Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Thursday, 13 Dec 1951

Vol. 128 No. 7

Committee on Finance. - Vote 50—Industry and Commerce (Resumed).

I want to make a few brief observations. I do not want to go into the heat of controversy as to whether it was right that there should be fuel dumps in the Park in 1947 or 1948. I want to look at this from above the heat of controversy which is inseparable from day to day Party politics. Looking at the whole situation in retrospective, I think it is clear enough to any intelligent mind that if you accumulate a large quantity of any kind of commodity in a time of scarcity and store it under conditions which do not tend to preserve its quality and then have to sell it in circumstances in which its original value is not present, you inevitably suffer losses and you have to sell the commodity at a price often substantially below that which you paid for it.

Complaint is made that the Park dumps of fuel were sold at less than the price which they cost. That was inevitable in the circumstances. What Deputies have to remember is that Irish turf is not like French wine, that Irish turf does not improve with age. To imagine that you could clamp it in the open in the Phoenix Park, leave it there under snow and frost for a few years, allow it to become sodden and to moulder and then sell it for the price which you paid for it, is just sheer nonsense and bears no relationship to the realities either of turf production or of commercial transactions in the years 1948 and 1951. A lot of the Park turf was simply rubbish, mouldering rubbish. Anyone who inspected it—as I took the precaution to do on a number of occasions—would realise that you could not possibly ask the consuming public to buy that turf at its original price, and no sane member of the community would have dreamt of paying for it anything more than we charged. In fact, some people were highly sceptical as to whether it was worth the reduced price at which we offered it in order to prevent it resolving entirely into a heap of turf mould.

The same applied to a considerable extent in respect of the coal. The coal which was imported and dumped in the Phoenix Park had been transported over a long distance. All the evidence shows that even when loaded for this country the coal contained a substantial slack element; and transporting coal a long distance inevitably adds to the slack content, with the result that when it was dumped in the Park it had a substantial slack element within it and by years of storage that slack content increased. The only way in which you could have sold it without loss was to fix a price for it equivalent to the price at which it was purchased and insist on the coal merchants selling it at a high price to the consumer.

It would obviously be a fraud on the consumers to ask them to pay for the Park coal, with such a high slack content, the high price which was originally paid for it on importation. In fact, in our time, it was not easy to induce the coal merchants to purchase the Park coal. Every one of them complained that it was not a suitable household coal. They complained, too, that it had a high element of slack and that they frequently had to riddle the coal in order to abstract from it a substantial amount of its slack content. To imagine, therefore, that coal could have been sold in 1948 or 1949—when imports of better quality coal were available — at the price originally charged, is to expect the impossible.

Therefore, having regard to the deteriorated condition of the turf, to the deteriorated condition even of the timber, to the fact that the coal was not of the best quality and had a high slack content, it was inevitable that losses should have been incurred in selling fuel of that kind. If we are now going to store American coal in the Park and if British coal subsequently becomes available, we are bound to lose in selling the American coal—unless we are going to say to the public: "You must continue to pay a high price for the American coal, even though other sources of coal are available to us and a quantity of coal can be sold at a lesser price."

Quite frankly, looking at the thing as objectively as I can. I say that this or any other State which resorts to the device of buying a scarce commodity of a somewhat perishable or deteriorating character and dumps it against a possible greater danger will always have to face the possibility that, if the supply position improves, the stored commodity will have to be sold at a lesser price. That has been the experience with regard to the fuel in the Park and that was the experience for the past few years. It is the experience of this Government to-day, which is selling Park coal at less than Park coal cost and that, I suggest, will be the experience of the Government when it comes to sell from dumps American coal bought and imported at a higher price than that at which British is available. I do not think we can help that. It is just one of the risks we have to take in an emergency, one of the things we cannot avoid. While one tries to aim at a certain element of balance, my own view is that I would prefer to overshoot the target rather than under-shoot it, because, though you will be forgiven for having too much, you will probably never be forgiven for having too little.

I should like to raise the whole question of the storage of American coal and the British responsibility in respect of fuel supplies. Under the trade agreement negotiated with Britain by our predecessors and under the trade agreement which we negotiated in 1948 with the British Government, Britain undertook to supply 1,500,000 tons of coal. On the other hand, we for our part agreed to supply Britain with certain commodities which were scheduled in the trade agreement.

So far as we were concerned, we kept that agreement and we felt that so long as that agreement existed—and it was authenticated by no less a signature than that of the British Prime Minister —we had every reason to believe that Britain would honour her bond and continue to supply this country with 1,500,000 tons of coal; but for reasons best known to herself—certainly reasons which were never explained to me sufficiently to justify her attitude— the British Government defaulted in the matter of supplying coal to this country. I do not believe the default was necessary because at the time Britain was declining to fulfil a solemn trade agreement with this country, she was supplying coal to overseas countries with which she had no form of trade agreement whatever. Britain was supplying customers overseas to whom she had a right to refuse coal supplies while defaulting on her coal treaty with this country.

