Dáil Éireann díospóireacht -
Thursday, 29 May 1952

Vol. 132 No. 3

Imposition of Duties (Confirmation of Orders) Bill, 1952—Committee and Final Stages.

Sections 1 and 2 agreed to.

SCHEDULE.

Mr. Dillon

I move the amendment on the Order Paper:—

To delete all entries opposite Reference No. 2.

I put down this amendment for the purpose of drawing the attention of the House to what I regard as a very extraordinary development. The House will remember that the Minister for Industry and Commerce announced his intention of legislating against rings and trade organisations concerned to promote restrictive trade practices. In these circumstances, when I was approached last January by two young men who had set up in the business of builders' suppliers, because they had been told by Irish Foundries, Limited, of Bailieborough, County Cavan, that they would not supply them with baths which these young men who had their own business wished to purvey to building contractors unless they joined a trade association, I said to these young men: "That is quite incredible in the light of the undertaking given by the Minister for Industry and Commerce to put an end to restrictive practices of that kind and there is no need to make a fuss about this business. I believe that all we have to do is to bring the facts of this case to the attention of the Minister and suitable steps will be taken forthwith to put an end to the abuse."

There then ensued this extraordinary correspondence which I now propose to read to the House. In November, 1951, the firm wrote to Irish Foundries, Limited, Bailieborough, Co. Cavan, asking them if they could give delivery of 5' 1" and 5' 6" square-end baths and to state their prices and terms. On 12th November, Irish Foundries, Limited, quoted for such baths. The Dublin firm wrote to them several times urging them to deliver the baths which they had then ordered from Irish Foundries, Limited.

On 26th November, the firm which these two young men were operating wrote to Irish Foundries, Limited, explaining that the baths were an integral part of their business and asking them to deliver an order which they sent them. Now I ask the House to listen to this letter of 17th December from Irish Foundries, Limited:—

" Dear Sirs,

We are in receipt of your letter dated the 26th November, and note your remarks.

We have, however, looked up the British Bath Manufacturers' Association list, and we cannot find your name on it as a bath importer. We have also looked up the Irish ‘A' Foundry list, also the Irish Builders' Providers list and we regret that we cannot get any information from them either concerning you.

We must, therefore, ask you to give us some more particulars. We would especially like to know if you are on any importers' list, if a member of ‘The Irish Providers' Association'. Also state the names of the foundries from whom you made purchases during the past 12 months."

Listening to that letter you would imagine that that was a questionnaire addressed to somebody who wanted a passport to travel in Sinkiang, or alternatively a questionnaire addressed to somebody who had a long criminal record. But the only modest purpose of these people was legitimately to trade in baths, which they had been doing without let or hindrance until the Minister for Industry and Commerce put a duty of 50 per cent. ad valorem on the baths. There was then one monopolist in baths, Irish Foundries, Limited, and that is the letter which they, in their enjoyment of their monopoly, address to a humble citizen of this State who writes to them, and sends them an order for baths.

However, the citizen replied to that letter on 27th December, and said:—

" Dear Sirs,

We are in receipt of your letter and note your remarks. You are perfectly right in saying that you cannot find our name on any of the association lists which you have perused. We have not found any necessity for joining these associations, and consequently are not members.

As indicated in ours of the 26th ult. we have imported between 700 and 800 baths in the past 12 months. These baths have been supplied by Messrs. S. Schonfeld Successors of London from German manufacturers.

We were experiencing no difficulty in procuring supplies at extremely competitive prices prior to the imposition of the import duty, designed, we believe, to protect your industry.

As indicated to you in ours of the 26th, we are prepared to market your baths provided we are buying on terms as favourable as our competitors, and must now request that you let us have confirmation by return that you are in fact prepared to supply so, or alternatively to give us a letter indicating your willingness to support our application to the Department for a duty free licence to import.

Will you kindly treat this matter as urgent, as delays in replying to our letters have resulted in considerable dislocation of our business."

Irish Foundries, Limited, replied:—

" Dear Sirs,

We are in receipt of your letter dated the 27th December, and note your remarks.

We have decided to put your case before our directors at their meeting on 3rd instant, and will communicate with you immediately afterwards.

In the meantime we would be obliged if you would give us an assurance that if supplied you are prepared to display our bath in your showrooms, and in this connection would like to know where your showrooms are situated.

We would also require a bankers' reference."

To which the firm in Dublin replied on 2nd January:—

"Dear Sirs,

Further to the writer's phone conversation with Mr. Murphy, we are pleased to confirm the following:—

(1) We are prepared to display your bath in our showroom which is acceptable to the Irish Tile Slabbers' Association for purposes of displaying tiled surrounds, and in which we are already displaying plumbing goods.

(2) Our bankers are the Royal Bank of Ireland Ltd., Foster Place.

We look forward to hearing from you within the next couple of days."

Now, here is the gem of the collection —on the 4th January a letter issued from Irish Foundries, Limited:—

"Further to our letter of 1st instant we have now had an opportunity of putting your case before our directors. They have instructed me, therefore, to inform you that they will be pleased to give you full terms as soon as you become a member of one of the appropriate associations but would not consider you eligible for full terms otherwise."

Each of the associations referred to in that letter meets weekly or fortnightly to agree on prices, so that if a local authority or a contractor applies for a tender for 50 or 100 baths there will be an assurance that, no matter how many tenders they get, all the tenders will be on the one word and there will be no competition. They meet weekly or fortnightly to that end, and if any member of one of these associations can be proved to have charged a lesser price for timber, plumbing, baths or fittings to any builder or any municipality, they are immediately struck off the list. Observe what happens when they are struck off the list. The monopolist, the only person in this country who is in a position to supply baths, writes: "They have instructed me, therefore, to inform you that they will be pleased to give you full terms as soon as you become a member of one of the appropriate associations but would not consider you eligible for full terms otherwise." The only basis on which you can become a member of one of the appropriate associations is that you will join the price ring—that you will undertake never to cut a price, and that you fully recognise that if you should ever do so you will be cut off the list and become subject to that general ban.

