In dealing with this motion of Deputy Milroy's, I desire, first of all, to pay my tribute of admiration to the very great industry, hard work and research which he has shown in preparing his statement.
QUESTION ON ADJOURNMENT. - FISCAL INQUIRY COMMITTEE'S REPORT—ADJOURNED DEBATE RESUMED.
Question again proposed:—
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.— (Mr. Seán Milroy).
Mr. EGAN
took the Chair at this stage.
Mr. EGAN
I might say that Deputy Milroy has undoubtedly treated the matter in the broadest possible aspect. He has travelled about 4,000 miles in his effort to give effect to his proposal, and I think it rather a pity that he found it necessary to call forth his powers of invective, when speaking about the members of the Committee, all of whom were elected by the Government, in the strong terms which he employed. He refers to their report as being "malignantly misleading." He talks about their having put industrial representatives in the dock, and appears to have a very strong objection to the fact that certain people are professors. Personally, I do not hold any brief for the members of the Committee, but, in all fairness to them, I think it must be admitted that, at any rate, they have no vested interests to serve, and that by the very nature of their calling they would, in the ordinary course, present a fair and judicial report of their proceedings. They had nothing to gain by doing otherwise that I can see. If you had this Committee constituted by prominent business men, industrial people associated with industry in general, there would always be the danger that you would have a certain amount of bias in approaching the various problems. Another matter in this connection is that whilst Deputy Milroy indulged in very eloquent generalities—he reviewed the fiscal problems from every conceivable corner of the globe—these gentlemen had before them witnesses taken from Ireland who had every opportunity of representing the Irish point of view, and that whatever we may think of international economics and the fiscal problems of other countries, the particular matter that concerns us is the Irish outlook. Of course, this controversy of Free Trade and Protection is a very old one, and it is a matter about which a great deal can be said on both sides.
A great many people hold that, by the mere application of tariffs, Ireland will be straight away converted into an agricultural and commercial paradise. For my part I have given a good deal of study to the matter, and I am not one of these people. I have, while preserving a fairly open mind, been always willing to hear concrete arguments as opposed to generalities, and I must say that I have a very strong inclination towards a Free Trade policy for this country, at any rate for a little while. One of the usual arguments used in connection with this controversy by the Protectionist protagonists is the analogy of other countries, and the country most often referred to as being a country which has developed its industries to a very great extent under Protection, is America. But it ought to be remembered, first of all, in comparing Ireland with America, that Ireland is a relatively microscopic geographical unit, whereas America is a mighty continent. The State of Texas alone, in America, is bigger than England and Ireland put together, and America is really a conglomeration of countries. America, within its own territory, possesses the biggest Free Trade area in the world, with an immense population to buy its own products. America possesses within its own shores every conceivable type of climate, soil, mineral wealth, and every natural advantage. America is a country that can afford to adopt any fiscal system it pleases, and still it can become a great country. Deputy Sears, and I think also Deputy Milroy, tried to establish the case that the great growth of commercial America, and of America generally, was owing to the fact that it had imposed tariffs on the products from other countries which go into it.
In my view that is a big question. I think the development of America was due to a great many other causes. First of all, America is a new country. Only a generation ago millions of acres of virgin soil were being ploughed up there, and that is going on still. They have enormous resources of oil, which supply half the world. They have enormous resources of coal and enormous resources of iron, and they possess gold and many other natural advantages, which Ireland does not possess. Consequently, I maintain that the analogy with America cannot be sustained. Now, people who refer to other countries where tariffs are prevalent; very conveniently overlook the great free trade country of England; and, after all. England, in proportion to its size and population, with all its faults, and I suppose they are many, still remains the greatest commercial country in the world, in proportion to its size and population. Yet, that is a prosperity which grew up directly under a free trade system. The greatest era of commercial activity in the history of commercial England corresponded with the repeal of the Corn Laws from the time of Cobden on. That is certainly a fact which must be taken note of. Of course, the greatest industry which England has is the shipping industry, and one of the things that America lost by her policy of tariffs was her shipping industry. I do not say that she lost it, but it was never developed to anything like the same extent that the English mercantile marine developed. In pre-war days, at all events—I am not in a position to state the figures now—nearly all American coast traffic was carried in English ships, because owing to the very high price of the necessary materials that had to come in for the building of the ships, America was not able to compete with England in the manufacture of ships.
Deputy Milroy considers that the imposition of tariffs would be a first-class cure for unemployment. I might remind Deputy Milroy that many and many a time the great country of America, upon which he depends for an illustration of his policy of protection, had very great epidemics of unemployment and very great trade depression. They had Bank and Stock Exchange failures and general commercial decadence at different times in America. At the moment it is true that American trade is booming, but I do not at all agree that it is due to the policy of tariffs. Then, to get away from other countries, and to come back to our own country of Ireland, I must say that the first thing we have to do is to define protection and what precisely protection means. I think, in a very few words, protection means the keeping away of competition. The keeping away of competition means, of course, that those who are left get better prices for the goods. If, as is sometimes argued, the imposition of tariffs will not increase the price of an article, where does protection come in? I fail to see it, and in this connection, further, we have this to decide when you are discussing a question of protection—are you going to propose to protect the individual manufacturer or trader, or do you propose to protect the whole community? My conception of my duty, as a member of the Dáil, is that rather than advance the views of any one trade or industry, it is my duty, as far as lies in my power, to look after the interests of the whole community. It is quite easy, we will say for the sake of argument, for a man who makes bottles, or bricks, or anything else, to put on such a tariff as will exclude all external competition. That would be a very excellent thing, if you regard it purely from the point of view of putting money in the pocket of an individual brickmaker, or bottlemaker, or bootmaker, as the case might be.
Then, there is a great deal said about what is called the incidence of taxation. Volumes have been written by people, who call themselves political economists, on this matter, and I do not propose to weary the Dáil with a long dissertation on this subject. If you have to put on a tariff you have to consider who pays it. The advocates of tariff say it is paid by the person who imports the stuff.
resumed the Chair.
Mr. EGAN
However, it is rather too big a question to decide how much of the tariff is paid, first of all, by the importer from the other side; secondly, by the Shipping Company who carries the goods; thirdly, by the wholesale merchant on this side; fourthly, by the wholesale trader; and, finally, by the retail trader. My own view is a very clear one on this matter. I have a certain amount of knowledge of commercial methods. There are such things as rings in commercial communities, and I am afraid the general tendency, if a tariff is put on, will be to pass it along to the consumer; and I do believe that in the long run the nation at large will have to pay the tariff. One of the great difficulties with which we are confronted in discussing a tariff policy for Ireland is that, first of all, Ireland is mainly an agricultural country. The difficulty is how to devise a tariff system which will do good to the agricultural community—which, after all, is the chief community—as well as benefiting the industrial community.
When one examines that problem one immediately sees how, from the Irish point of view, the whole question of tariffs bristles with trouble. In the case of the farmer, if you put a tariff on agricultural machinery, such as ploughs and harrows and threshing machines, manures, seeds, and various other things which the farmer uses, you are going to put up the cost of living, and the cost of production of these articles on the men who represent the most important part of the community. True, you may do a certain amount of benefit to the people who manufacture those goods, but you are doing it at the expense of the community; in other words, at the expense of the farmer. I would like just to consider a little further the question of protection, as it affects the agricultural industry. The farmer naturally would want some protection on some of his products. That would increase the cost of living to other members of the community.
