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Dáil Éireann - Volume 71 - 28 April, 1938

Agreements Between the Government of Ireland and the Government of the United Kingdom—Motion of Approval—(Resumed).

Debate resumed on the following motion:—

That Dáil Eireann approves of the Agreement between the Government of Ireland and the Government of the United Kingdom, signed at London on the 25th day of April, [164] 1938, copies of which were laid on the Table of Dáil Eireann on the 27th day of April, 1938, and recommends the Government to take the necessary steps to give effect to the provisions of the said Agreement.— (An Taoiseach agus Aire Gnóthaí Eachtracha.)

Minister for Industry and Commerce (Mr. Lemass): In view of certain statements which were made by both of the Deputies who spoke in this debate yesterday, and also statements which were made outside the House, I think it is desirable that I should intervene in this discussion at this stage for the purpose of explaining in detail the provisions of the Trade Agreement which the House is asked to approve of, and to express the view of the Government as to the bearing which that Trade Agreement has upon the economic position of the country, and upon its economic policy. As the Taoiseach explained yesterday in the course of his speech, there is an essential difference between the Agreement relating to the ports and the Agreement on finance, and the Trade Agreement. The first two Agreements arise out of the relationship between Ireland and the United Kingdom, a relationship which is not paralleled between any other two countries on earth, but the Trade Agreement is similar to other Agreements made between ourselves and other countries in Europe, and between the United Kingdom and other countries. There is no difference in principle between the Trade Agreement negotiated with the United Kingdom and that made earlier with Germany and other European countries and that made with Canada. In fact, I may mention that the provisions of our Trade Agreement with Canada involve that any concession or any preferential treatment to be afforded in consequence of this Agreement to produce of the United Kingdom must be extended also to the produce of Canada. It is, perhaps, necessary to emphasise, in view of the attitude taken up by certain people, that it is not possible to make a Trade Agreement upon “the winner take [165] all” basis. There is a fundamental difference between negotiating an agreement and the process of backing a horse. A trade agreement is essentially a bargain similar to the bargain that takes place when a farmer brings a cow to a fair. In this case the British Government was selling the cow, the cow being free entry to the British market. Just as a farmer will not sell his cow unless he thinks the price offered for it is equal to its value——

Mr. Dillon: They had to do it in this country for a long time.

Mr. Lemass: ——so also, the dealer will not buy the cow if he thinks the price is in excess of the value, or more than he can afford to pay. The dealer naturally will dislike every penny by which his first offer has to be increased in order to get the transaction completed. Similarly, many of the provisions of this Agreement were accepted by the negotiators with reluctance. I am sure it is true to say the same of the British negotiators, that many of the provisions of the Agreement were accepted by them with reluctance, and only after considerable discussion and debate. When we went over to London to negotiate a trade agreement we had two primary aims in view, firstly, to secure free entry for our products into the British market on the same basis as it has been afforded to Canada and other countries, and, secondly, to preserve our powers to promote and assist industrial development here. I am sure it must be clear to anybody who has given even a moment's consideration to the matter that the achievement of both these purposes was no easy task. Anyone who thought on the subject must have realised that the British Government would not give substantial concessions except in exchange for a substantial quid pro quo. If any of those in the Dáil or outside it who have in recent years been advocating that such a trade agreement with the United Kingdom should be made, had the idea that it could be done on any other grounds, they were living in a fool's paradise. This matter of a trade agreement [166] must not be confused with the economic war. The removal of the penal duties which follows from the settlement of the financial dispute is provided for in the Financial Agreement. The removal of these duties left protective duties in operation on both sides, and the Trade Agreement deals, not with the penal or retaliatory duties but with these protective duties. I think it is necessary to make that clear, because there are many people in this country who have obviously confused the duties to which our products were subject on entry into Great Britain with the penal duties that arose out of the financial dispute. The economic war began and these penal duties came into operation before the protective duties. The confusion, therefore, is not difficult to understand.

Up to 1932 Great Britain was a free trade country. The agricultural produce of all countries had free entry to the British market and, in fact, the greater number of industrial products had similarly unrestricted entry into that market. But in 1932 Great Britain changed its policy. It ceased to be a free trade country, and adopted a policy of protecting its own producers, whether agricultural or industrial. In May of that year the British Government enacted the Import Duties Act and brought these protective duties into operation. One of the provisions of that Act postponed the operation of these protective duties in the case of Ireland, as in the case of Canada, Australia, New Zealand and South Africa, for a period of six months, over the time at which the Ottawa Conference was due to assemble. What happened at Ottawa was that the nations represented there which made agreements with the British Government succeeded by these agreements in securing a continuance of free entry for their products into the British market, by making substantial concessions to British manufacturers and exporters. But, by reason of the fact that the penal duties had come into operation before the Ottawa Conference met, and were in operation here on the date upon which the protective duties came into force, many people in this country have not clearly distinguished between one set of duties and another. [167] Some of the protective duties applied to our produce equally with the penal duties. In other cases the protective duties were expressed to be in abeyance while the penal duties were in force, but would come automatically into operation with the removal of the penal duties. If any question arises as to whether the Irish negotiators in London did well or otherwise the easiest method of getting a satisfactory answer to that question, is by comparing the terms of the Trade Agreement which is now being submitted to the Dáil, with the terms of the agreements made by Great Britain with Canada, and the other countries represented at Ottawa in 1932. It was by these agreements that the Governments of these countries secured exemption for their products from the British protective duties, and it is by this Agreement that we propose to do the same thing. The agreements which were made at Ottawa were all similar in form, and it is, I submit, a reasonable assumption, that if it had been possible for us to have made a trade agreement with the United Kingdom at the Ottawa conference, that that agreement would have been similar in form to the other agreements made there.

It would at any rate have been a matter of exceptional difficulty for the British Government to have made with us a trade agreement of a different form from those made by the other countries there, and it was not unreasonable that when we went to London this year to negotiate a trade agreement the attitude of the British negotiators should be that if we were to secure Ottawa terms we would have to concede Ottawa terms. It is true that our circumstances are vastly different from those of the other countries that were represented at Ottawa. Our manufacturers and producers have not got the natural protection which the high cost of transportation over long distances involves. Our proximity to the British market makes our circumstances different from those of these far away countries, and, furthermore, the most effective, the most dangerous, competitors of the Canadian, Australian and South African industrialists [168] were not in Great Britain. For us, of course, the effective competition which our industrialists have to contend with is that which comes from the nearest country, but in the case of Canada the effective competition comes from the United States, and the same is also true, I think, of Australia and New Zealand. These factors operated to enable us to contend that there was such a difference in the circumstances of the various countries that the Trade Agreement which the United Kingdom Government made with us should be different in form to the agreements which the United Kingdom Government made with these other countries. Whether that argument would have been effective at Ottawa is, at least, doubtful, but it did prevail in 1938, and that difference in circumstances is recognised in the terms of this Trade Agreement of which the Dáil is now asked to approve.

Articles 1, 2 and 3 of this Trade Agreement secure for our producers free entry into the British market. Article 1 is expressed to provide that free entry. The terminology of the Article may be difficult for a layman to understand, and, in fact, its drafting caused some difficulty because, of course, the free entry which it secures does not apply, and is not intended to apply, to the goods which are, and have been for many years past, subject to revenue duties, such as beer, spirits, sugar, tobacco, and also goods which contain dutiable ingredients. That free entry, in so far as it is secured for the commodities mentioned in paragraph 2 of the Article, is guaranteed only until the 20th August, 1940. That provision is the same as in similar agreements made by the British Government with other countries and will be reviewed before that date.

Article 2 of the Agreement is expressed to provide us not merely with that free entry into the British market in respect of the classes of goods to which Article 2 applies, but also to give us a preference there over countries which have not made similar agreements with the United Kingdom Government: that is to say, countries other than Canada, Australia, New Zealand and South Africa.

[169] Article 3 deals with the circumstances in which marketing schemes involving the regulation of imports may be adopted by the British Government in relation to agricultural commodities. It provides that the quantitative regulation of imports will not apply to our produce unless the orderly marketing of such goods in Great Britain cannot otherwise be secured, and if the quantitative regulation of imports is applied, then in fixing the percentage of the total importations to be allocated to this country, regard is to be had to the past position of Ireland in the trade, and to any special conditions which may have affected, or be affecting, the volume of Irish exports to the United Kingdom. That Article, and a number of other Articles, as I am sure Deputies have noticed, provide for consultation between the Governments from time to time either for the purpose of determining whether quantitative regulation is to operate, or, if it is operating, to fix the quotas which will operate for us. I may say in respect to a number of these commodities, that consultations took place simultaneously with the negotiation of the Agreement, and that information concerning the arrangements made will, in due course, be communicated to the Dáil by the Minister for Agriculture.

