Seanad Éireann debate -
Thursday, 11 Dec 1952

Vol. 41 No. 5

Supplies and Services (Temporary Provisions) Act, 1946 (Continuance) Bill, 1952—Second and Subsequent Stages.

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

Minister for Industry and Commerce (Mr. Lemass)

It is again necessary to ask the Oireachtas to extend for a further year, that is, until December, 1953, the powers conferred on the Government by the Supplies and Services (Temporary Provisions) Act, 1946. In order that Senators may understand the reason for retaining those powers I propose to explain briefly the main purposes for which the powers under the Act will be required in 1953, that is, after the 31st December this year when, but for this extension, the powers would expire.

The Minister for Finance will require power under that Act chiefly for the following purposes: First, to control the foreign exchange transactions. Separate legislation for that purpose is in course of preparation but has not been presented to the Oireachtas. Second, to guarantee the borrowings of certain semi-State bodies. A Bill has been introduced in the Dáil to deal with that matter, but it has not yet received its Second Reading there and will not be enacted before the end of the year.

The Minister for Local Government requires powers under the Act to maintain various regulations dealing with traffic matters for which there has not yet been permanent legislation although permanent legislation is contemplated. The Minister for Social Welfare will require these powers for sundry minor relief measures which originated during the emergency and which it has not yet been found expedient to discontinue and in relation to which, in fact, it has not yet been possible to reach a decision as to whether their maintenance permanently will be necessary or not.

The Minister for Agriculture requires power for sundry regulations connected with the dairying industry, the meat industry, cereals, feeding stuffs and a number of other matters. It is not yet practicable to relinquish these powers and it cannot yet be said with certainly that permanent legislation should be enacted to cover them. The Minister for Industry and Commerce will require powers in connection with price control, the suspension of certain quotas and tariffs and for the control of exports.

The Seanad is, I think, aware that the Control of Prices Act of 1937, which is the only permanent legislation on the statute books for price control, was found to be insufficiently flexible in present-day conditions. That Act has, in fact, been lying dormant since the outbreak of the war, and in the interval powers of price control have been operated under this temporary legislation. That situation must continue until such times as new permanent legislation is enacted. I indicated last year that, in my view, the time had not yet arrived for permanent legislation—I thought differently in 1947, but the character of price fluctuations in the meantime caused me to change my view. The more leisurely type of price control machinery which we might adopt in normal conditions should not, in my view, be brought into operation until there is a return to more stability in prices. I think there is some reason for hoping that we may reach that stage next year, but in the meantime it is better to retain existing powers under the Supplies and Services Act. The existing permanent legislation for the control of quotas and the imposition of tariffs is also defective in some respect in regard to flexibility, and the question of suitably amending that legislation is not being overlooked.

Regulations relating to the control of exports are now few in number, but it is clear that some of the emergency powers relating to exports must be retained for a further period. Alternative permanent legislation for the provision of such powers is necessary, and that problem is also under examination. The original emergency powers are still used for dealing with a number of other minor matters. During the course of the past year, quite a number of the powers under the Act were relinquished. So far as these were exercised by the Department of Industry and Commerce, the main powers relinquished related to food rationing, building control and the rationing of petrol, and there were a number of other changes of lesser importance.

It is evident that substantial progress has been made towards shedding these wartime controls, but the Act is still needed for the purposes I have mentioned. I do not think that I can say when that need will entirely pass.

I am asking the House to agree to continuing the powers conferred by this Act for a further year until December 31st, 1953, but I do not think that I would be justified in giving an assurance that it will not be necessary to come again to the Seanad and ask for a further extension next year. Even if the need for emergency controls had passed entirely by the end of 1953, there still would be the problem of alternative legislation for quite a number of minor powers that have to be retained. Many of these relate to matters which, if there had been no emergency, would have had to be dealt with in the normal course by legislation, and they will have to be so dealt with when the time occurs. That will have to be done gradually so as not to overburden the legislative programme. There is a substantial volume of legislation to be dealt with next year, and with the best will in the world we will not be in a position to have all the enactments which would be required, if this Supplies and Services Act was to be relinquished, enacted before the 31st December, 1953.

In the Dáil it has been the practice for some years past to use the debate on this Bill as an occasion for conducting a general review of economic conditions, and there was no departure from that practice on this occasion. There was a discussion in the Dáil which ranged over a wide variety of topics, some of which were never the subject of Emergency Powers Orders, but the debate was, in the main, directed towards such serious problems as the rise in the cost of living, the burden of taxation and the level of unemployment. I have no desire to lead a discussion in the Seanad on these lines, but, on the reasonable assumption that some echoes of the Dáil debate may be heard here, I think it would be no harm if I mentioned a few facts so that Senators debating these subjects may be induced to keep them in mind.

The cost of living, of course, has risen during the present year. It rose in the past 18 months, since May, 1951, to August, 1952, by 13 points in the cost-of-living index number. Of that increase of 13 points, seven were directly attributable to the withdrawal of food subsidies in the Budget and the other six to factors outside Government control.

In the three months preceding May, 1951, that is between February, 1951, and May, 1951, there was also an increase of seven points in the cost-of-living index number. So that over the whole period from the beginning of 1951 to date an increase of some 20 per cent. in the cost of the commodities taken into account in calculating that index was recorded.

The power of the Government by the exercise of controls to regulate that rise was exceedingly limited. The previous Government, although they had established by emergency Orders a special investigating body and had maintained the remnants of an earlier general Standstill on Prices Order, was unable to prevent a rise of seven points in three months early in 1951 and, although the rise tended to show down subsequently, until the withdrawal of subsidies had effect, it nevertheless continued steadily over the period. I could not say that it has ceased.

It is true that there are no factors now operating to force prices up except internal ones. The movement in prices of imported goods has been downward for some time, not a very pronounced fall, but nevertheless a movement in the right direction. On the other hand, higher wages and higher taxes at home are countering the effect of that movement in import prices and it would be, I think, wrong to suggest that the full effect of recent wage increases has yet appeared in retail prices.

There is no doubt whatever that that rise in the cost of living caused hardship for those of our people whose incomes were not adjusted in accordance with the rise. It is true that many classes of workers have secured adjustments and, no doubt, others will in the early future.

The justification for the withdrawal of subsidies and putting the prices of the foodstuffs formerly subsidised upon a realistic basis was that it was better that they should be on that basis and wages adjusted accordingly rather than that a completely artificial and untenable situation should be perpetuated.

It is, I think, necessary to emphasise that the rise in the cost of living which took place over the past few years in this country took place in most other European countries. In Great Britain, since the beginning of 1950, the rise in the cost of living as shown by their index number was precisely the same as here. On the other hand, other statistics suggest that the rise in wages was less than in this country, that the British workers did not get compensation for that rise to the same extent as Irish workers.

It was stated in the Dáil that because of the rise in the cost of foodstuffs there has been a falling off in consumption of them. I was unable to give the Dáil precise information in that regard in concluding the debate, but since then I have got some statistics which I think the Seanad will find interesting.

Instead of there being a fall in the consumption of the foodstuffs previously rationed and subsidised, since the subsidies were withdrawn there has been an all round increase. In the case of creamery butter, the quantity consumed in 1952 in the five months' period from July to November was 3 per cent. higher than in 1951, the exact amount being 9,431 cwt., and that increase was recorded in practically every months of the period except the first, so that the trend was definite. The fact that there was not an increase in the first month was, no doubt, attributable to some extent to forestalling of the rise in price which people were aware was about to take place.

In the case of flour and bread, a similar increase is recorded. For the whole period from the 5th July to 22nd November the consumption of flour of all kinds, shop flour, bakers' flour and wheatenmeal, increased by 51,643 sacks. That sounds like a substantial quantity of flour, but it is a relatively small increase in consumption reckoned on a percentage basis. The total issues during the periods in each year were as follows: 1,071,357 sacks for that period in 1951, and 1,123,000 for that period in 1952. The increase took place in respect of all classes of flour, the consumption of shop flour over the period increasing by 12,308 sacks, of bakers' flour by 28,009 sacks, and of wheatenmeal by 11,326 sacks.

There is another feature of the picture of flour consumption to which I think it is desirable to draw attention. Within that overall period, from the 5th July to the 22nd November, there was a further increase in bread prices and flour prices following upon the payment of increased wages to bakery and flour mill workers on the recommendation of the Labour Court. That increase became effective in mid-September. Between the 21st September and 22nd November there was also an increase in flour consumption, an increase of 23,595 sacks. Again it is to be noted that that increase was distributed under all heads, the increase in shop flour consumption being 16,866 sacks, in bakers' flour 2,161 sacks, and in wheatenmeal 4,568 sacks.

In the case of tea, it is not possible to give consumption figures comparable with those which I have given in the case of butter and flour. What we can compare is the figure of sales of tea by Tea Importers Limited, that is, the central importing organisation for tea, since rationing was abolished and the figure for annual consumption of tea under rationing.

The figures for sales since July last are, however, affected by two factors, firstly, the unknown extent to which wholesale merchants may have sold from stock and, secondly, the general uncertainty which has prevailed in the tea trade regarding prices. Since July last, however, the sales of tea by Tea Importers have been at the annual rate of 23,600,000 lb. as compared with an annual rate of 22,000,000 lb. under rationing.

I am sure Senators will be relieved to know that the anxieties expressed in the Dáil lest the adjustment of the prices of these commodities had caused a fall in consumption were unfounded, and that there has been, consequent on the re-arrangement of prices and the withdrawal of rationing an all round increase in consumption.

I do not propose to refer to the subject of taxation which was also debated in the Dáil. That subject has been adequately debated in both Houses of the Oireachtas since the Budget, but there is no doubt that our rates of taxation are very high in relation to the present stage of development of the national economy. However, when I put a question to the Dáil as to whether any Deputy would agree that the Government spending should be held to its present level, there was no one who would support such a proposal.

The members of the Dáil expressed an anxiety, which the Government very strongly shares, about the position in regard to employment. The numbers at present registered at the employment exchanges show an increase this year over last year. While it is known that there are a number of factors which affect the figures at the employment exchanges registers, nevertheless they are high enough to make it clear that measures which have been adopted to improve the national economy and increase the employment opportunities afforded have not yet produced the desired or expected results. I would like to say, in that regard, that the special circumstances which prevailed in a number of industries about this time last year and early in the present year and which resulted in the closing down of a number of concerns and the commencement of short-time working in others, have passed.

So far as the manufacturing end is concerned, the slump which affected textile, clothing, leather, boots and shoes and most forms of wearing apparel has passed and practically all of these textiles mills, tanneries, clothing factories and boot factories are back to normal working. In fact, so rapid was the recovery and so large the volume of orders coming into Irish mills, that they have experienced temporary difficulty in filling them, notwithstanding overtime. Representations have been made to me by a number of interests that the inability of Irish mills to give expeditious execution of orders should be met by permitting special imports under licences.

More satisfactory from the point of view of any over-all objective examination of the position is that the increase on the live register does not represent any diminution in the number of people in employment. So far as it is possible to calculate the numbers of people in industrial employment from the number of employment insurance stamps purchased, the average weekly employment in 1951 was 14,000 greater than in 1950. While I cannot produce a corresponding figure in respect of 1952, the officials of the Department of Social Welfare inform me that they have carried out trial checks and are satisfied that the figure will show a slight increase in the present year.

The outcome of any objective examination of the position to which I have referred would lead to the conclusion that while the economic situation here requires our most serious attention and justifies even exceptional measures to relieve it, it is by no means as bad as is sometimes represented. We have many urgent problems and a few long-term problems still to solve. We have also the strength to solve them if we use it in the right direction. I would like to feel that in relation to any of these matters, that the members of the Oireachtas can obtain precise information, and while most of the information available to the Government in regard to them has appeared in various publications, if there is any further supplementary information Senators would desire and they indicate that desire in the course of the debate, I shall be glad to give it to them.

