I move:
That the Dáil disapproves of the decision of the Executive Council accepting the recommendation of the Tariff Commission that a Customs tariff should not be imposed on packing and wrapping papers and cardboards.
The report of the Tariff Commission on this application was published recently. The application was made in the first instance by the Paper and Paper Bag Manufacturers' Association of the Irish Free State, and was for the imposition of a Customs duty of an amount equal to 33? per cent. of the value of the article on importation into Saorstát Eireann of packing and wrapping paper, and subsequently an application by the proprietors of the Clondalkin Paper Mills for a Customs duty on certain cardboards was added. Both applications were reported on together. The recommendation of the Tariff Commission, which has been accepted by the Executive Council, is unfavourable in respect of both applications. I think it is very desirable that the Dáil should have an opportunity of discussing the Report. In the ordinary course the Report from the Tariff Commission on an application which has been reported on unfavourably would not come before the Dáil, and that, in my opinion, is a very serious defect in the Tariff Commission Act. It was to try to remedy that defect, and to afford the Dáil an opportunity of considering the Report that I tabled this motion. Apart altogether from the desirability of the Dáil considering the Report, the case for the rejection of the application is so weak that, in my opinion, the Dáil should pass the motion in my name and thus induce the Executive Council to reconsider its attitude.
I do not remember any Report from the Tariff Commission in which a weaker case for its recommendation was made than in this Report relating to wrapping papers and cardboards. I came to the consideration of the circumstances of this industry completely as an outsider. I knew nothing whatever about it. Only once in my life was I in a paper mill. I got no reliable information from any outside source whatever. The bulk of the information available to me is contained in the Report. But, on the information made available in the Report, it seems to me the recommendation of the Tariff Commission should have been other than it was. Of course the outstanding fact arising from the Report is the complete unsuitability of the Tariff Commission machinery for dealing with the circumstances of an industry, such as the paper making industry in this country. There is in Clondalkin a paper making mill which at one time gave very considerable employment, and which is capable of giving some employment in the future. A number of persons are apparently prepared to acquire and work that mill in the production of cardboards and papers subject to a customs duty being imposed. The Tariff Commission however is precluded under the terms of the statute under which it operates from agreeing to the imposition of that tariff until the mill has been actually acquired by persons intending to work it. The position is, therefore, one of stalemate. The Tariff Commission refuses to recommend a tariff, and refused at one stage even to proceed with the consideration of the application, because it was not satisfied that there was a company available with the necessary financial resources to acquire and operate the mill.
On the other hand a number of people who were apparently quite willing to acquire and operate the mill did not want to commit themselves financially in an irretrievable manner until the certainty of a tariff existed. The Report of the Tariff Commission upon the part of the application relating to cardboard has nothing whatever to do with the merits of the case for establishing the industry but deals only with the merits of the particular individuals who appeared before them and expressed their intention of working the mill subject to a tariff being imposed. It is in fact difficult to understand what the Tariff Commission mean when they say in their Report that the application failed in so far as it relates to the Clondalkin mill. If it is the duty of the Tariff Commission to acquire all possible information relative to the industry in respect of which the application was made, to examine the question of whether that industry is capable of development in the country, whether a tariff is going to promote that development, whether its imposition may not have counter-balancing effects upon other industries, then the actual merits of the individuals associated with the application should only have a very minor part in their consideration of the question. In relation to this particular application, however, the merits of the possibilities of the industry were apparently not considered at all but only the financial resources and technical ability of the group of individuals concerned. I am not interested in the individuals.
