Dáil Éireann díospóireacht -
Friday, 24 Feb 1928

Vol. 22 No. 4

VOTE 29—BEET SUGAR SUBSIDY.

Debate Resumed.

Mr. LEMASS

Deputies will recollect that, before the adjournment last night, I was endeavouring to establish that the management by the Government of the subsidy for the growing of beet sugar was such as to show considerable inefficiency on their part. I pointed out that, when the Bill was before the House, the Government supplied the Deputies present with totally wrong information as to the probable total output of the factory during the ten years during which the subsidy would run, and also as to the amount of subsidy which the State would have to pay. Deputy Derrig pointed out that, as a result of the subsidy, the owners of the factory are making very substantial profits, that they have written off in their first year 10 per cent. of the capital valuation of the plant and machinery, and have also secured a 10 per cent. dividend for themselves, and that it is very obvious that at the end of the ten years during which the subsidy is to run the owners of the factory will not merely have completely cleared off their capital liability but will have netted, in addition, a very considerable sum of money as profits. They will then still have the factory on their hands and will, I submit, be subject to a strong inducement to close down, to net their gains, and to leave the beet-growing industry in this country in exactly the same position as it was before the subsidy was granted. The factory during last year made a gross profit of £114,000.

It is obvious that a smaller subsidy could have produced exactly the same result that the subsidy now being given has produced. I think there would have been little difficulty in getting capital invested in that enterprise, even if the reward offered was less than the 10 per cent. which has been secured. During a debate upon a similar Supplementary Estimate last year, the Minister for Finance stated:—

"The people who were to undertake the erection of the factory were desirous of getting Irish capital for many reasons. They wished to have people who were connected with the country and who would be of assistance to them in dealing either with the Government or the beet-growers, but in their early efforts to get Irish capital they were so unsuccessful that they were discouraged. At one point they were very much discouraged."

Now I submit that either the Minister for Finance was in those remarks deliberately deceiving the House as to the facts, or that he himself had been deceived by the proprietors of the factory.

AN CEANN COMHAIRLE

I think the Deputy will realise that to say that the Minister was deliberately deceiving the House is not desirable. The Deputy ought to withdraw that, because if we are to intercharge across the House accusations of deliberate deception we cannot get on.

Mr. LEMASS

I will take the charitable explanation that the Minister himself has been deceived. When Class A £1 Shares of the Irish Sugar Manufacturing Company were placed on the official list of the Dublin Stock Exchange, the "Financial Times" made this comment:—

"This will be the first opportunity the general public in Ireland have had of taking an interest in the concern, though it is not expected that much scrip is likely to come on the market as the bulk of it is in Belgian and Czecho-Slovakian hands. In point of fact there was no real appeal to the public, and there appears to have been considerable misunderstanding over the financial details. One firm of brokers was prepared to take shares to more than half the sum mentioned in the Dáil, and there can be little doubt that, with proper publicity, a much larger subscription would have been secured in Ireland."

I think our own commonsense should convince us that there can be little doubt that a much larger share of the capital could have been secured in Ireland if a serious effort were made to get it. The owners of capital in this country, as a general rule, are not national and are not anxious to encourage industry in the country, but the prospect of 10 per cent. and several other additional profits would, I think, appeal to them just as forcibly as to any others. The fact remains in any case that in consequence of the misunderstanding, as the "Financial Times" puts it, concerning the financial details, the bulk of the capital of the factory remains in the hands of foreigners, and the profits which are being realised in consequence of the subsidy are going out of the country. As I endeavoured to establish yesterday, the resulting policy of the company is such as to give us very serious grounds to believe that they are working the factory for the ten years during which they will get the subsidy, with the obvious intention of closing it down and clearing out with the profits at the end of that period.

I gave an example yesterday of one instance, which can be verified, in which the factory conducted its business in such a manner as to antagonise one of the biggest potential customers it could have in this country. And there are other examples. Throughout the whole management of the factory there is evidence that there is no serious effort being made to make it an efficient business enterprise. The cost of production in the factory during the period for which figures are available must have amounted to about £15 per ton. The costs of production in England at the present time average about £8 per ton, and in Germany, I understand, about £5 per ton. We have a whole board of twelve directors drawing over £4,000 in fees. We have also the spectacle of a considerable portion, nearly 50 per cent., of the company's ready cash deposited not in any Irish bank but in banks outside this country.

There is also reason to believe that there is some co-operation by the Government with the company in antagonising possible customers in this country. There is an excise duty on sugar amounting, I think, to 9/4 per cwt. A manufacturer of sweets in the Free State, exporting sweets outside of the area, is entitled to a rebate for the duty paid on the sugar content of the sweets. Now sweet manufacturers with an export trade have been refused that rebate in cases where the sugar used was Carlow sugar, and they were actually told that the Carlow sugar pays no duty. It does pay a duty.

Mr. BLYTHE

No.

Mr. LEMASS

Are we to understand from the Minister that no duty is paid on the Carlow sugar?

Mr. BLYTHE

There is no duty paid on it. Part of the subsidy, of course, is exemption from duty. The other part of the duty is paid in cash. There is no duty actually paid or collected, the system here being different from the English system.

Mr. LEMASS

Is the duty deducted from the amount of the subsidy given?

Mr. BLYTHE

No.

Mr. LEMASS

I understood the Minister to say that a subsidy is given less the duty. Am I correct in that?

Mr. BLYTHE

No. What I said was that part of the subsidy is exemption from duty. Then there is a cash subsidy making up the total.

Mr. LEMASS

In actual fact the subsidy is 24/- per cwt., plus 9/4.

Mr. BLYTHE

No.