Professor Hayes

There is a convention about this particular Bill that it gives an opportunity for roaming at large over the economic and financial position of the country. The Minister, while hoping that we would not imitate the Dáil, and I hope myself we will not, has ranged over a considerable field. It seems to me that one of the things which emerges is that our supply of politicians is not particularly good and that our prospects for a further supply of them are rather bad. I would like to deal with the Bill and that particular point at the same time.

The Minister, in opening the debate in the other House, made an appeal to members of the House generally not to conceal economic realities from our people and said that he hoped there would be a different approach to this Bill. One different approach, and not an unsound one, might be to make the Bill end on September 30th instead of October 31st. It would give the Dáil something to do in October and it might be brought into the Seanad after a short debate in the Dáil, allowing us perhaps to debate it at length in the month of October when people would not be in a hurry. That is one suggestion the Minister might consider in relation to his appeal for a different approach to the whole matter.

In opposition, the Minister's approach was, of course, to prolong sittings of the other House so as to physically wear down the Ministers and those supporting them. That extremely bad example is perhaps being followed, although not quite so thoroughly or ruthlessly as the Minister in his younger days was able to do it. One can understand that in his present position, with the burdens he has to bear, he finds a necessity for a different approach, but apart altogether from his personal difficulty, there is a real necessity for a change. That idea was met, I thought, rather adequately by the Leader of the Opposition in the other House, but the atmosphere and the tenseness and nervousness created by the debate induced the Tánaiste to interrupt and seem rather unwontedly bad-tempered and touchy. Perhaps that is understandable.

The Minister could address himself to his colleague, the Minister for Finance, with regard to letting our people understand the realities of our economic and financial position. Quite recently, apart altogether from any of his recent speeches, the Minister for Finance has covered up our economic and financial position with a wealth— or perhaps I should say a waste—of verbiage and abuse. Recently, in Belturbet, he dealt with Marshall Aid in a manner which no one could regard as having any shred of sincerity or reality—and in a way with which the Tánaiste could not possibly agree. He places the burden of all our economic troubles squarely on the shoulders of the last Government and blames them even for accepting Marshall Aid, just as someone in the Dáil explained that the last Government got dollars and put them into the sterling pool. Marshall Aid did not involve getting dollars, it involved getting dollar credits. When the Minister for Finance was talking about Marshall Aid, he forgot that the Irish Press had a heading one time welcoming Marshall Aid and also had a leading article welcoming Marshall Aid and explaining what we would get under it. The complete irresponsibility of misrepresenting that position to our people, of even inferentially explaining that the Americans were rapaciously making something out of it—instead of helping us very generously, as the present Taoiseach said at that period—is to give to our economic affairs a completely unreal aspect.

As a matter of fact, the Fianna Fail Party acquiesced in the acceptance of Marshall Aid, and the notion that you could have got the money from Irish taxpayers is, of course, quite foolish, because Irish taxpayers could not have given you dollar credits anyhow, no matter how much sterling they had at their disposal. A realistic showing of our economic position will not be possible unless we can abandon once and for all the language of abuse, unless we can come down off the Party horse and walk calmly amongst the people.

During the last war, from 1939 to 1945, we were able to get co-operation amongst the Parties for certain purposes. It must be remembered that during the war we were not actually attacked at all. Now we are being attacked—attacked by depression, by recession in trade, by a higher bank rate, by rising unemployment, by emigration and by various financial problems, some of which are beyond our control, and some of which are within our control, and which anyhow call for a much better solution than mutual name-calling or fisticuffs.

Perhaps in a general way and very briefly one could state the problems which strike a person who, like the Tánaiste or myself, thought at one time that an Irish Parliament and an Irish Government could make great progress towards solving our problems. We have made very little progress towards solving our depopulation problem. We are one of the few white countries with a declining or merely static population. There are only three counties in the country where it is going up, and those counties are near Dublin, and the increase there may be accounted for by the increase in Dublin. We have a decline in the rural population, as anyone knows who goes to the country, apart altogether from the figures, and we have the knowledge that the lonelier the countryside gets the more people are inclined to leave it. We have—and this seems to be the most difficult of all our problems and we are not doing anything at all to solve it—the latest marriage age in Europe or the known world. There is no country which furnishes statistics of the marriage rate which shows people marrying at a later age than our people marry. One girl in every three in this country remains unmarried, and that, perhaps, has a great deal to do with the emigration of women, which is, of course, the greatest loss to us.

The Tánaiste is identified with industrial development, but it is true that no matter how successful industrial development may be, no matter how much co-operation his Government or any other Government have given towards industrial development, the employment given in industry is not catching up with the emigration from our rural areas. That is absolutely and undeniably true. And yet we can devote ourselves to wondering who is to blame, instead of devoting ourselves to solving the problem. We have external assets and under capitalisation at home but, most extraordinary of all, a great number of our strong young people are emigrating from jobs —not going to get jobs—they already have them—so that the urge for emigration in our case is by no means wholly economic. In the case of girls, it may be associated with the fact that the marriage-rate is so low. Another matter, which may have nothing to do with economics but which strikes a number of us very forcibly, is that after 30 years we are perhaps more denationalised than we were under British rule. The Irish language and all that goes with the Irish language is very far indeed from being in the position that enthusiastic people thought they could put it into 30 years ago. Free young Irishmen are yielding now to foreign influences and becoming less Irish and more international than at any period of English occupation.

While all that is going on, we are waging a form of Party warfare. Mind you, I am strongly in favour of Parties and I am strongly a Party man myself, but there are various methods of waging this particular struggle. We are waging a kind of Party warfare which jangles the nerves, tires the body and tends to weaken the intelligence. We have a parliamentary machine which has more to do than it was ever contemplated it should bear, and not only is the machine itself, particularly the other House, overburdened but its operators are overburdened, too. There is a great deal said about politicians and how Government and Parliament should be run in this country.

Some of it is malicious. Some of it is quite ignorant, but a good deal is well founded, and we have to blame ourselves for it. Perhaps we should consider for a moment, if I may be allowed, the position of the Tánaiste himself at the present time. I do not agree with him politically, but I do not want to kill him. His position at the present moment is that, for reasons which we all deplore, the Tánaiste finds himself in the position of being the acting head of the Government, which means that he is also the head of the majority Party in the State. He is also the Minister for Industry and Commerce. He is also the Leader of the Dáil. He has obligations to leave Dublin to perform various duties—some of which are public duties—arising out of his office, and some of which are Party political duties, which also are necessary, as we all know. As well as that, he has to sit in the Dáil for a week, like this week, or recent weeks, and discuss all kinds of things, in an atmosphere which, physically, I find overheated, and which is tiresome and heated in other ways. It seems to me that the qualities the Minister would need to have, to be a successful Minister, could be enumerated in this way— he would need the strength of a horse, the skin of a rhinoceros and the patience of Job; and if he had all these together he would still need the tongue of Demosthenes and the brains of Aristotle; and even with all those, he would not bring a single member of the Opposition into the same Lobby with him. Is not that true? No matter whether he stayed late or early, or whether he belonged to Fianna Fáil or Fine Gael it would not make any difference; it applies to them all—and the way things are going now he would need to have a private income as well. Surely there is something that should be done about that.

It has been proposed as a remedy for that that there should be unity between the Parties. That kind of suggestion is quite foolish. It is really a suggestion that people who, like the Minister and myself, were united at one time in the Sinn Féin movement should unite again to keep everybody else out of Government and Parliament—an extremely bad scheme, because surely the whole purpose of the Sinn Féin movement was to make Parliament and Government available for all kinds of Irishmen, to make, in the words of an Irish patriot: "Catholic, Protestant and Dissenter rejoice in the common name of Irishman," and to give various kinds of people an opportunity to work in an Irish Parliament. Unless we can find some better method of working it out than we at present have, we are going to exhaust and kill off the politicians we have and we are not offering any attractions to younger people to come into it.

It is true that the Parliament here is a more orderly Parliament than most, but it is also true that our differences here are very much less, in spite of all the talk, the occasional arguments and even the fisticuffs, than they are in England or France or Belgium, to speak of a few places I happen to know, and much less grievous and less vital than they are as between Parties in any of the small countries of Northern Europe which have a strong Communist Party which takes a line quite different from that which any Party takes here. While we need not have unity and cannot have unity, we should at least be able to talk to one another. We should be able to have calm and courtesy, and, from the point of view of legislation, I think that one of the things we might have is an arrangement in the other House to talk to each other and have a scheme, through the Whips or by some other method, whereby they would have a programme and an arrangement, and not meet indefinitely, night after night and week after week, with nobody knowing when there was going to be a division and nobody knowing when he would be free for anything, fraying everybody's nerves and sending to the Seanad everything just before Christmas and giving us three hours to discuss this Bill when we might have three days.

An Cathaoirleach

These matters scarcely arise on the Supplies and Services Bill.

Professor Hayes

I am talking about a Bill which I have not got time to talk about. I have not time to discuss it in its real implications and I suggest that we might have a better debate, if we got this Bill in a different way and at a different time. I suggest that the things we have in too great supply are Bills and legislation. The Minister agreed with me on that before, and one of the things which the Parties might do between them is to agree to a stand-still order on legislation. It would save money, save time, save talk, save light here and in the Dáil, and I do not think that anybody would be any the worse. I have been nearly 30 years in this Parliament in various capacities and I have heard Ministers of various Parties bringing in urgent Bills. I never knew a Minister whose Bill was not urgent, and I never knew a head of a Department who did not feel that Ireland would collapse, that the sky would fall, if a Bill which he had taken six years to prepare could not be passed in six hours in the Dáil. That is quite a common thing. Bills are hardly ever urgent, though this one is because it must be passed before the 31st December, but it is a rara avis. That is one thing that could be done which would relieve everybody—have a truce on legislation for 12 months. Pass the necessary legislation—the Appropriation Bill, the Finance Bill and so on—and have nothing else and let people then start on a better scheme for legislation.

That would be a very great improvement. I think there could be a new approach, as the Minister suggested, but it would need a new approach on the Minister's part and it would be necessary for the Minister and a great many other people to forget their previous conduct. The Minister suggested in the Dáil to-day that they should forget the past aviation project and deal with the present. That is what I am suggesting, that we should forget the past and deal with the present, with the present immense difficulties and the present system which has had one very grievous effect, that it seems to have disgusted a great many people with politics and prevented us from getting a supply of people who will eventually have to govern the country.

One of the ways would be to have a new approach in the Dáil which would make it less the endurance test that it is at present and more a combination of brains and intelligence in the service of the country. If we did that, we would be able to ensure that good ministerial timber could function properly. The Minister—I make him a present of this—certainly is good ministerial timber, and what he is asked to do at present he is asked to do, largely through his own fault, in a way which prevents him from being as competent as he might be. If we had a better system, Ministers would be less harried, more helpful, and more competent, and more people would be attracted to politics, and, following the Minister's own idea, we could realise better the facts of our economic position which should be explained to the people, instead of having a cloud of vituperation, accusation and counter-accusation cast over them.

I should like, therefore, to agree entirely that we need a new approach to this kind of Bill and to our economic problems and I am confident that we could get that approach, if people who know a great deal about it were to sit down and think it out. The first step in that direction would be to sit down and think out a programme and timetable for Dáil Eireann.

Mr. O'Donnell

I am very glad to observe the lead which Senator Hayes has given to the House. I think that the majority of us will agree that the time has come when we should sit back and see in what way our Parliament has justified itself in its conduct over the past 30 years. Many will agree that we have been found lacking in many ways. It seems to me that the main purpose of such a Bill as this is to provide an answer to the fundamental question: What are we doing to improve the economic life of our people and what progress has been made or can be made in our economic life? Have we created a state of society in which the producer can satisfy the consumer and in which nothing will debar the consumer, even a fiscal policy, from what is his by right?