We discussed this matter early this year with the British Government and at these discussions, as I think the Minister will admit, we urged that Britain was morally, and, in so far as there was any international law recognised in these matters, legally bound to supply this country with 1,500,000 tons of coal. The British Government representatives never disputed that there was a moral responsibility on them to provide coal for this country, and we then urged that, as the quantity of coal provided for in our agreement was not large, having regard to Britain's total output, and the fact that she was supplying overseas countries, Britain should continue to honour her obligations under the trade agreement. The British Government, however, asserted that they had not sufficient coal for themselves and this was being asserted by Britain when she was supplying overseas countries with coal, although she had no obligation to these countries.

We then urged, and, I think, with every justification, that, as Britain was importing American coal and as our trade agreement with her obliged her to supply us with coal, she ought to avail of her access to other markets to buy coal there so as to enable her to supply our requirements either from her own deposits of coal or from coal secured in these other markets. Britain at the time had, and still has, of course, a most substantial mercantile marine. Her ability to find ships to transport coal could not be questioned and her standing in the world commercial market was such that she could quite easily have imported coal, either for her own requirements or to satisfy our needs under the trade agreement into which she had entered.

At the conclusion of our discussions with the British Government, they agreed that they would find additional coal for us in the third quarter of 1951 and that the whole position would be reviewed before the end of the third quarter, with a view to seeing how Britain then stood in the matter of the availability of coal supplies and what steps she would take to fulfil her obligation under the trade agreement of 1948. At that time, we urged that, even if Britain found it necessary to import American coal for her own requirements, she ought to do that in order to supply us with the coal which she had contracted to supply, and at the stage at which we left the discussions with the British Government, the whole question was open as to whether we would get American coal from Britain at British prices or whether Britain would supply us with coal as she was bound to do under the trade agreement of 1948.

I am not familiar with what happened since then. I take it that our representatives who went subsequently to negotiate with the British Government are aware of the memorandum which was prepared following the previous talks with the British Government and I hope that that question of Britain's liability to provide us with British coal or alternative coal at the British price was again raised with the British Government. It is true, of course, that the trade agreement of 1948 and the trade agreement of 1947, the latter having been negotiated by the then Government, did not provide for the price at which coal was to be sold to this country, but I think that, reading the trade agreement, it was clear that the coal was to be supplied at approximately the British price, and, while one could understand Britain being unable to fulfil her obligations under the treaty, if Britain had no coal, we felt that it was a bit thick that Britain should default on her coal obligations to this country, pleading that she had not sufficient coal for herself, while at the same time supplying coal to other countries in respect of which she had no trade or treaty obligations whatever.

I still think it is reasonable, even at this stage, to expect the British Government to fulfil their coal obligation under the trade agreement, that that obligation should be fulfilled by the British either making their own coal available to this country up to the limits provided for in the agreement, or by finding for this country, at the British price, the coal which our people were entitled to under the agreement. We pointed out to Britain that we had previously an obligation to supply Britain with a certain quantity of potatoes and when it became clear that these potatoes could not be supplied from native sources, we then undertook to the British Government that we would buy these potatoes outside this country at a higher price. We offered to sell them to Britain at the higher price because we felt, having contracted to supply Britain with potatoes, there was a moral obligation either to get the potatoes at home or elsewhere in order to fulfil our obligation under the trade agreement with them. I am quite sure that the importance of these facts is appreciated by the Government. I hope the point of view which was put up earlier this year that Britain has an obligation to continue to supply us with coal so long as the treaty runs will be put forward and that that obligation cannot be waived by Great Britain morally on the plea that she has not sufficient coal, when, at the same time, she is supplying coal to countries with which she has no treaty obligations. I should like to hear from the Minister, when he is replying, his view as to Britain's responsibility in that matter. I hope, at all events, that Britain will not be allowed to imagine that we consented in any circumstances to her defaulting on her coal agreement though supplying coal elsewhere. All this happened at a time when we were fulfilling in the spirit and the letter our obligations under the trade agreement with Britain.

There is one other matter to which I would like to refer and that is the question of the development of our native peat resources. I am an unrepentant believer in the value and the potential use of Irish peat. I am satisfied that properly organised, through an institution like Bord na Móna, we can win substantial quantities of peat from our bogs, making its cultivation and use an economic proposition and providing expanding opportunities for employment for our people in areas where there is no other employment available.

