Seanad Éireann - Volume 10 - 30 November, 1927
PRIVATE BUSINESS. - FINANCE (NO. 2) BILL, 1927—SECOND STAGE.
 CATHAOIRLEACH: This Bill has been certified by the Ceann Comhairle of the Dáil as a Money Bill. The question is “That the Bill be read a Second Time.”
Sir JOHN KEANE Sir JOHN KEANE
Sir JOHN KEANE: I do not know the correct form which an amendment should take requiring this Bill to be reconsidered by the Dáil. That is what I would like to have done but I have hardly any hope that the Seanad would support me in that way. I should hope to spare the Dáil the outpouring of economic talk, or rather economic heresy, which this Bill and the matters connected therewith received when under discussion there. Feeling strongly as I do and associated with so few people who share my views, I regard it as necessary to lose no opportunity of becoming bold and placing before the House and the country, so far as one can, one's view of the whole doctrine of our fiscal policy. I know that there are some people who regard opposition of my kind, of what might be called a doctrinaire free trader, as completely out of date and futile— nothing but a sort of Rip van Winkle waking up to find that times and circumstances have changed. All I can say is that we are in good company. Only recently a manifesto was signed largely by leading business men of repute in all countries, calling attention to the increasing danger of these tariff barriers. Only recently an Economic Council at Geneva, where it is very hard to get agreement, also sounded a note of warning and, although the report is obviously a compromise, it deals with the danger involved in economic isolation by piling up tariff walls, limiting markets and by the inefficiency of small-scale production which such a policy involves. A business man, no less eminent than Sir Hugh Bell in a recent speech, pointing to a map prepared by Mr. Morrison Bell showing the effect of tariff walls, said: “There are people starving and dying on account of these.” That is true. The economic policy of isolation and selfishness is responsible more than anything else for the inability of Europe to recover to-day.
In this country, in approaching the  problem, we played in a cautious manner. We adopted what is called the selective method. I do not think that that method is any better; in fact, I think it is rather more dangerous than some scientific and co-ordinated method. The selective method reminds me of a man who drinks himself to death by a slow process. He has a whiskey and soda to-day and it does no harm. He has two to-morrow and the next day, and the process apparently does no harm, but the process is certain and the end is sure. He has created a demand and craving for a drug which ultimately ruins his whole constitution. That is not an unfair analogy to the psychology and mentality involved in this doctrine of so-called protection. You make one schedule to-day in connection with tariffs, and you make another to-morrow, and before you know where you are you have the whole thing ringed around and you are in the meshes of this vicious system. I only refer incidentally to what I believe to be the official policy of the Opposition, which is neither restrained nor scientific. It is madness, in my opinion. It is a doctrine which has as its undisguised object to build up through economic methods a spirit of nationality, and the nationalism is to be forced on the country through its economic system, and, by prohibition and licence, to compel articles to be made within our shores, however unsuitable people may be for making them, however scant we may be in raw material, or untutored in industrial tradition of manufacture. Surely the first intentions of the Government were right, and why they departed from them has not been satisfactorily explained. They said: “You must first settle principles before we discuss details.” They appointed the right class of people to examine them. Obviously, business people are not suitable in that respect. You get all kinds of logrolling, wire-pulling, and you discover qualities of cupidity and avarice when you refer such matters to business men. It is a case of “You support me and I will support you.” Everyone tries to get behind the barrier as immediate profit lies there and the question of national interests is rather liable to be  overlooked. As I say, the right people were appointed, people who had no axe to grind, and they turned the whole thing down. They admitted in principle that if you had to settle this matter by a body free from all political influence, and if you were to remove it all from party politics, you might conceivably fix on certain duties which would do no harm.
What did the Government do? In the face of that report they immediately proceeded to rope in fifty per cent. of non-agricultural imports. They roped them in behind a tariff wall and they proceeded to appoint a Commission to deal with the remainder. They then called in civil servants. I admit that civil servants are a better tribunal than business interests but they are far inferior to trained economists who are the only people with knowledge and with the power of seeing the unseen, because it is the unseen that is so important in matters of this kind. A distinguished French economist, Professor Bastiat, recently dealt with great skill and in a popular manner with this seeing of the unseen and all the repercussions involved in these fiscal heresies. We are now dealing with the first born of this Tariff Commission. Doctors say that first born are generally weak but it does not mean that the next offspring will not be stronger. It is often said that the youngest child is strongest of all. If that analogy comes true you see what we are in for later on. We have quite enough in the comparatively minor recommendations contained in this Bill to enable us to examine all the implications of it. We can see in connection with the margarine tariff the manoeuvring that evidently must have gone on behind the scenes. We reached a stage where the three parties involved disagreed, but am I wrong in suggesting that before that disagreement came an attempt was made to arrive at a division in percentages of the pool? I may be wrong, and, if I am, I shall be glad to be corrected. That is what generally happens. Interests get together and they say: “We are now going to be all right. Our market is to be restricted. We will pool our produce and share the great percentage of the receipts.” That did not happen in this case.
