Ceisteanna—Questions. Oral Answers. - Floods in Ballyhoe (Co. Meath).
Ceisteanna—Questions. Oral Answers. - Untenanted Land in Saorstát.
Ceisteanna—Questions. Oral Answers. - Resumed Holdings in Saorstát.
Ceisteanna—Questions. Oral Answers. - Foot and Mouth Disease (Great Britain and Northern Ireland).
Private Notice Question.
Question on the Adjournment.
Trustee Bill, 1931—(Seanad)—Committee.
Railway Fires (Amendment) Bill, 1931—Committee.
Finance Bill, 1931—Second Stage.
Town Tenants Bill, 1931—Committee Stage.
Adjournment Debate. - Closing of Co. Tipperary Creameries.
 Do chuaidh an Ceann Comhairle i gceannas ar 3 p.m.
Mr. Mathews: asked the Minister for Finance if he is aware of the serious loss sustained by twenty families at Ballyhoe, Co. Meath, owing to the overflow of the Lagan river (Glyde drainage district) which raised the level of Descart and Ballyhoe lakes, and submerged most of the crops of these people; and if he would send an inspector to this district to report on the possibility of preventing such flooding in the future.
Parliamentary Secretary to the Minister for Finance (Mr. Bourke): The lands referred to are in the Glyde drainage district, for the proper maintenance of which the County Councils of Louth, Monaghan, Cavan and Meath, acting through a Joint Committee, are now responsible. No useful purpose would be served by an inspection of the area.
The Deputy should not forget that a drainage district such as this was never intended to be able to cope with such floods as resulted from the recent abnormal rainfall.
Mr. Briscoe (for Tomás O Deirg): asked the Minister for Lands and Fisheries if he will circulate a return showing the amount of untenanted land in process of acquisition by the Land Commission in each county of the Saorstát as on 31st March, 1931.
Parliamentary Secretary to the Minister for Lands and Fisheries (Mr. Roddy): A return showing the amount of untenanted land in process of  acquisition by the Land Commission in each county as at the 31st March, 1930, is given on page 16 of the last published Report of the Land Commission. A similar return showing the figures as at 31st March, 1931, will appear in the Land Commission Report for the year and period ended 31st March, 1931, which is at present being compiled. In these circumstances, I do not think it necessary to circulate a special return at present.
Mr. Briscoe (for Tomás O Deirg): asked the Minister for Lands and Fisheries if he will circulate a return showing the number, extent, and valuation of resumed holdings in process of acquisition by the Land Commission in each county in the Saorstát as on 31st March, 1931, and the total price paid for such holdings.
Mr. Roddy: The compilation of such a return as the Deputy asks for would involve considerable time and labour on the part of the Land Commission staff and the interruption of their normal duties and I do not see any good purpose to be served by its circulation. If it will meet the Deputy's wishes I am prepared, however, to supply him with a return of the total number of holdings actually resumed by the Land Commission in each county, as this can be prepared without difficulty from the available statistics. On the other hand, the compilation of a return of the cases in process of resumption would involve a case to case examination of a large number of holdings in various stages of acquisition and I cannot undertake to supply such a return. The Land Commission staff are fully engaged on the colossal task set them by the Land Act, 1931, and I would require very strong reasons before adding anything to their burden at the present time.
Dr. White: asked the Minister for Agriculture if any steps can be taken to hasten the opening of the Port of  Waterford for the shipment of livestock to England, in view of the fact that no foot and mouth disease exists in Saorstát Eireann; and if he will make representations to the British Ministry of Agriculture to permit all pigs and cattle held up in Fishguard to be released for immediate slaughter on 96 hours' licence.
Minister for Agriculture (Mr. Hogan): Every step on the part of the Saorstát that could conduce towards the opening of the ports has been taken, and the Department are in constant touch with the British Ministry on the subject. I would point out, however, that the position in regard to foot and mouth disease in Great Britain is one of very considerable gravity, and that this delays the opening of their ports. Enquiries have been addressed to the British Ministry as to permitting pigs and cattle held up in Fishguard to be released for immediate slaughter, and the Department have been informed by that Ministry that they are unable at the present juncture to agree to movement from Fishguard for slaughter.
Major Myles: asked the Minister for Agriculture whether he is prepared to modify the order of the Department, imposing an embargo on cattle returning to Saorstát Eireann in the case of Donegal farmers exhibiting at Derry in the North West Agricultural Show, in view of the paramount importance of this show to the farming community of County Donegal.
Mr. Hogan: I regret that I cannot make any modification of the Order referred to at present. There is a disease risk involved in the matter, as animals from different areas in Northern Ireland were exhibited at the show. I consider that under existing circumstances every precaution must be taken, and that no relaxation can be granted at present.
An Ceann Comhairle: Deputy de Valera for a Private Notice Question.
Mr. de Valera: I want to point out that this is not the question that I handed in, but only part of the question which I wish to have answered.
An Ceann Comhairle: The Deputy submitted a question and this is the form of the question approved of by the Ceann Comhairle.
Mr. de Valera: I did not submit this question. I submitted a different question.
An Ceann Comhairle: The Deputy's position is that he can only ask the question in the form approved of by the Ceann Comhairle under the Standing Orders.
Mr. de Valera: The Ceann Comhairle cannot put me in the position of asking a question which I do not want to ask.
An Ceann Comhairle: The Ceann Comhairle has no such desire. The Deputy need not ask the question. The Standing Orders on this matter are quite clear. We have had this matter before on several occasions. The Standing Orders apply to questions to be asked whether by private notice or otherwise. The Deputy said he would ask this question.
Mr. de Valera: I said I would ask another question.
An Ceann Comhairle: Then the question is not settled at all and it cannot be asked.
Mr. de Valera: I gave no permission to have this question put down in my name as it stands.
An Ceann Comhairle: Then the Deputy is not satisfied with the form of question and he cannot ask it.
Mr. de Valera: I am not satisfied.
An Ceann Comhairle: Let us have this point clearly settled. The position is that questions must be approved by the Chair. A Deputy gets an opportunity of seeing whether he can arrange with the Ceann Comhairle as to the form of the question he wants to ask. If he can, then he asks the question; if he cannot, then the question cannot be asked.
Mr. de Valera: I can say——
An Ceann Comhairle: The Deputy is not satisfied with the form of the question. It is not his question. Therefore, until such time as we can arrive at a position when he is satisfied with the form of the question he cannot ask it.
Mr. de Valera: I can at least save myself from having to put a question that misrepresents my views.
An Ceann Comhairle: Certainly.
Mr. de Valera: I say that the Ceann Comhairle, or anybody else, has no right to put down a question which misrepresents my views.
An Ceann Comhairle: I have not put down any question.
Mr. de Valera: This question has been put down in my name.
An Ceann Comhairle: No. The Deputy came into the Dáil last night and asked a question without any notice at all. This is Standing Order 28:
Questions must be in writing, and must reach the Clerk not later than 4 o'clock p.m. on the second day preceding that on which they are to be asked, but no question shall be handed in on a Saturday, Sunday or public holiday: Provided that Questions relating to matters of urgent public importance may, by permission of the Ceann Comhairle, be asked on private notice to a Minister.
“May, by permission of the Ceann Comhairle, be asked on private notice to a Minister.” The Deputy asked a question last night purporting to be a question of urgent public importance, without the permission of the Ceann Comhairle. He had not asked for any permission. The Leas-Cheann Comhairle was in the Chair and informed him of the position. Standing Order 29 says:
Questions addressed to a Minister must relate to public affairs connected with his Department, or to matters of administration for which he is officially responsible.
 Then Standing Order 30 states:
The Ceann Comhairle shall examine every Question in order to insure that its purpose is to elicit information upon or to elucidate matters of fact or of policy, that it is as brief as possible, that it contains no argument or personal imputation. The Ceann Comhairle, or the Clerk under his authority, may amend any Question, after consultation with the Deputy responsible for the Question, to secure its compliance with Standing Orders.
The position, therefore, is that when a Deputy sends in a question in a form which is not approved of, it is not put upon the Paper until we get his consent, if it is feasible to get his consent, to the approved form either personally or by proxy. In the case of a Private Notice Question, the position is the same. If the form is not agreed upon, the question cannot be asked. There is no such thing as putting the Deputy in a position that he must ask a question of which he does not approve.
Mr. de Valera: What were the particular grounds of objection?
An Ceann Comhairle: Obviously that is not a question which can be argued in the House. We had this point before. The Standing Orders simply give the Chair discretion. The purpose of a question must be “to elicit information upon or to elucidate matters of fact or of policy.” The form is a matter for decision by the Chair. If every Deputy who disagrees with the Chair as to the form of a question could cite the terms of the original question, we would arrive at the conclusion that he can always put his original question. The Deputy is not satisfied. An amended form of question was shown to me at 3 o'clock to-day, but I had no time to consider it, and the Minister had no notice of it. Possibly that form, or some other form, might be suitable and could be put to-morrow. This is the form of question which I am prepared to accept. If the Deputy does not approve of it, he simply will have to leave the matter over until we can get another form which he will agree to.
Mr. de Valera: Will I be given that opportunity to-morrow?
An Ceann Comhairle: Certainly.
Mr. Briscoe: Arising out of your remarks, sir, with regard to the Standing Orders relative to the practice——
An Ceann Comhairle: I am not prepared to take any more questions on the practice now. I will take a question on the matter if the Deputy gives me notice of it.
Mr. Briscoe: As to the question on the Adjournment to-night I have arranged with Deputy Fogarty that he shall bring up question No. 14 on yesterday's Order Paper to-night, and I shall bring up question No. 15 to-morrow.
An Ceann Comhairle: Deputy Fogarty will raise the matter of question 14 on yesterday's Order Paper on the adjournment to-night.
Bill put through Committee without amendment and reported.
Report Stage to be taken to-morrow.
Bill passed through Committee without amendment.
Bill reported without amendment.
Report Stage ordered for Friday, 26th June.
Minister for Finance (Mr. Blythe): I move the Second Reading of this Bill. The Finance Bill embodies the various Budget Resolutions which have been passed by the House with, in certain cases, modifications arising out of representations since received either in the House or outside the House. It also gives effect to certain other proposals which were outlined in the Budget statement. There are also in it  a number of minor supplementary provisions. The only thing of importance which has not been before the House is the provision in Section 31 which provides for the payment of interest by the Local Loans Fund. It has always been intended that the Local Loans Fund, which is supplied by the Exchequer with capital out of borrowed money on which interest has to be paid, should pay interest to the Exchequer. In the early years the amount of money actually outstanding in the Local Loans Fund was small, and no steps were taken to provide for the actual payment of interest to the Exchequer. The sum has increased very much in the last two or three years. It has now become substantial. It is accordingly provided that interest shall hereafter be chargeable, and also that Local Loans Fund money may be used by the Exchequer as it has been used in the past. When that occurs interest shall be payable to the fund for the use of that money. I think that is the only matter of importance in the Bill.
Mr. MacEntee: Surely the Minister is going to give some explanation of Section 2, which proposes an amendment of Section 8 of the Finance Act of 1925; of Section 4 which introduces a new principle into the income tax law; of Section 28 which proposes to extend the privileges of certain public utility companies, and of Section 32. These are matters which were not touched on at all by the Minister in his statement. I think that before asking the House to agree to the Second Reading of the Bill he should explain it in greater detail than he has done.
Mr. Blythe: Section 2 arises out of a dispute which occurred recently as to the liability of executors to pay duty on unpaid income tax over a period of six years prior to the year of assessment in which a deceased person died. Where a person is still alive, of course the assessment can be made and the duty can be recovered for the six year period. It was intended, and possibly if the matter were litigated out to the full it would be held, that the same liability fell on the estate of a deceased person. However,  the section is put in to make certain that the tax will actually be recoverable in such cases. With regard to Section 4, it really arises also out of a case which was in the courts recently.
Mr. MacEntee: And is still in the courts. The cases that Sections 2 and 4 deal with are still in the courts.
Mr. Blythe: Not Section 4. Section 4 arises out of a case in which a public servant persistently declined to furnish any returns of income. Certain proceedings were taken against him in respect of that failure. They were successful in the High Court, but failed in the Supreme Court on the grounds that proceedings could not be taken until, as a matter of fact, the assessments had been made and had become final and conclusive. It is considered necessary, for reasons which I shall detail on the Committee Stage, that there should be power to proceed immediately against a person who fails, neglects, and refuses to make returns of income. It would be unsatisfactory and anomalous that some estimated assessments would have to be made without the information that ought to be available for the making of them, and that proceedings could only be taken after they had become final and conclusive. Section 28 is for the purpose of continuing the exemption of certain public utility societies, such as railways and building societies.
Mr. MacEntee: And tramways?
Mr. Blythe: Certainly, railways.
Mr. MacEntee: And gasworks?
Mr. Blythe: The companies which have heretofore been exempted since the tax was first introduced. There is a proposal to add the Agricultural Credit Corporation. There are certain other exemptions which are of very little financial importance in favour of the Agricultural Credit Corporation. It is clear that these exemptions have to be made if the Credit Corporation is to have a chance of continuing its work on any sort of a reasonable basis.
Mr. MacEntee: Before the Minister leaves that section would he explain how it is that so far as public utility companies are concerned—gasworks, waterworks, tramway undertaking, etc. —that the limit of 1934 is substituted for the limit of 1931 in regard to these exemptions?
Mr. Blythe: It has been renewed each year for a period of three years. The last time it was renewed was in 1929. That was for a period of three years, and we are simply continuing that. It might easily be made permanent if that is what the Deputy has in mind, because I think there will always be a case, unless we are to have extraordinary changes in conditions, for these exemptions.
Mr. MacEntee: Can the Minister justify the exemptions?
Mr. Blythe: I do not propose to justify them on this stage of the Bill. I will do so on the Committee Stage. This is merely carrying on a provision that has been in existence since the Corporation Profits Tax was first imposed. Section 32 is simply a machinery section which arises out of the dissolution of the old Department of Agriculture and its re-arrangement incidental on those changes. The Acts which have necessitated this section are the repeal of the Agricultural and Technical Instruction (Ireland) Act by the Vocational Education Act of 1930 and by the Agriculture Act of 1931.
Mr. MacEntee: The Minister and I think the House have been under the misapprehension that from year to year the Finance Bill is merely a redaction as it were, first of all of the financial statement that the Minister makes every year, and secondly of the consequential financial resolutions which he submits to this House. But I think the questions which I have put to the Minister have shown that in fact that is not the case, that without due notice given to the House, very important changes in the law might be proposed in the Finance Bill submitted to the Oireachtas every year.
The Minister has proposed at least  two amendments to the existing income tax law. In that connection I would suggest another which he might fittingly propose. It arises out of Section 1 (3), which proposes that the several statutory and other provisions which were in force during the year beginning on the 6th day of April, 1930, in relation to income tax and surtax shall, subject to the provisions of Part 2 of the Finance Act, 1929, and of this Act, have effect in relation to the income tax and surtax to be charged as aforesaid for the year beginning on the 6th day of April, 1931.
Amongst several statutory and other provisions continued in force under this section will be Section 3 of the Act of 1925 which provides that military gratuities and demobilisation pay to officers of the National Forces or the Defence Forces shall be exempt from income tax. I do not wish to enter into the merits of that provision at the present moment. Some people may have good arguments from the Ministerial point of view to put forward in support of it, but I say that the House which has granted this privilege of exemption to certain military pensioners, at the same time should see that the pensions awarded to the dependents of the men executed in 1916 should not be assessed for income tax; that the pensions awarded to widows of 1916 men shall be equally exempt from income tax with the pensions of officers who have served in the National Forces, which I presume mean the National Army and the Defence Forces. I cannot see any reason for discrimination, and I am sure the Minister could not justify that discrimination to the House. I am, in fact, aware that the pension of one lady has been assessed for income tax. When the opportunity presents itself on the Committee Stage I hope the Minister will amend the law so that there shall be no discrimination as between these cases and pensioned officers of the National Army.
In relation to Section 2, the position in that regard seems rather extraordinary. Originally under the Act  of 1918 trustees of deceased persons who furnished wrongful or misleading returns were liable within three years to have an additional assessment made on them. It happened however in the year 1923 that Rule 18 of the General Rules was amended to extend the period under which trustees or executors are liable from three years to six years. Two years after that the Act of 1925, sub-section 1 of Section 8, was passed by this House, and it states:
(1) Subject to the provisions of this section, an assessment or an additional first assessment in respect of income tax chargeable for the year beginning on the 6th day of April, 1922, or any subsequent year may be amended or made (as the case may be) under Section 125 of the Income Tax Act, 1918, at any time not later than six years after the expiration of the years of assessment.
I think the position was that so far as trustees were concerned they were not dealt with in the original Acts, but were dealt with in the Rules. There was nothing, as Section 2 of the Bill before the House shows, in Section 8 of the Act of 1925, which amended the General Rules and particularly Rule 18, made under the original British Act of 1918. Apparently those who drafted the Act of 1925 were under the impression that the writ of the British Houses of Parliament still ran in this country, and that there was not any necessity for them to amend the Bill; that automatically the Act of 1923, passed by the House of Commons amended the General Rules in relation to income tax here in 1925.
Members of Fíanna Fáil have often been twitted in the House, while labouring under all the disabilities which Private Deputies do labour under, when they draft legislation. They were twitted on their slipshod and faulty draftsmanship. In my opinion there was very little justification for that charge at any time. Any proposals which we have ever submitted to the House have been carefully thought out and were put in such a form as to be easily understood  and were never ambiguous or doubtful. As a consequence members of Fíanna Fáil have never had to introduce Bills to remove doubts, as we have many times seen Ministers on the other side do, to clarify ambiguous and doubtful phrases in one of their own measures, and in some very important measures. At any rate the law remained as it is at present from 1922 onward until a case was brought to court, and there for the first time the Minister, and the Revenue Commissioners charged with the administration of the income tax law, found that, after all, occasionally the law may be on the side of the taxpayer, and that in fact trustees or executors were not bound to accept this additional assessment— at least that additional assessments could not be made on trustees unless made within the period of three years from the death of the deceased. I think that is approximately the position. The wording of the section is rather obscure.
The attitude which I take up in regard to this is that I do not see that a good case has been made for the amending of the existing rules. After all a man acting as a trustee, as an executor or administrator of an estate, discharges a very onerous and a very responsible duty and I think if he is called upon to accept liability, at least his liability as far as income tax is concerned should not be extended from three to six years. I think a three years' period is long enough taking into account the fact that when a deceased person dies, quite a lot of information comes into the hands of the Revenue Commissioners, which normally they did not get during the lifetime of the deceased. Surely inside three years they ought to be able to make whatever investigations are necessary to satisfy them whether the additional assessments should be made or not. If they are not able within three years to do that, I think the executor or administrator should be released from any further responsibility in the matter, and be allowed to wind up the estate as quickly as he can. For that reason, we are not disposed to adopt this amendment unless the Minister  can put forward a very good reason for it.
I have not anything very much to say in relation to Section 4. I merely wanted to have it brought out here that again the Income Tax Commissioners have been pursuing the income taxpayer without having the law on their side. This matter had to be carried by the Commissioners to the Supreme Court before the attitude which the taxpayer took up was vindicated. It has now been vindicated, and the action taken by the Minister is one of revenge, not indeed upon the individual taxpayer concerned but upon every taxpayer in the community. He seeks to amend the law, so that when next the sleuthhounds get upon the trail they will not be on a wrong scent so far as the persons affected by this section are concerned.
Sections 5 and 6 of the Bill are possibly, from the point of view of the community, the most important sections. Section 6 is the one under which the tax upon sugar is proposed to be increased by ½d. per lb. In that connection, I would like the House to feel that this is going to impose a very heavy burden upon the poorer sections of the community. The excuse which the Minister has offered to the House for increasing the tax on sugar is that he proposes to provide something like three-quarters of a million pounds for the relief of rates upon agricultural land. During the debate on the general financial resolution here we had some statements as to the burden which this tax upon sugar was going to impose upon the general body of the taxpayers.
While we contended that it was going to be a heavy and significant burden so far as the small farmers and agricultural labourers of the country were concerned, and so far, too, as the industrial workers in the towns were concerned, on the other hand, the Minister said that our figures were grossly exaggerated; that the people in the towns and the country nowadays took very little sugar, particularly the poorer sections of the community, and that consequently an increase in the sugar tax was not going to be a significant  impost upon the community at all. We had a debate here shortly after that dealing with the cost-of-living bonus, and one of the arguments which was put forward in that connection was that the household budgets upon which the cost-of-living bonus was computed were not truly representative of a particular class in the community—were not what might be considered a normal budget in the household of the civil servant. But nobody either from these benches or from the benches opposite contended that the figures were not fairly representative so far as the general body of industrial and agricultural workers were concerned.
Accordingly, when I started an investigation into this matter the first group of statistics to which I had resort were the statistics compiled by the Committee which was set up to report upon the cost-of-living in the Free State in 1922. According to the Report of that Committee we find that sugar is responsible for 3.25 per cent. of the total expenditure in the standard household budget, in which 57.05 per cent. of the total expenditure is on food. In that connection I would like to point out to the House that the smaller the income enjoyed by the household the larger the portion of that that is spent upon food, and that is clearly proven by the figures given by that Committee on the cost of living. According to the figures supplied by them in households in which the income is about £3, the net expenditure on food is 61.1 per cent. of the whole, as contrasted with the average percentage of 57.05 for all household budgets under examination, in which cases the incomes ranged from £3 up to £6 and over. Consequently, in households in which the income is £3 and under, the expenditure on sugar is 3.47 per cent. of the whole in a standard household. A standard household, according to the Cost of Living Committee, is one in which there are two adults and three children. It roughly works out at that number of persons per family in the agricultural districts in the country; actually the figure is 4.67 persons in each family.
 Let us consider on the basis of these figures what the effect of a tax on sugar is in the household of an agricultural labourer or a small farmer. In order not to go into the matter in too great detail, and not to have too many calculations, I propose to take the average income of the small farmer or agricultural labourer as ranging from 27/- to 30/- per week. I know that there are large numbers of agricultural labourers getting nothing like 27/- a week. Some of them are getting as low as 18/-. I think 25/- a week is the figure in many districts.
Mr. G. Wolfe: Not in my district. None of the labourers there get less than 30/- a week in cash.
Mr. Lemass: The official returns of the Department of Industry and Commerce give the average wages in Kildare at 26/- a week.
Mr. G. Wolfe: Irrespective of such things as potatoes, fire, housing, milk, and other things, I know that it is 30/- in my district.
Mr. MacEntee: According to Deputy Lemass the average is 26/- in Kildare, and I am taking the figure at 27/- to 30/-, so that it cannot be contended that my figures are unduly favourable to the arguments I am putting forward. The smaller the income the larger the percentage of it that is spent upon food. Consequently, if the wages I have taken for agricultural labourers are a little too high, neverthless not even Deputy Wolfe will state they exceed 30/-.
Mr. Wolfe: I did not say in every case, but I know that in quite a large number there is nothing less paid in cash to the labourers than 30/-. That is in actual cash, irrespective of his house, potatoes, fire and milk.
Mr. MacEntee: Well, that is the highest in actual cash. I am dealing now with cash incomes. Sugar has to be paid for in cash. The maximum that Deputy Wolfe would pay would be 30/- a week.
Mr. Wolfe: If you take into account the other things it would come to £2 a week.
Mr. MacEntee: In such households the expenditure on sugar amounts to 1s. 0½d. per week, and that is the equivalent to 4½ lbs. of sugar in a poor household of five persons. Any person who has ever had anything to do with a public institution or who knows anything about an internment camp will know that four and a half pounds of sugar per household per week for five persons is not by any means an excessive consumption for that commodity. An additional impost of ½d. per lb. on sugar in these households is equivalent to a tax of 2¼d. a week or 9s. 9d. per year.
Probably the Minister will say the figure I have chosen of 4½ lbs. a week is too high. I would like to deal with that in advance. I am sorry I have to quote so many figures, but we have to try to make some sort of definite estimate as to what the sugar tax will mean for our poorer people. It is very important that the farmers should know exactly where they stand under the de-rating proposals of the Minister, and realise that he is robbing them with one hand, while bribing them with the other. We want them to see that while there is a comparatively small section of them who will gain, the vast majority of them will lose substantially.
It has been difficult to get exact figures as to the consumption of sugar in the Free State. I have taken the average of the years 1924 to 1927, the years before the sugar factory in Carlow was brought into full swing. The average import of sugar into the Irish Free State during the years 1924 to 1927 was 82,000 tons per annum. That, I think, fairly represents the total consumption of sugar for all purposes in the Free State. The number of private families in the Free State, according to census returns, is 622,687. In addition to that number there are 181,000 odd individuals—I do not mean odd in the sense of being peculiar. There are, at any rate, 181,000 and somes hundreds of individuals living in religious communities, institutions, barracks, hospitals, and in other forms of solitary or community life.
The average consumption of sugar in the Free State is .55 cwts. per  annum per person. The amount of sugar, therefore, consumed elsewhere than in private families is just under 5,000 tons. We are thus left with 77,000 tons of sugar, which is consumed one way or another by the 622,687 private families in the Free State. This gives an average consumption per household of 2.48 cwts. of sugar per annum. The corresponding estimate which I have derived from the cost of living figure is 4½ lbs. per week, 234 lbs. per year, or 2.09 cwts. The figure which I derived from the national aggregate consumption is 2.48 cwts. per annum, almost a difference of .4 cwts., or 45 lbs. of sugar. As the figure derived from the Cost of Living Committee's report is so very much lower, I think it is a tolerably exact figure, indicating the consumption of sugar in all its forms in the poorer households of the community.
I am not even certain that I am justified in taking too low a figure. I think it is too low, but it is one, at any rate, with which I can back up other figures and calculations which I will submit now, and for that reason I am selecting that figure. We have to remember that in the smaller households, in the country districts particularly, tea is a staple article of diet. It is taken at all meals. Very often it is the substitute for the principal meal. That is so in a considerable number of cases. I believe, therefore, that as the consumption of tea in the smaller households is very much higher than among the wealthier sections of the community, the consumption of sugar in these households is correspondingly higher. I am not bringing that forward in support of my case. I am relying entirely on the figures which I have given to the House. I submit that the normal consumption of sugar among working-class families in this country is 2.09 cwts. per annum. Under the Minister's proposals that involves an additional tax of 9/9 per annum upon the households of industrial workers, small farmers, and agricultural labourers.
The tax upon sugar is not the only additional tax upon the community which the Minister proposes in this  Bill. Under Section 5 we have a proposal to increase the tax on petrol. I think this impost is regarded by many members in the House as being less serious from the point of view of the farming community than the sugar tax. I am not certain that that is the correct view. When I take into consideration the amount of money the Minister proposes to get from this tax, £450,000, I feel that a very considerable proportion of the tax will be passed ultimately to the consumer. As the agricultural community consumes by far the largest portion of manufactured goods and imported foodstuffs, I believe that a very considerable proportion of the tax upon petrol is going to fall ultimately on the shoulders of the agricultural community. The Minister proposes to collect £450,000 as a result of the petrol tax. If we ascribe one-fifth of it, or £90,000, to the motoring which is done purely for pleasure I believe we shall not be under-stating the proportion of it which is so derived, and I should say legitimately derived. I have no objection whatever to taxing the person who motors purely for pleasure. I have not any objection to taxing luxury motorists.
Allowing for that £90,000 which is to be collected from pleasure-seeking motorists, the remaining £360,000 is a charge upon production, an encroachment upon the standard of living of the people, absolute so far as the urban dwellers are concerned, and partial so far as it affects the agricultural community—partial because of the relief which the Minister proposes to give by way of an increased agricultural grant. Of the £360,000 about £120,000 is, I presume, derived from petrol used in the transport of passengers and £240,000 is realised through the transport of goods. I propose to treat the whole sum of £360,000 as a burden upon the community. During the course of his financial statement, the Minister, defending this tax in advance, stated that after all it was not going to mean very much because the companies were not going to raise fares and this tax was not going to be  passed on. It is quite true that the bigger passenger-carrying concerns in the Free State are not raising their fares. How long are they going to refrain from raising their fares? They are not raising them immediately because they have another purpose in view. They know that a large number of the buses owned by private individuals, a large number of which are one-man concerns, are finding it very hard to make ends meet. They know that the imposition of this tax is going to be a crushing blow to these competitors of theirs.
Therefore, the Irish Omnibus Company, the Great Northern Railway Company, and the Dublin United Tramways Company are not going to raise their fares at present. They are going to drive their competitors out of business first. When they have established themselves in a monopoly position, they are going to make the passenger pay, not only for this increased tax on petrol, but also for the losses which they suffered in driving their competitors off the road and securing the monopoly. The Minister by approaching these bus companies, in the first instance, and securing that promise from them played into their hands. In telling the community as a whole that the buses need not raise their fares to their passengers if this tax was imposed, he was helping the policy of the I.O.C. and the other people who are attempting to establish a transport monopoly in this country, because he made it impossible for the smaller competing concerns to raise their fares. If they raise their fares, the public will say: “The Minister has said that there is no reason why these fares should be raised,” and they will naturally feel aggrieved and go elsewhere. The traffic will be diverted to the tramways, the railways and the big bus companies, and the smaller concerns will be driven out of the field. That is the purpose of the Minister.