Generally speaking, it is quite clear, on reading this Report of the Fiscal Committee, that there was a great deal of difference of opinion, even amongst the commercial community, as to the desirability of tariffs. They are not by any means all agreed. I will just take the industry with which I am associated most personally—the Malting Industry—and, in expressing the views on that industry I am expressing now, I am giving not only my own views but the considered views of the Maltsters' Association of Ireland, who handle annually three-quarters of a million barrels of Irish barley approximately. As you will see by the Report issued by the Fiscal Committee, the Irish Maltsters' Association gave evidence to the effect that a tariff on barley would be bad for the country, bad not only for them, but bad for the agricultural community more particularly; because it has to be remembered that barley is largely the raw material for our biggest export industry. If you put a tax on anything that is used in connection with the manufacture of Dublin Stout, you immediately penalise the Dublin stout brewer when he tries to compete with the English brewer in England where, by far and away, the biggest end of his trade lies. That is a fact which, I am afraid, is not very often appreciated by people who call for a tax on barley—that probably two-thirds of the produce of their barley is exported across the water. It is true that a certain amount of foreign barley does come into Ireland in connection with the manufacture of stout. For various technical reasons, which I need not go into, this amount is necessary, and even with a tariff on that amount of barley coming in, it would still come in, and would have to come in, for not only is it necessary for technical reasons, but Ireland does not, at the moment, grow sufficient barley for our large export trade in stout. If you put a tax on that small amount of foreign barley coming in, of course you would undoubtedly get a certain amount of revenue, and from that point of view I dare say it might bring a certain amount of delight to the mind of the Minister for Finance; but as a purely protective measure, I cannot say it would do very much good.
In this connection, I would like to refer to the fact that Deputy Milroy told us that there was practically no export of tillage products from Ireland. I have already instanced the case of barley. I should say there is probably anything from £500,000 to £600,000 worth of barley exported in the form of stout and whiskey. There is also a very large proportion of oats exported, but I have not the figures. In dealing with this question I suppose it would be quite right that one should take the whole of Ireland as a fiscal unit, including Northern Ireland, as of course Northern Ireland exports a considerable amount of linen, which is made from flax grown in Ireland. Therefore, I think he is rather over-stating the case when he tells us there is practically no export of tillage products from Ireland. Furthermore, in that connection, the stock-raising and the tillage industry are so intimately interwoven they really, to a great extent, may be said to be part of each other.
In the winter of course roots, mangolds, turnips, rape and other products of tillage have to be utilised for the feeding of stock, which afterwards are exported, either as stores or fat cattle, to England, and other countries.
Then, again, you have to consider that the farmer would naturally say we should have a tax on wheat coming in. Someone else would say there should be a tax on flour. You cannot tax either one or the other of those articles without putting up the cost of living on the general consuming community, and that is another difficulty I see. Deputy Milroy also referred to tobacco. Tobacco is, to a certain extent, grown in Ireland under a Government scheme of protection, and, to my mind, public money was never more ill-spent than in trying to cultivate the growth of tobacco in Ireland. The real reason is that, even when you have got your Irish-grown tobacco, the Irish manufacturers can only use from five to six per cent. of it in their products, and the amount that can be used is not worth talking about. Further, it can only be grown, and has only been grown, with the definite aid of a Government subsidy for which the rest of the country have to pay. My own view is that neither the soil nor the climate of Ireland is fit to grow tobacco that will compete with the sun-grown and sun-dried tobacco of other countries. It is really a waste of money trying to bolster up an industry of that sort for which the country is naturally unfitted.
We had a discussion on building. Is it proposed to put a tax on building materials, on slates and cement, and on the various timber goods used in connection with building? If you do, what is the result? Is it not going to make the President's task, in dealing with the housing problem, more difficult? Will it not increase the cost of housing? I cannot see that the country as a whole would gain anything by a tariff on these articles. Deputy Sears, in seconding the motion of Deputy Milroy, referred to the beet industry, and he told us a certain amount of what had been done in Norfolk. I have always held the view that the beet industry is a particularly suitable one for Ireland; but there are many difficulties in the way. The first is where are you going to get your beet? There would have to be a very appreciable increase in the area under tillage.
Of course, you could not grow beet as an isolated crop. It has to be part and parcel of some definite rotation of crops. It would necessitate more land under the plough and a greater supply of barley and oats or other cereals, and it would require rather a revolution in our existing tillage rotation. In the tillage rotation systems which work in our different districts, it would mean a change. It certainly could not be done in a hurry. It is one of those industries that could scarcely be taken up as a matter of private enterprise. It would not only require a great deal of capital to start the factories, but also a tremendous amount of co-operation on the part of farmers, in order to enable the factory to be supplied with beet and to have extended the area under tillage.
There was one remarkable omission in the course of Deputy Milroy's speech. He made no reference whatever to the possibility of action being taken by other countries in response to our tariff policy. In other words, he made no reference to the policy of retaliation. I am aware, of course, that England is our chief market, and it may be argued that the Englishman is not likely to tax his food; that is to say, he would hardly tax our cattle or agricultural produce going in. There are, however, a great many forms of retaliation other than a direct tariff on imports. They might, for instance, in England give greater facilities for the importation of Canadian cattle, or produce from the Colonies, if we started a policy of taxing English manufactured goods that come in here. While I have, as may be gathered, fairly strong ideas in favour of free trade, I am quite willing to keep an open mind and to listen to any convincing arguments that may be advanced in favour of protection. I say, however, that in a debate of this sort you cannot reach any finality. In discussing this problem you must have definite, concrete cases put before you. Each individual industry must be taken on its merits and the effects of tariffs examined from their source to their logical conclusion. It is only by taking each individual industry separately that a really true decision can be arrived at as to what is best for the country. I think it is a very good thing that this discussion did arise, and I hope that Deputies later on, instead of indulging in generalities in connection with it, will try and develop details and make some proposals in a concrete form.
I desire to add my tribute to that already given by the Deputy who spoke before me to the diligence and detail with which Deputy Milroy made his case. With a great deal of what he said I am in agreement, and with some of it I am not in agreement. It is admitted that a public service has been rendered by bringing forward this case. Deputy Egan is correct in saying that the debate is more or less of the nature of a pious debate. It is preliminary to the conclusions that the Ministry are considering and which they will put forward before the Dáil, and the time to criticise will be when they come forward in concrete form. I do not suppose that any Deputy is prepared to explode his shell before the occasion arises when it will, if it ever will, be necessary to do so. The report of the Fiscal Committee is, I think, a very unsatisfactory one. I am not going to charge the members of that Committee, as Deputy Milroy did, with malignancy, but the form of the report is unfortunate. It is scrappy, it is incomplete, and the first portions of it are entirely contradictory to the latter portion, and several arguments advanced in various parts, when brought face to face with one another, will be found to be mutually destructive. I think that possibly the cause of this is to be found in the early section of the report, where the Committee state that they regarded a speech delivered in this Dáil by President Cosgrave as imposing certain limitations upon them in which he stated that it was facts, and not policy, which the Committee was intended to determine. I remember that sentence at the time, and I remember wondering exactly what it meant. The Committee have not furnished facts, nor have they furnished a policy, but have indulged in the use of words that I think do not apply to the needs of this country at all. I say so with every deference, because all the preceding speakers in this debate have also adverted to these phrases. They spoke about free trade and about protection. I contest the use of those words in relation to this country, and I say that they have no application to us at all, that the policies which are meant to be included in those phrases have no application to this country, and that free trade and protection as alternative fiscal policies have only relation to a country that has an organised system, a system which this country has yet to have. I suggest that it is only common sense to consider that all the various arguments used from time to time over this much-vexed question as to whether free trade or protection is the correct form of policy, are arguments that leave us entirely cold. I suggest that common sense points to that conclusion, but not common-sense alone. Those who turn to the text-books on these matters and those who argue in terms of one or other of the two fiscal theories, will find that the text-books bear out the contention which I am making. Adam Smith, John Stuart Mill, and modern writers like Hopson have all said that the protection of industries that are merely in a state of youth and that have not yet learned to walk is not protection in the economic sense in which that phrase is generally used. It is as though people were to argue, as the members of the Fiscal Committee have argued, protesting against protection as an economic policy; it is just as though some other Committee were to state exactly what is the best method of tending forests when we have not yet got the woods that are to be tended.
The first point I wish to make is, that it is not until a country has got its industries that it can afford to consider whether the ordinary methods of protection or free trade are applicable in their terms to such a country at all. The United States has been cited as a great protectionist country. If I were a citizen of the United States I should be a protectionist, because it is a policy clearly devised for the needs of that country. If I were a citizen of the United States I would agree with the policy of that country, irrespective of what economists might call that policy. If I were a citizen of Great Britain I would agree with the policy that Great Britain has adopted, and it would be a matter quite immaterial to me if I were told that that policy was free trade, because it is devised for the needs of that country and meant for the betterment of its quite peculiar circumstances. Deputy Egan has already mentioned this matter, and stated that the United States covers a very large area of territory, and covers within the limits of that territory enormous resources of raw material. Great Britain has nothing of the kind, and must depend on her shipping to bring her those raw materials.
