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Dáil Éireann - Volume 30 - 23 May, 1929

Public Business. - The Flour-Milling Industry.

Mr. de Valera: I beg to move:—

“That it is the opinion of the Dáil that the flour-milling industry should be protected by imposing a tariff on all imported flour, save flour admitted under special licence for biscuit manufacture.”

Deputies will remember that this motion was put by Deputy Lemass and myself on the Order Paper a short time after the discussion on the Report of the Tariff Commission advising against a tariff on imported flour. That was many months ago. Some time afterwards Deputy T.J. O'Connell put down an amendment which deals with a wider question. It seems to us it is a pity that we should be compelled to vote as between these proposals by way of motion and amendment. Deputy O'Connell's amendment deals not merely with the question of the protection of the flour-milling industry and a restriction on the importation of flour, but it also deals with the promotion of the growing of native wheat. Our position in that matter is that we are largely at one with Deputy O'Connell. Like him, we believe it is most important that the State should take the necessary steps to induce the growing of native wheat to a far greater extent than it is grown at the present time. In fact, we put that as part of our general policy. We are in the position now, with respect to the amendment, however, that we will be compelled to vote against it, although we agree largely with the main purpose of it. We will be compelled to vote against it because we regard the putting of restrictions on the importation of flour as an urgent matter, as something [175] that can be done immediately, and as something in which we are likely to get a greater degree of agreement than in the case of wheat. It was on that account that at one stage Deputy Dr. Ryan withdrew proposals which he had put forward and now appear over his name in another motion on the Order Paper. He put his proposals in a separate motion rather than let them go forward as a further amendment.

We are sorry Deputy O'Connell could not see his way to allow these two questions—Deputy Dr. Ryan's proposals and his own amendment to this motion to be considered together. We feel that it would be a very much better way of dealing with the question. However, if Deputy O'Connell is not prepared to take that course we will have to deal with both proposals. There is, of course, a certain advantage in doing that, but we must be clear in our minds as to the relation between the two matters. It is clear that a proposal to restrict the importation of flour is a necessary addendum to or a necessary consequence on any proposal to promote the production of native wheat. On the other hand, we think that even if the Dáil were not to agree to any scheme for State assistance towards the promotion of native wheat it would be necessary, in the general interest of the community, to prevent the present free importation of flour which tends to destroy our milling industry. The relation between the two is that the restriction on imports would be necessary as a part of a general scheme for providing our own flour supplies, partly through the growing of native wheat, but without any such scheme it would be advisable to have restrictions on the importation of flour, such as we propose in our motion.

Our general attitude towards the whole question involved can be summarised by saying that we believe it is the best national policy to make ourselves as self-sufficing as possible in all vital economic matters. There is no matter, of course, more [176] vital than the question of food. We are an agricultural country. Our exports in 1927 in agricultural produce, articles of food, live animals, drink, etc., came to about £39,000,000 in round numbers. It would be a very difficult thing, I think you will all agree, to expand that, so as to increase it by two-thirds. Yet, we have a home market which would absorb just that amount. We are importing no less than £26,000,000 worth of agricultural produce, while we are exporting £39,000,000 worth.

We do not know why it should not be the policy of the State to see that this home market is captured. We believe that it can be captured, and that not to capture it is to give employment to the stranger while our own people have to emigrate for want of work. We have estimated that the net gain to the community in added wealth by producing those articles of agricultural produce at home which we needlessly import would amount to £6,000,000 yearly. That means that there would be employment given, even after making allowance for the partial employment that would become full-time employment—there would be extra employment given to a number of hands, and that number would run from 12,000 to 20,000. Indeed, 12,000 would be a very low estimate. Now, the employment of 12,000 hands is a thing that should not be disregarded. The possibility of employing 12,000 hands, or more likely up to 20,000 hands, is a possibility that should not be neglected in our present condition.

That has regard to agricultural produce only. If we go into the wider field of general manufactures we find that there are about £28,000,000 worth of manufactured goods, exclusive of food. drink, tobacco and agricultural produce, imported in the year for which we have the last completed figure, 1927. If these were substituted by home products and home manufactured articles it would, we calculate, result in giving an increase of wealth to the community of about £14,000,000, and would give employment to anything from 60,000 to [177] 100,000 extra hands. If we were to do that accordingly, if we were to make it our aim to become as self-sufficing economically as possible, and pursue that aim we would be able to provide a solution for our great unemployment problem.

If we look at the list of imports we will see that the largest items are wheat, flour, maize and maize products. Wheat and flour alone account for seven millions of those imports. Being an agricultural country, we think that we ought to set out to supply these ourselves, apart altogether from the added consideration I have just hinted at, namely, that it is a vital matter and to see that the community will at all times have essential articles of food. I think it was actually stated in the Report of the Tariff Commission that at the time of the general strike in England the total available supplies necessary for the making of bread did not amount to more than would be sufficient for the community for 27 days.

At the present time, if we take the necessary figures and make a simple calculation, we come to the conclusion that the amount of wheat that is grown in the country at the present time would not supply the needs of the community for more than 12 days. It seems to me that we ought not to allow ourselves to remain in that precarious position with respect to such a vital article of food as bread is. It is not enough to be told that in case of necessity we could kill our cattle, or that we could use potatoes, perhaps, to a greater extent than they are being used at the present time. We ought, it seems to me, provide so that the ordinary supplies will not be disturbed, that no foreign crises would disturb these supplies, and that they would run on continuously and smoothly in all circumstances. We are not in that position at the present time, and it is on that account that we should regard this protection of our milling industries as an urgent problem.

Dealing with wheat would take more time, but there is hardly a doubt that we are acting most unwisely in allowing time to elapse [178] without taking the measures that are necessary to deal with the flour question. Since 1921, ten of our flour mills have closed down. Since 1924, six have closed down. When the discussion on this question was taking place before, I read extracts from statements that were made by the managing directors of certain large mills pointing to the dangers that lay ahead of them, and, in fact, indicating that unless the State intervened they could not continue at work and that they would have to close down. That position still holds and, therefore, we are asking the members of the Dáil to examine this whole question carefully, and to ask themselves why, if we are satisfied that in other industries protection should be given, protection should not be given in this very vital industry also.

Perhaps it would be well before I come to deal with the flour question in detail to revert to the question of wheat. Our proposals are given in the report which has been circulated —the Report of the Economic Committee. The main plan of the proposal was to guarantee to the farmer a definite price for his wheat, that price to be guaranteed for three years in advance. If a definite price were guaranteed to the farmer, one of the principal objections that he has at the present time to the growing of wheat would disappear. We know that there are fairly big fluctuations in the general prices of wheat, and as there is such a preference for the foreign wheat, as the majority of the millers have up to the present shown, the farmer is afraid that if he grew wheat he might find no buyer. By these proposals you meet immediately his doubts as regards the market; you guarantee the market, and you guarantee him against any great fluctuations in price.

I believe that with a guarantee of that kind given to the farmer, areas in this country which are suitable for wheat growing would be utilised for the growing of wheat. In 1847, or about that time we grew well over 600,000 acres of wheat. Last year we grew something about 31,000 acres of wheat. I am giving the [179] round numbers. The actual figures will be found in one part or another, I think, of the Report of the Economic Committee. I can give them, but it is just as well that we should keep to the main items. If you look at the map of the country showing the areas that grew wheat in 1847 you will find that by far the greater part of the Free State is suitable for wheat growing. As I have said, you could guarantee the farmer a fixed price. We know that there are over 600,000 acres of land which formerly grew wheat, which can now grow wheat also. Our proposals were intended to provide for the promotion of wheat growing, extending over a period of about ten years. We did not expect that we could get quick results. We believed that time would be necessary, and that confidence would come from experience. We expect that the programme could not be worked out in much less than ten years. In that time it was hoped that we could, by making a fixed price certain to the farmers, induce them to provide something like half our wheat requirements. The amount that would be required to meet our present consumption, making allowance for seed, for a 70 per cent extraction of flour, and allowing 20 per cent. off for wheat which would be unsuitable for milling, would be 860,000 acres. Of course, the half of that would be 430,000 acres, and therefore, even to come to the point which we hope to reach within ten years, we would have to increase the cultivation of wheat up to 430,000 acres.

The machinery by which we hope to achieve our objective was outlined in detail and can be found in the report. The reason why I am not going so fully into details here is because I think that will be more appropriate when we are dealing with Deputy Ryan's motion. The whole machinery has been worked out, and that is why we think that Deputy Ryan's proposals and the proposals in the report are preferable to Deputy O'Connell's proposals. Deputy O'Connell has made merely general [180] suggestions, whereas the other proposals have been worked out and all the machinery shown. In the main, the machinery would consist of a wheat control board, which would be responsible for buying and re-selling such imported wheat as was necessary to make up the deficiency in our home supplies. It would also have the duty of determining the fixed price that should be paid to the farmer for the three years in advance. It would have power to change that price upwards, if conditions demanded it, but it would not have the power of changing it downwards. That would be to ensure a supply, if some special conditions made the price originally guaranteed such that it would not be an economic proposition for farmers to grow the wheat. The board would also have the duty of determining what sum should be paid to the millers to make up for the losses they might incur through the use of native wheat instead of foreign wheat. With that machinery, we see no reason why the whole scheme cannot be worked out. Of course, objections have been made, but we do not think they have very much substance in them. The main objection that has been made was that wheat is a precarious crop. We are not satisfied that that is so to any greater extent than in the case of other crops. We believe that if proper attention were given by the Department of Agriculture to developing proper strains of wheat risk in that respect could be obviated.

