Progress was reported during the discussion on amendment 11, and that amendment is therefore before the Committee.
BEET SUGAR (SUBSIDY) BILL, 1925—COMMITTEE STAGE RESUMED.
(SECTION 5, AMENDMENT 11.)
May I say, in respect to this amendment, that I am not binding myself to defend or to advocate, with insistence, either the phraseology, the form of the amendment, or the proportion of the amounts set out in the amendment. I realise the difficulties of construction; I never realised them so much as when the consideration of the form of this new section was before me. If there is to be any further discussion, I would like that that discussion should be on the principle involved; that is to say, the State, having contributed sums which may amount to £2,000,000 in ten years —it may be less and it may be more— should, at the conclusion of that period of subsidy, be entitled to part ownership of the property that has been created by virtue of the subsidy. There should be this proviso, which is contained in sub-section (3), that the share holdings of the original shareholders, the investments of the original shareholders, will be guaranteed, or will at least be entitled to call for five per cent. of the value of the share holdings before State holding would come in for any share of the profits. As to the rate of interest, and the amount of holding or the proportion of the subsidy, those are matters for consideration if the general purposes of the section were found acceptable. I do hope that the Dáil will be prepared to face the proposal that, having paid out in the course of an experimental period of ten years a sum of money which, in effect, is capital expenditure, the property created by that expenditure will, at least in part, be that of the State that contributed the money.
I rise to support this amendment moved by Deputy Johnson. I think the principle he has laid down there is a perfectly fair and equitable one. I have in mind the fact that a document has been distributed in Dublin—it has been quoted by the public Press, and therefore, I think, no privacy can be claimed for its contents by M. Lippens, whom we are helping with this industry, because that is virtually the position—indicating that it is expected, under the terms of this Bill, to be able to establish the factory and keep it continuing for ten years, and at the end of that period to be able to amortize the entire sum with which it was capitalised at the beginning. Now, obviously, I am not going to pay an excessive amount of attention to any documents that are circulated with a view to getting capital. These are always very fully coloured, necessarily, under the facts of the case. But there is a statement, the figures are worked out, and it would appear there is a very fair justification. Although I am not going to pay an exaggerated attention to prospectuses of that kind, I do know that a much more conservative type of mind made a similar calculation that was distributed to Deputies in this House, very fully substantiating those figures. Those figures were calculated by Deputy Johnson, who, I think, is, strictly speaking, so far as finance is concerned, whatever his tenets are, a very conservative person.
I mention Deputy Johnson's figures merely in substantiation of those that have been circulated. They do support the figures and claims there made, that under a scheme it should be possible that the concessionaire—because M. Lippens is a concessionaire under this project—should be able, at the end of a ten years' period, to redeem, to amortize, the entire initial capital expenditure. If that be the case, it means quite clearly that the State contribution will, in that event—I am only suggesting this by way of hypothesis— have been a very generous contribution indeed. It might not be proved to be so. That happy, fortunate forecast made in the prospectus might not prove justified. If it is not, in any case the calculation allowed for in this amendment will not injure the position at that time. I suggest that, in the State's interest, we ought to look forward to what will happen at the end of the ten years' period. The industry might prove justified, it might be an admirable concern. If it is so made, it will be made mainly and largely by virtue of what the Government and the people of the Free State have put into it. Then it will be the right time to enter into a calculation of this sort in order that, whatever might happen in the intervening period, the State might be able to claim its share in the enterprise which its contribution has established.
Deputy Figgis, with his customary ingenuity under cover of the amendment moved by Deputy Johnson, has contributed to the debate on the question: Is the subsidy too large? Deputy Johnson's amendment, to my mind, has a peculiar value. That value is not that, if accepted, the amendment would improve the Bill. It is resident rather in this, that at the basis of his amendment is a doctrine, and the doctrine, I think, taken by itself, is an admirable one. He declared, in the speech before the last one, that a subsidy is, after all, a contribution of the people's money to the realisation into success of a company's project; consequently, when that success has been achieved, a measure of its result is attributable to the contribution of the people's money, and that, if a valuation could show to what extent the people had contributed to the earning of dividends, these dividends should, in some proportion, be distributable as on the popular capital. I do not think that Deputy Johnson denies that that statement which I attribute to him is a fair paraphrase of several statements he made.
