Deputy Good very often tells a story similar to mine, but he invariably has a different application and moral. I also am inflexibly hostile to the unnecessary interference of Governments with commercial affairs, that is to say, in the sense of interference to run them. But it is a very different thing to say that a Government must not interfere in a process which is in operation in this country and which is definitely inimical to the State. The difficulty with Deputy Good and those whom he represents is that they are always perfectly in favour of a thing being done and always entirely opposed to the doing of it. I propose, in a moment, to go through a little bit of Deputy Good's speech, because it was a contribution which ought to be very valuable to a debate of this kind, which I hope will be carried on throughout in the spirit in which it has been initiated. That is the spirit of people who are facing a big actual problem in relation to their own country, prepared to think out frankly, face to face, its difficulties and, if possible, to co-operate in its solution.
Deputy Good says that capital alone does not make an industry. That is perfectly true. It requires capital, it requires labour and it requires management. He then goes on to draw some strange conclusions. At any rate, that seems to be what I drew from him, that we in this country were failing in industry through the lack of those brains which he says we require. I suggest that there is a perfectly feasible and understandable explanation of the failure of Irish industries, which is not founded upon lack of brains, and I propose to take a particular illustration. I am not going to give the names. The names are at the disposal of the Minister for Industry and Commerce.
As we know, the insurance industry of this country is practically completely possessed outside. With all the talk we have in prospectuses, and so on, of the advances of our native insurance companies, they have not even scratched the paint on the armour of the opposition. Very often it is said that that is due to this lack of brains and that lack of organisation which seems to loom so big with Deputy Good. A certain Irish insurance company had the insurance of a great industrial institution in Ireland for, I think, somewhere about £1,400,000 or £1,500,000. It had that insurance at the rate of 2/- per cent. on the general buildings, and it had very liberal terms, up to a pound or so, upon temporary buildings. It came on to the time when the insurance of that enterprise would be renewed and word came down from the head office here in Dublin of that Irish insurance company intimating that the rate of insurance had been raised from 2/- to 3/6, a rate which was obviously and utterly absurd. This rate was submitted to the insurer. He expressed himself in terms which this Dáil would not allow me to use. Protest was made to Dublin, and in the end there was produced a document showing, I think, that re-insurance of that risk had been set by a collection of English companies at 3/6. I need hardly tell you that an Irish insurance company of the size could not honestly take on itself, under present conditions, the holding of a risk of that kind. This was re-submitted, and several attempts were made in Ireland to get the rate for that particular industrial concern, but it was, like the parrot disease, 3/6, 3/6 everywhere you went to. The insurance was running out, and the local manager in Ireland got on to Lloyd's Bank in London by 'phone and asked for temporary cover. He got temporary cover to the extent, I think, of £780,000 at 4/-, and subject only to the whole insurance being given by 4 o'clock the next afternoon at 4/-. This again was reported to the Irish industrial concern. The rate was apocryphal, and the man went to London to an insurance broker of whom I know. He said, "I want to insure this place for £1,500,000." The answer was that there was no difficulty. He came back to Ireland on the next boat with the place insured, not at 4/-, not at 3/6, not at 2/-, but at 1/10, and the firm that led in setting that new insurance at 1/10 was the firm that led in setting the re-insurance of that competently-managed Irish company at 3/6.
That Irish company went all over the world looking for re-insurance in face of a block of opposition of that kind. They went to Germany, and there was a re-insurance available in Germany, because at that time they had broken squares with the people upon the other side, but the Dawes scheme came into operation. The financial interests became friendly again, the block was reformed and Germany refused to re-insure. They went to America, and America said: "If the firms close by who know you will not re-insure at those rates, how can you come to us?" They went as far as Japan, but the ring was complete. Re-insurance could not be got, and in the end that Irish company was sold to the company which led in setting the rate at 3/6, and which led in giving the insurance at 1/10, and which is now concerned in insuring that same enterprise at 1/6. It was not lack of brains, it was not lack of organisation, it was not lack of efficiency which broke that organisation out of the comity of Irish industries.
There is no more dust in the sunbeam than there is in the rest of the room, and what practically does happen in Ireland is this: That when enterprises by efficient management grow out of the stage at which they can be ignored into the stage into which they must be considered, then they find themselves up against this block and faced with the proposition of either putting their chanies in the pool or being smashed. I could parallel that story, which to me is fundamental, in many smaller examples in Ireland, and that is what you have to face. Many good plans have been broken in Ireland, and not through lack of brains, not through lack of efficiency, but because there was power and intention to smash them when they had developed into the position in which they were capable of being considered as effective nationally.
