When I opened my remarks last night, I paid a tribute to the Minister for Industry and Commerce for what he had done for Irish industry in the past and I should now like to pay him a tribute for the speech he made in introducing this Bill in Dáil Éireann. He has on various occasions told us to get out of our camps and I should like to congratulate him on getting out of his igloo and into the caravan of more advanced thought in relation to the matters dealt with by this Bill. I do not agree with the attitude of mind expressed by Senator Hayes and Senator O'Higgins on this Bill, that the Central Bank Report should not be debated by this or the other House. The impression I gathered was that that report was sacrosanct, that it was their statement and nobody could refer to it, but it seems to me that a corporation of a type of the Central Bank, which is created by the Oireachtas, should be subject to whatever criticism, comment or advice any members of the Oireachtas want to put forward and I propose to avail of this opportunity to make some comment.
Supplies and Services (Temporary Provisions) Act, 1946 (Continuance) Bill, 1951—Second Stage (Resumed).
May I say that I merely said that the Central Bank Report should not be subjected to what might be called political criticism?
I express my regret for my misinterpretation of the Senator's remarks.
What the objection really is to is the use the Minister made of a certain stick in the Dáil with which he knocked over all the Opposition. I think that is what is wrong.
As a back bencher, I am surely not going to educate the leaders of both sides of the House. I want to express my appreciation of the wonderful review of our economic condition which was given to us by Senator O'Brien and to draw attention to the fact that the Irish Press of today—I refer to the newspapers generally and not to the newspaper of that name—were appreciative of his contribution. I disagree violently with portions of it, but I agree just as violently with other portions, and I feel that it was a good thing that we had a man of his ability and broadmindedness to give us the type of survey he gave us.
I was rather interested in his description of certain words which have been referred to by a professor in another university as "bankers' jargon", as "emotive terms". It was a rather nice gesture from University College, Dublin, to University College, Cork. You, Sir, represent Galway, so you are out of it. I was wondering whether, at any point in the debate, Senator O'Brien would fall for the emotive term and I was glad to find that he was human, because, at the end of his address, he did come back to the ordinary terms of inflation and deflation.
When discussing a matter of this sort, which affects the whole economic life of the country, we should get down to the basis of what the cause of the trouble is and what was the cause of it. I am of the opinion that the members of the Oireachtas are themselves entirely to blame. We have bandied about abuse of our banking system and we have bandied abuse as to the Central Bank. The Central Bank is of our creation, but the Central Bank Act of 1942 does not give the bank the powers which some members of the Oireachtas are desirous of giving them. I do not think it is fair that a joint stock banking system should be victimised because it is a commercial institution. If our financial system is not correct, then it is in our power to alter that. We should not direct criticism to a system of commercial banking which is operated outside this House and which cannot reply to the criticism of this House or the Dáil.
I find that bankers are reasonable people if you treat them reasonably. I hear a great deal about the fact that credit facilities have been restricted. I have not been able myself, on investigation, to find a single case where bank facilities have been refused. That was where good quid pro quo was offered. We have people on this side of the House who are engaged in business. It is not their custom to give extended credit to people who are not going to pay. Neither is it the custom for bankers to give long-term loans to people who are not courteous and reasonable.
Senator O'Brien raised so many matters in his survey that I will find it very difficult to deal with them entirely. One thing he mentioned was the exchange value of the Irish pound. I have not the broad viewpoint that he has got on this matter but I cannot see, taking the long-term view, why the Irish pound should fall. You have on the other side of the water a machine which is creating money for the making of non-productive goods. You have an economy over there which is in terms of pound notes—notes which are used in purchasing material to be used for destructive purposes, but the Irish pound is based on our own internal values, and this country is intrinsically a wealthy country. I am not speaking about wealth in terms of money. I am talking about the climate, the means of subsistence, food and clothing. In respect of these things Ireland cannot be out-rivalled by any other country.
Senator O'Brien will remember that in the early part of 1935 a survey was made in America. It was found out that America was 98 per cent. self-sufficient. France at that time was next on the list and Ireland followed. I say, with due thanks to both this and previous Governments, that since that time the real natural wealth of this country has increased pro rata. This is a wealthy country, and to imagine because of money values that it is a poor country is wrong. It is an unfair attitude to adopt. We should be down on our knees thanking God for the country we have. Senator Hawking referred last night to the unerring prophecy of the Tánaiste. I was going to refer to it as the other Gospel of St. John in which was prophesied three years of doom. Even during that three years of doom the wealth of the country increased.
When people come along and say that the Irish pound will fall and must fall in relation to the English pound, I do not entirely accept that statement. It is a mere matter of book-keeping that could be corrected. The pound sterling may be devalued again, but if the Irish pound must fall in value in relation to what must it fall? Is it in relation to the English pound, the dollar or the French or Swiss francs? What Senator O'Brien really meant in this connection was that our total exports in terms of money will never equal our total imports in terms of money. I think that the relationship there should be governed by our own internal administration of our legal assessment of values.
A lot of us have fought for the ultimate freedom which is the economic freedom of this country, and it is sad to reflect that when we arrive at the point of creation of that freedom we find a mere matter of an entry in a book not equating with an entry on the other side barring our progress. I have got the greatest respect for Senator O'Brien's mentality and knowledge. What I am saying I am saying as an ordinary man who has taken some interest in economic matters. Any inflation that has come is being caused by the influx of the English pound for the purchase of Irish property by one type or another. I see Senator Hayes shaking his head, but I think I can prove that £100,000,000 of English-created sterling has come into this country this past three years.
With regard to industrial production, it has to be remembered that we have only 25 years' experience of it. We are still learning. Senator O'Brien said the one thing that might affect exports is stagnation in production. With regard to the industrialists themselves, I need not praise them as they have been already praised by speakers who went before me, but I would like to pay tribute to Irish workers. The Irish worker is intelligent and is as good a worker as anybody else. It will not be the fault of those people if there is stagnation. The stagnation arises from the fact that there has been under-investment and under-development. The fact is that we have been doing everything to invest our capital abroad for the creation of atom bombs and we have neglected our own internal economy.
Senator O'Brien gave three solutions to our present difficulty: an alteration in exchange values, to raise interest charges and the restriction of bank loans. Having discussed the first two he formulated the theory that the best of the three solutions was probably the last, but he said that its result would be unemployment and that we must face up to the fact that unemployment would result from the restriction of bank credit.
I think I am correct in saying that what he really wanted to say and did say-but I could not write as fast as he could talk—was that he would like to see a transference of employment from luxury goods to essential goods. I do not agree with the definition of luxury goods. My young wife uses a cream upon her face. I think that God made her beautiful enough and I do not think that she needs this cream but she thinks she does, and who is Senator Professor O'Brien to come between us on matters of this kind? To define luxury goods is very difficult. Some of the ladies in this House will agree that what the mere male looks upon as a luxury is an essential and I do not wish to disagree with the feminine section of our population. On the other hand, some people regard vehicles as luxuries. I have been in-interested in the production of a particular class of vehicle and I do not want to go into that question too closely. This is not the eighteenth century, however, and while I agree with Senator Quirke in his advocacy of the continued use of the horse as a mode of transport, some of us at our age are not adaptable and could not get as easily on a horse as we would get into a Ford sedan. Whether a car is a luxury or not is debatable. When you come down to the actual conversion into practice of what Senator O'Brien said, it is difficult to determine what is a luxury and what is essential. Some members of this House would say that Seanad Éireann is one of the former.
I would agree entirely with Senator O'Brien in his argument for the creation of an investment council. It is not to-day or yesterday but long before Dáil Éireann was established that the argument was first made for the establishment of a national economic council. With all due deference to the Government and Ministers who seem to think that they are omnipotent and that power confers infallibility upon them, I would say that the ordinary common man outside has plenty of common sense and that to refer to him and take advice from him even on economics might be good national policy in the long run. There are many people in this country who will never enter the portals of Dáil Éireann or the Seanad for many reasons, but we cannot assume that those who have been elected here have a monopoly of the brains of the country with regard to economics or any other matter. In the matter of economics which guides our daily lives it would be wise in the long run to form a national economic council. I would again plead, if the Government are not prepared to form such a council, that they should extend to the Industrial Development Authority which still exists whatever powers they can give in that direction. Under-investment is still rife and many industries are ready for development. The people who could best judge what industries should be developed are the Industrial Development Authority.
Senator O'Brien said that the next best thing to producing for export was to produce substitutes for imports which is so axiomatic that I need hardly comment upon it. That is what Deputy Lemass, Minister for Industry and Commerce in 1934, had in mind when he brought in the tariff and protection clauses. He did so to develop the production of substitutes which are in most cases as good as, if not better than, imported goods. That is Government policy. The creation of further substitutes can only be done by scientific endeavour.
I do not entirely agree with Senator O'Brien on the necessity to finance investment out of savings. Savings are a method of short-circuiting purchasing power. Take the agricultural community. These are the people who mainly save in the proper sense of the word "saving". Industrialists and businessmen do not save; we invest, usually in our own businesses. The agricultural community saves and invests unfortunately at 1 per cent. in the ordinary commercial bank. Then they raise an overdraft on which they pay 5 per cent. These savings at 1 per cent. go to the central bank, by which I mean in this instance the head office of a bank such as the Bank of Ireland, whose directors I used to find some years ago going about with headaches worrying about what they should do with the £95,000,000 agricultural deposits which they had. That was a portion of what are now referred to as external assets. This was not so much saving, consequently, as expatriation, and I do not argue for it.
I would much prefer to see capital issues, possibly under the direction of an economic council, and farmers and those who could save could invest in industrial development. There are plenty of opportunities, and although Irish industries might not pay the immense dividend yield of English industries, they are generally basically sound and, apart from the patriotic point of view, they would give a better yield than the banks. It would mean investment at home instead of abroad. When I talk of savings, I hope that I am not misrepresenting Senator O'Brien's mind, but I am not entirely enamoured of the word "savings". Savings do not come back to their source. They have been unfortunately up to now invested externally for the greater part. I do not want to deal with figures, but the greater part of the bank holdings are external investments, and that is undesirable.
