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Seanad Éireann debate -
Wednesday, 12 Dec 1951

Vol. 40 No. 4

Supplies and Services (Temporary Provisions) Act, 1946 (Continuance) Bill, 1951—Second Stage.

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

Ní ga dom óráid fhada a dhéanamh ar an mBille seo. Tá sean eolas ag na Seanadóirí ar an mBille cheana. Tá gá ann le haghaidh ciondála agus tá gá freisin ann le haghaidh na praghsanna a rialú.

There is no necessity for me to explain this Bill. It has already been before the Seanad on many occasions. Unfortunately, there is still necessity for the powers contained in it to continue the rationing and also to continue price control. The Bill contains certain powers which the Government would like not to have but, unfortunately, the circumstances in the world necessitate having them for next year.

The Minister, speaking in Irish, said that it was the custom for the Seanad to pass this Bill every year. There is an Irish proverb—"Ná déan nós agus ná bris nós"— neither make a practice nor break an established practice. I hope we will pass this Bill after the Second Reading discussion, as has been the practice heretofore. To that extent, therefore, if perhaps not further or otherwise, I am in agreement with the Minister. The Supplies and Services Bill is, as he said, a hangover from the war and it is still necessary to have rationing and to have certain control of particular articles and services; but this year, as it happens, the Bill has been made the occasion of a discussion of our economic and financial position. There has been a very long discussion in the Dáil and I would express the hope—perhaps I might be able to give an example—that it would not be as long in this House, but, at the same time, I would say that it is an extremely healthy sign that the Dáil should discuss economics and finance in that particular manner; first, that members of the Dáil should not accept ministerial statements of a panicky nature and, secondly, should devote themselves, even with a certain amount of passion, to economic and financial problems. It is better for the Dáil and better for us to discuss who wasted our external assets rather than who started the civil war or who established the Republic. To that extent, the debate has been of considerable benefit to everybody.

There were various targets for various speakers in the course of the debate. One of them was the Central Bank and its chairman and the other, the Department of Finance, as distinct from the Minister. I think we ought to acknowledge, at the opening of this debate, that this is a place where Governments and their actions or inactions ought to be criticised, but that the Central Bank has its own functions and that these are not functions which should be subjected to what one might call political criticism. It is no harm —it is quite the reverse; it is of great benefit—that there should be people, independent and put in a position of independence, able to speak their minds clearly and to the public on matters of economics and finance, and it is far more desirable that the directors of the Central Bank should express views which may be unpalatable to some people, if they are their own views genuinely held and properly expressed, rather than that the Central Bank or its directors should endeavour to express the views which they think the Minister would like them to express or anybody but themselves would like to see expressed.

To that extent, we should put the Central Bank in its proper position, which is that of an independent advisory body which has the right to make a report and which has made a report over a period of years. We should not make the mistake of endeavouring to prove that they are directing policy, because they are not. It may be said about them in a nonpolitical way that they have made the same kind of report in extremely different circumstances and that perhaps, in their remedies, they do not take sufficient account of the human beings and human reactions which Parliamentarians and Ministers must necessarily take into account.

The same thing to exactly the same extent applies to the Department of Finance and the Minister's advisers. The Department of Finance, as distinct from the Minister, gets a considerable amount of abuse. It got some in the recent debate and I had myself, in the course of an official career, occasion to disagree with considerable violence and energy with actions of the Department, but it should be remembered that they have a very difficult role to play and that action, when taken, or inaction, when resorted to, is something for which the Minister is to be blamed, that the Minister and the Government are charged with a duty of taking action and that we, as members of the Oireachtas, are charged with agreeing with or dissenting from the action taken.

There is a considerable amount of truth in the Report of the Central Bank which has been discussed on the stages of this Bill in the other House. The remedies suggested may be a little removed from human feeling, and, in the end, if we resorted to deflation, unemployment and a considerable reduction of purchasing power, the cure might very well prove to be worse than the disease; but there is a real problem, and it seems to me that the report of the bank might have been used by the Minister for Industry and Commerce, the Minister for Finance and Ministers generally to get a general realisation of what our difficulties are and to get co-operation towards a solution of these difficulties. Instead, it is quite clear that, when the Minister for Industry and Commerce saw the Report of the Central Bank —and he saw it before the public saw it—he did not say to himself:"Here is a problem to be solved." He said to himself, and then said it very strongly in public: "Here is a stick to beat my political opponents with." He produced the stick and proceeded to belabour his political opponents as best he could, and mind you, he is pretty good at it. In other words, he made a purely Party and purely partisan use of a document which should not be put to any such uses.

His first speech, in which he laid all our ills, no matter where they come from, at the door of the inter-Party Government, and particularly at the door of the Fine Gael Party, suggested to me that we were in for a period of austerity and reduced consumption, and many people thought it made certain a supplementary Budget and increased taxation. Later, having found that the atmosphere was not good for that, he completely changed his tune, threw the Central Bank Report over completely and proceeded to find that, in fact, there was no crisis at all, that there was only a certain amount of difficulty and that the country was not bankrupt. In fact, so far from the country being bankrupt, the Minister found that it could finance not only present schemes but other newer and more extensive schemes of his own making. That is a wrong use entirely to make of a report such as the Report of the Central Bank. Ministers spoke with quite different voices, but perhaps I need not bother about that, as the Minister is not here himself.

The thing that seems to me to be wrong is that, as a result of ministerial speeches, there has been a certain amount of unemployment, a certain amount of nervousness about purchasing and a certain restriction of credit. These were caused, I think, not so much by the Central Bank Report as by the speeches made by responsible Ministers. The Minister for Industry and Commerce, who is a very vigorous speaker, and never more vigorous and apparently more sincere than when he is completely wrong and making complete misstatements, has an old gag as a political weapon—this business of creating panic. As far back as 1947 I seem to remember a speech of his in Letterkenny in which he predicted that we were in for three years of economic disaster, but, of course, he implied if he were still there everything would be all right. He has a political technique which always predicts disaster and always says that he has pigeonholed somewhere a plan for averting the disaster if it is left entirely to him.

This matter might have been approached from a very different angle, because everybody knows that there are economic difficulties and that there are financial difficulties; that they do not stem entirely from the action of any Government or any Party; and that they are not remediable entirely by any Government or any Party, or, unfortunately, by any combination of Parties in this country. It seems to me that what we need more than anything else from public men is that they should state the truth and keep on stating the truth of our economic position to the people rather than that they should endeavour to deceive them.

This State—I was going to say it was an island—unfortunately, is only the greater part of an island. It should be remembered that urbanisation and industrialisation in this country are comparatively recent. We enjoy a high standard of living and we have been what is called, for want of a better word, modernised. People have been given a taste for consumption of a certain modern type of goods.

In order to maintain that modern standard of life—I use the word "modern" advisedly—we must import a considerable amount of goods and we must pay for these goods by export. I think that simple economic fact—it is not very complicated and it is true— should be told more frequently to our people. We must work to produce goods. I know that the phrase used is: we must have more production. Unfortunately, the word "work" is a less palatable word than the rather vague word "production". It must be made clear to our people that we must produce goods, export them and sell them in a free market, a market over which our Government or Parliament, no matter how constituted or united they are, have absolutely no jurisdiction and no power. We may have to be in the position of having to work more and to do without certain things in order to live at all. More work does not apply only to farmers and farm labourers. We must export in order to live.

One of our common mistakes—and it is understandable in a country which was only recently established, as 30 years is a very short time in the history of any country—is that people fail to realise that as a Parliament we cannot legislate ourselves or protect ourselves or plan ourselves into prosperity. That is not so. That is where the present Minister for Industry and Commerce misleads a great many people by pretending or appearing to pretend that he has a plan which can make us prosperous. The truth is that we are influenced in preserving our standard of living by so many forces operating at such immense distances that no planning of ours by itself can help to make us rich. Neither can we tax the rich in order to make ourselves prosperous or pay for anything because, having taken over the land and having disposed of the landlords, I think we have comparatively few rich people left. Taxes, in the main, come from those who are not wealthy. It may be easily said but it is quite foolish and groundless to think we have any sources of income either to finance social services or development in agriculture or industry unless the ordinary person who works, works harder and pays more taxes. Even for social services workers must in the end pay themselves.

It is said that we should develop industry. I agree that we should develop industry and for many reasons, including one which appeals to me, that industrial development gives you a variety of life from which you can have a variety of culture. But agriculture, no matter what we say or do or no matter what plans we may make, must remain our main capital and main resource for exports. If we cannot make our farming more efficient either by the investment of capital or by any other method which would enable farmers to produce and export more, then we cannot maintain our present standard of living. It should be told to our people that while the employees of Córas Iompair Éireann or the Electricity Supply Board may be employed by this State the Irish farmer is very often employed by a foreigner, by an Englishman, by a Dutchman or by an American. He cannot go on strike against his employers and cannot do anything about them. That applies to Englishmen too. Englishmen, to a large extent, work for foreigners.

It seems to me, therefore, in this kind of a situation which I think is not one that suddenly arises or one that would suddenly disappear, instead of being panicky we should endeavour in united fashion to tell the people what the facts are. We should have agreement rather than recriminations. We should have co-operation between the Parties to achieve economic stability which is as great a need as any national objective that any Irish generation ever had to achieve. Some of us are very interested in keeping this country distinctly Irish. Some people say we have a contribution to make both from the Irish and Christian point of view. But before we can make any contribution we must live, and before we can continue any national tradition of our own or impart it to anybody else we must be alive. For that reason this is a matter of very great importance. I think it is one very well worth discussing and one upon which instead of seeking for the maximum of disagreement we should seek for the maximum of agreement.

The Central Bank, for example, and the Minister for Industry and Commerce are in agreement I think that we should have less personal spending. The Central Bank would like us to spend less, to have less to spend, put more in the banks and presumably invest it in British securities. I am afraid that the Minister for Industry and Commerce would like to make us restrict our spending by taxes, by taking more money from us and investing it for State plans, a system with which I do not agree. Industrial development in this country, of which there has been a good deal, means we must import more raw materials. It means more urbanisation and the creation of a still greater demand for the kind of commodities that urban workers need or urban workers at any rate desire.

It seems to me that we should combine to state the facts and as far as possible combine to tackle the problem because it is a matter of survival for ourselves. If the Minister for Industry and Commerce—I take it he has business in the other House— were to devote his great energy and considerable ability towards solving the problem rather than towards fixing the blame, something could be done and I think he would merit well of the country. If we can succeed in doing that we might find in the end a word of praise even for the unfortunate Chairman of the Central Bank.

This is a Supplies and Services Bill which embodies the principle of extending emergency powers six years after the so-called emergency came to an end. I do not think it would be right to allow this Bill to pass without saying—I do not say registering a protest—that the sooner these emergency powers are brought to an end the better for the country. I think we ought to hold very strongly to the general principle of the rule of law. The Seanad has played a small part in establishing that by setting up a Statutory Orders Committee. At the same time, everybody must admit that the emergency has not passed and that the time is not yet ripe for the complete restoration of the free prices system in the Irish economy. The affairs of this country may be described as an inflation but if it is an inflation it is only one inflation in a world of inflation.

It seems to me that there are three great inflations in the world to-day from which we are suffering. There is the dollar inflation, the sterling inflation and the Irish inflation. Which of these is the greatest influence on our affairs it is very difficult to say, but in so far as we have control over these inflations it is only over the last that we have any control. With regard to the others we have to accommodate ourselves to them in the best and most intelligent manner we can.

I do not make any apology for discussing some of the matters which were discussed in the Dáil at some length because I think it is the duty of the Seanad to contribute something to this debate. Perhaps I might preface my remarks by saying that, as a reader of the debates in the Dáil, I felt that the matter was being discussed at three different levels. Two of these levels struck me as being inappropriate and the third as being appropriate, and therefore the level to which we should confine ourselves. This matter was discussed at some length at a technical level as though it were merely a technical problem. The discussion dealt with how the Government and the Central Bank, with the appropriate measures at their disposal, could restore equilibrium in the balance of payments. I do not for one moment wish to suggest that technical considerations are irrelevant. In fact, they are all-important, and a country which adopts the wrong technical means even to achieve the right ends must pay a serious price if not perish in disaster.

At the same time, I cannot help feeling that to confine ourselves to the technical aspect of the problem is inappropriate in dealing with a problem of this kind. After all, we are dealing with the population of the country; we are dealing with a great many human feelings and the mere restoration of equilibrium in the balance of payments, which is quite easy to achieve as I will mention later by means of the appropriate measures, ignores many matters relevant in a problem of this kind. It is just like the case which Senator Hayes mentioned where you have a successful operation but the patient dies. It is quite easy to envisage the restoration of equilibrium in the balance of payments in this country obtained by various methods but the effects on our economy, deflation, unemployment, emigration, business losses and political discord are too high a price to pay for the immediate benefit conferred. I think that to discuss this matter on a purely technical level is inappropriate.

On the other hand, many speakers in the Dáil seemed to make the opposite mistake and discussed it, if I may say so, on the emotional level. A certain number of words have now acquired a certain emotive content. The phrase "repatriation of capital" suggests that our capital is an exile or refugee from persecution at home. "Dragged at the heels of the Bank of England,""Tied to sterling" are akin to the phrase used by William Jennings Bryan in the United States when he said that America was crucified on a cross of gold. Emotive terms are inappropriate in a debate dealing with very live topical issues and I think that they might be avoided.

I am sorry to say that two words have acquired an emotive significance, not only in this debate but in the world at large to-day. These two words are "inflation" and "deflation". They have become almost terms of abuse. Political Parties describe each other's programmes as inflation or deflation. After a lecture on this subject recently in University College, where I was attempting to explain some of these points, a student came to me and said: "As far as I can make out, the only dilemma in this country is whether we are going to be ruined by inflation or by deflation." I do not think that is the case. I think that there may be some third path by which we may avoid ruin. The words "inflation" and "deflation" are used in Party controversy and I do not propose to use them any more. Except they are used with an exact definition, they have simply become emotive terms which are simply used as counters in a political game.

The third level on which the debate was conducted and on which I think it should be conducted is the political level and by political level I do not mean the Party political level. I agree with Senator Hayes that these matters are so important, so momentous, that we should, if we can, try to constitute ourselves what I might call a grand inquest on the state of the nation rather than score debating Party points. When I say that it should be discussed on a political level, I mean that in politics one cannot always confine oneself merely to technical considerations. As I said already, the restoration of equilibrium in our balance of payments is quite easy, but at the same time it may produce effects on public opinion and on public confidence in which the loss would far outweigh the gain. I think that when we are discussing this matter on a political level we should consider, in the first place, what measures are technically appropriate—that is really the question of means—but also what ends are politically desirable. That is the question of ends. The distinction in this debate between ends and means is very important and one which, I think, in the discussion in the Dáil was not sufficiently observed. I think that the test of the correct solution to our difficulties is a combination of policy which is technically sound, politically feasible and economically defensible.

Politics, after all, is the science of the possible, and by the possible one does not simply mean what can be imposed by a Government on an unwilling population. It means the policy which will be accepted by general consent. Therefore, I think it is too much to expect any Government, especially a democratically elected Government which depends on popular support for office, simply to pursue a policy of drastic rectitude which may achieve for a short period the correction of disequilibrium at the expense of a very long period of sacrifice. I said that politics is the science of the possible. I might also say that politics is the science of the short run. Discussions about very long run effects are inappropriate. As John Maynard Keynes said, "In the long run we are all dead." So in considering policies of this kind, the run we are considering is a matter of extreme importance. We should aim at something between shock treatment for the patient which will administer some sort of temporary cure at a very severe cost and long neglect of his condition which will end by his gradually bleeding to death.

I agree, of course, with Senator Hayes that this is no occasion for the finding of scapegoats and that the Department of Finance and the Central Bank are not here to defend themselves. They have only been doing their duty. They have been doing what they are supposed to do. They are not responsible for the difficulties with which we find ourselves confronted. They are not responsible for the unpleasant nature of the cure which may be necessary for those difficulties. The Department of Finance is the body in charge of the national housekeeping of the country. It is not only entitled but it is its duty to call attention to anything it sees in the way of danger signals in the economic system.

I think it is only right for us to say that the high credit standing of this country at the present moment compared with other countries is largely owing to the record of the Department of Finance in the years since the Treaty, that it never has ceased to urge on successive Governments prudence, caution and orthodoxy, on many occasions making itself unpopular, as it has done on this occasion. I think it is only fair to call attention to this fact, that the Department of Finance always has regard to the interest of the taxpayer. If it is criticised on the ground of being unduly restrictive on spending, that, after all, is in the interests of the taxpayer, and at the present time, when taxation is so high, and when the poor pay so many taxes, safeguarding the interests of the taxpayers as a whole is surely a course which should not be accorded blame, but should be accorded, rather, praise. Therefore, I think that, apart from the general principle that parliamentary representatives should not criticise civil servants, these attacks on the Department of Finance have been singularly wide of the mark.

The Central Bank, again, has been doing just precisely what it was asked and expected to do. The Central Bank is a creature of the Oireachtas. It was set up by the Act of 1942. I distinctly remember the proceedings in the Banking Commission, of which I was a member, on the report of which the Central Bank was set up, and I am quite clear that one of the principal functions which we hoped to achieve by setting up the Central Bank was publicity, research, the education of the Irish public. One of the major recommendations of the Banking Commission was that the Central Bank should conduct research, should publish statistics, should draw attention to any deterioration in the Irish economic condition, and should generally educate the Parliament, the Ministers, and the Irish public.

In publishing this report the Central Bank has been carrying out that duty. We need not necessarily agree with everything in the report but the Central Bank surely is assured independence under the Statute. The very composition, the very non-removability of the members, means that the Oireachtas meant it to be an independent body which could pursue the truth as it saw it without fear, favour or affection. All I can say is this, that, if one of the objects of the Central Bank was to secure publicity, to secure that people would talk about the Irish economic situation, then its report for the last year, which is the subject now of this discussion, has certainly succeeded beyond the expectations of the most sanguine of its founders.

There is one point in regard to the Central Bank Report to which I think I should draw attention. I think it needs clarification. There has been misunderstanding, I think, in the debate in the Dáil and in the Press. The Central Bank calls attention to disequilibrium in the balance of payments, a matter to which I will return. They then proceed to outline a large number of alternative types of policy which may be resorted to in order to restore equilibrium. I emphasise "alternative" because it is quite clear, reading the report of the Central Bank, that the directors did not envisage the simultaneous application of all these policies at the same time. Reading the Report of the Central Bank, there is only one specific recommendation, a categorical specific recommendation about which there is no doubt, and that is that the current Budget should be balanced. The other recommendations of the Central Bank are all stated in the alternative, with this proviso, which is most important, that when they are being applied, if one of them is applied less, the others may have to be applied more.

That is actually in the report. I do not wish to delay the Seanad by quoting but that is in the report. Senators can read it themselves. Therefore, what the Central Bank has done is: it has given to the Government a choice of policies. It has not put forward this great mass of deflationary policies all to be pursued at the same time—and this, I think, also has not been sufficiently appreciated—nor has it stated that the whole of the disequilibrium should be corrected at one blow.

