth of expenditure, a growth of expenditure which in the last year amounted to £2,000,000 and was only set off in any substantial measure by the cessation of payments for bounties, a thing that cannot recur, which is finally settled once for all, whereas the tendency of expenditure seems to be steadily increasing.

As I say, there is not much object in making one's case in detail, the case is so clear. In the Minister's own Budget statement we are told that the dead weight debt per head of our people has gone up £7 since 1932. We see an increase of some £5,000,000 in taxation, bearing in mind that £2,000,000 was saved on the payments to Great Britain. I must confess I was not very much impressed by the Minister's explanation of that point. He dealt with the point that when Fianna Fáil were in opposition they intended to save £2,000,000, and he showed how they did, but surely it would be more realistic if the Minister had said when in opposition "But we are hoping to spend another £7,000,000 or £8,000,000." Anybody who heard their statement at that time would not imagine that there was going to be an expenditure of £7,000,000 or £8,000,000 in spite of a saving, which was undoubtedly carried out, of £2,000,000.

There is another not very reassuring feature of the financial position in that the Budget is helped by a sugar tax owing to the fact that apparently a lesser acreage of beet is being grown. One hears in the country that it seems to be rather doubtful that the present acreage of beet will continue, unless higher prices are given for the produce. This is bound to mean increased taxation, the increased cost of sugar and such commodities. Therefore, I do feel that the Minister in this House ought, to impress Senators, to make a frank and straightforward statement on the whole subject of public finance and say that there is an intention of appointing some body of men expert in finance and not connected with politics, to look into the whole thing with a view to bringing our expenditure within the country's means.

I think it was in a broadcast from the United States that I heard a description of a true democrat as "a man who never voted in favour of a tax and never voted in against an expenditure". Now, I think there might be a certain justification found for that idea if I had been as diligent as another Senator in reading speeches made, not solely by the Minister but by other members of his party.

I am not quite sure that anybody else ever exceeded the Minister on the same line; but I want to suggest that those of us in opposition are always placed in a certain amount of difficulty. Nevertheless, if an Opposition does not frankly and definitely criticise the expenditure, I do not see how one can maintain the parliamentary system effectively. I have a very strong suspicion—which is not altogether without some justification—that there are many members of the Party supporting the present Government who would like to feel perfectly free to say exactly what they think of the present financial position. I would like to support Sir John Keane in stating that, while not for a moment suggesting that the Opposition have not got responsibility for expenditure and taxation, a lead must come from the Executive of the day. That was the attitude taken by the Minister when in opposition and I think it is the attitude that he should take now he is Minister for Finance.

Most of us who have had experience in business have had to face, at one time or another, a period when we have had to call together our principal staff and say: "The fact is, this business cannot stand this expenditure, and there will be disaster if something is not done." You have got to get together your most experienced men and have them start with the axiom that you cannot go on increasing expenditure. When you are dealing with a business, as distinct from a State, that axiom can be rather easily accepted, because if you do not take action you simply go on until you are forced into liquidation. The State can carry on for a very considerable time before the evil effect of a bad financial system is felt, or felt to the full extent. I believe that it would be a good thing if the Government would take their courage in their hands, state that we cannot go on increasing expenditure, that there will have to be adjustments in the coming year, and state frankly what the position is. If necessary, the Opposition can challenge that point of view if they wish.

I have a certain amount of sympathy with the Minister's brevity in introducing this Bill. In the first place he did not need to go into a lot of detail, because I think this is one of the Bills —at least, so far as his Budget speech is concerned—which everyone of us reads, and, therefore, we have most of the points before us. He passed over an increase in income-tax from 4/6 to 5/6 in the £ by simply mentioning "the usual provision for income-tax". It seems to me that the Government made a blunder, a blunder which I think they will regret, in not maintaining income-tax at any rate at something lower than Great Britain and Northern Ireland, even though certain other taxes had to be imposed in order to make up the difference. The Minister may say that we would have equally objected to the other taxes. We cannot say, until we see the alternative; but I believe that a definite mistake was made.

I think there is a good deal of very genuine uneasiness as to the future. The income-tax in Great Britain is 5/6 in the £ when that country is undertaking, I think, the greatest armament and most expensive armament programme in its history. We, rightly I think, and probably of necessity, are not attempting any such programme, but our income-tax is at the same rate as that of Great Britain. What would it be if we were forced— as I hope we never shall be—to even increase our armaments at a proportionate rate to that of Great Britain, if, with our present expenditure, income-tax is 5/6? I think, recognising that, if the worst happens and Europe is again at war, there will have to be a further increase in income-tax, the Minister made a mistake in going to 5/6 at the present time.

I wish to refer to another reason. Part of our State policy, and particularly the policy of the present Government, has been an attempt to establish and develop a number of industries. The income-tax at the rate of 5/6 is a very great hardship on those industries, especially when that 5/6 is charged on the full amount of such profits as are kept within the business or placed to reserve. In most other countries—certainly in Great Britain —where you have a large number of industries which are financially strong, you find that their strength to a very large extent lies in the fact that they were able, during a prosperous period, to build up substantial reserves. With those reserves they can meet a period of difficulty without endangering their existence and without any undue addition to the price to the public generally. Industries which have not adequate reserves are faced with the fact that their existence is seriously endangered unless they can hand on this increased taxation to the public. Now, the period in which the principal and largest reserves were built up in Britain was the period in which the income-tax varied from 2d. to 1/- in the £ and it is going to be extremely difficult, if not impossible, for the industries here to build up large reserves with an income-tax of 5/6 in the £.

Personally, I have always felt and I still feel, that the Government should carefully consider whether it would not be possible to make some concession, something on the lines on which earned income is allowed to individuals, to limited companies to the extent of the profits as ascertained for the year, which have not been divided or paid out in that year. If dividends were paid out of previous reserves, that would have to be counted against the assessment for the year in which they were divided. Every business finds that there is a certain amount of absolutely essential expenditure which must be made if the business is to be kept up to date. These are regarded—and no doubt properly regarded within the present law—by the Revenue Commissioners as capital expenditure, and it is very rare indeed that the sum assessed for income-tax represents the actual sum in cash which the business has made for the year. The 5/6, instead of representing something over 25 per cent., generally represents a very much larger proportion of the actual cash which has been made in profits and which can be divided to shareholders or remain in the business. I recognise that there might be certain administrative difficulties in a scheme of this kind, but I do not think that they would be insurmountable and, certainly, they should not be serious in the case of businesses where the profit is small—say under £2,000 a year. If that profit is retained, it is for the benefit of the business and the benefit of employment. I certainly think it would be a very wise step if the Government could see their way to make some concession, especially now that income-tax is at the high rate of 5/6 in the £.

Perhaps the next largest increase in taxation in this Bill is on petrol. I am inclined to agree—not that I like it— that it was natural that, when the Minister had to obtain additional money he should see whether some of it, at any rate, could not be obtained from petrol; but I think again he has made a mistake by not making an effort to meet certain difficulties arising out of that tax. We will have before us, possibly to-day, a Bill to provide for very considerable expenditure on the tourist industry. The same day we are expected to approve of taxation which adds to the cost of petrol for tourists who may come here. This is a country which is becoming an excellent country for motorists. There are few places where, within such a reasonable area, it is possible to obtain so great a variety of scenery and, if, as we hope, we get an improvement in hotels all over the country, it should be a country which should have a very considerable attraction for motorists; but if you are going to make motoring expensive, you are not going to induce tourists to come.

A few years ago, I visited Switzerland with a car. When I arrived at the boundary, I was given a card on which the number of my passport was duly entered and it was explained to me that if I had all the petrol which I purchased in Switzerland entered on that card and stayed the requisite number of days—I am not sure of the exact period, but I think it was a week or six days—I would be allowed a refund up to a fixed amount. It prevented evasions by providing that it did not apply in respect of all the petrol I wanted, but only a reasonable amount. I could therefore go to Switzerland feeling that if that State wanted their people to pay an increased tax, it did not want to take it out of tourists. I suggest that something of the kind here would not to any substantial extent reduce the State income, but would be a definite attraction to tourists. Small concessions made to tourists in Europe have undoubtedly been a very good advertisement, and, although they do not amount to very large sums, they are definitely an attraction.

I was very much surprised to find that when an amendment was moved in the Dáil with regard to the position of taxi-drivers, the Minister—I did not listen to his speech and I saw only the newspaper report—appeared to be unsympathetic, and I think he said the proposal was impracticable. These taxi-drivers are poor men, who need, to my mind, to spend any spare money they have in improving their vehicles and in other ways. They have to charge a fixed sum, which they cannot change, if they ply on the streets, and this tax is therefore something which they cannot possibly pass on. I cannot see why a concession could not be made in their case. There is definite registration. They have to be registered as owners of hackney vehicles and I cannot see why, with that registration, they could not receive a card and obtain a refund of the additional tax on petrol to a fixed amount. I quite agree that it should not be unlimited, but I think the actual cost could not be very large and a hardship on a certain class would thereby be avoided. I personally cannot see— perhaps it is due to my ignorance of administration—why that could not be done fairly easily in the case of drivers of hackney vehicles because there is specific registration and it could easily be ascertained whether or not a man has a hackney vehicle for hire.

There are one or two other important matters more or less indirectly arising out of the Bill to which I should like to refer, but, before doing so, I should like to refer to one or two minor, though interesting, items in the Bill. I have for a very considerable time advocated some concession with regard to films. This is now provided in Section 14, and I am very glad the Government have seen their way to make the concession with regard to film societies. I take it that is the purpose of the section. There is a second concession which enables development to take place outside the country of films exposed here. It applies, I take it to, 16 mm. and smaller films, and I am very glad to see that concession made. I have used these films for a long time, and when I saw in the Press a photograph of the Minister for Finance with one of these cine-cameras, I hoped that he would see the point I had in mind for a number of years. I should like to ask him, however, why exclude sound on film, if it is sub-standard? I admit that at the moment practically nobody uses it here, but it is used by amateurs in other countries, and particularly in the United States. It is a coming thing, and I cannot see how a concession could be abused. One of the reasons why I could not consider sound film myself is that the cost of processing by sending it outside would be prohibitive. This section definitely excludes it and I cannot see the reason for that exclusion, but perhaps the Minister could give a good reason. I am not a bridge player, but I was interested in the Minister's description of the concession made with regard to bridge when he spoke of exempting bridge players who did not play for the purpose of gain. I began to wonder whether it was going to help very many. However, I think that is not exactly what he meant.

Senator Parkinson raised a point, which I think is of considerable importance, when he referred to the possibilities of export trade. If you speak of the possibilities of export trade from this country, you are liable to be laughed at here. Most of our people have the idea that prices are too high and ask: "What can we expect to do in the way of export trade." There may be a certain amount of truth in that, but I believe that attitude is fundamentally wrong. I think we need an export trade and I believe it is possible to get it, but I do not believe that, in the present world conditions, it is possible to do it without active Government assistance. Perhaps I have used too strong a phrase in speaking of "active Government assistance," and should say without active interest on the part of the Government because practically no international trade of any substance is possible nowadays, except as a result of agreements between Governments. I should like to see a section of one of the State Departments, with one or two officials, paying its attention almost entirely to the question of export trade. I believe that, after a few years, the results would be more than satisfactory, but I am quite sure that certain things would have to be done. I am interested in some export trade. Manufacturers here who try to carry on export trade are very much handicapped, as compared with similar firms in Belfast, or Great Britain, because there is no export credit guarantee system in operation here. An exporter in Belfast can go to a British Government Department, pay a percentage, which varies from a half to 1 per cent., and, provided the people to whom he is exporting are approved, can, by paying that small sum as an insurance, get from the British Government a 75 per cent. guarantee that his money will be paid to him. With that guarantee, he can go to his banker and borrow more money, to continue his trade at a very low rate of interest indeed.