In many of the large and valuable turf areas of this country there is no land capable of being used efficiently for agricultural purposes. In these areas, where turf abounds, there is no other potential employment except in the exploitation of our turf deposits. It is for that reason that I think it behoves the State to insist on the development of these peat deposits either by burning the peat on the bog, converting it into electricity or by encouraging, through Bord na Móna, machine-won methods of turf production and encouraging the local people to cut turf even by hand methods in order that they can provide fuel for themselves and, at the same time, make a living by marketing that fuel in the neighbouring towns and villages.

I think the Bord na Móna programme is a creditable one and I think their time-table in the matter of production is running according to schedule. Bord na Móna ought to be given the maximum encouragement to push ahead with all enthusiasm and vigour its machine production programme. Not only is that the best way of winning turf for commercial purposes, since it enables you to sell it at an economic price, but the extension of the board's activities will provide a substantial measure of expanding employment in areas where there is no employment available. I am glad, therefore, that the board is pushing ahead vigorously with its programme. I hope that, so far as this House and the Government are concerned, the board will get every possible encouragement to continue along that road.

So far as cutting turf by hand is concerned that is a craft known to our people for very many generations. It is not the best way of cutting turf in order to sell it at a low price, but it is the best and only method so far open to the small man who has to depend on his slane and his knowledge of turf cutting as a means of earning a livelihood for himself and providing fuel for his household. I think, therefore, that Bord na Móna should be asked to encourage those who cut turf by hand to do so under the best possible conditions. The board should be asked to facilitate the private turf cutter by endeavouring to make bogs available to him under conditions which will give him a fair chance of cutting this turf without having to encounter the heartbreaking difficulty of working in an undrained or improperly drained bog. The more we encourage, in the turf areas, the man who cuts turf by hand to continue to do so, the more turf we will get into the national pool and the more we will help that man to depend on his own efforts to provide for his family.

I think it is even preferable that the hand-won turf should run side by side with the machine-won turf rather than that the hand turf cutter should be swept into the Bord na Móna machine. I think the continuance of the craft of cutting turf by a slane has still something to commend it. I think it will preserve for future generations a source of fuel production, perhaps, long after Bord na Móna has moved from the local area of operation.

One thing I plead for at all events is that, in those areas where bogs exist and where the sole means of livelihood for the local people is the production of turf, the State, in every possible way, ought to encourage the production of turf, firstly, because it is an Irish fuel, secondly, because properly cut and saved, it is a good fuel and, thirdly, because it helps to render our people more independent of foreign fuel imports.

I will be very brief. I am very sorry that Deputy Norton's colleague, Deputy Dillon, was not in the House this morning to hear Deputy Norton giving his point of view on the muck in the Park, as they referred to it the other night. All in this House, as well as the Government, were collectively responsible for the amount of fuel that was stored in the Park in 1947. I was a member of the House at that time when urgent motions were put down by the Opposition to go in for fuel storage. One Deputy after another on the Opposition Benches urged the Government to go in for stockpiling in order to prevent a recurrence of the conditions that existed during the bad winter of 1946. The weather that year was exceptionally bad. It is all right to play politics. That stockpiling in the Park was the result of weather conditions, the very bad harvest, spring and summer, and the Government which was in power at the time took the necessary steps at the unanimous direction of the whole House—it was not a Government scheme but a unanimous decision of Dáil Éireann—but directly God in His own good time brought good weather again the turf which had been stacked in the Park to save the people from undue hardship was misrepresented by speakers on the other side of the House. That is playing politics to a high degree.

I was delighted to hear Deputy Norton's contribution this morning. It was a change from the speeches to which we have been listening. I am sorry, however, that he did not use his influence with the Government with which he was associated. The Minister for Industry and Commerce has to face a position caused by the neglect of his predecessor and the other members of the inter-Party Government. A number of those Ministers were the Deputies who asked the present Minister for Industry and Commerce to get coal no matter where, to get turf and to get wood. Then just because they thought that they might get some political kudos they decided that it was all a Fianna Fáil racket, as Deputy Dillon told us the other night. They say that it was wrong to have that turf in the Park; but the coal was bad and the timber was bad and that turf would not have been so bad if there had been a very bad harvest and winter in 1948 as there was in 1946 and 1947. If you meet insincerity of that type it is very hard to know where you are going.

The inter-Party Government should have honoured their obligations during their time in office instead of handing us on a legacy. They knew well that weather conditions and other things beyond the power of this Parliament were responsible for that state of affairs and that anything the Fianna Fáil Government did was done in the interests of the country as a whole. They do not even say that they will face up to it now or go as far as making a contribution like Deputy Norton made this morning. Are we ever to get away from that insincere political quibbling which we hear in this House from people who go in for political slander and misrepresentation of facts and who say that everything which Fianna Fáil did during their years of office was wrong?