Article 4 of the Agreement does not appear in the corresponding agreements made by the British Government with the other countries to which I have referred because the conditions which apply in respect of the egg and poultry trade are, in a sense, peculiar to ourselves. It is, however, extremely unlikely that the exports from Éire will so increase as to cause a disturbance in the British market for some time to come. As Deputies are aware, the exports of eggs and poultry from this country have decreased in recent years due to reasons not associated with the economic war at all, and a substantial recovery in exports could take place before the stability of the market for eggs or poultry to the United Kingdom could be upset.

Article 5 has been regarded by some of those who have commented on this [170] Agreement as an important Article. Under it the Government of Ireland agrees that certain categories of goods, set out in the Second Schedule to the Agreement, of United Kingdom origin will not be subjected to import duties for the duration of the Agreement. The Federation of Irish Manufacturers, in a statement which they published hastily on the day that the Agreement was published, stated in connection with that Article as follows:—

“It appears, however, from the published text that future industrial development is drastically limited, if not wholly prevented, by Article 5 of the Agreement, by which protection is denied to a list of articles covering six pages of the Agreement, and in which are included some products capable of being manufactured at some future time in this country. Article 5, therefore, seems to have put a definite limit to industrial development in this country which is surprising, and requires very careful consideration.”

Now, it is quite true that the Article does debar us from putting tariffs on those goods of United Kingdom origin, which is, of course, a very different thing from saying that those industries must not be established here. If the list is examined by anybody with a competent knowledge of industrial possibilities here, it will be found that the articles set out there—that is, the articles of an industrial character as distinct from the agricultural products which are also included in the list—are either not capable of being manufactured here by reason of the fact that they are derived from natural products which we do not possess, or, if they are to be manufactured here, must be manufactured upon a basis which will involve an export business, because the limited size of our market would not permit of their being made economically for home consumption only; and, if they are manufactured here for the purpose of export, well then, assistance by way of tariff may not be required. It is, however, utterly preposterous to suggest that our abstention from imposing duties upon those goods either drastically limits or wholly prevents industrial development. The total value of the imports [171] of those goods in 1937 was £4,250,000 out of a total importation of goods of a similar character in that year of £24,000,000. In so far, therefore, as Article 5 operates to limit industrial development, it limits it to the extent of 16½ per cent., and, in fact, the field for industrial expansion which is left is much greater than I—and I have generally been regarded as an optimist in those matters—think is likely to be covered during the three years for which this agreement is expressed to operate. The advantage of the Article to the United Kingdom is not that it limits our industrial development to any extent, but that it precludes us from making trade agreements with other countries involving the imposition of duties upon those goods of United Kingdom origin. That Article and the accompanying Schedule also provide for the free importation of specified classes of agricultural products. I do not think it is necessary to comment upon that provision. The commodities set out in Part II of that Schedule are in the main, if not all, classes, in which we do an export rather than an import business.

Article 6 of the Agreement provides for the modification of the minimum customs duty, for the repeal of the stamp duty upon non-dutiable imports, for the abolition of the Post Office delivery charge, and also for a modification of the package tax on goods of British origin. Those changes have no effect whatever upon the industrial development programme. In so far as the goods concerned are manufactured here, and are consequently liable to customs duties, those customs duties will still apply. The reduction of the minimum customs duty may convenience occasionally the importers of small quantities, but it is not likely to impair in any way the protection which the Dáil decided should be afforded to the industries concerned. Article 7 is of a similar character. It provides for the giving of a preference to United Kingdom producers and manufacturers in certain circumstances, but it does not, obviously, interfere with our industrial programme in any way. Article 8 of the [172] Agreement is the important Article. Under Article 8 it is provided that the protective duties upon articles manufactured here, as against United Kingdom manufacturers and exporters, will be fixed in the case of fully established industries upon a stated principle, the principle being stated in the Article. It is in connection with that Article particularly that I would invite Deputies to make the comparison which I suggested with the agreements made at Ottawa between the Government of the United Kingdom and the other countries represented there, and also with similar agreements made between the United Kingdom and those countries since Ottawa.

The Agreement made between the Government of the United Kingdom and Canada at Ottawa provided, in Article 10, that the Government of Canada would not afford protection by tariffs to industries other than those which were reasonably assured of sound opportunities of success. Under Article 11, the Government of Canada undertook that during the currency of the Agreement—I am quoting now from the Agreement—“the tariffs shall be based on the principle that protective duties shall not exceed such level as will give the United Kingdom producers full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, provided that in the application of such principle special consideration shall be given to the case of industries not fully established.” Under Article 12, the Government of Canada undertook to constitute a Tariff Board, and, under Article 13, they undertook that on the request of the Government of the United Kingdom they would cause a review to be made by the Tariff Board as soon as practicable of the duties charged on any commodities in accordance with the principles laid down in Article 11, which I have quoted, and that after the receipt of the report of the Tariff Board the Canadian Parliament should be invited to modify the tariff in such manner as to give effect to such principles. Under Article 14 the Government of Canada undertook that no existing duty would [173] be increased on United Kingdom goods, except after inquiry and on receipt of the report from the Tariff Board, and in accordance with the facts as found by that body. Under Article 15 the Canadian Government undertook that British producers should be entitled to full rights of audience before the Tariff Board when it had under consideration matters arising under Article 13 or Article 14 of the Agreement. In the Agreement made between the United Kingdom and New Zealand in Ottawa, there is in Article 7 a similar undertaking that tariffs would not be afforded except in the case of industries which are reasonably assured of sound opportunities for success, and in Article 8 the Government of New Zealand undertook to institute an inquiry into the existing protective duties, and where necessary to reduce them as speedily as possible to such level as would place the United Kingdom producer in the position of a domestic competitor, that is, that the protection afforded to the New Zealand producer shall be on a level which will give the United Kingdom producers full opportunity for reasonable competition on the basis of the relative cost of economical and efficient production.

Mr. Dowdall: Would the Minister be good enough to read from the page before that, where it says something about consulting the producers?

Mr. Lemass: Is it in regard to the right of audience?

Mr. Dockrell: I think that is the point which the Deputy is making— the right of audience for the producer.

Mr. Lemass: The Canadian Agreement provides that the United Kingdom producers should be entitled to full rights of audience before the Tariff Board when it had under consideration matters arising under Article 13 or 14 of the Agreement. The Agreement made with Australia is similar in form. Article 9 is similar to the Articles in the other Agreements concerning the industries which will be protected by tariffs, and Article 10 provided that the Government of Australia should undertake that, during the currency of the Agreement, the tariffs would be based on the principle [174] that protective duties should not exceed such level as would give the United Kingdom producers a full opportunity of reasonable competition on the basis of the relative cost of economical and efficient production, provided that in the application of such principle special consideration could be given to industries not fully established. Article 11 provides similarly for a review of existing tariffs, and Article 12 undertook that no new tariff would be imposed and no existing tariff increased except on the recommendation of the Tariff Tribunal. Since Ottawa, other Agreements have been made—notably, one, in last year, between the United Kingdom and Canada, which similarly provides that the Government of Canada will not impose any new protective duty, or increase any existing protective duty, except after inquiry at which the United Kingdom producers shall enjoy full rights of audience.

Now, the Agreement made between the United Kingdom and Ireland, which the Dáil is asked to approve, is, as Deputies will have noticed, different in form. Paragraph (1) of Article 8 provides that, when tariffs are being reviewed here, they shall be adjusted in accordance with the principle that they shall not exceed such level as will give the United Kingdom producers and manufacturers full opportunity of reasonable competition, while affording to Eire industries adequate protection, having regard to the relative cost of economical and efficient production. There is no undertaking that new tariffs will not be imposed and there is no restriction on the powers of the Government to increase existing duties if circumstances should necessitate such an increase. There is implied in the Article, however—and it is necessary to call attention to it, because the point appears to have been overlooked—that existing prohibitions upon imports, i.e., the quantitative regulation of imports, will be substituted by import duties, except in the case of certain commodities set out in Schedule 3 of the Agreement.

Mr. Dillon: In Schedule 3?

Mr. Lemass: It has been suggested that Article 8 of this Agreement [175] limits our freedom to promote industrial development. In fact, the intention behind that Article has been expressed repeatedly to be the intention of this Government, long before the negotiations with Great Britain were commenced. It was never contemplated that duties originally imposed at a high rate for the purpose of helping industries in their initial stages would be continued indefinitely after these industries had been fully established and had overcome all their initial difficulties. I could quote here, if it were desirable, a number of speeches that were made here by me and by other members of the Government on that matter. I shall quote from one speech I made in Limerick, in January last, in which, referring to the powers of the Prices Commission, I spoke as follows:

“The Prices Commission had been asked to undertake a review of the very large number of protective tariffs in operation with a view to discovering whether or not it was necessary to maintain many of these tariffs at the level at which they were originally imposed. In order to get a number of industries established, tariffs at a high rate had to be imposed, but, as time went on, the necessity for the tariffs should become less and equal protection might be given by tariffs at a lower rate. It was not to be taken that, any general cutting down of tariffs was anticipated. On the contrary, they intended that each individual case would be the subject of investigation by the Prices Commission.”

Mr. Davin: What was the date of that speech?

Mr. Lemass: January of this year.

Mr. Davin: What was the date?