Looking back over the years, the one thing which we have accepted all the time is—it is fundamental; something from which most people shy away; and something in respect of which those of us who refer to it are likely to be called crackpots, but something which is at the foundation of our society—control of our financial system. I do not propose to talk at any length on that subject, but it is quite evident to all of us that all our Governments have eventually been defeated by the financial system because they failed themselves to take control of it. The time has come when we must eventually face up to the fact that, whether we approve or disapprove of the present method of financial control, we must at least sit down and examine it in a cold and detached manner to see if its impact on our society is for the betterment of our people.

It is something which is above Party politics, something which is fundamental to ourselves, but we may eventually find—I say this in view of the plea for toleration made by Senator Hayes—that the crackpot of to-day may be the genius of to-morrow. It has been a common attribute of all Ministers for Finance that they derided any people who argued for the examination of this fundamental aspect of our lives. A sort of sneer has been thrown at anybody who suggests that the financial basis of our economy is wrong.

I would reiterate the plea made by Senator Hayes that there might be more co-operation between all Parties both in this House and in public. I have always stressed that there should be no Parties in this House. I think the greatest damage that was ever done to these premises was the construction of the central gangway. This Seanad is founded on a vocational basis and I am here on a vocational basis. I hope the members of the House will treat me in that fashion. I know that it will again be brought back to me that I am not realistic as if realism were a justification for the continuance of a House based on a political basis when it is based primarily on a vocational basis.

Some days ago I heard the Tánaiste plead very eloquently for a management institution. He pointed out that with the growing industrialisation of the country many industrialists were lacking in ideas that would be good for our country, and that a management institution should be set up. I entirely agree, but I suggest that as well as setting up such an institution for these poor, misguided and ignorant manufacturers, a similar institution might be set up for Governments.

We hear repeatedly accusations from one side or other of the House, whichever Government is in power at that particular time, that the Government is not doing its business right. What we will be eventually faced with is to ascertain whether these Governments over the past 30 years have justified themselves or not. As one who remembers that period, I know that no matter what Party was in power the country improved beyond all measure. One has only to get down among the people to see the great improvement in our economic life. I should like again to pay my tribute to the Tánaiste for the great part he has played in reviving the industrial life of this country. To him more than to anybody else we owe in a personal way our thanks for his efforts to solve that portion of our economic problem. I hope he will be as successful now as he was in the past. I may differ from him on many points, but with his general policy and his objective approach I entirely agree.

I hope that Senator Hayes' plea will be listened to by Senators on all sides. There is a feeling outside that this Oireachtas has become a mere plaything of politics, that it does not matter what anybody says, he just does not believe in it any longer and says it just because he belongs to a Party on one or other side of the House.

An Cathaoirleach

I do not think the Senator should discuss the conduct of the Oireachtas any more. He ought to advert to the Supplies and Services Bill.

Mr. O'Donnell

I accept your ruling, Sir, but I thought we were discussing this matter in the manner in which it was discussed in the Lower House, where there was a sort of general survey. I should like to say that I do not see how this country can continue successfully to develop its economic life so long as we allow Dublin to grow into an incubus which is becoming more and more so as time passes on. We have here an extraordinary anomaly.

We have a city ever growing while the hinterland is being denuded. As stated here to-day, we find, despite the interest of the Tánaiste, as Minister for Industry and Commerce, and despite decentralisation, the young people leaving the countryside. If, as a result of his industrial policy, he can do anything to stop the extension of the city and develop the countryside, which is mainly composed of producers, it seems to me that we will not then have a city of non-producers, as it were, sucking the lifeblood of our hinterland. We are here discussing the general economic life of the country, and it seems to me that what I now speak of comes under the head of supplies and services. It is because the growth of the City of Dublin is part of that economic life that I am pointing out the danger of its continuing. I do not know in what way a legislator can legislate to stop that.

We have a population of roughly 750,000 who are mainly non-producers and who are living entirely upon producers of the countryside. The land and producers constitute the main body of our wealth. Industrialists and others are only ancillary. If we allow one-third of our population to come along and swell up this marvellous city of ours, we are creating a great economic evil. It is a matter to which all Parties in this House should address themselves these days.

I thought I could have referred to the Undeveloped Areas Act. I thought it was one of those services for which the Minister was responsible. Senator Hayes pointed out that industrial employment is not catching up on emigration. I hope he did not mean to infer by that statement that it was the fault of the Minister for Industry and Commerce or his predecessor. There are many reasons why industrialisation has not benefited the countryside as much as it should have done. I am not too sure that industrialisation is not making rapid progress towards destroying the evil of emigration. There has been continued decentralisation of industry and under the Act I mentioned a few moments ago—the Undeveloped Areas Act—if the Minister has not succeeded in turning back the tide of emigration, he has made a great effort to do so.

I do not want to score points. The Minister has referred to the rising cost of living. He explained why the cost of living went up. The cost of living has gone up and has gone up in other countries similarly. As a result of that increase in the cost of living, people are finding it more and more difficult to live in their different strata of life. The position to-day in regard to industrial development is that there is a terrific lack of capital. Bank policy is stringent and everybody is living on what they owe everybody else. Until we solve the fundamental issue of the control of credit and currency, I do not think that all these Bills, all these efforts we are making, will be of any avail until the "crack-pots" justify themselves ultimately.

Mr. Douglas

I do not propose to follow the previous speaker's line of argument. It seems to me that the immediate issue before the House is whether or not we are justified in continuing certain administrative powers which enable the Government to operate the various matters referred to by the Minister and which I need not repeat and to that extent influence the economic position.

I do not honestly believe that a long debate on all the aspects of the situation which would be strictly in order would achieve very much. As far as I am concerned, I do not propose to take more than a very short time. The idea put forward by Senator O'Donnell, that by some peculiar and mysterious way we could get rid of some regulation on currency which is crippling us, is quite a common idea at the moment but it reminds me of my young days when almost all my friends believed that if we could get rid of Britain we would have some kind of millennium, and they told me later that if we could get rid of Cosgrave everything would be all right and then if we could get rid of de Valera everything would be all right and eventually that if we could get rid of the inter-Party Government everything would be all right.

What I want to suggest is that we do not want to abolish Parties. We want a measure of accord by which whatever particular Minister is in power and has to administer any Bill such as this particular Bill, it should be possible to have in relation to the Government a degree of co-operation which is not being granted at this particular time and which has not been granted for a number of years. I say that because as far as my experience goes I think that the present Minister has generally shown a spirit of willingness to co-operate and has listened to any point of view put to him with regard to his Department. I would never hesitate for a moment to put to him a point of view and I would be very surprised if he would not listen to me and consider that matter.

The main control powers have been set out by the Minister and my principal criticism of the Minister is that he gave us no indication of how far he intended to use these powers or how far it might be possible to use them to meet what I believe to be the serious situation existing at the moment.

The fact is that there has been a very serious slump so far as business generally is concerned and many people are finding it extremely difficult to maintain their business and they see the prospect that there are almost certain to be substantially reduced profits in a large number of businesses and that of itself is liable to cause increased unemployment. I cannot help feeling that it should not be impossible so to adjust or operate controls that there would at least be an encouragement to increased business or at least something that would turn the present trend. The Minister has stated that he was convinced that there was an improvement as far as many classes of business were concerned and that he thought that the slump was ended. I hope he is right, but I find some difficulty in being quite so optimistic because most of the manufacturers are dependent on the public buying, and if buying does not improve—and there is an unwillingness to buy just now—the position will become somewhat difficult.

The main difference between myself and the Minister in regard to Bills of this nature is that he and the Government believe in price controls being continued even where there is keen competition in business and a plenitude of goods. I think that in such circumstances effective price control machinery should cease to operate. It would be reimposed if the position altered, but if it is continued in a situation of keen competition and a plenitude of goods then there is the danger that it may defeat its purpose.

In the Dáil the Minister spent a considerable time explaining what had been done in regard to the prices of bread and flour. I am not going to discuss that question because I do not know so much about it, but I was nevertheless interested in his explanations, and I am inclined to agree with the view he took. What I do want to put to him, however, is that if one important and large industry is immediately investigated when there is an increase of wages and an adjustment of prices is made, I think the same machinery should operate in regard to other businesses and industries when there is price control or marginal price control. There should be in any price control of this kind some system allowing for a reduced trade, or some method by which the price control would be adjusted in the other direction. Where you have marginal price control it is obvious, where you have a large turn-over, that you cannot have a similar margin when there is a substantial decrease in business. I think that that is something which requires investigation.

I am not sure there is much difference of opinion between myself and the Minister with regard to competition— where there is acute competition and a very definite trade stock. The Minister has stated that he hopes to introduce new legislation with regard to price control when there is relative stability in prices. How he is going to know that and when that time comes, I do not know. I would like to know, and I am sure there are many others like me. I am afraid that if we wait until we get relative stability of prices we will not do anything further. I do not honestly believe that we are going to get any period of time at which we can say that we have a position of relative price stability unless there is a more stable international position. I believe that while the present position is there we will always be liable to have changes in prices.

In addition to that, unless you could know that we are not going to have another programme of substantial increases in taxation or another round of wage demands, you cannot say that you have a position of prices stability. There is no evidence at the moment of any relative stability in prices. Having said that I nevertheless can venture to say that prices are as near stability around the present time as they have been for a considerable time.

The Minister made a statement when introducing this Bill which rather intrigued me and I would like to know more about it. He said that he had made a suggestion that there might be a period of time in which our taxation might remain on the present level and nobody was prepared to agree with him. I certainly would be prepared to agree with him and I think there are many others also.

Mr. Lemass

I said that Government expenditure might remain at its present level.

Mr. Douglas

I thought the Minister said that taxation would remain at its present level. That may be it. I was not thinking of that. I was not trying to make a point. When I refer to Government spending remaining at its present level, I mean exactly the same as what I mean with regard to my own spending. That is, if I am going to take a bus home, I will have to do without something else. I do not mean that you simply stop spending money of any kind.

If there could be an agreement for a year or so that there would be no increased level of spending, in other words, if something was necessary, it would have to be done, but something else would have to be done without, it would do this country an amazing amount of good. If there should be nobody in the Dáil, as the Minister suggests, prepared to agree, there is a very large number of people in the country who would be extremely willing to agree, even though it meant that some pet legislation of their own would not be passed or that certain things that they were hoping to have done would not be done.

There is a very strong feeling abroad, which I share—that is why I am rather glad that Senator Hayes took the line he did take—that the present position of a Party system as it is operating here is operating simply to cause expenditure above the capacity of this country with, therefore, taxation above what we can meet. If that be true— and I think it is very near the truth— surely it is time that some of us put our heads together to see if we cannot stop it.

This, I think, is closely allied to this Bill. It is part and parcel of what has been debated and also of what I think ought to be debated on this Bill. If you had not, perhaps, a standstill Order, but an agreement that for 12 months or two years the present level of expenditure should remain, you would almost inevitably have a minimum of legislation and it would be largely through co-operating together in the operation of administrative action that Government would function. I would like very much to see it. I wish I could be hopeful.

Professor Johnston

This Bill originated in a period of emergency scarcity and is still continued some six years after the period of emergency came to an end. The best remedy for scarcity is more production. Therefore, I think it is highly relevant to address oneself to the facts of production in our economic life and to suggest increases of it so far as they may be feasible in the immediate future.

I may say that, compared with what he was some 20 or 30 years ago, I regard the Minister, from the economic point of view, as a regenerate sinner and, in fact, almost an economic saint. In particular, I welcome his recent recognition of the importance of the agricultural basis of industrial development and his appreciation of the important part that our agricultural effort must play in future development of the industrial pyramid.