In fact, experiments show, taking them over a considerable period, that the risks of failure in the case of wheat are not greater than the risks in the case of other grain crops. It was also stated that wheat is a particularly severe crop on the land, and that it induces the growth of weeds. We think that quite the contrary is the case, that a good crop of wheat smothers the weeds. and that you have only an excess of weeds where you have a particularly bad crop. Statistics show that we are able to grow good crops of wheat and it is only in the case of bad crops that the question of dirty [181] land would arise. On the other hand, an advantage in connection with wheat is the fact that it is the most suitable of the grain crops as a nurse crop for grass seeds.

Mr. Gorey: For what?

Mr. de Valera: For grass seeds.

Mr. Mathews: Has the Deputy ever grown wheat?

Mr. de Valera: I have not.

An Ceann Comhairle: It would be better to allow the Deputy to proceed.

Mr. de Valera: We have got people who have practical experience of the growing of wheat, and they will bear that out. Another objection that was put up to the scheme was that an increase in the amount of land under grain would necessitate an increase in root crops beyond our requirements. Again, that will not stand examination. The fact is that even in an ordinary four-course rotation you have grain twice for roots once, and there is room for an increase in the quantity of wheat grown to the required amount without any undue increase in root crops. For instance, in Denmark the ratio of grain to roots is three to one, while the ratio in Ireland in the years 1847 to 1851 was ten to four. When crops relatively greater and heavier than the crops of a later decade were grown, the acreage of root crops, when compared with grain, was only about forty-two per cent. We hold, therefore, that that is really no objection. As regards the general question of climate, in other countries they have to face drought and frost, and everybody knows that the farmer, in one way or another, is dependent upon the weather. But to single out wheat specially in this manner is, in our opinion, simply a matter of prejudice, pure and simple.

As I have said, I wish to deal only in very general terms at this stage with our wheat proposals. I do so simply to indicate that we are largely at one with Deputy O'Connell in the [182] main purpose that he has in mind in his amendment, but we will vote against it, mainly because to allow it to pass would prevent us from dealing with what we regard as the immediate and the more urgent question of flour. Now let us come to the question of flour. I indicated at the outset that our mills are closing down, that the directors of some of our principal mills are anxious about the future. There is only one mill in this country at present that is working at full capacity. The average working of the other thirty-four mills is not up to sixty per cent. of their capacity. It must be obvious to everybody that when the mills are working only fifty to sixty per cent. of their capacity the overhead charges must be such as to make it very difficult for them to compete with mills that are working at full capacity. At the present time our flour supplies come mainly from the Liverpool mills. As has been indicated already at one time or another in discussions on this matter, England was over-milled at the time of the Great War, and there has been competition among the biggest mills for the English trade, and also for our trade. The result of that competition and of the desire to get a market has been that they cut down their prices to the very lowest when sending flour into this country, and in our report we show that there is not merely a cutting down to a small margin of profit, but that a process of dumping has actually been going on. Figures have been given in the report of three specific instances where flour was sold in the Twenty-Six Counties at at least a shilling per sack less than the price at which it could be produced. If that is to continue what the result will be is pretty clear. The closing down of mills will be continued, and in the case of those which will survive, their fifty to sixty per cent. working capacity will be reduced still further, and the possibility of successfully competing with outside mills will become even more remote, so that finally our position will be that we will be practically completely dependent for our flour supplies on foreign sources.

[183] We hold that these conditions are such that it is our duty to put an end to them. We believe that a moderate tariff on flour would prevent that unfair competition and would give our mills an opportunity of holding their trade. At present our mills do not supply much more than fifty-two per cent. of our average consumption. They are capable of supplying close on ninety per cent., and there is hardly any doubt that if the protection we demand were given to them they would be able in a very short time to meet the complete demand. Is there any reason why that protection should not be given? No really good reason was put forward in the former debate except one, and that was that it would cause a rise in the price of bread. We believe that that need not necessarily follow, at least after the short period of reorganisation and readjustment to the new situation. But supposing it did, in view of the position we would have to face it. I believe that it should be faced. But we do not think that it will follow. If you read the Report of the Food Prices Tribunal, and examine the diagrams showing the relations between the prices of flour and the prices of bread, you will notice that, over a period of two years, the prices of bread as compared with the prices of flour were unfavourable to the consumer and greatly favourable to the baker in twenty-one out of the twenty-four months given, and if you look at the amounts you will notice that they are greatly to the advantage of the baker in three months that were examined.

Now, if we had this tariff, and particularly if we had a control board such as we have suggested in the case of wheat, the prices could largely be controlled, because the price at which the wheat and such flour as would be allowed in would be given to the millers on the one hand, and the bakers on the other— allowing for drops in prices or advances—could be so arranged that they would correspond definitely to a change in price of the loaf, so that [184] the curve showing the price of bread and the curve showing the price of wheat and flour would be absolutely parallel. As I have indicated, there seems to us to have been no good case whatever put forward by those who have opposed the tariff, no good case whatever, except on the one matter of price. As I have said, we have to face that. I believe that if we face it, the results will not be those that have been anticipated, and that, if we take into the whole scheme wheat and flour, we can obviate them.

Concluding then, our position is this: that wheat and flour are vital articles for the community. They ought to be left in no unsafe position with respect to these supplies. The amount of labour and employment that could be given is considerable; the amount of capital which is involved, and the replacement values of all the flour mills in the Free State, would be something like one and a half million pounds. The present capital reserves of 29 of them is £1,700,000. Now, we ought not to allow an industry of that importance to be jeopardised, and as I have said we ought not to allow the community to be placed in a precarious position with respect to a vital article of food, nor should we, when we protect other industries, allow an industry of this particular size and importance, to be neglected. As well, there is urgency.

It has been said that the amount of extra employment that will be given will not be very great. But it is obvious that the 1,700 hands at present employed part-time would, if the scheme of protection was put into force, be assured of whole-time employment. If we do not protect the industry, a large proportion of them, anyhow, will be thrown out of employment. But if we do protect it, these will be safeguarded in their employment. They will be given whole-time employment instead of the part-time employment which they have at present. It is also estimated that direct additional employment in the trade will be given to over 170 hands as an immediate consequence of protection. There are also the ancillary industries [185] to be considered. There is no reason why the same sort of protection should not be given to them. In fact, the millers themselves are prepared to use Irish-manufactured articles, such as sacks and twine, and so on, which represent a considerable sum of money each year, so that on every ground we hold that this protection should be given.

Several months have elapsed since this motion was put down, and we would ask Deputy O'Connell to reconsider his position with respect to the amendment—whether it would be wise on his part to defer taking action in connection with the import of flour until the wheat scheme is accepted. We think that the industry is in grave danger at the present time, and that it would be most unwise to defer for a moment the putting on of this protective tariff, particularly when the putting on of that tariff would not be contradictory to, but would be supplementary to and really ancillary to the scheme for the promotion of the growth of native wheat which the Deputy has in mind. If, however, the Deputy does not do that, then we will be compelled to vote against his amendment, and to wait until Deputy Dr. Ryan's motion comes along to press proposals for the protection of native wheat.

Mr. Aiken: I formally second the motion.

Mr. T.J. O'Connell: I move the amendment which appears on the Order Paper in my name:—

To delete all after “it is the opinion of the Dáil that” and to insert:—

“it is expedient that special steps should be taken to promote the production of wheat and protect the flour-milling industry in the Saorstát and for these purposes the Executive Council is requested to formulate and submit to the Oireachtas proposals which will provide—

(a) that a guarantee shall be given to wheat-growers in the Saorstát of a market at a paying price for wheat suitable for milling with the object of securing [186] that within ten years twenty per cent. of the country's wheat requirements shall be home-grown;

(b) that the full capacity of the flour mills in the Saorstát shall be utilised and to this end that the importation of flour shall be controlled by a State organisation;

(c) that it shall be obligatory upon the flour millers of the Saorstát to take a prescribed proportion of home-grown wheat;

(d) that special facilities shall be given to biscuit manufacturers to enable them to continue to import whatever flour they require for their industry at minimum market prices;

(e) that there shall be established a control over flour and bread prices so as to limit to a minimum the cost to the community necessitated by the guarantee of a paying price to wheat growers and the protection of the flour milling industry.”

