Seanad Éireann debate -
Wednesday, 6 Dec 1939

Vol. 24 No. 1

Public Business. - Finance (No. 2) Bill, 1939— ( Certified Money Bill )— Second Stage.

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

Minister for Finance (Mr. O Ceallaigh)

A twin surprise for Seanad Eireann in the form of a Supplementary Budget presented by a new Finance Minister is sufficiently unusual to deserve a passing reference. We have not had a Supplementary Budget since 1931 and then the architect of the earlier Budget had to carry the responsibility of the latter. I arrived on the scene after the first Budget and with a heavier burden. My rôle is unpopular, but the tax gatherer has never found favour. Nobody regrets more than I do the occasion which has given rise to all this financial malaise, and none hopes more fervently that its duration may be short. But the omens are against this, and elementary prudence requires that the Government should try to have the nation in a state of preparedness as far as possible for all eventualities. Long in advance of the outbreak of the war we had been considering steps to cope with the situation, but its drastic suddenness at the end took almost everybody, even the belligerents themselves, I believe, by surprise and with their preparations only partially complete. Some things which were inevitable could not be guarded against and, amongst these, was the short fall in revenue and a rise in expenditure.

To cope with this situation our first step was, naturally, in the direction of economy in existing services, and to this end the Government set up the Economy Committee under the chairmanship of the Parliamentary Secretary to my Department. The committee devoted considerable time and energy to its inquiries and presented us with three reports, two interim and one final. The recommendations it submitted are not drastic in character as it had to bear in mind the undesirability of displacing labour in urban areas to a material extent. It was also given to understand the desirability of maintaining, as far as possible, the State's outlay on social services. At present the latter form such a considerable element in Government expenditure that it is difficult to secure large-scale retrenchment without interfering seriously with the high standards which have been set in this country. At the same time we have also to bear in mind that taxation in itself tends to create unemployment, especially when it reaches the high levels it is approaching here. The balance of advantage and disadvantage has to be carefully weighed, and it was in this spirit that I approached the financial problems confronting the Exchequer.

On the one hand, I was faced with a fall in tax and non-tax revenue amounting to £1,620,000 and on the other with an increase in expenditure unknown in size but offset by other decreases. This increased expenditure relates mainly to defence and here uncertainty arises from delays in the execution of orders and the delivery of equipment. Other items of a capital or abnormal character for which provision was made in the Budget of last May, for example, air ports, employment schemes and afforestation, are not affected by the emergency and, so far as normal expenditure is concerned, I made every effort to supply the needs of the new or expanding Departments by transfers of staff from other Departments, where their services were not so urgently necessary. I am glad to say that the extra work of the Ministry of Supplies, the Department of Defence, the censorship, air raid precautions and compulsory tillage, to take some examples, has been or will be met mainly by transfers of existing personnel. I must acknowledge the assistance afforded to me in this respect by my colleagues.

It will be seen that our financial problem thus resolves itself mainly into one of meeting the deficiency in revenue which, as I previously mentioned, was put at £1,620,000. The labours of the Economy Committee produced a figure of £400,000 to set against this sum, thereby reducing the deficit to £1,220,000. No economy axe, no matter how drastically wielded, could serve to bridge this gap and, accordingly, I was forced to appeal to the taxpayers to tighten their belts a little further. But I endeavoured to distribute the burden as equitably as possible.

I do not wish at this stage to go into all the details of the taxation proposals that I submitted to the Dáil. It will suffice to say now that I raised the standard rate of income tax by 1/- in the £ for the year beginning on the 6th April, 1940. The scale of surtax for the current year (1939-40) will be revised upwards and tax on the new scale will be payable on the 1st January, 1941. As the revision of the surtax scale is complicated, particulars will not be available until the ordinary Budget next year. I have also proposed an increase forthwith in the rates of estate duty chargeable on estates of a value exceeding £10,000, the increase varying from one-tenth in the case of estates exceeding £10,000 and not exceeding £50,000 to one-fifth in the case of estates exceeding £50,000.

So much for inland revenue duties. On the customs and excise side I increased the duty on imported sugar by 7/- from 16/4 to 23/4 per cwt. and the excise duty on sugar made from homegrown beet by the same amount, from 1/2 to 2/8 per cwt. Tobacco also came in for a share of my unwelcome attentions and the main rate of duty, that is the sum chargeable on the unmanufactured leaf, was increased by 2/8 per lb., thus raising the customs duty to 13/4 per lb., and the excise duty to 12/6 per lb. Beer and spirits also felt the blow of the emergency taxation, the beer duty being raised by 12/- per standard barrel of 36 gallons thus bringing the excise duty to £5 12s. and the customs duty to £5 12s. 6d. An addition of 10/- per gallon at strength of proof was made in the spirits duty, thus bringing the rate chargeable on the home-made article to £4 2s. 6d. per proof gallon, the rates of customs duty on imported spirits being slightly more, as hitherto.

All these changes of taxation, which I proposed to Dáil Eireann, were approved and became effective as from the 9th November. Considerable though they were, they still left me with a considerably large sum to find, even allowing for the economies to which I have referred. So far as the finding of this sum is concerned, I relied and still rely for a little further help on the buoyancy of the revenue, which has often come to the help of my predecessors in similar, if not equally critical, situations, and to some extent my optimism is borne out by the good showing made in recent weeks by the customs receipts. Up to last Saturday the revenue from customs duties amounted to £7,679,000 as compared with £6,865,000 in the corresponding period of last year—an increase of £814,000. Excise has also shown a slight upward tendency at £4,295,000, as compared with £4,160,000 in the same period last year. But, as will be seen by reference to the weekly exchequer statement, most of the other items of revenue betray a downward tendency. The result is that in the aggregate our receipts to Saturday last at £19,008,000 show an increase of only £458,000 on last year's corresponding figure. Up to the same day the total expenditure on Central Fund and supply services shows an expansion of £701,000. All things considered, this increase is not unduly high but it has to be remembered that our commitments for defence equipment are considerable and have still to be paid for.

As I have already stated in the Dáil, the financing of this capital and abnormal expenditure will require the issue of a public loan. As regards this issue it has been brought to my notice from a number of quarters that owing to the relatively short period for which the subscription lists of public loans remain open, limited liability companies, trustees and others sometimes find difficulty in completing arrangements for making application before the lists are closed. To obviate these difficulties, I now desire to announce that, provided all the necessary arrangements are, as I expect them to be, completed, it is proposed to publish the prospectus of the new issue in the daily papers on Saturday next, and applications will be received from Monday. The amount of the loan will be £7,000,000 in the form of registered or inscribed exchequer bonds, redeemable 1950-1960, bearing 4 per cent. interest, and issued at par. These bonds will, of course, be a full trustee security. A substantial sinking fund will be provided—1½ per cent. per annum, which will be applied half-yearly to the purchase and cancellation of the bonds. In addition, the loan will carry a right of conversion which will be expressed in the following terms:—

"If the Government of Eire should make, during the present state of emergency, or within six months after the termination thereof, a public issue other than Exchequer Bills or similar short-dated securities, bonds of this issue will be accepted at par, with an allowance for any interest accrued thereon, as the equivalent of cash for the purpose of subcription to such issue."

The duration of the present state of emergency referred to in this extract which I am quoting from the prospectus will coincide with the duration of the Emergency Powers Act, 1939, so that, as long as that Act remains in force or is renewed, and for six months thereafter, the conversion rights attached to these bonds will hold good. I might add that the allowance for interest accrued on the bonds, referred to in the extract, is a cash allowance and will be payable as such.

The purposes for which the loan is to be floated are, I think, already sufficiently clear from my previous announcements. They include the funding of floating debt, mainly in the form of Exchequer Bills, payment for works directed towards the relief of unemployment, capital expenditure on defence equipment and the financing of advances to the Local Loans Fund and the Electricity Supply Board for the Liffey Development scheme and other reproductive projects. These purposes are, I think, such as to commend themselves to all members of this House and in making an appeal to them for their support by precept and example of the forthcoming issue, I do so with a considerable degree of confidence. In the Dáil I urged that all Parties, all financial interests and the investing public, whether they have much or little to invest, should help in this important task. The co-operation of all elements in the State is necessary if the present crisis is to be surmounted, and with such co-operation the success of the contemplated issue is, I feel, assured.

There is little else I want to say, except, in further reference to the emergency and to the cause of the emergency, the war, to say that I think it is generally accepted that the war threatens to be long drawn out, and naturally, that causes all of us great concern. The troubles of the war are not brought home to us in the same way, or in the same measure, as they are brought home to belligerents, or to some who are closer to the conflict than we are, but nevertheless we are affected, and bound to be affected, to a certain extent. If the war continues for a considerable time, no nation can say with certainty that it may not be drawn in, or involved in it, before its close. I hope that will not be our fate, but that we will continue to remain outside the scene of conflict. We are a small, neutral nation anxious to stand aside from the conflict, so far as we can. We have seen the tragic end of some moderately small nations in very recent times, and their fate and those things of which we are sad witnesses in these very days, the happenings in Northern Europe and in the Baltic area, where another small nation is making a gallant stand for its rights, give us furiously to think. We hope that we may not see anything of the kind come near our shores. We know that these troubles have brought a certain measure of uneasiness to our people, as well as the economic and, to some extent, financial difficulties which have come upon us as a result of the conflict in Europe. We hope that we may come through safely, that the war will be as short as possible and that, in in the end, when peace does come, it will be a peace inspired by justice and charity for all concerned.

Mr. MacLoughlin

I sympathise with the Minister for Finance in the unpleasant circumstances which attend his maiden visit to the House in his present capacity. In this Bill, he has presented us with a bitter pill. There is no doubt that he has coated it with a few soft words, but I suppose the supplies of sugar were not equal to the requirements, and he has forced a few grimaces even from his own supporters. Listening to the Minister, I could not help thinking that, while the voice was the voice of Seán, the hand was the hand of Eamon. The Minister has certain human frailties like the best of us. He is not the type of man who would go without his two lumps of sugar in his tea; he is not the type of man who would enjoy exquisite satisfaction from the wearing of a hair shirt; nor is he the sort of fellow who would impose a Lenten penance on himself in the middle of Advent. The Budget enshrined in this Bill could only have been conceived by a dyspeptic teetotaller, by a man of rancid philosophy who believes that we can only save ourselves and save our country by denying ourselves everything worth having. That is why I say that the hand is the hand of the Taoiseach. Nobody else could have conceived such a Budget. It represents the sour, introspective, ascetic teetotaller in his most inhuman mood.

The Government has clapped an additional ¾d. on the lb. of sugar after rewarding the Sugar Company with an increase in price to the same extent. By the way, it was rather interesting to find that the chairman of the Sugar Company also happens to be chairman of the Irish Press. That, of course, is pure coincidence, a coincidence of which, I am sure, the Government is quite unaware; but be that as it may, the position now is that henceforth we shall be paying 2½d. a lb. duty on imported sugar and that that sugar, when it passes through the hands of the Sugar Company and comes on to the table, will cost 4½d. or 5½d per lb. I am told that sugar could be bought, in the quantities in which the Sugar Company generally buy it, at about 1d. per lb. If the Government had not established a monopoly in sugar, and had allowed merchants to import their requirements and build up a reserve in the usual way, our sugar now would be costing us about 3d. per lb. less than it is costing.

That may be a small matter to the opulent representatives of Fianna Fáil in this House, but it is an important matter to the poor householders throughout the country. I want, at this stage, to protest against the mean devices adopted by the Government to escape responsibility for their blundering. Owing to their lack of foresight, prices have been forced up. The people are given the impression that the fault is with the shopkeeper. They were told in the middle of the sugar shortage, when the sugar company were hoarding supplies in anticipation of the increase in price, that the shopkeeper who would not supply sugar without tea was profiteering. The shopkeeper was expected to supply sugar, which he could not get from the wholesalers or the sugar company, to every casual customer who crossed his threshold. Otherwise, he was a "profiteer", according to the Minister for Supplies. But now the Government, by their lack of pre-vision, having forced up the price of sugar by 1½d. per lb., the shopkeeper is denounced if he charges more than ½d. per lb. profit—less than he was accustomed to previously, while he is expected to sell lard and, I suppose, a few other commodities for less than he can obtain them from the wholesalers. If he does not, he is a profiteer according to our highly virtuous Government and their equally virtuous supporters here. I protest against this attempt to make the traders of the country the stalking horses of the Government. They are as much entitled to live as Ministers or Senators, and if the Government newspaper has increased its price by 50 per cent. because of the increased cost of paper, I do not see why the man who sells sugar should himself have to bear the increased price of the paper bags in which his sugar is put up. There is too much of this mean delegation of blame to small people, while the bacon curers and the millers are allowed to run up prices, make profits as they will and, to borrow Deputy Norton's expressive phrase, "get away with the swag". If the sugar company cannot make all the sugar we require at an economic price, then it would be better to wind it up. It was never intended that we should set up an expensive undertaking to import sugar which we could import more cheaply ourselves.

The Government have also increased the cost of the pint and the glass of whiskey and the ounce of tobacco. They have picked out the three luxuries of the poor man. This so-called "Poor Man's Government" have made the poor man poor indeed. They will not permit him to eat, chew or drink. They want to convert us by their oppressive taxes into a nation of non-smokers, non-drinkers and sugarless tea consumers. In short, they want to make us a nation of cadaverous and embittered cranks. They may succeed for a time, but I venture to predict that, wherever the cranks are after the next general election, they will not be in Government buildings.

We are told that these taxes are necessary to enable us to maintain our neutrality. Neutrality has only recently been adopted as Fianna Fáil policy. But now it is represented as the sole discovery of Fianna Fáil. The Taoiseach, speaking in the Dáil last week, was eloquent on the advantages of neutrality, and suggested that if the Fine Gael Party had been in power the policy adopted would be one of belligerency, with loss of blood and treasure to the country. The Taoiseach has a short memory. At one time most people were convinced that Fianna Fáil's policy in the event of war would be to ally itself with Britain. Here is what the Taoiseach told the Dáil a few months ago:—

"In providing for defence of our own interests we would also, if necessary, be providing for British defence of British interests. We got the ports unconditionally and this Government, at any rate, intends to see that they are not used by any foreign power that might covet these harbours as bases of attack either against British trade or against Britain herself."

And again:

"Any attack on us by a foreign Power could not be ignored by Britain because if this country were taken by a foreign Power Britain would be in a very perilous condition. Indeed, Britain would have to do her utmost to prevent such an attack, so that whether we willed it or not, force of circumstances would make her an ally of ours in our defence. Therefore, in planning our defence to meet such an occasion, and in order that in such a situation the greatest possible strength should be behind this nation to defend its rights, the planning should take place on the basis that we wanted to have the combined forces as effective as possible."

However, when Fine Gael advocated neutrality the Taoiseach executed a somersault, and we are now enjoying a highly expensive form of neutrality. It need not have cost us a penny. In fact, we could afford to squander £10,000,000 on neutrality without any second leg of this twin surprise in the shape of an additional Budget if the Fianna Fáil Government had kept the cost of running the country at the figure at which it stood when they took office. But they squandered the millions they could have saved, and they are now proposing to spend further sums that may be spent in the same direction to the accompaniment of the apologetic cry of "neutrality".

I notice that "up to the present" our commitments for defence amount, according to the Minister, to £4,750,000 —a tidy sum to pay for neutrality. In Donegal we have an example of how portion of this sum is being squandered in the operation known as coast watching. All round our coast, numbers of untrained country lads— picked by minor Volunteer officers chiefly because of their political leanings—are being paid at the rate of 30/- or £2 a week, and planted like palm trees on the tops of hills overlooking the sea—scanning the horizon with the naked eye for, I presume, enemies of our neutrality. When they imagine they see an aeroplane or seaplane they walk five or six miles to the nearest telephone box to communicate the news to headquarters. Of course, they do not know the nationality of the machine, nor does it matter a bit as nothing can be done about it or will be done about it. This whole business of having these youths wasting their time staring out to sea is farcical, and is a scandalous waste of public money.

I notice from the debate in the Dáil that the coast watchers are to be reinforced by a naval or marine service in the shape of torpedo boats. I suppose this particular departure has been chosen by the Government because of the possibility of extravagance. It is remarkable how the Fianna Fáil Party, which got into power on a programme of rigid economy, has developed a peculiar weakness for the expensive in every line. Now we are to have a navy. I chance to know a little about navies. In the last war I had the Grand Fleet as my next door neighbour, and if there is anything more expensive than a navy—except perhaps a Fianna Fáil Government—I should like to know what it is. I warn the Minister that the first depth charge dropped by our naval forces will blow his Government skyhigh.

I confess that I myself could bear the loss with composure, but the Minister might be slightly discomfited. When the navy materialises and when Éire rules the waves I should like to know who will be First Lord of the Admiralty. I ask the question because I have a fear that a certain gentleman who serves as the Government's pooh-bah would be pitchforked into the job. When the First Lord is being chosen, I trust that the Seanad will not be overlooked, and if a suggestion from me, on account of my Grand Fleet experience, would have any effect, I would mention my fellow-countyman from Donegal, Senator Cú Uladh, for the post—chiefly because he is generally at sea.

I am not surprised at this Budget. It is the characteristic effort of a spendthrift, feeble-minded Government, and I fear there is worse to come. The Minister's first appearance in this House as Minister for Finance is inauspicious. It would seem as if the "white elephants" which the Minister's predecessor, when he first came here, set out to annihilate, were having their revenge. If they trample down our Fianna Fáil Finance Minister No. 2 in their stampede, I trust that an appropriate monument will be raised to his memory, and I suggest that a pillar of sugar would constitute a fitting memorial. He would then enjoy a celebrity equal to that of Lot's wife, and I think he deserves it.

The McGillycuddy of the Reeks

I had the opportunity of reading the report of the statement in the Dáil in which the Minister outlined his proposals to the House and which he has repeated to-day. There are several things in that statement which I would like to quote. He said:

"In some Departments heavy additional and unforeseen expenditure has become necessary."

"We shall be fortunate indeed if the conditions created by the war do not result in greater burdens than those which I am now about to propose."

"The Irish people made great sacrifices to win independence. They will no less willingly accept the burden of defending it."

"The co-operation of all elements is necessary if the crisis is to be surmounted."

"The prospect must cause us all the very gravest concern."

Now, this is all on top of what Mr. MacEntee said in May last—"Stringent and straitened as our position is"— and so forth.

Well, knowing the position which they had created for the country, the Government did nothing to economise and, finally, when this sudden crisis came upon us, they came to the House, and they said, "There is a deficit of £1,600,000. We propose to rectify that by putting another 1/- on income-tax, by putting 7/- on sugar, by increasing estate duty and the duty on beer and spirits. We are contemplating various savings. We cannot tell you what they are. There will be still a deficit of £617,000 which we are putting on the long finger until next year and then the remainder of our deficit will be found by borrowing."

I personally have always felt that as a sovereign and independent State we should keep armed forces to the extent of our resources and not shelter entirely, timorously, as the Germans have already suggested. Listening to the Government in this crisis of their own making, one would almost think that the whole country was going to be mobilised in a few days to resist a physical attack. It is undoubtedly the war in Europe which is the immediate cause of this particular crisis and of the resultant, unfortunate, lamentable attempt which the Minister has put before us to make both ends meet. But it is not the incidence of the war itself which has caused the crisis but the economic structure which this Government has created in this country during the past seven years against everybody's advice and at enormous expense to the country. The result is that at the first puff of wind down falls the pack of cards upon the table.

It is really idle to ignore the geographical position of this country, as some speakers in the Dáil have already done, and to quote small countries that are paying a lot more to defend their neutrality. The real fact is that we are more desirably placed from a geographical point of view than any other country which is near or has anything to do with the belligerents. The fact is that if there had been some measure at all of responsibility in the conduct of our economics in the past seven years there would have been very little more than minor inconveniences in this country.

