THE FIANNA FAIL ECONOMIC PROGRAM placed major strains on a cabinet, administrative, and parliamentary system derived from more laissez faire British practices. Scrutiny was reduced and established practices overridden as power passed to Lemass and his officials. The cabinet was limited to examining major projects, though it cannot be coincidental that discussion appears fuller during Lemass’s absences when Thomas Derrig was acting minister. This lack of consultation reflects Lemass’s style of work and his department’s skill in restricting scrutiny by Finance. On many occasions under Cumann na nGaedheal, Finance defeated unpalatable proposals by delaying a response; in May 1932 to overcome this tactic, it was decided that ministers could bring matters to the cabinet without prior consideration by Finance if the latter failed to respond to proposals within a fortnight.
In November 1933 a subcommittee of ministers was established to report on ways of eliminating delays resulting from Finances scrutiny (Fanning 1978, 218). Industry and Commerce proved adept at exploiting the Emergency Imposition of Duties Act, which was passed at the onset of the economic war, and they evoked a sense of emergency, even when unwarranted, to secure rapid cabinet confirmation of duties. The department frequently commissioned the parliamentary draftsman to draft a new order before referring the proposal to Finance, which could be left with only one day to respond. Such behavior caused Finance Secretary McElligott to protest that in respect of emergency import duties “the functions of this Department are being reduced to those of the Post Office.” Emergency duties received little consideration in the Dail as they required no legislative confirmation if limited to eight months, while orders sent to the Dail could be accepted or rejected but not modified. Scrutiny of budgetary duties was equally lax, and there is not a single instance of Finance or the cabinet altering the schedules submitted by Industry and Commerce. Dail scrutiny was also limited given the volume of tariffs, and while Finance objected to Industry and Commerce’s failure to inform it, the department supported this trend. One senior Finance official endorsed the tendency to impose duties by executive authority with reduced Dail scrutiny and suggested that the process be extended to cover all taxes (F22/50/33).
Ministers and officials displayed common cause in extending executive authority, evoking the sense of a country at war to further this end. De Valera told the Dail in April 1933 that the cabinet needed more time away from parliamentary duties to tackle national problems and suggested that the Dail should be given “say six months holidays to get that work done” (PDDE 7 Apr. 1933). Lemass kept details of his industrial policy secret, arguing the need for confidentiality, to the fury of opposition deputies, causing Fine Gael T.D. James Dillon to accuse him of acting as “prosecutor, judge and jury between himself and any individual citizen” (PDDE 21 Nov. 1937). The oppositions greatest criticism was reserved for ministerial control over the granting of import licenses or of licenses under the Control of Manufactures Act. Licensing was criticized because it enriched the beneficiaries, whose names were not disclosed. McGilligan claimed that tariffs and licenses “should mainly enrich the community and not individuals” (PDDE 19 June 1935) but did not specify how this could be achieved. Opposition deputies pressed for disclosure of the names of licensed foreign firms, and Lemass was forced to establish a public register in Industry and Commerce.
Fine Gael and the Economy
Lack of information was a major plank of opposition criticism because the issue did not commit the party to totally opposing protection. Cumann na nGaedheal walked a sensitive path between criticizing government programs and avoiding accusations of free-trade sympathies or of lack of patriotism. The general election of January 1933 resulted in an overall majority for Fianna Fail, and Cumann na nGaedheal subsequently merged into a new party, Fine Gael, which included the Centre party and the neo-fascist Blueshirts (Fanning 1983, 114–15). Fine Gael attributed all economic ills to the economic war and believed that, as W. T. Cosgrave stated in 1934, successful industrial development was impossible where agriculture, “the main industry of the country, is not a success” (PDDE 17 July 1934). However, the party was not prepared to restore payment of land annuities (McMahon 1984, 70–71), and would have been unlikely to totally reverse protection. In 1937 James Dillon argued that Fine Gael “believed and still believe, that in the existing state of the world a moderate use of tariffs can be defended on empirical grounds” (PDDE 10 Nov. 1937). However, the party criticized the speed and scale of protection and its implications for government control, for inflation, and for inefficiency. In June 1932 McGilligan begged that Fianna Fail “should not speed the machine too fast and beyond what the factories can cater for” (PDDE 17 June 1932), while Dillon claimed that national self-sufficiency “means in the heel of the hunt, either social evils of the Moscow variety or social evils of the Berlin variety” (PDDE 23 Mar. 1938). Fine Gael believed that tariff increases should be balanced by reductions in other taxes, and McGilligan argued that had this been done “there might have been a chance that a tariff policy would not be made the subject of violent Party disputation” (PDDE 19 Oct. 1932).
Fine Gael was careful to avoid charges of being less nationalist than the government and tended to occupy the nationalist high ground on some issues. Alleged evasion of the Control of Manufactures Act and government licensing decisions proved valuable weapons in this purpose. Richard Mulcahy repeatedly asserted that “aliens are getting into new industries and undermining industries already established” and asked, “How many factories have been opened by persons with the names of Matz, Gaw, Lucks, Galette, Wigglesworth, Woodington?” (PDDE 24 May 1934). The names changed but the tenor remained the same: that foreigners were benefiting disproportionately from protection. Patrick McGilligan attacked the promoters of a razor-blade factory on the grounds that “one is a gentleman who came to this country from Palestine via Great Britain and the other is a man who came from Belfast via Tanderagee.” He attributed this favoring of foreigners to Lemass’s Huguenot blood, boasting that he himself was “a native Irishman without any tinge of foreign blood in me at all” (PDDE 12 Dec. 1934).
The opposition in the Dail exercised little influence on economic policy. Initially the Senate proved more effective because Fianna Fail was in a minority and because of the Senate practice of dissecting legislation. It passed a total of thirty-four amendments on the control of prices bill and more on the control of manufactures bill. Cosgrave was irritated by Senate thoroughness when he was in office, frequently cutting debating time and waiving rules (O’Sullivan 1940, 317, 198–201). It is not surprising that Fianna Fail restricted and abolished the Senate, replacing it with a more amenable body.
Placating the Grass Roots: Industrial Decentralization
While the legislature was given short shrift, Fianna Fail proved responsive to local interests. Most Irish towns sought a new factory or revival of an old industry, and local development committees mushroomed following the 1932 election. The public meeting called in Bray Town Hall in August 1932 to consider the towns industrial prospects was typical of many such occasions. Committees collected funds and, in theory, planned for industrial development. A Cork group prepared a pamphlet listing buildings suitable for factory use (Ir. Ind. Yrbook. 1933). These groups frequently evoked nationalism and memories of an economic golden age to generate enthusiasm. A meeting held in Hacketstown, County Carlow, in December 1933 was told that the town had once contained two tanneries, and amid deafening cheers a resolution was passed, which was seconded by Michael Barry, “brother of the boy martyr Kevin Barry,” supporting the reestablishment of the industry (Ir. Ind. Yrbook. 1934). New Ross laid claim to a tannery on similar grounds of industrial tradition (Inds. A. Room 303, 43/2). Many committees proved successful at raising finance; those in Nenagh and Kilkenny identified a prospective investor. However, the majority did little more than collect money and lobby ministers and officials. The letter from Ennis to De Valera seeking his support in establishing a cement factory is not untypical.