What the Central Bank has done is this: it has called attention to the fact of a disequilibrium—a matter to which I shall return. It has then stated that, if this disequilibrium is to be corrected, one or more of a variety of courses there laid down is the appropriate policy. The question of how much disequilibrium is to be tolerated is a matter of policy for the Government and for the Oireachtas. When the question as to the degree of disequilibrium that can be tolerated has been decided upon, the further question of to what extent the remaining disequilibrium is to be corrected is a matter for the Government and the Oireachtas also. It is we who have the responsibility for taking these decisions, not the Central Bank, and to attempt to make scapegoats of the Department of Finance and the Central Bank is disowning our own responsibility, resigning our own function.

I have used the word "disequilibrium". I do not wish to tire the Seanad with quoting statistics. The statistics are all available for anybody to read. But there is no question at all about it that, however people may disagree regarding the exact magnitude involved, the balance of payments in this country was in disequilibrium in 1950 and it is going to be in greater disequilibrium in 1951. That is agreed on by every speaker—the fact of the disequilibrium.

It is also agreed, although there may be differences of opinion regarding the precise magnitudes involved, that the disequilibrium has been bridged by dollar loans, Marshall Aid loans, by the infusion of a certain amount of new sterling into the Irish economic system by outside investors, and finally by a certain degree of using up of our accumulated sterling reserves. Without going into any figures, there is no question at all that those three forces have operated to bridge this gap.

In other words, the internal savings in this country have not been sufficient in the last two years to finance current consumption and current investment, and that is the central trouble in the whole system to which the Central Bank draws attention—the deficiency in the rate of current savings. That is the central core of our troubles. If that core could be corrected, all our other troubles would tend to disappear. The other troubles, the disequilibrium, and so on, are symptoms of the insufficient savings in the Irish economic system.

I will mention one figure only. The amount of new saving in 1949 is estimated to have been about £30,000,000, and the amount of new saving in 1950 is estimated to have been about £15,000,000 plus about £5,000,000 stockpiling, a total of about £20,000,000. I think, in view of the level of prices, of the volume of consumption and the volume of investment, that savings of that amount are not adequate to the necessities of the situation.

The disequilibrium in the balance of payments has been minimised and explained away to some extent on two grounds, both of which are valid. The first is that a large part of the imports are capital imports and that what we are really doing is repatriating foreign investments. The second is that another large part of the imports consists of stockpiling and, therefore, represents a prudent stocking-up of consumer goods for the future. Without going into exact magnitudes again, it is clear that the total of these two forms of import of capital goods and stockpiles does not account for the whole of the gap between imports and exports.

As regards the capital goods, we had a long debate in the Seanad less than two years ago on the whole question of the repatriation of Irish capital assets. I think there was a very general agreement in the House regarding the desirability of a policy of that kind. It may have been a matter of regret that it was not pursued on a larger scale in earlier years, but that regret would simply be one example of the regret of people who regret that they did not do things they would have done if they could have foreseen the future course of events. This repatriation can only take the form of an import of capital goods. Provided the net yield on the capital produced in Ireland as a result of that importation is at least equal to the net yield of the external investments and assets which have been sacrificed in its favour, a movement of that kind can be regarded as an unmixed good.

To the extent to which the repatriation of external assets is used for the building up of really new productive capital goods inside the country, the disequilibrium of the balance of payments, far from being a matter for alarm, is a matter for congratulation. But the total amount imported in that way is only a fraction of the whole. If you look at the imports of consumer goods you are brought up against the question of stockpiling. It has been stated in the debate in the Dáil—rightly, I think—that a large number of those consumer goods have been the raw materials of export industries and that they have been reexported, having been processed into a higher form. That, I think, is true, though it is difficult to identify the fraction which has been processed in that way. Certain imports of sugar, wheat and vehicles have entered into export production. To that extent the net import is less than it appears.

The second explanation is that the importation of a large volume of these consumer goods is stockpiling and that in a period of rising prices and international uncertainty it is wise and prudent for a country to acquire additional stocks of consumer commodities. That that process has been going on is unquestionable. But, however much people may disagree regarding the details of the figures, the stockpiling, plus the capital goods, do not in themselves bridge the gap between the imports and exports in 1950 or 1951. It is not irrelevant to say that an importation of consumer goods, even for current consumption, could have a considerable justification if they were consumed by people working in the country in capital-producing industries. In that case they would be indirectly building up capital at home. But the amount of new capital formation has been so small relative to current consumption that I think any allowance of that kind is too negligble seriously to affect the figures. Therefore, we are driven to the conclusion that, when full allowance has been made for all capital items in the imports, a disequilibrium of a considerable magnitude still remains.

Most people will agree that a large and prolonged disequilibrium in the balance of payments is something which should not be tolerated indefinitely. A continued disequilibrium leads to a draining away of external reserves, which has bad results, economic and political. The economic results have been hinted at by Senator Hayes, who pointed out that we require a considerable volume of imports to maintain our standard of living and that if, through any period such as the '30's, our exports are temporarily interrupted, we cannot maintain our imports except from our external reserves.

The capacity of this country to survive the interruptions of trade known as the economic war in the '30's depended very largely on the possession of abundant external reserves. Analogies have been drawn in the debate in the Dáil between our circumstances and those of certain European countries who happen also to have taken drastic measures to restore equilibrium in the balance of payments. I think it is right to say, in passing, that these analogies have been partly overdone. The countries which have been selected as examples are not creditor countries. Therefore, they have not had the same freedom in regard to their policy as we have.

The restoration of equilibrium is a matter of urgent necessity rather than of deliberate choice. It is also correct to say that some of those countries had already utilised external reserves on a considerable scale to build up domestic investment. Denmark had been a considerable creditor country in 1870. In the course of 70 or 80 years it deliberately used up its external reserves to build up its internal productive capacity. It did what many people suggest this country should do. Therefore, it was, so to speak, at the end of the process of which we are only at the beginning. I think the analogies between the Scandinavian countries and ours, although useful, have been overdone and are not exact. They are not guides to policy for us, who are lucky enough to posses still abundant external reserves which give us that liberty of action to which I referred a moment ago. The political results of a dissipation of external assets might be extremely serious. Any country which goes to borrow abroad is liable to have strings tied to its loans, and those strings are not necessarily of an economic or financial kind.

Many examples may be found in recent times of countries which have had to make a considerable political payment in order to obtain outside accommodation. I should not like to see this country reduced to that status. It has been said that democracies are improvident—that some of the socialist countries in Europe to-day are throwing away and dissipating the savings of past generations. I would not like that said about this country.

When we got our independence in 1921, we inherited from several generations of thrifty and frugal Irish people considerable holdings abroad and I think that the rapid dissipation of those holdings in high living, keeping up a volume of consumption to which we are not entitled, would be a political betrayal. It would be giving away for a mere present advantage some of the most valuable assets which have been handed on to us by our predecessors. Therefore, both from the economic and political points of view, anything like a wholesale dissipation of external assets is a course of action of which no prudent person could possibly approve.

An argument has been put forward in the course of the debate in the Dáil which should be dealt with. That is, that because the value of sterling has been falling in recent years, it is a wasting asset and therefore should be got rid of as quickly as possible. That would be equally true if we had all our external reserves in dollars or any other currency—since every currency in the world, with the exception of gold, has depreciated in value in recent years. Moreover, it looks, merely to a newspaper reader, rather as if the worst days of sterling are over. The intense and painful deflation which is taking place at the present moment in Great Britain is obviously designed to strengthen sterling, and the best opinion amongst people I can discover is that the great fall in the value of sterling has been arrested. Furthermore, even if sterling were to fall further, that would be no reason for treating it with disrespect. The mere fact that an asset is falling in value is no reason for throwing it away. One only has to look down a list of securities in the newspaper to-day to see that the shares of the most solvent and rich companies are falling in value every day. Is that any reason for the holders throwing them overboard and regarding them as of no value?

Remember that in the 19th century gold itself lost value on several occasions. There were several periods in the 19th century when the value of gold was falling quite substantially. Would anyone have suggested in those days that a gold standard country would have been prudent or wise in dissipating those gold holdings, simply because gold itself deteriorated in value? I say that that is not an unfair analogy. Unless we can look forward to the complete destruction of sterling —of which there is no sign on the financial horizon at the moment—to dissipate sterling simply because sterling is falling in value with all the other currencies in the world, seems to be rather a nonsensical thing to do. In fact, it could be argued the other way, that the less valuable our assets become the more of them we want and it is just because they are declining in purchasing power that we ought to harbour them up, since the same amount of assets now are not worth as much as they were 20 years ago, through no fault of their own. Therefore, perhaps the Seanad will agree that the residual disequilibrium which undoubtedly exists should be corrected —and by that I do not mean abolished at one fell blow, but rather reduced or brought under control.

In was suggested in the course of the debate in the Dáil that action to achieve this end would involve undesirable interference with the liberty of private people, that there was something totalitarian or tyrannical about action by the Government to restore equilibrium in the balance of payments. Even in the heyday of laissez faire, even in the days a hundred years ago when free trade was generally accepted by the prevailing enlightened nations all over the world practically, where you had a universal understanding about it, where people were talking about minimising Government interference and were also talking about leaving money to fructify in private pockets and leaving people without interference with their liberties, a disequilibrium in the balance of payments was regarded as a subject for intervention. In the height of Victorian liberalism, when the Government interfered practically not at all with industry, there was one sector in which it always interfered, that was to arrest an outward flow of gold. The international gold standard and the world monetary system of the 19th century depended upon vigorous action by the central banks to keep equilibrium in the balance of payments. Therefore, to suggest that appropriate Government action to-day to restore equilibrium in the balance of payments is in some measure totalitarian or anti-liberal, shows a certain ignorance of recent economic history.

As regards the extent to which this disequilibrium can be tolerated, the view has been put forward that if it is left alone it will tend to correct itself and that, to that extent, less vigorous action can be taken. Stockpiling, of course, is coming to an end. It may be that the great rise in import prices has also stopped. The world rise in prices seems to have reached something like a plateau at the end. There is also a sign of an expansion in exports, so it does look as if there are certain slight corrective trends. At the same time, in view of the magnitude of the gap, it would be foolish and unreal to expect these corrective trends to do what is necessary. Further action on the part of the Government is imperatively called for. To correct an unbalance, exports must be expanded or imports contracted, or both done simultaneously. Those are the only things that effect the cure. The difference between them is, I think, a matter I have referred to already—the length of the period in which they are applied. The expansion of exports necessarily takes time; it is a long-run policy. A drastic reduction of imports can be quite easily achieved; it is a short-run policy. What we really are seeking to consider in this discussion is what compromise between the two will combine safety and prudence with the minimum inconvenience to the Irish people.

I think it should be stressed that some active measures must be taken, that a policy of mere drift will not be enough. I think it is necessary to say —perhaps I should have said this before—that if the disequilibrium is not corrected by appropriate policy on the part of the Government, it will correct itself in an unpleasant and drastic manner. We are not asking that action be taken against an imaginary or hypothetical danger. We are asking for action against a real and not too distant danger.

One has only to look around the world to-day to see the plight of countries which have neglected to take proper measures. Balance in international payments is being forced on countries against their will, against the will of their inhabitants, involving reductions of consumption and every form of inconvenience. These are the evils which we wish to avoid and which we can avoid.

When I come to deal with the means rather than the ends, we are back to what I described at the beginning as the technical level of the discussion. The Central Bank and the Government together possess abundant weapons to restore equilibrium in the balance of payments, if they care to use them. I mention one or two of them merely to dismiss them as being inappropriate in the Irish situation. The first thing that can be done is a change in the exchange value of the currency. That was done in England in 1949 and has been done in many other countries. On that, I think it only right to say that, when people have been talking in this country about varying the value of the Irish pound, they have always assumed that the Irish pound would be valued up—that it was undervalued— and not valued down. If revaluation of the Irish pound, a change in the exchange rate, is resorted to as a corrective for the disequilibrium, it means a valuation down and not a valuation up. It means doing in respect of sterling what sterling did in respect of the dollar in 1949. I do not think that is either suitable or effective in our circumstances. If it were done, it would not expand exports, I think, because the limiting factor on exports in this country is a certain stagnation in production. It would put up the cost of living; it would put up wages; and it would lead to more rises in prices, which, as we are all agreed here, are to be avoided, if we can possibly avoid them. Furthermore, it would reduce the confidence of investors in the future of the Irish currency and therefore I do not think that is the appropriate measure to take.

Another method, the historical traditional method, of restoring equilibrium is to raise bank rates, to raise interest rates in the country, hoping thereby to induce a fall in prices and deflation. This matter was carefully considered in the Banking Commission Report and it was pointed out that Irish rates, through no fault of our own, tend to vary with English rates, that we have no independent rate structure and that, even if we could impose an independent rate of interest in this country, it would not have much effect on the business situation. Irish borrowers are not sensitive to small changes in bank rates, but, on the other hand, at a time when, as I will say later, considerable investment is required and considerable Government borrowing, raising rates of interest would have adverse effects in other directions, and therefore I do not think that a rise in interest rates, any more than the depreciation of the currency, is the appropriate tool to effect a re-equilibrium in Irish conditions.

Another method is a restriction of bank credit. That is a matter which was discussed in the debate on this Bill in the Dáil and there was a certain amount of difference of opinion as to the extent to which restriction is being imposed; but I cannot help feeling that a certain restriction of bank credit, judiciously and qualitatively applied, might have its part to play in the correction of disequilibrium. The English Capital Issues Committee has recently received new instructions from the Treasury regarding the types of loans which are looked on with favour by the Government to-day and similar instructions have been issued to the English banks. The English banks have been instructed and directed to scrutinise loans on the same standards as the Capital Issues Committee. I need not weary the House with what those standards are —our conditions are slightly different from theirs—but I cannot help feeling that a certain direction of that kind to the Irish banks is not an intolerable interference with the conduct of their business. It is being done in other countries with a very strong tradition of the freedom of the banks, and I really cannot see why it should not be done here.

One may as well face up to this—it is bound to be raised later in the debate—restrictions of credit in certain directions would cause some unemployment and I think that is a matter on which something ought to be said. One must distinguish between a general fall in unemployment, leading to emigration, and a fall in employment in particular industries, which, for some reason or other, are not as prosperous as some of their rivals. In recent years, we, who live very much in the atmosphere of English economic thought, have been obsessed with the idea of full employment as the be-all and end-all of economic policy, and full employment has now come, in certain circles, to mean that every person in employment is wedded to his job for all time, that nobody must ever lose the job he has at the moment. If that were consistently carried out, it would hamper all industrial adjustment, and I think that a certain amount of mobility of labour, a certain amount of shifting around from falling to rising trades, in the national interest, is something which we must be prepared to face. If every job is regarded as something which in no circumstances whatever can ever be terminated the elasticity of the Irish economic system has disappeared, and the correction of the disequilibrium will become almost impossible A certain restriction of bank credit, a certain rationing of bank credit, is, I think, a corrective measure not to be dismissed.

Finally, I come to the major weapon in this battle—the Budget, the financial policy of the Government. The Budget in modern times, in this country as well as in other countries, has become far more than a mere expenditure-revenue account of the Government. It has become a method by which the total volume of employment and investment can be largely controlled and the correction of this disequilibrium, in the long run, will depend on Budget policy, in the broadest sense of the word.

Now, the Budget of last year and this year are not relevant to this debate. I assume that the recommendation of the Central Bank that the current Budget is to be balanced will be followed. I assume that whatever taxation is necessary to produce that result will be imposed, and will have to be reluctantly endured. But before accepting that as the only solution to balancing the Budget, I would suggest to the Government the necessity for an extremely detailed investigation into the possibilities of reducing current expenditure. One type of current expenditure in particular which I only need mention—to indulge in a discussion would delay the House even more —is the food subsidies.

Food subsidies were originally introduced as part of a policy of stabilising wages by a wage peg, but the wage peg has long gone and the food subsidies remain. I think that the question of food subsidies as a possible economy in the Budget is a matter to which public attention should be constantly directed but, as I say, the current Budget is not the subject of this debate. Therefore, I propose to say a little about what can be done in the Budget on the capital side to effect the desired objectives of increasing exports and diminishing imports. The diminution of imports really does not involve any discussion. We have seen certain measures taken in the last few days— drastic measures—which have had the result of reducing imports.

I do not wish to single out any commodity or any trade by name as being a suitable victim of treatment of this kind but I simply say that, looking over a list of imports, there are a certain number of luxury goods of a consumable kind which I really think the country could temporarily do without. There are certain imports which could be slashed without anybody being very much the worse of it, except—and this brings me back to a point I mentioned before—that certain people might be unemployed in the process. If we are not prepared to face unemployment in certain trades, then we may give the whole thing up as insoluble. If we regard the structure of employment and trade as sacrosanct, never to be touched, then we might as well sit down and consider the whole problem as hopeless. The idea that no individual human being is ever to lose his job is not what is meant by maintaining full employment. If the volume of employment as a whole can be maintained, the Government cannot be accused of doing anything anti-social by striking at certain branches of production which are of a kind the country might not be able to afford.

As I said, in the long run, the expansion of exports must be the aim of long-term policy. That, again, involves a great many technical problems of a kind of which I do not pretend to have expert knowledge and which, in any event, could not be discussed in this debate. I will just mention one or two. Everybody is agreed, of course, that agricultural production should be expanded. It has not been, perhaps, sufficiently stressed in the Dáil that the disequilibrium in the balance of payments from which we are suffering is nothing new. Except for the war years, there has been a disequilibrium in the balance of payments in this country ever since the Treaty. It was exhaustively discussed in the Banking Commission Report. There are long period forces at work in this country tending towards disequilibrium in the balance of payments, the rise in the standard of living largely depending on imported goods.

The transition from subsistence to an exchange type of agriculture, the urbanisation of the country, the shift in population from food-producing areas to the towns, the revolution in transport which puts a great strain on the balance of payments, are long-period factors tending towards a disequilibrium in the Irish balance of payments. These things could have been tolerated and could have been safely allowed if there had been a corresponding expansion in agricultural production. It is the curious inelasticity and stagnation in agricultural production which has rendered the Irish balance of payments to tend to be in chronic disequilibrium. The trend was interrupted by the war. The critics of the Banking Commission said: "You are talking nonsense. What you have said is not true. You are piling up assets again." The war accumulation has now been spent. We are now back to 1939 with the difference that our external assets are worth less. Therefore, of course, the central problem is the expansion of agricultural production. I do not pretend to have any expert technical knowledge of this matter, but it must remain obviously the central problem of Irish economic policy.

With regard to the expansion of industrial exports — again technical questions are involved—I would like to say that both employers and men in Irish industry have been working very largely in a protected market, and in order to expand industrial exports some change of mind may be necessary on the part of both industrialists and trade unionists. In a country trying to export to the outside world, high labour costs, not caused by higher wages but by restrictive practices, are definitely anti-social, something to be deprecated, something to be attacked and something, if possible, to be ended.

In a general way, everybody will agree that an expansion of agricultural exports and industrial exports are objectives to be desired. They involve investment and this is the last matter which I wish to discuss. This country is largely under-invested. In the debate we had in the Seanad on the repatriation of capital abroad that was generally agreed. If investment is to take place here, it is desirable that it should take place by private investors if that is at all possible. What the Government can do to encourage Irish investment by Irish investors is to make investment attractive. I do not refer merely to protective tariffs but to make investment attractive by a suitable taxation policy, by a proper depreciation allowance in the income-tax code and by taxation of profits not calculated to deter enterprise. A policy of that kind, energetically pursued, might succeed in tempting certain Irish investors to repatriate their holdings voluntarily and invest them at home instead of abroad. It might also tempt certain outside investors to invest in Ireland.

