Dáil Éireann díospóireacht -
Wednesday, 3 Mar 1937

Vol. 65 No. 8

In Committee on Finance. Additional Estimate. - Vote 78—Peat Fuel Development.

Minister for Industry and Commerce (Mr. Lemass)

I move:—

Go ndeonta suim na raghaidh thar £35,000 chun íoctha an Mhuirir a thiocfaidh chun bheith iníoctha i rith na bliana dar críoch an 31adh lá de Mhárta, 1937, chun Deontais-i-gCabhair chun Forbairt na Móna.

That a sum not exceeding £35,000 be granted to defray the Charge which will come in course of payment during the year ending on the 31st March, 1937, for a Grant-in-Aid for Peat Fuel Development.

Deputies will have noted that on the face of the Estimate the following note occurs:—

"This grant will be paid over to a deposit account from which advances will be made to the Peat Fuel Company, Limited, by the Minister for Industry and Commerce in such sums as he may from time to time determine. The amount advanced will be secured by a debenture charged on all the assets of the company and will be repayable at such times and on such terms and conditions as the Minister for Finance, after consultation with the Minister for Industry and Commerce, may determine at the date of the advances or subsequently."

It is, perhaps, desirable to make it clear to Deputies that the Peat Fuel Company, Ltd., referred to there, is not the Turf Development Board which was established by the Government and which is financed annually by moneys voted here in the Estimates. The Peat Fuel Company, Ltd., is a private company which was formed in 1934 for the purpose of engaging in the production of a particular type of peat fuel by certain original methods— original both in respect of the harvesting of the peat and of the manipulation of it—which it had the right to use under licence from the patentees. It was financed with a capital of, approximately, £57,000, and made an application for, and received, a trade loan guarantee for £90,000. At the time that the question of the application for the trade loan guarantee was under consideration I went very fully into the question of the practicability of the method of working which this company proposed to operate, and arranged for an expert examination, both into the plans of the company and into the actual working of a factory in Denmark where the same method of operation was being tried. On the basis of the information supplied in the report of these experts as well as on the general conclusions I have reached from the plans submitted by the applicants, I decided that the object was one worth supporting.

It was obvious, of course, that their plans were very experimental in nature and that the particular method of operation which they proposed to adopt might or might not prove suitable in the conditions prevailing in this country, even though they did appear to be working satisfactorily in Denmark and elsewhere. In fact, the company found that the particular machinery which it had designed for an operation here was not altogether suitable. The bog at which they were operating, situated in County Kildare, was a very wide and deep bog and different in its nature to the bogs existing in other countries, and the machinery, although in the opinion of these experts satisfactory in principle, was too heavy for successful operation upon Irish bogs, which involved the redesigning of that machinery to a very considerable extent.

The process which the company, apparently, is operating is divided into two parts: first, the winning of the turf, and, secondly, the manipulation of that turf and its manufacture into briquettes. So far as the briquetting plant was concerned, the company were successful in their operations. The plant was created and, as a result of working on the amount of material that had been harvested, it produced satisfactory briquettes. In any event, the company were secured by a guarantee from the designers and directors of the plant as to its efficiency. The difficulties which the company encountered all arose in connection with the particular process of harvesting—a rather elaborate process involving the use of machinery to a great extent. The company, as I explained, found that the machinery which had been designed by their experts, and which was put into operation, was unsuitable. It was unsuitable mainly because it was too heavy, although in certain other respects it had to be redesigned and additional equipment was considered necessary. In any event, the company were involved in considerable expense as a result of the necessity for changing their plant, and early in last year they approached my Department to explain that their liquid resources had become exhausted and that, if the experimental and operating work of the company was to continue throughout 1936, certain additional financial assistance would be required. After consideration of the case they then made, I agreed to the creation of a new debenture which would rank in priority to the general debenture which the Government had secured upon all the assets of the company, and which was the security for our trade loan guarantee. Unfortunately, however, 1936 proved to be a very unsatisfactory year for this company. As Deputies will remember, it was exceedingly wet throughout the whole of the summer.

Mr. MacDermot

Would the Minister say what was the amount of the new debenture?