Lemass and his officials appear to have responded to such letters and met deputations, in contrast to the reluctance shown by Cumann na nGaedheal. This contrast is most evident on the question of beet sugar factories. Cumann na nGaedheal informed all pressure groups that the decision on location rested with the proprietors. The interdepartmental committee in 1933 urged to no avail that the location of factories “must be considered on economic grounds and on these alone, and that no other considerations of any kind whatever should be entertained if disastrous consequences are to be avoided.” Deputations and letters multiplied and the cabinet devoted several meetings to considering possible sites (S4128). A wish for geographical spread caused cabinet numbers to choose Mallow, Thurles, and Tuam. At the Tuam sod-turning ceremony De Valera expressed the governments determination to spread the benefits and to ensure that the west would get “its share of whatever employment resulted from government action” (IT 25 Nov. 1933). The Leinster Beet Growers Association felt that they had been deprived by this decision and pressed for a fifth plant. However Agriculture opposed further dispersal on the grounds that “geography brought a factory to Tuam which has not yet proved a success” (S4128).
Fianna Fail was no less active in dictating the location of privately owned concerns. Few politicians were qualified to pronounce on arcane matters of tariff levels or of the degree of fabrication; the political dividends from a new factory were intelligible to all. Decentralization appeared to reconcile the paradoxes of preserving rural society while achieving industrial expansion. It offered political dividends, gave the impression that industrial employment was in the governments gift, and proved a major factor overriding antipathy to foreign industry. Whereas Irish concerns had local roots, foreign industries were footloose and could be directed to areas lacking indigenous enterprise.
The official wish was to spread industry as widely and thinly as possible with an apparent preference for maximizing distance from Dublin despite considerable unemployment there. Dunlop’s wish to locate in Cork was accepted with reluctance. Lemass minuted that he had made unsuccessful efforts to divert the company, adding that “a refusal to agree to either Dublin or Cork would jeopardise the scheme” (S6560A). A potential tannery investor who informed officials that he had decided to locate in Bray was informed that “the farther he decided to go from the city the greater attraction would he lend to his proposal” (TID 43/63).
Decisions on location were determined with scant respect for economics. Building suppliers Brooks Thomas were urged to set up a plant in Bandon, County Cork, despite the firm’s opinion that it “would be an impossible centre” involving substantially higher costs (TID 1207/171). A Welsh-based tannery who wished to locate in Drogheda, close to several shoe firms, was informed that the minister would prefer and might make it a condition that another site be chosen. The tannery was directed to Tralee, Sligo, New Ross, and Portlaw, opting for Portlaw on condition that the state drain a disused canal. Despite the cost, this decision was greeted with delight because it involved reopening the Malcolmson cotton plant, which had been closed for over fifty years, providing a concrete expression of industrial regeneration. A normally prosaic official minuted, “My own feeling is that there is such an attraction in having this old site occupied and employment given in the district that it would be worth while meeting this part of the application. We have had many deputations from Portlaw district” (Inds. A.Room 303).
J. H. Woodington was refused permission to build a tannery adjacent to his Drogheda shoe plant or in an adjoining town. He was informed that the minister preferred a town that did not have an industry and was dispatched to Mountmellick following local representations, despite the lack of a suitable site. When he turned his attention to Portlaoise because of an offer of local capital, officials proposed Tralee, “where all the capital necessary would be available.” When he demurred because of distribution difficulties, Lemass informed him that a competing tannery was being established in Passage West and “that it is improbable that any facilities would be granted for the establishment of a similar tannery at Maryboro” (Portlaoise). Ultimately the Woodington tannery was located in the old workhouse at Gorey, replacing a proposal that had fallen through. Mountmellick and Portlaoise protested. Mountmellick was provided with a bag factory that employed females but responded with a protest mission and the threat, in the teeth of ministerial opposition, to set up a suitcase plant (presumably employing men), competing with a plant that they felt had been unfairly allocated to the adjacent town of Portarlington (Inds. A.Room 303; TID 43/75). Portlaoise became the location of Irish Worsted Mills.
|Dublin City & Co.||42,082||35.6||55,105||39.9||13,023||65.5|
|Rest of Leinster||22,261||18.8||26,736||19.3||4,475||22.5|
|Cork, Limerick & Waterford cities||12,394||10.5||14,158||10.2||1,764||8.9|
|Rest of Munster||24,460||20.7||24,607||17.8||147||0.7|
Source: Census of Population.
Despite these efforts, the 1936 population census revealed that gains in manufacturing employment were concentrated in the Dublin area and Leinster. Munster, outside Cork, Limerick and Waterford, gained 147 jobs; Connacht and Ulster gained 348 and 133 jobs respectively (see table 5). This situation was undesirable given Fianna Fail’s electoral support in the west and the aura attached to the area. Industrialists were prepared to locate in the midlands and southeast but not west of the Shannon or in border counties, except Louth. An exclusive manufacturing license was granted to Irish Sewing Cotton “because the Minister of the day wished to get employment in Westport,” County Mayo (CVO evid. par. 14885).
In theory Lemass could dictate location to firms needing a license and could use tariffs and quotas, trade loan guarantees, or duty-free licenses to influence others. Such efforts resulted in hard bargaining that generally led to a compromise. The textile firms Gentex, Salts, and Irish Worsted Mills were directed to the west, all to no avail. Lemass was “disposed to press Sligo” or “a western port” as the location for the Gentex plant, dangling a reserved commodity license as a bait. When Father Kelly, a Longford priest, attempted to lobby for this plant, he was told that “although Longford was not west of the Shannon the Assistant Secretary thought there was a chance of a visit” (Inds. A.R. 303). Gentex located at Athlone on the east bank of the Shannon. Lemass ordered Irish Worsted Mills to inspect sites in Cork, Kerry, Cavan, Donegal, Mayo, Roscommon, and Sligo, but Dublin accountant Vincent Crowley explained that only Naas, County Kildare, could provide satisfactory water, labor, and market access. Crowley pressed his case “with some heat” but was informed that “the Minister would rather abandon the whole scheme and make arrangements with some other group than approve Naas (TID 19/145). The company’s compromise suggestion of Portlaoise was accepted because of the need to placate that town over the loss of a tannery.