MINISTER for LANDS and AGRICULTURE (Mr. Hogan)

They pay no duty, and they get a certain subsidy. That is what happens.

Mr. LEMASS

In other words, what they are getting from the State is a 24/6 subsidy, plus a 9/4 exemption.

Mr. HOGAN

The subsidy is 15/2 and the duty 9/4.

Mr. LEMASS

In other words, instead of getting a subsidy of 24/6, they get 15/- odd, and then the exemption from duty.

Mr. HOGAN

That is it.

Mr. LEMASS

At all events, the effect of the whole thing is that they do not have to pay duty. But what has happened as a result of it? The sweet manufacturers, who have to pay the same price for the Carlow sugar that they have to pay for the imported sugar, get no rebate on the sweets they manufacture and export if Carlow sugar is used. Therefore, any sweet manufacturer who has an export trade in sweets, no matter how small it may be, will not stock the Carlow sugar, because if he does he has to employ a clerk to keep trace of the sugar as it goes through the factory, so as to be able to prove to the Revenue Commissioners that not a single grain of it was used in the sweets manufactured for export. The result is that the sweet manufacturers in the Free State are not stocking the sugar. I think that shows that there is considerable mismanagement in the whole business in connection with the subsidy. The action of the Government at the beginning, the false estimate on which they worked, the excessive subsidy which they are paying, and the fact that the benefit of the subsidy goes to the factory, and not to the farmers, the fact that the farmers will be left at the mercy of foreign owners at the end of three years, as well as the further fact that the factory itself is being grossly and inefficiently managed, and that, in addition, there are other red-tape regulations which prevent its development, justify, I submit, this House in rejecting the Vote and in making this a vote of censure on the Government in connection with its management of the whole business.

Mr. GOREY

I have listened with some care to the two speeches from the Opposition on this Supplementary Estimate. It struck me, if I may use the expression again, that Deputy Derrig's speech was ill-informed, and that it was wanting in knowledge with regard to the whole work and life of the factory. He wanted to know what had been done to protect the growers, and said nothing had been done. He seemed to think they were like a lot of sheep in which neither the Minister nor anyone in the Free State was interested. No one was interested in them except Deputy Derrig and the people for whom he speaks. But what are the facts? When has Deputy Derrig, or one of his Party, interested themselves in the growers, except just now?

Mr. FRENCH

in 1920.

Mr. GOREY

Let us have a record of what they did. Before the growers started to grow at all, before the first seed was sown, an association was formed of beet growers. The Farmers' Union convened a conference of the growers in the area to be served by the Carlow factory. They were brought together and asked to form an association. They formed this and appointed their own chairman and their own officials. Their staff has been in the factory since. Their agents have been at the several stations where beet is taken in both by rail and canal. Their agents are in the testing-room and all over the factory, and we are asked what has been done? This is a little general information for the first time for Deputy Derrig and his friends. If this powerful organisation of beet growers are unable to look after their own interests, that is their affair. Any assistance they want outside their own staff they have always received, and people have been working in this House for the last two or three years to give it to them. It has been said that the directors are paid £4,000 a year. I do not know how much they are paid, but I know that £4,000 a year has very little to say to the total overhead charges in the factory. What is the total wages bill? Mention has been made of the cost of production in Germany. Deputy Lemass has said that it cost £15 to produce a ton of sugar in Carlow and £5 in Germany. What has £4,000 to say to that? Is Deputy Lemass making a case, deliberately, to use his own words, making a case against Irish workmen? What is he making a case for, and how does this £4,000 a year affect the case he is trying to make? It is time that Deputy Lemass and his friends awoke to the fact that the Irish farmer and the Irish worker deserve some care and attention.

Mr. MORRISSEY

I am glad to hear Deputy Gorey admit that.

A DEPUTY

A new recruit for the Labour Party.

Mr. COONEY

What wages does the Deputy pay his workers?

Mr. GOREY

If the Rhode Island Red Deputy on my left will speak a little plainer I will answer his question. I never heard such senseless cackle as this in my life.

Mr. COONEY

Does the Deputy know the wages paid in the Carlow factory?

AN CEANN COMHAIRLE

My advice to Deputy Cooney is not to interrupt Deputy Gorey. Having given him that advice, I can give him no further protection from Deputy Gorey.

Mr. GOREY

I am sure the Minister for Agriculture will be able to answer that; but I just want to tell Deputy Derrig and Deputy Lemass that the farmers and the growers have had some little attention paid to them during those years, and if they want any further help, they will be able to get it, and they will not come looking for it to those Deputies.

Mr. McDONAGH

I never saw the Carlow factory. I was never near it. I have heard mention of the way business is done and the way sugar is sent out. As a pretty large user of the sugar, I can say that nobody can complain of the manner in which they turn out their product. This bears testimony to the way the work is done. As early as last January the factory had contracted to sell all the sugar it could make for the whole year. To-day if Deputy Lemass or any other person wanted to get one hundred tons of sugar from that factory he could not get it, because it has been already sold.

Mr. MOORE

I would just like to know if the export of the pulp is still going on. We are such dud economists here that we think it would be a useful thing to keep that material at home; that it would be more economic to supply that pulp to our own stock than to export it to other countries. I would like to know if it is the intention of the Minister to allow that export to go on, or whether he will taken any steps to prohibit such export.

Mr. KENNEDY

Would the Minister assure us if it is the objective of the Government to bring up the production of sugar to the requirements of the Free State, and if towards this end the Minister contemplates the establishment of a refinery and auxiliary factory?