Mr. Lemass: The 31st of January.

Mr. Davin: That was after you were in London?

Mr. Lemass: Well, the Deputy can make any point he likes out of that. I say here, without fear of contradiction, that it has been frequently declared to be the policy of the Government [176] to review protective measures when the industries benefiting by these measures had been given a reasonable opportunity of establishing themselves. It is quite clear that any new industry would require protection at a higher rate in its initial stages than it would need after it had got over all its earlier difficulties and had become fully established. The policy of the Government in that regard is not out of accord with the provisions of this Article. Until, as the Article makes it clear, the industries are fully established, the principle contained in it will not apply to them, and, by fully established, I mean until they have reached the position of being able to secure maximum efficiency from their equipment, from their organisation, and from their staffs. When they have been developed, then there is no reason why they should expect more than the protection determined in accordance with that principle: that is, such protection as will offset any higher costs which are involved in manufacture here, either by reason of higher wages paid to labour or arising out of the smaller size of our market, or occasioned by the fact that British trade names have a high goodwill value in our markets, or that advertising undertaken by British manufacturers in British newspapers for the British markets has an effect here by reason of the fact that these newspapers circulate here. If the protection is fixed upon such a basis as will offset these disadvantages, then, in the case of fully established industries —using that phrase in the sense in which I have already defined it—there is no reason to anticipate that they will not be able to maintain themselves and secure their continued development if they are conducted with reasonable efficiency and reasonable economy.

Now, a lot of nonsense has been talked about that Article being a limitation upon our fiscal freedom. Deputy Cosgrave confessed to a certain sense of humiliation, because it was necessary, he said, for us to get taught a lesson by our neighbours. What lesson? Apparently, because we have agreed to review our tariffs. Is it the [177] Deputy's idea that our tariffs should have been fixed so low in the first instance that even the British Government would not think it necessary to ask for a reduction when negotiating a trade agreement? Was it a national humiliation for Canada to make an agreement with the British Government involving a very substantial reduction in existing duties and the abolition of a large number of other duties, as well as the giving of this undertaking to submit for review to their Tariff Commission the remaining duties and any new duty to be imposed? Was it a national humiliation for Australia and New Zealand to make an agreement on these lines? Is it a national humiliation for the United States of America, which is at this moment negotiating a trade agreement with the United Kingdom, involving a substantial reduction in a large number of very high duties that have been in operation there, to enter into that agreement? Was it a national humiliation for the British Government to make this Agreement with us, involving the abolition of the protective duties which were imposed by a British Act against our products? I think the only source of the Deputy's humiliation is that his every prognostication has proved to be wrong, and others have achieved what he did not dare to attempt.

Mr. O'Leary: You did not get the republic.

Mr. Cosgrave: Do you want an answer to that question?

Mr. Lemass: Any time the Deputy likes to give it. Reference has also been made to the fact that United Kingdom producers and manufacturers shall be entitled under the Agreement to full right of audience before the Prices Commission when it has under consideration matters arising out of Article 8. There is, however, nothing either new or remarkable in that provision. Even if no such provision had been inserted in the Agreement, it is obvious that the Prices Commission, in order to make a thorough investigation, would wish to hear evidence from British manufacturers and producers of [178] the goods to which a particular inquiry related. That practice was adopted by the Tariff Commission established under the Act of 1926, and I believe it is the practice of similar bodies in every country in the world. There is, in fact, as I have mentioned, in many trade agreements of which we are aware, a similar provision.

Some comment has also been made upon the fact that the Government undertakes to act upon the recommendation of the Prices Commission when a review of a tariff has been undertaken by them. If that review by the Prices Commission is to have any value at all in relation to a trade agreement, it is obviously essential that the Government should undertake to give effect to the Commission's recommendations. As I have pointed out, similar undertakings were given by Australia and Canada in the agreements which they made at Ottawa. The Prices Commission will have every opportunity of making the fullest investigation and of hearing evidence from all parties competent to assist in the investigation, and the Government has every confidence that the Commission will discharge its duties both impartially and efficiently. However, I think it is unnecessary to say more in relation to Article 8 than that it involves our doing what would be in any event good policy for us to do, and that is, to institute a review of existing duties and, in the case of fully established industries, to modify them to such an extent as would give our manufacturers adequate protection, but no more than adequate protection, upon the basis of relative costs of economical and efficient production in this as compared with other countries.

Article 9 of the Agreement relates to agricultural imports and provides for free entry here, but with the possibility of quantitative regulation in certain cases, provision being made for the substitution, by agreement, of quantitative regulation by import duties, where it is agreed that the purpose in view can be more conveniently effected by that means.

Article 10 provides for certain reductions in existing duties. These reductions have been very carefully considered, [179] and it is felt that the rates of duty set out in Part I of that Schedule should afford sufficient protection to the industries in question. But, it will be observed by Deputies that paragraph 2 of the Article provides an additional safeguard. It provides that, if the imports of any of these articles should, as a result of the reduction in the duties, increase to such an extent as to endanger the prospects of success of the producers or manufacturers of such goods in this country, the Irish Government will be entitled to apply the quantitative regulation to the imports of such goods. It will also be noted that paragraph 1 of the Article contemplates that on the removal of the quantitative control of imports of the items prescribed in Part II of Schedule 5, rates of duty higher than those set out in the Schedule may be imposed on these items, if the Prices Commission are satisfied that, in fact, higher rates of duty are necessary. Until these items have been reviewed by the Prices Commission it is the intention that quantitative control of imports of goods in these categories should be maintained and that such goods as are imported shall be subject to customs duties at the rates set out in Part 2 of the Schedule. Yesterday, speaking on this matter, Deputy Norton referred, in relation to this Article, to the reduction or abolition of what he called “retaliatory” duties. None of the duties applying to the goods set out in Schedule 5 were retaliatory duties. The only retaliatory duties in operation are the three referred to in paragraph 5 of the Financial Agreement, that is, duties of ten per cent. ad valorem on cement, on certain electrical goods, and on certain iron and steel goods. The reductions provided for in Schedule 5, as I have said, have no relation whatever to the retaliatory duties.

Mr. Dillon: Before you pass from that Article, are we right in understanding you to say with regard to the goods in Part 2 of Schedule 5 quotas and duties continue until the Prices Commission have examined them and then quotas and duties will be substituted by duties if necessary?

[180] Mr. Lemass: These goods are subject to quantitative regulation at the moment. That quantitative regulation will continue until a review has been undertaken by the Prices Commission. Following that review the duties may be increased on the abolition of quantitative regulation if the Prices Commission so recommend.

Article 11 of the Agreement is an Article which provides for certain preferential treatment for British goods in this market. Preferential treatment to British goods was given regularly until the outbreak of the Economic War. It was given occasionally during the Economic War. The Article provides that in the case of any new duties a preferential rate, one-third under the full rate, will operate against the produce or manufactures of the United Kingdom. There is, however, in paragraph 2 a further provision to which Deputies should refer. It is the only paragraph of its kind in the whole Agreement. It involves the imposition by us of a duty upon certain commodities, which are not manufactured here, for the benefit of British manufacturers of those commodities, that is to say silk and artificial silk. The benefit of that Article to British manufacturers is not inconsiderable and it was with considerable hesitation that the Irish representatives agreed to it. There is however nothing to be said in its favour from our point of view other than this—that it was considered desirable by the British representatives and pressed by them as something which they regarded as essential to the conclusion of an Agreement.

Article 14 provides an anti-dumping clause. Its intention is to ensure that if goods are being dumped by British manufacturers in this country or by Irish manufacturers in Great Britain then, following consultation between the Governments, special action outside the scope of the Agreement may be taken in order to check that practice.

Article 15 involves the withdrawal by us of bounties paid upon exports, particularly such bounties as were designed to offset the penal duties imposed by the Government of the United Kingdom arising out of the financial dispute. [181] It does however provide an exception for bounties that may be necessary to maintain production in Éire on an economic basis or to secure effective operation of schemes for the orderly marketing of agricultural produce.

Article 16 deals with coal, but, in fact, involves no change, or, at any rate, very little change, in the present position concerning the importation of coal into this country. At present the importation of coal is subject to quantitative regulation so designed as to secure the whole of the market here for British producers. That, as Deputies will remember, was a consequence of the coal-cattle pact two years ago. Under this Article, the quantitative control of imports will be abolished, but instead a duty of 3/- per ton will be imposed upon coal other than coal of United Kingdom origin, and the effect of that imposition will, it is assumed, be similar to the effect of the present prohibition of import of other than British coals.

Article 17 is designed to secure that the circumstances under which the motor assembling industry is at present being carried on here will not be changed, at any rate in respect of cars of British origin. It is expressed to provide that the requirements as to the disassembly of parts when imported here in order to qualify for admission at the lower rate of duty, known as the compounded duty, will not be made more onerous than at present. That is a provision that will be welcomed by everybody except myself. It will be particularly welcomed by the people who are engaged in the assembly of these cars.