Therefore, the policy of permitting those raw materials to enter the country without any preliminary taxation is a right policy for one of those countries and not for the other. I have never yet seen any assessment as to the proportion between what the economists call the invisible imports and the total imports and exports of Great Britain. I wonder would it be possible to assess it? Attempts, hitherto unsuccessful, have been made. It is notorious that England is a country, the invisible imports of which form a very large portion of her total prosperity. Obviously, England is a country which cannot afford taxation on industries or manufactured products. The point I am desiring to make is this: I am not regarding the fiscal policy of Great Britain as a free trade policy, nor am I regarding the fiscal policy of the United States as a protectionist one. What I am saying is that each of those two States has drawn up its policy in direct relation to its own needs. If, then, at some later stage, the theorist comes along and has his own labels for the two forms of policy those countries have adopted, I suggest that is a matter of no moment to this country. What we have to consider is the same problem that they have had to consider, and not whether we are going to be a free trade or protectionist country in the ordinary connotation of those terms, but rather what is the policy best adapted by our own special and peculiar needs. I remember in the years 1903, 1904, and 1905, a great Englishman, Joseph Chamberlain, advocating a new policy that started a very remarkable period of public debate in England. I remember reading—I confess it with no particular pride—every one of the speeches delivered by the two great protagonists on either side. I remember encumbering my shelves with the very great number of works produced at the time and—a tribute rather to my industry than intelligence—mastering those works, and finding as a result that the argument very largely was not an argument as to facts, but as to party moves. Why I referred to it now is that I think the memories of that great debate have thrown their shadow across our present times and have obscured our application to practical problems because of the reference that those practical problems bring to the terms, conditions, and, if I may say so, the general terminology of that argument. I remember one of the catch phrases of the time, and we have heard that catch phrase here actually from a speaker who through the general part of his speech kept himself free from it. The phrase was: "Your food will cost you more." He did not use the phrase, but there were certain references to that very question. I put this very practical question to the Dáil. The protectionist argues for a certain form. I remember a protectionist arguing the case for his party, and in the recent English election his opponents rose and stated "Your food will cost you more."
Deputy Milroy dealt with this matter, and pointed to a fact which is unquestionably true and which we all admit. We can admit the fact, and proceed from the basis of the fact, that there are two commodities more used in this country than any other commodities, namely, sugar and tea. There is not a single house that does not use those two articles of food. We know, if we turn to the last nine months' statement of the monies received in this country because of the dues it levies at the ports, that a very considerable portion of the income of this country is derived from the duties on sugar and tea. If there were to be any proposal that wheat or flour were to be taxed, or that meat was to be taxed, I imagine there would be a number of people in this country who would rise and say, "There you are, this is Protection, your food will cost you more." Deputy Egan said that the consumer will have to pay for it. There is one part of that argument which is well worth considering, and that is that our present scale of taxation does yield to this country the income it requires within a little margin. It is intended to yield the income this country requires. Therefore, if there were to be other taxes levied, those taxes would have to take the place of some of the present taxes. I take the case at its extremest. I take those two fundamental commodities—flour and wheat. If those two commodities were to be taxed it would be quite possible to release taxation on sugar and tea, so that the general price of food would not cost more. I know it would at once be said, "this is Protection." I have for the last seventeen years, since that great debate was conducted, asked a number of people what is the meaning of the two words, Protection and Free Trade? In some cases people, unfortunately stricken with frankness, admit that they themselves cannot give a definition, and in other cases they smile credulously at the question. I repeat, what is Free Trade and what is Protection? I shall be told that if bread and meat were to be taxed, rather than tea and sugar, that is Protection. I shall be told that if tea and sugar were to be taxed, rather than bread and meat, that is Free Trade. I refuse to accept any category so artificial as this. I say there is no justification for the taxation of two such items common to the consumption to every household in Ireland as sugar and tea, because they are articles of absolute need. One is an essential food, and the other is not a luxury, but an essential need.
I might even go further and ask with regard to porter and stout, and if anybody says to me that porter and stout are not food, I shall refute any such critic with the complaint of an old lady in the Coombe, who asked how it was possible to continue these times with the price of food at 8d. per pint. I am not urging a particular form or that any particular commodities should be taxed. What I am urging is that we should consider, not merely accept the fact, that tea and sugar, because they have been received into our hands from another nation's need, were each of them taxed at a time when these commodities were considered to be luxuries, although they have long since passed out of that category; that we should free ourselves from these acceptations of previous arguments and apply ourselves anew to our own special needs and circumstances.
Deputy Milroy, in his speech, referred to a great number of authorities for whom I have a certain degree of veneration, and I have heard the complaint made that some of the authorities he has referred to are now somewhat out of date. I do not believe that these essential arguments do become postdated quite in that manner but, even if that be accepted, I would refer the Dáil to what I consider to be the latest work on the subject and, probably, the finest. That is a book that I have been studying for some weeks now, called "The Fundamental Principles of Taxation in The Light of Modern Development," by Josiah Stamp. He states in regard to all taxes that they must be regarded from three points of view: (1) from the individual point of view; (2) from the State point of view; (3) from the point of view of the community. To return for a moment to the instances that I gave, that if the taxes on sugar and tea—and I put it quite hypothetically—were to be remitted completely, and the same revenue was to be sought from other forms of taxation, quite apart from whether the words "protection" and "free trade" would apply, or would not apply to such a change, it is quite clear that the individual would gain. If these other sources of taxation were wisely sought so that they did yield the same revenue, the State would not lose. If they were so wisely sought that industries could be promoted in this country, that do not exist at present, the community would gain also. That is the argument that I am putting forward.
I say that we have received and were acting upon taxes levied upon certain commodities, all those taxes being entirely obsolete in their own country, and never yet have considered whether they suit the conditions and circumstances of this country. I do urge that it would be a profitable exercise if we took into our hands a list of commodities on which taxation is levied in the Free State, and asked ourselves whether they were necessary from the point of view of the individual, whether they could not be given a like benefit from the point of view of the State, and whether changes could not be effected in them of very much greater benefit from the point of view of the community. In other words, I am urging, if I might put it in a humorous way, that our Minister for Finance should levy a very high tax upon any Deputy who rises in this Dáil and uses either the phrase "free trade" or the phrase "protection." Let us drop the use of these words altogether. They are no indexes to realities; they are merely indexes to outworn controversies. We should not seek to devise some policy that would theoretically be conformable with either of these doctrines, but should seek to devise a policy that should be a real policy as opposed to a theoretic policy. To put it in another way, it should be a scientific policy drawn from our own separate Irish needs without references to old controversies and without any reference to the special needs of the country that first devised the taxes under which we are labouring and which we have taken over from that country.
Supposing we were to do so. Supposing we ceased to think of protection, to think of free trade, and only thought of the utmost gain that we could get from the best system of taxation that we could devise, the best form in which our duties could be raised. Deputy Egan says that that might involve us in some retaliation from other countries. I think he hardly remembered that the British Dominions are themselves what are generally spoken of as protectionist countries, and I have yet to learn that where it suited the needs of Great Britain to receive their commodities that Great Britain brought any retaliation into effect in respect to such Dominions. I do not think we need fear the question of retaliation. Countries always consider their own special needs. Without prejudging the real question that will come forward when the Budget proposals of the Ministry are framed, without going any further into an argument that at present is rather in the nature of being a pious argument, all I am urging is that we should not follow the example of the Fiscal Inquiry Committee, and let our minds be beclouded with old controversies, old labels, old terminologies that have no application whatever to this country; that we should cease to think about protection and free trade and come down to the actual concrete problem of devising some means that will give help to the industries of this country without bringing any greater injury to the individual taxpayer; giving the same result to the State, but giving a greater result to the community than the community can hope for under the present system.