The associated firm Salts was anxious to locate close to Portlaoise in the interests of efficiency. However, the acting minister, Thomas Derrig, informed John Leydon “that every effort should be made to have the factory located at Ballina,” though he subsequently compromised on any town west of the Shannon. When Vincent Crowley opted for the western town of Ballinasloe this was rejected, because it was earmarked for the Dubarry shoe plant, which had been forbidden to locate in Dublin. A mutual game of bluff ensued with one official reporting that insistence on a western location “means that we shall lose the industry altogether,” while Mr. Crowley was informed that approval would be conditional on this. In the meantime a midlands businessman and local Fianna Fail T.D.’s lobbied on behalf of Tullamore. Salts expressed willingness to locate in Templemore, Tullamore, “or any town approximately the same distance from Dublin,” and Tullamore was approved (Inds. A.Room 303).
The most extreme cases of decentralization involved efforts to locate industry in remote Irish-speaking areas where official policy sought to retain traditional language and life-style. In 1937 the Gaeltacht subcommittee of the cabinet, chaired by Derrig, sought to have several new industries such as the Gentex spinning plant and a pottery (subsequently based at Arklow) reserved for Gaeltacht areas and wished to promote other industries in competition with existing plants. These plans, which posed a direct challenge to the authority of Industry and Commerce, were sabotaged by a joint effort with Finance, and Derrig sought to bypass both departments by bringing projects direct to the cabinet. Lemass, who viewed the Gaeltacht problem “as solely an economic problem arising from considerable congestion of population,” proposed that younger workers be encouraged to migrate for training and employment. While Derrig’s proposal was rejected, the cabinet agreed that Gaeltacht plants should be given preference in government contracts, despite higher costs (S9164).
Decentralization added a further layer of distortion and affirmed the primacy of political and social aims. Production at the Jordan plant, located at Ennis on official instructions, was delayed for three months because of lack of housing for workers and was subsequently hampered by lack of water (TID 1207/602). A Northern Ireland joinery firm forced to locate in Letterkenny under the terms of its license discovered that all joiners were fully employed on housing schemes and was forced to recruit workers from a distance at considerable cost (TID 1207/26). These directives raised production costs and permitted companies to extract compensating concessions. The difficulty of attracting industry to Galway led Lemass to “compel” a hat factory to locate there, with the added attraction that it would employ Gaeltacht workers. R. C. Ferguson explained that “in consequence of this he was simply bound to support it,” although the hats led to “something approaching a revolt … among the consumers” (CVO evid. par. 14839). The Dubarry shoe company demanded a trade loans guarantee plus licenses to import shoe leather and components duty free in recompense for being sent to Ballinasloe. While licenses for components were invariably refused, a civil servant minuted that “the circumstances of this particular factory being established in Ballinasloe might however justify a change in policy,” though Lemass vetoed this concession. A deputation from the town in June 1938, prompted by the firm’s difficulties, claimed that it merited special treatment by virtue of location, and officials arranged for the company to manufacture shoes under license from a Bristol firm (TID 1545).
|Dublin Co. B*||42||43||43||42||59||53||54||52|
|Rest of Leinster||18||19||19||20||12||15||16||17|
|Rest of Munster||16||14||13||15||9||10||9||11|
Source: Census of Production 1936, xxv; 1938–1944, xiii.
* The drop in the percentage of net output produced in Dublin is atttributable to a decline in production at Guinness’s brewery.
The more intensive drive for decentralization in the late thirties appears to have been ineffective (see table 6). Rural areas gained little: as consumers they were net losers. Western areas dominated by small farmers were net losers from programs to grow wheat, sugar, and animal feedstuffs. This caused Agriculture Minister James Ryan to propose, without success, that tobacco growing be reserved for smaller farmers (S11692); it was also the motivation behind the ill-conceived industrial alcohol scheme, which proposed using potatoes as a raw material. A possible reduction in oil imports was only a subordinate consideration. The idea, first mooted by the Commission on Industrial Resources (R10/7) and examined by a Senate committee (Inds. Room 212/C15), did not receive serious consideration until 1932 when it was seen as offering a cash income to farmers who could not benefit from sugar beet or wheat. Lemass favored combining a preliminary statement with the announcement of sugar factory locations to deflect the criticism of northern and western farmers.
Industry and Commerce proposed to establish a company that was controlled and financed by the state with a foreign technical and managerial team that would be paid a royalty. The proposal involved an investment of £1.5 million, the annual purchase of 400,000 tons of potatoes, and the employment of 750 workers. Petrol companies would be required to purchase and use a specified quantity of alcohol in a manner similar to wheat or tobacco, and this would lead to an increase in fuel prices. The resulting excise changes would entail an annual Exchequer loss of £330,000. Cabinet assent was granted in September 1933. When proposals for a company financed by the ICC did not materialize, Lemass decided to run the distilleries from his department, to the dismay of Finance who appear to have been excluded from the decision (Inds. Room 212/C44).
In an effort to spread the benefits it was decided to build five small distilleries. Fianna Fail cumainn [local chapters] in Butlersbridge and Dundalk wrote pressing their claims. Carrickmacross Urban District Council justified its entitlement on the grounds that it had “made a real effort for a beet factory” and that having recently completed a total of fifty-nine new houses, it was “absolutely necessary that the tenants, all of whom belong to the labouring classes, should be provided with the means whereby they could be able to pay their rents and thus avoid creating a burden on the rates” (Inds. Room 212 C/15). By early 1935 Leydon was considering plants at Ballina, Cooley, County Louth, two in Donegal, and a fifth in Carrickmacross or Donegal, though the Carrickmacross effluent would run into a lake where it would “make a stink.” However, a deputation argued that it could be fed to pigs and or dumped in the river Glyde, so Carrickmacross won through.
The enterprise faced major difficulties; costs were substantially exceeded; production was delayed; all five plants were short of supplies. In the 1936–1937 season, Cooley, the sole plant in operation, had only six weeks’ supplies. In the following season Cooley processed 7,000 tons and worked for 175 days; the other plants each processed 1,000 tons and worked for 25 days (S10392, TID 2/187). By 1940 all the plants processed 15,000–16,000 tons, 1% of potato output (CVO evid. 10657–663). Broken production runs led to cost increases. In 1937–1938 costs at Cooley, the most efficient plant, were estimated at almost 4s. per gallon, and the product was sold to petrol companies at 3s. per gallon, six times the cost of petrol. In 1938 Industry and Commerce was forced to recommend duty-free imports of molasses to provide adequate and cheaper raw material (Inds. Room 212/c43).
The industrial alcohol saga was the most ineffective self-sufficiency and decentralization operation undertaken, an unsavory example of Lemass’s empire building and a classic illustration of the problem of investments absolved from conventional economic criteria. The decision to build five small distilleries increased costs; locations were determined by social and political factors. Ferguson justified the scheme as “a kind of social service for certain parts of the country”; however, two directors urged the establishment of an independent joint stock company subject “to the full rigours of government procedure” on the grounds that “as at present carried on it was liable to all sorts of political influence. From the point of view of purchase of raw materials, payment of wages etc. the obvious attitude of the farmers was to consider the Government ‘fair game’” (Inds. R 212/c43). Direct administration by Industry and Commerce proved time consuming, as delegation appears to have been negligible, and it must have reduced effectiveness in other areas.1 The most incisive criticism of the proposal was delivered before its establishment by John Leydon when he told Lemass that it would be better to “buy 400,000 tons of potatoes at 30/- per ton and distribute them among the poor and to employ 750 men the whole year round on, say, useful Public Health works at 30/- per week” with an annual saving of £444,000. Transfer payments such as unemployment assistance and infrastructural investment, which promoted employment in the building industry, were more beneficial to western areas (see table 7).