Article 19 of the Agreement deals with its duration. The Agreement operates for three years from the date on which it comes into operation and may be continued thereafter, but will be liable to denunciation by either Government upon six months' notice.

That is the whole of it, and I think that anyone reading the Agreement for the purpose of understanding it will agree that the objects which we had in entering into these negotiations were achieved. I may remind Deputies of what these objects were, [182] as I expressed them at the beginning of my remarks—to secure free entry for our exports into the British market and to preserve our powers to promote and assist industrial development here. With considerable difficulty and after protracted negotia tions, which many times appeared likely to prove fruitless, an agreement has been made of which I think it may be fairly said that it preserves these aims. I know that some industrialists have expressed anxiety as to its effect upon their positions and that is perhaps something which was to have been expected. There are many industrialists, however, who are perfectly reasonable and who understand that there is a limit to the assistance which the State can give them and to the encouragement which they can expect from the public. There are, of course, some industrialists who think that every aspect of State policy should be subordinated to their demands.

Mr. Dillon: It is time you found them out.

Mr. Lemass: In fact, Deputies will I think remember from what they read in the newspapers during recent weeks that there were quite a number of people in this country who expected that the Trade Agreement would provide for a substantial modification of all or many tariffs, and, if evidence of that fact is required, it is to be found in the almost complete cessation of trading for some weeks past. These people are no doubt relieved now to find that the immediate reductions for which the Agreement provides are not drastic, and that, in so far as the Agreement involves a lowering of tariffs, it permits of the reduction being effected gradually, being effected after detailed examination of individual items, and on a basis which ensures the continuance of adequate protection for Irish industries.

The Agreement is one which we can confidently recommend to the Dáil and to the people. It is, I think, likely to prove of very considerable benefit to this country and will permit of an expansion of its economic activities which will strengthen our resources and increase [183] our powers for dealing with the many social problems which we still have. The economic war is over. It is, I suggest, complete waste of time to discuss now who began it. The important fact is that we won it. It is, I suggest, also useless to debate now whether an Agreement on these lines could have been made before this. I can only say that if an Agreement of this kind could have been made before this, we would have made it. That Agreement, in all its aspects, is one which we would have made six years ago, three years ago or even six months ago, if circumstances permitted of its being made then, and if there is any evidence required that it could not have been made before now, that evidence is in the fact that it was not so made. However, it is made, and, as I have said, we have now an opportunity of dealing effectively with many problems which, because of the consequences of the economic war, we could not tackle before this. More than that, we have cleared out of the way many of the points of difference between the political Parties in this country.

Mr. Dillon: Hear, hear! A most remarkable conversion.

Mr. Davin: Take him over.

Mr. Lemass: The importance of that fact does not arise out of the agreement of Deputy Dillon, but because it permits of our securing what might not have been possible before this, that is, some combination of effort between all sections in order to improve economic conditions in this country and make life easier for its people. I do not mind Deputy Dillon and those others on the benches opposite who are always against us, but many on those benches were once with us; and if we divided, we divided very largely upon questions of tactics and not on questions of principle. They may have considered it injudicious or unwise to press matters as far as we were prepared to go, but they have got to take note of the fact that we have now got to where we set out to go. We have reached that goal. All the things which in 1932 we had before us—the various constitutional changes which [184] were then the subject of great public controversy——

Mr. Keating: And the finding of alternative markets.

Mr. Lemass: ——the retention of the land annuities in the Irish Exchequer, the return to our sovereignty of those ports which were occupied by the British troops—all these things have been achieved, and I say with confidence that there is not in this House, or in this country, a single person, no matter how much he may have opposed our programme at the time, would now demand that these things should be undone. If that is so, can we forget the fact that we differed as to the practicability or wisdom of attempting these things before, and face the future in the knowledge that we have got an opportunity of doing something for this country which no group of Irishmen ever had before—an opportunity of securing a concentration of our united effort upon economic and social problems? Heretofore, differences between ourselves dissipated our strength, or the need for conducting our affairs in the light of our relationship with Great Britain weakened our ability to deal with these social and economic problems. These difficulties have been removed, and, in these circumstances, it is not unreasonable, however unfruitful it may be, to appeal to the various sections in the Party opposite to forget these past differences and give us their assistance now in a constructive way in dealing with the remaining problems upon which the Government will henceforth be concentrating.

Mr. Dillon: When the Prime Minister rose yesterday to introduce this agreement, I bade him welcome on his conversion to the policy of Fine Gael and the Prime Minister then told a little story which is recited in this morning's Irish Press, the kept paper of the Government. The Prime Minister is reported as saying: “You and I are one, but I am the one.” This comes from an old story about a blushing bride. According to the story, the bridegroom remarked to the bride: You and I are one, and the blushing bride replied: But I am the one.

[185] I am quite prepared to welcome the Prime Minister's conversion but proposals of marriage are as yet a little embarrassing.

Mr. Corish: No confetti now.

Mr. Dillon: It is gratifying to find on the opposite benches a return, in some measure, to economic and political sanity and I sometimes feel inclined to rebuke my colleagues that they have done their job too well as an Opposition in this country. After battering away for five or six years, we have actually taught the Fianna Fáil Party commonsense. It is true that the public of this country have had to pay about £50,000,000 for their education, and that is a pretty expensive business, but still, they have learned their lesson, even at the expenditure of £50,000,000 and it is good that we have managed to arrive at the point we have now reached by parliamentary and democratic methods of argument, and eventually agreement, in regard to certain fundamental economic facts and that we did not settle our differences by the violence which characterises other countries and which in the past, unfortunately, has characterised this.

So far as I am concerned, I have nothing to conceal, and I want to make my position in regard to this Agreement perfectly clear. In so far as it recovers for our people a free market in Great Britain, I welcome it on behalf of the rural population of this country. The only fault I find with it is that it has been made six years too late. There have been men and women in this country who have suffered during the last six years what appeared to be an endless agony and the announcement of the removal of these penal tariffs was for them the ending of a ghastly nightmare. On their behalf, because they are the people amongst whom I live, I rejoice exceedingly that this Agreement has been made and that that market has been recovered. Let us pause for a moment to ask ourselves: Suppose Deputy Cosgrave had gone to London with his colleagues and had come back with that document as an Agreement——

[186] Mr. Anthony: There would be a revolution.

Mr. Dillon: ——what would the present Prime Minister have said at the monster meeting which he would have called in College Green? He would have begun by saying that we had sold the North; he would have gone on to say that we had sold our fiscal freedom; and he would have finally said that Deputy Cosgrave had delivered our people into the slavery of the base, bloody and brutal British Saxon. Every one of his present colleagues would have sprung to his feet and cheered him to the echo; every one of the Parliamentary warriors sitting behind him now would have got hysterics of patriotic enthusiasm and would have gone down the country and wept over the desecrated person of Cathleen Ni Houlihan and would have pledged himself most solemnly never to sheath the sword until this awful deed was undone; and the Prime Minister would have spoken more in sorrow than in anger, and he would have gone amongst them and said: “Now, boys, whatever you do, do not nail their ear to the post”; and the Irish Times would have said: “This noble and disinterested man, who always speaks with moderation, has begged the somewhat reckless men who stand behind him not to murder their opponents. Of course, if any murder is hereafter done, every true and honest journalist in this country must acquit the Prime Minister and blame it upon the Party he has such difficulty in controlling.” I have not the least intention of saying that the Prime Minister has sold the North in making this Agreement. He has not sold the North; he has not betrayed the North; he has not let down the North. It would be cheap and easy for us to say that he had but it would not be true. We knew, when he went to London, that he could not abolish Partition in the course of these negotiations. We never expected he would be able to abolish Partition. No reasonable man who understood the situation ever dreamt he would abolish Partition, but he did commit the wrong against the people of Ulster of leading them into the belief that he was going to abolish Partition in the course of these [187] negotiations. That was a cruel, mean thing to do. The Prime Minister knows as well as I know that every Party and every Deputy in this House is anxious to co-operate in the abolition of Partition, anxious to do anything that in them lies to abolish the Border and bring back our people—Protestant and Catholic—into an united Ireland. But there is nothing more contemptible, nothing meaner than to make capital out of the natural anxiety of Northern Nationalists to get back into Ireland and to hold yourself out as the knight in shining armour who is going to surrender everything unless he succeeds in abolishing the Border, which he knows in his heart and soul he is not able to abolish.

The Taoiseach: If a person did that he would be as mean as the Deputy says he would be.

Mr. Dillon: I have no doubt the Prime Minister did not say that, but he used words which persuaded everybody in Northern Ireland that that was what he proposed to do.

The Taoiseach: The Northern people are not so senseless as to form an opinion which, the Deputy says, nobody else shared.

Mr. Dillon: They went over to London to assure our Prime Minister that they cordially approved of his declared intention never to settle this dispute unless Partition was disposed of.

The Taoiseach: I think it is only right to interrupt now to ask that my position in that matter be proved by statements and not by assertions. I think that it is scandalous to make assertions like that.

Mr. Dillon: It is the truth.