In relation to a debate upon another tariff, the flour milling tariff, I had occasion to point out that because of the peculiar formation of the association responsible for the application a case for a tariff was made over which I personally was not prepared to stand, and which in my opinion was not the best possible case for the tariff. The same applies to some extent in relation to this application. The actual business merits of the company which had acquired an option on the Clondalkin mill should not weigh unduly with the Tariff Commission people. Undoubtedly they should take relevant matters of that kind into consideration but the main question for them to decide was, whether the imposition of a tariff was going to result in the re-opening of the mill and the development of the paper making industry in the country. It is quite obvious from the evidence submitted to them and from the conclusions as stated in the report that the imposition of a tariff would have that effect. I do not know whether Clondalkin mill is doomed as a result of this report or not. It appeared at one time immediately following this publication that the mill was doomed, that the machinery was going to be scrapped and that the buildings were going to be utilised for some other industry. An announcement to that effect appeared in the Press. Subsequently however it appeared that a London firm of auctioneers have expressed their willingness to acquire the mill and operate it as a paper mill if a tariff is imposed, and on the first of this month it was stated in the "Irish Independent" that the head of the firm, accompanied by Sir John Irwin and Mr. D. McCullagh, met the President of the Executive Council and the Minister for Industry and Commerce. The report reads as follows:
It is understood that he made representations to the effect that the present owners of the mill could arrange the necessary finance to restart the mills if the Government would guarantee the necessary tariff on imported boards, packing and wrapping paper. An application for such a tariff was rejected by the Tariff Commission mainly because the financial provision for the re-opening of the mill was unsatisfactory. An "Irish Independent" representative learned that the matter may go again before the Tariff Commission and another effort be made to restart the mill.
I do not know if there is any foundation whatever for that statement in the "Independent," but if there is I think that an early official pronouncement should be made so that workers concerned, who are emigrating in large numbers, and the other parties interested should be given to understand that all hope has not been destroyed. It did appear, as I said when the Report was published, that the paper-making industry was doomed to extinction; but if the matter is to be referred again to the Tariff Commission in consequence of the representations made by the deputation to the President and the Minister for Industry and Commerce, then an official announcement to that effect should be made soon. The announcement already was made during the progress of a by-election in the constituency in which the mills are situated, and they have been influenced by that fact. A number of people had the opinion that it was a red herring drawn across the trail in order to deceive the people of Clondalkin for the few days that intervened between the appearance of the notice and the polling at the by-election. Whether that is so or not I do not know, but as the by-election is now over we may have an official contradiction to set all doubts at rest from the Minister for Finance to-day. The position is that the Irish Free State is at present the only country in the world which permits the importation of paper free of duty. The surplus products of mills and factories in other countries can be sent in here without any restriction whatsoever. It is difficult to see any circumstances existing here which would make the imposition of a tariff inadvisable that do not also exist in England, France, or any of the other countries. The difficulties of the Irish industry have been considerably aggravated by the fact that in 1926 an import duty of 16? per cent. was imposed upon wrapping papers and cardboard imported into England.
The same consideration that seemed to weigh so heavily with the Tariff Commission here must also have occurred to the British Government— the possible effect upon the cost of production of other industries and the cost of living in general. Yet the British Government seem to think that the competition with which the British mills had to contend was of such a character as to be capable of being considered unfair. The same competition was offered to the Irish mills and was, in fact, intensified as a result of the British tariff, so that since 1926 the industry here has found very considerable difficulty in carrying on, and there is, in fact, at the moment only one mill in full production. The Tariff Commission considered this application in relation to various matters set out in the Tariff Commission Act: the efficiency of the industry, the cost of production, the nature of the competition, the effect of the tariff upon other industries and on the public revenues. I have said already that it is very difficult to understand how, in view of the evidence made available to them and in view of the information relating to the industry published in the Report and their own conclusions under each one of these headings, they recommended against a tariff. If the wording of the Report were changed slightly, without in any way altering the material, it would appear to be a Report in favour of a tariff rather than against it. They say, of course, that there are certain objections to the imposition of a tariff. In the first place, we are told that the industry is not efficient. We have come up against this efficiency difficulty in relation to every industry which had the audacity to make application to the Tariff Commission. The persons in charge of these industries were each told that they were inefficient, whether they succeeded in getting their application considered favourably or not. It appears that the paper mills in the Free State are not efficient. Nobody expected the Tariff Commission to say that they were efficient. Some day, perhaps, the Tariff Commission will discover an efficient industry in this country and the effect will be so astonishing that the Dáil will immediately proceed to vote a subsidy to the manager of the mill or to do something of that kind. There is no indication, however, that an efficient industry is likely to be discovered for a long time. I want to read the paragraph of the Commission's Report which relates to this question of efficiency (paragraph 42):
The efforts made by the Brown mills to keep working in the face of severe competition, the expenditure which they have incurred in the improvement of their plant, and the satisfactory quality of their products give ground for believing that they would endeavour to improve the industry under the more favourable conditions which a tariff should bring about. It is to be expected that the mills at present closed would re-open. and if they obtained regular orders, in sufficient volume, all three mills should be able to work full time.