The fact is that, according to the returns, none of the bus companies is making a profit. The I.O.C. made huge losses last year. The buses run by the G.N.R. Company lost last year. If, with untaxed petrol, the bus concerns  lost last year, how can they, with taxed petrol, make a profit this year? Their working costs have gone up and they are not, as the Minister for Industry and Commerce would probably agree if he were here, in this business for pleasure. They are in it for profit, and if their working costs are to be increased they are going to recover those costs in some way from the community.
I suggest that the way they are ultimately going to recover them is by creating a monopoly and then holding the community to ransom. Before that comes about, there is going to be a war fought between them and the smaller buses. The people who will have to pay this tax immediately are the workers in those concerns because bus companies cannot continue to run at a loss. They have got to pay the tax on petrol which the Minister is collecting from them and one way in which they will seek to make good that tax on petrol will be by a reduction of wages or staffs, or in some way like that, which will throw the whole burden of this tax back upon the general community—upon the farmers, the workers and the shopkeepers of the city. The farmers, the shopkeepers and the members of this House should not be under any misapprehension. If the Minister is going to get £360,000 out of the business of transport of passengers and goods, then the community and nobody else—certainly not the bus companies or the petrol companies—are going to pay that £360,000. When the Minister hands back to the farmers £750,000, there will be included in it a large part of the £360,000 collected from them through the petrol tax.
Let us see exactly how much this petrol is going to mean to the average householder in the Free State. According to the census return, there are 622,678 private families in the Free State. Those account for about 95 per cent. of the population. I am taking it that the burden imposed by the petrol tax will be distributed. There is no other way in which you can deal with a problem of this sort. The burden of that tax is eventually distributed over the whole body of the community. If we are to divide the £360,000 which the Minister is going to  procure by a tax upon the transport of goods and of business men, workers, shopkeepers, farmers going to market and others—if we are to divide that £360,000 by the 622,678 families which are in the State, we find that the average burden imposed by the petrol tax is at least 11/6 per household per annum. That is the average figure for the whole of the Twenty-Six Counties. In the case of householders living in remote parts of the country, distant from the principal seaports and the distributing centres, the tax will be much more.
So far as the poorer districts are concerned, I believe it will be even greater because the tax upon petrol is going to mean that considerably more traffic will be sent by rail and, in the case of towns remote from the railways, there are going to be increased charges for completion of the journey by motor. At any rate, we have got two figures to consider. We have the 9/9 which is going to fall upon the average household as a consequence of the tax upon sugar, and we have the 11/6 which is going to fall upon the same household in consequence of the tax upon petrol. We find, therefore, that in this Finance Bill the Minister is going to impose an additional burden of 21/3 upon the average householder in this country. What are we going to receive in exchange? So far as the skilled and unskilled labourers are concerned, nothing. So far as the small farmers—fifty per cent. of the farmers of the country— are concerned, very little. I should like to deal with that also at length.
In the Twenty-Six Counties, according to the report of the De-rating Commission, there are 117,000 holdings having an aggregate area of 1,115,000 acres and an aggregate valuation of £254,000. The average size of these holdings is 9½ acres and the average valuation of these buildings is 4/7 per acre. The average valuation of an average holding of this type is therefore, about £2 3s. 6d. per annum. The aggregate valuation of all the agricultural land in the Twenty-Six Counties is £7,556,000. The additional grant in relief of rates which the Minister will, I suppose, shortly submit to the House,  is £750,000 or just under 2s. in the £ per £ of valuation. The average relief which will, therefore, be afforded by this grant to the farmers holding 10 acres or less will be 4/4 per annum, against which they will be taxed to the tune of £1 1s. 3d. per annum. There are 40,780 such small farmers' families, numbering 203,900 souls, in the Irish Free State.
Again, let us take the farms of from £4 to £7 valuation. According to the De-rating Commission, there are 52,881 such holdings in the Free State. They have a total area of 1,116,574 acres and an aggregate valuation of £302,160. Their average area is 21 acres and their average valuation is £5 15s. According to the census, about 60,000 families live on such farms. These families will be relieved of rates to the extent of 11/9 per holding, but will be taxed in return to the extent of 21/3.
Again, take the case of the farm of from 15 to 30 acres. There are, first of all, 44,516 holdings in the Irish Free State, having an aggregate area of 1,495,417 acres, and an average area of 33 acres. There are also 40,346 holdings, having an aggregate area of 1,112,194 acres, and an average area of 21 acres.
For the purpose of finding out what benefit these farmers of from fifteen to thirty acres are going to derive from the Minister's proposals, I propose to take the average of these two classes, because the class which gives me the average area of the farm as 33 acres, is fairly representative of the farmers at the top end of the scale, and the class which gives me the average area as 21 acres is fairly representative of those at the bottom of the scale. The aggregate valuation of these 84,682 holdings is about £900,682. Their aggregate area is 2,607,000 acres, and their average valuation is about 7s. per acre. Their average area is 30.8 acres. There are altogether 75,000 families living on holdings of from 15 to 30 acres. In the case of those living on 15 acre farms, they will be relieved to the extent of 10s. 6d., and in return will be taxed by the Minister by just twice that amount. In the case of the 20 acre  farms, the householders would be relieved to the extent of 14s. and taxed 50 per cent. more. In the case of the average 30 acre holding, whose valuation is £10 10s., the Minister will give to the farmer about 21s. with one hand, while he picks his pocket to the tune of 21s. 3d. with the other.
It is clear therefore that so far as farmers who have up to 30 acres are concerned, none of them will benefit by the Minister's proposal. These farms support 150,267 families out of a total farming population of 268,930 families.
Under the Minister's proposal about 56 per cent. of the farmers will not benefit at all. In fact some of them will lose very heavily. I do not propose to weary the House. I have shown, I think, fairly clearly, and I think irrefutably, that so far as 56 per cent of the farmers of the country are concerned, they are not going to benefit, but instead are going to lose by the proposals which the Minister has submitted to the House in this Bill, by the proposals to impose an additional duty on sugar and to tax petrol in order to provide £750,000 for the relief of rates.
In the debate on the general financial resolution, I think I showed fairly clearly, and I think any Deputy who has examined the matter since for himself will agree with me, that the only people who are going to benefit by the Minister's proposals are the big farmers and the big graziers, men with farms of 200 acres and upwards, with valuations running from £200 upwards. They are going to benefit very substantially—make no mistake about it. Let Deputy Sheehy, and those who are here representing the congested areas, and the small farmers in general, realise that if the big farmers in certain districts, the graziers in Meath, in Kildare and elsewhere, are going to benefit, they are benefiting at the expense of their poorer neighbours and the small farmers, the people who really need relief in these hard times.
Of course that is only in keeping with the general policy of the Minister. As has been said often since the Government came into office, they  have made the rich richer and the poor poorer. To those who have much they have given more, and from those who have little they have taken away.
If we wanted any further proof of that, we would find it in Section 28 of the Bill.
I do not know whether the House paid any particular attention to the case which the Minister made for Section 28, but in explaining it to the House he started off by saying that this section was designed to relieve the Agricultural Credit Corporation of any liability for excess profits. That was his first statement. A body like the Agricultural Credit Corporation is intended to fulfil a long-felt want. It is ostensibly supposed to provide financial accommodation for the farmers at reasonable rates of interest. But these rates are not nearly so reasonable as they might be, if the Agricultural Credit Corporation was not so much under the thumb of the banks, and if the Minister, on occasions, as Minister for Finance, intervened in order to ensure that, whenever the Agricultural Credit Corporation made an issue of stock, the price of issue would not be determined beforehand by banks at such a level as would maintain their rate of interest on agricultural loans in this country at not less than 6 per cent. per annum. However, this is a matter that would more appropriately arise in the debate on the Minister's own estimate.
As I say, at the beginning, the Minister stressed the fact that the main purpose of the section, as I gathered, was to help the Agricultural Credit Corporation. But the main purpose of the section is to do nothing of the sort. The main purpose of the section is to continue for a further period of three years the exemption which, under Section 28 (a) of the Finance Act of 1920, certain public utility companies enjoy in relation to the Corporation Profits Tax. Section 28 (a) of the Act of 1920 makes the Corporation Profits Tax not to apply to a public utility company limited in respect of price or dividend. By Section 33 (2) of the Finance Act of 1929 a public  utility company is defined as meaning such company as is mentioned in paragraph 6 of Section 52 (2) of the Finance Act of 1920, which defines it as a company which carried on wholly within the United Kingdom any gas, water, electricity, tramway, dock, or canal undertaking. First of all, I am not quite clear upon this point. It would seem to me that the drafting of the Finance Act of 1929 was faulty, in so far as under sub-section (2) of Section 33 of that Act a public utility company is defined as meaning such company as is mentioned in paragraph 6 of Section 52 (2) of the Finance Act of 1920. The definition there is by reference to Section 52, sub-section (2), of the Finance Act of 1920, and the terms of that Act are quite explicit, because it defines a public utility company as a company which carried on wholly within the United Kingdom any gas, water, or electricity, tramway, dock or canal undertaking. I do not know what the position would be of any company not definitely a Free State company if it were to challenge the Minister's right to collect Corporation Profits Tax from it. I am sure lawyers would reap more profit from such litigation than the Minister would. I think the drafting of that particular section of the Act ought to be looked into.
But to come back, it will be noticed here that Section 28, paragraph (a), proposes to amend Section 33 of the Finance Act of 1921 by the substitution of 34 for the figure 31. That is, to continue the exemption of certain public utility undertakings in this country. Public utility undertakings are defined as undertakings for the manufacture and supply of gas, the carriage of passengers by tramways, and the manufacture of electricity. The two companies with which I am concerned are the companies which have a monopoly of the supply of gas and the supply of electricity in the City of Dublin. The Corporation Profits Tax does not apply to a company such as the Gas Company, whose dividends are limited so that they bear some relation to the price at which the gas is sold. Under this section I think that the Dublin Gas Company will be exempt from Corporation Profits Tax. I presume that the  grounds upon which the Minister will justify that would be to say that the dividend of the company cannot exceed a certain rate so long as its charge for gas is not below a certain figure. Of course, public utility companies and large corporations, when they come to publish a balance-sheet and declare a dividend, do not as a general rule make a complete show down of what their actual profits are. We had a case in London the other day where it was admitted that it is the general practice of those huge undertakings to accumulate hidden reserves and thereby not to disclose their full profits immediately. One of the ways in which hidden reserves can be accumulated and huge profits remain undisclosed and, to a certain extent, a fair share of those profits distributed, also indirectly, to certain privileged persons, is when an undertaking of this sort goes in for wholesale extension of its plant and machinery, very often before this plant and machinery is worn out. In that way a considerable proportion of the real profits of the company can be distributed among friends of the company, amongst those who are shareholders in subsidiary undertakings, amongst those who, while they may be on the board of the company, may be also interested in other companies which supply these public utility undertakings with the plant and raw materials for the manufacture of their products. So that really this question of the limitation of dividends, ostensibly in the interests of the consumers, very seldom affords the consumer any real protection against the monopoly.
There are many ways in which this monopoly deals unfairly with the consumers but I am not going to enter into them now. I am merely addressing myself to the question of whether, in view of the fact that its dividend is limited in relation to the price which it charges for the commodity which it produces, there is any case for exempting that particular company from excess profits tax. It is in a monopoly position and is making much higher profits than were dreamed of when the original Bill was before Parliament. I think it ought  not to be exempted. What I have said in relation to the Gas Company applies also to the tramway undertaking. I do not think any clear case can be made for exempting a monopoly concern from the operation of the Corporation Profits Tax. It is only one way in which the community as a whole can recover some share of the proceeds of the monopoly from the monopolist.
I was going to say something in relation to Section 32, but in view of what the Minister said in introducing the Bill I am going to let that stand for the Committee Stage. In the meantime I think the Minister in his reply ought to give us some fuller information as to the funds which are now being wound up in consequence of the Vocational Education Act and other Acts which the Oireachtas has passed. I should have thought that this diversion of the annual income derivable from the surplus of the Irish Church Temporality Fund into the Exchequer would have been one of the matters to which the Minister would have referred in his financial statement. According to information which the Minister furnished me in reply to a question the surplus from the Irish Church Temporality Fund arose from the property which was placed at the disposal of the Parliament of the late United Kingdom by Section 68 of the Irish Church Act of 1869. The Minister stated it is not possible to state what the capital value of that surplus is but he stated it was originally valued at 6½ million pounds and has since been considerably reduced. According to him the income from the invested fund in the year 1929-30 amounted to £77,909 and in the year 1930-31 to £79,465. The income seems to be a growing one. It was originally applied towards the payment of the annual statutory charges on the Fund. According to the Minister's statement, however, the income has been in excess of these statutory charges since the year 1912. Consequently I take it in normal circumstances any excess income which might arise from the fund over and above the statutory charges which were made upon the fund would be  applied to the reduction of capital debt. That is a point of view which has often been advanced in this House by Deputy Flinn and others, where monies accrued in this way they should be used to reduce the capital debt of the State and thereby make available, from year to year for the ordinary social services of the community, a greater portion of our annual income from taxation.
I do not want to go into the matter any further at this stage, but I do hope the Minister for Finance will give the House some fuller information regarding the funds which have been wound up by recent legislation, and let us know what provision he proposes to make to replace the money which he is now diverting from these services into the Exchequer.
There is just one other question I would like to touch upon before I sit down, and that arises in connection with the discussion which took place in another place the other day. During the discussion in the British House of Commons on the Unemployment Fund, Colonel Wedgwood, who was a member of the previous Labour Government, and enjoys a position of great influence and prestige in the British Labour Party, made a suggestion which I think a Minister who has a certain responsibility in this House for the Currency Commission ought to advert to. He said this: “Their manufacturers had to compete with people abroad who had written off their debts and who were bound to cut them out of the trade of the world.”“We shall,” he said, “have to get rid of something of our national, municipal and private debts in order to give the country a chance of starting again on equal terms with other countries, and take advantage of any improvement in trade that may come hereafter as a result of the Hoover proposals.”“We shall have to get rid of something of our national debts”! Sir Robert Horne, a Conservative member, who was an ex-Chancellor of the Exchequer, described this as a very remarkable pronouncement, and said it was the first time the realities of the situation had been openly faced. Colonel Wedgwood had suggested desperate remedies. He had described the inflation  of the currency as the only method by which they could save the situation if they were to save their wage scales. That was a severe remedy. He (Sir Robert Horne) would not say it might be a resource to which they might not have to turn if they went on as they were going, or even if they allowed things to drift. Mr. J.H. Thomas (Dominions Secretary) replying, agreed that sound finance was essential. It would be extremely dangerous to let it go forth that any section was in favour of an unbalanced Budget.
The point I want to make is this, that our whole currency system depends upon something like £7,400,000 of British securities that we have. If there is going to be any re-valuation of the British pound—if the British Government are going to take Colonel Wedgwood's advice and get rid of something of their national debt I hope that the Minister will take time by the forelock and realise and turn into cash this seven and a half million pounds of British securities which the Currency Commission holds. Personally, I do not believe that he should re-invest them. I think that, even if we lose a certain amount by not re-investing, the feeling of confidence, security and stability which would be created by the knowledge that at least our currency was upon what is, as compared with the gold exchange standard, a solid basis would amply compensate the Minister for any loss in revenue which he might suffer in consequence of the fact that he had realised or compelled the Currency Commission to realise these investments in British securities. There is a clear indication in the discussion which took place in the British House of Commons that this question of writing off as they say—of inflation as it really is—is receiving the serious consideration of a number of influential members in that Assembly and I think that the Minister charged to a certain extent with the responsibility in this House for the Currency Commission ought to direct the attention of the Currency Commission to that fact and ought to ask them to consider seriously whether the time has not come to realise those British securities.  I suggest not to invest the money elsewhere, but to bring the gold home if he can get it. Failing that he should re-invest these securities in some other State where the prospects of devalorisation of the national currency does not arise.
Mr. Davin: A certain section of this Bill makes provision for the remission of duty on sugar over a certain quantity manufactured within the State. I would like to know from the Minister for Finance what is the estimated cost to the taxpayers of the State for putting that section into operation during the current financial year. Certain questions affecting the beet sugar industry were raised in the House four or five weeks ago and the Minister for Agriculture, for apparently good reasons at the time, thought or was of the opinion that a discussion in the House at that particular period might prejudice certain negotiations which were then going on. I have read certain statements which were made by the Minister since that date at public meetings in the country, in the course of which he made certain candid admissions. He said the Belgians have behaved well by the country in establishing a factory in all the circumstances. He went on to say then quite impartially that there was no question about it in his opinion that they could have given a better price for beet this year. He also said that he was satisfied that this dispute would be settled on two conditions, namely, that the parties concerned were organised and that they approached the matter in the spirit of co-operation and fair play. It is particularly in connection with the latter statement that I want to hear something from the Minister for Finance, the Minister for Agriculture or some other Minister speaking for the Government.
An Ceann Comhairle: How does the Deputy connect that with the Finance Bill?
Mr. Davin: There is a section in this Bill which makes provision for the remission of duty on sugar manufactured in the beet factory at Carlow.
An Ceann Comhairle: A new remission?
Mr. Davin: It is part of the financial policy of the State, as the Minister for Finance knows, and part and parcel of the yearly finance Bill since the subsidy was first voted by this House under the terms of the Beet Subsidy Act, 1925. I think that this House is entitled to some explanation from some Minister regarding the present position of the Government in any negotiations that may now be going on in connection with this whole dispute. There is no doubt about it, whether we be beet-growers or workers or part and parcel of the general taxpayers of the country, that this dispute has been provoked by the action of the directors of the beet factory in definitely challenging the right of the farmer or grower to organise for industrial purposes, challenging the right of the Beet Growers' Association who represent the majority of the beet-growers of the country, small and large, to act on behalf of the growers with the directors of the factory in protecting the price conditions paid from time to time by the factory to the growers. There is no doubt about it also that their action in provoking the present dispute was quite deliberate. In fact repeated communications were addressed to the directors of the factory at the end of last year to open up negotiations for the current year or for the remainder of the subsidy period. The directors of the factory quite deliberately refused to meet the representatives of the Beet Growers' Association until they felt fairly certain that the farmers who had been growing beet had been prepared to put in the crop for the present year. Then they came along suddenly and sprung a proposal for a reduction of 8/- per ton in the price of beet. They have now definitely declined to recognise the Beet Growers' Association. That is a challenge to the right of collective bargaining, and if the Minister for Agriculture or the Minister for Finance have any sympathy with the farmers in their right, as I believe they have a right, to organise for industrial purposes, then it is their duty to tell this House, and particularly the people concerned, what is  the present position, so far as the Government is concerned.
An Ceann Comhairle: There is an estimate for the payment of the sugar beet subsidy. Does this question arise here rather than on the estimate for the subsidy? I do not understand how the Minister for Finance is responsible in this particular case, considering that there is an estimate on the Paper which must be discussed at an early date.
Mr. Blythe: If you, sir, give me as much time to reply as you are giving to Deputy Davin, even though it is out of order, it will do.
An Ceann Comhairle: There is an estimate for a sugar beet subsidy. Is not that the proper place to raise this question? Will it be raised again on that estimate as well as on this Bill?
Mr. Davin: The estimate does not cover the remission of duty. There are two ways of putting money into the pockets of the directors. One is by the remission of duty on sugar manufactured in Carlow and the other by the direct payment of a subsidy.
An Ceann Comhairle: Will the Minister meet that point of the remission of duty in this particular section?
Mr. Blythe: There is no new remission.
Mr. Davin: Sub-section (4) of Section 6.
An Ceann Comhairle: That does not remit any duty on the sugar beet factory at all.
Mr. MacEntee: It raises the whole question.
An Ceann Comhairle: A customs duty is being imposed and an excise duty also on the sugar beet factory. I realise that a debate on the matter will be in order at some time. Whether it is in order on this Bill rather than on the estimate is what I should like to establish. Whether we are going to have one debate on the matter on this Bill and another on the estimate, and whether the  debates are going to be identical, I should like to know from the interested parties.
Mr. Davin: I thought I was entitled on this section, which is certainly going to cost the taxpayers something, to ask for a statement from the Minister as to the present position in regard to the negotiations that have been going on, more especially in view of the very pronounced statement made by the Minister for Agriculture at a recent meeting in the country.
Mr. Blythe: If you will allow me, sir, I am prepared to answer the Deputy.
Mr. Davin: This sub-section in Section 6 is part and parcel, I admit, of the agreement signed between the Government and the directors of the factory subsequent to the passing of the 1925 Act. But, it is within the right of Deputies from year to year to say whether this should remain in the Bill or not. As long as the present dispute lasts, and the Belgian directors of the factory refuse to recognise the right of the Beet Growers' Association to bargain on the question of price, and as long particularly as these Belgian directors refuse to pay an economic price for the raw material. I think I am quite justified in opposing that particular sub-section in the Bill.
Mr. G. Wolfe: There are one or two questions I should like to ask the Minister. In fact, I have been requested to bring certain things to his notice in regard to the collection of sur-tax. I think that comes under Section 2. There is a very great want of knowledge as to the basis on which this sur-tax is charged. Everybody who is honest wishes to pay the correct amount, and to do it at the proper time, but it is extremely difficult to understand it, and I have been asked to elicit information from the Minister on the subject. An individual of my acquaintance who has the misfortune, or the good fortune as some people would call it, to pay sur-tax made a return on 5th April this year, and he will pay tax on that on 1st January, 1932. That is, of course, all right. His  figures were agreed to as being perfectly correct. He was rather astonished, however, on receiving from the Revenue Commissioners a request to pay on a considerable sum that he had not got. It was natural that he was a little astonished at this, as anybody would be. He requested information, but the information was given in such an involved manner that he was more confused than he was before. It was to the effect that his income had fallen £300 or £400 under what was returned on 5th April, 1930, and that they halved that £360 and charged him on half of what he had paid previously in the year 1930. That is a most extraordinary arrangement, and contrary to all ideas of justice. Perhaps the Minister will be able to give an explanation of it. As a matter of fact, neither this individual nor myself can really understand it, although we tried to get an explanation from the Commissioner. We only became more fogged as the information proceeded. Perhaps the Minister will be able to make it clear. At any rate, it seems to be extremely unjust that you should be taxed on what you have not got. It is perfectly right that you should be taxed on what you have got. No one can say anything about that, but to be taxed on what you have not got, on an imaginary thing, seems to be beyond the limits of justice. Perhaps the Minister will inquire into that matter.
I should also like to refer to the price charged for sugar and tea, which more or less comes under the head of taxation. I see tea in the shops marked at 3s. per lb. That seems to me to be monstrous as there is no tax on tea in this country. The growers of tea in India cannot find a market for it. I have acquaintance with some people in Ceylon who can get absolutely nothing for the tea they produce and they are on the rocks. I have myself been offered the very best tea at 1s. 2d. per lb. Here I see it marked at 3s. and 3s 6d. per lb., so that there must be some infamous over-charging somewhere, which should be inquired into. Then as to sugar. Those who grow the best sugar in the West Indies  are also on the rocks, as they can get nothing out of the sale of sugar, while a considerable price has to be paid for it here. The matter is beyond my comprehension and needs some inquiry. The working classes, of course, will have nothing but the best tea. They will not buy tea unless it is marked at a high price, as they think it is not good. That is what keeps up the price of these things. Unless there is a high price charged for them they will not have them.
Mr. J.T. Wolfe: I wish to thank the Minister in the first instance for getting rid of a very real grievance by the amendment which he has made to Section 27. That amendment has got rid of a very great hardship and a real injustice. In many cases the amount of duty involved would be something like £1, but in addition to that £1 certain expenses had to be incurred, because solicitors cannot live on air alone, and to pay that £1 a person who succeeded under a settlement and not under a will or an intestacy had also to pay a sum of two guineas in order to get liberty to pay the £1. I put it to the Minister, as he has got rid of that injustice, that he should make the section retrospective. I do not at all suggest that in the case of duties already paid the amount should be refunded. That would be impossible and under the circumstances entirely impracticable. In many cases, £2 or £3 duty would be got at an expense of £2 to the individual and at an expense of £3 to the State. I would not ask that. Subject to that, I say in regard to these outstanding small items, which should never be collected, now that the principle has been admitted, which was all along apparent to everybody, that this section should be made retrospective.
I wish I could thank the Minister for Part I. of this Bill dealing with income tax. As I have been elected to this House to support the Constitution, I cannot in all conscience support sections of this Bill which are flagrantly in violation of the Constitution. I refer to Sections 2 and 4 of the Finance Bill. They are not merely without precedent, but they are against the  Constitution, and I am sure no one knows that better than the Minister and those advising him. What do they mean? They mean this, that during the last year there were two people who had pluck enough to stand up against the Revenue Commissioners, and they beat the Revenue Commissioners. In one case the matter is still sub judice or, at all events, under appeal by way of case stated from Circuit Court Judge Shannon. What do the Revenue Commissioners say? They say we do not care whether you beat us or not, we will go to the Dáil and get a section passed that will reverse the decisions of the courts. Section 4 is in exactly the same position as Section 2. Another taxpayer went to the Court of Appeal. He was charged with certain penalties. The Court of Appeal found in his favour, and the Revenue Commissioners said: “We care no more about your Courts of Appeal than we do about Circuit Court Judge Shannon. We have as much contempt for the one court as we have for the other, and with the assistance of the Minister for Finance we will tear up the decision in both courts, and make this thing retrospective.” That is not only a violation of precedent, but of practice in every country. I respectfully submit this is a clear and open violation of Article 43 of the Irish Free State Constitution. That Article states:—
“The Oireachtas shall have no power to declare acts to be infringements of the law which were not so at the date of their commission.”
Where are we? Are we to pass sections of this Act that would on the face of them be ultra vires? I put it to the Minister that he is creating a precedent which is not merely against the Constitution but is also against the best interests of this State. I think the passing of these two sections in their present form will only tend to bring the State and our legislation into contempt. I would most strongly urge upon the Minister not to do this. I would ask him not to make Sections 2 and 4 retrospective. I would ask him to make them clearly not retrospective. Then he will be acting within the terms of the Constitution, and he will  be doing what precedent says he can do.
I would submit the meaning of Section 2, in plain language, is that a court has held that an executor of a deceased is only liable to account for the deceased man's unpaid income tax for three years and not for six years. The Revenue Commissioners say we will make that six years, and we will run in this section and reverse the decision of the judge. I would say in regard to this Section 2 that as a matter of fair play it is impossible for the executors to go back without very great inconvenience and expense to the estate, and I would submit that no change should be made in the law in regard to the liability of the executors as regards unpaid income tax. In the absence of the dead man the tendency of legislation should be to reduce the present period of three years to one year, which is at present for decision and which is quite arguable and has yet to be decided, rather than to go back and increase it and back up the Revenue Commissioners to six years. It is a monstrous injustice and it ought not to be done, and it is only putting additional power into the hands of the Revenue Commissioners.
I quoted here last year a letter from the Revenue Commissioners telling a widow how the executors were to be treated in her case and how she and her children were to be treated. Looking over the schedule of assets it was found that a sum of £140 had been on deposit and on the strength of that a charge of fraud was framed and levied by the income tax officials against the dead man. There was not a word of truth in it. The money was put in the bank three days before he died. The man died in Cork hospital and bills and money unexpectedly came in and his executors deposited the money in the bank. On that alone a charge of fraud was based against the dead man and upon that foundation and that only the order went forth from Dublin Castle to the executors that they should employ a firm of auditors to examine into the dead man's affairs. And the name of the firm of auditors had to be submitted to the office in Dublin Castle so that the firm of auditors might be  suitably instructed. They must be auditors approved by Dublin Castle and if the auditors do not get that approval and if they do not do what Dublin Castle wanted them to do and if they are not at the beck and call of the Revenue Commissioners, then they are to be black listed. If the auditor has the pluck to do his duty on this case he is in danger of being dismissed and that has occurred to my knowledge. The very telephone wires in Dublin Castle are used for the purpose of levelling the charge of fraud against the dead man. I have myself known other instances of that kind also. I suggest in all fairness to the Minister that even if Judge Shannon's decision is reversed it should not be made retrospective. I submit to the Minister that he ought not to reverse the judgment and that he ought to consider the matter from the point of view of the widow and the orphans. It is putting a monstrous burden upon them to ask that when the mouth of the one man that could speak is closed in death that it is most unjust that this enormous expenditure should be undertaken under the direction of the Revenue Commissioners in order to try and resurrect and fake up accounts and pay duty that should never be paid to the Revenue Commissioners. I suggest that the Minister should delete Section 2.