The Taoiseach: It is not. It is a falsehood.

Mr. Dillon: The truth is bitter, and I propose to utter it now. It is base and mean, in my judgment, to exploit our people's feelings in Northern Ireland. It is wrong for any political leader down here to suggest that everybody else is indifferent to the [188] problem of Partition and that he is going to solve it. You may employ language which you can afterwards demonstrate did not explicitly mean that, but that you conveyed that impression to the people of Northern Ireland there is not the faintest doubt. In so far as you did any wrong in that matter, that is the only wrong you did. Any person who says they were sold, betrayed or let down says what is not true. It was never in the Prime Minister's power to abolish the Border. If it were I am satisfied he would have done it. But it never was and it is ridiculous to taunt him with his failure to abolish the Border in the course of these negotiations. It was not for want of goodwill, but for want of ability to do it, that the Border was not abolished and it was a dilemma in which anybody in the office of the Taoiseach would have found himself no matter who he was.

Now, I come to the question of fiscal freedom. I have no doubt that the Prime Minister would have denounced us, if we had made this agreement, for having sold the fiscal freedom of this country. I do not believe you have sold the fiscal freedom of this country. I believe you have gone, in certain details, beyond what prudence would dictate but I also believe that the other Parties to this Agreement are reasonable men. I believe the British people are reasonable people and I believe that this Agreement will be operated and applied in the spirit rather than in the barren letter. Though some of my own colleagues may be more apprehensive than I, I honestly believe that, when this Agreement comes to be put into operation, such restrictions as are in it will not fundamentally interfere with the healthy development of the industrial life of this country and that, if there does emerge some specific case in which a desired fiscal reform cannot be made to coincide with the letter of this Agreement, no serious difficulty will arise which the decent kind of negotiation which has gone on in the last couple of months will not surmount, so that whatever is deemed desirable by our Parliament in the interest of our people will be made to coincide with [189] the Agreement entered into between our Government and the Government of Great Britain.

I do say that it is a mistake on the part of our Government to have identified these negotiations with the negotiations that went on in Ottawa because we were in a much better position for negotiation there than any of the other “Ottawa countries.” All the other “Ottawa countries” were selling much more stuff to England than they were buying from her. At the time we would have gone to Ottawa, we were actually buying more from England than she was buying from us. In regard to the other “Ottawa countries,” England was in a position to say “You have got to take much more stuff from us if you are going to maintain or develop the present position.” We were in a position to say to England “You have got to take more stuff from us if you want to maintain or develop the present position.” We could greatly have improved on the position then instead of buying back, by fiscal concessions, the position we voluntarily abandoned six years ago. I agree with the Minister for Industry and Commerce in this regard: I do not want to go back on that. That damage is done and our job should be to repair the damage. I do not believe in demonstrating to the Minister for Industry and Commerce his follies during the past six years. If he has learned sense now, it is as much as I desire. I believe he has learned sense or that he has come to realise that, if he is not prepared to learn sense, he will be thrown overboard, bag and baggage, because his colleagues have learned sense. As Deputy Cosgrave said, it is somewhat of a humiliation that the Minister for Industry and Commerce should have to go to London to learn what we have been trying to teach him for the last six years—that is, that economic self-sufficiency is a “cod.” It is not his fault that it is a “cod.” It is a “cod” in every country—in Russia, Germany, France and Spain. His policy was designed to an impossible end and it is somewhat humiliating that he should have to learn that lesson in London instead of learning it in our own Parliament where abundant argument has been adduced.

[190] Mr. Lemass: Does that apply to the U.S. also?

Mr. Dillon: The last matter I have to deal with is that of the ports. I have no doubt that the Prime Minister would have said to us, if we had undertaken to take over these ports and put them in defence, that we had sold the people into the servitude of the base, brutal and bloody Saxon. I say you have done nothing of the kind. What I do complain of is this deliberate wriggling. Why does not the Prime Minister get up like a man and tell the people what he is going to do with the ports. I listened to him yesterday weaving words round and into and about the problem, and the one thing he did not say was: “I am going to put those ports into defence.”

The Taoiseach: I said so.

Mr. Dillon: I know the Prime Minister meant that, but the Prime Minister used terms which would enable Deputy Kelly to go down to Meath and say that he never said that he would put those ports into defence. Deputy Kelly could say: “He spoke two columns in the newspaper, and I defy you to point out anywhere where he said he would put those ports into defence.” The Taoiseach is going to put them into defence as naval bases. I think that that is perfectly right. We have to make up our minds whether sovereign independence and national unity can best be achieved in the Commonwealth or out of it. If we make up our mind that these things can best be obtained in the Commonwealth, it is idle nonsense to pretend that we can be in that Commonwealth and stand indifferently by if that Commonwealth is attacked or jeopardised. We cannot. The Prime Minister knows that. The difference between him and me in that regard is that I tell the people perfectly plainly now that if the unity, sovereignty and independence of this country can be best provided for in the Commonwealth of Nations, then it is our duty to let the world know now that, if that Commonwealth is attacked, we, as part of it, will defend it. It is perfectly true that if that Commonwealth went Nazi, or if that Commonwealth went Communist, it might become [191] our duty to secede from it, to leave the Commonwealth of Nations and set up on our own on the ground that we should no longer be a member of it because we did not approve of its policy. But why can we not be honest with the people, and tell them honestly what we are doing? Why make concealment about it? If you are going to provide naval bases at your ports, if you are going to give the British Navy accommodation there for the general convenience of themselves and of every other country of the Commonwealth, why do you not say so honestly? Say it in terms that the simplest man or woman here can understand; do not say it in accents deliberately designed to deceive the simple people and at the same time to carry out the undertakings given to the other party to these negotiations. There is nothing to be ashamed of.

The Taoiseach: What undertakings?

Mr. Dillon: Did you not assure them that if you took over these ports that you would put them in a state of defence?

The Taoiseach: I will deal with the Deputy at another time.

Mr. Dillon: I am not trying to embarrass the Prime Minister; I think the Prime Minister was right. All I am asking you to do is to be as straight and plain——

The Taoiseach: As the Deputy has been about what I have said, I suppose?

Mr. Dillon: I am trying to find out what the Prime Minister did say, and you are trying to bewilder the people of this country.

An Ceann Comhairle: Deputies should not be addressed in the second person.

Mr. Dillon: I was merely taking an example from the Prime Minister. However, I take instructions from you. I do not want to speak heatedly about this matter at all; rather do I want to approach it objectively. I urge on the Prime Minister that when he [192] comes to deal with these matters again, he should deal with them quite plainly and simply so that when a Fianna Fáil Deputy meets his constituents down the country he can explain quite simply to them what it is the Prime Minister means and what it is the Prime Minister actually said. Let me remind this House that, so far as we are concerned, we repudiate emphatically any desire to make any of the cheap capital of that kind that we could make out of this Agreement. So far as I am concerned, I am prepared to repel on any platform and in any public place any suggestion that betrayals of the sort outlined by me just now have been undertaken by the Government. I am quite satisfied that in the circumstances, and with the equipment at the Government's disposal, they did the best they could. I think they made mistakes; I think they made mistakes in certain fiscal parts of this Agreement, but I do not blame them for that. I did not expect any better; in fact, I did not except this much. I think, however, that if they had the experience and the prudence of their predecessors in office some of the mistakes made in this Agreement would not have been made.

Mr. Flinn: What about the damn good bargain?

Mr. Dillon: There is just one other matter to which I should like to make reference. A lot of people imagine that once the free market is restored to our people, everything will readjust itself overnight. They are quite wrong. It will take years to repair the damage that has been done in this country. There are thousands of farmers who have been bankrupted by their experience during the last five years. There are thousands of people at present unequipped to take advantage of the markets we have now secured. I put it to the Government that, in order to get the full advantage of this Agreement, active and courageous measures should be taken at once to relieve the distress of the agricultural community; otherwise they will be unable to get for the community as a whole all the advantage [193] they ought to be able to get out of this Agreement. I suggest to the Government that the first thing they should do is to proceed with the immediate de-rating of all agricultural land so as to put farmers on an equal footing with the farmers of Great Britain and Northern Ireland and, secondly, money should be made available to the farmers on reasonable terms with reasonable safeguards and at a low rate of interest so that they can equip themselves to cash in on the advantages that will accure under that part of the Agreement which provides for the free admission of our agricultural produce to the British market. It is going to be a slow process to get back on our feet; it is going to be a slow process to get back that measure of prosperity which we had in 1931, but I am convinced that with this Agreement we can do it. I am convinced with the market in Great Britain we can get it.

We have told you for the last five years that if you abandoned the codology about hating the Commonwealth and so forth that you could get really constructive work done with a view to the unity of Ireland. I think you have come to see that yourselves, and perhaps that is a good thing. We told you during the last five or six years that if you abandoned the codology about economic self-sufficiency and about the British market being gone forever, thank God, and the tin-pot schemes of the Minister for Agriculture, growing tobacco, and so forth, we would be able to build up a prosperous community. It is a source of unalloyed satisfaction to me that apparently our words have at last borne fruit You have come to learn what we tried to teach you in so far as you have left the road open to a constructive policy by which we can develop the country and restore our people's prosperity. If that be so, that is what I want.

