That is 50 per cent. of what I think you said was dumped. You will see in the Report of the Fiscal Committee that the word "dumping" appears in the evidence of almost every witness. I have experience of people coming to see me about various matters, and I find that this word is really used very loosely. When you ask for proof as to dumping you can get no one to come up to the scratch in order to produce proof. Deputy Johnson, and I think Deputy Milroy also, made one very good point when they referred to the fact that the principal industry of the country, or what was supposed to be the principal industry, was the raising of stock and the exporting of it. They made the point that this industry only gave the minimum amount of employment. That is a very serious state of affairs, and it is one certainly that the Government must take into consideration; the growing population of the country, and the fact that employment must be found for the people in some way or other. Agriculture cannot absorb the labour that is floating about presently, and it will surely increase as the years go on. Before reading my statement there was one important point raised by Deputy Davin that I wish to refer to. It arose, I think, as a result of his being present on Monday last when the English Premier was making his speech. It struck him from hearing that speech that the English Premier had actually gone to the country on his policy of Protection, as a result of decisions arrived at at the economic conference at which the Free State was represented. The Deputy asked that some information should be given to the Dáil as to the nature of these discussions. Our position there was simply this: We went there, and at the opening, as some of you have seen, it was definitely stated that we were going there to listen, and if and when anything came up for discussion that concerned the Free State, we would take part in it. Now the result of the conference, as far as Ireland is concerned, was very little. Any decisions arrived at there were simply an extension of Imperial preference on commodities such as tinned lobster, dried fruits, apples, and things like that, and these decisions really did not affect us at all. I, with the Minister for Agriculture, share responsibility for the setting up of this Committee, and we feel bound to express regret at the tone of some of the criticisms on the Committee's report. It is only natural to expect that Deputies should feel strongly on a very important matter such as this. I can quite understand the attitude of Deputy Milroy, in view of the fact that he told me when he read the report he could not sleep for the night. That must be a fact, because I met him a couple of days afterwards and he was really foaming. It is quite proper, of course, that Deputies should express their opinions forcibly, but I hope it is the last occasion when comments of the kind that were made on this report will be made on the report of a Committee, particularly one like this. I hope it will never be the custom to impute motives of a sinister or malignant character to the persons who form these Committees, and after all it must be remembered that their work was gratuitous. They had very long distances to travel; they sat very long and laboured very hard.
I have heard no Deputy refer to paragraph 137 of the report. The Committee there indicates that it has been mainly concerned to set out the economic considerations arising out of the proposals actually made to it for changes in the fiscal system, while recognising fully that the question has other aspects, all of which must be taken into account before a policy is decided on. Deputy Milroy's speech seemed to be based on the belief that any person who did not regard Protection as the obvious and immediate remedy for all economic difficulties must be stupid at the best, and animated by a sinister or malignant purpose at the worst. I know he does not really mean that, and I have been struck by the fact that the speeches delivered in this debate have shown a remarkable freedom from prejudice or dogmatism, a readiness to consider honestly and carefully what we can do through our fiscal system to benefit the nation and a general recognition that this question is very much more one of expediency than of principle. In such an atmosphere there is every hope that the combined wisdom of all parties will be applied to the general advantage.
It would appear as if many believers in Protection regard the mere mention of the word as establishing their whole case, the onus then resting on their opponents to disprove the case if they can. But the matter is not so simple as that. What is the essence of Protection? It is an artificial device whereby certain activities are stimulated and fostered at the cost of preventing the general community from buying goods where they are offered at the lowest price. I am far from saying that any community is naturally so wise or virtuous that it can be left to attain to its full development by the mere play of its natural inclinations. But it must be recognised that advocates of Protection necessarily have the onus of proof on themselves and that the onus is not adequately discharged by reference to the practice or policy of other countries whose conditions are essentially dissimilar, and whose present state is not the best advertisement of their policy. War is not so distantly related to industrialism and high protection as to be left out of account in examining their results.
Protection has obvious disadvantages, Its immediate effect is to raise prices, though this effect may ultimately be modified in greater or less degree. It thus develops one economic activity at the initial expense of the rest of the community. The ultimate results of protection may more than counterbalance this disadvantage, but that this advantage is inevitable, as well as being serious in the present condition of this country, is to my mind a matter beyond argument.