As regards Section 4 I agree it is on a different level. There is a state of affairs there disclosed in a case which the Minister had before him when he got this Bill drafted which it may be necessary to meet. Section 4 deals with a live man who is able to answer for himself but I say that as regards Section 4 where he is against the Constitution, is against fair play and is against precedent the Minister ought to make it clear that it shall not be retrospective. If he does that I would say then it is for the Minister to say whether the law should be altered so as to make Section 4 operative in future within reason. But I do not know how it can be used and I am afraid it cannot be used well. But still such as it is I agree that people who owe income  tax ought to pay it. I suggest that these amendments are in violation of the Constitution. As a supporter of the Constitution I cannot support them.
Mr. Flinn: I think the point taken by Deputy Wolfe has been well taken in relation to retrospective legislation. On many occasions since I became a member of the House I have in the House called attention to retrospective legislation. Deputy Wolfe has pointed out a case where retrospective legislation, in his opinion, and he speaks as a lawyer with some knowledge on these matters, is a direct violation of the Constitution. What I would point out is how this Bill has been introduced to the House. The Minister for Finance got up and made that usual semi-inarticulate statement which we are getting accustomed to from members of the front bench when introducing Bills. He made no allusion of any sort, kind or description to the fact that he had inserted in the Bill retrospective legislation of this kind, and retrospective legislation which was a violation of the Constitution. I rather gathered from him in his answer to Deputy MacEntee that the Second Reading stage of the Finance Bill is, in his opinion, a purely formal stage: that it requires no explanation from Ministers either of old or of new matters in the Bill, and that the House as such requires to have no understanding of the fact that there is new matter introduced into the Bill, or why it is introduced before we are asked to accept the principle of the Bill which is discussed on Second Reading.
I suggest to the House that from a Minister for Finance conduct of that kind in relation to a Finance Bill is utterly irresponsible conduct in relation to finance. When under examination by Deputy MacEntee, and since in the explanations which we have received from Deputy Wolfe, we discovered from the Minister that really fundamental and serious alterations have been made. It is grossly to his discredit, and it has been grossly disrespectful to this House. It is a gross dereliction of his own duty as Minister for Finance that he should have introduced the Finance Bill in the careless,  casual and inarticulate manner in which he has introduced it. If the statement made by Deputy Wolfe is correct, then, unfortunately, it is typical of a great deal of the respect for the Constitution, respect for the rights of the subject, respect for the existing law and respect for the authority of the courts which is part of the conduct of this Ministry.
I have deliberately pointed out in the past, and I deliberately point out again now, that under the actual retrospective legislation in this House in relation both to finance and to contracts, the position is that there is no contract existing in this State between any individual in this State or between the Government and any individual in the State, which cannot, in accordance with the actual precedent of their previous conduct, be rendered null and void by legislation in this House. There is no security for any existing contract. According to Deputy Wolfe there is no security that a man may not now at this stage be made to have committed a crime in 1922 and 1923. If that is the sort of responsibility with which Ministers approach the sacred Constitution, I certainly think that some other name than the Constitutional Party should be put forward.
As to alterations generally in relation to income tax, I am in agreement, too, with Deputy Wolfe to this extent: that there may be changes desirable. They have to be argued and justified upon the facts, but we are not entitled by inserting 1918 in an Act which was passed in 1925 to make a man retrospectively liable for something which the courts of this country said that neither in 1918 nor in 1931 was he, in fact, liable: that anyone who does that tears up, not merely the fundamental law of the State, but tears up, or pulls down if you like, the basis of respect upon which the average citizen in this country can be required to obey and respect the law. These are revolutionaries and anarchists, pure anarchists. The principle of anarchism is a disrespect for law as law. It can be shown in a small particular or in a large one. I say to the House deliberately that in relation to retrospective legislation in the past, and  taking Deputy Wolfe's definition of this clause as correct, in actual practice in this Bill their attitude towards the existing law is purely anarchic; and as long as they are there carrying on, administering and introducing law in that spirit, no one who has respect for the Constitution, and no one who has respect for the law, should have respect either for them or for their laws.
I think the lesson which the Minister has received to-day from one of his own supporters should show him that this ought to come to an end. This is not the only piece of retrospective legislation. Nothing that we can do now, unfortunately, unless we go back and destroy the whole of the retrospective legislation, can get away from the consequences of the retrospective legislation already introduced. We have done it time after time. We have said: What is now has to be taken as if it had been different, that the decision of the courts shall be interpreted to mean the exact opposite to what the decision of the Court is. How anyone is going to carry on, to enter into contracts or into commitments in the future, while things of that kind occur, I do not know.
There is not a pension of any single officer in the country which is secure, which cannot in a perfectly legal manner, following the precedent of the Minister, be destroyed. There is not any contract which they have entered into which cannot be declared to have been void ab initio. I hope that on the Committee Stage the Minister will at least make a deathbed repentance as Finance Minister, and not in the last stages of his existence in that position; that in articulo mortis, at any rate, he will refuse to persist in the course of conduct in which he, as Minister for Finance, has succeeded so far in degrading any technical respect there can be for the law as administered here.
Part II. deals with minerals, hydrocarbon light oils. I am of opinion that the position is satisfactory, but I want to get an assurance that it is. When this clause was introduced it was introduced specifically for the purpose of dealing with petrol, but as happens in all these cases, other things were  incidentally dragged in—at any rate the equivalent of petrol used for other purposes. Two oils were dragged in under this careful technical definition, white spirit and turpentine, which are used for industrial purposes. At first the Minister told us—a natural mistake probably—that turpentine was not included in the tax. He then discovered that, in fact, it was, and that white spirit was included all the time was admitted. I am not saying that he specifically exempted turpentine. He agreed to exempt turpentine from the tax, but there were certain technical difficulties in the way of administration in exempting white spirit as well. All I want is an assurance that clause 2 of Section 5 completely exempts turpentine and white spirit when used for the purposes of manufacture. Can we take it that that is so?
I am asking the Minister whether we can take it that white spirit and turpentine are now exempt from tax when used for manufacturing purposes. If the Minister prefers to remain inaudible—he having started by being inarticulate—when it comes to the Committee Stage we will get an answer. There is one rather curious point in relation to white spirit which the House, perhaps cynically minded, a bit in regard to taxation, will be glad to know is to the credit of those concerned. I was in fairly close touch with this particular matter. The people who came to me and asked for an exemption of white spirit were, curiously enough, those who did not use it. The people who came to me were some of the largest manufacturers of polish in this State and they did not use white spirit. They came specifically to have it exempted on the grounds that it was being used by small manufacturers and that if it were not exempted these smaller manufacturers would be wiped out, which would be to the benefit of the larger manufacturers. I think that is a rather unusual procedure, one which I think we may well put on the records of the House to the credit of those responsible.
As to petrol generally I agree with Deputy MacEntee that luxury petrol,  joy riding petrol, etc., that it is purely and simply a matter for the Minister to get what he can out of it quite independendtly of whether it is going to be spent specifically for the relief of agriculture or not. It is a perfectly legitimate source of taxation like the entertainment tax. When you come to tax petrol used for industrial purposes and used for the transport of goods or people on ordinary occasions you are simply adding to the cost of production. You are adding to the cost of the goods which we are selling in competition before we sell them. It is fundamentally in defensible per se where a tax on petrol is put forward as an alternative tax then you exempt it in relation to the difficulties and disabilities which are occasioned by existing taxes which it substitutes, and if the disadvantages of the existing taxes are greater, then there is something to be said for the petrol tax even if it goes on industrial production. Personally I cannot justify a tax per se which goes on industrial production. I agree with Deputy MacEntee that the cost of the petrol tax in so far as it is used in production or in transport will simmer down and will be distributed over the consumers of the goods and of the transport which it covers. To say that this is a method of finding relief for agriculture seems to me absurd, simply taking it out of one pocket and putting it into another.
There is one thing I would like the Minister to deal with when concluding. On previous occasions the President told us that the Minister had balanced his Budget. I say that the Minister has never balanced his Budget, not a single Budget that he has introduced. He has taken pre-existing assets and converted them into money. He has sold them to pay his current expenses. He has in that way misappropriated the total amount of pre-existing revenue, which is equal to what he acknowledges to be the National Debt of this State. That statement has been made in detail in this House, and the Minister declined to answer it. But you do not get away from facts by not answering them.
I will only give one example. The Minister on one occasion had to admit  here that he was in arrears to the extent of £400,000 for the provision of the payment of savings certificates. In other words, he had not provided the interest, and had not provided the redemption up to the extent of £400,000 for the savings certificates which he had got. When he meets the thrift body in the Mansion House to-day I am quite sure he is not going to tell them that. When he does come to speak we want to know what is the present position in relation to savings certificates, whether or not he has charged up to revenue up to date the amount which he is actuarially liable to put aside to meet the accruing charges on the savings certificates. We will simply take that as a test case. If he is up to date with that, then we will begin to deal with other matters. Unless he is up to date on that the position is that he has not balanced his Budget in that respect. He has put £5,000,000 of pre-Treaty income tax arrears into his ordinary Budget, and he has sold everything else that he could lay his hands on. That is how he has succeeded in balancing his Budget, and it is neither creditable to him nor creditable to the House which has allowed itself to be fooled in this manner year after year without proof. On the last Budget when we had to deal with this Minister we had to say that he had no conception of the dynamic as apart from the passive use of taxation. There is no evidence in this Finance Bill any more than in the previous ones of a desire to build up. The Minister is simply here to collect all the money he can, to sell all the goods which are loose, to empty out the larders, so that when his successors may come in, they will have his commitments and they will not have the advantage of the assets. In addition to that, as Deputy Wolfe has said—and he has given us one example of the extraordinarily bad effect of retrospective legislation— the Finance Bill does not redound in any way to the credit of the Minister, and it is not a Finance Bill which in its various principles makes for the stability of the State, whose credit the Minister for Party purposes defames.
Mr. T.J. O'Connell: If this Bill contained only the section which seeks to put an additional tax on sugar I would feel it my duty to oppose it and to oppose it strongly. When the legislation imposing this tax was under discussion here before I said what I found it necessary to say by way of protest against this tax. I gave figures to show the incidence of the tax upon the poorer members of the community. I do not propose to-day to go into details, except to say that those figures advanced from these benches, and from the Fianna Fáil Benches have not been seriously questioned. They may differ slightly as to the extent of the burden that will fall on the working class family as a result of this taxation. That burden may be 10/- or it may be 15/- in the year, but whether it is 10/- or 15/- the burden is a heavy one, and any attempt to make light of that burden will not be successful and will not persuade the people on whom the tax will fall that it will be a light burden.
Year after year in this House the point has been made that taxation on the necessities of life, on food and on essentials of that kind falls much more heavily proportionately upon the poorer classes of the community than upon those better able to bear that burden. But for some reason or another that does not seem at any time to have had that appeal to the Minister for Finance or to the Executive Council that one would expect from people who make such protestations such as they do.
Mr. Carey: What about tariffs?
Mr. O'Connell: I will talk about them later. This tax on sugar is put up in order to give relief to a certain section of the community. Surely if it is a question of giving relief to a certain section of the community, the section of the community that deserves and needs that relief most should have the greatest consideration. In seeking the wherewithal to give relief, consideration should be had to the ability of particular sections to bear the burdens for the purpose of finding relief for other sections. That has not been  the case here. Very definitely it has not been the case. We have, on the one hand, a definite refusal to increase a tax such as income tax because it is supposed to work back, as it were, eventually to the poorer classes, but you have definitely placed a direct tax on the poorer classes in order to provide this relief that is being given to the farmer. And the children in the back lanes of our towns, and the industrial population and the working class people here in Dublin are called upon to make this sacrifice to provide this measure of relief.
There are children in the slums of Dublin who have never seen a cow and probably never seen a green field who will be expected to bear their share of this burden in order, as has been pointed out, that those who have big ranches and a very big share of this world's goods may get relief in their rates. I do not think that is an equitable proposition and I do not think it can be defended on the grounds of equity. Deputy MacEntee has called attention to the fact, and it is undoubtedly a fact, that the chief people who will benefit by this proposal of the Minister will be the big farmers and the big ranchers. At the same time I cannot help reminding Deputy MacEntee that he himself and his Party set a rather bad example to the Minister for Finance and to the Government in that direction when they themselves proposed a method equally objectionable; a method under which the big farmers and the ranchers would have walked away with the bigger portion of the relief grant. It may be said that that was only temporary and that this is going to be permanent. But, temporary or permanent, the principle is bad, and we must not forget that Deputy MacEntee and his Party very definitely turned down the motion from the Labour Party which stated that the tax for the relief of the farmers should not fall on the poorer section of the population. I am sorry that a very bad example was set to the Government in the method of the allocation of the grant. I will say this much also, that as between the methods of allocation, if we had to  choose we would certainly choose the one which is proposed by the Government because it is more equitable as between county and county, though within the county the principle is the same. Still it is more equitable than the proposal which came from the Fianna Fáil Benches under which the counties with the high valuation and a small population were going to walk away with the greater part of the benefits. The proposal to raise relief in this way and to tax those who are least able to bear the tax is one that deserves condemnation. So far as the tax on petrol is concerned, it is not, so far as I am concerned in any case, open to the same objection.
There is just one point in Deputy MacEntee's speech to which I would like to refer. The Deputy spoke of the smaller concerns or firms which are running buses suffering as a result of the tax on petrol because there has been no increase in the fares by the bigger concerns, who can afford to pay the extra tax in the hope that the small concerns will die out. Deputy MacEntee appeared to me to be at some trouble to make the case for the one-man concern that is finding it hard to get on. Is there any justification for the one-man concern in transport services of this kind?
If there is going to be a transport service run on well-organised, economic lines, it cannot be run by a one-man concern or by a small concern. The more highly organised it is, the better the service and the better the conditions of the workers. I do not stand for the small concern that is trying to keep its buses, that are got on the instalment system, on the roads, and that pay something like 10/- a day to workers who are obliged to work at least sixteen hours each day. If a concern like that can treat its workers in that way, and carry on a service in that way, then it is much better that its buses should be off the roads. There must be taken into consideration also the protection of the public and the convenience of the public. In matters like transport the more highly organised a service is the more economic it will be to run it. If not, why have we unification of railways, and not a  a multiplication of small companies? The same principle is behind all those matters. Deputy MacEntee says there may be a monopoly, and once the bigger concerns have crushed out the smaller concerns there will be a monopoly that will salt the public and do what it likes. This House would not be doing its duty if it allowed that to take place.
Mr. MacEntee: It is already permitting it.
Mr. O'Connell: The way to deal with the problem is to prevent that monopoly, to organise and unify transport and control transport rather than allow everybody to get on the roads and facilitate them in doing so.
Mr. MacEntee: I would like to point out that to my knowledge there is a one-man concern—and when I say that I mean one bus service owned by one individual or, at the most, two individuals of the same family — and it pays higher wages than some monopoly undertakings.
Mr. O'Connell: I am quite ready to admit that, but in the nature of things there must be exceptions. While making these points on special sections, about which we talked at some length on the general Resolution, I would rather address myself to the general principles involved in the financial policy of the Government in so far as it is embodied in the Bill and especially in so far as it concerns the matter of tariffs. The Finance Bill is a measure which enables us to collect a certain amount of money every year, but it ought to be very much more than that. The taxes imposed and the relief given ought to be such as would give a general direction to our economic policy. I think we have a right to inquire how far that has been done and with what success it has been done by the present Government through the proposals which are embodied in this and previous finance measures.
On the question of tariffs, I think it is essential that the whole matter should be immediately examined as to whether or not it is a method which is going to bring about what we are all agreed should be brought about, the revival and development of our industries.  It is essential that such an enquiry ought to be immediately instituted. I feel sure that in the very near future this is going to be a subject which will be discussed all over the country. It will be the subject, possibly, on which the next Government may be elected. It will be one of the subjects which will determine very largely the fate of many candidates, and perhaps of Parties, too. Have the people sufficient knowledge of the subject to judge and act when the time comes to act? Will they have full knowledge of the effects of the policy which has been in operation for some six or seven years, and will they be aware of the likely effect of an advance in that particular direction in regard to that policy?
When tariffs were introduced here six or seven years ago, our Party supported the idea. The object was good, and we agreed then, and I agree now, that a tariff should not be put on for a short time and then taken off; that there should be definite security in the minds of the people who would take advantage of a tariff, that it was not going to be put on for one or two years and then taken off. I think, however, the time is now ripe when we can say that tariffs have been tried for such a length of time that one can form a judgment as to their effects, as to whether or not they should be varied, and in what manner they should be varied. It strikes me that there ought to be some kind of an investigation, not into one particular tariff, but into all the tariffs that have been imposed from the very beginning. I refer now to protective tariffs, and not merely the ones put on for the purpose of raising revenue only.
In the case of protective tariffs there ought to be an exhaustive enquiry by some commission or committee in order to find out whether or not the objects which this House had in mind when the tariffs were put on are being achieved, and what is the measure of success they met. I have been looking into some figures recently with regard to one particular industry on which a tariff was placed. It was a tariff for which I voted in  1924. I refer now to the tariff on boots. A very great amount of money has been paid in the case of boots, by way of tariffs, by the purchasing public of this country. The object of putting on a fifteen per cent tariff in 1924 was obviously quite clear to everybody. It was to develop the industry in the country. Are we satisfied that that development during the last seven years has been everything that it ought to be? Are we satisfied that judging by the rate of development that has gone on during that period, we are justified in doing anything more to continue the tariff on boots? The figures show that six years after the tariff was put on the import of boots has increased by 104,000 dozen pairs. Those figures apply to 1930. We have that definite figure in excess of the boots imported in 1924. I admit there are other factors that would account, to some extent, for that increase; but the fact remains that £1,750,000 is still being paid for imported boots.
We have this big market here and we have the tariff wall of 15 per cent. We are entitled to ask our boot manufacturers, our industrialists and our capitalists what steps they have taken and what steps they propose to take to cater for this market. If nothing further is to be done than is being done I, for one, would reconsider my attitude towards the tariff on boots. The tariff appears to me to be nothing more than a revenue tax and a tax that falls very heavily on those of the community who can least afford to bear it. We have some evidence of the progress that was made in this industry during the years 1926 to 1929. We find from the Census of Production that the nine principal factories engaged in this business increased their number of workers by 126 in three years. The wages bill, on the other hand, fell by £5,500. Although this big market was open to them, although 1¾ million was going out of the country and although 104,000 dozen pairs of boots were imported, those engaged in the boot industry increased their output by less than £1,000 per factory during those  three years. If nothing better can be done by the tariff policy than that, we should, in the interest of the country as a whole, and not as a Party matter, consider whether merely continuing the tariff is going to help an industry like this. How is it going to help even if the tariff is increased considerably and made possibly prohibitive? Who is going to supply the market? I cannot see anything, in that event, except increased prices for the product turned out. I should like to have a statement from the Minister as to whether he is satisfied in this particular case. I give this as an example and I admit that it is, perhaps, the best example from my point of view and the worst example from the point of view of the effect of the tariff policy. Is the Minister satisfied that things should be allowed to continue in that way or should there not be some revision, some new consideration taken into account that would enable us to capture that market?
My own belief is that the tariff policy, by itself, is not sufficient at all. I have said that more than once. The Minister cannot be satisfied. I should like to hear from, say, Deputy Lemass whether he is satisfied that the position will be met by increasing, or doubling the tariff, or making it prohibitive. Will that be satisfactory unless the plan that we have stated definitely here should be adopted is adopted—direct intervention, direct positive action, the organisation and development of industry by State funds, State credit, State direction and, if necessary, State control. Is there any way short of that by which the capitalists, the industrialists and the manufacturers will be induced to develop the industry and meet the market that is there — the home market that we hear so much about? This is a very important matter at this stage. It is important to enlighten the people of the country on the merits of tariffs since they will be called upon in the near future to decide on that issue. It is very important that they should have the fullest possible information.
I do not know whether or not the present Tariff Commission has the  right to make inquiries into tariffs already granted. I think they have. If they have not, they ought to get that power, or some commission should be set up which would go into this question as a whole—not into one particular tariff but into all the tariffs—and let the public see what is the general effect and what chances there are that these tariff measures will have the effect by themselves that they are generally supposed to have by those who advocate them so strongly from time to time. It is important from every point of view that steps should be taken to develop our industry and to develop it at a much more rapid rate than it is being developed at the present time. We hear that the adverse balance is going down. The adverse balance could disappear altogether; if we were not able to buy any goods from other countries, there would be no balance one way or another. That would be one way of bringing it down but it would not be a healthy way. I can conceive circumstances in which it would be a good thing to have a good adverse balance. We hear of the price given for National Loan. I have more than once pointed out here that that, of itself, is not a healthy sign of a country's prosperity. It might be like the bright blush on the face of a person in the first stages of a wasting disease. When money is tied up in securities of that kind, it means that it is not free for industrial purposes. It is quite a common thing to see very high prices for Government stocks and securities at a time when there is very great unemployment and industrial depression. We are told that we have escaped the wave of depression to a greater extent than other countries. That may be so but, if we have been hit to any extent by the wave of depression and if it can be shown that we need not have been hit so hard if other measures had been taken, then we are blamable.
I have risen specially to urge upon the Minister that the time has now come when the operation of tariffs ought to be very fully and impartially examined, and examined away from the atmosphere of the political platform.  If it is impossible to get an impartial examination of the effects of the policy which has been in operation since 1924, I think the country should have it and have it as soon as possible because it would enable us to judge whether or not we should continue along that line. In view of the developments that have taken place, or rather the want of development, I have very grave doubts whether we should continue along that line. If we cannot continue along that line, let us have some considered view as to the line our industrial policy should take for the purpose of doing what all of us agree should be done and what all of us agree would be a good thing if it were done.
Mr. Lemass: I was not in for the whole of Deputy O'Connell's speech but I heard the portion of it which he devoted to the tariff on boots. I rise for the purpose of endeavouring to extract from Deputy O'Connell information as to the policy of his Party concerning that tariff. I am no clearer now than I was before Deputy O'Connell spoke as to whether Deputy O'Connell and his Party are opposed to the tariff on boots or not. He asks that we should have a considered view on the matter. He wants the tariff reviewed but he has not clearly indicated whether or not the Party for which he speaks wants that tariff removed, maintained or increased.
Mr. O'Connell: The policy of my Party with regard to this matter and a great many other matters can be purchased in a little booklet by the Deputy for the sum of 3d. I am sure he knows all about that booklet and has read it and studied it. If the Deputy asks me on this particular matter what is my view, I say that if I were to think that there was to be no further development, or that development was not to come at any greater rate, I would be quite prepared to reconsider my position and to take off the tariff altogether if nothing more could be done. But I would not be content to leave it at that if I had the opportunity. I would take special and  more effective measures to increase the manufacture of boots here.
Mr. Lemass: Deputy O'Connell has made an explanatory statement in which he used the word “if” five times. I am no wiser now as to what his policy is than I was before.
Mr. O'Connell: I cannot help that.
Mr. Lemass: It is important that we should realise what his policy and the policy of his Party is on this matter and there is considerable doubt as to what their policy is.
Mr. O'Connell: Not on the part of ordinary people.
Mr. Lemass: The Minister for Education made a speech at the League of Nations in which he described the Labour Party as a “Free Trade Party.” That description of the Party appeared on the records of the League of Nations and it is something which Deputy O'Connell must take into account. Apparently he has made up his mind that since the Party has been described as a Free Trade Party, it must live up to the description though he has spasmodically supported a tariff policy in this House. What is the position as regards this tariff on boots? This tariff has been selected for attack by the advocates of free trade principles in this country. Apparently, they think that they have discovered a weakness in the tariff policy in its application to the boot industry and that if they hammer at that sufficiently they will bring down the whole tariff wall. Deputy O'Connell has mentioned that only 120 more people are employed in the boot manufacturing industry than there were employed in 1926. I think that that is something to be satisfied about.
Let us consider the industries in which the number of people employed is less than it was in 1926. Deputy O'Connell made a study of the Census of Production in relation to boots. Let him make a study of the Census in relation to a number of other industries and he will find that it shows that the number of employees has decreased considerably. If the tariff on  boots had done nothing else but maintain employment in the industry at the 1926 level it would have justified itself. The coach building industry has not been able to maintain the position in which it was in 1926 because it was not protected. The paper-making industry has not been able to maintain the position in which it was in 1926 because it was not protected. The flour milling industry has not been able to maintain the position in which it was in 1926 because it was not protected. Employment in these industries is much lower than it was in 1926 and if any proposal had been made to the Dáil, or if any proposal were now made in the Dáil, which would result in increasing employment to the 1926 level would not all of us be pleased about it? I think Deputy O'Connell would be the last to oppose it.
What is the position here? Is it fair in the first instance to judge the effect of the tariff over four years such as have elapsed since 1926? During that period not merely this country, but the whole world moved into a depression. There was a slump in business and a slump in industry. The consumption of boots in this country has decreased since 1926. Deputy O'Connell can work that out from the Census of Production also. If despite a decrease in consumption the Irish factories have increased production, it means that they are gaining proportionately a greater portion of the market than the figures would, at first, appear to show. I have worked out the figures and I have arrived at that conclusion. The number of persons employed has increased despite the slump in consumption. The part of the market which the factories are able to supply has increased despite this decline in consumption. The industry is probably more firmly established now than it was at any time in the recent history of the country.
Deputy O'Connell drew attention to the fact that despite a small increase in the number employed, there is a decrease in the wages paid. There is an explanation for that. The explanation is that in 1926-27, when these  factories were being built up, it was necessary to bring highly skilled operatives from abroad for the purpose of training the workers here, and to pay these skilled operatives very high wages. The industry is now evidently in a position in which it does not require the services of skilled operatives from abroad. The native workers have proved their skill, and are able to conduct the factories without outside assistance at all. I am not saying that there may not have been some fall in wages, I do not know whether there has or not, but I know that the fact I have mentioned is one explanation for the apparent diminution in the total amount of wages paid in all factories during the year 1929 as compared with the year 1926.
Let it be clear however, that it is no function of Deputies on these benches to defend the existing boot tariff. One thing we will argue is that there is an unanswerable case for the protection of the boot manufacturing industry in this country. If there is any industry capable of being established here that is one. We have the raw material, we have the skilled workers, and the market at our doors.
Mr. O'Connell: I agree.
Mr. Lemass: Deputy O'Connell agrees with that. We are agreed that the industry can be established here.
Mr. O'Connell: There is no doubt about that.
Mr. Lemass: The question is whether the method adopted by the Government to protect the industry is the best method that can be adopted. Let me say that the existing tariff, even though I was probably one of the strongest critics of that tariff when it was first imposed, has done good. It has preserved the industry at a time when other industries were disappearing. I think there can be no doubt whatever that if the boot tariff was increased to 30 per cent. or 40 per cent. you would get made here all the boots required by the people of the country, but you would not get them all made by Irish-owned factories. The position is that there is a  great number of factories in England, the greater part of the trade of which is with this country. These factories do not regard this 15 per cent. duty as a sufficient inducement to come in here. They were able by price cutting, by the utilisation of their trade machinery and because of the strength of their trade connections to overcome that tariff barrier. They were able to maintain their position here in spite of it.
The Dublin Technical Committee at the time the tariff was imposed, sent a deputation to examine the boot factories in England. The main purpose of the deputation was to acquire the information necessary to enable them to prepare classes for the training of operatives in the industry here. They discussed with a number of English manufacturers the probable effect of the tariff, and the English manufacturers whom they met told them that they were not worried at all about a 15 per cent. duty. They said 15 per cent. duty would not hamper them in the least in this country, but that if a 35 per cent. or a 40 per cent. duty were imposed they would be all in here in a week. We have to face that position. We can get all those factories here in a month by increasing the duty to 40 per cent., but is that what we want? Is it our sole desire to get these factories established here irrespective of who owns them or under whose control they will be? The whole difficulty of the tariff policy is that, side by side with it, you must have some method of securing native control of industry in this country. What that method will be is difficult to say, but it will have got to be decided. Some means will have to be devised. Various suggestions have been made here by Deputies from time to time. These suggestions have not found favour with other Parties in the House. The Government seem to have ignored that aspect of the question altogether. They have not made any attempt during their period of office to restrict the operations of these foreign companies within the country. The plausible argument that these companies  give employment is advanced and it is not one which is easy to answer in a period like the present. Deputies here must take a longer view than that. They must consider the ultimate possibilities. There can be no doubt that if we can allow the industries of the country to pass, as the flour industry is passing, into the hands of external owners, in the long run it will result in less work, less employment and more depressed conditions here. We cannot take that risk. I believe through the operation of a scheme of State assistance similar in principle to that embodied in the Trade Loans (Guarantee) Act we can make it possible for native-owned concerns to take advantage of any protection which we give them in the Irish market.
The building up of industries here which are being controlled by natives of the country would be a very distinct asset. That is a question on which we are very anxious to know the attitude of the Labour Party. Statements have been made by members of that Party that they would just as soon have British capital as Irish capital.
Mr. O'Connell: If that is all that was to be in it, if there were to be nothing further done.
Mr. Lemass: I am not quite sure what the significance of that remark is. The importation of capital, I suppose, is not a bad thing in itself, provided it is subject to native control. Is that what Deputy O'Connell means— that he considers Irish capital as bad as English capital, and that it does not matter to him whether factories are owned by Irishmen or by Englishmen? If we had a clear, definite statement from the leaders of organised labour on that matter, it would be of very great advantage.