Mr. Lemass

£20,000. As I was saying, it was exceedingly wet throughout the whole summer, and the amount of material harvested was far short of that required for the economic working of the briquetting plant. Furthermore, all the difficulties which the company had experienced in relation to its methods of harvesting peat were not fully overcome, and some further adaptation of the plant and equipment is apparently necessary. At the end of 1936, therefore, the company found themselves in the position that once again their resources had been exhausted and they were facing a new season without the wherewithal to enable them to carry on their operations, and they placed the facts of that situation before me. It was with very great care that I went into all the circumstances relating to the enterprise. Of course, there are two Government directors on the board of the company and I had the benefit of their advice as well as having an opportunity of studying the very careful reports prepared by the company's own experts and those whose opinions it had sought upon the nature of this enterprise.

I think, in conclusion, that the enterprise is one worth continuing with. The progress made gave good reason to believe that the difficulties which the company had encountered in the past could be overcome and, having regard to the very great importance in this country of perfecting a suitable method of working peat bogs in the particular manner it is doing, I felt we would be justified in granting the company further financial assistance. It is not practicable to give that further financial assistance by way of trade loan guarantee and, consequently, this procedure of coming to the Dáil for a Grant-in-Aid has been adopted. We are proposing to ask the Dáil to agree to making £35,000 available, to be advanced from time to time, as I may consider it necessary, for the purposes of this company; each advance to be secured by a debenture upon all the assets of the company and to be repayable with interest at such rate as the Minister for Finance, in consultation with myself, may determine. It is proposed, however, that the Government will have the right, at its option, at any time after 1st April, 1939, to convert this new debenture into 35,000 A ordinary shares of £1 each, fully paid-up in the company. Each A ordinary share carries two votes per share; otherwise, these shares will rank pari passu with ordinary shares at present issued which will in future be designated as B ordinary shares. The effect of that provision is that if the Government should choose to exercise that option, it will have complete voting control in the company.

I do not know if it is necessary to say more to Deputies at this stage. I think a number of Deputies are familiar with the particular enterprise to which I have referred. It is one in which I take a personal interest, because I saw that, if successful, it offered very considerable possibilities for expansion. The fuel produced is a very satisfactory fuel. It has a high calorific value. It is very easily transported, very clean, and will be very suitable for particular uses to which coal is put in this country. It may be that the particular patented process which this company is operating will not prove successful, but I have come to the conclusion that there is at least a very good prospect of success and, that having regard to that, we are justified in advancing this money, in other words, in not allowing the experiment to collapse at this stage until it has been fully tried out. If, at the end of the present year, the difficulties have not been overcome, and the financial difficulties have not been eased by the production of a marketable commodity which can be sold, then a new situation will arise. But in the circumstances now existing, having regard to the climatic difficulties which prevented the company operating to the full extent last year, the nature of other difficulties with which the company have met, and which engineers and others assure them can be overcome, I think we ought to allow the experiment to proceed and to make available this money for the purpose. If the enterprise is a success the money will be repaid, or, alternatively, we shall be able to take control of the enterprise, which is at present in the hands of a private company, and carry it on The reason why, in my opinion, that alternative course of action should be open to us is that whereas the private company interested in this process might be satisfied with the successful operation of one unit, certain national considerations might justify the expansion of the industry on a wide scale if successful. We should be in a position to ensure that that will happen, having regard to substantial financial assistance which the State is giving to it. On the other hand, if it is not considered desirable to promote such expansion, the full security of the assets of the company will be available to the State as against any advance which may be made.

Mr. MacDermot

Has the company acquired all the new machinery it considers necessary?

Mr. Lemass

The company acquired in the first instance the full range of machinery it considered necessary. Some part of the machinery proved unsatisfactory in operation in Irish bogs and had to be scrapped entirely. New machines to carry out the particular operations for which the original machines were designed were then planned and constructed. Some of the other machines which the company was operating, although apparently satisfactory in principle— in other words, the design and purpose of the machine proved all right—proved too heavy upon the bog on which they were operating. The bog is very deep. It has a depth of from 20 to 25 feet, and the machinery had only previously been operated on a commercial scale on a much shallower bog at the factory in Denmark where the process was tried out on a large scale. Various alterations were made in the machines in order to suit the conditions on Irish bogs, some of which were satisfactory and some of which were not. I could not say that at the present time the company is satisfied that it has got all the machinery necessary for successful operation. There is still a certain amount of experimental work in the designing of machines to be done, but we are assured by those who are our advisers in the matter that the task of designing that machinery is not a matter of any insuperable difficulty.