 We see disagreement and we also see a curious thing. One firm—it is common knowledge that it is controlled by a foreign combine—gave a guarantee as regards price and quality and we see another firm withdrawing altogether from the application. Then we see a curious development in the other case, where an attack is made on that firm controlled by a continental combine and they say: “This is no use to us because it is going to be behind the tariff wall controlled by this large continental group and they will have such great resources and be so efficient that we, independent people, will be beaten.” If that did not happen and if the guarantee had not been given I can see a state of affairs that would have occurred. The percentages of division would be agreed, the prices would be arranged, but they would not be in the interest of the consumers. There would be substantial profits and concerns would have no inducement to become efficient in their methods of production. Prices would be fixed as they were during the war. During the war the price of turning a sack of flour into bread had to be fixed so as to allow for the variations in efficiency of between 10s. and 35s.—10s. in the case of the efficient and 35s. in the case of the inefficient firm. That is, more or less, the method that would be involved in fixing the prices if the agreement as to percentages had been made. This tariff on margarine shows the danger involved in the question of tariff barriers. You might conceivably get a better managed foreign firm driving out of business its competitors in this country and then raising prices against the consumer. Where it is claimed that the consumer is protected in the present case is that the guarantee is given that prices will not be higher and that the quality will not be inferior to the same article produced under the same conditions in England. I ask you, as sensible men, what is that guarantee worth. The prices of margarine can be compared, but what about the quality? There is no article in which quality varies more than margarine. It is common knowledge that there must be a great difference in quality as there is in price. How does this State  claim that it is going to safeguard the taxpayers? Will all this margarine in retail establishments be periodically submitted to chemical analysis and will there be maintained an array of State chemists going round the country and pronouncing on these various qualities? I do not believe that can be done and it would be wholly unnecessary if we had a rational doctrine of free imports. We have also curious arguments brought forward in connection with this special article.
I notice that in the Dáil one Deputy asked, “Why do you not also protect the oil, which is an ingredient?” The reply was, “Our policy is not to protect raw material,” suggesting that oil is a raw material. It is the raw material of one trade, but it is the finished article of another trade—seed-crushing. Why not protect seed-crushing, and have our oil produced at home? Professor Whelehan, one of the Tariff Commissioners, has discovered that it is very hard to say where one trade begins and another ends. I am surprised that it should be necessary to receive evidence so that the Commission may arrive at a knowledge of an elementary economic truth. You have prohibition of machinery in this margarine tariff. Where margarine is produced with the greatest efficiency it is alongside the seed-crushing business, and the oil is conveyed from the seed-crushing plant to the margarine works. Here you are bringing oil over in barrels, and the extra cost has to be borne by the consumers. Margarine is the poor man's butter and a large amount of it must be consumed. You have in this subsidised inefficiency for which the consumer somehow, in spite of all guarantees, will have to pay. This whole question of protection is difficult, and is the blemish of small nationalities; they are good, they are cultural, and they are individual, but they have this blemish, that they all try to make themselves, fiscally and in a manufacturing sense, self-contained. Their markets are small, their capital limited and their sources restricted, and they cannot produce articles with the same efficiency as if there were a system of free imports where industrial tradition could be used to the best advantage for employing the raw material, and the  natural resources of each developed in its proper medium, so that the world would get the advantage of combined efficiency. We hear of the analogy of America and how it has prospered under the doctrine of protection. There is no analogy. If you had the whole of Europe one economic entity, and all these twenty-eight tariff barriers that are destroying the economic light of Europe swept away, and if you had free interchange such as there is between the States in America, then the position would be somewhat analogous; or if you had that free interchange within the British Empire you would have something analogous to America, which is a huge continent, self-contained, and with a population of eighty millions. I hope the Government will study the question of Australia. To-day Australia is being very sorely pressed by her policy of heavy tariffs. Prices are rising and land is going out of cultivation. It is generally believed that her very heavy borrowing policy, which has become mainly the policy of the world, is largely accounted for by that. Her policy of protection can only mean subsidising inefficiency to build up industries. I hardly dare to ask the Seanad to send back the Bill for reconsideration, but I hope the House will seriously consider the dangers of this policy I have referred to—of when you get into trouble taking another pull at the bottle.