From that point of view, he reminds me of a story about a Chicago pork butcher who said to a neighbour: "In this city we have not yet taken up culture, but when we do we will make it hum." I would like that the Minister would take an interest in agriculture and I have no doubt that, under his protecting care, it will hum most musically and that in fact it will become the dominant note in our national economic orchestra with him as conductor—agriculture playing first fiddle, so to speak.

There are only one or two points that I should like to emphasise in the course of my subsequent remarks. First, I want to ask the question, what is it that inhibits the increase of agricultural output for, as everyone knows, as compared with 14 years ago the physical volume of agricultural output is practically the same, whereas the physical volume of industrial output has increased by some 60 or 70 per cent. I want to emphasise the tremendous economic importance of an increase in agricultural output. I mean especially the physical volume of it, ignoring for the moment the prices at which those things are valued.

Perhaps the best way in which I could bring home the significance of such an increase is by a certain comparison which I hope will not be regarded as invidious, because it will involve a comparison with our neighbours in Northern Ireland.

As compared with 1922, according to their official statistics, the physical volume of agricultural output in Northern Ireland in recent years had increased by some 30 per cent. In our case we are still practically on the same basis as we were 20 or 30 years ago and I am not going to enter into the question of who is to blame for that. I do not want to rattle any of the old bones of former controversies.

An Cathaoirleach

It would not be in order.

Professor Johnston

I am going to keep strictly in order, Sir. What I do want to suggest is that if we could in some way have increased physical output of agriculture by 30 per cent., in the course of the last ten or 12 years, that would have meant that our agricultural income would be, in terms of present prices, some £50,000,000 more than it actually is. Further, in view of the fact that there seems to be a steady relationship of some 30 per cent. between the agricultural income and the national income, it seems highly probable that if we could have increased the agricultural income by £50,000,000 in terms of present prices, as compared with ten years ago, the total national income would have increased by £150,000,000 in that period. In other words, we would be as well off as a nation from that increase of agricultural output as we would be to-morrow if, through some miracle, we could have all existing public services and every 1d. of taxation abolished forthwith—because the amount of taxation is of the order of £100,000,000 and the increase in the national income would be more than that if we could have brought about that 30 per cent. increase of agricultural output.

Another point I want to make is that an increase of the physical output of agriculture seems to have a kind of multiplier effect in our economy. Every £ that the farmer makes by way of additional income resulting from additional physical output seems to cause the production of at least another £2 worth of real goods by other elements in the economy. I am not going to start to analyse why that should be but it is arguable that when our whole economy is well founded on the grass roots of agricultural enterprise, every increase in the physical output of agriculture will be reflected in a threefold increase in the total output of economic wealth in the economy as a whole.

We have had in the last ten or 12 years a very desirable increase in the physical output of industrial products of the value, in current prices, of some £65,000,000 and that is all to the good. Somehow or other an increase of industrial output, following on the policies that have hitherto been pursued, does not seem to have that same multiplier effect on the rest of the economy that an increase of agricultural output would have had and that is, to my mind, a reason why, even from the point of view of sound industrial development, it is desirable to concentrate first of all on the development of agricultural output, and why I welcome the Minister's recent obvious interest in the possibilities of an increase of agricultural output, and in the possibilities of developing industry on the basis of the agricultural raw materials that are the result of such increase of output, many of which were hitherto sold unprocessed to other countries.

The moral of it seems to be to increase the physical output of agriculture and automatically non-agricultural output would be increased in greater measure. To bring about such an increase, the first thing we want is more knowledge and we seem to want a kind of economic survey of agricultural conditions as a whole, both national and local in its scope, almost going down to the details of the individual efforts of typical farmers in every part of the country. That might be a big order, if done precisely, a kind of William the Conqueror Doomsday Book, in fact. If you want to get the immediate results, you must know the achievements of highly-organised farmers and consider how far it is possible to strengthen them, because all these local and highly-efficient farmers in doing what they are doing, can improve the output of agriculture.

Nothing is more characteristic of the whole agricultural scene than the fact that there are here and there local oases of highly-efficient agricultural production, sometimes occurring in a cluster of farmers and reflecting not only the activities of a single highly efficient farmer, but also the contrast there is between these local oases of highly-efficient production and the desert of rack-weeds and grass which represents the inactivity of their farming neighbours. If by some method you could increase the scope of the activities of these highly-efficient farmers, whose numbers may be 10,000 or 20,000—but they are a minority—if you could increase the scope of their personal activities and facilitate them in acquiring more land where they have less land than they can make efficient use of, you would take definite steps towards increasing agricultural efficiency in the country as a whole and, consequently, agricultural production.

Everyone is aware of cases where there is a local highly efficient farmer farming, perhaps, 20 or 50 acres who could quite well produce better results if his farm was 200 or 300 acres in size. That man may be surrounded by other owners of land who live in a city or town who are commercialists rather than farmers and who let their land on the 11-months system. I have actual cases which I could give to the Minister privately where a farmer could buy land at a reasonable price but the owner refuse to sell. He would rather leave it derelict than sell it, and the nation suffers in consequence.

We should, first of all, acquire a knowledge of where our individual efficient farmers are, what they are doing and to what extent they are handicapped by not having enough land to till. We might also pass a law to enable these farmers to acquire by compulsion the land of their lazy, neglectful neighbours. That is the sum of my contribution to this subject and I hope that I have not transgressed the rules of order, as I usually do.

Mr. Baxter

One might suggest that the policy being pursued in this House is a welcome change for the Tánaiste. It must be very restful and slightly refreshing for him to come into the atmosphere of the Seanad and be received by the leader of the Opposition in the spirit in which he addressed himself to the Minister's appeal. I do not know if the Tánaiste would always like to have it like that but he might feel we were beginning to get rusty if he did not have an opportunity of seeing whether his agility is as it was of old.

The Tánaiste, in the course of his remarks, told us that the economic situation here was difficult and required attention. I would say that, generally, I assent to the point of view expressed by Senator Hayes. I feel there is a real problem confronting the country in regard to the future of its political life. This requires study and examination, for we can very easily leave a desert behind, and it is a problem for all of us. I am going to concern myself immediately with one or two points mainly in support of the remarks of Senator Johnston.

I think that everybody agrees that the Tánaiste, in the sphere of his activity, works hard with a considerable degree of success, but there are people who have expressed the view that the degree of success achieved by the Tánaiste in his policy of industrialisation has actually handicapped the development of a stronger economy in the other arm of the nation's life. I wonder has the Minister thought much about that. I suggest he would and I suggest to him that the strength of our industrial arm in future is going to be determined by the vigour of the agricultural industry on which it rests. If you start from zero, it is very easy to show how you have increased and multiplied and to indicate the numbers of people and the increases in percentages of the numbers employed in various industries that did not exist in the past.

We have evidence, of course, of the very considerable capital investment in industrial undertakings to-day as against 1930, but the amount invested in industrial undertakings at that period was rather small. It is regrettable, too, that during all that period, when there was undoubtedly an improvement in the conditions in regard to industrial establishment, so little progress was made in agriculture. It does not matter who is in power, but the truth is that agriculture is not making progress in this country. Speaking as a farmer and speaking of conditions as I see them from one end of the country to the other, the total volume of our physical production is no higher than it was 50 years ago. It is true we have fewer people on the land and it may be that we could study this aspect.

We probably have as much power on the land now as we had 50 years ago when the population was much greater, but even so, there is a terribly depressing situation for us and for those of us especially who are concerned about the future of agriculture, and I think it is a special problem for the Tánaiste as Minister for Industry and Commerce. Our industries cannot increase and multiply unless there is a greater volume of production in agriculture than there is to-day. Because industry was on the march and the cost of industry had to be borne by the people at home, I felt that the extra burdens on agriculturists were a handicap in regard to agricultural productivity. That must be stated in relation to the present agricultural situation.

It is true that during all the years of the Tánaiste's office as Minister for Industry and Commerce there was no counter-balancing force on the other side in regard to agriculture. If there were someone else there, working with the same drive, the same vigour and imagination that the Tánaiste displayed in his Department, I believe the situation would be immensely different and the country's economy much stronger than it is to-day. I get no comfort out of the thought that agricultural incomes may be higher at present than last years ago, when that increase in income has not accured from an increase in the volume of output on the land. There is no stability in that position for us.

I think the future of agriculture is brighter than it was ten or 15 years ago. As one can see the world situation to-day with regard to the output of food, I believe the future of agriculture is bright; but if we should experience a reverse in regard to agricultural prices the whole economy of this country can experience a very severe rebuff and our industrial development is bound to be retarded.

I do not know what position industrialists would find themselves in, who are dependent on the exchange which agricultural exports can provide for the purchase of the raw materials which must be found abroad. Agricultural productivity has not increased in 50 years, and that is true, if anyone measures the volume of it. We might talk about an increase in income. There is nothing stable about that. We may get reversals in regard to cattle prices. We know that the sugar supplies of the world are higher at present than for a long time. It is one crop of which there is an over supply. The wheat crop last year in America was vast in its yields and American and Canadian wheat growers are perturbed about the possibility of their being able to market the wheat crop which they harvested last year. We know that the people who were a party to the wheat agreement were hesitant about going into another wheat agreement.

We know, with regard to cattle stocks in the world, that the position is not anything like so happy, but it is a fact that meat is becoming quite a luxury, in fact almost as much a luxury as the turkey. In a world where incomes are being shortened by the claims and demands of rearmament, it is just not clear whether the present high prices of meat can be retained. That is a consideration for us and especially for the Tánaiste as Minister for Industry and Commerce. It requires very careful study and something radical must be done about it very soon.

I see no efforts, I confess, in the agricultural policy pursued by the Minister in charge, that there is any hope of increased yields from our fields. I suggest that what this country needs at the moment in agriculture is to be able to cut costs of production and raise the output. I see no sign of either one or the other being accomplished. The instruments of production are not available to the farmer in a variety of ways. If you look at our fields, anybody with an eye to see what the face of the land reveals with regard to its condition of health can see clearly what is wrong. I travel from the City of Dublin to my home town and there are not half a dozen fields that I will pass on the way home to-morrow morning where you can see visible evidence of an abundance of potash, phosphates and nitrogen.

Go to Cork or go from Dublin to Connaught and it is the same story. Anyone who knows anything about the results of the application of fertiliser to land will see it. Go across the Border and you find the story is entirely different. I am not going to hold the House on this, but I am convinced we have not yet attempted to face the problems involved in trying to increase our agricultural productivity.

What Senator Johnston says is true: we need knowledge, education first and then we need instruments. I see organisations like Macra na Feirme; I see those young men interested in trying to do better farming, trying to build up an organisation; and I wonder just what is going to come out of it. Let any group of intelligent, progressive men get together to talk about what they are going to do in their districts; when they get together to plan, what is available to them? In the first place, they want knowledge and they want information. It is terribly difficult to get that. We have no educational plan at all with regard to agriculture that bears any comparison with what is being done in other countries, with the progress on the Continent amongst the small peoples, the Danes, the Dutch, the Swedes and the rest. France and even Britain are much superior to ourselves in this respect. The people in those countries are all getting the additional equipment which is not available to our people. Our farmers do not really know, but it is not their fault and they ought to be given a better opportunity than is available to them just now.

In regard to the machinery, we can get nowhere until we can make very considerable sums available by way of capital investment for agriculture. The Minister for Industry and Commerce knows that a very recent report of the Industrial Credit Company revealed the fact that £14,000,000 was made available for industry since they started. More power to them. Did the Minister bother to look at the amount made available and utilised by the sister company, the Agricultural Credit Corporation? They put out about £4,000,000. Just look at the situation—11,000,000 arable acres and they have utilised £4,000,000 to get the machinery going there. It cannot be done by efforts of that kind.