There has been a tendency in some quarters to misrepresent the attitude of Fianna Fáil upon this issue. It is not merely that we desire to protect the interests of certain individuals who have invested capital in industries in this country. It is that we think it would be decidedly nationally harmful to have the greater part of the industries  of our country controlled by persons who have no direct interest in its welfare. We have seen the effects of allowing that to happen in one or two industries, and we do not want to see it any more. If we are going to increase existing tariffs, side by side we must take action to maintain native control of the industries concerned.
Mr. O'Connell: Where will you get the capital to be invested in them?
Mr. Lemass: I am satisfied that there will be no difficulty at all in getting capital to invest if the State creates the right conditions here. We have a surplus of capital. Let that be clear to Deputy O'Connell. There are £200,000,000 of Irish capital invested abroad. The people who invest that capital can be induced to bring it back here if there is a use available for it here. It should be the policy of the Government to give an inducement to them to do that and afford opportunities for investment. The adoption of a protectionist policy is one way to afford an opportunity, but it is not sufficient in itself. As I explained, to get back to the boot tariff, the position is we have preserved an important industry. We have increased its productivity. We have increased the employment it gave, even though by a small amount. Other industries are declining. These facts alone justify the imposition of the tariff, even though that tariff was too small and was wrongly applied. I do not think those who are anxious to start a new Free Trade crusade would be very wise to select that particular tariff as an object of their attack.
Mr. O'Connell: What has the country paid for the tariff?
Mr. Lemass: Let me explain to Deputy O'Connell. It is an elementary lesson, but it will do him good. A certain amount of revenue comes into the Exchequer as a result of the boot tariff. If that revenue did not come in in that way it would have to be got in another way. As a result of the tax on boots the Government were able to reduce the tax on tea, sugar, or some other commodity. The total amount of revenue which the Govern-  ment get is the same. By the imposition of this tax they get revenue in a way that helps industry.
Mr. O'Connell: Could not that amount of money be better used to develop the boot industry than in the manner in which it has been used?
Mr. Lemass: How could it be used? The money that came into the Exchequer has been used to meet the ordinary expenses of government. The revenue that came in would have to be got in some other way. The Minister for Finance will explain that later.
Mr. de Valera: I want to add another word of protest against the imposition of the sugar tax. On every occasion that presented itself here we pointed out that the amount that is raised in indirect taxation bears in this country an unfair proportion to that which is raised by direct taxation. We have pointed out that to tax an essential article of food in circumstances like these is most unfair and most unjust. The excuse that the Minister has for bringing in this tax is that he wants to provide a sum of £315,000 in order to relieve agriculture. A more extraordinary method of relieving agriculture, I think, has never been presented to any assembly. Who are the agriculturists who need most relief? Is it not the small holders, the small farmer?
Mr. O'Connell: Hear! Hear!
Mr. de Valera: We have the statistics published in 1912 proving to us that on small farms of from 15 to 20 acres there is five times as much labour employed as on farms of over 200 acres and on farms from 30 to 50 acres there is three and a half times as much labour employed, that more food is produced directly off the land in these farms than on the larger farms and that the stock that is raised is the kind of stock on which most labour is employed. When we know these facts, and they are patent to anybody who has any knowledge whatever of conditions in the country or anybody who takes the trouble to read the agricultural statistics, it is certainly very strange that we should have the  Minister for Finance coming in and proposing to relieve agriculture by actually imposing on the small farmer a heavier burden than the burden he is carrying up to the present.
We have had calculations made for a number of counties and in these counties on an average it works out when you come to a farm of over £10 valuation—it goes up to £10 in most cases—a farmer and his family if he has a family of five will pay to the Minister for Finance more in this sugar tax than the amount of relief he is going to get by remission of the rates. In the case of farmers whose valuation is not over £4 they are relieved in rates to the extent of about 3s., and if they have average families of five they have to pay 10s. 6d. in order to get that 3s. or 4s. It works out an extra burden to them of 5s. or 6s. in the year.
The first point, therefore, is that this is not relief for agriculture. It is a burden on the particular agriculturists who deserve most consideration, and who are most in need of relief. That is due to the fact that the money required for the relief of the rates is being raised partly off the farmers themselves, and particularly off the small farmers. It is also unjust, because it has to be provided partly by the poorest of the non-agricultural sections of the community. It is unfair that it is the poorest of every section of the community who should be called upon to bear the principal part of that burden. It is the poor worker, the small shopkeeper and the small farmer who are providing this money, which is, for the most part, to be given for the benefit of the larger holdings.
Of course, it would be too much to expect that Deputy O'Connell would forgo the opportunity afforded on an occasion like this to tilt at the motion we brought in, but he knows full well that when we brought in that motion we stated expressly that it did not indicate our attitude towards de-rating as a permanent solution. We made it quite clear that as the report of the De-rating Commission was promised, we did not want to anticipate any discussion that might be upon that. The purpose of our motion was to bring  pressure upon the Ministry to come immediately to the relief of the farmer.
Mr. O'Connell: Why did you not vote for our motion?
Mr. de Valera: Because the motion brought in by the Labour Party did not do anything of the kind. It provided an excuse for anybody who wanted to avoid bringing in immediate relief to the farmers to get out of it. As a complete settlement of the de-rating question, it was unsatisfactory.
Mr. O'Connell: It did not pretend to be complete.
Mr. de Valera: It was neither fish, flesh nor good red herring.
Mr. O'Connell: It was much better than the Deputy's motion.
Mr. de Valera: It provided Deputies on the opposite benches with an excellent opportunity of saying that the proposals that were put forward were impossible. It gave them an excuse for voting against it. We put forward a definite motion of such a type that it could not be turned down on the grounds that it was unworkable or anything of that kind, because a similar proposal had already been in operation.
Mr. O'Connell: It favours the ranchers.
Mr. de Valera: It proposed to give relief to the agricultural industry in such a manner that everybody, whether the small farmer or the large farmer, would be relieved in the same proportion. Everybody, whether he was a big farmer or a small farmer was going to benefit to the extent of one-third of his burden and then we are told by Deputy O'Connell that if he had a choice he would prefer the present system to the system of relieving everybody of one-third of his burden.
Mr. O'Connell: I would like to point out to the Deputy that as between the method of allocation set out in the Government proposal for the distribution of the £750,000 and the method of allocation in the million motion of  Deputy de Valera there can be no doubt whatever that the county with the small farmers and the large population are doing better under the Government allocation than they would have done under Deputy de Valera's proposal. That is the only point I made. I had special regard to that seeing that the Co. Mayo, that I represent, has done better under the Government scheme.
Mr. de Valera: Go and tell a small farmer in Co. Mayo that he would be relieved of one-third of the rates that he had to pay, and ask him would he prefer it to paying seven shillings in order to get three shillings.
Mr. O'Connell: We would have given him three-fourths and you voted against it. You also voted against the proposal in our motion that no proportion of it should fall on the small farmer.
Mr. de Valera: We voted, as Deputy O'Connell very well knows, against his proposal because of the fact that it was simply introduced to queer the pitch.
Mr. O'Connell: That is not true and the Deputy knows it.
Mr. de Valera: Deputy O'Connell knows that is true and well he knows that neither our motion nor his motion, in a House constituted as this is at present, had any chance of passing. Therefore it was introduced definitely in order to force the Government to give immediate attention to the needs of agriculture.
Mr. O'Connell: And set a bad example.
Mr. de Valera: We set no bad example because we pointed out that the principle of discriminating in favour of the small farmer was a principle that we stood by.
Mr. O'Connell: And voted against.
An Leas-Cheann Comhairle: The Deputy must be allowed to make his speech.
Mr. de Valera: Deputy O'Connell may talk about his little manoeuvres  here. That is all this thing was. The people outside are not such fools as Deputy O'Connell thinks. They are able to discriminate between the little manoeuvres here.
Mr. O'Connell: Hear, hear.
Mr. de Valera: We can leave it to them very safely. We brought in our motion in order to force the Government to give immediate relief to agriculture. We said that. We said that the principle underlying it was proportionate relief to everybody and we stated that it was of such a kind that it could be applied at once and that no excuse could be made on the ground of further examination. This question had been two or three years in the hands of the De-rating Commission. The point is this: that the method by which this money is raised is a bad method and that is what I am interested in at the moment. The mode of distribution is bad, but what makes it utterly bad is the fact that the money is being raised off the particular class who most deserve benefit.
Mr. O'Connell: Hear, hear.
Mr. de Valera: We are agreed then upon that. The next question that has been raised is this question of tariffs and our attitude towards it. Deputy Lemass has pointed out that one thing at any rate has been secured by the boot tariff and that is it has maintained that industry in a position in which it was able to give employment at least on the previous level when other industries that were not protected gave less employment. But we are not satisfied that the position of the boot industry is as it ought to be, not by any means. If we had our own factories supplying our needs in boots there would be employment for close on 6,000 workers. We want to see that employment given here and we want to see the money that is spent in giving employment across the water spent in giving a livelihood to our own people here at home. Our attitude upon the question as to whether the present tariff is sufficient or not is that a tariff that is not sufficient really to protect the industry is a useless type of tariff. We want to have adequate protection  and I would class as adequate protection not merely protection against manufactures being sent in from outside but protection also against the invasion of foreign capital, such as Deputy Lemass pointed out was likely to come if we put up adequate protective tariffs. How does Deputy O'Connell imagine that we are going to get Irish capital put into these industries if the people who sink their capital feel that to-morrow morning some combine from across the water is going to come in and destroy whatever hopes they had of having their capital profitably employed? It must be obvious to Deputy O'Connell that if we are going to get Irish capital invested in Irish industries we must give it protection against invasion from outside of foreign capital.
Mr. Shaw: And give up talking about war and the smashing of treaties.
Mr. de Valera: Who is talking most about war?
Mr. Shaw: You are.
Mr. de Valera: I have not been speaking about war but I have been speaking about standing for our rights, national, economic and otherwise.
Mr. Shaw: What about the interview you gave to an American paper and the talk about a show-down?
An Leas-Cheann Comhairle: The Deputy must be allowed to proceed.
Mr. de Valera: Deputy Shaw is not worth bothering about. I take it that what he is introducing has no relevancy to the present matter.
Mr. Shaw: Nobody will invest money in this country as long as there is talk of that kind.
Mr. de Valera: Money will be invested in this country when there is adequate protection given and when outside combines will not be allowed to come in and rob a man of what he naturally expects when he puts his capital into an industry. It is an urgent matter and a matter which will have to be attended to if the policy of protection by tariffs is going to lead us anywhere. I think, as far as our  attitude is concerned, what I have said makes it clear enough that we are prepared to consider very carefully and sympathetically any proposals which will be made to protect Irish capital put into Irish industry, protect it from the invasion from outside. The capital is there. The £200,000,000 of Irish capital invested abroad has been referred to. It is only a short time ago since we saw it stated that there was £160,000,000 deposited in Irish banks. In one place it was given as £180,000,000, and in another place as £160,000,000. The figure given in a recent issue of the “Statist” was £180,000,000. Let us take the smaller figure of £160,000,000 as the deposits in Irish banks. It is estimated that there is already invested abroad some £200,000,000 which would be available for investment here. That money, in my opinion, will be available for investment the moment that the people who have that money to invest are satisfied that, if they build up industries like the boot industry here, when they have their factories started, their property is not going to be made valueless by the invasion of some combine from outside. There is another matter besides this invasion of capital from outside. Suppose we give to those Irishmen who are prepared to invest their capital in this country adequate protection and that that does not induce them to come and enter into industry, then I would be prepared, for one at any rate, to go the distance that Deputy O'Connell has suggested the Labour Party would go, and that is to take direct action, if necessary, rather than see our own people idle whilst money is being sent out of the country and giving employment to strangers.
To come back to the sugar tax. We are going to vote against it. We think there is no justification for it. There are other directions in which the Minister for Finance could look to provide that money and provide it in a way which would be fairer to the community as a whole, and which would really relieve agriculture, and not, as the Minister is doing, put a further burden upon a portion of the farming community which really deserves relief.
Mr. Little: Deputy Shaw introduced what we might call a fresh breeze into a discussion upon what is otherwise regarded in the House as a rather dull Bill usually—namely, the Finance Bill. Coming back as I was from the front, so to speak, where I was in the atmosphere of tin helmets upon soldiers and Hotchkiss guns in ambulance wagons and other guns on the roofs of hospitals, and so on, I could not help feeling that Deputy Shaw, when he talked about war, must himself have come out of the war-like atmosphere of his own Party. There is no war talked upon this side of the House, and no war made upon this side of the House. It has nothing whatever to do with the investing of capital in Ireland.
An Leas-Cheann Comhairle: I quite agree with the Deputy. It has nothing to do with the Bill, so let us leave it.
Mr. Little: It is important to point out to people in this House and outside that the only thing which a capitalist has any regard for is the security of his investment, and that does not depend in the year 1931 upon any of the scare headlines set by the Government as to the possibilities of civil disturbance in this country. As the discussion proceeded, I could not help thinking of the City of Waterford, where there is a number of business men of considerable capacity, most of whom always invested their money outside Ireland, and some of whom have suffered very severely because of the big slump which has taken place in English investments. Now the business men in Waterford are beginning to realise that the only way in which they can have securities which are secure is to have them under their own hands in the form of industries upon the spot. We of the Fianna Fáil Party put it to these business men, that if they did not believe in our programme, if they did not believe in tariffs, they should try in some way or other under present conditions, if they believe in free trade, to build up the industries of Waterford.
I want to give them credit for their efforts. They certainly did try. They had annual exhibitions and visitations to factories and so on. But these have  not done any good, and now business men of that sort, who are most antagonistic to us in politics, have admitted that it is absolutely necessary to have a tariff, as in the case of the bacon industry. Owing to the import of Polish bacon, there is more and more unemployment in Waterford and in the surrounding districts and, in general, depression amongst those who are producing the pigs. In that case you have an industry which is supported by prominent members of the Cumann na nGaedheal Party, but for some extraordinary reason, which it is impossible to fathom, no security in the form of a tariff is given in this year's Finance Bill for the protection of the bacon industry. Then again there is a boot factory in Waterford which has done very well under the small tariff, such as it is. The owner of that factory, who is a very amiable person, but who I suspect is a strong supporter of the Government, told me that if he were to get a bigger tariff he could extend the business and that would mean the absorption of a considerable number of the unemployed in Waterford. I speak about Waterford because a good concrete example which has general application drives a point home better than a very general statement.
Tariffs I admit can do more harm than good if they are applied partially, because you are not affecting the general producing power of the people; you are only affecting a few industries. If you want to get the benefit of tariffs you must spread them out as far as possible so that the purchasing power will be able to meet any slight increase there may be in prices in the beginning, anyway until they get well established and stable prices. So that once you have begun to introduce tariffs it becomes an absolute necessity, if you are going to get over the evils, to spread them out over as many industries as possible so as to increase the purchasing power to meet—I was going to say the argument of the Government against tariffs—whatever rise there may be in prices from time to time before the thing becomes properly stabilised. In Waterford you have the best example of a successful tariff in the  case of margarine where, because the Government insisted upon a certain principle of fixing prices, you have had no deleterious effects from the tariff in the matter of prices.
I now turn to the case mentioned by Deputy Jasper Wolfe in reference to Section 2 of the Finance Act. I do not think the Minister and the Government realise how much they are penalising people who are in the position of executors. An executor is a person who generally has to do a considerable amount of difficult work, accept an onerous responsibility and very seldom is allowed to be paid for his work. He does it generally out of respect for the dead or out of family affection, and so on. It involves an amount of detail dealing with succession duty, estate duty, and so on, and he is now to have added the extra responsibility of going back six years instead of three years in dealing with the accounts of the deceased person. In England the period fixed was three years. The Minister seems to dissent, but I assure him the period is three years in England. I am certain of that, and they cannot go behind three years.
As a matter of fact, the whole history of this particular statute of limitation, so far as this House is concerned, is very interesting. At first the Minister, when I raised the question that he could not go back behind six years, denied it. Afterwards it was discovered that he could not go back beyond six years, and then the case was made that going beyond six years was in the nature of a penalty. We pointed out that this was a policy which was greatly deprecated in England. Judges set themselves against that particular attitude of imposing a penalty. They said if you want to impose a penalty, do so as a penalty, and do not make use of the ignorance of the public of the statute of limitation in order to get more tax out of people, and have the covering excuse, which is merely a penalty. At any rate, it became clear to the public that they could not go back more than six years. Subsequently it was discovered when the public became aware of this, that there was the possibility of taking action in  court. Action was taken, and the Government was beaten, and as a result of that we have legislation which is retrospective, and which is not merely a flouting of the authority and respect for our judges, but is undermining whatever respect we might have for portions of the Constitution, and at the same time is inconsistent with the Government's own attitude upon other questions.
I am thinking at the moment of a great cruelty that was done in a particular case in Waterford on an old man who went through great family sorrow. At the time his accounts should be made out his son was drowned, and he got ill, and because the time had run out during which he should have made his appeal he was come down upon and was threatened by bailiffs if he did not pay up £300. He appealed against that, and lost his appeal on the ground that he had not appealed in time. At that time the Revenue Commissioners apparently did not want to advert to the fact that they themselves, on a reasonable excuse, might have extended the time in a case like that. They did not do it, and the matter became res judicata and could not be reopened. Subsequent to that they passed a section in the Finance Act emphasising the powers of the Revenue Commissioners to extend the time under reasonable circumstances. Still they did not see their way to give any relief to the unfortunate man who had been mulcted in the original action for £300 which he should never have paid. See the contrast there. They make penal legislation retrospective, but legislation which might have brought relief in a very cruel case they do not make retrospective.
[An Ceann Comhairle resumed the Chair.]
The spirit of the Constitution as set out in Article 43 is that a man should not be penalised for something that was done before the Act was passed as if it had been done after the Act. The Minister, I hope, will reconsider his attitude towards that and bring in some sort of an amendment that will leave the public less exasperated by  the income tax laws than they are at present.
There are one or two matters that I would like to make some suggestions to the Minister about, and which have been made to me by people in the trade. One is that motor hackney car men should be given the benefit of the relief given to owners of cars that are five years old. Perhaps the Minister will look into that. Another is that he should allow in all casting, stamping and forgings for the motor trade which have not been machined in any form. At present there is no importation of that sort at all. It does not affect the general trade. They would only be imported by people who are enterprising enough to wish to develop their engineering garages into motor works. There are only a few such at present. It might encourage more to go in for that, because it would mean those parts would be machined in the first place, and ultimately built into cars, and it would give apprentices and the trade generally an opportunity of developing trade so far not developed here. And I think it would not have the difficulty which made the Minister refuse last year drawbacks on motor parts which were machined, because it would be very easy for an officer to find out very rapidly whether parts were machined or not machined.
Then again I came across cases where men who started with little or no capital and after a considerable number of years had accumulated a certain amount of capital were charged with excess profits. The capital they had accumulated was not sufficient to put them in the way of being what one might call rich men, yet they were charged in respect of excess profits so much that it left them as poor almost as when they started, or at least with indebtedness to a Bank or elsewhere, to pay back their liabilities to the State. I think something should be done to give relief to small men in that respect. In conclusion I would urge the Minister to respect the authority of the Judges, to respect whatever there is good in his own Constitution and not to make those people who are in the position of executors to feel as if they were outlaws in the State.
Mr. Shaw: Deputy Lemass and Deputy de Valera referred particularly to the sum of £200,000,000 which they say is invested abroad. There is a very large sum invested abroad but I think that figure is something over the mark. In reply to a question put in this House some years ago it was stated that the probable sum of dividends that came from investments abroad was something like £11,000,000 per annum and of course that sum would be considerably less now. I want to make it perfectly clear that this money will not be re-invested in this country until people are certain of a continuation of the conditions of stability existing in this country at the present time. I do not want to say anything controversial on this Bill. I did interrupt Deputy de Valera when he was speaking because of the fact that statements have been made inside and outside of the country——
Mr. de Valera: What statements?
Mr. Shaw: One statement was that if the Party opposite got into power very probably you would have a show-down with England.
Mr. de Valera: Who made that statement?
Mr. Shaw: I saw it in the newspapers.
Mr. de Valera: You see lots of things in the newspapers.
An Ceann Comhairle: I take it that the Chair did not encourage Deputy Shaw's interruption?
Mr. Shaw: No.
An Ceann Comhairle: I thought not.
Mr. Shaw: The point that I want to make clear is that if you want to attract back capital into this country then you have got to finish all this nonsense about smashing the Treaty. I know many capitalists who are prepared to invest large sums in this country and who are awaiting the results of the general election before they will do so. There are people who have money invested outside of this country——
Mr. MacEntee: They have lost a lot of it recently.
Mr. Shaw: —who will not re-invest it here unless they feel that we are going to have stability.
Mr. MacEntee: What about the Irish investors who had their money in the Royal Mail Steampacket Company and in the Cunard Company? Where is that money now?
Mr. Shaw: Deputies on the opposite benches talked about the sugar tax and the tax on petrol. Everyone agrees that large sums of money had to be obtained from some source to come to the rescue of the farmers. We all admit they are the wealth producers of the country. I did not hear one suggestion from the benches opposite as to where the money required for that purpose was to come from if sugar and petrol were not taxed. A tax is put on petrol but the price of petrol has been reduced by a halfpenny a gallon since. It ought to have been reduced by at least another halfpenny if we here were to be put in the same position as people in other parts of this country. I do not think the criticism offered from the benches opposite was fair for the reason that no suggestion was made as to where the money was to be got that was needed to give relief to the farmer. It is all very well to say that a tax should not be put on sugar or petrol but if that had not been done where was the money to come from? I think it is only fair to ask the Deputies opposite to say where did they think the money should have been found.
Mr. Blythe: There has been a certain amount of discussion on Sections 2 and 4. These really are very minor provisions which aim solely at keeping the position in regard to the collection of income tax as it was understood to be prior to the hearing of two cases in the courts: to see that the practice which was in existence prior to a few months ago has full legal force and effect. There is no such thing as there being any contravention of the Constitution. If these provisions were in contravention of the Constitution they would be void and have no effect.  They are not contrary to the spirit of the Constitution which simply dealt with the question of crime. It says that any act is not to be made by legislation a crime if it was not a crime at the time——
Mr. MacEntee: Will the Minister read the exact words in Article 43?
Mr. Blythe: They are not in contravention to the spirit of the Constitution. In regard to revenue provisions we constantly must have retrospective legislation. That is the position in England too. The reason for that is that the courts in interpreting revenue statutes do so in an extremely strict way. They interpret them in this manner, that if there is any loophole at all for the taxpayer to get out, the taxpayer is let out. The courts, both here and in England, often give decisions which are really inequitable as between the taxpayer and the community at large on that basis of always interpreting revenue statutes with extreme strictness. Consequently, decisions are constantly given in the courts in this country and in England which mean that a gap has to be stopped up. Gaps are made, and chinks are worn as it were, in the revenue law and they have constantly to be stopped up. If the legislation stopping them up were not to have retrospective effect then great sums of revenue would be lost.
It is absolutely necessary that retrospective legislation should be introduced. That legislation generally is simply this, that it confirms something that was always understood to be the law. Often over a long period of say 50 or 60 years it has been acted upon by everybody as if it had been the law. It has frequently happened that something has been the practice, and then at the end of a very long period a case is brought into court. The courts in interpreting the revenue statutes, as they often do, find that the practice was illegal. What we are doing here is what is generally done in the case of these revenue amendments. We are simply restoring the position to what it was believed to have been and to what it was accepted as being by the public generally.
 With regard to Section 2, I think that Deputy MacEntee was under some misapprehension in regard to it. Deputy Little was also wrong. The practice here and in England has been to go back six years from the year of assessment in which the death occurred, provided that was done within three years of the year of the death. We are not proposing to alter that. Deputy MacEntee apparently was in error slightly as to the intention of the section. All that we are proposing to do is to restore the practice as it existed here, and as it exists in England, where they go back six years prior to the death if the tax has not been paid. The additional assessment must be made not later than three years after the year of the death.
A case recently occurred where a man was returning an income of three, four or five hundred pounds a year. When he died it was discovered that his estate represented a capital sum of £80,000, most of it situated in England. The tax had not been paid on the full income of that estate. In fact, it is estimated that man had succeeded in cheating the revenue out of about £17,000. If we were not to be able to go back, as we have always gone back since the period when the present sections were passed, we would lose that sum of £17,000. There is no reason why that sum should be lost because if the man were living and the fraud was discovered he would have to pay up. We do not know really what view would ultimately be taken by the Supreme Court on this particular point. It has so far only been before the Circuit Judge. If we were not to legislate we would go to the High Court. Then presumably either the revenue authorities or the taxpayer would appeal and would have the matter dealt with by the Supreme Court. There are three possible decisions: that we could go back six years as we have been going and as they have been going in England, that we should go back three years or that we should go back one year. We see no point in going on with that prolonged and expensive litigation. We propose to put the law in the position that it was understood to be. By doing so  we are not penalising anyone. There can be no rational objection to what is proposed unless one wants to take the view that if a man succeeds somehow or other in defrauding the Revenue up to the day of his death his heirs in all justice ought to get the benefit of his malpractices.
Mr. MacEntee: That is entirely wrong.
Mr. Blythe: That is the only argument that can be put up against it.
Mr. MacEntee: The argument is that the subject is entitled to the benefit of the law as it stands, and if he is found right, and if the legal advisers to the Revenue Commissioners are found wrong, he is not going to be victimised.
Mr. Blythe: We are always entitled to change the law, provided that we do not do an injustice in changing it. Of course, we cannot enact laws contrary to the Constitution. Within Constitutional rights the only thing is not to do injustice by changing the law.
Mr. Little: What is the function of the judges?
Mr. Blythe: The function of the judges is to interpret the law, and if the judges interpret the law, and in some particular sense it reveals a weakness or an anomaly, it is the business of the Legislature to rectify the faults which, shall we say, the judges have disclosed.
Mr. Little: For the future, if you like.
Mr. Blythe: Either for the future or the past, as is just.
Mr. J. Wolfe: No.
Mr. Blythe: In England the period is made for six years, provided the assessment is made three years after the death. That is the present position. With regard to Section 4, I do not think it can justly be termed retrospective at all, and in the case in which a decision was given, as a matter of fact, the court appears to have given the decision with great reluctance, and although they had to decide in their interpretation of the statute in the man's favour, his case had absolutely  no merits. Again I think it would certainly be a most unreasonable and a most illogical position if you had to proceed, in the absence of information that a man ought to give, to ascertain his liabilities before you could bring proceedings against him for penalties for having refused the information which he ought to give.
Dealing with one or two minor matters, Deputy MacEntee argued that a gas company, or certain other companies, ought not to be exempt from corporation profits tax, because a limitation of their profits in various ways represented something that was not very effective as regards the public. Nevertheless, those limitations do put companies which are subject to them in a different position to companies that are subject to no limitation. Taking it broadly, I think it might be accepted that a company whose profits are limited in some way or another statutorily is in a different position, and is entitled to more favourable consideration in dealing with a tax provision than a company whose profits are not limited in such a way. These public utility services have been free from corporation profits tax from the beginning. In some way the corporation profits tax is an anomalous tax, but one which we have not been able to give up, because it brings in a very substantial revenue very easily. It is not levied upon the smaller firms. It is a sort of extra income tax which is levied on a limited class of firms, and I think in principle to some extent, it may be admitted, that corporation profits tax is an objectionable tax. Apart from everything else, I would not propose something that was in fact an extension at the present stage of the corporation profits tax.
If anything were being done I think the corporation profits tax ought to be reduced or abolished rather than extended. We could not abolish it unless a proper tax could be devised, or substituted, that would give us equivalent death duty in cases of certain businesses, where, if they were privately owned, even by people residing abroad, we would get death duties that we do not get at present. As it  stands, whatever we may do with a different tax as a substitute for it, I would not be inclined to extend it at all.
Deputies asked some questions about Section 32. The Department of Agriculture was really the residuary legatee of the Church Temporalities Fund and received a certain amount which might be from time to time fixed by the Treasury, according to the amount the fund could afford to pay without encroaching on capital. We have abolished that arrangement and additional funds have been actually voted for the Department of Agriculture and Technical Instruction and for vocational education and this residual amount will now flow into the Exchequer instead of flowing directly to the Department of Agriculture. I have not any figures at hand about the income of the fund but I furnished some information to the Deputy.
Deputy George Wolfe asked about a particular surtax. I think it would be better if Deputy Wolfe would furnish me with some details when I will endeavour to get full information of what has been done and the reason for it.
Mr. G. Wolfe: The surtax has been paid on a particular amount every year. The year before last the amount was greater than it was this year. Say that a man paid in £2,500 this year and £3,000 last year. According to the rules he is now asked to pay not only on £2,500 this year but on the difference between the £2,500 and what he paid last year. That seems to be inequitable.