On the other hand, Free Trade has its disadvantages, some of which are obvious to-day and have been commented on by the Deputies. There is, I think, general agreement, and it is a fact of which there is much evidence in the Fiscal Committee's Report, that what a Deputy has described as our industrial limb is under-developed. Our main industry is agriculture, and that is an industry subject to so many fluctuations due to world conditions over which we have little control as to make our present economic condition one of instability. Unemployment here is a serious and pressing problem for which no early solution can be offered by agriculture. On a general survey of the economic life of the country, I think few will be found to deny that our industrial limb is not only capable of development, but that its development is necessary to a healthy economic balance.
The Government has given much consideration to this question. It has no preconceived opinions in favour of one economic dogma against another. It regards the problem as one entirely of expediency, and, so regarded, is of opinion that its solution does require some re-adjustment of our fiscal system, particularly having regard to its present anomalies.
It may not be generally realised what the difficulties confronting Irish manufacturers and industrialists are to-day. The European war which began in 1914 effected an immense revolution in industry and trade. The tremendous expansion of manufacturing operations necessary in all countries to carry on the war resulted in abnormal changes in productive capacity in the distribution of markets and in the nature and direction of trade.
New influences appeared in the control of finance, of raw materials, of production and of distribution. Countries, such as Russia, or Germany, on whose consumption of manufactured products the prosperity of other countries largely depended ceased to be able to buy. I need not pile up details of the economic revolution that the war caused; they are in greater or less degree familiar to everyone. With the end of the war there began a strenuous competition for the restricted markets then available, and a concentration of political energies everywhere to secure a foot-hold in the new economic field. Ireland lost four years in this matter. From 1919 to 1923 the country was in one political upheaval after another, and now that stable conditions are restored we find that we are considerably behind-hand in the race. Ireland is one of the few countries, not itself industrial, in which the immense productive plants created by the war have been able to find a market unimpeded by any serious fiscal barrier or by any general inability to buy. Our industries and manufactures have survived the last four years to find that their home market is flooded by competitors able to use those years to improve and develop their business and to obtain a start which the native manufacturer, unaided, has little hope of catching up. The position is so abnormal as to require remedies of an abnormal kind.
It is when we come to devise remedies that such a Report as the one we are now considering is of unmistakable value. The possible remedies are not many; the Report warns us as to some of the objections and difficulties involved in the most obvious of them. It has not been sufficiently recognised that all manufacturers seeking protection for their industries had full and ample opportunity to argue their proposals before the Committee, and that the Committee's conclusions are very largely coloured by the kind of case that those most directly concerned made to it. Taking economic considerations only into account, I fear that Irish industries did not make too convincing a case to the Committee and nothing I have heard in the course of this debate has altered my view that there is much in the way of efficiency to achieve before a system of protection, or any conceivable fiscal device could bring about the ideal conditions which the imagination of Deputy Sears painted so attractively. I feel that we should not approach this question as involving primarily the discovery of means for preserving existing industries, but rather base our policy on such conceptions as we may form of the kind of social and economic life we think best fitted to the resources of the country and the capacities of its people. The Government does not accept the mere fact that an industry exists and is in difficulties as a reason for protecting it.
We must be satisfied that an industry seeking protection is an industry adapted to the country, that it is one which with reasonable application and intelligence we can develop economically and that there is a real prospect of the initial cost which the rest of the community would have to bear being returned to it in full measure in the future. Modern industry and modern business are matters very much more complex and technical now than they were ten years ago. We here have had little opportunity of learning or understanding the rapid technical, scientific and financial developments of recent years. We are out of the main stream. We must, therefore, have as one object in adjusting our fiscal system the encouragement of those from whom we can learn to come to this country and set us an example. We cannot ask the agricultural or any other section of the community to pay the cost of protecting industries for which the country may have no natural fitness or of maintaining an industry which takes no pains to or is incapable of meeting the requirements of efficiency. I recognise fully that we cannot reasonably complain of our manufacturers or business men not possessing the knowledge or experience of "captains of industry" in Europe or America. They deserve all credit for having kept things going under circumstances of great difficulty. But if the community is to accept obligations with a view to assisting the industrial side of our activities the industrial side, on its part, must satisfy us that every other means of making industry efficient has been conscientiously applied.
Opinions may differ, and differ widely, as to how to determine what activities of a manufacturing kind are best suited to the Saorstát. It must be largely a matter of opinion, and I doubt whether many of us forming a judgment can claim the qualifications of an expert. I am not certain that in the future it may not be found that this country can develop prosperous manufactures of commodities to which at present we give little or no attention, and if we encourage industrial and manufacturing enterprises to regard An Saorstát as a country with possibilities where energy and efficiency will have reasonable protection, I think we shall find more than a few people ready to make discoveries for us.