In his efforts to adjust the difference in income and expenditure which the Minister has revealed, he makes no secret of the fact that the present proposals, the present impositions on sugar, income-tax, etc., will do no more than give him a bare breathing space to work out further taxations. He makes no suggestion that he will make economies. He calls no halt to the main expenditures in which the nation has engaged for the last few years and he falls back on the well-worn excuse that Chancellors of the Exchequer in England have often used, that he is going to use taxes which are easily collected. Both the Minister and his predecessor had the expert advice of the Banking Commission which was set up by the Government themselves, but in no single item of their policy in the last few years have they attempted to implement the words of caution which the report of that commission contained and that no notice was taken of their advice is shown by the present crisis in this country. There was no preparation, no readjustment, of their normal activities whatever, quite regardless of the fact that a crisis was bound to come in the near future. That was known as far back as September, 1938.

If we turn to the proposals in detail. The first is income-tax, which is increased to 6/6, almost one-third of a £. Practically, in effect, it is a capital levy on a country that is not at war and which really should stand to profit by the higher prices which the belligerents must pay for their produce during the next year and we are practically adequately protected by a neighbour.

There are only two ways, I think, of meeting this extra tax and neither, so far as I can see, is to the national interest. The first one is a reduction of commitments of ordinary business and general life and that, of course, includes the employment of labour by those who are at present still able and willing to do so. The other is the liquidation of foreign investments which already in the past few years have been contracting in a very dangerous way.

In the present crisis I do not think you could take into account more than a few of the Irish investments, because, in fact, there is really no market on 'Change for them. The greater part of our foreign investments are in sterling, and national defence contribution and excess profits tax, plus the increased cost of production, will operate continuously to reduce dividends, and for that reason I question — perhaps wrongly—whether the Minister will get the whole of his estimate in that direction. Incidentally, in connection with income-tax, it is possible that the House may not realise that the actual income, for taxation purposes, has fallen in the last ten years by £5,000,000, while income-tax has risen in that period from 3/- to 6/6, so that the rate now imposed, compared with 1929, is a fraction over 7/- instead of 6/6.

The sugar tax has been so exhaustively dealt with elsewhere that I will content myself with saying that, though it is the one which bears on everybody, it bears hardest on the poor, the old age pensioners, and particularly on those with families of young children. I cannot think how anybody so able as the Minister was persuaded to put it at such a high figure, unless it was a counsel of despair. At any rate, I hope he will see that the last penny of income-tax is recovered from those merchants all over the country who hoarded sugar in huge quantities at the expense of the poor. Taking beer and spirits together, the resultant income is so small as to be immaterial in the present emergency. I take it that the Minister was encouraged to impose the increase, because the latest figures showed a slight improvement in consumption, and that he expects increased return from agriculture as well as more people on the dole.

Tobacco might really have been used to reduce the sugar duty. I am quite satisfied that young people, and a great many old people, will smoke cigarettes as long as they have money to buy them. But I enter a protest against, and I ask the Minister to reconsider, the tax on plug or common tobacco. It is hard on the workman, after a long day, to have to pay more for his only pleasure, a smoke.

Now we come to the postponed deficit, £617,000, which has been left on the long finger until next year. We do not know what that year will bring us in the way of further tribulation, as, in the Minister's own words: "We may have to shoulder burdens far greater than those which I am about to propose." Then we borrow. Would any public company get credit from anybody on a proposal such as the Minister brought forward, after four years of unbalanced Budgets? Thinking people are becoming seriously alarmed at our debt. Whereas in 1924 our outstanding debt was £13,000,000, with an annual interest charge of £120,000, it rose in 1937 to £73,000,000, with a charge on the taxpayer for interest of £2,733,000 per annum. I know that the Minister will say that rather than have any dead-weight debt, by a financial arrangement we save £100,000,000. I think the House will decide what the real answer to that is. Two factors affect the rate of interest at which, in the future, we will be able to borrow. The first is outside credit, and the second our savings. Our outside credit depends on the amount of our foreign investments. In the four years to 1935 there was a decrease in foreign investments amounting to £9,000,000, and though 1936 and 1937 practically balanced each other, 1938 showed a further decrease of £3,500,000. The second point is that every penny taken from savings or from the liquidation of foreign investments reduces the amount available for private enterprise in agriculture or elsewhere if it is lent to the Government. An absolute minimum of State borrowing in present circumstances should therefore be undertaken.

In connection with our present borrowing position I would like to draw the attention of the House to the words of Mr. Seán Moynihan and Mr. O'Loghlen, who both added minority reports to that of the Banking Commission. Mr. O'Loghlen said:—

"There is perhaps no part of my colleagues' report with which I am in such complete agreement as those passages in which they refer to the rapid and dangerous growth of the public indebtedness..."

"My colleagues say very rightly: ‘The large and continuous expansion of the burden of deadweight debt is one of the most serious matters which we are called upon to review...'

"While we do not want to give expression to any unwarranted pessimism, we think that on the facts and information at present available it would be rash to look lightly upon courses tending to increase the deadweight debt. Our considered view is that no increase whatever beyond the existing volume of net deadweight debt should be permitted..."

Mr. O'Loghlen goes on to say:—

"With this conclusion I wish to express my complete agreement."

I admit that he qualified it by saying that the Government should appoint a statutory commission, charged with the duty of providing productive employment. Elsewhere Mr. Moynihan tells us that, with the exception of slum clearance, which he holds to be absolutely essential to make up the leeway of mis-government, projects involving the creation of deadweight debt for any other purpose should not be approved unless an overwhelming case could be made for them. He continues:—

"Provision should be made for the redemption within a short period of all deadweight debt now existing or to be created in future."

As I have shown the House, this is being reduced year after year by millions. He finishes off by saying: "The national income sets a limit to expenditure which cannot be transcended without peril." I admit after saying all this that—in my opinion, at any rate—the the requirements of armaments in the present crisis demand a certain departure from the basic principles enunciated by these experts, but this expenditure should have been foreseen a year ago and savings made elsewhere, as far as possible, as an offset.

So far there have been very few indications of any savings whatever. It is true that the Minister has told us that about £400,000 will be saved, the details of which we will hear later. If there is any real urgency, the Minister owes it to the country to make really serious and drastic reductions in the expenditure which we are committed to at the present moment. I will only deal here with one point that has been discussed elsewhere by the Leader of the Opposition in fragmentary items. I wish to mention the huge number of State employees. The figures which I am going to give the House are available to everyone. They include Senators and Deputies as well as everybody else. They exclude officers and other ranks of the Army and the Gárda Síochána, as I have always deprecated tampering with the uniformed forces in any way. They take no account whatever of the stupendous amounts spent in office equipment and maintenance, as I had not the time to extract those items accurately.

If any Senator wishes to confirm the figures which I am giving, he can do it easily, but it will take some little time to arrive at them with approximate accuracy. When he has done it, he will find that there are 27,396—as nearly as I can put it—officers and wage-earners who are State paid. They receive about £11,250,000 in the yearly Budget. There are certain charges such as that for the Army, the Gárda Síochána, the old-age pensions, and widows' and orphans' pensions, which I have omitted, as I think under no circumstances should they be touched. When he does add them to the standard charges he will find that, out of a Budget of £32,000,000 there will only be a sum of £14,000,000 to come back in any form whatever to the original subscriber of the taxes.

I have not finished quite there. There is another burden—a necessary burden to a certain extent, as we must have local government as well as central government. We are carrying 23,000 county council officials—that is, outside wage-earners. There are, therefore, some 50,000 State employees carried by a population of adult wage-earners and taxpayers at the outside, 1,300,000. I personally would prefer to put it at 1,000,000, but I have kept my figures conservative and to the advantage of the Government as far as I possibly could. This 1,300,000 means one State employee for every 26 adults in the land. Taking the lower figure, it is one in 20. I am not for one moment suggesting that these officials do not serve us faithfully, loyally and well; but the question is: can a small country like this afford, in our stringent position, such huge numbers of State employees? It is no concern whatever of ours what other nations do in other circumstances. In my opinion, the whole of our administrative expenditure is based too closely on the British scale. I believe that if proper economies were made, the Budget deficiency could be found without any further taxation.

Mr. Crosbie

I would like to join with my colleague, Senator MacLoughlin, in sympathising with the Minister in having to introduce this Budget. I would, however, sympathise with him on slightly different grounds from those of Senator MacLoughlin. The principal ground on which I sympathise with him is that he has already had to listen to a lengthy and acrimonious debate on this Budget in another House, and is now faced with listening to a second debate on it in this House. I trust that tempers will not become frayed here, and that hard words will not be bandied across the floor of the House. No useful purpose can now be served by such recriminations. The fact of the matter is that this Budget is there, and that whether we like it or not we have got to make the best of it. For my part, I should like if possible to persuade the Minister to make certain alterations, rather than to fall back on past errors and past mistakes.

I wonder, however, if the Minister, before he drafted this Supplementary Budget, studied the figures for the national debt. If he did, he would find food for very deep consideration. In 1932 the national debt amounted to £31,000,000 odd. In addition to that, there was a local authorities' debt of £17,000,000 odd, making a grand total in 1932 of £49,000,000 odd. In 1939 we find that the total national debt including permission to borrow £9,000,000, and including the local authorities' debt, has reached the enormous sum of £109,000,000. Surely, if the Minister had given consideration to these figures, though he may have been forced to introduce a Supplementary Budget, he would have laid the burden of that Budget on other shoulders than the shoulders on which he has laid them.

I will take, for instance, the increased taxation on sugar. That is a tax, which, as the Minister stated in the Dáil, everybody has to bear. The entire community has got to bear it, but they do not have to bear it equally. It falls hardest on the poorest and most uneconomic members of our community, particularly on the poor families where there is a big number of children. Before this Bill goes through and becomes law, the Minister ought to see whether he cannot raise elsewhere the money which he hopes to raise by the sugar tax. He has imposed taxes on beer and tobacco, and he states in doing so that they are luxuries. I beg to differ with the Minister on that. Tobacco may be a luxury to well-off people, but tobacco is not a luxury to the working man. I think a fair description of tobacco would be a comfort. The same applies to the tax on beer and spirits, and I think the Minister ought again to endeavour to find that money somewhere else. Surely if the Minister sets his mind to it, with the assistance of the Economy Committee that has been set up under the chairmanship of the Parliamentary Secretary, sufficient economies in Government expenditure can be made.

The Minister will probably want to know what economies can be suggested. It is really not for us to suggest economies, but if the Minister wants an example, apart from expenditure on Government services and in Government offices, shall we take the question of flour milling? The Minister may say that flour milling does not come within the scope of his office but, on the contrary, it does, because the Minister for Finance is of necessity the Pooh Bah of every Government. All Departments have got to come to him for necessary supplies of money. Therefore, all Departments, including that concerned with flour milling, come under his eagle eye as keeper of the national purse. The position about flour milling, as far as I can make out, is that flour in this country is costing the people of the country—the taxpayers and the buyers of bread and flour— nearly £3,000,000 more than is necessary, or more than if they were buying flour in the open market. I have taken the trouble to look up some of the figures dealing with the flour milling industry and they again are rather illuminating. In 1931 there were 29 flour mills in Eire. These mills employed 1,979 employees. In 1937, which was the last year for which we have figures available under the Census of Industrial Production, there were 38 mills, an increase of nine. These 38 mills in 1937 employed a total of 2,769 persons as against 1,979 in 1931. There was thus an increase in employment between 1931 and 1937 of 790 persons. These people are not by any means all men or all adults. The figure includes juveniles and females. Surely to pay nearly £3,000,000 a year to employ an extra 790 people is an extravagance that this country cannot afford? One might go even further and say that it would pay the taxpayers of this country to give every one of these 790 people £3 or £4 per week for doing nothing, rather than to spend nearly £3,000,000 putting them into employment.

The Minister will probably say in reply, or if he does not his colleague, the Minister for Agriculture may say it, that that extra expenditure of £3,000,000 on flour is due to the subsidy on home-grown wheat, but that is not correct. If it was merely the subsidy on home-grown wheat that was involved, the figure would not amount to anything like that. It is due to the fact that the price of flour in this country is governed by the cost of production in the most uneconomic and inefficient mill in the country. All the other mills have to adjust their prices in order to shoulder the burden of the inefficient and uneconomic mills. That, if I may say so, is a matter to which the Minister might give his attention and investigate, because at this critical period in our national finances, it certainly does not appear feasible, practicable or just that the taxpayers of this country should be, shall I say, skinned to the tune of nearly £3,000,000 a year to pay for one of the necessities of life, when the production of that necessity has only given rise to an increase in employment for 790 people. I trust, therefore, that the Minister will give these matters his closest attention, and that on a later stage of this Bill he will be prepared to consider suggestions and recommendations both as regards the sugar tax and the various economies that the Government might make.

Mr. Douglas

Probably every member of the House sympathises with the more or less ad misericordiam appeal which the Minister made—“Nobody loves a tax-gatherer”. At the same time, I should like to suggest to him that he should view the problem from a somewhat different angle. I should like to suggest to the new Minister for Finance that it might very well be—if his prophecy is right, and I am very much afraid that it is, that the war is going to be a long one—that the financial policy of the Government may be even more important to the future of this country than the policy of any other Ministry. I say that deliberately, and I include definitely the Ministry of Defence and the Ministry of Supplies, which some people seem to think are more important. I, therefore, suggest to the Minister that he may have a very unique opportunity, and that if he can produce a satisfactory financial policy, which will enable this country to come through the next two or three years, he will deserve the credit of everybody in this country, and he will get it. Instead of worrying that nobody loves a tax-gatherer and that he is a new Minister having to introduce a Supplementary Budget, I should like him to take a more optimistic view and to feel that he has got the chance of his life, a unique opportunity. I say that not simply in a joking manner, but because it seems to me that the great lack in the speeches we have had up to the present has been a lack of indication of anything which could be called an outline of a policy for the next two or three years, and if some of us jibbed at an income-tax of 6/6 in the £ and disapproved of sugar at 4½d., and other charges, we might not be inclined to worry about or to oppose these charges if we were quite satisfied that they were going to enable this country to go through the next two or three years without very serious danger and damage.

The Minister stated in the Dáil, in, I think, the peroration of his last speech on the Second Reading of the Bill, in reference to the credit of the country being unimpaired:—

"We intend to keep that credit position safe as long as we are the Government. We shall borrow for those things for which we ought to borrow, and for which we can borrow with a good conscience. As for the day-to-day expenditure, we shall come to the House and straightforwardly and honestly tell it what the position is, and take the consequences."

I should like to approve of these words so far as they go, but I think that if there is to be borrowing, if there has to be a further loan—and I think it is probably inevitable—we should have an indication of a two or three years' policy in relation to the problems we shall have to face here, and we should know what the borrowing is for; and if there are to be Supplementary Budgets for day-to-day expenditure, using the words of the Minister, we should be fully satisfied that every conceivable effort has been made to keep that day-to-day expenditure at a minimum.

I personally view the position here with regard to the future with a great deal of misgiving, and I am not foolish enough to suggest that I can put forward a simple remedy. I do think, however, that the whole position should be viewed without any attempt to make Party capital or to gain Party advantage, because I believe it to be extremely serious. Whether we like it or not, whether we blame it on the policy of this Government or the other, as some people do—I do not—or whether we regard it as the inevitable result of our geographical position, we are very closely allied with Great Britain in economic matters, and I do not believe we can get away from that fact. Great Britain is engaged in a war, the seriousness of which we cannot estimate at the moment. Their responsible Ministers say that it will be a long war and, at any rate, they have a policy for a long war. The Minister for Finance agrees, and I am afraid that for any of us to say anything to the contrary would simply be wishing something which we have no evidence to prove.

That country is spending about £6,000,000 a day. I do not know where they are going to get it; I do not know how it is going to be met; but it is their policy. They are spending it and a great deal of it is going simply, as it were, into the sea. That has enormous drawbacks, but it has some compensations. Acquaintances of mine in London tell me that London, economically, has been suffering intensely during the war; on the other hand, I have information that there has never been as much employment for years as there is in other towns in England. This vast expenditure is not a compensation for a war, and the evil attendant on a war, but it does induce a certain amount of compensation and does provide employment for a considerable number. My fear, and it is a serious fear, is that we are going to get most of the drawbacks. I am speaking from the economic point of view and I am not suggesting that that is as bad, or can be as bad, as loss of life, and the evil and hatred involved in a war, and for being spared which we cannot be too thankful; but I am very much afraid that because of our close economic connection with Britain, which we cannot avoid and certainly cannot change suddenly, we are going to get the drawbacks and not going to get what I have called the compensations, for want of a better word. It would be a serious thing, and no one realises it more than I, to have to borrow largely to add to what is called the deadweight debt, to hand down to those who follow us large debts which may be a burden on them. At the same time, it is a terribly serious thing to allow to continue a policy which will simply increase unemployment, as seems to be the case, and hand down a growing unemployment, with the discontent and the other things which may be connected with it during the next two or three years.

It seems to me that a good deal of the Government's financial policy, so far as I am able to understand it, has a tendency to increase unemployment, and the only remedy I can see is that we are going to maintain social services at the same standard. Now, social services are good, but they are no remedy for unemployment. They are only a palliative at best—we all agree on that. The Minister to-day said that increased taxation had a tendency to increase unemployment. I agree. That is inevitable with most types of taxation and it certainly would apply to certain of the taxes which he has increased in this Budget. The policy of non-spending, except in so far as it is a bona fide saving from waste, also may have a tendency to increase unemployment. The policy adopted at present by the Prices Commision, I think, will have a tendency to increase unemployment. The Prices Commission are very anxious, and, I think, rightly anxious to avoid profiteering. The policy which they are adopting in most, if not in all, cases, is that no matter what increase of volume of trade may be achieved by any industry here, there must be no increase in profits, unless it is a direct result of increased capital in the business; that if we get from workers, and those responsible, increased production, that if the turnover is doubled, the rate of profit must be halved and pro rata.

I am convinced that the intention is good, but I believe the result will definitely be bad, and I should like to ask the Minister whether, if he is going to borrow a certain amount, the Government have put their mind to the problem of what is going to be done with that borrowing and whether it is not possible—and if it is not possible, we should be quite sure, after the most careful investigation, that it is not—to find schemes of capital expenditure which will not be deadweight debt.

Sir John Keane

For example?

Mr. Douglas

In business, we find that nothing is more dangerous than to go on increasing your capital, unless that capital is remunerative. If you do, you will come to grief, sooner or later. We are simply going to borrow to increase social services and similar schemes, and if we cannot see that the generation that comes after us is going to be better off and better able to produce; that the total wealth of the country, from the point of view of production, is increased by that expenditure, then I think the result will be bad. We will simply be leaving the country with a burden of taxation that it can scarcely stand.

Senator Sir John Keane says: "For example." I am not going to take up the time of the House throwing out vague suggestions which I am not in a position to prove. What I do want to suggest to the Minister is that part and parcel of Government financial policy during the next two or three years when we are facing an emergency, should be to seek for and see that whatever borrowing does take place should, as far as is possible, be spent on schemes which will increase the future productive capacity of this country. There were suggestions in some of the Reports of the Banking Commission for the setting up of very elaborate machinery—to my mind far too elaborate and, I think, unworkable. If you had a small group of persons, whether they were in the Government or closely connected with it, who would come down and say definitely: "We have examined this and find that there are no schemes of capital expenditure which will be remunerative in the future," then we could say that the position was hopeless, or at all events it would be up to us to produce some other schemes, if anybody could do that. I hate this talk about public expenditure and public works. It generally means putting up a new Parliament House or something of that kind. That is all right for a wealthy country, but it is impracticable in our time.

I think that a bona fide effort ought to be made to see whether it is not possible to find public expenditure which will yield an increase. The reason why many of us are alarmed at the steady increase of taxation is not because the total expenditure per annum is getting higher, but because it is getting higher in proportion to the national income. If we could increase the national income the Minister would not have any worries. For my part, I look with the gravest misgiving, in view of what some Ministers have said and what I fear to be the case, on this: that we are going to have steadily increased unemployment during the next six, nine or 12 months. I look with the gravest misgiving on the political and financial effects of that on the country. I believe it is as important, if not more important than the protection of our neutrality, to find some method of dealing with that. We cannot separate it as an ordinary economic problem. We talk about the Army and of expenditure on it as part of our defence, but I believe this is as much defence of the future of this country as anything else.