In conclusion, for the reasons set out and with the reservations mentioned, I welcome this agreement. I am glad it has been made. My only regret is that it was not made long, long ago. I agree with the Minister [194] for Industry and Commerce, I do not want to discuss the reasons why it was not made long ago, because I think it would be fruitless. I hope we may depend in future in regard to the matter of Partition on a different attitude from the Prime Minister. I hope we may get from him recognition that everybody in this country is just as deeply concerned as he is to recover the unity of this country, but that there are those of us who regard it as a horrible responsibility and as a shameful thing to do to raise false hopes in the hearts of those whom we know we are not at the moment in a position effectively to help. We tell them, as we tell the Prime Minister, that in time and by the exercise of commonsense and prudence in this part of the country we will be able to get back the lost province, but we will not get it back, and we will never get it back, by high-falutin' speeches made in the safety of Dublin or of London. We have to get it back by showing ourselves competent to run this country in the way it ought to be run, by demonstrating to the world that those who went before us and who staked their claims that the Irish people were best fitted to run this country and were the only people who could run this country well, were justified in their attitude. We have to show by our vindication of the men who said that, that we ought to be united and it cannot be done to-morrow or the week after next. I believe that it can be done in our lifetime, but it can be done in our lifetime only if that question is lifted out of the controversial politics of Ireland and is removed altogether from Party platforms and if our political differences are accepted amongst us all as the bona fide anxiety of everybody, no matter on which side of the House he sits, to do the best for the country.

Mr. Davin: The fact that the Taoiseach has put his signature to this Agreement proves that he is a statesman with a considerable amount of courage. I state that deliberately because I have a very clear recollection of many political pronouncements made by the Taoiseach in the past in connection with the demand for the [195] complete independence of this country and on the policy of self-sufficiency. At no time within my recollection in the past history of this country did the representatives of the Irish people meet the representatives of the British people under more favourable circumstances. When the present Government Cabinet decided to meet the British Government representatives in mid-January last, they did so at a time when they had all the good wishes of the Irish people and all the good wishes of the leaders of the political Parties in this country for their success. They did so at a time when every citizen in this country hoped that they would succeed in getting from the British Government representatives what they were looking for. They met the representatives of the British Government at a time when the British Government was in a weaker position than at any time in all its history. If the Cabinet and the negotiators have come back here with this Agreement and have confessed that it is something short of what they promised the Irish people in the past—short politically and short in the matter of trade and finance—they cannot blame anybody but themselves and their own actions in their dealings on that matter with the British Government. They had the full support of the whole Irish people and an assurance of support from all political Parties in their meetings with the British Government. Remember the British Government was never in a weaker position than it was at that moment. For that reason, it is then the concern of the members of the Government themselves to explain that to the Irish people. I feel certain that before the Cabinet decided to reopen these negotiations they had information as to what they were likely to be offered. Therefore, when the Taoiseach took upon himself the idea of initiating negotiations he had a good idea that he was not going to come back in an empty-handed fashion. I assume, therefore, that the Cabinet, having decided to initiate negotiations with the British, must have gone over with their minds made up as to what they were prepared to accept. It has been said here that this Agreement could have been secured six [196] or seven years ago. I do not believe it could, and I would brand myself as a traitor to my own class if I thought that it could have been secured six or seven years ago.

It has been contended also that this Agreement could have been secured by the Fine Gael Party if they had remained in office. I do not believe any such thing. How could the Fine Gael Government, after having said that these moneys were legally and morally due to Great Britain, go over to the British Government and secure agreements of the kind now before us? The British Government would be a pack of fools if after such admission they made such agreements. I do not believe it. I do not believe that any of the 11,000 or 12,000 people who voted for me believe it. I do not believe that such an Agreement as this, bad as it may be in the eyes of some people, could have been got while Mr. Thomas, the late British Dominions Secretary, was in office. It could not have been got before he was removed from office. Mr. Thomas dragged into the whole dispute the question of the constitutional status of this country. In the extract that has been read out he made it quite clear to everybody that unless and until the Government of this State recognised and admitted certain things no such agreement as this could even be discussed.

It has been said that this particular Agreement could have been secured as a result of the Ottawa Conference. I am not in the confidence of those who represented us at Ottawa but I do not believe that an agreement like this could have been secured at Ottawa. It could not because Mr. Thomas was then in office and it was not until he was removed from office that it was possible to approach the British Government with a view to coming to an agreement on the lines of the one before us. I, personally, and I believe the members of my Party and the supporters of the Labour Party in the country are glad that this nightmare of the economic or uneconomic war has now been got out of the way.

I claim that the Taoiseach would not be in a position to negotiate this Agreement or to sign it were it not for the fact that he had secured the loyal [197] support of the small band of labour Deputies who have been sitting on these benches since 1932. If we had thought that this Agreement could have been secured before now we would have indicated our desire in that direction. I have described the economic war as a nightmare. Is there any Deputy who has been sitting on these benches since 1932 and has since travelled to his constituency who did not find in either private or public conversations the question put to him as to when this economic war was to end? My Colleagues and I have been challenged, and we have been told “if you Labour lads wanted it this economic war could have been settled long ago—why do you not press de Valera to get it settled?” That conversation always wound up by our taking under what Conditions it should be settled, and the only answer we got was that it should be settled by surrendering to the conditions which the British were prepared to offer.

This Agreement may be short of many of the things in which we believe, but it is not a settlement by surrender. It is a settlement by agreement. The responsibility for that Agreement rests with the four Irishmen who appended their signatures to it. The responsibility rests on these men and their immediate colleagues and on nobody else. At any rate, the nightmare of the economic war has now come to an end. That is a good thing for those whom we represent in this House. In future if we stand here and discuss the policy of the Government regarding the solution of its financial, social and economic problems we cannot be charged with stabbing the Government in the back when engaged in a fight with the common enemy. The possibility of a charge like that disappears when this document is approved of by a majority of this House, or by the House as a whole.

As a result of this Agreement, the Government will be confronted with the task of solving much more serious problems than those with which they were confronted during the progress of the economic war. During that time the Government were able to get up [198] in the House and give the existence of that economic war as an excuse for not doing many of the things which previous to 1932 they promised they would do. I But the road is cleared of that obstacle. The road is now straight, and I hope the Cabinet will present to the House before many days schemes for the solution of these and many other problems with which the country is faced. The financial policy pursued during the course of that economic war resulted in our citizens being compelled to pay more for our own butter, bacon, eggs and other necessaries of life than the price at which these were sold in Great Britain. I hope when the Minister for Finance presents his Budget next week that part of the present policy of the Government will be dropped. I hope that the Irish Government in the future, under whatever policy they decide to engage, will be able to see that the food produced here is sold at least at the same price as our food is sold to people in a foreign market.

Mr. Allen: Would you deny producers the cost of production?

Mr. Davin: I say it is the first duty of the Government to provide food, clothing and shelter for the people of the country, and surely the Deputy will not disagree surely me when I say that that food and clothing should be produced and sold at least at the same price to our own citizens as it is sold to the foreigner.

Mr. Allen: What about the cost of production?

Mr. Davin: I hope that we shall have a clear indication now of a change of financial policy on that matter anyway. I sit in this House as a farmer's son. Everybody belonging to me is associated with farming and nobody realises better than I do— because I have been in continuous contact with up own people before I came into this House and since I came into this House—the extent to which the rural community suffered during the progress of the economic war. I am glad to say, and I am sure many Deputies will agree with me, that the people with have suffered most during [199] the economic war have borne their sufferings in silence. They have not gone out dressed in white shirts, red shirts or blue shirts, or any other kind of special garb, to parade their poverty and destitution to the people. They suffered in silence and these are the people who are entitled to the first benefits of any settlement brought about. The agricultural labourers of this country, in fact the whole of the rural population, are the people who have in the main borne the suffering involved by the continuance of the economic war. The bankers have been able to get their rate of interest in the same way as they got it before the economic war started. The stockbrokers likewise have been carrying on in the same way without any loss. The brewers also have been able to get their normal profits. The middlemen, even the increased number of middlemen created as a result of the commencement of the economic war, have been able also to get their bit out of it. It is the producers and the workers who have borne more than their share of the suffering, and I hope the four men who have signed this document and submitted it to the House will bear that in mind when they are considering the allocation of the financial benefits which will accrue as a result of their signing this Agreement.