Mr. MacDermot

Where was the machinery bought?

Mr. Lemass

Some of it was bought in Great Britain, some of it on the Continent, and some of it was constructed here. The machinery at the factory itself was constructed by Babock & Wilcox, who are financially interested in the project. They are the firm who are guaranteeing the efficiency of the factory. There is no difficulty as regards the machinery there. The difficulty is in relation to the part of the work that precedes the operations in the factory. Part of the machinery had to be specially constructed, and various engineering firms were called upon to do that. I think I am right in saying that some parts were constructed where the personal supervision of the manager could be given, as everything seemed to depend on the designing of suitable machinery.

Mr. MacDermot

In what month will the company resume operations?

Mr. Lemass

It resumes in March, and it carries on through the summer months. During the summer, material is collected in the bog for manufacture during the winter in the factory. I cannot guarantee in any way that this company is going to be successful in its operations, but I have reasonable grounds for believing that it will be successful. In any event, having regard to the considerable advantage it would be to this country if it were successful, I think we are justified in giving this financial assistance to enable the experimental work to be concluded.

Mr. Brennan

When the Minister for Industry and Commerce comes to this House and asks the House to vote a sum of money for an industrial enterprise, the first thing he should endeavour to do is to establish confidence in the enterprise. I am afraid that the Minister has entirely failed to do so in this instance, and I am afraid he knows that. It is certainly very hard for anybody having listened to the Minister's introduction of this Estimate to feel any confidence in the enterprise. The Minister has told us that we have here a company with a capital of £57,000. He has not told us that it is all paid up.

Mr. Lemass

It is paid up.

Mr. Good

Who subscribed it?

Mr. Lemass

Quite a number of people.

Mr. Good

Has the Government subscribed any of it?

Mr. Lemass

Not to the £57,000

Mr. Good

It was subscribed by private interests?

Mr. Lemass

Yes, by private interests.

Mr. Brennan

We are told that the company has a paid-up capital of £57,000. In addition to that, the Government, on representations made to them by the company, have lent them £90,000.

Mr. Lemass

The Government has guaranteed a loan for that amount.

Mr. Brennan

The Government has guaranteed a loan, which is practically the same thing. Now we propose to give them a grant-in-aid of £35,000, which is supposed to be secured by a charge on the debenture stock. I suppose it is no use in asking the Minister if they have repaid any of the £90,000.

Mr. Lemass

They have repaid no money so far.

Mr. Brennan

Notwithstanding that they have a paid-up capital of £57,000, plus £90,000 of a loan, we propose to make them a grant-in-aid of £35,000

Mr. MacDermot

They have a second debenture stock of £20,000.

Mr. Brennan

We are supposed to have the power to take over full control eventually. When, after we have paid the £35,000 and received our A ordinary shares, the Minister for Industry and Commerce, or the Government of the country, whatever Party will be the Government at the time, are looking forward to getting anything out of the company, they will be disappointed, in my opinion.

I do not at all agree that the development of peat is of such grave national importance; I think there is entirely too much being made about it from that point of view. When the Minister tells us that, owing to the climatic conditions, those people could not make good last year, that makes me rather sceptical that they are ever going to be able to make good. When they started to use machinery they might have made some effort to select the type of machinery that would be able to overcome climatic conditions. We can all save turf, hand-made turf or machined turf, if we get the climate. So far as this proposal goes, the Minister asks us to make a further grant to a company that apparently has not succeeded in overcoming climatic conditions in the making of turf briquettes. I do not think that is a fair proposition, and I do not think the Minister has made any case for it.

He has told us that the whole scheme is largely experimental. That is the only justification offered for asking the House to make another advance towards this enterprise. Is an experiment of this type, carried on by a company that is not able to overcome climatic conditions, of such grave importance to this country that we ought to expend this large sum of money on it? Personally I do not think it is. The Minister has made no case for the advance of £35,000 except this, that there are certain people who apparently made a mistake in bringing over machinery that is of no use to them now and they may have to scrap it; they have, in other words, squandered their own and a good deal of our money. It is a very poor case.