A number of people think that the Control of Manufactures Act of 1932 and the attitude which it represents have gone out of date, that at a time when we want to expand investment and expand exports foreign investors should be attracted, welcomed and encouraged to invest in Ireland rather than being slightly hampered as they are by the Control of Manufactures Act. That is an important point, I think, to which I would like the Minister to apply his mind. When all the possibilities of private investment have been used up I think we must agree that a considerable field of public investment still remains. That, I think, is the core of this discussion— to what degree our public investment can be continued in view of the disequilibrium in the balance of payments.

On that I want to clear up a misunderstanding. I have tried to clear it up for many years in University College and elsewhere, and I will try again. The Banking Commission Report of 1938 has been misunderstood and misrepresented in its representations with regard to deadweight debt. Deadweight debt is nothing more or less than debt which is not financially self liquidating. Any debt which imposes a charge on the Budget is deadweight debt. The distinction between deadweight debt and non-deadweight debt has nothing to say to the desirability of the investment for which the debt is incurred on either political, social or even economic grounds. If it incurs a charge on the taxpayers it is deadweight debt, however suitable the objective is. If it does not impose a charge on the taxpayers it is not deadweight debt, however undesirable the objective is.

The Banking Commission never recommended a cessation of the housing programme, and the Central Bank has not done so. We are all agreed that the building of houses and hospitals is a desirable objective in this country. I do think, however, that this should be said about it: to a large extent it creates deadweight debt. We have to face that. That deadweight debt must be kept down, first of all by the provision of suitable sinking funds, and I think it is only right to refer to the sinking fund provisions of the late Administration in the capital Budget. The expansion of debt provided in the capital Budget was covered by a quite severe sinking fund calculated to extinguish the debt in 30 years. Secondly, programmes of investments of this kind imposing deadweight debt are only tolerable if the cost of pursuing them is minimised, and again I want to refer to restrictive practices by trade unions to put up the real cost of building. The building of hospitals, houses and all the rest imposes a severe strain on the balance of payments. It is admirable; it must be encouraged; but the cost must be minimised and every individual person who has it in his power to reduce the cost and does not do so is adding to the difficulty of the country.

There is another point which I want to make. The Banking Commission's distinction between deadweight and non-deadweight debt is not the same as the distinction between productive and non-productive debt. There are many objects of investments of a productive character in the long run which impose deadweight debt. An investment that increases the national income of the country, the exports and the taxable capacity may in the short run not be self-liquidating. Such things as education and arterial drainage are productive in the long run but they do not impose deadweight debt.

That brings me back to the point I made before, that in this programme of investment it is very important to choose the right period of investment to mature. We may not be able to afford investment which will mature at too distant a date. It is only rich people who are able to build houses of granite, marble or other enduring materials. Poorer people will have to do with houses that will wear out sooner. Equally, a poor nation may not be able to afford very grandiose long-maturing projects but must concentrate on something that will yield a dividend in a shorter period. That is relevant to programmes of land reclamation. Is it better to get a fairly quick return by a small increase on good land or a very long-delayed return by a bigger increase on bad land? These are the types of priorities and considerations that have to be discussed.

I have used the word "priorities" and that, I think, is the essence of this problem which we are debating to-day. Our resources are scarce and limited; our needs are great. The essence of the economic problem is to adjust those scarce resources to those great needs in such a way as to get the most intelligent and most paying results. I think that the capital Budget to some extent did that because it did enable the Dáil during the Budget debate to discuss these matters in public and educate the public. To that extent I think it was a good innovation apart from anything else. The question arising out of priorities of this kind should be decided. The Banking Commission recommended the establishment of an investment council and that investment council has never been set up. The Taoiseach, in a debate in the Dáil, gave reasons for dissent from that recommendation and I admit that there is a good deal to be said on both sides. I also admit that in the end the Government must be the final arbiter of the investments to go forward and of the investments which are to be postponed.

I may throw out possibly in passing the suggestion that the Industrial Development Authority might add this function to its other functions. But, whether it is an investment council or the Industrial Development Authority or the Central Bank or the Executive Council itself that takes these decisions, there are certain standards that must be kept in mind. If a certain investment is to be made and a certain other investment is not to be made there are certain well-agreed standards which I put forward for the Minister's consideration. One, of course, is the effect on exports. Other things being equal, an investment that leads to exports, invisible or visible such as the tourist trade or agricultural exports, is to be preferred to one that does not. The next best thing to increasing exports is to produce substitutes for imports and there is a wide field there. Looking down the import list one sees a number of things which still can be produced at home. Sugar is one thing and the whole question of the development of turf and the electrification of the country are also relevant as all these things might save coal Afforestation and the development of our building materials would greatly help the housing programme.

In the debate in the Dáil, Deputy McGilligan called attention to the fact that a large number of the imports were of things which are necessary for the new houses. He pointed out that it is no use having a housing programme if the houses have not got lavatory basins and things of that kind. To the extent to which these things could be produced at home, the housing programme would press less heavily on the balance of payments.

Another criterion, I suppose, everyone will say, is the volume of employment. I do think we ought to try to be clear about this, that employment for itself is not really a legitimate end of policy, merely digging holes and filling them up again. The public works in the famine period, some, I am afraid, of the so-called public works of the local authorities to-day, give employment but the employment does not really produce any very useful return. Therefore, I do not think that the mere employment content, giving work for its own sake is a desirable criterion of investment at a time like this when we have to choose our investments with such care.

I would be inclined to say that what is required is not so much a reduction in the quantity of investment as greater discrimination in the quality, that our capital resources should be directed towards the best investments and not merely towards any investments, and that some of those standards which I have mentioned will be relevant to making the choice.

Finally, we come to the matter which perhaps is most relevant to this debate and that is: how is the investment to be financed? That will be the Budget problem which the Minister for Finance will have to face. As I said in the very beginning of my remarks, the Achilles heel of the whole Irish economic situation is the insufficiency of savings and the new investment, whether it is in private hands or whether it is in the Government subscribed from public loans, should be as far as it possibly can financed from new savings.

I think it is only fair to say this, that, if you have a sufficient volume of investment, additional savings will be more easy to get in future. Savings, after all, depend on surplus production and the more production we have the more savings we have. That, again, is a long-run view, and in the short run I suggest that the best way to encourage savings is by offering attractive rates of interest, attractive repayment rates, giving complete confidence regarding future taxation and the value of the currency.

I do think that the possibility of attracting outside capital might now be explored. As I said, I think the Control of Manufactures Act mentality has gone a bit out of date. I make two suggestions—they are only suggestions—I throw them out—one is that loans with the interest paid free of tax might attract outside investors and, secondly, the possibility of something like lottery loans might be considered again. They existed in Ireland in the eighteenth century and there is no compelling reason why they should not be resorted to. The Hospitals' Sweepstake has raised a great deal of money by the lottery principle, and I, for one, do not see any moral objection to the Irish Government getting money by appealing to—I will not say gambling—the slightly speculative elements of investors.

When we have exhausted voluntary subscriptions to loans, we now come to the accumulation of funds in the hands of the Government, of the banks, and of the Central Bank. The last thing I want to say is something about those. The Minister for Industry and Commerce in the Dáil argued, and I think convincingly, that the funds in Government hands were not available for Irish investment; they were very largely related to the Post Office Savings Bank account, and therefore liquidity should rank unusually high in the disposition of those funds. Therefore, I do not suggest that the funds should be employed for home investment.

When we come to the commercial banks, I come back to what I said about the Capital Issues Committee and the directions issued. The English banks at the present moment are receiving elaborate directions regarding the type of loans they should encourage, and the type of loans they should refuse from the Treasury in England. I cannot see why the Irish banks should not receive similar directions from the Irish Government or the Central Bank. These directions are not orders; they are not imperative; they are requests. I really do not see why, when banks in other countries are complying with the requests of Governments to help them in investment programmes, the Irish banks should not comply with similar requests.

Finally, I want to deal with the Legal Tender Note Fund in the Central Bank, about which there has been such a lot of discussion in the Dáil. The present provision of the Legal Tender Note Fund is that all the assets must be held either in gold or sterling. In other words, the Irish currency is backed by 100 per cent. of external reserves. That was recommended by the majority report of the Banking Commission, but it was one of the recommendations about which I, as a member of the commission, was never completely happy. It seemed unduly severe. Central Banks in other countries were not required in those days to hold 100 per cent. of external reserves, and the arguments in favour of that recommendation which were made to the commission were two.

It was stated that since sterling left gold in 1931, and since many other currencies had been devalued, the gold holdings of the Central Banks had not been written up to their bullion value and that, therefore, in fact, many of the Central Banks held gold backing for their issues amounting practically to 100 per cent. It was also pointed out that as the reserves in the Legal Tender Note Fund could be held in British Government securities, they were not confined to a mere sterile non-interest-bearing asset, as they would have been if they were confined to gold. These two considerations, I think, convinced the commission that the 100 per cent. cover did not impose an intolerable burden on the Central Bank.

The Currency Act of 1930, amending the original Act of 1927, envisaged the possibility of the Currency Commission, now the Central Bank, on its own motion, with the consent of the Minister and the Oireachtas, varying the assets in the Legal Tender Note Fund, and those provisions were extended by Section 64 of the Central Bank Act of 1942.

Whether that variation is made or not is entirely a matter for the Board of the Central Bank to initiate. Without expressing an opinion whether that discretion should be exercised or not, which to my mind is properly inside the discretion of the bank, if the bank did opt to exercise that discretion with the consent of the Minister for Finance and the two Houses of the Oireachtas, and if it did elect to put 20 per cent., let us say, of domestic assets into the Legal Tender Note Fund, it would not be doing anything very revolutionary or very unprecedented or very extraordinary.

I want to disabuse the impression that has gone forward from the debate in the Dáil that anything in the nature of the inclusion of domestic assets in the Legal Tender Note Fund would represent something very forward or revolutionary in Irish finance. Other Central Banks have large quantities of domestic assets. At present, the issue department of the Bank of England contains nothing but domestic assets except a very small quantity of gold against the total of the domestic issue. If a decision of that kind were come to, it might not help the country very much but it would not be the end of everything. It would not represent a break with the link with sterling or anything very revolutionary. It may be thought that people who make that proposal have in mind something very new and very revolutionary. All they are suggesting is that we should do in regard to our Central Bank what other Central Banks have already done. It is a proposal of minor importance which has been exaggerated entirely in the course of this discussion.

I have explored all the source of funds of a voluntary lending character —new savings, outside investors, public funds, commercial banks and the Central Bank. Suppose something still remains to be found. It has been suggested in the course of the debate in the Dáil that what remains necessary for the programme of investment could be raised by taxation. That is an extremely bad suggestion. To finance capital development by means of taxation imposes forced savings on the community. There are only two classes of taxes in this country that could be raised—(1) the most productive, those that press on the poor, and (2) those that do not press on the poor. If you attempt to raise taxation on the poor to finance capital investment you are putting the real burden of the saving on the people who are least able to bear it. Therefore, I rule out indirect taxation. That leaves direct taxation—the income tax. An increase in the rate of income tax would probably bring some funds into the Exchequer which could be allocated to investments but the adverse effect on incentive and the effect on the amount available for voluntary saving would probably be at least as great.

I think this is the occasion on which to say that the whole income-tax code in this country is unfair and unsuitable from beginning to end. I think that an increase in the income-tax in this country would strike at a very small part of the population while a very large part of the population escapes scot free. The small section of the population who do pay income-tax have paid more than their proportionate share to finance the running of the country in recent years. To impose an additional burden on that small section of the population, while exempting many of the richer rural sections of the population, would be very unfair.

As regards business people, industrialists, the present depreciation allowances are generally admitted to be too low. Capital investment is being impeded by the inadequate allowance. Therefore, as regards income-tax on industrial profits, what is wanted is not more taxation but less taxation.

Finally, as regards private people, an increase in the rate of income-tax might quite frequently—it has happened in England and it might happen here—cause people to live on capital. To that extent it would cause people to live on savings. Therefore, instead of imposing saving it would have the contrary effect and be directly inflationary. I suggest strongly to the Minister that whatever additional taxation is imposed this year should be used for balancing the Budget, not overbalancing it: that the Central Bank recommendation of a balanced Budget should be followed but that a Budget surplus is inappropriate and would impose too great a burden on the country.

I want, very briefly, to summarise the main points of what, I am afraid, has been a long speech. In the first place, I suggest that the disequilibrium in the balance of payments cannot be allowed to drift along. It must be reduced—not necessarily abolished in one year. It must be controlled. We want some compromise course between panic on the one hand and complacency on the other hand. We want some course which will get this movement into control—which will canalise it and prevent it from getting out of hand and injuring us too much. In the short run it may be necessary to impose a restriction on the import of commodities of a luxurious character and that can quite easily be done. It is the less effective way, but it would have an immediate effect.

In the long run, agricultural and industrial expansion should be the objective of Government policy. This expansion leads to investment. With our small capital accumulation, this investment must be very carefully chosen. The priorities must be very carefully investigated. Everything must be done to stimulate saving in the community. That is the real trouble— the insufficiency of saving. Whatever residual gap remains must be bridged by judicious, deliberate and controlled use of external reserves. Just as I said regarding labour—people in jobs— no particular level of external reserves is sacrosanct or untouchable. External reserves must be used, but they must not be used up. They must be used intelligently. They give us a great advantage. By dissipating them we lose that advantage. By using them intelligently we reap that advantage. I said at the beginning that a lot of difficulties in this country flow in from the outside world. We are living in a world of inflation—dollar inflation, and sterling inflation which have flowed in here. We are suffering from it. To a large extent we are the victim of circumstances over which we have no control.

I should like to end on this note: that even small countries, by judicious policy inside their shores, can help to steady the economy of the world as a whole. Every country that solves its difficulties in a panic manner by simply slashing at imports has the effect of producing deflations elsewhere, causing difficulties and unemployment abroad.

Therefore, as a good European country, we should have regard in the management of our affairs not entirely to our own interests but to those of our neighbours as well. A policy of controlled expansion, a policy of maintained employment, maintaining investment, will do good at home and will not do harm abroad; whereas sudden panic, sudden restriction of imports, will bring a lack of confidence, unemployment and emigration, and will brand us as being selfish members of the European community.

After the two very interesting speeches we have had from our own university colleagues, especially the sharp revealing examination of this complicated question by Senator O'Brien, I have no intention of attempting to traverse the ground they have travelled. There are some points which I would like to have an opportunity of studying. The impression I got from Senator O'Brien's speech is that there is an inclination to be still wedded to the status quo, but perhaps the reading of his speech would be enough to clear away that idea. I am sure the House is grateful to him for the width of his survey and the immense labour he has undertaken in enlightening all of us on this matter. But then, he was on his own subject; it has been his life study and he has made quite a remarkable contribution to the development of economic thought in the country. Some of his pupils may not always think as he would expect them to think, but he has opened the minds of many young men, who have gone out into the economic life of the island and I hope will play as remarkable a part as he has in his time.

This whole subject, which was debated in the other House for a number of weeks, has caused many people to think about our financial and economic problems who gave them very little thought heretofore. I am not prepared to comment on the action of Ministers who started on a rather frightening note about the economic situation, but I do not think the line they pursued was justified. It has had economic and social consequences within the country which they did not anticipate when they first made their public declaration. I cannot understand why Ministers with their great responsibilities should be so perturbed about this disequilibrium in the balance of payments, about the very considerable importation of foreign goods, when actually the goods have been paid for. Had we taken in great quantities of products from outside for which we were not able to pay, then there would be justification for a note of alarm. That is not the position. What were we doing but what all were agreed should be done? The Ministers who were in Opposition, every one of them, at some time or other laid stress on the importance of providing against the uncertainties of the future and periods of emergency. That is so. The Government gave definite instructions to those who had the responsibility of purchasing abroad to go out and purchase, and they asked the dealers in credit to facilitate those importers who would bring in supplies needed for our normal development and for maintaining the stability of our economic and social life. Many things were imported in a year or 18 months which in the normal course might not have been imported at all or imported over a much longer period. But we did provide against an emergency.

There was also this consideration to be taken into account. There was a condition of high employment, living standards were high, more people than ever before since the State was established were earning higher wages than ever before. These people were spending—some of them perhaps, rather foolishly—and were living well. They were prepared to pay for the things they wanted and they expected that no obstacle would be put in their way by the Government. Whether it was butter from New Zealand or Denmark, or something else, they expected to have it and that the Government would see that it was provided.

It might be said that political considerations weigh in these matters. Of course they do. A Government living because it has obtained popular support is not going to take very drastic action to deny to the citizens something to which they have been accustomed. That situation faced the last Government, it faces this Government, and so far the people are enjoying the benefits of these liberties. And who will say they ought not to? There comes a time of reckoning, it is true. This whole debate has brought us up against the consideration of what we are to do in the future to maintain stability in our domestic life.

Senator George O'Brien, in his very able speech, outlined many of the technical problems confronting a Government in trying to solve this particular difficulty. There are technical means of bringing about a balance of payments, but there are things which have to be done by the common people in every country to maintain equilibrium in the balance of payments. If the common people cannot do that job of work, if they are not shown the way, or are not given the instruments, there is a grave danger that we may have to adopt one technical method after another, all of which may fail unless we can win to our side the support of the common people, the producers in the country.

The Minister for Industry and Commerce, in his speech—I think I heard him make it, and certainly I read speeches which he made—said that over the years, while there has been considerable development in industry and a marked increase in industrial output, there has been, as Senator O'Brien put it, a position in regard to agriculture which the economists speak of as the inelasticity of agricultural output. I want to say in support of what Senator O'Brien has said that, in my judgment, things are not going to be put right, fully and completely, in this country by any sort of method we can adopt in regard to greater industrialisation, or by any technical plans which the technicians may suggest or advise, unless we can get from the agriculturists much greater output and a much greater volume of exports than we have attained heretofore.

I want to say also—and it depresses me—that while the Minister for Industry and Commerce, with his ability and the energy he puts into his work, emphasised the fact that there has been no expansion in agricultural output, while at the same time industry has been expanding all along the line, he never seems to have adverted to one factor which is fundamental to the whole position. He has never appeared to have calculated how many million pounds of new money has gone into industry in this country over the years. That investment in industry was quite right and it was essential. You could not build up industry here without capital, without making certain that you were going to be able to purchase machines and technical skill, but what did we do for agriculture during all those years? What evidence whatever is there of any reinvestment in the agricultural industry?

Senator O'Brien has spoken of the necessity for increasing agricultural output and exports, and I had hoped that he would have given us some enlightenment—certainly some of his views—as to what might be done with regard to the agricultural industry, but we will probably hear Senator Johnston's point of view about the necessity for capital investment, if we are to get from agriculture what the country needs and what it must get if we are to have equilibrium in the balance of payments in future. I see nothing that this country can do, unless it can get agricultural productivity up, and this productivity cannot be raised from the agricultural industry as it is to-day. Look at it. We have, over the years, taken everything that was there out of it and have put practically nothing back. It is only very recent history—the period of the economic war, when we took everything we could out of the land and were unable to put anything back, and then the war period, when we had a continuation of what went before.

