Seanad Éireann debate -
Wednesday, 21 May 1958

Vol. 49 No. 5

Tea (Purchase and Importation) Bill, 1957—Committee and Final Stages.

An Cathaoirleach

Sara mbreithneofar Céim an Choiste den Bhille seo, is mian liom a chur in iúl go bhfuil leasuithe Uimh a 1 agus 2 atá in ainm an tSeanadóra de Búrca agus in ainm an tSeanadóra de Barra as ordú agus nach bhféadfar iad a thairiscint. Tá an dá leasú sin ar neamhréir le prionsabal an Bhille mar léadh é den Dara hUair.

Tá litir i dtaobh an ní sin seolta go dtí na Seanadóirí.

Before we take up consideration of the Committee Stage of this Bill, I wish to say the amendments Nos. 1 and 2, standing in the names of Senator Burke and Senator Barry, are out of order and may not be moved. Both these amendments are in conflict with the principle of the Bill as read a Second Time.

The Senators have been communicated with in the matter.

Section 1 agreed to.

SECTION 2.

Question proposed: "That Section 2 stand part of the Bill."

Mr. Burke

I have been given to understand that if a tea wholesaler wishes to become a member of this company, he must subscribe £2,500 in £1 ordinary shares. If that is so, does that not effectively keep out of the company most of the traders we know in the provincial towns who have traditionally been in the tea trade for several generations? Furthermore, why has this very high figure been put in? Perhaps the Minister can give me some information on this matter.

Minister for Industry and Commerce (Mr. S. Lemass)

I think the Senator misunderstands the intention of the Bill. Traders in provincial towns were never importers of tea. They purchased their requirements from tea wholesalers. The purpose of this company is to organise the tea wholesalers of Ireland so as to ensure that the importation of tea will be organised and its resale to the retailers will be conducted in the normal manner.

It is to be assumed that any person who will engage in the business of purchasing tea in the countries where it is produced and shipping it directly to this country will require to handle fairly substantial quantities, if he is to do so economically. Consequently, the minimum shareholding prescribed— which is also the maximum—is not out of line with the volume of business which they will be doing. I should point out that the constitution does not provide for £1 shares. It provides for shares of £2,500. No person can hold more than one share.

Mr. Burke

The Minister says, in essence, that anybody who wishes to take part as a shareholder must subscribe £2,500. That is the appointed amount he must subscribe. I disagree with the Minister entirely. I know people who have been importing tea for generations. They have been buying the tea on the biggest market in the world, in London, where slightly more than half of the entire tea of the world is landed.

As I understand the meaning of the language we are using here, if the tea is bought in London, it is certainly imported. One of these people said to me that this legislation means that if he has not, loose, a sum of £2,500, he will be ruled out of that business, although he might require the money for some other purpose.

I say to the Minister that this Bill will give an unfair advantage to the bigger business people as against the smaller business people. We ought to lean over in favour of the smaller business people, some of whom have been doing this business for two, three, four or five generations. I think we should lean over in their favour rather than in favour of the bigger people in the bigger towns.

Mr. Barry

I am sure the Minister does not want to hear me on this Bill again. However, Senator Burke is of course quite right in what he says. The provision in relation to the £2,500 has already effectively diminished the number of registered tea wholesalers in this country by 50 per cent. as only 50 per cent. of the existing registered tea wholesalers have agreed to come into the new scheme. However, that is part and parcel of the legislation and I shall not object at this stage.

What precise difference will there be between tea merchants who do not join this company and who import tea from the East and who have to import it through the company machine? What precise difference will there be in the advantage or disadvantage that will accrue to them?

Mr. S. Lemass

None that I know of.

Mr. Barry

The Minister is wrong. They are to be charged for services. I have not been able to ascertain precisely the services for which they will be charged, or what the charge will represent in a lb. of tea.

Mr. S. Lemass

Apparently Deputy Barry has available to him information as to how this company, which has not yet been formed, will operate. I have not that information. He tells me that half of the existing tea wholesalers of the country will not become members of the company. That may be so; I do not know. The register has not been opened yet and therefore I cannot give him any precise information.

Any tea wholesaler who wants to register may do so. He can join this company if he wants to, but there is no compulsion on him to join it. So far as his operations in the future are concerned, the company will give him the same services, and is obliged to do so——

Mr. Barry

What will he be charged for that service?

Mr. S. Lemass

The company will have no interest in charging excessive fees in order to make profits because the distribution of dividends is limited. So far as it is possible for legislation to impose safeguards against misuse of the company's powers, the safeguards are there. The company will consist of the registered tea wholesalers of Ireland who will elect their directors.

Professor Hayes

Is it not difficult to believe that a person who subscribes £2,500 to become a shareholder of a company and to be on a register will be in precisely the same position as a colleague who does not? To a person who does not know anything about tea except to drink it, that argument does not make sense. People I know who have businesses and keep shops are not like that. Even professors are not like that.

Mr. S. Lemass

With regard to people who keep shops, and to whom Deputy Burke referred also, I have this to say: the people who are concerned with this legislation are tea wholesalers, people who import tea in bulk from the country in which it is produced, blend it and sell the blended tea to retailers. The ordinary tea retailer of this country is not concerned with this arrangement.

For a number of years past, the position in this country has been that all the tea is imported through Tea Importers (Éire), Ltd. They sell that tea in an unblended condition to the registered wholesalers, who blend it and subsequently resell it to retailers. Therefore, no retailer has been buying tea in London for years past.

Mr. Barry

Most of the types of dealers to whom Deputy Burke referred in provincial towns have been importing big quantities through markets in which they are sold by the countries of origin. That source is now denied them. I shall be satisfied if we can get to a stage here where the importer will be enabled to buy to his satisfaction. We want to import our original teas and to do our own blending. I do not care where we get the tea so long as I can taste it first, before I buy it. That is my only objection to the Bill.