Mr. HOGAN

I must say that Deputy Lemass managed to cram a terrible lot of nonsense into what was, for him, a short speech. I do not mind him laying down the law about the Governor-General, and even talking in a general way about tariffs, but when the Deputy gets up coolly to criticise technical processes, the working of a factory and its efficiency, really it shows that he completely lacks a sense of humour. There are very few people in this country even now who know anything about the manufacture of sugar from beets. There are very few people even in England, and there were none before the establishment of the factory there. The processes are highly technical, and it simply is absurd for Deputies in a loose sort of way to use the Dáil to throw charges of inefficiency in connection with an enterprise of this sort. It is in fact one of the most efficient and one of the finest factories in the world. It is a factory that we are all proud of. That is admitted even by its rivals in trade. We can judge one end of the business, and that is the way in which they turn out the article. Deputy McDonagh, who at least knows what he talks about, because he deals in this article, says he can testify, just as any big wholesaler can testify, as to the quality of the article they turn out and the way in which they do their business.

We are charged here with a great number of offences. First, the subsidy was too high. That charge should not come from that side of the House. I was through the whole of the sugar beet negotiations. We interviewed three or four of the best firms in the world, because our idea at the time was to get the most efficient company that we could possibly get to carry out this experiment. If we were undertaking a commercial transaction, the first question to consider would be the question of costings, the question of £ s. d., profits, and so on; but when you are undertaking an experiment, when you are undertaking a big experimental proposition, the first question you have got to consider is efficiency, and you have got to pay for efficiency. You can take no chances whatever in that regard. When our committee had travelled over Europe, and had interviewd practically every big man in the sugar world, we decided, rightly or wrongly, that if we could make terms with M. Lippens, we would give him the factory, and then we came to discuss the subsidy. That was at the end of 1924 or the beginning of 1925. This was a nice country in 1924 and 1925 in which to invest £400,000. Look at it from the point of view of a stranger. Deputy Lemass, I suppose, or Deputy Derrig, would hardly make the claim that Ireland was full of first-class business men who could establish a factory here. I presume that they will at least admit that we had to go outside the country.

The PRESIDENT

Not for all of them.

Mr. HOGAN

We had to go outside the country. Look at the proposition from the angle of a Belgian, a Dutchman or an Englishman investing £400,000 worth of capital in this country at a time when we had hardly repaired the bridges. They were broken at the time. We had hardly repaired or replaced houses that were destroyed. The houses were hardly rebuilt. The smell of petrol had hardly left the country. That was put up to us, time and time again, by every single one of them, and we had to go out of our way, in spite of all that evidence that was under their noses, to assure all these firms which we were anxious should come into this country and compete for an industry, that that state of affairs was not going to recur.

Remember all the wild talk there was going on at the time, the number of people who wanted to die for Ireland still, and so on. In all these circumstances we had to make a bargain with foreigners and ask them to come in here and spend £400,000 worth of their good money in putting up a sugar beet factory. In addition to that, there was the fact that the crop had never been grown here on a commercial scale, that nobody had any real information as to whether the farmers would or would not grow it, whether, if they did grow sugar beet, it would be approximately equal to the Continental sugar beet, and whether there would be anything in Irish sugar beet, due to the soil, climate and so on, which would make the process of manufacture more costly. All these things had to be taken into account and ensured against—ensured against, at least in the mind of the people who were putting up the money, who were going to do the work, and, above all, who had to be ensured against the condition of the country at the time.

Now we are told at this stage from the opposite benches that the subsidy was too high. I believe that, but for the events of the last five years, we could have had a factory with a smaller subsidy—not very much smaller, because when you compare the subsidy in our first ten years with the English subsidy there is not such a tremendous difference. The subsidy for the first ten years works out at, I think, 22/6. The English subsidy for the first ten years was 19/-. It is not a tremendous difference when you remembers the conditions in England— the financial and economic reputation of England, its reputation as a secure country. I have no doubt whatever that but for the events, which I will not recapitulate, of the last five years, and all the loose talk—and when I speak of loose talk I mean this condemnation of Irish labour, of Irish business, the constant complaints and demands for State assistance for everything, constant demands for spoon-feeding and subsidies, that give the impression generally that the people of this country are no good and cannot do anything unless they are spoon-fed at every hand's turn——

Mr. DERRIG

Who condemned Irish labour? Was it not the co-operation of the local Labour Party in Carlow which did more than the Minister to get the factory established?

Mr. HOGAN

That may be true. I must say I have nothing but admiration for the company who came in here at that subsidy and started a factory. I am delighted that they have made, not £114,000—we ought to be accurate at least in some respects—but £50,000 net profits last year.

Mr. LEMASS

£114,000 gross profit.

Mr. HOGAN

Yes, gross profits; but when we refer to profits we do not refer to gross profits but net profits, which are what really count. I am sorry they have not made £100,000 or £200,000. I should like very much if they had made £400,000, because what would it prove but that sugar beet could be made a commercial proposition in this country? Do we want the experiment to be a success? If we do, we should be anxious to see that this company is able to make very good profits, because the more profits are made the more elasticity there is, the better the chance of being able to get some other company, or the same company, to open new factories on a commercial basis.

I cannot understand why people take a balance-sheet in connection with this experiment, examine it, and say: "This company made £50,000 net profits and £114,000 gross profits," and consider that this is criticism of the scheme. I consider that is in its favour. I can well imagine what would be said if during the first year the company was a failure and made no profits. Everyone would point out what fools we were. We would get all this belated wisdom about sugar beet, but in an entirely different sense. We would be told that sugar beet never suited this country, that we were foolish ever to start it. We would be told exactly what we were told when we were endeavouring to start this enterprise.