The Minister did not even tell us what they did produce when they were working. What are they able to produce? He mentioned that the briquettes had a high calorific value. Possibly they had. When this business is established what will it turn out and what price will be charged to the public? What relationship will the product bear to ordinary turf or coal? We ought to be told what the company is capable of doing, provided it has the right machinery and is able to go ahead. The Minister has not given us the information we require. All he tells us is that here is a company that has been a failure, and, because it is regarded as being in the experimental stage, it should be given some further assistance. I think the Minister has made a very poor case.

Mr. Moore

Deputy Brennan said that the only case made for this grant is that the production of peat briquettes is purely experimental. He does not think that that is a good case. I wonder what he would consider a good case in the way of an experiment? He does not think the development of our peat resources is of great national importance. What would he consider of great national importance in the way of industrial enterprise? If there is one thing we have that might be a special asset, it is our peat resources. If they are not found to be an asset, then, apart from our land, we are poor indeed, because I think we recognise by this time that we have not any very considerable mineral deposits. The one hope with regard to raw material for industrial development, for a definite and special industrial development, is that our peat resources would turn out to be resources that could be utilised on a wide scale.

This experiment is on trial; it has not been long on trial. This company has already turned out a splendid article, an article considered by those who use it as ideal from the point of view of household fuel. In my opinion it was put on the market at too high a price, but I understand that that price is not to be considered the normal price as soon as production is normal. So far as the quality of the fuel is concerned, it could hardly be improved upon. Those who use it say that if it could be made available in unlimited quantities, and at even a slightly lower price, there would be no excuse for burning coal. An experiment that has resulted in creating that opinion amongst the general public who have actually used the product is an experiment that at least deserves sympathetic consideration.

Mr. MacDermot

Could the Deputy give us any particulars of the tests or indicate who have tried this fuel?

Mr. Moore

It has been on sale in Dublin; these briquettes have been on sale. They were used very largely amongst Dublin householders, and I am quoting the opinion I have heard expressed.

Mr. Brennan

The producers have lost money, all the money they had.

Mr. Moore

Of course they did. Is that a new thing in connection with industrial development?

Mr. Brennan

Unfortunately, no.

Mr. Moore

Is Deputy Brennan familiar with many industrial enterprises that have made profits in the first year? He must be very optimistic if he considers that any important enterprise can avoid losing money in its early stages.

Mr. Good

This is not the first experiment in this country with regard to peat.

Mr. Moore

It is the first experiment in the case of peat briquettes that I know of. At all events, the House approved of the experiment and of the Government supporting the experiment originally. Now we have the position where success has not yet arrived, but there is still the possibility, and even to some extent the probability, of success. If the Government said: "Enough of that; since you have not been able to make good within the year or two that you have been in operation, we are having nothing more to do with you; you can do what you like with your plant; you can, so far as we are concerned, clear out to-morrow," would the House welcome that action on the part of the Government? Surely, if the Government have any function with regard to industrial enterprise it is in relation to experiments, and particularly where such experiments are connected with such a big natural resource as peat. I think there is a very good case for this money being granted, and I hope the House will accede to the Minister's request.

Mr. McMenamin

I regret to learn of the misfortune of this company. To me it seems incredible that £76,000 has been entirely lost in the process of winning turf, particularly when we take into consideration that the three years preceding last year were record years for the winning of turf, even hand-made turf. The Minister's case is that last year was substantially unsuitable from a climatic point of view. He asks the House to believe that this company incurred considerable loss as a result of the weather last year. The Minister is a city man and perhaps he does not know very much about this job. Would he be surprised to hear that the rural population last year succeeded in saving their entire requirements of hand-won turf? Let me tell the Minister that while last year was something of a handicap and was not everything that might be desired, not entirely comparable with the three preceding years, at the same time last year was not at all a bad year. There are plenty of Deputies who can confirm that the entire requirements of hand-won turf were saved.

Mr. Moore

Not at all.

Mr. McMenamin

We know that even in years when the heather was scorched there were men who would not save sufficient for their own requirements. But I am talking about people who put in the normal amount of industry and who are determined to get their turf crop out.

Mr. Moore

No.

Mr. McMenamin

In these circumstances, £76,000 has been lost in the production of turf. I do not know what was the value of the machinery, or if the entire £76,000 was invested in machinery.

Mr. MacDermot

Could we get this figure clear as to what really has been spent? My calculation is that it is £167,000—£57,000 plus £90,000—not £19,000, I think—plus £20,000; total, £167,000. Is that what was actually spent?