There is one small matter that I want to deal with. I am putting this suggestion forward to the Minister in connection with his scheme of new taxation, particularly in regard to income-tax. At the present time private individuals and partnerships pay their income-tax in two instalments. Limited companies have to pay it all in one instalment at the beginning of the year. I happen to know that quite a number of the smaller industries here are faced with the fact that raw materials are costing more, and that prompt payment is almost essential in order to get supplies. Payment once a year, which was perfectly reasonable when income-tax was 3/-, becomes a pretty considerable hardship when income-tax is going up to 6/6. I would like the Minister to consider whether it would not be possible to allow the same privilege to a limited company that is allowed to private persons or partnerships running industry.

Mr. O Ceallaigh

It might be possible, but at the same time it might be hard in the first year.

Mr. Douglas

I suppose the Minister means hard on him. It comes harder on the company, because there will be less money coming in.

Mr. O Ceallaigh

There might be more coming in in the first year.

Mr. Douglas

At any rate, I put that forward to the Minister for consideration.

Mr. Goulding

It is extremely difficult to stand up in any place to defend taxation. None of us likes it. We all have to pay taxes, and I suppose are opposed to taxation, but where the national interests are concerned we have to agree, whether we like it or not, and have to endure it. In an Assembly such as this, every effort should be made to help the Government to find the money that it needs, and to find it in the best way possible. Disruptive criticism, such as we heard from Senator McLoughlin this afternoon, will get us nowhere. There is no earthly use in holding forth and saying that this or that tax should not be imposed, and at the same time making no suggestion as to where the money is to be found. As I have said, we should do all we possibly can to help the Government to find alternative means, if such exist. The only way the Government can get money is by imposing direct or indirect taxation— taxation which will hit the people as evenly as possible, taking the community as a whole. The well-to-do members of the community are pretty hard hit by the direct tax on their incomes at present. In the case of people of means, income-tax to-day is a very serious burden. There is no way of levelling taxation over the community as a whole except by putting indirect taxes on the things that are used by the people who do not pay income-tax. If any Senator can suggest a way of avoiding this taxation on the poorer people, we should be all very glad to hear it. Personally I do not see how it can be done.

I thoroughly agree with what Senator Douglas has said as to the seriousness of the situation that is facing us. His suggestion that expenditure in the future should be made remunerative is a wise one. I wish some Senator could suggest a form of expenditure that, in the end, will prove remunerative to the nation. That is what we are looking for, because undoubtedly we are approaching a very serious state of affairs in this country, not perhaps as serious as that in other countries. We cannot hope to escape the effects of a world war. Inevitably, the enormous and wasteful expenditure that is going on to-day all over the world is going to have serious effects for us, as for every other nation. We here are not throwing away piles of money on explosives. We are not sending out vessels which cost £4,000,000 to be sunk in the Atlantic. We are not building enormous fleets of aeroplanes to be blown to bits eventually. At the same time, we are bound to make some effort to defend ourselves. Every small nation must do that. Therefore, what we want in this debate is constructive criticism. I would suggest to speakers who follow me, if they can possibly do it, to point out to the Government where they are incurring expenditure that is not going to be remunerative, and in what directions they are inflicting taxation that is unjust and unfair, and any other way in which they can suggest a reduction in the present burden of taxation and in what way economy could be introduced.

I think every Senator will admit that we cannot economise on the social services. Senator Douglas pointed out a moment ago that unemployment is going to be a very serious problem in the near future. If so, you have got to cater for that. None of us agrees with what is popularly known as the dole. We would all prefer to see the men who are getting the dole at work. Can anyone suggest how it could be done? At the moment there is a certain amount of public opinion in favour of breaking with sterling and going out on our own. I am not sufficiently conversant with finance to say whether that would be a wise thing to do, whether it would be wise for us to break with sterling and follow the example of New Zealand, for instance. Perhaps it would be worth exploring. Other people have various ideas as to what we might do in the matter of currency. All these are worth considering and if anyone is sufficiently conversant with high finance to give us a constructive speech on the possibility of breaking with sterling he would be doing good work, but it is merely wasting time to criticise without making any constructive suggestion whatsoever.

Mr. MacDermot

Surely the Senator is ignoring the most obvious thing of all. Surely he is ignoring the most obvious thing that has to be done, that is, to make the principal industry of the country remunerative.

Mr. Goulding

Agreed. Undoubtedly. Senator Crosbie, a moment ago, dealt with the expenditure on flour, but Senator Crosbie did not inform us that that expenditure is within Ireland. The bulk of that money goes to Irish farmers and to workers on Irish farms. If that money was sent outside Ireland and spent on something that was manufactured abroad, which we would have to import, then it would be unwise expenditure, but the expenditure, such as it is, is inside Ireland and the money is left to Irish farmers, Irish workers and Irish manufacturers. Therefore, that is not wasteful expenditure.

Look at the other side of it. We are approaching a terrible time in this country when, perhaps, it will be impossible to obtain food stuffs from abroad. If we were depending on outside forces altogether, for the next year or two for our flour and our sugar, where would we be? The wheat scheme and the beet scheme have been vigorously criticised in the other House and here, but where would we be in the next few years but for the fact that, to a great extent, we will be able to supply our own needs in both of these essential commodities? I do not count that as wasteful expenditure at all.

As Senator Douglas pointed out, the increase in the national burden that is going to be imposed on this country in the near future, is a very serious thing because, if the national income does not increase, then it is going to be very hard on the people who will remain to pay the increased expenditure. I would ask any Senators, who are to speak here, to endeavour to put forward constructive criticism which will help the Government. We are supposed to be a non-Party House here. Let us act in that spirit and do all we possibly can in the national interests to make the burden lighter for everyone of us. We are all going to suffer—Senators, T.D's., working people, farmers and all. A terrible national burden is going to be inflicted on everyone of us. Let us try to help the Government to make that burden as light as it possibly can be made.

Mr. M. Hayes

I am afraid I am not sufficiently expert in high finance or sufficiently fertile in constructive suggestions to satisfy my friend, Senator Goulding, but before I go on to the main debate to-day, perhaps I might point out to him that his position, seeing that he was satisfied with taxation last year, is entirely different from the position of a person who was not satisfied last year. That is the first important difference between the supporters of the Government and other people. Senator Goulding thought last year that 5/6 income-tax was quite a sound thing. Naturally, therefore, when the war came along, Senator Goulding says it is only 1/-, but, as a matter of fact, it is 3/- on 3/6 but only 1/- on 5/6. That is a very important distinction between the reasonable supporter of Fianna Fáil and the supporters of other Parties. The Government, with which we are asked to co-operate, really wants those who represent nearly 50 per cent. of the people, to remain entirely silent while the Government, which certainly has a majority in the country and in the Dáil, carries out its own policy. I submit to the House and to Senator Goulding, who is a very reasonable member of this House indeed, that the people who do not support the Government would be neglecting their duty to the country if they failed to put their point of view and to explain the situation that now exsts as they see it.

The Minister introduced himself to us to-day in a rather forlorn and pathetic manner as a twin, and he led us to understand that the policy enshrined in this Budget, the policy of increasing taxation, is a kind of new born babe. It is no such thing. The policy of increasing taxation does not arise from the war. The Minister talked of the drastic suddenness with which the war came upon us, implying thereby that with drastic suddenness the Government was forced to increase taxation, to increase income-tax, to increase the sugar tax, to increase the tax on tobacco and the tax on beer and spirits. What we have here is merely the logical development of a settled policy on the part of the Government of increasing expenditure and increasing taxation with no reference whatever to either a disturbed situation in Europe or to an actual state of war. Since 1932 they have increased the tax on sugar—the example which, I suppose, is nearest to everybody's heart, and which presses most severely upon the poorest section of the community, because those who have least variety of food desire, and ought to get, more sugar than others. But the Minister's Government increased the sugar tax to 2d. after they came into office, and then to 2¼d. They reduced it to 2d. in 1938, and now it is 2½d. again; but it is not for a war situation they increased the tax on sugar. It was for no war situation at all.

Apart from the increase in taxation, an increase which did not press upon the rich but upon the poor also, it was laid down definitely by the Parliamentary Secretary to the Minister for Finance and, I think, subscribed to by Ministers themselves, that the poor must pay taxes. The disagreeable and melancholy fact of the situation here and everywhere else is that, in spite of election propaganda, you cannot impose taxation which the poor will not have to pay. This Government, before the war broke out and before there was any talk of war, taxed sugar, for example, and taxed the poor in a great variety of ways. We have had rising taxes from central government, rising rates from local bodies, rising cost of living and rising cost of production, not only to farmers, but to the very people the Government set out to help—industrialists. And apart from these high taxes, we have had hidden taxes on sugar—about £1,000,000 a year —for 1934, 1935, 1936. We have had the increase, about which Senator Crosbie spoke, on the bread and flour which we must all consume—and the poor more than others, as a matter of fact—owing to the Government's scheme. I want to remind Senator Goulding that some of the money that was taken from the pockets of the poor for the flour-milling industry did not go to the farmers and did not go to the workers; it went into the pockets of the flour millers.

Mr. Quirke

Not all of it.

Mr. Hayes

A very substantial portion of it, and an entirely disproportionate part of it, went, not into the pockets of the workers by way of wages or into the pockets of the farmers by way of subsidies, but into the pockets of the flour millers, while the ordinary man must pay more for his tobacco and pint of porter. As it happens, I am not concerned about these things myself.

There are people who have made a profit owing to Government policy such as the flour millers. There is no talk of restitution by them of the money that Government policy put into their pockets. It was a very substantial sum indeed. We had an estimate of the sum which the bacon curers made by a Government Commission, and it amounted to £300,000. That money did not go into the pockets of the workers or the farmers. It went into the pockets of the bacon curers. At the time when we are told that a working man who makes a false claim on the National Health Insurance Society is doing an immoral thing, as undoubtedly it is, I suggest before we go after him we should get back the money that was improperly taken from the pockets of the poor and, if it cannot be given to the poor, it should, at any rate, go to the Government to lessen the burden of taxation on everybody, including the poor. Besides these taxes on sugar, flour and bread, we had a hidden tax on bacon. We had a Government scheme under which the production of bacon decreased, until it became a luxury that none but wealthy persons could eat. We had also a tax on butter. There is no use in saying that it was not much. It was there.

Besides all these things, we have the Government endeavouring to make the economy of this country stand on its head, and it is because of that that we have no resources now to meet this situation, and it is because of that we are called upon to bear taxation at a huge figure. Seeing that there are no rich here, it must be borne by working people. If I understood what the Minister said aright, the working people must bear their share without getting any increase in wages. I think he will find some difficulty about that. Senator Goulding told us that we had no navy, a very small army and air force, and that we were not making projectiles or ammunition to plunge into the sea. Of course we are not. Is not that fact the greatest indictment that there could be of a system of expenditure which is larger here in proportion than that of Great Britain? The British had a 5/6 income-tax before the war. So had we. What were we doing with it? Senator Goulding said that the British were building an enormous navy, that the cost was much bigger than that of last year, and that they were also building an enormous air force. I hope I will not be accused of being pro-British, but if I were an Englishman and was asked to pay increased income-tax there would be some satisfaction in doing so in order to get adequate protection. They have also been building up enormous armaments.

For five years before the present Minister was appointed, and before this Budget was introduced, we had here no expenditure on armaments, and no expenditure on a navy. There was not even sufficient expenditure to provide blankets for the Volunteers when they were called up, if the information I got was correct. The British had a high income-tax, and in this small neutral State it was just as high, but they had enormous armaments for their far-flung Empire, and they are, perhaps, the richest people in the world. We were subjected to the same taxation for no good cause.

I do not want to be acrimonious, and to imitate the tactics of the Dáil, but when Senator Goulding asked me how a better scheme could be found, surely there must be better schemes in the files in Mount Street, at the Fianna Fáil headquarters, where they had schemes for doing everything. However, none of the schemes they took up has been good. Our position is that, in spite of all the money we have spent, and all the talk about subsidising the farmers, we have had decreased production, and what the present Minister for Industry and Commerce described as an alarming decrease in agricultural employment. Now we are faced with a war situation in which the only thing that the Government think of doing is to expend money and increase taxation. If they were doing that under a definite plan, one might not be so discontented about the whole situation, but the position seems to be that they have no more plans for the future than they have given evidence of for the last seven years. For us that is a very serious position.

Senator Douglas wanted to know if there was any clear plan for the future. If my recollection serves me right, the Taoiseach told us on one occasion that their policy of self-sufficiency was a good one, and that he was sorry it was not continued further, but the present Minister for Industry and Commerce told the Dublin Chamber of Commerce that we were in a state of dependent economy. Unless the English language, which is very treacherous, is serving us badly, I do not know how the two things could be reconciled, self-sufficiency on the one side and dependent economy on the other. What happened is that we have endeavoured during seven years to pursue an unnatural economy, and that we are now in a position it is very difficult to get out of. Surely, if the propaganda of the Government about the economic war was correct, we ought to be £5,000,000 a year to the good. One would cheerfully bear the burden if the problems they set out to solve had been solved or were even in the process of solution. But we have still growing unemployment, apart from the war situation, decreased agricultural production, decreased agricultural employment and nothing at all to indicate that money, spent so lavishly, is being put to good use.

Senator The McGillycuddy commented on the enormous increase in the Civil Service, and suggested that the number should be reduced. Unfortunately, it is not so easy to reduce the numbers when they have grown. When the Government increases the number of officials, it is very difficult to decrease them without hardship to individuals. The real remedy was not to have taken the action that was taken, instead of having to come along now and to decrease the numbers. Before the war took place the Government fought a little war of their own, and lost it hands down. We are going to have a loan now for war purposes. We have just had a loan to pay the British £10,000,000 on top of £26,000,000 before that. We are paying the land annuities by a round-about process. Several suggestions could be made, but no steps should be left untaken to put the farmers into a position to benefit by the war. Our geographical position and our political position as members of the British Commonwealth —if we are members of it—should be taken advantage of to improve their position. Increasing agricultural production will increase employment and benefit everybody.

Ministers themselves should get clear in their minds as to a long-term policy and should face up to their responsibilities—not through civil servants—by talking to British Ministers on the question of long-term agricultural production to see what could be done in that respect. That might have the effect of improving our position here and giving us a return for our taxation.

I wonder if the Minister could give the House any information as to whether he really expects to get the return from the taxation, and particularly on tobacco and spirits, with neither of which I am concerned because I neither smoke nor drink. Senator MacLoughlin does not like people who do not smoke or drink, but from what I hear there seems to be considerable economy exercised in these things by many people.

I would like to add to what Senator Douglas has said with regard to limited liability companies and the payment of income-tax in two instalments. At present they are obliged to pay in one instalment. It has been put to me by a number of people lately that in very many cases this payment, in the new situation with the increased rate, would be a very grave hardship. Firms now are expected to pay practically in cash for raw materials or for materials which they sell in retail houses. The only people who can survive are people who are in a position to pay cash or on short credit terms. It has been suggested to me that the State Treasury itself would benefit if an arrangement were come to whereby, instead of having to pay the tax in one instalment, they adopt a system of payment like that for private individuals, in two instalments. I gathered from the Minister's reply to Senator Douglas that he was definitely prepared to consider it. It would be valuable. The situation with which people are faced is a very bad one and the payment of a single sum might perhaps have the result of some people going out of business and of others effecting economies in a way which would mean a reduction in employment. I wish to assure Senator Goulding and everybody else that any scheme which increases employment, increases agricultural production and increases the strength of the country will have the support of every member of the House and of every good citizen.

Mr. MacDermot

The taxes that are embodied in this Finance Bill are terribly heavy and I would be more cheerful about it than I am if I were even sure that they were heavy enough to produce all the revenue that is really needed in the present situation. Naturally enough, the Government are upbraided with extravagance. Senator Hayes has made the point that the size of this Budget is not to be thought of as a sudden misfortune brought upon us by the war but that it is the logical development of the policy of the Government during the last seven years. There is truth in that, but it must also, in fairness, be said that it is to some extent a responsibility which the Opposition must share.

The outcry against extravagance is always kept in general terms; and when a measure of expenditure is proposed in the Dáil it is attacked by the Opposition as too mean and too stingy. That is the case not only in this country but in most countries where the Parliamentary system exists. The Opposition will complain when the Budget is brought in and high taxes are proposed; but all through the rest of the year they will do everything they can to spur on the Government of the day to incure more and more financial obligations. It is popular to abuse expenditure and in general to talk about extravagance, but when it comes to starting any particular economy it is always an unpopular thing to do. In many cases during the last seven years the Government have been pushed by the Opposition into higher expenditure than they were proposing. There have been cases where the Government proposed economies and where they were forced out of those proposals by the attitude of the Opposition.

The size of our present Budget is something for which no Party can altogether clear itself of responsibility. Certainly, the Labour Party cannot do so any more than any other Party. The Government are naturally entitled to say that the war has made a large contribution to it; and I am not one of those who are inclined to say that the Government should have done nothing in the way of self-defence in this country. I think the honour and status of this country demand that we should make such expenditure as we can afford in protecting our own shores against aggression, but I wish that the Minister or somebody in the Government would tell us a great deal more than we have been told about the state of our defence forces of various kinds. The British—who are a nation at war and who, therefore, have more reasons for secrecy than we have—are given infinitely more information in Parliament about the strength and efficiency of their forces. We are told next to nothing. I confess myself to be in a condition of almost blank ignorance as to what our defence arrangements really amount to. I have heard a number of very alarming stories lately, similar to those of which Senator MacLoughlin has been telling us this evening. Regarding the coastal defence, for example, I have heard it alleged that the whole of this improvised coastguard system is a ridiculous farce; that it is doing no good and could not do any good until some adequate arrangements are made for communications, for supplying the watchers with binoculars and for giving them some sort of training to enable them to recognise what they are supposed to have been placed there in order to see, if it comes. I do think the Government ought to take the country much more into its confidence than it has done so far, so that we can have some ideas as to whether we are getting value for our money in regard to the very considerable expenditure which is taking place upon defence.

Senator Douglas has referred to the subject of unemployment. There is, at any rate, one Minister—the Minister for Supplies—who has stated that for us this war is primarily a problem of employment; and I have no reason to suppose that what was stated by the Minister for Supplies is not the view of the Government in general. I hope it is realised that that is the greatest of all problems facing us for the next few years. Senator Douglas has spoken of discovering some reproductive public works which would contribute to the solution of that problem. I ventured to intervene when Senator Goulding was speaking, with the suggestion that the most productive of all forms of Government effort would be the taking of such measures as would make our principal industry remunerative. If we could feel that agriculture was really on a sound basis in this country, we could look forward to the future with infinitely more confidence than we can at present. One of the few hopeful things that has been occurring lately has been the discovery by the Fianna Fáil organ, the Irish Press, of Dr. Kennedy, of the Irish Agricultural Organisation Society. I was delighted to see that he has been given the honour of a leading article on his ideas. Dr. Kennedy has, for a considerable time; been carrying on a devoted campaign in order to stimulate the zeal necessary to attain a greater degree of agricultural efficiency.

Sir John Keane

From grass.

Mr. MacDermot

Yes. He recognises, as everyone recognises, that agriculture is our key industry and he claims that dairying is the key industry within the key industry, that it is the key industry of agriculture, so to speak. He has been for years past pleading the case for the introduction of a more up-to-date system in regard, in particular, to winter dairying.

When I was in the Dáil and when the Centre Party existed, we had a motion, I remember, at one time asking the Government to set up demonstration farms in various parts of the country to be run by the Government at the public expense and to be used, not only for showing everything that was most modern in agricultural methods, but also for showing that these modern methods were remunerative. Naturally, the Government did not like the idea of that because it was in the middle of their policy of standing our economics on their head to which Senator Hayes referred a few moments ago. In other words it was in the middle of the so-called economic war, and obviously under these circumstances no demonstration farm, however up-to-date its methods, could be made to pay. But now the situation has changed. If ever there was a time when agriculture in Ireland should be given a fresh start, it is now in the middle of a European War, with the British so embarrassed to get goods across the seas and with such an opportunity for us to fill the British markets with agricultural exports.