There are people all over the country and they import more than half the total quantity of tea imported into this country: I am thinking now of towns such as Clonmel, Galway, and so on— apart altogether from Cork—where there are substantial buyers of tea. If you look at the list of registered tea wholesalers, you will see that quite a number of them are in those towns. Surely those people cannot be expected to find £2,500 as well as the £15,000, the £20,000, the £30,000, and so on, which they will require in order to get into this eastern market. They will be injured. To what extent will they be injured? What advantage will there be to those who come into this new company? Only 50 have come into it so far and that 50 will diminish until they can be counted on the fingers of one hand after one year. Eventually, the three big English firms here which will remain here will control imports into this country. I do not want the advantage given to them by this House.

Mr. S. Lemass

When Senator Barry says that only 50 per cent. of the registered tea wholesalers of this country are on the list so far as he knows, he is putting the facts in a false light. Any tea wholesaler can become a member of the company.

Mr. Barry

I know the figures.

Mr. S. Lemass

The Senator is referring to the fact that, of the existing register of tea wholesalers, 50 have already declared their intention of becoming shareholders; but, if the other 50 or 40, or whatever additional number it may be, want to become shareholders, they are entitled to become shareholders.

Mr. Barry

I bet that the Minister will not get five more.

Mr. Burke

I wish to ask the Minister to permit, under the powers given to him in Section 2, that wholesalers be allowed to become members of the company at a fee, say, of £500. No one is going to lodge £500 with the company in order just to be registered as a tea wholesaler, if he is not doing that business at present. I am afraid the conditions that exist among the people in country towns have not been sufficiently considered in this Bill, and I do not think it was the Minister's intention to exclude these people. As Senator Barry has said, they have been buying original samples and have been blending tea for generations. I know one man whose father established a firm 50 years ago. He was approached by a big firm to sell packaged tea some time ago and he told them that, while the sign which his father had put up over the door remained, he would continue to sell his own tea.

The big blenders will have advantages over the smaller men in the country towns. I am afraid the smaller men are being done a serious disservice under this Bill, and I am asking the Minister to see if he could substitute that figure and arrange, under the powers given in Section 2, that tea wholesalers be allowed to become members of the company for £500 rather than £2,500. The larger subscription is keeping a number of these people out. We can all imagine family businesses who may have to consider £2,500 a considerable sum of money, particularly at the moment because banks and credit institutions are inclined to tighten their belts.

I would ask the Minister to consider this matter seriously and I think he would be doing a great service if he met this point. We should be determined to protect the smaller man. In this country, he is not being protected. Every single piece of legislation helping enterprise is in favour of big business.

Mr. S. Lemass

The company must get capital to carry on its business somehow. It has to get that capital from its shareholders. It was estimated that £250,000 would be required in subscribed capital to enable the company to operate. We know there are not quite 100 tea wholesalers in this country. The shareholding provisions were drawn up on that basis, that, if every single tea wholesaler elected to become a shareholder, the full capital required would be met.

Mr. Barry

Would the Minister indicate in figures, so that I could understand, what disadvantage it is to those who do not become members or shareholders?

Mr. S. Lemass

They suffer no disadvantage.

Mr. Barry

They must suffer some disadvantage. If I do not put up £2,500 and Senator Burke does, he will get something for his money. I want to know what the difference in charge is to be.

Mr. S. Lemass

The difference is that the majority of tea wholesalers in this country think this is the right way to carry on business, to import directly from the countries of origin, to set up here an independent tea trade, and they are prepared to co-operate in doing that.

Mr. Baxter

Surely the Minister ought to answer Senator Barry's question. If 50 people are prepared to come into the company, putting up £2,500 each, what will that £2,500 earn them? What is the compensation to the members of the company for the capital they subscribe?

Mr. S. Lemass

Whatever dividends the company pays them.

Mr. Baxter

Did I understand the Minister to say that this dividend was to be limited?

Mr. S. Lemass

That is right.

Mr. Baxter

If it is to be limited, what is in the Minister's mind as to what these people will earn on their investment of £2,500, that is, the people who have the big money? At all events, it means that some people will be excluded because they have not got that much money.

Mr. Burke

Do I understand the Minister to say that these people who want to stay out are against the Bill? I was speaking to one man last night and he said it was the £2,500 that was keeping him out. He said he could invest it better than in this company. It is only reasonable in any group that the bigger people should be expected to put in more, but the jumps should not be put too high. I must press the Minister to consider that. I have not spoken to anyone who has been traditionally in the tea trade in the Provinces who was not against that provision. It is not that they dislike the Bill. Most of them say they want to buy tea wherever they can and in the best way. They want freedom of action, but this precludes many of them from being members of the company. I do not see any reason why larger people should not put up £5,000, if they think it necessary, if they think it will be of advantage to the trade and, being in the trade, will be an advantage to them.

Mr. S. Lemass

The articles of association of this company were drawn up by the tea wholesalers of Ireland. The dividend limitation about which Senator Baxter is talking is not in my mind; it is in the articles of association—a dividend of 2 per cent. in excess of the rate charged to their customers by Irish banks, or 10 per cent., whichever is the higher.

Mr. Burke

I know these are the articles that were drawn up by the people who are to form this company, but I say that the Minister has a duty to see that the traditional tea merchans in towns like Kilkenny, Tullamore and Clonmel, many of them established over 100 years, will co-operate with the Minister in the operation of this company by being allowed to get in on a subscription for shares at a lesser rate. To many of the big people in Dublin, £2,500 is only chicken feed.

Mr. S. Lemass

The Senators should argue it out with Senator Barry.

Mr. Barry

God forbid.

Mr. S. Lemass

I think you would eliminate each other in argument in a very short time. I am trying to convince Senator Barry that it makes no difference to traders if they are in this company or not. As wholesalers, the company is obliged by statute to give them the same service as if they were in the company. People outside the company will get the same service as those in the company are entitled to get.