We must face the position and, given an opportunity, we will. We will try to rectify some of the misrepresentations of the past and face the position as honestly as possible. The inter-Party Government should be ashamed of themselves for leaving such a state of affairs behind them that the Minister for Industry and Commerce must ask the House to do something which should have been done during the last three years. I am also delighted to hear of Deputy Norton's recent conversion to the turf scheme.

You are talking through your hat. I was never more enthusiastically in favour of anything than of turf production.

I am sorry that your colleagues in the inter-Party Government were not so much in favour of it when they went into power. It was very hard for the present Minister for Industry and Commerce, Bord na Móna and the Government to build up turf production. You cannot build up these things overnight and it took Fianna Fáil a long time. It was a slow process to drain bogs, get in machinery and try to encourage people to cut turf and all that was destroyed in one year, 1948. Why? I will be honest enough to say that as British coal was coming in the inter-Party Government decided that there would be less demand for turf, but we now find that we have not British coal. Deputy Norton explained that England had broken her agreement. The Minister for Industry and Commerce and Bord na Móna, however, find it very hard to get workers to go on the bogs to the same extent as they did prior to 1948. A number of these people have left the country while others will not place their trust in turf. When you build up a form of economy and it gets a setback it is very hard to rebuild.

Bord na Móna have now more than twice the number of employees that they had in 1947.

Deputy Burke should read the figures.

It was very hard for Bord na Móna to get employees. The hand-won turf was a decided advantage to the people in those areas. In those backward parts of the country it helped people to get a few pounds which they would never have thought of otherwise. That system of hand-won turf cutting, saving it and selling it was also destroyed and Deputy Norton must agree that his Government contributed to a great extent to its destruction.

You should see the official file and see when the decision was taken to discontinue hand-won turf cutting.

Who sent out the circular on the 18th of August, 1947?

We have to try to go back and slowly build up that form of economy.


Please God we will succeed. I hope we will have the wholehearted support of the Opposition. If the same thing should occur again and fate compelled us to pile turf in the Park again and if we had the turf for our people we would not hear contributions like those which have been made in the House during the last few days.

It is very unfortunate that countries which make trade agreements do not honour them but I suppose that that has happened from the beginning of time and will go on as long as there are Governments until the end of time. It goes to show that the only policy for this country is the Fianna Fáil policy of making the country as self-supporting as it is humanly possible to make it. No other policy will survive because if we depend on foreign imports of things which we could produce here ourselves our country will not go forward. I hope the Minister will continue the good work. He has a difficult task to do in trying to rectify some of the mistakes of the past. I am sure that, given the opportunity, he will bring the ship of State safely into harbour.

Nobody could have expected that the reserve stocks of fuel which were held in the dumps at the beginning of 1948 could have been dispersed without loss, once British coal became freely available again. I have no criticism whatever to offer of the action of the previous Government in disposing of those stocks as opportunity offered and at the price that they could realise. Any criticism to which they are open turns entirely upon the fact that they failed to meet that loss as it arose. I know that in this matter Deputy Morrissey, if he were free to speak his mind, would agree with me. The loss to the country in unnecessary interest payments, because the Coalition Minister for Finance struck out of the Estimates prepared by my predecessor in each of three years, the provision proposed for the payment of this sum, amounts to about £375,000. That amount of money went down the drain for no other reason except that it was desired to keep the figure upon the cover of the Book of Estimates down below what it should be.

Deputy Morrissey in the course of this debate gave a very fair and very objective account of the circumstances in which that reserve stock came into existence. I should, perhaps, add to it in one or two respects. We emerged from the war period with certain reserve stocks of coal, certain iron rations, which were held intact until the war was over but in the winter of 1945-46 these stocks were put into use in the expectation that the emergency was over and that in the year 1946 fuel supplies would again become fairly normal and, may I say, with the intention of minimising the probable loss to the Exchequer if these stocks were held for a further period. But the winter of 1946-47 was the worst in living memory, as Deputy Morrissey said. For three months this country was ice-bound but, far more important from the point of view of coal supplies, so was Britain, and coal production almost ceased in Great Britain. So limited was the trickle of coal which came into this country that not merely were gas and electricity supplies very severely rationed but rail transport practically stopped. Deputies may not now remember that for a long period in the beginning of that year rail services were reduced to two main line trains per week.