In the meantime, a rough guide as to the direction in which manufactures in this country might develop will be found in the list of its principal imports. If the inhabitants of the country regularly consume particular commodities in large quantities, manufacturers of such commodities at home would have at least one essential element of efficient production under modern conditions—a large and stable home demand. If, moreover, it appears that included in such commodities are a number for which this country itself produces the raw materials, I think we could feel some confidence in selecting such commodities for a fiscal experiment.
It would have to be admitted that in the beginning the cost of these commodities to the consumer would rise. The increase in price might in some cases be small, while in other cases it would inevitably be large. The cost of living in the limited sense of the cost of the particular commodities on which the official cost of living figure is based, might not be directly affected. Nevertheless, what I might call the general cost of existence, must rise to some extent on the hypothesis that we started by protecting commodities of which the home consumption was large. This prospect might not, however, cause undue apprehension. We are agreed, I think, that the cost of living in this country under present conditions is capable of considerable reduction, though we may not be agreed as to how best that result is to be obtained. It is undeniably true that in many cases the present level of retail prices offers scope for reduction without any serious hardship to retailers and distributors. Moreover, I think it is recognised that it may be possible to devise a limited system of protective duties which will not injuriously affect the overhead charges of our main industry, agriculture, and which can be modified, and perhaps extended, according as measures for the relief and development of that industry begin to show substantial results. We have resources which, if the brains and energy of the country are seriously devoted to this economic question, provide us with ample reserves to meet contingencies. But the brains and energy must be applied to their work by all sections in the country if we are find a true economic balance.
I have said that some rise in price is unavoidable at the outset of a protective system. Deputies have endeavoured to prove that prices and the cost of living in protected countries are generally lower than in the free trade countries. They have not wholly convinced me. But there is no inherent reason why with careful discrimination any rise in prices for this cause should be unduly prolonged. If we adopted a system of tariffs on commodities of which there was a large home consumption, it should follow that such tariffs would open a wide field at home for competitive manufacture. The larger the demand for the commodity protected, the greater the initial effect on prices; but, also, the larger the competitive field. It would, however, be a field in which growths such as trusts or monopolies would have to be strictly supervised.
I do not know that I can add much more to this debate. This is a matter in which we need to proceed with great caution and deliberation, but I think it was due to the Dáil that I should express, first, the opinion of the Government that our industrial limb needs development, and, secondly, that special measures are necessary for that purpose. A fiscal revolution, however, we do not contemplate, nor do we believe that it is the true destiny of this country to become a concentrated industrial region. Between now and the time the Budget is presented, we will examine with all possible care the various directions in which changes would be made without undue prejudice to any section of the community. Whether the changes we have to propose will be few or many, I am not in a position to prophesy; but I believe that on examination we shall find that we must proceed slowly in the matter, that what we do must be largely of an experimental nature, and if it is shewn to us that any of our proposals involve dangers greater than their probable advantages we will be willing to modify or withdraw them.
An important matter which has been mentioned more than once is the possibility of shifting duties from one set of commodities to another, with a view to avoiding disturbances in the cost of living. This we will carefully examine; but I am bound to say that the Minister for Finance, who has the responsibility of providing on a reasonably certain basis for the revenue of the country, cannot be expected to gamble too rashly on changes which offer him a less certain prospect, and which, if they have a genuinely protective effect, will to that extent deprive him of revenue. Nor must it be forgotten that an important element in this question is the possibility of collecting with reasonable economy and without undue inconvenience, whatever duties it were decided to adopt. The Minister for Finance must pay close attention, closer attention than, I fear, is paid by many Industrialists and manufacturers, to his "Costs of Production." The external trade of this country, and particularly the import trade, is carried on through so many channels and often in such small quantities as to make the collection of duties a difficult and an expensive task. The criticisms we have heard during the debate as to the absence of any adequate trade statistics can be attributed wholly to this cause. Such statistics will soon be available; but it has proved an immense undertaking when our trade had first been thoroughly analysed, to provide the staff, machinery and organisation necessary for the detailed preparation of statistics, and, while the adoption of new duties would not necessarily involve additional expense for this purpose, it must involve a large expense in staff for customs work. The Government is prepared to accept Deputy Milroy's motion.