Mr. Blythe: If the Deputy will furnish me with details I will have the case examined. I was asked was turpentine excluded from the tax. It is by the words “mineral hydro carbon oils.” Deputy MacEntee told us what the sugar tax would cost the average family and what petrol would cost the average family according to his estimate. I think the Deputy's estimate for sugar at any rate for the poorer families, which we have most to consider in this case, is distinctly too high. I think that perhaps one-third might  be taken off his estimate in order to get at the amount of the burden that would be thrown on the poorer families. I suppose you will not get any two families which are affected in exactly the same way, but I think if you assume in the case of the poorer family that the consumption would amount to something like what it was in the war time allowance for all individuals you would not be very far wrong. In better off families a great deal more sugar is used not only in tea but in the form of cakes, puddings, and sweetmeats of various sorts, which considerably increases the amount of sugar used as compared with the poorer families, per head of the population.
I think there is no real foundation for the Deputy's contention that we can assume that the burden of the petrol tax may be spread over all households equally. It seems to me quite clear that while some portion of the burden of the petrol tax may be passed on, even to people to whom it can hardly be traced, nevertheless it is clear that you could take thousands of families in particular districts and you could see pretty clearly that the petrol tax did not affect them at all, or affected them in no appreciable way. They are not direct users of petrol.
The question of bus travel is a small thing and not a regular daily item, or even a weekly item, of expenditure. In the case of goods there are really other means of transport, and, in fact, so far as one could see, the petrol tax would not affect them at all. If you take the ordinary family of the small farmer it is quite safe to say that the burden of the petrol tax scarcely reaches them. Of course, it is perfectly true that if you attempt to relieve agriculture by such a method as de-rating you cannot give as much to the small farmer as to the large farmer, and you can hardly affect the agricultural labourer at all except by way perhaps of insuring him a continuance of employment, or a greater measure of employment than he otherwise would have.
The people who are indirectly connected with agriculture in the same way can only benefit in so far as the  increased prosperity in agriculture gives them employment or gives them trade. But dealing with direct benefits with any form of relief in the nature of de-rating it means that the small man cannot get much. No matter whether you spend £750,000 or £1,500,000, or £2,000,000 or £2,250,000 on de-rating you will find that the man who only pays £1 or £2 yearly in rates cannot be relieved by any scheme of de-rating to a greater extent than £1 or £2. The argument against going any further in the way of de-rating is implied in that fact. There is no doubt that there are few forms of taxation that do not spread far beyond those on whom they directly fall. If the taxes themselves are not passed on certain ill-effects arising from these taxes are passed on. You are bound to throw a certain burden on the man who is rich, or the man who pays no rates, if you spend £750,000 on the relief of rates. If you spend £1,500,000 you probably more than double that burden, because the difficulties of raising the additional money involve the throwing of the net much wider.
The labourer can get nothing directly but the farmer with £1, £2 or £4 valuation, and with rates ranging from 10/- to £1 10s., can only be relieved, at most, to the extent of his rates. Various people have talked about the farmer who pays 10/- or £1 in rates, and they have suggested that by their particular scheme of de-rating something wonderful would be done for the small farmer, whereas no matter how much we pay in de-rating the man who only pays 10/- would only benefit to the extent of 10/-. It seems to me that a lot of people who were talking about the matter have not examined the limitation of this system of de-rating at all. The benefit of de-rating is simply that immediately you can pass a considerable sum of money to agriculturists. Some proportion of that will come from the farmers themselves, but the greater proportion is collected, at any rate, directly from other sections of the community, and it does not seem to be passed on to the agriculturists. That is its advantage.
There are other methods that are intrinsically better, but they would be  much slower. The majority report of the De-rating Commission pointed out methods that they thought ought to be adopted for the helping of agriculture and, intrinsically, these methods are much superior to de-rating. They have this disadvantage which was acknowledged in the majority report. They could only be slowly put into operation and the benefit to agriculture would only accrue from them several years ahead. Consequently, de-rating was adopted as something that would give immediate benefit but it was adopted with some knowledge of its limitations. Only partial de-rating for these as well as for other reasons was decided on.
Deputy Davin asked what was the decision about negotiations in regard to sugar beet. It has already been stated that the Government did intervene in this matter with a view to having a settlement reached if it were at all possible. That intervention continued from the inception of the dispute right down to the end. The Government is still dealing with the matter and there is a good prospect that the negotiations will be resumed between the factory and the beet-growers, not with regard to the prices payable in the present season but with regard to the prices payable during the next four years. As the Government is the only body that can intervene, and as the Minister for Agriculture is in this matter very much in the position in which the Minister for Industry and Commerce is with regard to an ordinary industrial dispute, very little can be said about the matter. Certainly, if the Government's efforts with a view to having negotiations resumed and brought to a satisfactory issue are to be successful, as we have every reason to believe they will be, it is not possible for anybody on behalf of the Government to say very much about the details and the points that are in dispute. I think that no more can be said than has been said by the Minister for Agriculture when he indicated a definite opinion that the factory could have afforded to pay more for beet and should have agreed to pay more.
 Deputy MacEntee referred to certain remarks in the British House of Commons about getting rid of public and municipal debt and the possibility of some measure of inflation. He suggested that steps should be taken to induce, although there is no legal power at present for that, the Currency Commission at a certain stage to sell out securities and to bring home gold. I think the Deputy may be assured that the Currency Commission will watch all such matters.
I would like to say that if it became necessary to sell out any particular class of securities, I would not be in favour of the policy of bringing gold home. I cannot see any advantages, in a country of this size and so situated, that would accrue from holding a stock of gold here. There would be trouble and expense connected with it. There would be no advantages and the loss of interest to which the Deputy refers as something negligible would, in fact, be a very important factor. Suppose that we were to have seven million pounds or thereabouts invested in some securities and, as a result of deflation, the value were to be reduced by one-half, even in such an extreme case we would not really be any worse off if we had already had seven or eight years' investment income from the amount so invested. When you take ordinary rates of compound interest, the investment income is really so important that over a period of fourteen and a half years it is as important as the whole capital sum involved.
In comparison with the resources and wealth and foreign investments of the country, the sum like £7,000,000 which is involved in Currency Commission investments is really a very small sum. Deputies sometimes seem to me to attach a far greater importance to these sums than is merited by the facts of the case. If there were any deflation in England to the extent that I have indicated, or even to a much lesser extent, the effects on this country in other directions would be so great that the effects on this relatively small sum invested by the Currency Commission would be entirely a minor  matter. There is no reason why we should suffer these capital losses. In any case, they will be, as it were, made good in advance by the income that can be earned. I think it is purely doctrinaire, theoretical reasons which cause people to talk about the need for bringing gold home and the advantages there would be in having gold.
There are countries whose finances are on such a large scale that investments in the securities of other countries would not be a practicable method for them to dispose of funds such as the Currency Commission funds. When a country is small it may as well take advantage of any opportunities that its size makes available for it, because it certainly has to bear the disadvantages that its small size involves.
Deputy O'Connell referred to the question of tariffs, and particularly to the question of the boot tariff. I do not make any bones about admitting that I feel the boot tariff is rather on the low side. When it was first imposed, before there was any Tariff Commission, I suggested a 20 per cent. tariff. I was persuaded by some people whom I thought knew more about the boot trade and the effect upon it of protection than they actually did, to reduce the amount to 15 per cent., under the impression that that would be sufficient. Even 15 per cent. has undoubtedly led to an appreciable extension of the industry. Certain firms, of course, have taken little or no advantage of the tariff, but other firms—and it is their case that we really must consider, the case of the progressive firms—have taken advantage of it to a very considerable extent. They have extended their output and have gone in for new lines of business; they have trained hands and have built up connections and have, to some extent, accumulated capital for further extensions.
I do not believe, unless we were to import both outside firms and outside workers, that a very rapid extension of the boot trade could take place. I understand it requires a considerable time to train hands and make them fully expert in many of the operations  that have to be undertaken. Consequently, the development of the boot-making industry is one which must take place relatively slowly. Undoubtedly, if we put on a high tariff, made no difficulties about admitting hands and threw no obstacles in the way of foreign firms coming in, we could in a very few years get five or six thousand hands, but, even apart from any of the factors to which Deputy Lemass referred, I do not think that would be desirable. The real burden of a tariff does not lie in the amount collected by the Exchequer. I find, as Deputy Lemass pointed out, that there is a very common error in regard to the boot tariff. A lot of people through the country say that because there is £250,000 a year collected by way of a duty on boots that it is actually costing the country that amount. That money is simply replacing the tea tax which was remitted when the boot tax was imposed.
Where the burden on the country comes in is in respect of boots which are sold at the same price to the public as tariffed boots and which yield no revenue to the Exchequer. If we got to the position where all the boots required in the country were made at home, and if they were sold at exactly the price which foreign boots would fetch after putting on the 15 per cent. duty, then we would have the boot industry costing the country £250,000 per annum and we could count the operatives in the industry and see what it was costing the country per annum to maintain each one of the operatives. So far the boot industry is, in fact, costing the country relatively little. If we put on a huge tariff like 40 or 50 per cent. it would undoubtedly put 5,000 or 6,000 hands at work. We might easily have no imports. We might have boots costing the public 40 or 50 per cent. more than they would cost if there had been no tariff. That might mean that the country would be paying £500,000, £600,000 or £700,000 per annum for the purpose of maintaining the boot manufacturing industry. If it cost £700,000 per annum and there were 7,000 people at work, you could say that it cost £100 per annum, or £2 per  week roughly, to maintain each employee at his job.
The danger of putting on very high tariffs is that the factories are ill-organised and the workers never got perhaps the real expertness that they ought to get. Very often the plant is not renewed or kept up-to-date as it ought to be. Consequently, you have this net burden which a tariffed industry sometimes throws on the country increased beyond what it ought to be. If you have your tariff too high, you diminish the prospect of that industry being sufficiently organised and conducted that some time or another it might be possible for it to continue without a tariff —that is to say, that it would be so efficiently conducted that it would sell its goods, roughly speaking, at the same price that outside factories sell similar goods.
Mr. de Valera: Is the Minister leaving out of account internal competition? Would there not be ordinary competition internally?
Mr. Blythe: There may be internal competition, but if you have a relatively small country—it happens even in big countries, but I fancy it is easier to organise it in a small country —you are quite likely to have an internal arrangement amongst your manufacturers. In every business, to a greater or lesser extent—you may ignore it or not—this is one of the things which tend naturally to arise. If you have your tariff very high so that external competition does not count, you may have manufacturers going to one another, and saying: “Why should we be cutting one another's throats? Could we not do a great deal better, and have none of this cutting at all, since we have nothing to fear from outside?” I think it is worth while keeping a tariff relatively low, provided it will develop the industry—even though the result may be somewhat disappointing to those who would like to have big changes— where keeping it low makes for the ultimate health of that industry and the ultimate benefit of the people. I am not arguing at the moment in favour of the particular rate at which this tariff is fixed. There is, however,  this to be said, that the boot manufacturers have, as I understand, met on more than one occasion—I heard of one meeting, at any rate—to discuss the question of applying for some increase in the tariff. No application was made to the Tariff Commission as a result of their deliberations. I do not know what disagreement arose amongst them. If there was not a majority against the proposal, there was not, at all events, sufficient agreement to allow them to proceed with an application for a higher tariff.
Mr. de Valera: Is it not obvious that they would be afraid in a case like that of bringing in some outside combines?
Mr. Blythe: I am sure that would be one of the factors which would be present to the minds of those who were considering the question. But the question of outside combines is not really disposed of by a reference to a matter of that sort. If we had had a law a few years ago against the coming in of outside combines, we would have no Ford factory in Cork. Points arose even since the factory was set up and if the Dáil had begun to legislate along such lines it would have created an alarm which, I believe, would have led to the factory being withdrawn, even though that involved big losses in the removal of plant and the scrapping of premises. I agree that after a certain point the coming in of outside concerns or the domination of industries here by outside concerns would not be in the national interest, that it would limit development in certain directions, that it would prevent any real heads of industries being trained and living here amongst us, that it would mean that in many cases industries would be run as branch concerns by people who had nothing to do with policy and no appreciation of the general policy of the industry in which they were engaged. But we have not at all reached that point at the present time. The number of firms that have come in is very small. I would like to remind Deputies that there are people who run industries here—I have come across cases of this kind—who would object to a foreign firm being allowed  to start a new industry here but who are in favour of foreign firms being allowed to buy up existing industries. In relation to one industry, there was quite a ramp and an agitation carried on along these lines. Some of the people who were engaged in that ramp did succeed afterwards in selling to the foreign firms. Even in relation to the boot and shoe industry, there would not I think be any likelihood of foreign firms coming in to the extent of squeezing out the more efficient firms. They possibly might have some effect on some of the others but if we take everything into consideration there might be an advantage.
Deputy O'Connell urged that we should have something more than tariffs—that we should have direct State interference and, if necessary, State control. I do not believe that you would get any real progress in that way. If you are to have State control of industries, you will need all the machinery that is employed in the country in which you have State control—Tcheka and all the rest—if you are to make it really effective. There are certain things which a State can run very well. There may be even certain industries which a State can run efficiently. There are a great many others in which State intervention would only lead to difficulties of every sort. On the one hand, if you appoint people with too much freedom, you are going to have recklessness, because they will not be dealing with their own money. If you deal with them summarily on the Russian method——
Mr. O'Connell: Is there no intermediate stage?
Mr. Blythe: There is an intermediate stage but it does not work out very efficiently. If you have something like the control that works back to the Comptroller and Auditor-General, then you cannot carry on an industry at all. What is called Parliamentary control is quite impossible from the point of view of carrying on an industry.
Mr. O'Connell: I agree.
Mr. Blythe: Something that is a monopoly, something that is in the nature of a public service, it is well known, is carried on efficiently——
Mr. MacEntee: The Post Office.
Mr. Blythe: The Post Office is not so bad at all. The Post Office does not pretend really to be a commercial concern.
Mr. O'Connell: It gives service.
Mr. Blythe: It does not pretend only to have a delivery where a delivery will pay. It is quite a different thing from running a business which must be run on some sort of a competitive basis. I do not see that the State could really do anything by way of intervention. There might be certain instances in which it might facilitate coordination, amalgamation or something of that sort. I do not believe in the suggestion of Deputy Lemass that we should have a new Trade Loans Guarantee Act or some scheme of providing capital for private individuals which would, I presume, even go a great deal further than the Trade Loans Guarantee Act. I am satisfied that if we did provide facilities in that direction that, again, because we were giving some people easy money, money for which they had not to provide full security, you would have an inevitable spirit of recklessness in the running of the industry and almost inevitable loss. My belief is, in regard to the promotion of industry, while a little may be done in various directions by supplementary methods, not excluding technical education—quite a variety of minor methods may be of use and give some assistance—the imposition of tariffs is the best method and will generally give more satisfactory results. I think that the main difference I have with Deputy O'Connell in regard to that is that although one might like to see industrialisation proceed very rapidly there are certain advantages in going slowly. There are certain advantages in just giving industries sufficient protection to enable them to fight their way upwards and in order to fight having to be fully efficient all the time.
Mr. Little: May I ask the Minister whether he will consider letting in the unmachined castings?
Mr. Blythe: I will look into the position.  I do not know whether the Deputy was referring to any difficulty that arose quite recently.
There were certain castings brought in for the purpose of being converted into motor-car parts. We found, under the law as it stood, that we were able to let them in, although we knew what they were for. In fact they were not identifiable as such by appearance. We were able, under the existing law, to allow them, and they are being used by a company carrying on that particular work.
Mr. Little: Will that be the practice in future? These castings are not very recognisable. Will they be allowed in in future?
Mr. Blythe: Some of them would.
Mr. Little: It would be better to regularise the position.
Mr. Blythe: I would not like really to strain the law; I would prefer to amend it. Considering that the sort of parts dealt with a fortnight or three weeks ago might be used not only for the making of motor parts, but for the manufacture of certain other things, I think they were properly allowed in under the Act, although we knew what they were for.
Mr. Little: Will the Minister consider extending the Act?
Mr. Blythe: I will consider the point the Deputy raised.
Mr. Little: Perhaps the Minister would also consider the other matter in regard to extending the relief in respect of cars that are more than five years old to the hackney motor trade?
Mr. Blythe: It was deliberately decided at the time not to extend it to hackneys for the reason that if a private individual cares to use a dilapidated old car or a car that had reached the danger point, that is more or less his own look-out, but it was felt that we should not encourage the use of absolutely decrepit cars for public hire. It was deliberately decided at the time to exclude these cars.
Mr. Little: You could increase the tax again after ten years.
Mr. MacEntee: Would the Minister bear in mind the point which I have raised in regard to Section 7—the assessment of income tax on the pensions of the widows of 1916?
Mr. Blythe: I will look into it but I could not give the Deputy any promise.
Mr. MacEntee: Would the Minister  not put them in the same category as those other pensions?
Mr. Blythe: There are probably a number of other pensions in the same category. I am not prepared to give the Deputy an answer at the moment, but I will look into the matter.
The Dáil divided: Tá, 60; Níl, 30.
|Aird, William P.
Beckett, James Walter.
Bennett, George Cecil.
Bourke, Séamus A.
Byrne, John Joseph.
Cole, John James.
Collins-O'Driscoll, Mrs. Margt.
Connolly, Michael P.
Cosgrave, William T.
Doyle, Peadar Seán.
Duggan, Edmund John.
Egan, Barry M.
Finlay, Thomas A.
Gorey, Denis J.
Hassett, John J.
Heffernan, Michael R.
Hennessy, Michael Joseph.
Hogan, Patrick (Galway).
Mathews, Arthur Patrick.
McFadden, Michael Og.
Mongan, Joseph W.
Murphy, James E.
Murphy, Joseph Xavier.
Myles, James Sproule.
Nolan, John Thomas.
O'Reilly, John J.
O'Sullivan, John Marcus.
Shaw, Patrick W.
Sheehy, Timothy (West Cork).
Thrift, William Edward.
White, Vincent Joseph.
De Valera, Eamon.
Gorry, Patrick J.
|Kent, William R.
Lemass, Seán F.
Little, Patrick John.
O'Connell, Thomas J.
O'Kelly, Seán T.
Sheehy, Timothy (Tipp.).
Ward, Francis C.
Tellers: Tá, Deputies Duggan and P.S. Doyle; Níl, Deputies Little and Killilea.
Motion declared carried.
Committee Stage ordered for Thurs day, 2nd July.
 The Dáil went into Committee.
Debate resumed on the following amendment:—
To delete sub-section (2) and substitute the following:—
“In this part of this Act the expression Proprietary Lease or Proprietary Agreement, means a lease complying with all the following conditions, that is to say:—
(a) such lease is a sub-lease (whether mediate or immediate) under a building lease, and
(b) the land demised by such lease is the whole or part of the land comprised in such building lease, and
(c) such lease is made for a term expiring at the same time as, or not more than one year before the expiration of such building lease.— (William E. Thrift.)
Professor Thrift: I do not want to repeat in any way what I said yesterday, but, thinking over what occurred yesterday, I would like to take advantage of what, perhaps, was dropped by the Minister as a hint and say that, perhaps, a good deal of the difficulty could be met by diminishing the numbers that are used in the definition clause of the term “proprietary lease.” In two of the sub-sections in the Bill a period of 31 years is mentioned as a term for which the lease must have been held, and the figure of 25 times the reserved rent is mentioned as the figure which must have been paid for that rent. I would like to suggest to the Minister that a good deal of the difficulty could be met if those numbers were substantially reduced. I do not think it would go far enough, but I think it would be a reasonable compromise that we might ask him to accept on the section. If he would undertake to consider alterations on these lines I, for my part, would be prepared to withdraw the amendment.
 The two points would be to reduce the 31 year period to a smaller period, say 20 years, and secondly to reduce the amount payable from 25 times to, say, 15 times. I have got here a form of words which will bring out a point which was made yesterday of considerable importance namely, that money expended in improving the premises should be taken on a par with money actually paid to the lessor for the sub-lease. I will read the words suggested. These words should be introduced into the sub-section “Such lease was made partly in consideration of a payment, other than rent, by the lessee to the lessor at or immediately before the grant of such lease or in consideration of an expenditure by the lessee on the lands demised or both such considerations and (e) such payment or expenditure or both together amounted to not less than fifteen times the yearly rent or the greatest rent reserved by such lease.” I do not ask the Minister to accept that or anything like these words at the moment, but if he will consider the introduction of the points which are covered by these amendments before Report Stage I am prepared for my part to withdraw this amendment.
Mr. Fitzgerald-Kenney: As I intimated yesterday, it is quite possible that a term of 31 years is too long, and possibly also the number of years' purchase, so to speak, is perhaps too high. I expressed the general principle that I wanted to see established, that is that the person who had really the most beneficial interest in the premises was the person to whom a renewal of the lease should be made. Deputy Thrift's amendment as it stood, is an amendment I could not possibly accept because it would mean that a person who had a lease perhaps for three or five years would be in possession of a house at the time at which his immediate landlord's lease expires. He might never have spent a single penny on the house. He might be perfectly willing to keep paying his old rent and would suddenly discover from nowhere, a gift from the goods reducing his rent in an enormous fashion. Remember, a  person may have only a three years' lease of a house for which he was paying £60 a year and was satisfied to keep on paying and suddenly, because a lease to which he was not a party expired, he might discover his immediate landlord, the person who had built the house, was cut out and that he was getting his premises for something like possibly £10 or £15 a year. That certainly would not appear to me to be equitable, but as I say, I will consider how far, in fairness, these two things can be reduced, and I will bring the matter up on Report Stage.
Professor Thrift: That being so, if leave be given, I will withdraw the amendment.
Mr. Geoghegan: I rise to express a slight measure of regret that Deputy Thrift should have in any way receded from an amendment of his which to my mind is a second best solution of this problem. The solution at which I would aim is expressed in a later amendment which would seek to give the benefit of the increment to the possession of bricks and mortar to which the Minister has referred directly to the community in the shape of the local authority. But failing that, I would strongly support the amendment tabled by Deputy Thrift, subject to some trifling emendations to which, I think, Deputy Thrift may not take exception. They are so trifling as to be hardly worth mentioning. The Minister states that his desire is to give the lease to the person who has the greatest beneficial interest in the hereditament and the Minister dwells on the want of equity and justice in giving that renewal to a tenant who might, perhaps, have been in possession merely for two or three years. Let us consider what we are dealing with. The bricks and mortar have been there during the entire term of the lease. Under the law as it stands at the present time the bricks and mortar the instant that the lease expires belong to the ground landlord. The middleman certainly has no legal claim. He could not advance anything  in the nature of a legal claim to the ownership of the bricks and mortar or anything therein. The ground landlord has at least his legal right but the general sense of the community seems to be that that legal right should be eaten in upon in the interests of the public at large. What benefit does the public at large derive from the perpetuation of the middleman system. I can see none. If the middleman gets the lease he may be resident in Brighton, he may be resident in the South of France. The community may drive no benefit at all from his ownership of a middle interest. Give it to the occupying tenant, as Deputy Thrift's amendment would in substance do, and you have at least a person owning the leasehold who would be dealing with the local baker, the local butcher, the local grocer, the local draper, and consulting the local doctor and the local solicitor. A strong case can be made in favour of eating in upon what is perhaps the legal right of the ground landlord in favour of such a person. But when you come to think of it what can you say about the middleman?
The Minister mentioned the case of the occupying tenant who is merely in for two or three years. Does the Minister forget or overlook that many of the middlemen have, in fact, been there for perhaps only three, four, five or six years? It is fallacious to assume that the person entitled to this middle interest is the original building lessee. Of course he hardly ever is, and he rarely is the person who takes by descent from the original lessee. In many cases this middle interest changes hands. We see it advertised day after day in the “Irish Times”. A person buying that middle interest knowing that he has only four, five or six years to run, and knowing at most that he has merely a chance of getting a new lease from the ground landlord has no right up to the present. The effect of the Bill as it stands, and to a lesser extent the effect of the Bill if the compromise suggested by Deputy Thrift is enacted, is that some speculator who within the past six or seven years bought for little or  nothing a sub-interest, but not a possessory interest, in a house on the chance that one of the great ground landlords in the vicinity of this city, or any other city, would give him a renewal, is now to be clothed with a legal right to become the owner for a long term of years of the bricks and mortar to which the Minister refers.
[An Leas-Cheann Comhairle took the Chair.]
I would ask the House to consider whether every word which has fallen from the Minister against the three year occupying tenant, does not apply with equal force to the large number of middlemen who have recently, or comparatively recently, acquired leases and I would ask the House also to consider that in cutting up this melon that legally belongs to the ground landlord—I do not think anyone suggests that he should be allowed once this Bill is passed to have this building—the person who can advance the least possible claim to it is the middleman who, as I said before, may be an absentee. I would ask the Minister if he is considering the rewording and revision of this clause to go much further in the direction of Deputy Thrift's amendment than Deputy Thrift has himself suggested.
Mr. Fitzgerald-Kenney: Of course I think I dealt yesterday with every argument Deputy Geoghegan has put forward. They were all put yesterday and I do not think it is necessary for me to go through them again.
Mr. Lemass: Did you deal with them in the Dáil?
Mr. Fitzgerald-Kenney: Yes.
Mr. Geoghegan: I was not here yesterday. If I had been aware of that I would not have gone over the ground again.
Mr. Fitzgerald-Kenney: The Deputy put them very forcibly. My answer to them is that the actual person who owns the building lease is there by descent. It may not be so in the majority of cases. I think it would be absolutely impossible to get any statistics.
 But if a person has paid a considerable sum of money for the bricks and mortar to the person who built them he stands in the shoes of that person. That houses have been sold very cheaply lately because the reversionary interest might be short is against every single thing that I have heard happening. If one or two individual houses have been sold cheaply, that cannot affect the general question, which is that the person who built the house should have the value of the improvements which he put upon the land and that no one else should have it.
Professor Thrift: Deputy Geoghegan would have been a most valuable ally yesterday. I urge the Minister to go as far as he possibly can in the direction of the compromise I have suggested. If you try to meet various types of cases by a single section there will be hard cases. My conviction is that the hard cases will be more numerous the longer you make the term and the higher you make this figure. The wider you can make the extent of ground covered by your definition of proprietary lease the less you will have these hard cases arising. I ask the leave of the House to withdraw the amendment because I think it better to compromise than to be defeated, but I think the further the Minister can yield in the matter the more good he will be doing to those who have these sub-leases and who are tenants in occupation.
Amendment, by leave, withdrawn.
Mr. Fitzgerald-Kenney: I move amendment 88:
In sub-section (2) (c), to delete all from the word “of” in line 42 to the word “expiring” in line 43 and substitute the words “which equals or exceeds whichever of the following periods is the lesser, that is to say, thirty-one years or two-thirds of the term of such building lease, and which in any case expires”.
The reason for that is that sometimes building leases may have been for a  comparatively short time and the subletting could not have been for thirty-one years. That goes a certain distance already towards what Deputy Thrift urges.
Mr. Geoghegan: The amendment which the Minister has set down here is one which I do not oppose. If the section, in its present form or in a revised form, is to go through, I do not see that much is to be gained by opposing it. But, subject to that, I desire to avail myself of this opportunity, as the Minister is dealing with sub-section (2) (c), to suggest that whatever form this sub-section eventually takes the period of two years there is too short. When the Minister is recasting this section I would suggest his extending that period of two years possibly to five years. In ordinary clean-cut cases the period of two years which is in the sub-section would seem ample because the nominal reversion that is reserved by a sub-lessee is usually between one and three years and probably two years would cover most of them. But, in one country town which I have particularly in mind, and in the city of Dublin, there is not merely a sub-lease, but out of that sub-lease there is again carved a further sub-lease, and even a further carving of a sub-lease, each sub-lessor reserving what to him is more or less a nominal reversion of, say, one year. Consequently, you may have, and will have, in many instances, a person who, within the real intendment of this Bill, is the owner of a proprietary lease, with a period of more than two years between him and the head lessor. For that reason I suggest to the House that two years is too short. If the House does not see its way to extend that period, and there may be objections to an extension of that period to some other arbitrary period that I do not foresee, some elasticity ought to be given. There ought to be some power given to a judge in the special circumstances of a case to extend the period so as to cover the combined nominal reversions where there are different sub-leases carved one out of the other.
Mr. Fitzgerald-Kenney: The Deputy knows that the question of sub-leases is provided for. There may be several proprietary leases on the same premises, but provision is made as to who is to get it. It is the person who is in the nearest actual occupation.
Mr. Geoghegan: I have not followed that, but I accept the Minister's assurance. If there were a succession of sub-leases to the same hereditament each reserving a nominal reversion, and that the sum of the successive nominal reversions exceeds two years, I do not see how this Bill operates to give the person who has what one might call the lowest proprietary lease the right to a renewal, but I accept the Minister's assurance if he states to the House that the Bill does so operate. If between the expiration of the head lease and the expiration of the lowest proprietary lease the combined term is more than two years, and the operation of the Bill as drawn will give the lowest proprietary lease-holder a right to a building lease, I am content with that.
Mr. Fitzgerald-Kenney: I will look into that.