Mr. McMenamin

I thought it was £19,000. Give me £167,000 and I will get hand-won turf of the best quality, suitable for burning anywhere. I will produce the value of the entire £167,000, and make a profit on it, and I will not want any machinery, only turf-spades and barrows. This House is asked to vote another £35,000 to be dumped into these men, whoever they are—engineers, directors and machinery experts to inspect the machinery. They want another £35,000 after losing that. I want to be frank for the reputation of a country where turf production should be developed, because it has got those resources. The fuel is there. If we are going, simply because we have turf deposits, to dish money out to incompetent people that give us that result, I say that this House is putting a premium on incapacity. No business man would do it. He would not listen to such a proposal for two minutes. I think the Minister is going very far in asking the House, in face of these facts, to vote these people, whoever they are, an additional sum of money.

There is one thing clear from this, that the board of the company, whoever they are, who are managing this, have proved themselves incapable of doing their business, and before this money is voted, the board should be entirely abolished. Apparently, they are completely under the control of this House, so far as the major portion of the money they have got has been given by this House or by the Government. It is time that the House should conduct a thing like this in a business-like way. Surely, the Minister will not suggest that any body of business men, or any bank or financial house, would give an additional advance to a company with that record? Let me tell the Minister that last year, while it was unfavourable for turf production, was far from being highly unfavourable— very far from approaching years I have seen during the last 45 years. That is no apology or excuse for this company. Apparently, they thought they had this House and this State behind them to vote money, and all they had to do was to squander and slash money about wherever they are in the County Kildare.

Deputy Moore tells us about the quality of the briquettes. You can produce anything, of course, at a price. Simply because this is taxpayers' money, is he satisfied to produce briquettes at this price? Is he prepared to go on at this price? If it were his own money, after the history of this, would he be prepared to put an additional sum into it. I think the whole thing is discreditable. It shows gross incompetence that people with that huge amount of machinery could not produce turf last year. In other years no machinery was wanted. The weather was so good that the turf dried itself. All you had to do was to scatter it about and it was saved. Last year was slightly unfavourable for the winnowing of turf, but not highly unfavourable even for hand-won turf. Now we are told that £167,000 has gone west, and another £35,000 is asked for.

Mr. Lemass

I did not say that £167,000 had gone west.

Mr. McMenamin

You have some machinery left, you say. You told us that portion of that machinery, apparently, is unsatisfactory and probably will have to be replaced. Some of it has already been replaced. Apparently, in other places this development is far advanced, and the machinery required has been brought to a state of perfection. Of course, we sent a commission roving over the Continent to see the machinery working. We sent to Germany and elsewhere about a year ago. I wonder were some of the members of that commission on the board of directors of this company.

Mr. Lemass

They had nothing whatever to do with it. That is an entirely different matter, and had nothing to do with this.

Mr. McMenamin

Did not the Government send a commission abroad about peat?

Mr. Lemass

This is a private enterprise. I explained very carefully that it has no relation to the Turf Development Board.

Mr. McMenamin

Were any of the members of the board of this company on that commission?

Mr. Moore

The enterprise had started before the deputation went abroad.

Mr. McMenamin

I know that quite well.

Mr. Cooney

The Deputy wants a seat on the board.

Mr. McMenamin

The Deputy had better speak about something which he knows something about.

Mr. Cooney

We are waiting to hear what you know about it.

Mr. McMenamin

The old story of "Every man to his last" applies in this case. Perhaps it would be better to put the Deputy on the board of this company so that its efficiency will be completed. Of course I can appreciate the apologetic way in which the Minister asked the House to vote the money. Really, it requires a good deal of brass to face the House and ask for this additional sum. I would be very glad to vote this money if there were anything in the history of this company to indicate success, but I cannot see it. I regret to have to say it, but I cannot see any of the ingredients of success there. I should like someone to tell me where they are. Deputy Moore, of course, wants to remain indefinitely up in the experimental air. It is quite easy to go on with experiments in the air while thousands are being voted. But it is the people's money we are voting away. Some of the people contributing this money have saved all their turf by hand, and when to-morrow they hear that we are voting these thousands of pounds to a limited number of men to win turf, after having lost that much money, they surely will have a grin on their faces. They will be wondering what sort of mentality Deputies have when they vote money to a company to lose it in this manner and still not produce any turf. Deputy Moore complains that the cost of the turf might be too high. If anything was charged for it it would be too high, considering the amount of money that has been lost. Yet Deputy Moore comes along and passively says: "Carry on the good work; let it remain in the air during the experimental stage." That is his justification. No one would be more delighted than I would be to see the development of turf on a mass production scale. It is a thing that I always thought might be possible, but if this is the result of the scientific production of turf it would certainly blow any opinion I had in that respect sky-high. I suggested many years ago that there were enormous possibilities in the development of the bogs of this country, but apparently there is very little prospect of that being the case. It is only a question of how long the purse will remain open so that experimental work will be carried on. Deputy Moore will favour experiments as long as there is a penny left. I think this is a very discreditable history, and, conscientiously, I cannot concur in voting further money for this company.