I do suggest that the Government ought to give immensely more attention than they have so far appeared to give to the question of improving the methods of our agriculture. Farmers have had a lot to complain of, I admit, in the way of Government policy, but I do think that not all of their misfortunes, not all of their difficulties, not all of the poverty in the agricultural districts are due to bad Government policy. I think they are also due to the fact that we have been too easygoing, that we have not kept up with modern developments in agricultural methods. Figures prove conclusively that over the period of the last 20 years, whereas other agricultural countries have gone ahead immensely, we have stood still. We cannot expect our farmers, who have been hard hit by the events of the past few years to start large-scale experiments such as I have in mind, without considerable prompting from above. Therefore, if the Government are contemplating the spending of money on public works, I would venture to suggest that there is no form of public work on which money could be more usefully spent than on agricultural processes that would demonstrate to our farmers new methods which would put this country on a sounder footing than ever it was on before.

It was pointed out very forcibly by Deputy Childers, in the Dáil a week or two ago, that this war, or any war, might be regarded in some respects as an actual danger to our agriculture because it makes things too easy: that England might find herself in the position where she had to have our products at any price and that, consequently, we might go on producing lazily in any old way knowing that England would have to take our products. Once the war was over we would find ourselves, it was pointed out, again in competition with people who utilised absolutely first-class methods, so that we must not postpone this thing until the war is over.

That the war produced special difficulties in the way of getting foodstuffs and other supplies into this country I quite recognise, but, even recognising that, I do urge that an opportunity is here of which the Government should take advantage, and that everything should be done to make our agriculture more skilful and more economic than it has been so far. It is very disturbing to find, in spite of all the opportunities the Government have had to learn economics during the last seven years. in spite of a good many speeches which inclined one to suppose that they had learned a great deal during the last seven years, that every now and then things are said which seem to show that the old Adam is alive and kicking even now. For example, I must confess that I was horrified to hear the Taoiseach the other day referring to the policy of having the widest possible exchange of goods and services as a policy of the jungle. I cannot imagine a worse inversion of economics and commonsense. The policy of the jungle is essentially the policy of what is called self-sufficiency and isolation. If we are ever going to be in a position in this country to bear big burdens or to make our taxes so productive that they can be fixed at a lower scale than they are at present, it will be because we have got away from false economic ideas.

Complaint has been made of the particular taxes embodied in this Budget I do not propose to go in detail into these taxes, but one thing I would say with reference to a remark made by Senator Crosbie. He spoke of tobacco as being a necessity to the poor and the working man, and, therefore, an improper subject for taxation. I think we have got to face the fact that there are not enough rich people, that there are not enough even moderately well-to-do people, to provide the money the country needs. The poor and the workingman have got to contribute as well. The working man's luxuries are not numerous, and whether you are to call tobacco a luxury or a necessity is a matter of terminology that, perhaps, it is not very interesting to pursue. What certainly is true is that you have got to tax something like tobacco, which is almost universally consumed in order to raise the money that the Minister needs. If it is almost universally consumed there will be people who will call it a necessity. That cannot be helped. It is an unfortunate fact that the finances of the country can only be kept in order if the whole of the community, including the poor and the working man, contribute to them. In fact, the bulk of our revenue must come from people of modest means because there are not enough of the other sort of people. In conclusion, may I ask the Minister, when he is replying to this debate, to say something, if he can, that may cheer us up a little about the expenditure on defence and the state of the arrangements for preserving the inviolability of our shores.

An tOllamh Liam Ua Buachalla

Ach oiread leis na daoine atá tar éis labhartha ar an mBille seo, níl fonn orm cuidiú le Bille a chuireas cánta ar dhaoine; ach san am chéana, ba mhaith liom é seo do rá, go bhfuil fáilte agam, ar slí, roimh an mBille, mar taisbeánann an Bille go bhfuil an Rialtas dá ríribh mar gheall ar chreidmheas na tíre do chosaint. Dá bhrigh sin, tá áthas orm go raibh sé de mhisneach ag an Rialtas, agus tá súil agam go mbeidh an misneach céana acu aon uair a mbeidh an t-airgead de dhith orra agus go dtiocfidh siad roimh an Oireachtas agus an fhírinne d'innsint faoi'n sgéal. Níl morán cleachtuithe agam ar imtheachta an Tighe seo go fóill ach caithfidh mé a rá gur thug an cainnteóir deireannach sásamh dom. An chéad chainnteór, labhair sé go nimhneach, searbhasach i dtaobh an Taoisigh. Níor chuala mé riamh im shaol oráid chó nimhneach, ná, chó granndha le h-oráid an tSeanadóra sin.

Tá a lán cainnte mar gheall ar na cánta atá á chur ar shiuicre agus ní mhian liom dul isteach ins na h-airgóintí ar fad. Do leigh mé gach focal a labhradh sa Dháil agus léigh mé oráidí na n-Airí air, agus caithfidh mé a rá, go bhfuil mé ar aon inntinn leis an bhfreagra thug an tAire ar na h-oraideacha sin. Na daoine bochta, tá a lán cainnte mar gheall orra! Ach, beidh siad i ndan an cháin d'íoc agus sé an fáth go mbeidh siad i ndan í d'íoc mar gheall ar gcabhair a thug an Rialtas agus atá an Rialtas ag tabhairt dóibh. Cinnte, beidh siad i ndán an cháin sin d'íoc. Beidh sé deachair orra, ach creidim go bhfuil an méid sin measa ar a dtír ag muintir bhocht na h-Éireann go mbeidh fonn orra an tír do shábháil, agus go n-íocfaidh siad an cháin sin. Rinneadar cheana é agus déanfaidh siad arís é. Tá a lán cainnte mar gheall ar chánta mar seo— deirtear go dtógann an Rialtas an airgead as pócaí na ndaoine agus go gcuireann siad ina bpócaí féin é. Ceard imthígheas ar na cánta go bhfuil siad ag gearán mar gheall orra? Sé'n rud atá á dhéanamh ag an Rialtas ná ag iarraidh an t-airgead a fháil ó na daoine gur féidir leo é do sparáil agus é ag tabhairt do na daoine bochta atá 'na chall.

Tá tagairt déanta do scéimeanna soláthracha nó sceimeanna "reproductive". Bhíos ana-shásta leis an óráid ón tSeanadóir Dubhghlas. Tá ceart agus ciall aige. Táimíd go leir ag iarraidh go gcaithfear an t-airgead ar scéimeanna soláthracha agus faoi sin, creidim go láidir gur ceart níos mó airgid do chaitheamh ná atá á chaitheamh, ar scéimeanna den tsort sin— draenáil, portaigh, boithre agus rl. Mara gcaithtear an t-airgead ar scéimeanna fóirthine agus solathruigheacha ní ar an Rialtas atá'n locht ach ar an lucht poilitidheachta atá 'na n-aghaidh. Tá na scéimeanna seo ag cuidiú le feabhas agus le saidhbreas na tíre. Sé mo thuairim gurab iad lucht oibre iad féin na daoine is mó atá ag cur le forfhús scéimeanna mar sin agus ba cheart ciall do bheith ag lucht oibre faoin scéal. Ba cheart dóibh smuaineamh ar an díoghbháil táthar ag déanamh don tír agus scéimeanna solathracha a choinneál ar gcúl.

Níl morán le rá agam anois mar, gidh go bhfuil a lán rudaí le rá ar an mBille seo, tá siad ráidhte cheana sa Dáil, agus dá mbéinn ag cainnt ar feadh dhá uair an chluig, ní bhéinn ach ag déanamh aithris ar poinntí atá déanta cheana san Tigh eile. Tá poinnt ann, amhthach, gur mhaith liom tagairt do dhéanamh dó. Bhí cainnt mar gheall ar an méid rachmus nó maoine atá caillte ar an tír seo. Táím ar aon inntinn le gCoimisiún na Bancaerachta faoi rudaí áithride ach ní creidim go bhfuil an tír seo caillte. Níl aon chaillúint ann gur fiú cainnt uirthi. Ba cheart do dhaoine cuimhniú ar seo: Cén fath a gcuirtear airgead i leath taobh ó am go h-am? Mar bíonn súil aca go mbeadh sé de dhith orra nuair bheadh rudaí ag dul ina gcoinnibh san am le teacht. Tá cuid aca ag rá gur ar an Rialtas atá an locht faoi phé'r bith cailliúnt a bhí ann ach ní chreidim-se é sin. Níor chreid mé riamh é agus ní chreidim anois é. Tháinic an Rialtas seo i gceannas ar an uair is measa a d'fheadfadh aon Rialtas teacht isteach. Tháiniceadar isteach nuair bhí briseadh ar tionnscail, ar fheirmeoracht agus chuile short eile, agus deirim-se é seo: Murach a ndearna an Rialtas ó tháinic siad i gcomhacht, ní hé go mbeadh na tionnscáil sin go lag ach bheadh na tionnscáil imighthe ón tír ar fad. Cinnte, chaill an tír roinnt— rud nádúrtha é sin agus an chall a rabh an saol—ach ní fiú trácht air mar chailliúint.

Bhí cainnt ar an airgead atá á chaitheamh ar an Airm agus ar chosaint na tíre, agus tá mugadhmagadh á dhéanamh 'na thaobh. Is ioghantach an rud é sin—in Oireachtas na tíre seo, go mbeadh Eireannaigh sásta seasamh suas agus an Rialtas do mhaslú, mar gheall air go ndearnadar a ndicheall chun saoirse agus nea-spleachas a dtír do chosaint. Feicimíd náisiúin níos láidre ná an náisiún seo, náisiúin go raibh nea-spleachas aca, náisiúin nar fhulaing mar d'fhulaing an tír seo agus náisiúin a bhí réidh i gceart le cogadh, imighthe ar fad agus a nea-spleachas scriosta. Tá ceart ag an Rialtas gach rud is feidir leo agus gach rud atá riachtannach do dhéanamh leis an tír seo do chur i gcóir len a saoirse do chosaint, agus molaim don Aire, agus an Rialtais aon rud atá riachtannach, mar cídhtear doibh é, do dhéanamh agus beidh beannacht muintir na h-Eireann leo.

Aon uair a mbeidh gá leis, ní hé amháin go mbeidh muintir na h-Eireann sásta a gcuid airgid do chaitheamh le saoirse na tíre do chosaint, ach, beidh siad sásta le lánchroidhe é do dhéanamh. Ní mian leis an Aire Airgeadais pighin amháin do chaitheamh ar aon cheo muna fiú é do chaitheamh. Creidim nach bhfuil fonn ar an Rialtas airgead do chaitheamh ar an Airm, agus ar na rudaí eile ar a bhfuil airgead á chaitheamh gan fath maith a bheith leis; ach is aca atá an t-eolas, agus dá bhrí sin, tá muinghín agam as an Rialtas agus as na h-Airí atá ag déanamh na hoibre. Creidim nach gcaithfidh siad aon phingin amháin níos mó ná atá riachtannach, agus deirim-se gur ceart don Rialtas aon rud atá riachtannach le saoirse na tíre do chosaint do dhéanamh nó dhéanfaidís feall ar an náisiún.

Tá poinnte eile ann. Chualamar a lán cainnte ar thionnscáil an bhágúin agus an phlúir agus ar na brabacha móra atá dá bhaint amach as na gnaitheacha seo. Tá cuid de na daoine a bhí ag cainnt annseo agus ag cainnt ins an Dáil, d'réir na tuarascbhála a léigh mé, agus tá siad ag rádh go bhfuil sé in am ag an Rialtas scrúdú a dhéanamh ar chunntas na gcomhluchta mór agus pé ar bith brabach mór a fuair a bhaint díobhtha. Is greannmhar an rud é, ag teacht o na daoine atá ag cainnt mar sin. Mar, creid mise ann, tosaigh air sin leis an tionnscal bágúin, tosaigh air leis an tionnscal plúir, agus cuirim an cheist ortha: cé'n áit a stopfaidh sé?

Cé fuair an rud so amach go raibh airgead mór á bhaint amach ag an tionnscal bágúin? Chreid Fine Gael gurab iad a fuair é sin amach. Níl sé fior. Narbh é an Rialtas a chuir an bórd ar bun le praghasanna a sgrúdú is le brabach a nochtú? Narbh é an Rialtas a rinne é sin? Nach é an Rialtas fhéin a rug greim ar lucht an bhágúin agus narbh é an Rialtas fhéin a fuair amach cad é an brabach a bhain siad amach? Tuigim fhéin as an méid sin cruthú eile ar dúil an Rialtais teacht suas ar dhaoine a dhéanfas éagcóir ar an bpobal nó aon chuid de'n phobal.

Sin á bhfuil le rádh agam ach amháin go gceapaim gur rud anmhaith é go bhfuil deis á thabhairt do'n phobal anois roinnt dá gcuid airgid sparáltha a choinneál sa mbaile. Táthar chun iasacht a chur ar fagháil anois. Is ar mhaithe leis an tír an iasacht atá molta ag an Aire. D'réir deallramh, beidh failte ag an tír roimhe agus is dóigh liom nach mbeidh stróbh ar bith ar an Aire an t-airgead fháil.

Mr. Fitzgerald

I think it was the last time a Finance Bill was brought before us—and that was not very long ago—I had to point out that the Minister for Finance is the last Minister who should come in here with such a Bill as this. What the Minister does is merely to decide how money will be raised. His function really relates to the incidence of taxation. This additional taxation has to be put on, not through his action, but through the fact that the Ministers responsible for the various Departments have allowed those Departments to go on increasing their expenditure. The Minister says that a rise in expenditure is unavoidable and he remarks that the existing taxation ceased to bring in the amount that it did before. He moves from the point that we had reached before this war began. As a matter of fact, he assumes that we presume that the whole money spent when this war began was rightly spent and rightly taken from the people. I contest that right away. He says that large scale economies are not feasible. Unfortunately, I have to talk about what I know. I am not in that perfectly free position of my colleague, Senator O Buachalla. One is able to get up and talk more eloquently when one is not handicapped by a close knowledge of detail, but I will handicap myself and I will not give myself his freedom. I must talk about something I know something about.

In the last year that I was in charge of the Department of Defence the Appropriation Accounts showed that the cost of the Army for that last period was £1,170,000, if I remember rightly. Previously, each year it had fallen down to that. As far as I can see at the moment, the cost is something over £5,000,000. That jump is not a jump immediately from £1,170,000 to over £5,000,000. During those years, from 1932 onwards, there was a steady rise in the cost of the Army. One might say, why talk of relating cost to value? It is assumed that if an Army costs £5,000,000 it is five times as good as an Army that cost £1,000,000. It may be right the other way about. The rigid control of expenditure on the Army during the period before this Government came into power improved the general discipline of the Army. My own observation and the information that I have indicates that this larger expenditure has disimproved the value of the Army as an army. When the war had begun we had a mobilisation of reservists at enormous cost, and if you work out the cost per reservist, you have got to put more than the cost of his food and of his pay. I know myself of cases where two-ton lorries were sent to bring along one reservist. You can see that is waste. I quite agree. But, much more vital than that is that that general laxity, that lack of control, that lack of immediate making of decisions at headquarters has led, I am convinced, to a disimprovement in the quality of the Army. We have gone from £1,170,000 to over £5,000,000.

I notice that we have now a Minister for a non-existent thing—a Minister for the co-ordination of defence forces and we put another man in as Minister for Defence. I think that may well have been justified because— I am not speaking with any intimate knowledge—under the existing Minister for Defence there was a wild mobilisation, without any regard to the advisability of it or the capacity of the Army to absorb those men and to look after their discipline and utilise them, and maybe—I do not know—it was considered that it would look rather bad if the Minister who had wildly done that immediately began wildly demobilising them. I do believe that since that change has come about a great number of these men have been demobilised and I am very glad to see that. But here, in this one case, we had a jump from £1,170,000 to £5,000,000. To my mind that is scandalous. Senator O Buachalla can say how horrified he is to hear the way we quibble about money being spent on our freedom and all the rest of it. You must look at the facts of the case. You must first of all see whether this money is necessary for the defence of this country and, secondly, if this money is being used in the best way for the defence of this country. I think the answer in both cases would be in the negative.

I think we do need a small Army in this country. I think you must have an Army, largely with a view to the internal order of the country. The consciousness that there is an Army able to bring its military activity into force against subversive activities in this country is vitally necessary.

The Minister spoke about the countries around the Baltic and so on, and of what they have tried to do. The position of the countries in the Baltic is this: that they are surrounded by their immediate potential enemies, and are in the peculiar position of being unreachable by those who, in existing circumstances, we might calculate would act as their friends in defending them from aggression. Now our position is quite different. I assume that we are not thinking of declaring war on England, so that we are in that peculiar position which is just the opposite of the countries that the Minister referred to. We are in the position where we are cut off, very largely, from possible aggression, and are immediately close to possible co-operation. We are spending £5,000,000 or £6,000,000 on our Army, and we love to get up and talk in these days when there is a war on, when small nations are getting a bad time of it, when many of them are losing their sovereignty, and say: "Is it too much to ask our people to spend £5,000,000 on the Army?" When you spend money you must relate it to what you are spending it on. Money spent on an Army is, in a way, waste, because it is not productive. It is defensive.

If we are going to conceive of our Army and of our defensive arrangements as being related to the resistance of a hostile invasion in this country, we must then face the fact, as I said in 1927, that our defence forces would co-operate with the defence forces of Britain. The members of the Fianna Fáil Party may remember the words that I used on that occasion, because they used them as an advertisement with that high sense of honour that was then so typical of that Party. They most carefully changed my words and put them in a public advertisement in inverted commas. I think that if anyone ever had cause for a libel action against the Taoiseach I had on that occasion. I said in 1927 that, in the event of a general attack on these islands, we could not blink the fact that our defence forces would co-operate with the defence forces of Great Britain. The people who used that remark of mine as an advertisement have had to accept it since. Now, the defence of this island and of Great Britain is really one, and if we are going to spend £5,000,000, with a view to the defence of this country, it does seem to me that militarily the expenditure of that money must necessarily be done in co-operation with the British Government.

Mr. Stafford

Nonsense.

Mr. Fitzgerald

I do not know who the military expert is who has told me that it is nonsense. I doubt it very much. If this country is going to be attacked by a hostile force it will be part of an attack on Great Britain, and the defence of these two countries then becomes one. If we are going to spend this large sum of money on defence it must be related to a joint defence of these islands between ourselves and Great Britain. Is any Senator going to say that the force, the power, which overcomes the power of Britain, is then going to be successfully resisted by our Army. I believe in patriotism. I believe I have some elements of patriotism in me, and, unlike some people in this country, that patriotism demands of us that we accept the truth. The truth is that the country that can overcome Britain is eminently capable of overcoming us. The truth is that, at a given point, if you take the present situation in Europe, and if that position becomes such that Britain falls before her present enemy, or that her fleet is no longer able to defend these islands, as they do at the moment, then we are spending £5,000,000 to put up an army to resist the power that has overcome them.

To my mind that is rot and not patriotism. I do not think it is the truth. Consequently, if we are to relate the function of our Army to the defence of this island against an enemy other than Great Britain, then I hope that our Army is in close association and close conference with the British Army, so that the defence measures between the two islands can be coordinated. It is very nice, of course, to feel that you are a very much greater patriot by calling that nonsense. But that is the fact.

If Great Britain is overcome, and if her enemy's fleet is controlling the seas; if for some reason or other the enemy should decide that they are going to land their forces in this country, what are we going to achieve by this expenditure of £5,000,000 on our Army? I would like to know what anybody expects from that. I can quite see that it might be possible that another Government might say to us: "You must put up certain defence propositions" and, if that is so, I would like to hear about it. There is no reason why it should be concealed from us. There is no use in the Government creating a feeling in the country which amounts to humbugging the people.

I do not want to say this by way of tribute to myself, but I maintain that the Army we had at the end of 1931, which was then costing £1,700,000, was an efficient Army within its size and equipment. I am not at all satisfied that the larger and more costly equipped Army of to-day is equally efficient. I have referred to the slackness of sending a two-ton lorry to bring in a reservist, and then of nobody knowing what the reservist is to do when brought in. You had a system for reservists in the Army under which a man could resign on seven days' notice. I ask Senators to use their common sense in considering this matter. The men in charge of reservists, no matter how they sweat blood in trying to make them into fine soldiers, cannot do that when the position is that a reservist, on giving seven days' notice, can resign. Does anybody think that the discipline that is going to be applied to these men is the same as that applied to the men in the regular Army? I am not blaming anybody for the fact, which was inevitable, that the discipline for reservists that was maintained before this mobilisation, when men knew that they could resign on seven days' notice amounted to—I do not like using the words— damn all, but these words very adequately describe the discipline at that time.

