Dáil Éireann díospóireacht -
Thursday, 20 Oct 1927

Vol. 21 No. 4

IN COMMITTEE ON FINANCE. - FINANCIAL MOTIONS.

MINISTER for FINANCE (Mr. Blythe)

It might be well, perhaps, before moving either of the resolutions which I have to move, to say a word in regard to procedure. It is customary, when resolutions proposing or modifying duties on customs and excise have to be proposed, not to circulate them in advance, but to distribute them to Deputies when they are being moved. That is necessary in order that forestalling may not take place. If the resolutions were put down on the Order Paper in the ordinary way it would be possible for traders, and other interested persons who might be very much alert, to take advantage of the knowledge and succeed in either importing or removing goods from bond, thus making considerable profit and either injuring the revenue or defeating the object of the tax. Under the Provisional Collection of Taxes Act, if it is declared expedient in the public interest that a resolution in Committee on Finance shall have statutory effect, the position then is that the tax can be collected but, within ten sitting days after the passage of that resolution, it must be confirmed by the Dáil on Report, and if it is not confirmed by the Dáil on Report, it ceases to have effect, and any taxes collected under it must be repaid.

If it is confirmed on Report, the Second Reading of the Bill, embodying the substance of that resolution, must be passed within the next twenty sitting days. If it is not so passed the resolution ceases to have effect and any tax collected must be repaid. Finally, the Bill giving legislative effect to the resolution must be passed within four months of the passage of the resolution in the Dáil or the time of coming into effect of the resolution. If that resolution is not so passed, the tax so collected must be repaid. If there is any modification in regard to the tax and money is collected which would not be collectable under the Act as finally passed, then repayment must be made. We have not hitherto had any duties on customs or excise imposed except at Budget time, but I think the same procedure would not be suitable on the present occasion. When we have had a Budget the usual procedure has been for the Dáil to pass without a full debate the resolutions submitted to it. Within a week or ten days the resolutions came up on Report and were fully debated. The reason that they could not be fully debated when first presented was that Deputies had not opportunities for thinking over them in advance, and it was also necessary on several occasions to pass a large number of resolutions on the same day.

The first resolution which I have to propose is as follows:—

1. That a customs duty of an amount equal to thirty-three and one-third per cent. of the value of the article shall be charged, levied, and paid on every rosary and every article which in the opinion of the Revenue Commissioners is a substantial part of a rosary imported into Saorstát Eireann on or after the 22nd day of October, 1927.

2. It is hereby declared that it is expedient in the public interest that this resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

This resolution is introduced pursuant to a recommendation of the Tariff Commission. We passed in 1926 a Tariff Commission Act setting up a body to which the proposals for tariffs were to be referred. That body was given power to make regulations for its procedure, to hear witnesses and to employ such people as were necessary to investigate fully and effectively the proposals which were brought before it. It was directed to report under ten heads on a proposal. These were:

1. The efficiency, extent, and relative importance of the industry in respect of which the application is made, the amount of capital invested therein, the number of persons employed therein, the total annual value of the goods produced by the said industry, and the cost of production of such goods in Saorstát Eireann as compared with such cost in other countries.

2. The cost, efficiency, conditions of labour, and rates of wages in Saorstát Eireann in the industry in respect of which the application is made as compared with such cost, efficiency, conditions, and rates in other countries.

3. The effect which the granting in whole or in part of the concessions asked for in the application would be likely to have on the several matters mentioned in paragraph 1 of this Schedule.

4. The effect which the granting in whole or in part of the concessions asked for in the application would be likely to have on other trades and industries in Saorstát Eireann.

5. The effect which the granting in whole or in part of the concessions asked for in the application would be likely to have on consumers of the goods produced by the industry in respect of which the application is made and on the cost of living.

6. The effect which the granting in whole or in part of the concessions asked for in the application would be likely to have on the public revenues of Saorstát Eireann.

7. The prospects, if any, which the industry in respect of which the application is made has of establishing itself eventually on a permanent basis without the continued aid of a customs duty or with a modification of such duty after a period.