The soil impoverishment which has gone on in this country is only equalled by what is taking place in the arid regions of the earth—in the Argentine, the Middle-West of the United States, parts of Canada, Australia and South Africa—where, due to other conditions, there is soil erosion and devastation of hundreds of millions of acres which are being lost to the world population and are not going to be available again for the production of food. To a very great extent, something similar is taking place here, and it is only now, when our soil scientists, under the Land Rehabilitation Project, have gone out into the fields and attempted to measure the constituents of our soil and to discover the deficiencies, that the startling results are being unfolded to the farmers, many of whom do not really understand the implications of what has been taking place over a very long period of years.

As I see it, unless the people can close their ranks and approach this problem in an entirely new spirit, realising and appreciating what it is going to mean to the nation of the future, we are not going to resolve it at all. The petty Party differences over which we are splitting hairs are keeping the people from working together. We are not making a real effort to discover what our problems are, and, even when we do discover them, we are not able to get together to put behind our efforts the force necessary if these problems are to be resolved. I saw recently a speech by the Minister for Industry and Commerce in which he addressed himself to the difficulties of feeding the population of Ireland. He pointed to the fact that year by year the world's population is growing by 25,000,000. That is so. Year by year, the population of the world is growing by 25,000,000—there has been an increase of more than 500,000,000 since the war—and year by year the agricultural land of the earth is becoming smaller in area.

In such a situation as that, not only has a country like this a responsibility to its people at home, a responsibility to make its contribution from the point of view of restoring equilibrium in the balance of payments, but it has a responsibility to make an even greater contribution from the point of view of the well-being of mankind, and that is, to get from its soil the maximum output possible under good management and under the developed agriculture which is possible for us to have here, but which we have not got at present.

I have on a number of occasions addressed myself to the problem of capital investment in agriculture. I am not very optimistic that we are going to meet with success in trying to convince the present Ministers of the necessity for greater capital investment, so that our agriculture may be put in a position to do its job efficiently. I have never had any experience of a readiness on the part of the Minister for Industry and Commerce to apply his mind to the necessity for doing this job of work. Anything we know of the present Minister for Finance does not make us hopeful of getting any assistance from him. I have here a copy of the Official Reports of a debate away back in 1939, when we were impressing on him the necessity for putting capital into agriculture, and assuring him that it would bring rewards. He was as obscurantist then as he seems to be to-day, and, in a situation like that, one cannot be optimistic, but one can at least state facts as one sees them, and hope that enlightenment may come to some group of people who will press on the Government the necessity for having this job of work done.

The land of the country can do something to reduce our imports, and in that respect the policy of the Government appears to be to do its utmost to get a greater area put under beet, to save us the importation of sugar, and a greater area under wheat. I hope they will meet with success in their efforts. Quite frankly, I am not too optimistic. I have been making inquiries about the reaction of the sugar beet growers to the recent decision of the sugar board with regard to prices for the coming year. I cannot say that the reception has been too favourable.

Take the growing of wheat. We are offered 75/- per barrel of 20 stones for wheat, but one can get 80/- per barrel of barley of 16 stones. That is the sort of problem which confronts the Government. I am not quite optimistic that the balance of payments will be improved in the coming year so far as our imports of sugar and beet are concerned.

The Senator will have to admit that the acreage of barley is admitted on contract. Is that right?

I presume the number of contracts is limited. Where you have men being paid 80/- per barrel there is a great temptation for these men to grow barley.

Every farmer cannot grow barley.

We do not know what Senator O'Rourke is saying.

There is no temptation. There is no further possibility of getting a bigger contract for barley. There is no temptation at all.

I am merely suggesting that it is going to be very difficult to get farmers to grow wheat.

That is a bad point.

I believe myself that so far as it is possible to get farmers to do it, it is necessary to have it done. When we come to the end of the year, it is very doubtful if we are going to be any better off than we are now. All this is a matter of a few hundred thousand acres of land one way or the other which could do something to redress the balance of payments. I feel the Government labour under a certain disadvantage in talking about the cattle industry. There was an effort over a number of years to decry the live-stock industry which entered on a very difficult period in the thirties. It has presented a problem over a number of years to the Government. It was a problem that was not always easily resolved. It seems to me that the cattle industry, if concentrated upon, can do more to restore the balance of payments than anything else. It seems to me that the cattle industry can do more in this respect than the technical economists or the internal industrialists or anybody else.

Across the sea from us is another island country. The people are much worse off there than we are from the point of view of food, very much worse off. There is an urgency there to do things and they have achieved a great deal. We seem very slow to copy any of the things they have done. It is becoming very urgent for us to get more out of the land. That is the only way by which we can do anything to maintain the living standards which our people enjoy at present. Either we must do that or a number of our people will have to emigrate. I do not think it is dissipating our assets to bring badly needed equipment into this country for the further development of the land. Dissipation of our assets is a term which is sometimes used quite wrongly.

In Britain there is an organisation called the National Farmers' Union. It is a very powerful organisation which has done an amazing job of work over the last ten years. In a pamphlet of theirs called Information Service it is stated:—

"Farmers responded well to this financial and psychological stimulus. In four years, the volume of agricultural production rose by approximately 25 per cent."

This was at a time when the Government here were speaking of the inelasticity of agricultural output.

"Some of the individual production targets have been reached, while others have been surpassed. This expansion has been attributable partly to greater inputs of the factors of production. Imported feeding-stuffs, for example, although still lamentably scarce by pre-war standards, have steadily increased in quantity over the years. More fertilisers are being used than ever before. The expansion, however, is attributable also to an improvement in the efficiency of farming—an improvement made possible by better management, the use of modern machinery, better drainage, the provision of new and well-laid-out farm buildings and many other things besides. This steady increase in efficiency has enabled farmers to carry on their own shoulders a substantial and growing proportion of the burden of increased factor costs which would otherwise have to be borne by the taxpayer or by the consumer."

That has been taking place in Britain. I have said in this House—and I have repeated it over the years—that it is possible for us to do the same thing.

What I regret is that I see no evidence of facing up to the problem of trying to do what these people have done. There is no mystery about it. Not only has it been done in Britain but it has been done in practically every Western European country. Why is it not being done here? Were we able to increase by 25 per cent. the output of our live-stock industry we would gain enormously thereby. We have 4,300,000 odd cattle, and if we were able to add 1,000,000 to that it would be 25 per cent.

I have no hesitation in saying that we could make it a 50 per cent. increase if we did the right thing with our land. I am convinced it can be done. If we were to add 25 per cent. to the number of cattle that would be available for export, we would be able to export to-day 1,000,000 cattle which are worth £50 each. In this way there would accrue to the country an extra £50,000,000. Is that worth aiming at? Not only is it worth aiming at, and not only is it attainable, but it is essential that it should be our aim, and it can be achieved.

It should have been achieved with Marshall Aid.

I ought not to be interrupted with silly remarks. I am trying to put forward something constructive, something which I think the country can do and must do. Either we do this or adopt the policy of being an old country with a dying race. You know about the three or four old bachelors, aged from 60 to 70 years, living on a 200-acre farm. They contract and keep on contracting. They may have thousands of £s in the bank at 1 per cent. with which they will do nothing. You see that type of person up and down the country. We can adopt that kind of attitude. We can adopt the attitude of not showing any faith in the country or of not being bold or courageous. We can build up our sterling assets and permit them to remain in Britain, but I do not believe in that.

I have here a leaflet in connection with a farm which the Minister himself knows because it is situated in his native county. I am quite sure he knows it. I was there only a short time ago. This is a farm of 76 acres, together with 35 acres conacre—altogether 111 acres.

An Leas-Chathaoirleach

Is it a departmental leaflet?

No. It is just a record of what one man has done. He is a Nationalist in the Six Counties and a very good Nationalist at that.

This man, on 76 acres plus 35 acres of conacre, is carrying the equivalent of 80 milch cows; their average milk yield is 800 gallons and they are fed on this farm. I was there a month ago last Sunday when his cows were being milked. He was selling milk at 4/- per gallon and is now getting, I think, 4/4d. He was getting 100 gallons a day in midwinter from cattle fed on grass and grass silage with some cotton nuts. That was all, but that man knows how to farm and how to breed stock; he knows how to manage and he manages well. On this area in 1950 he put 3.4 cwt. of sulphate of ammonia, 5.4 of superphosphate and 0.9 of muriate of potash per acre. If you like, take it that altogether he put 9.5 cwt. of manure per annum on his land. That cost altogether, at present prices, about £5 6s. 8d. That is what is going into every acre of his land. These people have built up one generation on another. They had no immense capital resources. All he had was out of his own production and management and what his father had passed on to him, knowledge and industry.

Relating those figures to the Republic, we see that that is the sort of thing we have to do, or something equivalent. We may not do all, but we must face up to the fact that it is not being done. We have 10,000,000 arable acres at least. I think that the Minister will agree that on the tillage figures to put it any higher would be doubtful. On the average of this man's dressing of manures 10,000,000 acres gives us a requirement of approximately 4,500,000 tons. The immense capital expenditure of £5 6s. 8d. which he incurred would demand, according to my figures, a capital investment of £60,000,000.

You travel up and down the country, Sir. We all do. It does not matter whether you go through the plains of Meath or Kildare or go down to Limerick. You see fields that have been given attention and fields that have been neglected. The field that has been neglected is grey and white. It is like the blanched face of an old woman. On the field that has been dressed and attended to, however, you can see the effects of fertility and life. It is green and fresh and you might describe it as resembling the "maid of Erin". That is the problem with which the country is faced to-day. When I hear the Minister for Industry and Commerce or some of his colleagues talking about the policy of investment for the future and emphasising the fact that we will have to pay for investment out of our current earnings through budgetary methods I can see no hope whatever that the land of the country will be put in a position to do for the nation what it can do.

I have the figures of production of that farm in the Six Counties. I might have calculated what the total milk yield on that 100 acres is, but I could say to Senators from Limerick and Cork that it would take half their countryside to produce as much milk as was produced on those 100 acres. There has been a very considerable increase in all farm costs, here and every place else. In order to help them to put capital into the land, those people are getting a subsidy on their fertilisers of 30 per cent. That is how people who want food ensure that they will get it out of the land. I do not know what prospect we have of getting that done. But it must be in the minds of every one of us who wants to see closer equilibrium in the balance of payments.

I want to emphasise in this House that this country has possibilities with regard to beef production to-day that it never had at any time in its history. Beef in the world of the future will be just as precious as gold, and we have an opportunity of doing what few small nations anywhere in the world can do. We should exploit these possibilities to the fullest and the Government should take action along these lines at once. We are sending our meat in cans to many countries to-day. The prices review with Britain will probably be up within the next two or three months. In the past meat for the people of Britain came, in the main, from the great Republic of the Argentine, but things have changed in that great country. A few years ago the Argentine sent 400,000 tons of meat to Great Britain; to-day they have a contract for 200,000 tons, and it is very doubtful whether they will be able to deliver the goods. There is no place else where Britain can get meat, and this situation exists not only for Britain but for other people whose standards of living are rising and who are going to enjoy more meat, if it is available in the world. Not alone that, but the figures showing the population increase in the Argentine indicate that, going along their present lines, the Argentinians, in eight or nine years, will not have any meat at all for export. Recently the British have turned to Australia. They are apparently optimistic about the possibility of developing much larger meat exports from that country than heretofore, but quite recently the Meat Traders' Journal of August 1st said:—

"Australia's population is expanding at the rate of 250,000 persons per annum and the average rate of meat consumption is 230 lbs. per capita. Thus the extra population will absorb 450,000 head of sheep and 50,000 head of cattle per annum, which, in eight years' time, would account for the entire exportable surplus unless production can be proportionately expanded.”

What I want to emphasise is that there is a great meat shortage in the world to-day, and that the rise in population and in standards of living in those countries that were the main exporters of meat in the past is having such an effect in these countries internally that their exports will fall, and unless people are going to abandon the eating of meat and the hope of being able to procure it in the future, there will be few places in Europe where meat will be available for export in any quantity, except in this island of ours. It seems to me that there is urgent necessity to tell the Government and the farmers to concentrate on maximum beef production.

The land has been drained of practically all its fertility over 20 years, and the farmers are not able, out of their limited resources, to carry the numbers of live stock which the land could carry if its fertility were increased to a degree that we ought to be able to provide if capital were made available for the purpose.

Deputy Dillon had a scheme to be put into operation with his land project whereby a man who was prepared to add the cost to his annuity could have his farm dressed with artificial manures following a soil test. I would urge the Government to push forward that scheme with the greatest possible vigour. I have seen lands where that has been carried out, and the results were remarkable. The entire country needs such treatment. That is the way in which we can climb to higher rates of production in the shortest possible time.

There are other things that we should do to redress disequilibrium in the balance of payments. When one speaks of artificial fertilisers one thinks of imports. It has puzzled me that over the years we have not displayed ability to create a nitrogenous fertiliser plant of our own. That is our most urgent need to-day. I do not mind how much of our sterling assets have to be liquidated in order to finance the establishment of this industry and to get the technicians required. We would be justified in selling out a very large proportion of our sterling assets in order to create such an industry here.

It is along roads like this that we must travel, it is on such aspects of the problem that we must concentrate, if we are to put ourselves in the position of independence of which the Minister for Industry and Commerce speaks, so that we will not have to go to the foreigner to borrow for the purpose of purchasing something outside the country for which we are unable to pay.

I referred earlier to the necessity of getting our people together to find a solution for these problems in a way that we have not attempted heretofore. I believe that there are political divisions in this country that are keeping apart people who ought to be able to get together and to work together for the common good. They have a common ideal and the road is the same road if only they were agreeable to walk together on that road.

If I were asked what I would do with the rural parish to-day and how I would implement my plan, the kind of thing I would like to do would be to get the farmers in a rural parish together. They have been doing it in some of these places. I would say to them: "We are not making progress. People say that agricultural production has been static for the last 20 and even the last 50 years. That is true. What can we do about it?" I would say: "Let us take an inventory of everything in the parish, the live stock, poultry, pigs, cattle, cows, calves the area under tillage, and so on. Having done that let us set ourselves a target that in three or five years we will increase the productivity of the parish by 10, 15 or 20 per cent."

Every farmer is concerned to increase output because that is the only way of enabling him to carry the burden of increased costs. When we consider the problem, what do we find? In the White Paper reference is made to the number of tractors imported. How are we to get a greater number of acres under the plough if we have not greater mechanisation? The only hope for beet production in future is greater mechanisation. Men who consider this problem immediately come up against the difficulty of power. We must have capital investment in this, that and the other but, above all, we must increase the fertility of the fields by more than 100 per cent. Many fields are at zero from the point of view of fertility. Unless we are able to increase fertility we will not get productivity.

These are serious problems. If every parish in the country were to discuss the problem, you would have a demand for the expenditure of capital never dreamt of except by a few people like Dr. Henry Kennedy and Senator Professor Johnston and a few others whom you could count on the fingers of one hand. That is why productivity in agriculture is inelastic. That is why there is the adverse trade balance about which there is so much talk.

A friend of mine was on the Continent recently. He went to see a fodder beet harvest in Denmark. He was from the Six Counties. When he came back he wrote to me in these terms:

"I saw the work of harvesting fodder beet in full swing. I saw some crops up to 42 tons of roots per acre with about 20 tons of tops. This is equivalent to between eight and ten tons of barley per acre. My friend with whom I stayed for a few days had 20 acres from which he has about 750 tons."

These people are getting the equivalent of from eight to ten tons of barley per acre and they are feeding that to their pigs which they are selling at £16 each, and they are better pleased with that than the people in the Six Counties are who are getting £23. That is one of the ways to a solution of our problem, but how many of our Ministers or agriculturists are thinking about it or what concentration is there on the subject? None at all. My friend goes on—this is also very informative, especially to some of the Southern dairy farmers:—

"Milk at 1/6 per gallon with separated milk returned is so uneconomic that thousands of cows are being slaughtered."

That gentleman did not imagine that I would read that out here and the letter was not written for that purpose. It is dated 18th November.

These are some of the things that are happening in the world. When we speak of what farmers in Denmark are able to do to-day, make no mistake, it is the external assets which these people held many years ago which were liquidated, brought home and invested in their own country which make this immense production possible. These are the fruits they are getting to-day. That is what we should do and that is the approach that we should make to finding a solution of the problem.

Many of the things that were said on this Bill elsewhere did not contribute to a solution of our difficulties. They are real difficulties but they are difficulties which we can resolve if we face up to them. As Senator O'Brien said, we will not resolve them by restricted practices in industry, agriculture or anywhere else. From my point of view, it is just as immoral for a man not to give a full day's work for the wage he gets as it is for somebody else to restrict the production of a commodity which means that perhaps children will be half-starved. There is not much difference between one and the other. That is the sort of mentality we have to deal with here. We must understand that when we are considering a solution of the problem. If this debate and the alarm created by the speech of the Minister does nothing else but help to make our people concentrate and meditate on some of our faults and failings, it will have good effect.

Business suspended at 6 p.m., and resumed at 7 p.m.

When an employer speaks on this Bill of Supplies and Services there is always a feeling that he is talking about and defending privilege. I do not know why that should be peculiarly so as regards employers. I suppose there is not a Senator in the House who does not represent some form of society for which privilege is claimed and whose privileges are defended. While there may be a sort of inferiority complex nowadays, we are always conscious that we may be accused of appealing for privilege. Earlier to-day, as I was walking along the corridors of Leinster House, I met a farmer Senator. I asked him if he was going to speak in this debate. He said that, as a matter of fact, he had not intended to speak in the debate but that, having heard Senator Professor O'Brien talk about taxing the farmers, he had decided to speak. That particular farmers' representative in this House will, therefore, defend the privilege which the farmer enjoys of not paying the same amount in taxation as the industrialist or the commercial man.

I should like to stress that in the remarks which I am about to make I do not wish to defend or ask for privilege. I think the day has gone when employers or industrialists are given privilege, but what we ask for is fair play. I suggest that if more fair play were given to industrialists and business people in our economy it would be in the interests of the whole community. In the supply of goods and services in this country we have to use certain methods.

The principal method employed in this country is the system of private enterprise. We have a certain amount of Government enterprise, but it is our national policy, and has been so declared, that State enterprise will be used only where private enterprise has not found it possible to carry out the particular activity which must, therefore, be carried out by the State in the interests of the community. That principle has been pretty fairly adhered to by all our native Governments.

At present we are not carrying out our economic policy in a consistent manner. We are given all the incentives to start with. We declare that our national policy is to set up an industrial economy worked by private enterprise. For that purpose we have built up a system of tariffs and protections of all kinds. That is the right thing to do. It is our policy to protect industry, and to make it possible for it to commence life and to function here against the cold winds of unfair foreign competition or competition that is further advanced than ours. That, in itself is all right—but what do we find then? We find that when industry here has started, and has proceeded to try to live and be successful, an atmosphere of suspicion, criticism and penalisation of industry surrounds it. There is much contradiction, therefore in the general attitude to industry and commerce in this country. We will the end, namely, the establishment of an industrial economy, but we refuse often to will the means, namely, the conditions that create confidence in private people and private enterprise, which is the one great source for the creation of wealth from which workers and governments will collect an ever-increasing share. Nobody with his eyes open in this country can deny that there is a very great volume of public opinion which discourages and disparages the industrialists and the commercial community of the country. There is a criticism of profits—but without profits business would be a failure. As recently as last year attempts were made in connection with the imposition of excess profits tax.