Deputy Lemass, in an airy moment, charges the Minister for Finance with deliberate misrepresentation, and, in a charitable moment, gives him the benefit of the doubt, withdraws the charge, and says he was mistaken. He says there was no real attempt made to get Irish capital. That is nonsense. The Deputy must know that a company is not going to put their shares on the market to establish a new enterprise unless they have some idea that they will be taken up, unless there is a chance that they will be taken up. If you try to float an enterprise and fail, you discount it in the beginning. No business man would attempt to float an enterprise and ask the public to take shares unless he thought that there was a fair chance that they would be taken. What any business man who knows anything about his business does is: he first makes all the inquiries he can make through stockbrokers, banks and other sources to see what the chances are, what the prospects are—whether there are any chances of getting capital from the public—and if he is satisfied, he asks for it and gets it. No business man would adopt any other method.

In this case the company were extremely anxious to get Irish capital, and we were extremely anxious to get it for them. We used all the resources we had, they used all the resources they had, through their stockbrokers, to get Irish capital. I heard moneyed people in this country, who count financially, telling the representatives of this company that they were foolish to put any of their money into sugar beet, or into any Irish enterprise. After every effort that we could make, that they could make, and that men of good-will in the financial world in Dublin could make, they got, I think, £20,000. But now it is a success. Who made it a success? The farmer number one, the company number two, and labour number three. Now, when it is a success, all the wise people tell us, first of all, that the subsidy is too high, that this is a gold mine, and Deputy Lemass is qualifying for a position worth about £4,500 per year as the chief technical expert of the sugar beet processes in this country. Deputies are anxious that another factory should be started. I wonder what will the prospective company think of this debate? We hear complaints about the taring and the testing arrangements—that the farmers in a state, I think the words were, of great anxiety and insecurity——

Mr. BOLAND

And glass in the sugar.

Mr. HOGAN

I was nearly forgetting that. I am glad you did not let me forget that. I thought that was a good point. There is glass in the sugar, their taring is wrong, the testing is doubtful, and the farmers are in a state of trepidation as to what is going to happen when the guaranteed price ceases. Moreover, what is the Government going to do about it? Should not the Government take a share in the factory? I think Deputy Derrig suggested that it was a good idea that the farmers should control the factory themselves. But he went on immediately to explain that when he spoke of the farmers controlling the factory he really meant the Government. I thought as much. That is always what is meant. There were suggestions made that the farmers should have some say in it—in other words, that the factory should be run by a committee and that on any business proposition that would come up for discussion on some technical question we should have a sort of debate between the farmers and the company and the whole lot of us as to what should be done—have the sort of debate we are now having. If we are to judge by what they say, that is their idea of business. They say they are anxious to start another factory and enterprise generally. Some Deputy complained—I think it was Deputy Lemass—about the Germans on the Shannon, the Belgians on the Barrow——

Mr. LEMASS

And the Frenchmen in the streets.

Mr. HOGAN

And the Frenchmen in the streets. Many good Frenchmen, one time or another, came into this country. We could very badly do without them.

Mr. CLERY

French beauties were even brought in.

Mr. HOGAN

Quite so.

Mr. O'KELLY

What would you say to the Frenchman who had to leave a month or two ago—what about him?

Mr. HOGAN

I have no complaint to make about French beauties. We want enterprise, and we want everybody to help. We have not all the money and brains and efficiency in this country. We want help from all sides. What are the prospective producers, who are thinking of establishing sugar beet factories and industries of one kind or another in this country, to think of a debate like this? By the way, the Minister for Finance has again been misquoted. It has been said that he gave a definite undertaking to the Dáil that only 85,000 tons of sugar would be manufactured, and that he afterwards altered that and agreed to have 125,000 tons manufactured. That is not so. At the beginning the proposal was for a factory dealing with about five thousand acres of beets per annum, and upon that basis—five thousand acres for the first year, six thousand acres for the second year, and seven thousand acres for the third year—it would work out in ten years that about 85,000 tons of sugar would be produced. Remember when that was being discussed, the question was whether we could get five thousand acres for the first year and six thousand acres for the second year. We held that we could, although we were a little doubtful. Other members of the Dáil held that we could not, while others held that we could get up to ten thousand. Personally I never thought that we could get up to ten thousand, but the point of view of everybody was perfectly clear, that if we could get up to ten thousand acres, so much the better. That was made quite clear by the Minister for Finance. Deputy Lemass has not discovered something new in the case when he reads the debates, and tells us it was only afterwards we realised we could get ten thousand, and from that he infers that we deceived the Dáil when we said we could only expect five thousand acres the first year.

The Dáil knew our desire was to get as much beet as we could grow up to ten thousand acres. We did not believe we could get it. I did not believe it at the time, but the fact that we got it is an example that the farmer is not a fool and does not need all the advice from people who are amateurs and not farmers, and can see a good proposition when put before him. He realised that this was a good proposition and that the price was good. They came in with 9,000 acres the first year, and they have grown 17,000 acres this year instead of 15,000. That will put the contract out again and will lead to further debates in the Dáil because, under the contract, the company can only accept if they are to keep to their final estimate, about ten thousand acres the first year, fifteen thousand acres the second year, and much less than ten thousand acres in the two following years, and then, after that, go up to fifteen thousand acres again. You had close on 10,000 the first year, and then 17,000 acres the second year, which will mean that you must drop your estimate for the following years, or else a new arrangement will have to be made. When we come to discuss that we will be told that that was our foolishness again, but that is not so. I am glad to see this happen. I did not anticipate it would happen, but the farmers saw the advantage, and saw that they were getting a good price, and we found it extremely difficult to keep them within the estimate. They have grown this year two thousand acres more than they should have grown. Now as to what is to happen next year when the market is open. There is no guarantee next year for the farmer as to the price the farmer is to get for his beet, and we are asked what is to happen?