There was considerable hardship suffered by the public by reason of the fact that not merely were fuel supplies scarce but, because of the abnormal weather, the turf available was of a very, very poor quality. Anybody who chooses to turn to the Dáil Debates of 1947 will find that there was no subject we discussed more frequently in that year than fuel supplies and there was a continuous demand from every section of the House and from every public authority in the country that the experience of the winter of 1946-47 should not be repeated in the following winter. We set out to build up reserve stocks of turf, firewood and American coal.

The American coal was purchased as obtainable. It was, I think, the first year in which America shipped coal in any quantity to European countries. There was not merely a certain reluctance on the part of American coal producers to enter into the trade, which they did not think would be permanent, but there was an absence of harbour and transport facilities as well, and we had to take the coal on a "run of the mine" basis as we could get it.

The reserve stocks accumulated during 1947 would not, however, have been more than enough to carry us through the winter of 1947-48 if conditions during that winter had been as we had anticipated. I, as Minister for Industry and Commerce, went to Britain towards the end of 1947 for the purpose of entering into trade negotiations, and the one thing I was striving to get out of these negotiations was some increase in British coal deliveries or at least some promise of an improvement in their deliveries during the following year. I got that promise. It was a promise to increase deliveries to approximately 20,000 tons per week, which would be 1,000,000 tons per year, commencing in April of 1948. No amount of pressure by me secured from the British Government any promise to expand deliveries earlier than April of 1948.

The circumstances which had caused the anxiety here, which induced us to exert ourselves to build up these reserve stocks, had been, of course, duplicated in Great Britain. The British Government was determined, if possible, not to have a repetition of the experiences of the previous winter during the winter of 1947-48. They also were building up reserve stocks. As it turned out, they accumulated more stocks than they required. The winter was particularly mild. Coal production was maintained at a higher level than had been estimated and just about Christmas of 1947 I began to receive reports that coal was arriving in far greater quantities than previously from Britain and that coal merchants here were receiving offers of coal from Britain in very substantial quantities. In fact, British coal was then on offer in unrestricted quantities, three months prior to the time which the British Government had anticipated. So much so that, in order to avail of the situation, to give the advantage of the cheaper and better fuel which these supplies represented, we derationed coal at the beginning of January, 1948, and permitted its unrestricted purchase for household consumption. Prior to that, coal for household consumption was not permitted at all and even industrial supplies were rationed.

That meant that we at the same time took a decision that these reserve stocks which had been accumulated against the winter would be held as reserve stocks and, in fact, they were no longer drawn upon for either industrial or domestic purposes during the remainder of that winter and were there when the change of Government took place.

There may be some criticism of me in this, that when these abundant supplies of British coal began to arrive and rationing of coal for domestic purposes was withdrawn I did not at the same time shut down upon the deliveries of firewood and turf to the dumps. If I say there was an election in progress, I am not pleading that it was political considerations that produced that decision. It just meant that I realised that there was going to be a problem associated with the transition from that emergency fuel production to the normal circumstances which then appeared likely to be at hand, that the handling of that transition problem in a manner which would be fair to the individuals who were engaging in that fuel transport business and the associated activities would be difficult and that it would take some time to taper off that emergency activity to the requirements of normal times.

That reserve stock was there and was disposed of. It is practically all gone now. What we are doing with this Supplementary Estimate is repaying to Fuel Importers, Limited, the loss they incurred in selling these stocks at less than it cost them to accumulate them. That loss occurred in each year, and it should have been met in each year. Instead of the provision proposed by my predecessor as Minister for Industry and Commerce, the Coalition Minister for Finance merely put in a token figure of £5 against the sub-head in the Estimate each year.

I have been asked why we have to pay it now. The answer should be obvious. First of all, I think it is very desirable that this unnecessary payment of interest should cease. Most of us could think of a lot more useful things to do with £375,000 than paying it out in interest unnecessarily to a bank. Secondly, and more important, we now have again the task of building up a reserve stock. Fuel difficulties have been acute this year and it was decided to resume the importation of American coal and to build up another reserve stock. That has to be financed. When, early this year, my predecessor discussed this matter with Fuel Importers, Limited, and they went to their bankers to secure assistance in financing the importation of substantial quantities of American coal and the accumulation of reserves, their bankers naturally referred them to the fact that they had paid nothing off the old debt for three years.

Or the interest.

The interest was paid regularly.

You say the interest was paid?

That is the point I am making, that there was an unnecessary wastage of public funds in paying interest which should not have been allowed.

Was not the large amount of £767,000 of interest due in 1949-50?

No. On the contrary, the amount due to Fuel Importers, Limited, was paid up to the end of 1948. The Estimate for that year was prepared by me and it was adopted by my successor. The amount was provided in the Budget and paid and at the end of 1948 Fuel Importers, Limited, had a credit balance of £11,000.