I think it will be evident that this is a subject upon which those who have been in the habit of acting together in the past will find themselves divided, and there may be curious combinations when we come to real politik in this country. I do not know what kind of exhibition it would make if the “flure” were taken by Deputy Milroy, Deputy Figgis and myself against “all who may.” I will say that I regret that the motion of Deputy Milroy did not ask that a statement of Government policy on this matter should be made. It is nearly a year ago since the first suggestions were made that the question of fiscal freedom, and the use which was to be made of it, must be referred to a Committee of Inquiry before the Government would be justified in launching upon any change of policy. Inquiry was made and a Report was handed to the Ministry. We are within a month or two of a new Budget, and a decision will have to be made as to future fiscal policy. I think it would be well if we could have had from the Ministry—it is possible we may still have it before this debate closes; but I do not think there is evidence of any great interest in the matter from the Ministerial ranks—a statement of policy, but I think it is unlikely. I would like to have had a vote of the Dáil declaring its wish and belief that the time had arrived when a definite statement of Government policy on this matter should be made. Bear in mind that there are many people waiting anxious to know what the policy is to be before embarking upon enterprises, before extending their present enterprises, or before deciding whether to close down their present operations.
took the Chair at this stage.
The persistent delay in declaring yea or nay, whether there is to be any departure from past policy, is retarding any potential development of industry to a greater degree—I ask Ministers to take a note of that—than any question of the rate of wages that are to be paid in the ensuing months. I agree with a great deal of what Deputy Milroy said in criticism of the Fiscal Committee's Report. It may sound strange for me to say that I am not sure yet, having read the Report carefully, whether it is intended to decry protective tariffs, whether it is intended to advise or suggest to the Ministry that tariffs for protective purposes should not be imposed. Judging by the public comments, particularly the newspaper comments, and may I say particularly the comments in British financial newspapers, the Report of this Committee has given very widespread satisfaction to those established interests which are prosperous and do not require any assistance. From other comments which one has read, one would imagine that the conclusions that are assumed to have been arrived at by the Committee have been generally accepted as satisfactory because there has been no widespread agitation, and no very keen criticism, or dissent from the Report as presented. I think the conclusion is a false one, and I think as a matter of fact that there has been a great deal of dissent and criticism of the Report. Whether there has or has not been, there ought to have been. I said I was not quite sure what the conclusions were that the Committee desired the Government to take out of the Report. As has been pointed out by more than one Deputy, the Committee has taken particular note of the direction which was given it by the President when it was set up in June last.
"It is facts, and not policy, which the Committee is intended to determine. Every proposition that is advanced will be examined, solely with a view to ascertain and inform the community as to all the facts. The Committee is not expected to advocate a policy. That will be a matter for the people and the Government when they have the facts before them."
That quotation from the President's statement is repeated in the Report, and it is evident that it governed the proceedings of the Committee. But when we read the Report we find an extraordinary absence of statements of fact. We find page after page of precis of evidence. This witness said that and another witness said something else, but we have no facts. A little later we have paragraph after paragraph of conclusions and economic theories which one might have imagined had been taken from certain economic text-books. They are not statements of fact. They are not figures of fact which the public can lay hold upon to determine policy from. It is facts which are to be elucidated, and the intention was that the Report should inform the community as to all the facts. I looked through the Report in vain to see what are the facts relating to, say, the glass bottle industry, the boot-making industry, the textile industry, the wholesale clothing or any other industry.
What is the capacity for production in this country of those various industries to-day? What is the market in this country that those establishments may be expected to supply? What are the costs of production in this country as compared with the costs of production in other countries? What amount of assistance would be required—or shall I put it the other way—what amount of handicap should be placed on competing industries to enable Irish industries to meet the competition? We have none of the facts. We have a presentation of theory, a presentation of suggestion, but none of the facts upon which the community was and is asked to draw conclusions. It may be, of course, that facts have been placed before the Ministry. It may be that weeks and weeks were spent in intimate inquiries as to the facts relating to the various industries, and that these facts have, in reality, been placed at the disposal of the Ministry. We as a Dáil did not appoint this Committee, and, therefore, we have no right to call upon the Committee to give us its Report. I will assume that the facts which were called for have been collected and have been placed at the disposal of the Ministry which appointed the Committee. I will assume further, that the facts have been examined and digested, and, as a consequence, the Ministry will be able to say to the Dáil, before the debate concludes, that they have arrived at general lines of policy and will indicate them to the country, that in due time the working-out of the policy will be announced, and that advantage will be taken of the introduction of the Budget to indicate the policy in its application in detail. But the Committee has not presumed to suggest, or to forecast, that fiscal policy for the country. "It has taken its task to be rather that of collecting and analysing facts and presenting them to the best of its ability." If there are Deputies present who have the Report in hand, I would ask them to refer to paragraphs 117, 119, 124, 125, 126, and ask themselves whether these paragraphs are really presentations of facts relating to Irish industries. Deputy Milroy has, of course, pointed out that it is suggested as a reason against tariffs in certain industries that the effect would be to increase the wages in those industries, and it is suggested, if not to the Ministry and the Dáil, to the companies or the business men who were making proposals regarding tariffs in those industries, that that was a warning which should be taken into account, and even that it is a sufficient inducement to prevent them continuing to advocate tariffs for the protection of their industries.
I said, of course, that I was not quite sure what was really the intention of the Committee in making the Report—what they desired to suggest to the Ministry in regard to the effect of proposals for tariffs upon the country as a whole, and upon the particular industries concerned. Let me draw attention to the second Interim Report, in which they referred to the duty upon motor cars. They point out that the existing duty does not fall upon motor vehicles engaged in industry, or husbandry, or upon manufactures or ambulances, and, as a matter of fact, the existing duties apply to private cars for pleasure and luxury. "The duty cannot, therefore, be regarded as one that seriously interferes with any important industry or agricultural interest, and in view of the present importance of the revenue and the proceeds of this duty," the Committee did not see its way to make any recommendations for its removal. But there is a proviso: "Having regard to certain evidence, the Committee reserves for its Final Report the discussion of a change in the apportionment of the duty between the chassis and the body of the completed car." But in that Report it recommends the withdrawal of the duty upon accessories and component parts. That is to say, it recommends the withdrawal of the duty upon the raw material for an assembling or a repairing industry. But in the third paragraph of the Final Report it comes down definitely with a recommendation for protection for the body-building industry, and recommends that the present tax on completed cars should be maintained, but that a much lower rate of duty should be levied upon the chassis when imported without the body. Now, there is the fact. There is a definite proposition there, because having regard to the industry and to the effect of a tariff upon employment in that industry, they recommend that there should be a change in the duties affecting motor cars, and in effect to protect by a tariff the body-building part of the motor car industry. Put that recommendation against the theories in the paragraphs which are named, from 116 onwards, and I ask the Dáil and the Ministry to note that this Report is not, in fact, a Report against the imposition of duties on imports for protective purposes. That is a definite conclusion which I ask the Ministry and the Dáil to come to.
I think that possibly the most interesting, possibly even the most valuable, portion of this Report is the Appendix marked A. It gives a comparative table of the nominal and real wages in certain industries in the Saorstát, Northern Ireland, and Great Britain, respectively. I will not quote further from this Report, but I ask the Deputies to take it home, read it carefully, study it thoroughly, take notes, and sleep on it, and then let them come back and tell us whether they want to see a change in the rate of wages in Ireland as will approximate them to those in Great Britain. And note a very important fact in connection with these industries, that pre-war in the industries named the wages were generally considerably below the rates ruling in Great Britain. Perhaps Deputy Milroy will report this to those whom he may come in contact with, who are interested in these suggestions, and are advocating preferential tariffs as the only means of saving their industry. They had, as a matter of fact, a protective tariff in the rates of wages pre-war—considerable protection—and the industries were not eminently successful, and there were not such widespread organizations as we would like to have seen. They had a protective tariff, in effect, by the fact that they had lower rates of wages in Ireland than in the competing industries in England, but they were not able to succeed and develop to the extent that they and we all would have liked. The conclusion I ask the Dáil to draw from that is, that protective tariffs are not the only factor to be taken into account. You may have a protective tariff and no improvement in your capacity to produce, no improvement in your market, no improvement in your business organisation which will enable you to supply that market, or as the word goes, "capture" it.