Decentralization overburdened an economy handicapped by lack of entrepreneurs, a dearth of managerial and technical skills, and restrictions on road transportation imposed to protect the railways (Skinner 1946, 65). The thin scattering of industrial plants reduced the gains from external economies and militated against the growth of an industrial culture—a deliberate government aim. Foreigners could be hired to meet shortages of key workers, though they suffered from a restrictive licensing policy and from the xenophobic attitudes of the local work force who might protest at working under English supervision (Daly 1984b, 260–61).
|Dublin City & Co.||11,105||30.5||15,184||27.2||4,079||21.1|
|Rest of Leinster||7,602||20.9||13,210||23.7||5,608||29.0|
Source: Census of Population.
For Fianna Fail these costs may have been offset by political dividends. The commitment to dispersal and evidence of scattered factories were undoubtedly popular, and the efforts of local committees were not unavailing. Father Hughes of Ballinasloe was rewarded with his factory (which still survives), and Carrickmacross was also successful. Criticism was directed at the inadequacy of decentralization rather than at its cost (Skinner 1946, 64). The procedure gave a populist veneer to a program charged with authoritarianism and provided opportunities for the exercise of political patronage thus ensuring Fianna Fail’s long-term success.2
The Irish electorate has a long tradition of seeking political favors: nineteenth-century candidates were expected to deliver government patronage (Hoppen 1984, 74–83); by the end of the century the Congested Districts Board and Local Government Board opened up new sources of benevolence, and deputations pleading for new roads or famine relief were common. The Cosgrave administration introduced an unwelcome austerity in this regard. Much of the publicity given to the alleged famine of 1925 reflected disenchantment with its response. A Local Government inspector reporting on conditions on Achill Island at that time noted that “the appeals of the islanders and of those acting for them have perhaps been too generously met in the past and I am keenly alive to the spirit of depravity that exists among them and as a result of which they look outside the resources of the island for the wherewithal to live on. They look either to the harvests in England and Scotland or they seek Government aid. The existence of a native government alters the whole outlook” (S4278A). A Cumann na nGaedheal senator from Roscommon in 1926 charged that his constituents had been let down by the government in the matter of favors (Moss 1933, 105). Opportunities for favors were limited in the austere conditions of the twenties, but those that existed were not exercised. Olson has argued that large groups are less able to act in their common interest than are small groups; consequently the ability of individual towns to secure an industry at a cost to the wider community is not surprising. He also suggests that the benefits from redistribution outweigh the gains from economic growth (Olson 1976, 31). It was thus in the interests of Carrickmacross or Ballinasloe to secure a particular factory rather than to await the diluted benefits of economic growth.
Industrialists frequently used local groups to fight their case. The British shoe firm of Rawson opened a plant in Dundalk in response to a deputation and a promise of premises in the disused barracks (a favorite location). When its request for duty-free imports of shoe parts was rejected, the town clerk contacted local T.D. and Defense Minister Frank Aiken. The Dundalk Joint Representative Committee, which included the Urban District Council, the Chamber of Commerce, the Labour Council, and the Business Club, responded to an attack on Rawson’s foreign status from the Irish Free State Boot Manufacturers Association with a resolution of support (TID 1207/7). Most deputations were led by a priest, reflecting bipartisan effort and continuing an earlier tradition. The involvement of politicians appears to have been only equal to that of business leaders.
Capital and Labor: Corporatism
The growth in government economic intervention in the interwar period and the apparent inappropriateness of legislatures as scrutinizing bodies led to the emergence in other parts of Europe of corporate institutions, which were perceived as better suited to contemporary needs. Although the 1922 Irish Constitution authorized the Oireachtas (Parliament) to provide for the establishment of Functional or Vocational Councils (J. Lee 1979, 325) and the Papal encyclical Quadragesimo Anno supported corporate structures, no such structures evolved. Under Cumann na nGaedheal institutional innovation tended towards centralization, as in the establishment of county and city managers. The state corporation, such as the Electricity Supply Board, was adopted for reasons of convenience rather than of principle and did not entail any wider corporate or consultative process. Cumann na nGaedheal’s policies did not generate much need for new structures; Fianna Fail’s program did.
In 1928 Lemass claimed that Fianna Fail “considered that the entire economic policy of the country should be decided by a National Economic Council such as exists in Germany and France and such as is suggested by one of the big English parties” (J. Lee 1979, 321); however, in 1932 De Valera admitted that although he had been in favor of establishing “something like an economic council,” on gaining office he had rapidly discovered “that the Minister himself was carrying out the sort of survey that such an economic council would carry out” (PDDE 29 Apr. 1932). That corporatism had acquired fascist undertones and that Fine Gael had come to advocate corporatism (O’Sullivan 1940, 335) may have dictated inactivity. Centralized authority had also proved attractive, particularly to Lemass. Fianna Fails public gestures were limited to instituting a corporate structure for the new Senate, and to establishing, on the proposal of opposition senators, a commission to inquire into the prospect of developing vocational organization in Ireland, though the commission’s report had no practical consequences (J. Lee 1979, 324–46).
The Irish corporatist movement was weakened by lack of popular support. Catholic church support for corporatism had evolved in a situation where the church found itself in opposition to a state that upheld alien values (Berger 1972). In Ireland the state supported Catholic values. It is not surprising that corporatist ideas surfaced among groups such as cattle farmers who resented the disruption of their livelihood as a result of government action, but the battle against the state lacked broad support because the state reflected Irish and Catholic cultural values.
The failure to establish corporate institutions conceals the major changes undergone in government relations with business and labor and the existence of consultative structures. Throughout the 1920s, Industry and Commerce encouraged the establishment of industrial associations, maintaining regular contact and using them as sources for commercial intelligence; however, most sectors did not establish formal stuctures until after 1932. The delay is attributable to the lack of perceived benefits of association before that date. Cumann na nGaedheal was suspicious of interest groups, and the legislation establishing the Tariff Commission excluded industry groups. The Fianna Fail government brought a new receptiveness and much to lobby for. Where groups did not emerge spontaneously, officials willed them into existence. The Irish Wholesale Furniture Manufacturers Association was formed in 1937 “in response to the Government’s desire for a representative body to speak for the industry when tariff questions are being considered” (CVO pars. 231, 239, 276). When clothing manufacturers claimed prejudice against their goods from commercial travelers and drapers, Industry and Commerce suggested establishing a consultative committee of drapers, chambers of trade, and manufacturers (FII minutes 19 Oct. 1934), without success. Despite allegations to the contrary, there was frequent official contact with such bodies. During a debate on a furniture tariff Lemass told the Dail that he had met with the trade associations and regarded it as desirable to consult interested parties before imposing tariffs (PDDE 24 May 1932).