If I tell you that your accounting officer gave that figure to the Public Accounts Committee will you accept it?

I think the Deputy misunderstands the position.

Will you accept the figure given by your own accounting officer to the Public Accounts Committee?

The full amount due to Fuel Importers, Limited, was paid up to 1948. In 1949, there was also paid £500,000 carried over from the previous year.

£767,000 interest for one year?

I do not know what the Deputy is talking about.

You do not want to know.

The interest charge to Fuel Importers, Limited, in 1949 was £137,000; in 1950, £124,000; and this year, £110,000; a total of £371,000. But the interest was paid by borrowing from the bank. The amount required to pay the interest was borrowed from the bank.

Compound interest.

That is the only criticism I have to make with regard to the handling of this problem of the dispersal of these stocks. These amounts should have been paid as they became due. My predecessor thought they should be paid, but they were not paid. When the question of getting new and more substantial bank finance to facilitate the importation of American coal and the accumulation of reserve stock arose, there was an arrangement with the bank under which the amount due in respect of 1948 and the subsequent period would be repaid. That is what we are proposing to do now. It is good business to pay it anyway.

Did the bank insist on it?

Of course they did. You said so before.

I have no doubt that further bank accommodation could have been secured even if the amount was not paid, but it would be bad business. It was a perfectly reasonable proposition. It is no good complaining about the banks restricting credit for commercial purposes if we absorb the credit that could be given for these purposes by unnecessary evasion of a State obligation.

Unnecessary evasion of a State payment?

The payment should have been made. Deputy Dillon, Deputy D. Costello, Deputy O'Higgins and some other Deputies chose to misinterpret what I said concerning the decision of the Government—that they are not going to try to pay this £3,000,000 in this financial year by imposing supplementary taxes for the purpose. Perhaps it is no harm that I should say a few words to relate this Estimate to the Budget position which was under discussion previously. Every Deputy knows what a Budget is. There is a list of services upon which the Government propose to spend money and in the Budget statement the Minister for Finance announces the Government proposals for getting money to pay for these services. The Minister for Finance segregates these services into two classes, what he calls the above-the-line services, the cost of which is defrayed out of tax revenue, and the below-the-line services, the cost of which is defrayed by borrowing. We might criticise the segregation of particular services into one or the other class, but that was the practice and it was what Deputy McGilligan, as Minister for Finance, did in May this year.

The point I want to get clear is that, taking Deputy McGilligan's Budget as he prepared it, we find the estimated expenditure on the above-the-line services will exceed by approximately £4,000,000 the tax revenue which will be received. There will be a deficit on these services to that extent and that deficit will have to be defrayed by borrowing. We have decided not to meet it by a supplementary Budget.

Of course, that is only an estimated amount.

Yes. Over and above that deficit on Deputy McGilligan's Budget as he prepared it, we have to add other expenditure against which he made no provision either above the line or below the line. This is one of them. He knew at the time of the Budget that this amount would have to be paid out during the year. He knew there would be a loss incurred by Córas Iompair Éireann which would have to be met during the year. There were some other expenditures for which we have introduced Supplementary Estimates which were not referred to in the Budget statement and which were not provided for in either category of expenditure, either as normal services to be met out of tax revenue or as capital services to be met by borrowing. The total amount of additional money which the Minister for Finance must find is approximately £10,000,000. Deputy Costello and Deputy O'Higgins spoke as if it was merely a matter of saying that it should be added to the national debt. The money has to be raised.

The point I was trying to make in the speeches I delivered on the Supplies and Services Bill was that, if we raise the money for that purpose, we cannot have it for other purposes as well. I mentioned that the total amount which Deputy McGilligan, as Minister for Finance, was able to raise by borrowing during his whole period of office averaged £15,000,000 per year. That £15,000,000 per year was far below the amount required to finance necessary and desirable capital development on housing, electricity development, turf production, hospital construction and other things which we want to see done. If we revert to borrowing for purposes of this kind, then, of course, there will be nothing at all available for other desirable developments we want to undertake.

Do I understand that this will be met out of current revenue?

Obviously not. The revenue will be short by £10,000,000 of the amount necessary to cover the Budget deficit and these Supplementary Estimates.

Can we get this clear as it is very important? We had a figure of £10,000,000 thrown around by the Minister, by the Minister for Finance and by the Taoiseach. Subsequently, we had a figure of £5,000,000. We had some other figure given on the third occasion. Now we are back to the £10,000,000 again.

Taking the Budget as Deputy McGilligan prepared it, there will be a deficit of between £4,000,000 and £5,000,000.

