I beg to move:—
"That the Dáil is of opinion that the Government in considering the fiscal problem should have regard not merely to the admittedly restricted view of the matter taken by the Fiscal Inquiry Committee as indicated in their final Report, but should examine the problem in the broadest possible aspect—due regard being taken of all the factors affecting the general well-being of the Saorstát."
I think very few Deputies will question the advisability of initiating at the very earliest moment a discussion upon the issues raised in this motion. The Report of the Fiscal Inquiry Committee was tabled the last day that this assembly met prior to the Christmas adjournment. It has, in the interval, I understand been circulated to Deputies. I trust that most, if not all of them, have carefully read and scrutinised this Report, and that this discussion will elicit what impressions they have formed upon it. But whether these impressions are favourable to the Report or otherwise I think there will be general agreement with the contention that the data provided by this Report are completely inadequate for a basis of fiscal policy in this country. A wider and a fuller grasp of the factors that enter into this matter will have to be secured before anything approximating to a permanent conclusion can be arrived at as to what is to be the fiscal policy or the fiscal system under which this State can progressively exist. Therefore, I think that the publication of this Report is a good thing, inasmuch as it helps to clear the air and indicates somewhat definitely the direction in which certain economic influences in this State are tending. I wish to suggest that that direction is not satisfactory, not one that makes either for national health or economic stability, but one fraught with serious danger to the future of the State.
I have read this report several times carefully, paragraph by paragraph, and it appears to me to be inadequate, or incomplete in its survey, inaccurate in its premises and misleading, sometimes malignantly misleading, in its conclusions. The limitations of the Terms of Reference of the Committee cannot be pleaded as being responsible for its main defects, for the Committee appear to have imposed upon themselves voluntarily certain limitations unwarranted by their instructions. These limitations exclude essential matters to such an inquiry, and have practically rendered abortive the labours of the Committee. Here are the Terms of Reference:—"To investigate and report:—
(a) as to the effect of the existing fiscal system, and of any measures regulating or restricting imports or exports on industry and agriculture in the Saorstát, and
(b) as to the effect of any changes therein intended to foster the development of industry and agriculture with due regard to the interests of the general community and to the economic relations of the Saorstát with other countries."
Such are its Terms of Reference, but a perusal of the report would almost convince one, unaware of its Terms of Reference, that the Committee was instructed to investigate and report as follows:—
"(a) as to how best to inspire contempt for existing industrial enterprise in the Saorstát, and
(b) as to how to discourage any further effort to prevent Ireland from fulfilling the prophecy of a certain English nobleman when he spoke of this country as being destined to be the fruitful mother of flocks and herds to feed the industrial workers of Britain."
So far as I have been able to glean a coherent impression from this report, the manufacturers, business men and industrialists of the Saorstát have been placed in the dock, and indicted as a set of incompetents whose incapacity is the primary cause of our lack of industrial progress. Scattered through about a dozen paragraphs of this report, are reflections upon these men engaged in these enterprises, which while being utterly irrelevant to the inquiry, may possibly at the same time have the effect of lowering public opinion in Ireland and elsewhere as to the merits of our native products. I do not wish to suggest that was the object of the Committee, but the kind of comment in this direction in which our professors on this Committee have indulged, seems to me to be like saying to a drowning man: "We are very sorry for you, but really your predicament is entirely your own fault. If you had only learned to become an expert swimmer you would have a much better chance of surviving, but as you did not do so we think it would be most unfair to charge the public purse with the cost of throwing a lifebuoy to save you." Perhaps the insinuation which will be most resented by Irish manufacturers is the one which is a reflection on their probity, as contained in paragraph 101, which is as follows:—
"There is the further possibility that the secure possession of the home market may lead to the lowering of the standard of the article produced, which even if the normal price remained unaltered, would be equally injurious to the consumer."
Here we have the imputation, not merely of incapacity, but of gross dishonesty. One would think that this Committee had been appointed to inquire into the morals of our manufacturers instead of into matters appertaining to the economic welfare of the country. It is true that in certain paragraphs of the report the difficulties that face Irish manufacturers have been duly noted in passing, but only to be brushed aside in later passages as so many irrelevancies—where the men who have steadfastly borne the brunt of financial and other embarrassments in the interests of Irish industry, where the men who were entitled to look for some consideration and some sympathy, have been offered cynical homilies on their own shortcomings. The Committee in its superior wisdom, or rather, self-complacent ignorance of realities, seem to suggest that the value to the State of industry is to be measured, not by its services or potential services to the nation, but by its capacity to face alone and unaided the strongly entrenched interests of other nations. They seem to have overlooked one great truth which indeed has been overlooked by many others similarly engaged like them in trying to galvanise the dry bones of Adam Smith's philosophy into life again, the truth enunciated by Frederick List when he said, "Between each individual and entire humanity there stands the nation." But the entity of the nation has found no place in the pages of this report, or in the consideration of its authors. There appears to be no conception of the fact that all captains of industry are of value to the State, or that healthy and solvent industries are not only assets to the State, but essential if the State is to make economic progress. Rather one gets the impression, reading through the sorrowful mysteries of the five professors, that our manufacturers are regarded as so many parasites who wish to prey upon the public purse, and these gentlemen of the Committee regard themselves ordained by Providence to stand between them and their fell design. Now, in this connection the Committee would have been very well advised to have pondered a little further certain declarations of one great man who walks no more amongst us, the late Arthur Griffith.