That is not "efficiency," in the opinion of the Tariff Commission. I do not know exactly what their definition of "efficiency" is. It seems to me that the obvious meaning of that paragraph which I have just read is that the industry in the Free State is as efficiently conducted as existing circumstances would permit. The Tariff Commission, of course, tell us that the premises and plant of the mills which they visited in the Free State did not approach in efficiency the premises and plant of the average British mill, but they add: "We feel that expenditure warranted by the circumstances of the industry in the Saorstát had been made, or was in process of being made, at this mill" (that is, the mill in full production), "and that, in view of all the circumstances of the case, the management had secured reasonable efficiency." The efficiency which the Clondalkin mill would be likely to attain was difficult to estimate, because it had been out of production since 1921, and there must have been some deterioration of the machinery. At the same time there was no reason to believe that those who would acquire the mill, consequent on the imposition of a tariff, would not be able to conduct it properly and to equip it so as to permit of the production of paper and cardboards, if not as cheaply as they can now be imported, at a price which would be in very close accord with the prices prevailing in other countries. When we come to consider the question of a possible rise in the price of the products, following a tariff, we must bear in mind that this is the only country in the world in which no tariff on paper exists, and that it can be said that dumping does actually operate. The term "dumping" is very hard to define, and it is one in respect of which great differences exist. But mills in England and on the Continent are able to send, and do in fact send, their products for sale in this country at a price less than they actually procure for their products in the home market. That, undoubtedly, is happening, and the effect has been practically to kill the industry in the Free State. The increase in price of the products of the industry following the exclusion of these dumped products is not something to be deplored; it is rather something to be sought for, because the present situation can only be a temporary one in any case.
As soon as the last Irish mill has disappeared those supplying the market from abroad will be in a position to charge any price they like for their product and will, undoubtedly, set out to recoup themselves for their losses now. There seems to be no reason whatever to believe that the paper-making industry cannot be fostered here. At one time it was one of the most important industries in the country. Over a hundred years ago there were 100 mills in production in this country, employing a very large number of people. In consequence of developments in that industry, and the troubles it had to contend with during that period, the number has now been reduced to four, of which only one is, in fact, working full time. The case made for the tariff before the Tariff Commission seemed so convincing to one of the firms which opposed the tariff—a firm of bag manufacturers which imported the paper—that they became convinced that the Tariff Commission would have no option but to report in favour of a tariff and they acquired a mill. They now find that their action was unnecessary. The Tariff Commission did what they did not expect. Although this firm were opposing the tariff, they thought that the case for a tariff was so strong that the Commission could not possibly refuse to recommend that a tariff be imposed. They bought a mill. They may proceed to work that mill, but in fact, the chances of their doing so, now that free importation is to continue, are slight. The raw materials of the industry exist in plenty. They are mainly, as Deputies know, waste paper, rags and things of that kind. We export a considerable quantity of these materials. The export of these materials last year was valued at £34,000 or £35,000. The Tariff Commission recognised that fact, and they say that if the industry received the protection which it asked it would be able to organise the purchase of these materials in a more efficient manner and take steps to obtain a steady and cheap supply which would enable it to reduce its costs.
The wages paid in the industry are lower than those generally paid in England. All the parties associated with the application paid tribute to the efficiency of that labour. The managers of the Irish mills stated that they were quite satisfied, and the Tariff Commission held that their estimate was confirmed by the owners of mills in Great Britain who now employed workers who were formerly engaged at Clondalkin. The costs of production are somewhat higher, because, of course, the mills are only working spasmodically at present, without any certainty of sale for the products. It is impossible to say what the costs of production would be if the mills went into full production. The situation in this case is similar to that in the case of flour production. Because the mills cannot be worked to their full capacity the costs of production are higher than they otherwise would be. If a tariff were imposed only for the time necessary to enable the mills to reach the point of working at full capacity, its removal would leave the mills in a much stronger position to deal with foreign competition than at present.