The evidence supplied to the Commission came from representatives of separate industries, which separate industries were asked to report upon their own industries, to give information about those industries, and to make proposals regarding the assistance, encouragement, or protection of those industries. I presume that they confined their evidence to that which they might be presumed to know most of, and while they were asked to do that, and while their evidence was confined to matters within their own knowledge, a complaint is made during the course of this Report, to the effect that "none of the witnesses gave them very much assistance regarding the effects of a tariff on industry generally." That seems to me to be another point of criticism which is valid against the Report, in the conclusions which it has arrived at regarding the effects of a tariff policy upon the country as a whole.
I want to get away from the Report a little with these final words, that the evidence which was adduced quite clearly produced an impression upon the Commission that there is something wrong in the state of industry in Ireland from the point of organisation, management, and marketing ability, and I think it clearly points to this conclusion, that tariffs or no tariffs, protection, or no protection, free trade or no free trade, there is not much hope for industrial development in the country until there is a very great improvement on the capitalists', employing, entrepreneur, side of industry. But the fact remains that we are living in Ireland, and we have to deal with the population we have to-day, their character, ability, training, and knowledge, and with facts as they are. The ability may be great or small, but such as it is that is what we have to deal with. The problems before statement —shall I say before politicians—were stated a good many years ago in a popular work in words something like this: “Given a country and a people, find how to make the most of that country and that people.” That is the problem we have before us now. We have a country and a people, and it is our business to make the most of this country and this people, and notwithstanding the defects, the failures, the inabilities, lack of education and training, whether of employers or workmen, it is this country at this stage of its development that we are to deal with. But we cannot come to any satisfactory conclusions unless we take into account the situation in countries outside our own. What are the facts regarding those countries in relation to this? One of the facts, a very important one in my opinion, is the industrial development in England and Continental countries. Let us take England. The power to produce cheaply commodities for ordinary consumption has been tremendously advanced within the last ten years; advantage was taken of the war period to improve productive facilities, organisation methods and equipment, and consequently the handicap which existed pre-war against Irish manufacturers compared with British manufacturers is doubled, or trebled, or quadrupled to-day because of the fact that the productive ability in competing countries has increased greatly in proportion to the productive abilities in this country.
If we were to accept the doctrine that cheapness to the consumer should be the determining factor in the fixation of prices, and in determining economic policy, let us ask ourselves where we shall be leading to? A manufacturer in Birmingham or Sheffield or Leeds can to-day, undoubtedly, produce commodities for domestic consumption and raw materials for other industries —that is, partly manufactured goods— and place them in any part of Ireland more cheaply than competing manufacturers, such as we have within Ireland, can, because of improved organisation, cheaper power, more convenient coal, better management, and longer training on the operative side. Are we to say that it should be the considered policy of this country to feed and to satisfy the desire for cheapness on the part of the consumer to this extent, that because British or German manufactured articles can be placed in Athlone or Mullingar or Cork cheaper than an Irish manufacturer can place them there, it must follow, as a matter of public policy, that the consumer in Cork or Athlone or Mullingar, must be free to purchase that article cheaply, because it is cheap, even though it is manufactured under specially advantageous circumstances in England? If that is to be the determinant, then I predict continuance of the tendencies as between the two countries that have existed for 70 or 80 years. It is the logical conclusion, and the businesslike conclusion, of the acceptance of the principle that the consumer's interest must predominate, and the consumer's interest must determine the economic policy of the country.
What is the article that we can produce most efficiently, most satisfactorily, most cheaply, in comparison with similar articles from any other country? The history of the country supplies the answer—store cattle, grass-fed beef; therefore, the conclusion is that our energies should be directed as a nation to producing, in increasing quantities, that which we can produce most cheaply, most efficiently—store cattle and grass-fed beef—because we can put that into the English market, and get a higher monetary return for it to the proprietor than by any other line of production that we know of. Is that to be the policy? And if so, what will be the result? One of two things. Either the human population will still follow production and exchange cattle for boots, and the potential bootmakers will go to where the boots are made, and we will send cattle in exchange for boots; or, alternatively, that for the export of cattle which have not consumed labour in their production we shall receive wealth which will be expended by the recipients in employing men in ordinary personal services. We may continue the present tendency and so export those articles which embody a small amount of human labour, and import those articles which embody a large amount of human labour because it is more profitable to the exporter, to the producer, to the proprietor, and let the proprietor then expend his receipts in employing what one might, without offence, call the parasites of the land.
It has been quite seriously put forward that the real development of this country should be to make it a pleasure ground for the rich, or as somebody paraphrased it, to make a circus of Ireland. And one would imagine, reading the newspapers lately, that that was going to be the accepted intention. We shall receive high prices for cattle because the most profitable, or in deference to the farmers we will say, because of higher profits than we can get from any other export, and we shall expend these profits in employing men to run races or to groom horses, or to entertain us in theatres, or to plead for us in the law courts, or to lecture us in our Universities, or to pay politicians in the Dáil—that, in fact, the population of this country will not be engaged in production.
Is that a prospect that commends itself to the Dáil, is it a prospect that commends itself to the Ministry? It is not, I am sure. Everyone has spoken about the necessity for developing industry and of encouraging industry. What steps then are we going to take towards that development, or to make that development possible? I have come to this conclusion, after examining this subject as carefully and as honestly as I could, coming to it with prejudices definitely in favour of free imports, I have come to the conclusion that to make that development possible there will need to be a change in the apportionment of import duty, and that to give an opportunity to those who desire to develop industries at home there will need to be some handicap placed upon the fundamental urge of humanity to buy in the cheapest market. We all desire to get goods, when purchasing, in the greatest quantity for the least expenditure. It is a natural attribute of humanity, and the Free Trade economist, the Free Trade philosopher succeeded in England, particularly because he was adjusting an economic policy to a natural attribute in allowing free play to human nature, forgetful of the fact that civilisation is, in reality, a curbing of the natural appetites.
I am following a good deal on the lines that Deputy Figgis indicated when he was speaking as to the unwisdom to say the least of it, of laying overstress upon the experience of other countries. If I were in England, I still think I would be in favour of a limitation of the principle of import duties upon manufactured goods, and I do not think for a moment that the facts which were adduced by Deputy Egan that Free Trade had assisted in making England commercially and industrially prosperous, and that Protection in America had not prevented America from becoming industrially or commercially prosperous, were matters of very great moment to us. They proved this, though, that neither one system nor the other is the essential condition to prosperity. I believe it is desirable, if we are to make the most of this country, that we should have some alternative to the pastoral industry, and that there should be an encouragement given to the production of as many of the essential commodities as can be produced at home, even though there may be, as I said earlier, some handicap placed upon the desire of the people to buy in the cheapest market.
The Minister for Agriculture and the Minister for Home Affairs have said on two or three occasions lately what has been said in other countries, and what will be said more and more, I think, in this country: that the costs of distribution and transport weigh disproportionately heavy upon the productive industries of the various countries which have the same complaint to make. The Minister for Agriculture gave some figures or estimates which have not been checked, but which may be taken as roughly indicative of the true position, to show that the costs of transport and distribution were unduly heavy, and that there was a disproportionate number, to the population, engaged in transport and distribution. I ask the Dáil to consider how is that going to be remedied. Let us take it that you all agree with the complaint, that you all agree with the diagnosis, and that it indicates economic sickness. Supposing you tried to redress the balance and reduce the number of redundant people engaged in distribution, what, I ask, are you going to do with them? Do you suggest that there is room for them in agriculture? We are told that they are leaving agriculture because it is not prosperous, and is it suggested that the redundant men and women should transfer their attentions to America, England or Scotland?
at this stage resumed the chair.
Every public man is urging against a policy which would lead to emigration. Is it suggested that instead of engaging in distribution they should engage in performing cartwheels before passing vehicles, and call out for pennies, or that they should engage in any other form of amusement catering. That is a possibility, but is it going to make a great nation? Then what other alternative do you put before us? The only alternative that I can see is to make it possible for them to find a way to produce wealth in the course of their application of labour to industrial production. If that is essential, then you have got to ask yourselves how are we going to find a way to ensure that there should be a redistribution of the occupations of the people, so that a larger number shall be engaged in productive work? I submit that we have got to find a way to employ that idle labour, or wasted labour, or misapplied labour power, to new industries, or to the development of existing industries.