I was rather surprised to hear the rather enthusiastic tribute—over-done in my opinion—which the Prime Minister paid to the negotiators on the other side. I was surprised too to hear him express the opinion that this settlement could not have been secured from anybody but a Conservative Government or from any Conservative Prime Minister except Mr. Chamberlain. I wonder what this poor old State will do when Mr. Chamberlain goes out of public life or when he will pass away, as all of us must, some day? If Mr. Chamberlain is the great and just man that the Prime Minister say he is, why does he allow this buffer State to remain in the North, propped up by British guns and British money? If he is the great, just and God-fearing democrat that the Prime Minister suggests he is, let him take away his [200] British guns, kept there by the money of British taxpayers, to impose horrible condition on the Nationalist minority there Deputy Norton asked the very pertinent question if anything had transpired at the meetings between our negotiators and the British negotiators regarding the future of the Nationalist minority in the North. We are entitled to know if these people are going to be compelled to live under the harassing restrictions imposed on them in the past, whether they are going to be tolerated as ordinary citizens with the right to work or whether the means of earning a decent livelihood are to be kept from them.

The people of the country as a whole, although I think the majority of them believed that it would not be possible to wipe out the Border by a stroke of the pen, think that it is only fair and right that our negotiators should get some better protection for the Nationalist minority in the North than has been given to them since the Treaty was signed. What has been done to secure for them even the restoration of proportional representation? What has been done to get anything better for them than the dirty, rotten treatment meted out to them for the last 15 or 16 years, or longer? I venture to suggest, although it is not my in tention to boost British Labour leaders, that certain British Labour leader who have a good knowledge of the conditions of this country for some time past, have given considerable help in creating the atmosphere that led to the opening of these negotiations. The Lord help this State anyway, according to what the Prime Minister says, when poor Mr. Chamberlain passes out or disappears from public life. Who, in the name of God, are we going to get to protect us here if and when Mr. Chamberlain disappears form public Life?

A Deputy: Mr. Dillon.

Mr. Davin: I followed very closely and very attentively the rather weekkneed speech made by the Minister for Industry and Commerce. I thought he was going to get up and rake the Opposition Benches but instead he put up a most extraordinary defence in support of the trade section of the Agreement. [201] He started off by saving that this was accepted by both sides with reluctance and he finished up by saying that all his objects were achieved. I am not sure whether there is any difference between the meaning of the two sentences but to me, at any rate, there seems to be considerable difference between the tone of the commencement and the tone of the conclusion of his speech. Tributes have been paid, and rightly paid, to the work performed by some of our civil servants in connection with the negotiations that have been carried on prior to the Agreement. I certainly desire to join in that tribute to the full. Were it not for the fact that we had at our disposal civil servants of the type of the very highly qualified men that this Government is lucky enough to possess, the work would have taken a mach longer time and, perhaps, would not have been done so well. If there is one man amongst them—and I know what I am talking about in this regard—who deserves a tribute from this House and from the Government for the tact, diplomacy and perseverance which he has displayed during a very critical period, it is the Eire Commissioner in London, Mr. Dulanty. I have some knowledge of the work which Mr. Dulanty has been called upon to perform. At the commencement and during the continuance of the economic war he was compelled to live in a city surrounded by suspicion and prejudice. He has borne the brunt of this struggle well and I am sure there is no Minister who will not admit that he played a very important part in the negotiations which led up to the settlement.

In conclusion, I want to say that the problems created as a result of the signing of this Agreement will he greater than any of the problems that have confronted this Government in the past. I hope they will sit down and consider their policy for dealing with these problems and present that policy to the House at the earliest possible date. This Party has on many occasions advocated the establishment of an economic council. If there was ever a time in the history of this State when an economic council was essential, it is now. It was never more essential [202] in my opinion than at the present moment. I hope the Government will give careful Consideration to that proposal. If they want to devise a solution of the pressing problems that will confront them after this Agreement has been accepted by the House, I think they will see their way to set up an economic council to enable them to achieve that work to the greatest possible advantage.

Professor O'Sullivan: Like every other Deputy, and like most people in this country, I share the deep satisfaction that is felt that this dispute is at an end. I do not think Deputy Davin described the position too harshly, and I do not think anyone aware of the conditions that prevailed in the country for the last five years could deny that the position was nothing less than a nightmare. Therefore, whatever may be said about the details of the Agreement and the conditions that made the Agreement the best that the Government and the negotiators could get, everyone will be delighted that the economic war is over. The Minister for Industry and Commerce finished up a remarkable speech by saying that the economic war was won. As Deputy Davin pointed out, the speech was remarkable for the complete lack of fire which generally is so characteristic of the Minister. The Minister for Finance proved that the economic war was won long ago. We were told that that was the position. Let us hope that at last it is over now. I think the country will be grateful to Providence that it is over. Two types of Agreement were made between this Government and the British Government, the Coal-Cattle Pacts and the Agreements we are now discussing. On each occasion we Government waited until the country was at its last gasp. In the case of the Coal-Cattle Pacts they waited until it was borne in upon them that the country could tolerate the conditions no longer. Since the first of these pacts they waited year after year until they could wait no longer. It was not a question of taking the first moment that a pact could be made. It was done at the moment beyond which the country could not wait. I will say this for the Government that they waited until the [203] last moment, so that anything they got, anything that brought the economic war to an end, could not but be accepted by the people. That is the position we are in. It was no credit to the Governments and to the statesmen on either side that this dispute was allowed to continue the length it did. Therefore, we welcome the end of that senseless war.

We listened to two remarkable speeches in this debate, to a remarkable political speech yesterday, and to a remarkable fiscal speech to-day from the Minister for Industry and Commerce. We must take them not as mere speeches, but as most significant actions on the part of the Government. Let us hope that the two speeches, the one we heard yesterday and the one we heard to-day, really mean a complete reversal of policy an the part of the Government and that we may now take it they are looking in a different direction to that they looked before. For that reason I welcome not merely these Agreements, with whatever drawbacks they have and however bad the conditions that forced the Government to accept them. I welcome also certain portions of the speech made by the Taoiseach and the complete somersault, if not as regards economic matters, at least in outlook revealed in the speech of the Minister for Industry and Commerce. Whatever we think of the circumstances that made this, as the Government say, the best possible bargain they could get, the conditions are to-day such that there is no other course open to the country but to accept it, and to accept the Agreement fully in the spirit as well as the letter and to make the best out of it. Let both sides, the British and the Irish, try to draw the bast out of this Agreement whatever drawbacks it has. Let us try to get the most out of it for the common advantage of the two countries. That is the policy we have been preaching as long as we have bean in this House. I do not regret that the Government now adopts it. They can say it is their own or not. More power to them if they work it. Let us hope that as long as they are the Government they will try to make most out [204] of this Agreement, and work it fully and honourably for the benefit of this country. Of quotas and tariffs we have had a surfeit in the last five years. It took a long time to convince the minister—possibly others were more easily convinced—that these quotas and tariffs that were imposed against us brought this country to the brink of economic destruction.

Certainly the Government did not act a moment too soon. It has good reason to know that it did not act a moment too soon, and that it could not delay longer. Then we had within the space of a month or two a complete reversal of mentality towards the close of last year, I presume, which we heartily welcome on the part the Government, and we had the starting of the negotiations. Candidly, after listening to the minister for Industry and Commerce, I cannot understand why they were so long about it. I read Article after Article of the Agreement, and as I listened to the Minister for Industry and Commerce explaining Article after Article, I had it borne in upon me that most of the Articles were almost imposed on the British Government for the benefit of this country rather than vice versa. There is such a thing as proving too much. There was a certain lack of fire about the defence of the Minister. It lacked his usual vim when dealing with these things and he proved altogether too much, which gravely interfered with business for the last four months. There was uncertainty, and there will be more uncertainty after the speech we listened to to-day—the explanatory speech as, I suppose, the Minister would call it. There will be more uncertainty as to what some of these Articles mean. The Minister referred to the way in which business has been held up owing to uncertainty while the negotiations were going on. He is now prolonging that uncertainty by giving a peculiar interpretation to some Articles and slurring over the implications of others. It would be better if he explained to us what precisely these things committed us to. If all that he said about the Articles is true why was there such difficulty in getting [205] consent? Listening to him we were imposing this apparently on the British Government rather than the other way round. As I said earlier, the Government waited too long and inflicted intolerable losses on the nation because of the length of time they wasted. We have to face the problem that we do not get back to the economic position we were in before. Every class in this country will now have to start from an incomparably lower level than we had before and build up. I certainly hope that the House will pass this Agreement without dissent. While the people will have to start pretty far back in the race, at least there is the conviction that they are looking in the right direction. I regard as one of the principal advantages to be acknowledged as a result of the negotiations that, at last, the people are allowed to look in the proper direction.