Without some such conditions, I do not see that our manufacturers here could hope to do an export trade. My experience is not that there have been heavy losses in export trade and I understand that the British Government does not lose money because the percentage charged is sufficient to cover losses taken over a number of years. One of the greatest difficulties exporters have to face at present is not bad debts, of which the percentage is not any higher than in home trade, but the possibility of a moratorium or exchange restrictions under which a firm may not get its money for years. No Irish manufacturers, with perhaps one or two obvious exceptions, are strong enough financially to face anything of the kind even where they could get the business. Consequently, I believe that you will never do a satisfactory export trade, so far as manufacturers are concerned, unless you have some system of export credit guarantees. Now that we have a trade agreement with Great Britain, I feel almost certain—I have no right to say this officially, because I do not know —that if our Government were to set up a similar department here, the British Government would give their experience by way of reference, so that a great deal of information would be available which would minimise the loss, if any, to the Government here. It would at present be taken advantage of only by a small number of firms, but I believe it is a matter of considerable importance.

As usual this Finance Bill includes a number of adjustments in tariffs. It is, I think, inevitable in any tariff system that every year and almost every month there have to be certain changes and adjustments. I do not criticise that because I regard it as something that is quite inevitable. I would like, however, to take this opportunity of suggesting to the Minister that the whole basis on which tariffs are charged here ought to be carefully considered and probably revised. I cannot see how this Government or their successors can properly take any steps which are going to injure the industrial policy of this country or injure the manufacturers provided they are reasonably efficient — manufacturers who have been set up or have set themselves up as a result of State policy in the last six or seven years. I am therefore assuming that this or any other Government will consider itself bound—assuming that there is reasonable efficiency—to maintain adequate protection for these manufacturers. Nevertheless, I believe that in order to provide that adequate protection, of necessity in many cases tariffs now have to be at a much higher rate than would be necessary if a better and a more efficient system was in use. At the present time almost all import duties are charged ad valorem. They are charged on the invoiced price of the goods. The Revenue Commissioners take great pains, I am quite satisfied, to do everything they can, and I believe they are very effective, generally speaking, in preventing wrong invoices and in providing that the prices on the invoices are the prices paid by the importer for the goods, whether that duty be 100 per cent., or 75 per cent., or 40 per cent., or 25 per cent., as the case may be.

It is well known that many industrial countries, or rather, many manufacturers in industrial countries find it expedient to export goods from time to time at prices considerably below the cost of production and at a rate below the market price in their own country. That is very often described by a word which I very much dislike, the word "dumping" because it is often misleading. This action on the part of manufacturers in other countries is generally a perfectly bona fide effort on the part of those countries to get rid of surplus manufacturers at a price at which they could not sell the goods if they were not surplus goods. They can only do it because they get a higher price for the goods in their own country. I think it is reasonably clear that if goods of that kind are imported here that the invoiced price can be a genuine price, but nevertheless even with the duty added a comparatively low price that is actually paid for the goods on importation. Now a comparatively small quantity of that kind of “dumping” may be disastrous to our manufacturers because we are such a small country and the number of manufacturers in any one industry is relatively small. In a country like Great Britain, which may have some 20, 30, or more factories making one class of goods as they have in many industries, the manufacturers there can reasonably afford to ignore a relatively small quantity of imported goods at “dumped” prices. Similar quantities could not be imported here without injuring the Irish manufacturer very seriously. Because of the fact that such a position exists it has become absolutely necessary for manufacturers to ask the Government to keep import duty at a high rate, a rate higher than would be absolutely necessary if one were certain that the fair market price would be charged with the duty. In Canada, duty is not charged ad valorem on the invoiced price, which is the custom here. I think to a certain extent that the same system exists in the United States, but I am more familiar with the position in Canada. The customs system here is the system that we took over from the British Government. The figure on which duty is payable in Canada is the figure which the Canadian Commissioners are satisfied to be the fair market value of the goods there. As a rule, they take the figure as the average price at which the goods would be normally sold in the country from which they were imported, but may adjust the price where the price is regarded as an abnormal one owing to extraordinary conditions, such as are to be faced with goods from Japan at the present moment. For that purpose they maintain commissioners in Great Britain. I do not know whether they have them in other countries. The British manufacturers, I believe, recognise that the Canadian system is fair, that it prevents unfair and unreasonable price cutting amongst manufacturers. They are quite willing to give correct information to the Canadian Commissioners. The result is that the system in Canada has worked reasonably and efficiently. The fair market value has been made the basis upon which the tariffs are charged. I am satisfied that it would be a great advantage if some such system could be worked here. I see no reason if it works well in Canada why it should not work well here after time and experience. I am quite satisfied that in that event our manufacturers here would be able to obtain the adequate protection which is absolutely necessary for them without such high tariffs being continued in this country. This would mean that the duty would not have to be as high on such goods as would actually have to be imported.

With a limited number of manufacturers there must always be some imports. I know that in that case the Minister for Finance may lose something in tariff revenue. He will lose if tariffs are more effective and if the tariffs are at a smaller rate. I say that because I believe that under the Canadian system the amount of goods imported would be less and the rate would be less. The Minister would probably have to impose other import duties in order to make up for the loss. Something would have to be substituted. But if so these would be duties put on frankly for the purpose of revenue.

To my mind unless this matter is faced carefully and fairly there is grave danger that there will be amongst the public a sort of reaction against Irish manufacturers because of high import duties which are put on goods which have to be imported because they cannot be obtained here, and the duty is at a high rate. The public, perhaps naturally, is inclined to blame the Irish manufacturers for these high rates, whereas in fact the provision is necessary because the Government at present has no other way of dealing with the import of goods at less than their usual market value, which is usually called "dumping". I want to suggest that the system in vogue in Canada and other countries should be carefully investigated. I would suggest that the Senators would carefully look into it themselves. I would also advise the manufacturers to examine it and try to get all the information they can. This question should be very fully examined. I believe if this were done we would discover something which would be of very definite advantage to the country and prove it so clearly that the Government would have to adopt it.

I think there is a danger that you may get an ill-considered, an unreasonable and not fully thought out demand for a reduction of tariffs: that reductions may be carried through political feeling or through political exigencies, and that if you have that done without any change in the system under which the duty is payable it may be disastrous to industry and that no matter what Government was in power it would be obliged to make changes again. I, therefore, suggest to the Minister that in considering his policy this year he ought to carefully look into the whole plan adopted, particularly by Canada, and those other countries where the duty is chargeable on the fair market value and not on the ad valorem value as is the case in this country.

The Finance Bill, which the Minister is asking the House to give its assent to, may be said, I suppose, to epitomise the policy of the Administration. In approaching a discussion on this measure none of us, I suppose, can do better than approach it from the angle we best understand. The man from the country must inevitably look on the Government's policy, as expressed in the Finance Bill, in its effects and consequences on the land of the country, and on the people who occupy that land. I always feel at a slight disadvantage in attempting to discuss our agricultural problems in the presence of the Minister for Finance. It is difficult to talk about things in rural Ireland with a desire to have them bettered unless you feel that you are talking to a Minister who has got it in his bones and in his blood: who will know and understand your language, as he ought to, if he is to deal adequately with the problems which this country has to face.

The great trouble, unfortunately, is that we have enunciated through this Finance Bill the policy of an Executive which, as I have said before and repeat now, is of a predominantly urban mind. While that is so, we have here an agricultural country, composed mainly of small farmers. The members of the Executive, however well-meaning they may be, have the urban outlook, and from the start have attempted to build up here an urban civilisation. It was what they knew best: the kind of life they understood, and, being naturally accustomed to this more comfortable kind of life, they felt when they came into office that it was the best type of existence for us. During the years that have since elapsed, they have proceeded along that line. I would not quarrel with the Executive in the administration of its policy, the policy that we find enunciated in this finance measure, for the reconstruction of our urban life and the bettering of our urban civilisation, if they had managed to bring that about before they broke the other, but to-day we have reached the stage when they have almost broken the one and have got nothing to replace it.

Frankly, I do not think—I do not say this with any feeling of pleasure—that any country in Europe, which won its freedom 17 years ago, can to-day show as little evidence of progress in those 17 years as the Government of this country. Neither in the cultural nor in the economic sense can we see any evidence around us of that advance which we had hoped would come to us when we had the management and control of our own affairs in our own hands. We have misused our opportunities, and we cannot, as other small nations in Europe can, truthfully leave the blame on the disturbed conditions outside. Most of the disturbance was made by ourselves, by our own people on our own people, and so it is we have a declining population. Is there any other small country in Europe that has lost such a big percentage of its population, in the same period of time, as we have? We have a declining populalation, our land is impoverished and our people are broken and apathetic. In addition, you have here to-day the destruction of moral values which it would be impossible to estimate.

One could get up here and say, as the Minister would like, that he and those associated with him have achieved very remarkable things. One could say quite a number of pleasant things, but I agree with Senator Douglas that that is not the function of responsible Senators. The responsibility is on us to speak the truth, to speak of things as we know them to be. If things are going to be improved, then that can only be brought about by facing the facts. We must try to understand the facts, and, most important of all, try to get the other fellow to understand them. None of us finds fault with the Minister in the discharge of his function of levying taxation. He must do that. My quarrel with him is, not so much that the amount of taxation is so overwhelmingly great and so much beyond our capacity to bear, as that he is levying it in such a manner and distributing it over our people in such a way as to create here a situation which displays sterility, as far as the Minister is concerned, to attempt anything constructive. The Minister is spreading that heavy burden of taxation—the heaviest that this country has ever had to carry, except on one occasion since the signing of the Treaty—over fewer people and over a lower level of production. The last report in our trade Journal indicated that our volume of exports last year was down by 7 per cent. as compared with the previous period. The Minister is seeking to raise off a debilitated nation a huge sum of money, so very little of which is going to be applied in any constructive fashion whatever.

The Minister, of course, will tell us that he need not raise so much taxation if it be pointed out to him wherein savings can be made. I remember that many years ago, in the other House, when the level of expenditure was not anything approaching what it is to-day, we sat down and pointed out where savings could be effected. The Minister came along in his own time, and, in going through the same Estimates, pointed out where, in his opinion, savings could be effected. It is, of course, always easy to spend the other fellow's money. The truth of the situation is that the Minister, and the Ministry of which he is a member, are spending other people's money. My quarrel is not so much that the money is being spent or that they are leaving us with less than we had before, but that none of it is being spent in a constructive way to help to increase the production which the country so badly needs, if even a lower level of expenditure is to be maintained in the future.

