Committee Reports > List of Committees > Dáil > 1926 > Special Committee on Home Grown Tobacco Duties > Interim Report and Final Report - Home Grown Tobacco Duties

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 18adh Márta, 1926.

(Thursday, 18th March, 1926.)

The Committee met at 11. 30 a.m. in Room No. 2.

Mr. G. N. Keller, called and examined.

Chairman.

399. You attended, Mr. Keller, before the Agricultural Commission and gave evidence?—Yes.

400. In your précis of evidence you state that at that time you believed that a preference of one-sixth on home-grown tobacco would be sufficient to enable the existing growers to produce a crop on an industrial basis. I think I am right in saying that you have since changed your opinion on that?—I have. I have been forced to conclude that that was an erroneous opinion, owing to unexpected developments which have since occurred.

401. Would you give us the reasons which have led you to change your opinion?—It amounts to this, that previous to 1923, or I might say, previous to 1919, growers had no difficulty in selling their tobacco. Previous to that date there was practically no preference on Irish tobacco except this 2d. excise allowance. Tobacco growers had been able, since 1914, to produce tobacco more or less economically when they had a subsidy amounting to £25 per acre which roughly amounts to 6d. per lb. It follows, then, as a logical conclusion, that they should be able to carry on with 1/6 per lb., but the reason why that conclusion did not hold good was that since confining the preference to Irish tobacco it has been practically unsaleable in the home market. Of course that absolutely dashed all of our conclusions to the ground because, without a market the growers obviously could not carry on, quite regardless of anything else.

402. You attribute the cause of this decline entirely to the fact that the Irish manufacturers refuse to purchase Irish-grown tobacco?—Entirely to the absence of a market in the Saorstát, and in the case of England to the absence of a profitable market in competition with other Empire-grown tobaccos.

403. Although it is not within our terms of reference, it has been stated here that an allowance of 1/- on exports would make it profitable to sell tobacco in the English market. Do you agree with that?—Well. I think I may say that that conclusion is based upon the results of sales that have actually been concluded, having regard, of course, to the cost of production. As to whether there would be a large and relatively unlimited market is purely a matter of opinion. The Irish growers, no doubt, would find the same fierce competition in England under Imperial preference that they found in their home market when the preference was given by an Irish Government. As a matter of fact, the difficulties regarding sale which Irish growers have experienced dates from 1919 when Imperial preference came into force. Previous to that date, Irish tobacco was practically the only substitute tobacco on the Irish, or I might say even the English, market, and all tobaccos were bearing relatively the same duties. Irish tobacco had then, as now, an allowance of 2d. in its favour. This 2d., while given ostensibly for the purpose of covering the extra cost entailed by excise supervision, provides a means to the grower for bargaining with the manufacturer, and he can give either all of it or half of it to the manufacturer, and thereby effect a sale, but when Imperial preference was imposed it gave the importers of colonial tobaccos 1/4 per lb. to trade upon. For very good reasons—I suppose they are apparent— they were in a position to offer the entire 1/4 to the manufacturers as an inducement to buy their tobaccos, whereas the Irish grower was not, for the reason that he was suffering from difficulties arising out of the war. Wages, as you know, had gone up to 30/-or 40/- per week from 12/- per week. The cost of production was so high that it was utterly impossible for the Irish grower to give the whole of the 1/4 to the manufacturer.

404. Table 5, which you furnish, shows that the average cost of production was growing even since 1921?—Yes. It went up materially last year. Table 5 refers to the results at Sir Nugent Everard’s. You will see from the returns that the principal cause was the low yield. As a matter of fact, it cost less per acre in that year to grow than in the previous year, and, if you note the cost of growing per acre, you will see that there is a tendency to fall instead of to rise. These figures should be studied in conjunction with Mr. Anderson’s in Table 4.

405. I notice in Table 3, which deals with the range of prices, that apparently one type of tobacco was sold in 1922 and 1923, seeing that the lowest and the highest was the same?—Yes. Your conclusion is correct, but the reasons for it are not apparent, that is to say, the whole crop was sold at what we call a round price. The entire crop was sold to one concern at a round price. That is a customary thing in the tobacco trade with handlers, and especially growers, when selling tobacco.

406. But from 1914 to 1919 there was a very considerable range in prices, from as low as 1d. to 2/- and 2/6?—Yes.

407. Can you say how many types of tobacco were sold?—Roughly two types and three or four grades. These very high prices were obtained for the better grades of both pipe and cigarette tobacco and they are war prices. If you refer to Table 2 you will see a more normal range of prices. That was at a time when the conditions in the tobacco trade were more stable.

408. Would you say the same applies at the present time?—At the present time there is a very wide difference in the price of different grades of tobacco due, to some extent, to Imperial preference. There is a much wider range in prices than prevailed before the war. For instance, here is a quotation from the most recent issue of the Irish Tobacco Trade Journal:—Tobaccos which we grow here for pipe purposes may be classified as “Western”—that is to say, similar tobacco to that grown in Kentucky. Filler-leaf ranges from 7d. to 12d. per lb., whereas the best wrapper-leaf ranges from 21d. to 22d. That is to say, that the wrapper-leaf is three times as valuable as the filler-leaf. Now before the war, the difference was about 50 per cent. —that is, filler was worth about 4d. as compared with 6d. for wrapper. The cause of that is that Empire tobaccos, as a substitute, occupy a lower position, and it is the superior grades of foreign-grown tobacco, meeting with no competition from Empire-grown tobacco, that fetch these relatively high prices. The difficulty of obtaining suitable wrapper, from Empire countries, is another way of putting it.

409. What, in your opinion, is the quality of Irish wrapper?—It is very difficult to produce a perfectly satisfactory wrapper leaf even in America. It is the object and the aim of every grower to produce as much of the higher grade as possible. He finds, in certain essentials, he is helpless. As regards your point, in Ireland we suffer from one serious handicap. Wrapper tobacco must be very oily and gummy. It must have abundance of “life,” and Irish tobacco is somewhat deficient in this respect. The qualities required by the trade, in wrapper tobacco, are somewhat difficult to obtain, and they have to use the best at hand, and that is why very superior wrapper tobacco brings in good prices. The Irish manufacturers have always denied the possibility of using Irish tobacco for wrapper, even though, possibly, they do use it at the same time. It is not good business for the manufacturer to let the grower know what he is using his tobacco for. If a grower was told that 30 per cent. of his crop was used for wrapping plug, next year for a similar crop he would want to know why he should not get as good a price, and possibly would insist upon getting the same price. Manufacturers do not acquaint the growers as to the use to which they put their tobacco. We endeavoured to obtain that information for experimental purposes, and it was largely with the view to obtaining that information that Lord Dunraven and Sir Nugent Everard established experimental factories.

410. Mr. Goodbody, I think, gave evidence before us that the only use to which Irish grown tobacco could be put, in this country, was the manufacture of roll, and, in England, the manufacture of shag?—Yes; he represented it would be specially suitable for the manufacture of shag for which there is no demand in this country, and that its use in this country must be confined to roll tobacco. I think he means “should be confined to roll tobacco.” There is nothing to compel him, as a matter of fact. It is just a question of policy on his part, and that policy, I think, is based upon competitive considerations.

411. You were of opinion during the Agricultural Commission, but 1/6 preference would be sufficient. Can you give any figure as to what, in your opinion, would be a sufficient inducement to the manufacturers in this country?—Well, I have explained, in my evidence, that after the serious miscalculations that were brought about I would hesitate very much to express any opinion as to what amount of remission of duty, barring total remission, would be effective, because as you can see, it is in the hands of the manufacturers to refuse to purchase Irish tobacco in any circumstances.

412. In your opinion, total remission would probably be sufficient to induce them to purchase?—Well, of course, the total remission would give, to all those concerned, an absolutely free hand. Total remission of duty would mean that Irish tobacco would be exempt from excise supervision. A man could smoke it, or spray his crops with it, or do anything he liked with it, but as long as it is an excisable article it must pass through definite channels in order to secure the collection of duty. Of course, that is a question which might be more properly answered by the manufacturers themselves. I do not wish to advocate anything. I think my function is properly confined to the elucidation of technical points and the verification of statements in the light of actual facts. Undoubtedly, the effect upon the Revenue of total remission would be a very serious one.

Deputy Mulvany.

413. Total remission would be too much to hope for?—Well, I can tell you that the point of view of those responsible for these experiments has always been that their object was to prove whether tobacco could be grown in open competition with the tobacco grown in other parts of the world, and to that extent, although it was always an academic point, I think it is the official view that the experiments have fulfilled their object. They have proved to what extent tobacco can be grown in Ireland under existing conditions, also the cost of production and market price. Experiments cannot establish a market. You must produce a thing on a commercial scale in order to prove the possibilities of establishing a market.

414. In your opinion, how does Irish tobacco compare with the tobacco from other countries?—As I understand it, it is different. The tobacco of every country is easily recognised by the expert manufacturer, because it bears the marks of climate and the soil of that particular country, and, I think, that really accounts for most of the defects of Irish tobacco—that it is essentially different. It is inferior to American when judged, strictly, by the standard of the better class of that tobacco, and we are prone to judge it by that standard. We do not compare Irish with the worst American tobacco. We usually compare it with the standard for American tobacco. It is rather an extraordinary circumstance. American tobacco has attained the monopoly, you might say, of these markets, as a result of one hundred or two hundred years of scientific manufacture and slow development of excise regulations, which affect the methods of manufacture that can be adopted. The tax has had a great deal to do with these methods, because the higher the price of tobacco to the consumer, the greater the economy he must exercise in consuming it, and it is principally on that account that tobacco of the Kentucky kind is particularly suitable to our requirements, and not so suitable to the requirements of the country where the tax on tobacco is negligible. Tobacco must bear a very high percentage of moisture in this country but not because tobacco is best when wet—and the gummy tobacco produced in Kentucky and Virginia is the best suited to the trade here. It is a difficult standard to attain. It is one that comes about from natural conditions of climate and soil, and particularly the temperature and the rainfall. It is not easy to attain that standard in its perfection, and that is why these tobaccos hold an unassailable position in this country. Unless they had attained that position, the 2/- preference in the duty that exists at present in England would very rapidly undermine their position; but we find that after five years, practically speaking, of Imperial preference, only eight per cent. of the total consumption in Great Britain is Empire-grown tobacco. The figure was given the other day as 6 per cent., but I am adopting my figure of 8 per cent. from the British Customs and Excise Report, 1925.

Chairman.

415. What is the total weight?—About 129,000,000 lbs. The exact total amount for consumption, not the total amount imported into the country, but, as I say, the total amount retained for consumption in the year 1924-25 was 129,093,118 lbs.