Mr. O'FARRELL Mr. O'FARRELL
Mr. O'FARRELL: To come to the Bill before the House, if the main object of the two new tariffs proposed in the Bill is to give employment, as is claimed by the Government, then certainly the maximum achievement to be hoped for is negligible, and would, in my opinion, hardly justify the introduction of a special Finance Bill. To listen to or read the speeches of Deputies in the other House as to the utility of protection in solving unemployment, made when this little Bill was under discussion, one would imagine that the unemployment problem was to be solved by the imposition of these tariffs. One of the results of the tariffs will be that they will make it more difficult for the poor to live, unless there is going to be some guarantee that there is to be no  increase in the price of margarine. Only 85 people were employed in the manufacture of rosary beads in 1926. Many of these are low-paid women, and the majority of them were only part-time employees. The maximum it is hoped to employ when this tariff is in force, and the sale of Irish rosary beads has increased, is 160. Seeing that the majority of these are low-paid workers, and taking into consideration the amount of time that has been wasted before the Tariff Commission, by the draftsman, and in the debates in both Houses, and the amount of publicity given to the whole thing, surely one has to admit that there has been a mountain of noisy labour to bring forth a very delicate and ricketty mouse. Incidents small in themselves have sometimes far-reaching consequences. I can foresee quite a difficult problem for the customs authorities when they come to collect the tariff on imported rosary beads. One can carry several dozen rosary beads in his pockets without very appreciably increasing his bulk. Fancy a person laden down with religious emblems being asked if he has any rosary beads with him, and his commercial instincts overcoming his religious convictions, and his giving an untruthful reply. One can easily see that the moral qualities of the Irish trader are quite equal to salving his conscience for the breaking of manmade law by the knowledge that he would thereby make it easier for the poor to follow their religious practices by his importation of the rosary beads in defiance of the customs law. Could the Minister say what is the maximum number of rosary beads a traveller can import free of duty? Every year large pilgrimages go to Lourdes and Rome. Ministers, including the President have gone on these pilgrimages. It is quite a common occurrence for many of these pilgrims to bring back rosary beads— perhaps hundreds of them—for distribution among their friends, and for use generally in the district in which they live.
Are these rosary beads to be admitted free of duty? If they are to be admitted, what protection is there against an unscrupulous trader using a friend in a pilgrimage to import hundreds of beads from England or elsewhere on  the plea that they were brought from Lourdes? Another problem is that the beads brought in in that way are all blessed, and as such cannot be sold. They cease to have any value in a commercial sense—that is, if anyone can value them in a commerical sense. Suppose a tax is imposed, how can the officer say what is their commercial value, and what is their religious value? I see here a conflict of opinion between the Church and the State. The problem has to be solved by the inland revenue and customs authorities. I do not like the idea of laying hands on a passenger and rudely searching him for beads, as if he were being searched on suspicion of being a bootlegger. This tariff on beads is going to make it very difficult for the poor to carry out their religious practices. The same people will, perhaps, later on have to pay more for their margarine. Coming to margarine, according to the figures given by the Minister, the number of people employed in that industry last year was under 150—104 in one factory and 37 in another. A number of these were out of employment at the end of the year. The amount of extra employment to be given as a result of the imposition of this tariff is, and must be, exceedingly small. I find that the value of the margarine produced in Ireland in 1926 was £271,800. Of that £153,000 worth was exported. The value of the margarine imported was £168,000, so that our imports and exports in that particular commodity almost balance. The total consumption in the Saorstát was £286,000, so that there is a danger of our losing the foreign market. Even if we capture the whole of the home market we will not be able to employ many more people than were employed in 1926, probably the worst year in the margarine trade.
As Senator Sir John Keane said, margarine is the butter of a large section of the poor. Unless there is some effective control in regard to price, it will mean the imposition of an unwarrantable burden on the poorest section of the population. We are assured by all those who look for tariffs that prices are not going to go up as a result of tariffs; that, in fact, they may go down, because as there will be a bigger turnover they will be able to sell cheaper.  We find that in practice it is quite the reverse. A couple of years ago a tariff of, I think, 33⅓ per cent., was put on furniture. I have had a specific example of the manner in which that tariff has been used by an Irish manufacturer. There is a particular type of cheap armchair, for kitchens and dining-rooms, brought out by an Irish firm, which is being considerably assisted under the Trade Loans Act. Before the tax was put on the wholesale price of that armchair was 24s. 6d., and it included a very substantial cushion which would cost 4s. or 5s. The price of that article now, with the tariff, is 28s. 6d., minus the cushion. It is the same article in every respect, but the wholesale price has gone up, allowing 4s. for the cushion. That is only one example of the manner in which these tariffs are exploited. People furnishing their houses find it much more difficult to get furniture than before the tariff was put on. These are difficulties the poor, and even people of the middle class, are experiencing as a result of tariffs. We know that the importation of boots has scarcely diminished since the imposition of a tariff. The Minister gave some figures in regard to that. He said the value of the boots imported in 1924 amounted to £1,900,000, and in 1926 to £1,790,000. The general belief is that a cheaper type of boot is being imported. It carries a tariff which is paid for by the purchaser, so that less value is being received by those who buy.