The Minister himself, in discussing in the other House this question of agricultural production particularly, said "Like Deputy Dillon, I, too, feel that we have to expand our agricultural exports. I feel that we must do that in order, as I said before, to compensate ourselves for the loss of externally derived income which results from the fact that we have had, for one reason or another, to realise our investments abroad." I should like the Minister to point out to us where in his Budget he is making any provision for the production of agricultural commodities that are going to get into the export market. My quarrel with the Minister's Budget is that he is spending money foolishly, and he has spent it very foolishly in the past. Had he spent it more wisely —had he even attempted to do some of the things that were urged upon him in this House—we would have a greater volume of agricultural exports available for sale which would go to some extent to maintain the position that, unless we are to come down to a much lower standard of living in this country, can only be maintained by depleting our external assets year after year. The economic war left the country and the farmer very much poorer than the Minister is prepared to admit. I am speaking of farmers who have to try to live on their farms, and if I am to be contradicted, let me be contradicted by such a farmer, or at least by one who has to live on his farm, say, with the addition of £200 or £300 a year from some external source other than his land. I am prepared to state that, in my judgement, the farmer was much better able to pay the full annuity before the economic war than to pay the half-annuity to-day, and that when he had paid the full annuity in those days he had much more left than he has to-day after paying the half-annuity.

On what grounds does the Senator make that assertion?

On the grounds of my own personal experience, and the experience of every farmer I meet.

The present prices for agricultural produce do not justify it.

I do not know whether or not the Senator comes within the category which I have classified as being able to answer me, but he can make his own case from his own point of view. The farmers of this country had their resources depleted to an alarming degree during the economic war. What did they get for it? We paid £35,000,000 to Britain, and we paid £10,000,000 afterwards to settle the war which we had expected to win.

We saved £90,000,000.

That is the trouble; that is the matter to which I want to refer. We see no signs of that whatever. We are told we saved it. It may be saved for a future generation, but it is of no great value to me to tell me that my son in 25 years' time may be a great deal better off than I am. The Minister says we won the war. The farmers have no doubt that it was lost. They lost, even though there may have been a victory from the Minister's point of view or the point of view of the political Party which waged the war. None of the proofs of that victory has been made available to the farmer. He had to spend and spend in order to carry on; he had to deplete his capital resources of every description. His land is poorer; he himself is poorer— poorer in physique and poorer in spirit. His land is poorer. His cattle are poorer. Look how many thousands of them were taken from the farmers this year. Why are they poorer? They are poorer because the farmers were too poor to buy the necessary food for them. In addition to his stock being poorer and producing poorer progeny, his machines on the land are not what they ought to be, and generally the position of our farming community to-day is much lower than it was in 1932.

In addition to the economic war, the Minister has to remember that he started another policy side by side with it. Perhaps it was not he who started it; it was started by the Minister for Industry and Commerce and the Cabinet assented to it. The fruits of that campaign, as far as the farmer is concerned, are that to-day we have the position that when the farmer goes out to buy he has got to have £170 or £175 in order to buy what he would get for £100 in 1914, but when he goes out to sell he gets only £112 or £113 or £115 as against £100 in 1914. How is he going to get £175 worth of goods for £115, unless he goes out and sells more off his land than he ought to sell off his land if he is to keep the capital goods which are essential for his production? That is the problem we are facing in the country. While the Minister, in his flights of poetic imagination, can tell the farmers that they are getting £10,000,000 free, and ought to be very thankful for their treatment, the farmer sees no signs of it. The only result of this situation is that conditions in the country are much graver than the present political Party in power are prepared to admit. The trouble, as I see it, is that that cannot be put right unless there is admission of the fact that the situation is grave.

We have evidence here that our external assets have been depleted from the figure of £72,000,000 in 1934 to £61,000,000 in 1938. As I said earlier, if we are going to keep up the standard of life which we would like to see our people enjoying, and without which they cannot pretend to be living up to any recognised modern standard of culture or the like, our production has got to be increased to a much greater extent than we are capable of doing to-day. My feeling is that the policy of the Minister which, on the one hand, admits that increased agricultural exports are essential for our well-being here, and his policy, on the other hand—sterile, fruitless as it is— which is making no effort whatever to get us the increased agricultural production or increased agricultural exports, are most inconsistent. If the Minister were doing something to get us increased agricultural production, he would have any amount of backing from this side of the House, and the criticisms that are offered about his Finance Bill and his finance policy would not be anything like what they are. We quarrel, of course, and rightly so, with all the hundreds of thousands of pounds spent on the alcohol factories, and with all this money that is being spent on peat, although there is a good deal to be said for experimenting on peat, when so much of it could be profitably employed on the land, the possibilities of which we fully understand.

That is what is disturbing the people in the country who believe in the land, and believe in the possibility of giving our people a future here. The Minister has been urged time and again to make it possible for our people to go into greater production. A couple of weeks ago here we had a motion in this House, sponsored by Senator Counihan and Senator Johnston. It was not, apparently, acceptable to the right-hand side of the House. Whether they were right or wrong is a matter of history now. But, whether the Minister likes it or not, unless he is prepared to make provision for credit to enable us to go into greater agricultural production in this country he is seriously imperilling the whole future financial stability of the State. As Senator Johnston pointed out on another occasion, the position of our sterling assets day after day is being weakened if the volume of our agricultural exports continues to fall. With fewer people to work on the land and less capacity on the part of those who stay to produce, these exports must inevitably fall. Unless that is counterbalanced by some action on the part of the Minister he will have some day, perhaps, or his successor will have, to take very bold action to put right a position which is not too difficult to save at the moment, but which, apparently, the Minister has not the courage to tackle.

In days like these when people are thinking in terms of war, and thinking how futile any efforts of ours in the matter of expenditure on armaments must be for the protection of our State, or our lives, it is natural that our people should turn to those other fields where money can be usefully and fruitfully spent. What is the justification for spending money on armaments, either on ports or guns, or anything else, to defend a country where the land is not being worked and will not be worked by the people because the Minister for Finance will not give them a chance? What is the justification for spending money on the production of armaments, or a scheme of defence in this country when a much better scheme of defence would be the production of more food? In war what is as essential as food? Is not food the life of all? While the Minister will spend money on the ports and alcohol factories, and the like of that, he will spend no money to enable the farmers to produce more food. Food can be sold outside the country just as well as it can be consumed inside the country.

If the Minister, later on, is faced with the cry, which is growing in the country, that because the credit position of this country is not right we must break the link with sterling, we must depreciate the value of our currency and so on, make no mistake about it, the Minister will have played his part in creating that situation. You cannot keep thousands and thousands of people idle in the country when they see that they could be usefully employed if there was money to employ them, and when they realise that the Minister could make that money available by an effort on his part, and that he will not do it, either because he has not the courage to do it, or because he does not understand his country. It may be a combination of both.

I believe that what we want in the way of a financial policy is to consider particularly the capacity of the people to carry the burden of taxation which the Minister levies. The Minister, in our present condition, has put upon the people a burden far beyond their capacity to bear. He has done that without making any effort to make them better fitted to bear the burden which they have to carry. If he played his part, and exercised the power which he can get, as a Minister of the State, to make our people better fitted to do the work that is there for them to do in their own country by obtaining the credits that are necessary for the working of our land, there would not be half as much criticism about heavy budgetary expenditure, because expenditure is great or small in accordance with the capacity of the man to bear the expenditure.

When the Minister tells us that there is no credit available for agriculture and, at the same time, the Minister declares that greater agricultural exports are essential for our stability, financial and otherwise, when we know the Minister himself has, perhaps from £14,000,000 to £16,000,000 of securities over which he has control, in England, and when, apparently, none of that can be made available for the farmers; when we are told that there is £35,000,000 on deposit in the Irish banks, the property of farmers, invested at 1 per cent., and that none of that seems to be available to invest in further farming effort in this country except at a rate——

Surely it is available to the owners if they want it?

I am not talking about the men who have the deposits. I am talking about the people who have no deposits and about the money which is on deposit in the banks at 1 per cent., and 1½ per cent. if the amount be over £2,000. None of that money can go to these people except at 6 per cent. interest, and then only with security which, apparently, a great many are not able to produce. It is creating a situation in this country which is very dangerous indeed. The Minister has resolutely refused to face up to that situation. I believe his failure is going to create a very unhappy condition. We are going to have in the matter of our production a continuous drop at the very time when we should be getting greater yields of every kind and description. That situation has arisen because of the waste and the dissipation of effort which has gone on since we got the government of the country into our own hands. Until the Minister, or his successor, sees fit to understand and to realise that the land of the country and the farmers are the country's greatest asset and is prepared to adopt a financial policy that will give these producers a chance, every finance measure which the Minister may bring in, based on the conditions which we find to-day, must meet with opposition.

I share the feeling of Senator Sir John Keane that on a Bill as important as this we are entitled to expect some statement of policy from the Minister, and I hope confidently that, when replying to this debate, the Minister will atone for the rather arid nature of the remarks by which he introduced the Bill to us by telling us frankly and fully what the ideas of the Government are about the future.

Are we to assume that the Government see no hope of reducing the size of future Budgets? Are we to assume even that Budgets in future are to go on increasing, as they have increased during the past few years? Or may we, on the contrary, believe that some careful examination is being made by somebody, either in the Government, or out of the Government but under the instruction of the Government, to see where economies are possible? In the second year of office of the present Government they introduced a Bill which was called the Temporary Economies Bill, and which has been rather generally forgotten by this time. The fate of that Bill was unhappy. It may have been ill-conceived, but, at any rate, the Minister introduced it, as I think in good faith, as a measure of economy. It was received with most bitter hostility by all Parties (other than supporters of the Government) except the Centre Party, and even by the supporters of the Government, the support given to the Bill was very tepid. An experience of that kind, no doubt, tends to discourage a Government from doing anything in the way of economy because, even if the particular provisions in that Bill were ill-conceived, were badly chosen, the general course of the debates upon the Bill were such as to intimidate a Government from proposing any sort of economy at all.

It is true, as several Senators have said, that a Government itself must take the responsibility of considering whether economy is possible and making proposals for it, and that it is not discharging its duties by merely saying to the Opposition, "You criticise all this expenditure; very well, suggest what is to be done in the way of economy." The Government's responsibilities are heavier than that; but I do think that, at the same time, it ought to be fully realised that there is a responsibility also on Opposition Deputies and Senators, and that those who are at all influenced by love of their country must resist the temptation that is offered to them by every proposal of a Government for any sort of economy to oppose it and use it as a lever for putting the Government out of office or making the Government unpopular. The responsibility of producing a change of mind in this country on the subject of public expenditure is a responsibility that rests on the shoulders of every Deputy and every Senator, and if, in speechifying all through the country, every public representative were to remember that he could do something along those lines, a great deal might be accomplished. It has not been my experience, at any rate, that the country people resent being talked to about the importance of public thrift or the importance of private thrift, but they hear all too little about it. There have been one or two speeches lately on the subject from a strong supporter of the Government, Deputy Childers, and it would be very interesting to know to what extent, if at all, his views are shared by his colleagues in that Party. I cannot believe that any Government will have the courage to do anything really important in the way of economising unless the rank and file of Deputies and Senators prepare the way for them throughout the country by explaining to the people the seriousness of the financial position.