Most associations operated to ensure increased protection or higher prices. The tanning industry organized a successful campaign for specific minimum duties on leather despite Lemass’s concern over the impact on the shoe industry (TID 23/73, box 255). Many associations exploited sympathy towards protection to raise prices. In 1938 a deputation from the structural steel industry was lectured about the “ultra high prices” that they charged, but they continued to seek higher tariffs and did little to cut prices (TID 41/27). Official control was hampered by the policy of granting tariffs without investigating costs and by Lemass’s affinity for quotas and import licenses that excluded competing imports.
The 1932 Control of Prices Act provided for the establishment of a part-time Prices Commission and a full-time controller of prices with authority to control the price of food, drink, fuel, and clothing and the power to investigate the price of any protected item (PDDE 19 Oct. 1932). Many tariff schedules presented to the cabinet included price undertakings, as in the case of Irish Tapes, who sought a tariff increase from 50% to 100% but undertook not to increase prices. The agreement with Irish Dunlop included an undertaking that the retail price for tires would not exceed British prices by more than 15%; however, the undertaking lapsed in the event of any change in relative costs between Dunlop’s British and Irish plants (S6560A). Requests for extraordinarily high levels of duty, ostensibly to prevent dumping, coupled with undertakings of limited or no price increase were common, but it is unclear whether they were fulfilled. In 1937, in the course of amending legislation, Lemass told the Dail that the Prices Commission had investigated the price of wheaten meal, bread, heavy fuel oil, building materials, furniture, and mattresses.
The 1937 Act substituted three full-time price commissioners, substantially extended their investigative powers, and empowered them to fix prices and to report on causes of “unreasonable” prices (PDDE 6 Oct. 1937), but there is no evidence that the increased powers were used. While there is evidence of official concern about some prices, pressure appears to have been exercised through informal channels and was directed at the prices of intermediate goods. The Ever-Ready Battery Company was forced to reduce prices, though this failed to stem imports (TID 1207/166). In 1938 Lemass ordered an investigation of leather prices. It is no coincidence that batteries and leather were intermediate products. One official minuted, “If leather was a commodity going direct to the consumer one would have less hesitation in recommending a high rate of protection. But when a very important industry is affected I submit that a very strong case should be made before increased duties are imposed” (TID 43/63, box 255). There is no evidence that lower prices were enforced by reducing protection, though Lemass threatened such steps against a doll factory if the quality did not improve (PDDE 27 Oct. 1937).
The increased costs resulting from protection have been estimated at £9 million in 1936, a rise of 27% over the free market level, though tariffs averaged 45%; the increase on nonfood items was considerably higher (Ryan 1949, 302). These figures may overstate the inflationary impact. The Irish Cost of Living Index stood at 177 in November 1937, against 160 for Britain and Northern Ireland; for January 1926, the figures were 188 and 175. Prior to 1932, a 12-13-point gap appears to be the norm, compared with 17 points in 1937 (ITJ December 1937).
Lax control over prices and profits appears to have been the inevitable consequence of rapid industrial development, as a memorandum by T. G. Smiddy, De Valera’s economic advisor, on the 1937 prices bill shows. Smiddy claimed that if the Prices Commission used all the powers available under the bill it would replicate the investigation carried out by the Tariff Commission before 1932, though he argued that the prices commission should be independent of Industry and Commerce (S9490). Yet in 1932 Lemass had admitted that detailed price investigation would spell an end to industrial development. “If we are going to let the factor of prices determine our position as to whether or not an industry is to be established here, then we can abandon the whole idea of industrial development at once. There is no single industrial commodity which we are capable of producing here which we could not buy more cheaply somewhere [else]” (PDDE 13 May 1932).
There is no accurate information on the extent of private fortunes resulting from protection, but accusations that Fianna Fail policies had resulted, perhaps “unintentionally” in the creation of “a kind of new plutocracy of economic privilege” (PDSE 14 Dec. 1938) among those with access to licenses or monopolies were frequent though unsustained. Some fortunes were accumulated, though fewer than critics might suggest, because industrialists faced a powerful trade union movement and were forced to meet a variety of social criteria.
Trade Union Membership
Trade union membership and bargaining power increased as a result of protection. Membership had grown rapidly during the war and in the years immediately following but fell in the early twenties, a pattern common to other European countries. Returns to the Registrar of Friendly Societies show a decline from almost 140,000 members in 1921 to less than 89,000 by 1927 and to 86,000 by 1931. By 1939 numbers had risen to 135,000. The 1937 annual report of the largest union, the Irish Transport and General Workers Union (ITGWU), recorded the seventh consecutive year of growth; the British-based, National Union of Boot and Shoe Operatives (NUBSO) saw its Irish membership grow from 378 in 1932 to 4,224 by 1937 (Fox, 1958, 528); membership of the Irish Women Workers Union doubled between 1925 and 1938 (CVO, 185).
Industrial employment grew without a drop in real wages, one index of trade union effectiveness. Real wages of adult male workers in Dublin were 10% higher in 1936 than in 1929, which was identical to the rise in United Kingdom real wages; by 1934, Dublin laborers, who traditionally earned less than their London equivalents, were apparently earning more. The Banking Commission concluded that “from 1929 to 1936 wages rates were maintained better in Dublin than in London” (CBC 1938, 63), and trends in the regions were not dissimilar as union organizers sought, contrary to government wishes, to maintain uniform wage levels throughout the country (McCarthy 1977, 182).
In industries such as boots and shoes, flour milling, hosiery and textiles, joint industrial councils or conciliation boards representing employers and workers negotiated wage levels, frequently with government participation (CVO, 199–202). Both workers and employers were aware that protection cushioned them against competition. Mr. Cunningham of the Boot and Shoe Manufacturers Association claimed that “the Union” (NUBSO) asked for higher wages “because the industry is so well protected here”; it was “only after considerable discussion that we were able to get the existing Irish rates down to the English rate” (Curtis 1981, 34). British unions ensured that Irish wages and working conditions would prevent Irish plants’ competing in British or third-country markets. Lionel Poole, Irish national organizer for NUBSO told his members in 1933 that “we cannot prevent our industry from spreading itself into districts that it has not been established in previously but we can prevent this position from becoming a danger to other centres. This is our task in the Free State” (Fox 1958, 482).
