The Economic Conditions and Policies of the Irish Free State
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The Empire Club of Canada Addresses (Toronto, Canada), 15 Apr 1926, p. 159-168
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Smiddy, His Excellency the Right Honourable Timothy A., Speaker
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Text
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Ways in which Canada is intimately bound up with the Irish Free State. The similar constitutional status of the Irish Free State with that of the Dominion of Canada. The Irish Free State, like Canada, free to determine and work out her own destiny in her own way, without any hindrance from any other country or any other government. Now the Irish Free State and all nations in the British Empire united by the symbol of the British Crown, and what that symbol means. The differences in meaning between "co-equal in stature," and "co-equal in status." Ways in which such co-equality among the different nations forming the British Empire is a guarantee of world peace. The economic conditions of the Irish Free State at present, and the difficulties that the Government has had to contend which. The position of the Irish Free State and Ireland after signing the treaty with Great Britain. The short-lived Civil War. Policing. The organization of the Civic Guard. An overhauling of the judiciary, and reasons for it. The Land Act of 1923 which wiped out the last vestiges of landlordism in the Irish Free State. Exports from the Irish Free State. A butter inspection Act and its effects. Agricultural development. The lack of industry in the Irish Free State. Examples of development. Tariff protection and its results. Wealth from the River Shannon: developing hydroelectric power. Developing the growing of beet for sugar. The financial position of the Irish Free State, which some figures. The establishment of a banking commission, and its endeavours to improve the banking system. Amalgamating the railways. Civil Service in the Irish Free State. The ultimate reunion of Ireland as the real hope of all citizens of the Irish Free State and how that may be achieved. Developing the Gaelic language.
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15 Apr 1926
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English
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THE ECONOMIC CONDITIONS AND POLICIES OF THE IRISH FREE STATE AN ADDRESS BY HIS EXCELLENCY THE RIGHT HONOURABLE TIMOTHY A. SMIDDY, M.A. Before the Empire Club of Canada, Toronto, Thursday, April 15, 1926.

THE R.T. HON. MR. SMIDDY was introduced by the President, and spoke as follows: Mr. Chairman and gentlemen, I can assure you it was with a real, spontaneous pleasure that I accepted the kind and warm invitation to come and address you at lunch today. It is, I think, the third occasion on which I have spoken in Canada, and the second occasion in my capacity as Minister of the Irish Free State. I get a peculiar interest in speaking to Canadians because the Irish Free State is in a very intimate way bound up with Canada. The first article of our treaty with Great Britain cites that the constitutional status of the Irish Free State is the same as that of the Dominion of Canada. The second and third articles of the treaty which speak of the relations in which we stand to the Imperial Crown and to the Imperial Parliament, cite that the law practice and constitutional usage of Canada in so far as they determine the relations of Canada to the Imperial Crown and the Imperial Parliament, likewise determine the relations of the Imperial Crown and the Imperial Parliament to the Irish Free State. Therefore we are very much interested in your constitutional development, because our development goes along the same lines.

The broad fact emerges that the Irish Free State, like Canada, is free, free to determine and work out her own destiny in her own way, without any hindrance from any other country or any other government. Now the Irish Free State and all nations in the British Empire are united by a symbol, by the one symbol, and that symbol is the British Crown. But the development of the British Constitution in recent years suggests that really that symbol is a symbol of unity of interests, a community of interests, of ideals, and of kinship. That common symbol does not fetter us in the least, it does not prevent us from just doing as we like within our own country, and governing it as we see fit, and I myself am of the opinion, that the freer the bands are that attach us, the less formal they are, if you wish, and the more we will develop those spiritual and moral attachments one to the other, the stronger will be our unity in times of need and times of stress. I want to refer to the first article in our constitution; that article cites that the Irish Free State is a co-equal member of the community of nations forming the British Commonwealth of Nations; in other words we are all co-equal, the Irish Free State, Canada, Australia, and Great Britain herself. Naturally, we are not co-equal in stature, but we are co-equal in status. And therefore that brings into relief a different meaning, I think, that has grown up to this one symbol that binds the lot, and that is the Imperial Crown. It is not a monopoly of England, it is not the monopoly of any one nation within the British Commonwealth of Nations. Now I think there emerge from that great co-equality some very important conclusions. To begin with, such co-equality among the different nations forming this Empire is a guarantee of world peace. We form really a small effectual League of Nations. If Great Britain by any chance had her pride affected and she were more or less induced perhaps to rush into war-I just cite that hypothetical case-she would not do it without consulting her various partners. They may not see eye to eye with her on that particular issue, they will argue, they will reason, there is compromise, and within the British Empire itself, to my mind, there is a security of peace as a result of this co-equality. Great Britain also would not enter into war, at least any war she might enter into as a result of these deliberations and this common action would be an internationally justifiable one. I just mention that as one obvious effect of this co-equality of the nations forming the British Empire.

