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Seanad Éireann debate -
Thursday, 12 Dec 1946

Vol. 33 No. 4

Industrial Alcohol (Amendment) Bill, 1946—Second Stage (Resumed).

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

In continuing the debate on this Industrial Alcohol Bill, I should like to say that I approach the Bill with mixed feelings. In fact I might say that the Bill is, in many respects, a characteristic product of the Minister's mentality and outlook on life. I think we must recognise— at least I consider—that the Minister has a kind of dual personality, a kind of Jekyll and Hyde combination in his composition. I would not go so far as to say that he suffers in any degree from that mental disease known as schizophrenia, but I am sure we must all recognise the fact that, even before the invention of D.D.T., there were no flies on the Minister, not one, and it would be, I think, a valuable public service if we could eliminate entirely from the Minister's character the Hyde element and facilitate him in appearing consistently before the nation as the beneficent Dr. Jekyll character that he tends to be more and more as his political maturity develops. Now, there are certain elements in this Bill which reflect the Dr. Jekyll aspect of the Minister's character, and I thoroughly welcome and approve of those elements.

I agree that money, to any reasonable amount, is well spent in facilitating industrial research, and I am also of opinion that it is desirable that there should be, side by side with the activities of the Industrial Research Bureau, a pilot firm of the character which this industrial alcohol concern will shortly assume which will be in a position to explore the possibility of producing, on a commercial scale and at an economic cost, the various chemical products which we know from laboratory tests are capable of being produced in the laboratory.

I think we must recognise that scientific research, and the application of it to agricultural and industrial problems, has performed great service in improving the efficiency of both economic activities and in adding to the number of valuable materials, both agricultural and industrial. I do not know whether penicillin might be regarded as an illustration in that connection, but it has been a most valuable discovery, the product of the application of scientific investigation to the various problems of life, and not only has it been an important agent of a therapeutic character in dealing with human diseases, but it has had valuable effects also in dealing with animal diseases. I understand that penicillin is being successfully used in the treatment of mastitis, one of the most serious diseases that afflicts our herds of cows. In so far as this Bill tends to bring about that kind of result in the agricultural and industrial problems that confront us, and facilitates an increase of our agricultural and industrial output, I welcome it. I feel it is thoroughly desirable.

I think it would be in order at this stage to say what I believe should be the principles governing our economic development as a whole, with special reference to the contribution which this Bill will make to that end. We should endeavour to increase the real income of the nation, while at the same time ensuring its more equitable distribution among the various classes of the community and, recognising that in the main our natural resources are agricultural rather than industrial, we should emphasise agricultural rather than industrial development. But that is not to say that we should entirely exclude industrial development. On the contrary, although I speak mainly from an agricultural point of view, I recognise the desirability of an industrial development which will be in harmony with and closely integrated with our major agricultural interests. The most direct method of achieving such industrial development is not necessarily the most successful method. It may be that by putting the emphasis mainly on agricultural development we shall achieve more permanent and successful industrial development than if we concentrate attention excessively and unduly on a limited objective of industrial development.

There was some comparison yesterday between Denmark and Ireland in another connection. I would like to compare the two countries in one aspect from the point of view of industrial development. We hear ad nauseam of the marvellous agricultural achievements of that small continental country, but it is not so widely known that industrially Denmark is a much more advanced and more highly developed country than ours. The figures illustrating that phenomenon are most revealing and ought to be kept permanently before us. In Denmark only 35.7 per cent. of the occupied population are engaged in primary, that is mainly agricultural, production; in Éire about 50 per cent. are so occupied. In Denmark, 27.5 per cent. of the population are engaged in industrial production; in Éire, only 13.1 per cent. are so engaged. Consequently, Denmark, in spite of or because of the fact that she puts first things first and concentrates on developing her agricultural production, is industrially much more advanced than we are, and in that respect commands our envy and admiration and, I hope, our imitation.

Industrial development should be based on and closely integrated with our agricultural development and the emphasis should be on agricultural development, not only for its own sake but because of its effects in facilitating the best and most permanent kind of industrial development. In illustrating that point of view, I should like to develop certain positive aspects of that principle but it would carry me beyond the scope of the present debate, and the present occasion is not a suitable one for such development. On the other hand, in certain negative respects I think there are certain matters which ought to be pointed out. One of them is that industrial development, however desirable in itself, must not take a form which adds to the raw material costs of agricultural production.

In this connection I would like to examine, quite briefly, the Minister's past record in this matter and, in the course of such examination, I may have occasion to refer to some of the Minister's past sins. There is a proverb which says that the greater the sinner the greater the saint—that is, when he becomes a reformed character—and if I refer to any of the Minister's past sins it will only be with the hope and intention of stimulating him to unheard of achievements in political and economic sainthood during the rest of his political career, which is by no means finished.