416. That is 8 per cent. of all the tobacco imported. Is that all similar to the tobacco grown in Ireland?—It would naturally be similar inasmuch as it is Empire grown. The 8 per cent. came mostly from Nyasaland and India. You could confine the matter to these two tobaccos; Nyasaland tobacco is primarily for cigarettes, Indian tobacco is grown primarily for pipe and cigar smoking, and the particular outlet for Indian tobacco is, I think, the home market. India grows about 2,000,000,000 lbs. per annum. Nyasaland has relatively no home market, being an undeveloped Protectorate. They set out in Nyasaland to imitate bright Virginian tobacco, and with the aid of a 2/- preference they are succeeding in growing tobacco and selling it quite profitably in Great Britain. The total production at present is, I think, about 10,000,000 lbs.

Deputy Mulvany.

417. The cost of production would be very much less there than in Ireland?— Yes, and much less than in America. They can put tobacco into London cheaper than America can. The trade being wedded to American tobacco, would have nothing to do with these tobaccos unless they were cheaper and very much cheaper.

Chairman.

418. Are the Excise regulations in this country a hindrance to the small farmers growing tobacco?—I think necessarily so. I do not think they are deliberately made a hindrance but it is obvious that any Excise restriction upon an agricultural crop is bound to be more or less of a hindrance. But I think the authorities have almost gone out of their way to reduce the nature of these restrictions to a minimum. In fact they have gone so far as to make their procedure rather ridiculous in the eyes of the small farmer. I think Mr. Caffrey explained how absurd they appeared to him, while they were really trying to make it easier for Mr. Caffrey. The Customs and Excise regulations of this country, I may say, as an outsider, have been evolved, having regard to the fact that tobacco was not grown in this country, and it is, naturally, rather difficult to make settled regulations of this sort exactly fit in with the growing of tobacco here. It appears to me from my point of view that that question is included here in the terms of reference and that it is a matter for the serious consideration of the committee.

419. Do you think that it would be possible, short of remission of Excise, to assist the growers by new regulations in regard to Excise?—I think, as a matter of fact, it is purely a question of compensation; remission of the duty is undoubtedly a way out, but a very costly way out, I should think, from the point of view of the Government. As a matter of fact, any difficulties that arise do so from the simple fact that the duty is collected on the raw article, and so long as the duty is collected on the raw article, there must be strict supervision and control of raw tobacco. On the other hand, the very high duty that exists at present could not be very easily imposed upon the finished article, because it would leave the raw article untaxed and liable to consumption in the raw state. Someone from the Customs and Excise Department can explain these matters much more thoroughly and, from the technical point of view, better than I can. I am sure that at present the great problem of the Customs and Excise authorities is how to control the industry without making the restrictions onerous, and the question of costs enters into consideration, and it must be one of the ideas behind this enquiry, because the terms of reference refer here to the effect upon revenue and any alteration of the existing duty. That is a matter upon which I could not speak.

420. This rebate of 2d. in the £ is only given to the exporter?—There is an export allowance of 2d., and there is an Excise allowance of 2d. The Excise allowance of 2d. is given on tobacco purchased and consumed in Ireland. The export allowance is given when that tobacco is exported from Ireland, but the same tobacco does not enjoy both. In one case it is a remission of duty, that is in the case of domestic consumption. In the case of exported tobacco it is, you might say, a bounty. The reason why it is not called a bounty is because it is really in lieu of the cost of Excise supervision which the grower of that tobacco has incurred, and it is in order to put him on a level with his competitors, when he is catering for the foreign market. It is done in the case of all excisable articles, such as whiskey. They all receive an export allowance for the same reasons. The fact that in the case of world tobacco, a great deal of it is produced quite free from any Excise supervision whatever, naturally handicaps Irish tobacco competing with tobacco in the Continental or English market under present conditions.

Deputy Mulvany.

421. What are the real obstacles that confront the Irish grower at present?— The last is the most serious one, that is the marketing of tobacco. The other difficulty which is almost the same thing as far as the actual producer, if he be a small grower, is concerned, is the relative absence of cheap re-handling facilities. While there is a re-handling station in Ireland the volume of tobacco produced is so small that the cost of re-handling is exorbitant.

422. Then, if tobacco were more extensively grown the re-handling would be done cheaper?—Re-handling is strictly a poundage charge, and the overhead charges are very considerable. I could quote you figures showing that in 1914, when Sir Nugent Everard was producing one hundred thousand pounds of tobacco, the cost of the actual re-handling operations was 1½d. per lb., and the cost of his overhead charges was more than half that amount per lb. The overhead charges should be a negligible amount per lb. if he were re-handling tobacco to the full capacity of his plant. There are many current charges not subject to great reduction, except by adopting efficient methods, by working full periods, that is, working six days in the week. Sir Nugent found it did not pay him to run his re-handling plant more than one day a week. That meant that he let his fires go out and a quarter of a day or more was lost in starting work.

Deputy M. Doyle.

423. Do you think that the Excise interfered very much with the growing of tobacco?—I do not think it is an insuperable obstacle by any means. It might cause a certain amount of irritation, but that might easily be compensated for. I fancy a great many farmers would be very glad to turn it into a money consideration, but under this re-handling scheme most of those Excise regulations are imposed on the re-handler. The grower is left relatively free. There is a difficulty about bonds, but if the farmer will put up with an occasional visit from an Excise man and let him sign the book in peace, I feel a good many of those little difficulties will disappear. For example, there is no real difficulty for a farmer to notify so many days in advance that he intends to harvest tobacco. It is valuable information to the Excise officer, and we will all agree that the dropping of a postcard a few days before is not an insuperable difficulty to tobacco-growing. There is the licence of 5/- per acre and various other things which are complained of.

424. I felt always in growing tobacco that I could not complain very much of the Excise interference?—You were in just the same position as a small grower under the re-handling scheme, inasmuch as your tobacco was cured or re-handled at a central drying station.

So long as we are not able to create a market there is no use in talking of the growing of tobacco. Could you think out any way whereby a market can be created other than taking more from the duties and giving it to the manufacturer or the grower?

Deputy Mulvany.

425. May I ask a question before that is answered? It has been stated here by witnesses that there is a boycott of Irish tobacco by manufacturers. Do you believe that?—I hesitate to make that statement.

426. The fact remains that they are not buying?—Exactly. Certainly the one manufacturer to appear before you did not explain why in years gone by he patronised Irish tobacco, and at present refuses to buy any. The only excuse I have been offered is that competition at present is on the basis of quality, more so than before the war, and that the Irish manufacturer, in face of the serious competition now confronting him in connection with the new factories that have been started, would not dare to use anything but the best American, for fear of losing his trade. No doubt, there is a great deal in that, because it is quite apparent if you look into it that the dearer the tobacco the more exacting the consumer will be as regards quality, and, seeing that tobacco has advanced from threepence an ounce to ninepence, naturally the consumer is out to get the very best value he can, and he will not tie himself up to any brand. Another consideration that enters the question is that tobaccos are now being sold under proprietary brands, whereas fifteen or sixteen years ago cheaper tobaccos were not sold that way. A man went into a shop, simply bought an ounce of twist, and did not know whose it was. Now they are branding everything more and more, and the result is that a man will turn from one brand to another if he hears the latter is better. That is an important consideration. There is no doubt but that the competition is based upon quality to a great extent for the reason that there is a wide margin of profit at present. Twenty years ago the lower-grade tobaccos were sold on the basis of cheapness. Competition was based on cheapness, and the manufacturer was willing to buy cheap tobacco if it were a penny a pound less, because that penny a pound would probably represent his total profit. To-day we are still being charged war prices for our tobacco, and there has been no reduction in price since prices reached their peak during the war. Manufacturers are able to maintain those prices and hence it affords a wide margin for them to play upon, and once you provide a wide margin all private manufacturers compete with each other on the basis of quality; the higher price, as I pointed out, also affords a strong incentive to the consumer to look around for the very best value he can possibly obtain for his money; and, thirdly, the branding of the different tobaccos affords him a means of doing so. Plug has displaced roll to a great extent and he can ask for So-and-so’s plug and be sure of getting it, because the maker’s stamp is on it. That explains why manufacturers are changing their attitude towards Irish tobacco.

427. Are the Irish manufacturers at present using a percentage of home-grown leaf?—I think I can say “No” unqualifiedly, because none of them has purchased any Irish tobacco to any extent in recent years. Only one manufacturer has purchased any Irish tobacco since 1918, excluding of course, the Irish Tobacco Company, which is merely an experimental factory.

428. They practically bought no home-grown tobacco since 1918?—I must amend that statement in a very important respect, because one company bought all of the tobacco grown and re-handled by Sir Nugent in 1923. They bought this as an experiment, because they had no experience of Irish tobacco for twenty years. I think Sir Nugent can tell you much more about this point than I, because he has had more to do with the sale of tobacco.

Chairman.

429. There is no particular financial inducement for them to buy Irish?—Yes, there is the difference in duty.

430. At the cost of production at its present figure in Ireland that does not amount to very much?—It amounts to this: they were asked to pay 1/6 for the tobacco, and I think the growers assert they could not grow the tobacco for less. Now, given that 1/6 were the established price for Irish tobacco, that happens to equal the difference in the duty, in other words, the preference of 1/4 plus the allowance of 2d. Then it follows that the difference is the short price of the foreign leaf. That comes about in this manner: 6/8 is the duty on the Irish and 1/6 is the short price. The two make 8/2. That is exactly the duty paid on foreign tobacco. Therefore the manufacturer gets the Irish tobacco for the amount of duty paid on the foreign tobacco. Hence, the difference in the gross cost of foreign as compared with Irish tobacco, is the short price of the foreign. If that is 7d., the amount Mr. Goodbody quoted, and as I think I quoted, for the lowest grade western filler, it means he is getting an advantage of 7d. per lb. If it is dearer tobacco he is obviously getting a greater advantage. If the manufacturer bought Irish tobacco at 1/6 per lb. the preference on it would be 7d. per lb.

Deputy M. Doyle.

431. That is the monetary inducement?—Yes.

432. How would that work out?—The manufacturer would have 1 lb. of Irish instead of 1 lb. of American filler. Probably he would tell you there was 7d. of a difference as regards quality. That is, naturally, a matter on which every man is entitled to his own opinion.

433. With that inducement they are not buying?—No.

434. Are you aware if Irish manufacturers made any offers for Irish tobacco? —No. I have heard the expression used that they would not touch it with a forty-foot pole.

435. Then, if they refuse to take it, I fail to see that the remission of duty, or anything like that can help, unless we look for a market outside?—You have only the alternative—and it does not come within your Terms of Reference— which I stated in my precis of evidence: to alter the present attitude of the home manufacturers or to make the sale of Irish tobacco remunerative in Great Britain. I think that is the question at issue.

If we had a larger remission of duty I wonder would that tempt the manufacturers?——

Chairman.—It is for them to say.

Deputy Mulvany.

436. I think the Minister for Finance made a statement, that if they got it for nothing they would not take it?—The Minister was dealing with a point that I tried to elucidate, that 1/6 plus 6/8 making 8/2 is simply the duty the manufacturer pays on foreign tobacco. Hence, it might be stated that they are getting Irish tobacco for nothing. That is fallacious, to the extent that the cost of the tobacco to the manufacturer is the short price, plus the duty. He is really paying 8/2 for Irish tobacco as compared with 8/9 for American tobacco, showing a difference of 10 per cent. or 11 per cent. That is the proper way to look at it.