Mr. Barry

Let me put it this way. I buy 100 chests of tea in Calcutta which cost £25 per chest. I have to hand the importation over completely to this company to bring it home. I cannot find yet what the company propose to charge me for their services for bringing it home. I want to find out am I buying at a disadvantage in not being a member of the company. I know I am putting it clearly and that the Minister can understand what I am saying. I want to know do I suffer a disadvantage in not being a member of the company, and using the facilities which the company provides. Do they charge me for that, and is it a different rate from that which is charged to their own members?

Mr. S. Lemass

What the Senator will be charged will depend on the services which the Senator requires. If the Senator requires this company to act as his agent, presumably they will charge an agency fee. Alternatively, he may buy the tea himself anywhere he likes—in Timbuctoo or anywhere else—and the company will act as shipping agent and will recover for the service of shipping the tea in bulk to him only the proportionate cost of the freight.

Mr. Barry

At precisely the same rate as it charges its own members?

Mr. S. Lemass

At precisely the same rate.

Mr. Barry

I want that clearly understood in this House.

Mr. Baxter

That is the Minister's answer on that point?

Mr. S. Lemass

Certainly. I have been saying that for the last five minutes. I am glad it has penetrated.

Mr. Baxter

The Minister did not say it clearly.

Mr. Murphy

I wonder would the Minister give me his comments on the fact that the memorandum and articles of association of the company cannot be altered without his consent. It follows from that, of course, that they may be and can be altered with his consent. He spoke just now about the articles of association and he disclosed something which was news to me—surprising news—that the people forming this company would get a minimum profit of 10 per cent.

Mr. S. Lemass

Nobody said that. I did not say that. I said they would get a maximum.

Mr. Murphy

I understood the Minister to say that it would be 2 per cent. over some bank rate, or 10 per cent., whichever is the higher.

Mr. S. Lemass

That is right.

Mr. Murphy

Whichever is the higher.

Mr. S. Lemass

That is right.

Mr. Murphy

That means they must get 10 per cent. minimum guaranteed anyway.

Mr. S. Lemass

No.

Mr. Murphy

Does it not—or am I stupid?

Mr. S. Lemass

They at least have to earn a profit before they can pay a dividend, and they are not guaranteed to earn any.

Dr. O'Donovan

Why are they not guaranteed to earn 10 per cent.? Is it not a monopoly? Of course, they will.

Mr. Murphy

I take it that the articles of association to which the Minister referred have been laid on the Table of the House and I may not have looked them up; they may be there, but I have not seen them. Arising from that, there is this point, that there can be further alteration in the memorandum of association with the permission of the Minister, and the Houses of the Oireachtas may know nothing at all about the matter. We are giving power to the Minister to control this company. We are creating a monopoly. Probably it is appreciated by the majority in this House that there is a need to control the tea trade in the national interest. We are doing so by the device of a company which is in fact a co-operative of the main tea importers; and the Minister is taking power to control them. The Minister, in turn, is not to be in any way responsible to the Oireachtas in the matter.

When we give power like this to a Minister under legislation, we usually require that any orders he makes shall be laid on the Table of the Oireachtas. If this section goes through, the Minister may allow a change in the articles of association at any time and the Houses of the Oireachtas would not be any the wiser; it would not be drawn to their attention. I wonder would the Minister say whether there is any provision in the Bill, or would it be his intention, that any changes would in fact be drawn to the notice of the Oireachtas?

Mr. S. Lemass

Instead of creating a monopoly, I am ending one. The present situation is that there is a complete monopoly in the importing of tea in the hands of the existing organisation. I am bringing that to an end. There is being substituted for the present system a new system that allows any tea merchant in the country, retailer or wholesaler, to buy his tea wherever he likes, provided he buys it in the country in which it is produced. This, however, establishes another organisation which will be set up by the tea trade, controlled by the tea trade and which will have the obligation of organising the bulk shipment of that tea direct to this country.

So far as the future is concerned, the Minister and the Government will be completely out of the tea business and there will be no Government supervision or control exercised at all in relation to the tea trade. That situation will continue as long as the company set up by the tea trade conforms to the articles of association which they have now prepared and which have been published to the Oireachtas.

Mr. Murphy

Yes, but the articles may be changed with the permission of the Minister later without anybody knowing about it.

Mr. Burke

The Minister said that I said the company would act unfairly. I did not. I did not even suggest that the company would act unfairly. They would be very imprudent and foolish to act unfairly; and if they did, they would be very likely to draw on their heads the Minister's displeasure. However, I am firmly convinced from the people who have spoken to me whom I know are in this trade, that the Minister should allow the smaller people in the country to take part. They have been traditional wholesalers, traditional purchasers of original samples of tea. They are people whose business has been established in country towns and which has grown up traditionally there. One must have regard to these people. I would hate to see the country in the state where all the important business people were in Dublin. That would mean looking on Dublin as a sort of economic "Pale" with people outside to whom things would be sold, rather than that those people would do the original work themselves. Some of those people are experts in the handling of this trade and it is a traditional business.

Deputy Murphy said this would be a co-operative society. It struck me that one might as well say, in the case of a co-operative society for dairy farmers, that the only men allowed in would be the men with 100 cows. That would not be a co-operative and in the tea business, this only allows in the man who has £2,500 ready for shares. I say to the Minister that, in the interests of all, and so that this trade may be preserved and expanded, I would rather see it expanded in the country than in the city. These country wholesalers or merchants who wish to come in as wholesalers cannot be let in under £2,500. Undoubtedly the bigger people who would see the benefits which the Minister says will result from this Bill would have no objection, in my opinion, if the benefits are there, to providing or putting up twice the amount they are putting up at the present moment. We all have a duty to protect the smaller trader, the smaller capitalist or whatever you like to call him. In my opinion, he is an important man—not the big operator here in Dublin, Cork or some other city.