Let us compare some of the outstanding facts of our economic position in the year 1929-30 with the year 1938-39. In those two years, according to official records and statistics, the physical volume of our agricultural output was much the same, though its pattern had been drastically altered in the interval. The money value of agricultural income in 1938-39 was about £12,000,000 less than the money value of agricultural income in 1929-30. The real national income on the later date was practically the same or very little more than it was in 1929-30. In other words, in the interval—an interval in which the Minister was trying his 'prentice hand on our economic salvation—the principal thing that happened was a transfer of income among various sections of the community, but a failure to increase the total real income of the nation. In fact, the national economy was going round and round in circles, like a kitten chasing its tail.

We want to get away from that situation and, if possible, to do whatever we can to facilitate an increase in the real national income, both agricultural and industrial, and its more equitable division among the various classes of the community.

Coming now to closer quarters with the problem of chemical industries in relation to our general economic situation, I have no doubt the Minister has got phosphorus in the brain, but he seems to have sulphate of ammonia on the brain. I would much prefer that he would have phosphates on the brain, as I have, and I think other thoughtful students of our present agricultural situation also have.

If we look at the statistics of the consumption of chemical manures during the last 14 to 20 years—they are conveniently set out at page 32 of the Majority Report on Post-Emergency Agricultural Policy—we will find that in 1929-30 there were two fat years of phosphate consumption in Irish agriculture. I should mention that the data related to rock phosphate, which is the raw material used by our own superphosphate producing factories and, in that connection, one should bear in mind that one ton of imported rock phosphate is the means of making about two tons of superphosphates. The other elements in the phosphate position are imports of basic slag and superphosphate. If you make certain arithmetical calculations, as I did, you will find that, aggregating the total phosphate consumption with reference to these two fat years—1929-30—the annual consumption of our agriculture of phosphate amounted in those two years to 268,600 tons. Then came seven lean years, between 1933 and 1939. If you average the phosphate consumption of our agriculture in those years you will find that it averaged annually only 163,600 tons; in other words, roughly 100,000 tons a year less than in the two fat years. Then came the seven absolutely starvation years of the war in which it was almost impossible to get any phosphate manures at all and, in fact, practically no artificial manures of any kind. Consequently, if you take together these 14 years and make any kind of estimate of phosphate consumption, you must admit that, at a moderate estimate, there is a phosphate deficiency of about 2,000,000 tons spread over the last 14 years, as compared with what would have been the case if the rate of consumption of 1929-30 had been maintained. That being so, I hold that the No. 1 priority need of Irish agriculture is phosphate and still more phosphate. Already we have factories which produce phosphate manures and there is no immediate problem there.

On the other hand, I am not so sure about the desirability of increasing the dosage of sulphate of ammonia so far as our agriculture is concerned. It is a manure which can be used in excess and, according to some authorities, is calculated to poison the land rather than add to its permanent fertility. It also tends to diminish the lime content of it. One way and another it does not seem to matter quite so much about sulphate of ammonia but it does matter and is of the most vital importance that the phosphate content of our soil should be restored and increased.

I am not blaming the Minister for that phosphate deficiency of 2,000,000 tons but, nevertheless, he cannot escape some share of responsibility for the fact that Irish agriculture used less phosphate during the last 14 years. In 1932 the Minister, apparently, was approached by the superphosphate manufacturing interests who were alarmed at the tendency of their output to diminish by reason of considerable imports of superphosphate from abroad, mainly from Belgium. In deference to those representations, he restricted the import of superphosphate. One immediate effect of that restriction was that the cost of fertilisers generally to the Irish farmer between 1932 and 1933 rose in the ratio of 84.9 to 89.6. It was a case of hitting agriculture when it was down, a case of sacrificing the interests and welfare of 600,000 agriculture producers to the supposed interests of about 1,000 people occupied in producing superphosphates. From what I know, all these manure factories in Éire form a pretty close combination amongst themselves, if they are not a virtual monopoly. They are well able to look after themselves financially and they could have taken a knock in 1932-33 much more conveniently than the unfortunate victims of their higher price policy facilitated by the action of the Minister.

However, what was done then was done and it certainly had the effect of increasing the price of artificial manures, notably phosphates, to the Irish consumer and, to that extent, of encouraging the farmer to use less of these manures than he would otherwise have done. Therefore, to that extent, the Minister must accept some responsibility for the fact that our phosphate deficiency is what it is, although I do not blame him for the whole 2,000,000 ton phosphate deficiency. If we now suffer from impoverished pastures and diminished crop yields throughout the country, as we do, it is mainly because of this phosphate deficiency.

Mr. Hawkins

On a point of order. Is this discussion in relation to agriculture relevant to the Bill that is before the House?

I take it that Senator Johnston is leading up to the Bill.