I also entirely disagree with the Senator when he referred to what he describes as the control of manufactures mentality. I suppose that the finest living exponent of it is standing in front of you, and I make no apology for it. What the Control of Manufactures Act did and wants to do is to retain the control of Irish industries in Ireland. That is what it was actually devised for, but instead of being an effective instrument, through no fault of the Minister or of the Parliamentary draftsman, it has become the laughing stock and the plaything of the Irish Bar. It is well known that advocates in the legal profession have discovered that some of the best incomes that can be made can be made in discovering loopholes in the Control of Manufactures Act. A great many of our new issues of capital for supposedly Irish controlled industries have been so successfully evaded under the Control of Manufactures Act that it has become a frightening state of affairs. There is an infiltration of external capital control in our industries. I do not agree with Senator O'Brien there, and I hope again that I do not misrepresent him.
I would like to stress out the danger that the influx of external capital investment could have. It could have a serious effect upon our future development, on our political future apart from our economic future. I would suggest that the Minister for External Affairs should convey to the Minister for Industry and Commerce the often expressed desire of the confederation of which I happen to be a member that industries in this country should operate under licence rather than that the present farcical evasion of the Control of Manufactures Act be continued. It would follow that Irish nationals, because they were Irish nationals, would get a licence to start an industry, but it would certainly debar all the hokum that is going on at the moment, when after 25 years of freedom or so-called freedom, our industrial economy is in very grave danger of control from outside the country. It is because of that that I disagree with Senator O'Brien's suggestion that external capital investment might be a good thing. I do not know why we need it. I do not think we need it. I have been watching capital issues for the last few days, some of which are not very attractive, and I find that one was over-sold within five minutes, and another was over-sold within three minutes.
There is no shortage of money in this country, unfortunately. I say "unfortunately" advisedly because a lot of it is in the wrong hands and is not being used properly. I think we do not need external capital for industry here. No greater vote of censure could be made either upon our ability to conduct our industries or to finance them. I believe that it is not necessary and I hope that it will never be sought.
I agree with Senator O'Brien entirely when he says that the direction of commercial banks should come from the Government or the Central Bank and that they should follow out those directions. I do not know, and I do not know whether Senator O'Brien or Senator Johnston knows, who directs economic policy in this country, who controls the issue and cancellation of credit. I understand that the directors of the Central Bank spend most of their spare afternoons burning up used bank notes and the other afternoons trying to find out where to invest millions of pounds in English investments. I do not like talking of directors of any organisation where I am protected by privilege and I am not saying that cynically or in the sense that I do not think these men are doing as best they can. I do say that we will have to go much further than the Oireachtas has yet gone in giving powers to these directors. Let us hammer out some economic policy that will get us back to what we originally had in mind when we were thinking clearly about these matters 30 or 35 years ago.
I do not know who has been governing the procedure of the Central Bank. I do not know in what way there is contact. I know that the Secretary of the Department of Finance is a director of it. I do not know in what way the decisions are affected by and in what way they are correlated with Government decisions on economic policy. When Senator O'Brien argues for actual contacts, I am in entire agreement with him. I hope the Government will go even further than he has suggested and give them power to do even more than they have been doing.
Senator O'Brien also suggested that it might be wise to convert portion of our invested assets to legal tender. If portion should be converted, why not the whole? Is this terrible bogey of liquidity to be continually held over our heads? We are the only country in the world having liquidity of that nature. I doubt if any professor or Minister will tell me of any other country that holds external assets of this nature for liquidity purposes. If there is to be conversion into legal tender, then I say let it all be done and let us get on with the job.
Senator O'Brien spoke about taxation and the absurd income-tax laws. Of course, we all agree with him when one gets down to income tax. He made one very profound statement, that some are paying too much and some are paying too little. I know this will not be popular with some members of the House, but I do say there is a moral aspect of this matter as well as a legal factor, and I am afraid a political factor. The farmers have the voting power and, so long as that is so, I am afraid they will never pay their true and moral proportion of taxation. We know that many farmers and agriculturists are getting away lightly. We know that men who are making more than the so-called wealthy industrialists are getting away legally with murder in the form of taxation.
Last year, when I was President of the Federation of Irish Industries, I referred to the last figures I could obtain on national income which were for the year 1947. In 1947, the total national income was in the region of £320,000,000, of which agricultural income was £100,000,000 and nonagricultural income £220,000,000. That meant that, from 1938, when the agricultural income was £39,000,000 and non-agricultural income £115,000,000, there was an increase in agricultural income of 250 per cent., whereas nonagricultural income increased by only 94 per cent. The index of retail prices in 1947 was 173. To meet an increase of 73 per cent., the poor farmers had increased their income by 250 per cent. and the capitalist, the businessman and the white-collar worker had an increase of 94 per cent.
Nobody wants to take more than their just share from the farmer or from anybody who is working on the land, but I maintain that the present disposition of income tax is immoral and is legislated for a section of the community. If farmers and agriculturists have greatly increased their proportion of the national income, as I believe they have done since 1947, they should pay their due proportion of the cost of running this country.
In so far as direct taxation is concerned, at any rate, agriculture is not paying its due share. I hope some member of an agricultural committee will get up here and be honest enough to admit it. I am only saying that because it makes my gorge rise when I have to pay 10/- in the pound, realising that somebody who has made a lot more money than I have, by staying in on wet days and working on other days, has got away with taxation of a very minute sum. I would reiterate Senator O'Brien's appeal for a revision of the income tax code.
I wish to refer to the increased deficit in the balance of trade that has loomed up in the last two years. We are told that it will put the whole country in bankruptcy, that we just cannot carry on and that something must be done about it. In fact, it has become so bad that people have stopped buying goods, presuming that they will be sold out, lock, stock and barrel. Nobody seems to have adverted to the fact that, taking 1938 as the base 100, export prices in 1950 had risen to 296 and import prices to 271, so that again it is a matter of figures, again it is a matter of book-keeping, of relating two figures. I would suggest that the position is not nearly as bad as prophets of doom would have us imagine.
I am still wondering what has caused the declension of purchasing power. One has only to leave this House, to be asked in five minutes: "Did you sell anything to-day? What is doing?" We know that at the present time in this country and in the United States and England there is a terrific declension in purchasing power. I would understand it happening here if I thought the national income was falling but I understand that agricultural prices are retaining their buoyancy and, so far as employment is concerned, excluding this last three weeks when, I hear, there was a fall of 4,000 in the number employed—I shall not vouch for the figures—there has been no serious fall in employment. Consequently, I am rather bewildered to discover the reasons why this decline in purchasing power has set in. I hope the Minister will give me the answer.
I think it is the most serious question he could answer to-day. Everybody in this country is asking for some more feasible explanation than that given by the Minister for Industry and Commerce in the Dáil. In the earlier part of my speech I ascribed it to two speeches, one made by himself and the other made by the Minister for Finance. I shall be glad to know if the Minister for External Affairs agrees with me on my interpretation of the causes.
The Central Bank Report gave an estimate of goods still here as a result of stockpiling. While I cannot give an official figure, I am very much of the opinion that the £10,000,000, which they gave as their estimate, is a great underestimate of the actual quantity of goods here as a result of stockpiling.
I should like to refer to the contents of the Central Bank Report itself and to the extraordinarily abstruse, obscure and pedantic language in which it was phrased. This report was meant for the information of the common man in the street. Any man at the crossroads in the West of Ireland should be in a position to understand it. However, economics seem to have become the closed ground of authors of jargon. The more obscure it can be, the better it sounds and the fewer people will be able to interpret it. I appeal to the directors of the Central Bank to write their future reports in a way in which they can be easily read and understood. While Lord Dunsany might not, probably, understand the economic contents of the report, he would at least be able to help to improve the English and also help to clarify the meaning.
I welcome the recent tariff increases. I may say that it is about time they were enforced. It is possible that many people who are not engaged in trade do not realise the very tough time industrialists have had during the past few years working upon a reduced tariff rate and against rather unfair methods sometimes. It seems to be a popular pastime nowadays to attack Irish industry and Irish industrialists: to say that Irish industrialists go rolling round in motor-cars and make millions. It is extraordinary that the people who make these attacks nowadays are the very people who, 20 years ago, were fighting for the establishment of Irish industry. Even among religious orders you will find black sheep. Why, therefore, should Irish industry, as a whole, be blamed if it should contain a few black sheep? It is possible that, even in this House, there are people who are not up to the general standard of the rest of the members. I feel that Irish industry has not been getting the assistance that it should have got, and I want to thank the Minister for Industry and Commerce for his timely help in coming to our assistance. I hope that, to some extent, it will assist in solving the present depressed economic position. I do not know how it will react upon purchasing power, though I do not think that it will motivate an increase.
When the Minister for External Affairs is replying, I hope he will reiterate what the Minister for Industry and Commerce said in another place, namely, that there is no immediate possibility of a fall in basic commodity prices. Anybody who reads the daily newspapers will be aware that the farmers of New Zealand and Australia are still pricing wool on the upgrade. While the present position in Egypt continues, I do not expect that cotton will fall for a long time. I can say with certainty that the public should be told that they ought to buy now. I should be glad if the Minister would exhort the public to realise that prices are not going to fall, that now is the time to buy and that, in doing so, they will keep Irish workers employed in Irish industry. If the consumers' purchasing power is not increased very rapidly we shall have a most disorganised state of industry. We shall have colossal unemployment and we shall lose our key workers whom it has taken us years to train. Further, it will take a long time to reorganise industry again. I want to stress, therefore, that anything that can be said or done by the Government or by the Minister for External Affairs, who is here to-day, should be done to make people realise that to purchase goods now is wise, not alone in their own interests but in the interests of good national economics.
Senator O'Brien mentioned the investment of foreign capital. Foreign capital has, to some extent, come into certain Irish industries with most disastrous results. When an Irish firm is associated with a foreign firm which holds an established trade mark or trade name, generally there is a restrictive clause governing its creation forbidding the export of the commodity it makes from this country. The great majority of the trade marks which we see every day in the Press are of foreign origin, one way or another.
