Seanad Éireann debate -
Thursday, 7 Dec 1939

Vol. 24 No. 2

Finance (No. 2) Bill, 1939 (Certified Money Bill)—Report and Final Stages.

Question put: "That the Bill be received for final consideration."

Agreed.

Question proposed: "That the Bill be returned to the Dáil."

The McGillycuddy of the Reeks

I must take this last opportunity of protesting strongly against the Minister— according to the newspaper report— saying in his reply to the Second Reading of this Bill yesterday that, instead of the Budget for the last years being of an unbalanced nature—as I had said—there had been surpluses of £629,000, £464,000 and in 1936 just over £1,000,000 and that there had been only one deficit. Loan or no loan, I think the country should be aware of what the position has been here in those past years. In 1937/38, the Minister claims a surplus of £629,000 but he does not in this take into account unemployment schemes, export bounties and alcohol factories which amount in all to £1,289,000 and which turn his surplus into a deficit of £659,958. In 1938/39 there were no export bounties, but the other two items I have referred to increased his deficit— which he has already admitted—to £777,000. For 1935/36 his £1,000,000 surplus is turned in the same way into a deficit of £422,000. These are purely official figures which I went into and took the opportunity to collect in detail.

Admittedly, as he says, there is divergence of opinion as to what a balanced Budget should be; but, excepting the elasticity which a State possesses in its powers of borrowing, to the ordinary working man in the country the Budget of a nation should be exactly similar to that of the working man who earns a weekly wage. Borrowing is correct finance when the charge is an endemic one or one which it would be unfair, owing to its amount, to place on the taxpayer in one year, but anybody who has even a general knowledge of the principles of finance will cut out immediately such things as unemployment assistance and subsidies as being an entirely unjustifiable method of meeting a deficiency in taxation.

Mr. Baxter

The Budget which the Minister has introduced is one of the most depressing events which the country has had for a long time. The Minister is a jovial sort of character himself and I think it is not what was expected of him. People were wondering just what was going to happen when he was transferred to the Department of Finance. I am afraid his reputation will be rather different, to a great many people in the country. He was a very kindly and good-natured gentleman until he was put in charge of the country's finances.

I am at the disadvantage that I was elsewhere engaged yesterday and have not the benefit of knowing exactly the arguments put forward against the Bill. My own feeling is that what matters most is not the amount of taxation imposed but the capacity of the people to bear it. I think that is what is troubling every intelligent person in the country. One would expect that that would be present in the minds of the members of the Government, whatever about people on the Government side who have to say "yes" to things to which they would prefer to say "no". I believe that is true of a great many people in the Government ranks to-day. None of them want these taxes; none of them want to make people pay more for sugar. What Senator Hayes and everybody else says is true: the people are not able to bear these taxes, in addition to the increased taxation, which, year after year, has been made to the amount of taxation levied on industry and agriculture.

Industry anywhere to be a success must always have a reserve left. The farmer, the business man and the individual can only pay taxation out of what they have got from their earnings, out of some surplus that is left. What the Ministerial policy is doing and has been doing for a considerable time is to take away year after year the money which should have been left as a reserve to go into capital enterprise in the country, to replenish the reserves which keep the wheels of industry turning in the fields and in the towns. Under the present scheme people are being impoverished and a situation is being created where the capacity to produce is depreciating one year after another.

You have reached a stage to-day where you are imposing this additional burden on a country suffering now the first reactions of a war in which the country is not engaged, suffering reactions which are the consequence of the policy which you have been pursuing yourself to a certain extent. The first result is that quite a number of people who were employed have ceased to be employed. To the extent to which that employment has affected their livelihood, they are less able to bear the burden of taxation and the net result is that there is hardship and poverty in the country to a degree about which none of us can be very happy. The Minister and his colleagues talk a good deal about co-operation. As far as I am concerned, I feel anyway that this is a time in which it would be a good thing for the people of the country if we had a leadership that would be able to say to them: "Steady, let us step together," but we have not got that. The kind of leadership we have is not a leadership that will make men steady in their minds, their thoughts or their actions, or that will get them to step together. You know that when you are asking people to co-operate, you can only get them to co-operate on the basis that there is general agreement about the job that has to be done and the way you are to do it. I do not suggest that if we had to face up to the problem of Finland, which God forbid, there would not be a different set of conditions here. We would be fighting then for our very lives. The method would not count then. We would have to do things and we would have to forget the inefficiency and the incapacity of some leaders, simply because they had been thrown into their jobs. Perhaps, one would have to march out and not bother whether they were behind or where they were. We are not faced with a situation of that kind yet, but if we should have to face a situation like that our ability and our capacity to face it are definitely being worsened by the kind of policy you are pursuing. Therefore, when the Minister talks about co-operation he can only get from sane men, normal human beings, co-operation on the basis that there is reasonably general agreement about what has to be done and the way it is to be done.

The Minister knows that there are fundamental differences about the kind of things the Government are doing and the way they are doing them. I believe myself it should be possible to get a much greater measure of agreement about what the country ought to do to-day. As far as I am concerned as a countryman, my great difficulty about this Bill is that you are imposing taxes on sugar, tobacco and alcohol and you have raised income-tax. In my judgment, the country is much less able to bear these increased taxes to-day than it was seven or eight years ago. That is true, because of the policy which you have pursued. Our productive capacity has been definitely falling. The money which should have been left in production has been taken away and spent. It is gone. Now, you are adding to our Budget liabilities. You are even going to put a loan, amounting to £7,000,000, on the market. I should like to see the purposes on which that loan is to be spent. I cannot see that 1d. of it is going to be put into anything which could be called, in my judgment, a productive enterprise. Although things like what you are doing in the case of electricity, from one point of view, may be regarded by some Senators as improving the conditions of certain people in the country, nevertheless this country to-day is thrown back again on its agriculture and its farmers. Quite a number of our industrial workers and the people in our towns are going to be unemployed because the raw materials of their industry, which were imported, will not be available, so that to a much greater extent perhaps than at any time during the period of office of the present Government, they have got to depend on the farmers again.

Had the advice of some of us in this House been taken two or three years ago, had very considerable additional sums by way of capital been put into Irish agriculture, the strength and the vitality of that particular industry to-day would be very different. The total productivity of the nation in 1940 and 1941 could very easily be 25 per cent. more than it is going to be. The Minister's predecessor in office had no sympathy with rural problems. He displayed a complete lack of understanding of the problems of rural Ireland, and what was worse, he did not display any sympathy with them. I do not suggest that the present Minister would be unsympathetic, but his sympathy has not been demonstrated in a very practical way.

The effects of the war on our economic life are very different from its effects on life in England. There has been a very considerable increase in purchasing capacity there owing to war expenditure. One of the ablest economists on the other side has been advocating a compulsory savings plan for people across in England. In his judgment, the people there are earning more money than they can wisely spend after paying all taxes. The Chancellor there however has initiated a campaign of voluntary savings. I should like to see our Minister going out after this Budget to initiate a campaign of voluntary savings on the part of our people. There is no use in exhorting people to save who have no money. They have not the necessary capital to work their industry or whatever occupation they may be engaged in, even to 60 per cent., in many cases, of its total capacity. I believe myself the Labour Party are not saying anything like as much as they might about conditions in the country, but I would say to the Minister that we are definitely going to add to the numbers of "have nots" in this country. In our local paper the other day, I was reading where a deputation of working men went to the Board of Health to put their case for consideration for the Christmas season. They put before the board the fact that there were a number of married men unemployed in the town of Cavan. These men were getting 14/- a week, some of them less. They were paying a rent at the rate of 4/6d., some of them up to 5/-. They said that a cwt. of coal cost 3/6, so that there was 5/6 left to feed a married man his wife and family. What can you do in the country under conditions like these?

This country has certain things which it could exploit. It has the land, and it has the physical energy and intelligence. Therefore, there is not any justification for anybody being pessimistic if there was leadership to show the way to get work done. My complaint is that we have not got that leadership in the country. Added to that, you have a number of "have-nots" in the community. The number is being increased month after month in our towns. The unemployed are the "have-nots" from the point of view of some people. Goodness knows, they must be possessed of magnificent virtues to be as good as they are. In the country we have a number of farmers whose places are uncapitalised. The number is growing, and they will be soon thrown in amongst the "have-nots" because the farmer who cannot work his place to the full, and who is not able to meet the extra demands which the Government make upon him, is just as much a "have-not" as the unemployed workers in the towns. The Government are adding to the number of these, but they cannot continue doing so because very soon the result will be a lop-sided economy. Is it not tragic to be facing a situation like that when one thinks of all the other things that are possible for us. I am not the least bit pessimistic. Some people like to say that I am. But I am not. I prefer being a realist. I believe that the Minister and his colleagues must face up to this: that if they are going to keep peace and order and have progress in the country, if they find it essential to increase the burden of taxation on the people year after year, that can only be done if they, on their part, see to it that our productive capacity is fully utilised, and that the balance which is left to our people, as a result of their increased production, will be enough to meet the increased taxes imposed and, at the same time, will enable them to maintain a decent standard of living. What I say is, that the Government is attending to one side of that but not to the other. The obligation, however, is on the Government to do what I suggest.

We see that in England at the present time millions of pounds can be found for enterprises, quite a number of which cannot be said to be productive. Here with us there are enterprises which we know definitely could be made productive. Work on the land, for instance, holds possibilities. In present circumstances that is absolutely essential for us, but there is no good in telling me to go home and plough up my fields and to do so-and-so, if the first essential to all that is not available to me. Agriculture has been bled white, and the result is that we have not any reserve in the shape of capital, which is essential for us if we are to increase our production. To the extent to which that is lacking, our income in the future is going to be lower, and so is the Minister's capacity to rake the money off the taxpayers of the country which he wants to spend on his various activities. I am not going to say now whether the way this money is going to be spent is wise or not. That question has been argued at length. There are vital differences of opinion on it. My own judgment is that the best way to preserve our sovereignty is to have conditions created here whereby all our people will have a chance of living and working in the country, and of getting paid for their labour. To the extent to which Government activity can assist that, in my opinion, is the best method they could adopt to maintain the sovereignty of our people. I hold that the Government are neglecting to do that. They have neglected it for years as far as agriculture is concerned, and there can be no doubt about it but that we will reap the whirlwind.