Mr. S. Lemass

I should mention perhaps that, under the articles of association, it is open to a group of traders to combine to buy a share.

Mr. Burke

The Minister has not really said what disadvantage he sees in the suggestion. Any of these wholesalers could find £500, but they could not find five times that amount.

Mr. S. Lemass

If a person asks me what advantage a shareholder has over a non-shareholder, I do not see that he has any advantage.

Mr. Burke

I might answer the Minister in another way. What are the advantages of business meetings ever? The Minister has had considerable experience in business and he knows if business people attend some business meeting, no matter what vows of secrecy there may be, they all talk about business and that is one of the advantages of business meetings. The smaller people in the country will be kept out and this is to be kept in a little select group in Dublin or Cork— and I dislike that.

Mr. Barry

I am going to satisfy the Minister by disagreeing with Senator Burke. I am accepting the Minister's statement that there is no disadvantage whatever in remaining outside this company——

Mr. Baxter

And he is going to see to it that there will not be.

Mr. Barry

——and I will buy tea as favourably in the country as those in Dublin.

Mr. Murphy

Now that the tea importers have agreed, might I, on behalf of the consumer, stick to my point? Will the Minister make available the articles of association and will he make available any changes in those articles that might be allowed in future years?

Mr. S. Lemass

I do not know what the law provides, but I presume the company cannot change its articles of association, except with a certain amount of publicity. Forget about the profit limitation. The amount of profit that can be paid on the capital of this company is insignificant in comparison with the value of the tea trade.

Dr. O'Donovan

There is a point which Senator Murphy has raised and which I should like to reiterate and which is important from the point of the country. I think there has been a remarkable disclosure by the Minister to-day in a very offhand way as people do when they want to get rid of something quickly because they are ashamed of it. I refer to this guarantee of a dividend of 10 per cent.

Mr. S. Lemass

No.

Dr. O'Donovan

There is. This is a monopoly.

Mr. S. Lemass

No.

Dr. O'Donovan

Of course it is. No one else can import tea.

Mr. S. Lemass

Nobody else can ship tea but anybody can buy it.

Dr. O'Donovan

Use any word you like. What is the difference? The word "monopoly" has a certain meaning. You said that you were not setting up a monopoly, but a co-op. If you want it that way, the standard rate for co-operatives, as we all know, is 5 per cent., not 10 per cent. as it is here.

Mr. S. Lemass

Personally, I did not mind what rate they fixed as long as it was a maximum rate and that there should be no advantage to the shareholders of this company, to charge higher fees for service than would be normal and proper.

Mr. Barry

Does the Minister know what is the estimated price for handling charges?

Mr. S. Lemass

I do not.

Mr. Barry

It is rather alarming. It is 8d. a lb. and the British figure is only 3d. a lb.

Mr. S. Lemass

Let us get what are the comparative British figures. We are now getting back, I presume, to the kernel of this whole matter—that the country could do better if, instead of setting up our own tea organisation, we went back to the London markets and left ourselves in the hands of the merchants of Mincing Lane.

Mr. Murphy

We have finished with that.

Professor Hayes

Do not wave the flag. The Minister is bringing politics into it.

Mr. S. Lemass

I am interested only in the proposition that it is in the interests of the consumers of tea in this country that we should do our own buying of tea where it is produced and ship it into our own ports, and not buy where the London wholesalers would be the predominant influence, on the English market. The only figures I can give in relation to costs either in Britain or here are average figures, and Senator Barry will be quick to point out that in relation to tea an average import price can be misleading, without having information as to the influence of quality on that price, but average prices will do for my purpose in this connection.

The average price of tea imported into this country from the countries of origin in 1956 was 5.8d. per lb. less than the average price of tea imported into Britain. That, at least, suggests that Tea Importers Limited were buying as advantageously—I will not put it any stronger—as the British merchants. The figure I want to compare with that is the average price of tea which was exported from Britain, and I find that it was 1/3½d. more than the average price at which tea was imported here from the countries of origin. The difference between these two figures is interesting. It means that the British wholesale merchants were charging for the service they rendered to the people who bought tea from them 10d. per lb. That is what we would have to pay over what we did pay, if we decided to go back to that system. I do not think it makes sense.

Mr. Barry

I do not think that the Minister has been well informed. There are classifications of tea, not vague and loose groupings, and I know that "breaks" were available on the English market at 1/6 a lb. under the Irish prices a month ago. I have been able to identify every chest I bought by its markings, and I never paid more than 2d. a lb. to any dealer for bringing it from London. The Minister can give those figures but I can quote figures as well.

An Cathaoirleach

We must now get back to the section.

Mr. Barry

I am sorry, but the Minister was taking us down this lane. I will give way, but the Minister's figures are not accurate.

Dr. O'Donovan

The Minister has sidetracked the point that Senator Murphy and myself made, arising from the information he gave us on the Memorandum and Articles of Association. When the banks in this country subscribed originally to the Agricultural Credit Corporation, there was a guarantee of 5 per cent. In the thirties, that was regarded as excessive when money could he had for 3 per cent. Here we have a company getting 2 per cent. more than the bank rate, or 10 per cent., whichever is the higher. I am not suggesting that this is a big thing in relation to this transaction, an import of tea amounting to £5,000,000. It is the principle that I am speaking about. In the case of Cement Ltd., perhaps I did not agree altogether with the people who went up to 10 per cent., and I wanted it limited to 8 per cent. The circumstances were rather different from these, where there is a specific guaranteed dividend handed to a State monopoly company. You can twist words as you like, but that is what it means. If we are to pay 10 per cent. for purposes of this sort for State companies, let us have it that way. Everybody will then know what the cost is, but if it was 1 per cent. over the bank rate, or even 2 per cent. over the bank rate, I do not think anybody could have any serious objection to it. If and when the Labour Party come back into power in Britain, as they very shortly will according to the forecasts I read in the Sunday papers, the rate will come down to 5 or perhaps 4 or 3 per cent.