Deputy de Valera, in the course of his speech, seemed to criticise the action of the Labour Party in putting down this amendment. It seemed to me that the greater part of the Deputy's speech was in favour of the amendment rather than of the motion, and that it had reference to the amendment rather than to the motion. We could only judge what was in the minds of the Fianna Fáil Party by what we saw on the Order Paper before us When we saw the motion on the Order Paper, a simple motion asking for the imposition of a customs tariff on imported flour, we felt what Deputy de Valera has admitted now, that the Fianna Fáil Party felt and fully believe, that this in itself was not a complete solution of the problem and did not purport to be. But, as have said, we could only judge by the motion that we saw on the Order Paper. It simply asks for the imposition of a customs tariff on imported flour. That is a question that was examined at great length [187] by the Tariff Commission. A report has been issued on it and, while the Commission seemed only to take into account by way of the advantage of a tariff, the extra employment that it would give, it seemed to them—that is their main reason for turning it down—that the amount of employment that it would give would not be sufficient to compensate for a possible increase on the community as a whole.

I must say that, looking at it from that point of view alone, it did seem to us that the extra amount of employment that would be given, taking into account the 1,700 who would be given full-time employment and the extra 153 who would be employed, would not be sufficient to warrant the possible increase that might be imposed on the community by way of an increased price of the loaf made of home-manufactured flour, and we had to take into account that the imposition of a tariff might lead to the concentration of the milling industry at the ports, an amalgamation of mills, perhaps, and the introduction of more efficient machinery, which would mean that from the point of view of labour alone the increase would not be very great. Consequently we felt that there was something more than a mere tariff on flour to be considered, and that bound up with the milling industry was the encouragement of the growth of wheat, which would have the effect of increasing the supply of home-grown breadstuffs, as well as an extension of tillage, an increase in the productive wealth of the country, and, as a consequence, a decrease in the adverse trade balance. Hence we believe that a tariff on flour should not be taken by itself, but that it should be bound up with the more important issue of the encouragement of the growth of wheat. Deputy de Valera suggests that I should withdraw this amendment and let the other one go, but is it not much more obvious that Deputy de Valera should withdraw his motion and accept my amendment [188] as a substantive motion? My amendment contains what is in his motion, but it contains much more. If the Deputy will read the amendment he will find that it makes provision for the protection of the flour-milling industry, and on the question of urgency the only point he makes is that to allow my amendment to pass would be to prevent us from dealing with what we regard as the more urgent question.

Deputy de Valera did not show how the passing of my amendment would prevent him or the country from dealing with the more urgent question. I cannot see why, if this amendment is passed, it will not meet the point that Deputy de Valera has in view, and even do something more. So far as our proposals are concerned, they differ essentially in one or two respects from those proposed by the Fianna Fáil Party. There is, for instance, the question of a control board. I do not know what special reason the Fianna Fáil Party have for making that control board a limited liability company rather than an organisation or a board which will work in the interests of the community as a whole. Is it that they are rather nervous of being, as some might say, tarred with the brand of State socialism? Are they afraid of the term?

What is the particular object of a limited liability company? Is it going to be a profit-making institution? Is it going to work in the interests of the community as a whole? Is it going to be under the control of the State in any way? Why a limited liability company? That is one of the things I cannot understand. I wish some of the speakers who are to follow would explain why the board that is to control the importation of flour and wheat is to be a limited company, and the measure of control which the people of the State will have over that limited company? Is it to be a profit-making institution, and if not, how are its profits to be controlled? We suggest that any such organisation should be controlled by the State—under the control [189] of the community as a whole. That is nothing new in this country, or in other countries. There is no objection to it, but there may be the possible objection that one might say that here we are landed into socialism. My friend on the right would regard that as a final tragedy.

Mr. Good: And the end of all things.

Mr. O'Connell: Yes. There is one other point in which our proposals would differ from those in Deputy Ryan's motion, that is, in regard to the percentage of wheat which should be incorporated in home-milled flour. We take it that 20 per cent. is a more practical proposition and is more likely to be achieved inside a period of ten years than the 50 per cent. which the Fianna Fáil Party propose. There is nothing sacrosanct about the 20 per cent. or the period of ten years within which that figure would be reached. There would be time to see whether that figure was possible of attainment or whether it might be increased. It has been selected because it represents approximately the acreage which was under cultivation during the war years. It is safe, I think, to assume that the land that was brought into wheat cultivation in those years was on the whole suitable for wheat growing, and that all the land that was suitable for wheat-growing was used for that purpose at that time, so that we think on the whole the 20 per cent. figure is a more suitable one to aim at than 50 per cent.

If it was shown to us definitely that 50 per cent. was attainable, we would be glad that 50 per cent. should be grown rather than 20 per cent. The proposals in the amendment do not pretend to be explicit or definite or worked out to the last detail, and I do not think Deputy de Valera's scheme, unless he has his proposals worked out somewhere else, are either. I have not seen them worked out to the last detail anywhere. They do not pretend to be and it will be noted they enunciate nothing more than general principles, and the Executive Council, as [190] the authority for the time being in the State, is asked, if the Dáil accepts the principles, to submit proposals showing the detailed working out of the scheme. The objects to be attained are two-fold: the encouragement of the milling industry and the encouragement of wheat-growing in the Free State with the consequent extension of the area under tillage.

Someone will ask: Why encourage the growth of wheat instead of any other crop? The answer seems to be obvious—that wheat is a crop which provides a suitable product to be consumed by the people. There is, therefore, an assured home market for wheat. It is sometimes said: Why not encourage the growth of oats? I submit that there is no analogy. We are practically supplying our home market with oats. Comparatively speaking, the quantity of oats imported is small. The proposal set out here is that the importation of flour should be controlled. It may not be necessary to impose a tariff. If the importation of flour is controlled by a board, that board will admit into the country the amount of flour required in the country to make up the deficiency in the amount which millers can supply. The Irish millers will be told to go ahead and to work at their full capacity. The balance of the flour required for the community will be imported and put on the market by the control board. This will serve another purpose. If the millers, taking advantage of the position in which they are placed, are inclined to charge an unreasonable price for flour, the control board, by admitting to the market an increased supply of flour, can check the price which the millers will be allowed to charge. For instance, if the Irish millers are charging an unreasonable price for the flour, the control board will say that if they continue to charge that price the board will admit an increased amount of imported flour on the market and undersell them. That will have the effect of checking the price charged by the millers. There is no reason, from the [191] point of view of urgency, as pointed out by Deputy de Valera, why a scheme of that kind could not be made operative within a year, and why the flour mills in the State could not within a year or a year and a-half be working at full capacity, if the importation of flour were controlled as we suggest in our amendment.

I cannot see that there is any practical difficulty in that scheme, and, personally, I think that that is a better way of putting the milling industry on its feet than the mere imposition of a customs tariff—that the flour imported into the country should be controlled, and only such amount let into the market as the Irish mills fail to supply. Even when they are working at full capacity, until new mills are established, or the existing plants and buildings extended, there will be something like 300,000 sacks of flour that would need to be imported. The second portion of our proposition—it has been already touched upon by Deputy de Valera—is that the farmer should be encouraged to grow wheat, and that arrangements should be made whereby all the wheat suitable for the market which the farmers would produce would be purchased in the country, and for that purpose that it should be laid down by this control board that a certain proportion—the proportion to depend upon the amount of wheat produced and the amount of wheat available—of home-grown wheat should be incorporated by the flour mills of the Free State. It will be held, no doubt, that there are various objections to that proposal, that it will mean control of various kinds and an increase of officials. I think that these objections are magnified. I have studied very carefully the reports of the Economic Committee, and I think the arguments used in the majority report are in the main largely superficial. We were told, for instance, that an individual farmer might do better by growing some other crop. There seems to be too much of that looking to the individual farmer rather than to the good of the community [192] as a whole. It has been argued, too, that the farmer who would be asked to pay may not benefit from the growing of wheat. Farmers and other taxpayers are asked to pay for a great many things from which they do not directly benefit, but from which the country as a whole benefits. The Mayo farmer pays for the Army, but he does not benefit very much from that payment, while Deputy Colohan's constituents may benefit very considerably from it.

Mr. Colohan: Question.

Mr. O'Connell: The farmers of Galway and Mayo do not benefit very much from the subsidy paid to the farmers in Kildare and Carlow for the growing of beet. The particular argument, that the man who has to pay does not benefit very often directly from the payment of a subsidy, can be pushed very far and too much can be made of it. I think that what we should take into account is the organisation of the State as a whole, and it has yet to be pointed out to me that if the wealth of the country can be increased, as it can undoubtedly, by the production of wheat, the country as a whole will not benefit by it. I do not pretend to be anything in the way of an expert on these matters, any more than many other Deputies. While Deputy de Valera was speaking, Deputy Mathews was inclined perhaps to make light of the views of Deputies like Deputy de Valera or myself on agricultural matters. Perhaps if Deputy Mathews and myself were put into an acre of land and told to live on it, I might make a better hand at knocking a living out of it. In any case, it does not require a great deal of agricultural skill to grow grass on the plains of Meath.

Minister for Agriculture (Mr. Hogan): On the other hand, you might not.