There is no such thing in business as excess profits, if prices are fair. Obviously, the higher the profits the more goods are being sold at fair prices to the public. Therefore, it is no charge against business to assert that large profits are made. The idea seems to be to tax energy and progress and to put a premium on mediocrity and lethargy. Even the State itself is quite inconsistent in its industrial policy. Senator Professor O'Brien has already referred to the income-tax code. The allowances for machinery, replacements, and for ploughing back money into business are inadequate. We have a system operating here in a country with infant industries of all kinds. The same system, scarcely changing a line, has been taken over from a highly industrialised country, England, which has had hundreds of years of industrialisation and which has built up great wealth behind industry. That system is obviously wrong. Yet we have been slavishly copying it and taking over something we had not even thought about. We are always proud to boast that there is an Irish way of living and an Irish way of thought, but I submit that, in this question of the taxation of industry, we have not got down to thinking about the matter from our own point of view and in our own particular set of circumstances.

Again we have rates on property. This has been referred to recently in this House and I think there is a motion down in the other House at present, about the application of a higher rate to people who expand and extend their businesses, for the purpose of creating more employment and production. That is another feature. We have, of course, death duties on estates which are very much copied from England and which are a disincentive to people to save and build up fortunes and prosperous businesses in this country. That particularly applies to one-man businesses —not small ones, but big family businesses. If a business is in the hands of one man—a big business—he can be caught for a very big death duty, which may have a crippling effect on his business and on his family. That is another point that surely does not give an incentive to build up business in our infant industries.

Broadly speaking, no one nowadays could claim that high prices, the high cost of living to-day, is in any way due to profits. The industrial and commercial community have been so rigidly inspected, controlled and interfered with in every way that that point can no longer be really believed in or made. I might ask this question. We have high prices in Córas Iompair Éireann for travelling, the highest ever. Are these high prices caused by high profits? Córas Iompair Éireann is losing £2,000,000. Surely it cannot be said that the high prices charged by Córas Iompair Éireann for travelling are being caused by profits. It is about time the unfair attacks on our industrial enterprises of all kinds should cease. It is also about time that workers and trade unions admitted that for a new country we are paying extraordinarily high wages and giving extraordinarily good conditions of employment. We should turn our attention a little more from trying to take everything out of business and we should try to help business to put something back and to look to the future. When private enterprise succeeds it is attacked for making profits: when it does not succeed it is attacked for failing to carry out its duties to the community.

In the course of the debate in the Dáil last week it was stated by some Deputies that private enterprise had failed in this country and could not be relied upon to carry out the national job of industrialisation. I gather that what these people mean is that we should have uneconomic industrialisation at the expense of the taxpayer and at the expense of existing successful people in private enterprise. It is obvious that industry, if it is going to have to pay out all these taxes and pay high wages—it is unnecessarily high wages I am talking about, and I think I can show later on that some of these demands are unnecessarily and unreasonably high and are being forced on industry by the strength of organisation—and if industry is living only from hand to mouth it can never be self-reliant and can never exist without a high degree of protection by the State.

Public opinion here is for ever asking why it is necessary to go on protecting industry so highly. The answer, of course, is that while, on the one hand, it is national policy to protect industry, on the other hand it is national policy to suck its life-blood by heavy taxation. At the same time there is heavy and hostile public opinion which creates an atmosphere that stifles and discourages private enterprise. If industry is to be efficient and successful, if it is to pay good wages and produce goods at low prices, if it is to be in a condition to face and surmount the difficult periods, which are inevitable in business life—slumps, hard periods and so on—it must be allowed and encouraged to become stronger by the Government, the public and the workers—and by strong—I mean wealthy, and I am not afraid to say wealthy. It can never grow wealthy while the State in all its shapes and forms and the workers continue to suck away its liquid resources—the one in taxes of all kinds, many applied purely for political reasons, and the other by unnecessarily high demands for high wages and shorter hours of work.

The shortage of liquid resources leaves industry trying to live by the expenditure of borrowed money. Industry is like an individual. The man who is chronically short of ready money and always in debt—can he be sufficiently self-reliant? and not only that but he cannot be depended upon to give good employment and safeguard himself and his workers in times of difficulty and slackness of trade, not to say give good service to the public. Irish industrial enterprise is chronically short of money and is for ever leaning on the banks and on borrowings. It is in the same position as the man I have already described. That is the reason why we cannot—and never shall, at the rate we are going—be enabled to remove the high protective tariffs. It is not the industrialist who is at fault, it is not the businessman who is at fault; it is the fault of the line of policy that we are carrying out.

As I said before, there is the difficulty of public opinion designed to prevent industry becoming strong and prosperous and wealthy and the very people most likely to benefit from the prosperity of Irish industry are the very people most vocal in calling for controls and taxes of all kinds. We talk a lot here about freedom and about thinking for ourselves but this is one of the things we ought really sit down about and think for ourselves and work out an Irish policy for Irish industrialisation.

When people talk about industrialisation and about people in commerce they always visualise wealthy men with big houses and big cars in O'Connell Street. We do not smoke cigars much in this country, so they do not add that. That is the general picture. It seems to be forgotten that the vast majority of shareholders in our industries are people who are living on the interest of their savings. The persistent attacks and calls for restrictions on dividends are a grave injustice to these people, as well as being a discouragement to people to save and invest their savings. There is to-day inside the community a positive animous against thrifty men, and when the time comes to enjoy the interest on what he has saved he finds himself called a drone and a person living as a recipient of unearned income.

People must be encouraged to save but if they do save there must be something in which they can invest with reasonable security and with the hope of even increasing their capital. This can only be achieved by giving the invested amount some chance of going up as well as of going down. No one talks about the people who lose their money or never get dividends—although this has frequently happened in the case of investors here. People must get some return for their money and have a chance of their investment appreciating in value. If you are betting on a thing you must have a chance of winning as well as a chance of losing. It is always forgotten or overlooked by the critics of private enterprise that it is the invested savings of large numbers of hard-provide the working capital of industrial concerns, either directly through working and thrifty small people which holding shares or through savings in the banks.

Speaking of England, the other day I was reading last Sunday's Graphic and saw where Mr. W.J. Browne, an ex-Socialist M.P., stated:

"Taking some 30 big companies, including Imperial Chemicals, Imperial Tobacco, Courtaulds and Rolls Royce, there are no fewer than 1,113,000 shareholders in these 30 companies and the average holding works out at about £312."

These are the biggest companies in England.

"Generally speaking, there are about the same number of shareholders in a business as the number of workpeople it employs and many of the shareholders are themselves employed persons who have saved their money instead of wasting it."

And incidentally, helping to create inflation. It is the same in this country. I happen to be associated with a project in this country which has had to be sponsored by certain people. In order to get the Industrial Credit Corporation to put up the money for that project, it has been necessary to get a certain amount of local support and the number of people required to put up even the initial sum in order that this industry may be started—an industry which would employ from 60 to 100 people—runs into some hundreds. They are all small traders and businessmen in an Irish country town. In this particular case, before the industry starts —the sum required will represent only about one-eighth of its capital—there are already twice as many shareholders as there will be workers, and we will be told in a few years' time that the workers own this particular industry and that these people should not be there at all.

These workers, from the time they lift a hammer, will be paid every week, whether money is coming in or not, and before money is coming in. Yet, people who never see the beginning of things, but merely see this industry there in full operation, will be found to say that the people who put up the money should not be there at all. That is the philosophy behind a lot of this feeling. It is unconscious in many cases. We do not know that the Socialist mentality has percolated into the people here, but people who would be the last to believe that they were Socialists are impregnated with that kind of thinking. Under the industrialisation drive, it is the workers who mainly and primarily benefit. Granted too, we do it for the purpose of producing our own goods here and being self-sufficient, but the primary object, as has been stated by our Governments, is to create employment.

The workers must realise—the employers know it already, because they have been told it often enough—that they work under a high protection wall and should show a high degree of responsibility in the matter of wage demands, hours of work and output. Regard must be had to what an industry can afford to pay. When demands are made nowadays, it seems to be thought that whatever sum is decided on by the workers is the sum which the industry must pay. Very rarely in recent years—and I have had a lot of experience—have I heard the workers base their claim upon what the industry could afford to pay. It is merely what they want. We had a case of it last week in Dublin. In a particular industry, a demand was put forward (the industry had already given a wage rise at the beginning of the year) for 25/- increase in wages. In negotiation, they were offered 5/6, then 6/6, and eventually the matter finished at 10/-; but in the course of the negotiations, it was stated by the unions that the employers were only coming up in their offers in pennies, while the unions were going down in shillings. The point, however, was that the employers were going up in money and the unions coming down in fresh air. Industrialists have a very grave responsibility to the community for prices because they are the people who ultimately have to ask the prices and who will be accused of raising prices.

Senator O'Brien also referred to another matter which is relevant to my particular line, the matter of restrictive practices. We have been told that a Bill is to be introduced to deal with restrictive practices by traders. There is another aspect to it. A Bill is to be brought in to deal with restrictive practices and price maintenance by traders, but surely, if we are to be fair to all sections, there should also be brought in proposals to deal with restrictive practices by workers, the people who put up the costs. We talk about prices but that is only the barometer. Let us get down to what causes these prices. It is not price maintenance which makes prices high. There are other restrictive practices besides this, and, when the time comes, we will defend many of these price maintenance agreements and it will be found very often that they are in the interests of the consumer. We have restrictive practices in this country copied from other very highly-developed industrial countries which should not be applied to our infant economy. I do not want to detain the House very long, but I would remind Senators of some of the restrictive practices in operation in this country at present. There are, literally, hundreds of them, but the outstanding ones include the go-slow policy, the restriction of output by workers in accordance with a prearranged plan. The ostensible excuse for such practices, which are seldom openly admitted, is the protection of the worker from redundancy brought about by over-production. Can anybody say that we in this country are suffering from over-production? We are suffering from a limitation of output.

Can the Senator who made that suggestion tell the House where any responsible trade union has asked workers to go slow?

Bricklayers are a well-known example, and I was told to-day that carpenters are allowed to lay only so many "square". Bricklayers must lay only so many bricks a day. Everybody knows that, without being an employer at all. The building industry is absolutely full of restrictive practices of this type. There is, then, working to rule, which we had in the Post Office recently, and there is the ostracism of the pacemaker, the man who works too fast. There is the closed shop which many unions have tried to enforce. We have got closed shops in many cases and we have the union shop nearly everywhere. The closed shop very often means that an employer cannot employ the best person. There is the refusal to agree to dilution of labour—they will not allow women to work with men in certain cases. There is the banning of overtime working—we have that in several cases—and the restriction of entry into apprenticeship. These are a few of them—I have pages of them here.

The stock trade union reply to criticism of such practices is that, in an economy based on the purchase and sale of labour power, there should not be any complaint if organised labour, like any other group with commodities to sell, tries to keep up the prices of its commodity by restricting its supply. I grant you that there was a time when labour was much too cheaply bought and it was only right that labour should get together, but I am saying that we want labour to get a fair deal just as we want industry to get a fair deal, but what they must be content with is a fair deal. I am suggesting that we should go into all this business and consider whether, if we put restrictions on employers, we should not do the same with the people who cause the high prices.

I am not asking for anything unreasonable. I am not anti-Labour. I am willing and anxious to work in the utmost harmony with them. I can never be accused of being unfriendly to them. We want a fair deal for employers and we want to give Labour a fair deal as well.

Our new industries are mostly sponsored by a large number of small investors, and it is quite unreasonable for workers to start working with an anti-boss complex. This complex, I am sorry to say, is present in this country in certain places. There is a feeling that instead of being partners in an industry there must be all the time the idea of getting as much as possible and giving as little as possible. That is not Irish. It is a mentality that has been taken undigested from Socialist countries. It is a spirit of class war and hatred. In this country we should have a spirit of vocational co-operation. Only on such a basis can there be copartnership in the true sense. You often hear it being suggested by Socialist thinkers that a lot of the difficulties between employers and workers could be done away with if there was only more co-operation between the workers. If there is to be co-partnership in industry, or partnership of any kind, we must get away from the Socialist mentality and get on to the idea of the vocational mentality which has been suggested by all the Christian social thinkers in this country.

But not practised by many.

I grant you that. If we had a vocational background, and if we dealt with one another in a vocational way, with everybody in the industry talking to everybody else and working out their problems together, we would have far more harmony, and we could work out a system more suited to our own needs.

I have been talking quite a lot about the duty of workers. I will not leave out of the reckoning the duty of employers, management and industrialists. They have got a great responsibility working behind the high protective walls and tariffs of all kinds. It is very important that managements should build up the highest degree of proficiency so that goods can be produced here, both in quality and in price that will justify the protection that is being given them, always remembering the duty to the consumer. That is very important, but it is very often forgotten that an employer in fighting what he thinks are unreasonable demands for wages and conditions of employment, which will increase his costs, is in fact fighting the battle of the consumer. The employer will not be often given credit for that. He is in fact fighting for a lower price to the consumer when he is trying to fight against higher costs.

I would like to suggest that the slogan of our Irish industry should be that our goods ought to be bought because they are good and not because they are Irish. As well as that, I think it is very important that those of us who are engaged in industry and commerce in this country should not lean too heavily on the State. The more we keep away from State aids, the more self-reliant and independent we are. It has been said by several Ministers in different Governments that they make no apology for interfering in business of all kinds, because business and businesses come to them seeking all kinds of supports and props, and the man who pays the piper calls the tune. It is important to remember that business should be self-reliant. It should not look for helps of all kinds. If it is in trouble, it should try to get out of it by business methods rather than by State props.

I would like to suggest that the Government should try, as far as possible, to refrain from any taxation that would cut down spending power at present. The trouble with us in this country at the moment is that we have got a superfluity of goods and they can never be liquidated, unless the public have the money to buy them. Any increase in taxation would mop up that purchasing power.

It is obvious that if we want to have a successful industrial economy, there must be harmonious relations between workers and employers. I have already spoken on the necessity of the vocational approach. I feel we ought to pursue the idea of vocationalism here. There already exists in the Organisation of Workers and Employers the elements of vocationalism. Particularly is this so in the case of employers. Most industries and trades in this country have vocational bodies watching their interests. There are all sorts of trade associations, and I think there is hardly a trade that has not got an association. That gives us a ready-made organisation on the employer side. On the trade union side, it is not quite so easy at present. They are inclined to look upon the relations between employers and workers in a general way. These organisations are often general ones. Therefore, they make general demands for wages which are not applicable to particular industries on the assumption that because certain wages are paid in one industry, they must be paid in another industry.

The industries may be as different as chalk is from cheese. One industry might be strong and vigorous, while the other is weak and struggling. Because of the fact that the trade unions are organised on a national basis, you find they lack understanding of the individual character of businesses and groups of businesses. If we could develop some form of vocationalism, in our organisation of workers and employers, we could greatly assist in the solution of our many problems. Unfortunately, the spirit behind the dealings between employers and workers and industrial relations in this country has no characteristically Irish tinge about it.

It is just copied straight from English sources. Many of our new employers who started up find themselves branded with the evil taint of the capitalists of 19th century England; because they happen to have the name of industrialists it is assumed they are the legitimate followers of the English capitalists of the 19th century, with all their faults and failings.

I have already mentioned the individual character of businesses. I would like to stress the fact that there is a tendency to forget the individual character of each and every industrial enterprise. If we get down to this idea of vocationalism, I think that individuality will be properly recognised. On the question of bringing workers into consultation in business matters with the employers and giving them a more human interest in our business, the difficulty in the way of that, at the moment, is that some employers are suspicious and hesitate to be more expansive in co-operating with their workers, because of the attitude of many Trade Unions and Trade Unionists which is of fundamental opposition in the whole system of private enterprise. There undoubtedly exists an attitude quite openly expressed by people in the Trade Union movement against the idea of people owning a business. There are plenty of good Trade Unionists in this country who have a full recognition of private ownership. but, generally speaking, the spirit of the movement is wittingly or unwittingly socialistic and, therefore, opposed to the idea of private ownership. Because of this employers here naturally consider that any movement towards loosening the employers' ownership in industry by greater participation of workers to be a movement towards the eventual confiscation of their property rather than one towards greater co-operation, unity and harmony. They consider it as participation towards confiscation rather than participation towards co-operation.

I come to what I think is a very important factor in the industrial relations life of this country: the Labour Court. I think that if we are ever to have orderly relations between workers and employers in this country it will be agreed by all that some arrangement should be made whereby the grievances of workers can be resolved without resorting to strike. The one that was set up by the Minister for Industry and Commerce some years ago in consultation with the congresses of unions and the Federated Union of Employers was the Labour Court. Undoubtedly, the Labour Court could be, and as a matter of fact is, a great factor in orderly relations between workers and employers in this country. At least it would be so if it were properly utilised and if everybody approached it in a right spirit. There will be no real peace in this country unless the present Labour Court or an extended form of Labour Court is utilised by all parties instead of resorting to force. I am not going to speak very much about this because at the moment consideration is being given to it by the Government—it is common knowledge—that something may be done, extending the Labour Court's activities and making it more potent.

No matter what is done with the machinery of the Labour Court, no matter how it is extended or improved and no matter what money is spent on it, it will be no good unless parties approach it with a spirit of goodwill and with a desire to accept its findings. Otherwise it will be useless because at present I am sorry to say that the Labour Court is being decreasingly used. Some of the machinery of the Labour Court is being frequently used to raise the bidding and strike action is being resorted to without going to the Labour Court proper. Our only instrument of industrial peace is the Labour Court but it is no good unless it is entered with the right spirit by the parties concerned. I can say here and now that employers will accept at all times the findings of the Labour Court if labour will do so too. I can say that without any fear and I have confidence that I will be backed up by my fellow employers. If we could get the workers to say the same we could look forward to a happy future in our industrial relations.

As I have been talking about private enterprise I may say that I was rather shocked by a suggestion which you may have seen in the papers during the last year, that is the suggestion to hand over to Córas Iompair Eireann the private hauliers of this country. The private hauliers of this country are a successful private enterprise; Córas Iompair Eireann is an economic failure. When I went to school long ago there was a lesson in one of the books which told a story about a boy who put good apples among bad apples, and it related how whenever you put good apples among bad apples instead of the good apples making the bad apples good the bad apples make the good apples bad.

If we are to put the private hauliers of the country into the hands of Córas Iompair Eireann, instead of making Córas Iompair Eireann better off than it is now it will be like putting the good apples among the bad. Apart from that, in a country one should be very careful not to leave oneself vulnerable, not to be dependent on one unit, say, for one's light, because if one bomb is dropped on the source of supply one is without any light. If you put all the transport of the country into the hands of one company, if there were a strike, as there was two years ago, during Horse Show week there would be no Horse Show. That is what would happen if there were no private hauliers or road transport because you are at the mercy of any group of men who want to close it down. I hope that the suggestion that the private hauliers be taken over by Córas Iompair Eireann will not be taken seriously.

There has also been talk about a purchase tax as a way out of preventing people from buying luxury goods, I think that this would be a deplorable move because it is generally agreed that the British purchase tax has been one of the most fruitful and mischievous of all factors of inflation and, therefore, an added burden on the family budget. Apart from being one of the most serious factors in inflation the tax is mischievous in that it can be concealed so adroitly and at the same time can be extended to almost every business transaction. Some articles in Italy were taxed 40 times over and that simply goes to show how lazy public finance and clever tax-gatherers can extend the device once it is imposed. Chaos and corruption follow immediately and the cost of living soars without any open check on the cause. Such a tax would mean an unlimited rake-off for the State which is already taking more than a fair share of the national income. Consumers' resistance to such a state of affairs will inevitably harden. By all means prohibit the import of luxury goods but do not add to the pressure on the family budget by imposing a purchase tax system which will inevitably be used and extended to add to the burden of indirect taxation already in force.

