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Dáil Éireann díospóireacht -
Wednesday, 25 Jun 1924

Vol. 7 No. 30

COMMITTEE ON FINANCE. - TRADE LOANS (GUARANTEE) BILL, 1924—SECOND STAGE.

I move that this Bill be now read a Second Time. The Bill has already been favourably received by the Press and the public generally, and one statement has been made about it with which I agree, and in consonance with which I intend to make my remarks here very brief to-night. It has been expressed in this way: That the Bill speaks for itself, that there is nothing very secret or very complicated about either its proposals or its machinery, and that no great detailed explanation will be required as to its main provisions. I said previously, when introducing the Unemployment Insurance Bill that I regarded it as a rather unfortunate matter that that Bill had to be introduced by itself and that this Bill should have been delayed and could not appear on the Order Paper on the same day because producing these measures in this way is apt to give people a wrong impression of what the Government policy is towards the main problem that faces almost every Government at the moment. And that is the problem of unemployment.

Although I did intend, by confining my remarks on unemployment regarding the Bill, to confine the discussion, the discussion did wander and there was rather a general debate on the question of unemployment in the course of which a Deputy made a remark that the only cure for unemployment is employment. That may seem a platitude. It seems to me to be definitely in the region of a truism, but it has to be adverted to as the first approach to any dealing with this problem of unemployment. On further consideration this remark posits that there ought to be in some way or another increased activity in industry leading on to increased demand for labour and especially leading to an increased demand for labour in its normal occupation, not by means of relief works or other methods, which though sometimes reproductive, are certainly extravagant in expenditure. The first step, therefore, in the approach of this problem of unemployment brought inquirers up against the fact that industry in some way had to be stimulated into further activity. The next immediate question was how was that to be done. Now, on that there may have been many answers given in this House. If Deputy Milroy was here he would give a ready-made solution on the question—Protection, and Protection alone, to do all that is necessary. The answer, again, that would come from another quarter of the House would be that if industries were nationalised that also would be a specific.

Which quarter would that come from?

I do not care to be more particular than to say from some quarter. It might be regarded as a specific, and there would be coming from various quarters of the House different answers to the question. Now before putting forward this Bill as an answer I want to make one thing clear. It probably is clear to the majority of the House, and it is a point that I want to stress for purposes of my own, that unemployment is at present abnormal in most countries. It is abnormal here, but it is abnormal from a different set of circumstances here from that which operates in other countries. There is unemployment here, as there is elsewhere, due to the destruction of national wealth since 1914 and up to 1916. There is unemployment by reason not so much of the direct action of war resulting in the destruction of business property as in the aftermath of war—the lack of confidence felt by the investing public in this country to put money into industrial enterprise until they are assured that the conditions are definitely stable, and likely and certain to remain so. These two things definitely are factors here, but there is also a third thing, and there is a certain danger in so putting it, but that danger must be faced. It is due to the fact that emigration, which for long abnormal in this country, has ceased to a certain extent. There is danger in putting that, inasmuch as I may be represented in hinting at an increase of emigration as a cure or a remedy for the present state of things. I do not mean to urge that at all. It does not enter into the consideration. But what must, at any rate, be adverted to is this: that counting that the drain of emigration has lessened even in the normal circumstances pre-war in this country, there would be a larger percentage of people unemployed than probably would be elsewhere. That is due to historical conditions in this country. It is not very easy to get money to flow from the investing public to industrial enterprise here. People have not got a habit of investing in industrial enterprise in this country, and we want to loosen the flow of money towards our industrial enterprise. We want to create an investing public, and more than that, we want to bring here the creators and directors of industry; of these we have some, but not enough.

In stressing the point about emigration, I stressed it for this purpose: to show that even if we get back to a pre-war state of things in this country we would still not have settled the unemployment problem and have to go further afield and create industries where industries, previously did not exist. Unemployment, as I have said, is a problem with most Governments at the moment, and where unemployment is the problem it will almost automatically be found that one of the main ways of facing that problem has been some such measure as this. Those who are acquainted with the history of the matter in England must know that the extension of credit under the Trade Facilities Acts has been made the main plank in the programme of all political parties on the other side.

Having arrived at the point that industry must be stimulated, various ways of stimulating industry come to one's mind. There is the direct one of subsidising. That has its advantages, but it has very big disadvantages. It immediately increases taxation and, to a certain extent, raises the cost of living. Excessive taxation is, of course, one of the reasons in this country, as in many other countries, why there is less purchasing power and less money for enterprise. Subsidising has already been attempted in certain things here as a secondary approach to the unemployment question—subsidies towards housing and roads. There are certain national undertakings which may have direct subsidies given to them, but the field is very limited. The main thing is that others have to be stimulated into starting up again the machinery of production, in the hope that when the machinery is started, and when it is rotating, it will draw in other industrialists. Once the wheel is started, and it goes full circle, then there is hope that everything drawn in by that, when all added together, may make a definite impression on the unemployment question which would not be made by any small single undertaking. The cumulative effect, the snowball effect of such a Bill as this, has its value to start the machinery going. There is hope then that further additions may help in solving this big problem. That is one of the effects looked for under this Bill.

There is a second which, to a certain extent, I consider even more valuable than the first. I have spoken already of the lack of confidence that there is in the country with regard to conditions, and the lack of confidence on the part of the investing public. There is a psychological effect created by a Bill of this sort which is very valuable. If a scheme is investigated and passed by an Advisory Committee, it is then submitted for departmental criticism, and finally emerges as a scheme which has won for itself the guarantee of security. That immediately constitutes a hall mark on the scheme, inasmuch as it has passed the barrier of criticism and survives, and is valuable to that extent.