It is not an exaggeration to call our financial position "serious". Needless to say, we are by no means alone in the world in that respect. There are unpleasantly few countries whose financial position is not serious in the appalling times in which we are living, but we differ from other countries in this: that we have hardly any excuse for having got into a serious financial position. That we have done so is the most amazing upset of the theories and doctrines preached by nationalists ever since the Union—and, indeed, before the Union. It has always been maintained that, if only we could escape from the grasp of the British, if only we could escape from British taxation, from the brutal hand of the Saxon which was suppressing our trade—the moment that was accomplished we would, in the words of Wolfe Tone, "go up like a balloon". We have not gone up "like a balloon". Our taxes are heavier than they were under the British, and what have we to show for it? Has the material prosperity of our people been enhanced to any appreciable extent by the fact that we have been managing our own finances for the last 17 years? It does really look as if, as Senator Baxter says, we have been mismanaging our affairs very badly. Or, perhaps, we have only been mismanaging them rather badly; but the ideas that were held about our financial situation by nationalists throughout the whole of the nineteenth century were absolutely false. It has got to be realised that the whole claim that we were overtaxed by the British was based on the belief that our taxable capacity was lower than that of the British. It was not alleged that we were overtaxed because more was being drawn from us in taxation than was being spent upon us. That was not the allegation and that was not the fact—certainly, as regards the latter part of the British régime. The idea was that there was something fundamentally wrong in a people as poor as we were being subjected to anything like the same taxation as the British were.

Here we are on our own, without having to join in this terrific armament race except to a comparatively paltry extent, without any disabilities to prevent us from starting any industry in the world we like and, nevertheless, we have these high taxes. It is not alone that we have escaped the appalling military dangers of other countries which have forced them to extravagant expenditure, but we have also escaped economic disadvantages of other countries, because what other country is there in the entire world that had, at the same time, a free hand to put on any tariffs it liked in order to start any industries it liked within its shores, and also a free market for its agricultural produce at its door—a market into which the whole of the other agricultural countries of the world were eager to get? In spite of these amazing advantages and exemptions, we have managed to get into a serious financial position.

The Minister indicated in the other House that the position would become far more serious if there was a European war. That I do not doubt. But I must say that a large number of people in this country behave as if they did not realise that at all, behave as if they thought that the thing that would be the salvation of this country would be a European war. A large number of people who are seeking to weaken British power and British prestige in every part of the world seem to be utterly regardless of the fact that the result of doing so might be to contribute to a European war, and that that European war might mean not merely the temporary but the permanent downfall of British prosperity and power. Still less do they seem to realise that the downfall of British prosperity would mean, with absolute certainty, the downfall of any such prosperity as we do possess in this country.

If the Minister says that a European war would produce a far more serious financial and economic position here, I think very few could be found to dispute that. At any rate, I do not know of any argument that could be used to the contrary. I should like to know what is going to happen even if there is not a European war. What is the Minister's view about the future? Does he see any hope of improvement? Is he able to tell us if he can see a situation coming when taxes will be less or, at any rate, when taxes will not be more? Can he see a situation coming in which borrowing at low rates will be easier or, at any rate, will not be more difficult? In a debate like this, on a Bill imposing such extremely heavy taxes, we have a right to expect that when the Minister comes to reply he will tell us as frankly and as fully as he can what his view of the future is, and what is the Government's policy to meet it.

I do not intend to follow Senator Baxter in discussing the economic war. I am sure we have all heard enough about the economic war, and that we are all anxious to forget it. For my part, I never want to hear another word about the economic war. I agree with Senator Baxter, that the principal reason why appeals to the Minister and to the Government for relief for farmers are turned down is because they have, to a great extent, the city or the urban outlook. Their associations are with the cities and the urban areas, and they do not understand the difficulties under which agriculturists suffer. That is the principal reason why they have been so callous regarding appeals for relief for farmers. The Minister is always able to procure money for every purpose except for the relief of farmers. The Government seem to be satisfied if they see Dublin expanding. Everything is considered prosperous if there are more houses being built in every direction around the city. They forget where the money is coming from. The house-building schemes and the prosperity that Dublin enjoys at present at the expense of the country will suddenly cease unless we are able to expand our agricultural exports. The only hope we have of maintaining our present standard of living, our present social services, or continuing, even in a smaller way, the building schemes is by greater exports of agricultural produce. After all, agricultural produce is the only thing we have to export.

The first necessity for expanding our agricultural produce is the creation of credit or working capital for farmers. When we get that credit and working capital it will enable this country to export very much more, and to export better quality produce of the right sort. The principal reason I intervened in the debate is to mention that some months ago I sent an outline of a proposal to the Minister which would create credit or working capital for farmers. The Minister received that proposal sympathetically, but nothing has been done. It was a scheme that was approved of by the best brains in this House, by financial experts, and to a limited extent by banks; but the Minister and the Government do not seem to be inclined to do anything about it. I want publicly to appeal to the Minister to do what the motion passed by the Seanad asked him to do—to convene a conference representative of the Government, the banks and farmers to consider the whole question of credit or working capital for farmers. The scheme sent in need not come into it, but I am sure if the Minister called a conference, some scheme would be evolved from their united efforts that would be of the greatest advantage to the farmers and to the country as a whole. I hope the Minister will see his way to concede to that appeal.

I want to ask if we can hope to hear some speakers from the other side of the House. I have been listening to speeches which more or less reflect my own views, but I should like to hear someone who is in favour of the Bill, especially as I had not an opportunity of hearing the Minister's opening statement.

Are we not to hear anyone from the Government Benches? Is there no one on the Government side to defend the Minister? Is he to be left to himself? I have great sympathy with him.

Some of the other speakers have dealt with many of the things that I proposed to refer to on this Bill. There are one or two important points that arise, and in view of the fact that a Finance Bill puts on paper proposals by which the Government is going to collect money to carry out its policy, I think a very definite pronouncement should be made by the responsible Minister on the important questions raised in a House like this, where we are endeavouring, as far as we possibly can, to do things from a non-Party and non-political point of view. I wish to make only constructive suggestions. In this particular case I find it extremely hard, when one disagrees with a very great deal of the economic policy which the Government is adopting, to find anything to say that is really constructive. I must, therefore, ask the Minister whether it is proposed to go on spending, as he suggested, if the position is worse next year, and whether it is the intention of the Government to implement in any direction whatsoever the report of the Banking Commission. I admit that in some directions that report was very conservative, or a sort of text book not to be used actually for such work. We have taken no notice of it whatever, but go on in a rather highly irresponsible way, thinking in millions when we ought to be really thinking in pounds. When we remember the figures quoted by Senator Baxter — a reduction from £74,000,000 to £61,000,000 in external investments— we ought to look at these figures with all the noughts taken off. The farmer found that £74 was reduced to £61, and that last year that amount was further reduced by £3 10s.—that is the way we should look at finance in this country. Instead of being more careful, we go on spending at the same rate as before. Our Government financial structure is built up with subsidies, guarantees and taxes. That is a very fragile thing, and from day to day is being altered. It is quite clear that while the balance is checked by expenditure on wages and salaries, if war comes it will fall to pieces like a pack of cards.

Senator Parkinson mentioned our export trade. I agree with him thoroughly that, if the Minister could possibly do it, some better arrangement should be made with the United States of America, where millions of our young people are living. The United States have an adverse balance of some £4,000,000 with us instead of it being the other way round. There might, for instance, be some arrangement made in connection with the Baltimore fish trade, or they could take thousands of horses from us. All those things should be gone into with a view to improving matters.

I think the increase in the rate of income-tax is an unfortunate thing, not because it bears more on one class than another, but because in actual fact we have not got anything like the responsibilities which England has. Although the actual figure in regard to income-tax in England and Ireland is the same, the operation of the tax in this country is much more considerable than it is in England.

There are one or two things that occurred in the debate with which I do not agree. Senator MacDermot mentioned the Economy Act. The Minister, at one time in the last Parliament, made an attempt to effect some economies. In certain directions we resisted them because, I think, they were not very well picked. I do not think any credit should be given for that economy legislation, because it arose simply out of difficulties connected with the economic war.

A point was raised by Senator Baxter on the question of armaments. In this connection we should not seek to shirk our responsibilities. We aspire to be a sovereign nation; we hear people saying that every day. The Prime Minister came here about a month ago and talked to us on that subject for an hour. If we aspire to be a sovereign nation, we must shoulder some portion of our responsibilities. We cannot remain entirely unarmed and endeavour to hide behind the British forces, whom we have done all we can to get rid of, and still be a sovereign nation. If there is a war, the British forces will be fighting to keep themselves and, incidentally, to prevent our becoming a German colony.

Chualamar a lán gearáin indiu i dtaobh ceist seo an airgid agus 'sé an dream céadna a dheineann na gearáin is a dheineann gearáin i dtaobh na talmhan. Tá a lán airgid á chaitheamh indiu ar na seirbhisí puiblí agus badh mhaith liom dá mbeadh siad níos ísle ach níor rinneadh aon tagairt do seo—an méid atá á caitheamh anois nach raibh á caitheamh ag na nGall nuair a bhí siad i réim annso ar na bochta agus ar na feirmeacha agus leis na déantúsaí agus rudaí mar sin. Tá an-chuid den airgid ag dul ag cuidiú le muinntir na tíre agus ar ndóigh ní gearán é sin. Ma's locht é sin le dream amháin ní mar sin le dream eile é. Tá 'fhios agam go bhfuil obair mhaith á dheanamh dos na feirmeoirí, gídh gur chualamar an gnáth-ologón annseo indiu mar gheall ortha. Ní'l na feirmeoirí ag díol as na feirmeacha anois an méid a bhí siad ag íoc nuair bhí mise 'am gharsúin. Ní'l siad ag íoc acht tuairim is an cheathramhadh cuid. D'isliú an cios sin dhá uair. Fadó bhí ortha síntiús bliadhna d'íoc mar gheall ar luacháil na bfeirmeacha agus maitheadh a leath sin dóibh. Mar sin féin ní'l siad sásta. Dar leobhtha nach féidir dul ar aghaidh leis an feirmeoireacht agus cad cuige nach féidir? Nach bhfuil na feirmeacha aca? Nach bhfuil talamh na tíre aca agus nach féidir leobh slighe beatha a bhaint as. Má theastuigheann an talamh uaimse, nó uaitse, nó ó dhuine ar bith, ní thiubh-raidh na feirmeoirí an talamh seo in aisge dúinn agus má theastuigheann an talamh ó'n tír iomlán le h-aghaidh obair forghaoiseachta nó aon rud mar sin nó le roinnt ar daoine eile a bhainfheadh feidhm as, tógann siad gearán milteannach; bíonn rí-rá aca mar gheall ar an talamh sin a thógaint uatha.

Tá's againn nach bhfuil forghaoiseachta, cuir i geás, ag dul ar aghaidh ins an tír seo mar ba cheart, nó a leath mar ba cheart. Sé'n leithscéal is mó a thug an t-Aire Tailte annso dúinn nach féidir leis an talamh fhagháil. Ní hé an talamh is fearr atá ag teastáil do'n ghnó sin acht sléibhte agus mar sin. Agus mar sin fhéin nuair a theastuigheann beagán talmhan uainn chun crann do chur tá rí-rá agus éirghe amach. Ní féidir dul ar aghaidh leis an obair. Anois, tá mé tuirseach ag éisteacht leis seo agus ba mhaith liom an focal seo a rádh in' aghaidh.