Mr. MacDermot

Is the Minister satisfied that £35,000 will suffice to give an adequate trial to this process for one full year? I do not think we ought to vote this money unless the Minister is satisfied. I think part experiments are the surest ways of frittering away money, and that if we are going to finance further experiments at all it should be to carry them through 1937 on an adequate scale. Is there any possibility of giving us some sort of expert report on the fuel actually produced, the briquettes—whether they are as good as coal for domestic heating and cooking, for commercial purposes and for railways, and to what extent they have been tried? Can we not get some kind of expert report on their capabilities? That is one side of the company's activities which we are told has been satisfactory. I agree that it is a very important side. If these briquettes are really good, my whole instinct would be to support the Minister's request for this further amount now, but I think we ought to be satisfied with a really authoritative pronouncement. We ought also to be satisfied that the money we are asked to vote will really suffice for a further year's full experimentation.

Mr. Good

The Minister informed us that the machinery had been guaranteed by some firm. What is the nature of the guarantee that was given by this firm? I would also be glad to know what is the approximate value of the assets of the company. It is important to know these things, because £160,000 has been already sunk in this venture, and there is no use sinking any more money in it unless we have some indication, something like what Deputy MacDermot mentioned, in the way of an expert's report on the products that have been turned out. The House should know if these products are saleable and are up to the standard, as well as their advantages over coal in the market. Experts should be able to advise on these matters. If experts advise that further money should be sunk on the enterprise, I would be interested to know the reasons. Peat is not by any means in the experimental stage in this country. I have heard people saying that more money has been sunk in the bogs of Ireland, trying to make peat an economic factor, than any other enterprise. I knew of several companies some years ago that engaged in the making of peat fuel and gave it up. With that experience before us, surely the Minister could get some expert to advise whether the venture is worth spending more money on, and whether it is likely to prove of commercial value. If there was such a report, the House would be with the Minister, but, in the absence of experts opinion, I do not feel justified in incurring further expenditure.

Mr. Lemass

Deputy Brennan complained that I did not introduce the Estimate in a manner which would suggest that I had any great confidence in the enterprise. In a sense, that is correct. I cannot say with certainty that the experimental work the company is engaged in is going to be successful. I have good reason to believe that it is having regard to the progress that has been made so far in overcoming difficulties, and to the reports which have been available to me from persons who are acknowledged experts in this matter, as well as the nature of the representations made by the board of directors of the company. The board of the company comprises persons who are very well known—if not the best known—in the financial and commercial life of this country, and any recommendation they would make would have to be taken very seriously indeed by a person in my position. They are engaged in this enterprise, and they have invested a substantial amount of private money therein. They have met with unexpected difficulties, but they are confident these difficulties can be overcome, and, if overcome, that an industry with very great potentialities would be made possible, and considerable national advantage derived therefrom. It is entirely incorrect to talk of the money already utilised by this company as being lost. It is not lost. It has been invested in visible assets. There is available a large area of bog, thoroughly drained and thoroughly prepared for the class of work that the company proposes to do. There is also a substantial factory, equipped with very efficient machinery.

Mr. Brennan

Largely unsuitable?

Mr. Lemass

No. The factory has been thoroughly successful.

Mr. Brennan

Did not the Minister tell us that a good deal of the machinery was unsuitable?

Mr. Lemass

I made it clear that I was not referring to the factory machinery, but to the harvesting machinery. That is the machinery which is on the bog to harvest the peat, which is then treated by the factory and manufactured into briquettes.