I was reading the Economist the other day and saw a note on Ireland. In discussing the problem of Irish economy the note said:

"The long-term problem is that production for export has failed to expand at a rate commensurate with the increase in imports."

The same thing was said by Senator Professor O'Brien here to-day. I feel that unless we as a people make up our mind to encourage in our citizens a spirit of hard work, high output and co-operation of all classes, and unless there is a willingness to reward persons at all levels of society for efficiency, enterprise and thrift, we shall fail in achieving our national economic salvation.

Listening to the speeches, I felt like doing something which I do not usually do, that is, complimenting the speakers of the Opposition on their less unreasonable approach to this measure than we usually find among them here in this House. One thing that seemed to be common to all speakers so far was the bouquets thrown to the Minister for Industry and Commerce, and I hope that the Minister for External Affairs will convey the news to him when he meets—which, I take it, will be tonight.

Senator Hayes, who opened the debate for the Opposition was, I must say, quite reasonable in his approach. He spoke at considerable length about the numerous voices in the present Government but I think that it would not be unreasonable to say that if we ever wanted to find a lot of people talking in different voices we would have to go to the present Opposition speakers—not in this House but in the other House. Senator Hayes said that the Minister for Industry and Commerce, who probably knew what the Central Bank Report contained before it was published, decided, not that there was a problem to be solved but that there was a stick there with which he could beat his political opponents. I think he would have to be fairly blind —and I do not think anybody has accused him of being blind so far—if he did not realise that it was a stick with which he could beat his political opponents. I know if any of our political opponets had a stick at any time to beat us, or if they ever have in future, they would not hesitate to use it. What they should do is compliment the Minister for Industry and Commerce on that as well as on the other things he has done.

One would think that the Minister was guilty of some serious mistake when he prophesied, in Donegal, I think, that we were heading for three years of disaster. Having lived through the three years I cannot see how anybody could say that he was wrong in his prophecy. Surely we lived through three years of disaster. I think it will take us a couple of years more before we are back again on the proper road. Senator Baxter laughs but Senator Baxter knows well what has happened in the last three years and anybody listening to Senator Baxter's speech tonight would realise that the starch has been taken out of Senator Baxter as a result of what has taken place during the last three years.

You were not listening.

Of course I was listening. Did Senator Baxter or anybody else who had any interest whatever in the farmers or in the farming industry think they would live to see the day when we would have a Minister for Agriculture in office who would actually export all the butter we had and then, when it was practically down to the last pound, realise that we must get butter from somewhere? That is exactly what happened. He then rushed around and got butter from here and there at prices far in excess of the price he obtained for the butter he sold. I will not name the various countries that the butter came from because we have friendly relations with most of these countries. I do not blame the countries at all. They realised that we would have a change of Government and that we probably would not be continually in the market as a good customer in future once Deputy Dillon was gone out of office. Therefore, they sent us whatever they had knocking around, the sweepings of the loft, so to speak. We got it and while I do not agree that it killed all the people it is supposed to have killed or that all the people who got sick were sick because they ate some of the imported butter, we all have to agree that it could not stand competition with our own butter

The same thing happened in other Departments. In fact I would go so far as to say that if one were to study the matter seriously and make a case as a lawyer would make a case in court one could prove to the satisfaction of any reasonable person that every Department of State was grossly mishandled by the last Government. If you do not call that three years of disaster, I would like to know what you would call it.

As far as industry is concerned, I do not agree with the note that was sounded here to-day that industry in this country is in a terribly bad state. I think industry has made very considerable progress and, while we might find that a few industries have taken the rap over the past two or three years, we will find that, taking a general picture, Irish industry is in a reasonably healthy condition.

Of course some of the Opposition speakers would probably have the nerve—they are not short of nerve, whatever else they are short of—to try to attribute the success of the various industries to the previous Government. If there are any honest men in the Opposition—and there are a few—I believe they will realise that the success, standing and strength of Irish industry to-day is due, not to the failure to produce complete disaster in the past three years, but to the energy, enthusiasm and wisdom of Seán Lemass and the Fianna Fáil Party when in power, before they were put out of office by what might be called a coup d'état three and a half years ago.

We had three years of disaster. The first thing the inter-Party Government did when they got into power was to cut down the speed of new industries. They allowed the hide situation to get so much out of control that the tanneries went out of business. Immediately the tanneries went out of business the boot and shoe factories were closed down. That is a well-known fact. The same thing happened in Senator Baxter's constituency as well as in the constituency that I would be supposed to represent if a Senator can be supposed to represent any constituency, that is, Tipperary. We had deputations to Dublin to see if anything could be done to get hides for the factories. At the time the hides were leaving the country wholesale just the same as the butter left the country. Then everyone was amazed why the factories could not be kept going.

To-day, largely as a result of Government policy, there is a very different situation and boots and shoes are being exported at a considerable profit to the manufacturers and very considerable employment is thereby provided for Irish workers.

In the same way air transport was slowed down. The policy of the previous Government as far as Aer Lingus was concerned was radically changed by the inter-Party Government. As a result the transatlantic service, which would have been invaluable to-day, was completely eliminated. The aeroplanes which were sold at that time could be doing very valuable trade for this country, but they were sold at a price which would bear no comparison with the price of their replacement to-day, according to present standards.

The same thing applied in various other industries. As far as the turf industry is concerned, I must say that before the inter-Party Government went out of office they were converted to turf, as they have been converted to most other things.

Turf mould. Go up to the Park.

We will deal with turf. The turf industry was slowed down so much that it took about one and a half years to get it started again. It was not so much that the inter-Party Government had to be converted but, in their frantic efforts to prove that Fianna Fáil was wrong, they decided that they must slow down the machine, even if it meant throwing men out of employment. They decided that they would be in power for five or six years and would be able to remedy that. The wind changed before they expected it. I do not thank them for starting it because anyone with any sense could not do anything else but encourage the industry which was providing fuel for the people and for industry, and at the same time producing something which, of course, was started under Fianna Fáil, namely, turf products for export to America. I do not know whether Senator Baxter knows anything about that or not. If he does not it is his own fault because we brought him down and marched him over the bogs in the Midlands, where he saw what was going on.

Numerous industries have been set up over the years and to-day they are doing an export trade which is invaluable to this country. Situated as we are, we must, I suppose, continue to import certain materials in addition to tea and tigers. We must import machinery of various kinds, and if we are to keep on importing we must at the same time export a certain amount, at least sufficient to meet our requirements.

The Minister was accused by Senator Hayes of pretending that he has a plan to make us prosperous, or appearing to pretend that he has a plan to make us prosperous. I cannot see what the difference is. I am not a professor.

Over the past 15 to 18 years Deputy Lemass, the Minister for Industry and Commerce, has made numerous statements in regard to industries which he considered would make this country prosperous. In the case of 97½ per cent. of the propositions which he put up, attacks were made on them by the people who now form the Opposition of this House and of the other House. Notwithstanding all that opposition, Deputy Lemass has been proved right. Practically every plan put forward by him, when put into effect, has proved successful in spite of the vigorous opposition it received. As a result of his foresight, we have the industrial picture we have to-day—and for which a lot of people are inclined to take credit. Many of these industries have been slowed down but, with the return of Deputy Lemass to the helm in the Department of Industry and Commerce, they will once more get the encouragement and help which they require. I believe that inside another year these industries will be in a far better position than they have ever been since they were started.

Senator Maguire says that there is not sufficient consistency in our economic policy. I cannot quite follow what he means. The present economic policy is the same as that which operated ten years ago. I believe we will have a continuation of that policy for a long number of years to come.

There was a war on ten years ago.

I am aware of that. I am aware also that, were it not for the policy introduced by Deputy Lemass many years before the outbreak of the war, we would not be here now to criticise the people who saved us during the war because we would have starved.

I come now to deal with the question of taxing farmers. I do not propose to follow Senator Professor O'Brien into the realms of high finance. I do not believe any sane Government would take his advice as far as the imposition of income tax on farmers is concerned. I take it that Senator Professor O'Brien has very little contact with the land or with rural Ireland at all. However, I am sure he has read Irish history and, that being so, he must realise that such a policy is merely the policy of the landlords of this country in the distant past. At that time the landlords had what they called a "land warner" who went around to inform the farmers that the day for paying the rent was coming round. The land warner was, in fact, a spy— a secret service agent, if you like— whose job it was to see how the farmer was getting on. If he found that the farmer had more cows or more pigs or more poultry, and so forth, than he had on the occasion of his previous visit, up went the farmer's rent. That, to my mind, to a very great extent, represents the attitude of Senator Professor O'Brien. At present the farmers may be enjoying a period of reasonable prosperity which they have not had for a considerable number of years. We do not know how long that prosperity will last. The policy advocated by Senator Professor O'Brien is that, now the farmers are making a bit of money, the thing to do is to slap on the tax.

He did not say that.

What other conclusion can anybody come to from what he said?

That is unfair.

I do not want to be unfair to anybody and above all to Senator Professor O'Brien.

You should not publicise that. The Senator is not in the House now to defend himself.

There is not much danger that it will be publicised.

What about the Irish Press?

The farmers have had a period of temporary prosperity and any interference with the farmers would be very bad business for this country. The alternative to the present system would be a system whereby the farmers would have to keep accounts. In the first place, it would be a very difficult job to get the farmers of this country to keep strict accounts, but if they kept them for a number of years they would be paying no income-tax at all or, if anything, a little less than they are paying at present. We must all agree that the agricultural industry is the backbone of the country and that every possible encouragement should be given to that industry whether it is enjoying a period of prosperity or otherwise.

I come now to transport. Senator McGuire said he thought it a very serious matter to put all the transport of the country into the hands of any one outfit. He pointed out that if one bomb dropped on Córas Iompair Eireann it would put the whole of the business out of action.

He did not say that.

I can agree with him to some extent but not altogether. It is not a question of any one outfit having control of transport, because that one outfit could have its centres in four different parts of the country. It could have one centre in Dublin, another in Galway, another in Waterford and another in Cork—or whatever you like. If one bomb fell on any of these centres it would not mean that the whole outfit would be put out of action. However, transport is a question which needs very serious attention from this or any Government. To judge by what we hear, if a serious war breaks out it will be far more ruthless than the last war and we in this island will be in a much worse position than we were during the last war. Immediate steps should be taken to provide more storage tanks for petrol and fuel oil. Somebody told me the other day that certain steps have been taken—that the Electricity Supply Board or Córas Iompair Eireann or somebody got a couple of tanks. I do not know what tanks they got but I would be inclined to bet that whatever provision has been made represents only a very small percentage of the storage which would, possibly, be needed in the event of war. We should have, preferably, underground tanks for fuel oil and petrol and for the other lubricating oils, and so forth, that we would need. These supplies would be needed, not so much for motor cars or even trucks but to ensure the carrying-on of the turf industry and the various other industries which are dependent on imported fuel for their transport.

I am glad to see that recently Bord na Móna has made successful efforts to run a considerable amount of its own transport on turf, and that at long last Córas Iompair Eireann have found that trains can be run on turf. I would be inclined to go much further than that, and say that in the event of war we will find ourselves in a worse position than we were during the last war—and the reason is that we have allowed the horse transport industry to decline. That is a form of insanity.

You do not want to stop people from getting tractors, do you?

No. I do not want to stop anybody from getting a tractor or a motor car or anything else, but from the national point of view it is ridiculous to allow a country such as this to go completely into mechanised transport.

We should encourage in every possible way the keeping of the greatest number of horses we possibly can in employment in this country. We are told by some of the advocates of mechanised transport—I suppose Senator Summerfield would say it, as most people who are mechanically minded would be inclined to think— that the day of horses has gone. I do not believe that that is true. I believe that the audited accounts of Córas Iompair Eireann up to the present will show that where they are using horses in the city—I do not know how many hundreds they have in use—although they are paying top price for everything, horse-transport works out cheaper than mechanical transport. If that is so, surely an increased number of horses should be used for haulage purposes, particularly where there are a number of stoppages involved. Take, for instance, the delivery of milk. For that type of work horses can stand up to and beat any other type of transport.

We are so far advanced and have become so modern that we will soon pass out New York or London. I understand that at present there are thousands of horses working for the corresponding company to Córas Iompair Eireann, one of the principal railways in England, and that there are 8,000 horses on the streets of New York. We are getting out of horses as fast as we can and are shipping them out to be slaughtered in France and Belgium. I have said before, and I wish to repeat it, that that is a bad policy. I believe we should take the matter in hand now and realise that in the early stages of the last war our only salvation was that we had some horses and some horse ploughs and, what is more important, some men able to follow horses and so cultivate the land.

The tractors came in. I am prepared to say they did a good iob—a rushed job which did not improve the land, but that cannot be helped, as the crops were produced. If the war had been postponed for another ten years it would be practically impossible to find a man in every county who could show the rest how to tackle a pair of horses and open the "bán" field to prepare it for a crop.

Senator Baxter referred to the poverty of the soil because numerous crops had been grown and nothing put back for a number of years. That is quite so and there is no question about it. If you asked anyone, up to a few years ago, why manure was not put back into the soil, he would tell you that it could not be got. Now the position is that there is more artificial manure than a market can be found for.

Why? Because it has gone up £4 or £5 a ton since you came into office.

Since we came into power some terrible things have happened. The manure is in the country. It may have gone up.

It has gone up—not may have.

If it has gone up £5, £4 or £3 a ton, the fact is that there is manure in the country. Despite all the propaganda—including the posters circulating around the country saying that manure can only be sold if 50 per cent. of the cost is paid down and the remaining 50 per cent. in three months —the fact is that manure is available. It can be bought and part of the reason why it is not bought is the propaganda worked up by people who ought to have more sense and the other part of the reason is that the farmers have been accustomed to buying manure on a long-term payment basis. It was quite a common thing for a farmer to buy manure from a local trader and pay for it in a year, or in two or three years. Those who know the country know that that is so.

At the present time credit has been tightened up in this as in every other country, and I suppose there is a certain amount of justification for the fact that prices have gone up and for the fact that people do not want to extend their payments over as long a period. There is no getting away from the fact that manure can be got and facilities can be obtained, but for some reason or another the manure has not been bought. I believe that the situation will not continue, that the manure will start to move and that the farmer will start to use it. Senator Baxter referred to a man in the North of Ireland who fed 80 cows on 75 acres of land and 30 acres of conacre. I do not say that is not so. It probably is so. I am quite certain that with intensive farming and intensive manuring more cows could be kept on that land; but there is not much difference between the man who owns 75 or 80 acres on the other side of the Border and the man who owns the same acreage on this side of the Border.

The other man is getting a 30 per cent. subsidy on his manure at the moment. That is a very great difference.

If Senator Baxter will elaborate on that——

That is a fact and it needs no elaboration. Here are the particulars, if the Senator wants to see them.

That is all right, but the fact is that what is wrong here at the moment is that the farmers have been used to a different system for buying manures. I believe that in a short time the difficulty will right itself.

Senator McGuire said that the slogan in regard to Irish industry should be: "Buy Irish, not because it is Irish, but because it is good." I believe there is a lot in that. What we want here is more efficient management in Irish industry, a more serious attitude towards the production of Irish products and a greater pride in their production by the workers and the factory managers. I will not say any more on the point at present.

Senator Quirke started by expressing the hope that the Minister for External Affairs would report to his colleague, the Minister for Industry and Commerce, that the speeches from the Opposition Benches were less unreasonable than usual. I hope the Minister for External Affairs will not report Senator Quirke's contribution in toto, for the sake of peace and harmony in the Party opposite, as I feel that some portions of his contribution would not be at all well received by the Minister for Industry and Commerce. I was very glad that Senator Quirke was frank enough to concede the point made by Senator Hayes, and one which I proposed making also, namely, that the Central Bank Report was deliberately used by the Minister for Industry and Commerce as a stick to beat his political opponents.

I do not intend dealing at length with the Central Bank Report. I agree with the remarks made by Senator Hayes. The members of the Central Bank have a particular job of work to do and they are entitled to do it in their own way. I do not feel that we, as members of the Seanad, are called upon to criticise that work, even though we may disagree with it. It is wrong, however, for a member of the Government, as part of a plan—and quite clearly it was part of a plan—to use that report to try to discredit his predecessors. Senator Quirke has frankly admitted that that was the case, that the Central Bank Report was used deliberately by the Tánaiste as a stick to beat his political opponents. It would be as well if we all studied that report and decided on our attitude towards the matters referred to in it and conducted our policies according to whether we agreed or disagreed with the recommendations in the report.

There is one thing in the report to which I wish to refer. It may seem somewhat out of place for a city man to refer to it, but I think it is right that it should be done. Senator Baxter may have referred to it already. It is that portion of the report which has been interpreted by the Minister for Finance and by the editorial writer in the Irish Press as referring to the land rehabilitation scheme. There is a portion of the general part of the Central Bank Report which, according to the Irish Press editorial of the 24th October last, was particularly relevant to Deputy Dillon's land project. The Minister for Finance, in referring to the latter when this Bill was under discussion in the Dáil, also appeared to agree with that, according to the Official Report.

At column 722 of the Official Report of 14th November last the Minister for Finance had this to say in relation, I assume, to that particular part of the Central Bank Report:

"One of the reasons why the White Paper has been so virulently attacked in this House or outside this House by Deputy Dillon and those who are associated with him, is that the White Paper and the report of the Central Bank between them sound the death knell of Dillonism in this country."

So far as the Central Bank Report was concerned, quite clearly the people concerned with producing that report had no particular animosity towards Deputy Dillon. In so far as the Central Bank Report is to be interpreted as sounding the death knell of Dillonism, as, according to the Minister for Finance, it does, the reference is to the land rehabilitation scheme; the land project initiated and carried into operation by Deputy Dillon when Minister for Agriculture. It would be a very grave matter for the rural population if the Minister for Finance is to be taken at his word. If we are to assume that the Central Bank Report in its approach to the land rehabilitation scheme has the approval of the Government, according to the Minister for Finance in the words I have quoted, it sounds the death knell of Dillonism. I trust that the Minister for External Affairs, when replying, will make it quite clear that that remark was not intended to be taken at its face value—that it was merely a rather exuberant expression of the feelings of the Minister.

I am sorry that, when the Minister introduced this Bill in the Seanad, he did not take the opportunity of making some statement which might have had the effect of clearing up some of the doubts in the minds of members of the Seanad and of the public outside. I do not think the Minister for Industry and Commerce succeeded in doing that in the Dáil. A number of matters were left outstanding, and one of the matters I want to refer to—again, it is in relation to the Central Bank Report, but I would have referred to it, even if there were no Central Bank Report —is in connection with the bank restriction of credit. Here again I think it might be wise for the Minister not to quote Senator Quirke too fully to the Minister for Industry and Commerce. The case was made in the Dáil —and I read very carefully the speeches made by all members who contributed to the debate—by Government Ministers that there is no restriction of credit by the banks. In particular, the Minister for Posts and Telegraphs made that case in the Dáil. The Minister for Industry and Commerce did not go quite so far, but he did give figures to show that, in his opinion, there was not any real restriction of credit. He did, however, admit that he had heard rumours that the Government had given instructions to the banks to close down on credit, and he said he wanted to take the opportunity to say that that was not so. Therefore, by implication, he admitted that there was something in the nature of a tightening up of credit. Senator Quirke admitted that credit has been tightened.