Deputy Doyle.

437. If he pays 7d. for plug he has that advantage per lb. if he purchases Irish tobacco?—Yes, and that amounts to 10 per cent. or 11 per cent. The manufacturers’ costs are all based on duty plus short price.

438. I suppose you are not able to make any suggestion about the creation of markets?—I am afraid that is beyond me. That is the issue before the growers.

439. I agree that it was not your business to make a market—your business was to ascertain the facts?—I am prepared to stand by the conclusion, that the issue is to find any market at all in the Saorstát and to find a profitable market in Great Britain. I mention Great Britain because it would not be feasible, except by a system of bounties, to compete in the open markets of the world. The markets of Great Britain are not open at present as there is a preferential duty on Empire tobacco. That is why I suggest Great Britain. The logical thing is to develop the home market, where you have no demand at present.

440. I wonder why we lost the patronage of the Irish market? Is it on the ground of the quality of the leaf?—That is the explanation that was offered. During the past few years I had occasion to offer Irish tobacco to practically all the manufacturers and, having been in close touch with the market for tobacco, the only logical excuse that was offered was the one I have stated. You must give it some weight. We know that the manufacturers have always been very keen on getting a cheap tobacco and 7d. in the lb. is an enormous profit, but by the time it is blended, if a 14 per cent. blend is adopted, it would be only 1d per lb.

441. Your opinion is that the growers cannot produce the crop and make more than 1/6 on it?—If you examine the statement of Mr. Anderson, who is an experienced grower and a man whose figures I would be inclined to accept, you will see that he said his cost price was 1/5⅜. It was the same the previous year. We have to go back to 1921 to get a really good yield. That was the total cost including rehandling and marketing.

442. As an expert do you think there is any future for Irish tobacco?—It is certainly conditional upon the development of more favourable conditions than exist at present. I see no prospect and the acreage indicates that. In my written evidence I stated that tobacco growing is languishing almost to the point of extinction since 1923. As a matter of fact, members of the Committee will be able to form their own conclusions when they learn that there are small growers who have not received a penny on either their 1925 or 1924 crops. It is perfectly unreasonable to expect small farmers to grow any crop under such conditions.

443. Deputy Mulvany.—They want to get paid?—The object of the last experimental scheme was to prove whether that class of grower could produce tobacco economically. One of the essential conditions of that scheme was that the rehandler was to provide a cash market for the small grower. That meant that on delivery of the tobacco to the rehandling station or, as soon as possible thereafter, the small grower was to receive cash for his tobacco.

Deputy Doyle.

444. Does the chief manufacturer in the North of Ireland use any Irish tobacco at present?—No.

445. Of course he can get the preferential treatment of 2/- on the Empire grown tobacco?—Yes; he was offered the residue of some stock latterly, and he refused it. He expressed the opinion quite gratuitously that he did not believe that any manufacturer in the Saorstát would buy it. I do not know if he had inside information or not.

446. The ring must extend outside the Saorstát?

Deputy Mulvany.

447. Up to and including the year 1918 Irish tobacco was grown and used by the Irish manufacturers?—Freely.

448. At that time were there any complaints about the quality of the tobacco purchased by Irish manufacturers?— Plenty of complaints, but they continued to buy it. Up to 1914 there was not unreasonable difficulty in disposing of the Irish tobacco. A new scheme then started. It was placed in the hands of two individuals and one society, so that there were fewer sellers. Selling was concentrated in the hands of three interests. One was Sir Nugent Everard who, in the meantime, had so developed his experimental factory that he was able to manufacture most of the tobacco rehandled by him. Lord Dunraven confined his manufacturing operations to cigarette tobaccos, and sold it all in London because it afforded the most ready market for miscellaneous grades. Wexford Tobacco Growing Society grew tobacco for only two years under this scheme. For several seasons previous to 1914 they sold tobacco in Belfast, and they continued to do so.

449. Quite right. I think we sold it for five or six successive seasons to Mr. Gallaher. As Mr. Keller has explained, we had complaints, but still he did not refuse to buy it. We got within a penny or a halfpenny per lb. for our first quality, compared with the price paid for the American leaf?—The price received in 1914 was 4⅛d. for all your tobacco, and in 1915 the Wexford Growers’ Society got 5¾d. The war came on and supplies became scarce. We then had the manufacturers actually begging us for Irish tobacco, and we got prices as high as 2/- per lb. As Mr. Caffrey stated, he had them begging for his stalks. Manufacturers did not turn up their noses at Irish tobacco when there was a scarcity. I think all that proves that Irish tobacco must be smokable. At present one would infer that it was no use, seeing that there is absolutely no demand for it.

450. It is my opinion, rightly or wrongly, that since the Irish manufacturers discontinued using Irish grown leaf the quality of their manufactures has not improved?—Yes, I cannot reconcile their statements as to the extremely high quality of tobacco at present with the actual facts of the case. The average smoker of plug or roll will not admit that the quality has gone up.

451. I think it has deteriorated?—I am not a smoker of that class, but I think no one considers that tobacco is better now than it was pre-war. The experience of Sir Nugent Everard in his experiment factory has been very valuable in that respect. I have repeatedly seen tobacco, 50 per cent. Irish, good, sound stuff, which was smokable. I have seen it tested by various workmen, and I know that a great many people around Randlestown smoke it. It could not be supplied to the public at a lower price, and naturally there is a large amount of prejudice against the home-grown article.

There was a certain amount of difficulty in obtaining it, and that militates greatly against tobacco for which there is such a small demand. Absence of a steady, strong demand renders it impossible for a shopkeeper to keep the tobacco in condition. That accounts for the fact that in a small shop in the country you see only one brand of cigarettes and one brand of plug sold. Tobacco bearing a high percentage of moisture is liable to rapid deterioration

Chairman.

452. There is one point in connection with the experience of agricultural labourers. Have you any figures or any idea as to how it paid them in the few experiments you made in that respect, because the agricultural labourer was in the difficulty, I understand, of not having the manure which the small farmers had, and consequently it was more difficult for him to make the experiment pay? —Our experiment in that respect was somewhat limited. We managed to obtain, particularly in the South, a few labourers who were occupying County Council cottages to grow tobacco on their acre plots. Of course, I think they managed to solve the question of manure, because tobacco was grown very largely on artificial manure. They managed to get the requisite quantity of farmyard manure to grow potatoes, and they usually grew tobacco in rotation with their potatoes. Of course it was a very short rotation, as they grew tobacco alternatively with tobacco or oats. I have numerous figures for small farmers in all conditions, but for labourers’ holdings, one-acre plots, I have very few. Most of these are under the Development scheme. I think, as a matter of fact, the cases I want to get are in another report, but I will see if I have any for 1923 or for one of the later years. It might suffice if I took two or three cases in Offaly. This is apparently the rehandlers’ account with the grower, showing the amount due to the grower and the amount of his indebtedness to the rehandler. This is the account of Edward Dunne, of Mullagh, Killurin, Tullamore. He grew 1 rood 12 perches. He produced 250 lbs. of tobacco. Half of that was second grade and half of it third grade. His total receipts were £17 1s. 3d. off practically one rood. That is to say, he produced a yield of 1,000 lbs. to the acre, and he obtained a gross return of about £65 to £70, from which, of course, he had to pay the instalment on his equipment. These are figures which Major Everard can give you more clearly. I did not bring along the figures for Lord Dunraven’s scheme. I may tell you, however, what the difficulty was that we got into with this man. He had a rather poorer yield in 1922 than he had in 1923, but all through Dunne gave us very consistent results and afforded us much valuable experiments, showing what a labourer can do in a small plot. His one difficulty was that his rotation was too short, and his crop was more or less liable to root-rot in his field. That could be avoided easily by the adoption of the conacre system. He could have arranged with the landlord for conacre. The acre plot compelled him to rotate on that small bit of land. This man only grew half an acre, occupying half of his total holding, and even more, because something had to be allowed for the house and the little garden plot. On that there was also erected the barn, which, of course, was extremely valuable to labourers. They found that very useful, and all the results we have got are largely influenced by the consideration that many of the growers entered tobacco-growing for the sake of the barn and a great many without any idea of doing their best by it. Once they got the barn they settled down to enjoy its benefits. That again shows the difference between the theory and the practice in tobacco-growing. Theoretically, Ireland can grow tobacco of fair quality and get a good yield. There should not be any trouble in getting 1,000 lbs. per acre. I could show you yields up to 1,200 and 1,500 lbs. per acre, and, in fact, our highest yield was 2,300 lbs., but in practice it does not work out that way at all. It is simply the old story of the difference between theory and practice. If a farmer is extremely careful, does everything he is told to do, or that he really knows should be done, he is fairly assured of a good result as regards yield and quality, when the tobacco is judged by Irish standards as regards quality, but in practice we have had men who have had miserable failures and very poor yields. They had the effect of reducing the average yield down to nearly 800 lbs., and in the past few years, operating under the discouragements which I have described as regards markets, the yields tended to fall off. With their experience they do not seem to be growing better. You have the particulars in my evidence showing the yields per acre. That is on Table 3. It is not worked out for years subsequent to 1923, but in fact the yields are not increasing, and that is due largely to the discouragement with which the growers are meeting owing to their failure to find better markets for their tobacco. During the war their efforts were seriously affected by the competition of other crops.

Deputy Mulvany.

453. On account of not being able to market their crop they got more or less indifferent?—Yes. One is inclined to look at the theoretical advantage of tobacco growing and disregard the practical difficulties, but seeing that all our growers had to start without any experience, had to learn all about tobacco growing—a crop which is utterly different from anything they had grown before, much more exacting, much more of a horticultural crop—it would take a very long time to establish the industry as it is established in tobacco growing countries where they have grown tobacco for generations. In conclusion, I might direct your attention to the fact that the prohibition on tobacco growing in Ireland was remitted, I think, in 1779, and it was not until about 50 years after that time that the industry began to extend rapidly. Then, when it did begin to extend, it extended at such an alarming rate that the British authorities suppressed it, but for years and years there was an Act on the Statute Books permitting tobacco to be grown in Ireland but very few people took advantage of it. It came at a time of political strife; it was a sop which the people despised. A period of 50 years elapsed before the industry became quite established and began to grow. Then we find that there were 130 factories scattered all over the country manufacturing this native leaf. The industry aroused the enmity of the Customs and the English manufacturers, and it was suppressed.

454. At that time in Deputy Doyle’s county there were about 800?—Yes. As far as I can gather it was grown duty free, and there was a fairly good market in smuggling it across the Channel. It must have been widely used at the time, when there were 130 factories throughout the country.

Deputy Doyle.

455. Provided we did get further concessions, do you not think that the subsidy should be put on the poundage instead of on the acreage, that is on each pound produced?—You mean as it was in the first instance?