I am coming very close to the Bill, I hope. The principal object of sulphate of ammonia is as a source of nitrogen, one of the three essential manures for agricultural production. We do require nitrogen very badly but we want it from the cheapest possible source and in such a way that it will fit in in the best possible manner with our total national economy, both agricultural and industrial. Sulphate of ammonia is one convenient source of additional nitrogen but there are other possible sources, some of which ought to be taken into account before we proceed too far with any idea of establishing a sulphate of ammonia factory arising out of the possibilities contained in this Bill. A great deal of valuable nitrogenous elements run away in improperly maintained manure heaps throughout the country. There is a farm improvements scheme which ought to be availed of if necessary in order to provide a concrete surround for manure heaps at farmyards and thus prevent the loss of this valuable material. In that way, we can greatly add to the quality of nitrogen available for Irish agriculture. In addition to that, if the policy of encouraging the system of short lea farming is adopted and if we go in for a tillage-cum-grass economy, we will have the land regularly ploughed up and equally regularly sown down with grass seeds and clovers. In that way, we will create a condition in which the nitrogen content of the soil will be maintained and increased.

Let me emphasise again the need for phosphates. Unless the phosphate content of the soil is restored, the grass seeds we sow simply will not grow. If we have the phosphate content right, then by sowing from time to time the correct mixture of grass seeds and clovers we can create a situation in which those plants, especially the clovers, will go on making all the nitrogen we want and leave us needing very little in the way of sulphate of ammonia.

I suppose the Minister is aware of the elementary bio-chemical fact that every single plant of clover—and, indeed, all the leguminous plants that grow—is a nitrogen factory. I suppose that the clovers planted by our farmers might be regarded as a form of private enterprise directed to the production of nitrogen. With reference to Section 7 of the Bill, I hope the Minister will have due regard to this very desirable form of private enterprise. At a moderate estimate there are about 1,000,000 acres of Irish land that require reseeding with a proper mixture of grass seeds and clovers. I do not know if the Minister is aware that 1 lb. of wild white clover contains 686,400 seeds, every one of these, when it grows, is a nitrogen factory. So that, so far from wanting only one nitrogen factory in the country, I want at least 686,400,000,000 nitrogen factories—and I want them to take a form of clovers growing in the mixture along with all the valuable grasses. If we do that, there will be very little need for nitrogen in any other form.

Finally, even if one admits that, for reasons of national security, it is desirable to maintain factories producing superphosphates and, perhaps, even establish a factory to produce sulphate of ammonia, and even if it turns out that these factories cannot produce and sell their products as cheaply as similar products could be imported, then the additional cost of that element of national security should not be imposed on agriculture. That cost should be met by the taxpayer from public funds, if we must have those factories and if we must pay for national security, let us pay in that form. The essential thing is that, whatever our experiments in industrial expansion, with a view to producing chemical manures and so on, they must not directly or indirectly add to the cost of agricultural production. If these safeguards are kept in mind, I see no serious objection to this Bill.

I fully accept the principles laid down by the last speaker as a headline for our economic policy, namely, that none of these industrial ventures by their cost should place a burden on agricultural production. That is a sound policy and one that, in a country like ours where almost our entire resources are agricultural in character, is the right one for developing a healthy economic policy.

I was interested in Senator Johnston's attempt to analyse the Minister's mentality. I have often made that attempt and must confess I have failed. The thing I do realise is that he is a very astute politician. But when he comes along with a Bill like this, with complete satisfaction on what he proposes and with no attempt to explain or apologise for the past, I must say he is making rather a strain on our innocence and credulity. He says the objects of this Bill are to examine the potentialities, the possibilities, of establishing a chemical industry. Surely there are other objects also and is not one of them to try to bury the past, to get away from the ghastly failure that has been exposed by this Industrial Alcohol Bill? There is only one thing worse than that in our national economy, if I may say so—and this a matter we will deal with some time—and that is our proposal to make our own steel. This is an example that will want a lot of explaining in relation to what the Minister suggested yesterday was a fixed and established economic policy, which a lot of us, judging by our speeches, have not yet grasped and understood.

Here we have an industry established to produce industrial alcohol from potatoes, which did little or nothing in that respect and, ultimately, had to be kept alive through the importation, from Cuba or somewhere else, of molasses as a source of its raw material. The Minister told us, when this Bill was being introduced, that 3/- would be about the highest figure that the alcohol would cost, but we know now that the cost of production was 7/6 a gallon. In order to camouflage the economics of the whole venture and make it appear on paper to be economic, we force the motor industry to mix—I think I heard it said adulterate—this product with imported petrol. Some explanation is due from the Minister as to the failure of the whole venture. I was disappointed, as I look on the Minister as a man with great brain and with a mind of a very resourceful character; and I should have thought he would have the courage to come forward and say: "We cannot establish a new economy without certain losses and here is an outstanding failure; let us cut our losses, let us realise that the money is gone, and let us make a fresh start and learn from the past".

I suggest that this money is lost. I suggest—and the Minister even hints at it in the statements he made in the Dáil—that it is very likely this new venture will supersede the industrial alcohol production. If that is so, all the money—or a large portion of it—so spent should be written off and not camouflaged in the way that is now being done by this measure. When I say "camouflage" I mean this. The Minister is seeking power to give this company the right to make experiments, and, if the experiments prove successful, to make the company the basis of a new chemical industry. I ask the Minister this question: is this plant for making industrial alcohol of any value technically, as it exists, in relation to the production of sulphate of ammonia? It is not. It is about as much use for the production of sulphate of ammonia as, may I say, a gasworks would be for the production of steel. Technical people tell me that there is nothing in this factory which will help towards research as regards sulphate of ammonia. If that is so, I regard all this money spent on industrial alcohol equipment as wasted. It has been a ghastly failure. The alcohol was costing 7/6 per gallon. The industry is not going to be revived—at least there is every likelihood that it will not. This new venture will derive no assets from it, except possibly land. The main part of the equipment will be of no advantage in the establishment of a chemical industry.