Mr. Geoghegan: I will be content with that too.
Amendment put and agreed to.
Section, as amended, agreed to.
Mr. Lemass: I move amendment 89:
Before Section 42 to insert a new section as follows:—
“(1) On the expiration of a building lease, the council of the county or other borough or of the county in which the land demised by such lease is situate shall be entitled to obtain from the person in receipt (otherwise than as agent for another) of the rent reserved by such building lease, a reversionary lease on the terms fixed by this section of the said land.
(2) The duration of such reversionary lease shall be a term of ninety-nine years from the expiration of the building lease to which it is reversionary.
 (3) The rent reserved by such reversionary lease shall be the rent reserved by such building lease.
(4) The council of a county or other borough or of a county to which a reversionary lease is to be granted under this section shall, notwithstanding anything to the contrary in any enactment in force at the date of the passing of this Act, be empowered to accept such reversionary lease.”
This is an amendment which, in my opinion, embodies the ideal solution of the question that we have been discussing for the past two days. Deputies will remember that from different places in the House various Deputies rose and clearly demonstrated that whoever had a right to a reversionary lease of a building lease it was not the landlord, or the middleman, or the occupying tenant. That was clearly demonstrated in respect of each of these in turn. The discussion that followed was considerably confused by the fact that nobody could point clearly to a right in a reversionary lease reposing in any of the parties named because no such right existed. I take it that all Parties are agreed that an amendment of the present law is necessary. The present law, as Deputies are aware, is that on the expiration of a building lease the ground landlord resumes ownership of the land and the buildings thereon. He has originally given a building lease to a builder and that builder constructed houses which he either let or sold. When he was taking the lease and expending the money upon the building of the houses he knew quite clearly and definitely that at the expiration of his lease the ownership of these houses was going to revert to the ground landlord. He may have had expectation of a reversionary lease but, as Deputy Geoghegan has pointed out, he had no legal right to it. It seems to me that the builder or his successor gets under the existing law exactly what he pays for. In the majority of cases, as was explained, the builder has sold out to a middleman who has purchased what is for him an annuity for a number of years. He takes the obligation of paying  the rent to the ground landlord, gets the privilege of collecting a greater rent from the occupiers of the houses, pays the former rent out of the latter, and pockets the difference. That is his profit rent.
In the majority of cases the middleman is the person who purchased for a definite sum that profit rent for a fixed number of years. Is it seriously contended that he has in justice a right to a continuation of that profit rent for another period of 99 years? Some Deputies think so, but the view of a number of Deputies in all Parties in this House was that he had not. The Minister has been arguing against giving the right of a reversionary lease to the occupying tenant unless that occupying tenant has purchased the middleman's interest. He has apparently satisfied himself, and to some extent Deputy Thrift, that the occupying tenant who has not paid a substantial fine for the lease—a very substantial fine which in effect would purchase the middleman's interest—has no right to the reversionary lease. It was, as I pointed out, clearly demonstrated by Deputies in various parts of the House that none of the three persons or any of these parties has a right to share in what Deputy Geoghegan called this particular melon. Who has the right to it? The proposal we make is that at the expiration of a building lease the community, the local authority for the area, should become the owner of the land concerned. The proposal that we would make is, that at the expiration of the building lease the local authority would become the owner of the land, and would pay to the ground landlord an interest-bearing security of sufficient value to provide him the same income he previously enjoyed from the land. That is not the amendment I am moving, because such an amendment would probably be out of order, and certainly would be impossible for Deputies in our position to draft. We are presenting here an amendment to provide that at the expiration of a building lease the reversionary lease, which under the Bill goes to the middleman, should go instead to the local authority,  which will pay to the ground landlord the same rent which the ground landlord hitherto received. The local authority in consequence steps into the shoes of the middleman, takes the profit rent, and puts it to community purposes. Now the Minister for Justice, in an aside yesterday, said something about the Pope's Encyclical. I have been thinking the matter out since, and I cannot discover any particular Encyclical relating to this amendment.
Mr. Fitzgerald-Kenney: The recent one on Socialism.
Mr. Lemass: There is nothing contained in this amendment which has not been enacted in respect of land. The community has taken to itself the right of acquiring land compulsorily at its own valuation from the owners when that land was used for agricultural purposes. Why should it be right for the community to do that in respect of agricultural land and not right to do it in respect of building land?
Professor Thrift: In respect of land so many years' purchase was given.
Mr. Lemass: In this case we are proposing——
Professor Thrift: To give nothing.
Mr. Lemass: We are proposing that the original owner of the land, the ground landlord, who is probably the descendant of some pirate or robber, will get in the future what he was getting in the past. Only in future he gets it from the local authority instead of in rent.
Professor Thrift: You do not give him anything for his admitted legal right which you are taking from him.
Mr. Lemass: A legal right given to him by a Parliament composed of persons of his own class and which we are now proposing to take from him. He is going to lose that right at any rate. His day is done; his number is up; his right is gone, and on the 31st of March this year he lost the right to give a voluntary reversionary lease.
Professor Thrift: My point is that you should not compel the landlord.
Mr. Lemass: Why not?
Professor Thrift: Because you give nothing in the one case, and you give so many years' purchase in the other.
Mr. Lemass: In this case we propose to give him the same rent as he received before.
Professor Thrift: But you give him nothing for his legal right.
Mr. Lemass: He is getting nothing under this Bill. Of course, there are provisions here which might result in his getting an increase of rent in the future. We will oppose these because we at any rate think that he should be quite satisfied if he gets what he got before from the person in occupation, who paid him rent.
The profits that went into the pockets of the middlemen will go to meet the expenses of the community either in the form of a reduction of rates or to pay for increased community services. That is the proposal here. It is the commonsense solution of this problem, and it is the solution that should commend itself to this Dáil. Because it is the commonsense solution and the just solution the Minister for Justice runs away from it and shies at it like a spirited horse at a railway engine.
Mr. Fitzgerald-Kenney: I have not spoken yet on the matter.
Mr. Lemass: I took it from the Minister's reference to the Encyclical that he intended to hide behind it.
Mr. Fitzgerald-Kenney: Oh, no!
Mr. Lemass: I am very glad and I shall be glad to give the Minister an opportunity of speaking now. He must admit that the community has a greater claim to this increment than any of the parties whose interests are advocated here, and certainly have a very much stronger claim than the middleman. He has no claim whatever. He is in the nature of a social pest to a large extent, and if we eliminate him it will be a decided benefit. The ground landlord has some claim. As Deputy Thrift pointed out, he has not merely  a claim but a legal right, which we propose to take from him and give him nothing in exchange. The occupying tenant could advocate some claim and I am sure if Deputy Byrne were here he could advance an eloquent claim for him, but the strongest claim of all is that which could be advanced on behalf of the community, and that is the claim which this amendment advocates.
Mr. J.X. Murphy: I would like to ask a question. Are there not cases where people have become landlords by acquiring other landlords' rights? The Deputy's case is that the existing landlords got their heritage by robbery.
Mr. Lemass: Some of them, present company excepted.
Mr. Fitzgerald-Kenney: The House has had some difficulty in deciding, and undoubtedly different views have been advanced as to who should be entitled to the reversionary lease when the original building lease expires. Some persons would hold that the ground landlord is entitled to the full value of the premises, that that was the contract he entered into, and that when the lease has expired he is entitled to get back the land plus the buildings on it. Some people put forward the view, which I think is a fair and just view, that the person who has improved the land, and placed a house upon that land, and to whom the value of that improvement of the bare bit of ground has gone, is the person who is entitled to the major interest in the premises. Other persons have put forward the view that it is the occupier, where he has been there for a very long time, but this much is clear, that between the three of them somebody—the person who owned the land, the person who built the house, and the person who lives in the house—has the entire right to the house. But because there is a difficulty in deciding which of the three persons is to have the major interest Deputy Lemass says, “Do not give it to any one of them; give it right away to the community.” I did mention the Pope's Encyclical, but I am not going to go  into it now. I think this is the most socialistic proposition that I have ever heard put forward, because no matter whose property you are confiscating, you are obviously confiscating somebody's property. You are giving to the State, or to some town council or corporation, rights in property which they did nothing for. It is not due to them that there is a house there. It is due to the person who built it, and because views differ in deciding as to where the major interest lies, we are asked to take away that major interest and to give it to somebody who has no claim to it; to give it to the general community.
When I heard Deputy Lemass speaking I was reminded very much of an old judge. Deputy Lemass was trying to decide in a judicial capacity as to where the right lay. The very old judge I refer to is Solomon. When a baby was brought before Solomon and he was asked to decide which of the two ladies owned the living baby he directed that the baby should be cut in two. If the real mother had not claimed the baby the result of that decision would be that neither would have enjoyed the baby. Here, because there is some difficulty in deciding which of these persons is entitled to the rights of ownership or semi-ownership in these premises, Deputy Lemass says: “Cut it in two and give it to neither; make it worthless for either of them and take it clean away.” That is an astonishing proposition, that the occupying tenants are to pay the full value to some corporation or to some urban council. The person who has built the house is to be completely swept away and the urban council or the corporation who did nothing are suddenly to confiscate other people's property. It seems to me to be a terrible proposition.
Mr. T.J. O'Connell: As the Minister has called to his aid the Pope's Encyclical he will not, I am sure, object to my quoting one little sentence from it that has a bearing on this matter. It reads:
For it is rightly contended that certain forms of property must be reserved to the State, since they  carry with them an opportunity of domination too great to be left to private individuals without injury to the community at large. Just demands and desires of this kind contain nothing opposed to Christian truth, nor are they in any sense peculiar to Socialism.
I would ask the Minister to think that over.
Mr. Fitzgerald-Kenney: May I inform Deputy O'Connell that there is nothing in it which prevents an unlimited number of houses being built, and that there is nothing in it which prevents the individual whom Deputy Lemass described as a social pest— that is, a person who builds houses— from acquiring land and building houses on it.
Mr. Geoghegan: Until I heard the Minister's reference to Solomon and his paraphrase of the text I really never quite grasped the meaning of the phrase that a landlord can quote Scripture for his purpose. The Minister seems to think that Solomon, in proposing to cut up the baby, took a very wise fine, as, indeed, is generally accepted. I do not quite follow what the baby is in this case. Is the baby in this case the unearned increment? If it is, then I think the House has already gone far enough in this Bill to make it perfectly clear that it has taken the baby away from its mother. The unearned increment at the present moment belongs to the ground landlord. Everybody is agreed that the ground landlord has to lose it.
Professor Thrift: Not yet.
Mr. Geoghegan: I stand corrected. I should have said in whole or in part. I think everybody is convinced that the House will go far enough to deprive the landlord of part of his property, of something that belongs absolutely to him at the present time in the eyes of the law. Therefore, it is not a matter of confiscation. It is now a matter of donating this. This House has now taken to itself this unearned increment. To whom is it to give it? Is it suggested by the  Minister that the middleman has some extraordinary right to it? What right has he to it? The State is now grasping it. Why should the State imitate the kings of the Stuart regime and grant away these things to some favoured class? That is what it amounts to. Why is the middleman to get out, except possibly that he has either by reason of the numbers of middlemen or by reason of the depths of the purse of middlemen considerable political power? What other reasons can be advanced for donating this thing to the middleman?
If this House is taking possession of this unearned increment, and is giving it away, why should they not give it to the public at large? What greater claim has any one member of the community in this State, or any favoured class such as the middleman class, to this something that the House is giving away, than any other citizen in the State? I ask the House, now that they have divested the ground landlord of his right, to be logical and give it to the community. I put it also on the other ground, that hitherto this ground landlord has had a power which it is right to say was sometimes exercised as a benevolent despot exercises his power. It was not exercised always in favour of the middleman.
Now you are conferring a right on the middleman. If you are to take away what was sometimes the benevolent despotism of the ground landlord who in practice will frequently give a new lease or a reversionary lease to an occupying tenant—we all know that happens—then I suggest that the next best thing you can do for the occupying tenant when you are not giving him an improvement right is to give this property in the form of this increment to the local authority who will deal justly and probably with a certain amount of benevolence as between the various parties who have claims to it.
Professor Thrift: I agree with the Minister that the pea in this case is under one of the three thimbles or is somewhere distributed amongst them, but I find fault with Deputy Lemass's  argument to an extent. He dealt very satisfactorily with two of the thimbles but I think he was very weak in reference to the first one. He seemed to me to base his case on a comparatively small number of instances. He cited cases of the ground landlord as if he were some one who had invariably come by hereditary possession into large estates and who had nothing whatever to do with them himself. That occasionally is true. But there are many other types of cases. There are cases where people have bought estates with their accepted legal rights attached, and paid cash down for those rights. The State itself—this is very important—has profited by those legal rights in many instances, because if the owner of an estate of that type dies his successor to the estate has to pay death duties on the value of the estate, including the cash value of the reversionary rights attached to the estate. The State has received large sums of money from the estimated value of these reversionary rights. Now the State proposes to come in and say: “These reversionary rights are nil; we took the estate duty on them and profited by them when they were there; they are now, so to speak, in the air, and we say they are worth nothing. We profited by them when it was to the interest of the State to say that they existed.” Now when the matter comes before the House, the House as representative of the State says there is no such right. That is definitely the argument of Deputy Lemass.
I think the fair thing is not to say that the estate owner is always some one who possesses it by hereditary possession, is by no means always a bad landlord—though there are such—by no means always a mere person who stands by and sees his property grow in value of itself, but in many cases he spends large sums of money in improving the property, and having done that in the expectation that by so doing it he would in the end profit by the increased rents which he would be able to get when the lease fell in. That seems to me most unfair, and  is the first time that anything of the kind has ever been done by this State, at any rate, to step in and say to the ground landlord “You are to lose your hitherto vested legal rights and get nothing for them.” The only equitable way in which to proceed is to estimate, by providing that the increased value should be distributed between the people who are really interested in the property. I contend that it is neither fair nor reasonable to assume, as Deputy Lemass did, that because of certain cases that the ground landlord is not entitled to any profit at all when a lease happens to fall in.
Mr. Fitzgerald-Kenney: Of course the failure of Deputy Geoghegan's argument is that he talked of unearned increment. We are not dealing with unearned increment. We are dealing with an increment earned by the man who erected the house.
Mr. Little: Landlords can be divided into good landlords and bad landlords. I will deal first with the good landlords. The middleman who bought the interest has improved the estate on the basis that he had a certain lease. His investment was made after keeping his eye closely on the fact that the lease would end at a certain period, and he calculated accordingly what his profits would be. In most cases he knew, until this Bill came before the House, that he would probably not get a reversionary lease on the termination of the present lease. He would get no new lease on the termination of his investment, or might get it. Most sensible men did not start improving the property until they were perfectly certain they were going to get that. In most cases an investment, generally for 99 years, has already paid back interest and capital, and that person has really no grievance in the matter.
As to the ground landlord, he has a fixed rent and a fixed security of an extremely valuable kind. He has a rent which must be always paid. No matter whether the middleman is able to pay it or not, the ground landlord is certain of getting his rent in some shape or form, unless the property is  assigned to a man of straw. Ultimately it must fall into the hands of the ground landlord. The ground landlord is in a privileged position and he should be well satisfied if he gets out of the property after the passing of this Bill what he was getting out of it before.
As a matter of fact, in a great many of the estates in the City of Dublin and around it—and I take it the same is probably the case in other parts of the country—the root of the title of the landlord is perhaps one of the most discreditable things in history. Most of them got titles to large estates in the city over a “drunk” of members of the old Dublin Corporation, many of whom went into the Corporation especially to get property worth thousands of pounds for a few hundred pounds. These men and their descendants having got the property at that low price have been coining money ever since out of the high rents of the city. I say that we are not going to end a considerable number of the evils that exist in the City of Dublin, and in the slums, until we have put upon a proper basis the rents those ground landlords are to get out of the property. To my mind this amendment is an extremely moderate amendment, because according to the strict application of human justice those people only paid a few hundred pounds for property because they were the mistresses of the kings of England. They should be dispossessed because the property originally belonged to the community by right. The robbery that took place at that time is a continuing evil which is largely responsible for the slums of Dublin to-day. It is also responsible for the high price of goods in certain areas, where gambling has been done, and where the increased value of property has been put on to the price of goods in certain streets. If we are to get any sort of stability and fairness we must apply some rigid principle in the case of landlords who originally got public property for a price which was so cheap, as to be a mere trifle, and which has been making a profit for them ever since.
 What we propose in this amendment to do is not to do severe justice to these landlords, having regard to the landlords who have purchased that property on the basis of the ground rents which were taken out of that property. In some cases, of course, these ground rents have been sold over. The basis on which they were bought is on a fixed number of years' purchase and provided that they continue to get the rent which they were getting when they purchased that property you are doing no injustice to that property. You are treating them very fairly because you are securing for them the same rent which they were getting when they purchased the property.
Professor Thrift: What about the properties with reversionary rights, on which the death duties have been paid?
Mr. Little: The question of these death duties paid upon the reversionary rights might be a question which could be dealt with in some other way, but it certainly cannot be dealt with in a Town Tenants Bill. There may be incidental evils arising out of a case which could be remedied possibly by a Finance Bill. If there are real grievances in the matter I do not see why they should not be remedied. That question raises many ramifications which I am afraid one could not discuss on a Town Tenants Bill because it really belongs to a Finance Act and we are forced to leave that matter there. We have an opportunity—the first opportunity that we have had in this country—of undoing some grave injustice to the community who suffered through the robbing of those lands, of establishing some sort of stability which will spread from this question of landlord and tenant. It will spread to the question of price, and I believe if the community were to become middlemen it would have a considerable effect in preventing an undue increase in the value of property and stabilise prices generally. I hope the Minister will look at this question in a very large way and consider the problem and come round to our point of view, to this extent of admitting  that the principle which we are attempting to establish in this amendment is a valuable one.
Mr. M. Hennessy: I was inclined to support Deputy Lemass until he came to the point where he suggested that the property would be handed over to the local authority, and that the ground landlord is to be continued in possession. I think our big trouble in this country is the ground landlord. To my mind, the housing problem will never be solved until we get rid of the ground landlords. There are two parties, and, as the Minister pointed out, there are three parties involved in this particular case—the ground landlord, the man who built, and the tenant in possession to-day. If the man who put up the bricks and mortar is in possession, surely he is the proper person to get the renewal of the lease when the old lease expires. If he has sold that lease to the person in possession, the person in possession has a right to something. You may argue that he has paid the price for the unexpired term of the lease. At any rate, he paid a lump sum of money, and surely he is entitled at the end of the term to a new lease. Not only is he entitled to a new lease, but he is entitled to the right of fee-simple, which we are not giving him. I say unfortunately that we are not giving this right to him, but he is entitled to it. Deputy Lemass suggests that at the end of the lease the property goes to the local authority. In other words, that the ground landlord is to continue indirectly to fleece the community.
There are many places here in the Saorstát that I know where the ground landlord has been bleeding the leaseholders, the people in possession of the building, white for the last half a century. On the moment the lease expires these rents are raised 500 per cent. I have a knowledge myself of three urban areas, two in the South and one here. Deputy Thrift has some sympathy with those ground landlords. They are entitled, he said, to certain rights. In a few cases there might be sympathy with them, but in  the big bulk of the cases there should be no sympathy with them, and I think that class of case is the predominant one. These ground landlords continue to get good prices for a certain number of years for their ground, and at the end of the lease period they coolly come to the man in possession, who has already paid a big fine—I have seen these cases occurring—and they point out to the man in possession that he must expend £500 on his house, according to the plans of their architects. The moment a man does that his rent goes up 500 per cent. That fleecing and that public robbery has been going on in this way for a number of years. The suggestion now in Deputy Lemass's proposal—and possibly he does not see it—is this: that instead of the ground landlord robbing directly and fleecing the unfortunate man in possession, he is in future to do so through the local authority. The amendment is making the local authority the medium of doing this.
Mr. Little: No.
Mr. Hennessy: Because I see that that is the case I cannot possibly support this amendment. I want to get rid of the ground landlord holus-bolus.
Mr. Flinn: It seems to me there are four people involved in this matter, not three. These are the ground landlord, the middleman, the occupier, and last of all the community. I am trying to see that the existence of the fourth party is recognised. In recognising the fourth party that does not say exactly who is to get the benefit that has accrued. I think you will have frankly to recognise that there are four parties. I do not see why the rent should go to one of these. The Minister for Justice has told you that that is socialistic. Frankly I am not a bit frightened on being told that it is socialistic. My hairs are grey and I am looking towards the sunset, but I am long enough hearing about things being socialistic. We have heard that factory legislation was socialistic, that old age pensions were socialistic, that income tax, free education, unemployment  pay, and home assistance were socialistic. Everyone of these things have been called socialistic. But we have swallowed them all. In fact the slogan years ago was, “We are all socialists now.”
The Tory Party to-day have as their minimum programme what was the maximum programme of those accused of being socialistic in previous generations, so that we need not be at all worried on that ground. Deputy Thrift has difficulties in taking away from somebody something on which the State has already collected taxes. He says that in collecting taxes you apparently have admitted the right to the property which you have taxed. The State does not admit anything of the kind. In America the State is collecting income tax from gangsters. In doing so are they acknowledging the right of gangsterdom to continue in existence? They are collecting income tax from bootleggers, and will collect property taxes from them when they die. They collect income tax, reversionary tax, and inheritance tax from high-jackers. Are they admitting the right of the bootlegger, the highjacker, and gangsterdom to continued existence simply because they tax them? Personally, I think it is an absurd argument to put forward.
It is a perfectly sound proposition, which I think Deputy Thrift will admit, that a man can pass on no better title to another than he has himself. No man can pass on a better title against the community in relation to rent than the title of the man from whom he took the property. If you are going to be absolute in the matter you cannot make up a good title out of a bad title. Deputy Little says that a good deal of the people who are enjoying these increased rents and ground rents in Dublin are largely the heirs of corruption. In a great many more cases the people who are obtaining these rents are the heirs of confiscation. Neither confiscation nor corruption gives against the community the title to the land. The land of Ireland belongs to the people of Ireland. Except in so far as a man has, by the expenditure of  effort or brains, made property much more valuable to the community, he has not in any way improved his title as against the community.
I come now to the fourth person involved, the community. You already have had the ground landlord who lets land for a certain period at a certain rate. Then you have the occupier of the land who takes it at a certain rate. He has to take it, because the ground landlord is in a position to impose that rate. He is not a free agent in the contract, and he takes the land under the conditions imposed upon him by the fact that people are in possession of the land which they obtained by corruption, inheritance or confiscation. He has got what in law he is entitled to get under a contract which he was bound to enter, and certain conditions were imposed upon him. The third man gets a reversionary interest and takes up part of the lease. He gets what he contracted for and, according to Deputy Little, he is not going to spend any money over and above the amount he thinks he can get enjoyment out of during the unexpired portion of the lease. All the time things are developing around, and people who are neither ground landlords, middlemen, nor occupiers are deciding the value of the reversion of the lease. Why should that belong to any one of the three?
I suppose there is no man in the House who is less of a Socialist than I am. I have not the faintest tendency towards Socialism, though I am not afraid of the word. I do not think it is Socialism, in the sense that anyone might be ashamed of, to say that the property which belongs to the community shall inure to the community. If we can find the means by which that portion of the added value in the renewal of a lease could go to the community, then I am in favour of the community getting it. I had two or three examples recently. I was in England and I visited two towns which I had not seen for a period of five or six years. Going up certain streets I came across marked changes by way of development of buildings. Those changes were obvious. What struck me most was that the side streets, with which I  was very familiar, were changed considerably. We are all familiar with the frontage of the principal streets in a town. In these places I visited new streets had been opened up, and there was an amazing improvement in the value of the side streets. The houses had improved in appearance and there was a distinct improvement in the class of goods being sold. The suggestion that the increased value in that instance belonged by natural right to any of the three people I have referred to, as against the community, is a ridiculous suggestion. You could possibly give the credit to the man who improved his property quite separately. There was an obvious and blatant increase in value due to efforts which had no connection with the occupier, the middleman, or the ground landlord. In these cases there is no question of Socialism. It is not a matter which in any way impinges on our rights as individuals if we say that those values which were created by the community should inure to the community and not to the individual.
Mr. Fitzgerald-Kenney: It is perfectly obvious that Deputy Flinn has not the remotest idea what the amendment is about. We are simply dealing with who is to have an interest in a house which is being built by an individual on a particular bit of ground.
Mr. Flinn: The Minister will not be able to get away from that. He says that I do not know anything about this amendment. I know as much about it as that old bachelor knows about babies.
Mr. Geoghegan: I would have had something to add to what I said previously if Deputy Thrift had alluded in his speech to a matter that he mentioned afterwards by way of interpolation. That is this matter of the community already having to some extent raided the ground landlord's property by way of death duties. That interpolation of Deputy Thrift's might prove exceedingly variable both in regard to this amendment and in regard to later amendments as to the fixing of the rent under this lease that is to  be granted. I wonder would Deputy Thrift, and other Deputies who think with him, support an amendment on the Report Stage, if admitted, to the effect that the Commissioners of Valuation, under Section 44, or the judge, if it has to go to the judge, would be entitled to call for and have regard to death duty accounts furnished by a ground landlord within a period of years prior to the passing of this Bill, a period which this House would consider reasonable? We could say a period of five or ten years. I wonder would Deputy Thrift support such an amendment, if brought forward? If so, the amendment might receive a measure of support from quarters that perhaps Deputy Thrift would not expect.
Death duty accounts and the working out of them form a very intricate subject, and perhaps they cannot be put accurately with great brevity. Let us take the simple case of a 99 years' lease that has only five years to run at the time the ground landlord dies. Death duties have to be returned in respect of the property. The place might be let at a rent of £10 a year, but it might have a potential letting value, if there was vacant possession, of £80 a year. The Revenue Commissioners, instead of allowing the landowner's representatives to pay death duty on the basis of £10 a year rent, might say: “Oh, no; that £10 will only continue for five years. After that time you can exact a much higher rent.” Is Deputy Thrift prepared to support an amendment that will have the effect of entitling the Judge or Commissioners of Valuation to call for these returns, including the reply made by the ground landlord to that claim as to the value of the reversions? What value does Deputy Thrift think ground landlords have placed on these reversions as distinct from the value of the rent itself? I hate to make predictions but I venture to think that whoever may be entitled to the reversionary lease here— be it the community or the middleman or the occupying tenant—would be very glad to get that reversionary lease on the basis of the value that the landowner's  heirs-at-law or executors attributed to that reversion as distinct from the rent.
I imagine that when death duty accounts were being passed, the custom on the estate was paraded of giving rents on a certain basis that had not regard to competition, and Deputy Thrift might, perhaps, find that it would work out another way. However it works out, if such an amendment is brought forward, there will be a lot to be said for it. If the landlord has, in fact, returned the value of these reversionary interests as substantial, I can see that there is a lot to be said for it. But I can also see that it is a two-edged weapon, and that it may work out greatly in favour of the person getting the reversionary lease.
By way of explanation to the House, I should say that when I said in my previous speech that the Dáil was in the position of giving something away, what I really meant was that a building lease is to be given to somebody at a rent to be fixed in a way which will be determined by this Bill. I did not attach, perhaps, sufficient force to clause 3 of this amendment that I am now supporting—that the rent should be that reserved by the building lease. Suppose the rent is to be the rent reserved on the new reversionary lease, will Deputy Thrift or any other Deputy  who has opposed the grant of this lease to the community persist in the objection, because if the community gets it at the rent under the reversionary lease as distinct from the rent under the expiring building lease, I cannot see in what way this amendment can prejudicially affect the ground landlord, whomsoever else it may prejudicially affect.
Professor Thrift: Without committing myself, I may say that I am predisposed in favour of the amendment that Deputy Geoghegan has suggested. In cases where estates have been in the habit of granting reversionary leases—new leases—on reasonable terms, they have had very considerable difficulty in proving to the Estates Commissioners for the purpose of death duties that such was their practice. The matter would need inquiry.
Mr. Geoghegan: I should be interested to see an amendment tabled to that effect.
Mr. Flinn: Will Deputy Thrift table that amendment or, if Deputy Geoghegan tables it, will Deputy Thrift support it?
Professor Thrift: I shall certainly make inquiry about it.
Mr. Flinn: That is good enough.
The Committee divided: Tá, 29; Níl, 59.
De Valera, Eamon.
Gorry, Patrick J.
Kent, William R.
Lemass, Seán F.
Little, Patrick John.
Murphy, Timothy Joseph.
O'Connell, Thomas J.
O'Kelly, Seán T.
Sheehy, Timothy (Tipp.).
Ward, Francis C.
|Aird, William P.
Beckett, James Walter.
Bennett, George Cecil.
Bourke, Séamus A. Connolly, Michael P.
Cosgrave, William T.
Craig, Sir James.
Doyle, Peadar Seán.
Duggan, Edmund John.
Egan, Barry M.
Esmonde, Osmond Thos. Grattan.
Gorey, Denis J.
Hassett, John J.
Heffernan, Michael R.
Hennessy, Michael Joseph.