I have often said in this House that I adhered closely to my illusions. I always go on patiently believing that this is a decent country to live in and that in the last analysis small people cannot be trampled under foot. Wisely or unwisely, I said to these two chaps, "Look here, do not worry. It does not matter how big these fellows are. You have the public statement of the Minister for Industry and Commerce that he will not stand for racketeering of that kind and rings and price fixing. He is very busy but I am perfectly certain that as soon as the facts are brought to his attention, effective measures will be taken." I rang up the Department at once and I suppose I was ringing the Department—always receiving perfect courtesy from the variety of officers in the Department with whom I spoke—for a month at least and finally this letter issued from the Department, on the 9th February:

"A Chara,

I am desired by the Minister for Industry and Commerce to refer to your recent representations on behalf of (a firm) who are unable to procure supplies of baths at best wholesale terms from Irish Foundries, Limited, Bailieborough, County Cavan, and to say that the inquiries which the Minister has caused to be made in the matter have not yet been completed. The result of the inquiries will, however, be communicated to you immediately it is available.

The Minister wishes me to add that it is not the practice to recommend the issue of duty free licences for imports of goods solely because a particular trader cannot obtain certain trade terms from a home manufacturer."

I summoned the two lads. I said: "There you are. I told you that as soon as this matter was brought to the attention of the Minister he would look into it and you will see that this abuse will not be allowed to continue." I was wrong. On the 25th March, that is six weeks later, I got this letter from the Minister's private secretary:

"I am desired by the Minister for Industry and Commerce to refer further to your representations on behalf of (a firm) regarding the refusal of Irish Foundries, Limited, Bailieborough, to supply baths to that company. In the course of your representations you stated that you felt that the real reason for the refusal to supply was that the firm in question refused to abide by the price-fixing conditions laid down by the Builders' Providers' Association.

The Minister now desires me to inform you that he has investigated this matter and finds that the unwillingness of Irish Foundries, Limited, to supply this concern with baths is in no sense dictated by a refusal on the part of the Dublin concern to conform to the price-fixing conditions of any association, such as has been suggested. Irish Foundries, Limited, have been and still are prepared to supply their goods to anyone, either within or without the Builders' Providers' Association provided that the customer is sound financially, that he is in a position to place a minimum order for baths, that he carries on a bona fide merchanting business to the extent that he carries stocks, has suitable facilities for displaying such stocks, and has a sales organisation. The Bailieborough firm are carrying on the established usages of trade in the same way as every other reputable manufacturer, and in no case are they confining their sales to trading associations of any kind.

The Minister is satisfied from his investigations that Irish Foundries, Limited, have not violated any of the canons of reputable trading and, in the circumstances, he finds himself unable to recommend that facilities be granted to the firm in Dublin to enable them to import baths free of duty."

In retrospect, I confessed to looking very cynical but, believe it or not, I said to the two boys: "There you are. Did I not tell you that, as soon as the Minister became fully apprised of the facts, these abuses would be at once laid? All that it behoves me to do is to write and tell him the facts and of the existence of the letter." Listen to this letter, because this is good—you would imagine in retrospect that it was written by an innocent schoolboy instead of a hardened old warrior like myself—this is from me:

"The Private Secretary

to the Minister,

Department of Industry

and Commerce.

Dear Sir,

I have your letter of March 25th.

The Minister is clearly misinformed in regard to the circumstances of the case to which I directed his attention.

In your letter you state that ‘the Minister now desires me to inform you that he has investigated this matter and finds that the unwillingness of Irish Foundries, Limited, to supply this concern with baths is in no sense dictated by a refusal on the part of the Dublin concern to conform to the price-fixing conditions of any association. . . . The Bailieborough firm are carrying on the established usages of trade in the same way as every other reputable manufacturer, and in no case are they confining their sales to trading associations of any kind'.

I have before me at the present moment a letter from Irish Foundries, Limited, Bailieborough, Co. Cavan, to (the firm in Dublin), dated January 4th, 1952, which reads as follows:

‘Dear Sir, —Further to our letter of 1st instant we have now had an opportunity of putting your case before our directors. They have instructed me, therefore, to inform you that they will be pleased to give you full terms as soon as you become a member of one of the appropriate associations but would not consider you eligible for full terms otherwise.'

In view of the fact that this letter from Irish Foundries, Limited, categorically contradicts the statement in the Minister's letter, I would be glad if you will ask him to review this matter in the light of this fact."

You would imagine that that had cleared the ground as much as it was humanly possible to do. You would imagine that out of that there could arise no conceivable answer but that the Minister had brought this firm in Bailieborough to book but, if you imagined any such thing, you would not have reckoned with the resource of the Tánaiste. I got no reply to that letter, which is dated 26th March, until 4th April, because he was manifestly a bit staggered by this. Here, I must confess, my childlike faith began to wither and I am prepared to bid goodbye to one of the very few illusions that are still left to me. I got this letter dated 4th April:—

"A Chara,

I am desired by the Minister for Industry and Commerce to refer to your letter of the 26th of March, 1952, in which you quote from a letter dated the 4th of January, 1952, addressed from Irish Foundries, Limited, Bailieborough, to (the Dublin firm), in which it was stated that Irish Foundries, Limited, would facilitate the Dublin firm as soon as they had become a member of one of the appropriate associations."

Listen to this, because this is good:—

"The issue of the letter referred to above has been discussed with Irish Foundries, Limited, who have assured the Minister that the letter was not in accordance with the firm's policy and was written by their managing clerk under a misapprehension."

Could you beat that?

"They have assured the Minister that they are supplying several firms who are not members of any trade organisation and will be quite willing to supply Builders' Direct Suppliers as soon as they are in a position to comply with the very reasonable conditions which they say are required to qualify as bona fide merchants and which are incorporated in my letter to you of the 25th March, 1952.”