The Minister justifies his first approach towards a chemical industry on the ground that we must not be left wanting again in the next emergency. I am sufficient of an optimist for the future to hope that there will be no emergency of the kind we have just come through for a very long time. I have a belief in the United Nations Organisation. I have a hope that we shall not have another world cataclysm so soon as to affect our present economy. I think we are justified in taking that risk. I think we are justified in trying to get into line with those optimists who say that world recovery, which will include the recovery of every nation, is based on the increasing interchange of goods on the most favourable terms and the development of international trade. If that is accepted, we should make what is most suitable to our own resources. I do not preclude a certain limited investigation. I do preclude the possibility of the chemical industry being in any way suitable. Perhaps that is an over-statement, but I say that there is very little prospect of the economic establishment of such an industry in this country.

Let me deal with the question I raised yesterday. I asked the Minister to define what he meant by "entirely economic". He used that expression in the Dáil on one occasion and I was not quite clear about it. I could not grasp his definition. I suggest that an industry is entirely economic when it can produce goods for export; in fact, when it produces goods below the price at least of countries with a standard of living equal to our own. I do not suggest producing goods for export to a country with a debased currency and a very low standard of living. I say that we cannot claim any industry as being entirely economic, and I stress the word "entirely", which cannot produce goods at a price at which they can be exported to Great Britain, the Scandinavian countries, and countries which enjoy the standard of living that these countries do. I should like the Minister to say whether he would accept that as an adequate definition of "entirely economic".

At this stage I want to affirm that it is not right to accuse those who criticise our new policy of unpatriotic motives, because that is the line which was taken on recent occasions. At least one speaker in this House has done that. Only yesterday, Senator Summerfield impugned the motives of those who criticised our new economy. If those who support our new economy have no better argument than that, they are in a sorry plight. They should defend their beliefs on convincing ground and not merely impugn the motives of those who do not agree with them.

As to the suggestion of the Minister for using this company as an experimental ground in connection with a future chemical industry, is it seriously suggested that we cannot get a fully-informed opinion from large established companies, who have spent millions in research, on the prospects of an economic chemical industry in this country? You have only to go to Imperial Chemicals to-morrow—there are other companies but that is one we all know of— and say: "I should like you to examine and report on the prospects of starting a sulphate of ammonia or other heavy chemical industry in this country." Their report surely would be of infinitely more value than some hotchpotch experiment carried out by this company, whose record up to the present has been deplorable and whose equipment, I suggest, as it at present exists, is quite unsuitable for research into this matter.

The Minister stated that he has been told and knows that we can make sulphate of ammonia in this country cheaper than we can get it abroad or, was it, cheaper than it was before the war. He said he had been given figures which satisfied him that we could have an economic production of sulphate of ammonia. Why, then, have all this research? If he is satisfied, let him give us the figures and go on. Do not let him cover it up with the ugly past of this company.

The Minister assured us that there is no great danger, or no severe financial obligation involved in this venture because the amount of capital that this company can raise is limited. He has already raised—and I suggest poured down the drain—£275,000 of the country's money. He can only carry on that process to the extent of another £225,000 I think. That is the total capital which can be raised by law for this purpose. There is no difficulty in raising it because he can go to the Minister for Finance and get a cheque the next morning or he can raise it from the public, if he likes, on a Government guarantee. But the Minister has not told us, either in this House or in the Dáil, that there are further resources under the present law within the grasp of this company. This company can raise debentures and can borrow. I suppose there is a limit but there is nothing to preclude further substantial borrowing powers on the part of this company without obtaining any Parliamentary sanction so that the safeguard in regard to the limit of capital is not the whole story. There can be further expenditure without Parliamentary authority, in respect of borrowing or in respect of debentures.

What is to be done about it? Of course we have to toe the line. There is no prospect of preventing this Bill going through. I did read the other day of a philosopher who said that the greatest form of mental torture was to know that wrong was about to be done and that it was impossible to do anything to prevent it. Will the Minister believe that I am suffering considerable mental torture?

For a long time.