456. Yes?—Well, that presents certain advantages and certain disadvantages. The difficulty is that it would not solve the marketing problem at all, and I believe that unless you devote attention to the solution of the marketing problem, you will miss the main issue entirely. How are you going to encourage this? You can only use persuasion. How are you going to induce Irish manufacturers to patronise Irish tobacco? One thing that would induce them would be an actual demand on the part of the consumer, and you cannot get that actual demand on the part of the consumer so long as no monetary inducement is held out to him. You cannot expect him to smoke it for purely patriotic reasons.

457. The price to the consumer should be reduced?—I think that involves a very considerable remission of the Excise duty, and that is where the Committee’s work begins. It will involve a very considerable remission of the Excise duty to give the consumer anything, and if I might make a suggestion, you cannot offer the consumer much less than ½d. in the ounce. In fact, if you consider a reduction of ½d. in the ounce, it would simply mean this: that the consumer would say, “Shall I buy this Irish blend tobacco at 8½d. instead of paying 9d. for the pure American”? It is a very small inducement. A ½d. an ounce means 8d. on the raw leaf, and supposing you blended at 50 per cent., it means 1/4, and if you blended at 5 per cent., as Mr. Goodbody said, nothing short of the total remission would make the slightest alteration. How can you induce anybody to smoke it if you say that Irishmen would not smoke it unless it is blended with 95 per cent. of other tobacco?

Deputy Mulvany.

458. Mr. Goodbody recommended 50 per cent. even to the Edenderry Board of Guardians?—Seeing that many men have tried it and liked it, and that many men have freely admitted that they would smoke it if there was a reasonable difference in price when it is blended to the extent of 50 per cent., I think that we would have to weigh very carefully the statement that it could not be used to the extent of more than 5 per cent., even though it comes from a manufacturer. It really expresses his own personal conviction, that in his blend he would not see fit to put more than that amount. As a matter of fact, in the small quantity which the manufacturers have purchased it was not necessary to use more than 5 per cent. It was a question of simply hiding it in the total output and not going to the trouble of putting out a special blend—or sprinkling it through the roll. Obviously that was tobacco that was not branded at the time, and it was less likely that any adulteration of it would do any harm. Growing out of that practice the idea crystallised. “Well, I have never used more than 5 per cent,” and all you have got to do is to substitute the word “must” for “have.” Then, the idea occurs: “You must not use more than 5 per cent. and only use it in roll.”

459. Chairman.—Is there any source of information by which we could verify these statements?—It is very hard to get manufacturers to talk about their business. The way I verified it was through these experimental factories, and I do not think it would ever be possible by hook or crook to verify it otherwise. The statements were so excessive that I could not swallow them. I began to suspect them when I found they were using more. When I compared the total amount of Irish tobacco bought with the total amount turned out, I came to the conclusion that these statements were not strictly accurately. They refused to purchase any of the fancy experimental tobacco we were producing. We tried cigar tobacco; we tried cigarette tobacco of a standard type, as well as various pipe tobaccos, and we found the manufacturers would not touch any but the common pipe tobacco. It was necessary then to stop growing these fancy types or to provide some means of manufacture independently of the manufacturer. Sir Nugent Everard and Lord Dunraven each established a small experimental factory for the purpose, working obviously under the greatest possible handicaps from the commercial point of view owing to their very small output and owing to the fact that neither had a knowledge of manufacture. They had to obtain low-paid experts, so to speak, to run their factories. They could not advertise, and, needless to say, both of these factories lost heavily. However, from these factories we convinced ourselves as to the extent Irish tobacco could be blended, and I was almost aghast sometimes to see that they were putting more than 50 per cent., in fact, almost entirely Irish tobacco into plug.

They were actually sending out tobacco that was mostly Irish. They did not build up a big business on that basis, but they sold the tobacco and it was smoked. The logical inference might be that that was the cause of its failure. That is a matter of opinion. I think myself that it is sufficient explanation of the failure that the industry was not properly capitalised or efficiently run, from a commercial point of view.

Chairman.—Can you tell us what, in your opinion, was the highest percentage which the manufacturers put into their blends, as distinct from their statement? —One manufacturer who had an output of about 250,000 lbs. per annum bought the entire crop for two years and, in each year, the amount was approximately 100,000 lbs. The tobacco was all pooled; that is why he bought it. Earlier it was found that the tobacco manufacturers naturally wanted to buy the Irish tobacco as cheaply as possible. The growers combined and pooled and sold to one man two years, and for two years to another man. The second man refused to buy the third year because, he said, he could not handle all of it. In the 250,000 lbs. was included all fancy tobaccos. What percentage of this output was fancy tobacco and what was common, I do not know. I am sure that all the Irish went into his plug and roll. Certainly, it did not go into his high-class mixtures and cigarettes.

460. Of that quarter of a million lbs. total output, have you any idea how much was lower grade?—The major portion of the 250,000 lbs. I would hesitate to say he sold more than 50,000 lbs. of fancy tobacco, leaving about 200,000 lbs. of common tobacco. He must have found that a 50 per cent. blend would not work. Anyway he did not buy the third year. You can appreciate how unsatisfactory it is to arrive at a conclusion by such means. That is exactly why an experimental factory was started. The most serious mistake that was made was that the Irish Tobacco Company was indiscriminately blending the Irish tobacco. They blended all grades and that is one of the great problems that confront Irish tobacco growers. When we speak of Irish tobacco as being as good as or better than American tobacco, we might be speaking of the best Irish. The question is: what is the average quality—how much low-grade tobacco is likely to be produced? Mr. Doyle has been asking questions on that line. But that depends entirely on the experience of the grower. If he is a beginner, he may produce all bad tobacco—tobacco scarcely fit for sale. One of the greatest problems that has confronted us is the production of a really sound saleable tobacco, with a maximum percentage of high-grade leaf.

Deputy Mulvany.

461. Have you any idea as to what percentage of Irish tobacco would want to be used in order to absorb the entire crop grown in this country?—The produce of 25 acres is all that is being grown; that is only 25,000 lbs. The latest figures which I have for the consumption here—these are based on the Customs and Excise returns—is 9¼ millions. We had no separate figures for the Saorstát until the last two years. What percentage is 25,000 of 9¼ millions?

Deputy Mulvany.—It would not be 5 per cent.

Deputy Doyle.—It would not average that much.

462. Chairman.—Is there any other matter that you would like to comment on?

Witness.—I have stated all the points I cared to make. I merely wish to stress that it is the difficulty of marketing that is the outstanding question. One can safely leave the others to the growers. You have their cost of production and what price they require, and the experiments have proved that a smokable tobacco can be produced here. The consumer naturally is not keen on smoking his native-grown leaf if he has to buy it at the same price as the foreign, especially when the latter is ornamented with a romantic name like Virginia. I still adhere to my original opinion that if the Irish tobacco would meet with the same demand and reception as it met with prior to the war, all the existing growers could certainly grow tobacco profitably. Whether a new grower could start off and equip himself or a new re-handler would be justified in building a re-handling station in another part of the country, is another matter. Moreover, the question as to the amount of tobacco that would be absorbed would be a matter of serious consideration. Therefore, I limit my statement to the existing growers, who are capable of producing, with their equipment, somewhere round about 200 acres of tobacco. I see no reason why the market could not absorb that as it did heretofore.

Very Rev. J. F. Sweetman, O.S.B., called and examined.

Chairman.

463. How many years have you grown tobacco?—I think it is twenty years since I began to grow tobacco.

464. And you have grown it every year since?—Yes.

465. In that period, when they were giving a subsidy on acreage, did you get your subsidy?—No, I never got a subsidy.

466. You grew independently of the Department?—Yes; I got assistance from Mr. Keller, but no subsidy.

467. Since the war have you any idea of what it costs you to produce tobacco? —Recently, I have been growing from quarter of an acre to one-third of an acre. The average cost of an acre for growing and curing would be about £50.

468. And the average crop?—About 1,000 lbs. per acre is a fair average. That is, growing cigar tobacco. I am dealing entirely with cigar tobacco.

469. Do you sell any raw tobacco?—No. I have two or three girls employed making cheroots.

470. You would not know what the price would be for the raw tobacco?—I arranged so that a lb. of tobacco makes 200 small cheroots. I sell those at 1½d. each, wholesale.

471. Could you give any figure as regards the amount you sold in any particular year?—I have not any figures with me. The demand is considerably in excess of the supply. I can sell as much as I am ever likely to produce. I have always been able to sell cheroots at 1½d. Those are retailed at 2d.

472. These are entirely home-grown?— Yes; not blended in any way. I think the gross return for an acre is something over £1,000. You can work that out at 1½d. a cheroot, 1 lb. making 200 cheroots.

473. And you never have any difficulty in marketing?—No; I am always short of the demand. I had an institution where I had over 100 people to provide for in the way of vegetables, with the result that I was short of manure, and I had to confine myself to about a one-third of an acre of tobacco. I never had any difficulty in disposing of that.

474. What proportion of artificial manure do you use?—I use no artificial manure—largely poultry manure. I probably could increase the quantity to nearly double by increasing the manure. I think 1,000 lbs. is a fair average.

475. A cheroot sold at 1½d. covers the cost of production?—Yes; with a handsome margin, even allowing for fairly high wages. I generally paid fairly high wages. A girl earns as much as £2 per week.

476. Have you only sold these cheroots in Ireland?—Recently I have had them sampled a good deal over in England. I find that I could sell any quantity of them at that price. The manager of the London Midland and Scottish Hotels told me that he would take any quantity I could supply.

477. Did you find that the growing of pipe tobacco was remunerative or was there a market for it?—Yes; I managed to sell a fair quantity of it. I had a surplus that I left in bond that I could not sell at all. I gave it up for that reason. I made cigarettes, and I found that I could sell them, but the profit was very small. I found that it was impossible to compete with the machine-made cigarettes.

478. You found the cheroots the most suitable?—By far.

479. Have you any idea of what remission of Excise duty would enable you to sell at even a cheaper price—for instance, at 1d. each?—I think the present duty works out at about one-third of a penny on each cheroot. The only difficulty I see about the thing as an industry is that you want to build up a market more quickly. You can do that by advertising, but that is rather expensive. You can popularise it by making a big reduction in duty for a year or two, in which time people would acquire a taste for it. I think an acre of tobacco, roughly, can keep three people working making the tobacco into cheroots. That is a fairly accurate calculation.

480. That would include manufacture? —Yes.

Deputy Mulvany.

481. You simply grow a certain quantity and convert it into cheroots?— Exactly.

482. Having a knowledge of tobacco growing, is it your opinion, leaving personal interest out of consideration altogether, that tobacco growing should be encouraged?—Certainly; I am very strongly of that opinion.

483. In favour of encouraging the growing of Irish tobacco?—I am very strongly in favour of it.

484. And then by having a reduction in the duty for a couple of years, and by making tobacco cheaper for the consumer, the people would acquire a taste for the home product?—That applies both to pipe tobacco and cheroots, especially cheroots. You find a great demand for cheroots outside Ireland, and people are always looking for cheap cheroots. There is a big demand for that type of smoke in England, but not so much in Ireland at present.