Mar gheall ar an tionnscal agus an saothar sin: nuair a bhí an tír seo fé na nGall dubhradh linn go léir gur cuireadh deire leis an tionnscal agus déantús ins an tír seo agus gurab é an t-aon rud amháin a bhí uainn ré na Gall do chur as an tír go bhféadaimís dul ar aghaidh agus rudaí a dhéanamh dúinn fhéin. Fuaramar amach nach bhféadaimís é sin a dhéanamh de bhrigh nach rabh siad suidhte againn-ne acht go rabh siad suidhte aca. B'fhéidir leo earraí d'iompáil isteach ins an tír seo fé luach margadh agus b'éigeann dúinn cáin cosanta nó tariff a chur suas le h-aghaidh sin. Caithimíd é sin do dhéanamh agus is fiú é dhéanamh. Caithimid gach rud a dhéanamh ionnus go bhféadaimís slighe bheatha a bhaint as an talamh agus rudaí eile a dhéanamh dúinn fhéin. Sin é an rud atáimid ag aimsiú. Molaim don Riaghaltas dul ar aghaidh mar atá siad fé láthair, bheith curamach gan airgead nea-riachtanach a chaitheamh má's féidir é, acht gan dul siar agus gach rud a dhéanamh chun na déantúsaí a chosaint.

Ta daoine go leor ins an tír seo nach bhfuil talamh aca. Molaim dóibh glacadh sleán agus dul ag obair agus toradh a bhaint as an méid atá aca. Sílim go mba cheart do'n Riaghaltas dul ar aghaidh le roinnt na talmhan feasta agus má's mian leis na feirmeoirí an talamh a choinneail 'na lámhaibh fhéin dul ar aghaidh leis an saothar bhealach nach bhfuil siad ag dul fé láthair. Sin iad mo thuairmí ar an gceist.

It was not my intention to engage in the debate, but a challenge has been more or less thrown out to the Senators on this side of the House, and I feel disposed to accept that challenge. I think that the Budget, generally speaking, was taken very favourably throughout the country, and I think it is generally accepted that the weight that is put on the shoulders of the taxpayers has been fairly distributed. I admit that the income-tax payer is not now the luxury man that he was in days gone by, and the income-tax claim has come to the door of people with very small incomes at the present time, but, generally speaking, I think it is accepted throughout the country and throughout the State that those who are best able to pay are called upon to pay, and that the poorer classes have been allowed to amble along in their own way without the weight of any extra taxation being put on such commodities as tea, sugar or other necessary foodstuffs.

Much has been said about the disabilities under which a certain section of the community, the farmers, have been suffering. I am not going to dispute that, nor am I going to dispute that they have their own anxieties and responsibilities. But what surprises me most is that nobody ever seems to discuss the troubles or disabilities of the big section of the community that lives in the towns and villages, and even in the cities, of this country. Some Senator mentioned the economic war and said, I think, that he hoped never to see such a thing here again, and neither do I, but during the general depression—even leaving the economic war out of it altogether— although the farmers certainly had a very bad time, they were the one section of the community that the Government took into consideration at the time. The farmers got a reduction of one-half of their annuities; all their produce was subsidised, and everything that could be done, within reasonable bounds, was done to help to tide the farmers over that particular period. Take the case, however, of the people living in the towns and villages, who depend on the farmer and whose incomes entirely depend on the prosperity of the farmer. When the farmer went down, the people living in the towns and villages went down proportionately, but no Department of the Government, no Minister, nor even our public representatives, ever thought of putting the case of these people before the Government. They got no reduction in their rents. Their rates actually increased; the property tax increased very considerably, and in every way their living expenses increased without their getting any subsidy of any kind whatsoever.

They are the one section of the community, to my mind, that have suffered most during the depression here. We hear from time to time that there is a Town Tenants Bill coming along; but it never seems to come along, and the fact is that, at the present time, when a person's lease of his house falls in, instead of getting a reduction in the rent, there is an immediate increase. The townspeople are suffering very severely in that way, and, in addition to that, it must be remembered that business has left the towns. Owing to lorries, vans, and various other means of transport, the people are not going into the towns now, because their goods are now delivered right at their doors, with the result that business in the towns is seriously injured.

I can see the time coming—whether we like to admit it or not, and whether it will be embodied in some future Bill—when the towns must be de-urbanised. Any town with about 10,000 of a population is incapable of carrying two heavy rates at the present time, that is, an urban rate and the town rate. We will have to be de-urbanised. I admit, of course, that where moneys are being borrowed for certain purposes in an urban area, provision must be made within the urban area for the repayment of that money. In most cases, however, moneys borrowed are what I should describe as self-satisfying, for want of a better word. What I mean is that the various building schemes, to my personal knowledge, are paying their way, and there is no loss on them. For instance, there was the Small Dwellings (Acquisition) Act, and to my own knowledge that has been most successful, and the plan has paid its way, and in our area we had not a single penny of arrears in connection with any of the houses built under that plan. The same applies to the Workmen's Dwellings Act. The plans there are paying their way, and there will be no loss to any future Administration.

The position at the present moment is, you have really, as it were, two systems of government in these areas where one should suffice. You have the urban council in a county, and the county council, and there is no reason why the one body should not suffice. As things are, the urban areas will not be in a position to meet the dual liability that is on them at the present time. Perhaps that does not entirely come within the scope of this Finance Bill, but as I understand that there is a Bill to deal with this matter on the way, I should like these considerations to be borne in mind, and that more interest should be taken in the people who live in the towns because something must be done for them.

As far as the Finance Bill is concerned, I do say, of course, that due consideration should be had to the necessities of the State, and that due consideration should also be had to the amount of money that has to be raised in order to keep up the various services and to see that the money is distributed in the most equitable way possible. Some Senator who spoke previously—I think it was Senator MacDermot—said that the taxes had increased very considerably, and he put the query: "What can we see for them?" Well now, I think he would be a very blind man who could not see something for these taxes. If you go down the country, either by road or rail, you can see myriads of lovely new houses springing up everywhere instead of the dirty cabins and mud hovels in which the people had to exist previously—I say exist, because you could not call it living. You can see these lovely new houses everywhere, and new suburban districts have sprung up around all the towns and villages. The same is true of the rural areas also. Most of the farmers are either improving their houses or building new houses with the aid the Government has provided through the taxpayer. That is what we have to see from the taxes. In the same way, if you go along any country road you can see that, in many cases, where big ranches of land that were run by a herd and a dog existed previously, there are now 10 or 12 prosperous families existing on that one ranch, with nice houses and nice gardens and nicely laid-out fields. Surely, as I say, he is a very blind person who cannot see that something has been done for the money that has been taken from the people in taxes. Generally speaking, I think any fair-minded man will say that there is reasonably good value given for the taxes which the people are called upon to pay.

Listening to Senator MacDermot, who told us that some of us were inclined to look forward some 20 years ago to the time when we would go up in a balloon, and listening afterwards to my friend who has just spoken about the flight from the towns back to the land, it seems to me tolerably certain that somebody is in a balloon at the moment. Possibly it may be myself. But to come back to solid earth, I think that if I ask the Minister to restore the £150,000 taken from the Road Fund, to which public bodies fondly look forward, I think it will be agreed that I am dealing with practical politics. I think it cannot be denied, no matter how much Senator Honan and others may deplore the fact, that there has been a war, and I venture to suggest as a farmer, again on solid ground, an economic war. I would further venture to contradict the last speaker when he told us that the farmers have their own grievances. I should say that the farmers have the nation's grievances, and have borne them. How they have borne them is reflected in the fact that there are now 40,000 less agricultural labourers employed on the land than there were six years ago. That speaks more eloquently than any words could convey the state of the agricultural industry to-day.

I think it must be admitted that county councils have been very severely hit by the fact that it is possible to bring forward any scheme that the county may require and that only one-third of the expenditure is provided by the national Exchequer. The balance must be borne by the rates. The fact that over a period of almost 30 years unceasing demands have been made on public bodies for expenditure of various kinds, has driven the rates from the level at which they stood some years ago to the present impossible position. We are told, of course, that the annuities have been remitted but that, in my opinion, is no justification for the increasing burdens thrown on local authorities. The annuities were a fixed figure that could be paid with a greater degree of stability, or solidity if you like, and you knew exactly where you were, but nowadays when you come to pay rates and when you try to look forward for, say, two years, you find it impossible to know where you will be. Then, as a further embarrassment to public bodies, the Minister comes forward and collars £150,000 out of the Road Fund. It is universally felt that a serious effort should be made to restore that deficiency in the Road Fund. Although it may not be strictly within the rules of order, I think it is not out of place in this debate to refer to the fact that a sum of £600,000 is being provided to promote the tourist industry. We, on public bodies, think that it would be far better, in the intrinsic interests of the country, if that £600,000 were spent on some measure to provide remission of rates.

Another matter to which reference has been made is the depopulation of rural areas. If people in the towns find it difficult to exist at present, as Senator Honan says, it is due to the fact that there is a scarcity of money in rural areas to purchase the necessaries of life which are sold in the towns. The lands are left idle and the credit of the farmers is absolutely gone. Yet, when the Government is asked to implement legislation so that the credit of the farmers may be restored, they decline to do so. I think the proper people to ask if rural credit is sufficient are people of the type of Sir John Keane and Irish bankers. With regard to the development of the country generally, I think Senator Parkinson was on very solid ground when he spoke of the necessity of developing an export trade, particularly to countries like America. The American people talk beautifully. We have all friends out there who speak beautifully, too, but when it comes to putting down solid cash that would bring trade to this country, the results are scarcely in keeping with all this beautiful talk. I think the Minister might take some steps to explore the possibility of extending our export trade with these countries.

It must be admitted that the chief agricultural output of the country is the cattle trade, and I think that some of this £600,000, which has been spoken of as a contribution towards the tourist traffic, might very well be devoted to the development of the cattle trade. It is impossible at the present time for an Irish agriculturist feeding cattle beyond the first or the second year into the stage of maturity where labour is required, to compete with the exporter to England, because the exporter to England is buying for a market that has the advantage of a bounty of 5/- to 7/6 per cwt. payable after three months. If we who are not exactly breeders but feeders, are to be expected to enter into competition with the exporters for the best cattle in Ireland, I think something should be done for Irish feeders to neutralise that disadvantage of 7/6 per cwt. Further, I think that it is only equitable that the £150,000 which the Minister has taken out of the Road Fund should be restored to our public bodies.

After the illuminating remarks of Senator Mac Fhionnlaoich and Senator Honan, I feel that my request for enlightenment on Government policy in relation to the Finance Bill has been met, and that I am now free to make my contribution to the debate with a clear conscience. I also feel rather tempted to speak sympathetically with reference to the Bill, and to the Minister responsible for the Bill, partly by way of balancing the oratory in this House, because most of the oratory seems to have come from this side of the House, and most of it has been rather unsympathetic. I suppose the Minister would agree that it would be quite possible to disapprove of a Budget of £32,500,000 to be spent on one set of objects, and yet approve of a Budget of £32,500,000 to be spent on a different set of objects. In other words, there are two aspects of the matter. One is the amount proposed to be raised by way of public taxation, and the other is the way in which this amount is being distributed by way of public expenditure. For a full discussion of our financial position and policy, we would need to consider both aspects of the matter together. However, I am not prepared to go further into that aspect of the matter to-day, as it would take too long. I shall assume, for the purposes of the rest of my remarks, that the Minister has decided, and that we accept his decision, that in one way or another he must get £32,500,000 by way of taxation, by hook or by crook. Most of my remarks will be concerned mainly with the wisdom of the various methods which he has elected to use in order to obtain that very considerable sum.