Yes. I shall go right back: I made a mistake I know in one instance. Let me confess what Senator Foran is trying to get out. Senator Foran knows that many members of the House are unaware of my record in the matter of the Electricity Supply Bill. I will admit that I was mistaken in that instance. I admit it fully but will the Minister admit that he has ever been mistaken in any of his ventures because, I think, if he really searches his heart and his conscience he cannot fail to do so? Will Senator Foran agree to leave this matter alone now? I have made full confession I was mistaken in that instance but if anybody expects to get through the world and get through political life without making mistakes, I think they are living in a fool's paradise. I should think that even such a great man as Mr. Churchill has made mistakes in his time. What is one to do? I have suggested that the Minister should make a clean breast of the whole thing and say: "This money has been lost. I ask the House now to allow me to start chemical industries. I shall call in experts, following the precedent of the Electricity Supply Bill, which Senator Foran is so anxious to recall, and then on their judgment I shall come to Parliament and ask for your sanction before going ahead with this scheme." I think that is the right way to do it and not merely try to tack this venture on to a company which I would suggest in its equipment—I am not prepared to criticise the brains or the knowledge at its command—is singularly unfitted to carry out the task which it is asked to do.

May I ask one question? We are told in the Bill that the principal objects of this company shall include—

"(iii) the manufacture and sale of any substance, all or any portion of which is produced or obtained by chemical process."

I am very sensitive to any subject that touches chemistry and that is why I raise this question. I presume the Minister means what this object implies and I presume the House realises the vastness of that object. It means that this company will be the most powerful company in the country because chemistry provides the key for so many things that the company can very soon establish itself in a position that would render it capable of controlling many different concerns. "The manufacture and sale of any substance, all or any portion of which is produced or obtained by chemical process". "Any substance" could include sugar and bread. Even sugar manufacture involves a chemical process—bleaching and so forth. I know the Minister will leave out sugar and leave out bread, so far as this company is concerned, but, at the same time, there is that possibility, that the object of the company can be extended to include the manufacture of a great many of these things that normally we would not regard as proper materials for a chemical industry. I do believe that that object will have to be curtailed a little bit. In so far as this Bill improves our scientific outlook and in so far as it provides a means of centralisation, I think it is very good. I am not quite so pessimistic about the question of research as Senator Sir John Keane, because if you start a company of this magnitude, and you require the information which he has mentioned, you can get any experts you require from all over the world. I am, however, reminded, considering the enormous power this company will have, of the quotation: "The glass is too big, take it away, I shall drink out of the bottle." I am rather afraid that the glass of object (iii) is too big and I would prefer to see smaller power in the possession of the chemical company.

I do not know what to say in reply to Senator Johnston's analysis of my character but I shall pay him the tribute of saying that while he has been in this House he has run true to type and has shown no signs of the split personality which he attributes to me. A great deal depends on the attitude of mind with which one approaches the consideration of the economic problems of this country. There are a number of people whose minds just stopped working about 25 years ago. They decided that the country had gone to the devil and they are determined that everything that has happened since will be interpreted as evidence of that fact. I do not think it is true that we must depend entirely upon the development of our agriculture for prosperity and that we should, therefore, not undertake any industrial development that might in any circumstance react unfavourably upon agricultural costs. There are changes taking place in the world, in the distribution of economic power throughout the world, and in the nature of world trade, and we must be, I think, prepared at all times to adjust our economic structure so as to get the best results for our people in these changing circumstances. I am surprised that Senator Johnston should have thought fit to point his argument by suppressing very relevant facts. It is a simple matter to rise in the Seanad and say that, between 1930 and 1939, the value of our agricultural production fell by £12,500,000, without any alteration in the volume of production or any alteration in the national income. Between 1929 and 1938, many things happened besides the advent to office of a Fianna Fáil Government. I submit that any honest student of economic trends would have come to the conclusion that those other things had a far more potent effect on the value of agricultural output than the change of Government which took place in 1932. There was a considerable slump in agricultural prices everywhere. In so far as the prices procured by Irish farmers were governed by the prices prevailing in the world markets, the level of prices here was beyond our control. Between 1929 and 1938, the world prices of butter fell so drastically that export from this country became impossible unless heavily subsidised. We maintained exports by subsidising them. A similar situation developed with regard to bacon. If we are to attribute all the decline in the value of agricultural products in that period to the development of industry here or to other causes within the control of the Government, then we must blame Irish industrial development or Fianna Fáil policy for events that occurred in every quarter of the globe. I submit that any honest student of the economic history of that period will be forced to agree that the slump in world prices, accentuated in our case by the consequences of the land-annuities dispute with Great Britain, had far more effect on the value of agricultural output than any industrial development that we succeeded in achieving in that period.

I quite agree.

That is agreed. I hope that Senator Johnston is not developing this mental disease from which he thinks I am suffering. It is true that we granted protection to the superphosphate industry here. It is probably also true that the cost of superphosphate produced from our factories during that period was higher than the price at which we could have imported it from some countries, though not from all countries. I wonder if that is a fair comparison. We know that the price of superphosphate which could have been purchased abroad during that period was uneconomic by any test. It was, in fact, sold at less than the cost of production. It was produced in other cases as a by-product of other forms of industry and sold merely at its ex-factory cost, without any additions for overheads or profits. We could, undoubtedly, have secured temporary advantage during that period of world depression by destroying our own industry and importing superphosphate at a slightly lower price. Would the gain have been anything more than temporary? I agree with Senator Sir John Keane that we must not plan our policy entirely on the assumption that we are going to have nothing but wars for an indefinite period, but there was a war and, during that war, the fact that we had superphosphate plants operating here was of considerable importance to our farmers.