485. How many hands do you employ? —At the present time I am living in England, but I had 50 employed one way or another.

Chairman.

486. Not alone on tobacco?—No. I calculate, roughly, that an acre would represent about one man’s time. Mr. Keller would know more about that than I would. You may have four or five on for a short period, but roughly one man’s time could be put down for the whole thing. I have no fires or artificial heat. I cure by hanging the leaves up on rafters of out-offices.

487. The only difficulty you see is to popularise the home-grown tobacco?—In other words, to create the market. If the demand is there, you will find that the manufacturer will produce the article quickly enough.

488. Even at the present time, there is a demand greater than the supply?— For my limited supply, certainly. I am always behind.

488a. That is for cheroots only?—Yes.

489. What would you propose in order to popularise the home-grown product? —I was going to propose the system of taxation that they have in Belgium. They tax on the acre and let the man make the most he can out of his acre. There is much less trouble and much less supervision. Let the tax be put on when, say, the crop is half grown. By that system, if the crop failed, a man could put something else into the ground. Otherwise I would like to see the tax reduced about a quarter to make it a popular smoke. I think a tax on the acre or half-acre would be a more satisfactory way to tax it as an experimental thing, because people would try to get the best they could out of their acre.

490. Did you find any difficulty in the Excise regulations?—Yes; very considerable difficulty, not from the individual officials, but from the system. The difficulty applies especially to the production of cigar tobacco, because it is all packed away in small cases. When the leaf is dry, if you pack it dry it gets cracked and an enormous quantity of tobacco is damaged. There is no necessity for that. They analyse the tobacco before going into bond to find the percentage of moisture in it. You have to dry it out, and it gets cracked and damaged. If they simply taxed the tobacco, then you could pack it in a damper condition and you would not have so much of the crop spoiled. About one-twentieth of the crop is pure water, and you have to pay 6/8 on water, so that one has to choose between either drying it out and so damaging it, by cracking the leaves in packing, or, packing it damp, and paying 6/8 tax on the moisture, which would be about £60 extra tax per acre.

Deputy Doyle.

491. What was the highest acreage of tobacco grown by you?—I have grown as much as three acres on one occasion.

492. Was that for the purpose of cigars or pipe tobacco?—At the time, I was merely experimenting. I used a good deal for cigarettes and for pipe tobacco.

493. Your gross returns per acre at present would be about £1,000?—I think about that. I do not grow as much as an acre at present. I could not afford to manure it.

494. And the growth and manufacture of that would cost you £50?—Merely the growing; the manufacture is a very much bigger item.

494a. You employ three hands?—At present I have three.

495. In the manufacture?—Yes.

496. You pay them £2 a week?—Sometimes it works out as much as that. I pay them on the amount they produce.

497. Would those be engaged all the year round?—As a rule, yes. I never have less than two hands and sometimes I have three.

498. The cost of production would run to about £50 per acre and this, with the cost of the two hands for the manufacture of the produce of this acre, would amount to £250. You reap a benefit of the difference between £250 and £1,000? —That is a paper profit, less tax. Many little items come along when you are experimenting that run away with the profit.

499. How did you do with the pipe tobacco-growing; did you make a profit? —I did fairly well but I had a difficulty in finding a market for it.

500. Did you produce at the rate of about 1,000 lbs. of pipe tobacco?—About that. I have grown the same tobacco all the time but I have taken to making cigars out of it.

Deputy Doyle.—If all the other growers could turn to this quality of tobacco and produce it as successfully as you have done, I do not think we would require any remission in duty at all.

Witness.—Except to popularise it. There is plenty of profit there, if you only get the market.

501. Chairman.—You have no figures as to the actual amount of cheroots you sold in any particular year?—No; I have just come from England.

502. Or the amount you produced?— Of course, I have been making various changes and experiments in the methods of treating. I am giving you what I might call my final results of the last year. In regard to the size and price, I have been making various changes at different times. I stake my reputation on that brand (specimens produced). The only suggestions I have to make are about this system of taxing, i.e., tax per acre and in the final weighing-out for the tobacco only instead of putting it on tobacco, plus water. It would be a tremendous saving of labour and it would improve the quality.

Mr. F. C. Hassell, called and examined.

503. Chairman.—I find from your précis of evidence that every 6d. per lb. taken off Excise would mean a loss per acre of £18?—Yes.

504. Deputy Mulvany.—You mean per acre taken on a yield of 800 lbs. per acre, and allowing for rebatements for waste? —Yes, you notice that there is an allowance of 10 per cent. for waste, stalks, etc.

505. Chairman.—If, during the last year the preference had been 2/- per lb. instead of 1/6. what is the amount that would have been lost to the Revenue during the year?—It would be £1,935 12s., so far as the figures are available.

506. That would be a total loss from the point of view that there was any preference at all?—That would be the difference between the full rate and the preferential rate.

507. That is about £2,000?—Yes.

Deputy Mulvany.

507a. At an average of 800 lbs. to the acre under the present conditions, the State is at a loss of £54 on every acre?— Yes.

508. Then your evidence goes on to say:—“If the preferential rate were increased from five-sixth of the full duty to three-fourths, as in Great Britain or 2/- per lb., the cost per acre on the same figures would be £72”?—Yes, that preferential rate, of course, includes the difference of 2d. per lb. between the Excise and Customs rates. That is to compensate for the extra cost due to Excise restrictions.

509. And you pay that on the quantity exported?—Yes.

510. You say: “As regards Table I. it will be observed (1) that there has been a steady decline in the quantity of home-grown tobacco produced in the years from 1921 onwards, (2) that the tobacco sent to the re-handler for curing shows a steady increase in the percentage found unfit for packing, indicating a want of skill on the part of the growers.” Now, as regards that paragraph, I would like to get an explanation from you?—In what respect?

511. This is your own evidence and I would like that paragraph more fully explained?—I take it that it is to sub-section 2 of that paragraph you refer. There is the first comment and that explains itself. A steady decline in production is shown in Table 1. As regards sub-section 2, these figures are based upon the actual returns made by growers and curers. This unfit tobacco is tobacco which has gone through the process of curing and is not considered by the curer to be good enough to be put on the market. It is, therefore, destroyed. In the year 1921 the percentage found unfit for packing was 1.4; this increased to 2.6 per cent. in 1922; it increased to 6.1 per cent. in 1923, and to 9.2 per cent. in the 1924 crop. Of course the weather had a good deal to say to it. In the year 1921 the weather was exceptionally favourable to the growing of tobacco and the percentage found unfit was lowest. In 1924 the weather was exceptionally unfavourable for growing tobacco, and the percentage rose to 9.2. I should explain that that 9.2 per cent. includes the total crop of one grower—350 lbs. His whole crop of 350 lbs. was found to be unfit for packing.

Deputy Egan.

511a. Does that mean that with the other growers there was no tobacco unfit for packing?—Oh, yes, there was.

512. I understood that 350 lbs., the whole crop of one grower, made up that 9.2 per cent.?—No, it is included in the 9.2 per cent.

513. Did that big loss in this particular case bring up the average percentage very much?—I could not give you the exact figure. I have not got it exactly.

514. Would the loss of that man’s whole crop have been sufficient to bring the total into this abnormal figure of 9.2 per cent.?—No, it would still be higher as compared with the previous years.

Chairman.

515. There was an increase in the acreage in 1925 as compared with 1924?—As a rule the actual acreage approved is greater than the acreage grown. A man will give the outside figure when applying.

516. Deputy Egan.—What becomes of this tobacco found unfit for packing?—It is destroyed.

517. It is unfit for any use whatever? —Yes.

518. So that in the case of the non-destroyed tobacco for the year 1924 the highest yield was only 694 lbs. per acre? —Yes.

519. Deputy Mulvany.—The years 1923 and 1924, as regards the weather conditions, were exceptionally unfavourable?— Yes.

520. They were unfavourable in the case of other crops as well as of tobacco? —No doubt.

521. Deputy M. Doyle.—In what way did the whole of that particular crop you refer to, fail? Is it because it was not properly cured, or do you know what was the reason for its complete failure?— I could not say. We do not get particulars of the reason why a crop is not fit for packing.

522. Do you know if the crop, as it left the field, was fit to cure, or can you say whether the failure was due to the method of production?—It must have been fit to cure, because it was sent to the re-handler.

523. Do you know why the re-handler could not cure any of it?—No. His opinion would be the deciding factor whether or not it should be packed.

524. Deputy Mulvany.—Taking into consideration the fact that the year 1924 was an exceptionally wet season for all crops as well as for tobacco growing, do you not think that 9.2 per cent. for the tobacco crop is an extraordinary low average?—It is accounted for, no doubt, by the bad weather conditions to a considerable extent, but to what extent I could not say.

Deputy M. Doyle.

525. The bad weather would apply to all crops as well as to tobacco growing. In the case you referred to, where a man’s whole crop was turned down, could you say whether the fault was due to that of the grower or to that of the weather that prevailed?—I am afraid I could not tell you that. Our official returns do not give any information on that point.

Chairman.

526. A number of the witnesses complained that the excise regulations were very complex. Are these departmental or statutory regulations?—They are statutory regulations.

527. Would there be any means of simplifying them, even assuming that the excise duty remains on the growing of tobacco?—I take it that the same authority that made them could simplify them. I do not think myself that they are in any way complicated. I have here a copy of the entry book that the growers and curers are required to fill up. They are given instructions as to how they are to fill it up. Any ordinary person ought to be able to fill it up. The requirements they are asked to comply with are not very onerous. The grower, as you know, has to take out a licence every year at 5s. He has to enter into a bond, and once he has done that the bond stands from year to year. There is no difficulty as regards that afterwards, except some change is made in the case of the securities. He has to enter in this tobacco entry book particulars of what he is doing; when he sows, the variety that he sows, with the area of land planted with each variety. When he is about to commence to cut he has to give the office notice. He is also required to give notice when he is about to remove the leaf to be cured. He is responsible under the bond for the due removal of the tobacco to the curer.

528. I suppose the bond is regarded as absolutely necessary?—It is. Of course, the duty value of the stuff is 8s. 2d. per lb., and it is felt that you must have some security to ensure that it is going to be properly disposed of.

529. It has been suggested that getting the security frightens small growers. The point was made that the small growers find it difficult to get security?—There might be difficulty perhaps in the case of small growers getting security, but I do not know that it is a serious difficulty. After all, if a man cannot get security it rather reflects upon himself.

530. Deputy Egan.—Do you think that if the regulations were simplified it would be an inducement to more farmers to take up the growing of tobacco?—I do not think so. The authorities are not very hard upon those people for minor abuses of the regulations. In some respects the regulations, very often, are badly observed, but unless we think there is an actual intention to defraud, or something of that kind, the matter is overlooked.

531. Deputy Mulvany.—Would I be right in saying that the whole question is one of revenue or loss of revenue?—From the revenue point of view, if the home-grown tobacco pays a duty of 1s. 6d. per lb. less than the foreign-grown tobacco and if it displaces an equal amount of foreign tobacco, there is a potential loss of revenue to the extent of the difference between the two. In that way only can you regard it as a loss to the revenue.