Before coming to that, I should like to point out certain relative figures which ought to be in the minds of all public representatives, and one of them is the relation between public taxation and national income. In 1929-1930 we collected by way of revenue something over £24,000,000, and in that year the national income, as estimated in the report of the Banking Commission, was something short of £162,000,000. In other words, taxation represented in that year one-seventh of the national income. In 1936-1937 the revenue receipts were over £31,000,000. In that year the national income could not have been much in excess of £150,000,000. In this year I doubt very much whether the national income is in excess of £150,000,000 at all. In this year taxation must be over £32,500,000 out of a national income which I am estimating at £150,000,000. Therefore, we have this year one-fifth of the national income represented by the amount taken by way of public taxation. In other words, the proportion which the public revenue receipts is bearing to the national income tends to increase. I am more alarmed by that increase in the proportion which taxation bears to the national income than I am by the absolute increase in the amount taken by way of public taxation. Because in a situation in which the national income was steadily increasing we might contemplate with equanimity an increase in taxation, or the Government taking year by year a greater absolute amount in taxation so long as the proportion which that represented or bore to the national income was a diminishing one and not an increasing one.

What alarms me about this Budget is that the proportion of the national income taken in taxation is increasing in addition, of course, to the increase in absolute amount taken. As things stand at present, we appear to be taking as much of the national income proportionately as our neighbours in Great Britain are taking. The national income of Great Britain is estimated at £5,000,000,000, and their Budget is well up to the £1,000,000,000 mark. That is a lot of money, and the proportion appears to be much the same as ours, but the proportion with reference to a national income which is more than £100 per head of the population in their case, is a very different thing in comparison with ours, where the national income is only about £50 per head of the population. If we go on increasing that proportion we are bound to have increasing national stringency and serious economic difficulties.

Our experience with regard to the national income has been rather an unhappy experience in recent years. I do not intend at the moment to go into the reasons for that. But I would like to say that other countries whose circumstances were in many respects similar to ours have been more fortunate than we in their experience with regard to their national income in the last six to eight years. Let us take, for instance, Denmark. Denmark was badly hit in the crisis of 1931, and by the British commercial policy in 1932, but in 1934 Denmark had reached and passed the national income which it had obtained in 1929. The United Kingdom was badly hit in 1931-1932, but already in 1935 the national income of that country had risen to the figure at which it stood in 1929. Since 1935 the national income in Great Britain has continued steadily to rise. I do not want to hold the British up to admiration in any spirit of slavish imitation. But I think Senators will admit that, like "Old Man River," John Bull does know something. One of the things which he seems to have done with reference to his financial difficulties was in the first year or two after 1931 when he reduced public taxation. Then, when the national income afterwards began to rise again —which it did in 1933—the public revenue began to increase automatically. Great Britain did not have to increase taxation until some years later, when the armament crisis came upon them headlong. In Great Britain it is clear that they tried, and succeeded, in keeping down taxation at times when the national income was showing signs of stagnation. Then when the national income is showing buoyancy there is less reason for keeping down taxation. We in the last six to eight years attempted adjustment of our whole economy in a different way, though to what precisely we have been attempting to adjust it I do not know. Up to 1938 there was, as our official policy, the effort to obtain a maximum degree of self-sufficiency and industrial development. But after making the agreement with the British in 1938, we got back our free export market for agricultural produce. The whole circumstances of our national economy were, in consequence, different, and therefore we required a different kind of economic policy if we were to make the best possible adjustment of our new and happier situation. For a time we made a certain amount of limited progress.

Our national income, even after the bleak years 1933-1935, showed a certain slow increase. That increase continued not as rapidly and vigorously as I would have liked. But nevertheless it showed an upward trend until 1936-1937. Since 1936-1937 there are indications of a certain stagnation in our economic expansion, and certain evidence that the national income has not continued to make a satisfactory increase. For one thing, according to the information at my disposal, the physical output of agriculture has now sunk again, after having risen between 1933 and 1937. It has now fallen below the level of 1929. For another thing, the recently published report of the trend of employment and unemployment gives rise to a certain feeling of disquietude as to the economic value of the protected industries. There are indications that unemployment is breaking out amongst these protected industries. We have still further evidence that the number of people employed in agriculture has diminished by 17,000 people in these few years. These are figures which give evidence that the position with regard to economic stagnation is one that gives rise to alarm.

If the Minister really wants to get £32,500,000 from the taxpayers' pockets, I could suggest various ways in which he could obtain that money much more easily than the methods he has chosen to adopt. His object is to increase the yield from public revenue. The best way to do that would be to reduce certain rates of taxation. By reducing the rate of public taxation he can increase revenue. Why not do it? To give an example. In 1929-1930 the tax on boots and shoes imported to this country was fixed at 15 per cent. and the revenue obtained in respect of imported boots and shoes that year was £268,000. In 1937-1938 the tax was at the rate of between 30 and 60 per cent., with quotas in addition, and the revenue received was a beggarly £42,000. In the case of clothes, in the earlier year when the tax was between 15 and 20 per cent., the sum of £680,000 came into the public treasury from the import duty on clothes. In 1937-38, when the tax was at an almost prohibitive level, that amount diminished to £380,000. In other words, by raising the tax to the region of 50 or 60 per cent. we diminished the yield to the public revenue from boots and clothes by as much as £500,000.

I suggest to the Minister that, if he wants to raise revenue, the easiest possible way for him is to bring down the tax again to something like the 15 or 20 per cent. level, and let us have this easy money from the import of increasing quantities of shoes and clothes. Of course, the answer that I will get to that suggestion is that we have put 10,000 additional people into employment in making clothes and boots. But, it does not follow that, if those 10,000 people were not making clothes and boots they would be completely idle. Some of them, at any rate, to my own personal knowledge, are the sons and daughters of farmers living conveniently near the factories where boots are being made, and, instead of looking after pigs and poultry, of acquiring a knowledge of housekeeping duties to fit them to be the future wives and mothers of a race of peasants, of a people devoted to the soil, they are learning the outlook on life of the typical factory worker—of quick money easily earned and easily spent—and are probably not developing the kind of virtues that we like to look upon as being characteristically Irish and characteristically rural. Therefore, I do not regard this additional employment of 10,000 people in boot factories as a clear national gain. For my part, I would gladly see less people employed in those projects, provided that the tax was so adjusted as to increase the revenue from the imports of boots and clothes. I feel that even if they disappeared from the statistics of employment, it would not mean that those people disappeared from the statistics of useful occupations, even though that meant remaining at home engaged on domestic and agricultural work.

Now, the real cause of our financial stringency is the economic policy that we have been pursuing for the last six or eight years. I sympathise with the Minister in regard to that, because, in his capacity as Minister for Finance, it is his business to incur all the unpopularity which he must know is the indirect and inevitable result of the economic policies to which he has to give his approval in other capacities. The general nature of our economic policies has been to make it possible for sections of the community to levy taxation on the rest of the community. In this way each section in turn gets an advantage, but when the wheel has come full circle, and when everybody had had his whack—his quota—at the expense of everybody else, we find that everybody is in the same relative position as before, except that we are all much poorer.

There is a proverb in the North of Ireland, from which country the Minister, like myself, is a willing exile, and it is to the effect that it is an easy thing to be generous at somebody else's expense. They call it "cutting the whang out of another person's leather." It strikes me that the Government's policy has been directed to encourage one section of the community after another to cut whangs out of the leather belonging to the community as a whole. In the end they suffer more as members of the general community by this effort of the Government to please one section after another.

The whole of the Government's economic scheme is subject to the same criticism: how difficult is the effort to raise oneself from the ground by pulling one's shoe laces? As part of the consequence of this effort to improve things generally by giving each section privileges at the expense of everybody else, we have in fact allowed and encouraged sectional interests to levy, for their own advantage, what amounts to private taxation on the community as a whole. We have had in a public report—I congratulate the Government on having had the courage to publish it— clear evidence that the bacon-curing industry was levying as much as £500,000 a year on the community as a whole by way of excess prices for bacon in a recent year. But bacon is only one of a dozen things. To-day, certain interests have been put in the position of levying taxation on the community as a whole. That occurs mostly, of course, in industry. But it also occurs in agriculture. Certain sections of the agricultural community—for example, the dairy producers —have been enabled to levy taxation on taxpayer-consumers. In the case of butter that private taxation may well amount to as much as £1,000,000 a year.

Then again, we have the case of the 14,000 people who have been given allotments of land at the expense of the taxpayers by way of a dead-weight debt amounting to £600 per person. Those 14,000 persons are really in the position in which they are levying on the rest of the community, including the unsuccessful applicants for land, taxation amounting to a sum in the neighbourhood of £350,000 a year. You get in or about that figure if you multiply the £600 per person by 14,000 and calculate interest at 4 per cent. And so we may go through the whole list and analyse it in detail. If we were to do that, I believe there would be no difficulty in showing that our economic policy has brought about private taxation which does not come into the public revenue at all but which does come out of the pockets of the consumers, amounting to as much as £10,000,000 a year.

In other words, our economic policies have diminished the real taxable capacity of the community by some formidable amount which, I think, is at least £10,000,000 a year. If you want to bring about a buoyancy in the public revenue, and to relieve the financial stringency that we find to-day, what you need to do is to reverse that economic policy and mobilise for real public objects some portion of that £10,000,000 of taxable capacity that has been diverted to private interests.

One aspect of our economic policy has been the substantial increase in the net industrial output between 1929 and 1936. It has increased by as much as £8,500,000. Most of those goods produced at home, under conditions of artificial encouragement in many cases, were of the kind known as "consumers' goods." In fact, we may say that practically all of them belong to that category. According to the figures given in the Census of Industrial Production in 1936, we imported, in 1929, £33,000,000 worth of goods "ready for use" which, presumably, means "consumers' goods," and in 1936, only £16,000,000 worth of goods "ready for use." In other words, between these two periods the imports of "consumers' goods" diminished by £17,000,000, but the provision of "consumers' goods" by our own factories and workshops only increased by £8,500,000, so that from that point of view the community as a whole appears to have been, so to speak, £8,500,000 worth of "consumers' goods" down on balance. It had much less "consumers' goods" to use in 1936 than it had in 1929. My suggestion to the Minister is that if he wants to increase the yield of public taxation, and, at the same time, reduce the cost of living, all he has to do is to reduce certain absolutely prohibitive and very unproductive taxes.

I had the curiosity to go through in the financial accounts the list of goods which bear customs duty, and, with reference to some 100 articles, the total revenue yield amounted to less than £50,000. I do not know how much employment was given in the production of those goods at home, but I doubt very much whether the employment given with reference to that kind of small matter amounts to much, either individually or in the aggregate. It would greatly simplify our commercial tariffs, as well as greatly reduce the cost of doing business and the cost of living, if you could wash out some hundred tariffs which affect small things, and with reference to which no national object is really served.