Quite a number of these goods are processed or manufactured, but in no single case that I am aware of have the products manufactured under a foreign trade mark been allowed to be exported from this country. That is having a retarding effect on export development. It takes many years and millions of money to create trade mark goodwill. I am afraid that it will take a long time before the smaller type of Irish industry can compete successfully with the imported trade mark commodity which is widely publicised, not only in our own papers, but in imported papers. The Minister for Industry and Commerce should reread the minority report on trade marks which was issued some years ago, with a view to seeing if we can preserve a genuinely Irish-controlled industry here which is not fettered either in regard to its domestic or its export markets. Those of us who are associated with industry are sick and tired of trying to fight foreign trade marks. If we do not get some encouragement and help from the Government in this matter there is the danger that we may throw in our hand and go out and take it in here and exploit it just the same as the other fellow. And that could create a very serious position.
Senator O'Higgins said that the Prices Tribunal—that new form of the Spanish Inquisition—has been wholeheartedly welcomed by the Irish people. I should like to point out to the Senator that profits and prices are already effectively controlled through the prices section of the Department of Industry and Commerce. As a representative of an industrial body, I desire to say that, at all times, we have appreciated working directly with the civil servant, per se. The civil servant has a tradition behind him and we have great confidence in him. I desire, in particular, to pay tribute to the civil servants working in the Department of Industry and Commerce for the courtesy, attention and great assistance they have given to Irish industry.
The Prices Tribunal, which has been referred to by Senator O'Higgins, has power to ask people to come out in public and defend their prices. I wonder how the farmers would like it if, every fair day, there was a public inquisition at the market place and they were asked why they should charge £10 for a hobbling horse, and questions of that sort. We object to the extraordinary power which has been given to the Prices Tribunal. A group of people are called in and given arbitrary powers to investigate the confidential affairs of a business. We accept Government interference but we do not think that there is any right, moral or otherwise, in an outside body having such powers. We doubt very much if the creation of a tribunal which has power to examine confidential documents which we present to the prices section of the Department of Industry and Commerce is not repugnant to the Constitution. We say that the prices section is entirely competent to do that job and that if we are overcharging we are prepared to carry out their directions. We say that no other group has a right to interfere. Not alone has the Government done an unprincipled thing but something repugnant to the Constitution, by setting up a group of people who to-morrow if they wish may use information we have to give them in a private capacity regarding our prices and profits.
We accept—it would be untrue to say that we welcome—the right of Governments during times of emergency to examine prices and profits, but we do not accept it in times of ordinary competition. We resent the creation of a prices tribunal—which I do not think is in being in any other country. I hope the Minister will see to it that the day will come when the declining powers of the prices tribunal will be a memory of the past. If people object to overcharging, they have recourse to the prices section of the Department and the gentlemen there will put us through the hoop as effectively as any public prices body.
It was mere Party politics that created the Prices Advisory Tribunal. I think it was very wrong. It was done on the demand of a group of hysterical people. There were letters in the public Press and this type of hysterical talk, and to soothe them a group of respectable men were put in as the new inquisition. We have been called a crowd of rogues, robbers and thieves, and that is the attitude of a lot of people towards us. If we want Irish industry to develop, there will have to be a different attitude of mind towards those who are engaged in it. At present we can barely pay our way.
I agree entirely with Senator Maguire in his advocacy of the vocational system. I hope this development will result in closer co-operation between the industrial workers and the industrial producer.
I make a plea for more imagination in industrial development. I know we have been in the creative stages up to now, and that imagination could not be used as much as it should. We have been going along the well-trodden, worn track of commercial production. It is essential that certain primary products be produced on a commercial basis as far as possible, but surely if we are to develop an export trade, it is our imagination we have to sell much more than anything else. It is one thing that we have that is different from that of other people. When we express that in commercial terms, I am sure that through our craft workers and others we will develop an extensive export trade of a new character.
When Switzerland had to develop her national economy, she set out to produce good quality goods and goods that were different. She did not set out to compete with the cotton industries of England, but evolved a technique of her own and commenced to produce quality goods. Switzerland to-day economically in the real sense, is probably the wealthiest nation in Europe.
When Czechoslovakia many years ago was reviving her industries. Masaryk did not set out to develop industries on the basis of prototypes from other countries. He called in the artists and told them to ally their artistic imagination with commercial potentialities and to produce articles that would be different; and anyone here who can appreciate artistic beauty —and I am sure the ladies do—knows that you could have bought in the multiple shops here sets of Czechoslovakian glass at 6/9 as beautiful as anything evolved from industrial production. I appeal for much higher prices, for a more imaginative approach to our industry.
I suggest also that some of the traditional industries might be revitalised. One of the greatest tragedies we have had to suffer has been the destruction of our native distillery industry. The whiskey export market could be a very vital asset. I might say we are entirely depending on two distilleries for the main production of that liquor which is so much sought after abroad. I hope something will be done to develop an industry that I am sure Senator Professor Johnson will support and because it is so closely associated with agriculture. It is an industry that is natural to us, an industry for which there is an unlimited market. I hope our distilleries can be revitalised and that our existing distilleries will expand and that we will do something more than take glory in the fact that the very fine premises of one-time distilleries are now being converted into gaudy picture houses.
Might I appeal for an extension of scientific research? We have the Bureau of Research and Standards, which is at present housed in Glasnevin. Some people may say that that is a rather appropriate location—with that I do not at all agree. We have some very expert professors and scientists there, doing work of a quality not yet appreciated by us. I am worried about one particular commodity and I cannot understand why we import it. We are continually importing wool. I am talking about wool as yarn mainly and about wool as tops. We are importing it because it is the fashion for a number of us to wear suits of worsted and it is considered not quite the thing to wear tweed. We have here as fine and as suitable wool as anywhere in the world, but it has never been treated to give it that silkiness and finish than you get from merino. The scientists tried some time ago to breed a cross between the South Roscommon and the merino sheep and for the first generation produced a sheep which gave wool of a similar type to the merino, but by the second generation the second lamb had become as acclimatised as his great-grandfather and produced the South Roscommon type of wool again.
Therefore, it seems that the interbreeding of sheep will not solve the problem or produce that wool. Yet through scientific research chemists should find it possible to treat our wool so that it may replace botany imports.
I am told the firm of Du Pont invented a new yarn-this may make some members' hair stand on end-which is in itself in every way equal to wool. It feels quite like wool, it looks like wool, it absorbs perspiration and it gives warmth. It is manufactured from a chemical compound. If a scientific firm in its laboratories can produce from a chemical some thing that looks very well like wool and acts like wool, it seems as if I am not asking for the moon when I am asking Irish chemists to produce new kinds of Irish wool from a natural base.
I welcome the innovation of power creation from wind velocity—I know that if they set up one wind generator in the House we might add our own quota—but I cannot say the same of the development of electric power from bogs, as that would eventually have a bad effect on our country. I am told by people who have investigated the matter that the largest bog deposit in this country has no longer than a 25-years' life on the present basis of consumption by the Electricity Supply Board.
May I remind the Senator that this is hardly the occasion to enter into the technical details of industry.
I was referring to wind velocity in a general way and expressing the hope that the process would be developed. May I plead for two other things before I finish—the development of craft works and of design in industry? The development of our craft and guild works might help towards a solution of a number of our economic difficulties.
I should not like to sit down without reiterating my belief that this is not a poor country, that it is a rich country, with tremendous potentialities and that we must not let noughts and crosses in bank books or—I am not referring to any of the gentlemen here —professors of economics guide or misguide us. This is a grand country. It is the cheapest country in Europe to live in to-day, and, no matter what differences there may be between us, we should all strive for a solution of our economic difficulties and thank God every hour of the day that He has given us the country in which we live.
I do not intend to trespass very long on the time and the attention of the House and, when I sit down, I trust I shall have not been guilty of having extended the already very wide limits of this debate which arises on this Supplies and Services Bill, although it is rather difficult to deduce that from listening to the speeches made. I, like Senator O'Donnell, would like to pay a very genuine and a very sincere tribute to Senator O'Brien for his calm, balanced, sane and analytical approach to the problems which, when they were debated in the Dáil at very great length, seemed, in my opinion, to lead to what I might describe as near hysteria on the part of certain ex-Ministers.
Most people now feel that the time has come for a re-examination of the present currency and credit system in this country. At the same time, all thinking people must realise that any interference with the existing system might be fraught with very serious, if not disastrous, consequences for our economy, and, accordingly, a change should be adopted only after careful examination and research. I trust that the Government will very soon embark on such an inquiry and that, when they do, they will take advantage of the abilities, the knowledge and the professional sincerity of Senator O'Brien.
In marked contrast with the approach of Senator O'Brien was the lyricism of Senator O'Donnell. At the very outset of his speech, he confessed to a longing for the possession of Heaven's embroidered cloths, although he has just told us that people in his trade are finding it impossible to get rid of their present excessive supplies of common or garden homespun. However, those who know Senator O'Donnell allow him a good deal of latitude for his lyrical powers. He was not at all so lyrical at the end of his speech, however, when he deplored the impertinence of Governments inquiring into the profits and prices being charged by the industrialists, of whom, of course, he is one. In my submission, we have far too much of this hypocrisy, far too much of this humbug in this country at the moment. There are people who go to the Government and ask the Government to give them protection. That protection was, certainly from 1932 to 1948, generously accorded. They got tariffs; they got quota restrictions; and they were helped in every possible way to establish their industry. The Government is elected by the people to protect the interests of all the people, but when the Government proceeds to endeavour to protect the interest of the consumer the industrialists, for whom Senator O'Donnell has spoken to-day, are up in arms—how dare the Government, how dare any tribunal or any body set up by the Government demand the production of confidential papers?
I did not object to the Government at all; I objected to the Prices Tribunal, which is a different thing. I did not object to the Government operating through the prices section of the Department, and I reiterate that. I do not want my good friend, Senator Hartnett, to misinterpret or misunderstand me.
I should be very sorry either to misinterpret or misunderstand the Senator, but if a body is set up by the Government it is only using such powers as are delegated to it by the Government, no matter what that Government may be. We had the Federation of Irish Industries when the Fianna Fáil Government was last in power, objecting to the introduction of the Industrial Standards Bill which was then contemplated. I read speeches at the time criticising it very severely, and, probably as a result of these speeches it was dropped by the last régime without explanation.
