Since the Resolutions were submitted to the House we have had an opportunity of studying the Report of the Tariff Commission, and also of reading the speech which the Minister for Finance made with reference to the Resolutions. I think that anyone who has read this Report will have become satisfied that a very strong case exists for the protection of the woollen milling industry. The various arguments which are set out by the Commissioners constitute, in my opinion, a conclusive case, and left them no alternative but to make the recommendation with respect to that industry which they ultimately did bring forward. It is, of course, to be regretted that the application was not granted about the time it was made, because it is obvious that a very considerable sum has been lost in wages to Irish workers, and a much larger sum in wealth to the nation as a whole, in consequence of the two years' delay which has occurred. It is, however, much more to be regretted that, despite the very long time the Tariff Commissioners gave to the consideration of the application, they do appear to have overlooked several very important considerations concerning it, and to have misunderstood the implications of other facts bearing upon it. I would like to deal briefly with these points. The first of them has been already referred to in the public Press, and concerns the position of the ready-made clothing manufacturers in the Twenty-Six Counties under the new duties. In their Report the Tariff Commission, paragraph 96, claim:
The increase in the duty on wearing apparel containing woollen or worsted tissues should prevent the making-up trades from suffering any loss because of the new tariff.
A careful examination, however, of all the facts which one can secure in relation to the industry, both in the report and in Census of Production, seems to indicate that their conclusion in this respect is not correct. The duty of 15 per cent. on wearing apparel was first imposed in 1925, and since then there has been considerable development in the industry, resulting in the employment of 2.234 new hands, and a reduction of about 70 per cent. in the value of the imports of boys' and men's suits since 1924. Part of that reduction is, no doubt, accounted for by the general fall in prices during that period but we know from the Census of Production that the value of boys' and men's suits produced by the ready-made clothing manufacturers of the Free State in 1926 was £648,000, or just 77 per cent. of the total imports of 1924, the year before the tariff was imposed. It would be, I think, exceedingly regrettable if, in consequence of any miscalculation on the part of the Tariff Commission or on the part of the Executive Council, who gave this matter only very hasty consideration, the good work done in the development of the ready-made clothing industry by the duty imposed in 1925 should be destroyed. The Tariff Commission themselves were apparently awake to the danger that might possibly arise as a result of the imposition of this duty on woolen cloth. In the same paragraph from which I quoted before, paragraph 96, they say:—
Our main object, however, in suggesting the modification in the apparel duty was to ensure that in endeavouring to assist the woollen and worsted manufacturers we did not injure the manufacturers of ready-made clothing in the Saorstát. These were our especial concerns, partly because we believed that the industry was of increasing importance and also because the imposition of the tariff in 1925 caused the investment of new capital and the training of many new workers; we assume that this development has been effected in the belief that the benefit of the tariff would continue for a reasonable period, and we considered that a tariff on cloth without an increase in the tariff on apparel would have the effect of reducing the margin of protection at a time when the industry could not yet be regarded as sufficiently developed to meet open competition.
From an examination of the various facts which they adduced in relation to the recommendation which they made, it appears to me that they have made a very serious miscalculation, and that in consequence of the imposition of the new duty on woollen cloth, they will be doing a serious injury to an already established and rapidly developing industry in the State. The two main points to be considered in this connection are: first, whether the ready-made clothing manufacturers require protection to the full 15 per cent. duty hitherto enjoyed by them, and secondly, whether the cloth they require can be supplied, or is likely to be supplied within a reasonable time, by the Irish mills. With regard to the first of these points, there does not appear to be any doubt that the clothing manufacturers require, at least, a protective duty of 15 per cent. If anything, that duty is inadequate, as the continued import of this large volume of goods would seem to indicate. In addition, the figures quoted by the Tariff Commission on page 56 of the Report, show that the cost of cutting, making and trimming ready-made suits in the Free State is somewhat higher than in Britain, due, I am informed, not to any difference in the rate of wages paid, but to the fact that the workers in the industry here have not yet been able to become as efficient in their work as the workers in the same industry in England. It is true, of course, that the ready-made clothing manufacturers claim that they have reduced their costs in consequence of their increased production since their industry was protected, and such facts as I have been able to ascertain appear to bear out their claim. We must, however, bear in mind that there is also some indication that the ready-made clothing manufacturers in England cut their prices, to some extent, for the purpose of meeting the new duty, and they are, apparently, prepared to cut their prices further, if necessary, in order to retain their business here. In that connection, I might read for the Dáil a circular which was issued by one firm of ready-made clothing manufacturers in Britain, with a large import trade to Ireland, which they sent to all their customers here on the day following that on which the new duty was imposed. It reads as follows:—
In view of the increased tariff on wearing apparel which comes into force to-day, we have decided to reduce our prices on all garments of 20/- and upwards by the 5 per cent. involved. This reduction will come into force from the 1st March next. We trust you will avail yourselves of this concession, and shall be glad to have your future orders on this basis. Always at your service.