Mr. O'Connell: In any case, I believe I did more with a spade and shovel than Deputy Mathews did, even though he is a farmer and I am not. I suggest that this is really a national question that ought to be [193] considered from broad national aspects rather than taking up individual cases and individual areas and showing that in one particular case the individual will not benefit, or a particular individual area will not benefit. There is an industry that is fast going out of the country, or will go out of the country, unless some steps are taken to encourage or protect it—that is the milling industry. There is an advantage in maintaining our inland mills.

Mr. Hogan (Minister): Before the Deputy leaves wheat and comes to flour, the amendment states:— “That a guarantee shall be given to wheat-growers in the Saorstát of a market at a paying price.” Would the Deputy indicate the price, because the whole question of cost hinges on that, and I think the Deputy would agree that that is a consideration to be taken into account in seeing whether it is in the national interest or not. He has not indicated a price and, therefore, the cost of this.

Mr. O'Connell: It is not easy to indicate a price.

Mr. Hogan: It is very relevant.

Mr. O'Connell: If you want a definite figure, I would be prepared to suggest that the farmers should get something like £1 a ton as a subsidy, and that that would be a reasonable figure.

Mr. Hogan: That is £1 an acre, roughly.

Dr. Ryan: It might be £2 an acre.

Mr. O'Connell: I suggest that as a figure, and the Minister can make his calculations upon that.

Mr. Hogan: I quite understand.

Mr. O'Connell: Experience might prove it, perhaps, to be too much or too little, but I am suggesting it as a fairly reasonable figure, in the circumstances. Working on that basis, I think that the cost of the proposals which I suggest would at the maximum be less than half a million. But, as against that, wheat to the value of one-and-a-half millions would be produced in the country, and there [194] would be a net gain for the farmers and the community as a result of the operations of the subsidy.

I suggest to Deputies on the Fianna Fáil Benches that instead of my withdrawing my amendment in favour of their motion for a Customs tariff, the proper course would be for them to accept my amendment as a more practical and a more comprehensive motion.

Mr. Lemass: Even though it is yourself that says it.

Mr. O'Connell: Even though it is myself that says it, because it does, what I say they want—it includes protection of the milling industry. It can be done urgently. There is no question of degrees of urgency involved. Their suggestion can be put in operation no more rapidly than mine, and it does commit the Dáil to the principles which are embodied in my amendment, and which I think are of greater importance than the mere question of the imposition of a tariff on flour.

The object is, as I have said, to encourage wheat growing in the country, to encourage an increase in tillage, to encourage consequent employment in the country. And it must appeal to the townsman as well as to the countryman, because if agriculture is our main and staple industry, as it is, any increase in the prosperity of agriculture is bound to react upon the towns, and if employment in the rural areas is increased it will mean that there is less pressure on the towns from unemployed people coming up from the farms to the towns and a greater chance for the townsmen to get employment at a reasonable wage.

I believe the Dáil would be well advised to pass this amendment, which asks the Dáil to consider proposals whereby these two objects, which I suggest are laudable objects in the interests of the community as a whole, would be effected, and to examine into the machinery which would be required to give effect to them. It must be admitted on all sides that these are objects well worthy of being considered in [195] the interests of the community as a whole. This would not be the only country in which that was done, and has been found to be successful in the interests of particular communities. We have had it in other countries, and there is no reason why we, situated as we are, seeing that it would be to the benefit and for the advantage of all within the State, should not put these proposals into operation in this country.

Minister for Industry and Commerce (Mr. McGilligan): I presume that on this amendment, as has been the practice of the House previously, it will be in order to discuss both the motion and the amendment.

An Ceann Comhairle: Yes. The motion and amendment will be discussed together and Deputy de Valera will conclude on both.

Mr. McGilligan: It is also the practice of the House, I think, that one may refer to the other motion on the Paper which has not yet been moved.

An Ceann Comhairle: That is inevitable in the circumstances I am afraid.

Mr. McGilligan: In fact I do not know why it was not moved. We have had a rather amusing conflict between Deputy de Valera and Deputy O'Connell as to why Deputy de Valera's motion should be preferred to Deputy O'Connell's amendment, and a further day left for Deputy Ryan to develop his Fianna Fáil policy with regard to wheat. Is it that we can only have in this House a policy really valuable when it comes under the Fianna Fáil auspices? Is there anything except jealousy in this matter of urging Deputy O'Connell to withdraw what he rightly says is the more comprehensive motion, and in voting for which, whether it is preferred as the better motion or not, Deputy de Valera does not in any way detract from the urgency of his own resolution with regard to the milling situation? It is much the more comprehensive. It was tabled prior to [196] Deputy Ryan's; it indicated a policy thought out, considered and exemplified in a motion before the House prior to that of Deputy Ryan. It includes the motion which Deputy de Valera has set down, and it was the obvious thing to set down after the Adjournment motion on the report of the Tariff Commission. Deputy de Valera to-day states that the only argument against the tariff on flour is the question of a possible, or, as we say, a certain increase in the cost of flour and a necessary increase in the cost of bread. In that Deputy de Valera follows very closely on the Tariff Commission themselves, who in their report say:

“The main difficulty which confronted us in dealing with this application and has prevented us from recommending in its favour is the smallness in the increase in the number of persons likely to be employed in consequence of a tariff, together with our disbelief that the additional output secured by a tariff to the Saorstát mills would enable them to reduce their cost of production sufficiently to prevent a rise in the price of bread.”

The Tariff Commission would probably have been more precise if they had stated “to prevent a rise in the price of flour.” I say that the other necessarily follows. Deputy de Valera has used an argument to-day to try to disprove that contention. What does that argument amount to? Simply to this: That if one reads the report of the tribunal on prices and takes the calculation set out there with regard to the cost of the loaf in comparison with certain given costs of flour it is clear that the bakers have been getting inordinate profits and that we should take some of these profits from them and so cover up the increase in the price of flour which is likely to arise from protection of the flour-milling industry. That is not presenting the case fairly to the public. It is not right to say, even if that did occur, that the public to some extent are being fleeced for the benefit of the Irish millers. I use the word [197] “fleeced” because I think that the report of the Tariff Commission pointed out that in their judgment the mills here are neither well equipped, well situated, nor well managed. If the price of bread at this moment in relation to the price of flour is too high it should be brought down. Let us assume that it has been brought down and that there is a figure at which bread is being sold. Is that going to be increased or not by a tariff? That is the way the question should be looked at, in order to arrive at a proper conclusion as to whether it will cause an increase. It should not be camouflaged by saying “The bakers' profits are too high. Let us take it out of them and let them reduce their profits and pay for the increased price of flour which must inevitably come about if the requirements of the country are to be met by the flour millers in this country.”

Merely to put forward that argument in order to hide the increased cost of bread is an admission in itself that Deputy de Valera believes that there is going to follow, on the granting of a tariff on flour, an increase in the price of flour. If the public have a right to get bread more cheaply with flour at its present price, let that be tackled as a separate item. It is a different question. All sorts of figures and calculations have been given in relation to the present price of bread, but I am not convinced that the price of bread in relation to the price of flour is too high except in the city of Cork. That is a particular problem in itself, and it is complicated by a variety of considerations, such as labour costs, output per man, the number of loaves to the sack, and so forth. Generally speaking, one is up against all sorts of ludicrous comparisons with the loaf baked on the other side, which is made under entirely different conditions. The Tariff Commission Report says:

“The main difficulty which confronted us in dealing with this application, and has prevented us from recommending in its favour, is the smallness in the increase [198] in the number of persons likely to be employed in consequence of a tariff, together with our disbelief that the additional output secured by a tariff to the Saorstát mills would enable them to reduce their costs of production sufficiently to prevent a rise in the price of bread.”

I am changing that to the price of flour for the purpose of clarifying the argument. We have a Minority Report presented by portion of the Economic Committee. We are told by the people who signed it that from the evidence given before the Committee it appears that in the more efficiently equipped and better situated mills the result in the reduction in cost would be much more substantial than the 18 per cent. which, the Tariff Commission state, the applicants claimed would result. The Minority Report of the Economic Committee states:

“It would seem, therefore, that if a tariff on imported flour were imposed for a period only, to enable the mills to reach their maximum production, and then removed, they would be placed in a much stronger position to meet foreign competition, and the more efficient of them might be well able to hold the position thus gained.”

I think that that is the test sentence, and best conveys the opinion of the people who signed the Minority Report on this item. Can the Free State mills as they exist—even the best of them—under prohibition which would grant them this situation in which they would work at their maximum capacity, produce flour at a cost equivalent to what it could be imported at from the other side? The answer to my mind is “No.” Read the sentence. They state that the more efficiently equipped and better situated mills would have a reduction in cost bigger than 18 per cent. They put up this position to themselves, and they answer it in this very reserved way: “If a tariff on imported flour were imposed for a period only, to enable the mills to reach their maximum [199] production, and then removed, they would be placed in a much stronger position to meet foreign competition.”