Another obvious source of a rapidly expanding yield to revenue would be provided if we could destroy at least three out of our four sugar factories. There may be an advantage in having one sugar factory, in case of an international emergency, to provide us with a certain minimum of that necessity of life, although sugar is a commodity that could easily be imported and stored, and there seems no reason why a nation should not provide against all reasonable contingencies by storing enough sugar to tide over any foreseen emergency. However, there they are, and it would be a pity, perhaps, to destroy them all, but if you could wash out about three-fourths of the sugar-producing capacity of the country, the imports of sugar bearing the ordinary customs duty would immediately bring into the public revenue something approximating to three-quarters of a million of money, and the consumers would be paying no more for their sugar than they now pay for mainly home-grown sugar. In that way, the Minister would find a considerable buoyancy coming to his financial position.

In the eighth Table published with the Financial Statement, there is an interesting series of figures purporting to show the assistance given by the Government to agriculture. It amounts in the aggregate to 10½ million pounds, and includes such items as the cost to the taxpayer of the beet subsidy, which is put at about £1,000,000, and the additional yield to the farmer from the growing of wheat, and so on. Surely this is rather a poor sort of joke. The growing of beet on some 40,000 acres of land cannot possibly benefit more than a few thousand farmers who happen to grow that beet, and is a positive injury to the rest of our agriculture, because the people concerned have to pay in one way or another more for that sugar than they would if it were merely imported. The same general remark applies to wheat. Wheat, also, may possibly benefit a few farmers whose land is suitable for growing wheat, but, as it has had the effect of greatly increasing the cost of flour and bread for the rest of the community, including the rest of the agricultural community, the injury to agriculture, as a whole, is far more serious than the benefit conferred on a small section of it. Similar remarks might be applied with reference to securing a high price for home-grown cereals at the expense of the people who must buy those cereals in order to feed pigs and poultry in other parts of the country.

In conclusion, I should like to emphasise again some remarks made by previous speakers on this side of the House about the terrific importance of expanding our agricultural production. I think the present situation is one in which we should take the fullest possible advantage of our new freedom of export, and that agriculture is and must remain our chief national asset. The Minister knows how important an asset it is from every point of view, and not least from the point of view of the building up of our somewhat diminished sterling balances. I am convinced that there are important directions in which our agricultural production could rapidly and properly expand if only the farmers had the working capital which would enable them to acquire the additional equipment and employ the additional labour which they would need in connection with such expansion. Consequently, I would ask the Minister to give his most serious attention to the scheme for agricultural credit recommended by Senator Counihan, or indeed to any scheme of agricultural credit which would enable our agriculturists rapidly to get under way in the direction of increasing production. With that final request— almost a petition—I sit down.

Most of those who have spoken have dwelt on the necessity for reducing expenditure. They have pointed out that our expenditure has been continually increasing, and that, if it is not greatly reduced, we will have to face a serious situation. I do not think they have looked the facts squarely in the face. I doubt if they have asked themselves whether it is possible greatly to reduce expenditure in this country. I agree that it might be possible to make small economies in all departments, and that it might be desirable to do so, but I do not think it is possible to obtain such drastic reductions as would greatly help our financial position. It is easy to criticise expenditure without giving any indication of the lines on which reductions should take place. It has been suggested, no doubt, that a committee should be set up with the view to devising means of reduction. At the same time, we all know what the main heads of expenditure are, and any opportunity for a big reduction must be apparent to every member of this House. I wonder if it would be seriously proposed that we should make a big reduction in the cost of the Army in spite of the international situation?

I do not think that proposal would be seriously advanced. I do not believe it would be seriously proposed that there should be a big reduction in the Vote for Education. The general impression seems to be that it must increase. I do not believe anyone would seriously propose that there should be a reduction in the agricultural grant, or that there should be a reduction in any part of the Vote for agricultural services. Nearly everybody who knows the situation is agreed that instead of a reduction there must be a large increase in the money expended on agriculture. I do not believe it would be seriously suggested that there should be a reduction in housing. I do not think anybody believes that the Government should reduce the number of houses being built. Above all, and it is one of the biggest items, perhaps, I do not think it is proposed to reduce the expenditure on unemployment assistance. In the present situation I do not believe any Government could seriously curtail the expenditure on that service. It has been suggested—I am sure everybody would like to see it done—that, instead of unemployment assistance, work should be provided, but that does not mean less expenditure, but greater expenditure.

I think, if we examine the situation fairly and squarely, we must realize that expenditure in this country has got to grow. What we look upon as working expenditure is really more or less capital expenditure. We got over an undeveloped country. The economic war and the slump in agricultural prices due to the world situation created a crisis in the history of this country which we have got to tide over as best we can. Our expenditure on unemployment assistance, housing, and all the rest of it, so far from being regarded as normal, everyday expenditure must be regarded as a capital investment for the future. The same applies to education and everything else. I think, looking at the matter squarely, we must realize that, this being an undeveloped country, our expenditure must be increased. There is no doubt of the fact that there must be largely increased expenditure in respect of agriculture. Professor Johnston and several others have pointed out that our only hope for the future is by increasing our exports of agricultural products.

A Senator

Where is the money to come from?

That is the point with which I am going to deal. We must realize that that cannot be done without increased capital being available. It has been pointed out that we cannot even maintain our present expenditure without precipitating something like a financial crisis. We want to ascertain, not alone whether there is a possibility of reducing expenditure, but whether it is possible to maintain the development of this country under the present financial system. There is no way out of it. The thing is forcing itself upon us. None of us would like to do anything rash by any means, but the feeling is growing that there must be something radically wrong in a financial system under which there is such great poverty in a country with such vast potentialities. It would be worth while to inquire seriously whether any modification of the present financial system is necessary if the country is to progress.

Perhaps I ought to begin by congratulating Senator McLoughlin on his excellent speech. I think I might say that it is the best I have yet heard him deliver upon a Finance Bill. Several Senators, including particularly Senator Sir John Keane and Senator MacDermot, expressed their disappointment that I had not taken this opportunity to make a very full statement upon the financial position of the State and of the community. I think that that would be to occupy quite unnecessarily an undue proportion of the time of this House. It is true that, under the Constitution, the Government, through the Minister for Finance, has once a year to make what is known as a financial statement, and that statement is made at the proper time and in the proper place under the Constitution. It is made to Dáil Eireann, which is particularly charged with responsibility for the national finances. I made that statement six weeks ago—a very full statement, I think. It is on the records of the Oireachtas, and it was accompanied by a very full set of tables which I thought would have enabled any Senator to participate in the debate here on this Bill as effectively as Senator Johnston has shown can be done.

In dealing with the Finance Bill, I followed the usual custom, a custom which I have not established, but which I inherited from my predecessor, and which prevails as the custom, not only in this House, but as the custom in the Dáil, by briefly explaining the main proposals in the Bill. I trust that the House will not think it was due to any lack of regard for its position that I failed to repeat here the statement which I had already made in regard to the financial position of the State and, so far as it was relevant, of the country to the Dáil. Two Senators—Senator Sir John Keane and Senator MacDermot—in referring to that statement, asked whether I regard the present financial position as serious. I do not think that I should allow it to be understood that I accept either "serious" or "grave" as adjectives that can be properly applied to the present financial position here. Undoubtedly, I make no concealment of the fact that it would be advantageous if a retrenchment in certain non-productive expenditure could be made.

Senator O'Dwyer has pointed out that a great deal more money might be expended here in the improvement of agriculture, in the development of educational facilities and in the development of various national resources. But, in my view, the natural limitations which are imposed upon mankind are such that there is only a limited pool out of which we can draw for all purposes, whether it is to maintain ourselves, to develop our country, or to defend it. If we have to spend money upon national defence, that expenditure is largely exhaustive—it is not reproductive. It may become, in certain circumstances, quite useless, or the things in which it is invested may never have to be utilised, and therefore it may never give any return, economic or otherwise. But it has to come out of the common pool and, to the extent that we have to provide for services of that kind, we have naturally to curtail our expenditure on other services, which most people might perhaps regard as being productive and the creators of wealth, or else, as we have in this case, to increase the general burden of taxation upon the community. But as I was saying, while it would be, in my view, undoubtedly advantageous if expenditure upon these services, which most people would say without question were not productive, could be reduced, and while it is undoubtedly true that, in these circumstances, proposals for further expenditure must be closely scrutinised, and demands for expenditure, even for the most beneficial purpose, not lightly to be acceded to, I do think that to apply the adjective "serious" or "grave" to the present position is to do an injury, I am sure unwittingly, not perhaps a grave or serious injury, because the words of politicians, even in the Seanad, are largely discounted by the people on both sides outside, but still an injury to the public credit. That injury would be much more serious if I were to accept, even by silent acquiescence, the position that there was any justification for applying such an adjective to our position at the present time.

I have been also asked whether I can see any sign of improvement, whether I think there is any prospect that public expenditure will be reduced, and, with that reduction in public expenditure, that there would ensue a reduction in the weight of taxation. I have been asked to say whether conditions of credit would be easier, or whether the position of the Exchequer in regard to the raising of public finance is going to be more grave. I think that those who put questions of that sort to me have, perhaps, lost some touch with the realities of the situation, because to answer these questions satisfactorily, at least to give an answer which would imply a conviction in my own mind, would mean that I should have either to be a prophet, which I am not, or a world dictator, which I am still less. Of what value would any opinions of mine be upon such a subject? I expressed my view of the position some six weeks ago and I have no reason to believe that the position since then has appreciably improved. Undoubtedly, if this crisis in world affairs should break in war, I think that the difficulties both of the Exchequer and of our people are going to be considerably aggravated, and that it is not going to be an easy thing for all of us to meet and to solve the problems which will then confront us.

There were a number of miscellaneous items raised in the course of the debate which makes it very difficult to make a considered or connected statement in reply. Senator Douglas, for instance, suggested that I ought to consider making, in respect of undivided profits retained within a business, allowances similar to the earnedincome relief extended to private individuals. One of the reasons he gave for making that suggestion was that very often the rates of earnings upon these reserves in the business were comparatively small. If the Senator would consider the matter for a moment, he would see that income-tax takes no cognisance of the rate of earning of an individual. It takes cognisance only of the amount of the earnings within the year.

Does it not exempt him altogether when below a certain rate?

Yes, because the assumption is that the individual requires a certain amount for his maintenance. A public company could not be put in that position. It either pays its way and makes profits, or it does not. Where it makes profits it does so after maintaining itself, and therefore it is not in exactly the same position as an individual, and the surplus must fall for taxation. I think that it would be quite impossible to administer a relief of that sort without leaving the door open to evasion. Profits accrue from year to year, and tax is imposed upon the profits as they fall due. There is no reason in equity, or from the point of view of public interest, that I can see, why, after providing a proper amount for depreciation, any portion of the earnings of a company should go scot free of tax or enjoy a reduced rate of taxation.

My contention was that this was part and parcel of what was necessary for maintenance. Otherwise, I agree entirely with what the Minister has said.