It does appear, therefore, that if the new arrangement has the effect of reducing the amount of effective protection which the ready-made clothing manufacturers enjoyed up to this, some modification in the proposal is urgently required. With regard to the second point, as to whether the Irish woollen mills can supply, or are likely in the near future to be able to supply, the cloth which the ready-made clothing manufacturers use, such facts as we can discover from the Tariff Commission's report and elsewhere seem to indicate that such is not the case. According to the Census of Production, the cloth used by the ready-made clothing manufacturers in 1926 cost on the average 4/3 per square yard. If the Saorstát mills could supply cloth of good quality and of sufficient variety of design it this price, then there would be no justification for any arrangement that would permit clothing manufacturers to continue to import the cloth they used to import before, and still enjoy the same degree of protection.
It appears, however, from the report that, although some of the Irish mills produced a cheap wearing cloth superior to the imported British cloth, they have not been manufacturing any quantity or variety of cloths of the style and finish required by the ready-made trade, nor do they appear, from their statements as published in the report, to be contemplating doing so in the near future. It would seem, therefore, that if the Irish clothing manufacturers are forced to use the available Irish cloth of cheap varieties exclusively, the consequence would be a big increase in the importation of English ready-made suits, despite the 20 per cent. duty, because of their more popular design and finish. The same result would, of course, be established if there was any substantial reduction in the measure of effective protection which the ready-made clothing manufacturers enjoyed before these Resolutions were introduced.
If in consequence of giving protection to the woollen milling industry we were to bring about a position in which the importation of ready-made clothing into this country from England were to be greatly increased, it would, I think, be a very undesirable consequence of the recommendations made by the Tariff Commission. The Tariff Commission, however, appear to believe that the combined effect of an additional 5 per cent. duty on wearing apparel, which they recommend to give, with the exemption of cloth under seven ounces in weight or under 1/6 per square yard in price, would be to give the clothing manufacturers the same degree of protection as they had before. Again I must say that to me that does not appear to be the case. It is obvious, I think, that the Irish manufacturer who has to sell his suits, after paying a 20 per cent. duty on the cloth contained in them and a shilling extra for the making, is not getting a 15 per cent. preference over the importer who pays 20 per cent. duty upon the imported suit. In fact, he is only getting about a 5 per cent. preference approximately—that is, if the cloths contained in the suits are the same in each case.
The Tariff Commission produce on page 56 some tables in which they show that even under the new arrangement the Saorstát manufacturer is in a position to sell a suit, made up of cloth costing 4/- per yard, at 1/4 less than the importer can sell a suit made from the same cloth here. The Tariff Commission, I think, would have been well advised to have gone a bit further, and have worked out for themselves what the position of the Saorstát manufacturer in relation to the importer was under the old arrangements and before the new duties came into operation. If they had done so, they would have found, I think, that before these new duties came into operation, the Saorstát manufacturer had an advantage of 2/11 over the importer, and that that advantage is now reduced to 1/4, or by about 60 per cent. It does not appear either that the exemption of cloth under 1/6 per square yard really affects the question.