Grant them a period in which they will work to full production and be able to get their costs down more than 18 per cent. We are, of course, speaking of the more efficient mills. Give them that position and remove the tariff. Do the five who signed the report say that they could then stand on their own feet? They do not. They say that they would be placed in a much stronger position to meet foreign competition, and that the more efficient might well be able to hold the position thus gained. I think that that is the test question for the consumers in the country.

Can we get the Free State mills —equipped as they are, situated as they are and managed as they are, into that position by giving them a tariff for a certain period to enable them to work to their maximum capacity and then removing the tariff—to produce flour which, when selling costs are added to the costs of manufacture, could be sold at a price equal to that of flour on the other side which has its manufacturing costs and freight charges to meet. The answer of the minority group is: “They might well be able to hold the position thus gained.” That reads peculiarly when taken in conjunction with another paragraph. Paragraph 13, page 20 of this report, after stating that the British millers possess certain counter-balancing advantages, goes on to state:—

“It seems to us, however, that no circumstances exist to prevent an efficient mill in the Saorstát, working at full capacity, being able to produce and market flour here at a price capable of competing successfully with British flour, if British flour is sold at rates which give a reasonable return to the producers.”

What is the difference in the two paragraphs? The efficient mill. What are we being asked to do by [200] the motion which has been put before us to-day? Remember that we are settling the industrial future of the country. We are asked to take a group of mills which have presented their case before the Tariff Commission which was set up to inquire into all the facts and circumstances put before them. These mills were invited to produce witnesses and to send in statements. They have had before them the counter-balancing statements of their opponents, and they were asked to comment on them. I do not think that we ought to discuss the question of management at this stage as it would not do any good, but on the question of site and equipment, two matters that can be rectified, if the mills here are not so placed or equipped as to hold their own with their British competitors, and even taking into consideration the question of freight charges which gives them a definite preference as against flour coming in from the other side, we are asked to take a group of mills which are not properly situated and equipped, and to give them protection. We are to hold off the competition which might mean the weeding out of some of them, and even the Minority Report considers that desirable. That might bring the best of them into the position required by renewing machinery, by getting better situation and by placing them at the water's edge, if necessary, to compete successfully with their foreign rivals. We are not asked to improve the industry, but to give protection which will prevent competition coming in on these people. The Tariff Commission referred not merely to fair but also to unfair competition of the dumping type. Has the Economic Committee added anything by way of proving dumping?

Deputy de Valera speaks of three specific instances. Three instances were given by one witness. His figures and his costings were challenged but the particular figures which were given and which. I think, were completely and entirely adopted by the witness, are given here on pages 15 and 16 of the second part of the report. [201] There are slight changes, but they are substantially the same. The Majority Report shows, at any rate, the questions that had to be taken into consideration when coming to a conclusion as to whether dumping had been proved in these three instances. At the start, there is the very big question of the price of wheat and there is a figure of 46/5 mentioned. The Majority Report states that wheat at that time was sold at 44/6. It is impossible to determine whether the consignment mentioned was made from the 44/- or the 46/- wheat. It says, however, that the two big items “working at mill” and “conversion ex ship” amounted to 1/9. They were quoted previously at 2/- and in the opinion of the Economic Committee were placed at twice the figure they should have been. There is no evidence of dumping given in these three instances. One witness came before us with regard to dumping, and his figures were challenged. The two items that have to be taken into consideration can be read but the impression created on the minds of the majority of the Committee was that the allegation of dumping, in so far as it related to these three cases, had not been proved.

Previously, the applicants for a tariff on flour had leave to go before the Tariff Commission and make their case on oath there. In the report of the Tariff Commission, page 16, paragraph 26, it is stated:

“The Applicants claim that the British millers instead of meeting the problem by restricting their output are in fact individually striving to keep their manufacturing and overhead expenses low by working their plant as near to full capacity as they possibly can and that a large proportion of the output of the Merseyside mills is exported to the Saorstát at prices with which they cannot compete and with which, as frequently being less than the cost of the article, they ought not to be expected to compete.”

They conclude, after having heard the evidence given by the witnesses [202] on behalf of the applicants:

“No clear and definite examples of such undercutting have been placed before the Commission.”

We got one man who came before us. His figures were challenged, and they are there. The Majority Report ends—

“If satisfactory evidence were forthcoming that the practice was widespread or that it had been maintained over a period, the State could not remain indifferent to it, but a case for governmental interference on this ground has not, in our opinion, been established.”

There is a definite promise implied that if the case be established, there certainly would be governmental interference.

Mr. Hennessy: Is it possible for the Minister to establish it?

Mr. McGilligan: The millers appeared before the Tariff Commission and the Tariff Commission have dealt with four definite examples.

Mr. Lemass: Never mind the millers. Has the State taken any steps to secure evidence?

Mr. McGilligan: The State took steps, and no example of under-cutting came before us. I do not know if I grasped precisely what Deputy Hennessy meant, but I take it that he was referring to certain allegations with regard to certain consignments of flour. That case suffers from exactly the same objection as these special cases referred to by the Economic Committee, that the particular consignments of flour cannot be related to particular cargoes of wheat. That is the biggest fault in the figures. One could take the ruling price, and so on, but nobody would allege dumping, and there would be no case for State interference on the few examples shown over widely-spread periods where, at any rate, it could be said that the flour was made from other cargoes of wheat, the price of which was less than the cost of production.

Mr. Lemass: Is it not the practice in the trade to give a price for flour [203] in relation to the price of wheat on a particular day?

Mr. McGilligan: Yes, but can we say that a consignment of flour, sent to Galway, related to a particular wheat price on a particular day? That is where I think the flaw is in the argument. At any rate, let us have a number of examples, not merely three. Take the position as it is. Witnesses appeared before the Tariff Commission and the applicants there put forward their best case. The Tariff Commission stated that no clear example of undercutting came before them. Another Committee was set up. We invited one person who we were told could sustain a charge of dumping to come before us, and he gave three instances. That particular individual had experience of the flour trade in this country for many months, at any rate, and out of an experience of many months he could only pick three instances. Will anybody say that the three instances coming before the Economic Committee, and no instance coming before the Tariff Commission, are sufficient grounds for anybody coming to the conclusion that dumping on any scale is going on in the country? The Tariff Commission wound up that paragraph by saying:

The view taken by us is that the bigger capital and production of these mills and their greater efficiency enable them to quote lower terms without resorting to dumping or selling without profit, and that it was for the applicants to substantiate these allegations, and this they have failed to do.

Let this question be separated from that of tariffs generally. Apart from the tariff generally, there certainly should be protection against dumping.

Mr. Hennessy: Read paragraph 26.

Mr. McGilligan: I have quoted from paragraph 26, page 16.

Mr. Hennessy: Read it higher up, [204] beginning with “the reaction of this state of affairs,” etc.

Mr. McGilligan: The paragraph deals with the capacity of the mills in Great Britain, and states that it is much greater than before the war and in excess of the country's requirements. It further states that competition is of the keenest, and goes on:

The less economic mills find themselves in a very precarious position, while some of them have gone out of business. The reaction of this state of affairs on milling in the future was not easy to determine precisely, though some of the results are obvious.

Then there follows what I have already quoted.

Mr. Hennessy: “The results are obvious.”

Mr. McGilligan: The results are obvious in the sense that flour is coming in here at a rate with which Irish mills cannot compete, and no question of dumping had been proved. I would like to separate dumping from tariffs generally. Dumping may be effected in a variety of ways. We have dumping from countries with depreciated currencies. You may have dumping caused by selling here at a price which is equivalent to the cost of production, without making any allowance for sending it across and unloading it here. Dumping can also be caused by a peculiar freight charge that would give a preference to imported materials. Another class of dumping would be that caused where a bounty is given in certain countries in respect of certain products. In any case, dumping is something which should be shown and should be treated apart from tariffs. There should be anti-dumping measures or anti-dumping legislation, but there is no case of dumping made out in the matter of flour.

The investigations of the Tariff Commission, plus the investigations of the Economic Committee, resulted in what is explained here in pages 15 and 16 of the report and what is in [205] some way dealt with in another page of the Majority Report. Let me get back to what I said was the kernel of the whole question. The minority of the Economic Committee do not believe—they do not state they believe—that after allowing even the more efficient and better situated of the Irish mills to work to the full capacity they would be in a position to withstand foreign competition again if the barrier of a tariff were removed. They say afterwards there is no reason why an efficient mill working at full capacity should not be in a position to produce and market flour here at a price capable of competing successfully with the British flour. That, I presume, refers to dumping. Also, the minority of the Economic Committee state that they can see no reason why the Saorstát mills would not be able to compete successfully with the foreigners, though they do say earlier that the best situated and best equipped of the present mills—they do not venture on the statement that they would be able, given some period in which they would get to work at full capacity, to maintain themselves— could not stand up against the foreigners.