532. But economically and industrially would it not be better for us to produce all the tobacco that we want in this country? Would we not be much better off if we consumed as much as we could of our own tobacco?

Chairman.—I do not think that is a matter for the witness to deal with.

Deputy M. Doyle.

533. Have you any idea how much preferential tobacco the Irish manufacturers import from the Colonies?—That would be manufactured tobacco. There is no preference on Empire tobacco now apart from Irish tobacco. Table II. gives the figures as regards manufactured tobacco on which duty is charged at the preferential rate. The quantity is small. It is 9,817 lbs.

534. The amount of tobacco grown here last year is not, I see, costing the State any more than £2,000 even if the manufacturers accepted it?—Yes, assuming that. That, of course, is based on the actual quantity cleared for consumption in the Free State, not the actual quantity grown, because it has not been sold to the manufacturers.

535. I thought you took it on the basis of lbs.?—Not lbs. in bond, but lbs. cleared.

536. Is there much of last year’s crop in bond?—The quantity in bond at the end of December, 1925, was 142,000 lbs. in round figures. That represents two or three or four years’ crops perhaps.

Chairman.

537. I see that the amount cleared last year was only 16,000 lbs. in round figures. Every reduction of 6d. in excise duty means a loss to the State in revenue of £18 per acre roughly?—Yes, on the basis that I stated earlier.

538. The question, then, for the Committee to consider is whether the loss of that £18 to the State per acre would be compensated for by the value accruing to the State.

539. Deputy Egan.—At the present moment does the Irish grower get any concession whatever on the tobacco he grows for export?—There is the allowance of 2d. per lb.

540. Chairman.—From the figures before us, if the preference last year had been 2/- instead of 1/6, the loss to the revenue would have been about £500?— Yes.

541. Deputy Egan.—If there was an inducement of 2/- per lb. on tobacco grown for export, is the witness in a position to say whether there would be a ready market for it or has he any knowledge of it?—I could not say. I have no knowledge of the market conditions, officially speaking.

542. Chairman.—The fact remains that since the introduction of the preference of 1/6 there has been an increase in clearances?—Yes, but so slight compared to the total quantity of tobacco cleared as to be almost negligible. There was a decrease in 1924, the first year in which the 1/6 operated as against the Colonial tobacco, but for the present financial year there is a slight increase on the 1924 figures.

Deputy Egan.

543. Could you give us any figures as to the export of tobacco?—The quantity of home-grown tobacco exported up to the 31st March, 1925, was 2,368 lbs., and for the nine months ending December last—that is in the current financial year—the amount was 33,700 lbs. You may remember that some time last summer a large quantity of home-grown tobacco was exported and that accounts for this figure of 33,000 lbs. odd.

544. That was tobacco that had accumulated in bond?—Yes.

545. Then the only concession they get at present is the 2d. per lb.—Yes, on export.

546. It is only natural, then, to assume that if they got, as was suggested by certain witnesses, 1/6 per lb. for export, the position for them would be better?—As regards that a difficulty might arise in the case of English and Colonial growers. They would probably object on the grounds that this was bounty-fed tobacco and they would ask to have a countervailing duty placed on it.

547. Is Irish tobacco on the same basis in England as Colonial tobacco?—Yes. The point is that if we gave our growers 1/6 per lb. on our tobacco that we exported there would probably be an immediate outcry from the Colonials to get the same treatment, so that one would neutralise the other. They would complain that this bounty-fed tobacco was getting an unfair advantage in the English markets.

548. Deputy M. Doyle.—But the Colonials produce their tobacco under cheaper conditions than we do. It was stated that most of this tobacco comes from India and Nyasaland, where I imagine the cost of production would not be a fourth of what it is here.

549. Deputy Egan.—Supposing that we were able to increase the quantity of the tobacco that we export, would it come into competition with, say, tobacco from Nyasaland?—I could not speak with any official knowledge on that, but no doubt some of it would.

550. Chairman.—I want to be quite clear about this twopence allowance. Is it a statutory export allowance?—Yes; it is provided for by law.

551. Is it looked at the same as the excise allowance for the home consumption?—It is really the same thing. If tobacco is exported twopence is paid on the quantity exported. As the home grower is regarded as at a disadvantage of this twopence then, on the free trade basis, he gets an allowance of twopence in the rate of duty; that is the old rate of 8/- against 8/2 to preserve the free trade basis.

552. I noticed that when Deputy Mulvany moved a motion, on the occasion of the last Finance Bill, in connection with this matter, the Minister for Finance drew a distinction between twopence allowed on excise, for internal consumption, and twopence granted as a subsidy on export, and for that reason, I think, the motion was ruled out of order, because it was alleged to be putting a charge upon the public funds?—It means the same point—compensation for cost of production, due to excise restriction.

553. How is that figure of twopence arrived at?—It is a round figure. There is no basis in actual figures for it. It is merely an estimate, and probably a very liberal one.

554. It was decided by the revenue authorities?—No doubt they were asked their opinion when it was fixed upon, but it was a legal allowance granted by law.

555. It could be increased without legislation?—Oh, no; that is the authority for granting it.

556. But not for granting that sum?— It is this way as regards import duty. The law laid down a certain duty for imported tobacco and an amount for home-grown tobacco. It makes no difference about the matter being an allowance; it is the legal authority for giving twopence per pound upon tobacco exported. You could not increase it or decrease it without altering the law.

557. It is fixed by law?—Yes.

Deputy Sears.

558. In any of the colonies is that twopence provided for?—No, because they have no excise restrictions in the colonies.

559. Is there any market for shag in Ireland?—I believe not, or, at any rate, very little.

560. Chairman.—We had evidence today that the restrictions or regulations in regard to tobacco, in bond, were calculated to harm certain kinds of tobacco such as wrapper and cigars?—I take it that storage conditions are more the business of the manufacturers.

561. We were told the regulations did harm to the leaf because of the manner in which it had to be stored?—I do not understand how that could be. All these warehouses are owned by private individuals or companies. They are not State owned warehouses; and if the storage conditions in a warehouse were regarded as unfavourable by an individual he could go to another warehouse where the conditions were more favourable.

562. Deputy Egan.—Is the Irish-grown tobacco stored in Irish-owned warehouses?—Yes; they are State-controlled, but they are not State-owned warehouses.

563. Deputy Sears.—Is there a possibility of extending the trade for Irish tobacco for shag in London?—I am afraid I could hardly say.

Mr. John Nevin, called and examined.

564. Chairman.—When last had you experience of growing tobacco?—Last season, 1925.

565. The cost of re-handling tobacco has gone up considerably in recent years? —Yes, from 1915 to 1919 the cost of re-handling went up very considerably. The cost went up to 6/8 per day, which was a big change.

Deputy Mulvany.

566. You have been familiar with tobacco-growing in your district from 1908 up to the present?—Yes.

567. And, of course, all that time labour was cheap and remained so until 1915?— Yes, from 1915 to 1919 there were great increases.

568. In 1908 I think you started on the experimental stage?—Yes.

569. Labour was then very cheap?— Yes, and there were a great many people idle, and that was the reason why this industry was started.

570. Being familiar with the growing since 1908 you have seen the various stages of tobacco in leaf, cured and rehandled?—Yes.

571. What is your opinion about the quality of the tobacco in the years 1906 to 1915?—I believe we produced as good a quality as could be produced in any country in the world. I have that from an American expert. An American expert visited our place and he told Sir Nugent Everard that the tobacco was as good as any they re-handled in the United States.

572. During those years you had no difficulty in marketing your tobacco?— No difficulty whatsoever.

573. And I suppose the greater portion of it was purchased by Irish manufacturers?—A large portion. There was some sold in London and in Liverpool also.

574. But the Irish manufacturers bought a considerable portion of it?—Yes, I saw a consignment of 24,000 lbs. go to one manufacturer in the North of Ireland.

575. I suppose you smoke tobacco yourself?—Yes, I am smoking Irish tobacco since 1908.

576. And other tobacco before that?— Yes.

577. I would like your opinion when the home-grown tobacco was being used by the Irish manufacturers and when there was a blend?—There was no check in the earlier period, but whether there was a blend or not we smoked it.

578. Irish manufacturers were using a certain percentage of blend?—It was really as good without as with a blend. I am a heavy smoker and I desired no change.

579. Would you feel justified in saying it was better?—No, but it was as good.

580. The Irish manufacturers bought it and used it then, but they refuse to buy it now?—Quite so.

581. What do you attribute that to? Not to the quality of the leaf?—I do not know.

582. At any rate your evidence goes to show that it is a crop that should be encouraged from the amount of employment that it gives?—That is my principal point. I have seen it from the start and during the whole period. It increased employment for us. Round our place, mothers, sons and daughters were employed at tobacco. Lots of people have been brought from Navan, on occasions, to work at the tobacco, so great was the employment it provided in our district. It would be a terrible thing if the industry were let down, because a great lot of people would be thrown idle.

583. The sum and substance of your evidence is that you want to labour the point of the amount of employment it gives?—Yes, it gives a great lot of employment. Tobacco crop is also of the greatest service to the soil. The best wheat is grown on land after tobacco. It manures and cleans the land. The residue after tobacco, in bog soil does away with the need for artificial manure. I have seen the very best crops grown in bog soil after tobacco. I have twenty-two or twenty-three years’ experience, and I have seen the land changed wonderfully for the better after tobacco. I have seen the yield increased from 16 to 21 barrels of wheat and up to 28 barrels in the case of oats, and enormously increased in the case of potatoes. That improvement was entirely due to tobacco growing. It improves the soil wonderfully, and all the small holdings that have grown tobacco have greatly improved; it helps to keep the land in a very rich condition.

Deputy Mulvany.

584. You can grow a better crop of wheat?—Yes, much better. The tobacco is taken out in September. You have an early harvest and you have your wheat in a good dry condition. Therefore you are sure of good results. It makes the land very fertile. I have seen fine crops of oats on mountain land after it. I have travelled over four years for the Irish Tobacco Company. For the first three years Irish tobacco was appreciated and smoked by a great many. I made good sales until the Imperial Tobacco Company started in Dublin. They give a large bonus together with a discount. I was asked could I give a bonus. I could not in the way the Imperial Tobacco Company gives it. The traveller went as far as to say that Irish grown tobacco was the cause of the rise in the market. That was unfair. I was doing a nice trade previous to this. I sold tobaccos and cigarettes. I sold “Sunrise” and “Banba” cigarettes. There is no doubt that Irish tobacco can be sold and smoked.

585. You agree that from the point of producing more food, especially wheat, and from that of employment, tobacco growing should be encouraged?—Yes.

Major Everard, called and examined.

Major Everard.—May I say there is nothing original in my evidence. My figures and conclusions are based on what appeared from the Department, and as for my suggested remedies, in view of your ruling, I will have to amend them.