I did not advocate their suppression; I advocated their subsidisation, if necessary.

That, I agree, is a different issue. There may be a case for ensuring that supplies of superphosphate or nitrogenous fertilisers are available to farmers at less than the production cost or at very low prices, that result being achieved by means of a State subsidy. That seems to me to be an entirely different issue from the question whether we should produce superphosphate ourselves or import it. Whether we produce it ourselves or import it, we can subsidise the price. I should not at all disagree with the policy of subsidising fertilisers for farmers. In fact, the Government are doing so at the moment. The present price of superphosphate fertiliser is heavily subsidised. In addition to the subsidy, which has kept the price down during the past few years, the guaranteed price for wheat was supplemented by a credit voucher, which will enable the farmers next year to procure a very considerable quantity of fertilisers free of cost. Those vouchers will be encashable next year. At all times, the Government has fully appreciated the importance of increasing the use of fertilisers and has shown its willingness to undertake financial responsibility to attain that object by making fertilisers available to the farmers at less than the manufacturing cost.

I should not like to define "economic production". I do not accept Senator Keane's definition. His definition was "production at a total cost which would permit of exports". It is possible to develop an export trade by various devices—low wages, long hours, tax remissions, abolishing social services and other methods of that character which would enable the purely price-standard of efficiency to be achieved. I should say that, for the great majority of industries, the economic cost of production is the cost at which we can produce here, given efficient plant, proper management and skilled workers. It may be that the economic cost of production here is higher or lower than the economic cost of production elsewhere. It is a matter for decision, as an item of policy, whether any particular form of production should be encouraged or discouraged. I think that common sense would support the wisdom of a policy of diversifying production. Any study of economic history I have been able to undertake seemed to me to prove conclusively that, in periods of world depression or upsets in international trade, the countries which suffered the most serious consequences were those which had, to an unsafe degree, specialised in limited ranges of production and that the countries which had withstood the consequences of international upsets and trade depressions were those in which production was greatly diversified.

I think that it would be entirely unwise for us to rely for prosperity on the limited forms of agricultural production that are possible in our circumstances. If we are to raise our standard of living and increase our economic security, we must supplement our agricultural industry by diversified industrial activities. I believe that is possible. I believe there is no logical, natural or economic reason why many industries cannot be established as efficiently here as anywhere else. I do not think that there is any law of nature or of Providence which decrees that British manufactured boots should be cheaper or better than boots manufactured here. I do not think there is any reason why sulphate of ammonia cannot be produced here as efficiently as in any other country. One reason that may affect the cost of production adversely here as compared with that in other countries is the cost of electricity. Electricity costs are a very considerable item in the production of sulphate of ammonia and there are countries which, owing to natural advantages, can produce electricity more cheaply than we can.

On the other hand, the raw material which is the basis of the industry is gypsum and we have deposits of gypsum as valuable as, if not more valuable than, any that exist in Europe. There are good reasons, therefore, to think that we could establish that industry successfully. Our pre-war investigation of it seemed to show that such was the case. It was true, however, that the best estimate we could make indicated that the price to the farmers would be somewhat higher than the price at that time prevailing in this country, but the price at that time prevailing in this country was lower than the price prevailing in other parts of Europe or in Great Britain. The manufacturers of these chemical goods are linked in cartels and have not shown themselves to be averse from adopting a policy of cutting the price here and there to prevent competition developing.

Senator Sir John Keane says it is not necessary to have an investigation into the possibility of these chemical industries, that Imperial Chemicals will give sound advice if we ask for it. That is a very naïve suggestion. There are, no doubt, manufacturers at present engaged in supplying existing markets in this country or elsewhere who will voluntarily advise other people to go into competition with them, but there are not very many of them, and I doubt very much whether Imperial Chemicals will be so completely disinterested as to give us reliable advice on the possibility of our competing with them in the production of these goods for this market.

Would the Minister not admit that the establishment of local industry is conditioned by the size of the market in relation to the cost of the capital required to obtain the most economic production?

That is a definition of economic production which I gave the Senator yesterday. I said production on a scale which would permit of the full utilisation of the equipment necessarily employed in production.

Full mechanisation.

Full mechanisation is not the phrase I would use. There was one important industry established here—the manufacture of glass bottles. The company which established that industry decided to purchase the largest machine in the world for the manufacture of glass bottles. They purchased and operated here an enormous machine which would turn out glass bottles at enormous speed and in enormous quantities. The company went bankrupt. Another company purchased the concern, scrapped that enormous machine and substituted smaller machines and has operated very successfully ever since. We can pursue the ideal of increased mechanisation to an uneconomic degree. That is a matter for consideration in relation to the practical circumstances of the market and the technical skill available and all other relevant considerations.

Has the Minister any objection to my clover-leaf nitrogen factories?

None whatever. I am not going to discuss here the desirability or otherwise of encouraging people to use sulphate of ammonia as distinct from farmyard manure or any other form of fertiliser. I feel, however, that if our farmers are going to use sulphate of ammonia, and they used it to the extent of 200,000 tons per year before the war, we can manufacture that sulphate of ammonia for them.