Surely that shows something wrong with the mills in the country? If we are here settling the industrial future of the mills, are we going to stereotype them in their bad situation, in their bad equipment and in their ill-management, if there is ill-management in some of them? Should we not get some spur put on them, or if necessary offer them some inducement and get their mills brought to better sites and have better equipment and more economical working? Give economics a little bit of play, and if necessary let the uneconomic concerns go to the wall. See if the best of them can manage. Give it to us without any bad effect upon the consumer—and the bad effect is unnecessary if the mills are put in order. The Minority Report of the Economic Committee says: “From every point of view the case for an import duty on flour appears [206] to us to be overwhelming. It would benefit the community as a whole by increasing the net production of wealth in the Saorstát by about £400,000 a year.” Then it goes on to say “it would give the farmers the advantage of a plentiful supply of corn offals at lower prices, with beneficial results on the dairying, pig-raising and poultry-keeping industries.” Everybody would agree that it would benefit the country as a whole if the net production of wealth in the country could be increased. Similarly, everybody would agree that if the farmers are given corn offals at lower prices that it would benefit them, and similarly everybody would agree that if security and increased earning power could be given to 2,000 employees that that would be a great benefit, and a benefit to be desired, if we could reduce the risk inherent in outside concerns.

But why should we get all these things in the present admittedly bad condition of the Irish mills? We can get all these things by getting our mills into a position in which they can compete successfully with outside flour millers. The Minority Report says that the signatories believe that no circumstances exist to prevent an efficient mill in the Saorstát working at full capacity to compete with the foreign mills. I hope the Report of the Tariff Commission is not going to be the end of the question as to the production of flour in this country or the ability of the flour millers to produce flour. I hope even this debate is not going to be the end of it. But I do not think it is right for us to impose upon the consumers, simply because the mills are badly equipped, badly situated and badly managed, a burden that they would not and should not have to bear if these mills were well equipped, well situated and well managed.

The Minority Report on page 20 says:—

“It was not our intention in submitting proposals for a tariff to keep in production mills which because of their poor equipment, [207] bad situation or indifferent management, should be allowed to disappear. We believe that within a comparatively short time after the duty is first imposed the flour milling industry in the Twenty-Six Counties will be in the hands of a smaller number of large well-equipped mills, capable of producing flour and offals at a cost very little, if at all, in excess of the cost of production in the present Merseyside mills.”

The Minority Report admits that there are certain mills in the country which ought to disappear, and which under their proposals for a tariff are likely to disappear. The Tariff Commission report only goes a step further, and says that more of them ought to disappear, and that their disappearance will be for the benefit of the remainder; the survivors of them will benefit by that disappearance, and the people employed in the milling will benefit, and it will definitely and clearly be for the benefit of the consumer of bread. Instead of getting on to that condition of things we are going to stereotype bad management and more bad milling in this country by simply blindly going ahead with the tariff. Under the tariff we will wipe out some of them. Under the tariff some of them will be weeded out. I think that is clear to everybody. It is time for the millers to put their houses in order before they come to the State for protection, which protection must be given to them at the expense of the consumers.

I have invited the millers to make use of the Trade Facilities Act or any other Act, or to put up proposals whereby they will be enabled, if they think a change is going to benefit their business, to remove their mills from their present situation, and then to see that they are well managed and well equipped. Let those that are ill-managed get a little more business method into their mills. I do not know to what number of them that applies. I know it applies to some of them. We have in the country an example of a mill [208] situated not very advantageously. I would not even say that this mill is equipped in the most up-to-date or efficient way. But this mill is so well-managed that the owners do not wish to appear as advocates for a tariff on flour. Now, I do not think that this mill would be considered one of the really up-to-date flour mills so far as equipment is concerned.

The question of employment must be looked to. The Tariff Commission themselves referred to that. They say “the smallness of the increase in the number of persons likely to be employed in consequence of a tariff, together with our disbelief that the additional output secured by a tariff to the Saorstát mills would enable them to reduce their costs of production sufficiently to prevent a rise in the price of bread,” compelled them to refuse the application. If the bread which the community consumes is to be at a higher charge in this country, and if the benefit to be derived from that charge upon the people of the country is going to be spread over a great number of people, if we were going to indicate any considerable hole in the number of unemployed at the moment, even if there is going to be a higher charge upon the community, the problem would deserve consideration; but we find that the claim made for the tariff is that at a maximum 153 additional persons are to be employed. I am not minimising the effect of the increased employment, but people now in employment are only part-time employed. The figure of an extra £100,000 in wages is given.

That is considerable, but set against it the cost to the community, argued to be about £300,000. We come, therefore, to this point, that the best opinion seems to be that if milling is to be conducted in an efficient fashion, it ought to be attempted in a small number of well-equipped and advantageously-situated mills, and that the numbers to be employed eventually may be lower than the numbers at present employed in the scattered mills. The [209] difference would be, of course, that the smaller number would probably be full-time as opposed to the 1,500 or 1,600 employed part-time now. The effect of a flour tariff on the unemployment situation is so small as to be negligible, and it is absurd in comparison with the cost to be imposed on the community.

A point made by the applicants before the Tariff Commission, which is referred to in the Minority Report, is that apart from the question of dumping, one must compare, not the price at which flour is sold here, vis-a-vis the price at which English flour at the moment can be sold here, but the sale price here compared with the price at which English flour would be sold if the Irish market were taken from them. That, I think, is a wrong argument. The number of bread consumers here is relatively a small thing in comparison with the population of England. If one takes the ordinary automatic increase in the population of England, Scotland and Wales, whatever offsetting disadvantage there might be for a very short period in the absence of the Irish consumption, it would soon be regained by the increase in population on the other side. To whatever extent that is an argument, I think it is an argument that should not be stressed. It is not stressed in this report, but it was stressed by the applicants before the Tariff Commission.

I am still of opinion that the Tariff Commission properly advised that the application for an import duty on flour should not be granted. I am still of opinion that their advice was justified, and justified on two grounds. They were justified mainly on one ground, but with some weight to be added to the second. They were justified mainly on the ground that there was going to be an increase in the price of flour, and, consequently, in the price of bread, and they were somewhat justified on the ground that the increased employment was going to be negligible. We will leave out of this question altogether the matter [210] of biscuit manufacture and Jacob's as a firm. Both proposals before the House indicate that they are going to give special facilities to biscuit manufacturers, so that they can import anything they may require. There is nothing, therefore, involved in this simple motion of any special difficulty in relation to the question of biscuit manufacture. Biscuit manufacturers are going to be dealt with separately if there is going to be a tariff. It is simply a problem of a tariff on flour and an increase in the price of flour which the Commission has decided would inevitably follow and which the majority of the Economic Committee decided would follow.

The Minority Report of the Committee implies in effect that there would be an increase in the cost of flour. I say that an attempt has been made to hide the effect of that from the public by saying that there need not necessarily be an increase in the price of bread. There are people who believe that the price of bread has been too high for some time past. If it has been too high, what one must look to is what price the bread should have been sold at, and will that price go up by reason of a tariff on flour and a necessary increase in the cost of flour? I think it must be admitted that that price will go up. The price of bread at the moment should be taken away from these consideration. It is first of all founded on the statement that bread is at present being sold at too high a rate. It is very hard to prove that, and I doubt if it can be proved except in one place. Even if it were, it is involving and clouding the argument to use that point. One should look to what would be the increased cost to the community of the tariffed article, and not to the tariffed article after it has gone through one, two or three processes, with the argument made that as regards one of the processes too much has been charged and some of the profits can be knocked off. Let us take the price at which bread should then be sold and let us query whether it would be raised or not if the tariff on flour were granted. I [211] believe it would; the Tariff Commission recorded its belief that it would; the Majority Report of the Economic Committee recorded its opinion that it would; and the Minority Report, while saying that it would not, admitted, I think, by implication, that it would. Therefore we get agreement as between the majority and the minority of the Committee on the point that at the moment the Irish mills are not capable of producing flour at a price which will compare with our English neighbours. I think also that we get agreement, if there are no circumstances here which would render that situation inevitable or unavoidable, that there is no reason why Irish mills should not be so efficiently conducted as to compete with English mills. But it is not being done, and we are asked to protect the mills that are here. I say if we protect them we are stereotyping for a very long time the existing badly-situated, badly-equipped and badly-managed mills.

Mr. Lemass: It is quite clear that it is not the mills which are there now that we are asking the State to protect; nor do we think the imposition of a tariff would stereotype the existing situation in the industry. I would like to ask the Minister why he considers it his duty to act the part of devil's advocate against proposition for the encouragement and development of Irish industry. He says we will get all the advantages which are mentioned in the last paragraph of the Minority Report as following from a tariff on flour by other methods. He does not indicate—he did not consider it necessary to indicate— the other method which should be followed. If these advantages can be secured from a tariff on flour, then until some other and better method has been placed before the House, the proposition to put a tariff on flour the field. No other proposition has been put forward. I am quite certain if there was any other proposition in the mind of the Minister it would have [212] been put forward. He was merely straining a bad case in order to cover up and to justify the action which the Ministry took in accepting the Report of the Tariff Commission—accepting it apparently without adequate consideration.