The outbreak of war has definitely found us in this position: that we are not able to produce anything up to our full capacity from the land. Everyone who bothers his head to think about it knows that is true. At the moment, I am not thinking of people who have resources other than what comes off the the land. I am thinking of the man whom we style "John Farmer." The people that he is typical of are oppressed and depressed. War is costly and all peoples, whether they are in it or out of it, are called upon to hear increased burdens. We are not in it, but our burden of taxation is just as high as that which is being borne by the people in the war. The Government are not doing their obvious job to put our farmers into production in the manner in which they should, and the result is that our people are depressed. The Government and their supporters will, of course, say that that is not so.

There have been various disturbances amongst our farming community recently. However much the Government may decry the things which these people did, or however much they may disagree with them, this, at least, I think will be accepted by all, that the farmer is not a revolutionary by nature. He does not like to waste time if he can spend it to better advantage on his farm at home. The things which certain farmers did recently were done in an attitude of despair. The strange thing about it is that quite a number of those farmers were led by men who, to my own knowledge, were some years ago most active exponents of the policy of the present Government. One of our troubles here is that we find it very hard to go back on things that we did and said in the past. The Minister knows that quite well himself. It must be said, however, that he has shown more sense with regard to the past than some of his colleagues. While that is so, it must be admitted that it is very difficult to get men who espoused a particular cause or policy in the past to come out now and repudiate it. But, it is a fact that quite a number of farmers who, in a great many counties marched out in protest a week ago, had been active supporters of the Government Party in the past. Why did they do that? I put it to the Minister that they did it because they are broken, disappointed and angered. I am not saying that the banner under which they marched out on this occasion was the best that they could unfold, but we know also that the British did not go to war with Germany just because of Poland.

Mr. Foran

What about the Finance Bill?

Mr. Baxter

I am talking about the Finance Bill, and I am pointing out—

Mr. Foran

Poland is very far away from the Finance Bill.

Mr. Baxter

—that while we are nonbelligerents we are raising a Budget that is going to be as costly on the country as if it were at war. What I am trying to indicate is that this non-belligerency which we are trying to preserve is very expensive. Cost is being imposed on people who have been impoverished in pursuance of a certain policy, and the burden can only be borne by them if the Government, on its part, will do things which are essential, if the people are to be put into production and this taxation carried. I have not been in consultation about this, but I am quite satisfied that the recent farmers' strike was a symptom, and a dangerous symptom. People may shout out and decry them, saying that they were only a certain type of farmers, but I know many of them to be valiant men. It is all right to say that they are fine fellows when they agree with you but, as soon as they disagree, give them the kick. We have had experience of that, even in this House.

Mr. O Ceallaigh

On both sides.

Mr. Baxter

That is true. If there is to be progress there must be understanding, fair play and reasonable action on the part of the Government in the way of helping the citizens. It should be realised that you cannot impose such burdens as will break them without doing the obvious thing, helping them to bear them. If this additional taxation is taken from the country, and if nothing is done to put people into greater production, you will find when you come back that they will be weaker. Where would that end? If there were people who wanted trouble I say that the policy being pursued has all the essentials for breaking people who want to work, who want to develop the part of the country they have got, and who want peace and order. The Minister is not very long in his present office. He will be doing very badly as far as the rural community is concerned, if he does not do better for them than his predecessor. Many people are dissatisfied, whether through political reasons or their shadows, but they are trying to look on the country's future from the point of view, not so much of political reactions, or as to what was done, but to the economic and spiritual consequences.

If the Minister is prepared to face up to the problems of rural Ireland then, even though he was brought up in Dublin, he should realise that only for rural Ireland Dublin would not be what it is. I suggest that if rural Ireland cannot be kept working to full capacity, Dublin will be a very queer place for the residents before 20 years have passed. If the Minister tries to get a sympathetic understanding of the mind of rural Ireland, I am convinced that in his term of office he can bring about a change in the conditions there. I suggest that some of the Loan of £7,000,000, if not all, which is going to be provided by the Irish people—and which I hope will be a thundering success—will be put into agriculture. When the Minister gets the money let him sit down and see how many millions he can put into agriculture. There is no way in which he could spend the money if he wants to get a better return. If he has to come to the House again in a few months to ask for more taxation he will find that the position is not improved at all, as it cannot be improved when you take away all the substance and put nothing back.

Peadar MacFhionnlaoich

Deir an Seanadóir Baxter gurab é an rud atá ag teastáil uainn treorú. B'feidir go bhfuil an ceart aige, ach cé'n áit a bhfuighimís an treorú? Táim annseo le dhá lá ag éisteacht le dream beag daoine ar an taobh thall de'n Tigh. Rinneadar mór-chuid cainnte ach níor thug siad aon treorú dhuinn. Níl siad uilig ar aon intinn agus ní féidir linn aon pholaisí a ghlacadh uatha. Tá gach athrú chainnte aca atá i gcoinne a gcéile—ceann aca ag rá go bhfuil na cánacha ró-árd agus ag eirighe níos áirde, agus nach ceart iad do ghlacadh, agus ceann eile aca ag rá gur ceart níos mó airgid do chaitheamh ar seo agus ar siúd. Tá seanphort ag an Seanadóir Baxter i gcomhnuí—go mba cheart níos mó airgid do chaitheamh ar na feirmeoirí agus ar an talamh. Níl sé sásta go bhfuil na luacha ar torthaí na talmhan ag dul suas gach lá. Ba mhaith leis, san am chéana, níos mó cánacha do chur orainn sna bailtí móra agus ar lucht oibre ar fud na tíre, le cáirdeachas gan ús do thabhairt do na feirmeóirí. Annsin cuireann sé i gcoinne Bille cánacha mar seo—Bille atá riachtannach. Má's rud é gur mhaith le'n ár gcáirde ar an taobh thall treorú do thabhairt dúinn, caithfidh siad teacht síos ar phoinnte amháin. Caithfidh siad glacadh le cánacha níos áirde nó ní féidir airgead do chaitheamh annso agus annsúd. Tá siad ag leigint orra go bhfuil truagh aca do lucht oibre na tíre ach ní doigh liom go bhfuil aon pholasaí aca ar a mbeidh árd-mheas aca uirthi. Táim cinnte nach nglacfadh lucht oibre le mórán den pholasaí atá luaidhte againn le dhá lá annseo. Tá súil agam nach dtiubhraidh an Seanad aon aire don chainnt a chualamar ó Sheanadóirí annseo, gidh go bhfuil Béarla galánta agus flúirseacht, agus oráidí breagha aca. Mar sin fhéin, ní labhrann siad ar son muintir na hÉireann, agus ní bheidh siad ag labhairt ar a son go dtí go gcluinimid an Ghaedhilg uatha.

Sir John Keane

I think the matter to which I propose to refer should perhaps more properly have been raised on Section 1, dealing with income-tax, but I had not the opportunity of raising it. I have raised this matter several times before, but where a palpable injustice exists, or is alleged to exist—and I think it can be proved to exist—it is the duty of any Senator to keep on referring to it, in the hope that, in the course of time, the consciences of the Minister and of those who advise him may soften. I refer to the injustice that exists in respect of the taxation of people on income which they do not receive. I refer to people under Schedule A. There are two classes of people who receive income under Schedule A. One class is that which has property let—the landlord who owns property and lets it for certain rents. He receives a certain rent, but that rent is not the actual money he has to spend in many cases. There is, in connection with property, the cost of upkeep which may be very considerable, and, under amendments to the Income-Tax Acts, carried out by the present Government, of which the Minister may not be aware in detail, but of which his predecessor is fully aware, owners are taxed not on their net income, but on their gross income. No allowance whatever is made now for repairs except on property of £5 valuation or less. That is the position with regard to the people who actually receive money, where you can apply a definite test of what the income is. As far as I know, in no other case, no case of farmers or commercial undertakings, is anybody taxed on income they do not receive. That is the only case, the case of people who own property which is let and property of over £5 valuation.

I come to the case of people who occupy property themselves. I think we all know the sad spectacle throughout the country of these derelict demesnes, and whatever may be our political feelings I think we all must admit that the remnants of the resident gentry are an asset to the country. They contribute very largely, as far as they are able, to the amenities of sport and social work. They are definitely, in many cases, almost pioneers and leaders in such matters as district nursing, and matters of that kind. They are, without suggesting anything snobbish, remnant centres of civilisation in the country. They occupy in many cases what one might call the remnant demesnes, on which the upkeep is exceedingly heavy. They have the upkeep of biggish houses, the upkeep of grounds and gardens. I suggest that, considering that they are a social asset in the country, their case should be considered and they should not be taxed on notional incomes and not be allowed to set off the actual expenditure incurred in the maintenance and upkeep of their places.

That was the position up to three or four years ago, when the Government, when Mr. MacEntee was Minister for Finance, swept all that away. Up to that time, there was a definite allowance given for repairs, which could act as a basis test. If your valuation were £100, so much of that could be set off as the allowance for repairs; I think it was about £20. Then you could relate that allowance to the actual expenditure, and if an owner occupier was proved to have spent more than that £20 it was set off against his total income. But now the whole of that basis test of upkeep is being swept away. The valuation of these properties has been increased by 50 per cent. and they have no relief whatever.

I ask the House to accept the fact that those people are an asset, living as almost economic prisoners—as I know many of them to be—on their properties. I know many of them cannot afford the money to go away. As long as they stay in their homes they can just live, but if they want to go away for a holiday they have not got the spare money. These people deserve consideration just as much as farmers or the wage-earning class or anybody else, and they should not be taxed on income they do not receive. That is the position now.

I know there are administrative difficulties in this. In fact, if I were to hazard a guess, it is the administrative inconvenience that is at the bottom of all this injustice. The old system necessitated reference and examination of cases and a lot of extra work in the income-tax offices. I do not want to be hard, but I want to be only human and suggest that the officials naturally did not like all that and, in the interests of simplification, they introduced this system which, in my opinion, is a gross injustice.