It is quite clear that if the present position is allowed to continue the industry will disappear. The loss of employment involved is considerable. The reference in the Commission's Report to the men who were formerly employed in Clondalkin mills, whom they now found employed in English mills during the Commissioners' visit to those mills in Great Britain, is, I think, a condemnation of the delay which took place in affording this industry the protection which it has asked for since the Free State Government was first established. It seemed possible that some degree of protection would have been given when the British Government decided, in 1926, to impose a customs duty on paper imported into England. The effect of that duty in England has been to increase the efficiency of the English mills, to decrease the costs of production and to decrease the selling price of the products.
The imposition of a similar tariff here would have the same effects. Surely the same considerations which seemed to weigh in the mind of the Tariff Commission here applied also in England. There are firms here who might have to pay a slightly increased price for cardboard and paper used in the packing of their goods, but it would be so infinitesimal that it would have no bad effect of any permanence. That applies particularly to the tobacco industry. The tobacco factories have practically an absolute monopoly of the home trade. If there were any possibility of these factories, in consequence of the increased price of wrappers, having to face intensive competition from abroad, there might be some case for rejecting the application. That, however, is not so. Every factory operating in the Free State will be subject to the same disability, and the market is reserved for them in any case, the possibility of foreign competition increasing being very remote.
It is hard to know what were real reasons which influenced the Tariff Commission in producing this recommendation. It seems to me that on the report the recommendation should have been otherwise. Those who were present at the inquiry, including one of the firms which appeared in opposition to the application, were satisfied on the evidence— though I am prepared to admit that the case of the applicants was very badly prepared and not properly presented—that the Commission would be forced to produce favourable recommendations. They did not really consider the case for a duty on cardboard at all. They only considered the financial position and commercial stability of certain individuals who acquired an option on the Clondalkin mills. That was not what the Commission was set up to consider. Here is an industry which existed, which can exist, and which gave a large amount of employment to skilled workers, an industry in every way suitable to the country and with the raw materials available here. Will that industry be fostered by a tariff? The answer must be in the affirmative. There is no case for hoping that the industry can survive under present conditions, and unless a tariff is imposed it is going to disappear. Surely the Free State is not in such a prosperous condition as to be able to afford to watch an industry disappear without taking any steps to preserve it.
If it is worth while on the part of Great Britain to depart from her traditional policy of free trade and to protect that industry, if it is worth while on the part of every country in the world to protect that industry, surely it should be worth our while also. If the Free State is to remain the dumping ground for paper mills with a surplus to export to any part of the world, then this very old industry is going to disappear, and the members of the Tariff Commission when they next visit Great Britain will find a much larger number of Irish workers employed in the paper mills there than they did on their last visit. The case for the passage of the motion which appears in my name, the case for the imposition of a tariff on wrapping paper and cardboard, appears in the Report. Anyone, like myself, who knows nothing about the industry, except what he learns from this Report, would be able to present here a case for a tariff much stronger than anything which has up to the present been made against it.
The existing concerns are admittedly efficiently managed. They have carried on under considerable difficulty in such a manner as to convey a reasonable assurance that if given the advantages of a tariff they will develop their plant and their productive capacity so as to provide the requirements of the country in paper and cardboard. The costs of production will be reduced. The efficiency of labour employed in the mills will be increased in consequence of the permanent employment which will be afforded. The effects upon other industries will be practically negligible and certainly will be no greater than the effects on British industry which resulted from the imposition of a British tariff on paper in 1926. Surely the Dáil is not going to decide that this industry, which has existed here for hundreds of years, which at one time gave employment to thousands of skilled workers, is to disappear now merely because certain individuals, whom the Commission did not like, acquired an option on the Clondalkin mills, individuals who also, perhaps, were not the best persons to entrust with the management of the mills subject to the imposition of a tariff. There are two or three groups, I understand, who are willing to put up the necessary finances to acquire the mill and operate it, if a guarantee of a tariff is forthcoming. The attitude of the Commission, however, is the reverse.
They want to see somebody commit themselves to the purchase of the mills and to their operation as a paper-making concern before they will even proceed to consider the question of a tariff. That is not their duty; it is putting the cart before the horse. It is the duty of the Dáil to reverse that order, in order to ensure that progress will be made. The employment of a number of workers is at stake. The existence of an old industry, and something more than that, is at stake, because I believe if the Dáil is prepared to reject this motion and to permit the disappearance of that industry on the very insufficient evidence contained in the Report, then there is no hope that the Dáil, as at present constituted, will give any more favourable consideration to any other application which comes before them.