Amongst the tables given at the end of the report, there appears a detailed list of the cloths imported through the port of Cork during the twelve months November, 1927, to November, 1928. Again, the Tariff Commission, I think, would have been well advised to have worked out for themselves the cost per yard of the cloths mentioned in that list. I have done so, and I cannot find that there was a single yard of cloth affected by the tariff which cost under 1/6 per square yard. Most of the cloth imported, even cap cloth, is considerably in excess of that figure. It does not appear, therefore, that that exemption has any real bearing on the case. Neither has the exemption of cloth under seven ounces in weight, because the cloth that is mainly used in the manufacture of men's and boys' suits is much heavier than that. It seems, therefore, that the operation of these new duties, while helping the woollen manufacturing industry, will undoubtedly destroy the ready-made clothing industry, and nullify the effects of the 15 per cent. duty on apparel which has been in operation since 1925.
It is possible, of course, even now, to remedy that state of affairs. Two solutions of the problem are possible: first, to increase the price of the exemption limit; and, secondly, to increase still further the duty on ready-mades. There are serious objections to the first course. The Tariff Commissioners themselves, apparently, considered it, and made the following remarks in connection with it:
The difficulty is that the material which they use consists largely, though by no means exclusively, of the lower grade woollen cloths which the applicants do not propose to manufacture. We could not recommend the exclusion of the whole range of such cloths from the scope of the tariff, because the better qualities of them compete with much of the cloth manufactured in the Saorstát.
It would therefore seem that the second course I suggest, of increasing still further the duty on ready-made clothing, is preferable. I may say that if, by adopting this suggestion, the effectiveness of the duty on woollen cloths would be impaired in any way, I would not make it, because although the ready-made clothing industry is an important one, it is not nationally as important as the woollen manufacturing industry; and if we have to make a choice as between the two, as, in effect, these Resolutions make us do, then we would prefer the woollen manufacturing industry to the other. There is no reason whatever to prevent us taking steps to preserve both industries. The effect of increasing the apparel duty to, say, 30 per cent. would not, I think, in any way diminish the effectiveness of the duty on woollen cloth. There would still remain the 20 per cent. duty on imported cloth to serve as an inducement to the ready-made clothing manufacturers to use as much Irish cloth as possible. The clothing manufacturers using Irish cloth will have the advantage of that 20 per cent. over any competitor who continues using imported cloth. On the other hand, the demands on the ready-made clothing industry which, according to the Census of Production, used in 1926 1,564,000 square yards of woollen cloth, will induce the woollen manufacturers to cater for that trade.
It is true, of course, and I have no doubt this objection will be made in the course of the debate, that to still further increase the duty upon wearing apparel will result in an increase in the price of the suits made here from imported cloth by the amount of the duty paid upon the cloth in them. That is a serious objection and deserves serious consideration. We are, however, faced with no satisfactory alternative. The only alternative which is open to us is to allow the ready-made clothing industry here to die out. If that were to happen, it would involve loss of employment to 3,039 workers, and, following upon that, the importation of the suits which we require from Britain, and paying a 20 per cent. duty on them. The increase in the price of the ready-made cloth offered for sale here would be much greater if the tariff were not increased to 30 per cent. than if it were so increased.
We do not avoid an increase in the cost of wearing apparel until the Irish mills can supply cloth to ready-made clothing manufacturers in sufficient quantity and in the design which these ready-made clothing manufacturers require. That proposal might be objected to on the ground that it might increase the cost of ladies' apparel imported as well as the price of men's and boys' imported suits. There seems no reason why the manufacture of such ladies' apparel should not be attempted. If an increased duty would result in a start in that direction it would be all to the good. I would place these arguments before the Dáil and ask the Deputies to give them serious consideration. I am sure there is no Deputy here that would like to contemplate that by helping the woollen manufacturing industry in the manner set out in these resolutions he would effectively destroy an industry which has rapidly developed in the last three or four years and put into the ranks of the unemployed 3,000 or 4,000 workers. The duty on wearing apparel has more than justified itself. The value of men's and boys' suits imported since 1924 has decreased by 75 per cent. There is no reason whatever to contemplate that the importation will not have entirely disappeared if that industry continues to receive in the future the same amount of effective protection it received in the past. One other point I wish to make. Regarding the recommendation of the Commissioners that the Imperial preference rate of four-fifths of the entire duty should operate in this case, it is, I think, very remarkable that the Tariff Commissioners did not give a single argument in their Report in support of this recommendation.