Mr. S. Lemass

This is trifling. So far as I am concerned, my interest was to ensure that there should be no incentive to this company so to operate its business as to maximise its profits, and therefore I insisted on some limitation of its dividend distribution. The limit proposed is quite reasonable from my point of view. My concern is to ensure that this company will have no interest whatever in operating its business except to facilitate the trade. Might I say a final word in that connection? I am prepared to proceed on the assumption that the great majority of the tea traders of Ireland are honest men.

Dr. O'Donovan

Really, this is ridiculous. This is the second time to-day we have had this kind of thing. I did not intervene before because I did not think it was my territory. This is just chasing around the mulberry bush. What does it show? It shows the complete change in outlook, and proves that the Government Party has become a right-wing Tory Party up to the hilt. It is the principle that I am interested in, not the quantity of money involved. The Minister is right when he says it is 10 per cent. of £250,000, but there is the fundamental principle that this co-operative monopoly have the dividend fixed at 10 per cent., whereas in co-operative companies the dividend is not in excess of 5 per cent. I would prefer that he should say that the rate would be 1 per cent. or perhaps 2 per cent. over the bank rate.

Mr. Murphy

I should like to reiterate what Senator O'Donovan has said. He has rather helped me. I have got information which has surprised me. He has borne in upon me that my comparison with a co-operative society is fairly sound, and that co-operatives have a legal maximum of 5 per cent. This is a co-operative and I think that in the very same circumstances the dividend which should be payable to the shareholders in this company should equally be limited to 5 per cent. If it is limited to 5 per cent., instead of taking the money in dividends will they not equally benefit as ordinary tea importers, as people in the trade? The Minister is right in taking a measure of control over them and in seeing that they, as shareholders in the company, should not be in too advantageous a position over the other tea merchants. I would again press the Minister about this question of the dividend. Ten per cent. is pretty high because it is—how shall I put it?—a co-operative. There is no risk that I can see.

Mr. S. Lemass

Certainly there is. Surely there is the risk of no dividend at all.

Mr. Murphy

There is the risk of no dividend?

Mr. S. Lemass

Yes.

Mr. Burke

How would that happen?

Mr. Murphy

Unless Ireland overnight is going to turn into a beer-drinking or coffee-drinking nation.

Mr. S. Lemass

There is no monopoly.

Mr. Murphy

There is a monopoly of import.

Mr. Barry

But you can charge for handling. It is a mystery which is well hidden.

Mr. Murphy

You can charge up to anything that will give you a minimum of 10 per cent. The consumer is the person who will have to pay for the tea.

Mr. S. Lemass

Let us get down to mathematics. Senator Barry is right in one respect. The information is that about 50 wholesalers will become shareholders and the total subscribed capital will be about £125,000. Assuming they paid a maximum dividend they will be paying out £12,500 per year less tax. The trade we are talking about runs into millions of pounds and at the moment the Government, I think, has guaranteed the overdraft for Tea Importers Limited for almost £5,000,000. Is not this a mere bagatelle?

Mr. Murphy

I do not agree. If C.I.E. increased their fares by a halfpenny, you may say to the ordinary person it is a bagatelle, but they can get a lot of money then from such an increase, and everyone, in effect, is a consumer of tea. It should be in the Minister's interests to keep the price as low as possible. I could not accept the argument that it is a mere bagatelle. It is still 10 per cent. I suggest that it is too much to take out of a business which cannot in fact lose any money.

Mr. Barry

I agree with the Minister that this company can charge only for the service it renders. Ten per cent. is rather high and I think they will not have to impost to get that. The Minister has reassured me that there will be no danger that they will put those who are not members of the company at a disadvantage.

Mr. S. Lemass

That is what I said.

Mr. Burke

I should like the Minister between now and the next stage to examine the position with regard to the wholesalers in the country. I should like him to consult some of them. Taking the long view, I think it would be shocking to think that tea will be handled by a small group in Dublin or Cork who have the £2,500 to put down, while people in other places, such as Kilkenny or Clonmel, have not. I think the privileges given to these people under these articles of association are wrong.

Mr. S. Lemass

Whom does the Senator want me to consult? I consulted the Tea Association of Ireland of which every wholesaler is a member and these are their articles of association. Whom else am I to consult? There is nobody left.

Mr. Murphy

Apparently they all aim to get in on the 10 per cent.

Mr. S. Lemass

Apparently there are not enough anxious to get in on it. On that point, I wish to point out that Senators are ignoring sub-section (2) of the section which makes it clear that if any undesirable practices are adopted, they can be investigated by the Fair Trade Commission.

Question put and agreed to.

Sections 3 and 4 agreed to.

SECTION 5.

Question proposed: "That Section 5 stand part of the Bill."

Mr. O'Quigley

This section provides for the cancellation of the register of registered tea traders and the cancellation will be effected by the Minister. I should like to ask the Minister what kind of rules he is going to apply, or what will the Minister for Industry and Commerce apply in satisfying himself that a person is financially assisted or that that person is ordinarily resident outside the State. There could be circumstances where the small family concern might require some financial assistance, perhaps of a temporary nature. If a tea trader were assisted by some relative ordinarily resident outside the State, would that be a circumstance under which the Minister would cancel the registration of the tea trader? As it stands, it would appear if a person carrying on business as a tea trader were even temporarily financially assisted by a person ordinarily resident outside the State, the Minister would be obliged under the section to cancel his registration. There are a number of other points which I should like to raise and perhaps it would be more convenient if I dealt with them separately.