I would like the Deputy to understand that a preliminary to the payment of dividends is, in my proposition, the fact of ownership by virtue of the expenditure of capital in the form of a subsidy.
Yes. Deputy Johnson's argument was peculiarly like the argument I put forward in the long and tedious speech with which I bored the House some time ago. I argued then that a subsidy, particularly this subsidy, is an investment, and I contended, and I was egotistical enough to believe that I had established what I contended, that the dividends that would flow from that investment could be raised under a variety of heads which I set out, and that the results were measurable in terms of cash and in terms not cash. Deputy Johnson's doctrine is, in substance, what I advocated on more than one occasion here; consequently, I speak in favour of it when I hear it again. The subsidy is, as Deputy Johnson says, a grant of the public money. The concessionaire company receives the public money. It works to success, thanks to that receipt of public money. Now, this argument is altogether unaffected by the truth of the doctrine advanced by the Minister for Finance, a truth which I accept, that apart from the form in which the aid is given to this enterprise, there is practically no difference between the case in regard to beet and the case for the sugar factory if the tax on sugar had been left at the figure at which it stood last year; in other words, whether you give a protective tariff, or whether you give a subsidy. But what you are really doing is, you are bringing the funds of the State to the aid of industry, an industry carried on inside the State.
It is more palpable, more obvious, that the State funds are being contributed to the industry when the form of the aid is that of subsidy. The important point which I think Deputy Johnson has, with all respect, overlooked, is that while his doctrine in this regard is a sound doctrine, namely, that where the people's money is contributed to the advancement of an industry, and that industry is carried on by a corporation, the State is entitled to look for some accruing advantage from this investment, he departed from my line last evening when he spoke of what I enumerated as the dividends in this case as direct advantages. To me it does not matter whether an advantage that comes by way of enrichment of the State comes to it obliquely or comes to it directly. If, as we have been able to show, there will be no industry of this type, no creation, and no carrying on of a sugar factory, unless we can induce a sugar-producing company to begin its operations here, and if that inducement is to take the form of some such bargain as this to which we are giving legal effect, then the State investment really is the procuring for the State and for the people of this community of a sugar factory properly equipped, and properly conducted by men who know how to conduct such a highly-specialised business.
The first gain of the subsidy is that we have the factory as a going concern, and we have the specialised workers there keeping it and maintaining it as a going concern.
That, I allege, without any pretence at "word-spinning," as Deputy Gorey would call it—when I use the words —is a dividend, and it can be calculated. Why should it be regarded as not a dividend, merely because it does not come into the coffers of the State by virtue of a vote made at a meeting of shareholders? It is an addition to the wealth of the nation. Without the subsidy, no industry; with the subsidy, there is the industry. If it be not of the proper amount, it is no subsidy at all for practical purposes. Therefore, the subsidy to be decided upon here, and the terms of which it is a part, must be such as will induce this firm to take up the work we wish to see taken up.
It is all very well for Deputy Figgis to quote from prospectuses about handsome profits. He knows a great deal more about how these prospectuses are coloured than any other Member of the Dáil.
He wishes he did.
Like that of a famous character in Dickens, his experience is "extensive and peculiar." He is entitled to say that it is customary in issuing prospectuses to colour them highly. But we, who are advocating the creation of a sugar industry in Ireland, are not privy to these prospectuses or to any editorial comment on them. They are absolutely external. The point is: Could the setting up of a sugar factory be secured on lower terms? On lower terms, "no." Surely, to begin to talk about what is handsome and what is not handsome, is to miss the essential point.