Chairman.—This particular Committee has only to deal with the question of excise remission?—Then I will not mention anything about exports.

586. What is the capacity of the re-handling plant you set up?—About one thousand acres. It was limited to 114, and that was grown in 1914 and 1915.

587. Who limited it?—The Department’s scheme. It was grown by money provided by the Development Commissioners.

588. What particular reason had they for limiting it that way?—You had better ask Mr. Keller. There were 114 acres for each centre, and a sum of £75,000 was allocated for this experiment by the Development Commissioners. There was one in the North and one in the South.

589. During the war did you sell tobacco in the English markets?—In the Northern experiment which I was overseeing we sold practically none in England up to the year 1918. We sold one and a half million lbs. from 1904 to 1918 in Ireland.

590. It suddenly declined in 1919?— Yes, owing to an imposition of Imperial Preference by the British Government. That put us in direct competition with the surplus product of coolie labour. Since 1919, except for one crop in 1923 which was bought for a certain reason, no crop has been actually sold. The Irish Tobacco Company took over in 1919, but no other manufacturer bought an oz.

591. Why was that?—There is a flat boycott against home-grown tobacco by the manufacturers. I have evidence here to prove it.

592. We should like evidence on that? —The first reason was, that from 1919 to 1924 Colonial tobacco came into the Irish market and was sold at perhaps 4d. per lb., although it had a preference in the duty of 1/4. We could not compete against that. From 1919 to 1924 we could not sell. Then in 1924 our Minister for Finance discontinued the preference to Colonial tobacco and left it on Irish. That is a preference of 1/4 and a 2d. export allowance to help the Irish grower. One manufacturer got the whole of the 1923 crop, but what happened was that the Irish manufacturers were very much annoyed because they would be deprived of a supply of cheap tobacco. In order for you to appreciate the conditions which have now obtained, I will say these few words. The annual trade of the Free State amounts to about 7,500,000 lbs. of which 80 or 90 per cent. is in the hands of the Imperial Tobacco Company. The other manufacturers are trying to maintain their trade by turning out a better article. Enormous sums of money have been expended in advertising brands in the Press and in supplying shopkeepers with highly artistic show cards. A proposal, to leave our tobacco practically free of duty as was done in other parts of the Empire, would meet with strenuous opposition from all parts of the trade, because the manufacturer, wholesaler and retailer, make their profits on turnover. The last thing the Imperial Tobacco Company would want would be to have a supply of cheap tobacco here. They are giving Irish manufacturers just enough to keep them alive.

In May, 1924, the manufacturers’ association, of which Mr. Goodbody was President, decided to raise the prices of the various brands by 6d. per lb. The Irish Tobacco Company refused to do so. In a little over a year’s time they were squeezed out of the trade. As to the attitude of the Imperial Tobacco Company towards Irish tobacco:—In 1924, just after they came over, we wrote to the Head Office in Bristol asking them to consider the purchase of 24,000 lbs. of home-grown tobacco at a preference of 1/4 and 2d. excise allowance, and I pointed out various things such as that they were coming into the Saorstát. They sent over people from their Head Office who looked at it hanging in the barn. When it was packed they examined the samples and bought it at 1/6. Last year, about December, we offered the Imperial Tobacco Company the 1924 crop, and the leaf department suggested that we should send it on direct to one of their branches here in Dublin. The leaf manager and myself sampled that tobacco, and he agreed with me that it was a much better quality than the 1923 crop. They kept it about three weeks, and then I got the following letter, dated the 17th January, 1926:—

“We have now carefully examined the samples of the 1924 crop which you have recently submitted to us, and regret to say that the tobacco is unsuitable for our manufacture. We therefore are unable to make an offer for it, and we shall be glad to know to what address we shall return the samples.”

That is to say, a firm doing a trade of about six million lbs. could not do with something under 10,000 lbs. I pointed out that there were some Imperial Branches in England, and they sent back a reason for not buying which both Mr. Keller and myself found non-existent. I think that fairly explains the Imperial attitude.

Now, as to Mr. Goodbody, he was summoned to this meeting as Chairman of the Irish Manufacturers Association.

Chairman.—He was only speaking for himself?—He is the Chairman. All I have got to say is, that it seems to me an extraordinary thing that he should speak only from his own point of view. Sir Nugent wrote to him about a week before, asking him to see the samples of the 1924 crop which were lying with the Irish Tobacco Company. He did not do so. Another extraordinary thing is, he had no considered proposals, from the manufacturers’ points of view, to lay before us. It almost seems to me that some knowledge he got after he entered this building rather changed his mind as to the evidence he was going to give. He stated that it was impossible to use more than 10 per cent. We have got this manufacturer’s opinion, and his firm on the 27th November, 1919, suggested that there ought to be a blend of 50 per cent. Then also on the 12th December, at a banquet in aid of the I.I.D.A., he stated he would strongly recommend Irishmen who smoke to try the native article. He said this as one who had smoked it himself, and yet he makes this statement. As to his 10 per cent., Mr. Keller was telling you of a certain manufacturer who, in the years 1908-09, bought 250,000 lbs. of Irish leaf. Mr. Goodbody stated here that as far as he could remember he had only bought what was grown at two places. As a matter of fact, he was the manufacturer who bought that 250,000 lbs. That is all I have to say about that. In answer to a member of the Committee, he said he was obliged to use a 50 per cent. blend, which was due to his own circular.

593. Deputy Doyle.—What about the remark of Mr. Goodbody that he could not wrap plug with any Irish-grown tobacco?—I have seen Irish leaf used as a wrapper in his factory.

594. Deputy Mulvany.—I think Mr. Goodbody stated here that he never used any Irish tobacco except what he grew himself. Would that be true?—That is what he stated. I say that he bought 250,000 lbs. weight, the whole Irish crop. I know that for a fact, and Mr. Keller can back me.

595. Deputy Doyle.—When the Imperial Tobacco Company refused your samples did you ask them why?—Yes, and they gave non-existent reasons. If you want to know, they said it was because mould developed very quickly on the samples. Mr. Keller and myself examined the samples, and except on one sample we did not find any traces of fresh mould after they returned them.

Chairman.

596. Have you any suggestions as to how the opposition of Irish manufacturers to Irish-grown tobacco can be overcome? —No, I am afraid I cannot, because it is their interest to put down home-grown tobacco. I do not see why the Imperial Tobacco Company should dictate to the farmers of Ireland as to what crops they should grow.

597. In your opinion the Irish manufacturers are allowed to exist, and are tolerated by the Imperial Tobacco Company? —That is so; they are only allowed to exist. No one has the capital necessary to attempt to fight them, or to put up cheaper brands. The Irish Tobacco Company was absolutely squashed and is closed now.

598. Do you think that any partial remission of excise duty would be sufficient to induce manufacturers to buy Irish tobacco?—What I am thinking of is, not so much inducing Irish manufacturers to buy, but to have a crop grown which makes wealth. As long as tobacco is grown I do not think it matters to the State where it is sold. If the excise allowance is increased to two shillings, and if that two shillings is paid to the re-handler as soon as the tobacco is bonded, whose business is it where the tobacco is sold? If the re-handler knows that one shilling or one and sixpence is available he will get the tobacco out of bond as quickly as possible. In that way you get increased national wealth, or three and sixpence for every two shillings paid, which seems to be pretty good business.

599. Deputy Egan.—Where would you get a market for all the tobacco you grew?—There is an alternative market. I believe the annual imports come to about 229 millions.

600. Deputy Sears.—The British market?—Yes.

601. Deputy Egan.—Would you favour the growing of tobacco for export, rather than for home consumption?—Until there is enough grown to make Free State manufacturers say “We want it.” When enough is grown it would be for manufacturers to say how much subsidy they want, so as to guarantee the growers, say, an average of one and sixpence.

602. I want to be enlightened on this point. I find it very difficult to understand the reluctance of the Irish people to smoke Irish tobacco. You are endeavouring to make the case that the manufacturers want to boycott it. As a business man I do not understand what the manufacturers have to gain by that. I presume you mean that the Irish manufacturers do not want cheap tobacco. Can you explain that?—Yes, because their policy is to keep up their prices.

603. Surely if manufacturers can buy cheaply they can sell cheaply?—They do not want to sell cheaper.

Deputy Sears.—They can sell the dearer class where they like.

604. Deputy Egan.—When you said that manufacturers do not want to buy cheaply were you referring to the Imperial Tobacco Company?—All manufacturers are competing with the Imperial Company and they buy only the very best American tobacco. They cannot afford to put cheap tobacco into their brands. If they did they would lose their trade.

605. Can you suggest any particular business reason why Irish manufacturers, or, for that matter, any manufacturers, should deliberately set themselves out to boycott the growing of Irish tobacco? What would they have to gain by doing that?—The Imperial people are the only people. They lose if tobacco is grown in Ireland, as a lot of little manufacturers would be springing up and competing at prices that they did not care to touch.

606. With their tremendous capital resources would they not be in a position to take the advantage here?—Do you think the Imperial Tobacco Company wants to scrap all the brands that they have spent hundreds of thousands of pounds advertising?

607. Why not?—It is not their policy at present.

608. You suggested that there should be a total remission of duty on tobacco?— I said that was one solution.

609. Supposing there was a total remission of duty would not the Imperial Tobacco Company be able to take advantage of it?—Yes, but they would much rather not do so, as they can buy cheaper tobacco now than any other manufacturer. If tobacco was grown in Ireland small manufacturers could buy it at the same price.

610. I do not agree with you there. I cannot understand why a big combine like the Imperial Tobacco Company could not buy on better conditions than small Irish manufacturers, no matter what kind of tobacco?—You are looking a long way ahead.

611. I am trying to get an explanation as to why the Imperial Tobacco Company or the Irish manufacturers would not provide Irish tobacco if the public would smoke it?—You are on the question of quality.

612. Why should they want to boycott Irish tobacco if they could have a market for it?—There is not enough of it. The industry is much too young and they do not want to see it growing up. As to the quality, I may say that the Irish Tobacco Company, before it was squashed, between 1912 and 1924, sold over half a million lbs. Between 1916 and 1924 they sold 365,000 lbs., of which 181,000 lbs. were Irish. Lord Dunraven and Sir Nugent Everard supplied cigarettes to practically all the messes of the British Army. We exported cigarettes and cigars to America. It is simply the case that the manufacturers do not want to change their present policy.

613. What was the cause of the disappearance of that trade?—Specialised competition by the Imperial Tobacco Company. They followed us to every district where we had a big trade, and it gradually faded away. We have no trade now and the Company is closed.

614. In other words, your capital resources were not as big as theirs?—We had very little capital.

615. Is not that the history of the Irish breweries and distilleries, and is not that due to the operations of trusts all over the world?—Perhaps so.

616. Chairman.—In your opinion, nothing short of a total remission of excise duty would give a chance of developing the home market?—In my view, if you suggested that, the Minister for Finance would say it would be too big a loss to the revenue. The way that I suggested would be a gain in national wealth.