May I say that the import of all nitrogenous manures averaged about 20,000 tons pre-war?

I said 200,000 tons; I should have said £200,000 in value. These are rather wide questions to be discussing on this Bill. It may prove to be the case that this company will ultimately be entrusted with the manufacture of sulphate of ammonia, but, as I explained in the Dáil, it cannot do so until fresh legislation is introduced. Deliberately, we have so framed the Bill as merely to alter the powers of the company without altering the financial structure, and if the company is licensed to engage in the manufacture of sulphate of ammonia, the financial provisions of the main Act will have to be amended, and, on the amending Bill, the Dáil and Seanad can express their views fully upon the wisdom of embarking on the venture.

Senator O'Donovan contemplates the possibility of this company engaging in the manufacture of atom bombs. I think I have read somewhere that it takes £500,000,000 to manufacture an atom bomb and this company has only £500,000, so that it will not manufacture even the smallest size atom bomb without fresh legislation. Senator Sir John Keane says I am an astute politician. I do not recognise myself as such. The mere fact that he has lost every economic argument he started in this House does not prove other people to be very astute. It merely proves that he is starting on a wrong basis and with the wrong facts. He is equally wrong in assuming that the Industrial Alcohol Company was, as he described it, a ghastly failure.

I think he has lost sight of the purpose for which the manufacture of industrial alcohol was initiated. It was not contemplated at any time that we could produce industrial alcohol at a price corresponding to that of imported motor fuels. In pursuance of the agricultural policy of the Government which was designed to ensure so far as practicable a guaranteed price for agricultural products, it was considered desirable to establish an organisation which could purchase potatoes offered to it at a price announced in advance. We could see no way of preventing the disastrous slump in potato prices which occurred in the years in which the decision to establish the manufacture of industrial alcohol was taken by a system of price guarantees. It was clearly impracticable to guarantee a price for potatoes unless we could guarantee a market for potatoes and we could not guarantee a market for potatoes unless we had an organisation which was prepared to purchase them.

It was to create such an organisation that the Industrial Alcohol Company was established, authorised to erect distilleries and to purchase potatoes for use as raw material in these distilleries in the production of industrial alcohol. That was the primary purpose. The production of industrial alcohol was also considered a desirable addition to our security in the event of an interruption in the supply of motor fuel from abroad, but that was a very secondary consideration. The industrial alcohol distilleries came into production in 1938 on a small scale. By that time potato prices were already beginning to improve, but I think that very few people familiar with the history of that time will deny that it was an immense benefit to the producers of potatoes to have that assurance of a minimum price which the possibility of selling their potatoes to the Industrial Alcohol Company constituted.

In fact, the price fixed for industrial alcohol in the first and only pre-war year of its operation was the price which we had estimated when the Bill was before the Dáil—a price of 3/- per gallon. That was the price fixed and at that price the company realised a profit. The present price is 7/6 per gallon, but that has no relation whatever to the circumstances that existed in the pre-war years, because at present it is quite obvious that it would be undesirable to instruct the company actively to endeavour to ensure that potatoes would be offered to it. The company will take potatoes where there are local surpluses, but in fact in very few of the pre-war years had we a surplus of potatoes, and in these years the Industrial Alcohol Company did not operate at all or operated only for very short campaigns in one or two distilleries, and in circumstances which made the cost of production per gallon extraordinarily high. We fixed a price for industrial alcohol sold to petrol distributors which recovered these costs of production and avoided a loss to the company, but the experience of the war years is certainly no guide at all as to the costs which might be realised in circumstances where normal, regular supplies of materials can be procured and continuous production maintained over a very long season.

In this year, the company has contracted for the growing of sugar beet in certain parts of Donegal and some other areas where beet was never grown before and where, in fact, at one time it was considered that beet would not grow, and intend to experiment with the use of beet for the production of industrial alcohol.

They have also been importing molasses for distillation here. The advantage of importing molasses is that it permits of continuity of production over the whole year, or for the greater part of the year, and even though there may not be any obvious national advantage in the utilisation of imported molasses for the production of industrial alcohol, it does permit of the more economical operation of these distilleries. In any event, whatever criticism is to be offered to that scheme should be directed against the Government and not against the company. The company was set up to establish these distilleries and to operate them, and it has done its job quite successfully, both from the technical and commercial point of view. Senators could urge, and some Senators have urged, that it was a bad decision to take. They might even urge now that the whole development should be written off and the enterprise stopped, but while they might do that they should not, at the same time, attribute the high cost of alcohol, or the decision to continue the production of alcohol, to the company, or criticise the technical staff of the company or its commercial administration. The company has a very competent technical staff, and the fact that the technical officers of the company are employed at present by it on this distillation process does not mean that they have not had experience of other chemical processes. I certainly would not like it to be thought that if the company is going to consider the possibility of engaging in other forms of chemical manufacture that it would not procure other expert advice if that were considered advisable.