That is only an estimate.

Yes. He left out of the Budget altogether this payment to Fuel Importers, Limited, the losses on Córas Iompair Éireann, and other charges. Now, whether these should have been properly charged against tax revenue or could legitimately be borrowed for does not affect the position. As far as the Minister for Finance is concerned, he is £10,000,000 short. We always met this charge out of tax revenue and I think that was good, sound financial practice. However, I will not argue the matter.

There was no similar problem in your time.

That is not the point. The point is that the Minister for Finance is £10,000,000 short and he has to raise it.

Did you not tell Deputy Cosgrave this figure would be raised by borrowing?

It has to be raised. Does the Deputy think it can be borrowed just like that?

You are giving the impression that you will meet it by tax revenue in the Budget.

I am not. Neither this charge nor the tax deficit will be met out of taxation. We have to close over the story of Coalition finance by additions to the national debt, raising the money by borrowing if we can. Remember, £15,000,000 a year was the most that Deputy McGilligan could raise by borrowing and there is no reason yet to believe that we will be able to step up that figure.

A few more speeches like this will make it absolutely certain that you will not get it.

Once the public realises that the national finances have been straightened out there will be far more confidence.

The policy is to confuse the public.

You should have a look at the State stock on the Stock Exchange for the last fortnight due to the gloomy speeches.

If the Deputy wants to make that case, I will tell him the facts. The British Government has decided in similar circumstances, and, may I point out, with the agreement of the Labour Party there, deliberately to restrict credit and they have instructed the banks to do so, by raising the rate of interest on advances, and to restrict new capital issues for industrial purposes. The effect of these measures to dry up the supply of money in Britain has been to force the liquidation of private holdings of British Government stocks and these stocks have slumped on the Stock Exchange.

Is that not what you are trying to do here?

It is precisely in these circumstances that the Government is being forced to realise the British stocks held on Government funds. This is the worst time to do that.

That is not an answer to what is happening on the Dublin Stock Exchange.

No, but we seem to be rambling away from the Park.

You are following Comrade Churchill here.

Has Deputy MacEntee not brought us back into the Commonwealth in the last week?

I think Deputy Norton should find out exactly what the Minister for Finance said before misinterpreting him.

That is one of the most baffling tasks in the world—to find out what the Minister for Finance said.

That is all I want to say in relation to the disposal of these 1948 stocks. Deputy Dillon, as usual, made a personal attack on a member of this House, Deputy Briscoe. From my own knowledge of the situation that attack was completely unjustified.

In 1947 we were buying American coal. Various people came and told us that supplies could be got from South Africa and even from India. It was duly announced that Fuel Importers, Limited, would not themselves organise the purchase of coal in any country other than America but that they were prepared to buy delivered at the quayside in Dublin coal brought there from these other areas by any private company at the same price as they were paying for American coal. Various people entered into the business of organising shipments from South Africa to sell to Fuel Importers. I do not think those who entered into that business made much money out of it. The quantity they could bring in was limited. The firm with which the Deputy mentioned was associated did participate in the business and in my opinion did it largely out of a desire to help the country in a difficulty as well as a normal commercial venture.

In relation to our present reserve stocks, if there is to be criticism of a Government for taking financial risks in maintaining reserves the effect will be wholly undesirable. As Deputy Norton said, the reserve stock of American coal which we are now building up will, if there is no intensification of the present difficulties or no world war, at some stage involve the Exchequer in a financial risk.

That is true of any insurance premium.

That coal is costing £8 per ton. It is our intention to build up a reserve dump of 200,000 tons, and that dump will be held intact until the need for it has disappeared, until the price of coal falls and supplies at cheaper prices are freely available. At that stage presumably the responsible Government will decide to get rid of this reserve stock, and that Government will have to sell at whatever price they can get, and there will be some financial loss.

If, on the other hand, there is another emergency and a curtailment of coal supplies that stock will involve no financial loss but, as Deputy Morrissey has said, nobody can ensure against these dangers of building up reserve stocks without facing the risk of financial loss. I submit that it is both unreasonable and unfair to criticise in retrospect a Government that takes that step when that financial loss has to be met.

I realise now that I dissipated the reserve stocks that were held in the winter of 1945-46 in order to avoid a financial loss to the Exchequer. I made a mistake. It would have been far better to have incurred financial loss and held those stocks into the following winter. I assumed that 1946 would see the end of war-time scarcities. Nobody could have foretold the abnormal circumstances of the following winter. But Governments will hesitate to take risks involved in organising precautionary measures of this kind if the only reward they get for their precautions is a criticism of the kind Deputy Dillon expressed.

What did you do when you were over here?