I went into a shop belonging to one of the principal Irish boot manufacturers recently for a pair of boots. Six pairs were shown to me and out of the six only one was an Irish-made pair. Here was an Irish firm that had applied for a tariff and got a tariff and, instead of trying to sell the Irish article, they were endeavouring to pawn off imported goods. It is simply because they are able to make a bigger profit as a result of the manipulation of the trade in connection with tariffs. The plea before the Tariff Commissioners is that they are going to give more employment and will help to solve the unemployment problem if a tariff is put into-operation. As far as one can see, almost the net result of the imposition of the tariff is to increase the  cost of the article that has the tariff imposed upon it.
The two articles before us are, of course, of comparatively little consequence. No one would die of hunger because he could buy a rosary beads. In the case of margarine suffering may be caused amongst the very poor people who have to use margarine instead of butter. To my mind, the Government will have to consider the question of controlling prices in the cases of protected articles. I find that those who are most loud in objecting to any form of State interference in connection with private industry are the people most clamant for State interference when it is a case of protecting what is very often their own inefficiency in industry. State interference otherwise seems to be anathema; it would tend to clog industry. But the people who are antagonistic in those circumstances are the very people who rush along and demand it for everything connected with their own business. That policy is inconsistent and it has largely been used by ignorant politicians as a popular party cry. It has been used throughout the country without any real consideration of all that is involved, and it looks like the wholesale development of a protectionist policy.
Mr. BENNETT Mr. BENNETT
Mr. BENNETT: One is almost coerced by what has been said here to venture a few remarks upon this question. Tariffs, from the point of view of Senator Sir John Keane, who is a doctrinaire free trader, are anathema. The Senator gives us two or three basic facts in connection with the imposition of tariffs. He refers to the scantiness of raw materials and mentions that they could not be used economically in industry where they are not locally available. He refers to the question of small nationalities and trying to use tariffs as a means of bolstering up small nationalities. The Senator also refers to the cost of imposing tariffs which will not be of any real value, as he suggests is the case in the present issue. I am neither a doctrinaire free trader nor the reverse, but I would like to point out that this country is in a position in which it is incumbent on Ministers to investigate the question of tariffs. We certainly are a small  nationality and I think we might hold that under the treatment we received for many years we were a backward nationality, and backward nationalities the world over have been exploited by the financiers of the world for their system of exchange, to get for themselves something for nothing, so to speak. Backward nationalities produce food and other things of that sort and they have been exploited by the commercial enterprises of the world that have given exchange values of a very high character to everything which is manufactured and exchange values of very low character to everything which is produced from the fertility of the soil and which is the gift of God.
Here in this country the main things produced and the main things exported are agricultural products, which on exchange have a very small value. All that is put into them through God and through the soil is supposed to be a gift for the world at large, and rightly so, and all the arguments of economists are based on suggestions of this nature, that it is only the values that you put into these matters by hand that are of any consideration. We, unfortunately, have no products in connection with which that great value is put in by industrialists and by hand. We have great fertility of soil, and the products of the farm, as the result of the work of farmers, may have a small exchange value, but they have a large utility value. The Government have set up the process of selective tariffs, and we must consider by what means the product we have to sell can be made so effective that we will keep for ourselves as much as we can of the gifts of nature, and utilise as far as we can the resources of nature to the advantage of our own country. When we consider exchange values, we should consider also utility values and the views of trained economists. All our efforts for industrial economy should be aimed at creating a market in this country for a great portion of our products. The only product we have, the great factor which pays for all these wonderful exchange values, is agriculture. I think this is the commodity which pays almost entirely for what we buy. We sell little else. The object of our tariffs should  be to try to secure for our commodities —if possible, by local consumption, which is the best means by which we can arrive at it—that we only select for tariffs such subjects as will utilise our raw materials. We have vast supplies of raw materials.
I believe the Government are giving careful consideration to all these matters. Trained economists, to my mind, are not of great advantage in this country of ours at the moment. I will not profess to be a trained economist, but since I was twelve years I have studied economics and have taken many prizes in economic subjects. I think the system that applies to England and other countries is not a system that would be inherently useful in this country.