I quite agree with Deputy Johnson in the doctrine he has propounded; so does the Minister, I think, when it is taken out of all these proceedings and set out as a doctrine. Those of us who are advocating a subsidy are advocating the doctrine that it is legitimate, and that it is wise to employ funds from the Exchequer to secure the creation of industries that otherwise would not be secured and which, if secured, will flourish in the land. To put an arbitrary limit on the amount that is to be earned is to assume, as Deputy Johnson has assumed in those figures that Deputy Figgis finds it advisable to eulogise, that the profits in this undertaking are going to be huge profits. They are not. Most decidedly they are not. I am speaking now on the authority of an expert in the sugar business, who is not to be questioned as regards length of experience or breadth and depth of experience. I quoted to the House on a previous occasion the offers from the Van Rossum group. The minimum terms upon which they agreed, in their tender to the Government, to set up a sugar factory and work it here, were terms arithmetically higher than the terms of the M. Lippens group. Accepting the criticisms set out by the Van Rossum experts as sound, and justified by experience, I believe the Government have made a wonderful bargain in extorting terms that are similar as regards the amount of subsidy per cwt. of sugar, and in respect of the terms during the first three years that are to be paid to the farmers for their beet.
The figures I gave showed that when allowance was made for depreciation on this elaborate machinery—the installation and equipment running to between £200,000 and £250,000—when allowance had been made for the huge body of expert workers that would be required, whether dealing with 5,000, 50,000 or 100,000 tons of beet, and when various other items had been provided for, the total earnings, with income tax calculated as it was calculated on the 19th January last, when these figures were put in—at 5s. in £— are only something like 7 per cent. or 7½ per cent. That is really the situation. Not only that, but it is clear to everyone that in the first two years there will be a loss on this undertaking. During the period of tutelage, in which the Irish farmer all round—not the Irish farmer of a favoured district where he is already expert, having experience of the crop—is gaining experience, there will be a loss. I say that to propose to handicap the company, as Deputy Johnson proposes, at the very moment when we are trying to use seductive measures to get the sugar factory established, would be to contradict and combat our own professions. If we say we will limit arbitrarily the amount to be earned on this industry, why should it be worth while for a firm to come over here and set up a factory at all? The difficulty we had with the Van Rossum group was to induce them to make a tender, and when they had made a tender, to adhere to it, and not throw up this country in despair. The solid fact in all these negotiations is—it was emphasised repeatedly by the Minister for Lands and Agriculture—the extreme difficulty of getting foreigners to come over here and work this thing for us. If, at the very moment that we are in process of legalising the contract, we are to proceed to insert in the measure, introduced to that effect, limitations on the earnings, when all the time we are alive to the difficulties of the enterprise, are we not saying to them in effect: "We really do not want you; what we have given with the right hand, we will take away with the left"? Anybody who is in earnest about the addition to Ireland's sources of wealth of an industry of this kind, would be much better pleased if, at the end of the ten years, it could be shown that this company had done well, because we look to the erection of other factories—and not one factory or two factories or three factories.
Unquestionably this is an industry that would suit this country, and when the fruits of it will have become common knowledge in every district, as in the district around Thurles at the present moment, which is clamouring for a factory, every district in the country will be clamouring to have a factory set up and to have its share in the prosperity which this industry will give. If we are going to frighten off now, in the initial stage, the company which is taking its courage in both hands to establish the industry, I think we are acting very foolishly, and I am not at all sure, though I am an optimist by conviction, that we will find it easy to set up factories later. I have already pointed out what the conditions are that must be satisfied in order that a factory should be secured. Nothing less, remember, in point of capital than between £300,000 and £400,000 is worth while. Add to that the character of the locality, an ample supply of water, easy transport, and all the rest. Unless this scheme we are adopting is an unexampled success, unless at the very earliest stage it exhibits itself as a great success—well cold water will have been thrown upon any other effort that might be made at a later stage to increase the number of factories. I am glad to have it on the records of this House that Deputy Johnson is in favour of subsidies, for the reason that a subsidy is what he declared it to be. I applaud his doctrine. It is my own doctrine also. But I oppose the amendment, if no no other grounds than that it is prejudicial to the whole enterprise, and that if, in a weak moment, we were to accept that amendment, we should really have jeopardised the whole thing for which we are contending.