The Minister for Posts and Telegraphs spoke on 8th November and gave the figures for bank credit facilities this year as compared with last year, and, having given these figures, he asked the Dáil:—

"Where does the bank restriction lie? Whose credits have been restricted? The figures can hardly be denied as being accurate."

Following that, the same Minister went as a guest speaker to a completely nonpolitical function, the dinner of the Institute of Chartered Accountants of Ireland, and his speech is reported very fully in the Irish Times of the 20th of last month. At that nonpolitical function, the Minister came back to this question of bank credits, and said that all the talk of panic and bank credit restrictions was mere political flag-waving. Senator Quirke has admitted quite frankly that there is a tightening up on bank credits.

I feel honoured that I have one of the O'Higginses here to defend me, but what I said was that a poster was in circulation in the Midlands and, in my opinion, put into circulation by the people who now form the Opposition, warning the farmers that they had to pay 50 per cent. down and the remaining 50 per cent. in three months, if they wanted to get manures. I think it is mere political propaganda.

I accept Senator Quirke's word. I take it that he is now making the case that he is siding with the Minister for Posts and Telegraphs and that there is no restriction of bank credit.

I was cross-examined before by Senator O'Higgins and he made a bad job of it. He will make as bad a job of it this time.

That was Deputy O'Higgins and not Senator O'Higgins. I do not mind on which side of the fence the Senator chooses to land. The Minister for Posts and Telegraphs has pinned his colours to the masthead in no uncertain way—he says there is no restriction on bank credit, that it is political flag-waving to say that there is. I was under the impression, apparently wrongly, that Senator Quirke had the courage to disagree with that view and that he was admitting this evening that there was a restriction. Apparently that is not so and Senator Quirke agrees with the Minister. Most of us here will have heard of an association generally known as the R.G.D.A.T.A. It is not a political association. They held a convention some time last month and, according to the Evening Herald of 13th November:

"A resolution asking the association to view with grave concern the possible consequences for the business community and for the country of the Central Bank's Report and of the present restrictive policy of the commercial banks was adopted by the R.G.D.A.T.A. Convention."

That was on the 13th November last Was that association indulging in mere political flag-waving, or were these businessmen who were there assembled not people who knew the effect of what they termed a restrictive policy of the commercial banks on their business? think they were businessmen who had come up against this tightening of credit.

A month before that, before this matter was discussed in the Dáil at all the political flag waving—if it is political flag waving—had started. We find on 19th October of this year or the front page of the Irish Press—a paper which is accepted as being the organ of the Government Party and in many ways the authorised organ of the Government at present; certainly, the man in the street accepts it that that newspaper reflects Government policy —an article headed “Banks Close on Credit.” That was the big banner line heading in heavy black type. Immediately underneath that, in small type, were the words: “Applications refused.” The opening sentence of the article, which was not written as we might have expected it should be written, by the financial correspondent, but by the political correspondent of the newspaper, read:

"It was becoming increasingly difficult to get credit from the banks for the past six months, and within the last two months this tightening on credit facilities has been intensified."

This article, written by the political correspondent of the Irish Press, then went on to report the result of interviews which the political correspondent had with various business men and with various bank managers.

Either that article was true or it was false. If it were false, it was written for some purpose. I am going to suggest that the article was intended as part of a campaign, deliberately indulged in by the present Government, to panic the public regarding our finances. If we assume that what was started in that article was true, then we find that the political flag waving, referred to by the Minister for Posts and Telegraphs, when he spoke at the non-political function to which I referred, started, not when the discussion on this Bill commenced in the Dáil, but as far back as the 19th October in the columns of the Irish Press. I think the people of the country are entitled to know what is going on.

You can easily find that out, at least the people concerned anyway.

It is easy for a person in my position to know it.

Anybody who approaches the banks will find that out very quickly.

They will. Many people have approached the banks in recent months and found out that what the Irish Press said on 19th October was all too true.

Who would you say was responsible?

I will certainly deal with that.

An Leas-Chathaoirleach

The Senator should be allowed to make his speech. Senators will have an opportunity of speaking.

The Senator has been speaking for a quarter of an hour but we did not know what the point was until two seconds ago.

It becomes all the better for the clearing now. The point is this. A Government Minister has put himself on record as saying that there is no restriction of bank credit and that it is merely political flag-waving to say there is. The Irish Press disagrees with that. My experience, as a professional man, is that for the last two or three months there has been very grievous restrictions on credit facilities from the banks. I think that anyone in the vocation followed by the Senator who spoke immediately before me will be able to testify to the correctness of that statement. There is a restriction on bank credit.

Senator Hartnett asked me who did I think was to blame for that? There is no doubt that the reason why that restriction on bank credit exists and has been intensified in the last two months is because of the speeches made by members of the present Government.

Made here and elsewhere.

In July of this year the campaign opened in the Dáil with a speech by the present Minister for Finance. There were various other speeches made—in particular by the Minister for Industry and Commerce. The whole effort was to paint a picture of real ruin in this country. A crisis atmosphere was deliberately created. As part of the campaign, the Central Bank was used as one of the weapons and Senator Quirke has admitted that this afternoon.

He said it was used as a stick with which to beat political opponents. That was the reason why the banks restricted credit. Because the banks restricted credit and because of the speeches that were made, there has been a very serious trade slump in this country.

I wonder would the Senator be in a position to give the figures in relation to the amount of credit that has been made available by the banks in the last six months?

An Leas-Chathaoirleach

The Chair thinks that it would be better if the Senator were allowed to make his speech.

I am certain that the Senator will not give me the information.

I am certainly prepared to give the Senator the benefit of this article from the columns of the Irish Press if he wants to hear it, but I do not imagine he does.

As a result of the speeches to which I have referred and as a result of the restriction of bank credit, there has been a very serious trade slump. The Minister for Industry and Commerce has made a number of references to that trade slump. He has given several different reasons why there is a trade slump. At one time, he said it was due to the stockpiling of the inter-Party Government, that if the inter-Party Government had not gone in for a policy of stockpiling there would not be any slump at all. Again, he said that the reason for the trade slump or recession was the building up of consumers' resistance to high prices. In his concluding speech on this measure in the Dáil, he threw overboard both of those excuses and said that, after all, this was a world-wide affair and there was a slump in every country. To put it at its mildest, there are good grounds for believing that the real reason, if not the only one, for the trade slump lies in the speeches which were made by the Minister for Industry and Commerce and by the Minister for Finance.

There was an effort made to create an atmosphere of crisis. When he spoke at the Publicity Club on 12th October last the Minister for Industry and Commerce used the expression, "this is a real crisis which we are facing." I think it was the Minister for Finance who said that he found himself put to the pin of his collar to keep the Irish pound on a par with the British pound. The Taoiseach, speaking at the Fianna Fáil Ard-Fheis on 6th November and reported in the Irish Press on 7th November, said:

"The one way in which we can meet the present crisis is by an economic fight for a policy aimed at using our own resources, internal and external, for the development of production."

You have three extracts there and they are not taken out of their context. They are all speeches made by responsible Ministers, the Taoiseach, the Tánaiste and—the key Minister in the Cabinet—the Minister for Finance. Two of them, the Taoiseach and the Tánaiste, refer to the fact that there is a crisis and they suggest methods of meeting that crisis.

The Minister for Finance refers to being put to the pin of our collar to keep the Irish pound on a par with the the British pound. I should like to pay tribute to the Tánaiste and incidentally to the Taoiseach. I think that they saw, albeit too late, what they were doing, the damage they were doing, and they did make an effort when the measure came under discussion in the Dáil to reverse, to retrace their steps and they turned a political somersault. They retracted all their crisis speeches. They agreed nearly fully with the views expressed by the Leader of the Opposition in speeches he made in Rathmines and in Cork. It might be a bit churlish if I were to complain because that somersault was turned by the Tánaiste and the Taoiseach. My only complaint is that they did not do it in time. They should have had the courage to retrace their footsteps a long time before they did, but at all events they did attempt when the Tánaiste introduced this measure in the Dáil to undo the damage they caused. I have to refer to his speeches there because we did not get the benefit of a speech from him or from the Minister for External Affairs in this House.

The Tánaiste did then say that he agreed that there was not any crisis. The day after he had referred at the Fianna Fáil Ard-Fheis to a crisis, the Taoiseach went back to the Fianna Fáil Ard-Fheis and said that there was not any crisis, that it was merely a serious situation. Credit, therefore, must go to the Leader and Deputy Leader of the Government for recognising the danger into which they were leading us and for endeavouring to avert that danger. I give them all credit for that.

The next matter to which I want to refer is the question of prices and price control. Members of the House will know that during the time of the inter-Party Government the Prices Advisory Body was established. It was stated publicly at the time that that body was being set up so that price applications could be heard and determined at public sittings. It was explained by those responsible for bringing this body into being that a certain amount of importance attached to the fact that this tribunal would sit in public and that anyone who desired to do so would have an opportunity of appearing before it and making known their objections to any applications for increased prices which were brought before it.

It was felt that that type of machinery would have a good result in two ways. It would give the manufacturer or industrialist an opportunity of explaining to the public why he sought increased prices and it would, to a certain extent, turn away the wrath of the public from him if he could justify his application. It was felt also that the ordinary Irish consumer is not an unreasonable person and that if he sees a logical and reasonable case for a price increase he will—grudgingly perhaps—accept the inevitable and pay the increase.

The policy of the last Government was that such an inquiry should be made, and should be made in public. Members of the present Government never claimed in so many words that they would reduce prices; they did it by implication. One thing that they did promise, however, was that they would set up more effective price control machinery. I want to place on record my opinion that the only change introduced since the 13th June last is that the Prices Advisory Board has been driven underground. Why I do not know, but I think there have been only one or two public sittings of that body since the change of Government. I would like the Minister in his reply to explain why this body, which could have rendered and, in fact, did render service to the public by sitting openly, should be driven underground. Why are price increases being made, presumably on the recommendation of that body, without the benefit of a public inquiry at a public sitting? Recent replies given by the Minister for Industry and Commerce to parliamentary questions show that a great number of recommendations have been made, but that they were made as a result of private rather than public sittings.

The people of Dublin City and, I think, the people generally, are disturbed by the rapidity of price increases, particularly in the last few months. It may be true to say, and I think it is true, that many of the commodities which have increased in price are not taken into account in the compilation of the cost-of-living index. Consequently they are not reflected in the cost-of-living index figure one way or the other. Nevertheless, they are articles which are bought and consumed by the people of the country with some frequency. They have increased in price, some of them by direct Government Order without being referred to the Prices Advisory Body, others apparently on the recommendation of that body. I think that the Minister would be wise to remember that people expect him to endeavour to have effective price control machinery as he promised and that people will probably understand the need for price increases if he allows that body to continue to sit in public rather than in private.

In my contributions in this House I am never very long-winded and I always try to avoid going over points which I intended to make but which have already been covered by other speakers. I am handicapped perhaps now because Senator McGuire, with whom I have frequent contact outside the House, in his carefully prepared statement dealt with many points with which I would have dealt myself, but there are one or two which will perhaps be novel in this debate.

I wonder if I will be accused of heresy if I say that the trouble with us in our economic situation is not that we have too much spending but that we have too much leisure. This is a measure dealing with Supplies and Services and it brings in the whole question of the proportion of industrial activities going on in this country. Industrialists know only too well that they are meeting demands daily from organised labour for more and more wages for less and less work. In case anybody thinks I am exaggerating in my language now I can tell the House that that is the situation with which organised industry is confronted at the present moment—demands for more and more wages and with them demands for a shorter working week.

Let us face up to reality. When I read the debate in the Dáil and the criticism made there on this very Bill I wonder if even now after years of industrial conditions we have made up our minds that Irish industry is entitled to a place in our economy. Industry has been given protection in the form of a tariff, but that is the only protection Irish industry has. Having got the tariff it is then without any protection at all against the sneering of every section of the community who, if they had the real interests of the country at heart, would not indulge in such ill-informed criticism as we have to put up with every day. It was urged in the course of the debate in the Dáil that where industry got this heaven-sent tariff, then that tariff situation should be reviewed every year to ensure that that industry could show that it was more efficient than it had been the year before. The former Tánaiste had the effrontery to say that, knowing himself how far the attitude of labour in this country to young industries is the cause of much of the inefficiency that may or may not exist.

It is time somebody said these things. I am not a pessimist in any way. I do not want to intrude a personal note into this debate. I am at the present minute engaged in more industrial development. It is not very heartening to people who are expected to put up their money and their time to create new speculative industries when they are subjected to this constant carping criticism which suggests that industry in this country should be treated worse than industry is treated in any other country of which I have knowledge, and I have knowledge of a few.

This is not the only country in which industry is protected. Great Britain has protected industry. The United States is the home of protected industries but these industries do not have to submit to the constant barrage of hostile and hurtful criticism that is the lot of the industrialist in this country.

Apropos of the scare, to whatever degree it exists, I would only say that, while I am happy to inform this House that many new industries at this moment are in process of development, there are others that are held up because all industrialists are not perhaps as progressive or enterprising as some more of us are. There are the timid type of industrialists in this country who have been scared and who are holding their hand about industrial schemes that they would be very anxious to put in force to-morrow, but how can they be expected to allay those fears when public men in the Dáil and out of it are continually hammering at industry and suggesting that it ought to put itself in handcuffs in order to please the people who do not even bother to find out what the facts of the situation are.

Another of the slogans that are used is that anything made in this country should be as good and as cheap as is made outside. I will boast that, taking industry by and large in Ireland, the goods produced are as good as are produced anywhere else in the world but do not expect that they can be as cheap as the imported article coming from countries which have more favourable conditions in the sense of a big domestic volume of output and where the working conditions are not as onerous on the employer as they are in this country. Let us get rid of this idea that anything that is put on the market in this country that comes from an Irish factory must be as cheap as the thing that is imported. If that is to be the case, shut down all the textile mills, shut down the clothing factories, bring in all you need from Japan. That is the way you will get cheap goods for this mysterious person called the consumer.

What is a consumer? Is the manufacturer in this country a consumer? Is the multiple-line shopkeeper and distributor a consumer? No. They are not consumers in the eyes of these self-constituted critics. The only consumer is the man who consumes his own verbosity and we have plenty of these.

Transport was discussed and I will not go into that at length although I could easily do so. I would join in urging that we retain in this country that degree of private enterprise in transport that we at present have. Nobody can tell me or prove to me or anybody else that a nationalised completely monopolist system of transport would be for the good of the country. To begin with, it would be inflexible. It would not suit the needs of our farming community. The little private haulier in any town or village is at the behest of those who need his services at times when no nationalised transport system could possibly give him service. I will leave it at that for the moment.

That brings us to another suggestion that I would like to make to the Minister. A few months ago I was one of a party that went across to England to see the initiation there of an enormous oil refinery. In the period of office of the first Fianna Fáil Government they went very far along the road to have an oil refinery in this country. I venture to say that the conditions for that now are infinitely more favourable than they were then and I would strongly urge the Minister and the Government to explore the possibility of bringing it into force. At the time we were talking about an oil refinery before, it was merely to refine petrol for the needs of this country and to refine petrol for a community of about three million people is a very speculative proposition. If we are to imagine another world war, which God forbid—we have to face up to the fact that the world is preparing itself for another world war —I do not think any man in this House doubts that if it were a clash between Communism and Christianity there is only one place where Ireland would be.

In that event, if I am right, and I feel sure I am, this country holds out to these big oil combines a fine location for a strategically placed oil refinery where the need of this country would be supplied—by this country I mean north, south, east and west—and it could easily be that it would be a nice handy hopping-off place for export from this country to other countries that might be engaged in the conflict.

There is a bigger thing now than petrol refining. The science of petrol chemistry has developed so much in the United States that the by-products of petroleum have got to a volume now that is staggering in money value. It is simply an amazing figure. The chemical by-products of an oil refinery in this country would stimulate a lot of the industries that we have at present and, funnily enough, they would create the raw material to set up an infinitely larger number of new industries.

I said my contribution would be short. I have tried to be a little bit constructive and helpful. I throw that suggestion out to the Minister and I conclude by echoing what Senator Hayes said in opening this debate: What we want is to declare, not that there is any need for panic, but that there is a wholesome need for more work. That will cure our troubles

Níl fhios agam cad é an bhrí atá le Bille den tsórt seo, Bille Soláthairtí agus Seirbhísí, a thabhairt isteach gach bliain chun údarás d'fháil féna mbeidh smacht ag an Aire agus ag an Rialtas ar dhíol agus ceannacht earraí, ar praghsanna agus ar chúrsaí eile a bhaineann le saol na ndaoine. Fé mar a chítear domsa ní móide go dtiocfaidh aon athrú ar imeachtaí an tsaoil ná ar an dul a bheidh ar na nithe a bheidh ag déanamh buartha do náisiúin an domhain, agus an náisiún seo a chur san áireamh, go dtí go mbeidh síocháin bunaithe sa domhan arís agus is baolach gur fada uainn an lá sin fós. Dá bhrí sin, 'sí is dóigh liom gur ceart don Aire Bille a thabhairt isteach a thabharfadh údarás agus cumhacht don Rialtas greim agus smacht a choimeád ar sholáthairtí agus ar sheirbhísí go ceann trí mblian no cúig bliana. Ach is dócha go bhfuil taobh eile ar an scéal. Tugann an Bille seo caoi do Theachtaí agus do Sheanadóirí díospóireacht a bheith acu ar pholasaí an Rialtais agus ar imeachtaí na ndaoine ar fad. Do réir mar a thuigim is féidir cur síos a dhéanamh ar aon rud fén spéir nuair a bhíionn an Bille cinn bhliana seo na soláthairtí agus na seirbhísí fé dhíospóireacht, cúrsaí airgeadais, cúrsaí talmhaíochta, cúrsaí leasa shóisialaigh, cúrsaí geilleagair agus tionscail, ceist phraghsanna agus mar sin de.

Ar a shon san is uile ní mian liomsa ach an chaolchuid a rá ar an mBille seo indiú mar is eol dom go bhfuil anchuid ráite cheana ag lucht polaitíochta ar gach taobh agus go dtuigeann na daoine ar fud na tíre gach gné den cheist agus fios fátha an scéil.

Like the Senator who has just sat down my remarks on this Bill will be brief. A lot of the discussion in this debate has centred on the Report of the Central Bank. Much reference also has been made to speeches that were delivered about the same time by certain Ministers of the Government. I notice that Senator Professor Hayes and Senator Baxter admitted that there was a certain amount of truth in the conclusions which the Central Bank Board had come to. It must be admitted by anybody who has read the report and who has read carefully the ministerial speeches that they all sounded pretty much the same notes.

No, there were several different notes.

They sounded a note of warning to the Irish people that the economic and financial position of the country is grave. Of course, anybody who studies the position must come to that conclusion—and it does not matter a traneen what it is called, whether it is called a crisis or a problem the gravity of the position is still the same. The fact is that we are paying out for goods we are purchasing abroad roughly £3 for every £2 we are getting in for the goods we are exporting. How could anybody look upon such a position with complacency.