We have now a new Minister for Finance and I would ask him to examine that matter de novo and try to detach himself to a certain extent from the official advice which I am afraid he will receive in this matter, and try to look at the bare justice of the case. I would ask him to start out, first of all, on the assumption that nobody should be taxed on income they do not receive and that, in the case of people who live in the country, who contribute largely to its amenities and to its social life, they should be allowed to set off the costs of their repairs and the upkeep on their places against their incomes.

If you go back to the origin of this thing, a Socialist Minister, Mr. Lloyd George, whose whole political life was the abuse of the capitalists, admitted the injustice in the case of residents on the land and allowed the very concessions that I am now asking for and which the Minister's predecessor in the Government to which he belongs swept away. I would ask that this matter might be reconsidered in the light of plain and elementary justice.

Mr. Douglas

As Senator Sir John Keane has mentioned this particular matter of taxation on income not received, and as it is an old hobby of mine, I think I might mention it again because I agree with him, but my arguments would be somewhat different. Perhaps not different, but I relate them to an entirely different class of persons. There seems to be a good deal of hope among members of this House that the sympathy of a new Minister may bring about changes. I am afraid I have been too much impressed by what is called collective responsibility to share their hopes to that extent.

Mr. O Ceallaigh

That is right.

Mr. Douglas

Nevertheless it might be possible that the brain of one man may take in and re-examine something which we failed entirely to get into the brain of another, and he might persuade other persons. The late Minister was adamant in this particular matter, and one never got even sympathy. I am not attacking him on that, because it often happens that one person sees a point very differently from another.

The removal of the allowance for repairs was proposed by the late Government. It was proposed first of all when Mr. Blythe was Minister for Finance. It came down to this House and I had the privilege of moving a recommendation, the only recommendation, I think, that this House ever carried against a Government.

Mr. O Ceallaigh

I beg the Senator's pardon. Would he mind repeating that?

Mr. Douglas

Certainly. The removal of the allowance for repairs was first proposed by the Government when Mr. Blythe was Minister for Finance. That Finance Bill came to this House and I had the privilege of proposing a recommendation that that be deleted and that the allowance for repairs should continue. To the best of my belief that was the only recommendation from this House that ever went back to the Dáil and was accepted against the Executive. There was, I think, a small majority. Some members of this House who were then members of the Dáil had the privilege in this particular matter of voting against the Government which they ordinarily supported. My optimism does not extend to the belief that this House, which has a majority for the present Government, could possibly be persuaded to act in the same independent manner as it did when it had a majority generally supporting the late Government, but at the same time I do think that some day this question ought to be re-examined.

I want particularly to emphasise the assertion of Senator Sir John Keane that income-tax should not be paid on income not received, and I personally think that the Schedule A tax, which is for all practical purposes a tax on house property, should not be mixed up with income-tax, and should be a separate tax altogether, relating to the facts of the case.

I am not disputing for a moment what Senator Sir John Keane has said, but I want to draw attention to a completely different class of persons for whom, I know, this new tax is creating a very serious problem at the moment. Quite a number of people have spoken to me. I raised this question before when the tax was increased to 4/6, and it is very much more serious now when the tax has been increased to 6/6. I am referring to persons who bought houses at a price which they believed, within their income, it would be possible for them to live in and to meet the expenditure. They knew the valuation or the approximate valuation. If they were new houses they were able to find out the valuation of similar houses in the exact neighbourhood. If they were not new houses they knew the valuation, and they made their calculations accordingly. When you have an actual income-tax and your income goes down, the rate of tax may be higher, but there is an adjustment, but that is not the case where you own a house. There is great hardship in the case of people, lower middle-class or upper lower-class, I think the Minister knows the exact class I am referring to—people with £20 to £25 valuation. Of course, it applies to higher valuations too, but the hardship is greater in the class living in houses of £20 to £25 valuation. They calculated what they were going to spend. In many cases they had to find a lump sum to commence with, and then they arranged for the balance, perhaps, with the Dublin Corporation or a building society or an insurance company. They knew they had so much per annum, and that the income-tax was 3/- or 4/- or 4/6. Now they find themselves with a 20 per cent. addition on to the valuation of the property when they bought it, and 6/6 instead of 3/- income-tax. The additional rate there is a very real hardship, and I think that if income-tax is going to be at the rate of 6/6 and, perhaps, for all we know, 7/6 or anything, there should be a special different taxation for people who are living in their own houses. I know, theoretically, that you set that off against another person who has to pay rent. I know the basis and the reasons for it, and I recognise a certain justice. I am not saying that persons living in their own house should pay no tax, but I am suggesting that you dislocate the position with regard to people with moderate incomes in a way they cannot adjust it.

Anyone who has had the experience of selling a house again and moving to a cheaper one knows that the actual cost of doing that is probably the amount he would save in three or four years. I know two or three young people who do not know how they are going to meet the position, for whom the increased cost is very serious. It may be only the difference between 4/6 and 6/6 on £20, but to some people that means a great deal. It means a lot to young married men who could not get houses to rent in Dublin and who saw a chance of getting a house for which they could pay over 20 or 30 years. I do say their position is a serious one. I say this particularly to this Minister because I believe it is exactly the kind of problem in which he is personally interested, apart altogether from his position as Minister. As Senator Sir John Keane raised the point, I thought I might make an appeal to the Minister for this particular class before the next Budget.

Mr. M. Hayes

I want very briefly to make one particular point. I have always had some sympathy with a Minister for Finance. I have heard a great deal of abuse of Ministers for Finance in my time and it always seems to me rather unjust to attack the individual who, for the moment, is bearing that particular burden because he has no more responsibility than any of his colleagues for the measures he introduces. Sometimes, indeed, he is acting against his will; he has made a valiant fight against expenditure, has been overborne by weight of numbers and arguments and finds himself arguing in favour of things against which he privately argues.

Mr. O Ceallaigh

Hear, hear!

Mr. M. Hayes

So that the Minister for Finance, himself, merely represents the policy of the Government.

Mr. O Ceallaigh

That is right.

Mr. M. Hayes

And it is not the Minister but the policy of the Government itself that ought to be abused. It seems to me that the situation with regard to our finances here needs a great many remedies, but there is one I would like to suggest. Undoubtedly, if any standard of life is to be maintained here, and if the Minister's revenue is to be kept up, we must have increased agricultural production, not only for home consumption but also for export. It is all very fine to say we do not need to import goods, but if we are not going to import anything then we are going to have a Robinson Crusoe mode of existence. We also need to export.

The Minister for Finance and his colleagues in the Government at one time proclaimed that they could find alternative markets for our agricultural products. They have found by bitter and very costly experiment that they can do no such thing. They have now come around in that, as in many other things, to the opinion of their opponents in public life in this country. That being so, and in the situation which you now have, of European War —and the British are planning for a long war—they surely must have taken into consideration their position with regard to foodstuffs. Surely our position with regard to the British market for foodstuffs ought now be a stronger one than ever it was before, and this surely ought to be an auspicious moment for going to the British, not by means of civil servants, but by Ministers themselves making up their minds here as to what they would like to do and then inviting British Ministers on a personal man-to-man basis. There is no derogation of their sovereign status —that is a familiar phrase to myself and the Minister from particular debate —there is no derogation of their sovereign status in doing that. All over the world at the present moment kings, queens, prime ministers, chiefs-of-staff, commanders-in-chief and admirals are flying from capital to capital making arrangements and negotiating from the point of view of their particular countries.

Mr. Douglas

And Ministers for Finance.

Mr. M. Hayes

Particularly. There is nothing at all derogatory in an Irish Minister for Finance or an Irish Prime Minister or any Irish Minister flying to another capital and endeavouring to make a long term agreement with regard to our agricultural production here which would enable him to give guaranteed prices and would enormously increase agricultural employment, and, I think, to a certain extent, other employment. That is one step which could be taken which would serve the country, and I think if it were known that the Minister were going to take that step it would help in his effort to get this loan or any other loan he may intend to float. He certainly asks for co-operation. I am never quite clear what he means by co-operation, although I suspect he means that people should be silent while he does whatever he pleases. When the economic war was on the Minister, if my recollection serves me right, is the very person who came back from Ottawa in 1932 and said that an agreement was in sight. The agreement which was then in sight did not actually materialise until six years later, 1938. It was six years before that they decided to settle the problem by personal negotiation. And may I point out—it is relevant, I think—that while these negotiations were going on for the settlement of the economic war, the Minister and his colleague got the co-operation of the Opposition in so far as not one single word was said by any Party in the country opposed to the Government about that matter. I think if they did the same thing again they would find that they would get plenty of co-operation in like manner.

I always thought that the settlement of the economic war was merely the beginning of an economic peace, was merely the beginning of more and more arrangements because Ministers—I say it in no captious spirit—had to rid themselves of all kinds of foolish opinions into which they were deceived by their own propaganda. Experience has shown them that certain things cannot be done. One thought, one hoped that the end of the economic war was the beginning of a series of agreements. If there were any difficulties before the European. War broke out, the incidence of the European War must surely have considerably reduced, if not entirely removed these difficulties. I think there would be plenty of co-operation in a real sense if Ministers would endeavour, by personal negotiation, to see what they can do with regard to long-term agreements with the British in the matter of our agricultural produce. If they did that, it would, I think increase the yield of taxation and might eventually enable us to reduce the burden. Both these things would be very desirable.

Mr. Quirke

As far as I see, we cannot even hope to get agreement on the Front Bench of the Opposition and if we cannot do that I am afraid I, like others, will begin to get pessimistic. If Senator Hayes had been listening to Senator Baxter's speech—he seemed to be listening to it but he must not have been—he would find where the whole trouble lies. Senator Baxter said in his speech that there are fundamental differences which, apparently, cannot be reconciled. That has been running through the whole debate here and it is quite obvious that the differences which Senator Baxter sees and which any sensible man would see are the differences between the policy of free trade and the policy of protection.

Mr. M. Hayes

Not at all.

Mr. Quirke

Absolutely.

Mr. M. Hayes

Not at all.

Mr. Quirke

If that is not so then I do not understand the meaning of English.

Mr. M. Hayes

That could be, Sir.

Mr. Baxter

That is the trouble.