The union position was strengthened by a superficial identity between unions’ social aims and those of the government. While the revised constitution of the Irish Trades Union Congress in 1930 retained a commitment to securing “adequate control of the industries and services” for all workers, more radical wording was rejected, and this commitment did not interfere with more prosaic goals. In her presidential address to the 1932 conference, Louie Bennett praised the new government, “which has brought a wave of hope and vitality into depressed and apathetic ranks” (McCarthy 1977, 97, 112). The 1932 annual report of the ITGWU expressed its support for protection and for the policy of industrial dispersal, criticizing only the excessive employment of women and juveniles and poor working conditions (ITGWU Annual Report 1932). The government proved receptive to suggested reforms in these areas because of sensitivity to opposition gibes that Irish industry was “a hole and corner development” and because of its aim to expand industry “without the evils of industrialisation as they have manifested themselves in other countries” (IT 24 Jan. 1934).
Conditions of Employment Act
Such considerations resulted in the 1936 Conditions of Employment Act, which created “an industrial code far ahead of that in force in any other country” (Economist, 2 Jan. 1937). Lemass boasted that “so far as I know” it was the first time that such measures had been introduced by “a Government that is still a democratic Government dependent entirely upon a Parliamentary institution for its power” (PDDE 17 May 1935). The act was influenced by International Labour Organisation decrees, and its passage was duly rewarded by Lemass becoming ILO president in 1937 (Skinner 1946, 66). The adult working week was set at forty-eight hours, and the working day was to end at eight PM, with limited exemptions; overtime was restricted and was to be paid in excess of normal rates. Shift work was forbidden except for continuous process operations or when licensed, and employers were required to document piecework rates. Workers were guaranteed one week’s holiday with pay in addition to six public holidays and were protected against wage reductions consequent on reduced working hours. Wage agreements between a representative group of employers and workers could be registered and made legally enforceable. Employment of persons under fourteen was forbidden; those under eighteen were restricted to a forty-hour week and could be restricted or banned from an industry following consultation with employer and worker representatives. The minister could restrict the employment of women in a similar manner, and both women and young people were barred from night work, though limited exemptions were possible for young people. A ban on outworking, or manufacture in homes, could be imposed by ministerial order (ITJ June 1936).
Lemass informed the cabinet that “if employment is to be balanced in the Saorstat, certain avenues must be reserved for men.” Women accounted for 75% to 90% of workers in industries such as clothing, packing, shoes, and confectionery, and unlike other countries, Ireland did not have substantial male employment in heavy industries. At one stage Lemass apparently toyed with banning the use of modern machinery on the grounds that it facilitated the employment of women, but he opted for statutory restriction, arguing that “without it, women may rapidly be recruited for most classes of industry that are likely to be developed here.”
Lemass’s proposals were supported by cabinet colleagues, and Finance raised few objections. The costs of reducing working hours without wage reduction were not examined; Leydon merely noted that “the additional expenditure entailed by such a proposal will be borne by the employer” (S84/14/35). In the Dail, opposition speakers united in welcoming the bill. Criticism, which was muted, consisted of Labour suggestions that more could be done and of familiar comments on the excessive ministerial powers, though there were differences of opinion on the merits of nominating public holidays rather than church holidays as designated days off work. Sean Milroy, president of the Federation of Irish Industries, welcomed the control on “back-room factories” and the prospect of policing firms that undercut responsible employers (IT 9 May 1935), while Sen. James G. Douglas, a speaker for manufacturing interests, approved the general principles, though he noted the act’s cost implications (PDSE 27 Nov. 1935). This public stance appears to reflect the attitude of the Federation of Irish Industries (FII). In 1933 the committee of the FII voted to support a 40-hour week (FII minutes 2 June 1933); in the Dail Lemass mentioned that employers who had made generous agreements with workers often requested that the terms be enforced on competitors.
The acquiesence to the terms of the Conditions of Employment Act at a time when Irish political life was deeply riven over nationalist matters reflects a broad consensus for an economic middle ground among employers, workers, and politicians. Several politicians mentioned the absence of an “anti-Labour” movement in Ireland. Both employers and unions sought protection from cost undercutting in the domestic market. Trade union opinion viewed the reduction of working hours and the curbs on female and juvenile employment as essential to reduce unemployment.
Union support was universal save for the Irish Women Workers Union, which objected to restrictions on female employment, a cause that elicited little support as the ITUC had submitted a memorandum to Lemass favoring restrictions (M. Jones 1988, 130). Senator Thomas Foran, president of the ITGWU, which had approximately 6,000 female members (Daly 1978, 73), denounced the opposition of women trade unionists: “Do the feminists want here what occurs in certain industrial countries across the water where the men mind the babies and the women go to the factories? Do they want that in this holy Ireland of ours” (PDSE 27 Nov. 1935). Yet even women trade unionists were ambivalent on this question, as they were in other countries. In a speech, Louie Bennett, president of the IWWU in 1932, concluded that the increasing employment of women in industry had been detrimental to family life and a possible cause of male unemployment and consequently of increased poverty. In 1942 Mrs. Margaret Purtell of the Tailors and Garment Workers Union requested a ministerial order barring women from much of the tailoring trade (Daly 1978, 75, 77). Popular attitudes favored male jobs, as a deputation from Mountmellick revealed. One hapless official noted, “The deputation was not in the least impressed. Fr. Murray said they wanted to find employment for men, Bat Leather Co. was employing girls” (TID 43/75).
The perception of juvenile and female encroachment into the industrial work force was correct, though overall female employment showed only a minor increase: gains in industry were offset by losses in agriculture and domestic service. In 1936 women accounted for 31.3% of the manufacturing work force compared with 26.6% ten years earlier. According to the production census the number of workers under eighteen more than doubled, from 6,619 in 1926 to 16,355 in 1936: 5.9% of male and 24% of female workers (see table 8). The increased juvenile and female employment, which was in line with international developments, was a result of the expansion of light industries rather than of a substitution of female for male workers. The female and juvenile share of the Irish work force remained below U.K. levels (C. prod. 1936, xvi, xxi). During the decade 1936–1946 women and juveniles declined as a proportion of the industrial work force. Although women accounted for an increasing proportion of workers in clothing, textiles, and boots and shoes, the expansion of heavy industry meant more male jobs (see table 9). The 1936 production census anticipated a falling proportion of juvenile workers as apprentices recruited by new industries reached the age of eighteen.
|C. Pop. trans, gds.||86,742||94,594||8,152||31,477||43,215||11,738|
|C. Prod, trans, gds.||41,112||64,045||22,933||17,358||37,271||19,913|
No formal restrictions were imposed on juvenile or female workers as a result of the Conditions of Employment Act, though there was an undoubted preference for male jobs. An official who visited two British tanneries to negotiate an Irish operation reported with enthusiasm that Dickens tanners had “no women employed and even the typing is done by male labour” (TID 43/63); this may have led to Dickens’s being favored over another firm. When Ever-Ready expressed an interest in an Irish plant Lemass minuted that “my raising no objection to this project depends on their employing men and I am prepared to contemplate prices higher than in Great Britain if necessary because of this.” Some years later the company successfully justified a claim for increased protection on the grounds of their maximum male employment (TID 1207/166).
|(% all pop.)||Juvenile M||Juvenile F|
|Year||Industry||Trans. Gds.||(% M pop.)||(% F pop.)|
Lemass claimed that the purpose of the legislation was “not to secure employment for men now unemployed but to arrest any tendency to increasing female for male labour” (PDDE 17 May 1935). However, the existence of powers to curb female employment may have exerted psychological pressure on employers. In 1937 the male share of the adult work force rose; men gained relative to women, adults relative to juveniles. An official noted, “So long as adult labour stands at 80% and upwards and so long as the figure for men does not decrease in favour of that for women, the type of labour provided in the protected industries cannot be regarded as undesirable” (F200/27/38).