I urge on the Tánaiste, for the sake of the country's economy as a whole— no one is going to say that he is not interested in the whole lot of it; that would be to label him with a level of intelligence much lower than his most bitter critics would label him with— that something must be done if the nation is to get a chance to develop and that unless something is done about agriculture quickly we will face a crisis.

There has been a great deal of talk about the dead-meat trade at the moment—Senator Johnston referred to it—but has anyone bothered to study where the raw materials of this industry are going to come from after a bit? Figures were produced recently, where the number of cattle under one year in the last statistics was almost 60,000 fewer than it was the year before. Next year there will be 60,000 fewer two-year-olds and the next year 60,000 fewer three-year-olds, representing on present prices £400,000 or, possibly, £500,000. That is not the worst of it. Our cows and in-calf heifers were down by 25,000 last year compared with the year before and they were 25,000 fewer then than in the previous year, making 50,000 fewer of the breeding stock than we had two years ago. Where is the value of the immense capital to build up the dead-meat organisation, the utilisation of all the offals, the handling of the hides and the rest of it, if the whole business is going to dry up at its source?

I suggest to the Tánaiste that these are very serious problems facing this country, which from the agricultural point of view are not being tackled. Somebody somehow has to educate the farmer and convince him that there are possibilities of an immense increase in his output. You must go to him and persuade him that that is so. It is no use standing on the farmer's ditch until you are invited to go in and tell him. You will have to cross the ditch and engage him in conversation about it. If he is agreeable to do it, you will have to provide the instruments of production and, even then, he will be doubtful and hesitant, and I do not think there is any use at all in going to the agriculturist to-day to persuade him that he can build up a profitable agricultural industry at the rate of interest at which he has to borrow money. For the life of me, above everything else done here, I cannot understand how the Minister for Industry and Commerce stands for that policy.

I urge that these problems are hot and burning, and nobody who is interested in the future of the country, in the future of its people, the people who are going and the people who will go, if a change does not come about, can give any thought to this Bill without feeling an obligation on him to make some reference to the problems which these difficulties present us with.

Professor O'Brien

I have really nothing to say that has not been said before in this debate. My reason for rising at all is to repeat, or re-emphasise, in the presence of the Minister, some of the things already said. The Minister, in his short review of the economic situation, ended on a somewhat confident and optimistic note. In doing so, I think he was right, because I think that the people who are over-pessimistic are probably doing harm to the spirits of people in the country and even to the credit of the country. Over-pessimism at a time like this may do harm. At the same time, I think the Minister will agree that, in the long period, there is every reason, if not for pessimism, at least for exercising our foresight to the utmost possible degree, because the long period outlook, as various Senators have said, does undoubtedly give cause for disquiet.

The principal point in the Minister's speech to which I would refer, which really gives me my starting point for what I am going to say, is his reference to taxation. He admitted that taxation is almost unbearably high, but he said that no person in the Dáil or Seanad will seriously suggest any reduction of expenditure and that we therefore have some sort of vicious circle. I agree with what Senator Douglas said about the necessity and the desirability of going without one thing when we want another, but, at the same time, I am rather afraid that what he advocates is not practical politics at present. We have to take things as we find them. We have to admit that Government expenditure is bound to go up, whether we like it or not, that every section of the community is crying out for more services, which will involve more Government expenditure, and we may therefore take it that rising Government expenditure is almost part of the data of the situation in which we live. In the same way, we may take it that rising wages are part of it.

We cannot look for a fall in wage rates at present or in Government expenditure. In other words, we are living in an inflationary period and we have to adapt our mentality to that period, because if we do not accept it we will make great mistakes and go wrong. The only possible way to prevent that inflation from doing great harm to the country, from causing ruin, is, as all previous Senators have emphasised, by a great expansion in production. The only possible way in which this increase in incomes, because that is really what it comes to, can be supported is by a considerable volume of physical production of goods and services which will support this great increase.

In this country—I entirely agree with the previous Senators—the place where we must attack the problem is in our primary production. I agree with Senator Johnston, who referred to the multiplier effect—that if we can get an increase in output in agriculture we will probably get a three-fold increase in output in the national income generally. Also, of course, it is not necessary for me to repeat what has been stated this evening by Senators, who far from being critical of farmers, are always friendly to them in this House, Senators who speak for farmers that the record of Irish agriculture in the past 50 years has left a great deal to be desired. The central problem of this country, whatever the cause—we need not attempt to go into it now—is admitted by everybody to-day to be the obstinate stagnation in primary production. That has been stated so strongly by previous speakers that I need only to refer to it.

Another point I want to make, arising out of that—I am simply repeating what other speakers have said—is that I think that the plea made by Senator Hayes that certain departments in the national life might be taken out of Party politics is one to which we should all attend. After all, in wartime countries put their defensive measures completely outside Party politics. Even in a period of cold war, or a period of rearmament, the defence services are not the subject of Party debate. At present, we know that, in most countries in the world, unfortunately, a great deal of money is being spent on atomic research and things of that kind. They are not subject to Party politics, but are the subject of national agreement.

There are other sorts of war besides the hot and the cold wars the world is fighting to-day. It is a cliché, I know, and a platitude, but that is no reason for not saying it, that we have to fight a war on want, a war on emigration, a war on unemployment and a war on agricultural stagnation. We also have to fight a war in order to preserve our national independence, not against aggression or invasion from abroad, but against the fate of debtors who lose all their assets and have perhaps to go to borrow abroad. It might, of course, be the end of our independence, if we get to the point that, in order to balance our payments, we have to go on bended knees to some of our neighbours for credit. In other words, the whole national safety of the country is at stake.

This is not solely a matter of scoring debating points. I am firmly convinced that the whole future of this country, not only on the economic side but on the political and national side, the very preservation of our independence, is bound up with a great expansion in output in our primary industry. There have been certain fields of expansion in this country which have largely been taken out of politics already—the fields of hydro-electric development, of turf development and sugar beet development. These are three large industries which I think are not now the subject of Party debate any more. These are natural resources which have been developed independently without any great question in modern times.

The Government have recently taken the question of judges' salaries out of politics. Perhaps that is not putting it quite correctly—they have decided that the question of judges' salaries is not a proper subject for Party debate in the Dáil. I suggest that there are certain other departments of national life that might equally be made the subject of an all-Party Committee. They are too important to be bandied about and to be made merely the subject of debating points. It seems to me that, if we could have an expansion in primary production here, practically all our problems would almost melt away. They would be almost automatically solved.

If we had a growing national dividend, based on healthy expansion of primary production we could afford all sorts of luxuries and extravagances which we simply cannot afford now. One thing we could afford is a considerable amount of public borrowing. The limitation on public borrowing in modern times is not any 19th-century hidebound dogmatism regarding the necessity of balancing the budget, year by year. The limiting factor, I suggest, is simply the failure of the national dividend to expand. It is almost axiomatic that, in countries with an expanding national income, an expanding debt may be a good thing.

Another thing is that we can stand for quite a long time—almost continuously—a disequilibrium in the balance of payments. A disequilibrium in the balance of payments if it is devoted to building up our productive investment, may not represent an unwise dissipation of accumulated reserves. It may represent a wise utilisation of the savings of the people. I am quite clear that what Senator Johnston said is correct. There would be at least a three-fold multplier in the system generally. Therefore, a primary expansion is not only desirable but absolutely essential.

I wish to agree with Senator Douglas in disagreeing with Senator O'Donnell. To suggest that the limiting factor is finance, that the whole problem could be solved overnight by some sort of wand, some sort of wizardy in the banking system is, I think, an oversimplification.

Mr. P. O'Reilly

The Midas touch.

Professor O'Brien

At least I am entitled to have an opinion and if the Senator disagrees——

Mr. Baxter

He said the Midas touch.

Professor O'Brien

I am sorry. I think the school of thought that is of opinion that some amendment of the Central Bank Act of 1942, some variation of the composition of the legal tender note fund or some clause of that kind passed through the Dáil and Seanad would solve the problem is an over-simplification and is getting away from realities. People who believe in and preach that doctrine are really underestimating the difficulties which face them. No variation in the legal tender note fund is going to increase the output of potatoes or beet. A great deal more than that is required. I do not say that there cannot be constructive changes in the banking system. I do not suggest that the Irish Central Bank or the commercial banking system is perfect.

I do not think anything in this world is perfect. We should be quite prepared seriously to consider constructive suggestions for the reform of the banking system, but the idea that there is some sort of restriction of credit, some sort of hidden hand in the financial field that is keeping down productivity in all fields is an over-simplification. That is escapism—refusing to face the difficult realities of the situation. To that extent I think it is almost dangerous talk.

I wish to say that I do not want to delay the Seanad or the Minister. In conclusion—I think the Minister himself, perhaps, will agree with me—I say that a valuable headline has been set in regard to some sort of co-operation of agriculture in the industrial field. The meeting at which I had the honour to be present in Dublin recently and at which the Minister spoke seemed to be a remarkable gathering.

We had there a collection of people drawn from every sort of industry in Ireland with widely different political outlooks. All came together for a common cause and united to increase the efficiency of industry with the object of reducing costs, increasing output and exports and pushing industry forward, as the Minister said, to the second stage of its development.

It has been built up almost to the maximum behind the tariff. Industry has now to go out into the world. It is growing up and, like the young man, it has to face the competition of its fellows in a hostile world. Therefore, it has to be built up, educated and allowed to go forward on its own. The Institute of Management I hope will prove a success. It is at least a well-directed effort to build up industry.

The lesson to be learned in the agricultural field is this. Here we have in a secondary industry an effort to cooperate between the Government, industry itself and the educational authorities. The whole basis of that great meeting the other day was that the Government, businessmen and the universities have something to give each other and all intend to help each other and give freely of their best. The time has come for a similar effort in agriculture. I do not think it is going to be easy. The number of people necessary to bring together are much greater. You cannot bring together the heads of the agricultural industry in the way in which the heads of the secondary industries were brought together in a room in Dublin. At the same time it seems to me to be the right method of approach. There must be co-operation at the highest possible level. The agricultural question in this country is one which must be taken out of party politics. It must be approached as a very difficult, urgent and technical problem—a technical problem which must be solved at a technical level. There must be, as Senator Baxter says, capital and technique. There must be control. There must be co-operation at every level.

If this debate has done nothing else it has at least shown that Senators are aware of the urgency of the problem. It is a remarkable thing in the Seanad seeing one speaker after another up to this completely unanimous in this debate. The urgent need of the country is a great expansion of agriculture and the person to bring about that expansion—I think I am interpreting the feeling of the House—is the already over-worked Minister we have with us this evening.

Mr. P. O'Reilly

I think the speech made by Senator Hayes was remarkable in that it started a standard of debate which existed some years ago, a standard to which I hope we will get back now so that matters can be discussed calmly and critically. It is very welcome and I hope that standard of debate will continue. It was quite good. It was better than the debates which took place in the Dáil in many cases.

This Bill gives scope for a pretty wide discussion but up to the present practically all the speakers—many of them experts—dealt primarily with agricultural production. I was surprised and rather glad that this was so particularly since the scope of the Bill allowed a very wide field of discussion.

Senator Johnston talked about the need for an increase in the physical production of agriculture. He was followed by Senator Baxter and Senator Professor O'Brien. All those people are experts. I might even suggest that Senator Baxter is a professor too, because he speaks like one very often. I know that he gives quite a lot of study to agricultural matters and talks quite a lot about them. Might I suggest that this talk about agricultural production seems to be what is really wrong? This has been going on and on, ever since a one-time Minister for Agriculture said: "One more cow, one more sow and one more acre under the plough." That was about 30 years ago but has agricultural production in a physical sense increased? No. I agree that the value of agricultural production has increased immensely. I am prepared to argue that if there was a recession in agricultural prices in the world market this country would be faced with a most serious crisis and could not continue even to maintain the present standard of living on the present output.