Now I shall not trouble you further on constitutional questions but I shall proceed to give some idea of the economic conditions of the Irish Free State at present and the difficulties that our Government had to contend with, some idea of their achievements, and there from, I am sure, you will be convinced that we of the Irish Free State are capable of governing ourselves and give hope for the development of a prosperous and happy country.

After the Treaty was signed with Great Britain, the Irish Free State and Ireland as a whole was in a very peculiar position. We had no army in the Irish Free State, we had no police. The old Royal Irish Constabulary had been disbanded and here we were without army or police and a civil war in process. Forthwith we had to organize an army of 55,000 soldiers and equipment. We also had to organize a police force which is called the Civic Guard. Fortunately the civil war collapsed after one year. The civil war in Ireland was no surprise such being the aftermath of most revolutions in most countries. It was short-lived, and taking everything into account the losses of life were not very great. They were nothing comparable to losses of life under similar circumstances in Finland and other European countries. The Civic Guard was organized, and a very interesting feature of the Civic Guard of the Irish Free State is that under no circumstances whatever may a Civic Guard carry an armed weapon. If he does, he is forthwith dismissed from the force. He has to rely on the moral support of the people; and if the Civic Guard have to try to capture robbers or highwaymen who are armed, they have to do so without arms. It is one of the strictest regulations in our police that they cannot carry arms.

The government was wise in adopting the regulation, because the police were sent originally during civil war, not as soldiers, but simply to administer ordinary civil law, and be it said to the credit of the populace of the Free State there was not a single policeman shot. Those that were shot were shot by robbers. We appeal to the sense of fair-play; anyone who would take arms to shoot a policeman would be considered a murderer. We have the Civic Guard of 7,000, very efficiently trained and highly educated. The Civic Guard is performing its work in a most admirable fashion.

We also overhauled the judiciary. The judiciary we had was expensive and not quite consonant with the traditions of the people, therefore we established a completely new judiciary. I do not mean to say we appointed all new judges, but the system of the judiciary was completely changed.

In 1923 a Land Act was passed which wiped out the last vestiges of landlordism in the Irish Free State. It put a hundred thousand tenants in possession of their own land and made them owners thereof, subject to annuities which they will pay over a period of years, and these annuities are about thirty per cent less than their former rents. We have close by us a very large market; that is Great Britain; in fact 99% of the exports of the Irish Free State are consigned to Great Britain and to the six counties under the jurisdiction of the Northern Parliament. What percentage of these exports are tran-shipped from England, I do not know, but roughly perhaps about 15°0. Now our exports from the Irish Free State are about 80% agricultural commodities. We have to meet in England the competition of Denmark, or New Zealand and Australia in agricultural commodities; we realized that our methods of production were far behind, as also our methods of merchandising; therefore we passed an Act by which all butter exported to Great Britain must be inspected first of all, and only exported if it reaches first class standard. Likewise eggs can be exported only from licensed premises, and must be graded and suitably packed. That Act has been in force only four months and already there are signs of its good effects, and the value of these commodities in Great Britain has increased. In order to compete more successfully with Denmark in butter exports, an Act has been passed by which the strain of the milch cow will be improved. Our milch cows on the average produce only 400 gallons per year, whereas the Danish cow produces between 700 and 800 gallons. Well, it costs the same to feed one cow as the other, therefore an Act has been passed by which we have got to produce a better type of milch cow, and we hope within three years to have the average cow in Ireland yielding at least 600 gallons. It is estimated that the returns to the farmer on that alone, with the number of cattle we have will be roughly about 35 million dollars per year, as well as improving the quality of the cattle we export. Last year we exported to England about 650,000 head of cattle, and the year previous close to one million head of cattle. The farmers can also borrow money from the government at a reasonable rate of interest for the improving of their land.

The river Barrow, one of the large rivers of Ireland which frequently overflows its banks and renders a great deal of land more or less useless, is to be drained at a cost of five million dollars.

So much for what the government has done in the way of agricultural development within the last few years. I mentioned that the Irish Free State exports mainly agricultural commodities. We have very few industries in the Irish Free State; the seat of industry in Ireland is in and around Belfast. In the Irish Free State we have a very bad balance between agriculture and industry, and there is no reason why we should not be able to develop some industries. I will take as an example the boot and shoe industry; we export to England hides and skins, and yet for every fifteen pairs of boots we wear in Ireland we import fourteen pairs. Likewise with soap and candles and clothing. Therefore the government decided to introduce tariff protection. It has introduced these tariffs on about twenty-five commodities as an experiment, and they are going to see how this experiment will work out, and then if it is successful, apply protection to a wider area. Last year as a result of protection that is in force, the industries concerned exports, an Act has been passed by which the strain of the milch cow will be improved. Our milch cows on the average produce only 400 gallons per year, whereas the Danish cow produces between 700 and 800 gallons. Well, it costs the same to feed one cow as the other, therefore an Act has been passed by which we have got to produce a better type of milch cow, and we hope within three years to have the average cow in Ireland yielding at least 600 gallons. It is estimated that the returns to the farmer on that alone, with the number of cattle we have will be roughly about 35 million dollars per year, as well as improving the quality of the cattle we export. Last year we exported to England about 650,000 head of cattle, and the year previous close to one million head of cattle. The farmers can also borrow money from the government at a reasonable rate of interest for the improving of their land.