The Conditions of Employment Act appears to have brought escalating wages without industrial peace. The year 1937 was marked by a lengthy building dispute and by rising wage rates as a result of inflation. The FIM argued in evidence to the Commission on Vocational Organisation that the legislation “while in itself desirable has been advanced too rapidly in favour of the industrial worker,” citing the fact that in 10 out of 13 industries Irish wages exceeded British levels (CVO evid. FIM memo, 5). Industrialists used alleged cost increases consequent on the legislation as justification for further protection (TID 21/43). By 1941 only 1 of more than 180 agreements had been registered under the act, and the government had rejected several agreements that enforced a uniform national rate of pay (McCarthy 1977,183).
Relations with Employers and Unions
Concessions on price, wages, and protective legislation should not be read as a sign of government weakness. Control remained in government hands, and because of such concessions, industry and the unions were expected to facilitate the government’s industrial design. Relations proved stormy with both on occasion as they opposed what they regarded as authoritarianism. The key issue revolved around native control. Both employers and trade unionists were affected by the heady nationalism of Irish independence, which was boosted after 1932 by the Fianna Fail government and the economic war. Traditional employer interests were unionist, and during the twenties the Dublin Chamber of Commerce and the Association of Chambers of Commerce adopted a conservative business stance, fearful of government intervention and committed to retaining economic links with Britain. They were opposed to the economic war—not surprising given the dominance of shipping, importing, and commercial interests (Cullen 1983, 95–105). Nationalist-minded businessowners were concentrated in the DIDA and its successor the NAIDA. Efforts to turn the NAIDA into a manufacturers’ interest group by insisting that the chair be a manufacturer were foiled in 1930 (NAIDA minutes 2 June 1930), and Irish manufacturers had no representative organization prior to 1932, though a short-lived Federation of Irish Industries existed for part of the twenties.
A new Federation of Irish Industries was founded in December 1932. The foreword to its minutes stated that as a result of the election of a government committed to protection it was felt desirable to have an organization dealing exclusively with manufacturers’ interests. Membership was restricted to Irish nationals so that “Irishmen alone will have the government, ruling and guiding of the Federation in its work for the welfare and development of home industry” (Jr. Ind. Yrbook. 1932), and this remained the tone of the organization. It sought improved access to finance, differential tax treatment for capital invested in Irish-owned industries, and insuring “as far as possible consistent with national requirements (that) industrial development shall be retained in the hands of Saorstat nationals” (FII minutes, foreword).
Despite common aims relations with the government were strained. In its submission to the Commission on Vocational Organization the federation complained of a lack of consultation on industrial planning and specifically of a failure to ask FII whether there was room for new factories “in industrial fields already provided for.” This statement is misleading. An Industry and Commerce official attended FII Council meetings and acted as liaison officer, and Lemass used Federation events to air his plans for the development of industry. More detailed blueprints were raised informally by Lemass or officials in regular meetings with individual industrial groups. Consultation was frequent, though on the governments terms, and the federation’s views had no formal status. The key issue was the government’s denying the FII a veto over the course of industrial development and particularly over the admission of foreign firms. The Control of Manufactures Act gave some native industrialists the mistaken belief that irrespective of competence, they were guaranteed a monopoly.
While the federation’s lobbying was one factor in the 1934 strengthening of the Control of Manufactures Act, the legislation fell short of their wishes. When Lemass was seen to welcome foreign firms, FII’s bitterness was evident. Former Cumann na nGaedheal minister and federation activist J. J. Walsh wrote:
Is it any wonder therefore, that great numbers of nationalists are disillusioned at the turn of events. Their long and bitter fight was waged for economic as well as cultural regeneration. They had hoped that a Government of their own would see to it that, whatever eventuated from the former, would pass to them as their natural right. Instead, not only did the enemy of their country get almost everything worth taking but the native taxpayer was compelled in many cases to supply him with the necessary finance to do so, through the Industrial Credit Company. (Walsh 1944, 88–89)
The issue of foreign companies came to a head over the proposal to establish the Salts spinning mill, which aroused considerable opposition because wool spinning was viewed as a traditional Irish industry. Allegations that Industry and Commerce had rejected proposals for a spinning mill from the Cork firm of Sunbeam Wolsey (which had 49% foreign ownership) were widely aired in newspapers and in the Dail prior to the 1937 general election; however, closer examination by the council of the FII revealed that the Sunbeam Wolsey proposal “could not be turned down when they had not put up a scheme to the Department.” Lemass claimed that his officials had repeatedly urged the Woollen Manufacturers Association to set up a spinning operation but that “they were not prepared to cooperate with the Department even though inducements in the way of Trade Loans were offered to them.” While individual manufacturers suffered selective amnesia the FII’s investigation confirmed Lemass’s version of events (FII minutes 1937).
Despite this finding, the federation passed a resolution that FII should explore the possibility of establishing any industry with 100% Irish capital and control before government assistance was given to firms not wholly controlled by Irish nationals. A decision to publish the resolution brought a split between moderates such as Sen. James G. Douglas, who favored “a line of friendly co-operation,” and the militant majority led by F. M. Summerfield, F. H. O’Donnell, and J. J. Walsh (FII minutes 15 Oct. 1937). Walsh’s membership on the Commission on Vocational Organisation explains why “the Report singled out the Department of Industry and Commerce for particular criticism” (J. Lee 1979, 331).
The FII demand for control of new industrial investment is reminiscent of the powers that Mussolini ceded to the Italian industrial confederation to evaluate license applications for new industrial plants. Italian industrialists used this power to increase their monopoly: of more than 5,000 licenses to set up industry issued in the years 1933–1940 only 414 had been instituted by 1945 (Sarti 1971, 108–9). Irish industrial interests are unlikely to have acted in a more disinterested manner. The continued obsession of the FII with native control and its unwillingness to admit “alien” industrialists weakened its claim to a consultative role. In Feb. 1938 FII changed its name to the Federation of Irish Manufacturers to mark amalgamation with the NAIDA; however, the new constitution emphasized that individual members must be Irish citizens, while corporate membership was restricted to firms where “legal and financial control of the business is bona fide in the hands of persons who are citizens of Ireland” (FIM minutes 18 Feb. 1938).