Mr. Quirke

It is quite possible, but in any case I have to paddle along and do the best I can. I understand that Senator Johnston suggests that the Minister is very foolish to take the risk of missing all the revenue which would be gained by the importation of sugar in the near or in the distant future. As an alternative to the production of sugar here in this country, he suggests that we should continue to import sugar. I ask the Senator if he seriously thinks that the Minister would be carrying out his responsibility as Minister or that the Government would be carrying out their responsibilities to the people if they took the chance on the further development of the war and the possibility that in a year or two years, six months or two months for that matter, we might not be able to import any sugar at all. If that is not a policy of free trade I do not know what it is. Then we had Senator Baxter saying that what we are short of is leadership. If we are short of leadership, Senator Baxter did not tell us how we are going to get leadership. What is his method? We have got the present leadership and we have got the same leadership repeatedly time after time and would undoubtedly get the same leadership to-morrow if another election were to take place. Senator Baxter knows that and so do the other Senators.

Mr. Baxter

He does not believe it, to tell the truth.

Mr. Quirke

In any case, that is the position.

Mr. Baxter

That might be upsetting for some people.

Mr. Quirke

Senator Baxter has said that we were drifting along and having more and more "have nots" in the country. Whatever we are having in the country, we are discovering more and more "have nots" in this House —people who have not an alternative to the policy of the Government. If Senator Baxter were really sincere he would stand up—as also would Senator Hayes and the others—and say that he was very sorry to see the taxes on sugar, tobacco, liquor and other such things, but that he had no alternative. But they will not say that: they keep on criticising the Government about the taxes which have been imposed, without their having any possible alternative to put up against it. Two or three of the Opposition speakers have suggested that it was a great thing that some members supporting them on the other side of the House voted against the then Government, and they suggested it would be a great thing if some of the people on this side of the House could take their courage in their hands and vote as they really believed rather than for what they had been told to vote.

Mr. Douglas

If the Senator is referring to me, I would point out——

Mr. Quirke

I was not referring to Senator Douglas.

Mr. Douglas

I was the only one who made that reference, and if not to me I do not know to whom he was referring. He clearly does not understand English, as I never suggested that anyone here was voting contrary to what he believed.

Mr. Quirke

The Senator has not proved to my satisfaction or to that of others that I do not understand English. A Senator suggested that voting had been so, and did it in very definite terms. That was Senator Baxter.

Mr. Baxter

Nothing of the kind.

Mr. Quirke

Let the Senator look up the Official Debates in case he forgets what he said. That is exactly what he said.

Mr. Baxter

No.

Mr. Quirke

The people on this side of the House are not bound by any pledge.

Mr. Baxter

I did not say a word about voting.

Mr. Quirke

On several occasions they voted against the Government. Senator Baxter comes along and points out the various things which have happened inside the last couple of weeks, and in deploring them he suggests that it was all the fault of the Government. Therefore, I take it from the way that Senator Baxter spoke that he would be prepared to stand up and support the policy of the strike of farmers which took place a few weeks ago. Is that right or not?

Mr. Baxter

I said nothing of the kind.

Mr. Quirke

He does not stand over that policy; that is one good thing that has come out of this debate. Running through the whole debate is this difference of opinion: we on our side believe in a policy of protection, of producing everything that can possibly be produced in the country; the people on the other side do not believe in the policy which we believe in, but that we should import anything that can be produced cheaper than it can be produced here at home.

Senator Johnston said in his speech that an unchristian spirit pervades the whole community. If we had a really Christian world, then there would be no need for this policy of protection. If there were a world in which all people believed that it was their duty to supply food wherever it was required, at a reasonable price, that would be all right; but unfortunately we have not a Christian world. In practically every country at the present time we have barricades being thrown up against imports from outside.

Mr. Johnston

Are we trying to improve on the golden rule?

Mr. Quirke

The suggestion is that those barricades should be thrown down, and that we should depart altogether from the policy which is that, not alone of the Minister for Finance and the Government, but of the people of this country. I did not intend referring to Senator Fitzgerald's speech—in fact, I did not intend talking at all, as I did not wish to raise any controversial matter. In his speech he went further than the rest. I see he is quite in agreement with the rest in doing away with the policy of protection.

Mr. Fitzgerald

The Senator is not referring to the speech I made on this reading, I hope?

Mr. Quirke

No, not at all.

Mr. Fitzgerald

He might easily do it.

Mr. Quirke

He suggested, I think, that a reasonable attitude to take on the policy of the defence of this country was that of defending it against the possible conquerors of England, that what we should do was to realise that our only hope lay in joining up with England. I suggest that we should, by every word and act here, maintain a policy of neutrality, and think of no such act. I am not a military expert any more than the ex-Minister for Defence.

Mr. Fitzgerald

Not as much even.

Mr. Quirke

The Senator says "not as much". I think I have proved to be a little better as a military expert than the ex-Minister for Defence. In any case, I am not sufficiently a military expert to question the military knowledge of Senator Stafford, as was done by the ex-Minister for Defence, and I think that, whatever may be coming to the rest of us, we should all at least take off our hats to the one link with the Fenians—Senator Matt Stafford.

The point is this: while we may differ on various things, we have come together in the past in a time of crisis. We have come together, as Senator Hayes has pointed out, and members of the Opposition have at least kept quiet while certain negotiations were going on. I suggest that we are not up against a more serious proposition now than we were in the past. If Senators were sincere in their attitude heretofore and if they are sincere now, all their efforts will be to do the best that they can for the good of this country. Rather than try to pick holes in a policy for which they have no alternative, they should do as they did in the past and admit that the Government is doing its best; rather than put obstacles in the way they should throw in their weight behind it and help it.

Mr. Fitzgerald

On this matter of co-operation, I do not see any objection to co-operation but, of course, under no circumstances are we going to say "yes" when the truth requires the answer "no". I think Senator Quirke has not only a certain amount of difficulty in English but a certain amount of difficulty in thought. He sees things much more clearly than anybody else. He challenged Senator Baxter as to whether he stands over the policy of the farmers in the recent strike. I do not know what Senator Baxter's view may have been—I can speak only for myself —but if you ask me do I stand over the recent strike it would be the same as asking me do I beat my wife? I would only be able to answer that there may have been justification for the strike with regard to the price of milk, but I could not say that there was justification for a strike aiming at derating or at a moratorium on payment of annuities. Things are not quite as clear as the Senator thinks. He talks about free trade and protection. If you ask me am I a free trader I would have to say "no" and if you ask me am I a protectionist, probably I would have to say "no", also. It is another thing to say that if you do not support the lunatic policy of the present Government you stand immutably over the doctrine of free trade. Things are not just like that. The Senator is out of touch with the realities of the situation. You could say that we were a protectionist Government when we imposed tariffs and maintained the Tariff Commission. Were we protectionist or free trade when we were imposing protection? As the Senator gets older he will realise— perhaps too late—the law of Aristotle: "Not too little, and not too much". That is the golden mean.

Mr. Baxter

That is too deep for him.

Mr. Fitzgerald

The Senator may remember the early history of the Church when one heresy sprang up after another, and the second one to spring up, in trying to rectify the first, would go too much to the other side and the pendulum would swing right over to the left. The real truth lies in the fact that the Senator does not understand. He talks about differences on this side and on the front bench here. I am now going to differ with my colleague, Senator Hayes, who has said that the policy advocated by Senator Quirke seems to be absolutely autarchic and suitable only for such a land as that of Robinson Crusoe. I think he is quite wrong. If you read the story of Robinson Crusoe you will see that when Defoe wrote it he realised that it was not going to be possible to write a novel about a man placed entirely alone, and unaided by the law of nature. If you throw your mind back, you will remember that Defoe arranged that the ship which was wrecked should be wrecked just near the shore.

Mr. M. Hayes

Surely Robinson Crusoe's sterling attributes are not relevant.

Cathaoirleach

I do not think there is a copy of Robinson Crusoe in the House.

Mr. Fitzgerald

Defoe was able to arrange for Crusoe to get guns made of metal dug out of the soil and smelted in great factories, and that soil had to be acquired in a place that was productive of iron. Also, there had to be a supply of gunpowder, which is acquired from places where there is nitre and saltpetre and so on. He required, in order to live that crude life, the resources of an enormous and complicated civilisation. As far as this country is concerned and as far as I can judge—I do not pretend to be an authority on the policy of free trade— I believe that to consider how absolute self-sufficiency can come about we must go back to the copper age and the bronze age.

When there was a copper age, this country produced copper but when it came to the bronze age, as the bronze required an admixture of tin, this country had to resort to imports. It seems to me, therefore, that to establish what Senators on the other side want, is not merely a matter of going back to the bronze age but to the early iron age. You have got, literally, to go back to the stone age. If you look at anything in this room, or any article which any Senator may have in his possession, I think I can prove that if we had for the last 200 years been completely cut off from the rest of the world, that article could not have been produced here. Even in the case of sugar, it is manufactured by complicated machinery made of steel and this country does not produce steel. As civilisation developed, this idea of absolute State supremacy gave way to a system of interdependence between countries.

Senators challenged me yesterday on what I said following the Minister's statement. My point was that we are spending more than £5,000,000 on an Army which a few years ago cost only £1,100,000. Some Senators seem to think that if an army costs £5,000,000, it must automatically be five times as good as an army costing £1,000,000. That is not so at all. It does not necessarily follow that an army costing £5,000,000 may be five times better than an army costing £1,000,000. What is the point of spending all this money? The Army can be used in a number of ways. We know that an army and its reserve are necessary for the general maintenance of order. It may be needed for other purposes. The Minister referred yesterday, directly or indirectly, to Finland. He talked about what the position in Finland was and referred to the money spent by other neutral countries. That analogy, however does not hold. Finland and, as I said, Estonia, Latvia and Lithuania are a sort of inland lake, surrounded by their potential enemies, while their potential friends cannot get to them.

In all the circumstances, does any. Senator think that our Army, enormously inflated in cost, is going to be called on for defensive purposes here? It may be—I am not suggesting it— that the Minister has in view a fight against England. In that case, we would be rather in the position of Poland and Finland. The potential enemy would be immediately beside us and our potential supporters, or the potential enemy of our enemy, would be more or less cut off from us. You might also have an Army inflated in this way for dealing with disorder in this country, though in this country, where we had the Head of the Government appearing with tears in his eyes making an impassioned speech about hunger strikers, stating that the Government would rather go down than surrender to a hunger strike, and where you read a few days later that the hunger strikers have been released, I do not see why we should spend £5,000,000 on an Army, merely for the purpose of suppressing internal disorders.