Mr. S. Lemass

The registration of a tea trader who is already in existence will only be cancelled if he goes out of business. For the tea trader who is now in existence, there is no qualification required whatever. Some of them are subsidaries of outside concerns, outside the State, and as they are in the tea trade now, they cannot be put out, except on going voluntarily out of business. In relation to those not now in business, the Minister must be satisfied before he registers them that they are bona fide Irish-owned and controlled firms. It is only where he finds that their status has changed subsequently, having accepted them as registered newcomers to the trade, that he can cancel the registration, having given notice.

Mr. O'Quigley

I appreciate that. I know that existing traders will have a licence cancelled only if they cease to be in the business. I am concerned about the newcomers. If there was a temporary need on their part to get some financial assistance, would that be a circumstance which would move the Minister to cancel the registration? As the section stands, I think the Minister might feel obliged, in order to comply with sub-section 2, to cancel the registration.

Mr. S. Lemass

The answer to the Senator's question is "yes". It will be understood that nobody will in future seek registration as a tea trader who is not at present in the trade, without being fully aware of the provisions of the section. The aim is to prevent companies which appear to be Irish companies becoming mere fronts for some powerful external tea merchants.

Mr. O'Quigley

Even in the case of temporary financial assistance?

Mr. S. Lemass

Yes. A loophole cannot be permitted, having regard to the objective.

Mr. Carry

The Minister is aware that three or four of the larger concerns will remain? They are very important people and they will probably dominate the trade.

Mr. S. Lemass

I do not see why they should dominate the trade in the future. They have not done so in the past.

Mr. Barry

In the past, we were able to defeat them. Now they will get the advantage created by this House—an advantage which we have not got. They have the money and the organisation.

Mr. S. Lemass

From the point of view of size, they always had that advantage, but in so far as we are now putting it back into the power of any trader to buy direct from the country of origin whatever qualities of tea he wishes to buy, the position of the small or independent trader is being improved rather than disimproved.

Mr. Barry

No; it is being disimproved. The small man was able to buy on this very big market which is on our doorstep. He was able to defeat the big fellow and build his own business up. He is losing that advantage now.

Mr. S. Lemass

The Senator knows that the very reverse was happening before the war and that the Irish wholesaler was disappearing.

An Cathaoirleach

This matter has been threshed out already on Section 2.

Mr. O'Quigley

What would be the standard applied in regard to a person ordinarily resident outside the State? The question of domicile gives rise to serious difficulties always. What standard will be applied?

Mr. S. Lemass

I would prefer that in Section 4, the precise qualifications to be held by a newcomer to the trade could be prescribed and made enforceable through the courts without any ministerial intervention. That did not prove to be possible, when we examined the matter. The only practicable method of dealing with the problem was to give the Minister power to decide. The Minister has to be satisfied that the newcomer conforms to these conditions.

Mr. O'Quigley

I am glad to hear that the possibility of having this matter determined by the courts was considered. Is the Minister satisfied it will not give rise to difficulties? It is the type of thing that would normally come within the purview of the courts. The Minister is aware that the phrase "is satisfied" connotes the exercise of a judicial function. It is a judicial function in relation to the property rights a tea trader would have. That phrase is used in relation to Part IV of the Offences Against the State Act, 1939. It was found that where you have that phrase in an Act of Parliament, it is a judicial function. That invalidated Part IV of the Offences Against the State Act, and there was another Act passed in 1940 which substituted a new phrase: "is of opinion that". That is a matter which the Minister might consider on Report Stage. It could well be that the Minister might consider the section with his legal advisers. It might give rise to the constitutional difficulties about which I was talking earlier to-day. The Minister might look into the matter on Report Stage.

Mr. S. Lemass

The Senator may not appreciate that this has been the law for a number of years. The section was taken word for word from the 1956 Act, which was itself only a renewal of an earlier Order.

Mr. O'Quigley

I would suggest that the Minister should bear in mind the particular phrase. It is likely to give rise to difficulties which I am sure the Minister does not want to have.

Question put and agreed to.

Section 6 agreed to.

SECTION 7.

Question proposed: "That Section 7 stand part of the Bill."

Mr. Barry

I regard this section as the heart of the Bill. I was not surprised that the amendments put down by myself and Senator Burke were rejected. I admit they negatived the purpose of the Bill. I have no intention of fighting a rearguard action. I have already said what I wanted to say, but it is noteworthy that in the passing of this Bill through this House no member of the Minister's Party supported him, except Senator Carter, who obviously had not the slightest idea of what the Bill sought to do. I was frightened by that lack of knowledge.

This is the beginning and end of the Bill as far as I am concerned. I do not mind where I am compelled to buy tea, provided I can taste it before I buy it. I hope the Bill will work out well. I am afraid we will go through a rough period for some years and I should like the Minister to consider reviewing the operation of this legislation in two years' time. It is quite easy to compare figures and grades. We can find out whether we are doing better then than we did in the past.

Mr. S. Lemass

I wish Senator Barry would tell me how this Bill prevents him from tasting the tea.

Mr. Barry

The tea is sent for auction. The auction catalogues are printed generally on Thursday in Calcutta. The auction takes place on Tuesday. It is physically impossible for me to get a sample of that tea and to give instructions before the auction takes place. What will happen in future is that branches of Mincing Lane firms will probably try to cater for the Irish trade in the East and buy tea and store it there, although Calcutta is very unsuitable, for climatic and other reasons, for the storage of tea. They will send small samples by airmail. If they suit me, I shall buy them at their prices. The only difference between what will happen in the future and what has happened in the past is that you are sending me 6,000 miles farther East to a comparatively small tea market. The figures of sales in Calcutta in respect of the season that has just closed were 169,000,000 lb. while the landings in London were 594,000,000 lb. We are going around with a very small shopping basket. We could buy very swiftly in the 600,000,000 lb. market, but you are sending us to the 169,000,000 lb. market and you are therefore limiting the choice and the price.

Mr. S. Lemass

The people in this country want Indian tea and nothing else but it.

Mr. Barry

I will buy all they want of it and better than what can be bought in Calcutta.

Mr. S. Lemass

He will buy it in India.