The river Barrow, one of the large rivers of Ireland which frequently overflows its banks and renders a great deal of land more or less useless, is to be drained at a cost of five million dollars.

So much for what the government has done in the way of agricultural development within the last few years. I mentioned that the Irish Free State exports mainly agricultural commodities. We have very few industries in the Irish Free State; the seat of industry in Ireland is in and around Belfast. In the Irish Free State we have a very bad balance between agriculture and industry, and there is no reason why we should not be able to develop some industries. I will take as an example the boot and shoe industry; we export to England hides and skins, and yet for every fifteen pairs of boots we wear in Ireland we import fourteen pairs. Likewise with soap and candles and clothing. Therefore the government decided to introduce tariff protection. It has introduced these tariffs on about twenty-five commodities as an experiment, and they are going to see how this experiment will work out, and then if it is successful, apply protection to a wider area. Last year as a result of protection that is in force, the industries concerned employed about two thousand people extra. Naturally the government cannot introduce wholesale protection without going to the country.

We have in the Irish Free State the largest river in the British Isles, that is the River Shannon, and it was brought under notice by a German firm that we had a regular mine of wealth in the River Shannon. I might state that the government was rather incredulous about it, because a previous commission pointed out that the River Shannon would not be a commercial success. Now this German firm submitted its scheme, the government looked at it incredulously, and did not approve of it. The Germans were nothing daunted; they said, " Well, submit our scheme to any body of experts you like from any part of the world, and if this body of experts turn it down, we are quits. If, on the other hand, they say this scheme is all right in detail, you may pay us a fee for the scheme and we will be satisfied." The government immediately appointed a commission of experts from Switzerland, Norway and Sweden; they spent four months going over the scheme of Siemens, Schuchert, of Berlin, and they endorsed all the statements of Siemens Schuchert. The government thought it was quite a safe venture under these circumstances to proceed with the development of the River Shannon. The scheme is divided into two parts. The first part of the scheme is to develop 90,000 horsepower, and work was begun last September, and when that part is built and the power used up, it will proceed with the balance of the scheme, which is to develop another 90,000 horsepower. So in the driest year, when this scheme is working fully, it will develop 180,000 horsepower, and the first part of the scheme distributes the electricity to every village in the Irish Free State, of 500 inhabitants and upwards. The social effect alone of supplying the villages of Ireland with plenty of light in winter time will be incalculable, and cheap power will tend to develop a number of industries and distribute them throughout the country areas instead of having them centralized in large cities.

It appears that the Irish Free State is also very suitable for the growing of beet for sugar, and an arrangement has been entered into with a Belgian firm, a sugar firm which also has many affiliations in Czechoslovakia, one of the largest sugar refineries in Europe, I believe. This firm has agreed to establish, and provide the capital, for a large sugar factory in Carlow, and it will begin operations next September, and the farmers have agreed and arranged to grow the necessary beet. We are giving a subsidy of so much a ton on the finished sugar. It is a scheme somewhat similar to the scheme that has been put into execution in Great Britain.

With regard to the financial position of the Irish Free State it may interest you to know that for the last two years we have balanced our budget. We raised a loan in 1923, issued at 95, at 5%, and in less than half the time allotted for getting the applications, the loan was oversubscribed. That stock was quoted on the Dublin market last October at 97, and as the result, I presume, of the agreement entered into between the President of the Irish Free State, Sir James Craig, Premier of the Northern Parliament, and the Premier of Great Britain, Mr. Baldwin, by which they agreed to leave the boundary in Ulster just as it was, and by which Great Britain agreed to waive Clause 5 of the treaty by which we had to make a contribution to the British National Debt, which contribution was to be determined by a commission-as a result of the settlement of the boundary, and as the result of the waiving of that liability, our loan appreciated to 99, so the loan that was floated at 95 is now 99, showing that our credit is good. Our total internal indebtedness is 65 million dollars. It is about 60°0 of one year's annual revenue. We have no external debt. We are also a creditable state; what I mean by that is that the value of the investments of the citizens of the Irish Free State in Great Britain and other countries, and British Government securities, is one billion dollars, and the value of the interest that we receive from our investments in those securities, and dividends on industrial securities, reaches--upwards of 55 million dollars a year. So you see we start with a clean slate and all the conditions requisite for good credit. With political stability assured there should be no difficulty in getting from the Irish people themselves all the financing that we want for the development of our industries.