We had a statement made by the Minister for Finance in proposing the Resolutions that the Imperial preference is being given for the purpose of easing the marketing difficulties that might arise for the woollen manufacturers in the near future, and we have the statement by the Minister for Agriculture that the reason we are giving Imperial preference was that Great Britain was our best customer, and we should do everything to please her. Neither of these reasons was given by the Tariff Commissioners. They gave no reason whatever. They merely make a recommendation, and leave us to guess the motives for doing so. With regard to the operation of this rate, I would like to say it is not at all unlikely that a duty will be placed on woollen cloth imported into Great Britain in the near future. If a preference is given of which the Irish millers can avail, it will be all to the good. I may say also that the giving of a preference to British goods in all cases may be good policy, but we have yet to be informed that it is the Government's policy. If it is the Government's policy, we should have an opportunity of discussing it, but if this preference is being given, not as a part of the general policy, but, as the Minister for Finance stated, to ease the marketing difficulties which the Free State millers may have to meet in the near future, it does seem that more serious consideration should be given to it than has been given to it heretofore, apparently, either by the Tariff Commission or by the Executive Council.
A preferential rate of duty should be given only when it is given in respect of a particular import in return for a similar concession from the country with which we hope to do the most profitable business. The figures given by the Tariff Commission, and the figures contained in the trade statistics published by the Department of Industry and Commerce, show that the Irish woollen manufacturers since 1924 have been rapidly losing their position in the British market, while at the same time they have been much more rapidly gaining a much more profitable market elsewhere. Between 1924 and 1927 our total export of woollen cloth declined by 2.2 per cent. During the same period our export to Britain declined 39.9 per cent., while our export to the United States of America increased by 212 per cent. There was an even greater increase in respect of a number of other countries, notably Canada. The Imperial preference rate would apply in the Canadian case. We import practically no woollen cloth from Canada or from the United States of America, but in 1927, the last year for which we have full and accurate figures, we imported other goods from the United States of the total value of £4,600,000, which was more than four times the value of our imports from Canada. I would ask the Dáil to give serious consideration to this question. If there is to be any preferential rate in the case of this duty we should give that rate in return for a similar concession from the country or countries with which we hope to do the most profitable business. If during the last four years our exports of woollen cloth to Great Britain have decreased by 30 per cent., it is only to be expected that the decline will be much more rapid after the duty comes into operation in Britain. Our exports to the United States have increased by 212 per cent., in spite of the very high tariff wall around that country. The same applies in other cases. According to the figures given by the Tariff Commission, the value of our exports of woollen cloth to foreign countries has remained stationary, because of the fact that countries other than Britain have been buying cloth in increased quantities, thus making up for the fact that we are rapidly losing our market in Great Britain.
I do not know, but I would like to be informed, whether this preferential duty is being given as a part of the general policy of giving a preference to British goods. I am not arguing against that policy. There might be, and can be, very sound arguments advanced for it. I would like to know, however, if that is the policy of the Government, or whether they are merely applying a preferential rate in this case for a special reason, and if so what that special reason is? Do they think it will help to restore in any part the lost market in Great Britain for the products of our woollen milling industry? If that is their only purpose in applying a preferential rate in this case I think they are making a serious mistake. I think they can use the possibility of that preferential rate as a point to work from to secure a special reduction as regards Irish woollens in the case of the American tariff wall.
I believe if we got such a preferential rate from America it would be much more valuable to our woollen millers than a similar preferential rate from England. We have reduced our sales to England by 30 per cent. during a period when no tariff was in operation, and if any tariff comes into operation in Britain, even though we get a preferential rate, we will still have difficulties to meet that we never had before, and our sales will decline very much more rapidly than during the past few years.
I put these points before the Dáil for serious consideration. I ask Deputies not to adopt the recommendations of the Tariff Commission with the same haste and lack of examination with which apparently the members of the Executive Council did. I may say, of course, that, irrespective of whether these suggestions are or are not adopted, it is our intention to vote for these Resolutions. We will vote for these Resolutions, knowing if they are carried in their present form it will kill an Irish industry and put 3,000 workers into the ranks of the unemployed; and knowing also that that undesirable consequence can easily be altered or prevented by increasing the duty on wearing apparel, not by 5 but by 15 per cent., for the purpose of giving firms here the same rate that they enjoyed heretofore, under which they built up the industry to its present position.