Mr. Barry

Less Indian tea is sold in India than in London, as the figures show. The figures of sales in Calcutta this year were 169,000,000 lb. while in London they were 594,000,000 lb., half of which was Indian and the rest Ceylon. The people of this country want at least one-third Ceylon tea in that blend. We are accustomed to drink that sort of tea. Perhaps I am not the Minister's equal in intelligence but certainly I am immeasurably superior to him in knowledge of this particular matter.

I shall get on quite well in the future. I shall buy tea on cup. I shall buy it from dealers here or from fellows in the East. But the Irish consumer will pay more for it.

Mr. S. Lemass

When Deputy Barry attacks me, I can only call upon the rearguard I have behind me—the rest of the tea wholesalers of Ireland.

Mr. Barry

The Minister has not them all behind him. I am afraid some of them are mercenaries.

Mr. Burke

I think Senator Barry is right when he says this section is the kernel of the Bill. Unfortunately, I was not able to speak on the Second Reading of this Bill as I was giving evidence at a marketing committee. However, I have taken the trouble to find out what would be the position. The best scientific test I could get was to consult two persons engaged in the wholesale tea business on both sides of the Border. They are Irish Nationalists and people who would not have a bias in favour of other orders across the Border. One of them happens to live in the Republic and trades on both sides of the Border while the other man lives in Northern Ireland and also trades on both sides of the Border. Their opinion was that, with the difficulties of trading, with the delay in getting tea from the East, and for other reasons, to say the least of it, on balance, the people here will have to pay more for their tea as a result of this measure. They cannot understand why this company does not trade in tea and sell it to anybody who wants to buy it from them. Why must they have a complete monopoly?

Mr. Barry

I think Senator Burke is misinformed about that particular aspect of the matter. The company are not dealing in tea but only in the actual handling of it.

Mr. Burke

They are handling from £4,500,000 to £5,000,000 worth of tea.

Mr. Barry

I have to tell that to the Minister.

Mr. Burke

Regardless of the technical difference between handling and selling, I am informed by reputable people I know for many years—that is why I consulted them—that we shall have to pay more money for tea as a result of this measure. They cannot understand why people will not be allowed to purchase tea in whatever quarter of the world they can buy tea at the best price. Therefore, I believe this measure is not in the best interests of the country. I believe this Bill is particularly against the small family wholesale business in this country.

An Cathaoirleach

The section.

Mr. Burke

Section 7 is working against the small family wholesale business in the country to the advantage of big businesses.

Mr. S. Lemass

The suggestion has been made that as a result of the enactment of this Bill the people of this country may have to pay more for tea than they would otherwise pay. My advice from the majority of the trade is the reverse. All the available statistical information shows that, in fact, by reason of the policy of direct purchases of tea in the country of origin and direct shipments to this country in recent years we have been getting our tea at a great deal less than the price for which we should otherwise have got it. I presume the comparable figures are those which would relate to the average landed price of tea shipped direct from India here and the average price at which tea was exported from Great Britain.

Mr. Barry

That is a dangerous figure.

Mr. S. Lemass

I admit that: qualities come into the picture. In so far as certain allowances must be made, they are in favour of the present arrangement. The average c.i.f price of tea shipped from English ports would not include the freight and insurance charges involved in bringing it here but, over all these years, the average price of tea landed in this country was one shilling or more below the price at which the same tea, brought into England, was reshipped from English ports.

Mr. Barry

Not quite the same. You have only to compare the tea which we get in the Twenty-Six Counties with that which they get in the Six Counties. On the average, their quality is higher.

Mr. S. Lemass

I concede it to be possible that the difference in the landed cost of tea here and the landed cost of tea in Britain—and our figure is much lower than the British figure —might disclose that tea was being bought here to more advantage than by the British wholesalers or it might disclose that, on the average, we were buying a cheaper grade of tea than was being brought into England. If that is so, any resulting complaint about the quality of tea goes back to the tea merchants because Tea Importers imported what the merchants wanted and in future it will be what they themselves actually buy. Therefore, any complaint about quality will not be the direct responsibility of those importing the tea.

Mr. Barry

The English merchant had an advantage which we had not. You could buy tea at exactly the same price from one man as from another man: both cost the same. But one type would be much more suitable for the water. What you might call bad tea would be just unsuitable. We have been buying tea blindly and in bulk for years. It has not been tasted for years. Senator Carty said that any man who does not taste the tea before buying it is a fool but you cannot do that in the East as they do not open tea there. Unless, as I shall probably try to do, we get samples by airmail, the position will be unsatisfactory.

Some dealers out there can buy tea in Calcutta and send samples by airmail. If I cannot taste it, I cannot take part in this great bulk purchasing with some of the bigger men. The small man cannot do that successfully and so he will be crowded out. What might be a minor parcel of bad tea to a very big dealer would be a catastrophe to a small dealer. It would injure his whole trade. It is not necessarily that they were buying worse tea but rather the type they got. We did not know what we had bought until we received it and that was four months afterwards.

Mr. Burke

These two persons I mentioned have been trading on both sides of the Border. Surely they have a wonderful facility for testing whether the system that is working here or the free system that is working on the other side of the Border is the better in the interests of the person purchasing the tea. I can give the Minister the names of these two reputable firms that have been trading in tea for a considerable number of years.

Mr. S. Lemass

I do not think the system working here now is a good system. That is why I am prepared to end it.

Mr. Burke

I cannot see the differerce being pleaded between Tweedledum and Tweedledee.

Dr. Sheehy Skeffington

There are two points I should like to make. One is a minor point. Paragraph (b) of sub-section (3) says: "The company shall not import tea unless the company either imports it under and in accordance with an authorisation given by the Minister." This "authorisation" is also mentioned in paragraph (b) of sub-section (4), but I do not think the power to give such an authorisation is mentioned anywhere else in the Bill. I am just wondering is this a usual way for the Minister to take power to authorise certain people to do certain things.