I wonder why? I wonder why there is all this sensitiveness about inquiries into prices and profits? I would suggest to the Minister for External Affairs that he should convey to his colleague, the ever-alert Minister for Industry and Commerce, that, if he is continuing the Prices Advisory Tribunal, he should alter or enlarge its personnel to include an efficient inspector of taxes, or perhaps a special commissioner of income-tax, together with some very competent chartered accountants, to deal with the section of the community for which Senator O'Donnell has spoken to-day, so that there may be the closest inquiry and the closest investigation before any price increase is accorded to this section who have already been more than well treated by successive Governments.
I do not want to undertake—it would be very foolish of me to attempt to do so—a disquisition on the intricacies of high finance, though it would appear from the debate in the other House that I have all the qualifications in having very little knowledge of the subject. However, I think there has been in recent weeks or months a great deal of nonsense spoken in this country by people who have not taken the trouble to study the subject—nonsense which, I have no doubt, has already been corrected to some extent by Senator O'Brien, though I am not saying that I agree with or that I am even competent to express an opinion on the conclusions he has reached.
All this arose out of the Report of the Central Bank. The Report of the Central Bank came out this year. We have all read it. Like Senator O'Donnell, who is always very sensitive to English style, we thought the style was bad. More than that, we and most people thought the recommendations which were made were retrograde and certainly not in accordance with the social directives of the Constitution which direct that credit in this nation should, as far as possible, be controlled in the interests and the welfare of all the people. But the Central Bank had been issuing these reports in 1948, 1949 and 1950. I will not bore the House by reading the Central Bank Reports for 1948, 1949 and 1950. The recommendations made in these reports were almost identical with the recommendations which were made in the Governors' current report. There was no furore then. There was no kick up about it. I do not see why there should have been this clamour about the Central Bank. I think it is rather unfair to the Central Bank. When the Governor of the Central Bank was reappointed, I do not think it is any breach of secrecy to say it was well known among the smaller Parties then constituting the Coalition Government, that there was considerable criticism, which criticism was over-borne—perhaps the only piece of criticism which was ever over-borne in three years—because of the confidence which certain people had in the personnel of the Central Bank. Because it was felt that a political point could be scored on foot of the report which was issued this year, they were even willing to throw overboard a person who they themselves had reappointed. I think that is an unfair approach. It is what one of the Senators last evening described as a political approach and, accordingly, one which should be deplored.
As I have stated already, there has been this atmosphere of unreality about the whole discussion. At a very early stage, the Minister for Industry and Commerce said: "You are not going to pin this report on us. We have read it and we are not going to act on it." I think I am quite right in saying that these were his ipsissima verba:“We are going to do the diametrically opposite to what is recommended.” Then, there was talk about panic. Where was the panic? Ministers of this country give warnings. Warnings were repeated yesterday by Senator Professor O'Brien who told us that a middle course between panic and complacency should be taken. But if certain warnings are given about the balance of payments, for example, and if that creates panic among certain industrialists, I do not think the blame should be attributed to the Ministers.
I remember another occasion when Ministers gave a warning, in the early part of the war years. I remember when clothes rationing was first imposed—I think both Senator McGuire and Senator O'Donnell will remember this—the drapers of Dublin got their staffs out on to the street and organised a protest march because they said they had stocks sufficient to last until the cows came home. And there was a shortage in six months.
Yes, under the rationing system that was being enforced.
I may be very stupid but I cannot see how a rationing system could produce a shortage.
If you are only allowed to sell one yard for five coupons as compared with selling 20 yards for two coupons it makes a difference.
They were complaining at that time that they did not have stocks six months after the protest march. I think I am correct in stating that that was a case where the panic was artificially created.
By the Government.
No, by the drapers. We are not going to see eye to eye on this matter.
That is a matter of opinion.
What I am doing is expressing my opinion after the Senator has expressed his without interruption from me.
Not on those facts.
Members of this House remember the case to which I refer quite well. Senator O'Donnell said that profits and prices are already effectively controlled by the prices section of the Department of Industry and Commerce. I would be inclined to take that as a warning that another kind of machinery is required in the interests of the consumer. I would ask the Minister to note that and to bear it in mind. Senator O'Donnell also said that he objected to a group of people being given arbitary powers of looking into people's confidential affairs. I think we have already dealt with that. We have that kind of humbug going on all over the country. We have attacks being made on officials. The matter is carried to absurd lengths. We have references to the arbitary interference of officialdom as if the civil servant was a person apart—an evil person. No doubt, under incompetent Ministers, an intelligent civil servant is able to get his way. I think in this debate, which primarily concerns the Department of Industry and Commerce, that could scarcely be said to be relevant. Nobody would agree with me more fully on that than Senator O'Donnell. I think Senator O'Donnell does agree.
Senator McGuire devoted a great deal of his very interesting speech to the shortcomings of the trade unions. Intelligent trade union leaders must now appreciate that the closed shop and restrictive practices have a good historical explanation, but anybody who has even an elementary knowledge of social history can fully understand that the time has gone for these and that in a democracy, functioning as our democracy does, they must be altered. There is always, of course, the dread of unemployment, the fear of bad times. In a State which guarantees full employment—as I am sure our State will in the near future—there will be no necessity for restrictive practices of this kind.
Senator McGuire made reference to the trade agreements. He said it was not price maintenance agreements which make prices high and that it would be found that these practices were, in many cases, in the interests of the community. Unfortunately, the Senator did not go on and give us even one example of how the price maintenance agreements, come to by the employers' associations, resulted in a benefit to the community.
With regard to one of these associations, R.G.D.A.T.A., it has been held —and I am sure that members opposite are going to be very impressed by this —by a high authority on Catholic social teaching in this country—again Senators will appreciate that I am not an authority on this subject—that the R.G.D.A.T.A. clause enabling them to fix minimum prices is in conflict with that social teaching. I can imagine Senators opposite dashing away immediately to inquire if what I say is true, but I am willing to stand over the fact that it has been given as his opinion by a very high authority on that subject that it is contrary to Catholic social teaching. I wonder will my remark on that matter produce the effect I trust it will produce? I very much doubt it.
Senator McGuire also referred to copartnership. Whenever we hear about the defects of the workers, the fact that they do not give a proper return for the wages paid to them, we hear at the same time in order to counterbalance that a reference to co-partnership or the vocational control of industry. The federation, however, or any of the employers' associations has never put forward any practical proposal or any proposal whatever, practical or impractical, regarding these matters. They cannot expect to have it both ways. Employers are well able to look after themselves and the unions, that is the workers, fortunately for them are also well able to look after themselves, but one section of the community which is not organised is the consumers and they do look to the Government to protect them and to supply the power which organisation would lend to them if they could be organised. I am sure that the Government will be extra watchful to protect the interests of the consumers against trade rings.
It was good news indeed to hear that the restrictive trade practices upon which certainly every lawyer, however junior, has had to advise at some time or other may shortly be brought to an end by a Bill which the Government propose to introduce. We will then have an outcry that this is an invasion of the liberty of these individuals who have gathered together to hold the people to ransom. We will be told that this is anti-democratic, that this is part of the dictatorial mind of the Government. The Government need not mind that. They will have 95 per cent. of the people supporting them in putting an end, and an end as quickly as they possibly can, to that kind of—and I use perhaps an unparliamentary expression—racketeering.
It was used before.
I trust that it has been used with the same aptitude and the same correctness as I have used it.
From this side of the House.
If these matters could be faced as national problems instead of "on this side of the House" and "on the other side of the House" there would be a possibility that we could make something of the Irish nation, but the kind of mentality to which I have referred, the mentality which applauded the Central Bank Report or at least said nothing about it in 1948, 1949 and 1950 and suddenly found that it was outrageous in 1951 is certainly to be deplored in politics.
It was even hinted in the other House that the Central Bank Report had been censored by the Government. That was said by somebody who was a member of the Government as far as my recollection goes. If that were the case, it could only mean that the Government were taking responsibility for the views expressed by the Central Bank. If the Government do not want the Central Bank to issue a report they can bring in a short Bill to-morrow wiping out their powers to do so. If the Government want to change the personnel of the Central Bank Board they can do so when vacancies occur and they are charged with the task of reappointing. In the course of the debate in the other House, as far as I could follow it, there was first an attack on the Central Bank and then there was a gradual receding more and more from that attitude and that point of view. I think that there was a very good reason for that. Of course I do not know authoritatively, but I think that there was a very good reason.
Again, Senator O'Donnell makes a concession to the Government which I have no doubt the Minister will convey to his colleagues. He said that he welcomed the power of the Government in times of emergency to examine prices and profits but not at ordinary times. That is very nice indeed. In times of emergency prices and profits are going to be examined. I take it that the Senator would accept the other half of the proposition, that is that in ordinary times there be no protection for industries and that the Senator and other industrialists would have to compete with outside combines and firms. I would not like to see that proposition arising but they cannot have it both ways and that is what they are trying to do.
The comparison is absurd.
Senator Hartnett is getting interruptions from his own side now. Which side is he on?
I am leaving my views to commend themselves to any Senator who wishes to accept them. I am certainly not speaking as part of a drilled company.
You are on that side of the House.
I am very glad of that.
They may be sorry after a bit.
I am glad, but do not ask for my reasons or you may get them. It would be very dangerous. I do not want to be provoked. At the same time I am always glad when I am.
Senator McGuire said something last night with which I very fully and heartily agree: that Irish goods should be bought because they are good and not because they are Irish. I think that that is a very laudable sentiment. At the same time—and this does not apply to Senator McGuire—I think it would be well if certain shops in the City of Dublin, relying for their custom on Irish people, would not recommend English goods to the customers who go into their shops.
I myself had an experience some years ago of buying a pair of shoes and I almost had to come to fisticuffs with the assistant in the shop before he would produce a pair of Irish shoes. Then he gave me 101 phony reasons why I should not buy them, and pointed out in how many respects they were inferior. That is a contemptible attitude, the slave attitude which I am afraid is only all too common throughout the whole country. It is common not only in our commercial and industrial life, but also, I fear, only too common in the political life of the country.
I am glad that Senator Professor O'Brien spoke early in the debate yesterday, because in the course of his elegant and well-phrased remarks he said many things well worth saying, and that will save me the necessity of saying them. I think that the Supplies and Services Bill is one that has been rendered necessary by the continual state of emergency in the rest of the world and, therefore, I think I would be in order in addressing myself both to the internal situation and the external circumstances that render a Bill of this kind so unpleasantly necessary.