Suddenly, the Government decided to call in men from their ordinary jobs, men who were in useful productive employment and earning money according to their condition in life. They were dragged into the Army. They had not a very high standard of discipline. I do not want to introduce any Party matter into this, but I believe that a great many of those in the reserve were able to suggest that they had powerful friends in Fianna Fáil quarters. I am satisfied that the bringing in of men who were in a position to resign on seven days' notice had a detrimental effect on the discipline of the Army.

There might, perhaps, be some justification for a larger expenditure on war-like stores, but I do think that a larger part of this increase of nearly £4,000,000 on one service is not merely waste but that it is harmful waste. It is disimproving the Army. The Minister for Finance may have argued all this out in the Cabinet. The Minister for Defence, I imagine, came in there and said that he wanted so much money. I would think that the Minister for Finance, while expressing the sincerest sympathy with him, would go into the Cabinet, and, in the interests of his Department and of the well-being of the people of this country, would argue against this high expenditure. I should think he was voted down there, and that he was sent in here to defend what, I hope, he denounced in the Cabinet.

I referred before to the police in this country. I do not know whether we feel that we are getting value for the police. The cost of the police has gone up to an enormous extent in the last seven or eight years. I am not satisfied that even for seven or eight years before that, when they cost less, we were getting really good value. Anybody who moves up and down the country must realise that our police force leaves much to be desired. I do not want to go into minor details, but we have expenditure on police which, presumably, is to some extent, due to the fact that there is a revolutionary organisation operating here. One hears in town and city of activities of that organisation which do not appear in the newspapers. For instance, I heard recently of interference with places of public entertainment. I have not seen it in the newspapers. The police have never tackled that problem properly since this State was set up. Can you wonder then at the drastic powers being given to the Government to have men arrested and not summonsed under the ordinary law? We have hunger strikes which are a sort of whine and people who ought to know better saying "Is it not terrible?" The Government was quite right when they arrested men legitimately, put them in jail and told them that even if any of them injured themselves the law would take its course. The Minister knows that the inefficiency of the police was largely brought about in that way. I am not blaming this Government for that, as to some extent, it existed when we were in power, and when a man got into jail he assumed, no matter what his sentence, that in a few months he would be out again, that he would be met by bands, that he was a marvellous fellow and a great sufferer for Ireland, and all the rest.

The Government has refused to apply the law properly. The police themselves to my mind have shirked this. The Minister stated that large scale economies were not feasible without interfering with the standards that have been set up. I believe if the police force was tackled rigidly with a view to economy that one of the byproducts of the economy would be a more efficient force. People are now asked to pay one-third of their earnings by way of income tax to the State. When these people buy a pound of sugar, the State gets 2½d. No matter what a person buys he is paying taxation. The difference between buying Irish-manufactured goods and non-Irish goods is that when you buy the latter you pay taxes to the Government and save your fellow taxpayer, whereas in the case of the Irish manufactured goods you pay taxes to the protected industry and you do not save your fellow taxpayer. I think the Government has not really faced up to the position. We are told that the Economy Committee cannot be too drastic. The Economy Committee could be drastic in two ways. How? You have individual Ministers not doing their job. The cost of the Army, for what we are getting, and as its services are directed, is scandalous. The police force could be reduced by at least 33? per cent. leaving us with a better police force.

We have the Department of Industry and Commerce, and every intelligent person realises that taking the cost, if the Minister was told to go away and take a holiday and do nothing, the country would be better off. The major part of the money spent on the Department of Industry and Commerce has been spent to the detriment of the people. The Cabinet system here is a difficult one. You have the Minister for Defence going to the Cabinet and saying what the Army is costing, and the Minister for Industry and Commerce coming along with wild-cat schemes about home industries, alcohol schemes and potato growing schemes that are going to blossom like roses, with the result that the Minister for Finance has to consult his officials to see how the money will be raised to finance those schemes. The taxation imposed is a scandal in relation to the actual production that takes place. There is also talk about giving employment. The object of giving employment is to produce. The Government might turn round and harden their hearts saying: "What we want, and it is our prime consideration, is to increase production." If they did that I think they would be doing a good thing.

In all the talk about giving employment, and about upsetting or interfering with the standard set up, it should be remembered that these standards are not automatically going to stay up in value if our production is constantly lowered. During a period of decreased value in production, you cannot maintain standards by living on savings that were accumulated beforehand. For the last eight years we have been living on accumulated savings, as can be demonstrated by figures that it would be too complicated to go into now. Now we have a new situation, creating all sorts of difficulties, a situation which may well mean a hastening of the demise of new industries. I think in the new situation—no matter what the Government thinks—the price of agricultural produce is going to increase. Just when that situation gives a chance to the one thing that matters, agriculture, the Government comes along with still more taxation. As to the economies, taking what I have been told—I do not say that it is true—production here is valued at about £150,000,000, and with a population of 3,000,000, the Government takes out of that sum £30,000,000. Right away the Government takes practically one-third or one-fourth of the whole productive value. What does it give for that? Is it giving value?

If you have to give someone one-fourth of your income you expect some reasonable service for it. Most people here find that they are merely handicapped by the work of the Government. The prime work of the Government has not been done because we have an inefficient police force. We are throwing money away on the Army and making it less efficient than it was. The Minister has to go to the Cabinet after consultation with the officials, to ask what would be a reasonable sum to mulct the people in, whether it should be £15,000,000 or £20,000,000. He has to go to the other Ministers and tell them that, without doing injury to the people, they could raise from taxation £15,000,000 or £20,000,000, that they could divide that amount amongst their Departments and spend it on keeping a big useless Army or dud alcohol factories, but that did not interest him. There is a limit to that. The Government by such taxation definitely injures the country, and is definitely working against increased production or the maintenance of the old standards.

If this country goes down in production, what is the good of saying that no large-scale of economies are feasible? Standards that have been set up will have to go unless we increase production. This is an enormous impost for the Government to put on the country, and it injures it in 100 ways, one being that it makes production more difficult. If production does not continue, present standards cannot be maintained, and if present standards cannot be maintained why is there so much talk about economies? These economies are necessary if we are to make any real attempt to maintain present standards. If this country is going to be rich it is only by the work of the people that that is possible. If people think they are going to have a nice life by the Government taxing farmers and spreading money around that does not get us anywhere.

What will get us somewhere are the productive efforts of the people. In 1914-1918, when we were part of a belligerent power taxation was not as high as it is now. What are we fighting for now? We have people going around saying: "Is it not splendid that we are neutral?" What does our neutrality mean? It seems to be dearer than war. I think the people are getting a very raw deal from the Government. No member of the Government has ever faced up in his own Department to the needs of the country. Money is being borrowed for the Army and we are told that it is not known how long the war will last. We are to maintain an Army on borrowed money, and we are told that drastic economies will have to come afterwards when the war is over, but that it is well to get whatever benefits we can get now.

Sitting suspended at 6 p.m. and resumed at 7 p.m.

Mr. Honan

I have just a small contribution to make to the debate. My chief reference will be in connection with the allegation—I believe it is not merely an allegation, but said to be a fact—that there has been a progressive increase in taxation. That is undoubtedly so; but we all claim to run the nation with the concrete idea in our minds that this is a nation which has been neglected for hundreds of years and that it has to be rebuilt. If you go to rebuild anything— especially a nation—it requires money, and the only way by which money can be procured is by taxation and borrowing. With the increased progressive taxation we can also say that we have increased progressive services, that the various social services have been increased in proportion to the taxation.

I refer in particular to the many housing schemes; to the demolition of slum areas and to the establishment of great schemes of houses in various towns throughout the country. Many towns which never had the advantage of sanitary accommodation, of a water supply and public lighting now are in a comparatively up-to-date position. Most of them are in that position so far as could be done in the time at the disposal of this country as an independent nation. There is no doubt that the point made about the progressive increase in taxation can be accounted for by the progressive increase in social services in every possible department. As for the extra expense that has been incurred, or is about to be incurred, in the defence of our country, I do not think anybody could reasonably say—now that we claim ourselves to be a sovereign, independent nation, at least as far as 26 counties of our State are concerned —that national defence is unnecessary. We were long enough in the toils of foreigners; now that we have achieved freedom for that part of our country, I think it is our duty as a nation to see that, in regard to the liberty that we have attained after so long, we will take at least a hand in its preservation.

It is too much to expect of any householder that he should depend on his neighbour to protect his house and property. Every man worthy of the name of householder and every Government worthy of the name of controller of a nation should at least take a hand in the defence of house and country. It would not be a fit or proper thing that the independence of this country —or of any other country for that matter—should be left to the tender mercies of any neighbouring nation.

As regards the increased taxation in this Supplementary Budget, it is, of course, regrettable for everybody that it was necessary; but, as it was necessary—and most people believe that it was necessary—I think the taxation was put on the items which least affect the people. If flour were taxed, if butter were taxed, if tea were taxed, or if the various other commodities that comprise our main food were taxed, that certainly would be a very grave thing for this country.

The articles which have been taxed are undoubtedly mostly in the category of luxuries. Those are the articles upon which we are dependent upon all occasions to bring in revenue to the State and I do not see how taxation could be better placed on any other commodities. I have very little sympathy, comparatively little sympathy, with the immense army of smokers, male and female, of cigarettes and other kinds of tobacco. If they wish to economise they can certainly do so by lessening the quantity of tobacco they use. The same remark applies to alcoholic beverages. Anybody in the habit of consuming them, if he feels he has a grievance, can curtail the amount he usually takes. If I had any plea to make in connection with the imposition of taxes on tobacco, it would be in reference to one class of tobacco that might be excluded from taxation. I refer to tobacco known as common twist or roll tobacco which is generally smoked by poor people and working men. If it were possible for the Minister to exclude that class of tobacco from the taxation imposed on other classes, it would be highly desirable and popular with all Parties.

Agriculture, of course, is a subject in which everybody is interested, as this is mainly an agricultural country. We should all be very glad if production could be speeded up to any great extent. I may say, however, that there are counties along the western seaboard, from Donegal to West Cork, in which the people are almost terrified to hear of further subsidies for the agricultural community because, by reason of their geographical position and because of the quality of their land, these people are unable to partake of the advantages of those subsidies and other benefits provided for the agricultural community. It has been already computed that the western counties who derive no advantage from the subsidies for beet, wheat and various other corn crops, are contributing from £2,000,000 to £3,000,000 a year to the counties which are blessed by nature with facilities for producing these crops. That is not quite just or fair. I do not know how it can be adjusted but certainly no equivalent advantage is given to those western counties which are not in a position to produce these crops. The people there are very big users of beet products and flour and they are amongst the biggest users in the country of tobacco and sugar by reason of the fact that these commodities provide them with the only luxuries they can afford. It is computed, by good authorities, that these counties, who cannot partake of the subsidies, are contributing by way of taxation, £2,000,000 or £3,000,000 per annum for the subsidisation of the more fortunate counties.

If the Minister for Finance, the Minister for Agriculture or any other Minister could devise some plan by which those counties would get the equivalent in some way of the advantages enjoyed by the midland and eastern counties, I am sure we should be all very glad. At the risk of repeating myself, I say that the present arrangement is very unfair to the western counties. None of the other items in this Budget call for attention, as far as I am concerned, but I am sure that the Minister will take note of what I have said on this matter and convey to the appropriate Minister and the appropriate Department the inequality of the position as between the eastern, the midland and the western counties. The western counties do not benefit at all from the subsidies that are given for the cultivation of the crops I have mentioned.

Professor Johnston

I feel, after listening to the eloquent denunciations of some speakers on this side of the House, that any further denunciation by me of this Finance Bill would be in the nature of flogging a dead horse, and I should be the last person in the House to wish to compete with the Minister in that occupation. But I would be giving a completely false idea of my attitude to this Bill if I expressed myself as being simply opposed to it. I think, in existing circumstances, a Finance Bill of this kind is absolutely necessary, but the necessity of this stringent increase of taxation arises, not so much from the circumstances created by the war, as from the results of the economic policy which has been pursued during the last seven years.

Now, before I get on with the rest of my remarks I would like to say, by way of introduction, that there is a very charitable doctrine of the Roman Catholic Church, the doctrine of invincible ignorance by which those people like myself who are invincibly ignorant of theological truth may, nevertheless, hope to slip into Heaven by a side door when we leave this present evil world. I would ask the House to believe that if the Government remains invincibly ignorant of economic truth and of the laws of social morality, the people who are the victims of such a Government are quite likely to slip into Hell by the front door of revolution. That, I think, is a description of the position in which we now find ourselves, and of the dangers that now face us.

I would not like to set out on a tirade of denunciation of Government policy, as such, because that is not my trade, and that is not my instinctive attitude to public questions. There are three points of view from which speeches in this or the other House may be delivered. One is that the Government has intelligence, but is lacking in patriotism. The other is that the Government has patriotism, but is lacking in intelligence, and whichever of these two is adopted—I do not propose to adopt either of them—the result will be that, in the course of your remarks, you are bound to flatter the intelligence of the Government at the expense of their hearts, or flatter their patriotism and goodwill at the expense of their intelligence. I am going to take up a totally different point of view.

I am going to assume that the Government have both intelligence and patriotism, and that what has failed in the last seven years is the service of me, and the likes of me, people whose profession and occupation it is to study this problem of economic welfare in the spirit of scientific disinterestedness, and to make available for the Government and the public the results of their disinterested investigations. For one reason or another those experts, and I am not by any means the only one, have failed to direct the marksmanship of the Government in its efforts to aim at the public welfare. So that I stand before you, so to speak, in a white sheet of penitence for having failed to make clear to the Government the true facts of our economic situation and the principles that should have guided our economic policy during all these years.

Let me remind the House quite briefly, almost in a sermonette, of the most fundamental facts and principles of social morality. One of them is that each section of the community should, as far as possible, attempt to increase its own contribution to the common pool of goods and services, as a condition of seeking to enlarge its own receipts from that common pool of goods and services. What do we find in practice? We find, in fact, that each section of the community, so far from attempting to increase its contribution to the common pool available, is attempting to get a larger share for itself of the diminishing total. That is true not only of the horizontal sections of the community so-called capital and so-called labour, but even of vertical sections of the community, the sections including capital and labour who have interests of their own which they pursue to the disadvantage of the common interests of all, and who use their economic power to obtain for themselves a larger share of the national income which, in consequence of this continuous fight between rival sections and selfish interests, is in danger of being diminished and at the moment is actually diminishing.

I would like to remind the House that the national welfare, economic and otherwise, can only advance as a whole if that advance is general all along the line. Mind you, I am quite aware that there are sections of the community who call themselves disinherited sections and who are, if you like, disinherited. I am aware that, compared to the rest of us, there is a greater need that they should make advances in general economic welfare than that the rest of the community should advance. The brutal fact is, and it is true, I think, that unless some little advance is made somewhere by every element in the community it is impossible for any section of the community to maintain a continuous trend of advance.

Now, in a normal healthy state of the economic body we find a gradual improvement in economic welfare common to all classes of the community, but more especially noticeable with reference to the poorer classes. Speaking as a member of the more privileged classes, I may say that so long as the welfare of the community as a whole is expanding I do not mind the poorer classes getting nearly 100 per cent. of every increase in the general economic welfare, but I do consider it regrettable that any section of the community should exercise its power in such a way as to secure for itself economic gains which can only have the effect of diminishing the economic welfare of the nation as a whole.

In other words, I deprecate and deplore the policy of grab by each section at the expense of the community as a whole. When that policy of grab is general throughout the whole community, its effect is to impoverish everybody, and even to neutralise the effects to some extent, of a successful policy of grab exercised by a privileged section of the community. Now a policy of grab succeeds only in the case where the successful robber is not himself robbed, and if only one section of the community could pursue successfully that policy of grab it would undoubtedly gain a permanent economic advantage from that policy.

When we have a situation in which, one after another, different sections of the community grab something for themselves at the expense of the community as a whole, then the advantage to each section in turn, which it attains as the successful robber, is neutralised by its being itself the victim of robbery by other successful predatory sections. In that situation if the beggar-my-neighbour policy spreads itself round the community, and was equally practised by other sections, the community as a whole would remain in much the same relative position except that everyone would be somewhat poorer in consequence of misdirected efforts. When we find that the successful grabbers are not coincident with the community as a whole, but only with a large fraction of it, the net effect is that the weaker sections are definitely depressed and injured in their economic welfare by the successful robbery practised by the economically strong sections. My complaint against Government policy for the last seven years is that unintentionally or otherwise it has conferred rights of legalised robbery on one section of the community and another.

I illustrate that by pointing to the milling industry. I think it is one of the greatest rackets in the country. It was the deliberate policy of the Government to increase the number of mills functioning, for the obvious reason that in so doing they increased employment in grain millings. One effect has been that whereas there were formerly about 100 mills producing maize and flour for commercial purposes, there are now about 140 mills. Whereas ten years ago there were some 20 or 30 mills producing over 100,000 cwts. of milling products each per annum and producing then practically four-fifths of our total milling products, now in consequence of favouring the growth of small mills there are only something like 15 mills producing more than 100,000 cwts. of maize meal and flour and the larger proportion of the total milling products is now produced by small mills.

I have every sympathy with the small man up to a point. The economic situation with regard to milling is that if it costs 2/- per cwt. in the small inefficient sort of mill to turn maize into maize meal, and if it cost 1/6 per cwt. in a more efficient mill and 1/- per cwt. in the most efficient type of mill, then if you want the less efficient type of mill to survive you must fix the price of maize meal at 2/- a cwt. over the price of maize all along the line, in order to allow the least efficient producer to survive, and that 2/- per cwt. margin, which is only necessary because of artificial inefficiency, becomes a margin at which every one of the mills producing maize can operate, and becomes a source of surplus profit to the mills producing with a greater degree of efficiency.

In that way I calculate that the cost of milling maize meal and flour has been increased systematically—no doubt without realising the full implications —by at least 6d. per cwt. in the last seven or eight years. That 6d. per cwt. sounds very little but when applied to some 17,000,000 cwts. of milling products it amounts to something like £425,000, and that £425,000 is simply and solely a tax levied by one section on the rest of the community, and particularly on farmers who use maize meal as a raw material. It becomes a tax on the cost of production, falling generally on the community who eat wheaten flour. A tax of that kind amounting to £425,000 a year is a serious thing in itself, but the iniquity to me is that that tax is not really a tax in the sense of payment for public services rendered. It is not something which goes into the public Treasury and out of which public services are paid. It is simply a transfer, induced by public policy, from the pockets of the community, into the pockets of a section of the community, to induce them to do something which is undesirable and which it is uneconomic that they should do. The object of the policy in that case was to increase employment in the milling industry.

According to the census of industry the total employment in the milling industry in 1937, was some 4,000 and in 1929, ten years before this policy was started 3,000. In other words, employment in milling was increased by a paltry 1,000 people, and it cost the community nearly £500,000 a year to achieve that result. It does seem that the policy itself, if carried to its logical conclusion, would lead us back again to the grinding of grain by means of the quern, of which we have examples in the museum, in which case you would employ perhaps 4,000,000 people grinding meal and flour, but less flour and meal would be consumed under these conditions than now. That is one example of many of a policy which has the effect of legalising the robbery of the community as a whole in the interest of one section.

Another section of the community that has been enabled to levy taxation off the rest of us is, of course, the wheat growers. If we take the difference between the price we have to pay for wheat to our wheat growers and the world price as £7 a ton tax represented by the higher cost of wheat is a matter of something like £2,000,000 a year on the consumers of wheat. It will not do to represent wheat and beet as concessions made by the community as a whole to the agricultural community as a whole for the fact of the matter is, as Senator Horan pointed out, that the number of farmers whose land will grow wheat is limited. It is not a matter of hundreds of thousands to choose from. The number of farmers who can produce wheat is limited, yet the poorer farmers, especially in the west, whose land will not grow wheat or beet are victims of this policy because they have to pay more for sugar and for flour than they would have to pay if this section was not compelled or bribed to rob the rest of the community. In suggesting that the wheat growers are robbing the rest of the community perhaps I am giving a misleading impression. The position from their point of view is that the money is handed to them on a plate by a beneficent Government and, why not take it? Even then the advantage of the wheat policy to them is not commensurate with the loss suffered by the rest of the community in respect to that commodity.