Again, it may be suggested that you have an Army to fight the North. Sometimes when a man commits a murder it is pleaded that he is a lunatic, in modification of the crime of murder. If anybody talks about the Army existing for the purpose of waging a war on the North, I would not suggest that it was criminal lunacy because lunacy is a modification of criminality. If the Government's proposal were to wage war on Northern Ireland, I would say that you would have the totality of criminality together with the totality of lunacy. It would be most unparliamentary for me to say, however, that people on the other side manifested the totality of criminality and the totality of lunacy and, I assume, therefore, that is not the policy. The only possibility left is that of some external enemy waging war on this country arising out of the fact that it was at war with England. The geographical position and the relations between these two countries are such that a large-scale attack on this country could only be possible if the British Navy were overcome. That is the position as I see it. The Senator may be able to correct me. It may be that he thinks that we shall come to a period when we shall have to fight against the same enemy as England has to fight.

Mr. Quirke

What I meant was that I was not sufficient of an expert to know where the attack might come from, but I thought that we should be prepared to meet it wherever it came from.

Mr. Healy

Even if it came from England.

Mr. Fitzgerald

I may be a rather cantankerous person, but I have my moments of good nature, and what I am trying is to assist the Senator. I have tried by a process of elimination to discover what the Army is intended to do. Up to a few years ago the Army, when it cost a little over £1,000,000, was deemed adequate. At the present moment, at a time of what is called crisis—remember the word means judgment—it is deemed necessary to raise a loan to provide an army which admittedly could not be maintained out of the ordinary taxation of the country. That is in relation to the crisis. In that crisis it is conceivable that a situation may arise when the enemy now fighting England would be in a position to invade this country. In that case, it means that you have a joint defence of these islands. The Senator is now leaving the House, but I should like to ask him or any other Senator, why in this time of crisis this country is putting an enormous burden on the taxpayers and extending that burden into future years within which the debt which we are incurring now will be repaid. The Army, presumably, is not to be used against Britain. Perhaps the Army is being maintained to face a possibility of attack arising out of this war. In that case there would be co-operative resistance. If that is the purpose for which this money is to be spent, it is proper that some steps should be taken by way of consultation between our military experts and the British. I do not know whether we have any military experts. Personally my own view is that I do not think this expenditure is necessary at all.

Senator Quirke says that we have no policy here. I agree that once a thing is done it cannot be undone. I would not say that if, by any unfortunate chance, I had to take the responsibility of the Minister for Finance, I would be able to get back to the position we were in in 1931, because he has extended the Civil Service, he has employed all sorts of other people, vested interests have been created, and, therefore, I think it would be against justice if any new Government were to come in and say that all those people were going to be sacked. I do think, however, that enormous economy, amounting to millions of pounds, could be effected in the case of the Army. I think that could be done without being unjust to anybody in the Army. I also think that enormous economy could be effected in the case of the police force. In my opinion there could be a modification of our industrial revival business. Anyway, I think that is going to modify itself irrespective of anything that the Government may do. I do want to make it plain that I would not favour any modification of it which would injure people who have expended a large amount of money under the law of the country, but, as I have said, I think it will modify itself.

This is a Bill to raise additional taxation. When one is faced with a certain position you have two alternatives. The first is to consider how you will set about raising the additional taxation, the other, how to create a situation in which the additional taxation will not be necessary. I do not think that any Government taking the place of the present Government could guarantee to reduce taxation to the level it was at when the previous Government was in power, because, as I have said, too many vested interests, rights and so on have been created since, and these would have to be recognised. But I think it is demonstrably true that, without doing any injustice, the additional taxation proposed here could be made unnecessary by diminishing the completely useless expenditure that I referred to yesterday. A great deal of the expenditure on the Army is not only useless but has, in fact, proved to be definitely harmful.

I have not got up here merely for the purpose of making party points against the Government. I am, myself, far from looking for some little points to attack the Government on a popular issue. I have never done that. I always like to be mixed up in anything of an unpopular nature. I realise that the Government have a great deal of responsibility. Whenever they have been forced to take a certain line which might easily bring on me a reaction of unpopularity, as long as I was convinced that the good of the country required that they should take that line, I have always hastened to associate myself with the Government.

It does not follow from that that I wish to see millions of our unfortunate people's money being thrown away in useless and harmful expenditure, or that I am bound by a spirit of co-operation, in view of the crisis in the world, to support everything that the Government do. I am prepared to give that co-operation on just terms, but I do not agree that I have got to say: "It is splendid that you are throwing this money away." I would not be just to myself or to the people if I did that, and if anybody asks me to do that then I say the sooner you abolish free speech altogether and abolish this Legislature the better. I, for one, realise that the Government are up against difficulties: that certain things must be done to safeguard and protect the interests of the country. I am quite prepared to co-operate with them in anything that tends to do that, even though that co-operation may involve some unpopularity for myself, because I rather enjoy unpopularity.

Mr. Foran

After the flights of fancy and imagination reached by the last speaker I want to say a few words on this Bill in case the Minister should lose touch with the ordinary common things that matter in the life of this country. I would be glad if we could have some information from the Minister as to what the Government's attitude is towards the poor, the unemployed, the old age pensioners and the blind people throughout the country. At the time their allowances were fixed, there was no crisis in the world. Since the outbreak of war there has been a substantial increase in the cost of living. The proposals in this Bill will make their burden a heavier one than it was hitherto, and they are the people who are least able to bear that burden. Senator Fitzgerald talked about all the iniquities connected with Army expenditure. I presume he was referring to the regular Army. To-day we have in this country another army, a hungry army of over 100,000 people. I submit that this army is a bigger menace to the welfare of the country than the trained army on which we are supposed to be wasting so much money. What are the Government going to do about those people? Apparently there is no possible hope of finding employment for them. The allowances they are receiving are miserable and entirely inadequate. I want to know what steps the Government are likely to take to make their position more bearable.

In addition to that huge army of unemployed, we have people in employment who are feeling the pinch of the present situation very severely, due to the rise in the cost of living. They have remained very quiet, and the country is fortunate in this, that a great number of people in the trade union movement realise that there is a crises in the world, and have tried to prevent industrial upheavals. Fortunately the threat made by the Minister recently— shaking the whip at them and telling them that they must not make any effort to counteract the high cost of living by seeking increases in their wages—has been explained away. A good deal of satisfaction has been expressed in connection with it, but it does not end there. The cause is there, and at any time it may come to a head. I fear that the burden will become so great that people generally will have to demand increases in wages. What is the Government's attitude on that? Unemployment, as I have said, is going to go on increasing. To my mind these are matters that are fundamental to the future of the country and to its ordinary everyday life.

We had evidence recently that the farming community are feeling the burden. I do not think they were well advised in the action they took, but at the same time I am of the opinion that the Government propaganda, and the powers which they exercised under the emergency legislation, will not get rid of the unrest that prevails amongst those people. Hence we must take notice of possible turbulence in the country. When I spoke on a former occasion about co-operation, I realised the serious position the country was in. After two months of war we find that the number of unemployed has gone up by something like 20,000. We are told that some of the combatants are making preparations for a three years' war. One does not want to have the imagination of Senator Fitzgerald to realise what that means. How are we planning? What steps are we taking to ensure that the ordinary, every-day life of the country will be carried on? These are points to which I would like the Minister to refer at the close of the debate. I am offering no suggestion, beyond saying that we realise the serious position that confronts the country. I am not going to scarify the Government. I know their difficulties, but, as far as we are concerned, we are prepared to co-operate in helping them to solve our problems. Certainly, we should have an expression of opinion from the Minister as to how the Government is going to deal with the hungry army, and what steps will be taken to increase social services?

Donnchadha O hEaluighthe

Ba mhaith liom cúpla focal a rá ar an mBille seo. Following the remarks of Senator Foran about the new Budget, unquestionably, the increase in the price of sugar has hit the poor people very heavily. There is no doubt about that. We have had discussions about farming in this House for some time, and on each occasion we have what is practically a repetition of the same speeches. As the Minister has always shown great interest in the housing question, I want to impress upon him the necessity of doing something for Dublin at an early date. I was speaking to one of our principal builders, who is carrying out a contract in the city, and he told me that he would shortly be compelled to disemploy all his hands, as the contract he had on hands for flats at Marrowbone Lane was ending. The building trade in the city is at a very low ebb at present. I think the Dublin Corporation has only one new contract on hands, and that the others will be completed soon after Christmas. Knowing the Minister's interest in the housing question, as a loan of £7,000,000 is about to be floated, I hope he will give some consideration to the necessity of providing building schemes in Dublin. Dublin Corporation has the ground developed for housing schemes, and the roads and sewers are completed. The corporation is now held up for money. I appeal to the Minister to give consideration to the question of continuing the building programme in Dublin.

Mr. Hawkins

In connection with the discussions that took place in the last few days, I think the House should disassociate itself from some of the statements that were made. I think it ill-becomes members of this House to make statements on the lines of those made by Senator McLoughlin. We have been asked if the present taxation is the price of our neutrality. My answer is "No". The price of our neutrality was paid by the blood and the sacrifices that were made by those who made it possible for us to assemble here and discuss this Bill. If we have to make sacrifices now, in order to maintain the freedom that we have got, I think it will be well worth making them. As a worker, I can cheerfully say that the workers are prepared to bear any little imposts in the way of taxation that is necessary in order to achieve our full freedom. I do not like the term "Opposition" being used in this House, because I understood that the Seanad was established as an attempt to set up a form of organisation on a vocational basis. I cannot understand why this House should carry on on Party lines. Every day we hear talk about the Opposition and about the Government supporters. That should not happen. This House should consider representations from every section of the people, and should deal with any measures that come before it, not from the Government or from the Opposition point of view, but in the interests of the people who sent us here.