I would like first of all, though, to clear up some of the obscurities that may have remained in certain people's minds even after the admirable exposition by Senator Professor O'Brien.
We have had a good deal of talk here and elsewhere about repatriation of external assets, inflation, excess imports and what not. Of course, the Minister for Industry and Commerce is perfectly right in saying, as he said in the other House, that external assets can only be repatriated in the form of imports and in the form of excess imports at that. But, I think there has been a failure to realise, not only on the part of speakers here and elsewhere, but also in the Central Bank Report and in the White Paper, certainly a failure to make clear, the elementary economic fact that capital can be imported not only in the form of capital goods, but also in the form of consumer goods.
I would like to illustrate that in as simple a way as I can. Suppose that an Irishman owning £10,000 worth of British securities sells out these securities and proceeds to establish a factory, shall we say, in Santry, for the manufacture of milk bottle caps. In the course of his expenditure of that £10,000 he pays various workmen and foremen, and so on. They go about spending that money and that money goes through the general circulation and some of it is spent on home-produced goods and some of it is spent on imported goods. Those goods, whether imported or home-produced, are, so far as the consumption of the workers is concerned, consumer goods but they are in process of being transformed into a permanent capital asset which is native to the country.
To make the matter even simpler, we may suppose that the foreman's wife has a child and that he feels the necessity of celebrating the event with the help of champagne and he buys a few bottles of champagne. Remember, all this purchasing power originated in the sale of a capital asset in London, and part of that capital asset comes over to Dublin and is consumed in the form of champagne to celebrate the birth of the foreman's baby, and perhaps at a later stage a baby carriage imported from the same source and paid for in the same way.
The new factory is a capital asset, but part of the resources for building that new factory have come over to us in the form of an import of consumer goods.
The matter, I think, is of sufficient importance to justify one or two more illustrations. We have the Shannon scheme and in the balance sheet of that scheme you will find that its capital assets are said to be worth some £20,000,000. Now, the Shannon scheme took many years in building but if you go through the import list for those years I doubt if you could add up the value of the actual capital goods in the form of generators, girders, and what not, imported in those years, to anything like the value of £20,000,000. In other words, an important part of the present capital asset which we call the Shannon scheme consists of the consumer goods which were used by the workers during the many years which we spent in building that scheme.
In fact, if you take it the other way, you can export capital in the form of consumer goods. In fact, all through the war we were exporting capital, £160,000,000 worth of capital, but it did not go out in the form of capital goods; it went out in the form of cattle, eggs and to a certain extent, I suppose, Guinness's stout.
We must not then be alarmed by the fact that so tiny a proportion of our total imports takes the form of what are technically known as capital goods. Consumer goods can also be a desirable and even a necessary part of that process of economic development involving the construction of expensive capital assets at home.
These excess imports arise because we are at the moment engaged, and have been for some years, in building up important and extensive new capital goods, housing, hospitals, factories, extensions of the electricity supply, turf development and what not. The reason why excess imports have taken place is that these new capital goods enterprises have not been fully financed by internal saving.
Assuming that the Budget is balanced, if you try in any economy to build up new capital assets beyond the measure of internal saving you are bound to have excess imports or else inflation, but in our circumstances, as we have the possibility of financing considerable excess imports by reason of our considerable external assets, we can avoid the worst aspects of inflation by an increasing volume of excess imports.
I am willing to agree as a matter of theory that in normal times and in normal countries it would be highly desirable that all capital developments within the economy should be financed by internal saving, but we are not living in normal times and this is not a normal country. What is needed is abnormal capital development of both agriculture and industry. Therefore, there may be a prima facie case for some use of our external assets as a means of financing that desirable abnormal development. If we seek to have an abnormal programme of capital developments and at the same time are reluctant to procure the additional resources necessary for that development by drawing on our external assets, then we must in one form or another depress the standard of living at home.
There are various ways in which that can be done. For example, there is the method hinted at by the Minister for Industry and Commerce. If we think people are not saving enough, we can increase taxation and bring about forced savings in the form of a budget surplus. I would like to underline everything that Senator O'Brien said about the undesirability of any such procedure as a means of trying to acquire the additional savings necessary to finance these new capital enterprises, but I think it is hardly necessary to stress that point. Such forced savings procured by such means would be politically unpopular, and the Minister, I hope, is not in a position to be guilty of any such unwise procedure.
On the other hand, the other alternative method of bringing about what amounts to forced saving and what might appear to make less necessary the item of excess imports would be to proceed as the Minister for Industry and Commerce seems inclined to do, by having an ambitious programme of constructing new capital assets while at the same time restricting the total volume of imports in order to diminish this excess balance which worries people so much.
I doubt whether, in practice, it would be possible to achieve that result. Assuming that it is possible that it would succeed in restricting the volume of imports and, at the same time, you put in circulation a vast amount of money to pay for new capital assets beyond the measure of internal savings, you will start a definite inflationary force internal to the economy in addition to all the inflationary forces from outside. That method of restricting imports, while at the same time increasing the circulation of new money by having an ambitious capital programme beyond the limits of internal saving, would depress the standard of living by the inequitable method of inflation rather than the fairer method of increased taxation.
Another point I want to deal with is that of excess imports. However much of a problem they may constitute in other respects, they are, so long as they are available, a positive disinflationary factor in our national economy. They provide the goods which help to mop up the surplus money put in circulation in the process of financing internal capital developments. If you do not have those excess imports, the home price level will rise above the outside price level and you will have a most objectionable internal situation. The problem is not, in theory, a problem at all. If you really want to reduce excess imports in order to make your balance of payments on current account balance, and have no capital transactions on either side, all you have to do is to balance the Budget—which is not an insuperable obstacle in our case—and cut the programme on capital expansion both private and public to whatever level you think desirable.
As for balancing the Budget, I should like to re-echo what Senator Professor O'Brien has said about the desirability of looking very closely into the question of subsidies. We are spending, I think, some £15,000,000 a year on subsidising various articles of food. That has introduced an element of artificiality into much of our economy. Personally, I think there is no sense whatever in subsidising the necessaries of life to at least 50 per cent. of the total population who are well able to pay the full economic cost of whatever bread, butter, flour and so forth they eat. If a method could be found whereby all these commodities which are subsidised at present could be sold at the economic price and the poorer classes of the community compensated by an increase in their money —including, especially, pensioners and those in receipt of unemployment assistance—that would balance the additional cost of paying the full economic price of the commodities that are at present subsidised, as much as £5,000,000 a year would be saved which is now wasted on subsidising food eaten by the more well-to-do classes and that would go a long way towards balancing the Budget.
There has been a lot of talk about sterling assets. Our sterling assets are a valuable and, indeed, an enviable possession. There is a right way of using them and there may be various wrong ways of using them. May I illustrate what I regard as a right way of using those assets? I am aware of a certain 65-acre farm in the Midlands which, five years ago, was practically derelict. It supported perhaps 20 cattle in the summer months and none at all in the winter months. I doubt whether the total output of that farm at that time was as much as £300 a year. About five years ago a man of capital and enterprise acquired the ownership of that farm. He levelled it, drained it, improved it and built cattle houses. With his own hands he built a hay shed on it last year, being able at that time to acquire the material though he was not in a position to get the labour.
That man has probably spent out of capital and income considerably more than he got in the last five years by way of sales and production from his farm. In doing so, he was doing his part towards bringing about this phenomenon of excess imports. However, in the present situation, he is now able to feed 40 cattle all the winter on silage, beet tops, barley, and other produce of his own cultivation, in addition to selling large quantities of beet and wheat.
The output of the farm must now be of the order of £1,000 a year compared with £300 a few years ago. That was achieved because the man had capital and because the nation as a whole had sterling assets which he helped to withdraw and transform into that different form. I should like to think that that procedure was typical instead of being exceptional. It would be a fine thing for the country if it were typical and if we were in a position to proceed along the lines taken by that man, namely, to withdraw a reasonable amount of our external assets in order to improve the fertility and productive capacity of our agricultural industry.
However, having said all that, it still remains true that we need to have and to keep a nest egg of external assets, principally because we need it to support the external value of our currency. The external value of the currency of any country depends primarily on the demand for that country's money in payment for that country's exports. Therefore, the external value of any country's currency depends on export capacity which, in the long run, depends on productive capacity. We are fortunate in having had, over a number of years, surplus export capacity which has been crystallised in another country in the form of our existing external assets. These assets are available at a moment's notice to support the external value of our currency. So long as we have a reasonable amount of these liquid external assets and our export capacity is maintained and improved we need have no permanent worry about the future value of our national currency. I am not in the least worried about our ability to keep the Irish pound at par with sterling.
I am worried about the future of sterling itself, because that depends on factors outside our control. It depends on the chances of peace and war in the course of the next few years or the next few months. It would be no harm to point out some of the factors that arise in that connection. If we look at the world as a whole, we must realise that Britain is no longer complete mistress of her fate. She is in a very active partnership, the managing partner being the United States of America. I have great admiration and regard for Americans. They are a generous and enterprising people—indeed, we have every reason to appreciate their generosity—but no one can say they have that quality which Shakespeare describes as "modest stillness and humility." At some risk of replacing Senator Stanford as the victim of Myles na gCopaleen, I would be inclined to say that I do not agree with Myles na gCopaleen's obvious opinion that verily they are the people and wisdom will die with them. They are not disposed to learn from other nations who, in these delicate international matters, are older and perhaps wiser than they.
In fact, then, we have two mighty empires who are arming for self-defence. No nation ever arms for aggression, but each accuses the other of aggression. The Communists are certainly not pacifists. If they see a tottering capitalist economy, weak and unarmed, they might be tempted to give that capitalist economy a little push and bring it down. From that point of view, a moderate degree of rearmament has much to be said for it, so as to remove that temptation. In my opinion, the best defence against Communism is a sound national economy, embodying the principles of social justice, which are being increasingly implemented in appropriate social institutions. The danger is that the economic strains imposed by the present degree of rearmament may weaken and bring down these economies without any world war at all.