In the meantime I had said to the Dublin firm: "Send in your order now". This was before I got the letter of the 4th April from the Minister. They did so, and, in reply to their letter ordering baths, they got a pro forma invoice from the Bailieborough firm which denied them the usual discount terms. I wrote to the Minister of Industry and Commerce on the 30th April:—

"Dear Sir,

Acting on the assurances contained in the Minister's letter of April 4th, Messrs. Builders' Direct Suppliers forwarded their order for 50 baths to Messrs. Irish Foundries, Limited, and have now received from them a pro forma invoice at £18 for 5' 6” baths and £16 17s. 6d. for 5' 1” baths, less 15 per cent., less 10 per cent., less 5 per cent.

This, however, does not represent the terms made available by Messrs. Irish Foundries, Limited, to members of what they have described as ‘the appropriate associations.' To members of ‘appropriate associations' Messrs. Irish Foundries, Limited, allow 15 per cent., 10 per cent. and 12½ per cent., with a settlement discount of 5 per cent."

The terms offered to the firm for whom I speak are therefore 12½ per cent. higher than those available to what they describe as Grade A firms. I now quote my letter again:—

"I would be glad if the Minister would take such steps as may be necessary to impress on Messrs. Irish Foundries, Limited, their obligation to revise their pro forma invoice, No. 927, and to allow to Messrs. Builders' Direct Suppliers the 12½ per cent. which they have not allowed on the pro forma invoice.”

On the 9th May I got a letter from the Minister's private secretary to say that the matter was being investigated, and on the 24th May I received the following letter:—

"With further reference to your letter of the 30th April, 1952, regarding Messrs. Builders' Direct Suppliers, I am desired by the Minister for Industry and Commerce to say that he has ascertained from Irish Foundries, Limited, that they did receive an order for baths from Builders' Direct Suppliers and that they quoted them ‘B' merchant's terms, which is all they were entitled to. The extra discount of 12½ per cent. to which you refer is granted only to ‘A' merchants, that is, merchants who have the facilities referred to in my letter to you of the 25th March last. If, and when, Builders' Direct Suppliers are in a position to comply with those requirements, Irish Foundries, Limited, will be quite willing to reconsider their application for terms applicable to ‘A' merchants."

Now, I want to submit that this firm, although they may not have the same equipment as the larger builders' suppliers in Dublin, have unquestionably adequate showrooms; showrooms, as they point out, which are acceptable to other suppliers of analogous merchandise. They can place and have placed an order for baths substantially in excess of the minimum stipulated. They undoubtedly carry on a bona fide merchant business, in evidence of which they pointed out to the Minister at an early stage that in the previous 12 months they had imported some hundreds of baths. I have here before me an invoice for 300 baths imported during the year 1951, before the imposition of this tariff, showing that they certainly carry stocks, and that they are bona fide in the business. They have similar facilities to other people in the business, and they have a sales organisation. The pair of them are night and day trying to build up the business to the best of their ability.

Here is the issue. Is it to become hereafter the rule in this country that nobody can ever enter an established business but the big firms already in it? If we are going to lay down the principle that if you want to go into the builders providers' business you must be prepared to provide forthwith from the day you open, premises which will compare with those of Brooks' Thomas, T. & C. Martin, Dockrell's, Dinan, Dowdall's, or any of the old-established firms; that until you do you are not going to be regarded as what they euphemistically describe as an "A" grade merchant and that you will have to trade against a rate of 12½ per cent. in favour of your larger competitors, it means that we are establishing a most malignant and poisonous system of price rings in this country. It may be that a couple of young chaps setting up on their own are not in a position to pay a team of travellers but, surely to goodness, there is nothing disgraceful in their acting as their own travellers—one man looking after the warerooms this week while his partner does the travelling, and vice versa the following week? It may be that they cannot take premises with a large frontage on one of our principal thoroughfares with extensive showrooms to display their goods to potential customers, but surely because of that they should not be put in the position that they may never aspire to anything but retailers, that they may never compete for the patronage of large purchasers, such as building contractors or a municipality? Surely it is to stop an attempt to crystallise a situation of this character that the Minister has announced his intention of bringing in legislation to control restrictive practices?

I now assert, and I challenge contradiction, that there are in existence in this city and this country at the present time associations which meet regularly for the purpose of determining minimum prices below which nobody will sell builders' materials, and that the penalty of offering to sell for much keener margins of profit than is laid down by the price merchants is exclusion from the association. I say that the House has before it clear evidence of the fact that the Bailieborough firm will not supply anybody who does not belong to such an organisation. I ask Deputies to bear this in mind. Firms like the Bailieborough firm may hate the system just as much as I do but they are placed in the position that if they should continue to supply a man who was not a member of the ring, the ring would be around the Minister for Industry and Commerce in the morning to say that their baths had flaws in them, that their baths had cracks in them, that their baths were unsatisfactory, that the baths were too dear and that the Minister should issue a licence for the importation of baths or take such other measures as would make things pretty hot for the Bailieborough bath manufacturers. If you have got to live out of your business and the alternative to trading peaceably and profitably with 99 per cent. of builders' suppliers is to break a quixotic lance with 99 per cent. of the builders' providers in this country in order to vindicate the right of a small firm that is struggling to get on its feet, then human nature cannot reasonably ask that you should throw your business into jeopardy in order to vindicate the right of the small man. That is what Parliament is for.