Several speakers referred to the effect of these taxes on the poor. If this House were an election platform, there would be some excuse for some of the remarks that were made. Some of those who spoke in that way advocate derating and other schemes that would certainly impose greater taxation on the poor, but which would relieve people who are in a position to bear taxation. While Senator Sir John Keane was speaking, I thought he might have mentioned a subject that I had in mind. A new loan is about to be raised, and I notice from the terms mentioned that the interest will be 4 per cent. I suggest that if the rate of interest was reduced to 3 per cent, or to 3¼ per cent., the loan would be just as well subscribed, and the £30,000 or £40,000 that would be saved in that way could be used for other useful purposes. However, we heard nothing about the matter from the Senator.

Sir John Keane

As the Senator has referred to me, may I ask him why he thinks that a loan at a lesser rate would be equally well subscribed?

Mr. Hawkins

I mentioned the Senator's name because he knows more about that subject than I do, and I thought he might have referred to it. While it is rather late to make a suggestion now, perhaps the Minister would bear this in mind, that when this country was engaged in a struggle for independence, our people in America generously came to our aid with financial assistance. Now that we have secured freedom for part of our country, and when there is an attempt being made to build it up by doing work of national importance, and developing its resources, I believe if the Government asked our people in America, who helped to build up this State in the past, they would subscribe generously to such an appeal. That suggestion might be considered in the near future. There is plenty of work to be done here. We know that any amount of land is under water, that the rivers required to be drained, and that our sea fisheries, which have been neglected, should be developed. The only thing that is preventing that work being done is the want of money. I have the idea that money could be obtained, some, probably, at home, but some from our people across the water who, I think, would help us at this time. This is about the only nation in Europe to-day which is not spending money for use in another direction, and I think it would be well if we made this clear to our people there. I have another suggestion to make. I think the present would be the ideal time to get into more close contact, both for international reasons and financial reasons, with our people in America. We have something like 20,000,000 people there and, if properly organised, these people could exercise a great influence on the American nation. We seem to be losing touch with them since we got our freedom, and I think an effort should be made now to develop closer contact with them.

With regard to unemployment and social services, I believe that, to an extent, some of the money being spent on these services is wasted, because while we have such large numbers of our people unemployed, the benefits that would naturally accrue if they were in productive occupations, or at least getting a decent wage, would be greater than the benefits arising from the money now being spent. In order to explain my point, I want to give an illustration. Some weeks ago, I met a man who had been unemployed for about six weeks. He has a family and he was notified one morning by the labour exchange to attend for work on a particular scheme. He was allowed to work the day, but, in the evening, the ganger in charge of the work said: "I do not think you are fit for this type of work. Your health does not seem to be such as to enable you to carry on." The man said he knew that, but asked what he could do in view of being unemployed for such a long time. The ganger notified the labour exchange, and, because the man was not eligible for work, he was struck off the dole. The alternative for him was home assistance, but home assistance is only assistance. The point I want to make is that if machinery goes wrong, an expert examines it, and the new parts required are put in. In the case of that man, however, there is no system by which he could be examined with a view to finding out what the deficiency was, and how soon he could be put back to work again. Probably that man will be drawing home assistance for the rest of his life.

Professor Johnston

It has been suggested to me that in connection with this whole matter, the experience of Sweden may not be without interest to the House. In Sweden, as I understand, the principle is that the Budget is balanced but not with reference to a particular year, which, after all, is a purely arbitrary period of time in the history of economic affairs, but with reference to what is called "the business cycle," which is likely to run for a matter of five or ten years. In other words, in time of prosperity, they budget for a surplus of revenue which is used for the reduction of national debt, and, in time of adversity, acute business depression or economic dislocation, they allow their Budget to remain unbalanced for a year or two, and borrow from the banking system the means of maintaining the public services. There is a lot to be said for a policy of that kind, if we were dealing with a country of the wisdom and experience in public matters of that great democracy of Sweden. Incidentally, I may observe, in passing, that professional economists wield great influence in Sweden, and it is partly in consequence of their advice that the Swedish Government has, in recent years, adopted that policy of deliberately allowing a deficit to take place in certain times, budgeting for a surplus in certain other times and balancing the Budget with reference to a period of five or ten years and not necessarily with reference to a single year.

I am sorry to say that I cannot recommend a similar policy for this country, partly for the obvious reason that this country is not governed or dominated by the wisdom of economists, but if the wisdom of professional economists had had any influence in the guidance of the affairs of this nation over the last seven years, then I may say that I, personally, in 1931, would not have been prepared to recommend the increase of taxation that was adopted by the Government of that day with a view to balancing their Budget. At that time, a time when the world was suffering, not from real want, but from a terrific glut of goods cluttering up the channels of commerce which were trying to achieve consumption and were unable to do so, it would have been, in my view, sound policy to allow the money incomes of individuals to remain higher than they were allowed to remain by budgetary stringency, in order to contribute towards a restoration of the proper balance between consumption and production, and the maintenance of world production and world trade. However, the wisdom of financial orthodoxy and even the wisdom of orthodox economists, in that year, took the form of advising that taxation should be increased, but in the light of subsequent events, I think it is true to say that professional economic opinion would be that, in a crisis of the 1931 type, budget balancing by increased taxation is not the obvious and necessary remedy.

On the other hand, we cannot argue from what would have been wisdom in 1931 to conditions which are totally different in 1939, for now we are confronted with a world which is not a world bursting with surplus wealth and excessive production, but a world threatened with a world-wide scarcity, on account mainly of the terrific destruction of goods taking place in Europe, and on account of the wasteful economic policies pursued in our own country, and in others, during the last seven years. We have had in the interval restrictionist economic policies, and, consequently, it would not be wise to recommend now expansionist monetary policies or to recommend any acquiescence in budgetary deficits. Consequently, although I deplore the restrictionist economic policies of the Government during the last seven years, I applaud the stringent financial Budget of the Government which is on all fours with their own restrictionist economic policies, for the one thing that no country can tolerate, and the high road to public ruin in any country, is a combination of economic restriction and monetary expansion.

I said enough yesterday to give reasons for thinking that the policies pursued during the last seven years had, on the whole, the effect of impoverishing this nation rather than enriching it, and I do not propose to develop that argument further now, but there are other matters that might be referred to in this connection. The outbreak of the economic war was not something for which our Government should be exclusively blamed. It takes two to make any quarrel, and two Governments were concerned in that problem, but, at the same time, I think it is true to say that the opportunity presented by the outbreak of that war was seized upon by our Government to push through a policy of rapid industrial development which, under ordinary circumstances, would not have been accepted even by their own followers.

They took advantage of the situation in order to pursue a restrictionist economic policy with a view to creating, as far as possible, a self-contained national economy. That was no doubt good politics, but exactly the same kind of thing seems to be happening now. The emergency created by the outbreak of the European War is being seized on by our Government, not to develop a policy of economic expansion which might enrich the country here, while at the same time co-operating with our neighbours, but to pursue to a still further degree the impoverishment and perversion of our national economic structure.

Let me develop that in some more detail. I have been challenged on the question of beet. If our farmers were not going to grow beet next year—at a terrific expense to the consumers of sugar and to the taxpayers, who by that policy are going to pay £1,500,000 more in taxation than otherwise—if they were not going to devote 60,000 acres to the growing of beet next year, then it is presumably agreed that they will grow things like mangolds and turnips and other forage crops instead and use them for the feeding of animals. Those animals in due course would reach the market and be exported and consumed probably in England, and with the money thus acquired we would buy many other things like sugar, which we do not produce ourselves. In other words we would be pursuing a policy of economic co-operation with our neighbours, while at the same time pursuing a policy on all fours with our natural economic conditions which are to promote and foster live stock production based on grass, our principal raw material, and the cultivation of root crops of which we do not produce half enough.

One of the results of this artificial production of beet is that the acreage devoted to mangolds and turnips has diminished, I think, by more than the acreage under beet has increased. To develop our economic facilities in the right direction we must enrich the country as a whole without impoverishing farmers, as we seem to be doing by wasting land on the growing of beet. We should use that land instead for the growing of other things in a general live stock policy. That policy would be the policy of encouraging agricultural expansion, not at the expense of the consumer and the taxpayer, but undoubtedly with the effect of increasing the proportion of our total output which would be either exported or consumed. If that policy were established it would enrich the country and bring good to all concerned.

I do not know what the Government policy is with reference to this question of co-operation with Great Britain, but if we are prepared to co-operate in the economic field with Britain we can get better terms there now than we could have got at any time in the last seven years. We can get terms now that will guarantee the future advancement and prosperity of this country, which depends on agricultural development more than any other single factor.

In my view, the opportunities for rapid increase of the national income by expansion of our much-neglected agricultural industry are by far the greatest opportunities which are available to us. That expansion means an expansion for export, as the home market is rigidly limited by the fact that we have a population of only 3,000,000 people, and our urban population consumes only about £12,000,000 of the agricultural production produced at home. We must expand for export, and that export must be to England; so that provides us with a reason why we should now approach England, not by civil servants, but by responsible members of the Government, with a view to determining the terms of economic co-operation on a basis which would be most favourable for us. I would urge the Government to consider that aspect of the matter very seriously. If we do, and if we take that policy of economic expansion rather than economic restriction, we will make up for Budgetary alleviations and will have no trouble whatever in balancing the Budget. Instead of increasing taxation, this expanding of the real national wealth will produce greater real revenue than is obtained by the existing taxation rates.

Peadar Mac Fhionnlaoich

Ba mhaith liom freagra a thabhairt ar an aragóint sin.

An Leas-Chathaoirleach

Tá an tSeanadóir tar éis cainnt a dhéanamh cheana. Nár labhair sé cheana?

Peadar Mac Fhionnlaoich

Do labhair Seanadóir eile an dara uair.

An Leas-Chathaoirleach

B'é ar an dara céim do labhair an tSeanadóir eile. Támuid ar an gcéim deireannach anois.

Peadar Mac Fhionnlaoich

Tá go maith.

Mr. O Ceallaigh

I hope it is not expected of me that I should try to follow the example of some of the distinguished Senators who spoke here, and who brought us into the realms of fancy, and who—if I may use the word —treated us to esoteric philosophy and fiction. I am afraid my capacity is limited, that I could not, even if I tried, attempt to follow the distinguished gentlemen who went into those realms. I do not intend to try. Senator Johnston comes back to his old theme.

Professor Johnston

He is very boring, is he not?