Question put.
The Committee divided: Tá, 17; Níl, 33.
Tá
- Pádraig Baxter.
- Seán Buitléir.
- John Conlan.
- Darrell Figgis.
- David Hall.
- Connor Hogan.
- Tomás Mac Eoin.
- Risteárd Mac Fheorais.
- Pádraig Mac Fhlannchadha.
- Ailfrid O Broin.
- Tomás O Conaill.
- Aodh O Cúlacháin.
- Liam O Daimhín.
- Tadhg O Donnabháin.
- Mícheál O Dubhghaill.
- Seán O Duinnín.
- Donnchadh O Guaire.
Níl
- Earnán de Blaghd.
- Thomas Bolger.
- Seoirse de Bhulbh.
- Séamus de Búrca.
- Louis J. D'Alton.
- Máighréad Ní Choileáin Bean Uí Dhrisceóil.
- John Hennigan.
- William Hewat.
- Patrick Leonard.
- Seosamh Mac a' Bhrighde.
- Donnchadh Mac Con Uladh.
- Liam Mac Cosgair.
- Seoirse Mac Niocaill.
- Liam Mac Sioghaird.
- Liam Mag Aonghusa.
- John T. Nolan.
- Michael K. Noonan.
- Mícheál O hAonghusa.
- Seán O Bruadair.
- Risteárd O Conaill.
- Conchubhar O Conghaile.
- Máirtín O Conalláin.
- Eoghan O Dochartaigh.
- Séamus O Dóláin.
- Aindriú O Láimhín.
- Séamus O Leadáin.
- Fionán O Loingsigh.
- Pádraic O Máille.
- Séamus O Murchadha.
- Máirtín O Rodaigh.
- Mícheál O Tighearnaigh.
- Caoimhghín O hUigín.
- Seán Príomhdhail.
Tellers—Tá: Deputies T. O Conaill and A.O Cúlacháin. Níl: Deputies Séumas O Dóláin and Liam Mag Aonghusa.
Amendment declared lost.
Question—"That Section 5 stand part of the Bill"—put and agreed to.
Sections 6, 7, and 8 put and agreed to.
FIRST SCHEDULE.
MAXIMUM RATES OF SUBSIDY.
|
AMOUNT OF SUBSIDY ON ONE HUNDREDWEIGHT. |
||||||
|
Degree of polarisation of Sugar. |
Sugar manufactured on or after 1st October, 1926, and before 1st October, 1929. |
Sugar manufactured on or after 1st October, 1929, and before 1st October, 1934. |
Sugar manufactured on or after 1st October, 1934, and before 1st October, 1936. |
|||
|
s. |
d. |
s. |
d. |
s. |
d. |
|
|
Exceeding 98 degrees |
24 |
6 |
22 |
6 |
22 |
0 |
|
Exceeding 97 and not exceeding 98 |
||||||
|
,, 96 ,, ,, ,, 97 |
||||||
|
,, 95 ,, ,, ,, 96 |
||||||
|
,, 94 ,, ,, ,, 95 |
||||||
|
,, 93 ,, ,, ,, 94 |
||||||
|
,, 92 ,, ,, ,, 93 |
||||||
|
,, 91 ,, ,, ,, 92 |
||||||
|
,, 90 ,, ,, ,, 91 |
||||||
|
90 degrees or less |
nil |
nil |
nil |
Note.—1. If at the time of manufacture of the sugar a customs duty is chargeable on the importation of sugar of the same degree of polarisation, the subsidy as specified in the foregoing table shall be reduced by the amount of such duty on one hundredweight.