The only gain to the wheat growers is the difference between the price they get for wheat and the price they would obtain for other products on which they would have used their capital, labour and land if they had not grown wheat. That is a matter about which some debate might be made. It certainly would not be equivalent to £2,000,000 a year. The policy, from that aspect is economically objectionable, since it robs the community as a whole of greater value than it transfers to the section that is favoured. Exactly the same considerations apply to the growing of beet. The Minister has bemoaned the loss of public revenue by growing our own sugar instead of importing cheap sugar, as a matter of £1,000,000 a year, varying with the customs duty on sugar.

On this whole question of beet and wheat, I know the answer is given that in time of war or national emergency the nation would be false in its obligations to its own welfare if it did not exert itself to procure the production at home of the elementary necessaries of life. That is all very well, but the position with regard to sugar is not the same now as it was in 1914. In 1914 these islands were largely dependent on sugar from the Continent of Europe, which was cut off in consequence of war. Following 1914, however, there has been an extension of cane sugar growing in tropical countries like Cuba and Java, and so a large surplus of sugar, cane and otherwise, was available in the world— so large that it constituted a major world economic problem. So long as the seas remain open to commerce we have had no difficulty whatever, and we will have none, in importing as much sugar as we like at world prices which are likely to be, even under the present conditions, actually less than the prices we are going to pay to the farmers for the production of beet sugar. One may say: "What about the submarine campaign?" If it succeeds in cutting off our commerce and our supplies of necessary imports to this island, then we are sunk, anyway, and it does not matter a "hang" whether we have beet or wheat of our own or not. We share the fate of every small neutral country in Europe.

I might have gone all round the circle and shown how one section of the community after another has got what amounts to a right of private taxation of the rest of the community. I could have added up those taxation rights to an estimate on the financial value of that right to each favoured section and probably would have arrived at the result that the total amount of this kind of private taxation, or legalised robbery, is something in the neighbourhood of £10,000,000 a year.

If it is possible for the Government to reverse that tragic policy and undo some of those policies which have legalised this large-scale robbery, it will automatically increase the taxable capacity of the nation without raising the existing rates of taxation, and increased revenue will be obtained with which to carry on the public services. If the policy of handing out industrial and other privileges to one section of the community after another had enriched the nation as a whole there might have been something to be said for it, but actually there is overwhelming evidence that this policy has impoverished the nation as a whole. At the present time the nation has a lot of industrial parasites crawling all over its body and eating its life blood. The precise word which is capable of describing this is not one that could be used here. Until a remedy has been applied to the body economic we cannot hope for economic health and for the advance of our economic prosperity.

The evidence that the nation has been impoverished by the effects of the policies of the last seven years has been overwhelming. As compared with other countries situated in much the same economic position as we are, we find that our national income has not yet recovered its 1929 figure; whereas a country like New Zealand, in many respects similar to ours, has reached and passed the 1929 figure. I think I am right in saying that the same is true of a country situated such as Denmark was, until the war came along and shut out recent information from that country. We are, of course, primarily an agricultural—that is, a live-stock rearing—country, and so far as that aspect of our economic activity is concerned, it is, I think, true, if you look at our agricultural statistics you will find that in the course of the last 80 years the only aspects of our agricultural activity that have shown advance are the increase in the number of dry cattle two years old and upwards and the increase in the poultry population. Other things, such as pigs —which are entirely suitable to the economy of small-scale farmers—have maintained practically stable figures during the last 50 or 60 years, at a level of about 1,000,000 pigs in the country on the 1st June—a totally inadequate degree of expansion of a pig industry which ought to be one of our principal agricultural activities. In the last few years our pig population has remained stable at about 1,000,000 pigs or rather less.

A country which ought to be part of ours although it is not, has had quite a different experience: in Northern Ireland the pig policy pursued there has had the effect of increasing the number of pigs from 216,000 in 1930 to 562,000 in 1937. From hearing those who know and from what I have read, I believe that, on the whole, their pig policy has been remarkably successful. Similarly, in the matter of poultry, whereas our poultry population is some 10 per cent. less than it was ten years ago their poultry population has gone up by some 10 per cent. in the last seven years. Compared with countries very closely connected with us or situated similarly to ours, our country has shown a complete failure to make that natural increase in agricultural and national income which would have been expected from us and which could have been attained if we had pursued sensible economic policies.

I find a totally wrong and un-Christian spirit prevailing in our whole community. There is too much of the spirit of envy, malice and uncharitableness prevailing in one section of the people after another. Too much thought and attention is devoted by certain sections—for example the so-called landless men—to coveting the possessions and property of their neighbours who are regarded as soulless ranchers. There is friction between one section and another where there ought to be a spirit of co-operation and mutual good will. Until we can eliminate this uncharitable and, I would say, un-Irish spirit of mutual envy and mutual selfishness, and bring about a spirit of mutual good will and co-operation, I can see no prospect of this country achieving the economic advance that is possible, or even of getting through the difficult times of the immediate future without heavy calamity. In my humble opinion, our national income could have been at least £20,000,000 a year more than it is if our economic policies were soundly devised and properly carried out in the last ten years. Even now, I would recommend, rather than the financial blister of the kind which this Finance Bill really is, a reversal of some of those costly and quite unnecessary policies which have done so much to diminish the taxable capacity of the country. Most of all, I would point to the necessity of doing away with the condition of industrial parasitism which is devouring our State, and the only result of which is that our economic condition is thoroughly lamenable.

Mr. Campbell

Going on the suggestion made by my colleague Senator Crosbie, I do not intend to introduce any note of acrimony in this debate. Fortunately, so far we have been free from that in this House. Senator McLoughlin, however, has twitted and taunted the Minister with the desire for the good things of life. Who is there amongst us who would not like a share of the simple and inexpensive luxuries of life? It must be remembered in this respect that the Minister did not hesitate to make sacrifices and endure hardships when the necessity arose. I know the Minister is well able to speak for himself in that matter so I will leave it at that, but I think it is about time some of us should protest against the note of acerbity and acrimony which has been introduced occasionally by members of this House. In that connection, I am also deprecating the references to the personal virtues of the Taoiseach, as something to be deplored. I pride myself on possessing a keen sense of humour, but must confess that Senator McLoughlin's bitter and biting conception of humour in his references to the Minister and to members of this House makes no appeal to me and is something to be deplored. No matter what the political opinions of the Taoiseach may be, and notwithstanding who the individual may be who occupies that position for the time being, in my opinion, there is no person in this State more deserving of respect and sympathy than the Taoiseach in the difficult task he is confronted with at the present time. I merely refer to that because I feel keenly these periodical references by some Senators. I myself think they are exceeding the bounds of decorum and decency.

Unlike other Senators I have a profound sympathy with the Minister in having to introduce a Budget of this nature. The taxes imposed in the Supplementary Budget became operative, I think, on the 9th November, but we find that in the case of income-tax the increased taxation does not become operative until, I think, the beginning of the next financial year so that the first impact of the taxes falls on the weakest section of the community, the working class, the class least able to bear the burden of taxation. I was amazed to hear Senator Honan refer to the tax on sugar, beer and tobacco as a tax on luxuries. It was an amazing statement and I do not believe that the country will support him in that contention. Like Senator Hayes, I am not a smoker and the revenue will not go up very much as a result of the amount of liquor I consume.

Mr. Honan

I am afraid my worthy friend has misinterpreted what I said. I did not mean it at all in that way.

Mr. Campbell

I accept the Senator's correction but I understood him to say that the commodities which were being taxed were luxuries. I apologise if I have misinterpreted the Senator. As I was about to say, I do not smoke myself and I do not drink to any great extent. Like some others in this House—I think the Minister will remember it himself—in the old days of the national council that preceded Sinn Féin, I took what was called an anti-revenue pledge. I am sorry to say that the Minister did not take it. However, I really think that the Minister has been a bit ruthless in imposing these taxes on the section of the community least able to bear them. In all conscience, the tax on sugar was bad enough but the whole circumstances surrounding the imposition of that tax left a very bad taste.

There is another question to which I should like to refer, namely, the question of unemployment. Some of us here represent, I suppose, the largest vocational organisation in this country —the Trades Union Congress. Every day it is becoming more manifest to us that, as the Minister for Supplies prophesied in the other House, the unemployment problem is growing to a very serious extent. The war, fortunately, if we can use that word in that connection, broke out at a very good time of the year from the point of view of employment. But every responsible trade union leader in this country is appalled by the prospect of unemployment which will confront us in the immediate future and the extent to which it will grow as soon as the Christmas rush of work is over. I think it is the greatest problem with which the Government will be confronted. They cannot ignore that problem and some effort will have to be made to deal with it. I think there is an opinion widely held by certain sections that it is not the responsibility of the State to look after these things. Generally, these people conceive it as a problem that should be left to solve itself, but there are higher authorities than the State who affirm that it is the duty of the State to see that none shall hunger or want. Hunger and want are becoming manifest now.

I do not know whether Senator Johnston was referring to our people when he referred to credit-worthy classes in the community and to those who are economically strong. I suppose the trade union movement could be termed economically strong in some respects. In that connection, I should like to refer for a moment to the Minister's statement in the other House as to the desire of the Government to set their faces against any attempt to secure increases in wages. That was a very serious statement to make. The working classes are not to make any demands for compensation for the ever-increasing cost of living. No statement has caused such perturbation and indignation amongst workers in my experience, at least, and we have daily contact with the members of our unions in our local trades councils and in the national organisation, the Trades Union Congress itself. If the Minister's statement were to be pursued to its logical conclusion, it would mean that if a union thought it necessary to seek compensation for the ever-increasing cost of living, while it might not be denied the right to appear before our conciliation committees—there are many of our industries which have questions of wages and conditions of labour determined by conciliation boards—the Government would instruct its conciliation officers to use not only their influence but their power to deprive workers of the right to procure compensation from employers for the rise in the cost of living. I do not know whether the Minister really meant that, but I should like to have a statement from him now that he did not mean it. I believe that if any Government were to do that it would have serious political repercussions and would ultimately result in their being driven out of office. I know that the Minister said in the other House that he and the Minister for Supplies represented more workers than Labour Deputies. That is true to a certain extent. We deplore it but it is nevertheless true. At the same time, I think that the trade unionist is a very different type of person when his trade union interests are affected in any way. The Minister will find that the trade unionist is a very different type of person if the Government try to interfere with a union's right to determine rates of wages and conditions of employment in consultation with employers. I think it necessary to refer to that matter because I do not really believe that the Minister meant what he said. He has an opportunity now, if he desires to use it, of clearing up the situation.

References have been made here by some people to the increase in social services. It must be remembered that the workers themselves contribute towards many of these social services. The social services are administered on a purely actuarial basis and the workers do not get anything which they do not pay for. Of course, they are subsidised to a certain extent but the workers themselves contribute to the funds. Senator MacDermot accused the Labour Party of being responsible for the increase in State expenditure. That, too, is true and we are only sorry that we could not induce the Exchequer to disgorge even more. We cannot, however, take more out of it than we put into it. There is nothing further that I wish to say except once again to impress on the Minister and on the Government the seriousness of the terrible problem that will present itself in the near future. I sincerely say that because I am in close touch from day to day with this problem. Practically 75 per cent of the building trade workers are idle at the moment, and there is no prospect of any work for them in the near future. Provision of some kind will have to be made for these people. That is the Government's responsibility. Reference has also been made in this debate to the fact—I think it was Senator Goulding referred to it —that New Zealand adopted certain measures to deal with unemployment. The Senator said that they did not solve the unemployment problem there. I say they did solve unemployment. If the Government is not prepared to explore this matter, then the responsibility must be theirs. If they are prepared to adhere to the orthodox economists, to their teachings and their conception of what is right, financially, for this country, then they must take the responsibility. I am not an economic pundit. We have had lectures here on economics. I feel I am not competent to undertake that, not being a graduate of either university.

I do not think that any Senator this evening referred to the announcement made by the Minister, in his opening speech, to the effect that it was the intention of the Government to float a loan of £7,000,000. I think it is only right that someone should say here that any help that can be given towards making that loan a success will be given. So far as our particular group is concerned any help that we can give by way of direct investment in the loan, will be given. Some of the trade unions have considerable sums of money at their disposal for investment, and I have no doubt they will rally to the support of this loan.

Mrs. Concannon

Most of the speeches made this evening were, I think, definitely pre-war. At least they had for a background such a complacent ignoring of the realities of the present situation that I cannot imagine the Minister getting very much help from them towards providing a solution for the serious problems that face him. His main problem is to distribute the burden as equitably as he can: the burden of maintaining the neutrality and liberty of this country, and of seeing that our life and our social activities—of all that makes life worth living—are not unduly disturbed. When the Minister comes to the Seanad, one would think that Senators would do their best to help him with concrete suggestions as to how to improve the Finance Bill which we are discussing. Some of the speeches that were delivered this evening were very useful, Senator Campbell's particularly, and Senator Douglas's. There were two or three others also who made practical suggestions. My reason for speaking now is simply to endeavour to draw practical conclusions from the suggestions made, and, if possible, to try and carry them a step farther.

Both Senator Campbell and Senator Douglas stressed what we all feel— that the red light on our path is unemployment. Nobody knows what is going to happen if that problem is simply left there, and if no real attempt is made to face up to it. As Senators know, we have had commissions appointed to deal with all sorts of things. We have had no commission to consider this question of unemployment. In my opinion, we have in this House many people well qualified to form the personnel of a commission to consider that question: to face up to that problem, and suggest ways of providing work for the unemployed. That certainly should not be beyond us. In my opinion, we ought to face it. As I have said, it is the red light on our path, and if we do not do something about it we are, I fear, heading for disaster.

We had a stimulating speech from Senator MacDermot. He stressed what we all know, that agriculture is our mainstay. He thinks there is very great danger if we simply complacently sit back and wait for whatever is to come to us, because everyone feels that the position of farming is going to be improved. It will be agreed, I think, that we must improve our farming methods. We have great hopes from the Agricultural Commission which was set up this year. May I say that almost everybody seems to ignore the part that woman plays in agriculture, but the farmer's wife is a very important person in the scheme of improving our agriculture. Egg production is mostly a woman's work. We must see to it that women are given an opportunity of being trained for that work. I was struck by what the Minister said about the results of the Economy Committee set up by the Government. Why not have a committee of that kind for the whole country? There is a great overlapping of social services, and I think many people feel that there is a good deal of, perhaps, waste, or at least that some of the money that is being spent on those services could be better applied. It may be that that has come about by reason of the way the situation developed: that we have not had time to think out schemes, and have had to live more or less from hand to mouth. My wish would be that the Government would appoint a committee that would sit down and consider all this: that would try and correlate all these social services and endeavour to get value for every penny that we spend. It is not the spending of money that matters. It is what we get out of it. If we spend money it goes round and everyone gets a share of it, but we do not want to waste it. Women have ideas about all these things. The woman has to be very practical in the running of her own little house, and she naturally looks on the running of the country as a bigger household. We should look at all these matters in a practical way, and it was for the purpose of adverting to that that I was prompted to intervene in the debate.

Mr. Cummins

I agree with Senator Douglas that our main industry is agriculture. It has been the subject of a good deal of discussion in the Seanad during the last three or four months. The Budget is disappointing by reason of the fact that it gives no indication that anything is going to be done to help agriculture. Senator Johnston advocated intensive schemes of tillage, winter dairying and a system of mixed farming such as was recommended many years ago by the old Irish Agricultural Organisation Society. The Senator, in the course of his speech, belaboured those landless men who, he said, were howling for a share of the soil. Surely he must know the reason for that.

Professor Johnston

I merely mentioned the friction between landless men and others as an example of the many social frictions you find throughout the country.

Mr. Cummins

I accept that. In the County Meath there are two landlords who hold between them 3,250 acres of land. That is a strange anomaly in a country like this. You have a somewhat similar position in the County Waterford. Is it to be wondered at if 3,250 families in the County Meath look with longing eyes on those broad acres held by two men who are giving very little employment? You have other landlords in the County Meath who hold about 750 acres of land each. If the figure of 3,250 is multiplied by four, you get over 12,000 families, with very little to live on, looking day after day at the finest and the richest land in Ireland from which their ancestors were evicted. Is it any wonder that they should long for a share of that land? We have heard much about the benefits of a good grass crop. If that is a good policy for the large farmer it must be equally good for the cottier who keeps an ass, and for his wife who rears fowl. They also may find it profitable to keep a portion of their half-acre in grass for the grazing of the ass and the rearing of poultry and pigs.

Much has been said about unemployment. If that problem is to be faced, I think a concrete solution for it will have to be found in revolutionising our system of farming. I mean, roughly, a complete change from the present system of agricultural work. About 75 per cent of our people live entirely by agriculture. If the drift from the country is to be stayed conditions must be improved for those working on the land. The farmers must be put in a position by some system of credits to get artificial manures and agricultural implements.

When the Minister set up a commission he should have had beside it an economic commission to deal with production and distribution. Our farmers failed, I believe, for want of co-operation. They have been through a strenuous time, including a war, and if they are to be built up attention must be given to their needs. If workers continue to drift from the land then we will have the position that we had in the old days, where the lowing of herds might be heard, but the voices of children and farm workers would not be heard. In any Budget or any loan the Government intends to float I ask the Minister to bear in mind the fact that the farmers are discontented. I did not agree at all with the steps taken recently by a certain combination of farmers. I think the procedure adopted was wrong, and very foolish and ill-advised on their part. It could only end in disaster if pursued for any length of time. I believe such procedure would soon have ceased of its own volition because of its inherent weakness. I also think that the Government made a mistake in adopting such drastic measures to cope with it, because such action was bound to fail. At the same time, it was evidence of the discontent that is making itself felt amongst workers on the land, and the sooner some efforts are made to grapple with such discontent the better for the country at large.

Larger measures of co-operation are necessary on the part of farmers, in purchasing, in production and in the use of agricultural machinery, especially amongst small farmers who individually cannot afford to buy machinery. They should co-operate in every locality. I do not necessarily mean through parish councils, but by some form of agricultural co-operation under the direction of the Government. The State should also put them in a position to obtain credits, if not for individuals, then for bodies that would cater for certain sections. There should also be co-operation in transport, in selling and in the marketing of produce. If our farmers continue to go on in a haphazard way they will surely be beaten in the world markets when the present war ends. They have a wonderful opportunity now. I also think the country has a wonderful opportunity now to build itself up. No matter what may happen in the war we have, at least, sufficient resources here, and with the co-operation of all classes we should be able to preserve a good standard of living and of comfort and survive the present difficulties.

I am sorry I cannot say a good word for the Budget, because it oppresses the poorest section of the community. It is difficult to offer suggestions as to where the necessary money might be got more easily, but I think the luxury taxes might have been put on more heavily, and that imports might be taxed to supply part of the revenue. It is deplorable that sugar and tobacco are taxed. These are necessities of the poor. I am afraid we would be a very unhappy community if the working man or the smaller farmer could not get a good strong smoke. I think if strong smoking tobacco were exempted from the extra duty that that would go a long way to allay discontent in that respect. We would all be content to smoke less strong tobacco if the more expensive kinds were more heavily taxed. If something could be done to exempt strong tobacco from the new duty I believe it would ease the position very much for the poor. The Minister may think that suggestion far fetched, but I believe it would be helpful and would give satisfaction throughout the country. Trades unions are capable of looking after themselves, especially those trades unions that the Minister claims to represent. They are a well organised body, but farm workers and others employed in agricultural work have really no organisation to look after their interests. Their position is a very bad one and something should be done to improve it.

The amount of land cultivated by farm workers is much greater than that cultivated by large farmers. Where these workers apply for additional land it should be possible for boards of health to give it without requiring them to vacate cottages. It has been suggested that those who have got accommodation plots of four or five acres away from their homes should be evicted from their present cottages and that new houses should be built for them on the other land. A holding of five or six acres seems to be regarded as an economic holding in Meath. I hope the Minister will see that tenants of cottages get fair play. My information is that where they get accommodation plots they are warned by the boards of health to vacate their present cottages and to take up residence in the new places. Probably new houses will be built there at increased rents, instead of amalgamating the two holdings.

Leas-Chathaoirleach

I think the Senator will find it hard to relate that question to the Finance Bill.