FIM protested strongly against the governments failure to consult the federation prior to the 1938 Anglo-Irish Trade Agreement, because British manufacturers had allegedly been consulted by the British Board of Trade. The 1938 agreement forced a reconsideration of the federation’s role. As federation president F. M. Summerfield pointed out, the federation had been “living in a fool’s paradise for the last few years.” The agreement provided for the strengthening of the Irish Prices Commission to review tariff levels; however, interests applying to the commission would have to represent both native and foreign firms.
By 1939 the individual industry associations had admitted foreign firms, but the federation proved reluctant to follow suit. F. M. Summerfield pointed out “that a great number of industries which it was alleged were non-national had, in fact become permanent institutions in the country, who are very much concerned to preserve their position, and that no Government at the present time or in the next few years was likely to turn them out” (FIM minutes 6 Jan. 1939). Ultimately many new firms were admitted to the federation, and total membership rose by 130 to 600 by the end of 1939, though this was allegedly done “without altering essentially the general beliefs of the members of the Council regarding the national position” (FIM minutes 1938–1940).
The more pragmatic approach appears to be linked with the appointment of Erskine Childers, formerly secretary of NAIDA, as federation secretary in 1938. Childers was also Fianna Fail T.D. for Longford Westmeath, combining both positions until 1944 when he became a minister (Skinner 1946, 302). The contrast in styles is evident in the Commission on Vocational Organization where Walsh excoriates the government for lack of consultation and “alien penetration” while the federation’s official memorandum concentrated on labor productivity and problems of industrial relations.
“Alien penetration” was also an issue in the Irish trade union movement, though in this case Lemass showed greater sympathy for native concern. The issue was compounded by the mass of unions in each industry representing different crafts and by the rivalry between British and Irish unions. Interunion disputes seem to have intensified after 1932 and the substantial recruitment by British-based unions was a further cause of friction. The 1935 report of the ITUC wrote of “warring competitive unions, disintegrating new bodies and internecine union warfare” (McCarthy 1977, 134). In 1934 the ITUC invited all foreign-based unions to attend a conference to examine the question of their Irish membership. Congress president Tom Johnson (who was English-born) stated that the national executive “merely asked the amalgamated unions to do for this country, long before any crisis arose, what was found to be needed in other countries…. There was growing up a different code of laws, a different legislative atmosphere affecting Trade Unions in this country from that which prevailed in Britain However the meeting resulted in the creation of a united block of British-based unions within the ITUC (McCarthy 1977, 124, 126) determined to remain in Ireland.
Following this lack of progress Lemass informed Congress in 1936 that if it did not rationalize the trade unions, the state would intervene. Congress appointed a commission of enquiry, which issued a report in 1939, sharply divided between those favoring little change and ITGWU proposals to reduce the British trade union presence and to increase ITGWU influence. This split led to the 1941 trade union bill, which drew heavily on the ITGWU proposals. All unions were to be licensed and forced to maintain offices and money within the state—measures designed to discourage British unions—and a tribunal would rationalize the trade union structure. While the measure became law it failed in its intent. British unions survived, and rationalization was thwarted.
Irrespective of the governments wishes, because of divisions within manufacturer and union ranks strong corporate structures would not have emerged. Evidence from continental countries suggests that the growth of democratic corporatism was the product of a long historical tradition. Ireland lacked that tradition and faced the problem that the Irish business elite—based on export-oriented agriculture and industry and on close Anglo-Irish commercial links—was in the throes of disruption, while a new protectionist business community was emerging. The trade union movement was equally in flux. The largest union, the ITGWU, was less than thirty years old. Both business and labor required a lengthy maturing period.
While both groups benefited from protection they failed to shift their concern from sectional interests to a wider national agenda. Government carrots such as high tariffs, lack of price controls or the Conditions of Employment Act do not appear to have elicited reciprocal concessions; the extensive protection afforded to both unions and employers only led to entrenched positions.
Ultimately the responsibility may lie with the government, which communicated the message of protection and native control only too effectively while ignoring issues of efficiency and productivity. Legislative curbs on female employment and decentralization of industry signaled that Ireland was elevating social desiderata above economic criteria and provided justification for employer and labor entrenchment.
The report of the FII to the Commission on Vocational Organisation, though partisan in that it ignores manufacturers’ weaknesses, highlights the low productivity in Irish industry. The problem was seen as stemming from a lack of industrial tradition, compounded by the shift to cattle farming, by population decline, and by emigration, all serving to “creat(e) an atmosphere not conducive to the necessity for work for the sake of high production through the necessity of earning as high a wage as is possible where work is paid for by results.” Case histories cited included a firm in a village employing small farmers’ sons who regularly disappeared for two days at a time, arriving late on Monday mornings and going absent for race meetings; and a Donegal factory where workers did not desire to earn more than a minimum weekly amount and consequently kept output low, where absenteeism on Monday mornings or on wet days, despite facilities for drying and changing clothes, was common. In one area devoid of industrial traditions girls recorded productivity levels 32% below what they had achieved during their overseas training (CVO evid. doc. 92). It seems probable that employers also took time off for race meetings and had “unambitious and unproductive” natures, though this was never stated. More common were criticisms of a “new plutocracy.” Both statements suggest that Irish society had not adopted the cultural values of a modern industrial society.
The most sustained attack on the government’s economic program came from the report of the Banking Commission. The report decided that the existing banking system and the link with sterling should be retained but feared that prevailing policies could jeopardize the sterling link by reducing the country’s external investments and by weakening export earnings. It rejected the possibility that new industries could contribute to export earnings: their prices were uncompetitive and would remain so because government economic regulation had given rise to “an element of rigidity” in the economy (CBC 1938, 132, 106, 181). The prescription was a curb on government borrowing and no further self-sufficiency lest it further damage export earnings.
Such comments emphasised the need to control the excesses of the protected economy. While De Valera countered criticism of the “new plutocracy” by arguing his commitment to private property and to the right of an individual to earn a “reasonable profit,” some of the alleged gains from the industrial program accorded ill with his description of the policies as providing “the material necessities of life” and “amenities which are necessary for decent living,” and he admitted that policies had failed to absorb the unemployed (PDDE 7 July 1935). Given the criticism expressed by the Banking Commission, the apparent failure of programs such as decentralization, and the perceived ingratitude of both manufacturers and trade unions despite numerous benefits, it would seem that threat of competition and the questioning of the industrialization program resulting from the 1938 Anglo-Irish agreement were not wholly unwelcome.
1. This is the impression that emerges from Inds. R212/cl9 and other related files.
2. For a more recent study of this process in operation see Paul Sacks, The Donegal Mafia (1976).
* The drop in the percentage of net output produced in Dublin is atttributable to a decline in production at Guinness’s brewery.