Let us examine for a moment the position the Tariff Commission had to deal with and the position we have to deal with. The Tariff Commission was established to consider an application for a tariff on flour which was submitted by the Irish Flour Millers' Association. That is not our function; we have nothing to do with the case put up by the Irish Flour Millers' Association. We have to consider the case for a tariff on flour as public representatives who are anxious to preserve the national interest. The Irish Flour Millers' Association is composed of the proprietors of mills throughout the country—good mills and bad mills—and they may be good proprietors and bad proprietors; they may be associated with efficient or inefficient concerns. The case they had to put up was obviously a case with which every one of their members would agree. They could not put forward a case to suit the efficient mills only; they had to make their application so that it would cover every member of the association.

Their case, therefore, was defective; it was bad, and it was that case which the Tariff Commission considered and rejected. If we find the majority of the Economic Committee basing their arguments, not upon the examination of the problem which they themselves conducted, but upon the examination of the Irish flour millers' case which was conducted by the Tariff Commission, then we can only come to the conclusion that the majority had themselves no argument to put forward against the proposal. I hope no Deputy will be influenced by the fact that the proposals which were submitted to the Economic Committee were rejected by a majority of that body. I think I am correct in stating that the majority of those [213] who signed the Majority Report did so giving as their ground that they were opposed to tariffs on principle and their signatures have nothing whatever to do with the arguments that are advanced there. It is because they were opposed to tariffs in principle—and, of course, it is possible that they were put upon the Committee because of that—that they signed that report and not the other report.

Mr. Hennessy: Can the Deputy establish that?

Minister for Agriculture (Mr. Hogan): Who are the majority?

Mr. McGilligan: That is quite a wrong statement.

Mr. Lemass: Well, I am speaking from my own recollection. I was present when the vote was taken, and I am quite confident that I am correct in saying that four of the seven who signed the Majority Report stated when voting that they were opposed in principle to tariffs.

Mr. Hogan: Who were the four?

Mr. Lemass: The four other than the three Ministers.

Mr. Hogan: That is wrong.

Mr. Brennan: Am I included in the four?

Mr. Lemass: Yes.

Mr. Brennan: I did not make any such statement. I am not opposed to tariffs at all in principle.

Mr. Gorey: The majority was in favour of free trade.

Mr. Lemass: I am stating my recollection of what happened.

Professor Tierney: Deputy Lemass should leave such charges to be made by Deputy Boland.

Mr. G. Boland: Deputy Boland will deal with Deputy Tierney any day in the week in any place he likes—anywhere, any time, any place.

Mr. Lemass: If my statement is [214] incorrect I am prepared to withdraw it. I am speaking from recollection.

Mr. Brennan: It is quite incorrect.

Mr. Lemass: I am quite satisfied that if those who were present at that meeting examined their memory they could bear me out. I am very glad to be able to accept Deputy Brennan's assurance that he is not opposed to tariffs in principle.

Mr. Brennan: I never was.

Mr. Lemass: I hope that if he speaks in this debate he will be able to give some concrete reasons as to why he signed the Majority Report.

Mr. Hogan: And will you accept our statement to the effect that at least three of the other four were not opposed to tariffs in principle and that they never even stated or suggested that they were?

Dr. Ryan: At least three.

Mr. Hogan: Four altogether. Deputy Brennan has spoken for himself. I have a clear recollection that only one member of that Committee stated that he was opposed to tariffs in principle.

Mr. Lemass: I have an equally clear recollection that Captain Nutting, Mr. Leonard and Professor O'Brien, in giving their votes, stated that they were opposed to tariffs in principle.

Mr. Hogan: And is your recollection of that matter as sound as your recollection with regard to Deputy Brennan?

Mr. Lemass: I think so.

Mr. Hogan: I see.

An Leas-Cheann Comhairle: That being so, let the Deputy proceed.

Mr. Lemass: However, to get back to the consideration of the case against the proposal which is contained in the Majority Report, I suggest that it is based upon the report of the Tariff Commission, and the report of the Tariff Commission is a [215] report, not upon the case for a tariff on flour which was submitted to the Economic Committee, but a report on the case for a tariff on flour which was submitted by the Irish Flour Millers' Association. If you examine the Majority Report you will find that in each of the paragraphs in which they deal with the main arguments advanced against the imposition of a tariff they based their statements upon quotations from the Tariff Commission Report. For example, in No. 6 we find that “The millers themselves do not in fact claim that, even with the reduction of manufacturing costs which might be expected to follow an increase of output to their maximum capacity, they would be able to bring their costs down to the level of the costs of British mills under the conditions which would ensue if the latter lost the whole of their present Saorstát trade.” Now, that is obviously an argument which was advanced, or a statement made, by the Irish Flour Millers' Association, because of the peculiar nature of its composition. There are mills in the Free State to which that statement might or might not apply.

Mr. McGilligan: They did not need a tariff.

Mr. Lemass: That may be so, but the point I am making is this, that the case made by the Irish Flour Millers' Association was not, from its very nature, the best case that could be made for a tariff and was not the case which the Economic Committee considered, and the majority in their report should have dealt with the case made at the Economic Committee and not with the case that was made before the Tariff Commission.

Mr. Hogan: We can deal with it here.

Mr. Lemass: The same thing applies to the paragraph in which they deal with the possibility of an increase in price. Instead of giving their own opinion on the information which they secured at the Committee, the paragraph is based upon the [216] statements which were made by the representative of the Flour Millers' Association before the Tariff Commission. I want Deputies to bear in mind that the Irish Flour Millers' Association was handcuffed in the making of its case by the fact that it includes in its ranks representatives of mill which will disappear in any case, tariff or no tariff, and which, because of their bad situation, bad equipment or inefficient management, it would be in the national interest that they should disappear. The Economic Committee set about the consideration of this problem as a national problem. I do not think that they would have had any function to consider it in any other way. The question of the preservation of an important industry and its relation to the national welfare was the only question that came before the Committee. We had to consider the statement made before the Tariff Commission that on the occasion of the general strike in Great Britain the supply of wheat and flour available in this country was sufficient only to maintain the population for a period of twenty-seven days. We had to consider that that situation was nationally unsound, and was one that should be remedied. Other countries faced similar situations, and faced them in the same way as we suggest we should face ours. We want to establish, as far as is reasonably possible, what would suffice for this nation. We want to increase the production of wealth within the country and thus give additional employment to our people, and to reduce the very considerable adverse trade balance that now exists. Let me deal with the points made by the Minister for Industry and Commerce. His case against the tariff can, I think, be briefly stated as follows: First, there is the danger of an increase in the price of bread—I think he suggested the certainty. Secondly, there has been no proof of dumping, and, thirdly, he maintained that in some other way, which he did not mention, the advantages that could be secured with a tariff could also be secured without a tariff.

On the question of the possibility [217] of an increase in the price we maintain, and we think we are reasonable in maintaining, that that should be considered in relation to the situation which would exist if the total milling capacity of the country were increased sufficiently to meet the country's requirements. There is at present a deficiency of milling capacity here. Working at full capacity, our mills can produce only eighty per cent. of our requirements in flour. For the period immediately following the imposition of the tariff during which that deficiency in milling would exist there would be a possibility—almost a certainty—of an increase in the price of flour. But we should consider the case for the tariff, not in relation to the situation that would exist for a short period after its imposition, but in relation to its permanent effect, and we maintain that no case has been established to show that after the development which we anticipate would happen, after the flour milling industry had been concentrated into the hands of a smaller number of highly efficient and well-equipped modern mills, flour could not be produced here and sold by these mills at the same price as English flour can be produced in England, shipped to this country, and sold here. The maximum amount by which the price of flour could be increased during the transition period would be the full amount of the tariff—two shillings per sack—and Deputies should understand that a fluctuation of two shillings in the price of a sack of flour is a very usual occurrence. In any one year the price of flour very frequently fluctuates by more than two shillings per sack. There has in fact been a drop of over two shillings in the price of the sack of flour within the last fortnight. Deputies should also, I think, have their attention drawn to a statement which appeared in the “Irish Independent” of this day fortnight, which is to the following effect: “Yesterday the price of straight-run flour fell from thirty-five shillings to thirty-three shillings a sack. Bakers say that a further reduction of two shillings a [218] sack will be necessary before the public receive the benefit in the form of cheaper bread.”

That statement would seem to indicate that the remorse of conscience which the Minister for Industry and Commerce appeared to imply had affected the bakers is not altogether as complete as he would like. We have, on the report of the Food Prices Tribunal, to accept the truth of the statement, that over a period of 23 months the price of bread was in excess of what it should be in relation to the price of flour, and was only less than what it should have been for three months, and then slightly less in comparison.