I agree with Senator Baxter that there should be links between the company and the universities. These links exist at the present time through a member of the board. There were other links that were severed and these may have to be reformed, but there certainly will be no disagreement on the desirability of keeping the operations of the company in touch with the universities. There is no possibility that the existing alcohol distilleries will be used in any way for the manufacture of sulphate of ammonia. I heard it suggested that they could be utilised for that purpose. As far as I know, the production of sulphate of ammonia does not require any distillation process. It would necessitate the erection of an entirely different type of plant, but it is possible that the distilleries may be used for the production of some other chemical products. During the war, when supplies of certain commodities were difficult to procure, this company produced ether for the hospitals and formaldehyde for disinfecting purposes. It also produced, as I mentioned yesterday, undenatured spirit, an industrial raw material, and used also in hospitals and laboratories. At Cooley it is setting up a new plant for the production of undenatured spirit, a pure alcohol, which is used in many industrial processes—from the production of perfumes to the production of gin, and which is also used as a preservative in chemical work.

It may be that these distilleries can be utilised for other forms of manufacture, but that is a matter for decision by the company. I would not agree that it is desirable that the company should discontinue the production of industrial alcohol in the present circumstances. We still need all the motor fuel that we can procure. I should think that in any circumstances there should be no question of discontinuing the operation of these distilleries while motor fuel is rationed. At any time we can decide, if we consider it desirable to do so, to suspend the operations of the distilleries, but that is a separate issue entirely from the one raised by this Bill, which is whether this company should be utilised for the exploration of the commercial possibilities of different forms of chemical manufacture, and should engage in their manufacture. If there is a decision to that effect, I think Senator Fearon need not fear that this company will grow into the powerful economic influence which he anticipated. First of all, I want it to be quite clear that there is no question of giving this company at any time monopoly rights in any form of industrial production. Ordinarily, it will not engage in any form of chemical manufacture in which private enterprise is engaged. Even if there should be some limited form of production by private enterprise not sufficient in our view to justify the withholding of a licence from the company, it will still not have monopoly rights. In fact, it is far more likely that this company will be given the task of producing by chemical processes goods which are not likely to attract private enterprise because their production here will not be entirely economical or not profitable, or would involve such heavy capital expenditure that private concerns are not likely to engage in it.

I do not think there was any other point raised in the course of the debate that it is necessary for me to deal with. I want to assure the Seanad that there is no attempt in this Bill to put anything over on it as some Senators seemed to me to suggest. I explained that the Government found itself at the end of the war, first of all, with the factory at Parkgate Street, operated by the Department of Defence, on the manufacture of certain chemicals. It found itself with a number of investigations proceeding under the auspices of the Emergency Scientific Research Bureau, some of which appeared at the stage that there were commercial possibilities likely to flow from them, and so had these unfinished pre-war undertakings still on hands such as the completion of the investigations into sulphate of ammonia. It decided that it required some organisation fully equipped with technical knowledge and the necessary financial resources to investigate these commercial possibilities and to carry on the examinations which had been in progress. Instead of setting up a new organisation for the purpose, it decided to utilise this existing organisation which appeared to be quite suitable, having regard to the personnel of the board of directors and of the technical staff it employed. That was the sole reason why we proceeded on the basis of altering the powers of the Industrial Alcohol Company. It appeared to us to be the most economical and the most satisfactory method of doing a job which would have to be done in any event.

Question put and agreed to.

When is it proposed to take the next stage?

We can take it after Christmas. The House is meeting on the 15th January, and the proposal is to take the Committee Stage and all stages then rather than now.

I could not urge that this Bill is an urgent Bill in the sense that it must necessarily be enacted by a particular date.

Is it not an enabling Bill?

There is a natural inclination to finish up the business of the session during the session and not carry it over to the next session. I should like to get these activities under way as soon as possible. If the Seanad is contemplating meeting next week, perhaps it could agree to take the remaining stages of this Bill next week.

Let us be clear about this. We do not intend to meet next week. At the meeting of the Committee on Procedure and Privileges we discussed these Bills, and were unanimous in deciding that certain Bills would go through all stages this week. We aim at finishing our business, if possible, to-night. I have given considerable assistance myself all day to this matter as the Minister may have noticed. When we meet on the 15th January we can do all stages of this Bill. That is the suggestion.

Mr. Hawkins

I understand that it will be necessary to complete all stages of the Ministers and Secretaries (Amendment) Bill before the Christmas recess.

Every possible effort will be made to oppose that decision. The Committee on Procedure and Privileges was unanimous that there was no necessity to do any such thing. Senator Hawkins appears to be a law unto himself. He will get a great run for his money on that question.

What is the question?

That the next stage be taken now.

I do not think the Minister is insisting on that.

If it is not agreed, I shall not press the matter.

Shall we say the next stage to be taken on January 15th, 1947?

On the next sitting day.

Will we take all stages that day?

The next stage will be taken on the next sitting day.

Which might be to-morrow.

I shall not press this matter.

Committee Stage fixed for Wednesday, 15th January, 1947.