617. Deputy Egan.—Do you think that the best prospect for the tobacco trade would be to cultivate it for export?—I said that I would not mention the word “export,” but, as you force me, I will say that is the one and only way.

618. Do you think there is a better prospect of a market for Irish-grown tobacco in England than in Ireland?—Mr. Keller, who was on his holidays at the time, and myself went to the biggest brokers in London. We saw all the samples of Colonial tobacco and went most carefully into the question. It is our considered opinion that the Irish tobacco will go to as good a price in the British market as tobacco of the same type and grade from any other colony. The other tobaccos have had five years’ start and we would take a couple of years to find out the sort that suited the country. We can grow any sort of tobacco in Ireland. Owing to this being a northern climate Irish tobacco is rather mild and wanting in flavour, but it can be blended with a variety coming from another country, which produces a similar type, to the best advantage.

619. You heard Mr. Hassell’s evidence, and the suggestion that there should be an allowance of one-and-sixpence per lb. on Irish tobacco for export purposes. Do you consider that would have reactions in England, and that colonial growers would make a noise?—You can always slap back at colonial growers and ask them why they have not the same excise duty as we have.

620. Supposing we gave the Irish farmer a bounty of one-and-sixpence per lb. on tobacco he grew for export?—The Irish farmers cannot be taken as a separate entity. It must be the re-handler. He prepares it for market. No single grower would have enough of one grade to fill a hogshead.

621. In other words, it is not a practical proposition to give an allowance to the farmer at all?—No. You give it to the re-handler. My point is, no matter what system tobacco is grown under, it should be sent to a re-handler. The re-handler should be licensed by the Customs and Excise authorities and by the Department of Lands and Agriculture so that no tobacco could be sent to any market that was not fit. What I want to prevent is having a lot of muck packed and giving two shillings export allowance on it. The tobacco should be passed by the Excise people and by the Department as marketable tobacco. The other point is that it is absolutely essential that the growers should be paid cash on delivery to the re-handler. As far as I see there is no difficulty about having an arrangement between the re-handler and the Department, or in some other way, so that the growers should be paid as soon as the tobacco is bonded.

Deputy Egan.

622. Your suggestion is that this 1/6 export duty should be paid through the re-handler?—The preference is 1/4 and the excise allowance, 2d. That at present goes to the manufacturer. It was never meant for the manufacturer. It was meant for the grower.

623. That is what I am trying to get at. I want to know how it would be passed on to the grower?—Well, then, give the excise allowance to the re-handler.

624. Will the re-handler hand it to the grower? You are satisfied that the grower would get a proper proportion of the 1/6 if it were given to the re-handler? —I am quite satisfied, because the re-handler would be under the direct supervision of the Department. He would, under this scheme, make percentage valuations of every man’s tobacco, and the total receipts would have to be checked by the Department.

Chairman.

625. I think you proposed 1/- as the minimum figure for an export bounty?— At the time I proposed that, I had not thought of one thing and that was that in the case of a new grower he would have to put up a shed. I do not know the exact cost of a shed and equipment now, but it would probably approach something round £100. That, on a six-year loan, would come to about £20 a year. In view of that fact, the man who grew what they call an average crop at 2/- excise allowance would make a profit of about £22 after paying for his manures, wages, re-handling, overhead charges and instalment on barn. I am talking about tobacco at 3/- now, and a new man who had not much experience might have only 400 lbs. That tobacco might only work out at 2/6 to him, that would be 2/- allowance and 6d. in the other market. He would have only a gross return of £50 whereas his outgoing would be £66, a cut in wages of £16. I do not think, if you want the industry to go ahead, that anything much less than 2/- would really do it. An old grower could get along perfectly well at 1/6, I am quite sure. I would grow as much as I could at that figure, and it would work out at about a profit of £40 or £50, but then I have got skill and experience.

626. Do you think that the bounty or allowance of, say, 1/6, would have to be continued indefinitely, or would it be only provisional?—I should say let it be temporary, say, for 5, 6, 7, 8 or 10 years perhaps, and then, if you like, do the same as is done with the beet. Stimulate tobacco-growing and then it will be worth the manufacturer’s while to strike out against the Imperial, but this industry is almost squashed completely. It has got to be revived again.

627. It would be several years before even 200 acres are grown?—Yes, possibly.

628. And consequently the loss to the Treasury would not be very great?—No.

629. You do not think that a corresponding reduction in the excise, that is to say, if you reduce the excise from 6/8 to 5/-, would have very much effect?—You would have to ask the Imperial Tobacco Company; I could not tell you.

Deputy Sears.

630. Your case is that the Imperial Tobacco Company do not like to see the home supply growing?—Certainly not.

631. And your case with regard to the Irish tobacco manufacturers is that in their struggle for existence against the Imperial Tobacco Company they have to buy the very best tobacco and they cannot afford, therefore, to use Irish tobacco?— Yes, you have got it absolutely.

632. You say that as good tobacco can be grown in Ireland as in any country in the world?—I said tobacco that would blend. I do not say that Irish tobacco is for a moment as good as the best Kentucky, but I say it is a very workable tobacco.

633. It is a good tobacco in a ten per cent. blend?—I was thinking of 50 per cent.—anything from 30 up to 80 percent. If the Irish tobacco is good you can blend as much as you like. The trouble with this experimental tobacco was that such a lot of poor tobacco was produced which had to be used. That is the point. When we get experience, men who do not take trouble to grow it properly will drop out, and the men who do grow it properly will produce good tobacco.

634. Do you consider there is an assured demand across in England if you had the assistance of a larger allowance?—I am perfectly certain that we have an assured market at prices at least equal to the Colonial tobacco. My point is that we want that 2/- to allow us to compete against the product of coolie labour.

635. Deputy Egan.—Supposing we did begin to get that trade on the English market, would it not be very natural for the Colonial producers to look around for a bounty to make up for that loss in their market?

Chairman.—The bounty on seven or eight million pounds would be very expensive if you gave 2/-.

636. Deputy Sears.—How do you fix that seven millions?—I am taking the figure which Mr. Keller gave, that is, about 8 per cent. of 229,000,000 lbs.

637. Deputy Mulvany.—You heard the statement made by Mr. Goodbody here the other day that Irish tobacco was only bought for one purpose in the English market—that was for the manufacture of “shag”?—My answer to that is, why did he buy 250,000 lbs. of Irish tobacco in 1908-09?

638. Chairman.—He said it could only be used in Ireland for roll tobacco, which is going out of fashion, and in England for shag?—All I have got to say is, how did he manage to use all that Irish tobacco in two years, if that statement is correct and he has only a small trade?

Deputy Mulvany.—His evidence did not impress me very much, nor do I think it impressed any other person.

Deputy Sears.

639. You spoke about tobacco raised by coolie labour. Does that coolie labour apply only to the eight per cent., the Colonial tobacco?—I was thinking of India and Africa when I said that.

640. That would be the British Empire tobacco—that would be eight per cent.?— That is a statement made by Mr. Keller, which I am sure is correct, that eight per cent. of the tobacco on the British market is Empire-grown. There is one thing further I would like to say. The crops from 1919 to 1925, with the exception of the 1923 crop, are practically still unsold simply because of the action of the British Government and our Government, and I think it would be only fair if you decide on fostering the growth of tobacco that any allowance you make shouid be made retrospective of these crops because they have been rendered unsaleable entirely through Government action.

Chairman.

641. Is that in bond? They have not brought it out yet?—Except about twenty thousand pounds which is at present in bond in England and which, as a matter of fact, has not been sold because we were awaiting the result of this Committee.

642. What action of the Government was that?—The imposition of Imperial preference.

Deputy Sears.

643. While one can understand the home product being subsidised against the foreign product, would you not think that an objection might be raised against subsidising the home product for export against the supply raised by coolie labour?—Who makes the objection?

644. On economic grounds?—Who would make the objection—you mean people in Ireland?

645. Yes. I do?—My answer to that would be that after all—I suppose you mean sentimentally—talking business, is it not business to spend 2/- to get us 3/6, which is what it would mean? If you give the grower 2/- he brings back 3/-or 3/6.

646. The State gives the grower 2/- and the grower gets 3/6?—The re-handler gets 3/6 which eventually goes to the grower. That means that the careful, experienced grower will make a fine profit on it, and God knows it is time the farmers of this country got something to make a profit on.

647. Is there any immediate possibility of operating on the home market, of getting the manufacturers to utilise the home-grown tobacco?—I have hawked around the 1920, 1921, 1922 and 1924 crop to the Irish manufacturers and they will not look at them. Why should they? They have a settled policy and they are not going to shift from it unless they are made to.

Deputy Egan.

648. Would not you say that that settled policy is dictated to a certain extent by the demand of the public for the particular class of tobacco they smoke?— I say a blend of Irish tobacco improves its quality.

649. If you could persuade the general smoking public of that you would be all right. That is the difficulty?—During the years 1913 to 1924 and up to 1925, before they started to squash us, the Irish Tobacco Company did every bit of trade their capital was capable of doing. As I tell you, we used 50 per cent. Irish tobacco.

Deputy Mulvany.

650. There is one thing that I take notice of, and it is this—it has been stated here by Mr. Keller, Major Everard and other witnesses, that the Irish manufacturers have boycotted or are boycotting the buying of Irish tobacco. Now, while all Irish manufacturers have been circularised and asked to attend here and give evidence at this Committee, they have boycotted it. They have boycotted this Committee as well as boycotting the buying of Irish tobacco.

Chairman.—We have not received their final answer as yet.

Deputy Mulvany.—It may be for years and it may be for ever.

651. Chairman.—Is there any other matter you would like to mention?

Witness.—I would like to read for you an extract from the proceedings of a Committee constituted by the Royal Dublin Society in the year 1830. It is a case of history repeating itself with one important difference. This Committee was addressing itself to a Parliament contemplating the suppression of the industry in Ireland, whereas you are here now to try your best to make this industry continue and flourish in this country. The extract reads this way:—

“Well may the bare suggestion of any scheme that has a tendency to withdraw from the country or even to diminish this source of such blessings, justify the unanimous expressions we have received from all quarters of anxiety for its preservation and ourselves, in recommending this part of the subject to your consideration in the most earnest manner.

“The next result of the existing state of things has been the production of an article of general use on cheaper terms. The consumer has, no doubt, enjoyed the benefit, and we are not aware that any equivalent inconvenience has attended it. Any apprehended diminution of revenue from increased home production has, we believe, hitherto been countervailed by a general increase of consumption. In Ireland, since the year 1779, the growth and sale of tobacco have been entirely unrestricted, while all foreign tobacco pays 3/- per lb. duty.

“We conclude this our report by earnestly expressing a hope, on the ground of expediency as well as humanity, as we cannot without anxiety contemplate any abrupt check on this infant source of our industry, that must not at once operate to the derangement of invested capital, the frustration of existing arrangements, the disappointment of hopes, and, above all, the dismissal from profitable employment of thousands of our labouring and long-suffering people.”

The Committee adjourned to Tuesday, March 23rd, at 11 a.m.