Hogan, Patrick (Galway).
Mathews, Arthur Patrick.
Byrne, John Joseph.
Collins-O'Driscoll, Mrs. Margt.
Conlon, Martin. McFadden, Michael Og.
Mongan, Joseph W.
Murphy, James E.
Murphy, Joseph Xavier.
Myles, James Sproule.
Nolan, John Thomas.
O'Reilly, John J.
O'Sullivan, John Marcus.
Sheehy, Timothy (West Cork).
Thrift, William Edward.
White, Vincent Joseph.
Wolfe, Jasper Travers.
Amendment declared lost.
Tellers: Tá, Deputies S. Jordan and Killilea; Níl, Deputies Duggan and Doyle.
Section 42 agreed to.
The following provisions shall have effect in relation to the terms on which a reversionary lease shall be granted under this Part of this Act, that is to say:—
(a) the duration of such reversionary lease shall be in a term of ninety-nine years from the expiration of the building lease to which it is reversionary;
(b) the rent reserved by such reversionary lease shall not in any case be less than the rent reserved by the said building lease or, where the land comprised in such reversionary lease is part only of the land comprised in the said building lease, such proportion of the said rent reserved by the said building lease as is fairly apportionable to the said land comprised in the said reversionary lease;
(c) subject to the foregoing paragraph of this sub-section the rent reserved by the said reversionary lease shall be the difference between the gross rent and the allowance as hereinafter respectively defined;
(d) the gross rent shall be the rent which in the opinion of the Court a willing lessee not already in occupation would give and a willing lessor would take for the land comprised in such reversionary lease in each case on the basis of vacant possession being given, and in circumstances of normal competition, and having regard to the other terms of such reversionary lease and to the letting values in circumstances of normal competition of land of a similar character to and situate in the vicinity of the said land comprised in the said reversionary lease but without having regard to any goodwill which may exist in respect of the said land comprised in the said reversionary lease;
(e) the allowance shall be such proportion of the gross rent as is, in the opinion of the court, fairly attributable to buildings erected or improvements made on or amenities provided for such land other than buildings, improvements, and  amenities erected, made or provided by or at the expense (whether by way of reduction of rent, payment of compensation, or otherwise) of the person granting such reversionary lease or any of his predecessors in title.
(f) such reversionary lease shall contain all usual covenants, conditions, and agreements.
Professor Thrift: I move amendment 90:—
“At the commencement of this section to insert the following words, `Unless the parties otherwise agree.' ”
I do not think there is any point of substance in this amendment. I am sure the Minister will say that it is already carried in the words of the section. Even if it is, I think it is desirable that it should be made clear that agreement between the various parties concerned may come about and thus avoid going into the courts. I suggest in this amendment that “unless the parties otherwise agree” should be put at the commencement of the section.
Mr. Fitzgerald-Kenney: I will introduce an amendment to that effect.
Professor Thrift: I ask the leave of the House to withdraw the amendment for the present.
Amendment, by leave, withdrawn.
Mr. Lemass: I move amendment 91:
To delete paragraph (b).
This section deals with the terms of the reversionary lease, and this particular paragraph is designed to provide that the rent reserved by the reversionary lease shall not be less than the rent reserved under the building lease. It seems to me that is an extraordinary provision, and I propose that it should be deleted. It is proposed here that if the rent, as calculated in accordance with paragraphs (d) and (e)—in other words, a rent which a willing lessee not already in occupation would be willing to give and a willing lessor would be willing to accept for these lands, less whatever deductions should be made in  respect of improvements and amenities not provided at the expense of the landlord—is less than the rent reserved under the building lease which has expired, the landlord is to be secured the old rent, despite the fact that if he was seeking a market for the reversionary lease in circumstances of normal competition he could not get it.
I cannot understand why this particular paragraph is inserted in this section when no similar paragraph was inserted in Section 27 which is almost identical in character except that it relates to tenements whereas this relates to land. Why was it not inserted there? Why should this safeguard be put in to secure that whatever arises, however the value of the land may have deteriorated, whatever the circumstances may be, the landlord will nevertheless secure a rent not less than the rent reserved under the building lease? It seems an extraordinary provision and I do not know how the Minister can justify it.
Mr. Fitzgerald-Kenney: I ask the House to reject the amendment. As the law stands, of course, the ground landlord at the expiration of a lease is entitled to the entire premises with the buildings which are upon them. We are taking away that right from him and I do not think we ought to cut down the income which he is receiving now from it.
Mr. Lemass: Why not? Presumably the Minister is taking away that right because he thinks the landlord should not have it. Why is he compromising on it, or creating the possibility that he will get back part of it? If the ground landlord has no claim in justice to what he now has a claim to in law and we propose to take that reversionary right from him, why should not the rent to be reserved under the reversionary lease be that which would be calculated in accordance with the other paragraph of this section without this over-riding provision to the effect that it shall not be less than the old rent?
Mr. Fitzgerald-Kenney: I have already explained that. I do not  think it would be fair to take away from the ground landlord what he is receiving. You are preventing him receiving what he could have under the existing law. I do not think the alteration of the law should be such that you would cut down his income. That appears, at any rate to me, to be just.
Question—“That the words proposed to be deleted stand”—put and declared carried.
Professor Thrift: I move amendment 92:—
In paragraph (c) to delete all words after the words “shall be” to the end of paragraph (e) and substitute the words “one-half of the Poor Law Valuation of the lands comprised in the building lease”.
I attach a great deal of importance to the idea underlying this amendment, and very little, indeed, to the actual form in which the amendment appears. I say that largely because I accept to a very considerable extent what the Minister himself stated when we were discussing this section on the Second Reading of the Bill. That was that poor law valuation is very fluctuating in various parts of the country. I think the important idea which I am trying to get accepted is that there should be some attempt at a standard by means of which the new rent shall be fixed. That would avoid the double calculation which is specified in the section of the Bill, a calculation which in its second part is going to be extremely difficult to make, and which I believe will very often lead to most protracted and expensive litigation, which I wish to be avoided.
Once the gross rent has been determined, that ought to be able to give us some kind of an idea of what the new rent on which the new lease is to be given should be fixed at. I suggest some fraction of the poor law valuation. I know that will vary from place to place in the country. Possibly, other standards might be substituted for that. I think if some fraction, perhaps, of the gross rent were taken  it would meet a lot of my difficulties. It would be a fraction which, in my opinion, ought to allow some reasonable increase to the ground landlord in many cases because, take this one point only, many of these building leases were made 100 or 150 years ago, and a rent, perhaps, of £5 was fixed at a time when £5 meant something entirely different from what it would mean within the last 30 or 40 years. I think the standard which ought to be aimed at should, at any rate, pay some attention to that fact. If you do not have some plan of this kind there will be a great deal of difficulty in determining an estimate of the allowances that are to be made, moneys acceptable by the different parties. What is meant, for instance, by the phrase “amenities provided”? What is meant, and to what extent is value to be attached, to work which the landlord or the lessee has done, or work which has been done, perhaps, by neither?
You cannot attempt in a general section of this kind, as I have repeatedly been trying to stress, to get an absolutely fixed kind of rule to apply fairly and equitably in all cases. You can make some attempt to deal reasonably with the majority of cases. The plan I suggest in the actual amendment, namely, to take one-half of the poor law valuation of the lands comprised in the building lease, would work out. I have been making inquiries, generally well in certain parts of the country, and I do not think this would be objectionable in those parts, but it would not work out quite so well in other parts of the country. If a fraction or a quarter of the gross letting value were taken I think on the whole it would prove to be a very fair and equitable way of deciding what was to be the ground landlord's share of the new letting value, and would work out in many cases at probably giving little or nothing more than what would be the increased value of money as compared with what it was 100 or 150 years ago.
I think the whole strength of the argument that can be put forward is to try to get rid of the litigation that  would follow from this appeal to court in order to estimate the value of these allowances. I hope the Minister will feel favourably disposed towards considering some automatic way of proceeding.
Mr. Fitzgerald-Kenney: I could not accept the amendment which has been put forward because, as Deputy Thrift himself says, the poor law valuation would not be a fair guide to the letting value of the premises. We know that certain premises are valued on quite a different basis from other premises. There would be, of course, a great deal to be said from the point of view of simplicity if it were possible to take a fraction of the gross rent and say that in all cases a certain fraction of the gross rent shall be payable as a ground rent and only that particular portion. That would have the very great merit of simplicity. But the real difficulty I would find about that would be to discover what the fraction ought to be.
I certainly would not be prepared at the moment to put forward any view as to a fraction which would work out evenly between the landlord and tenant. It would have to be an overwhelming majority of cases. Therefore, though I can see everything that can be said in favour of having a standard of that nature, that it would save so many appeals to Court and so many disputes as to improvements, the difficulty of actually hitting upon a fraction would be very great.
Mr. J.X. Murphy: Would the Minister consider the possibility of arriving at some fraction?
Mr. Fitzgerald-Kenney: I am afraid it would be very difficult.
Professor Thrift: The Minister really admitted the strength of the case I made. If the Minister would arrive at some fraction that would meet a reasonable majority of cases I would withdraw my amendment. If he fails to do it I cannot help it.
Mr. Fitzgerald-Kenney: I will consider the matter, but the Deputy must not think that I am giving him any undertaking or anything of that kind.
Professor Thrift: I do say the Minister has admitted the justice of the plea.
Mr. Fitzgerald-Kenney: I think if it were possible to hit upon a fraction everybody would be agreed that it would be very valuable. It would save a considerable amount of proceedings in Court, and it would save the Court from some very difficult inquiries, as to who made improvements that were made, say, one hundred or a hundred and fifty years ago. I cannot undertake that I will be able to hit on a figure that would be satisfactory.
Mr. Lemass: If the Deputy wants to get a simple method all he has got to do is to move the deletion of paragraphs (c), (d) and (e).
Professor Thrift: It is quite simple to rob.
Mr. Lemass: It is merely a matter of whom you would rob. I have no more interest in the ground landlord than I have in the middleman. It is a question of which of them is going to get it.
Amendment, by leave, withdrawn.
Amendment 93 not moved.
Mr. Fitzgerald-Kenney: I move amendment 94:—
In paragraph (d), lines 45 and 46, to delete the words “in circumstances of normal competition.”
It is a verbal alteration. Those words should not have come in.
Mr. Lemass: If the Minister is considering the revision of that term, “in circumstances of normal competition” in respect of Section 27, I think he should consider it in connection with this section.
Mr. Fitzgerald-Kenney: If I expand the word “normal” in one instance, I would expand it in the other.
Amendment agreed to.
Professor Thrift: I move amendment 95:—
In paragraph (e) to delete all words from and including the word “or”, line 53, where it secondly occurs to the end of the paragraph  and substitute the following words “such land by the lessee or his predecessors in title”.
I am rather inclined to think that this amendment was involved in a previous amendment, to a certain extent. I think in those cases where a lessor is going to be deprived of his reversionary lease he should be permitted to obtain the benefit attributable to the lessee or his predecessors in title. That is the purport of this amendment.
Mr. Fitzgerald-Kenney: I am willing to accept this amendment. I have considered the matter with some care and I have come to the conclusion that it would be almost a matter of impossibility for the ground landlords, in cases where they had done a tremendous amount to improve property, to prove that they had actually done that work, whereas in the case of the improvement which the tenant has personally made it will always be very easy to see whether the tenant has made the improvements or not. For instance, you will see if he has built the house. You will be able, by seeing the original lease to know whether he had built it or not. Similarly whether he was taking possession or not. I know that there are cases where the expenditure of sums of money by landlords has improved the value of the property out of all recognition. For instance, there is a very large block, as possibly Deputies know, in the city of Dublin which runs from Capel Street to the Custom House. At one time that was merely a strand. The Corporation leased it, and it was leased at the time at £2 8s. a year. That lease falls in in about 30 or 40 years, and, of course, that would be an enormous bit of property. It is familiar to Deputy Lemass. I think it will have an enormously increased value. In that particular instance no doubt you will be able to show that the Corporation banked on the Liffey. I think there will be very little doubt about that, but in cases where individuals improved their estates by building sea walls, and things of that kind, it will be almost impossible to prove it. You  cannot prove what was done 100 years ago in such cases except by tradition. Any improvement which the tenant does is improvement to the individual structure which would be much easier to prove.
Mr. Lemass: Might I draw the Minister's attention to the next amendment which gives the benefit to the person who gets the reversionary lease rather than the ground landlord. Deputy Thrift gives the benefit to the ground landlord. My amendment restricts the allowance for improvement to 25 years and gives the benefit of the doubt to the person receiving the reversionary lease. It seems to me that the benefit of the doubt should be given to that person. As I have already said, I am not much concerned between the ground landlord and the middleman. Socially they are equally objectionable, but in a matter of this kind I would be prepared to weigh the balance against the ground landlord in principle.
Amendment put and declared carried.
Amendment 96 not moved.
Professor Thrift: I move amendment 97.
To add at the end of the section a new paragraph as follows:—
I do not think this is a very contentious amendment. It is put down for the purpose of ensuring that repairs should be carried out which are very often most necessary in everybody's interest.
Mr. Lemass: Would it be possible to do it?
Mr. Fitzgerald-Kenney: If the Court considers it is right and proper when granting a lease that a sum of money should be spent on the repairs to the premises I do not see why it should not have such power. Subject to redrafting I accept the principle.
Mr. Lemass: Will it not be necessary to provide that the person receiving the reversionary lease will have the power to effect improvements if he is a middleman, as he will be in the majority of cases? He may not have the right of entry or the right to carry out the improvements.
Professor Thrift: The amendment only proposes to leave it to the court.
Mr. Fitzgerald-Kenney: If he is not the person in actual occupation the other lease will expire before his lease. The sub-tenant's lease will have to expire before his lease, and such improvements as have to be made will be made. He and his sub-tenant, of course, will get the benefit only and pay him the amount by way of rent. I do not think there will be any difficulty.
Amendment, by leave, withdrawn.
Mr. Fitzgerald-Kenney: I move amendment 98:
To add at the end of the section a new sub-section, as follows:—“(2) A reversionary lease granted under this Part of this Act shall be deemed to be a graft on the building lease or the proprietary lease (as the case may be) under which the person to whom such reversionary lease is granted previously held the land comprised in such reversionary lease, and the lessee's interest under such reversionary lease shall be subject to any rights or equities arising from such reversionary lease being such graft.”
This simply makes, as we had before, a reversionary lease a graft upon the existing interest of the person who receives the reversionary lease. That is, as I explained before, that if anybody has an equitable claim upon the interest of the lessee that equitable claim will be carried on.
Amendment put and agreed to.
Section 43, as amended, agreed to.
Section 44 agreed to.
(a) a person obtains a lease (in this sub-section referred to as the statutory lease) under this Part of this Act; and
(b) a lease (in this sub-section referred to as the voluntary lease) is made by way of reversionary lease to the building lease to  which the statutory lease is reversionary; and
(c) the voluntary lease includes any land which is included in the statutory lease; and
(d) the voluntary lease is made on or after the 31st day of March, 1931, unless it is so made in pursuance of an enforceable agreement entered into before the 31st day of March, 1931;
the voluntary lease (whether made before or after the statutory lease) shall be void and of no effect.
(3) No person shall be entitled to obtain a reversionary lease under this Part of this Act of the land or any part of the land comprised in a building lease where the person in receipt of the rent reserved by such building lease objects, on one or more of the following grounds, to make such reversionary lease, that is to say:—
(a) that he bona fide intends, desires, or has agreed to pull down and rebuilt or to reconstruct the whole or a substantial portion of the building on the land comprised in such building lease; or
(b) that he requires vacant possession of such land for the purpose of carrying out a scheme of development of property which includes such land: or
(c) that for any reason the grant of such reversionary lease would not be consistent with good estate management.
Professor Thrift: I move amendment 99:—
In sub-section (2) (b), line 43, after the word “reversionary” to insert the words “to any person other than a person entitled to a reversionary lease under the provisions of the Act.”
This section deals with voluntary leases being voided. I contend that the only way a voluntary lease should be void is where it has not been made with the proper party, and that is, I believe, the effect of the words I am proposing to insert. If the lease has been made with a  wrong person, it must be void. If the lease has been made voluntarily it should not be.
Mr. Fitzgerald-Kenney: I agree.
Amendment put and agreed to.
Mr. Lemass: I move amendment 100:
To delete sub-section (3) and substitute two new sub-sections as follows:—
“(3) Where it appears to the court that—
(a) the person in receipt of the rent reserved by a building lease bona fide intends or has agreed to pull down and rebuild or to reconstruct the whole or a substantial portion of the buildings on the land comprised in such building lease and to commence such pulling down and rebuilding or reconstructing within six months of the date of the order of the court; or
(b) that such person requires vacant possession of such land for the purpose of carrying out a scheme of development of property which includes such land and bona fide intends to commence the carrying out of such scheme within six months of the date of the order of the court; or
(c) for any reason the grant of such reversionary lease would not be consistent with good estate management,
no person shall be entitled to obtain a reversionary lease under this part of this Act of the land or any part of the land comprised in a building lease.
(4) Where the court decides under paragraph (a) or (b) of the foregoing sub-section that a person who would otherwise be entitled to a reversionary lease under this part of this Act shall not be so entitled, such person shall again become entitled to such reversionary lease if the person in receipt of the rent reserved by the building lease fails to commence the pulling down and rebuilding or reconstruction of the buildings or the carrying out of the schemes of development within six  months of the date of the order of the court.”
There are several points arising out of this amendment. It is proposed to re-draft sub-section (3) of this section. The first point arises as to the form of the amendment itself as compared with the form of the sub-section in the Bill. The sub-section is very similar in purport to sub-section (1) of Section 20, but it is different in form, and that difference in form has significance. If this sub-section had been drafted in the same manner as sub-section (1) of Section 20, or as I propose in the amendment, the onus of proof would be on the ground landlord to convince the Court of his intention to rebuild, reconstruct, or carry out a scheme of development, whereas in the form that it is in the Bill it appears that the onus is on the person claiming the reversionary lease to prove that the landlord does not intend to carry out this rebuilding, reconstruction or scheme of development of property. I am curious to know why the form was changed, and why the provisions of sub-section (1) of Section 20 were transposed in this manner when being drafted into this part of the Bill. That is one point. The second point is one which I take it the Minister will accept, and that is the elimination of the word “desires,” an elimination which he agreed to in Section 20.
Mr. Fitzgerald-Kenney: Yes.
[An Ceann Comhairle resumed the Chair.]
Mr. Lemass: The third is to add something which the Minister agreed to consider in the other parts of the Bill, namely, the imposition of some sort of penalty in the event of the person voiding the application to give a lease failing to carry out the undertaking to rebuild or reconstruct.
Mr. Fitzgerald-Kenney: As far as the latter two parts of the amendment are concerned, I shall proceed exactly here as I mentioned in the other instance. I do not agree with the Deputy that it is the person he suggests who will have the onus put on him. “No person shall be entitled to obtain a reversionary lease under this part of this Act of the  land or any part of the land comprised in a building lease where the person in receipt of the rent reserved by such building lease objects ...” that is to say, the head landlord, because he is the person who has the interest of the rent reserved by the building lease. When he objects on one of the grounds following, that is to say——
Mr. Lemass: That puts the onus of proof on the person claiming the lease.
Mr. Fitzgerald-Kenney: No, it puts the onus of proof on the person refusing.
Mr. Lemass: I do not think so.
Mr. Fitzgerald-Kenney: It puts the onus on the person who is to receive the rent, and that is the landlord.
Mr. Lemass: That is not clear. A person claims a reversionary lease, and the ground landlord objects to giving it on the ground that he intends to rebuild or reconstruct, and that seems to put an end to the matter until the person claiming the lease can prove in court that the landlord does not intend to do anything of the sort, whereas in Section 20 the person refusing the lease must satisfy the court that he intends to do these things.
Mr. Fitzgerald-Kenney: I shall look into the matter then.
Amendment, by leave, withdrawn.
Mr. Lemass: I move amendment 101:
To add at the end of the section two new sub-sections as follows:—
“(4) Where the court is satisfied that—
(a) a person in possession of land under a building lease would, but for the previous sub-section of this section, be entitled under this part of this Act to a reversionary lease in such land, and
(b) such person was in occupation of the whole of such land and the buildings thereon, during the whole of a period of three years expiring at or within three months before the termination of such  building lease wholly or partly for the purpose of carrying on therein a business,
such person shall, in lieu of a reversionary lease under this part of this Act, be entitled on quitting such land on the expiration of such building lease to be paid by the landlord thereof compensation for disturbance in accordance with Section 21 of this Act.
(5) The amount of compensation payable under the previous sub-section shall be a charge on the estate or interest of the landlord in the land in priority to all other charges, mortgages or encumbrances thereon.”
This is an amendment of the necessity for which I am not quite clear. It is intended to provide that where a person has been in occupation of a building under a building lease, and has been using the building for business purposes, such person will get compensation for loss of goodwill and disturbance in the event of his lease not being renewed on any of the grounds specified in Section 45. It is possible that the person has a right to such compensation under the earlier sections, but I am not clear.
Mr. Fitzgerald-Kenney: He has. I think this amendment is quite unnecessary. He can bring a claim for a new tenancy under Part 4 of the Bill, and the landlord can only refuse on one of the grounds mentioned in Section 20 (1).
Mr. Lemass: The grounds are the same as in Section 45 (3).
Mr. Fitzgerald-Kenney: Under Section 20 (2) he gets compensation for disturbance. I think he comes under the earlier part of the Bill, and I do not think it is necessary to have anything in this part.
Mr. Lemass: There is this point. It is clear that he is not going to get his new tenancy, because if the landlord can deprive him of the reversionary lease on any of the grounds specified in Section 45 (3) he can deprive him of the new tenancy on the same grounds.
Mr. Fitzgerald-Kenney: I shall look into the matter further, but I do not think this amendment is necessary.
Amendment, by leave, withdrawn.
Section 45, as amended, agreed to.
Section 46 agreed to.
Mr. Fitzgerald-Kenney: I move amendment 102:
In line 11 to delete the word “building” and substitute the word “reversionary.”
That is merely a slip in drafting. The word “building” appears where the word “reversionary” obviously should appear.
Amendment put and agreed to.
Section 47, as amended, agreed to.
Section 48 agreed to.
(b) no damages shall be recoverable for such breach if it is shown that, having regard to the age and condition of such tenement, the repairing thereof in accordance with such covenant or agreement is physically impossible or would involve expenditure which is excessive in proportion to the value of such tenement, or that, having regard to the character and situation of such tenement, such tenement could not when so repaired be profitably used or could not be profitably used unless it is rebuilt, reconstructed or structurally altered to a substantial extent.
Mr. Fitzgerald-Kenney: I move amendment No. 103:
In paragraph (b), page 25, line 4, immediately before the word “no” to insert the words “save where the want of repair is shown to be due, wholly or substantially, to wilful damage or wilful waste committed by the lessee.”
The object of this amendment is that if the tenant deliberately allows a premises to get into disrepair then he will not be safeguarded by this section. The sub-section safeguards him  against the enforcing of the covenant if a building is really dying of old age, but if the tenant deliberately let it go to pieces and made no effort to keep it in repair it is only fair that he should not be protected. The real meaning behind this is that a tenant shall not be asked to do what is completely impossible. He will not be ordered to build a palace in a waste place or a handsome dwelling in a slum because there is a covenant in the lease, but if he deliberately allows the building to go to pieces he should pay for it.
Mr. Lemass: Does the Minister not see the possibility of continuous litigation on the meaning of the words “wilful waste” and “wilful damage”?
Mr. Fitzgerald-Kenney: No.
Professor Thrift: My amendment No. 104 is to the same effect.
Mr. Fitzgerald-Kenney: Yes.
Amendment agreed to.
Amendment No. 104 not moved.
Section 49 as amended agreed to and added to the Bill.
(1) Every lease (whether made before or after the passing of this Act) of a tenement which contains a covenant, condition, or agreement absolutely prohibiting the assignment, sub-letting, changing, or otherwise parting with the possession of such tenement shall have effect as if such covenant, condition, or agreement were a covenant, condition, or agreement prohibiting the assignment, sub-letting, changing or otherwise parting with the possession of such tenement without the licence or consent of the lessor.
(2) In every lease (whether made before or after the passing of this Act) of a tenement in which there is contained or in which there is implied by virtue of the Act of the late United Kingdom Parliament passed on the 5th day of May, 1826, and entitled “an Act to amend the Law of Ireland respecting the Assignment and Sub-letting of Lands and Tenements”, or by virtue of the foregoing sub-section of this section a covenant, condition, or  agreement against assigning, sub-letting, changing, or otherwise parting with the possession of such tenement without the licence or consent of the lessor, such covenant, condition, or agreement shall, notwithstanding any express provision to the contrary, be deemed to be subject—
(a) to a proviso that such licence or consent shall not be unreasonably with held, but this proviso shall not preclude the lessor from requiring payment of a reasonable sum in respect of legal or other expenses incurred by him in connection with such licence or consent; and
(b) where such lease is made for a term of more than forty years and is made in consideration wholly or partially of the erection or the substantial addition to or improvement or alteration of buildings, to a proviso to the effect that, in the case of any assignment, sub-letting, changing, or otherwise parting with the possession of such tenement effected more than seven years before the end of such term, no such licence or consent shall be required if notice in writing of the transaction is given to the lessor within one month after the transaction is effected.
Professor Thrift: I move amendment 105:
To add at the end of sub-section (2) a new paragraph as follows:—
“to a proviso to the effect that where any such assignment, sub-letting, changing or otherwise parting with the possession of such tenement would cause a transfer or increase of any rates or taxes or other burden to or of the lessor, the lessor shall be entitled to recover from the lessee the amount of the rates and taxes so transferred or increased and to demand from the lessee an increase of rent commensurate with such other burden or increase of burden; and the lessor shall for the purpose of recovering the said rates and taxes and increase of rent, have the same  remedies as under the lease are applicable to the recovery of the rent reserved thereby.”
This is an amendment suggested to me in connection with cases that sometimes arise where the lessee of a premises assigns his interest in such premises to a government or other public department and the lessor immediately becomes liable for the payment of the rates calculated on half the rent reserved in the lease of the premises, and suffers a loss to that extent. The premises are let at a certain increased rent and then fresh rates fall. The new rent has to be added in order to meet the increased charge. This proviso is necessary in order to meet the situations that will arise. Such cases do not arise frequently but I think the Minister will agree that provision should be made to meet them when they do arise.
Mr. Fitzgerald-Kenney: I have decided to accept the principle of this amendment. What it really meets is a case where the landlord is compelled to give his consent to a letting but suffers loss so far as the payment of rates is concerned by being forced to give his consent. As a general principle the tenant pays the poor rate on the premises but in certain cases the tenant has not to pay all the poor rate. Half the premises are exempt and the landlord pays the other half. For instance if you let to the Department of Posts and Telegraphs a post office only half the rates are payable out of the post office and they are payable by the landlord to the post office. Suppose the landlord had a tenant and that tenant made an assignment to the post office he would hit the landlord who ought not to be demnified by that. In the particular instance I mention there it is the Department of Posts and Telegraphs that would suffer, but I only took that as an example.
Professor Thrift: On the understanding that the amendment will be re-drafted and introduced by the Minister I ask leave to withdraw the present amendment.
Amendment, by leave, withdrawn.
 Section 50 agreed to and added to the Bill.
(2) In every lease (whether made before or after the passing of this Act) of a tenement in which there is contained a covenant, condition, or agreement prohibiting, either expressly or by virtue of the foregoing sub-section of this section, the alteration of the user of such tenement without the licence or consent of the lessor, such covenant, condition, or agreement shall, notwithstanding any express provision to the contrary, be deemed to be subject:—
(a) to a proviso to the effect that such licence or consent shall not be unreasonably withheld, but this proviso shall not preclude the lessor from requiring payment of a reasonable sum in respect of legal or other expenses incurred by him in connection with such licence or consent nor, where such alteration would cause a transfer or increase of any rates, taxes, or other burden to or of the lessor, preclude the lessor from requiring an increase of rent commensurate with such burden or increase of burden; and
(b) if the alteration does not involve any structural alteration of the tenement, to a proviso that no fine or sum of money in the nature of a fine (other than such sum as aforesaid in respect of expenses) nor any increase of rent (other than such increase of rent as aforesaid) shall be payable for or in respect of such licence or consent.
Professor Thrift: I move amendment 106:—
In sub-section (2) (a), line 9, to delete all words after the word “from” to the end of the paragraph and substitute the words:—“recovering from the lessee the amount of the rates and taxes so transferred or increased and demanding from the lessee an increase of rent commensurate with such other burden and the lessor shall for the purpose of  recovering the said rates and taxes and increase of rent have the same remedies as under the lease are applicable to the recovery of the rent reserved thereby.”
I think this is only an equitable provision to meet the case where the rates and taxes are increased because of the increased rent. It is only intended to ensure that the new rent shall be satisfied by these increased rates and taxes.
Mr. Fitzgerald-Kenney: I am afraid I cannot accept this amendment. I have gone as far as I can in the previous one.