In yesterday's Times it was stated in the leading article that rearmament on the present scale has traditionally led to war. We are vitally interested in whether a third world war should take place or not, because that must make a tremendous difference to the value of our external assets, and the right way of using them so long as they still remain. As to the whole policy of containing Communism by rearmament and, if necessary, by war, I want to remind the House that after the first world war one-sixth of the world became Communist; after the second world war one-third of the world was Communist. After the third world war what proportion of the world will probably be Communist, no matter who wins or loses? The fact is that rearmament is imposing an intolerable strain on capitalist economies and they may be reduced to the state in which they would collapse without any external pushing at all. The danger of war arises from many sides, partly from human nature and partly from the mere fact of rearmament.
In this connection, may I make a comparison between a typical communist economy and a typical capitalist democracy? A communist economy is one which is completely controlled both in economy and in politics by an authoritarian Government. It is conceivable that the rulers of such a State should, after cool calculation of all the pros and cons, deliberately embark on war, but no part of their deliberations would be in any way influenced by any motive of private profit that may be made on the business of rearmament, because in a communist economy there is no private profit in rearmament or anything else. On the other hand, capitalist economies are somewhat more untidy in their political set-up and political-economic structure.
There are what could be described as barnacles that gather on the ship of State in a capitalist economy, and these barnacles sometimes get in the way of the steering gear and influence the decision of the man on the bridge. In other words, there are in capitalist economies, as the Minister knows, private interests not necessarily in conformity with the common weal, and which are irresponsible, but nevertheless they influence the decisions of Governments. There is always the possibility that in a capitalist democracy regard for these private vested interests of one kind or another may make Governments arrive at decisions about war and peace which are not really defensible from a strictly public point of view.
At the present moment the total national income of the United States of America is 250,000,000,000 dollars or more—I forget the exact figure. Of that national income, some 60,000,000,000 dollars is being set aside for rearmament. That is a terrific proportion of the total national income. Can you imagine what would happen if that 60,000,000,000 dollars suddenly ceased to be spent on the purposes of rearmament? Is there not there the danger of a tremendous disequilibrium? Can you not imagine a situation arising in which influential interests might see no easy way out except war and say: "Better a third world war than a second 1929 depression."
That danger exists owing to the very nature of capitalist democracy, and owing to one of the qualities of it which make it most admirable in time of peace, namely, the very spontaneity and autonomy of the various parts of the economic system, which make it less readily controllable in the national interest in time of emergency. In fact, if a large scale rearmament drive continues too long, it is apt to produce a kind of Frankenstein monster who takes control of the whole situation, with devastating results. Although it may be that in Communist countries there are professional interests which are engaged in finding the most scientific methods of killing people, there is an even greater danger of irresponsible vested interests influencing the decisions of government in a capitalist country rather than in a Communist one. In fact, there is always the danger that the dragon's teeth may be sown, and when they have been sown the husbandman is apt to lose control and the crop will harvest itself —and that will be a bloody harvest, indeed. As I see the world situation at present, only a long period of peace can save capitalism, freedom and democracy and the other values to which we attach fundamental importance.
Now, any reader of the current British economic periodicals must have seen signs of strain and stress in the British economy lately. May I quote from a pamphlet by Professor Cole, of Oxford, called "Weakness through Strength," in which he develops the theory that Britain's excessive burden of rearmament has weakened her rather than strengthened her in relation to world dangers and difficulties? He says:
"Mutual suspicions, and the conflict of Communist and capitalist philosophies, make it exceedingly difficult to persuade the ruling groups in either the Soviet Union or the United States that in arming madly against each other they are doing anything other than each is forced to do by the attitude and policy of its antagonist. But we in Great Britain, and with us the peoples of Western Europe, have nothing to gain by war and have the strongest reasons for knowing both that if it comes it is likely to be utterly disastrous for us, whichever side wins, and that a prolonged condition of near-war will wear us out long before it has exhausted either the Americans with their vast productive power or the Russians with their immense capacity for enduring hardship. I am quite unable to believe that either the American people or the people of the Soviet Union want war or would willingly resort to it unless they had been induced to believe that there was no other way open to them of defending their several ways of life."
Then he concludes:
"May it not be that the social discontents which will be created by the economic upsets of rearmament will leave us not stronger but weaker in facing the perils of a divided world, from whatever quarter they come? If armies march on their bellies, so do whole peoples. A weakened economy, rent by internal dissensions can be no good case either for preventing a war or for fighting one."
May I go on to quote an article which appeared in the New Statesman of the 17th November of this year, entitled “Dollars for Defence”. It reads:
"In ten months since the Brussels Conference which fixed national contributions to western defence, America's two chief European allies have been brought to the edge of economic collapse. The fact that the pace of Atlantic rearmament has undermined the recovery achieved under the Marshall Plan and thrown Britain and France back almost where they were in 1947 is frankly admitted in Washington and Paris."
He goes on to imply that the stability of sterling now depends on a reduction of the rearmament drive or increased dollar aid. May I conclude these remarks by quoting from an article in The Economist which appeared on 6th October of this year?
Speaking of the military's natural tendency to overdo armament preparations, The Economist wrote:
"They were encouraged to do so last winter by the almost universal conviction in America at that time that full war was imminent. In large measure, the present American programme is designed for fighting Russia, not for staying at peace by deterring a Russian aggression... When one hears talk of an air force of 140 groups, it is difficult to believe that it is not being overdone... It it not safe for the world for either side to be overwhelmingly stronger than the other—even if it is our side and inspired by the most pacific of intentions. Good men are not exempt from temptation."
You may remember that some time ago Mr. Attlee made a speech in which he said that it was not only power-hungry dictators who brought about modern wars, that modern wars were occasionaly the result of the actions of blazing idiots in high places. Are we quite sure that all the blazing idiots are on the other side of the Iron Curtain and that none of them is on the other side of the Irish Sea or the other side of the broad Atlantic?
In normal times, the stability and international value of sterling depends on a triangular trade relationship between Great Britain, on the one hand, the rest of the sterling area, on the other and the United States of American or the dollar area, on the third hand. Normally, Britain exports a surplus to the rest of the sterling area; the rest of the sterling area exports a surplus to the dollar area; and the dollar area exports a surplus to Britain.
That is all right, that triangular pattern reasserted itself for a year or so about 1949 or 1950 and everything appeared to be going back to normal, back to a stable world, but, unfortunately, since then, the whole situation has been changed. Japan has been revived and is now being built up, and is in process of taking over the trade of South-Eastern Asia which Britain formerly depended upon so much for her international solvency, and, on the other side, Western Germany has been built up and is now selling the steel and other products to various countries in Europe which Britain used to sell.
In the final result, the British economy is now in deficit with the rest of the sterling area, and, more important still, is now in deficit with the European Payments Union, so that as far as one can see the lynch-pin has been taken out of both wheels of the chariot of sterling, and, if present forces continue, nothing can prevent a serious collapse in the international value of sterling. In fact, so far as I can see, the present situation can only continue if Britain either gets vastly increased help from the United States or cuts down very considerably her large programme of rearmament. That is not a very cheerful outlook, but I do not want to end up on an entirely cheerless note.
What are the chances of peace? In that connection, I should like to remind ourselves of some of the outstanding events in our own national history, as well as in the history of Europe. There have been conflicting ideologies in the world before. I can hardly imagine anything more irreconcilable on the intellectual plane than the respective ideologies of the Protestant and Catholic Faiths and there was a time in the history of Europe when people killed one another for the love of God because of these conflicting ideologies, but they have long since learned to live and let live in an atmosphere of Christian charity, so far as that is concerned. Equally in our own country we have had conflicting ideologies.
I remember 30 years ago, when the Sinn Féin movement was still comparatively young and when one was conscious of the conflict of outlook between the old Irish Unionist mentality and the new Sinn Féin ideology, hearing in some of the circles in which I moved: "The only good Sinn Féiner is a dead one." Some of the people still alive who were saying that kind of thing 30 years ago have since become some of the most fervent admirers of the present Taoiseach and his associates, and that, I think, is a tribute to the fact that, in an atmosphere of live and let live and of Christian charity with which we have been confronting each other for many years, and especially since the establishment of the new régime down here, these ideologies, which are irreconcilable on the intellectual plane, have become reconciled on the emotional plane.
I should like briefly to throw my mind back over the past 40 years. I began my interest in public life by an appeal for non-violence in connection with the Ulster Volunteer movement which began about the year 1912. You know what happened then. You know how the Ulster volunteer movement ended and how a European war began which some people say may have had some slight relation to the events which took place in Ulster at the time. A lot has happened since 1912 in Ireland and in the world. No northern politician would ever openly admit that they made a mistake. Still there may be a feeling in their consciences that they are not entirely happy about the part played by the Ulster volunteer movement in bringing back the principle of violence and, perhaps, setting a match to the train of a European war.
If we could roll back the scroll of time to 1912 and if our Ulster friends with complete foreknowledge of what has happened in the last 40 years, had to make the same choice again that they made in 1912, 1913 and 1914, they would perhaps choose the method of peace and not the method of violence.
They are fundamentally a good-hearted, kindly people and, in their personal relations to each other, they display an attitude of Christian charity and it is only in their public relations to "the other side" that they attribute diabolical things to one another. If we could have the same friendly relations between groups in the North as in the South, we would go a long way towards solving the one remaining problem of our national life.
In this festive season it is well to remember what the Prince of Peace said: "Render not evil for evil but overcome evil with good." He did not say: "Overcome evil with atom bombs."
May I say, with all seriousness, that the correct Christian outlook on the Communist world is to regard Communists as erring children of a common Divine Father who might yet be led into the way of truth but will not be converted by atomic bombs. If the Christian world commits itself to a policy which may mean the wholesale murder of millions of men, women and children in countries beyond the Iron Curtain, then it is possible that Communists will not appreciate the superiority of the Christian ethic. In fact, only the spirit of the Prince of Peace, which is commonly called pacifism, can save the world from its present deadly peril.
The British no longer claim the moral leadership of Western Europe, but they still have considerable influence in the British Commonwealth. The House may remember that about a year ago a Commonwealth conference was held. Strengthened by the moral support of that conference, Mr. Attlee went to Washington and succeeded in persuading the Americans not to drop the atomic bomb on the Chinese just then. If they had dropped the atomic bomb, it would most certainly have precipitated a third world war. He saved world peace by a hair's breadth then but the situation is still somewhat precarious. The whole situation, in fact, is so precarious that, although we have no great influence or power in the political, military or economic spheres, we will have to use whatever power we have—and that is more than we realise—in the moral and spiritual spheres on the side of peace and on the side of a policy of live and let live. That is the only possible kind of basis of peace.