What is going to be done about this thing? Talk is not going to bring us a solution of the problem. All this talk has been going on for the last 30 years and I am afraid the time has arrived when we should have a serious inquiry into the whole system of agriculture. The American experts suggested that we had plenty of plans, but that we had apparently a lack of determination to execute them. We have our Department of Agriculture and our committees of agriculture throughout the country, I am a member of a committee of agriculture, and I suggest that we should immediately begin a serious inquiry into the output we are getting in return for the money spent by the Department and by the various committees of agriculture. I say that that must be done because we have not got the increased output in return for that money.

Mr. Baxter

We want a little more hard work.

Mr. P. O'Reilly

Yes, I agree. But I am talking about a planned policy, without which we are not going to get any tangible results. I know that recently the Tánaiste has been very critical of this whole matter and I am glad to see that because if we do not do something constructive very soon it will be too late. Since the time when a Minister for Agriculture put forward the policy of "One more cow, one more sow, one more acre under the plough," we have really done nothing about improving the output. We have been advised by experts on agriculture how to get the increased output but for our own part we have done nothing about it. One or two farmers in a parish could do much by setting an example to the others.

All the talk on our part will get us nowhere. We have been subsidising agriculture and agricultural products, but unfortunately the money spent in that direction has not been spent in the delivery to the farmer of phosphatic manures. If that had been done it would have increased our agricultural production. The farmers themselves were under-capitalised and could not do it and often because of lack of capital had allowed the good grass land to deteriorate. In most counties at the present time we have small staffs employed by the committees of agriculture and other staffs employed by the Department of Agriculture on the land project and farm building schemes and I wonder if there is that measure of co-ordination between them which will give the best results for the money which is being spent.

We are all sincere when we express our concern for the welfare of agriculture and for greater production, but what are we doing to secure it? In the congested districts there is a lot of mediocre land and there is a dwindling population. Unless some of these areas are attended to they will be deserted entirely because the population will become so sparse that these areas will become uneconomic and the people will not remain on the land. It has been shown that there is a great potential yield from land treated with rock phosphates and if it was treated with these you could even get better results from it than from some of the lands in Meath. I am prepared to agree that that could be so, but we have not evolved any workable scheme to ensure that these phosphates would be put into lands like those of County Leitrim. I suggest that if the subsidies spent on butter had been spent on providing these phosphatic manures it would have done much more good.

There are many people talking about cattle prices and I have heard many say that if you give the farmer an economic price he will produce the goods. The farmer does not produce the goods despite the fact that to-day agricultural prices are even higher than ever before in the history of the country. I often wondered what was considered an economic price, but anybody I have ever asked about it has replied that it was something higher than the existing price. That was an entirely wrong view. The solution of the problem to-day is not along the lines of getting a price higher than the existing price, but on the lines of increased output on the existing prices. That can only be done by the proper treatment of the lands with manures to ensure increased output.

If our creameries adopted a system of divided payments for their milk fats, part of it could be translated into artificial manures delivered to the farmers and that would help matters considerably. There are creameries which have a system of two payments by which a bonus is paid at the end of the year and they could easily arrange to give portion of it by way of these artificial manures. If we we can increase the number of cows we will be going a long way toward securing increased agricultural production.

There are people who imagine that you could hatch calves in an incubator. That cannot be done as far as I know. In the lands that used to be dairying lands, such as Limerick, there is a decline in the cow population and I greatly fear that it is on the mediocre lands of the dairying area of the North, such as Cavan and Leitrim, that this country will have to rely for the production of calves. It is vitally important to increase the potential output of those areas that will remain dairying areas.

Senator O'Donnell made a lovely statement about currency and credit. It seems to be popular to talk about that matter at the present time. Apparently, the people who talk about this matter are not able to produce a blue print. Why not have a dollar currency? It is on the ability of this country to produce goods or to give services that any currency will rest. The person who put the salmon, the horse and the pig on our coins was a realist.

I agree with the viewpoint expressed by Professor George O'Brien. I do not think he heard me correctly when I said "the Midas touch". I think I have put across some of the points I feel strongly about. I hope I did not unduly delay the House.

Mr. Burke

First of all may I say very briefly that I welcome Senator Hayes' speech to-night because a proper approach to the problem of politics is very desirable in this country. About 12 months ago I stated in this House that we ought to have an agreed policy on agriculture, which is our principal industry. I said at the time that in Britain there is an agreed foreign policy and no matter who may be the Prime Minister, whether it is Winston Churchill or Clement Attlee, their foreign policy with regard to this and other countries will be exactly the same. If we have an agreed policy in regard to agriculture we will pursue a course to make that industry prosperous. It has been for a long time in many respects the plaything of politics.

Senator Baxter referred to the reduction in the number of cattle. I say that if we do not increase the price of milk we will not be able to maintain our exports in dead meat, cattle, pigs, poultry and other products. I do not say that in any political sense.

I leave that point and return to what I believe is the matter which is strictly before the House—that is our economic position. In the economic sphere the country is suffering from two evils— high taxation and under-production. The weight of the burden of taxation has leant on our principal industry, agriculture, for over a century and a half. In the past it was the rack rent paid to the landlord; now it takes the form of rates and often of high prices for the commodities that the farming community have to purchase.

I believe that our local and central bureaucracy is over-staffed and that it is a dead hand on our main productive effort. To some extent it is a case of putting the car before the horse. Everything that is required for the State, everything that is required for the man that works and lives in the town, whether he is a professional man, a businessman or an industrialist, has to be covered first and what is left over is given to the agricultural community.

The agricultural community number something less than 50 per cent. of the population and receive something over 30 per cent. of the national wealth. Senator Professor O'Brien asks us not to be pessimistic. I am prepared to work with anyone. That is why I am in politics. I am not pessimistic about the future but let us be realistic. We must try to create some optimism in the young men and women, the sons and daughters of farmers, optimism that will keep them living on the land. It is no good having a city optimism, the optimism that Senator O'Donnell spoke about, the optimism that is making Dublin one of the gayest capitals in Europe. That is not developing our national economy in the way in which we would like to see Ireland developing. A little bit of gaiety is desirable now and again even for those who work in the country but that is not the goal at which we should aim.

We read recently in the Press a report of the E.C.A. experts who were asked to study our economic position. They referred to the effect of taxation on industry and have stated that the tax on our industry is higher than in most countries in the world, with the exception of Britain, the United States of America and Holland. These countries are at the moment on a war time economy basis. The report further states that we are a young country industrially and that we cannot afford this weight of taxation if we are to make substantial development. They state that the wear and tear allowance given for the replacement of plant and machinery, in their opinion is inadequate.

They go on to state that the weight of taxation is so high that the money required for investment in and development of new industries in our country is not forthcoming, that that money is being filtered away in taxation for State schemes, some of which are definitely of questionable productive use to the nation. The chief criticism they have of the dominant role of Government in general investment was that a disproportionately large percentage of investment had been devoted to "social overhead" rather than to production-increasing enterprises. They say that the possibility of maintaining the current gross capital formation in Ireland under existing economic patterns was seriously open to question. I suggest that these are matters to which the people should turn their attention.

There is another matter which has a bearing on high taxation: Are we getting value for the money that we take from the people in taxes? I believe that in many cases we are not. I spoke recently to a very high official in local affairs and he said to me that he believes that local affairs will tend to bankrupt the country unless the Local Government Department continues to see that there is greater efficiency.

Inspectors sent down by our Department of Local Government should report their findings directly to the council. Our inspectors go down and view the roads made and houses built and never report to these bodies who strike the rates and levy the burden whether a good or bad job is being done. We can take it that when that line of thought is there, a bad job is being done because one public servant does not like to report another public servant. There is another matter to which we should turn our attention: I recently came across the British Third Report on the cost of house-building, a matter mentioned here by Senators from each side of the House when calling upon the Government to have an inquiry into the cost of house-building here.

They have found in Britain that it is necessary to have a permanent committee sitting on this matter in order that they may get efficiency. I will read three lines from this Third Report:—

"We point out in Chapter 4 of this Report that if the pre-war productivity could be achieved approximately 25 per cent. more houses would be built with the same labour force and a saving of approximately £100 would be effected."

I suggest that, if these people who have been charged with this problem believed that 25 per cent. more houses could be built, in this country, where the problem is not watched, the saving would be greater. There is an outcry against high rents but this could be met by an inquiry conducted by the Department of Local Government.

In conclusion, this may sound like pessimism, but I am prepared, with others, to work to remove some of these evils. I believe that the evils which must be removed are those of under-production and over-taxation and until these are dealt with, you will not get people to live and work in rural Ireland. We have been suffering in rural Ireland from gross under-investment which is usually caused by the fact that people have no confidence in the industry in which they are working. The tendency has been to mind land, a tendency which has been handed down from father to son because in the original state the landlord took from the farmers anything in the form of money made by thrift. When these people became tenant farmers some of that deposite remained and, with the several money upheavals, the farmer was not encouraged to do otherwise.

We have had the longest period ever in our history of agricultural stability, and I think that if we had an agreed policy on agriculture and a lower rate of taxation we would encourage our farmers and our industrialists to invest their money in projects which would be for the benefit of our people. I ask the Minister to consider seriously the few recommendations that I have made because I believe in some respects they deal with the kernel of many of our economic problems and, certainly, with the most serious of them.

Mr. Hearne

I wonder would it be possible to get an indication from the House as to the number of speakers yet to come? The practice has been that this House adjourned at 10 o'clock but there is no Standing Order to that effect. It is not desirable to break an established practice unless it is by agreement of the House. If the House wishes to adjourn at the usual time, it will be necessary to sit tomorrow or next week. However, the matter is entirely for the House to decide.

Professor Hayes

I do not imagine there are many speakers to come and I suggest we should carry on and finish in time to allow the Minister to get in at half-past ten or before it.

Mr. Lemass

There is a vote in the Dáil at half-past ten.

Mr. Burke

We will let him off for the vote.

Professor Hayes

We shall have finished with him before the vote.

Mr. P.F. O'Reilly

That may be putting a time limit on the Minister, which would be undesirable.

Mr. Lemass

I would welcome it.

Professor Hayes

Some of us know the Minister better than Senator O'Reilly.

An Leas-Chathaoirleach

How many speakers are there? Two?

Mr. Hearne

As regards motion No. 6, the Minister for Health is anxious that it should be passed.

Professor Hayes

We can do that afterwards.

Mr. O'Higgins

In common with most other Senators who spoke, I want to dissociate myself from some of the remarks of Senator O'Donnell. The remarks from which I want to dissociate myself are those in which he pleaded, not for the first time, with Senators to regard themselves as having no politics and to regard this House as purely a vocational institution. I am aware that the original conception of this particular Seanad was that it would be along vocational lines, but, whether we liked it or not, the fact is that, with the possible exception of those elected by the universities, this Seanad is elected by active politicians and active supporters of the various Parties. I have no hesitation at all in considering that I was put here because of the politics which I profess and I have no hesitation in looking on matters coming before the House from the political standpoint should I so desire. The Supplies and Services Bill, however, does not relate to the supply of personnel to the Seanad and I think we might go on to other supplies, but I am glad of the opportunity of making my view clear about Senator O'Donnell's persistent appeal.

This debate, I understand, is one of the few occasions on which Senators get an opportunity to review general Government work and policy. I think we are entitled to ask ourselves what was the position last time we discussed the Supplies and Services Bill, what has happened since then and what is the position to-day.