Mr. Cummins

We were asked for suggestions to build up agriculture and I gave this one. I hope some of the new loan will be spent in that way.

Mr. Madden

I feel that I would be wanting in my duty if I failed to contribute something on behalf of a very important section of the community, whom I have represented on public boards for well nigh a quarter of a century. I allude to the farmers and the agricultural people. I agree with a great deal of what the last speaker has said, but he made a rather strange analogy when he picked out for special significance and reference a few extensive land owners. I may respectfully point out to him that, according to a statistical return, the accuracy of which cannot be questioned, there are in this country 201,000 farmers whose acreage ranges from one acre to 30 acres. I do agree with him when he says that 75 per cent. of the wealth producers of the country are to be found in the category of Irish farmers, and, I would say, the Irish worker whom he employs.

For a year and a half, since I had the honour to be elected to this House, I have on every occasion tried in my own way, ineffectively, if you like, and without the academic training of my friend on the left, to put the real condition of the agricultural community before the House. It is admitted in this and in the other House that the farming industry is the pivot on which revolves the economic stability of the State. If agriculture is prosperous, and some of us remember when it was, that prosperity is reflected in every section of the community. When it was prosperous, towns and villages were doing a splendidly remunerative and profitable business, but when the farmer finds himself in the position in which we know he is, the poverty, the necessity, the unremunerated efforts he makes on his land, are again reflected in a disappearing rural population, in shattered towns and, ultimately, in disappearing towns and villages.

In order not to repeat in the same language the expressions of sympathy and the facts which I have tried to enunciate here, I have put down on paper what I call a new outlook on the position of the farmer in his association with this Budget. No Government, not even a Fianna Fáil Government, can extract indefinitely all the taxation from one source. By their legislation, their taxation and their inflictions of officers and inspectors, the cost of whom must be met out of taxation, inevitably the source of supply, which is the land, will automatically become exhausted. Long before the European upheaval, the position of the Irish farmers clamoured for redress. Yet, so far from any measure being taken for their relief— and I challenge contradiction on this— nothing whatever has been done to equip and prepare agriculture to meet the tremendous difficulties and opportunities with which the outbreak of this long-threatened war confronts it. On the contrary, inertia, incompetence and complete lack of foresight have been displayed, notwithstanding that, for over 12 months, the Government have been in possession of two important reports of such vital and supreme importance that they would have aroused a spark of anxiety and energy even amongst the most incompetent of urban councils which were dissolved by the Minister when he was Minister for Local Government.

The report of the Currency and Credit Commission conveyed the most impressive possible warning of the inevitable ruin in which a continuance of the Government policy and expenditure would involve this country, and particularly the agricultural community. Yet, far from retrenching, the Government have devoted themselves to evolving new and fantastic schemes on which the dwindling remnants of the public resources may be squandered. Apropos of a speech in the other House, in introducing a Budget of over £30,000,000 last May for the current year, 1939-40, the ex-Minister for Finance who had attained that eminence by promising the electorate that he would reduce national expenditure to £19,000,000, admitted that the Government had taxed everything that was taxable, that we were at the limit of our capacity for expenditure—mark the words—and that he was utterly appalled by the prospect with which our finances might be confronted in a European war. Did even that gloomy picture by the chief of Finance intensify the interest, or the administrative and national responsibility of the Government? Not at all. On the contrary, in a mad panic, arising probably from unrevealed commitments to which they had committed the country, they plunged into the most frenzied and unproductive expenditure and it was found necessary, as a result, to introduce this Budget a fortnight ago which we have been discussing since 3 o'clock this afternoon. This task has been entrusted to Mr. Seán T. O Ceallaigh, who was an excellent Minister for Local Government, as I personally appreciate. He is new to this position and, like the Americans, perhaps he will bring in a new slant to the whole problem although some people think that the gentleman who flogged John Bull right, left and centre, might not be the best selection to pontificate on this obtuse problem of finance. I wish him luck.

The second report, that of the Registrar-General, is far more ominous. It discloses an extraordinary state of affairs—unemployment, a disappearing rural population, the closing down of rural schools, less marriages amongst the agricultural people. I think, subject to correction, something in the region of nearly 500 or 300 rural schools were closed. Because of the economic position, there is nothing to attract the rising generation of that noble peasantry, the agricultural people, to marry and maintain themselves in frugal, reasonable and happy comfort amid happy rural surroundings. The people "far departing, seek a kinder shore," as Goldsmith said. "And rural mirth and manners are no more."

There is no precedent for all this in our troubled history. Through centuries of war and bloodshed, persecutions in the dreadful years of the Famine, in the ever present menace of rack rent and eviction, the Irish race maintained its reproductive virility until seven years of Fianna Fáil misgovernment impelled it to commit national suicide. It must be admitted that, but for the ban on immigration, the exodus of the youth of the country would have been much greater. There is no outlet. They are like caged birds impatient to fly from a country that offers them either a life of idleness or a life of ill-paid drudgery. A public speaker recently ascribed the flight from the land as partly due to a quest of pleasure. While that may be true in isolated cases, it is grossly untrue of the great majority and it is refuted by the age-long devotion of the Irish peasant to his home so long as it provides him with food. The history of the Irish farmer's family is one of patient industry, laborious thrift and modest living but, above all, of intense love for the land that they thought they could call their own. Nothing but the direst circumstances have forced them to leave it in the past and a Fianna Fáil Government have provided dire circumstances enough in the present. I say that any thoughtful young peasant who observes the unending and miserable slavery of his parents is quite justified in saying to himself: "Am I going to devote my life to the drudgery that I see my parents engaged in at the present time?"

That is the philosophy that is being created by the economics and the administration of the Government in rural Ireland to-day. They are harassed by ever-increasing demands and the tendency towards a rise in rates and taxation, persecuted by flocks of Government inspectors—none of you can deny it—taxed in every article of food that they have to buy and every morsel of foodstuffs for their family and for their flocks. What can we think, if after 50 years of all this, they say: "If I am lucky and if my son marries well, which he is not likely to do if he has any sense, I will get a seat by the fire the Minister—these are the people and I say it with all respect, to remind the Minister—these are the people whom the Minister characterised some time ago as monarchs of all they survey and whose life is an eternal round of pleasure. The present Minister for Finance said that.

The truth is that we have developed a new aristocracy within the last seven years and, as a Deputy said the other day in the other House, some of our politicians when they put white collars around their necks and binoculars over their shoulders forget altogether the class from which they sprung. The other day a farmer was at a pig fair in the south where he could not sell his pigs for export—and that has a deleterious effect and I would like to draw Senator Honan's attention to it. Senator Honan has wonderful sympathy for towns and villages. It has had a deleterious effect on the commercial interests of the towns. This farmer said they had a great time watching the flour merchants and the pig curers racing their horses while the farmers were racing the sheriff. It would do some of the Ministers a lot of good if they went down to a Munster or a Leinster farm and took off their coats and did some of the drudgery and slavery and toil that at least 90 per cent. of these unfortunate farmers have to do, day after day, with no silver lining, no economic hope or ray, only taxation and inspectors.

The solitary reaction to the report of the Registrar-General displayed by the Government has been the Taoiseach's oft-repeated advice to learn the Irish language. That has been the solitary response. When the Irish race have disappeared, as they are disappearing, and when the last of the McCarthys and the O'Sullivans have cleared out, I can visualise the Taoiseach sitting complacently and presiding over an assembly of the Gaelic League composed of Lithuanians, Czechs, Belgians, Japanese, Jews, and all the rest who are flocking into this country to enjoy our monopolies.

Cathaoirleach

Will the Senator please relate that to the terms of the Bill before the House?

Mr. Madden

It is too close to it, with all due respect.

Cathaoirleach

I must say that I do not see the immediate relevancy, and I would ask the Senator to keep the purpose of the Bill more in mind.

Mr. Madden

Nothing has been done to meet the grave situation disclosed in these reports. Surely the outbreak of the European War should overcome the lethargy and awaken any vestige of foresight that the Government possess. Here was an opportunity, when agricultural produce was inevitably bound to command increased prices, no matter how Food Control Boards might attempt to cheapen them. Half a dozen housewives would have hastened to lay in stocks of every commodity which might be required while it was still possible to buy cheaply. A small shopkeeper is an individual who would not sell too prematurely. Anyone could see that the increased cost of transport facilities would inevitably send prices soaring.

Sugar can be bought for ¾d. a lb, We were assured in this House by the Minister for Industry and Commerce that there need be no dismay, worry or anxiety about the question of the supplies of sugar and of the other essentials. When sugar could be got-all they wanted of it—from Honduras or other places to implement our own supplies, at ¾d. a lb., and thus save that essential commodity for the breakfast table, the tea table and the dinner table of the working and the poor man, no effort was made by the Minister. He did not act like a careful man and secure all the resources and food available in view of the prospects of this world upheaval. Wheat and maize were at the lowest prices ever recorded. Did the Government hasten to lay in stores of these essential supplies which were going for nothing a few weeks ago? The Taoiseach tells us that he hastened to conclude the economic war because he foresaw that a war was inevitable. He should have foreseen the necessity and been prepared by laying in big supplies of foodstuffs, fertilisers and other materials to enable the agricultural conduct of the country to be continued and to take advantage of the rise in market prices which inevitably follows a war.

I trust, even in this late hour, that the responsible Minister for Finance will bear in mind the hardships under which agriculture is striving. Bearing that in mind and harmonising it with the essential fact that agriculture, as I once said before, is the essential pivot on which revolves the whole economic stability of the State, I trust he will maintain agriculture in such a position that the work will be remunerative to the farmer and prosperity will once more be reflected in the towns and villages, in brighter homes, in marriages amongst the agricultural people, in the reopening of our rural schools and in the keeping of the race living at home in the comfort, ease and prosperity to which they are entitled as workers and owners of the soil and as an essential part of our national entity.

Mr. Hogan

I am afraid the Seanad will not be anxious to hear me after the eloquent speech which has been delivered by Senator Madden, as what I am about to say consists of just a few stray thoughts. I feel that it is compulsory on me to express them, to say them to the Minister with all the earnestness which I can command, and to ask him to believe that I am saying them with that earnestness. Senator Goulding was on very safe ground when he asked us to suggest means by which we could effect economies. It is a job which one does not like to enter into at the moment, for one is very likely to be misunderstood when one suggests economies at the present time.

The issues between Senator Goulding and me would possibly be very fundamental, if I were to suggest economies Senator Goulding could engage in at the present time. I believe that much of the expenditure at the present time is useless. I will be told that we will have to be prepared to assert and maintain our national sovereignty. I suggest that any expenditure we are incurring is not going to put us in a position to assert or maintain our national sovereignty any better than we were able to do it before the war. Therefore, any expenditure we are incurring at the present moment in this Budget is sheer waste of the people's money. That is why I say that Senator Goulding is on very safe ground when he asks people who are very conscious of the attitude they should adopt towards the State and the national sovereignty to suggest economies. We want to be careful and we are careful—though we might like to say a lot of things in this connection—not to put the Government that is in office into a position that may prejudice them in their defence or maintenance or assertion of the sovereignty of the State. I could suggest—speaking only for myself—a great many means by which these economies could be effected, and I just give him a hint of one.

Senator Mrs. Concannon said that some of the speeches suggested that we were dealing with this matter with pre-war complacency. I suggest that we are dealing with it with too much complacency in regard to the real interests that face us at the moment. My statement is very brief but it is more or less in a staccato fashion. There are 100,000 or 150,000 people who are living on anything from 6/- to 12/6 or 15/- per week per family. I ask him to consider their position. I ask him to try and see what is happening in their regard, to look up the list of essentials that they have to endeavour to procure. The Budget does not make any provision for them, and that is the reason I am referring to it. This Budget imposes a burden upon them and makes no provision to help them.

Let us take the essentials of life, the very essentials of life, and ask how we stand in that regard. Flour has gone up in price, butter has gone up in price. When I spoke to Senator Quirke outside in the Lobby and showed him my speech, he said that it would make a very good speech if I just read it as it stands, so I will read it.

"Flour has gone up in price, butter has gone up in price, bacon has gone up in price, sugar has gone up in price, coal has gone up in price, eggs have gone up in price, milk has gone up in price, tobacco has gone up in price."

In Ennis we are threatened after 17th December with having to pay 6d. per quart for milk. Now these essentials have gone up, and let me with all the sincerity I can command, and after the eloquence of Senator Madden, endeavour to bring these few facts home to the Minister and ask him to consider the position of those people and to see if he can do anything for them.

Senator Mrs. Concannon said there was the red light of our unemployment. If it is a red light on the barricades, the light may disappear and nothing may be left but the barricade. It is no pleasure to me to indicate these things to the Minister. Of course, we have the opinion expressed by Senator Johnston that there should be more co-operation between certain types of people in the country, that there should be more Christian co-operation. He told us about landless men co-operating with men who have land in non-production. What co-operation can we expect from those two?

Professor Johnston

Unless a man has security of tenure how can he employ anybody?

Mr. Hogan

I suggest to Senator Johnston that the co-operation ought to come from the people who have thousands of acres all around them and who are holding that land only in partial production for scores of years. Until co-operation comes from that direction, it is wrong and it is not Christian to ask landless men starving on the roadside to look at land in non-production without asking the Government to divide it up and put it into production. I say that is absolutely wrong and a conception of Christianity that is at least new to me.

I agree with Senator Madden that there should be some means by which the farmer, who is asked now to bear the burden of production in the matter of essential foods, would get the necessary credits. He cannot get the necessary credits at the moment. We know he must make the attempt to produce these foods. He will make the attempt because he is sufficiently conscious of his duty towards the State to produce essential food for the community but some attempt should be made to provide him with the necessary money to enable him to do so. I said that my thoughts would be few. It is no pleasure to me to bring these considerations to the Minister's notice but I do feel that if a crisis should develop, it is not the Government that will go down before it but the entire community, the whole State. Therefore, I am not anxious to make any debating points or Party points against the Minister. I am putting these suggestions to him in all sincerity, conscious of my obligation to the entire community and conscious of the duty that devolves on people in the position of Ministers. It is necessary that they should be told these things. I do not know what sources of information they have but I tell them that there is a serious situation in the country that they will have to face either now, or later under worse conditions.

Mr. Lynch

I, like my colleague, Senator Hogan, propose to be extremely brief, in fact, to be even more brief than he was, especially as the hour is so late and the Minister, I am sure, requires all the time he has now at his disposal to deal with the various aspects of the situation which have been so well debated from many viewpoints. There is one aspect, however, which I think has not been touched upon and I rise merely to invite the Minister to give us his views on an aspect of the Budget which I am about to mention. A loan of £7,000,000 is about to be raised at 4 per cent. Speaking at the Engineers' Association Debating Society, Mr. J.P. Colbert, who was a Government nominee on the recent Banking Commission, made what seems to me to be a rather important statement. Mr. Colbert said that he had always advocated the bringing back of some of our external savings for domestic investment such as translation into factory production, public works and, above all, houses. I invite the Minister to say if it would not be a better policy to secure the return of such external assets, as those referred to by Mr. Colbert, to bridge this gap rather than to go to the lending authorities for £7,000,000 at 4 per cent. I am sure it will be of very great interest to the House to hear the Minister's views on that aspect of the Budget.

Mr. O'Dwyer

I do not propose to say more than a few words on this Bill. It seems to me that we, perhaps, are attaching too much importance to financial questions. We appear to think that we can do more to advance the national well-being by concentrating on the financial aspects of the situation, whether by way of making economies or by lessening taxation. We seem to forget that increased production is a much more important factor in the present situation. Increased production of foodstuffs is, I submit, our only safeguard and salvation in the crisis with which we are confronted. Senator Mrs. Concannon referred here to-day to the extreme distress arising from unemployment. We all agree that such distress unhappily exists and that, owing to the exigencies of war, it is likely to be increased during the coming year. We know also that there are very many who cannot purchase other than the barest necessaries of life, those who are in part-time employment. The numbers of these also must be increased during the coming year. We know, furthermore, that there will be a great shortage, amounting almost to a total cessation, of imports. We must, therefore, provide for an increase in taxation in these circumstances. It would be impossible for the Government otherwise to provide for the grants they have previously given for the relief of unemployment, nor would it be possible for them to provide extra allowances for those who are in receipt of unemployment assistance. There is one thing, however, that is possible to a degree greater than to any other country in Europe. We can produce an abundance of home-grown food and we should not forget that.

Much has been said about the agricultural situation. It has often fallen to my lot to speak about the position of farmers in this House and to ask that credit should be made available for them. I am sorry it was not made available before this, but at the present time it is absolutely essential that credit should be made available for farmers to enable them to go in for increased production. That is the only salvation for the country. While the war lasts, and for some years after the war, we are assured of a market that will take all our increased production. It is the Government's business to see that production is not slowed down for want of credit, that credit will be provided in the interests of the whole community.

There is another fact to which I should like to refer. If the outside market is open for a number of years at a remunerative price, it will mean that there will be prosperity in agriculture here. It is the duty of the Government in that situation to see that the price of food is kept at a lower level in this country than outside. The only chance of survival for this country is to keep the cost of living down. We cannot control the cost of food imported but we can, to some extent at least, control the price of foodstuffs produced here. These are the things to which the Government should attend rather than seeking to economise in any particular direction. First of all, they should provide the market for increased production and, secondly, they should see that the cost of living, so far as home-grown food is concerned, is kept within the reach of the people.

Mr. O Ceallaigh

I had a very interesting, and, with all respect, an instructive experience here in the Seanad —not for the first time, I must say. I never come in here that I do not hear something of interest, sometimes not exactly very closely allied to the subject under discussion. The Seanad is very liberal and, with all respect, Sir, very tolerant, even to Ministers I hope. We wandered all over the globe on all sorts of subjects from aeroplanes to agriculture and from pigs and poultry to submarines. We certainly travelled far and wide, deep and high. I was glad to hear the few words, uttered. I am sure, in all kindness, with all charity in his heart, addressed by my old friend, Senator Campbell, to his colleague in the Seanad, Senator MacLoughlin. I think the words were mild and that they were well deserved. I hope the Senator will ponder on them when he has an opportunity of reading them, if they have not been reported to him before now. Senator MacLoughlin was entirely wrong in suggesting that the present Minister for Finance was not the author, the cruel author, if you like, of the Budget and all it contains, particularly the unpalatable propositions regarding taxation.

I well remember the wry face of the Taoiseach when I told him what the result of my examination of the financial situation, after having taken over office and being there for a few short weeks after the outbreak of war, was, and when I announced that such things as sugar, tobacco, beer and spirits would have to bear additional taxation. Perhaps a good many members of the House know the Taoiseach better than Senator MacLoughlin. I do not know whether he knows the Taoiseach at all or not. I think he must not know much about him, because if he did he would not describe him as a sour, intolerant, ascetic teetotaller. The Taoiseach is anything but that to those who know him even slightly. He is as pleasant, as genial and, above all, as human a man as there is in this House.

Senators

Hear, hear!

Mr. O Ceallaigh

He has the weaknesses to which human flesh is heir, and if he could avoid or induce me to avoid putting a tax on any of these things, on the glass of beer or on the lb. of sugar, he would be very happy to try and do it. I said in another place that sugar had to be taxed. The tax on sugar is one of the items that have been singled out here, as well as in the Dáil, for special denunciation. We had to bring in this Emergency Budget because we found that the money that we had budgeted for in May last was failing us. In May last, we budgeted on certain items bringing in a certain amount, but we saw, soon after the war began, that the revenue that was coming in from these items was not going to be what we had anticipated. We took a conservative figure, and found that at the 31st March next we would fall short of our estimated revenue by about £1,600,000. If all the services we had budgeted for were to be carried on, then the money to finance them had to be got somewhere.

It was suggested, not here, I was glad to notice, but elsewhere, that we could have carried on and waited to see what the position would be at the end of the financial year. I took the view that that would not be right: that it would be better public policy for the Government to come to the Dáil and Seanad and tell the members of the Oireachtas the whole truth with regard to the situation, financially and economically, and suggest our remedy. The Government accepted the view and the policy that I put before them. In accordance with that decision, I, on behalf of the Government, went to the Dáil, and I am now before the Seanad seeking authority for this taxation.