We have, perhaps, no locus standi in international affairs, having left the Commonwealth and not having been admitted to the United Nations. I, personally, regret the fact that we are not any longer members of the Commonwealth. Although we are not members, we are still part of the Western world and part of the Christian conscience. We have a right to express our opinions about these matters in every legitimate way. I, personally, express the view that, apart from Korea and Formosa, which are still danger points in the Far East, the greatest immediate danger to world peace is the proposed rearmament of Nazi Germany. That is one of the sensitive spots in the minds of the rulers of Communist Russia. If that rearmament programme goes through there will be the certainty of a third world war. We should throw our weight, however light it may be, on the scales in favour of a peaceful approach to present world problems. All our problems derive ultimately from the present unsatisfactory world situation.
What about our sterling assets? If we think that war is in any way unavoidable, then we may as well realise that our sterling assets, and a great many other assets, will go up in radio-active smoke, some of which will be wafted over here. On the other hand, if peace is maintained, then there is every reason why we should economise our sterling assets and make the best out of them. It is most important that we should realise the true nature of the present conflict that is going on in the world. It is not a conflict between the people on the East of the Iron Curtain and the people on the West of the Iron Curtain.
It is not a question of being all black or red, or all white. It is a conflict between the spirit of the Prince of Peace and the forces of evil in the hearts of everyone, high and low, in every country in the world. We will have to make up our minds on what side we will be in that conflict. Above all things, we should work and strive for peace on the only realistic basis— the basis of live and let live in a spirit of good neighbourliness and in accordance with the parable of the Good Samaritan. Meanwhile, we, as a nation, should take neither hand, act nor part in the present rearmament craze which is bringing the world to destruction. I say that with reference to a Republic of 26 counties and I would say it again, with equal vehemence, if we were a Republic of 32 counties.
I think I have listened to every speech made during this debate. I must say that I felt very happy listening to them because the standard set seemed to me to be on a plane higher than that on which the Bill was discussed in the other House. There was one aspect of the present situation which I felt deserved very serious attention but very little has been said of it during the whole debate. I refer to the food situation of this country and of the world generally. Senator Baxter as representative of the agriculturists did refer to it and I think that he was the only person in the House who did. I disagreed, however, to some extent with his approach because he was arguing about the prices the farmers should pay for their fertilisers and the prices they should get for their produce. We know that there are millions of people in the world to-day who are starving or on the verge of starvation.
I remember that at the inter-Parliamentary Congress, which was held here a year or so ago, I happened to meet the representative of Ceylon. In a conversation with the Minister for Food he said to me—and I believe him —that the great cause of all the trouble in the East was that the people had not sufficient food. He maintained that the food produced in the world was not distributed properly so as to ensure that all the citizens of the world would have enough to eat. All that happened since has convinced me of the truth of that statement.
Here in Ireland we have land which can produce food and skilled agriculturists who know how to produce it. There is no excuse for us in a world in which there is so much starvation for drawing from the pool which great countries like the United States have made available to meet that distress in other countries. Since we have the land, a quantity of fertilisers and men skilled enough to produce the food, we should not only go all out to produce enough food to provide for ourselves, but try to produce a surplus to send to other countries. When I read of the Government's contribution to the relief of the distress which the great floods caused in the Po valley recently, it struck me that if it were possible for the Government, instead of giving £20,000 to the Irish Red Cross, to say to them: "Send this money to F.A.O. and ask them to take a quantity of food equivalent to that sum of money out of the pool made available for Ireland and send it to those people," we would have been doing good work, and those people would appreciate it very much more than any money we could give them.
Recently I had a conversation with two pretty sensible farmers from two different counties, who live within 40 miles of each other. It struck me as strange that both of them spoke with the same voice. One came to me for advice as to whether he should purchase manures or not at the present time. Speech or whispering had induced him to believe that there is a possibility that the Government will reduce the price of manures, or if the farmers hold out long enough that the people who have manures in stock will be compelled to sell at a reduced price. This impression has been created by the speeches of responsible people. As a result the farmers to whom I referred and many others for whom they could speak, have been refusing to purchase these manures. As a consequence perhaps what Senator Baxter said is true, and the land is not getting the nourishment it needs.
Both these farmers said to me that they believed that quite a number of farmers will not grow wheat this coming season. Both of them also said—and I say this believing them— that if Deputy Dillon stated that wheat should be grown in this country all those farmers who believe in Deputy Dillon would grow wheat. I believe that in the present situation there is a duty on leaders of the Opposition as well as on leaders of the Government to tell the people frankly that fertilisers should be bought at present prices, as Deputy Lemass has said, because there is no hope of a reduction. The price is lower here than it is in Britain and there is no need to worry about statements that fertilisers are subsidised in the North or elsewhere. The facts are that fertilisers are needed on the land and that there are fertilisers in the country. Every leader in the country should try to induce the farming community to avail of those fertilisers to produce a greater quantity of the food which is urgently needed in the world to-day.
These leaders should impress on agriculturists that they should produce wheat. Senator Baxter suggested yesterday that because a certain price is being paid for barley, farmers taking the selfish view would simply grow barley and would not produce wheat. The leaders of the Opposition should take steps to counter that attitude. Every responsible leader should use every effort to induce the farmers to use fertilisers and produce not only wheat but every foodstuff which the land of the country is capable of producing.
I can imagine what the position would be in the morning if America and other countries which are supplying the world at present were, like Ireland, to confine their vision to their own shores. Here in Ireland, I am afraid, we have that habit. If America in the morning said: "We will produce sufficient for our own people," we would feel the pinch and millions of people in other parts of the world would feel the pinch also.
There is no excuse for us here in Ireland for being short of food, because we have the land and we have the people with skill. Bad as the weather is at times it has been proved that even in the worst season we can harvest the crops which our land produces.
I just mention that aspect in the hope that people will take it seriously. What I have to say may not carry much weight but I believe that what I am saying is sensible. One thing we must all have is food. It is very selfish of our people, knowing the position in the world, to expect other countries to give us the food that we need, seeing that we can produce it ourselves.
I am going to say something in connection with prices and taxes which is purely my own personal view. I have never been worried about rises in prices or heavy taxes because, looking back over the years, I remember that in 1914 prices were very low, wages were low, unemployment was rampant and the people were living in misery. At that time men worked for a miserable wage, very often from 6 a.m. to 6 p.m., and if they were unemployed there was nothing for them except the poorhouse. Anybody who is old enough will know that is a true statement. Goods were very cheap. Then we had the Great War and, as the war developed prices began to rise, wages began to rise and, strangely enough, the conditions of the people began to improve. Anyone who reviews the years from 1914 to 1918 will agree that in 1918 when, as I have said, wages and prices had increased, there was more work and more prosperity in the country.
When prices fell, towards the end of 1929 and so on, the people again became very poor and miserable. In the last Great War, when prices increased, the pool of goods became scarce. Wages did not increase to the same extent, but at any rate the conditions of the people continued to improve.
While I am always anxious to keep taxation low and prices down, I have never feared increases in prices or taxation. If we are taxed heavily to provide good services for the people, I am quite happy about it, and I think the people generally are quite happy about it. We should not worry ourselves overmuch on this question of increases in prices provided the price increases are fair.
I listened to condemnation and praise of industrialists here this evening. I repeat what I have said before in this House that I will be quite happy if industrialists become as wealthy as could be if, in the process, they make conditions good for the people they employ. It would not worry me in the least if an industrialist made £100,000 a year if he were able to give good and continuous employment to a considerable number of our people at home and at the same time produce articles of good quality and at a reasonable price. When I say a reasonable price I do not mean a price comparable with that at which similar goods can be sold in this country by other countries. I am not so foolish as to believe that, say, a shoe factory in this country employing 200 or 300 operatives could produce goods at the same rate at which a factory abroad employing 3,000 or 4,000 men could produce them.
I would be happy to see our people paying a greater price for the produce of Irish factories provided that price did not give too much of a rake off to the industrialist. It is a bad policy that any section of our people should use places like this or any other place to cast a slur on those people who, some years ago, invested their money and gave their skill and were patriotic enough, even if it was for selfish interests, to start factories in this country. We should do everything we can to encourage these people and should not try to hurt them in any way.
I do not intend to detain the House any longer. I rose mainly to direct the attention of the House to the problem which I spoke of first, that of providing our own people with food, and I would stress again that, since we have in Ireland excellent land, we have a duty not only to feed ourselves but to produce a surplus which we might add to the pool to bring relief to the people in the world, wherever they are, who are suffering starvation at the present time.
Is the Senator serious?
An Leas-Chathaoirleach
Senator Douglas.
We have had a long and, in many respects, interesting and valuable debate. I do not want to repeat or to deal with various points that have been raised with which I agree. In fact, the only reason why I am speaking at this stage is because there are one or two matters which I want to emphasise and also one or two statements which I think I ought to correct.
In the first place, I would like to say that I think Senator Loughman made an important point when he drew our attention to the fact that our economic problems ought not to be regarded purely from an insular point of view and I agree largely with the point he made with regard to that.
Senator Hartnett made two statements which I think I ought to correct. He has not been very long a member of this House and I am sure he did not intend to make inaccurate statements, but he stated that the industrialists objected to the Bill introduced about four years ago, entitled the Industrial Efficiency Bill, because it provided machinery for dealing with prices. That is not correct. The whole objection to that Bill from the point of view of the industrialists was to Part V of the Bill which dealt, not with prices, but with the appointment of a person with power to control industry, to interfere with management and to act in a general supervisory way. I do not want to argue against that proposal now. It is a matter that can be debated again if it is ever again proposed, which I hope it will not. But, he is quite wrong in his assumption that all the other portions of the Bill were strongly opposed. They were not.