Frankly, it never crossed my mind that the Minister for Industry and Commerce would for one moment countenance the picture that I have laid before the House and I confess, hardened as I am to politics, to be profoundly shocked to receive a letter from the Minister saying that he accepted the story that the Bailieborough firm's letter did not truly represent the firm's policy, that it was written by their chief clerk under a misapprehension. I think that was a disreputable prevarication. I do not believe the Minister believed that letter. Surely the Minister agrees that if there is a letter here, which he can see, in which it is stated: "We are going to bring your case before a meeting of the directors," and in four days' time that is followed by a letter which says: "We brought your case before the directors. Here is their decision," it is the shabbiest prevarication to say, subquently, that this letter was written by the firm's chief clerk without authority and does not represent the view of the board of directors. The truth is that the board of directors got caught out. They never thought that anybody would bring the matter to the attention of the Minister for Industry and Commerce. I would have expected the Minister for Industry and Commerce in these circumstances to say: "That will not do. I will not tolerate that kind of chicanery. These people must be supplied provided they are prepared to pay for the baths."

Instead of doing that the Minister appears to me to join in this game and to say that he believes that this statement is true, when he knows that these people were told: "We are going to bring your case before the directors" and that four days later a letter was issued stating: "We have brought your case before the directors and their decision is that we will not give you the terms unless you are a member of an approved association." Then, when the Minister queries that, he is told that the chief clerk wrote that without authority and that it does not represent the directors' view.

Now I am simply concerned with justice for two young fellows whom I never heard of, whom I have only seen once in my life. I do not know who they are and whence they come. I have never seen their premises and I know nothing about their business. I was drawn into this solely because they came to me and told me their story the facts of which were verifiable and I wanted them to think that, whatever political differences exist, there were certain fundamental principles about which there would be agreement. I wanted to demonstrate to two young fellows that there was not such a thing in this country as the opportunity for a powerful organisation to crush or exploit little people or poor people, and that the moment you told the Minister for Industry and Commerce in this country, whatever Party he came from, facts of that kind, the whole power of the State would move into action to overthrow any vested interests, however great, in defence of a small person without inquiring as to what his background was, whence he came from or what his affiliations were, and that so long as he was an honest man and a citizen of this State he commanded a power greater than that which any vested interest could bring against him.

It will be a source of humiliation to me if I have to go back to two relatively unimportant and entirely uninfluential persons and say to them: "I was wrong. We are living in a community where vested interests are too strong for me, too strong for Parliament, and there is not any remedy. It is all a fraud. When you are going to get into a business of this character go and make friends with the Mammon of Iniquity, because righteousness and justice in this country have ceased to be the equal of Mammon. The big boys, the rich boys are in this ring and Parliament itself is not able to compete with it."

I lay this soothing unction to my soul. Maybe Parliament will not do it, but so long as I have a voice to denounce that kind of rotten, corrupt and bestial tyranny in this House I do not believe this House will for ever endorse vileness of that kind. Although these two young fellows may be successfully smashed by the rapacious rascality of a combination of this kind, it is some poor consolation to know that some day our people will rise up in righteous indignation to tear such organisations to pieces. It should be a humiliation to any Irish Minister for Industry and Commerce to tolerate for an hour such a thing. I have no high opinion of the present Tánaiste but I certainly never thought, as I think this correspondence manifestly shows, that he would be an approving party to a transaction of this kind. It is a revelation to me that it should be so.

It is a degradation, it is a humiliation to us all if these young men are wiped out, as they are apparently going to be. I hope that some other Deputies will resolve with me that if justice falls by the wayside to-day some day it will rise again and that rings and other combinations for the exploitation of our people and the aggrandisement and enrichment of avaricious individuals in our community will be destroyed for all time. So long as I am in public life they will be kept in the centre of the searchlight of publicity. Whenever the opportunity offers itself to me to keep them there they will be denounced for what they are—parasites on the body politic of this country—and we will find some day some legislative D.D.T. which will eliminate them for all time from the society of which we constitute the Legislature. No matter what we do hereafter, if this injustice be not rectified to-day we will all suffer and we must all share in the degradation that for a single hour a vested interest of this kind could set the fundamental principles of justice and equity at open defiance for no better reason than to make themselves richer than they ever could hope to be by honest means.

Mr. Lemass

The only question that arises in the dispute between these two firms is one of facts. All Deputy Dillon's ranting is intended to conceal from the House that the facts do not support the case he is making. I am quite certain that by this time Deputy Dillon realises that this firm on whose behalf he is speaking have no right to get that special advantage over other firms in the same trade which they are seeking. The House is aware that I am proposing to bring forward legislation designed to eliminate restrictive trade practices and price-fixing rings. I have no power to interfere with these practices now, at least no power under statute. But if I thought that any firm in the position of this Bailieborough firm, a protected industry supplying the Irish market, was in fact operating restrictive practices of the kind which Deputy Dillon referred to, I would have taken prompt measures to stop them or deprive them of their protection. When this matter was brought to my notice I immediately investigated it to see if there was any justification for the allegation which was being made.

There is another practice which I am going to discourage and that is, the practice of traders using political pressure, or a threat of political presure, to get from Irish manufacturers commercial advantages over their competitors. I want the House to be quite sure that we are not witnessing that at the moment. This firm manufactures baths in Cavan. According to the information available to me they are prepared to sell these baths to anyone at the prices on their price list. If some people set up a trade as a builders' provider—that is, persons who go around among builders seeking orders for baths and transmit these orders to the firm in Cavan—they will get on the list prices a fixed discount— a discount which will provide them with a reasonable profit for their work. If, over and above seeking orders for baths amongst builders and firms entering into building contracts, they agree to set up a showrooms and to carry in that showrooms a stock of baths, and maintain their own selling organisation, over and above the builders' providers' discount they get a further discount to offset the cost of carrying the stock maintained in the showrooms of the selling organisation.

This firm which, according to my information, is a firm of builders' providers who canvass orders for builders' supplies and pass these orders on to the manufacturers and never see the goods because they are sent direct from the manufacturers to the purchasers, are seeking to force this firm to give them the full discount to which they would be entitled if they had a showroom and were prepared to carry a stock of baths, which they have not got. The question is: Have this firm got that position in the trade that they maintain a showroom and carry a stock? Deputy Dillon said that they must be stockists because they imported some 300 baths from Germany last year. All the evidence is that they succeeded in getting orders for these baths, passed the orders on to the firm in London and had nothing more to do with the matter beyond distributing them for the exporters and collecting the commission on the sales.