Mr. S. Lemass

That is intended to be an emergency escape clause, in the event of circumstances arising to prevent the company bringing in tea from the countries where it is produced. In such an event, the Minister can authorise the company to buy tea wherever it can get it.

Dr. Sheehy Skeffington

I was just wondering has the Minister power, by mere reason of these clauses, to make the authorisation. One section says the company shall not import tea, unless in accordance with an authorisation given by the Minister, but no other section actually gives the Minister power to authorise. I am just wondering does the Minister consider that these two indirect references to "authorise" will be sufficient to give him power to make such authorisations?

Mr. S. Lemass

I think so.

Dr. Sheehy Skeffington

The other point is the difference between the position, as at present, in which we buy in bulk, and the traders get tea which has been bought in bulk at what I would suggest would be very lo prices, and the situation which will arise as presented by Section 7 in which individual traders must go to the countries of origin and bid against one another for individual items, but can only import tea through the company. If Irish nationals bid against one another in these auctions they will be putting up the price on one another. Instead of buying as at present in bulk for Irish needs, you will have Irish tea buyers competing against one another.

I put this question on the Second Stage, and suggested that it was like a man bringing his wife to an auction under the mistaken impression that if both bid for the same article, they will get it at a better price. The Minister's only answer was that though Irish nationals might be bidding against one another, they would not be the only bidders, that there would be others bidding, too. I do not feel that that is a proper answer. I think as a community we would get better value by bidding and buying with one voice, and I am strengthened in that opinion by the Minister's present statement that we have been getting tea cheaper through the operations of Tea Importers, Limited, than we did before that body was set up, that we have been getting it at something like 1/- a lb. cheaper because of bulk buying. It seems to me that this Bill does away with that valuable factor in the low pricing of tea in Ireland, as compared with before the war. I feel that Senator Burke is right, therefore, and that we shall be paying more for tea by reason of this change from bulk buying to a system of individual Irish traders bidding against one another in the countries of origin.

Mr. S. Lemass

I am surprised that Senator Sheehy Skeffington and Senator Burke, starting from two entirely different points, have got the same result. The price cannot go up for both reasons. If there were only one buyer for all our tea that buyer would have some commercial advantage, some capacity to shade the price, because of the size of the orders he would have to place. I do not know that that advantage could be very great having regard to the fact that the whole world is at these auctions seeking to obtain supplies of tea and bidding for the tea that is available. I know, however, that that commercial advantage, such as it may be, involves the disadvantage that Senator Barry talked about, the limitation on the varieties available to traders by reason of the fact that all tea is purchased by one agent. This measure is aimed to get away from that disadvantage, to create a situation in which merchants will be able to buy whatever individual varieties they like, the varieties they think their customers in their own localities will like, having regard to the quality of the water and all the various other factors that influenced trade in one district as compared with another. My answer to the Senator is that the commercial advantage would be very slight.

Mr. Barry

Would it be possible for the Minister to tell me that a through bill of lading would be accepted? He used the words "import direct."

Mr. S. Lemass

The aim at any rate is to secure the economy in freight which shipment in bulk will yield. The object of the tea importing company will be to organise cargo loads, even though the ingredients of the loads are the consignments of individual merchants. This will mean freight economy in bulk shipment.

Mr. Barry

There would be no danger of monkey business, if there was a through bill of lading. It would have this advantage. The credit position is going to be very important for the importers. Bulk shipment might mean that a man would have to wait for several weeks and the delay might be more than an Irish importer could cater for. Usually there would always be vessels available on routes from the East, even though they might call at various other ports along the way.

Mr. S. Lemass

We are merely prescribing to the company the operations which they should do. That is enshrined in the phrase "import direct". It is up to them to adopt the most economical and satisfactory methods.

Question put and agreed to.

Sections 8 to 12, inclusive, agreed to.

Title agreed to.

Bill reported without amendment.

Tomás Ó Maoláin

I understand there is no objection to taking the remaining stages now.

Mr. Barry

We have no objection. We have battled hard enough on it.

Mr. Burke

And have got nowhere.

Professor Hayes

There was nowhere to get.

Mr. S. Lemass

Striving for perfection.

Bill received for final consideration.

Question proposed: "That the Bill do now pass."

Mr. Burke

We said we would give the Minister all the stages, but on the Final Stage I must say that, in my opinion, this is a thoroughly bad Bill. In my opinion, it is all running in favour of big business and against the small business; it is for the big importer against the small importer; it is going to favour Dublin against the provincial town. I do not like to make use of any pious thoughts here in the Seanad, but this is contrary to what I have read in Catholic social principles—that is that we ought to be in favour of anything which would help the small man rather than the big man, of anything that would strengthen the small business man as against the big business man. I would like to have that on the records of the House.

Mr. S. Lemass

I should say I was predominantly concerned, in working out the arrangements which the Bill enshrines, to ensure that the smallest trader in the country would not be prejudiced in his future operations by reason of these arrangements; and I think we have secured that.

My concern in framing the Bill was threefold—first, to keep the wholesale trade in tea in so far as it is feasible to do so, having regard to the existing situation, in the hands of Irish-controlled firms; secondly, to maintain the policy of buying our tea requirements in the countries of origin; and thirdly, to establish effective arrangements which would ensure direct shipment to this country. Subject to these three aims of policy, we framed the Bill in consultation with and in agreement with the organisation which is representative of all the tea wholesalers of the country.

I think it is certain that the tea wholesalers, who have been working on the preparation of this scheme for some years now, will be trying genuinely to make it work in accordance with the general aims we all have in view. If it should prove to be so, that the fears which Senator Burke has expressed are well founded, that the small trader is not getting a fair crack of the whip as he should get under these arrangements, then I will certainly revise the arrangements.

Mr. Burke

Thank you.

Question put and agreed to.