Having arrived at that, what are we to do with it? If I were thinking of the distant future, if I were thinking of ten or fifteen years hence, I would press upon the Dáil policies which I think will ultimately be found acceptable in regard to the way that improvement in the industrial situation can be arrived at. But I am not going to look ahead ten or fifteen years. I see the position in the year 1924 as being a very serious one and a very difficult one. We are, in fact, at the parting of the ways, and I see that we have to confirm, in the economic sphere, a decision that was made in the political sphere. I will come to that in a moment. I cannot afford to look ahead ten years and propose policies which it would take ten years to attune the public mind to receive. I am driven to this conclusion, reluctantly, I admit, that there must be tariffs upon imports of such a kind as are capable of being produced and developed with a reasonable expectation of success in this country, and that economic enquiry should be directed to finding out which of those industries are best fitted for development, are most suitable for the conditions of the country, and are most likely to make the economic basis of future development secure and stable.
I said that we were, in my opinion, at the parting of the ways economically, and that we are compelled to make a decision in the economic sphere which will either confirm or deny the decision which was made by the country two or three years ago in respect to its political future. We decided that the country should be politically an independent entity. Many of us knew that that would mean very little indeed unless it were going to result in a change economically, socially and culturally. An independent political community is one thing. Can you conceive it as a desirable thing that we should have political freedom to conduct our political affairs affecting matters of administration and matters of internal communication and education, while at the same time allowing a continuation of the economic subordination of the country to more powerful neighbours? Are we wise in thinking of these islands, known as the British Islands, as the economic unit upon which we are to base our considerations, or are we to attune our minds to thinking of Ireland as the economic unit? If the former, then this Report in the main is quite understandable. If Great Britain and Ireland are to be considered an economic unit, then the policy suggested in the main part of this Report is sound, just as it would be sound for Devonshire in relation to Sheffield, or as it would be sound for any agricultural portion of England in relation to any industrial portion. Any of us who may have studied, even to a slight degree, the industrial history of the last 120 years, knows that the shifting of the population followed changes in the power of production and the necessity for the use of coal.
If Great Britain and Ireland are to be considered an economic unit, and if it is sound and sensible that what is potentially an industrial population should go where the industries are and leave the pastoral population to remain where the herds are, and that the aggregate amount of profit earned will be greater—if that policy is accepted and followed—certainly the aggregate amount of immediate profit will be greater. But I am asking the Dáil to agree that is not the intention of this country and that we do, as a matter of fact, desire that as far as it is reasonably possible Ireland should be an economic unit with such international trade as is necessary and desirable, always bearing in mind the necessity for making Ireland within reasonable limits an economic unit, and bearing in mind the necessity for keeping her within those limits.
I say that conclusion, that presupposition, is a consideration which should determine the economic policy of the country. It is not good enough to put questions to people, and say what is best for us industrially, and then when you have an aggregate of answers from a variety of people to say that we will follow that. This Dáil, at any rate, ought to be able to think in terms of the nation; not only as a political unit but as an economic unit. And why is it desirable that there should be an industrial population to supplement the agricultural population, and that that industrial population should have access to the material for production and plenty of opportunity to exercise their abilities? It is that notwithstanding the dearness, notwithstanding the possibility, that we may have to pay more, and that even we may all possibly have to live upon a lower standard than has been set up by a more highly organised industrial country across the water, we shall get a greater variety of development, a greater variety of culture, and a greater variety of experience, and, cumulatively, a greater ability to make the most of this country. Now, I am afraid I am going too far in what might be called the higher policy. Having said what I have said in that respect, convinced as I am, and possibly disagreeing with a great many of my colleagues, in saying that the future of the country depends upon at least securing, within the next few years, the foundations upon which the industrial future may be built, and that that basis probably can only be secured by something in the nature of protective tariffs; let me add that after protection is given, then will come the necessity for using the opportunities, and seeing that the opportunities are used; then will come the necessity for encouragement of technical education, and improved methods of production, and improved methods of organisation and of marketing. But if I may be allowed, if I am not wearying the Dáil, I want to deal with what might be called the more practical side of this question.
I want to deal with it now, because of the likelihood that the Finance Department is considering its taxation proposals for the coming year. If one takes in hand the report of the Cost of Living Committee of the Department, you will find, on page 13, an analysis of the proportionate expenditure on a large number of the wage-earning households. And without arguing, or even without concluding that these are absolutely reliable, and without going to draw any conclusions from them, they will be accepted, to say the least, as indicative of the way the average working class household expends its income on the ordinary commodities requisite to keep the family. Deputy Milroy, in the course of his speech, several times referred to the possibility of the transference of duties, and it is from that aspect that I want to speak. Deputy Figgis also touched upon that question of the transference of duties from tea and sugar to beef and flour.
I am asking the Dáil, and more particularly the Minister for Finance, to consider whether the possibilities of revenue may not be in harmony with or run parallel with the possibilities of encouraging Irish industry. Now, from the revenue point of view, there have been taxes imposed on tea and sugar, tobacco and spirits, beer, etc. From this analysis I find that out of 100 shillings expended by the average working class household, the sum which is paid for the taxes on tea and sugar—which, by the way, and I ask this to be noticed, is levied as import duties and not upon the retail selling price, a very different thing—the proportion of taxes which is paid by the average working class household in the town on tea and sugar amounts to 1.84 per cent., and the revenue from the tax on tea and sugar was estimated to be round about £2,800,000. Now, just as an illustration, and without urging this specifically, although I propose to put it forward as subject to the examination which the Minister for Finance can give to it, an examination which I am not able to give by virtue of the absence of statistics under the new Government—suppose that we re-adjusted the incidence of taxation, and wiped out entirely the duties upon tea and sugar, it would be reckoned to be a considerable relief to the average householder, and especially to the householder with a big family. That relief would be felt also by the farming community, especially the farming community which is living near the ground and has not much to spend, and spends proportionately more upon tea and sugar than the townsman does, that is to say, that of the total cash expended a greater proportion goes on articles of that kind than in the case of the townsman.
Suppose it were decided that the incidence of taxation for the purpose of realising £2,800,000 was placed upon manufactured textile goods, wearing apparel, leather goods and the like. By the way, let me say here that the revenue derived from the import duties on clothing and textiles in New Zealand amounts to rather more than a quarter of the total revenue derived from imports. The rate of duty is from 25 to 45 per cent. ad valorem. Now, with the best information at my disposal, again in the absence of reliable statistics from the Statistical Department, which I am sorry I do not see much sign of, to the great loss of the community, I have endeavoured to extract from the Department's report on imports in 1921—which include northern ports as well as southern and western ports—I attempted to make a classification of the various groups of commodities which are imported and sold within the Saorstát. From that classification and analysis I arrived at the conclusion that for that year there were about eleven million pounds' worth of goods imported for use in the Saorstát which might be described as wearing apparel or, in the wider sense, textile goods. If this 25 per cent. duty on an average was imposed on that wearing apparel, we should have a revenue practically equal to the revenue estimated to be derived on sugar and tea in the present year. What would be the effect on the cost of living of that change in the incidence of taxation? If it were a flat rate of taxation on wearing apparel and textiles the effect would be to increase the cost of living to the extent of one per cent. on the average expenditure of the working class family as defined in this report. As against that you will have a very much greater increase in the amount of employment given, because the greater proportion of the eleven million pounds' worth of produce would have been produced in this country—that is to say, that the wealth addition in the making up of goods is very much greater than the value of the raw material.
What about revenue?
The revenue, I pointed out, is, up to this stage, equal to the revenue on 25 per cent. provided there was no manufacture in Ireland. The revenue from the point of view of no change would be equal. Bear in mind that I said a flat rate on 25 per cent. of all wearing apparel. I think no one would suggest a flat rate. I think it would be found that the articles of consumption for Jamesie or Pádraig going to school and for the ballet girl and dancing master would be different. Jamesie's boots would not bear as heavy a tax as the pumps of the dancing master, and the incidence of the tax on wearing apparel would be so varied as to ensure that purely luxury articles would be much more highly taxed than the necessary articles which would be in constant regular use by the sons and daughters of farmers, and the sons and daughters of working men, and also that, in fact, assuming no change in the internal productive industries, the change in the tariff from sugar and tea to wearing apparel would add not one penny to the cost of living of the average family working in the country. Deputy Wilson reminds me—it is quite sound and right—that the revenue would lose if this eleven million pounds' worth of goods, instead of being imported in a complete stage, were brought in raw, and manufactured here to the extent that home manufacture replaces imported manufacture. Perfectly true, but no one is suggesting that you were going within one year to produce eleven million pounds' worth of manufactured goods to replace importation.