I said, and it was quoted, that there was a reserve stock of fuel, that it should be sold for whatever price could be got for it, and the loss added to the national debt, and decide that we had got out of the war situation cheaply.

I have been asked about future fuel prospects. According to recent pronouncements by the British Government they will have further fuel difficulties there this winter. They say their reserves, including those in London, are far below the target figures. They are arranging to import American coal to supplement their own production. I think I am safe in saying that there is no present prospect of improvement in the coal situation during the next year which should discourage private turf producers from continuing their activities during that period. So far as it is possible to foresee the future it can be said that the need will continue for all the private hand-won turf that can be produced in the next season. The Government will take measures to assist that production through the provision of funds for the construction of bog roads and other facilities, and by organising, where required, marketing arrangements through Bord na Móna.

What the position may be after 1952 I do not know. I have had two completely contradictory estimates from people who are both entitled to be regarded as authorities. One authority told me to make our plans for the future on the assumption that British coal would not be available to us at all. The other said he thought that British coal production difficulties were likely to be resolved, and that their position in the future would be easier. Obviously, the wise course for us to take is to organise our own fuel resources so as to minimise the degree to which our industrial and commercial activities are dependent on imports from abroad.

Have the British indicated that they will not be able to supply the agreement figure?

No. So far as the discussions which we have had already with the Minister for Fuel and Power are concerned, they clarified the position to the end of this year. Presumably, there will be contacts with the British authorities early next year to ascertain what their intentions are.

How many tons are we likely to get during the current period of this year?

I think I indicated what the figure will be in this year in reply to a parliamentary question last week. There will be total deliveries of 1,230,000 tons.

Is that all British?

That is deliveries from Britain.

How much are we likely to import from America to the end of the current year? Will it be 500,000 tons?

The imports to the end of the year will be about 450,000 tons. Other purchases have been made if shipment is possible, but there will be enough American coal to supplement the British supplies to meet all requirements, plus the 200,000 tons, in addition, for reserve purposes.

Deputy Norton referred to the British trade agreement. I do not think I should say much about it. At least, I do not want to appear to be arguing against the case which I may, in an official capacity, have to make. It is true, however, that the trade agreement of 1948 did not contain any arrangements regarding the price at which British coal was to be sold, as it was not contemplated at any time that price would be a problem. It is also true that under the terms of the agreement either party was entitled to request a conference to reconsider its provisions, if circumstances changed. The conference which Deputy Norton attended indicated that that step had, in fact, been taken by the British Government when they found that they were unlikely to fulfil their contract. As I said here on my return from London in July last, the attitude of the British Minister for Fuel and Power was clearly and frankly stated in the words which I then quoted: "We are defaulting on our contract and we are ashamed of it."

Deputy Hickey referred to complaints which he had received that wet turf was being delivered by merchants in Cork. I want to make it clear that Fuel Importers, Limited, are not engaged in turf sales. There is no official organisation participating in turf sales. The turf that is being produced by private turf producers is being bought by individual fuel merchants, and there is certainly no obligation on those merchants to buy turf from anyone if it is not of first-class quality. Anyone who accepts inferior turf from a fuel merchant has only himself to blame. If there are fuel merchants in Cork selling wet or inferior turf, then I think the sooner the people in Cork make up their minds to transfer their custom to other merchants who are making a better effort to meet their needs, the better it will be for themselves.

The circumstances are entirely different now from what they were during the war years. During the war years, a State organisation was set up for the purpose of taking all the turf it could get, and all it could get, good, bad or indifferent was still far short of the total requirements of the cities in the eastern areas. Admittedly, there was no very close check on the quality of the turf purchased, and many turf producers did not act fairly with the country at that period. But there is certainly no situation now which justifies any fuel merchant buying inferior fuel from a producer, and less justification for any citizen accepting inferior turf from a fuel merchant. I do not think there is any other point that I have to deal with.

Has the Minister given consideration to the serious position which has developed and is likely to develop in regard to the production of anthracite coal here? The consumption has gone up enormously. The question is, can production be increased?

Whether home production can be increased is a subject on which I would not like to give an opinion. I think that the operators of the coal mines here have every inducement to expand and get production up to the maximum. Coal mining, however, is not like the manufacture of sausages. You cannot get more by making the machine run faster. I think it is probably true to say, having regard to the number of skilled coal miners—those who work on the coal face—available and other limiting factors, the production of our own anthracite is at the maximum. We are getting some supplies from Great Britain, and we have to supplement these by American supplies which are being imported at in or around £11 a ton. The result is that the average price of the anthracite available is extraordinarily high. The development of anthracite production at home is something which we wish to encourage.

Vote put and agreed to.