I went into this matter with some care. I should have been far more determined, I think, to protect the interests of this firm if they were denied their just rights than Deputy Dillon professes to be. Deputy Dillon says he has not seen their showrooms or visited their premises. I had their premises inspected. The firm occupies the ground floor of a two-storey converted coach-house at 59 Fitzwillian Lane. Apparently these premises are used mainly for the purpose of manufacturing tiled fireplace surrounds. There is a small office and showroom combined which is not fronting directly on the lane but is separated from it by the usual stable yard. It is now used as a storing place in fine weather conditions. In addition a small stores is used in an offshoot from the lane which is normally kept locked.

Mr. Dillon

There is a showroom.

Mr. Lemass

There is not.

Mr. Dillon

The Minister has just read out that there is. You read from your report that there is a small showroom.

Mr. Lemass

No, there is a small office and showroom combined which is not fronting directly on the lane but which is separated from it by the usual stable yard, and another small store which is normally kept locked. There was no stock of baths and no indication there that the firm were engaged in business as stockists.

There are a number of firms on the list of customers of these bath manufacturers trading under a different set of conditions. Some firms are credited as merchants who carry a stock and maintain a showrooms and sales organisation. They get the appropriate terms for that class of trading. Then there are other firms who do not carry stock but who, nevertheless, are agents for the sale of the baths. They get their profit through the commission allowed them. As I understand it, the firm under discussion is in the second category, but it wants to get what, for it, would be an advantage over other firms in the same category, namely, the greater discount to which it would be entitled if it were incurring the expenses incurred by the firms in the first category and which, in fact, it is not incurring. I would not regard that system of discounts as undesirable. It is obvious that if this firm is allowed the greater discount without maintaining a showrooms, stocks, and so forth, that are maintained by firms in the first category, other firms will cease to do so, with the result that the staff which they employ will be disemployed, and that the firm itself will be forced back into the position of dealing in individual orders for small quantities, which would enhance its distribution expenses considerably.

It is true that an official of the firm wrote a letter in January last to the effect that they would supply the firm if they were members of one of the appropriate associations. The fact that that letter was issued—issued, according to the directors, by the firm in error—is used here to get for this firm the greater discount to which they are not entitled by their trading position. It was that letter which, naturally, aroused my interest in this case, and which caused me to pursue the very full investigations that were undertaken before I satisfied myself that there was no occasion for my interference. The firm have assured me, and have produced evidence, that they are supplying many merchants who are not members of any association, and that they continue to supply anybody who desires to enter this business on the stated terms, and to treat all comers equally. I do not think it is reasonable to expect me to insist that they should do more—that they should give to this firm a greater discount than they would allow to other firms doing the same sort of trading, or the further discount which is designed to offset the costs involved in carrying a substantial stock of their goods.

There is no issue here of monopolists grinding the face of the poor. There may, perhaps, be another kind of issue which I do not want to stress. So far as my investigations show, this firm in Cavan are trading under circumstances which could not possibly bring their activities within the scope of the restrictive practices legislation which I intend to introduce.

Mr. Dillon

I think there is evidence on the record to show that the Minister's implication that there is a question of strong pressure being brought to bear on anybody is manifestly false. I have been in correspondence with the Minister's Department since January last. During all that time Dáil Éireann has been sitting. I could have put down a parliamentary question at any stage, but those young fellows were not in the least anxious to become the subject of a cause célébre. I kept saying to them that there was no need to do so, that once we got the information accurately into the hands of the Minister for Industry and Commerce nobody would be more active to protect their legitimate interests than he. I said it was not a question that required to be raised in Parliament. I said that all that was necessary was to engage the Minister's attention. Sometimes it is not easy to bring matters of that kind to his attention. Day after day, I spoke to officers of his Department. They told me they had passed the matter from this Division to that Division. Eventually, I said to some of the officers of the Minister's Department: “I sympathise with your difficulties. It is not always easy to place precisely the responsibility in a matter of this kind. Would you please pass it to the assistant secretary in charge of your Division? If he feels he is not able to deal with it administratively he will bring it to the Minister's table.” That was done. Here there is no evidence of a desire to raise an acrimonious political issue in respect of this matter. It is not right to say there is. Four months have elapsed in each week of which I have been in correspondence, verbal or written, with the Minister's Department in order to press the matter forward to a satisfactory conclusion. I do not think it helps anybody to suggest that political pressure has been brought to bear. All the facts point in another direction. The Minister read out to the House a report which he himself elected to read.

Mr. Lemass

It is the issue on the fact about which the Deputy said I was wrong.

Mr. Dillon

The whole argument was based on that and nothing else. I have not seen the premises. I know nothing about the fellows either. The facts were reported immediately. In giving us the report he got from his own inspectors, the Minister says there was a small showroom and office combined. To the Minister that may sound as a trifling matter. If he knew as much about small business as I know, I wonder how he would describe my showroom in a country town? I wonder if he went into the showroom of any Deputy of this House who does business in a country town how would it compare with the showroom of this small firm in Dublin?

Mr. Lemass

That is hardly the point.

Mr. Dillon

You are not bound to maintain a showroom on a main thoroughfare in a city to fulfil the conditions of carrying a stock which you would show to your customers. I am not making the case that these people had a big service here. I am saying they had a showroom such that if they met a builder's contractor and bid him a price for a bath and he expressed the desire to see the bath they would say: "Come along. It is not a very stylish place." When the Minister directed the inspection of the premises, the duty had been in force three months. You cannot refuse a man a supply of baths and then bring it against him that he has not a supply of baths. They have been clamouring for baths for five months and they could not get any. When the premises were inspected there were not any baths there. How could there be? They would not give them any. Here is an order in respect of which the Bailieborough firm thought fit to issue an invoice. The Bailieborough firm issued the invoice and if they did not believe they were going to take delivery of the baths why should they issue that invoice?