The two tariffs imposed in this Bill are tariffs on rosary beads and margarine. I will not deal with the subject in a light manner. I agree with Senator O'Farrell that they are of small value and little worth. I would like to point to the difficulty of collection of the tariffs. A number of people may possibly be involved in the collection of the duty, and I wonder will the cost of the collection of this small tariff be justified. I fear a number of small tariffs will involve a larger number of customs officers than the collection of the tariffs will pay for. I am quite satisfied that this matter has been thought out, but I would like an assurance from the Minister that in this case the cost of collection is justified by the amount of the income derived.
The Government's course of selective tariffs is the only course that the State could adopt. I am quite sure that good results will come. We must be patient. I think in all these matters the idea is to secure that in imposing tariffs we should, in the first case, select industries for which the raw material is procurable in this country, and there are many. It is not economic to start an industry on a small scale where you have to import the raw material. That is an economic truth. I do not think we lack in this country raw material and I hope consideration will be given to that matter. I would like to feel in connection with the the tariffs that have been imposed, that consideration  has been given to the effect on local raw material.
As regards the question of boots, I would be glad to know how far the tariff has furthered the purchase of Irish hides. I have been told, but I may be wrong, that the number of Irish hides used in the production of Irish industries is very small indeed. Irish hides are of great value and I am told that they are too good to be put into the manufacture of Irish boots. I hope I am wrong and that I will be contradicted. I hope, in the imposition of tariffs, first consideration will be given to industries the raw material for which is available. Being available, a larger amount of labour will be given and the resultant effects will be greater.
Mr. BARRINGTON Mr. BARRINGTON
Mr. BARRINGTON: I would like to ask the Minister whether any arrangements are in contemplation for the protection of the consumer against the imposition of these tariffs. In the discussion in the Dáil it was stated that arrangements had been made for the protection of the wholesaler, and the Irish producers of margarine had agreed to supply the wholesaler without increasing the price. Are there any arrangements in contemplation for the protection of the consumer? I had an instance the other day—I do not know if the tariff is actually in force— when an old lady who lives in my neighbourhood and is given occasional employment at my place poured out the vials of her wrath upon me because she had been charged 3d. extra for margarine. If unscrupulous retailers are not in some way prevented from charging to the poor the imposition that is authorised by this Oireachtas, I am very much afraid the consumer will be the real sufferer.
Mr. O'CONNOR Mr. O'CONNOR
Mr. O'CONNOR: In relation to this question of tariffs I must say that it is one in which I, and indeed the whole country, are much interested. I notice that the Cathaoirleach has allowed the debate to digress from the issue now before the House in regard to rosary beads and margarine into other channels. As far as rosary beads are concerned, I rather deprecate that an emblem of our Catholic religion should be so much thrashed out here in the  matter of import duties. It is rather a small matter to have brought into this prominence in the discussion in connection with tariffs. The question of margarine has been already more or less ably dealt with, and I observed that one Senator has made mention of the length of time that has elapsed since he formed an opinion on that matter. My own opinion on tariffs was formed over forty years ago. Over forty years ago I formed my opinion as between tariffs and free trade—which was the best for the country, and which would be the best to follow. I formed that opinion in favour of protection, and I am still a determined protectionist, and one of the reasons was looking at the five, six or seven mills in my native district of Roscrea which are now idle but which I know were hives of industry seventy years ago. At that time all the flour needed in the district, for many miles around, was produced in these mills, and as a result we had the by-products for feeding cattle and sheep sold there at reasonable prices. The first blow to the working of these mills came when the roller system was adopted in the American flour mills. As a result, five of these mills in Roscrea are now idle. There is not one man employed in the five. Of the remainder, one is run by the Monastery at Mount Saint Joseph's, because they have free labour. As a result of what I saw in these mills in Roscrea I became a protectionist, and I am still a protectionist. I hold that protection is required for more than flour—in fact, I do not wish to discriminate in any particular article that could be manufactured in Ireland. The view I hold, and the view I have always held, is that if I had the making of the laws I would put tariffs on all manufactured articles coming into Ireland. I would have no such thing as imported articles coming into the country, and I would have every manufactured article coming into the country taxed. There should be no such thing as making fish of one and flesh of another. I am an out-and-out protectionist in regard to everything coming into the country. Tanned hides and all things like that coming into the country should be  taxed. I would allow none of those in free.
Ireland is an agricultural country. The protection that is now being given in the matter of selected tariffs does not go as far as I would wish it to go. Perhaps there are experts that know more about these matters than I do. I do not claim any distinctive knowledge on this question, but I tell you candidly I would run the risk of making no mistake about them and so I would protect them all. I would allow nothing to pass into this country at the expense of the people of the country who want work. There are many in this country who know that this question of tariffs and free trade was always in England's mind in the far-off days when she discriminated against Ireland's products and industries. England has herself been a manufacturing country and was always in a different position from Ireland. Speaking from the farmers' point of view, I say that, in my opinion, it would benefit the farmers if tariffs were put on every imported article, for by helping our industries here we would be giving the farmer a market at his own door.