There is a Beet Growers' Association, and the sooner that Beet Growers' Association takes full charge of the position the better for everybody concerned. It is an efficient association, and it has done a tremendous amount of good work. It has made the taring arrangements and the testing arrangements watertight.

Of course you are bound to have complaints, but they settled a lot of the difficulties that inevitably must arise between the company and the farmer. In the first instance, this is a matter entirely for the Beet Growers' Association and the company. The company is there and they have £400,000 worth of a factory. They do not want that to be idle. The farmers are there, on the other hand. They want a good price for their beets. There you have two elements to a bargain. The company do not want to close and lose the chance of good profits. They are open to a good bargain, and the sooner we get back to the healthy position that these bargains should be left to the interests concerned, and that the State should not be brought in except as a last resort, the better. If we are to have debates like this, if people are trying to bedevil the position by pretending to be interested in the farmers pressing for outrageous prices, and if we are to have people blackguarding the company, we will not get business done as we would if we let them alone. Let us, at least, try to have fair play. You cannot have the agricultural industry without the farmer on the one side and the entrepeneur industrialist on the other side. The soundest way to arrive at a proper price is to leave it between them, and, if we are to come in, let us come in a helpful spirit to see that it is settled as it should be settled.

Mr. COONEY

Has the Ministery always followed that policy as between employer and employed?

Mr. HOGAN

That does not arise. Now, coming to the railway arrangements, they are, in my opinion, good. I think the railways have acted well, and I think it is good business for them. They are giving freights at about a penny per ton mile. That is the average amount, and is a low rate. The arrangements about fertilisers are working out well. The arrangements are as follows: The farmers make certain arrangements with the shopkeeper for fertilisers. They then send documents to the sugar company authorising them to stop the price of the fertilisers out of the first payment for the beets. The sugar company do the rest. In other words, the farmer gets his fertilisers on credit automatically from spring to autumn. We do not attempt to rule the price for the fertilisers, and every Deputy knows now that the fertilisers are down to, and in some cases below, pre-war prices. Sulphate of ammonia is below pre-war price. Then there is the question as to twelve directors. I do not know that I ought to refer to that; I do not care if there are twelve or twenty-four directors. It is their own business, and they know their own business. They are really a first-class firm, and I wish we had more of them in this country.

Mr. DAVIN

Is it really a fact that there are twelve directors? I do not think there are.

Mr. HOGAN

I do not know. I should say not, but of course there are two companies. I was asked, finally, by Deputy Kennedy, what about other factories. There is no question of starting other factories on the basis of subsidising agriculture to the tune of £24 an acre. The sensible thing to do, both from the point of view of the farmers, and the country as a whole, is to wait and see the result of the first three, four or five years of the factory. We can get all the data required then, and a very complicated problem will then present itself. It will be a problem from the farmer's point of view as to what he can take for the beets, and the problem from the point of view of the company of what they can afford to run the factory at.

It will be a problem from the point of view of the country as a whole as to what are its reactions on, say, railway rates. On all these questions we will have from this factory fairly accurate data in four or five years that we can act on. We need no other factory for that purpose. This factory is handling about 15,000 acres of beet from seven or eight counties, from every variety of soil and grown under all sorts of different conditions, and this factory is sufficient to give us any information we want in regard to the growing of beet. Further, the beets are manufactured in great quantities, and the factory itself is handling such large quantities of such different kinds of beet that undoubtedly they can have all the data that would enable them to come to conclusions as to what exactly the processes must be for the manufacture of sugar from sugar-beet. We will get all this information from this factory, and it would be a pure waste of money to establish another factory at this stage. I could not say when another factory will be established. I do not think that there should be any pressure for other factories. I cannot understand how people on the one side will say that this subsidy is too high, and on the other that more factories should be started. Of course, I will be answered by somebody saying: "With a lower subsidy." Well, until you lower the subsidy to make it a commercial subsidy, whatever that may be, it is at best pure waste of the taxpayers' money to start another factory.

Mr. KENNEDY

Would the Minister say if the Carlow factory will be able in time to handle all the sugar necessary?

Mr. HOGAN

No, I should say that it would take about eight factories of the same kind to do that.

Mr. MOORE

Would the Minister answer my question about the export of sugar pulp?

Mr. HOGAN,

I am glad to be able to say that all the sugar pulp made this year, except what was required to fulfil contracts made last year, has been disposed of and used in the country. They gave good terms—I will not say any more than that—to the farmers. Their whole output, except what was required to fulfil contracts already made in America, has gone to Ireland this year.

Mr. KENNEDY

Am I to take it that the Minister is looking for a definition of what is a commercial subsidy?

Mr. HOGAN

You are.

Mr. LEMASS

I do not set myself up or pretend to be an expert in the making of sugar from sugar-beet, but I do think that I know the rudiments of business efficiency and business courtesy, and we have had fairly conclusive evidence that the management of the factory is lacking in the rudiments either of business efficiency or business courtesy. Does the Minister think that at the end of the ten years' time the factory will be able to manufacture sugar from beet economically without the aid of a subsidy? The Minister appears to be worried as to what the proprietors of the factory and the possible proprietors of other factories may think of this debate. One thing I hope they will get into their heads very definitely, as a result of this debate, is that there are Deputies in this House who are not quite as green as the Minister.