The Minister said there are certain categories of traders. Does Dáil Éireann want to set up a system of hierarchy of traders in which at every stage in the hierarchy there must be a margin of profit? You have "A" traders, "B" traders, "C" traders and retailers. What does that mean? What is the price of a bath in this country now? Here is how the thing goes up. You finally arrive at the stage when you get a six-foot bath costing £21. If you are a merchant of the third category you get 10 per cent. discount and 5 per cent. settlement. That means that the price of the bath is £21, less 15 per cent. Then there is category "B." The price of a six-foot bath is £21.

Mr. Lemass

It must be an imported bath.

Mr. Dillon

No. The price of an Irish manufactured bath as to six feet is £21. There is 15 per cent. settlement and discount if you are a retailer. If you are graded "B" you are entitled to buy the bath at £21, less 15 per cent., less 10 per cent. and less 5 per cent. Now there is a further category of merchants—Grade "A" merchants, and if you are a grade "A" merchant you pay £21 for the bath, less 15 per cent., less 10 per cent., less 12½ per cent. and less 5 per cent. so that the bath which began at £21 goes down to about £13 15s. in the following manner. You first take off 15 per cent. which we will say is £3 and that leaves £18. You then take off 10 per cent., which is, say, 30/-. That leaves you with £16 10s. You then take off 12½ per cent. which is £2 1s. and that leaves you about £14 9s. You next take off 5 per cent. which is 14/- or 15/- and, by heavens, the price of the bath is now down to £13 15s.!

I do not want to mislead the House. It sounds very queer, but the hardware trade is a peculiar trade and you would want to understand it before you evaluate facts such as that. There are certain commodities in the hardware trade which have a standard price. The price has always remained the same but moved up and down by way of percentage.

If you want to buy screws the price is related to a price quoted in 1936, plus 175 per cent. That is the way the hardware trade is run. I do not object to the system, which might appear scandalous, of saying: "Here is a price of £21, less 12 per cent., less 10 per cent. and so forth." The evil is that you have different categories of merchants entitled to rates of discount because when these commodities are brought before the price-fixing machinery of the Department of Industry and Commerce, the price-fixing machinery people say: "Look here, if this bath cost £15 to manufacture, are you not getting a fair profit if you get £16 10s.?" The manufacturer says: "Perhaps we are, but what about the wholesaler-retailer; or the retailer?""What about them?" says the Department. They say: "There are 40 genuine wholesalers in the country and they must get a living." They are given a living. The wholesalers distribute these baths to the wholesaler-retailers, and they must get a living. How many are there? Four hundred. We must give them a living. But, wait a minute, what about some 20,000 retailers? Are they going to get a living out of it, too? We will give them a living out of it. Remember, when they get a living, all the employees must get a living. You will have to give them a margin of profit. They have got to pay trade union wages.

The factory people say they can sell the bath for £16 5s., but they have been asked to provide a profit for the wholesaler. They are given 15 per cent. The wholesaler-retailers are given 10 per cent., and the retailer is given 12½ per cent. The bath is now £16 10s., plus 15 per cent., plus 10 per cent., plus 12½ per cent. Then somebody asks: "What happens when the fellow pays cash?" He will have to be allowed 5 per cent. cash discount. At this stage, the bath is costing £16 10s., plus 10 per cent., plus 15 per cent., plus 12½ per cent., plus 5 per cent.

Mr. Hickey

Those are some of the firms that are issuing huge bonuses.

Mr. Dillon

The man who gets the £275 housing grant discovers that a great part of his grant goes in a profit of 15 per cent. for the wholesaler, 10 per cent. for the wholesaler-retailer, 12½ per cent. for the retailer and 5 per cent. for the cash discount. I wish that Dáil Éireann knew precisely in how many trades that system of building up a hierarchy of costs exists at the present time. I wish the Deputies of Dáil Éireann would examine the structure of some groups of companies in this city at the present moment—groups which have thirteen separate companies.

Mr. Lemass

This is altogether away from the fact that you have no case on the issue that you raise.

Mr. Hickey

Bonus shares have been dished out lately by some of these gentlemen.

Mr. Dillon

Does the Minister really believe that these people have been fairly treated? He admits himself that they have a showroom. He told us that he went himself, by his officer, and saw the showroom. I was not in a position to certify that. As far as I could gather from what he said, the only thing in which these people failed to meet the requirements was that they have no showroom and they did not carry stocks. The Minister found the showroom. They have not stocks because they will not be given stocks. That is the burden of their complaint.

Surely, if they have a showroom, if they are prepared to pay for the goods, if they ask nothing more than the right to trade in them, and if they are prepared to receive delivery of them in the showroom which the Minister, by his inspector, knows to exist, they have complied with every requisition the Minister has laid down for a trader entitled to the best terms. The alternative is to close them down, put them out of business. I think that is not fair.

I say this is all part of a horrible system of price rings and price manipulation here under the protection of high tariffs and quotas designed to rob the public by ensuring that competition will not be whittled down. A whole tyranny of profit margins has been raised behind the protection of tariff barriers and quotas for the benefit of the few at the expense of the many. That is wrong. It is dishonest. It is unfair.

I believe that I could with confidence invoke the assistance of the Minister to put right what I believe to be a very real injustice in this case. I ask him now if these people, albeit that their showroom is modest and poor, take delivery of the baths, hold themselves ready to show them to any potential customer, are solvent and prepared to pay, will he direct that they get the same terms as any other merchant in the same line of business with a showroom, rich or poor, gets from these firms provided that he pays his debt and involves the firms in no financial liability?

Mr. Lemass

I do not have to give that direction. The Deputy has already been told by letter that the company is supplied.