Deputy Good told us that the building up of an industry was a matter of generations. I agree. The destruction of an industry is often simply a matter of the right-hand grip at the right time. Technical education is necessary. Technical education is a thing which for practical and efficient purposes ought to be developed. I know that that is the particular fetish of Deputy Good and I think that the House is fortunate in having somebody who, time and time again, will reiterate that point of view, but technical education alone will not do it when you are faced with blocks of this kind. Deputy Good told us that we have had several tobacco factories in this country and that there had been substituted some more. How, he said, can we stand up against mass production of that kind? How can we stand up against mass capital, capable of being used as a single unit, recklessly and remorselessly, through all the avenues of influence which it possesses in this country? We cannot stand up on any other basis than on the full understanding by the people of the real issue behind it, that activity in all parties, in all organisations and in all interests in this State which will bring the people of Ireland together, prepared to put into the market place something that can be neither bought nor sold.
You have a great many soap factories in this country, every one of which, perhaps with the exception of one, is controlled either through percentage of capital, through capital ownership, or through the control of raw material by one single enterprise. That enterprise has a capital of sixty-six million pounds. Assume, for a moment, that I have £100,000, all the technical skill necessary, and all the organising ability which is required, and that I put up, in Dublin or Cork, a perfectly efficient, new, and modern soap factory for the purpose of producing soap, what is the value of my 100,000 one pound shares? On the day on which I open the factory the enterprise with the capital of sixty-six millions is prepared to get after me as a unit. It is worth the scrap value, and only the scrap value, of the plant which I have put in. If, however, we could produce that miracle here of getting the people together, determined to face the problem in the only way in which they can face it, namely, by bringing into the market place something which can be neither bought nor sold, the loyalty of the people to themselves, and if when I started that factory they said that the only soap they were going to have was my soap, what would be the value of the sixty-six million capital acting as a unit in opposition? Not one red cent.
Allusion has been made to the adverse trade balance, visible and invisible. The greatest danger we have is one of our invisible exports, the export of the ownership of the means of production, distribution, and exchange in the country. That is going on continually and at a rate the understanding of which, I think, is not kept to one single party. I think that the Minister for Finance, though possibly not in the same degree, is as conscious as I am of what is going on and of the danger belonging to it. The Council of the County Borough of Cork last night passed this resolution:—
"That this Council views with concern the present and increasing tendency of existing Irish productive industries to pass into outside control, and demands that the Minister for Industry and Commerce shall take some such action as may be necessary to prevent the control of the Irish milling industry passing outside the State."
At the present moment I do not know what exact action may be necessary or, in the actual circumstances, is best to be taken in relation to that industry, though probably I know more about what is going on inside at present than most people. From these benches we give to our opponents an assurance that if they will take effective action, whatever that effective action may be, they can rely on us for our complete co-operation. I would like, however, to say something further, namely, that if the action which is necessary to be taken is not taken now, and if action is now taken which means that the control and ownership of that industry will pass into the hands of outsiders, we on this side of the House will not recognise that as a permanent position. There has been retrospective legislation in this country before, and if ever such legislation could be justified it would be justified to amend the evil in relation to this development which may, through present difficulties, through inadvertence or through indecision, fail now to be taken.
I agree with Deputy Good very strongly in one thing which might seem to have relation to this when he speaks of interference in the industry. If it is suggested that the Government of this country is competent or is the proper body to take over the job of reorganising cross-Channel shipping or Irish milling I thoroughly disagree. Perhaps the most useful development that has come about in public economic thought in this country in recent years has been the gradual hardening of the understanding that the effective function of any Government in relation to industry is not to do the things themselves but to stand behind those who are doing them. If the Irish milling industry is faced by a threat of rationalisation from outside which means in practice eventual destruction, I have not the faintest shadow of doubt that all this talk of rationalisation, to the extent to which it is profitable to individual millers or otherwise, simply means an economic version of the policy of the spider asking the fly to come into the parlour. If, however, the State is prepared to do the things which I think that it is absolutely necessary for the State to do, if the State is prepared to take the powers which in my opinion it ought to have, it should exercise its right, as against the Irish millers and against any other trade on whose behalf those powers are operated, to demand something in return. From the point of view of Irish economics, from the point of view of manufacturing in Ireland out of that industry the maximum number of livelihoods, and in the process giving the most efficient access to the most necessary foodstuffs for the rest of the people, they must be prepared to do their share. Rank is in, all the talk, all the stories you hear, all the pronouncements notwithstanding. The only thing that is true is that Rank is here and is here for Rank. Some months ago when we were dealing with the question of a flour tariff I said that there were two industries in Ireland which I thought were capable of standing up to economic penetration. One of them was the milling industry and the other was the woollen industry, but I said that they were only capable of doing it if they were prepared themselves to do what was necessary in internal reorganisation and co-operation.