8. The minimum amount of customs duty which would probably be necessary for the successful conduct in Saorstát Eireann of the industry in respect of which the application is made.

9. To what extent, if at all, the competition from imported goods to which the industry in respect of which the application is made is exposed is unfair by reason of currency depreciation or the grants of subsidies or bounties in the country in which such goods are manufactured.

10. Such other economic, industrial, and administrative aspects of the application as appear to the Commission to be relevant to the determination of the merits and demerits of the application.

As Deputies will see, the Commission is expected to cover a fairly wide field. Even in respect to the simplest and easiest application considerable delay is likely to take place. That arises out of the circumstances of the case. Delays will occur, but even without any undue delay occurring the investigation of an application will take a good deal of time. The application in respect of rosaries was made by the one firm which manufactured rosary beads in the Saorstát, Messrs. Mitchell and Co., of Waterford Street, Dublin, and it was referred to the Tariff Commission on 31st January, 1927. Evidence was given in support of the application by the manufacturers, and by Miss Louie Bennett and Miss Moloney on behalf of the Irish Women Workers' Union. Evidence in opposition was given by a number of firms engaged in the wholesale and retail trade. The Report has gone to the printers and will be circulated to the Deputies to-morrow, and they will have a chance before the Report Stage of the Resolution comes on to study it and make any inquiries in respect of it they care to make. The Commission recommends, as appears in the resolution, that an ad valorem duty of 33? per cent. be imposed, and it recommends that it be imposed in the first instance for a period of five years. When the Bill is introduced giving effect to these resolutions a clause will appear limiting the period of the duties to five years, and the matter can then be reviewed. The industry is a small one, the capital invested being about £10,000, and the number of workers employed in 1926 was 85, many of whom were part time. In previous years the number had been higher, being 165 in 1920-21. It is anticipated that following the imposition of this tariff the number of workers will be about doubled, and that the total will reach 160. The average annual output for the four years 1923-26 was £8,700. As a result of the imposition of a tariff it is expected that the output will be increased to £15,000 or £16,000. The competing goods are manufactured very largely in France, and are made in the homes of those engaged in the industry and not in the factories. It is alleged that the rates of wages paid are extremely low, and that the labour costs are so low in fact that it would not be possible for the industry to continue here without some tariff. Unless great changes occur there will be a time when it cannot be continued without some tariff.

Mr. GOOD

How has it continued so long?

Mr. BLYTHE

It has continued in a declining way, and if the decline continues the industry will cease. It is anticipated that there will be an additional investment of about £5,000 in the industry. The present manufacturers do not propose to undertake the manufacture of the cheaper grades, and it is possible that some other people may come in and engage in the manufacture of these particular grades. The Tariff Commission anticipates that the imposition of these duties will give about 50 per cent. of the trade in this country to the home manufacturers. It estimates that the value of the rosaries bought in this country varies from £60,000 or £70,000 a year to £20,000 or £30,000 a year. The manufacturers here estimate it at the larger figure and those engaged in the retail trade estimate it at the lower figure, and the Tariff Commission is inclined to accept the statement of the retailers.

At present no rosary manufactured here is retailed at less than 9d. The manufacturers believe that with increased output and the consequent decrease of overhead charges in relation to output they will be able to be retailed at 6d. I do not think that there is anything else I need mention except just to read the last paragraph of the Report:—

"Another aspect to which the Commissioners feel that they must refer, though not included in the above list, is the possible repugnance which the Catholic community may feel towards the imposition of a duty on objects of devotional use. This difficulty has been settled for the Commissioners by a letter of the 13th March last, addressed to Messrs. Mitchell & Co., by the Secretary to the Archbishop of Dublin, stating that ‘the Archbishop sees no objection to a tariff being placed on rosary beads.'"

Mr. COLOHAN

Could the Minister tell us if there has been any application for a tariff on prayer books printed outside the country?