Sir NUGENT EVERARD Sir NUGENT EVERARD
Sir NUGENT EVERARD: Although not such an out-and-out protectionist as the Senator who has just spoken, I must say that I was amazed Senator Sir John Keane should have at this time tried to convert the members of the Seanad to his views. I suppose that was the object of his speech—to convert the Senate to his point of view. That view is that any form of protection or any tariffs are injurious to the country. I suppose Senator Sir John Keane does read the history of mankind in other countries, and I think that before he holds us up as a horrible example to the world for having adopted such a mild form of selected tariffs as we have adopted, he should be able to show us some examples of a country which we ought to follow in the matter of free trade. He should have shown us the experiment of some country carrying out free trade and, as the result of that experiment, prosperous above all other countries. He did mention Australia as yearning for free trade. If you take the different Colonies  comprising that Federation you will learn the position with regard to protection there. I have a distinct recollection of reading a debate in the other House where the States of Victoria and New South Wales were mentioned as examples respectively of free trade and protection. I remember reading there how free trade failed and how protection succeeded, and how the free trade country eventually adopted protection. In the protected country not only was food cheaper but everything else was cheaper. Labour was abundant and emigrants flowed in: whereas in the country that adopted free trade the emigrants were flowing out, food was dear, and it was the same with other things. As a result it was practically unanimously decided that the free trade country would adopt the same form of protection as was followed by the sister State.
Everybody knows, and it is not necessary to tell us, that the United States of America has a diversified climate and fertile soil, and that great country has facilities in the way of raw material that are unequalled on God's earth. But why was it necessary then for that great country as a whole to put up a tariff wall that even a little country like ours cannot jump over? It seems small-minded on her part, but I presume that Sir John Keane, who is nothing that is not really sound in economics from the academic point of view, had some reason for not mentioning England as the greatest traitor to the cause of free trade.
Now we are talking here of such matters as rosary beads. It is a little matter, but the fact that a tariff has been placed on rosary beads is an indication of the want of a patriotic spirit on the part of the people who would rather buy German rosary beads than beads made in their own country and made of materials produced in their own country. One may think that this matter of rosary beads is so small that it is ridiculous, but it is well to remember that in England there is an industry that is somewhat similar to rosary beads, but it is a very big industry. I refer to the manufacture of buttons. Here you will find a great apostasy on the part of England from the doctrine of Cobden and the other free traders.  At the present moment the Board of Trade are actually considering the imposition of a tariff on buttons. I wish in this matter of tariffs that Senator Sir John Keane had given us an example of a country that we all could follow. Of course some Irish people think that this is the best of all possible worlds, but we will have to go outside this world to find any place such as Senator Sir John Keane thinks has adopted an ideal policy.
There is one point that I notice is notoriously absent from the speeches and arguments of free trade economists, and that is the question of employment. Now, may I ask if the arguments and theories of free traders were carried out to the Nth power or the Nth extreme, what sort of possible occupation could there be found for the labour that is found superabundant in this country? We know very well that in that event there would be only one outlet for labour and that is through the Irish ports in emigrant ships. Why should that be? If we had industries in the country we should still be able to retain the population within the four shores of Ireland at any rate and not have to send them out to these protectionist countries. I suppose as they are protectionist I should not mention them. To help by tariffs to build up industries is a more patriotic idea than the adoption of a principle of economic policy—the teachings of free trade professors who have been all their lives teaching these theories and doctrines without being able to persuade any of the countries of the world to adopt them. I do not know whether I would call them doctrines or policies, but I do say this that their rules have been, in every country in the world, more honoured in the breach than in the observance.
Mr. FARREN Mr. FARREN
Mr. FARREN: There seems to be some confusion in the minds of Senators Sir John Keane and Sir Nugent Everard with regard to the reason America put up a tariff wall. I think it would be just as well it should be understood now that America put up a tariff wall because the people of that country believed in giving a decent standard of livelihood to their  workers. The tariff wall was put up in order to prevent the employers from exploiting cheap labour. That is the reason.