This is what he said: "We must clear the minds of the Irish people of the pernicious idea that they are not entitled or called upon to give preferential aid to the manufacturing industries of their own country." If that idea were not met and combatted there would be an end to all hope of the development of the Irish manufacturing arm. We must offer our producers protection where protection is necessary, and let it be clearly understood what protection is. Protection does not mean the exclusion of foreign competition. It means rendering the native manufacturer equal to meeting foreign competition. It does not mean that we shall pay a higher profit to the Irish manufacturer, but that we must not stand by and see him crushed by the mere weight of foreign capital. If an Irish manufacturer cannot produce an article as cheaply as an English or other foreigner, only because his competitor has larger resources at his disposal, then it is the first duty of the Irish nation to accord protection to the Irish manufacturer. If, on the other hand, an Irish manufacturer can produce as cheaply but charges an enhanced price, such a man deserves no support—he is, in plain words, a swindler. It is contrary to the principles of protection and the interests of the community that a manufacturer in Ireland who can produce as cheaply as his foreign competitors should receive an enhanced price. The movement is one to give Ireland back her manufacturing arm, not to make fortunes for dishonest manufacturers. I now come to what I have described as the limitations which the members of the Committee imposed upon their inquiries, but on second thoughts that seems to me to be rather an inaccurate way of alluding to these limitations. Further consideration leads me to the belief that in this regard it was not so much a matter of limiting the scope of their investigations, as a lack of understanding of what really entered into such an inquiry which accounts for the strange inadequacy of this report.
There are certain fundamental factors which must be fully explored and considered in any satisfactory investigation into tariffs. Among such factors the following may be cited as obvious:—(1) The country's tariff policy in the past, and the effects of this policy upon its economic welfare; (2) the character of the foreign trade (i.e., whether the imports and exports are predominantly food stuffs and raw materials, or predominantly manufactured goods); (3) the increase or decrease of population in the recent past; (4) the state of employment; (5) the tariff policies of other countries, the motives underlying them, and the results achieved; (6) in the case of a country inexperienced in the framing of tariffs, the analogy, or lack of analogy, between its economic circumstances and those of other countries, and how far such a comparison would be held to justify the limitation of, or a departure from, the tariff policies of such other countries. In regard to each and every one of those fundamental considerations the report is silent. These things are vital and essential to any understanding of a tariff system, and in each and every one of them this report of five professors is silent. I propose, in the first instance, to touch briefly upon these sins of omission and then to examine and criticise the report.
Taken as an isolated fact, I would not feel disposed to attach undue importance to the omission from the report of any reference to the historical aspect of our tariff problem, how Irish industries were destroyed in the seventeenth and eighteenth centuries by means of penal legislation passed by the British Parliament, how they rapidly revived towards the end of the eighteenth century as a result of the protective policy of Grattan's Parliament, only to fall again into ruin and decay after the passing of the Act of Union, especially after the establishment of complete free trade between Great Britain and Ireland, and also how they have languished and died throughout the whole period of the Union. The Committee might have been excused for ignoring these phases of Irish economic history on the ground that a substantial proportion of the Irish public might be presumed to be well informed in regard to them and could appreciate their bearing upon the question of tariff policy; but when I find that other more important but little known factors falling within the scope of the inquiry are similarly passed over, I say that the omission in the present instance possesses a certain sinister significance. Moreover, on the face of it, this report contains no evidence whatever that the reactions of the political history of the country upon its economic development, or rather upon its economic retrogression, received any consideration at the hands of the Committee.