Mr. BLYTHE

That does not arise. I know that informal applications have been made, but I do not know that any formal application under the Tariff Commission Act has been made

Mr. LEMASS

The views of Deputies on these Benches on the matter of protection for industries are well known. We welcome this step that has been taken by the Ministry to protect the manufacturers of rosary beads in this country against competition from outside. I think, however, it is no harm to comment—we will have an opportunity perhaps of commenting at greater length later—upon the fact that the Tariff Commission took nine months to make a recommendation on one of the most trivial matters that could have come before them. At the rate of progress which the Tariff Commission has established it will take them more than the lifetime of the majority of Deputies before all the industries in this country which are in urgent need of protection against unfair competition from outside can be considered. The amounts mentioned in connection with the rosaries are small. If we take an increase of £5,000 in production here, and if that takes nine months to secure, Deputies can calculate for themselves how long it will take before the subject of wearing apparel, for example, on which the existing tariff is totally inadequate, and the imports of which for the first six months of this year amounted to £600,000, is likely to be adequately considered. However, it is a step in the right direction and as such we welcome it, and trust that whatever opposition may be forthcoming to this resolution from the advocates of Free Trade in this Assembly will not be considered by the other Deputies.

Mr. GOOD

I take it that adequate time will be given for discussing the important principle involved in these recommendations after we have received copies of the Report and the detailed information in connection with these proposals?

Mr. T.J. O'CONNELL

Would it be possible to discuss these two resolutions together on the general resolution? There is not much to be said on rosary beads, but there may be on the other.

AN CEANN COMHAIRLE

The object of the general resolution is to allow a general debate, not necessarily confined to the two resolutions now being proposed. The procedure is that each of these two resolutions will be subject to the ordinary rules of relevancy and that on the general resolution, whether it is taken to-day or later, other matters not strictly relevant to these resolutions, but relevant to the question of tariffs, may be discussed.

Mr. O'HANLON

In the first instance, I want to object to the findings of the Tariff Commission being put before this House piecemeal. If I am correct, the terms of reference to the Commission were not alone to deal with the question of tariffs on certain articles, but with the broad question of whether tariffs were or were not good for the country.

Mr. McGILLIGAN

Quite wrong.

Mr. O'HANLON

I am sorry if I was wrong. As a Free Trader, it is my duty on this, the first instance that has come before us, to oppose tariffs in any shape or form. As to the statement of the Minister that the evidence was that rosary beads sold at 9d. hitherto will in future be sold at 6d., I should like to ask if his experience has been where tariffs have been enforced that there has been a reduction of 33 1-3 per cent. in the selling price of the article. I think it is more likely that instead of being sold at 9d. in future they will be sold at 1s.

Mr. ESMONDE

I should like to draw the Minister's attention to the rather vague nature of the resolution in its fourth line, where it states: "and every article which, in the opinion of the Revenue Commissioners, is a substantial part of a rosary." I do not know if the Commissioners are well acquainted with rosaries, but I wonder would a small crucifix or any type of beads be included in that. It is a matter that might be enlarged indefinitely. I think that the resolution, as it stands, is vague, and perhaps the Minister could improve on it.

Mr. BARRY EGAN

I am glad that that point was raised, because there are quite a number of people in the country who get a good deal of employment through the making of rosaries from raw materials imported, which are not manufactured and could not be manufactured in the country on any kind of economic basis unless a tariff of something like 200 or 300 per cent. were imposed. Even then it would mean the setting up of expensive machinery, and it is quite unlikely that that would be done. It would be well if the resolution were made clear, otherwise the result may be that a number of people at present earning a living through the assembling of beads may be thrown out of work.