Senators will recollect that when we discussed this Bill a year ago the Minister and some of those supporting him were merely uttering coy threats to the existence of food subsidies, but the food subsidies were still maintained. The Minister for Industry and Commerce, the Minister for Posts and Telegraphs, and the Minister for Finance in particular, were at that time engaged in making panic speeches and gloomy speeches, such as the Minister for Industry and Commerce condemned in the Dáil earlier this week; but despite the speeches then being made by those Ministers and by Government supporters as a whole, the real trouble which was going to follow from their speeches and their policy had not yet come; it was only threatened.

This time last year the cost of living had gone up considerably compared with what it had been when the present Government took office, but it had not gone up to the heights to which it has soared since. That was the picture this time last year. What has happened since then? The panicky speeches made by the Minister and his colleagues in the Departments of Finance and Local Government have had their result and their effect. The folly of those speeches has now become apparent to everyone. The trade slump which was forecast by the speakers on this side of the House this time last year has since then become a reality. The unemployment which was forecast this time last year has become a reality.

The report of the Central Bank for 1951, to which reference was made in this debate just a year ago and which was rejected by the Minister for Industry and Commerce in the Dáil a year ago, has since been implemented by the present Government, by the Tánaiste and by the Minister for Finance. Those are the main features, the outstanding features of Government policy in the last 12 months.

We all remember the controversy and the stormy debates which arose out of this report of the Central Bank for the year 1951. We all remember the main recommendations in that report, that there was to be a drastic restriction in bank credit, that there was to be a reduction in or removal of food subsidies, and that there was to be interference with the land rehabilitation scheme. We all remember how, when it was demonstrated by the Leader of the Opposition in the Dáil that it would be foolish to pay too much attention to that report, having made several speeches in which he referred to a present or impending crisis, the Tánaiste sailed into the Dáil and rejected the report of the Central Bank and informed the Irish Parliament that so far as he and his Government were concerned the measures which they proposed to operate in the coming 12 months were to be diametrically opposed to the recommendations of the Central Bank. All of us will remember that, and I think the Minister cannot accuse me of any inaccuracy.

But what has happened in the last 12 months? Of the three main recommendations to which I have referred, the Central Bank recommendation that food subsidies were to be reduced or cut out entirely has been put into effect by the Government—not-withstanding that the Minister promised his policy would be diametrically opposed to the Central Bank, and notwithstanding the fact that it was diametrically opposed to the pledged word of the Minister for Industry and Commerce and all of his Government colleagues when, after the last general election, he and they sat down and published in all of the daily newspapers a solemn programme which they said they would implement if they obtained sufficient votes to form a Government. Despite that 17-point programme in which No. 15, I think, specifically referred to the pledge of the Government to maintain food subsidies, the Central Bank Report in that respect was implemented.

The Central Bank recommended, though perhaps not in so many words, that there should be some reduction in the impetus behind the land rehabilitation scheme. What has happened? In the first Budget introduced by the Minister for Finance, the moneys to be spent on that project were reduced, drastically reduced, and only this week we hear from the Government in the Dáil that the machinery used in connection with that project is to pass out of Government ownership.

It is necessary to emphasise that the third main recommendation of the Central Bank, that there should be a drastic restriction of bank credit, was and has been implemented by the Government; and it is nonsense for any Senator to suggest to anyone who has any connection with business circles or agricultural circles that there has not been, over the last 12 months, a very grave restriction in bank credit. That is what has happened in the last 12 months.

Side by side with that, we have Government Ministers, for some reason that I certainly cannot understand, still sniping away at the fact that Marshall Aid was accepted by the Government of this country. As recently as the 8th of this month, we find reported in the Irish Press under the heading “Pawned by Coalition” the views of the Minister for Finance, as given to a meeting of a Fianna Fáil Cumann in Belturbet. This is what the Minister for Finance says:—

"In view of the success of the recent National Loan, what justification was there for raising the Marshall Aid Loan at all? In raising the Marshall Aid money, the late Coalition put this country in pawn and the only thing left to their successors was the pawn ticket."

I would be glad if the Minister for Industry and Commerce would indicate whether, even on this particular matter, he agrees with the Minister for Finance.

All of us are quite well aware of the conflict, not only in personalities but in policies, as between the Minister for Finance and the Minister for Industry and Commerce. I have referred to the fact that, although the Minister for Industry and Commerce, the Tánaiste, sailed boldly into the Dáil to reject and throw overboard the report of the Central Bank for the year 1951, that report has been implemented nearly in full by the policy pursued by his Government under the direction of the Minister for Finance. We know that that conflict is there. I want to ask the Tánaiste does he stand over that kind of statement, that kind of speech by the Minister for Finance? His Leader does not do so.

I have here some cuttings for the year 1948—I have referred to this already—where the Taoiseach mentioned, in reference to the Marshall Plan, that it was an act of unparalleled generosity from one nation to another. In their issue of the 8th January, 1948, the Irish Press—which must be accepted, and is accepted, as the organ of the present Government Party— wrote a leading article on this subject, in which they said:—

"Scarcely ever in history has a nation made such a generous offer as the help America proposes to give to Europe under the Marshall Plan. American resources, to be sure, are vast, but so is her generosity measured on an equally grand scale."

In a special article in their issue of the 8th January, 1948, the Government organ carried a headline saying that the benefits of the Marshall Plan would get over the dollar shortage and aid capital development. They went on to explain what the effect of the application of Marshall Aid in this country would be, the supplies that would come in, and so on. That was at a time when the Fianna Fáil Party formed the Government of this country.

All of us know that the initial steps towards obtaining Marshall Aid were taken by the Fianna Fáil Government. I am not criticising them for that— they were quite right to do it—but I want some explanation of the attitude of the Minister for Finance in his perpetual sniping at the great American nation and the generosity of the American people in providing us with Marshall Aid. Does it reflect a change in Government policy? Does it mean that the Fianna Fáil Party regret having accepted Marshall Aid in 1948?

I know that another speaker is anxious to speak and I will curtail my remarks as best I can. I feel that the year that has passed has been one of great hardship for the people of this country. I believe it is a year in which the present Government, if they ever had it, lost the confidence of the people, and I believe that the powers asked for in this Bill are such as should only be given to and be used by a Government which has the confidence of the people. It is quite clear that the present Government and their policies have been rejected by the people of this country, and in particular by the people of the capital city. If proof of that is needed, one has only to reflect for a moment on the figures of the by-election in Dublin NorthWest. The result of that election was a clear and unambiguous call to the present Government to get out. I invite them to accept that invitation, to get out and give the people a chance of putting into office a Government in which they will have confidence.

Mr. McHugh

Like Senator O'Higgins, I want to disagree entirely with Senator O'Donnell. He said that we should not regard ourselves here as politicians. Some of us should, and particularly some of the Senators on the opposite side who would agree with Senator O'Donnell. We all know that the bulk of us here are politicians and we should be frank enough to admit it. The Minister is a politician and we should not put him in the position of feeling a little coy about talking in front of non-politicians.

This is the first occasion on which I have spoken in a debate like this and I understand that one can range widely over Government policy. I should like to assure you, Sir, that I do not intend to do that and to assure Senators that I do not intend to touch on agriculture, except to say that, while most Senators have alleged that agriculture suffers from under-production, I feel that it certainly does not suffer from under-production of speech.

In 1950, the unemployment figures show that we had reached the lowest figure on record in this country. They also show that, by October, 1951, the figure had increased by 8,400 and that, by October, 1952, they had increased by 10,500 over the 1950 figure. This is not really a true picture of the present unemployment position. It is entirely, in my opinion, and in the opinion of many other people, more qualified to pass judgment, due to the policy of the Government, but as I say, it does not present a true picture, because anybody in business or, for that matter, out of business must be aware that at the moment many people are in part-time employment and will be in part-time employment up to the end of next week. I suggest that the unemployment figure for the present period, as shown by the figures of the Central Statistics Office for, say, mid-January, will give a truer picture than the October figures.

The figures do not give a true picture because they take no account of the 5,000 unemployed who have been absorbed into the Army. I am glad, as an ex-soldier, to see the recruiting drive succeeding, but I must emphasise that these 5,000 people who entered the Army would, in the normal way, be on the unemployed list. The figure takes no account of the increased number who have emigrated, and I suggest that, in examining the figures, Senators and people who take an interest in these matters—I presume that refers to all members of the Oireachtas—should bear in mind that the figure for unemployment must be related to the figures for emigration and Army recruitment.

In connection with unemployment, I should like to say, in passing, that the man on whom his work bears most harshly at the moment, in my locality at any rate, is the manager of the labour exchange. I am not exaggerating when I say that he is working practically until midnight. Whatever the reason—I understand that he cannot get staff or possibly is not allowed —it is a fact that the hardest worked man in my locality is the manager of the labour exchange.

The cost of living was referred to here and in the other House and it is, to my mind, a remarkable fact that we should have in this House Senators voting for increased taxation which must force the cost of living further and further in an upward direction. I cannot understand the arguments which seek to excuse a vote which must force the cost of living up and, at the same time, seek to excuse the fact that the cost of living is going up. The people who vote for measures which are bound to force the cost of living upwards and, at the same time, on another Bill, seek to adduce arguments to excuse the cost of living and to accuse other Parties of sending up the cost of living, certainly have not examined the effect of their votes. I suggest that the present policy of the Government is being forced upon their own Party and that they are voting without examining the results of their votes.

Two years ago, we had a Government in this country which had the very happy experience of calling home workers from England to engage in the housing effort here. That Government, unfortunately, no longer exists but we now have a position in which the Government now in power have, by their efforts, as everybody knows, prevented, in large measure, the building of houses by private individuals.

I suggest to the Minister that they are also engaged in attempting to prevent the building of houses by public bodies. I do not know whether I am in order in referring to local matters on the Bill. However, I think the Cathaoirleach will pardon me if I quote from a few documents in my possession which might go some way to prove the statement I have just made that the Minister's Government is now attempting, having partly succeeded in stopping the building of houses by private individuals, to prevent the building of houses by public bodies. I quote from the report of the Clare County Medical Officer of Health to the Ennis Urban Council, dated 1/12/52:—

"Whenever one of the existing new houses at nearby Summerhill becomes vacant there is a keen demand for its tenancy. It cannot be said that there are any frivolous applications or that more than one or two of the applicants are not in need of alternative accommodation. I am satisfied that there is need for these 13 proposed houses and indications are that from now onwards the demand for this type of house will increase because of the falling off, almost to disappearing point, in the volume of small dwellings type of house building."

That is an extract from the report submitted to the Ennis Urban Council by the Clare Medical Officer of Health. It was asked for by the council in connection with a scheme to build 13 houses. I quote further, with your permission, Sir, to prove the statement I have made—this time from the minutes of the meeting of the Ennis Urban Council dated 5/12/1952:—

"The Council considered the above——"

that is, the minutes——

"which were read by the clerk, who stated, in reply to members of the council, that 11 applications had been received for a house at No. 1 clearance area which had become vacant in April, 1952, 16 for a house which had become vacant in January, 1952, and 11 for a house which became vacant in July, 1951."

I will now quote from a letter from the Department of Local Government dated 8th November, 1952. It is as follows:—

"The Minister is not satisfied that there is justification for the heavy capital expenditure called for in this case having regard to the stage reached with the council's housing programme and the type of letting involved and, accordingly, he is not prepared to approve of the acceptance of the tender for those 13 houses."

In other words, the Department of Local Government is not satisfied that there is need for 13 new houses in Ennis when the county medical officer of health says that there are up to 20 applicants for every house that becomes vacant and that no application can be considered frivolous.

Mr. Yeats

What price were they according to the tender?

An Cathaoirleach

I do not think we can enter into this matter in such detail.

Mr. McHugh

However, the houses were to be let at an economic rent of 25/- per week. That might suggest to Senators that the tender was not exorbitant or such that could be turned down.