There will be a very gradual process and the incidence of duties would necessarily vary with the requirements of succeeding years, as they do in every other country which has the same problem to solve. I put that forward as an illustration that it is quite possible from a revenue point of view to readjust your taxation in such a way as will gradually improve the productive capacity of this country, and that as you are improving the productive capacity you are at the same time creating new sources of taxation. I would like to have said a word or two about the possibility, even within the new budget that may come forward, of raising revenue by tariffs on a minor scale, not primarily and solely as protection but the creating of development funds for the assistance of industries within the country by other means than protection. I again draw attention to the fact that in New Zealand they raised anything from half a million to six hundred thousand pounds a year for a number of years past by a one per cent. primage duty and a duty of that kind; even one per cent. ad valorem, might well create a fund in this country, if imposed upon commodities which are not already dutiable, of not less than five hundred thousand pounds a year, which will be a considerable sum if wisely expended for improving and developing technical education and industrial research, and, perhaps, even the organisation of marketing facilities and the advertising of well made Irish products.
Your Committee, though it had a duty to examine into all such projects, failed to say anything of value about such schemes or such proposals as may have been put forward. There were to my knowledge, suggested, diminishing tariffs for the purpose of assisting the technical equipment of factories, industrial research and technical development. That was surely within the scope of the enquiry but it is dismissed with a sentence. I hope, therefore, that other factors outside the purely and narrowly economic considerations which were considered by the Committee will be taken into account by the Government itself. We cannot think in terms of commercial economics alone. We must think in terms of the nation, and those who compose the nation and their future. I submit that it is necessary not only that full consideration should be given to all those factors, but that the public should be made aware, without any unnecessary delay, of what the intentions of the Government are in respect to future fiscal policy.
Much of what Deputy Johnson said is of great force and weight, and I do not at present propose to comment on it, because I should like to think over it more carefully. I would suggest that there are factors which he has overlooked, that modern science, for example, is continually bringing every part and unit of the world closer, and that no such thing as a self-contained community can exist. Self-interest is still the guiding rule of mankind, and it would be very hard by any system of commercial tariff whatever, to neutralise the advantage of accessibility to minerals and so on. However you may try to alter the course of nature, you will find it difficult to do so. With regard to his definite constructive proposal of a tax on wearing apparel, I think there is a point which must be taken into consideration, and that is the question of how the tax is to be collected. Tea and sugar come in wholesale in bulk, and it is easy to collect the taxes on them. Wearing apparel would, I presume, include partly worn apparel and new apparel. I hope he will include the new and the old, otherwise what would happen would be that the slop suit manufacturers would shake a suit out, three or four times, put stains on it, and so escape the tax. New Zealand has not passenger steamers arriving two or three times a day. If Deputy Johnson were to go to Westminster on Monday to see the triumph of Labour, when he came back to Dún Laoghaire, he would find a difficulty if the Customs Officer were to take out all his suits and closely examine them. His clothes would be classified, some as luxurious suits, and others less luxurious——
How do they do it in other countries?
They do it in New Zealand, for instance, where only one ship arrives in the week, or in the United States, where boats arrive two or three times a week.
Did you ever hear of a place called Canada?
I have heard of Canada. The position is much the same there. Surely Deputy Johnson does not suggest that there is a mail boat running from Montreal twice a day to Holyhead. It is difficult to do this in this country. I put a concrete point to Deputy Johnson. Every week there comes to this country theatrical companies. Are their costumes to be taxed in Dún Laoghaire, and again when they go to Belfast? Will the kimono of "Madam Butterfly" and robes of "Iolanthe" pay a tax here? There are difficulties that Deputy Johnson has not yet considered. Before the Minister for Finance accepts the suggestion, he would do well to give a certain amount of consideration to it, and to study the situation in Canada, as Deputy Johnson suggests. As regards Deputy Milroy's motion, I do not disagree with it. I should have supported it had it not been for the speech he made. The motion itself is a pious expression which I think members of the Fiscal Commission could agree to. They said in their report that they did not deal with the question fully. I am not going to oppose it.
There are a great many facts in the situation to be considered, and, like everyone else, I am not a doctrinaire in this matter. I am not setting up Free Trade as a fetish, and on one or two points I am myself disposed to criticise some of the actions of the Commission. I am not a Cobdenite. Cobden was a very great man, but a bad prophet. Very few of his prophecies as to what would be done under Free Trade were justified by the event. When we examine what we might call the minority report of the Commission we begin to realise some of the difficulties with which the Commissioners were confronted. In one or two cases Deputy Milroy made statements which, in my experience, are almost wholly the reverse of the facts. I take one case. He said it was notorious that the cost of living was lower in the protected countries of Western Europe than it is in England under Free Trade. That, as far as my experience goes, is not the case. So, I listened carefully for Deputy Milroy's evidence. His notes were voluminous, and it is possible he may have got them mixed. The evidence he gave that the cost of living was lower in the protected countries of Western Europe, was the statement of a gentleman called Coughlan, speaking in 1903 about New South Wales and Victoria, which are not precisely in Western Europe. If you are going to prove things by statements of that kind the procedure is akin to that of the Juror in "Alice in Wonderland," who wrote down all the dates on slates, added them up, and reduced the answer to pounds, shillings and pence. Then Deputy Milroy produces another witness from Western Europe, Sir John Bowring, a most remarkable man, of whom an Irish historian, Mr. Justin McCarthy, said he was "almost invariably in the wrong and when in the right managed to assert it in a manner at once untimely, imprudent and indecent." That is Deputy Milroy's witness. I certainly did not gather from Deputy Milroy's speech, though I knew it already, that this witness died in the year 1872 and that the Report to which Deputy Milroy alluded and quoted as showing how Prussia had advanced and improved her conditions under a protective system, was written in 1839. That is Deputy Milroy's idea of "stoppress" news.
As a matter of fact, those years from 1839 to 1875 approximately were years of great prosperity not only in protectionist Europe, but in free trade England. During those years Gladstone reduced the income tax to 4d. in the £, and talked of abolishing it altogether. These years are not parallel years by which we can judge the state of things in which we find ourselves now, when half the wealth of the world has been blown away by war. So, I am afraid, I am not persuaded of that happening by Deputy Milroy's statement.
It is hard to compare the cost of living in any Continental country with the cost of living in Ireland, because the conditions are different; the currency is different. Last spring I was in Italy and France. It is very hard to compare the cost of macaroni in, for instance, Rome and in Ringsend, because in Rome macaroni is a necessity of life; in Ringsend it is more or less an ornament. There are things you can compare the prices of, such as eggs, which are the same everywhere, or should be. I found that eggs in Rome cost very much the same, or perhaps a halfpenny less than eggs in Ireland, and that the workman who bought the eggs was getting something like 75 per cent. lower wages. Some things are cheap on the Continent, but they are generally things which depend on human labour. You can take a cab in Rome and drive a distance for 2½d. that a Dublin jarvey would charge you 2/6 for. It depends on the labour. You cannot only take into account the cost of living in Continental countries; you must also take into account the cost of living. I think Deputy Milroy will find in all these countries of Continental Europe, whose example he urged us to adopt, that the standard of living at present is far lower than in Ireland.
I have a word to say as to the Report of the Committee. Deputy Milroy said that its conclusions were inaccurate and sometimes malignantly misleading. As far as the personnel of the Committee is concerned, there is only one of them I should know if I met him in the street.
The Deputy's quotation was not exact. I said "Its survey was incomplete, its premises inaccurate, and its conclusions misleading, sometimes malignantly misleading."