Professor TIERNEY

I join with Deputy Esmonde and Deputy Egan in the hope that the Minister will consider this matter more carefully. We have had experience already in the case of the furniture tariff of the manner in which the Revenue Commissioners interpret the wording of the Act. There have been very remarkable cases of hardship, as far as I understand, suffered by people importing various articles which can only be described as furniture by the Revenue Commissioners but which no ordinary person in his senses would dream of describing as furniture. I know of the case of a professor who purchased some dialect maps in Germany which had rollers at the top and bottom. The professor was charged something like 30/- duty on the maps because the Revenue Commissioners held that they were furniture because of the rollers. I wonder whether it might not be possible, as this resolution is worded, for the Revenue Commissioners to charge a duty to the purchasers of statues of Buddha or any other kind of ornament on the ground that they may have something to do with rosary beads. I think the matter of giving powers to the Revenue Commissioners by the vague wording of a resolution like this is one which should be very carefully considered and I am glad that Deputy Esmonde has drawn attention to it.

Mr. BLYTHE

With reference to the length of time that a tariff involving a few thousand pounds has taken, as complained by Deputy Lemass, it does not follow that an application for a tariff involving larger sums would take a greater time. A man could look over a field and see two sheep and also see a hundred sheep at the same time. It is not a question of the amount; it is a question of the complexity and the effect of the duty on other industries. A matter like the application for a tariff on flour will take a great deal more time because it involves the question of the cost of living. And so with many other applications. An application for a tariff on woollens is a much more difficult matter because it involves consideration of the existing tariff on apparel. It might be impossible, even if it were thought desirable, to impose a tariff on woollens without altering the tariff on apparel. There are a lot of reactions to be considered.

As a matter of fact, the Tariff Commission have only had one or two sittings in relation to rosary beads, but it had to take steps to get information in regard to the conditions in other countries and the wages paid by the manufacturers of these articles in other countries, and it has given a great deal more time to some other applications which it is not yet in a position to report on.

With reference to Deputy O'Hanlon's question, if the manufacturers increase the price, then presumably, no benefit will result from the tariff and the industry will disappear. The Commission believes that if the manufacturers are given increased output they will be in a position to carry on profitably and to sell their goods at a lower price than heretofore. If they fail to do so and if the tariff fails to produce results because of the manufacturers not taking advantage of the opportunities which it gives them, then, at the end of the five years period for which the tariff will be imposed, I presume the Dáil would decline to reimpose it.

Deputy Esmonde, Deputy Egan and Deputy Professor Tierney have referred to the wording of the first part of the resolution, "on every rosary and every article which, in the opinion of the Revenue Commissioners, is a substantial part of a rosary." It will be possible, if it is thought necessary on consideration, to put in restrictive words in the Bill, but it is necessary to have something like these words in the operative clause because if the power is not there it might be possible for people, for instance, to detach a crucifix, which is part of a rosary, and to import the crucifix separately and the other parts separately and claim exemption from the duty. It might be possible to separate the rosary into two parts and to say in respect of each, it is not a rosary, and claim exemption from duty. It is necessary to prevent that, and to make sure that it is not possible by some simple trick to evade payment of the duty.

The effect of the resolution is not to charge upon the component parts; it is not intended to charge upon the wire used for making the chain or on the separate beads. If the beads are imported separately they will not be charged on. Deputies may have noticed the wording in relation to certain other articles on which there is a Customs duty. The wording is generally "component parts." We have not used the words "component parts" here because it is not desired to charge on the beads or on the wire. If any restrictive words are thought necessary they can be inserted at a later stage, but some powers to the Revenue Commissioners are necessary here if the tax is not to be evaded altogether.

Captain REDMOND

Is there not a tariff on beads already?

Mr. BLYTHE

No.

Captain REDMOND

As articles of apparel?

Mr. BLYTHE

Except they attach to apparel, and then the value of the whole thing is assessed.

Mr. BRISCOE

Would the Minister give the House an interpretation of this clause in reference to what he would describe as coming under the head of a tariff in this connection? Could he describe to the House what is really intended to come under the head of a duty as a result of the description here?

Mr. BLYTHE

Rosary beads or any part of rosary beads; for instance, if you had the beads on the chain, and obviously part of a rosary, even if they are not a complete rosary, duty would be charged, but on separate beads duty would not be charged, and in respect of a chain or a wire by itself without beads duty would not be charged.

Question put and declared carried, Deputy O'Hanlon dissenting.