There is the further point that if the Government shows it is ready to run up a certain amount of productive debt in its attempts to stimulate industry, and if particular schemes are favoured in that way, that brings to the people's minds the thought that this industry has a better chance of prospering, because the Government want it to prosper. It might lead to such a side issue as this. If, for instance, certain State contracts had to be placed and the competing firms were firms in the Free State and firms outside it, the Irish firms having got guarantees through this Bill, obviously, apart from patriotism, the State would be bound to support in preference to others, the particular undertakings which had secured this guarantee. That is the psychological point of view that it tends to show the Government is making a serious attempt to stimulate industry and that particular schemes have won through, have survived criticism, and are being put forward as schemes for investors.

As to the machinery of the Bill, I do not think it will require any great explanation. There is an Advisory Committee. That committee is outside the Government departments. It is to be nominated by the Minister for Industry and Commerce in conjunction with the Minister for Finance. The Advisory Committee will not be a departmental committee in the sense that it will include officials. It will be composed of outside experts brought in to pass judgment upon certain schemes. I do not think any exception has been taken in a Bill of this sort to that method of appointing the committee. It has been found better to have an outside committee in such cases, as the schemes would then be approached from two points of view, that of the expert financial or business man outside, acting on the Advisory Committee, and that of the departmental official afterwards.

Will the Minister say whether he is thinking of a single committee to deal with all classes of schemes, or separate committees, and are the members to be paid?

That point with regard to separate committees has been considered, because the Bill is really a double Bill. It foresees the type of scheme which would come up under the ordinary Trade Facilities Act, and the secondary type of scheme of which the main object is a reduction in the cost of essential commodities. It is not definitely determined yet, but what was proposed was that there should be a fairly small committee set up for the purposes outlined in Section 1, and that special people be added to it for the purposes of Section 2. The question of payment of the members of this advisory committee has not been considered. It was not considered that they should be paid beyond the possibility of having to pay expenses. The fees referred to in Section 5 are to defray the cost and expenses mainly of a clerical staff in connection with the committee.

The Bill, as I say, has a double purpose. Sections 1 and 2 indicate in a certain way this purpose, because the first leans on the question—Is the scheme calculated to promote employment? The second would depend upon the answer to the question—Is the loan proposed to be raised calculated to promote a reduction in the retail prices of essential commodities? That second section is an addition to the ordinary Trades Facilities Act.

It has been thought better to deal with the retail prices question in this way, rather than by way of control. Control is difficult. It is, administratively, very expensive, and the effects of it, so far, have been none too good. In fact, it was said it was the period of control that gave rise to rings, and that it is rings, at the moment, and the presence of rings, that keep up the cost of living. This method is relatively simple; it is not expensive, and results are looked for from it. It has the additional advantage, from the Departmental point of view, of throwing the onus for promotion on to either a public authority or any association of producers or consumers, or of both. Schemes put forward by these bodies, showing good grounds for belief that they will be successful in reducing the cost of essential commodities, will get fair examination by the experts and, if successful, will get either a loan or the guarantee set out in the section.

Would the Minister state if there was any definite form of society in mind in using the words "any association, corporate or incorporate, of producers or of consumers, or of producers and consumers?"

There are many types of association in mind, but the section is general enough, I think, to cover any association. That question will remain for decision when a particular association comes forward with a particular scheme.

Could the Minister give an idea, when he speaks of two types of scheme, what type he has in mind?

I thought I had explained that. I meant the type of scheme that might come forward under Section 1 and have the effect required as the basic principle of No. 2. I was rather separating them in this way— schemes, the main object of which was to promote a reduction in retail prices of essential commodities, and schemes which had not that purpose, but which would be calculated to promote employment.

It was in reference to the Advisory Committees that I raised the point. The Minister spoke of two schemes.

I think I defined that differently. I said the idea was to have one committee appointed under Section 1 of the Bill, and to that committee would be added certain other people who would be concerned more with Section 2. To be more definite, the essential commodities in the Saorstát would be such commodities as form the basis of the cost of living figure. Let us take those. Take it that they are mainly agricultural products. That would mean that to the committee, say, of three, under Section 1, comprised, say, of an expert business man, a banker and an accountant you would add two men who had experience of trade in, or the production of, such essential commodities as I have described. The second committee would be the same committee with additional members added for special purposes.

I do not think the rest of the Bill calls for any explanation. Sections 3, 4 and 5 are really sections into which the Ministry of Finance is brought to supervise loans, and to arrange for payment and repayment. Section 6 is a further check by which under any loan granted under the Bill accounts have to be presented to the Oireachtas. The Bill includes a considerable number of safeguards and checks. There is the Advisory Committee, the Ministry of Industry and Commerce, the Ministry of Finance, and, finally, the Oireachtas. Guarantees under the Bill are limited to a period of twelve months after it is passed. The sums of money are also limited, so that, while there are sufficient safeguards, there is sufficient liberty under the Bill to allow for a certain stimulus, provided proper schemes are brought forward.

As the President spoke about the Dáil adjourning at 6.15, I want to know when the debate will be resumed?

I beg to move the suspension of the sitting until 7 p.m.

I beg to move the the adjournment of the debate.

I do not think the Minister for Justice was here when the President gave an undertaking that Deputy Milroy's motion would be continued at 7 o'clock for the remainder of the evening, and that no Government business would be taken.

That no estimates will be taken after the adjournment. That, I think, is what he said.

I think what he did was to give an assurance that no estimates would be taken after seven o'clock. I do not think he said that other Government business would not be taken.

We will resume this debate when, and if, Deputy Milroy's motion is finished.

Sitting suspended at 6.15 p.m.
Thainig an Dáil le cheile aris ar a 7 p.m. Bhi An Ceann Comhairle i gceannas.
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