Mr. O Ceallaigh

No, not a bit boring. I am certainly not bored at any time when a man is using his opportunities to press forward a policy that he conscientiously believes in. I do not find any fault at all with that. I can say to the Senator and to the House that I have been brought up on another policy. As I said last night here, there are many admirers of Arthur Griffith in this House on both sides. He was my teacher, and I was his colleague in pressing forward that policy and in doing the best I could to get it adopted. When I became a member of the Government, I enthusiastically took the opportunity to put it into practice. It was not by reason of the economic war arising or in any other haphazard way that the policy of protection was inaugurated by the Government when they came into office.

Those who are interested might throw their minds back to the programme and policy on which this Government was elected in a sufficient majority to form a Government. That programme of protection—the programme of the old Sinn Féin organisation— was the economic programme on which we stood before the country and got the first time, not a majority, indeed, but just enough to be elected as a Government. Our deliberate intention was, economic war or no economic war, to put that policy into operation in the country, and we have done it. The Senator and some of his colleagues will say we have done it with disastrous results, but the country does not say that. That policy has been put to the country on several occasions since 1932; the country has had at least three opportunities of deciding. The issues were put fully to the country, I believe, by both sides. The Opposition used their opportunity properly to put their views before the country and criticised and pointed out the failures and the hurtful way—as they said— that that policy was interfering with the country's prosperity and welfare in general and particularly the way in which it was hurting agriculture. All that was thrashed out over and over again, during general elections, in between general elections and at other times up to the present. We do not know how the next general election in four or five years' time may result, when we come before that same judge to which we all have to come—the Irish populace. The Irish voters will decide then but, at any rate, up to the present they have backed that policy.

Of course, I know it is true that at a general election you have not a clear issue on an economic programme. There are a number of other things that get mixed up with it—politics and other things. Of course economics are a part of politics too, but it is not easy as I say to get a verdict on the economic issue alone. We have had nothing like a referendum on economics so far, and I hope that we shall not, but it is only in some way like that, that you could have a single issue of that kind decided. In a general election, you have a variety of issues all taken together but, within reason, I think we can claim that the economic issue was put to the country and debated fully by both sides and that the country gave its verdict. We had to abide by that.

Senator Baxter talked of the great increase in taxation. It was not so much to the increase of taxation he referred as to the relative capacity of the people to meet the taxation imposed. As far as the figures show, there is no reason to believe that the capacity to bear taxation has lessened. Take the various items. There was an increase in the tax on tobacco last May. So far as I can understand from the revenue returns, there is nothing to show that consumption has decreased. Of course, if we go back over a long time and look at the consumption of beer and spirits, consumption had radically decreased over the last 15 or 20 years. That may be due largely to the price of beer and spirits. I know there are people who say that they would be able to imbibe a good deal more if they could afford it, but I think it is also true that the habits of the people have changed. Some people may argue that they changed because they had to change. I do not think that is true. I think the habits of the people have changed away from liquor and that they find other ways of spending their money, perhaps with better advantage to themselves and to the nation as a whole.

On the economic issue there does seem to be a definite dividing line between members of the Opposition, or, at any rate, between some of them, and the present Government and those who support them in the Dáil and the Seanad.

Mr. MacDermot

What is the dividing line?

Mr. O Ceallaigh

It is not, as far as I can gather from listening to the discussion here, on a matter of principle.

Mr. MacDermot

No.

Mr. O Ceallaigh

It is a question of the application of that principle—how far we should be a protectionist country.

Mr. MacDermot

Nobody now believes in self-sufficiency. Nobody believes it possible.

Mr. M. Hayes

Nobody believes in self-sufficiency, and nobody believes in free trade, so there you are!

Mr. O Ceallaigh

Pay your money and take your choice. I do not think it is quite as simple as Deputy Hayes suggested. It is pretty evident that there are certain gentlemen in the Seanad on that side of the House, and there may be some on this side—I have not heard them speak on this subject——

Mr. Baxter

We never hear them.

Mr. O Ceallaigh

We do. I have heard them often. On this particular issue, there are some who may agree with Senators on the other side, but whatever the difference is, it is pretty evident that some Opposition Senators do not intend to give the Government any support on the economic policy at present in operation in the country. They are entitled to do that and nobody objects to it. At any rate the policy of the Government is a protectionist policy. It has protected the home market and it is going to continue that policy. A good deal has also been done for the farmer. The Taoiseach went into that matter on the last day we were discussing the Budget in the Dáil. I do not intend taking up the time of the House going into that matter again, but I would refer anybody, who has not read the speech of the Taoiseach before, to that speech now. He will find therein figures and particulars of what the Government has tried to do to provide additional moneys for agriculture.

Moneys have been provided to a very considerable extent to assist agriculture. Part of the moneys we are now looking for, by way of loan, will also go to help agriculture. We announced in the Dáil in the last few weeks that the Minister for Agriculture has got sanction from the Government for a scheme of agricultural credits to facilitate the purchase of machinery, manures, etc. Funds have been put at the disposal of the Minister for this purpose.

Mr. Baxter

For manures and seeds?

Mr. O Ceallaigh

And for agricultural machinery. Perhaps the amounts are not as generous as Senators would like but, at any rate, what I regard as a considerable sum has been put at the disposal of the Minister for Agriculture for this purpose. I agree, and every reasonable man here will agree, that by far the best thing for this country is to get more and more production.

Professor Johnston

Especially agricultural production.

Mr. O Ceallaigh

Every kind of production. I know the Senator is not enamoured of industrial production, but even industrial production should be encouraged. Our main industry, however, is agriculture, and it should be helped in every way within the power of the Minister for Finance and every other Minister. There are, however, may other demands to be considered. You have every class of the community and every industry, dragging at the Government and at the Minister for Finance for subsidies, for aids, for credits and every kind of assistance. It is very hard to satisfy everybody. I think if Saint Michael were here, as Minister for Finance, he could not satisfy everybody or go anywhere near it.

Mr. Baxter

First things first.

Mr. O Ceallaigh

I agree, first things first. I agree that agriculture occupies a very prominent position in this country. A very large part of the people of this country derive a livelihood from agriculture. That is fundamental to the situation. That has been borne in mind by this Government. Again I may say—I said it last night and I repeat it now—that this Government would not be in office if it had not the backing of the farmers of the country. It has not the backing of all of them, I know only too well. The majority, as I have said, derive their living out of agriculture in one way or another, so that their interests must have been touched by the actions of this Government. Therefore, if the interests of agriculture were as adversely affected as some Senators would seem to think, judging by the speeches we have listened to here this evening and yesterday, surely those farmers would have turned against the Government, and have turned it out of office at any time from 1933 on.

Professor Johnston

What about the price of Indian meal?

Mr. O Ceallaigh

That is one item, unquestionably, that is hurtful to the farmer, but there were even bigger things, because during the economic war the price of cattle went down by 20 or 25 per cent.

Professor Johnston

Fifty per cent.

Mr. O Ceallaigh

The prices went down very heavily at any rate.

Mr. Counihan

I think you might say that they went down by 60 per cent.

Mr. O Ceallaigh

I will not dispute that with the Senator. He knows more about it than I do. Unquestionably, the farmers were badly hit, but it was not all due to the economic war. Everybody knows that there was a big fall in prices started in 1929 or 1930 and continued for some years. But even if we say that a certain amount of the decrease in prices was due to the economic war, and that the farmers were badly hit, nevertheless, as I have said, they did not turn out this Government and they could have done so if they wanted to. They evidently were not sufficiently hit to do that, or else they felt that the Government were trying to do something for them and for the country that eventually would be to the advantage of both.

Mr. Madden

Would the Minister say what would have been the value of two generations of slaughtered calves?

Mr. O Ceallaigh

I am not able to answer that question now, but I think if I were to ask the Minister for Agriculture he would be able to tell me. He knows his facts in regard to agriculture. No man knows his metier better than the present Minister for Agriculture, and I am sure that if he gave me an answer to the Senator's question it would be one that I could stand over. It would be my desire to see all the money that the State could afford put into productive enterprises. The other night, after spending a long time debating economies, seeing if economies could be made where people did not want to see them, I was presented at the end of the meeting with a Supplementary Estimate for Forestry for £30,000 odd. That Estimate is before the Dáil to-day. I do not know whether Senator Baxter will regard that as productive expenditure or not. Of course, it is productive, but it takes a long time to fructify. It is really reproductive expenditure, but there will be no return, in the way of value, from it for 20, 30 or 40 years.

Mr. Baxter

I agree.

Mr. O Ceallaigh

We have increased expenditure considerably on afforestation in the last seven years. I imagine that Senator Baxter has a special interest in the subject, but I want to tell him that during the period I have mentioned we have doubled the acreage under forests.

Mr. Baxter

That is not a great lot.

Mr. O Ceallaigh

It may not be a great lot, but at any rate the acreage, as I have said, has been doubled. On the other hand, we are criticised for every penny of additional taxation. While the members of the Opposition criticise us severely, they never give us a word of credit for expenditure of that kind. Senator Baxter is interested in that subject, and there, at any rate, is one item on which we have spent a considerable sum. He might at least have said that that money was well spent. During the debate on this Budget to-day and yesterday we had not one word from Senator Baxter or from any member of the Opposition saying that any single item of this additional expenditure for which we are making provision was worthy of support. I think we had a word of commendation from a member of the Labour Party in regard to one item, but that was all. On forestry, Senator Baxter might have said a word about this expenditure, because I am sure he agrees with it. We have done a great deal in connection with afforestation compared to what was done by the last Government.

Professor Johnston

May I express the hope that the Senator will say some nice things on forestry on the Appropriation Bill?

Mr. O Ceallaigh

The mention of this subject takes my mind back to the early beginnings of the movement that brought the Parliament, and the measure of independence that we enjoy, into existence. In the early Sinn Féin days, afforestation was one of the great things advocated by Arthur Griffith, and I would love to see it go ahead. I would be prepared to give it every backing that I could. As I have said, there is a Supplementary Estimate for Forestry before the Dáil to-day.

Mr. Baxter

It is a small thing.