Mr. MacDermot

The Minister will agree that money spent on discarded machinery is lost.

Mr. Lemass

That some part of the capital has been lost is undoubted; but not all of it; in fact, only a very small proportion of it has been lost in that particular way. The company started originally with the £57,000 invested capital and the £90,000 obtained on loan. That amount was, in my opinion, somewhat less than—even on the basis of our original plans —might have been required. It would have been sufficient if everything had worked out precisely according to plan. The margin of working capital in the total was small and insufficient to cover any period of delay arising from unforeseen causes. There was a delay; there was a delay, in fact, during the whole of 1935. The factory was not completed; machinery could not be delivered; the operations on the bog proved much slower than had been anticipated. In fact, a substantial part of the drainage work on the bog had to be done by hand, where it was originally intended to do it by those large draining machines. The result was that the company was not in a position to contemplate commencing operations until 1936. By that time, its working capital had become exhausted, and additional working capital had to be provided. It was provided by its bankers on the security of a first debenture to the amount of £20,000. I do not know whether Deputy McMenamin is serious when he talks about the climatic conditions that existed last year.

Mr. McMenamin

Perfectly serious.

Mr. Lemass

No matter what Deputy McMenamin says, I will at least submit this—that it was bad luck, that it was misfortune for the company that it commenced its operations in a year when the months of June, July and August were the wettest recorded this century.

Mr. McMenamin

Not at all.

Mr. Fitzgerald

They were not a patch on 1924.

Mr. Lemass

If any Deputy will cast his mind back to last June, July and August——

Mr. Fitzgerald

Is the Minister asserting as a positive fact that the rainfall in June, July and August, 1936, was the heaviest in this century?

Mr. Lemass

I will content myself with saying that they were unusually wet months. Undoubtedly, they did not prevent the company from operating, and would not in the ordinary course have had any serious effect on its production. The company's plans were based on successful operation in a year where the rainfall would be worse than the average. They had all the information they could get about the climatic conditions in this country, and planned their production upon the basis of a certain number of fine days in each year. They had good reason to believe that, with the exception perhaps of one or two very unusual years, they would get that requisite number of fine days. I am not saying they did not get them last year, but they were not in a position to start off at the beginning of the season as an established company and get into production straight away. They were still experimenting; the factory was not completed; the drainage of the bog was not completed; and the fact that the three summer months were unusually wet was a handicap for them. Undoubtedly, if this enterprise is to be a success it must be one that works one year with another, and that is part of the experimental work that is being done. I disagree entirely with Deputy Brennan in his contention that peat development is not worth while. Apart from agricultural land, the greatest natural resource we have in this country is our bogs.

Mr. Brennan

I say it is overestimated.

Mr. Lemass

We are, in fact, spending substantial sums in various directions in research as to the possible utilisation of our peat resources for commercial purposes. I have been contemplating and I have, in fact, agreed in principle to the establishment of an organisation financed by the State for research into peat alone. We have subsidised experiments which are being carried out in Cork in the extraction of wax from peat. We have also encouraged the Industrial Research Council and provided them with the finance to carry out certain further researches in relation to peat, all on the assumption that if we can succeed in making a valuable commercial asset out of our peat resources we will have solved 99 per cent. of the economic difficulties of this country. It is worth our while to lose a million if at the end we get to the position where we can contemplate large-scale industrial development based on our peat resources.

At present this company is engaged on experimental work in the matter of producing a particular form of fuel. Our big effort in relation to the development of our peat resources for fuel purposes is being done by the Turf Development Board upon different lines, but this particular project does offer very considerable possibilities if it can be made a success. It is worth our while, having regard to its nature, risking the loss of the sum of money contemplated here in order to enable the experiments to be completed. My personal opinion as to whether or not it is going to be a success is not worth very much. It is my personal opinion, based on the information supplied to me, that it will be a success. The opinion of the members of the board, of the experts in the employ of the board, and of the Government representatives who have been engaged to report upon this matter, is that it can be made a success, and that with the financial assistance now available it will be a success.