Every company which puts aside reserves does so largely in order to maintain the income of its stockholders or its owners in times of stress, and as a safeguard in the event of its making losses which would not permit of proper provision for depreciation and such matters. If the reserves are utilised for the purpose of making proper provision for depreciation and wear and tear, I think that an allowance is recoverable from the Revenue Commissioners. But if money is invested in the business for the purpose of extending and enlarging it, and thereby earning increased money for its owners, it is on all fours with any other investment.

The allowance is in respect of wear and tear of machinery only.

If we were to extend the concession now suggested to the man who invests his profits over and above what he requires for his own maintenance in his own business —if we were to give him a concession or exemption in respect of income-tax —we should have to extend that concession to the person who has invested his surplus income, not in his own business, in which the risks would be less because it would be under his own control, but to the man who would invest his money in the business of another man. That would mean that all profits derived from investments in public companies and in undertakings not under the immediate control and ownership of the individual would have to be free of income-tax.

You do give a concession up to £300.

The basic principle in assessing an individual to income-tax is that he must maintain himself in order to maintain his earning capacity. The principle in regard to profits is quite a different thing, and you cannot relate the position of an impersonal entity, such as a corporation or a public company, to that of an individual who has to maintain himself.

I should like to correct the Senator, if he is under any misapprehension, as to how long my interest in cinematography extends. It extends over a considerable number of years, and my personal interest had nothing whatever to do with the concession granted.

That was not suggested. I said that I was interested in it for a number of years, and that I was glad to see that the Minister was likewise interested.

It gave him a more intelligent appreciation of the position.

I did not suggest that the Minister's interest had anything to do with the matter.

It was with considerable difficulty that my opposition to this concession was overcome. For years it has been pressed upon me, and I opposed it very largely for the reason that some people might think I had a personal interest in the matter. However, the amount is infinitesimal. Senator Douglas made reference to the fact that we have no export guarantee system here, as in Great Britain, and said that if the suggestions of Senator Parkinson regarding extension of our trade with countries other than Great Britain were to be considered, it would be necessary to institute such a system here. I propose to bring that matter to the attention of the Minister for Industry and Commerce.

The Senator also suggested that the basis of our tariff charges here might be reviewed with the object, I think, of substituting for the existing system, whereby the ad valorem tariff is charged on the invoice of the goods, a system whereby the ad valorem tariff would be charged on the market value of the goods. That, I think, would lead to a great many difficulties and would involve a fairly considerable increase in our revenue staff, which would have to be paid for by the general body of primary producers in this country for the benefit of the secondary producers and others. It would be very difficult to determine, with any relation to the reality of the position, what the Senator has referred to as the “fair market value” of the goods. I take it that the fair market value in any country is what the goods in question can be sold for there, or what they are being sold for. That is the present situation. It may mean that the ad valorem rates have to be slightly higher than they would be in other circumstances but, whatever the quantum of protection, it has two components—the ad valorem rate and the basis on which it is charged. We have a fairly fixed and definite thing under the present system. It is what people in other countries can afford to sell their goods at here, as determined by the price at which they are, in fact, sold. We have something fairly fixed, definite and constant. If we want to find out what that basis is, we do not have to send investigators to other countries. We do not have to have a sort of jury system or investigation to determine that basis. It is fixed by the invoice price on the assumption that the invoice is an honest record of the transaction. Having arrived at that, we have only to determine the ad valorem rate. If we were to change to the basis the Senator recommends we would have two determinations. We would have to find out the fair market value, which might be a matter of some difficulty. Unless we were going to have protection on the basis of this assumed higher value, because I think it was mentioned that the fair market value would be higher in particular cases——

I did not suggest that in all cases. In some cases it would.

On that ground, we have to legislate really for a particular and not a general case. That would make our legislation cumbersome and inequitable. If it is only in a particular case in which the ad valorem tariff and the invoice price would be too low to afford fair protection, and if we were to legislate so as to raise the general basis, we should create a great deal of inequalities over a wide area. The matter is one that requires closer consideration than I can give it extempore, but I am prepared to have it examined, and to ask the Minister for Industry and Commerce to look into it from the point of view which the Senator has asked me to look into it—that is to say, that a great deal of the prejudice that at present exists against Irish manufactures would be reduced if the ad valorem rates could be fixed on the basis he suggests.

I do not know if I can undertake to follow Senator Baxter through his long speech. I note that the Senator felt he had difficulty in speaking on agriculture before the Minister for Finance. Perhaps, the difficulty might be greater if the rules of the House were more stringent, because I am not responsible for agricultural policy. I take it that my colleague's policy is the best that can be devised to meet the present situation, and while I am not going to contend that I am competent to defend it, I have not yet heard Senator Baxter offer cogent criticism upon it. The Senator does occasionally make very sweeping statements. Perhaps, it might be no harm if at a later stage he would justify some of them to the House. He said in the course of this debate that no country in Europe showed so little evidence of progress as this country. I think he was even much more categorical, and said that no country showed so little economic, cultural or political progress. It would be advantageous, since we are all here in council, if the Senator would take another opportunity of disclosing to the House the facts upon which he bases that statement. No doubt he must be familiar with conditions in a great many countries—I am not prepared to say with all countries—in Europe. Perhaps, comparing conditions there, as he knows them, with conditions here, as they are known to all, we might see whether the Senator, who talked about the functions and responsibilities of Senators, was indeed justified in stating that there had been general destruction of all moral values in this country during the last four or five years, or whatever period might be covered by his condemnation. I know that it is difficult to deal with the Senator because he has a dual personality. He is penurious in June but a few months ago, I am sure, he was almost profligate in the expenditure he was asking the Minister for Finance to sanction.

There is one other matter to which I might refer, because I think it touches slightly upon what has been said by one or two other speakers. The Senator said that a much better scheme of defence would be the production of more food. I find it very difficult to appreciate what he meant by that. If his suggestion is that we have not enough food of the sort that we can produce, in order to tide us over such a critical situation as we would have to face on the outbreak of a general European war, then I take it that is an argument in favour of the Government's tillage policy, and is really a call to us to increase and to intensify our wheat production campaign, as well as the campaign for the production of beet sugar. With the exception of these two commodities I do not think there is any essential article of food of which there would be any shortage in this country in the event of a European war. We certainly supply our won beef, butter, eggs and milk. We might have to go on short commons in regard to wheat, but perhaps we might make that up with some other cereal. The only real necessary of life of which there might be any shortage would be sugar. Tea we might be able to do without.

I think that if Senator Baxter really believed what he said, he will take an early opportunity of telling the people that he has become converted to the policy of the Minister for Agriculture in regard, at any rate, to wheat and beet. It may be that the Senator thinks, perhaps, we might be even more drastic in our efforts to ensure a full supply of these essential commodities in the event of a European war, and that he would really wish, indirectly, to advocate making tillage compulsory. I do not know whether that would meet with general acceptance on the part of his farming colleagues who sit on those benches. I know that I would feel a great deal of reluctance in going before the people of the country upon such a policy. Perhaps that is what Senator Baxter has in mind.

I hope, when he is making this comparison of conditions here and conditions in other European countries which I have asked him to make, that he will be good enough to open his mind a little more to us in regard to the expression of opinion which he has given. My own view in regard to this matter is that by all means we ought to increase production, but it must be production of the kind which we can dispose of at profitable prices. My view is that once prices are right, the production will follow. I feel that once prices are right, the credit for which Senator Baxter has been clamouring, and for which Senator Counihan has asked, and which Senator Johnston has begged me to extend, will be extended by the normal organs which have been built up over generations for the provision of such credit by the banks. Once the prices are right, and once we can have production at a profit——

And the costs of production.

The one covers the other. Price is a comprehensive term. As I have said, once the prices are right—and, naturally, that means that once there can be production at a profit—then the credit position can quite easily be solved. I may be wrong, and I may be a bit conservative, but I have seen many people go down because, to use a colloquialism, they have bitten off more than they could chew, commercially as well as in other ventures. Whatever our difficulties may be at the moment, the best way of getting out of them is to work with the resources that we have in our hands and endeavour to save a little. If our resources are not much, then let us not rush off to become a borrower. Let us try to save a little and to expand our resources. There may be special circumstances which have to be considered. It may be that there are peculiar circumstances that have to be considered, and special people who may have to be helped. I do not favour any large expansions, in an ill-considered way, of any facilities we may possess.

We hear quite a lot about credit for farmers, and credit for this and for that section of the population. The Senator referred to a statement I made that the farmers have £35,000,000 on deposit. There is £35,000,000 on deposit in the Irish banks. That money may belong to the small farmer, the large farmer, or the middle-class farmer. I think, in fact, that that £35,000,000 is very largely built up of small deposit receipts of one sort or another. The bulk of the depositors in the Irish banks are not the big Irish farmers. I rather think the depositors in the Irish banks are very largely the small Irish farmers, the men who have built up a nest egg, who have earned the money pretty hard, and who have entrusted it to the banks for safe keeping, knowing they will get a small allowance on it each year, and knowing it will be there in case of emergency.

We talk about our resources, our investments and our deposits. I do wish most sincerely that we would stop misusing the possessive adjective in that way. We hear talk of our deposits and of all these millions, when the fact is that most of us who talk in that way do not own one penny of them. Mostly they belong to the small man, the other fellow, who has put them there for safe keeping and who trusts he can rely on them in an emergency. Very often what are we asked to do here with the moneys of these people, who have put their funds in the banks in order to be held there in safe custody, and so that they may be available when they want them? We are asked that we should give that money to somebody who thinks he has a right to it and who has no such right under God. Many people, through self-denial, prudence and foresight, put by a little money which they entrust to the safe keeping of the banks so that it may be available when the need arises.

I do wish that we would try to get rid of the type of request I have referred to, because the fact of the matter is this, that this cry for credit for this section or that section of the population is fast becoming in the months of Senator Baxter and those others who follow him, a cry for confiscation and expropriation. That is what it is becoming, and it is time that those who profess to speak as leaders of public opinion in this country should make quite clear what this might ultimately involve. Supposing that we were to say that the banks would have to give this or that or the other thing, this amount or that amount, to this section or that section, do you think that the other sections of the community are going to stand idly by when they see these funds ladled out for the use of one or two privileged elements in the community? Not at all. They will soon start extending their hands, and what will be the consequence? The small man, who has put that money in the banks for safe keeping would do what the small man did in France and what the small has done in other countries. I do not like to start pointing the finger at one country or another, but the small man would do what the small man has done in countries all over Europe, and further afield than Europe; he would start taking his money out, and he would make certain that no one except himself would use it, and when that happens the last state of public and private credit would be infinitely worse than the first.

When we come to realise that there are certain rights involved in this question of credit, rights of private property, no matter how praiseworthy is the purpose for which that credit is demanded, it is only then we are going to get a proper spirit in the country which will tend to make us go ahead and prosper and be able to build ourselves up in the same way as did the people whose fathers and grand-fathers were serfs on the land, whose fathers and grandfathers had to work pretty hard to eke out a miserable existence here. They, through their efforts, have become the owners of the soil in this country, and are the masters of their own destinies.

Question agreed to. Committee Stage to be taken at the next meeting of the Seanad.

Perhaps it would be wise if we were to adjourn consideration of the Tourist Traffic Bill until to-morrow?


To-morrow is a holiday, and we cannot meet.