A lot of discussion has taken place on the subject of our external assets. At that rate of procedure and in conditions of that kind it would not be very long until the whole of our external assets were dissipated. It would be the duty of any Government—apart entirely from the Central Bank—to explain that position to the Irish people. When the Minister for Industry and Commerce and the Minister for Finance explained that position to their audiences and the Irish people they were doing no more than their duty. At that rate of progress in the wasting of our external assets we would soon find ourselves with no assets at all with which to purchase capital goods for the requirements of this country.

Apropos the question of capital goods, we have been told by certain politicians that the explanation for the gap in the balance of payments is partly that capital purchases have been made over the past three or four years. Apart from material for housing, I am not aware of any great capital purchase abroad either for the expansion of agricultural output here or for the expansion of our industries. I should like some speaker, in the course of this debate, to tell us where exactly these purchases have been made over the past three or four years, what they were and what use they were put to. Have they been utilised to increase production on the land? If they have, the result is very poor because we find that this is one of the very few countries in western Europe which has not increased production on the land over the past three or four years.

The only one of two.

Yes. Austria is the other country. If there have been such purchases of capital goods as we are given to understand were purchased, to what use have these purchases been put? They have not been converted to any increased production on the land. I was intrigued to hear Senator Baxter mention the advisability of, I think, a 30 per cent. subsidy on fertilisers. It took my mind back to the discussion in the Dáil when the Land Rehabilitation Act was being discussed before it was passed. Several Deputies proposed to the then Minister for Agriculture that it would be a good idea to utilise some of the Marshall Aid money to subsidise fertilisers. Did the then Minister or the then Government give ear to that suggestion? They laughed it to scorn. They said that it was not feasible, that it could not be done. Whatever chance there was of subsidising fertilisers when all the Marshall Aid money was available, where could the money be got now for that purpose seeing that we are faced with an unbalanced Budget and that we have to take responsibility for commitments that were entered into over the past three or four years and that were never financed? It was when Marshall Aid money was available that people should have spoken about a subsidy on fertilisers and those who did refer to it then did not get much heed.

The present position of the country is rather serious. However, while we all say it is serious, nobody seems to know what should be done about it. It is very easy to talk about more and more production from the land but how is that going to be achieved?

How is it going to be done? What are we going to do about ensuring increased production? There is price inducement, but is that enough? I remember the early days of Sinn Féin, when we had the question of trying to get the people to contribute to a situation here that would make the people self-supporting. Certain members of the Sinn Féin clubs were sent around to the farmers to appeal to them to increase the acreage under tillage. Some of the farmers responded and others did not. Of course, the policy of Sinn Féin at that time was not properly understood. It should be understood now and it appears to me that the only salvation for this country is the vigorous application of that Sinn Féin policy, with the co-operation and help and goodwill of all public men. Unfortunately, for the past three or four years, there have been public men who did not give that policy their good will. Instead, we had certain spokesmen of the then Government going around decrying the policy of growing wheat and beet and also making little of the efforts that had been made to develop the peat industry. I hope that we have seen the last of that. I hope we have left it behind and that we shall look to the future, all of us, with a better national spirit, that we will put the principles of Sinn Féin into operation here with all our might and all our goodwill.

On the question of transport, there seems to be a conflict of opinion as to whether private hauliers should be allowed to engage in transport or whether a monopoly should be left to Córas Iompair Eireann. I think a middle of the road policy would be a solution and that there should be no attempt to interfere with private hauliers engaged in local transport. It might be a different thing regarding transport over longer distances. If we are to keep Córas Iompair Eireann on its feet and bring about the day when it will be in a position of solvency, I am inclined to think that the activities of the long distance private hauliers will have to be restricted. That may be an unpopular thing to say, but I think it is more or less necessary to bring about a change. There should, however, be no interference with the local private haulier. He is in a totally different position from that of the long distance haulier.

Senator Professor O'Brien, in his very informative and instructive speech, commented on the functions of the Central Bank and the Department of Finance. He referred to the Central Bank as a creature of the Government, put there for a definite purpose, and said that the people or the Government need not follow the remedies that the Central Bank suggested to repair the balance of payments. It is all to the good that the Government did not follow the remedies suggested. If it did, they would lead to reactions which would be very serious for the country.

Bank reports are notorious for gloomy pronouncements, and the Central Bank Report is no exception. The worst of it was that its gloom seemed to have affected certain members of the Government. During the Recess following the adjournment of the Dáil last July—as adverted to by Senator O'Higgins this evening—many gloomy speeches were made by Ministers and quite a lot was stated about a crisis, that subsequently—as a result of the reaction of members of the Opposition —proved to be not a crisis but just a problem. It is strange that in 1947, before the present Government went out of office, certain prominent Ministers indulged in a series of crisis pronouncements, commenting on the three of four years of stress and penury that were sure to follow. There happened to be a change of Government, however, and instead of years of stress and acute conditions in the country the people, as a result of the policy initiated by the inter-Party Government, went through a period of prosperity and progress, that have certainly very much impressed the majority of the people, so much so that no future Government will dare depart from that without suffering the consequences.

Mr. Ruane

Senator O'Brien referred to the interest caused amongst the people following the publicity given to the Central Bank Report. At no time in our history have the people as a whole taken such an interest in financial matters and manifested such

They got Marshall Aid.

an interest in the question of capital development. As Senator Baxter rightly pointed out, if we are to get the expansion in production that the Central Bank asks for, if we want increased production, there must be investment to secure it. Just as ordinary industrial enterprises need capital investment to purchase the machinery necessary for expansion and increased production, so agriculture also needs capital investment.

The people—and certainly the farming community—did not need the strictures of bank directors to point out to them the necessity for increased production. To attain that object something must be done to restore the fertility of the land, to put something into the impoverished soil to replace all that has been taken out of it for years. What country is more entitled to the investment of Irish capital than this country? Certainly, the people as a whole will never again agree with a policy that encourages the investment of our assets abroad while this country is starved for want of investment. Senator Hayes pointed to the necessity for an unification of forces. There is no reason why a policy initiated by one Government should be repudiated by a subsequent Government which follows it, if that policy justifies itself.

It has been.

Mr. Ruane

There is a little good in the worst of us and a little bad in the best of us, and I think it is nearly time that people in this country, and especially those onerated with the administration of its affairs, made up their minds to try to consolidate the good on all sides. It is good to know that the Government do not accept the Central Bank Report and do not propose to follow the remedies it puts forward for remedying the balance of payments. The Government have accepted the land project scheme, the necessity for increased housing drive and for increased hospitalisation. Again, I advert to Senator O'Brien's advice in the matter, that while capital investment is necessary, it would be very unwise and the people would not stand for it if that investment were to be brought about by increased taxation.

I was also interested in and thoroughly approve of Senator O'Brien's remarks as regards income-tax, that a small proportion of the people—are at present taxed beyond capacity and to such an extent that a further imposition would be a gross injustice. I see no reason why the policy which appealed to the people and which was endorsed by a majority when an appeal was made should not be continued. I believe that if it is, with the combined efforts of the brains of all Parties, the country will be able to meet and solve any problem with which it is confronted.

I want to direct the attention of the House to the Bill before us. It is a Bill which the majority of members would prefer not to see introduced. It gives very wide powers to the Minister and the Government and I should like to direct the attention of the House to one or two aspects of those powers and to examine how they have been exercised during the past 12 months. The Bill is a Bill to extend for a further period of 12 months the Supplies and Services Act of 1946. At this time last year, we were considering a similar measure and our attention was then directed to the importance of price control. This Bill gives the Minister power to do various things, the most important of which have to do with the giving of subsidies and the control of prices. It is to these two aspects we should direct our attention rather than to the other matters which have been introduced both here and in the other House.

The question of subsidies is tied up with the question of rationing, and, so far as I can see, as long as there is any question of giving subsidies, we are going to have rationing, despite the promises made at election times. I do not agree with either. I should like to see a time arriving when we could abolish rationing and subsidies, but we cannot abolish one without abolishing the other. I feel that the amount of taxation collected from the people in order to subsidise various commodities, such as butter, bread, tea and so on, is not appreciated by the people as a whole, and if we could devise a system whereby these moneys could be provided for the people in a form other than subsidies, it would be better national policy. Under present conditions, no matter what he might like to achieve, no member of this or the other House will go into the Lobby to vote against either rationing or subsidies, so that we have arrived at the position in which we must agree on these two subjects.

There has been introduced into the discussion of this Bill, both here and in the Dáil, something which I would prefer not to discuss on it, something on which we could very well afford to have a separate discussion. From the trend of the discussion, one is inclined to get the impression that there is a feeling in the minds of a number of the members that moneys can be created in some way other than by production, and if there is any member here or in the other House who can put up a valid argument in favour of such a proposal, the time of the House could very well be devoted, and should be devoted, to giving him an opportunity of putting forward his views. Many countries have tried it in the past. In the course of the debate in the other House, some members suggested that it was merely a matter of turning a machine. When Senator Kissane was speaking, I was prompted to intervene with a suggestion that, despite all the advances we have made, we cannot boast of having made any in regard to the one Department which is the most important and essential Department in the State. I refer to the Department of Agriculture.

I propose to put before the Senate some practical views on why we have failed to do the thing we should have done during the past three years. Senator Baxter in his very long speech here this evening—he is always very long and lengthy in his discourses—suggested that there should be a national approach to the question of agriculture. I agree with that but what is the national approach going to be? In quite recent years, persons charged with the responsibility of directing this very important industry of ours issued very specific instructions to the farmers. Just a few occur to my mind. One was that the farmers should direct their attention to the growing of oats and potatoes. I believe that at the time this was to distract them from the growing of wheat. The farmers were assured that they would have a guaranteed market for whatever amount of oats and potatoes they would grow. The farmer is a person who looks to the future and he must, when about to sow down his land in January or February, make a decision. Having made a decision to grow so many acres of oats and potatoes he was given a guarantee by the person then in control of the national industry of this country.

A certain number of farmers went in for increased production of oats and potatoes. When they came to the Minister for Agriculture and asked him to find the market he had promised, he politely—though not as politely as I should like to do in the Seanad—told them it was no business of his to find a market. If they could not find a market, the best thing they could do was to apprentice themselves to a tailor or some other trade. They should not be in agriculture at all. The Minister for Agriculture gave them another alternative, I must admit. He told them that they should feed their produce to their stock and walk their produce off the land.

What the Minister forgot to take into consideration at that particular period was that we have in this country quite a large number of people—I am sure Senator Baxter has quite a few of them in the County Cavan—whose very maintenance depends on taking conacre. They rely on the taking of that conacre to meet their demands during the year. Not being satisfied for having received the farmers, the then Minister for Agriculture turned his attention to the farmer's wife. He told the farmer's wife that she had a very important part to play in the national economy of the country.

He told her that she could produce the poultry and the eggs and that by increased poultry production and increased egg production she would make a very valuable contribution to our national economy. What was the result of all this? Last January and February the Minister had only one advice to give to these poor womenfolk whom he induced to go into poultry and egg production. He told them that the best thing they could do was to sell out their old hens. The then Minister for Agriculture had failed to drive a hard and fast bargain—a thing he would not have liked to have done—with his friend across the water.

We have come to that pass on account of the varying instructions and directions that are issued to the agricultural community. Senator Baxter, I think, referred to the amount of money spent on the land rehabilitation scheme. I should not like to misrepresent the Senator but I think he made undue reference to the amount of money and to this particular scheme's application to congested areas such as Connemara.

I never mentioned it at all.

When the Supplies and Services Bill was before this House on a previous occasion, many of us made a suggestion which was not then accepted but I think it was a very valuable contribution at that time. We advised the then Minister that if we were to get production out of the land we should, as far as possible, under Marshall Aid or by way of any other assistance the Government could give, improve the lands that produced the food for the people during the emergency and, having done that, we could direct our attention to the waste lands.

It has been suggested from time to time that the land rehabilitation scheme was something which was never thought of before but for many years a vast amount of money has been spent on the farm improvements scheme and various other schemes.

In the congested areas, particularly Connemara, the land rehabilitation scheme is looked upon rather—as was said in this House—as an unemployment scheme. If we are just going to approach it in that way we could find more useful work and a better return for the money spent. A certain amount of money has been spent over the years in these areas. I would invite Senators Baxter and Hayes at any time to these areas to find out what has been done under the scheme and compare that with what was done under other schemes. If they are impartial—and of that I have no doubt at all—they will admit that more useful national work was done under other schemes. While something may be done in other areas, certainly nothing can be done in areas like Connemara and the Gaeltacht in general by the land rehabilitation scheme to make the expenditure worth while and it would be much better if we directed our attention to other schemes which existed before it was introduced.

The debate has centred round the Report of the Central Bank and the White Paper. I do not for one moment presume to be one of those competent to speak on financial matters but I would say that while many have suggested that Ministers have spoken with different voices no one has given us a quotation definitely pinning down differences in the attitude of members of the Government towards proposals to meet the present position. No speaker has questioned the correctness of the Central Bank Report.

It is, of course, quite natural to expect that supporters of the last Government would not be too pleased and that they would like, as a former Minister conveyed in the Dáil, I think, that a direction should have been given to the Central Bank as to what they should put in their report. I hope that we will never reach that stage. When Parliament sets up a board, either Bord na Móna, the Electricity Supply Board or the Central Bank, and when we request them to present us with an annual report, that report should be their own and not a report which they would consider favourable to a Minister or to the Government under which they serve.

It is suggested that the Government, having considered for a few days a copy of the report, should have sent a request to the directors of the Central Bank to alter it. We can quite understand—any person with common sense can understand—that if you are a director of a firm and auditors are called in and make a report which is not as favourable to your management as you would like it to be, you will feel a bit hurt. It is only natural, then, that those associated with the former Government should feel a bit hurt because the directors of the Central Bank had to present to the people of the country what they considered to be a true picture of the financial position.

Senator O'Higgins and other Senators suggested that there has been a complete somersault by Fianna Fáil Ministers. I should like to ask them: a complete somersault from what? My mind goes back to a very important report which could have had a direct bearing on the whole aspect of the country, the Report of the Banking Commission and the majority report of that commission was not very different from the Central Bank Report to-day.

That did not deter the Government composed almost of the same persons from going forward with their national policy. One would think from what one has heard in recent weeks that our housing programme was quite a recent campaign. It is on the records of this and of the other House and of Dublin Corporation that tributes were paid to the housing programme as far back as 1934 by the then chairman of the Housing Committee of Dublin Corporation, who was no less a person than the late Jim Larkin, and also by no less a person than the former Tánaiste, Deputy Norton. At that time we had to fight an economic war.

If people on the other side of the House had had a more national approach to that problem I believe—I may be right or I may be wrong—that that fight would never have been undertaken, or if it were undertaken that it would not have been so prolonged as it was. In spite of that economic war how many hospitals were built during that period, how much land division and afforestation was undertaken? Listening to some of the speakers here and in the other House one would think that only during the last two or three years was an attempt made to develop the resources of this country.

Senator O'Higgins suggested that there is or, at least, that there has been, a very definite policy on the part of the banks to restrict credit. When we read a statement in to-day's Irish Independent and Irish Times— I am not referring now to the Irish Press at all but to the two national papers that we have—made by the secretary to the banks association that in the last three or four months a sum of, I think it was £30,000,000, has been advanced, how can we say there is restriction of credit there?

I will admit that we directed the attention of the previous Government to the importance of stockpiling but we did not suggest stockpiling of the type that was undertaken.

For instance?

We have been told that there were imports to a certain amount. We have been told that our external assets have been wasted in bringing in what were considered essentials at that time but I would like to have a very definite statement as to the headings under which stockpiling took place. In connection with the housing and hospital programme, have we as a result of the moneys that have been expended the commodities to ensure that these programmes can be continued? If we have not, then we have wasted our assets.

I should like to conclude on the note on which I started, that when we speak about our external assets we are not speaking about something that we personally own; we are speaking of something that has been very dearly earned by the community. We should not flitter them away in the way in which they have been flittered in the last three years.

I must congratulate Senator Hawkins on his remarkable ability. He started by telling us that we should not talk about this, that and the other, and then with the greatest freedom got on to the very things that he suggested should be debarred from discussion in this House.

I was hoping that the level of the debate might have continued at the heights which Senator O'Brien reached in his brilliant address. If the Seanad needed any justification, the address of Senator O'Brien was sufficient justification for the existence of the Seanad. It was a provocative speech. I disagreed violently with parts of it, just as I agreed violently with other parts. It is a good thing that we have in this House a man with the qualifications to speak as he did, either rightly or wrongly, on our general economic position.

I am sorry to find that there is constant reference to the "Opposition". I have always believed that in such a House as this references of that type should not be made. This is the Seanad of our counry, and it should not be divided into opposing camps of angels and fallen angels. When we are discussing important matters such as our economic position, which we are seeking to discuss on the Supplies and Services Bill, clever Party scoring should be forgotten. There is a bigger issue involved, and no one in this House should say: "Just because I sit on one side and you sit on another, I am right and you are wrong." He has a perfect right to say that, but he has no right to ascribe reasons to the man who sits opposite to him.

I suggest that this whole matter should be discussed as calmly as possible because it affects all of us. Despite the adjuration of my friend Deputy Hawkins, I shall avail of the Bill to speak in the fullest possible terms. If members of the other House are allowed to ramble at their own sweet wills into pastures fresh or new, I do not see any reason why I should not go with them. Senator Yeats reminds me of his father's poem, "Had I the Heaven's Embroidered Cloths." Senator Yeats' father never conceived the variety of hues that were woven by the members of the other House in the debate on this Bill. If we vie with them in our tapestries, you will forgive us because we have as much right as members of the Dáil have to deal with a question of this sort in the widest possible manner.

I would like as a preamble to congratulate Senator O'Brien on his address to the House to-day. I think the Minister for External Affairs will agree with me that no speech emanated from any member of either House of the quality, vision or breadth of the speech of Senator O'Brien, be his conclusions right or wrong.

It is refreshing to find that at this hour of the day even Senator O'Brien in his old age is becoming unorthodox. To my mind that was the most pleasant part. I remember when I was younger and probably more foolish I always thought he was all for orthodoxy in all its forms. If to-day he has gone off the straight and narrow path into the primrose path, I welcome him.

Before I deal with what Senator O'Brien had to say, I should like to refer to the trade depression which undoubtedly is with us. If we wish to discuss economic matters, we have to face up to that in a realistic way. All around us in this country there is a severe trade depression. I am not going to say that that applies to this country alone. There is a trade depression in America and in England. I do say that, whether the Tánaiste and the Minister for Finance were right or wrong, they were unwise at any rate in making their recent speeches. It was not so much what the Central Bank Report did, it was not so much what the White Paper left unsaid, as the psychological reaction to the terrible note of doom that came from those two Ministers some weeks ago that has caused this depression. They were probably right—there is no reason to say they were not right—but I would say they were very unwise. As an industrialist, I would say that it will have very severe repercussions.

Although I have the greatest admiration for the Tánaiste and join with Senator Quirke in paying tribute to him as being the man who really established Irish industry, giving it tariffs and quotas and helping us along, I will say that on this occasion he was definitely unwise and that his speech and the speech of the Minister for Finance will have repercussions which are only starting to be felt and will, I believe, result in severe unemployment in this country within the next three months. Many industrialists here are at present keeping in production and hoping to keep going until Christmas, but I am of the opinion that after Christmas unemployment will set in.

I move the adjournment of the debate.

Debate adjourned.
The Seanad adjourned at 10 o'clock until 3 o'clock on Thursday, 13th December.