Mr. HOGAN

I thought I was not green at all. I thought all the greenery was on the other side. Green used to be the national colour. The Deputy wants to know whether I think that the factory will be able to operate at the end of ten years without a subsidy. I hope so, but, of course, it is a very difficult question. As far as I know there is only one country in Europe where sugar is manufactured from beet without a subsidy, and in that country the farmers are prepared to take a very low price. I do not want to say any more than that. I could not answer that. The Deputy suggested that it is quite plain now that at the end of ten years this company will close the doors of the factory and go away. I do not know how he arrived at that conclusion. I put this to him: They will close the doors of the factory and go if it does not pay them to make sugar-beet, and for no other reason. If it pays the company to manufacture sugar from beet they will continue it; if it does not they will not. And when they are considering the question as to whether it will or will not pay, they will have this big factor to take into account, that they have a valuable factory, originally worth £400,000, and renewed, by the way, practically every two years, and possibly then worth £300,000, and I think that business people will think twice before they close the doors of a factory and leave all that machinery and all that capital idle. It is a purely business proposition.

Mr. KENT

If I rightly understand the Minister, I gather that there has been a profit of £114,000 from this factory. Would it not be a good thing for the Minister to establish a few more of these factories all over the country?

Mr. HOGAN

Certainly, but it is the taxpayer who is finding it.

Mr. MacENTEE

Might I ask the Minister if he has any idea as to what the amount of the subsidy will be for the present year's crop? I understood from the Minister for Finance when he introduced this Estimate that 17,500 acres of beet were at present under cultivation and that, on the basis of last year's yield, he expected to get eight tons of beet per acre——

Mr. HOGAN

That is what was got last year.

Mr. MacENTEE

Having an average sugar content of 16.8 per cent.?

Mr. HOGAN

Yes.

Mr. MacENTEE

Has he estimated the quantity of sugar that will be turned out by the factory next year on that basis, and has he calculated the amount of the subsidy? Would I be right in saying that it will be £576,000?

Mr. HOGAN

No.

Mr. MacENTEE

Well, look to the figures.

Mr. HOGAN

Next year, if the contract is to be acted on strictly, there must be less beets grown. I do not think the factory can, under the contract, take the same acreage next year. That is the first consideration.

Mr. MacENTEE

It cannot take 17,500?

Mr. HOGAN

No.

Mr. MacENTEE

Well, the produce of 17,500 acres would be 140,000 tons.

AN CEANN COMHAIRLE

Is not that a question for the Estimate that we will be considering very soon?

Mr. HOGAN

Of course, that would more properly come up on the Estimate.

Mr. MacENTEE

Does the Minister make the point that it is useless for the farmers to produce 140,000 tons of beet next year—that the factory will not be able to deal with 140,000 tons?

Mr. HOGAN

No; I say that if they are to be kept to the strict letter of the contract, they will not. There is a maximum amount of sugar fixed. They are not supposed to produce more under the contract. If they are to be kept strictly to the contract, in my opinion they will have to say to the farmers next year that they cannot take the same acreage of beet.

Mr. MacENTEE

That is to say, that up to a certain output the subsidy will be paid?

Mr. HOGAN

of course.

Mr. MacENTEE

And the factory is bound to produce that output when the raw material is available?

Mr. HOGAN

Certainly.

Mr. MacENTEE

Then, supposing the raw material is available, the factory is not bound to utilise any excess over the limit placed by the terms of the contract?

Mr. HOGAN

No.

Mr. MacENTEE

So that they need not buy the excess from the farmers at all, and the farmers may grow beet for nothing?

The PRESIDENT

Can you do any more damage to this, or have you exhausted yourself?

Mr. MacENTEE

You have done all the damage.

The PRESIDENT

The Deputy said that I sweetened my constituency by having the factory there. Will the Deputy state that it was owing to any influence exerted by me that the factory was established there?

Mr. MacENTEE

Certainly not. I am not like the President. I do not state things without authority.

The PRESIDENT

I can quite understand. Then the Deputy, when he stated that, was simply making a metaphorical statement altogether. These are dangerous things. I direct the Deputy's attention to the course of the discussion on this business. The factory has been attacked on all sides.

Mr. MOORE

No, the subsidy has been attacked, not the factory.

The PRESIDENT

First the subsidy was extravagant; second, the factory was extravagant—extravagant on two grounds: in that it made too much money, and in that the depreciation was too big; and, third, by reason of the success of the growing of the sugar-beet a multitude of questions have been raised which may have no other effect than to warn farmers not to grow beet next year. Let us understand where we are. Is the idea to damage this place? One can draw no other conclusion from what we have listened to to-day. It was attacked because there was no Irish capital in it. I wonder if Deputies opposite know that down in Carlow they spent £1,000 in circularising the whole country with a view to getting Irish capital invested; that upwards of £10,000 was spent by other people interested in the County Carlow in having it made a success; that apart altogether from what the Minister has said about interested persons having Irish capital to put into it, these efforts were made locally, and that locally more work could not have been done to make it a success from its very inception by those who sold the site— which was sold at a cheap price—by those who took part in the construction of it, and in every phase of the operations from the commencement. And now I can draw no other conclusion than that Deputies opposite are determined to show that it has not been a success. They may not have intended that, but no other conclusion can be arrived at. If I examine what Deputy Lemass has said, that the cost of production is high, I can come to no other conclusion than that wages have been paid in excess.

Mr. LEMASS

Oh, not at all.

The PRESIDENT

Very good. There is mismanagement, and at the same time the company has made an extraordinary profit.

Mr. MacENTEE

Out of the taxpayers.