Mr. Dillon

Does not the Minister himself, through his inspector, know that they have a showroom?

Mr. Lemass

No. Let me make it clear. First of all, there is no refusal to supply. The only question is whether this is the type of firm that canvasses for orders and passes the orders on to the factory which supplies the customer without the canvasser having seen the goods at all, or is it the type of firm that carries the stock and supplies orders out of that stock? If it is in one class it is entitled to one rate of discount. If it is in the second class it is entitled to another rate of discount. All the evidence goes to show that the category is correct. If they can show they are in the second class, that they have a showroom and will carry stock, they will be able to supply on that basis.

Mr. Dillon

I have no complaint if the Minister will undertake to enforce that rule equitably. I think it is a fair ruling in all the circumstances. Whom must the firm satisfy as to their bona fides and standing? Will the Minister appoint some responsible officer of his Department to investigate that matter and report objectively on it to him?

Mr. Lemass

I have investigated and, on the evidence I have got so far, I have come to the conclusion that the firm's position is correct. I am not holding myself out as an infallible judge, and the firm can, of course, change its status in a week or in a month.

Mr. Dillon

Will the Minister undertake to see that a responsible officer of his Department looks into this matter objectively and sees that a ruling is given in accordance with the principle just laid down by him? If he does that it will satisfy me.

Mr. Lemass

The Deputy should be satisfied because the last letter he got told him that was the position.

Mr. Dillon

I am strangely paradoxical. Will the Minister get a responsible officer of his Department to make that survey and objectively and equitably settle the matter? I have no doubt that, if he so directs, the officers of his Department will see that it is done. In those circumstances I will have no desire to press this matter any further.

Mr. Cogan

Deputy Dillon, in the course of his statement, made an allegation that firms which are members of this protective association could, under certain circumstances, blackmail an Irish manufacturer by representing that his products were inferior and thereby deprive him of the protection of the protective tariff. I want an assurance from that Minister that that is not so. I do not think that firms like Messrs. Brooks, Thomas, Messrs. Dockrell or Messrs. Martin would be guilty of such conduct. If it were true, however, that distributing firms, because an Irish manufacturer dared to supply Irish products to a firm which was not a member of their association, could and would there and then go maliciously to the Minister and make representations to the effect that the manufactured goods were inferior—I do not believe that that would happen— I want an assurance from the Minister that, if that did happen and if distributors were guilty of such conduct, the Minister would at least protect the Irish manufacturer by having such allegations carefully and thoroughly investigated.

Mr. Lemass

Of course, from time to time disputes have arisen between manufacturers and distributors as to the quality of the product supplied. These disputes have to be resolved on the spot as and when they arise. I would remind the Deputy that on recent occasions I have been pressing upon manufacturers the advantage of seeking a standard specification for the type of goods they are making from the Institute of Industrial Research and Standards and applying that standard mark under the appropriate legislation to their goods. I think the best protection a manufacturer, a trader or the public can have is the extension of the use of the standard mark. The Institute of Industrial Research and Standards will prescribe a standard specification of quality for any class of goods. A number of standard specifications have been made. Others will be made until we will have, I hope, as many here as are in force in other countries.

When a standard specification has been prescribed the manufacturer can attach a standard mark to his product. By doing so he guarantees that his product is equivalent in quality to the standard prescribed and he lets it be known to the public that he is facing the possibility of prosecution if the quality of his product is less than the prescribed standard. I would, therefore urge upon all manufacturers the tremendous advantage it is to them to encourage the preparation of standard specifications of the type of goods they produce and to use that standard mark. It is by that means that any suspicions that may exist in the minds of the public or in the minds of traders as to the quality of goods produced in Irish factories can be finally removed.

Mr. Hickey

Quality is one thing. The question of the refusal to supply a particular firm is another thing.

Mr. Lemass

There has been no refusal to supply.

Mr. Hickey

I understood there had been because they had not got a showroom.

Mr. Lemass

No. In any case, there was no refusal to supply.

Mr. Dillon

It was a question of the rate of discount.

Mr. Lemass

There are, of course, a very large number of firms trading in these baths at the rate of discount at which this firm was offering to supply them. Obviously, it would be unfair to all these firms if this one competitor of theirs was to get more advantageous terms, although doing nothing more than they were doing. Is not that quite simple?

Mr. Dillon

In effect, these people were being prevented from trading on a basis of equality with large builders' suppliers having large and fashionably situated showrooms. It was sort of putting them in the category of commission men.

Mr. Lemass

That is what they have been. Deputies will understand that if I am a trader, if I carry stocks and tie up a lot of capital in my stock and supply my customers from stock, then I am going to cease trading on that basis if another trader next door gets the same discount terms as I get without carrying any stock, but merely collects orders and passes them on to the factory.

Mr. Dillon

That is the function of the commission man. Take this case. One man has large premises and carries a large variety of stock. Another man must content himself with a somewhat less elaborate stock. Surely, it is not going to be contended that, because he has not got as wide a variety of stock as his richer competitor, he is to be put out of the trade altogether?

Mr. Lemass

To get stockists' terms a minimum stock must be carried.

Mr. Dillon

There are fashionable stockists who carry a wide variety of baths. They can show them to a customer in green, pink and yellow, so that a builder can walk in and say that he will take 24 of this and ten of that. The other man has them only in white, and the few that he has may be in a basement. His wealthy neighbour carries a full stock. Is it to be contended that the other man who has only the one variety is not entitled to the same terms as his wealthy neighbour? If that were so it means that unless he can get together a capital of £250,000 he can never hope to be on the same footing as his wealthy neighbour. In that case there would be no new entrants to the trade at all, and most of us entered it on a shoe string.

Mr. Lemass

There are a very large number of firms in this trade on that basis.

Mr. Davin

Has the Minister any supervisory power which would help him to keep down prices?

Mr. Lemass

In this particular case I fixed them.