I think it was Senator Fitzgerald who said that we were looking for popularity. Well, I think that is about the last charge that might be levelled against me or the Government so far as this Supplementary Budget is concerned. Imagine anybody supposed to be looking for popularity coming in with proposals to tax sugar, tobacco, beer and spirits, some of which are already heavily taxed. It certainly was not in search of popularity that either I or the Government associated ourselves with this taxation. We did it out of a strict sense of financial probity. It was out of a sense of duty that we went to the Dáil, and have now come to this House to tell the members of the Oireachtas what the position is, and ask for the assistance of both Houses to enable us to meet the commitments we entered into when the Budget last May was adopted.

I know that the tax on sugar hits the poor as well as every other class in the community. It hits the poor, because probably, amongst them, you will find the larger families, and probably a greater consumption of sugar. Therefore, for that reason alone we certainly were not seeking popularity when we brought forward these proposals. They have been introduced to enable us to get the money that we budgeted for last May. In the course of the discussion here on this Bill, I have not heard any alternative suggestion put forward which would enable us to get by other means the money that the tax on sugar will bring in between the 9th November and the end of the financial year. Those who have closely studied the figures that I have presented to the House must, I think, agree that all this money, and more, will be necessary to balance the Budget. That is the situation.

We have been condemned here by some Senators. The Government was condemned, and I was condemned in the other House, for our want of thought for the poor. We have been asked why tax sugar above all things. I said in the other House, and I repeat it here, that over a number of years heavier taxation was put on sugar by the late Government, so that if the denunciations uttered against this Government in connection with the tax on sugar are just now they were equally just when the last Government was in office. I do not say they are just or warranted. The Government, and the Minister for Finance in particular, when looking for money has to get taxation from articles that will produce revenue, and sugar is one of these.

The tax on sugar was much higher than it is now, and there was also a tax on tea. We have no tax on tea. When referring to the taxation of the last Government, when discussing this matter in the Dáil, people who interrupted asked for the years in which taxation on sugar was high. Admittedly they were years after a series of years of trouble, when money had to be got. I do not deny that at all. Money had to be got, and taxation was high, and had to be put on sugar and then had to be put on other things. I said that in that way, in a period of emergency, a tax on sugar as well as other items is equally if not better justified.

If I might deal with one other point that was stressed, it was the question of neutrality referred to by Senator MacLoughlin. He said that neutrality was Fianna Fáil's policy. That is true. I do not want to misrepresent him, but I think he said that we took that policy over from the last Government. They may have preached neutrality. I do not remember that they did. If the Senator says so, I will take his word for it. I have no recollection that they preached it, or put it in the forefront of their programme, or that it had any place in their political programme at any time. I cannot say. Maybe they can explain how this country could have announced its neutrality, and could get that neutrality recognised in the fashion in which it is recognised, if a belligerent nation held our ports. There could not be neutrality if our chief forts were in the hands of any of the belligerents.

Senator MacLoughlin and others stated that taxation had gone up considerably since this Government came into office nearly eight years ago. It has gone up. Expenditure has gone up, but some of the items, including increased social services and new social services, have cost very considerable sums of money. We are paying over £600,000 annually now in widows' and orphans' pensions. That is a new item. We are paying close to an additional £750,000 in old age pensions. Then there are other items that will occur to Senators and that I do not want to take up time with by going into in detail now. There is a long list of extended items of social services that were already there, or of new social services. When any of these new services were being introduced in the Dáil, and when the Bills were put before the House, there was not one of them about which it was not said that the Government was not doing enough, and was not spending enough money. We were asked why should not the social services be improved. I do not complain of that criticism. I would like to see many of the social services much better than they are.

When Minister for Local Government and Public Health I had something to do with the administration of these social services, and with the introduction of others, and if I could have improved them I would have done so. I did try in some cases to have them improved by the Minister for Finance, and by the Government as a whole, and I had to agree eventually that the services, such as they were, were as much as we could afford. When members of this House of any Party criticise increased expenditure they ought—and I think this is a reasonable suggestion—to bear in mind the demands for increased expenditure they made at different times when social services were being discussed. I have had some discussions with some members of my own Party who complained about the high rate of income-tax and other things, and I hope I dealt with statements made in the other House criticising the Government for want of generosity towards social services and other matters.

Senator The McGillycuddy talked about our unbalanced Budgets of the last four years. I heard similar statements in the Dáil, made in one case by a person, with all respect to Senator The McGillycuddy, occupying a position of greater responsibility in public life than even he does and I objected to them. I say, the statement that we have had a series of unbalanced Budgets over the last four years is not correct. That statement, especially when it is not true, hurts the credit of the country. It is an unwise and improper statement for a member of either House to make, especially now when we are going forward for a loan. There was a deficit in the year 1938-9 of £527,000. In the three previous years there were large surpluses. These are the facts. In 1938-9 we had a deficit of £527,000; in 1937-8 a surplus of £629,042; in 1936-7, a surplus of £464,842; in 1935-6 a surplus of £1,092,000. That was our financial position as disclosed at the end of each of these four years. I do not think there is anything to be ashamed of in that. It certainly is not true to say that we have had a series of unbalanced Budgets in recent years. It is not helpful to have a statement of that kind made at any time, and particularly just now.

Senator Douglas, if I may say so with respect to him, was reasonable in his criticism, and tried to be helpful, particularly when he suggested that the Minister for Finance should try to work out a long-term financial policy. I should like to be able to do that. It would be helpful, but it is not possible in times like the present. When war broke out, and a time of emergency arrived, it upset considerably all the estimates and forecasts regarding our revenue and general financial position. The volume and value of our exports and imports changed, and values in particular are changing every week, if not, in some instances, even several times a week in the last couple of months. It is not a time when any Minister for Finance can set about forecasting or working out a long-term financial policy. I believe it would be a wise thing to do, if possible, and I hope later on, when the state of emergency ends, that it will be possible to adopt the wise suggestion he made, for working out a financial policy over a period of a few years.

Senator Crosbie referred to the total debts of the central and local authority. The note I took was that the Senator said that our total debt was about £109,000,000. I have made it out at £103,000,000, but we will not fall out over the difference, especially as we have not got to pay it. The figures I have are that the gross capital liabilities of the State on 31st March, 1939, were £61.4 millions and of local authorities on 31st March, 1938— the latest date I have—£30.5 millions, a total of £91.9 millions. These figures are gross and take no account of the capital assets. Senator Crosbie did not mention the capital assets either, but they amount to a considerable sum, to at least £30,000,000. It is about 50 per cent. of our State liabilities, which is a considerable figure, and, in addition, with regard to the liabilities of local authorities in respect of housing, the central authority pays a very considerable portion in most cases —at least 50 per cent. of their liabilities for housing.

Senator Crosbie and other Senators dealt with economies in administration. In the other House, that matter was mentioned to me several times and, on the last day on which the Budget was debated, Deputy Cosgrave stressed the possibility of making big economies in the staff of civil servants. I think it was Senator Fitzgerald here who this evening said that economies could not be made quickly by dispensing with staffs, once they are employed, and that is true. If they are in the offices, you cannot get rid of them. When debating that matter with Deputy Cosgrave, I asked him to take one office with which I was familiar for over seven years, the Department of Local Government. He had pointed out that there had been a considerable increase in staff in that Department, and asked why not get rid of a number of these? I pointed out the necessity for the increase in staff. I gave one instance, and said I was dealing with that because I was familiar with it. I cannot recall the figures of the increase in staff in the Local Government Department during my term there, but I asked the Deputy to look at the section of the Department which dealt with housing.

When the 1932 Housing Bill was passed, it meant an unprecedented increase in housing work all over the country, and in order to enable the administrative and office work necessary to implement that Act and to carry on housing to be done, several hundred additional officials were required. Even then, after about three years working of that Act, I used to get from Deputies, and, I am sure, from Senators, and from people all over the country, complaints about delays in correspondence and grants, and I remember asking the secretary and the head of the housing section to come to see me specially on the subject. I took the matter up rather sharply with them and said that these delays should not occur, and asked why I should have to get so many complaints. I went into the matter closely with them, and I discovered that, even when we had already increased the staff in that section by some hundreds, we had not enough, and I had to agree to make representations to the then Minister for Finance for additional staff. I remember when talking to them about the number of letters received in the office asking the head of the section how many letters they got on housing per day. I cannot give the exact figure, but he said: "We get thousands". I asked: "Do you get thousands in one day?" and he said: "We do". I asked if they ever counted them and they said they did not. I then told them to count the letters on one day in the middle of the week before opening them, and I was told that they numbered over 3,000 in that one section. That shows that there was necessity for a considerable addition to the staff in that one section.

What is true of that section of Local Government is true of other sections. It is equally true of the public health section, where there was enormous work done in respect of the number of waterworks and sewerage schemes put into so many towns and villages in the country, a number unprecedented in the history of this country. In order to get that work done, staff had to be employed, and what is true of these two sections of the Local Government Department is equally true of other Departments, but I cannot speak with the same knowledge with which I can speak with regard to the Local Government Department. Deputy Cosgrave asked: "Why not lop off so many from Local Government?" but certainly to carry out the activities of the housing and public health departments, that extra staff was necessary. We have, in every county, county medical officers, and assistant county medical officers, many of whom did not exist when we took office. There was more than half the country supplied when we took office, but the work has increased and the administrative staff has increased. I do not want to weary the House with that subject, but I want to say that it is not as easy as some people think to wipe out staff and reduce administration costs, if you want the good work to go on which has gone on in most of these Departments during the last seven years.

Senator Hayes talked about the cost of administration also and the extra taxation of this Government in the last seven years. He has a very special interest in education, and education is costing more than £500,000 more now by reason of increased numbers of new school buildings put up every year for the last seven years, and, with the numbers increasing with the passage of years, when the new staffs were getting into their stride on the work. Secondary teachers' salaries in a number of cases have been improved, and provision for pensions made, and there has been additional cost with regard to national teachers' pensions. On the whole, there has been an increase on education. I do not think that anybody here would suggest that we ought to cut down in that direction. It is not so easy, dealing with the question of administration, to do it. No one, no matter what power or authority he had, could do it and carry on the services. If you agreed to stop housing, public health works and a variety of other works and the building of schools that are badly required, you could certainly reduce costs. It may be that the Government would have to say—if not this Government, some other Government—"We cannot have any more new schools; we cannot afford them." But I would not like to be the Minister who would come in to this House with a proposition of that kind. He might be met with polite remarks, but they would be rubbed in with a good deal of force. I would not like to be the unfortunate individual who would have to come in to this House and tell the Senators that there was an end to housing, an end to public health works, or an end to the building of new schools that are so badly needed all over the country.

I have a note of the figures here in regard to education. Since 1930-31 primary education has gone up from £3,614,000 to £3,749,000; secondary education from £315,000 to £473,000; technical instruction from £165,000 to £323,000; science and art from £38,000 to £57,000—an increase from £4,132,000 to £4,793,000.

Senator The McGillycuddy talked of the fall in the income of the country. I have not the very latest figures, but the last figures I could obtain since he spoke are those for 1936-37, in the report of the Revenue Commissioners. In 1932-33 the Revenue Commissioners reported that the income received from income-tax purposes was £63,037,000. The revenue of the country, as disclosed from their figures, in 1936-37 was £63,300,000—estimated—it is not a final audited figure. That does not show a decrease anyhow.

I gathered from Senator Hayes that he understood that the Opposition were asked to remain silent. He reminded us that the Opposition were asked for co-operation. That is so, but I would never understand co-operation with the Government in a time of emergency to mean that everybody but the members and supporters of the Government would remain silent. I know full well that an Opposition has a duty to perform and I see no reason why it should not perform its duties in a time of emergency as well as in any other time. But there are ways, even while using their right of criticism to the fullest extent, whereby an Opposition which is willing to co-operate and be helpful could be helpful to the Government but, evidently, there is no desire of that kind animating the members of the Opposition at present— some of them anyhow.

Senator Hayes referred to the profits made by the millers and bacon curers. Others referred to it also. Whatever profits were made by those people— and it appears that big profits have been made—they are taxed and heavily taxed. Surtax, income-tax and a variety of taxes were instituted by ingenious Governments to extract as much as possible from the profits of industry and business and get them into the Exchequer to relieve the community as a whole. And these profits have been taxed. An excess profits tax was one of the taxes considered when we were bringing in this Supplementary Budget and, after going into the matter at length and examining it in all its bearings, we decided that there was nothing at present that we could get out of an excess profits tax. Therefore, it was not introduced, but we do not say that we might not examine the matter again at a suitable opportunity and if we came to the conclusion that there is more money to be got out of a tax of that kind we would not hesitate to impose it.

Mr. Baxter

And you will let them go on making the profits then?

Mr. O Ceallaigh

That might be considered from other angles that might not come exactly within the purview of the Minister for Finance, but the Minister for Finance will do his share to get all he can out of them.

Senator Douglas and, I think, Senator Hayes mentioned the subject of income-tax being paid by companies once a year and that it would be helpful to some of these companies to pay by instalments, as others do. I thought that it might be possible if for one year, let us say, next year, the companies concerned could be induced to pay three half-years' income-tax, that they might get the benefit of the payment by instalment system later on, but I have had a word with some of those who know more about the subject of income-tax than I do or, in fact, perhaps, I might ever know, because it is a very intricate subject, and they advise me that it is a matter that would require long and careful examination and, in the end, they doubt if it would be possible to carry out the suggestion. However, it is right to let the two Senators who mentioned the subject know that we are prepared to examine it and in the remote likelihood of its being found practicable it would be introduced, but I do not think there is much hope.

One other item that some Senators mentioned was the question of something being done to lighten the load of taxation on twist and plug tobacco. I would like to do that. I know that many members of this House and the other House would like to have that done also. I will have the matter considered. It cannot be done as far as the Supplementary Budget is concerned, but I will have it considered and see what we can do, if we can do anything, to lighten that load in so far as the next ordinary Budget is concerned, which will probably be introduced in April or May next.

There was a good deal of discussion on the subject of defence and the cost of defence. The question of the war generally was discussed in the likelihood of our being implicated in any way. I said in the other House, and I repeat it again, that I think it is most unlikely that we will be attacked. The important belligerent countries have recognised our neutrality and I believe they will continue to respect that position, but we would be untrue to the responsibilities that have been placed on us as a Government if we did not go as far as we could to have machinery and equipment to protect our country in any eventuality. I quite agree that we have evidence only too realistic and convincing of what powerful armies can do when they are provided with all the modern mechanical equipments that have been devised in recent times by wealthy and powerful Governments to suppress those with whom they are engaged in conflict. We all know what can happen. The independence that we have won at such cost is worth protecting, anyway, and we should do anything within our power, up to the limits put upon us by our resources here, to see to-day that we show the world that we value that independence and that we are prepared to defend it if attacked. I believe that we are not likely to be attacked: God forbid that we should ever have to call out the manhood of our country to defend the independence that we have won for the greater part of our country. At any rate, we ought to show all concerned that we value what we have won and that we will protect it in so far as in us lies.

I had the pleasure of hearing Senator Johnston only once before in this House. I found him interesting the first time, but I am sorry to say that I did not find him so interesting on the second occasion, as there was a good deal of repetition. Also, his economic policy was one that I have been listening to in debates in the other House ever since I went into it in 1927. I was used to listening to debates and occasionally took part in them, though I do not claim to have any particularly special knowledge of economics. I have taken an interest in national affairs over a long, long period, and I was closely associated with the late Arthur Griffith for many years in conducting newspapers. So far as economics is concerned, the economic policy that he preached and stood for was the economic policy and is the economic policy that Fianna Fáil stands for.

Professor Johnston

I question that very much.

Peadar Mac Fhionnlaoich

Tá sé ceart.

Mr. O Ceallaigh

I think I ought to know.

Professor Johnston

It was a policy of mutual robbery.

Mr. O Ceallaigh

He was jeered and gibed at for many years by the then Senator Johnstons and he would be jeered and gibed at to-day by the same Senator Johnstons.

Professor Johnston

By no means.

Mr. O Ceallaigh

I know what I am talking about. I have heard that threadbare old story of free trade over and over again for the last 25 or 30 years. I know the jeers and gibes and snubs that Griffith met with when he was preaching, in season and often out of season, that policy of Ireland's right to build up her own industries and to protect herself. That was his policy; that is ours. There is nothing new; we do not claim any new-found or newfangled policy.

Professor Johnston

It is a lot altered since then.

Mr. O Ceallaigh

Not a bit.

Professor Johnston

I am sorry my powers of exposition are not equal to the Minister's intelligence.

Mr. O Ceallaigh

I have not the powers of exposition of the Senator: we know what a distinguished academician he is and we had an example of that this evening. I do not want to say anything at all hurtful to the Senator, but to deal solely with his policy. For this country it is not, in my opinion, a good one. It was tried here too long. I remember the years and years I spent sitting listening to arguments—I see Senator Magennis over there and he will remember a colleague, and maybe a friend of his, who used to deliver the Barrington Lectures long ago.

Professor Magennis

Professor Oldham.

Mr. O Ceallaigh

He was an interesting cultured man. I remember the way in which Griffith used to flagellate him week after week on the subject of free trade—Senator Johnston's policy—versus Griffith's policy—call it what you like. We adopted the Opposition policy when we were all one. They had just as much of it as we had. Senator Baxter may have been a representative of that Party in the old days.

Professor Johnston

They are learning by experience now.

Mr. O Ceallaigh

I am addressing Senator Baxter; I did not interrupt the Senator when he was speaking. For reasons best known to themselves, they dropped it, but we kept it.

Mr. Baxter

You are not making a good hand of it either.

Mr. O Ceallaigh

Of course; the Senator would do much better; but he had ten years of it, until the country found him out and put him out. We have been before the country many a time. We heard talk here this evening about what the farmers think of us. Who has put us here but the farmers, and who has put us in over and over again with increasing majorities every time but the farmers. That is the best answer that can be given to the criticism we have heard. The country knows why we are here, the Seanad knows why we are here, and the Dáil knows why we are here. The people of the country have been asked to decide over and over again, and if they are asked again to-morrow they will decide in our favour as soon as they get the opportunity.

Question put and declared carried.

A Senator

Votáil.

Mr. Quirke

I would like to know how many Senators have challenged a division.

Cathaoirleach

Would the Senators claiming the division, please rise.

Four Senators rose—Senators Campbell, Cummins, Hogan and E. Lynch.

Cathaoirleach

As fewer than five members have risen, I declare the question carried. Senators Campbell, Cummins, Hogan and Eamonn Lynch will be recorded as dissenting.

Mr. Hogan

I submit that the rule is that the bell is rung and when the Seanad reassembles the question is put as to how many Senators are asking for a division.

Cathaoirleach

No; that is not the Standing Order.

Mr. Hogan

Well, that used to be the rule in the Dáil.

Mr. Hayes

This is a superior House.

Cathaoirleach

When will the Committee Stage be taken?

Mr. O Ceallaigh

I suggest to-morrow.

Mr. Hayes

This day week.

Mr. O Ceallaigh

If the House would agree. I should like to get it to-morrow.

Mr. Hayes

We could give the Minister all the stages this day week.

Mr. O Ceallaigh

There is just one thing that is bothering me: that is the loan. I would like to get it over as quickly as possible.

Mr. Hayes

Surely the Bill does not affect the loan. The Resolutions are operative without the passing of the Bill.

Mr. O Ceallaigh

It is not the Bill; it is the Resolutions. Things may be said in discussion.

Mr. Hayes

This is a most circumspect House. Nothing might be said which could affect the loan.

Mr. O Ceallaigh

I can only speak for myself.

Mr. Quirke

I suggest that the House should give the Minister the remaining stages to-morrow. Anything to be said to-morrow week could be said to-morrow.

Cathaoirleach

Is there agreement about to-morrow for the remaining stages?

Mr. Hayes

I do not see any difference between to-morrow and to-morrow week for all the stages.

Cathaoirleach

I should like, if possible, to have agreement.

Mr. Hayes

It is a very bad precedent but, if the Minister thinks the price of the loan might be improved by taking the Bill to-morrow instead of on this day week, I do not object. Would it be the first business to-morrow?

Cathaoirleach

Yes.

Agreed to take the remaining stages to-morrow.

Mr. O Ceallaigh

I thank the House for the decision.