Reference is made to this matter in the Minority Report, where it is pointed out that the price of flour to Dublin bakers fell between March and November, 1925, from 58/- to 44/- per sack. These are the figures given in the report of the Food Prices Tribunal. On the basis of ninety 4lb. loaves per sack, this decrease was equivalent to a decrease of 1.86d. per 4lb. loaf in the cost of producing bread, but the actual reduction in the price of bread in Dublin over the period was only 1½d. per 4lb. loaf. So that the profits of the bakers were increased by .36d., equivalent to 2s. 8½d. per sack of flour. Although the millers have no hesitation, apparently, in pocketing an additional profit equal to 2/8½ per sack of flour, if for a short period they have to pay 2/- extra for flour, they are going to see that it is passed on to the consumer, even though they cannot do it with the coinage that is in circulation. There would have to be an increase of at least 4/- in the sack of flour before they could increase the price of the 2lb. loaf by a farthing, which is the lowest coin in circulation. They cannot possibly increase the price of the 2lb. loaf by a farthing in consequence of an increase in the price of flour by 2/- a sack, unless they are going to make an additional profit of 2/- per sack. We maintain that if the Government for the brief period during which the milling capacity would be deficient following the imposition of a tariff, were to take steps that would [219] ensure that the price of bread would bear its proper relation to the price of flour, the possibility of hardship during that period would be obviated. It is no use for the Minister for Industry and Commerce to tell us that that is merely disguising the increase in the price of flour. If the Government had taken steps to bring down the price of bread to the level it should be at, then undoubtedly there would be a possibility of an increase in the price of bread.

Mr. Hogan (Minister): What steps?

Mr. Lemass: Whatever steps the Government consider necessary. They are the Executive Council, and it is their duty to consider what the steps should be.

Mr. Hogan: What do you suggest?

Mr. Lemass: I suggest that there should be temporary control of bread prices for that period merely to avoid the possibility of hardship, until the milling capacity is increased at least to such a degree that it is capable of supplying the entire flour requirements of the country. I think we have reasonable grounds for expecting that flour produced here could be sold, at least, at the same price as English flour is sold here, if the English flour is sold at a price which can give a reasonable return to the producer. The Minister is quite right in saying that we do not want to take any action which will keep in production inefficient mills. That is the essential difference between the case we are making for a tariff on flour and the case made by the Irish Flour Millers' Association. We are not concerned with the interests of the members of the Irish Flour Millers' Association. We are concerned with the maintenance and development of an Irish industry. We believe, and I think it is generally agreed, that the one immediate effect of a tariff would be that the firms which are now operating from the Merseyside, and doing the bulk of the Irish trade in flour, would establish mills here. I think it is [220] only reasonable to expect that they would. There may be grounds for considering that undesirable, but following the imposition of a tariff— even a smaller tariff than we suggest —I think it will be generally agreed that the milling capacity of this country would be considerably increased, and we would have established here large and highly efficient modern mills, capable of producing flour, very little, if at all, above the cost at which flour can be produced at the Merseyside. There is the possibility of a small increased cost, due to the fact that these Merseyside mills can purchase occasional parcels of flour at less than cargo rates. They have other minor advantages, all of which are offset by the fact that transit charges have to be paid on English flour brought to this country which would not have to be paid by mills here.

In theory, it is quite clear, and in practice I think it will be equally clear, that mills situate in Dublin, with the same equipment and management as mills on the Mersey, should be able to produce flour at the same price, leaving other considerations such as parcel prices out of the question. In practice it will be found that as soon as the milling capacity has been increased, and competition begins to come into operation, the permanent effect of the tariff on flour will be that we will produce in this country the flour we require at the same price as it can now be obtained, but with the additional and very substantial advantage of having for our farmers an adequate supply of offals as feeding stuffs at much reduced prices. The Minister for Industry and Commerce did not make any reference to offals. I will do so as soon as I have covered the main arguments used by him with relation to flour. He said the Government would reconsider their attitude towards the case for a tariff on flour if adequate proof of dumping were forthcoming. What proof does he require? What proof does he expect to get? It is said that a gentleman who appeared before the Economic Committee to give evidence [221] was a certain prominent miller. Obviously a certain prominent miller in this State is not in a very good position to get actual examples of dumping. If the Minister could get in touch with certain prominent importers he might get evidence. But these gentlemen would take good care that that evidence is not available. I would like to ask the Minister what class of evidence he expects to get. Surely there is nothing so difficult to get as evidence of the dumping of any commodity. Certain examples were produced, and in addition to these examples figures are shown in the report which purport to show the minimum price at which flour could be produced in an English mill, and therefore the minimum price at which it must be sold here, if the miller is not actually going to lose on the operation. The Minister appears to question the accuracy of these figures. The only items the Minister mentioned were the figures given for conversion ex ship and the working of the mill.

Mr. McGilligan: Plus the cost of the wheat.

Mr. Lemass: I will deal first of all with the cost of the wheat. We cannot say, any more than the Minister can, that a particular bag of flour was made out of a particular consignment of wheat, delivered at a particular price at a particular port on a particular day. We took the average price of Pacific wheats alloat Liverpool, as quoted in the current trade news in the period January 1st to January 31st, 1928. We took the average parcel price for the manufacture. The Minister will admit that a very small percentage of wheat milled in England comes in at the parcel rate. The big bulk of it comes in at cargo rate, which is the higher rate. During the period referred to the average cargo price for the same class of wheat was 47/- per quarter. Taking into consideration the fact that these figures are based upon the parcel rate, although, as I have said, the big bulk of the wheat milled in England is imported at the cargo rate, [222] taking into consideration also that these figures contain no allowance for depreciation, which I think it will be agreed should be about 8d. or 1/- per sack, and taking into account the price of offals quoted as the published price in the current trade news, and that the actual taking price of offals is probably something less—I think the Minister for Agriculture may disagree with that, because he has some extraordinary notion that the millers generally succeed in getting for their offals a bigger price than that which they ask for them, but how he arrives at that conclusion I do not know—and taking the moisture content of the wheat at 11 per cent., although the average in some of the Pacific wheats is 12 per cent.—despite all these allowances that could be made, and every possible allowance was made by us to reduce the ultimate price of the flour, we found that the lowest price at which these English mills could produce a sack of flour was higher than the price at which they actually sold in the three specific cases mentioned.

Mr. Hogan: No.

Mr. Lemass: The Minister will have an opportunity of disproving that.

Mr. Hogan: The Deputy is merely asserting that flour is being sold at a price lower than the cost of production. What I want to point out to him is, that that is an entirely different matter from dumping.

Mr. Lemass: We are agreed that we are not in a position to say whether the three particular cases mentioned represented the prevailing price at which English flour was sold, for that purpose, or whether special lots were sold at a specially cheap rate in order to enable English millers to establish a trade in a particular district.

Mr. Hogan: The Deputy used the word “average,” and average implies a lower and a higher price.

Mr. Lemass: Yes, I agree. I do not think the Minister is correct in [223] asserting that the price of flour coming in here as a result of these calculations is an average price. What I have pointed out is that we have made every possible allowance in the figures that would reduce the ultimate price of the flour. If we are going to take the average, then we will have to make allowance for depreciation, we will have to take the moisture content of the wheat at 12 per cent. instead of 11 per cent., we will have to take another figure for the price of the wheat than that given in the current trade news, and we will have to take into consideration the fact that the English millers pay for the bulk of their wheat a much higher average price than that mentioned there.

Mr. Hogan: Then the Deputy has nothing to do with dumping, although he was talking about dumping.

Mr. Lemass: I have said that I cannot prove that there is dumping in this country, and nobody can. What I do say is that no one can prove that there is no dumping going on.

Mr. McGilligan: To quote from the report which the Deputy signed: “The figures cannot be seriously challenged, and they appear to us to prove conclusively that the British millers are selling flour in this country at a price which the cost of production does not justify.” That is the ordinary definition of dumping, so that the figures in the report which the Deputy signed proved dumping, though the Deputy himself now says that he cannot prove it.

Mr. Lemass: The paragraph reads: “The figures given above cannot be seriously challenged, and appear to us to prove conclusively that British millers are selling flour in this country, whether as a general policy or merely to establish connections in particular districts we cannot say, at prices which their cost of production does not justify.”

Mr. McGilligan: Would the Deputy admit that selling at a price which the cost of production does [224] not justify is a good definition of dumping?

Mr. Lemass: Yes.

Mr. McGilligan: The Deputy signed a report stating that the figures proved conclusively that British millers were dumping, although he now says that cannot be proved.

Mr. Lemass: That dumping is being carried on. The figures prove either of two things: that dumping is being carried on continuously or that flour is being sold in special districts at special rates for a special purpose. I cannot say which is the correct conclusion, but it could point to either. To try to establish the case that there is a general policy of dumping being carried on by British millers would be almost impossible. It would be very difficult, any way. I say that if evidence of any kind is produced to show that even in particular districts a particular case of dumping has been resorted to, the Irish mills should be given the benefit of the doubt, unless the Minister can prove conclusively that in fact there is no dumping. But in this matter, as in all other matters, the Minister appears to think it his duty to take his stand against supporting a policy in favour of industrial development in this country. The whole case against the giving of a tariff to the flour milling industry is, according to the Minister, based upon these two statements of his that there would be an increase in price and that there is no dumping. He has proved neither.