Mr. Davin

Could the Minister do anything to reduce the number of commission agents who are getting a whack out of this kind of business?

Mr. Lemass

People do not go into a retail shop for a bath, and carry it home under their arm. They go to a plumber.

Mr. Hickey

There are a lot of people getting commission from these things.

Mr. Lemass

No wholesaler can remain in business unless he gives service to somebody. If there is some uneconomic and unjustifiable distribution, the force of competition will eliminate it. The wholesalers do serve a commercial purpose, and because they do they have to get a profit out of their business.

Mr. Davin

Does the Minister know that some of these builders' providers are getting 25 per cent. for the service of re-invoicing traffic which is unloaded from the ships at the North Wall and put into wagons?

Mr. Lemass

Why does the Deputy not get into the business?

Mr. Dillon

He will not be let get in because he is not a member of an approved organisation.

Mr. Lemass

If that is so we will burst that up under the promised legislation.

Mr. Dillon

There is the old saying in the country: "Live horse and you will get grass," but the horse frequently dies.

Mr. Lemass

This horse happens to have survived during three lean years.

Mr. Dillon

That is the trouble. I am afraid that before the general election a great many of the old horses will have disintegrated and died. I am trying to save them. The Minister says that there is no such thing as a multiplicity of unnecessary commissions.

Mr. Lemass

No, I did not say that.

Mr. Dillon

You said that the wholesalers discharged a service. Take a pair of boots. It costs the manufacturer £1 at the factory gate. It goes to the wholesaler who gets 15 per cent. on it. It is then 23/-. It goes from the wholesaler to the retailer, and there is 10 per cent. put on. That brings it to 25/6. The retailer puts the pair of boots in his shop window. He gets 30 per cent.

Mr. Lemass

You have already put in one extra.

Mr. Dillon

No; I will name them again.

An Leas-Cheann Comhairle

The Deputy is getting away from the amendment.

Mr. Dillon

I understood that we could discuss the whole thing together. If the Chair desires, I can discuss this on the Schedule. When the 30 per cent. is added, that raises the price of the pair of boots to 33/-, the same pair of boots which cost £1 at the factory gate. You have there a profit for the manufacturer, the wholesaler and the retailer. Would it surprise the Minister if I tell him that all three—manufacturer, wholesaler and retailer—in one case at least is the same man in different clothes. The manufacturer of the boots appears at the factory gate with the pair of boots. He changes his clothes and dashes across the street and becomes the wholesaler; he changes his hat, rushes out and becomes the retailer. He puts the pair of boots in the window as the retailer. Without being too precise, there is another like that man in Tipperary. The same man is manufacturer, wholesaler and retailer.

That same man is a manufacturer, a wholesaler and a retailer. The pair of boots which he manufactures costs the purchaser 33/-. I was in the boot trade in this country for the last 25 years, and I want to tell the House that in 15 years' trading, before tariffs and quotas in boots were brought in, there was no such thing as a boot wholesaler. There were two wholesalers in the whole of Ireland and they supplied three small hucksters' shops. Deputies must be familiar with the sign hanging outside a shop saying that the shopkeeper was an agent for, say, the "K" boot. The travellers from these firms came from England to Kilkenny, to Cork, to the Lee boot people, or to those who sold various other brands. They sold them the boots direct from the manufacturer. Three or four months before delivery was taken a consignment was sent from the retailer to the factory. When the system of price control came in there emerged a new, vital interest in the boot trade, namely, the wholesalers. They are a purely ghostly body that have no physical existence. They were put in solely for the purpose of establishing a step in the profit grading so as to widen the difference between the production costs and the legal selling costs. I could show the Minister in trade after trade in this country where, to my mind, an effort was made by trade organisations with the greatest possible assiduity and skill to sell that proposition to his Department. They successfully sold it. I tell Deputies that they will find groups of traders for whom profit margins are provided who have no physical existence. They only exist for the purpose of collecting a profit margin which was never there until they were thought up by trade organisations to make the margin between costs and selling somewhat wider than it would otherwise be.

Mr. Lemass

I am sorry Deputy Morrissey is not here to defend his system of price control.

Mr. Dillon

Deputy Morrissey would confirm a good deal of what I say. But, as Deputy Hickey points out, the most difficult thing of all is for the most resourceful, well-informed and industrious civil servant to wind his way through the labyrinth which the skilled trade organisations try to form to throw dust in their eyes. If an attempt is made to prove that there are no wholesalers in this country, the two wholesalers I have mentioned will be trotted out.

Mr. Lemass

Does the Deputy seriously suggest that there is anyone making additional profits in the manner he suggests?

Mr. Dillon

Yes. I know of one man who is manufacturer, wholesaler and retailer, and he collects a fixed margin at each stage of the operation.

Mr. Hickey

I want to point out to the Minister that there is a manufacturer of boots and shoes who has two or three shops within 300 yards of his factory. Am I to understand that he is getting the wholesaler's price and the retailer's price, although he himself is the manufacturer, wholesaler and retailer as well?

Mr. Lemass

He is running shops and he is employing people. Is he to get nothing to cover the cost of running the shops and paying his employees?

Mr. Hickey

It seems most unfair that a man should collect profits as a manufacturer, a wholesaler and a retailer, although his factory and shops are within 600 yards of one another.

Mr. Lemass

He does not get a wholesaler's allowance unless he is reselling to other traders.

Mr. Hickey

No, unless he sells the boots; but it is open to his own wholesale firm to sell them from the wholesale to the retail premises, and he is entitled to take a profit at each stage.

Amendment, by leave, withdrawn.

Schedule and title agreed to.

Bill reported without amendment.

Agreed to take the remaining stages now.

Bill received for final consideration and passed.

An Leas-Cheann Comhairle

This is a Money Bill within the meaning of Article 22 of the Constitution.

The Dáil adjourned at 4.55 p.m. until 3 p.m. on Wednesday, 4th June, 1952.