In reply to Deputy MacDermot's first question, £35,000 is the amount which is considered adequate to enable the board to complete its equipment, and to meet all its operating expenses until next winter, when it hopes to be able to carry on from the revenue it will derive from the sale of fuel. The amount was estimated by the board of the company. It was submitted in detail, showing the various items of expenditure that the company anticipated it would have to meet. On that basis they thought they could carry on, complete their experiments, and get a stock of saleable fuel which would enable them to finance their own operations in future. We have not got an independent report upon the fuel itself. I, personally, have used it and a number of other people have used it, and we are satisfied that for ordinary domestic purposes it is satisfactory. It has in many respects an advantage over coal. Its calorific value is about 80 per cent. of the calorific value of coal, but it has, of course, the tremendous advantage of cleanliness; it can be stored much more easily than coal, and is in many respects more attractive as a household fuel.

Mr. Good

Does it leave much ash?

Mr. Lemass

Not very much at all. We would hope to get that expert report this year, when large quantities of the fuel are being produced on the basis which will be the basis of permanent operation.

Mr. MacDermot

Approximately how many tons of it were produced?

Mr. Lemass

Only about 8,000 or 10,000 tons were produced in 1936, whereas the normal output of the factory is estimated at 50,000 tons. To some extent those briquettes were made from the peat which was secured as a result of the drainage operations upon the bog, and not from the harvesting of the bog in the manner in which the company will do it as a permanent method of work. I do not think there is much more that I can say. If I were in a position to say with absolute confidence that this is going to be a success I would have said so. I am not in that position.

Mr. Brennan

We are not asking you to do so; we do not expect you to do so.

Mr. Lemass

I cannot say it is going to be, but I myself have good reason to believe that it will be. We have got very competent advisers on the board of the company, the representatives of the private investors and the Government directors, and they have in their employ also persons who are very competent. All their reports, both collective and individual, have been available to me and to the officers of my Department. Upon the basis of these reports, we felt that we had, in fact, no option but to enable the work of the company to be proceeded with for another year. The alternative was to shut the whole thing down at a point where it appeared to be about to succeed, and that, we felt, would not be justifiable in the circumstances.

That is why we propose to make this sum of £35,000 available. The money will not be paid over to the company. It will be put into a deposit account from which amounts will be paid from time to time, as I authorise, on the requisition of the company and to meet the expenses of the company. It will be secured by this debenture on the assets of the company. I do not say, and I think it would be foolish to convey the impression, that, if the experiment was a failure, we would be able to get from the sale of these assets a sum equal to the amount we had advanced to the company. That is not so, but, in the event of the enterprise being a success, in consequence of these arrangements, we are in the position that we would be able either to secure repayment in full of the amount advanced or take full voting control of the company itself. There is at least as much prospect of the thing being a success as otherwise, and in these circumstances, I think this expenditure by us is justifiable.

Mr. Brennan

Does the Minister know whether in the manufacture and the preparation of these briquettes fine dry weather is necessary?

Mr. Lemass

No; I think they want 40 dry days in the year to make their operations a success in a normal year.

Mr. Brennan

Is the Minister aware that we had a very fine supply of hand-won turf dried by the weather last year, notwithstanding the fact that the Minister said it was the worst year of the century?

Mr. Lemass

I did not say it was the worst year of the century. I have here the rainfall for 1936. In January the rainfall was 3.05 inches; in February, 3.94 inches; and in March, 1.48. This company began to operate in June, when the rainfall was 5.49 inches. In July, it was 4.66 and in August, 1.67. June and July were the wettest months of the year.

Mr. McMenamin

What was June?

Mr. Lemass

The wettest month of the year, and Deputy McMenamin tells me that that is usual.

Mr. Brodrick

I should like to ask the Minister whether he is getting full co-operation from the other Government Departments in this matter, seeing that so much money is involved in this experiment? Seeing that the amount of turf is 8,000 or 9,000 tons, I should imagine that if the Departments were really serious on this matter of briquettes, there would be more of them sold.

Mr. Lemass

The Deputy will understand that the Government is also engaged in the turf business, and that this is almost a rival concern.

Mr. Brodrick

Does the Minister think that the Government Departments have made sufficient provision in their own way for the use of these briquettes?

Mr. Lemass

I do not think that Government Departments use them at all. So far as I know, all Government Departments made their contracts for ordinary turf last year with the Turf Development Board, which is a different organisation.

An Leas-Cheann Comhairle

Additional Estimate agreed to?

Mr. Brennan

No, Sir. We are not satisfied that a case has been made for it.

Estimate put and declared carried.