Now, as to the character of the import and export trade of this country, there is no country on earth for the given area and population, which exports so large a quantity of food-stuffs and animal raw materials, and imports so large a quantity of manufactured goods as does An Saorstát. The food stuffs and raw material in question are not the products of tillage cultivation to any large extent; they consist mainly of cattle, sheep, and butter, the products almost entirely of grass. These food stuffs, therefore, are produced with the minimum expenditure of human labour and at a maximum wastage consistently with the existence of agriculture in any form in the country. On the other hand, upon examining the items imported from abroad, it will be found that, apart from wheat, flour and coal, they consist of articles such as apparel of all kinds, boots, furniture, motor cars, and so forth—highly manufactured and luxury products—the value of which is almost wholly attributable to the labour employed in their manufacture. The official figures showing the quantities and values of the different articles imported and exported will be found in the report on "Trade, Exports and Imports at Irish Ports for 1921," and in the companion publications of previous years compiled by the Department of Agriculture. Were we to buy from Great Britain, the whole supply of the articles which she manufactures from the raw material and by-products obtained from the cattle and sheep which we export to that country, such as boots, shoes, leather goods, soap, textiles, combs, buttons, glue, brushes, clothing, etc., it would be found that the value of those articles would equal, or perhaps exceed, that of our total exports of cattle and sheep.
Therefore, the mountains of meat derived from those animals, ignoring for a moment the wasteful manner in which the country's resources are squandered in the raising of meat, constitute a free gift to Britain, in return for which she is pleased to keep a large portion of her population engaged in working up manufactures, and her mercantile marine engaged in carrying exports and imports. Never in the whole history of mankind has there been a more ruthless squandering of a country's natural resources as is here exemplified. One searches this Report for some glimmer of light upon this tremendous fundamental consideration, the very pith and marrow of a nation's claim for a tariff policy. One searches for some glimmer of light upon that, but one searches in vain. That was an aspect the Committee did not think worth while considering. Next, one wonders whether employment and emigration are phenomena which are peculiar to any food exporting country except Ireland. As examples of countries exporting food, one thinks of Australia, New Zealand, the Argentine, the United States and Canada. These are all protectionist countries, and, as is well known, there has not yet been an unemployment problem of sufficient dimensions in them to necessitate emigration. On the contrary, there has been continuous immigration into all the countries mentioned. On the Continent of Europe there are a few food exporting countries—Russia (before 1914), Denmark, Bulgaria, Roumania and Hungary. All those countries are protectionist to a greater or lesser degree, and in each the population has increased enormously during the past 70 or 80 years. These countries, moreover, export the products of their tillage in contra-distinction to Ireland, which exports the far more wasteful products of grass.
Every food-exporting country in the world, with the single exception of Ireland, is protectionist. Why? Every food-exporting country in the world, except Ireland, has increased her population during the last 70 or 80 years. Why? I return to this Report under discussion for some little light upon this pregnant question, but again in vain. Does there exist in this country at the present moment an unemployment problem, and has such problem existed in the past? If so, what are its dimensions, and what is its annual cost to the National Exchequer; and, secondly, to the family income of every bread-winner in the country who has to provide food, clothing and house for himself and family, and for one or more dependent relatives unable to find employment? What is the extent of the economic wastage involved in feeding and clothing, up to the age of manhood, all the young men and women who have emigrated from our shores during the last 70 or 80 years? What is the effect on the cost of living of this drain upon the nation's human resources? Has anyone the hardihood to suggest that these questions are not strictly relevant and pertinent to an inquiry into our tariffs? What is one to think of a Committee, specially constituted to inquire into the existing fiscal system of Saorstát Eireann, and as to the effect of any changes therein, intended to foster the development of industry and agriculture, which, after a lengthened investigation, has failed to provide an answer to any one of those questions, and seemingly has not deemed it necessary even to consider them? The State, like ourselves, in seeking to frame a tariff policy, would naturally look for guidance to the example of other countries, notably those countries presenting economic features analagous to those already touched upon as existing here—if, indeed, any other country in the world has been so unfortunate as to find itself thus circumstanced.
Why has no country in the world followed the example of Britain in opening, and keeping open its doors to free trade? Why has free trade at least in the past been admittedly a boon to Great Britain, and if it has been a boon to her, why has it not been a boon to every other nation? Is the inference justified that economic wisdom has centred alone in the statesmen of Great Britain, and that the statesmen of the rest of the world, in pursuing the policy of protection, have made a blunder? As I hope to demonstrate later on, the Commission has arrived at many amazing conclusions by short cuts, but I venture to say that even they would draw the line at broadly stating that the statesmen of the world, with the exception of those of Britain, were fools. In what respect is there a divergency between the economic circumstances of the Saorstát and those of protectionist countries, and at the same time an analogy between the Saorstát and Great Britain which justifies our adhering to the tariff policy of the latter country? It ought to be unnecessary for me to point out that this newly risen State of ours in the matter of tariffs cannot remain indifferent to the example of other countries whose economic circumstances more closely resemble those prevailing here than do those of Britain. The world is rich in experience in regard to tariffs. The world is rich in experiences, of those things. Why has no information concerning that experience been conveyed by this report to the Irish Government, and the Irish people? If protection is a mistaken policy for statesmen to pursue, there must be some one or two countries of the many protectionist countries in the world where protection has brought injury or, perhaps, disaster. If so, where are those countries and what is the extent of the injury done? One searches the report in vain for an answer to any of those questions. I will not further occupy the time of the Dáil by a recital of all the sins of omission that can be charged against the Report. To exhaust such a category would be a labour, not of hours, but of weeks. I think I have sufficiently indicated the extent and the overwhelming importance of those omissions to place the report in a clearer and truer perspective for the purpose of the critical examination to which I now propose to submit it.