Mr. O'HANLON Mr. O'HANLON
Mr. O'HANLON: Apparently there is room for a full dress debate on this subject under another item on the agenda to-day and when that debate comes along many of us will have much to say. I hope really that we will not be treated to the line of reasoning which Senator O'Connor put forward this evening. That is a line of reasoning of a number of protectionists who go on the assumption that all we have got to do in order to re-start our mills, to find work for the unemployed, and convert this country into a land flowing with milk and honey is to put up a tariff wall. That is a strange assumption. We would have to have a much closer line of reasoning before many of us would be converted to the view-point of the protectionists and converted to the view-point that protection is going to afford a panacea for all our ills, and that when we have protection we are going to have the millennium. Senator Farren has just mentioned why a tariff wall was raised up in America—in order to secure for the workers in America better labour conditions. Does the tariff do that? Senator Sir Nugent Everard mentioned Australia as an example of protection. What is the position there in one of the most highly protected countries in the world? The position is that the land is going out of cultivation in a country with illimitable resources, possibly the greatest resources of any land on God's earth. The people are crowding into the cities and the country is being run largely on borrowed money. The National and State debts are increasing. The National and State debts are at the present time in this highly protected country £955,000,000. What do we find there in relation to what Senator Farren says? We found there the other day one thousand unemployed in the capital city storming the Treasury in a country where a tariff is the real thing and which is most highly protected.
Senator Sir Nugent Everard should study the conditions in Australia. A  lot could be said about America. A great deal could be said on this subject, and I hope we will have an opportunity later of going into a more detailed discussion of it. With regard to margarine, there was one thing that struck me as rather extraordinary about the whole case. It was this: that the people who made a case for a tariff on margarine admitted that they send margarine into foreign countries and have secured a portion of the trade in them. That means that they are able to produce margarine here at a certain price, that they are able, after paying the transport charges on the margarine to these countries, to enter into competition with the foreigner on his own ground and secure a portion of his market, How is it that these people who are able to do all that, who are able to meet the foreigner in his own market, are not able, by a little reduction in the costs of production here, and by the introduction of more efficient methods, to capture the home market? I cannot understand why the Government or the Dáil should ever have agreed to the principle that a tariff should be given to people who put forward such a case. It seems to me to be a wholly illogical case. The putting on of a tariff on such an article inevitably leads to an increase in the cost of living for the very poorest of our people, who can least afford it. That is the position as I see it, and I hope the Seanad will be given another day to go fully into this matter. Some Senator said that Senator Sir John Keane was trying to convert this House to his views about free trade. I am quite sure the Senator knows well that he was not trying to convert some of us who hold equally strong views with him on this matter. When the opportunity is given on another day we hope to put forward our views.
Mr. BAGWELL Mr. BAGWELL
Mr. BAGWELL: I cannot help making a short contribution to this debate. I do not propose to speak at any great length, nor do I hope to say anything on this question that I have not said already. We have heard a great deal as to what the economic characteristic of this country might be if we followed  the example of this, that or the other country. That is all a matter of hypothesis. The fact is, that the industry in this country which gives employment and a livelihood to an enormously greater number of people than all the other industries put together is agriculture. The mutton, beef, eggs, chickens, butter and all the other things that we produce are, for the most part, sent to England and sold there. You cannot protect an industry where your market is away from you. For that reason it seems to me that Ireland, of all countries, should be a free trade country for the reason that you cannot protect your principal industry. Such industries as you can protect in the home market will only have the effect of raising the cost of living and putting a mill-stone around the necks of our agriculturists. Why should we do that?
Mr. DILLON Mr. DILLON
Mr. DILLON: In view of what my friend, Senator O'Connor, has stated, that he is a full-blooded protectionist, I must, sitting on the same side of the House as he, rise to say that I hold very much the opposite point of view. I think it is well I should refer to some practical matters that affect us agriculturists. One fact brought home to us is this: that agriculturists in all highly protected States constitute the poorest class in those States. Take any of the highly protected countries that have been referred to, such as America and Australia.
The agriculturists in them constitute the poorest class. So much is that a fact that agriculturists in these countries are flying to the cities. When it is said that protection may result in more employment being given at home, I can cite facts to show that such is not the case. The number of unemployed in America, a highly protected country, average from one and three-quarter millions to five millions. If protection, as its supporters contend, meant more employment at home, we would not have that fact staring us in the face. In an agricultural country like ours we have to depend largely upon our exports. Practically every citizen in this country, directly or indirectly, has to depend on agriculture for a living. If we have to sell practically all that we produce in another market, what is our  position going to be if we become a protected country? It may be an academic thing to say, but I believe if we reduce our imports that our exports will be correspondingly reduced in value. In the last couple of years there has been a reduction in our export trade, both as regards its volume and value. It is a matter for our economists to consider whether the items on which tariffs have been placed during the past few years have not had some influence on this admitted reduction in our export trade. I just got up to say these few words because of the fact that my friend, Senator O'Connor, had made the statement that he was a full-blooded protectionist. I am opposed to that policy.