Before Rank came in, that problem was comparatively easy, but you have now to deal with the fact that you have here a miller from outside who has, roughly speaking, thirty per cent. of the productive capacity in milling in this country, who imports about one half of the flour imported into this country, and who has a complete and intimate affiliation with those who import the other half of the imported flour, with those who control the mills which are working in England and the large amount of capital which they have and which they must use for fighting, to get possession of the whole Irish milling industry if they are going profitably to work their corporations together.
I would ask you to look at this problem for a moment—and I am not blaming Rank; he is here under the laws of the country which we have power to change; he is not doing anything illegal, he is not breaking any ordinary custom of commercial morality in anything he is doing— and to consider it as if Rank were not here and then see how you have to modify the solution of that problem, having regard to the fact that he is here, and here to stay, unless you decide otherwise. Having regard to the fact that England is completely over-milled, that she has available capital in the milling industry which is altogether greater than ours, and having regard to the actual state of financial embarrassment which is represented by the individual Irish mills at present, I would say that the whole Irish milling industry, taken as a unit, is a wasting asset, an asset which can be wasted very rapidly to nil, and which will, in fact, be very rapidly wasted to nil if ordinary economic forces uncontrolled are allowed to operate. What I would suggest to the Irish millers is this: that they recognise the fact that this is a wasting asset which may waste to nothing; that they first come together, the whole internal milling industry in Ireland, that they recognise that they are a unit—for the moment let us deal with the Free State—that they put perfectly separate and independent auditors into every one of these mills and estimate and record the value of each individual unit of that possible combination in good-will, profits and everything else; that then they form a corporation in which those mills will be represented by, say, one mill 1.8 per cent., another mill 15 per cent., and so on—in other words, units of value as distinct from nominal value. They can put on any nominal value they like.
Once that has been done, then that milling corporation, as a corporation, must be prepared to regard the whole industry as one. They must be entitled, with due regard to Irish economic interests and considerations alone, to remodel any mill, to scrap any mill, to build any new mill. Their business is completely to rationalise themselves from within. When they have done that, when they have shown evidence that they do intend to do that, if the necessary resources and assistance of safeguarding are put behind them by the Government, then I think they are entitled to come to this Government or to any other Government and to receive from whatever Government is in power, with the support of the whole House, every assistance that is necessary to maintain that efficient new Irish milling entity in safe existence. To deal with the facts, when now you have the cat amongst the pigeons, is a very difficult question. I would find it very difficult to draw legislation which would be effective. I think the Minister would. No legislation in my opinion will be effective unless you can put behind that unit of Irish milling the public opinion of a thoroughly-informed country, unless you can get people to realise that that is their asset, that to take that asset out of their possession is to put in pawn the price of their food and even the existence of their food at any moment which is critical. Any power that the Ministry can effectively use to reconstitute the Irish milling industry as an internally-owned and controlled efficient industry, they are entitled in my opinion to have the support of the House in giving.
Let me turn to one other difficulty and it is in my opinion more fundamental. It is a fact that in dealing with these cases, great as are the powers outside us, and immense as is their wealth, the real danger is inside. It is a fact that we cannot regiment on the side of our industry with anything like the efficiency they can—they bring to bear the powers of co-operation. The House will be familiar with the fact that in dealing with one of these outside influences, the Cork Harbour Board some weeks ago were asked by one of the tentacles of the octopus, the City of Cork Steam Packet Company—it was an impudent demand—to go to the Railway Tribunal or to a court for an injunction to prevent the Great Southern Railways, in which just at the moment I do not happen to possess any shares though I intend to buy them, from reducing freights from the whole of the South of Ireland to Great Britain. Imagine a demand more impudent than that.
Instead of the Cork Harbour Board passing that resolution they passed an entirely different one. That was that while maintaining all the rights and powers of the Cork Harbour Board for the benefit of the community, they dissociated themselves from this attempt of the City of Cork Steam Packet Company to prevent a reduction of these freights. An amendment was proposed to that resolution for the purpose of sidetracking it. There were not many people who voted for that amendment, but I want you now to see who voted for it, and then you will get an understanding of what you are up against. I think you will agree that that was an impudent proposal. There voted for that resolution the Chairman of the Cork Harbour Commissioners: there voted for it the Managing Director of the Cork Steampacket Company; there voted for it the Chairman of the Liquor Commission; there voted for it the Chairman of the United Cattle Trade Association; there voted for it the President of the Incorporated Chamber of Commerce and Shipping. And among the other qualifications of those who were included in that vote was the City Coroner, the ex-Chairman of the Cork Harbour Board; the founder and two ex-Presidents of the Cork Rotary Club, an ex-Lord Mayor of Cork, and an ex-T.D. I am not, in saying this, in any sense political, because I do not think it is a question on which there is any line of ——