Mr. O Ceallaigh

Well, it is £30,000 odd, and I am often put to the pin of my collar to meet demands for much smaller sums. The sum of £30,000 is not to be sneezed at. The Senator would like to see more credit made available for agriculture. I would like to see agriculture get as much as we could afford, taking the demands of all classes of the community into consideration. He says that agriculture is entitled to first consideration. I agree. At the same time, I remember that at the end of the last war, although I have not had any connection with agriculture personally, I was asked by friends and members of my own Party to go with them to interview the bank directors of various banks in Dublin to try to get some settlements made in cases where, I think, the banks had been too generous in giving credit during the last war. The criticism that I have heard from all sides has been that, during the last war, the banks were over-generous in giving credit to agriculturists. Some of the banks have suffered for that.

Professor Johnston

For giving credit to buy farms at fabulous prices.

Mr. O Ceallaigh

To buy farms in some cases and, in others, to buy cattle, and for other forms of agricultural work. I remember having had the experience of going to the headquarters of three different banks in Dublin with the people I have referred to. We met bank directors and managers. The position was that the individuals I have referred to were not able to meet their obligations. I am bound to say that I found those bank directors and managers reasonable men to deal with, and that they treated their clients, in these cases at any rate, with due consideration. I do not know what sums of money these same bank directors had to write off, but probably it ran into hundreds of thousands of pounds.

I do not know what it was. In cases I came across, some of them were for considerable amounts of money, that they agreed to write off. I do not want to say that in order to induce anyone who may hear me, or who may read what I have said, to tighten the purse strings, and not be generous or give credit. I think where they find an individual credit-worthy, or find farmers to be industrious men who will make a sincere and honest effort to honour their bonds and obligations, the banks will meet these men to the fullest extent in their power. That was the history in the past, and I am sure there will not be any change in the future.

Speaking of the farmers' attitude towards the Government, and their recent activities, Senator Baxter mentioned that, as far as he knew, some of the gentlemen from the farmers' organisation who were active in recent attacks against the Government were members of the Fianna Fáil Party. Maybe the Senator said former members of Fianna Fáil. I think in some cases that came to my notice they are actual members. I do not think that proves anything. Some of the most enthusiastic and active backers of Fianna Fáil since it was founded are former members of the Senator's Party. We would not be here only we got the backing of a great many former supporters of his Party. They saw the light.

Professor Johnston

The red light.

Mr. Baxter

We are seeing the shadows now.

Mr. O Ceallaigh

I have sympathy with the case mentioned by Senator Sir John Keane and backed by Senator Douglas. I am not saying that I have very much personal interest in it. I have some, but not much. Senator Hayes said it was not the previous Minister for Finance nor the present Minister for Finance should be blamed in matters of that kind. It is Government policy, and whoever the Minister is, he has to take the responsibility of standing for that policy and backing it.

Mr. MacDermot

Or trying to change it.

Mr. O Ceallaigh

Certainly, once it is adopted.

Mr. MacDermot

It is not irrevocable.

Mr. O Ceallaigh

Not in politics anyway, as many in this House should know. This question of taxes under Schedule A is an intricate one. It is one in which no Minister for Finance could give a considered "yes" or "no" without detailed examination. The Valuation Bill was already before the Dáil. I suppose it will be coming before this House as soon as the Dáil is finished with it, when matters of that kind, Schedule A and others, will get consideration.

Sir John Keane

May I suggest to the Minister that he should put himself into the position of a judge when reconsidering the matter by listening to others besides his official advisers? I am afraid that in these matters the Government is very much influenced, when taking up an attitude, by hearing only one side of a story—the official side.

Mr. O Ceallaigh

I am prepared to hear Senator Sir John Keane at any time he wishes to come along. I know a little about the matter, but not very much. If the Senator wishes to see me I would be happy to hear anything he has to say, or any friend that he cares to bring along. As to the speech of Senator Baxter, I agree that we ought to go in for increased production. Senator Hayes made the same point about increased production for export as well as for home consumption. The more we can produce and the more we can sell, the more we will be able to buy. Certainly, I am old enough in the way I have been brought up in not wanting to go back, as someone described it, to the Robinson Crusoe method. I do not want to change. Whatever modern means have been invented to make life easier, as far as they can be availed of I hope to encourage them. If we cannot make those things at home, I suppose we will have to import them, but if we want to import them according to the economic laws, we will have to find the money to buy them with exports. We will keep the figure as low as possible by making as much as we can at home. There are things we cannot get here, and these we will have to continue to import. Therefore, we will have to do all we can to encourage everyone here to produce more and more.

On the subject of export that opens up the remarks of Senator Hayes, there is no reason why Ministers should not go to meet Ministers in Great Britain, or in any other country, in an effort to find markets for our agriculture or other produce, or to increase our exports.

Professor Johnston

And a favourable price.

Mr. O Ceallaigh

Of course. But there are two sides to that question. Senator Hayes suggested that from 1932 I said I thought there was a settlement in sight. I had reason for making that statement at that time. The Senator said it took six years to get Ministers to negotiate with British Ministers. That is not correct, to the extent that I was in London, and the Taoiseach and three or four other Ministers were in England at different times negotiating and making efforts to try to make a settlement. I made a statement in 1932 that I thought a settlement was in sight. I had good reason for making it, but other people were not able to get their views adopted by their own Government. Perhaps the settlement would have come in 1932. It was a hope, but it was not realised.

Mr. M. Hayes

There is no difficulty in the situation now.

Mr. O Ceallaigh

There is no such difficulty now, but it takes two. We have not been failing in our efforts to get prices improved, and to get markets improved, and if there was any belief that these markets could be improved or expanded for our use and benefit by Ministers going to London or anywhere else, there is no reason why they would not go. They have no objection to going. As to remarks of Senator Campbell and Senator Foran, I know that our social services are not as high and are not as generous as those of other countries. I know that there is not a living, such as we would like to see given widows and orphans and unemployed people, to be got out of even the most generous unemployment assistance given where families are large. I think the same might apply to old age pensions. But when some of these social services were introduced the cost of living was higher than it is now. All I can say is that the Government does think of the poor.

Mr. Foran

That is very little encouragement to them.

Mr. O Ceallaigh

I should like to be able to say more. I should like to be able to say that we would increase the old age pensions and widows' and orphans' pensions, but I do not see any prospect of that immediately. I should like to do it, and the Government would like to do it. I know there are bound to be increases, and already we have seen increases in certain items that form a material part of the ordinary ways of living of our people. There is nobody who has ever suggested that workers, whether wage earners or salaried workers, would not, and should not, ask for increases. No Government could stop that and no Government here, at any rate, intends to stop it. What I did say was that we remember the disastrous consequences of the vicious circle of rises during the last war, and that we would make every effort to prevent the disastrous consequences of the collapse that occurred afterwards.

With regard to Senator Healy's point, I am not aware that the Dublin Corporation has been left without money arising out of any action of the Government, or of the Minister for Finance, in recent months. I know that, quite recently, the Minister for Local Government told the Dublin Corporation that £250,000 was at their disposal for a certain housing scheme.

Mr. Healy

Agreed, but it is not sufficient.

Mr. O Ceallaigh

I am sure the Corporation, when it wants more, will not fail to ask for it, but my recollection, and I was on the Corporation for a long time, is that the Corporation were always able to stand on their own feet, and did not have to come, hat in hand, to the Government, or to the Minister for Finance.

Mr. Healy

Their building programme is so great now.

Mr. Foran

Had they a manager then?

Mr. O Ceallaigh

No.

Mr. Foran

So much for the managerial system.

Mr. O Ceallaigh

No, it does not follow, because the credit of the Corporation, so far as the manager is concerned, has certainly not been injured by the economic management introduced by him.

I do not know much about Sweden, but I was interested in what Senator Johnston said about the system they adopted in Sweden of cycles of budgets and being able to run for a number of years, short or long, with deficits while waiting for the rosy time when surpluses would be available which they could earmark to wipe out their deficits. Would it not be a magnificent thing for a Government to be able to remain in power for five years, running up deficits all the time, and then to get out, and leave those who followed to meet their obligations? It might not be as good a system as some people, perhaps, think.

Professor Johnston

It requires a little political honesty.

Mr. O Ceallaigh

Perhaps we have as much of that here as is to be found in Sweden, or anywhere else.

Professor Johnston

I hope so.

Mr. O Ceallaigh

In all Parties, and not confined to any particular Party. I think I know this much about Sweden and professional economists, that the professional economists there showed themselves not to know the A B C of economy when the last war broke out. They advised their Chancellor in such fashion that he got rid of the economists. They led him into such a trap financially that he got rid of them.

Professor Johnston

Which war is the Minister talking about?

Mr. O Ceallaigh

The last war.

Professor Johnston

I do not know that I agree on that.

Mr. O Ceallaigh

He called the principal men in Sweden together—the names I cannot recall, but I have read of them and also something of the history of that time—and they advised a certain course, but he was not long until, metaphorically, he kicked the economists, professional and otherwise, out, and went his own road.

Professor Johnston

The economists are wiser now. They learn from experience.

Mr. O Ceallaigh

Even economists, therefore, can learn.

Question put.

The Seanad divided: Tá, 24; Níl, 11.

Tá

• Alton, Ernest H.
• Blaney, Neal.
• Concannon, Helena.
• Fitzgerald, Desmond.
• Goulding, Seán.
• Hawkins, Frederick.
• Healy, Denis D.
• Johnston, Joseph.
• Magennis, William.
• O Buachalla, Liam.
• O'Donovan, Seán.
• O'Dwyer, Martin.
• Nic Phiarais, Maighréad M.
• Keane, Sir John.
• Kehoe, Patrick.
• Kennedy, Margaret L.
• Lynch, Peter T.
• MacDermot, Frank.
• Mac Fhionnlaoich, Peadar
• (Cú Uladh).
• McGillycuddy of the Reeks, The.
• Quirke, William.
• Rowlette, Robert J.
• Ruane, Thomas.
• Stafford, Matthew.

Níl

• Baxter, Patrick F.
• Butler, John.
• Campbell, Seán P.
• Counihan, John J.
• Crosbie, James.
• Cummins, William.
• Foran, Thomas.
• Hayes, Michael.
• Hogan, Patrick.
• Lynch, Eamonn.
• Madden, David J.

Tellers:—Senators O'Donovan and O'Dwyer; Níl: Senators Campbell and Cummins.

Question declared carried.