MINISTER for FINANCE (Mr. Blythe) Ernest Blythe
MINISTER for FINANCE (Mr. Blythe): The two tariffs that are dealt with in this Bill are comparatively unimportant. They are proposed because the Tariff Commission presented reports. In the case of one of the articles dealt with, rosary beads, if immediate action had not been taken it would not have been any use to impose a tariff at all because such a degree of forestalling would have taken place that there would have been no possible increase of employment. It was necessary to act on the reports at once if we were going to act at all. The collection of such taxes as will have to be collected on these articles will impose practically no increase in the cost of the customs service. They are minor matters, and we have customs' officers at all the ports and at points on the road where goods are imported. They will be able to deal with this matter with very little difficulty. It is not anticipated that any actual increase in staff will be required. I do not think that the difficulties Senator O'Farrell referred to are incapable of being overcome. I do not think the people who bring home rosary beads may be expected to tell lies, or that they will go to the same trouble to smuggle as people bringing home other classes of contraband. In any case, if the difficulty arises I think it can be met.
With regard to the question of the quality and price of margarine, it is quite easy to deal with price. It is more difficult to deal with quality. The only thing that is possible there is, in  case there are any complaints, to investigate those complaints thoroughly and occasionally to have tests as regards quality carried out. Then if it is found that the undertakings that are given are not being kept the Government will have every justification for going to the Dáil and proposing that the tariff be abandoned. It would be much more difficult to do that if the promises were not there, and it would be impossible to convict the firm or firms concerned of any misbehaviour, so to speak. I do not think I need discuss the general question at great length, but it is a fact, and all Senators, I am sure, will acknowledge that in certain cases, by means of tariffs, you can have increased employment at no additional cost to the consumer.
The tariff on cigarettes which we took over, as it were, automatically, when we took over the British system of taxes in the beginning of 1923, has caused the erection of a number of factories and has given a considerable amount of employment without involving any increased cost to the consumer. So far as the confectionery tariff is concerned, the position has been almost the same. There are, perhaps, one or two grades of sweets in which exactly as good quality as the imported sweets cannot be obtained, but in general you have, without any cost to the consumer, and without any increase in the cost of living, a great deal of employment provided. I admit that the general effect of tariffs, taken all round must be to increase the cost of living. I have said that in certain cases there would be no increase in cost, but in certain cases there might also be an actual cheapening of the real price of the article. These are exceptional cases than otherwise, but in general it may be accepted that some increase in cost to the consumer may result.
We cannot be content to go on as we are going on and not look ahead. I think it is not desirable to have a country depending entirely on agriculture if that can be avoided. I think it is desirable that we should not have all our eggs in the one basket, as it is said, and if there is a very bad period in agriculture the country should have me chance of making that up in other  directions. Then there is the whole question of the sparsity of population. The great sparsity of population here involves a heavy burden on the country. It is this sparsity of population that makes our Post Office a losing proposition, although the postage here is twopence while the postage in England is only three-halfpence. If you had an increased population our railways would find it easier to carry on than they do at present, and would be able to give a better and a cheaper service to the country. In many respects government is dearer on the individual when the population is sparse. It is more difficult to provide good schools and give educational facilities. Every advantage of that sort is more difficult and costly to provide when you have a sparse population. The view that we hold, without taking any sort of what might be called an exaggerated view of the national future, is, that it is worth while to make some small sacrifices in the present for the sake of getting a more diversified economic life and of being able to retain greater numbers of our people at home with a view of being able to have an increased population. We feel, however, that we must go carefully about it, because it is a fact that so far as tariffs throw a burden on the consumer, they throw a burden on agriculture, which is our main producer, and is in an ill condition to bear an increased burden. It is for that reason that we are trying to have as good an investigation of every proposal for a tariff as we can have before any steps are taken to put it into effect.
Mr. JAMESON Mr. JAMESON
Mr. JAMESON: I should like to know from the Minister if he is able to give us any figures as to the increase in the employment of labour that is likely as a result of these tariffs here. There is no doubt whatever that as regards margarine it is one of the foods of the poor, and it is one of the last things that I would have expected anybody to try to protect. The Government, I imagine, must think that extra employment will be given as a result of these tariffs. Otherwise I am sure they would not feel justified, in the eyes of any ordinary economist, in proposing to impose such taxes.
Mr. BLYTHE Mr. BLYTHE
Mr. BLYTHE: There are some estimates  given in the report of the Tariff Commission with regard to both industries. I cannot at the moment put my hand on the paragraph in the report dealing with this, but I think the figures are 80 or 90 in each case.
Mr. JAMESON Mr. JAMESON
Mr. JAMESON: That is to say employment to about 170 more people?
Question: “That the Bill be read a Second Time”—put and agreed to.
Seanad Éireann 10 PRIVATE BUSINESS. FINANCE (NO. 2) BILL, 1927—SECOND STAGE.