Equally, he made a statement to the effect that the drapery trade organised to oppose clothes rationing. That is not an accurate statement. It is most misleading. I am interested in the drapery trade. If Senator Hartnett had been a member of this House at the time, he would be aware of the fact that I moved a motion in favour of clothes rationing almost 12 months before the Government decided that it was necessary to ration clothes. The particular exception that was taken at that time was, not to clothes ration ing, as such, but to the inclusion of certain articles of which the trade had reason to believe it was then possible to obtain substancial supplies. These were mainly rayon goods. After a conference between the trade and the Minister for Industry and Commerce, some acceptable amendments were made in the rationing Order.
It is quite wrong to say that the trade for selfish reasons opposed clothes rationing. I was present at the meeting. I spoke at it. I was present at the previous discussion when it was agreed unanimously that it should be made clear that there was no objection to the principle of clothes rationing. I cannot recollect criticism of any kind being made to me personally when I raised the question in this House in a debate and stated that in my opinion the time had come when there should be rationing of clothes which were becoming scarce. This is, to some extent, irrelevant except that it was mentioned by Senator Hartnett—no doubt without full knowledge and based on a vague recollection. I thought it was my duty to correct it.
In the debate on the Appropriation Bill last July, I ventured to suggest that certain phrases used by the Minister for Finance might do a good deal of harm unless they were corrected or modified with the production of a specific programme as to how he proposed to act. The phrases which he used and to which I referred were what he described as "the rapid dissipation of our external assets" and also his reference, to use his own words, to "the problem presented by an unwieldy programme of capital expenditure."
I did not, at that time, convince him because in his reply he only repeated his statements with regard to the dangers in our economic position. I believe it was most unfortunate that an impression should get abroad that the new Government intended to reduce capital investment. There is no doubt, however—and this is not a matter of party politics—that that impression was created and I think it was pretty widely held until the debate on this Bill commenced in Dáil Eireann. Although there was a great deal in that debate that, from my point of view, was of very little value, nevertheless the debate as a whole did good because I believe it helped to get a more balanced view of the position and to reduce a certain amount of unjustified uneasiness. It is now more generally realised that there is a problem—a problem which will require the co-operation of all classes and not one which this or any other Government by itself can solve quickly though its ultimate solution may depend on the wisdom of Government action at the present time.
Senator Professor O'Brien has been congratulated very rightly on the speech which he made here. I think the House itself may be congratulated on the fact that we have a member who is not only able but willing to put forward lucidly and clearly his point of view on economic questions. Not only that, it seems to me that his speech was a magnificent demonstration of how it is possible to tell the people of the possible dangers ahead and the economic problems which have to be considered, without in any way creating undue alarm. There was nothing in his speech to cause panic. There were no alarmist statements. Certainly, he left me with the conviction that the problems we have to face are capable of solution provided we have general co-operation and provided whatever Government in power is wise in its handling of them.
Personally—and this is very largely an individual point of view—I think it is unfortunate that the power given under this Bill will, at any rate for some time, be operated by a Government chosen from only one Party, and a Party which has not a majority in the Dáil. I believe, and have always believed, that political parties are not only desirable but necessary in the operation of democracy, but I have never believed at any period since I commenced to study politics that the British party system of government was ideal, or was suited to a small country. I should like, particularly, to draw your attention to the rather outstanding fact that the small democratic countries which, on the whole, have been best able to manage their affairs efficiently have practically all given up the one-party system of government. Either they have, as in Switzerland, a Government of all parties or—as in Holland, Belgium, Denmark and Sweden, and I think in other countries— Governments composed of members of two or three different parties, not always necessarily the same parties. The result is that there is no question of one group or party apparently imposing its will, or wisdom if you like, on the people: responsibility is shared. It is when you come to deal with economic matters that I believe that system has its greatest value.
I put this point forward though I do not want to debate it at length because it is highly controversial. One of the ways in which we may best be able to deal with our future economic problems will be by consideration and, if possible, by agreement, giving up what I call the British party system of government and adopting something different which would be more suited to our needs.
I may be wrong but my judgment is that the people to a very large extent are sick and tired of Party bickering. They hardly even laugh at the jokes about the Bank Report being a stick to beat opponents with. In the main, their sympathy is with the person or Party against whom the stick is used. Sometimes that only creates sympathy with the persons attacked. But any kind of genuine co-operation immediately gets support in the country and from people who voted for the different Parties. I am quite convinced that if it should be necessary to apply some of the less popular solutions such as those envisaged by Senator Professor O'Brien with regard to possible restriction on imports it should be done with common consent and with general co-operation. The vast majority of the people, as we know from our experience during the war, are willing to put up with the inconvenience if they are convinced that there is good leadership and particularly if it is not a matter of Party politics. I say with absolute conviction that it is unfortunate that, in the debates with regard to the balance of payments and the various matters relating to it, there should have been so many speakers with a desire simply to score Party political points. Certainly, that cuts extremely little ice with the people I meet and know.
To a very large extent, I found myself in agreement with Senator Professor O'Brien. I am not going to follow the various points which he raised. However, I am not quite sure whether or not I agree with his reference to unemployment. I intend to read his speech carefully when it is published in the Official Report. Incidentally, I would advise anybody who was not in the House to hear him make the speech to take the time to read it when it is published, because it is well worth reading. It is possible that when I do read his speech I will find that I do agree with him. However, it must be remembered that the problem of creating the maximum possible employment will always have to be a vital factor in considering the economic problems in a democratic State. By all means, as I think he suggested, let us see that our people are employed in the best possible manner having regard to the economic position of the country. But we must also remember that good government is, first of all, a human problem.
Our objective must be—and I do not care what party we may belong to— to see that ultimately all our people will have an opportunity of earning a decent livelihood, of having a respectable house to live in, and of bringing up healthy children with an adequate education. It would be useless, particularly after the publicity that has been given to the external assets, for me to say to some of the people employed by me: "I am sorry, I cannot employ you but, of course, if I brought back some of the money we have in England I could do so." If, as a result of a slump or of other circumstances which we cannot control, we were to have a substantial growth in unemployment, we would have uneasiness and unrest, which of itself would aggravate the problem.
I am sure Senator O'Brien is right when he emphasises the need for increased savings, which can be profitably invested in our own country. I agree with very little that Senator O'Donnell has said, and certainly not with his reference to savings. His idea of savings seems to be money placed in a bank at 1 per cent., while my idea is that it is something you do not spend for personal needs, but invest to benefit yourself as well as help the country. I am inclined to think we may find that this question of increasing savings will be the most difficult problem of the lot. There are few things more difficult for any individual or family to do than voluntarily reduce the standard of living in order to save. Just try it. It is extremely difficult, and takes a colossal effort, even at the best of times. When you are asked to save at a time when prices are rising, when you are a bit doubtful if the money you save will be of the same value in a few years' time, it is not surprising that there is a very great reluctance to save. One of the problems that will have to be faced is that of finding some way by which we can increase savings.
The only way I can seriously hope for a substantial increase in savings would be by some scheme more or less on the lines suggested by Senator O'Brien, by which there would be special inducements for investments, especially for the small investor. Not very long ago, I was interested in a public issue for a company with which I had some connection. It was fully subscribed, and I was extremely interested to find that the average investment was under £300. That showed that, where there seemed a fair degree of safety and a prospect of a moderate dividend, there are people with small incomes, certainly small savings, who are only too ready to invest. If we create a panic situation—or, to put it the other way, if we fail to check this feeling of panic, we might find it extremely difficult indeed to get our people to invest.
For the last 12 or 15 years I have consistently advocated in this House a reform of the income-tax code. My suggestion has been that the Minister for Finance should appoint a committee or a commission containing some experts on the revenue side and some business men—in other words, a committee not entirely of experts, though largely of experts. It should be given wide powers to revise the whole code of income-tax, always on the assumption that it has to raise the same amount of money. I do not believe that any Minister for Finance in any Budget will be able to make effective or satisfactory changes unless the code has first been examined from a wide and experienced point of view. I do not think there is any set of officials, no matter how able—and we have very able officials in the Civil Service—who could satisfactorily amend the code without the assistance of some people who have practical experience—they would be largely accountants, with one or two business men—of where the present taxation system has proved to be inequitable.
Whether it be right or wrong, I think I am right in saying that the majority of income-tax payers believe that our income-tax code is unfair. It is quite wrong to assume that any revision means an increased tax on farmers. It may or it may not, but it is certain that any responsible body examining a possible revision would be bound to take into consideration the fact that our agricultural industry is by far and away the most important industry in the country and that no adjustments should be made which would unduly burden it or lessen the prospect of increased production.
There has been complete agreement here and in the Dáil that the ideal method of getting over the gap in the balance of payments is by increased production. That is an easy thing to say, but not a very easy thing to bring about quickly. Comparatively recently, I met an Englishman who had had a good deal of experience in Denmark and who also knew this country very well. He told me he believed that, properly managed, our agricultural production could be doubled. That may or may not have been an exaggeration. I know nothing about the practical side of agriculture, but I believe that there is a capacity and a possibility of sufficient increase in agricultural production to get over our difficulties —though obviously that cannot be brought about immediately.
There is also considerable though limited scope for increase in what is commonly called industrial production —though agriculture is an industry also. One of the difficulties is that we need industrial production which will at the same time provide for exports and there is a tendency for our wage standards to be so high as to prevent successful exports. It seems to me that there is a need—it was emphasised by Senator McGuire—for some kind of active co-operation between representatives of our workers and representatives of the employers—between the employers' and the workers' trade unions. If by co-operative effort we can succeed in getting increased production—as is not only desirable but perfectly possible in our present industries—the workers will have to get some share of such increased profit as can be made from that. On the other hand, if they demand further increases of wages without increased production, they may easily defeat their own purpose and reduce the total amount of employment, as well as have a bad effect on our economy.
In several countries—and to a limited extent here—there has been a measure of agreement with regard to systems of incentive bonus. That is much easier in some industries than others, and no one knows better than I do how difficult it may be to work it out. I think it would be wholly desirable if we could extend the idea of the production bonus to Irish industry generally, so that, where the individual produces more, he will get his share of it. It should not increase costs. It might decrease costs and, at the same time, increase wages, but the idea is full of difficulties, and whereas I know that several trade union leaders and several leaders of employers are quite favourable to the idea, there are others who view it with a certain amount of distrust. I put this forward as one way, in addition to the various other suggestions, in which we might help to get the increase of production which is essential for the solving of our problems.
Business suspended at 6 p.m. and resumed at 7 p.m.