I accept the correction, but really I have not the time that Deputy Milroy had, and consequently I have condensed some of his remarks. As I said, I am not personally known to any of the Committee except one, and, therefore, there is no animus in my remarks, and I am not disposed to take up the cudgels on personal grounds. I know nothing of the Chairman beyond the fact that the Government selected him to fill a responsible post, and that, at any rate, he has experience of living in a protected country. Two of the others I know very little about, except that I have read a book of Professor Henry's, which seems to be a good work. I gather that Professor Smith must have some ability, because it is not at all easy for an Irishman to rescue a position from English competition. There are two others. Deputy Milroy complained the Committee had ignored the economic history of Ireland. When Deputy Milroy wants to study the economic history of Ireland, what book does he take down if he wants it in a ready and convenient form? I do not know, but if I wanted to do it, I would take down the works of a member of the Commission. Dr. George O'Brien's are the standard works on the economic history of Ireland, and presumably that history was in his mind when he helped to prepare and sign the report.
He had forgotten about it.
I come to the last name—Professor Bastable. It is ridiculous to say that Professor Bastable knows nothing about economics. In any discussion on economics anywhere you go Professor Bastable is quoted as one of the highest authorities on the subject. If you need any proof you have the fact that he has been appointed Examiner in Universities all over the world, from Cambridge to New Zealand. New Zealand takes its economics from a member of this Committee. It is not the custom of Universities to select as their Examiners persons who are inaccurate in their premises and misleading, and sometimes malignantly misleading. I cannot help thinking that Deputy Milroy exaggerated the case. It is very small encouragement to men of distinction to put their time at the service of the State—and I say this seriously—if they are to be stigmatised in those terms. Criticisms such as Deputy Johnson has made no one takes exception to. Everyone is prepared to have their doings criticised on the merits, but I think that epithets such as Deputy Milroy used are not conducive to the public benefit.
It seems to me that a motion of this kind is inseparable from the legislative independence of Ireland, because our predecessors in Grattan's Parliament had to listen to very much the same kind of speeches and hear very much the same kind of debate in the year 1783. I turned to Lecky the other day for a description of the conditions in these times, and I find this in the sixth volume, chapter 24:—
"Irish letters continually speak of food risen almost to famine prices: of great multitudes of workmen unemployed: illegal combinations of workmen (I am afraid that is what they called Trades Unions in those days): industry in all its forms lamentably depressed."
The spokesman of the protectionist interest in those days was a gentleman called Luke Gardiner, after whom Gardiner's Row and Gardiner's Place are called. He was one of the representatives of County Dublin, but his motive for intervening in the debate was not the same as Deputy Johnson's. He was annoyed with the Government because they had refused to give him a Peerage. I acquit Deputy Johnson of that. I hope Deputy Milroy, if he has not read Mr. Gardiner's speeches will do so, because he will find them very familiar. In one of them he said: "I wish to call attention to the poor distressed manufacturers." I heard something like that here the other day. Finally, he worked up to his conclusion:—
"The only way to serve the manufacturers of Ireland was to lay such duties on imports as might counterbalance the great capital of the English, the low price of their wool and their great exactness in furnishing goods."
That was very much Deputy Johnson's argument now. What was the result? Those measures were debated in 1783 by the Irish Parliament and they were rejected by overwhelming majorities. That is what Deputy Milroy calls the wise protective policy of Grattan's Parliament.
That is not what Deputy Milroy calls any such thing.
At any rate, these are the facts. That was Grattan's Parliament, and they rejected protective duties. They adopted one protective duty which I did not hear recommended by Deputy Milroy, the one on the import of grain. The then Chancellor of the Exchequer, Sir John Foster, also adopted a system of bounties to assist both manufacturers and tillage. To what extent the Minister for Finance will be able to follow in the footsteps of his predecessor I do not know. I believe there is good in that. All historians declare that Foster's Act was the keynote of the prosperity that afterwards came to Ireland. Newenham, writing 25 years later, said it was the primary cause of the unprecedented increase in wages in the last 25 years, so that not only did the farmer and the grocer benefit, but the labourer and the wage earner also.
I have done with the past. I come to the present. I think it is common ground that there are three evils at the moment in this State. One is the depressed condition of agriculture. Deputy Milroy says that will be remedied when he has flourishing manufactures in every country town, when Mullingar becomes another Manchester, and when a new Sheffield arises in Skibbereen; that then the farmer will have a good market at his own door and will prosper. That seems to be like the old proverb, "Live horse and you'll get grass." I think some immediate relief, whether on the lines of Sir John Foster or on other lines, is needed by agriculture. The second thing, which is generally admitted as an evil—I do not know whether Deputy Johnson accepts it—is the high cost of living. On going out of the Dáil to the street the first man you meet will say: "Are not things a terrible price?" Deputy Milroy's remedy was a transfer of taxation. He wanted to take the tax off tea, sugar and jam, and put it on clothing. I do not know why Deputy Milroy should be so unkind to jam. Perhaps he does not like jam. Jam, after all, is a manufactured product which we ought to be able to manufacture in Ireland. It is made from fruit, or it is supposed to be made from fruit. At any rate, it is made from something the farmer can grow, even if he grows turnips. I can see no reason why Deputy Milroy should extend protection to the clothing manufacturer and refuse it to the jam manufacturer. If you are going to adopt protection, surely every industry has a right to claim it alike? I think Deputy Milroy, however, is of opinion that protective duties are not likely to raise prices. I can give him tangible proof. Here is a hat that I bought in Paris nine months ago. It is not a bad hat, but it cost approximately 8/- more than it would have cost either in London or Dublin. It is a French made hat, and being French made, there was no import duty upon it, but the manufacturer put up the price because he was selling in a protected market. He, therefore, could afford to put up the price without fearing foreign competition. All my experience goes to show that if you put on a duty, the customer, the consumer, whatever you wish to call him, has to pay it.
I now come to the third point. It is a point I am glad to say on which I may be able to meet Deputy Milroy. To a certain extent there is in every industry unemployment. I do think that on that particular point the report of the Committee might have been fuller and more carefully studied. Deputy Sears spoke with great eloquency yesterday in support of a bounty, and said we were sending young men and women abroad to labour in other countries for our own market. That is an evil that ought to be remedied. I have felt that deeply. If possible, further consideration should be given to unemployment and emigration, in view of the fact that we are exporting our surplus manhood. The Committee do not seem to have realised that fact. They do not seem to have realised that at present we are producing more people, and probably in the future will produce even more, than we can find employment for. I do think that further examination of the problem on these lines is necessary and desirable. As I said I approach this question not from the point of view that Free Trade is a great principle. It is solely a matter of expediency. I would prefer before making the great revolutionary change that Deputy Johnson suggests—transforming the whole basis of taxation—that he should ask the Minister for Finance to see what is possible within the limits of our present fiscal system. Deputy Sears, I think, referred to beet sugar. Within the limits of our present fiscal system the Minister can give a rebate to beet sugar produced in Ireland. I think that would be a perfectly sound thing to do, economically. If anyone is prepared to put up a factory for beet sugar, and put up the necessary capital, he might well promise that for 10 years he would be exempt from Excise duties. The policy foreshadowed by the President on the subject of housing is right, that a preference, where possible, should be given to Irish slates and cement. In all these ways we could encourage industries without going into this vista of protection. One reason why it would be injudicious to do so is that we have very little promise from those who gave evidence before the Commission that they would be able to give increased employment, and that of large established firms that give big employment, the majority of them were either indifferent or hostile. I think that if we are urged to act now without further information, and without further knowledge, we shall be in the position of people who sink their ship in the hope that they will be able to make a very satisfactory raft out of what remains.
Deputy Milroy said that countries can prosper under protective systems. Countries can also prosper under Free Trade. It is the transition period that is the trouble. I feel that this country has had so much unsettlement and disturbance in the last eight or ten years that it is scarcely wise to add economic disturbance and unsettlement. You can sail a boat above Niagara, you can sail a boat below Niagara, but sailing a boat down Niagara is a different affair. I therefore hope that while the Government will not cease to interest themselves in this question they will hesitate before they take a leap in the dark.
As it is now practically 4 o'clock, I beg to move the adjournment of the debate.
Debate adjourned until Wednesday next.