Amendment, by leave, withdrawn.
Section 51 agreed to and added to the Bill.
Section 52 agreed to.
(1) Any person (in this section referred to as the applicant) who desires to obtain a building lease of land (hereinafter referred to as the building ground) situate in an urban area and either has obtained the consent hereinafter mentioned or is hereinafter exempted from obtaining any consent, may apply to the court for a building lease under this section of such land.
(5) Where on the hearing of an application under this section the court is satisfied, having regard to all the circumstances of the case, that it is reasonable and proper that a building lease should be made under this section of the building ground or any part thereof to the applicant, the court may direct such building lease to be made accordingly.
Mr. Lemass: I move amendment No. 107:
Before Section 53, but in Part VI of the Bill to insert a new section as follows:—
Every lease (whether made before or after the passing of this Act) of a tenement which contains a covenant,  condition, or agreement requiring the lessee to insure the tenement with a specified insurance company shall have effect as if such covenant, condition or agreement were a covenant, condition or agreement requiring the tenant to insure such tenement without reference to any specified insurance company.
This is an amendment which was suggested to me and the object of it is to provide that where a lease contains a covenant of condition that the lessee shall insure the premises with a particular insurance company that covenant in the lease should be deemed to be void. I understand it is the practice with a number of persons dealing with leases to insert a covenant requiring the lessee to insure with particular companies, and these generally foreign companies, for which they are agents. It is considered that the practice is undesirable and leads to a considerable annual loss of revenue to the country every year. The matter also relates to companies in this country. I have been informed of a case where a director in an Irish insurance company who bought a house and found that he was under an obligation in the lease to insure with a rival company. There seems to be no justification that such a covenant should be permitted and it seems desirable that it should be rendered void, as the amendment suggests.
Mr. Fitzgerald-Kenney: Insurance is a guarantee to the landlord that if the premises are burnt or partially damaged by fire he will be paid full compensation for the damage caused.
Mr. Lemass: That is provided for.
Mr. Fitzgerald-Kenney: I think the landlord is entitled to choose his own company. I do not think the amendment would help the Irish offices very much, because what the tenant will do is to go to the company that will insure him at the lowest possible figure. If you give the choice to the tenant he will not look for the solvent or insolvent company because he has no interest in the matter. He will simply go to the company, solvent or insolvent,  and there is a good deal of difference in insurance companies, that will give him the cheapest premium. That is obvious common sense. I do not think it would help any company in this country or do them any good in any way. It would be the company irrespective of its merits that would charge the smallest premium that would do all the best business. There is a great difference between insurance companies. Some insurance companies meet their clients in a most fair and generous fashion. Others are very different, and it is really the person whose interest is insured, and that is the landlord, who ought to have the choice.
Mr. Little: I suggest that covenants of that sort are tantamount to covenants in restraint of trade, because a number of these landlords are persons not interested in this country and have confidence only in English and Scotch companies and other companies of that sort. There are companies in this country which are perfectly safe and they are excluded by a large number of landlords. After all, we cannot ignore the fact that a number of property-owners in many cases are persons who have no interest in Irish companies in the public sense of the word.
While I admit that there should be some safeguard against a tenant insuring with a company that is in a bad condition. I think there should be some way of meeting this. The Minister should try and go as far as he can towards meeting the amendment in order to get rid of the objection that has been pointed out. There is undoubtedly a principle there at present that operates as a restraint on trade in the worse sense of the word.
Mr. Fitzgerald-Kenney: A restraint on trade would be illegal.
Mr. Little: I mean in the spirit of it.
Mr. Fitzgerald-Kenney: I do not think that this amendment will have the slightest bit of effect on it.
Amendment, by leave, withdrawn.
Professor Thrift: I move amendment 108:—
 In sub-section (1), line 43, after the word “may” to insert the words:—“in the absence of an agreement arrived at with the person or persons having an interest in such building ground sufficient to support the grant of a lease for one hundred and fifty years.”
The object of the amendment is to save people from going to law, if possible. It provides that everything should be done to secure agreement before an appeal to the court is made. That is the sole purpose of the amendment.
Mr. Fitzgerald-Kenney: There is nothing in Part 7 of the Bill which prevents private negotiations being entered into between the parties. I think the amendment is unnecessary.
Professor Thrift: The Minister does not think that it is well even to specify that an attempt should be made to have an agreement.
Mr. Fitzgerald-Kenney: I think it is unnecessary.
Amendment, by leave, withdrawn.
Professor Thrift: I move amendment 109:
Before sub-section (4) to insert a new sub-section as follows:—
“The applicant shall serve upon the intended lessor an application in prescribed form, and with such application shall furnish the intended lessor with elevations, plans and specifications of the buildings which are proposed to be erected upon the building ground to be comprised in the lease, and an estimate by an architect or surveyor of the cost of such buildings.”
I do not think that the Minister will say that this amendment is unnecessary. It is only fair that the landlord should be provided with information as regards plans, specifications, etc., of the buildings proposed to be erected so that he will be placed in a position to form a judgment as to whether the proposed buildings are suitable. He cannot do that unless he has the information referred to in the amendment.
Mr. Fitzgerald-Kenney: I think it would be very unfair to a person looking for a building lease if, before he knows that he is going to get it he has to go to the cost of getting out plans and specifications. These would cost a very considerable sum of money, and after going to all that expense he might not get the lease. I would be prepared to go so far as to say, that the form of application for a lease should have in it a general indication of the nature of the buildings proposed to be erected. If all that is set out in the amendment had to be done it would cost a man a lot of money and then his application might be refused.
Professor Thrift: The question as to whether it would be refused or not would largely depend on the nature of the buildings proposed to be erected.
Mr. Fitzgerald-Kenney: I am not prepared to go as far as the Deputy suggests in his amendment, but I think that the application form might give a general indication of the nature of the buildings proposed to be erected.
Amendment by leave withdrawn.
Amendment 110 not moved.
Section 53 agreed to.
An Ceann Comhairle: Amendment 111 to this section in the name of Deputy Lemass seems to me to be outside the scope of the Bill.
Mr. Lemass: The part of the Bill in which it is proposed to insert the amendment is entitled “Miscellaneous.” It deals with the acquisition of land for building purposes. That part of the Bill is intended to increase the facilities that are available for the acquisition of land and that also is the purpose of the amendment. The object of the amendment is to give local authorities power to get land for building purposes more easily than they can get it at present. That seems to be the main purpose of the miscellaneous part of the Bill.
An Ceann Comhairle: The fact that a part of the Bill is entitled “Miscellaneous” does not mean that the Chair could accept miscellaneous amendments. Apparently the purpose of the amendment is to deal with building ground exclusively. It does not deal with tenements or with tenancies at all, and it could not be inserted in a Bill of this nature.
Mr. Lemass: The Ceann Comhairle has ruled the amendment out of order, but still I would ask the Minister to consider it and if necessary to bring before the House a special Bill embodying the proposal in the amendment.
Mr. Fitzgerald-Kenney: That is a matter that might be considered in a Town Planning measure.
Mr. Geoghegan: Before the section is put, I wish to put before the House the possible desirability of extending the powers of a tenant for life to grant any lease under this Act. It occurs to me that it might be necessary for the easy working of the part of the Bill relating to the renewal of tenancies that the powers of a tenant for life to settled land should be enlarged. I just wish to ask the Minister if he thinks it worth while considering the desirability of striking out the word “building” before leases, and to enlarge the section so that a limited owner would have the powers conferred by Section 54 in respect of any lease granted for the purpose of carrying out this Act.
Mr. Fitzgerald-Kenney: Cases dealing with leases in the other parts of the Bill to which the Settled Land Acts would apply, always, I think, have to go to court. I would ask the Deputy to look at sub-section (1) in Section 32.
Mr. Geoghegan: I am content once I have drawn the attention of the House and of the Minister to it. Provided the other parts of the Bill worked smoothly without unnecessary expense in the way of application to the courts, I am satisfied.
Question—“That Section 54 stand”—put and agreed to.
 Section 55 agreed to.
Mr. Little: There is just one point with regard to the Title of the Bill that I would like to put before the Minister. All the individual houses that have been erected in country places are not really agricultural holdings, but in intent are really the same as town tenancies. In order to cope with them, and so that the Bill should apply to every tenancy which does not come under the Land Acts, I suggest to the Minister that it may be necessary for him to amend the Title.
Mr. Fitzgerald-Kenney: That is a matter that I would consider. I may inform the Deputy, however, that I do not see any way by which the houses he refers to can be brought under this Bill. I am still looking up the matter, and possibly it can be considered on Report.
Title agreed to.
The Dáil went out of Committee.
Bill reported with amendments.
An Ceann Comhairle: When is it proposed to take the Report Stage?
Mr. Fitzgerald-Kenney: On this day week.
Mr. Lemass: When does the Minister hope to circulate his amendments?
Mr. Fitzgerald-Kenney: Very soon. If the Deputy has not an opportunity of looking into the amendments for two or three days, then the Report Stage will not be taken on Thursday next.
Report Stage ordered for Thursday, 2nd July.
The President: I move the adjournment of the Dáil until to-morrow at 10.30 a.m.
Mr. Fogarty: I gave notice yesterday that I would raise a question on the adjournment dealing with the closing  of County Tipperary creameries. I had a question on the Order Paper dealing with the matter. The question reads:—
Mr. Fogarty asked the Minister for Agriculture if he is aware that the Grange, Rosegreen and Cashel Dairies were closed down on the 16th June, 1931; and whether, in view of the hardships on suppliers, who are obliged as a result to go considerable distances to outlying creameries, he will state if and when it is intended to reopen these dairies.
In reply, Mr. Lynch (for Minister for Agriculture) stated: I understand that the Grange, Rosegreen and Cashel Creameries have been kept open by the co-operative society to whom they were transferred, and that milk suppliers who are going considerable distances to outlying creameries can recommence at any time sending their supplies to these creameries.
Mr. Fogarty: I will raise this matter on the Adjournment.
On 13th May I asked the following question regarding the same matter:
Mr. Fogarty asked the Minister for Agriculture to state the reasons for the sale of the Rosebower Dairy, Cashel, with its auxiliaries at Grange and Rosegreen, to the Ballyduff Creamery Committee, and the price paid for same, and if he will further state what price was paid to Mr. McCluskey and Mr. Hanly for the creameries purchased from them by the Dairy Disposals Board, and also why, in the resale of the creameries mentioned, a preference was not given to the suppliers.
In his reply the Minister for Agriculture stated:—
With regard to the opening and concluding portions of the question, the reason for the course adopted was that the retention of a central creamery in Cashel was considered undesirable on grounds of economy. I am not prepared to give the figures asked for in the second and third parts of the question.
 In a Supplementary Question I asked:
Will the Minister say if the Cashel creamery and its auxiliaries are in possession of the Ballyduff creamery? Do they hold them yet?
The Minister replied: No, we hold the creameries.
These creameries were taken over the heads of the suppliers last November by the Dairy Disposals Board. They were worked by the Dairy Disposals Board until May and were then sold over the heads of the suppliers to the Ballyduff Creamery Committee. Ballyduff is a distance of 21 miles from Rosegreen and the cream has to be transported that distance at a cost of £600 yearly. The Cashel suppliers consider that this is not fair to them. They objected to sending milk to these creameries and sent it to outlying creameries. Two officials from the Dairy Disposals Board came down to make a settlement. One of them, Mr. Breen, told us that by joining with Ballyduff we were going to gain £1,000 a year. He did not consider the other side of the question, what it would cost to bring the cream from Cashel to Ballyduff and Rosegreen. We asked him would he consider the question of opening up the main dairy in Cashel and in reply he wanted to know if we were prepared to put down £8,000 although the creameries have been sold to Ballyduff for £5,200. We would have to put down £8,000 before he would give us the creameries. We told him we were not having that, and we asked him on what grounds we should be victimised to the tune of £2,800. Mr. Breen then left the hall and a deputation was appointed to meet him. He told the deputation that he could not give the creameries, but he came down in the price to £7,000 here in the House. I wonder if the Minister thinks that is fair to Cashel. The price has now been fixed at £5,200 for a creamery with a supply of 4,500 gallons. I always thought that the Dairies Act stipulated for £1 a gallon. That does not appear to be the case here. Surely if Clonmel got a supply of 3,800 gallons at a purchase price of £3,200, Cashel should be entitled  to some consideration. If the Minister is going to do justice he should see that these creameries are re-opened and handed over at the right price. It is not fair to victimise Cashel to the tune of £800.
We bid £4,000 for those creameries and the Minister will not accept that. Surely he must have an interest in Ballyduff when he wants to send the cream that distance or give it to a creamery that is in liquidation to the tune of £2,100, with another £700 for machinery. He must want to job upon the milk supply of Cashel when he is going to hand all this to Ballyduff. That is not fair to Cashel. The Minister wants to take the cream from the centre of the Golden Vale, within five miles from the station, to Ballyduff, on the brow of a bog. We hold that if you want to have a central creamery, Cashel is the place. There you will be within 400 yards of the railway station; you will be in an urban area where you can get a trade which will consume practically all your output. We have that guarantee if this central creamery is opened and I would ask the Minister to open it. Heretofore there were two main dairies in Cashel and now they are closed and we are to get only an auxiliary. We think that is not fair.
The Minister should open up the creameries and allow us to take the cream to be churned as heretofore in Tipperary and so avoid causing hardship to the suppliers by asking them to travel five or six miles. In the case of Cashel it is pure victimisation. We are entitled to the same treatment as Clonmel. We should get our creameries at £4,000 sufficiently equipped to pass a Dairy Board Inspector. Perhaps it is that there is a better organisation of Cumann na nGaedheal in Clonmel than there is in Cashel. There is something in it, anyway. The Minister has been offered a good price for the creameries, more than they are worth. The main dairy in Cashel is little better than scrap iron. There are six-inch walls with boards and felt. They gave a dairy to Clonmel at £3,200,  a stone building fully equipped with machinery, and we are entitled to the same consideration.
Mr. Flinn: Do I understand from the Deputy that the Disposals Board at one time asked £8,000 for this creamery and they are now prepared to accept £5,200?
Mr. Fogarty: Yes.
Mr. Flinn: I wonder on what basis did the Disposals Board arrive at their original calculation?
Mr. Morrissey: Is the Deputy now suggesting that they are offering the creamery too cheaply to the people?
Mr. Flinn: No. I am wondering why they asked originally what is apparently an outrageous price. If they are prepared now to accept £5,200 it looks as if the £8,000 formerly asked was an outrageous price. If they have been able to come down from £8,000 to £5,200 there would seem to be something in the contention that they could very well come down from £5,200 to £4,000. I am not suggesting anything, but I would like to know how they arrived at the figure of £8,000.
Minister for Agriculture (Mr. Hogan): I can answer that question off-hand. I do not know whether the Disposals Board asked £8,000 originally. I do not keep in touch with all the negotiations that take place between the Disposals Board and the creameries. I know, however, that if I had property that I was prepared to sell for £5,200 I would begin by asking £8,000.
Mr. Flinn: Is that the manner in which the Disposals Board proceed with their negotiations?
Mr. Hogan: Absolutely. There are people here in the House who, if you are to believe them, seem to have no experience at all of business dealings. I may say that that is not only the business method of the Disposals Board, but it is the method by which everybody does business. It is just ordinarily what is done every day. It is the method by which the White Star line would be sold to-morrow morning if it were for sale. That would be the method that would be employed.
Mr. MacEntee: I hope the Minister is not trying to justify his attitude by introducing the White Star line.
An Ceann Comhairle: One would imagine that the Cashel creamery could be discussed calmly anyway.
Mr. Hogan: I do not know what the Disposals Board asked originally. I am not at all interested but I assume the method they employed is the method by which anybody would make a bargain. I have made a few bargains, not possibly of the same magnitude as those made by Deputy Flinn. If I were making a bargain I would ask considerably more than I would be prepared to take. That is what I always do. In making up my mind what I was going to ask, I would try to sum up the psychology of the people to whom I was selling and if I thought they would begin low I would begin high and possibly we might agree on the price later on. At any rate that is the completely unscientific method of bargaining and selling that we adopt when we are selling any property. We act, strange to say, the same as any business man would act.
We have no scientific rules to regulate these matters. So far as this particular creamery is concerned, the position is this: There were two central creameries in the town of Cashel and two auxiliary creameries, and for years these two central creameries were owned by proprietors. For years the farmers had no say good, bad or indifferent in the running of these creameries; no rights to any of the property, no rights to any of the profits, and no rights to the trade and the development. In fact, none of the rights that they are so anxious about now. That was the position for years, and but for the fact that we intervened that would be the position for ever.
Mr. Fogarty: Were you not asked by the proprietors to take over the creameries? Is not that a fact?
Mr. Flinn: I understood you to——
Mr. Hogan: I must ask Deputy Flinn not to interrupt. I will speak for myself.
Mr. Flinn: What I wanted to ask——
An Ceann Comhairle: Please let the Minister answer the question asked by Deputy Fogarty.
Mr. Hogan: We have made it quite plain to all proprietors that we want to buy their creameries. There is hardly a creamery proprietor in the country who does not know that we are out to buy the creameries. Every proprietor has come to the conclusion that that is the position. The point I want to get the Dáil on is this: that these creameries were owned by proprietors for generations. They drew quite legitimate profits from these creameries and they put the profits in their pockets. They made any arrangements they wished, and the farmers had no say good, bad or indifferent in it. We intervened and bought up the creameries and transferred them to the farmers. If we had not intervened that would be the position to-day, and Cashel would not have a word to say as to where the milk was going, or would have taken no interest in any of the matters in which Deputy Fogarty is now so interested on behalf of the people of Cashel. At that time the farmers of the district around Cashel were carrying the overhead expenses of the working of two proprietary central creameries and two auxiliary creameries.
Mr. Fogarty: And getting as good a price as other creameries.
Mr. Hogan: They might, and better. The times were better. These suppliers were carrying overhead expenses for two central and two auxiliary creameries on a milk supply of 5,000 to 6,000 gallons daily.
Mr. Fogarty: Not at all. Some of them were getting over 1,200 gallons of milk a day.
Mr. Hogan: What does the Deputy say the milk supply of the area was?
Mr. Fogarty: It was at least 4,500 gallons.
Mr. Hogan: I said 5,000 to 6,000 gallons. However, the milk suppliers were carrying all the overhead charges on, we will say, as the Deputy puts it, a milk supply of 4,500 gallons. We will not dispute whether it is 4,500 or  5,000 or 6,000. Anyone who comes from a dairying district, or who knows anything about creameries knows that one central creamery can hardly be run economically on less than 4,000 to 5,000 gallons of milk daily.
Mr. Fogarty: How is it that Clonmel run their creamery on 3,000 gallons?
Mr. Hogan: I say that everyone knows that a milk supply of less than 4,000 or 5,000 gallons is not an economic supply for a central creamery. The average central creamery would have a milk supply of 8,000 to 9,000 gallons. But here in Cashel there were two central creameries, and two auxiliary creameries, bearing all their overhead expenses on a milk supply of 4,500 gallons. I suppose Deputy Fogarty will agree that it is difficult to run an auxiliary creamery on less than 1,000 gallons of milk daily and there were two auxiliary creameries. If you require say 3,000 gallons of milk daily for any sort of a central creamery you will agree that for the two central creameries you will require at least 6,000 gallons of milk daily, and for the two auxiliary creameries at 1,000 each there would be 2,000 gallons. so, for the four creameries altogether a minimum daily supply of 8,000 gallons would be required in order to make the creameries an economic unit. Yet the farmers were carrying the overhead expenses on these two central creameries, and two auxiliary creameries for generations on, as Deputy Fogarty puts it, 4,500 gallons of milk, and there was not a word of complaint about it. The farmers then had no anxiety about their rights, or the development of the butter trade. To-day, when the taxpayers' money comes in to make them the owners of their creameries, we have all these questions raised about their rights. Now we got those creameries. I suppose Deputy Fogarty will admit that one central creamery in Cashel is enough. Nobody will say that you require two central creameries to handle, say, 5,000 gallons. It takes a lot more than £700 or £800 a year to run a central creamery, and it costs £400 to £500 to  run an auxiliary creamery. At one stroke we were saving the milk suppliers of Cashel at least over £1,000 a year, and possibly very much more in the running of these creameries. The question for us is whether we can save them any more, having regard to the fact that there is a small milk supply. We have a duty not only to the farmers, for whom we are trying to do a good turn, but we have a duty also to the taxpayers who have to put up all that money.
We have a duty to see that this particular unit will be made economic and have the prospect of becoming economic in the future. In other words, from the point of view of the farmers, the more overhead expenses we can save the better. Deputy Fogarty will admit that an auxiliary creamery would have no difficulty in handling 5,000 or 6,000 gallons of milk daily. Also it would cost less to run an auxiliary than to run a central creamery. In that state of affairs we proposed to dispense with the two central creameries in Cashel and run one auxiliary creamery. That, from the business point of view, was undoubtedly the correct thing to do. We proceeded to carry out that arrangement and in pursuance of that arrangement we decided to sell this auxiliary creamery to some other co-operative creamery in the neighbourhood.
If we were establishing a central creamery in Cashel it would be a question of organising a co-operative society to take it over. Having come to that conclusion, we had to decide with what centre it would be connected. We offered it to a neighbouring creamery and, while they were quite willing to buy it, they made terms which we thought most unfair to the farmers who would be supplying the auxiliary at Cashel. The Deputy knows what I am driving at. We refused that and we offered it to another creamery, the Centenary Creamery, which the Deputy mentioned. They agreed to buy it for £5,200, and agreed to take in the suppliers as shareholders and give them the same rights as anybody else in the Centenary Society. We regarded that as quite a fair bargain,  favourable in the interests of the farmer.
Mr. Fogarty: Was it a fair bargain for the suppliers in Cashel?
Mr. Hogan: That is what I was saying; it was fair so far as they were concerned. I need not go into the question of the Centenary Creamery. It is a good creamery and has a good reputation. The Deputy said certain things about it, but, as I understand the matter, it is a perfectly solvent, first-class creamery and it was always regarded as that. They were well able to pay us and to run this creamery. If they had taken it over at this price the result would be that the milk supplies of the Centenary Creamery would be increased by 5,000 gallons. That would improve and strengthen the position of the creamery and, on the other hand, the Cashel suppliers would belong to a unit which is handling a very considerable quantity of milk, 8,000 to 10,000 gallons. When we made our agreement the people of Cashel objected. The objection was raised practically entirely by the townspeople of Cashel.
Mr. Fogarty: I deny that charge. A committee was appointed from the suppliers and they asked me to assist them.
Mr. Hogan: The quarrel started in the town of Cashel; there is no doubt about that. The people who had no cows and were not interested in cows took a tremendous interest in the matter. The agitation was quite successful, and we decided that, in view of the opposition which suddenly showed itself amongst people who seemed to have no interest in the creameries for the last ten or fifteen years, we would not force the Centenary Creamery to carry out its agreement. We considered it would be unfair because they would be taking over people who professed to be unwilling to supply. We opened the creamery. What happened? The supplies were not sent. We kept the creamery open for three or four days and it was then threatened that the water supplies would be cut off. I then closed the creamery.
Mr. Fogarty: It was not you closed it. A man came and locked the creamery and cut off the water supply.
Mr. Hogan: On our instructions the creamery was closed.
Mr. Fogarty: On 13th May I asked you if Ballyduff owned the creameries and you said no.
Mr. Hogan: And I say that now. Even if we had an agreement with Ballyduff, having regard to the agitation in Cashel we did not think it fair to take action for specific performance against Ballyduff and we did not press them to take over Cashel creamery. Anyway, we closed the creamery. When it was open no milk came in, and there was a threat about the water supply being cut off. The creameries are still closed.
Mr. Fogarty: You did not close them until the 16th of this month. They were open for a month and the managers were paid.
Mr. Hogan: Was there milk coming in there?
Mr. Fogarty: No.
Mr. Hogan: That bears me out. There was no milk supplied for a month and we closed the creameries. That is the present position. I am asked what we are going to do. We could have got £5,200 for the creamery and we regarded that as a fair price. Even at that price a certain subsidy would have to be paid by the taxpayer, but we would not take less. You will have a central and two auxiliaries for £5,200 and in very poor parts of Ireland centrals and auxiliaries have had to be put up by farmers who live on much smaller holdings than the farmers around the town of Cashel. Cashel is in the Golden Vale and, presumably, the land, as the Deputy pointed out, is good. It is not like West Cork and parts of Kilkenny, where farmers had to put up creameries without any help. Will the Deputy tell me where there was a central and two auxiliaries put up for £5,200? In fact, he offers £4,000 for a central and two auxiliaries, provided we put them  in first-class order. A central and two auxiliaries in first-class order would cost, at least, £8,000—the central £5,000 and the two auxiliaries £3,000. What the Deputy wants is £8,000 worth of property for £4,000. I do not blame him for asking it. He is adopting possibly the same tactics that I do, but, as between one man and another, I may tell him that he is not going to get them at that price.
Mr. Fogarty: Is not the price of these creameries based on the milk supply? Is not that what is laid down in the Act?
Mr. Hogan: No. The Act does not deal with creameries; it deals with milk supplies alone. If we close creameries and sell milk supplies, we sell for round about £3 a cow, or £1 a gallon, but if we sell not only milk supplies but building and plant, we charge something more. £3 a cow would come to something like £4,700 or £4,800, and we charge something extra for plant, machinery and so on. What the Deputy is asking me on behalf of Cashel is to give him £8,000 worth of property —the creameries being put in first-class order—for £4,000. That is asking too much and we will not give it. The reason we will not give it is because it would not be fair to the taxpayer. The taxpayer has done the handsome thing already by buying out these two proprietary creameries and giving a fair price.
Mr. Flinn: How much?
Mr. Hogan: I shall not tell you.
Mr. Fogarty: We were told that the price could be whatever they liked, and if that is so you could sell them at whatever price you like.
Mr. Hogan: When you are making a bargain you have, in the end, to do the fair thing. Supply and demand regulates the matter eventually. We are not going to sell these creameries for £4,500. The creameries were worth what we paid for them.
Mr. Fogarty: You paid a good price for them, and you want us to do the same.
Mr. Hogan: We can get £5,200 for these creameries and we will sell them for no less.
Mr. Fogarty: You paid £1,200 for the auxiliary.
Mr. Hogan: How do you know?
Mr. Fogarty: You paid £1,200 for the auxiliary and you got a free grant which more than paid for the cost of building and equipping it. There is nothing in it but six-inch walls with scrap iron.
Mr. Hogan: The Ballyduff people are not fools, and they paid £5,200. We could have got that from another society.
Mr. Fogarty: It was not for our good that the Ballyduff people came up to take our creameries.
An Ceann Comhairle: This is not a debate.
Mr. Hogan: We could have got that from another society, but they made conditions which we thought we should refuse to accept.
Mr. Fogarty: What about the suppliers of the three creameries? They should get first consideration.
Mr. Hogan: They did get first consideration.
Mr. Fogarty: They did not.
Mr. Hogan: It was because we were considering them that we refused to open a central creamery there.
Mr. Fogarty: You never let us know you were selling them. You sold them behind our backs.
Mr. Hogan: If you like to say so, we sold them behind your backs because we did not consider it a wise thing in the interest of the farmers to have a central creamery there. After all, what claim had you to them?
An Ceann Comhairle: There is no use in carrying on a debate in this fashion.
Mr. Fogarty: There are certain people in Ballyduff on the Committee that the Minister wanted to do a good  turn to. That is the whole question. There are certain people upon that Committee and he wants to give them a turn on this. They were to build up a good dairy and they would get suppliers for them.
Mr. Hogan: I did not know who was in Ballyduff until the Deputy himself told me.
Mr. Fogarty: The Minister knew right well.
Mr. Hogan: I do not expect the Deputy to believe me, but I did not. The Deputy knows that there is such a Board as the Dairy Disposals Board. I have no personal interest in these creameries —not the slightest. The Deputy talks about our refusing to give suppliers a say in the matter. I am entitled to ask why should we take all this trouble to consult suppliers. They went on for years supplying proprietary creameries. We bought them over. Having bought them over with the taxpayers' money, we have to safeguard the taxpayers' interest and see that the new unit established there is an economic unit. If we had to enter into negotiations  with every body of farmers affected by the purchase of creameries, we would never have succeeded in putting through a single transaction of this class. Having listened to this debate so far, I think you, a Chinn Comhairle, will agree with me in that. The creameries are there. We are not going to be blackmailed in this matter. We are not going to part with these creameries except for their value. Even at the price of £5,200, the taxpayers will have paid a substantial sum in the interests of the farmers of Cashel. If the Deputy likes, he can have the creameries at that price. We will not give them at any lower figure.
Mr. Flinn: Will the Minister tell us if the difference between the price he asked—£8,000—and the £5,200 which he is prepared to accept is included in the £163,000 by which he has written down the value of the creameries in the Budget this year?
Mr. Hogan: I do not follow that question.
The Dáil adjourned at 10.50 p.m. until Friday at 10.30 a.m.