I gather that not merely from the fact of this Agreement. But there are two other facts. I mentioned the fact of certain portions of the Taoiseach's speech yesterday and certain portions of the speech of the Minister for Industry and Commerce to-day. These were not ordinary speeches. If they were I should not pay much attention to them. I would find it extremely difficult to interpret what any phrase that the Taoiseach would use would mean, but the important thing is the fact that he made that speech—not any isolated phrase here and there but the fact that that speech was made by the leader of that Party in this House. That is a tremendous advance forward, a bigger advance even in some respect than many of the clauses in these Agreements. If I regret that there was delay in concluding these Agreements I still more regret that there was delay in making that speech. Let any Deputy in whatever part of the House he sits, ask himself this question: if the problems of this country had been faced with the same mentality that inspired one half of that speech that the House listened to yesterday from the Taoiseach, what a different position we should be in to-day? Everybody can see that themselves. I am not criticising the Taoiseach for the speech that he did make yesterday. On the contrary, I hope that the country [206] will look in the direction that by that speech yesterday he indicated that the country should look. I am not going to taunt him, as Deputy Davin did, for the tribute that he paid to the British Minister as to the way these negotiations were carried on. I am going to ask the country to recognise that at last that speech has been made from those benches and by the head of that Party. We can congratulate ourselves that that speech was made and that there is an end to this——

Mr. MacEntee: The Deputy seems to be annoyed it at the fact that the speech was made.

Professor O'Sullivan: On the contrary, if there was anyone annoyed it was not the people on these benches. If there was anybody in the House annoyed by portions of the speech which the Minister for Industry and Commerce made to-day it was not the people on these benches. If the minister for Finance had deserted his comfortable position and stood for a moment in the gallery above looking at the faces of those who sit behind him while that speech was being made, he would know where the good reception for the speech was coming from and where it was getting a very cold reception.

Mr. Davin: It is a pity that they were not photographed.

Mr. T. Kelly: What good would that do?

Professor O'Sullivan: I do not think it would do much good.

Mr. T. Kelly: It would not.

Professor O'Sullivan: I regret that there was an attack on that speech. It was a good speech—portions of it.

Mr. Briscoe: Like the curate's egg, bad in spots.

Professor O'Sullivan: Like the Deputy's factories, very spotty.

Mr. Briscoe: All good.

Professor O'Sullivan: I rarely in this House refer to the north or to the question of partition. I feel that the less we say on that at present the better. I would say the I think the speech made by the Taoiseach yesterday [207] has not put back a settlement with the North. I say further, had he that mentality many years ago some 16 years ago, there never would have been a boundary question. It may be that psychologically speaking we are now behind where we were 16 years ago. But at least, so far as that question is concerned, I believe again that we are looking in the right direction. I was surprised at the heat into which the Taoiseach got in relation to certain charges made by Deputy Dillon. We remember when those negotiations were inaugurated. I confess that I was amazed at the way in which the Northern question was dragged in and given publicity, by whom? By the Press by our Prim Minister, the Taoiseach, and by the Prime Minister of Northern Ireland. The last mentioned alone benefited. But why was the Taoiseach's anger to-day visited on Deputy, Dillon? Remember that for a couple of weeks that was the dominating question in these negotiations, and yet to-day what the Minister for Industry and Commerce said—he repeated it again towards the end of the speech—was that they had two main objects in entering these negotiations. This was no slip on his part because he repeated it again. He said that the two main objects were—entry into the British market and to secure that we would not be deprived of the right of protecting our industries. That was what the Minister said and he was speaking on behalf of his colleagues. He at least entered into these negotiations with no thought of the North in his head, and yet there was no indignation at that revelation, no indignation from the Taoiseach. He listened calmly.

Mr. MacEntee: The Deputy know that that is misrepresentation of the Minister for Industry and Commerce.

Professor O'Sullivan: That in enterring these negotiations—he repeated it twice.

Mr. MacEntee: He was referring to the Trade Agreement.

Professor O'Sullivan: He was referring to more than the Trade Agreement. He was referring also to the economic [208] War. Does the minister deny that? Why is it that these two things were singled out by him and the other left out? Be cause other was never in his head.

Mr. MacEntee: That was the problem to be solved in getting the Trade Agreement.

Professor O'Sullivan: I took a carefull note of what the Minister said, “that we entered on these negotiations to achieve two purposes, and these we have achieved.”

Mr. MacEntee In regard to the Trade Agreement.

Professor O'Sullivan: He said nothing of the kind. You can have it if you like in the amended report, but he did not say it in this House.

Mr. Victory: Get another Feethaw Commission.

Professor O'Sullivan: I did not catch what the Deputy said.

Mr. T. Kelly: We are not saying a word.

Professor O'Sullivan: I agree that the Deputy did not, but the Deputy sitting behind him did try to say something.

There is no question about the acceptance of this Agreement. There is no other alternative open to the people owing to the condition to which the country has been reduced by the Government. If I may parody a phrase that used to soil the walls of Dublin in unhappy days, I do not object to something which sums up the present policy “Heads up, and into friendly relations with the British!” It is better than “tails down and into the bog”; the bog in which we have been during the last six years. That is the effect of the Agreement, and let us acknowledge it is a good and sound policy and stick to it. Let us have an end of all this cant about the “only enemy” as a result, thank goodness, of the speech that we had the pleasure of having delivered in this House yesterday. All that at least is at an end. No longer our only possible enemy! Our best friend now! As we are on that, perhaps the Taoiseach would answer only or two questions? I think it is only fair to the House that the Taoiseach should tell us what he [209] thinks be will be the cost of putting the port in to the condition that he intends to put them in?

Mr. Davin: Fighting condition?

Professor O'Sullivan: Perhaps the Taoiseach would make that clear to us? Can he answer me straight off, or has he any idea of the sum it will cost to put the ports into that condition?

The Taoiseach: I am not going to make my speech piecemeal.

Professor O'Sullivan: Was there any figure, even for his information, mentioned in the course of the negotiations? Can he tell me that? The same sphinx-like attitude! Yet, I think people ought to be told. No secret negotiations—

Mr. MacEntee: The Deputy is debating, not cross-examining.

Professor O'Sullivan: Vague phrases. Remember, it is not merely this House which is being kept in ignorance. The people are being kept in ignorance as well. He spoke yesterday about putting them in a certain position, namely, for defence. One would have thought he would have made it clear, when Deputy Dillon put the question, whether it was naval defence or not.

Mr. MacEntee: That was not the word.

Professor O'Sullivan: It occurred several times. You can ignore the word, but it was there, and it was an important thing. From the point of view of defence policy we ought to know that. Secondly, have we now a defence polIcy? Before the debate concludes, perhaps the Taoiseach would at least give an outline of the essential portions of that defence policy. Is that again one of the matters upon which the Taoiseach will be silent, and simply refer us to yesterday's speech, which leaves all the essential points untouched?

We are, as I say, glad of the two pieces of evidence, the two acts that we had, the speech of yesterday and the speech of to-day, because they represent a conversion, however it was brought about. I do not at all say that this side claims credit for the conversion. Hard facts converted him, and the British Government converted him but we should never be able to get a [210] body of Irishmen who would convert him. But the conversion is there, and possibly an opportunity will be given to the Taoiseach once more of giving another explanation of what “another round” with England means. It means sitting around a conference table or sitting around a luncheon table Again the Taoiseach was original. Breakfasts were taboo owing to the action of the Irish Party; dinners were taboo owing to the action of this Party, so the Taoiseach took luncheons.

Mr. Davin: What about top hats?

Professor O'Sullivan: He will be different. He did that. Of course that is what he meant long ago when he mentioned “another round” with England !

Just as some time ago we abandoned the Republic, to-day we have solemnly abandoned the doctrine of self-sufficiency. I am sorry to say that many people in this country are quite ready to abandon portion of our fiscal autonomy, and there are some—I do not know how many—who are glad that there is such an abandonment, because of the use made of it by the Minister for Industry and Commerce in the last six years. It is a sorry confession to have to make that one of the crucial points of the negotiations of 1921 has now been scrapped, formally at least. As to the price fixed, we will have to wait for more detailed examination, but formally we are committed to an abandonment of that particular policy. As Deputies opposite know, the question of our right to exercise fiscal autonomy nearly broke down the negotiations of 1921. What is the situation to-day? As I said, owing to the unwise use made of that power by the Minister for Industry and Commerce, many of the people in the country are glad that some check has been put upon him, and that he will not be in a position to come down here any morning, without notice practically, and impose new tariffs, new costs on the people, and new interference with the business of this country. It may be that some industries may not suffer. Probably some will. There were hothouse industries started on every possible occasion by the Minister for Industry and Commerce. [211] They may suffer now. Some people may have been wise; they may have seen what was coming and got out. But there are men who put their money into those things and who will suffer a loss as a result of their trust in the Government. The Minister for Industry and Commerce quoted us a speech made on the 31st January last. That was after the negotiations had been initiated!

Fiscally, you found this country free. Fiscally, from the formal point of view, you have put her into chains. We spent much of our time in this House in the last five or six years doing away with mere symbols, or as the Prime Minister put it on one famous occasion, converting into words things which were already facts, yet with an accent of scorn in the Minister's voice we abandon, formally at all events, our fiscal autonomy. The element of scorn in the Minister's voice certainly struck us on this side of the House as very peculiar.

Once more I can only say that it is time a settlement was made. The Taoiseach was not right yesterday when he said it was the first moment. He knows perfectly well it was the last moment; that the country could not have lasted out another 12 months. He knows that. He knows that that was so in the case of the cattle pact, and he knows it in the case of this Agreement. It was not the first moment at which he could make a treaty; it was the last moment. He could not push