The PRESIDENT

And taking into account what the Minister has said, that there is a difference of 2/- between the subsidy here and in Great Britain, I find it hard to draw any other conclusion than that we have got the idea, as the Minister has said, that, with the Belgians on the Barrow, the Frenchmen on the streets of Dublin, and the Germans on the Shannon, there has been a deliberate policy to exclude Irishmen from developing their own country. That is a bad atmosphere to import into a discussion of this sort. This was a business proposition from the beginning. It has exceeded the rosiest anticipations of everybody connected with it. Great efforts were made by persons interested in this industry to get a large acreage sown. It was not believed that we would ever have had 10,000 acres in the first year. Now, because a larger acreage has been grown, and has been grown successfully, we are attacked for its success. Deputies can have it every way, but they cannot prove that it has not been a question of good industrial development. There has been every effort made to get Irish capital into it, and even in face of the damaging statements that are made I believe that the people of this country will be satisfied from this industry that there is a hope for industrial expansion, notwithstanding the caoiners and the wailers and the fee-fa-fums that we have here.

AN CEANN COMHAIRLE

It was understood that the Minister for Lands and Agriculture had concluded, and that we were asking him some questions about it. However, I think that Deputy MacEntee must be allowed to speak now.

Mr. MacENTEE

First of all, I think we want very strongly to rebut the President's allegation that we are attacking the industry as an industry. We do attack the subsidy as a bargain and as a contract, and the reason why our speeches have been made here has been in order to elicit some information regarding this particular company. When the Bill was going through the Dáil various efforts were made by practically every party in this House, including some members who followed the President into the division lobby, to set up a committee to inquire into the bona fides of this contract, to ascertain whether it was a justifiable one, and likely to be a profitable one for the country. But the extraordinary thing about it was that the sugar beet subsidy went through in exactly the same way as the Siemens-Schuckert contract, without any detailed inquiry into the merits of the proposal by this House. I noted that on the Second Reading or the Committee Stage of the Bill there was a proposal that the whole scheme should be referred to a Select Committee nominated by the Committee of Selection, and that was turned down. There was then a proposal made by the present Parliamentary Secretary to the Minister for Posts and Telegraphs that, in the event of the company being established, a director should be appointed who would be nominated by the Minister for Finance. The Parliamentary Secretary gave very cogent and sound reasons as to why that course should be adopted. He was supported, I think, in that attitude by the then chairman of the Farmers' Party, Deputy Gorey. I think that the course of this discussion should have confirmed them in their wisdom, and that to-day we would know a little more about this Carlow sugar beet factory, if the course they had suggested had been followed.

There is something remarkable about the accounts of the Carlow beet factory. The Minister pays a subsidy, and one of the conditions of the Act was that within a statutory period the accounts should be presented for his inspection. They are there and you can understand them, but it is quite easy to see that last year there was, after an incomplete year's trading, a profit of £114,000 returned, and of that £114,000 some £40,000 was allocated for depreciation services. That sum is sufficient, I believe, to redeem the whole capital expenditure of the Carlow sugar beet factory in a period of approximately seven years, allowing for interest at 5 per cent. on the investment. But, as you have heard, the cost of maintenance of this factory is very high. The Minister says that practically the whole plant has to be renewed within two years.

Mr. HOGAN

Not quite.

Mr. MacENTEE

I am not so certain that that is so. I am not so certain that the real depreciation charges upon this factory, the real costs of keeping it in repair and maintaining it, are so heavy as the Minister suggests. This House has no means of knowing, and it is quite a common thing in every trading company to create something in the nature of hidden reserves, by putting down excessive charges for maintenance. We have the accounts presented here, but there is no trading account, nothing which shows the actual income and the actual expenditure of that company. We have a statement as to the net profits, and a balance-sheet, but we have nothing that would show that the company is not, in fact, making a much greater profit than it returns. We have nothing which would enable the House to judge for itself as to whether this subsidy is in fact a profitable and economic one for this country. Not only that, but there is another point to be considered. Originally, I think the factory was to have a certain output. I believe the capacity of the factory has been greatly increased. Surely it must be very largely increased if, instead of having an output of 10,000 tons, as was originally contemplated, it is now to have an output of something over 23,000 tons of sugar in the year.

Deputy Kent voices the demand of the farmers of Cork county, and the farmers in other districts, when he suggested that the Government ought to consider the establishment of sugar beet factories in other centres. We, on these benches, would like to see several sugar beet factories working in Ireland, but we would not like to see them started on the same terms as the Carlow sugar beet factory was started. We would like to see that the subsidy paid would be a reasonable one, one that was just necessary to enable the factory to show a profit, and let any excess of that profit depend on the skill and management of the factory. The fact that the subsidy is excessive, I believe, is going to prevent the development of the sugar beet industry, because this factory, with an excessive subsidy, is in a position to dominate the whole internal market. There is very little chance of another factory starting with a smaller subsidy and being able to pay its way in the face of this over-subsidised concern. Therefore, the bargain that has been made, if the subsidy is excessive, instead of helping the development of the sugar beet industry will help to kill it.

Mr. DAVIN

I think all this debate ranges around the question as to what it should cost this country to educate the farming community. There is bound to be difference of opinion on that question, so long as you have different parties in this House. I do not think that this debate, so far as I have had the privilege of listening to it, is going to serve any useful purpose. Deputies Lemass and MacEntee are at a certain disadvantage in taking part in a debate of this kind, in so far as they represent industrial areas as against rural or agricultural constituencies. If those Deputies had the information at their disposal which representatives of tillage constituencies have, regarding the necessity for further beet factories in this country, I do not think that they would be so enthusiastic about the contributions which they have made to this debate. I find that the trouble in the constituency which I have the honour to represent is that everybody who has been engaged in tillage operations in that area, and who has been unable in the last five years to make a living out of the land, is anxious to know when we are going to have further beet factories.