Mr. Hartney

The Minister did not say that the houses should not be built.

Mr. McHugh

He said he was not prepared to sanction the building of 13 new houses.

An Cathaoirleach

The general policy of housing may not be discussed on this Bill.

Mr. McHugh

It suggests to any reasonable Senator that the Minister is not prepared to sanction the building of houses in Ennis at an economic rent of 25/-. It suggests to me that he of houses by local authority just as his is attempting now to stop the building Government have attempted to stop the building of houses by private individuals. I will not pursue that subject any further. However, as far as I can see, the policy of this Government is exemplified in an Evening Mail headline of this evening: “Room to cash in on Air Service.” I would not venture to criticise the Parliamentary Secretary for his choice of words but I would suggest that is not the type of phraseology which should be used by any Minister, junior or senior. It appears to me to suggest the mentality behind the Government—cash in on everything. In other words, they must get cash. They must tell the people they must get cash. They cannot afford to have the people in the relatively comfortable position in which they were, enjoying relatively light taxation.

Mr. Lemass

Senator Hayes criticised the provision of this Bill which extends the life of the Supplies and Services Act until December next and suggested that it might be more desirable to provide for the determination of the Supplies and Services Act at some other time of the year than December. He suggested October. The fact is that the Act used to terminate in September each year and was extended at the request of the Seanad and I think of Senator Hayes himself. I mention that, however, merely as an indication that we cannot always foresee what is the best arrangement to make in matters of this kind.

I confess that I did not come here prepared to discuss the practice of politics or the functioning of the Oireachtas, but with a great deal of what Senator Hayes said I find myself in agreement. I have the intention of bringing his remarks to the notice of some of my colleagues and I hope he will do the same.

Mr. Baxter

Some of his colleagues.

Mr. Lemass

There is no doubt that the growth in the functions of Government over the past quarter of a century is imposing on the Houses of the Oireachtas and on the Cabinet strains which it was not contemplated they should carry and that at some time we will have to re-examine the whole position.

Turning now to the matters directly related to the Bill which were raised in the course of the debate, I would like to correct an impression which appears to persist in the mind of Senator Douglas that the Government believes in price control as necessary in the public interest even where competitive conditions have been restored in any particular trade. I have very little faith in price control as a method of preventing prices from rising or even of ensuring that they will fall when costs justify it. I have frequently expressed the opinion that many of our existing price controls keep prices up instead of the reverse. It is not always easy to get rid of price control once you have it because not merely must you be satisfied that its removal will, in fact, have beneficial results, but you must be able to convince the public of it.

I mentioned in the course of the discussion in the Dáil on this Bill the question of flour and bread prices. It is the fact that in many parts of the country flour and bread are being sold at less than the prices fixed by Order. I think that if we removed the price control in respect of bread and flour and could take effective means of ensuring that there would be competition between bakers and flour millers that these lower prices operating in some districts would become general. I am quite certain, however, that if there was a proposal to remove price control in respect of bread and flour somebody would say that its effect would be to enable bakers and flour millers to make more profits. That would be said by a sufficient number of people to make it undesirable to follow that course because by doing so an attitude would be created in the public mind which would be prejudicial to the Government and the aims of its policy. It is clear also, that the removal of official control does not mean that all control will disappear.

The Seanad will, I trust, at an early date next year, have before it the Restrictive Trade Practices Bill. I certainly think that we should have power to deal with business organisations operating for the purpose of keeping up prices and to restrict competition before we can in any way weaken or remove the present machinery of price control. What form of permanent organisation we should have to investigate price levels—and some organisation is necessary in a country of our size where the policy of protection by tariffs and quotas is operated—is a matter we will have to consider later, but in the meantime, I am quite satisfied in my own mind that it is necessary to preserve the special powers conferred under this Supplies and Services Act.

Senator Johnston referred to the static character of agricultural output and every other Senator who referred to that said that something must be done about it. Senator Burke suggested we should be agreed as to what should be done, but I am afraid the historical fact is that every commission and committee set up to recommend a policy for agriculture as a whole or any branch of agriculture failed to produce a unanimous report and not infrequently produced more than one minority report. I do not pretend to have any claims to be regarded as an expert on this subject. I have read most of the blue books that were published, studied most of the reports from the various committees and commissions, listened to the speeches in the Oireachtas, read Senator Johnston's book on the subject and I have certain views of my own which I would only venture to put forward in a tentative way.

Senator O'Brien said that this static production is a technical problem, a matter of capital, technique and machinery. I would like to suggest that it is not a technical problem and the mistake we have made lies in the fact that we have always approached it as a technical problem; that all these commissions and committees regarded it as such and directed their activities and energies to making recommendations dealing with agricultural production as a technical matter. There are other factors that lead me to that conclusion. The first is the failure to secure a higher volume of agricultural output following upon the development of agricultural technique peculiar to this country, and even to the part of this country for which we are responsible, which has not achieved the same increase of output as has been recorded in the six northeastern counties. Why is it that in the present day, when an Irish Government is in control which has been not only benevolent but paternalistic to Irish agriculture, making large sums available every year for farm improvement schemes and building schemes, fertilisers, drainage, credit facilities and the provision of highly expert advisers, that the volume of agricultural production to-day is no higher than it was in the worst days of Irish landlordism?

Clearly, that is a big matter and to me it is obviously a psychological matter. I was impressed by a series of articles which appeared on English agriculture in the Economist where the writer tried to analyse the British approach to agriculture and the efforts which had been taken to stimulate production since 1948. There was one big jump in production there during a short period after the war and then there was no further expansion from that on and that particular writer approaches the matter as a psychological problem. He says that it was because there was an unwillingness on the part of the British farmer to respond to the inducements held out to him to expand further and that that was due to the fact that on the average the British farmer was satisfied with the standard of life that he had and that the benefits of a higher income would not be immediately reflected in his mode of life and could be secured only at a risk and effort disproportionate to that involved in giving him the standard of life with which he was satisfied. I feel that there is some similarity in that approach to the position we have here.

Senator Baxter said that if the farmer was paid enough he would produce the goods. I would like him to prepare graphs showing agricultural prices and output over the past 25 or 50 years. I do not believe that if he did so he would find the graphs moving parallel: rather would he find quite the reverse. I do not think that we are getting the production we should be getting in relation to the value of the assistance we are giving by guaranteed prices and the other devices which are designed to raise the standard of life of the farmer and designed to induce him to give increased agricultural output.

These are only casual ideas which have occurred to me from time to time and I put them forward for what they are worth. I think they show clearly that this is not entirely a technical problem and that on the whole the technical approach to it is not the right one and will not, in present circumstances, solve the problem.

I agree with Senators who said that the success of all our plans for increasing the security of the national economy and raising the standard of life of the people depends on our finding the answer to that question: why it is that despite the efforts of a quarter of a century notwithstanding all the aid that has been given out of public funds to agriculture no expansion in the volume of output has resulted.

Senator O'Higgins, who for some reason thought it necessary to explain that he was a politician, made some statements that I am anxious to correct. It is not true that the restriction in bank credit, if there was such a restriction, was implemented by the Government. The published accounts of the banks show that the volume of loans and advances is higher than ever. The Government does not control and would not attempt to influence the decision of bank managements upon applications for bank accommodation. We may have influenced it by the extent to which we have ourselves used bank credits during the course of the past year.

I do not know that Senator O'Higgins was correct in saying that the Central Bank recommended the reduction of food subsidies. Whether it did or not, it certainly was not a reason why the Government decided to adopt that course.

It is entirely incorrect that the Government set out to restrict the land improvement scheme. On the contrary, we took a scheme which appeared to us to be a bit of a fraud and made a reality out of it. Let us compare the achievement of two Ministers. In 1950/51 the then Minister for Agriculture got voted in the Budget £3,000,000 for that land improvement scheme and spent £500,000. In this year the present Minister for Agriculture, having been given a similar amount, pushed the scheme so vigorously that to-day in the Dáil he was asking for more money, having spent the full amount voted in the Budget, to carry the scheme on to the end of the financial year.

Mr. Baxter

Had not the previous Minister brought in all the machinery for the work? Is not that true?

Mr. Lemass

I am dealing with the contention by Senator O'Higgins that the Government decided to restrict the land improvement scheme.

May I say a few words about Marshall Aid just to get some facts known? The Marshall Aid scheme—I was myself at the conference in Paris which initiated it—provided for the giving of assistance to States in Europe in two forms, either by grant or by loan. Sometime after the change of Government in 1948 I said that there had been no question of aid in loan form for this country while I was a Minister and I was contradicted and it was proved that I was wrong, that during the course of the election campaign a document had been received in the Department of External Affairs which indicated that aid for this country would be in loan and not in grant form. I mention that incident to emphasise that the question of accepting Marshall Aid in the form of a loan never came before the Government of which I was a member—the Government that went out of office in 1948—it was never considered by that Government. I as a member of it did not even know that the document which brought up the question for decision had been received until after the election and the change of Government was over.

In May, 1948, however, our successors considered the question and decided not to accept aid in loan form. That fact is not, I think, well-known. The views of different Ministers representing various Departments in that Government are on record and the decision of the Government is on record. Having examined the whole question in the light of what was best in the interests of this country, they decided not to accept Marshall Aid by way of loan.

Then there were negotiations in London leading to the 1948 Trade Agreement and in the course of these negotiations the question of accepting Marshall Aid dollars arose and there was an agreement that in order to avoid any nett draw upon the sterling area dollar pool the Irish Government would use Marshall Aid dollars to finance its dollar requirements while they were available and subsequent to these London negotiations there was a formal reversal of the previous decision not to accept Marshall Aid in loan form and a decision made to accept it instead.

It is quite obvious, therefore, that there were very serious considerations to be taken into account in that connection. The Government that was in office in 1948, prior to these London discussions, thought that this country could get by without borrowing dollars under the Marshall Aid plan and that, taking a long-term view, it was better that we should endeavour to get by without these dollar loans and it was only when the difficulties of the sterling area of which this country forms a part were brought to their attention and the need to get dollars, no matter how they were obtained, whether by loan or by grant, emphasised, that they decided to accept loans under the Marshall Aid Plan.

I think that we should not attempt to minimise the seriousness of the consequences for this country. We now have this dollar debt on which we are paying interest and which we are due to start repaying in 1956. I do not think that the economy of this country was expanded by the use of these funds to an extent equivalent to the additional charges which that debt has placed upon it. I hope that we will have so raised the national income by 1956 that we can take the repayment of that loan without hardship or difficulty but it is a burden which we would much prefer not to have to carry, a particularly heavy burden because it involves the payment of that interest and sinking fund charge outside the economy and particularly so because it involves payment in dollars.

Professor Hayes

Was not there also a grant of over £6,000,000?

Mr. Lemass

A grant of over £6,000,000 of which the counterpart has not yet been expended, as against a loan of $42,000,000.

Professor Hayes

£6,000,000 is a very big sum of money to get for nothing.

Mr. Lemass

Certainly, and there is no doubt that the counterpart of that grant—that is, the Irish currency counterpart of that grant—can be yet expended.

Professor Hayes

Provided a plan is made.

Mr. Lemass

We are in the position now that a complete plan for the whole amount has to be submitted to a committee of the American Congress. There is no longer an E.C.A. administration.

Professor Hayes

Was not there a plan in 1950 to deal with that money?

Mr. Lemass

No.

Professor Hayes

My information is that there was.

Mr. Lemass

The grant came subsequent to 1950.

Professor Hayes

It came before 1950.

Mr. Lemass

No; the grant came in 1951.

Professor Hayes

I think not. However, it is too late.

Mr. Lemass

In view of the hour I will conclude now.

Question put and agreed to.

Agreed to take remaining stages now.

Bill put through Committee without amendment, reported, received for final consideration and passed.