A document upon the question of tariffs which omits any reference to the consideration of the factors to which I have drawn attention, must necessarily be defective fundamentally, and, therefore, I claim that in examining and discussing the different positive features of the Report I am dealing with what are, in the main, either subordinate or irrelevant points of controversy in the issue. In its final and only important Report the Committee was careful not to make recommendations or to adduce findings. It interpreted its duty to be the narrow one of examining from the economical standpoint the results to be anticipated from a system of protective tariffs, and it proceeded by special pleading, by suggestion and innuendo, by palpably false inferences, and by lopsided inferences, from inadequate premises, to construct the most blatant piece of Cobdenite propaganda that our generation has witnessed.
The following are some of the objections urged by the Committee against the application of protective tariffs here:—(1) They lead to no permanent expansion of industry or permanent increase of employment. (2) They increase the cost of living. (3) They increase wages. (4) They increase prices. (5) They provide no remedy against dumping. (6) They hamper agriculture. (7) They are difficult to construct and difficult to administer, and they raise uncertainty as to their duration.
I will take all those foregoing objections in the order set forth above. It seems almost superfluous to have to disprove the Committee's contention that protective tariffs lead to no permanent expansion of industry because the mass of evidence to the contrary is overwhelming. However, as this Dáil and the Irish public have had very little opportunity of observing first hand or of studying the effects of protective tariffs in this respect, I propose to discuss the point in some detail.
The well-known English economist, Mr. John A. Hobson, than whom there is no more robust free-trader, is responsible for the following statement in one of his most recent publications, "The Evolution of Modern Capitalism," page 100:—
"It must be generally admitted that English industries would not have advanced so rapidly without protection, but as we built up our manufacturing industries by protection, so we undoubtedly conserved and strengthened them by free trade; first by the remission of tariffs upon the raw material of manufacture and machine-making, and later on by the free admission of food-stuffs which were a prime essential to a nation descending to specialised manufacture."
I next quote certain particulars showing the comparative rate of economic developments of the two Australian States of Victoria and New South Wales from the year 1870, when protection was adopted in the former colony, to 1903, the year after the Commonwealth tariff had extended protection to New South Wales and given an immediate and immense impetus to the manufacturing industries of that State. These particulars are taken from a work published in Melbourne and London in 1908, entitled "David Syme, The Father of Protection in Australia."
From its inception up to 1870 the colony of Victoria had run an uninterrupted course of free trade. Free imports had prohibited the possibility of industrial expansion. Several manufactures had been started by enterprising spirits but the importers had strangled them at their birth. The importers were bringing in foreign made goods and foodstuffs to the value of £15,000,000 a year in exchange for Victorian gold, wool, timber, and tallow. In the years 1855-59 more than 45,000 persons had emigrated from Victoria, owing to the lack of means of industrial employment. Cobdenism was the established fiscal policy. No voice had ever been raised against it. No one dreamed of questioning it. A free trade historian of these times, Mr. Henry Giles Turner, in his "History of Victoria," states:—
In the early sixties no educated man would have cared to pose as an advocate of protection
(they were all like our professors).
If they thought about it at all it was as a gloomy memory of desperate times in the old land where its monopolistic tendencies drove the labouring classes to the verge of revolution, where it was a synonym of the most hateful form of oppression of the capitalist and was broken down and routed by the Parliamentary champions of the workingman."
Such was the outlook of the situation when protection was first mooted in Victoria. The proposal met with cries similar to those which are voiced in Ireland to-day. Protection, the importers asserted, was a drag, a burden, a fraud; slavery and robbery. The people were warned that the doctrine was intended to tax the entire community for the benefit of the few manufacturers whom protection might encourage into a febrile industrial existence. I think we have heard something very like that recently from the mouths of our professors. The end of the struggle was, however, that a protectionist tariff was adopted with the result of an increase of social comfort, education, population, agricultural and industrial development and wealth, while the cost of living remained lower in that State of Victoria than in the neighbouring free trade State of New South Wales. Official figures and statistics substantiating every one of these assertions can be found in the volume I have referred to.
Now I come back home again. We have an example of the efficiency of protection in the matter of stimulating industries nearer home in the fact well known to everybody——