2. Where the amount of the sugar is more or less than one hundredweight, the subsidy as specified in the foregoing table and the reduction (if any) under the foregoing paragraph shall be increased or decreased (as the case may require) proportionately.
I move amendment 12:—
In the second column under the figures "24s. 6d." and above the word "nil" to insert the following figures in the following order:—
|
“22 |
6.5 |
|
21 |
11.4 |
|
21 |
4.4 |
|
20 |
9.3 |
|
20 |
2.3 |
|
19 |
7.2 |
|
19 |
0.1 |
|
18 |
5.1” |
This amendment is really for the purpose of filling in the blanks that are left in the Schedule. At the time the Bill was handed in we had not time to make all calculations. Of course, it is necessary, just as Customs duty is charged at a low rate on sugar which is not of the same purity as sugar over 98 degrees, on which the highest Customs duty is charged, that the subsidy be graduated in the same way. It is not intended in this factory that there should be any sugar of less than 98 degrees produced. It may happen that through some accident in the manufacture, outside of the control of the people conducting the factory, that sugar of a lesser degree would be turned out, and the subsidy must be paid for that type of sugar at the appropriate rate.
Amendment agreed to.
I move amendment 13:—
In the third column under the figures "22s. 6d." and above the word "nil" to insert the following figures in the following order:—
|
“20 |
8.4 |
|
20 |
1.9 |
|
19 |
7.4 |
|
19 |
1.0 |
|
18 |
6.5 |
|
18 |
0 |
|
17 |
5.5 |
|
16 |
11.0.” |
Amendment agreed to.
I move amendment 14:—
In the fourth column under the figures "22s. 0d." and above the word "nil" to insert the following figures in the following order:—
|
“20 |
2.9 |
|
19 |
8.5 |
|
19 |
2.2 |
|
18 |
7.9 |
|
18 |
1.5 |
|
17 |
7.2 |
|
17 |
0.9 |
|
16 |
6.5” |
Amendment agreed to.
I move amendment 15:—
In the Note at the foot of the table to insert after paragraph 1 a new paragraph as follows:—
"Whenever an excise duty is chargeable and is paid on the sugar, the subsidy as specified in the foregoing table shall be increased by the amount of such duty on one hundredweight."
I think I explained this in connection with the money resolution. At present, as the Finance Bill stands, there is no excise duty chargeable on sugar manufactured from beet here, but it might be that for some reason in the future, and before the expiration of ten years, an excise duty might be imposed. Naturally, if that were done it would be necessary to increase the subsidy by the amount that would have to be paid in excise duty.
Amendment agreed to.
I move amendment 16:—
In paragraph 2 of the Note at the foot of the table to delete the words "the reduction (if any) under the foregoing paragraph" and substitute the word "paragraphs."
Amendment agreed to.
First Schedule, as amended, put and agreed to.
SECOND SCHEDULE.
PRICE OF BEET.
Description of Beet.
Best grown in the years 1926, 1927, and 1928.
Price per ton.
50/- for one year's contract; 54/- for three years' contract.
For the purposes of this Schedule—
(1) The price means the price payable as in respect of beets properly topped and washed, delivered to the factory and having a sugar content of fifteen and one-half per cent.
(2) Where the sugar content of any beets is greater or less than fifteen and one-half per cent. there shall be made an addition to or deduction from the minimum price at the rate of threepence in respect of each 0.1 per cent. above or below fifteen and one-half as the case may be.
(3) The sugar content of beets shall be ascertained by means of the cold water digestion method.
Amendment 17 not moved.
I move amendment 18:—
In paragraph (2) to delete the word "minimum."
The word "minimum" is unnecessary here. It might even lead to confusion.
Amendment agreed to.
Title put and agreed to.