The farmers of this country are conservative enough in their own way, but they realise what a good proposition is. The farmer is the last man who, in this country particularly, will tell you he is making money when he is not doing so. I have sufficient evidence from the people in my constituency to enable me to say that the farmers are unanimously of the opinion that beet-growing is a paying proposition for them. I was one of the Deputies in this House who happened to be concerned with the organising committee drawn from the Barrow area who were responsible for the creation of the agitation to establish a sugar beet factory, and I was engaged in the squabble as to whether the proposed factory should be built in Athy or Carlow. I was not much concerned with that once I had experience of finding out in Belgium what beet cultivation meant to the farmers there. I had the privilege, with other Deputies who were in this House at that time, of going on a deputation to Belgium, when we were given an opportunity of going through the beet factories there. After two or three days spent in a tour of examination of the working conditions of those engaged in beet cultivation there from the productive side, and having seen the workers engaged in their work in the factories in Belgium, I began, I confess, to ask myself whether we could find similar types of workers in Ireland for factories here. It was a new industry to us. We came to the conclusion that men working in those factories were mere machines, and I wondered whether we could find workers here who would be able to do that kind of work in the same way as they did it in Belgium.

I had my doubts then, but I was glad to hear from those responsible for the Carlow factory that the workers in the beet factory there are equally as good as those in Belgium or anywhere else. I would not have taken part in this debate were it not for the serious statement of Deputy Lemass regarding mismanagement and bad working in the Carlow factory. It was only in the middle of December that I had my first opportunity with representatives of the surrounding districts of going through the factory and seeing the conditions under which the workers were working and the way in which the factory was conducted. I am satisfied with them— we will agree to differ, so far as Deputy Lemass and I are concerned— and I see no difference in the methods of management carried on in the factory in Carlow and those in Belgium. So far as I know, the conditions under which the workers work in the Carlow factory are, at any rate, acceptable to the leaders of the workers who belong to the Irish Transport and General Workers' Union and to the Amalgamated Transport Workers' Union who negotiated the conditions of service on behalf of the men there. The question of future factories is a difficulty. The question as to when and where these factories are to be established is one which the Minister for Agriculture has to consider and decide.

I notice that a Deputy from Cork is looking for a factory there, and we know that when we get Deputies from Cork—Fianna Fáil, Cumann na nGaedheal, and Labour Deputies together—making a joint move there is generally danger. The question of the establishment of future factories and the conditions under which they are to be worked will not, in my opinion, be helped by throwing cold water on the working of the present factory. We can agree, or at least agree to differ, as to whether the conditions of the subsidy for the Carlow factory are too generous or otherwise. I think those who have the interests of the farming community at heart see that beet cultivation is a good proposition for them, and, incidentally, for the workers who will be afforded employment. People should not be anxious to throw cold water on the working of the factory, and on the beet-growers who are supplying the raw material. The only profit made by the farmers in my constituency of Leix and Offaly has been made out of beet, and I challenge Deputy Gorry and Deputy Boland to deny that it is only the farmers who have grown beet who have been able to keep their heads above water.

Mr. BRISCOE

There is one aspect of this question that has not been touched upon to any extent. We have had the admission from the Minister for Lands and Agriculture that the sugar beet factory made a net profit of £50,000, and we have been informed by Deputy Derrig that £40,000 was written off against capital expenditure. In other words, there has been a clear profit of £90,000 on the working of the factory. The capital investment is £400,000, and that sum brings from the Government a guaranteed subsidy, which amounts in ten years to £3,000,000. I think when the Government has committed itself to support the factory to the extent of £3,000,000 of the ratepayers' money it should at least have had the foresight to invest £200,000 in the undertaking. The Government has interested itself in other undertakings where the ratepayers' money has to be expended, as for instance the Agricultural Credit Corporation and the bank that guarantees the trade loans. But in the case of this beet factory it did not consider it necessary to invest a portion of the money in the factory. An expenditure of £200,000 by way of investment would not be a great addition to the £3,000,000, and if that sum had been invested we would not have the situation that has arisen. It is a fine proposition for the people concerned. I cannot see how anybody could have refused to support the undertaking if the matter had been properly presented. Here you have for an investment of £400,000 practically a guaranteed profit of 25 per cent. per year, and yet we are told by the Government that support was not given to the undertaking. I maintain, with previous speakers, that the facts of the matter were not put properly to the country.

Mr. KENT

I do not wish to take up the time of the House in discussing matters already dealt with. This factory is only in its infancy, and it should get all the encouragement possible. The question is whether the subsidy given to the factory is too large for the ratepayers. I sincerely hope this factory will be successful, and that it will be the forerunner of others that will be established in the near future. I think this is a question that should be left to an open vote.

Mr. DALY

I am very much surprised that the Opposition should in any way try to retard the onward march of industrial Ireland. The establishment of a beet factory was unanimously supported by this House on the grounds that it would go to show that we were almost a self-supporting country. Even though it should be run at a loss to the ratepayers it is an industry that is giving employment in the district, and I am sorry that any Deputy should raise his hand against it. In my county we are hoping for the establishment of beet factories, and we would be very grateful to the Government if it would give us a beet factory with a subsidy, even if that subsidy was to be put on the local rates. I assure the House that we would be delighted to contribute to the support of such a factory. If we only put our shoulders to the wheel we could make this country self-supporting. We have advanced in that direction by establishing the beet factory, and we hope in a short time to be able to grow tea.

Mr. DE VALERA

Will the Minister inform us what steps he proposes to take to meet the difficulty where there is over-production in respect of the terms of the contract?

Mr. HOGAN

We are taking up that immediately with the factory.

Vote put and agreed to.