At present there is a bank commission sitting in the Irish Free State, with the object of endeavoring to improve our banking system, if that is possible. Our banking system is good at the moment; we have had no banking failure in Ireland since 1880, but at the same time we think that perhaps some slight changes may aid the development of industry and agriculture. In any case, in accordance with the Treaty, we will have to introduce a new Bank Act. The Chairman of that Commission is the gentleman who was the first secretary of the Federal Reserve Board in the United States, Professor Parker Willis, Professor of Banking also in Columbia University, and he has as a colleague one of the directors of the Commonwealth Bank of Australia; as well as some Irish bankers, so we hope as a result of that Commission perhaps to improve our banking methods.

We had in the Irish Free State about twenty-one different railways, and the government set up a commission recently which brought about an amalgamation of those twenty-one different railways into one, so now we have one system of railways, not under government control, but under the directors that managed the various railways, some of them eliminated; and already reductions have been effected in the passenger rates and in the freight rates.

Our Civil Service may interest you. I think it is somewhat on the lines of your own Civil Service. It is similar to the British Civil Service, divided into two categories, a first class division and a second class division. Candidates for the first division are usually young men of University standing, those for the second division are young men and women of less education. Admission to the Civil Service is only by competitive examination, to all positions in the government except the purely political positions such as ministers; all others are got uniformly by competitive examination, and the examination is by university professors. Creed and politics play no part whatsoever in the Irish Civil Service. In fact any position within the power of the executive is determined only by efficiency and ability. Recently there were some positions to be filled, three in the Supreme Court and the High Court, and these positions were filled by three men who are not of the religious persuasion of the majority of the people of the Irish Free State. They were put there purely through efficiency. The government in its desire to improve also the municipal administration found itself reluctantly compelled to disfranchise, practically speaking, the Corporations of Dublin and Cork. A great deal of unnecessary labor was employed by these corporations, so much so that the rates became excessively high, and the government disbanded the corporations and appointed two Commissioners to manage the City of Dublin, and one Commissioner for Cork, with full plenary powers. The result has been in the first year a reduction in the rates of about 250/0 in both Dublin and Cork. The government disbanded those corporations at a time when, you might say, it was fighting for its life, at a time when it wanted votes. It was an unpopular thing to do, but still it had the courage of its convictions and performed that very necessary work. For instance, the City of Dublin wanted to have the streets cleaned and received tenders for cleaning the streets of the city for twelve months. Tenders were received from Irish bodies, and I believe from British, German and French firms, and the contract was assigned to a French firm. So it is a French firm that is cleaning the streets of Dublin-naturally utilizing Irish labor, Dublin labor, and great economy has been effected. I have not been there since, but I am told that the streets of Dublin were never cleaner.

I referred to Ulster and the agreement that was entered into. The real hope of all citizens of the Irish Free State is the ultimate reunion of Ireland. That is really what we want and we hope to achieve it, by good example, by friendliness, by developing the Irish Free State, making good by low taxation, by prosperity, and giving Ulster proof that she would benefit by her coming in. We would gain by her advent and I think she would gain by us. Also the more we tolerate differences of ideals, of traditions, of culture, in Northern Ireland and in Southern Ireland, the more variety of outlook and of general culture we shall have, the bigger contribution we shall make to literature, drama, and other aspects of human life. We shall have thereby a more varied picture, and that is, I think, a tendency of the peoples of Ulster, and of the Irish Free State. After all we are one people and we are all Irish.

It may interest you also to know that the government of the Irish Free State is most anxious to develop the Gaelic language. The Gaelic language is now made compulsory in all the schools of the Irish Free State. The object of making Gaelic obligatory in the schools is to try to bring back some of our old traditions and our old culture. As far back as 2500 years ago Ireland possessed a wonderful culture, a wonderful folklore, a wonderful mythology and a wonderful art. We want to get back some of that culture, and people think it can be best reacquired by getting the Irish people to speak their native language. There is no effort to abolish, and no thought of abolishing, the English language; we shall be a bilingual country, and we believe that the more Gaelic we are, the more Irish we are, and the better friends we shall be with our neighbors. The main point is to try to give our civilization a culture of its own, and the civilization we get from other countries, when grafted upon that, may produce something new; and we think that we may contribute to literature, to art and to drama, something worth while. We have done it already as the result of the Gaelic League; we have poets like Yeats and John O'Casey with his recent dramas, and we say we will do still more according as we get back as much of our old culture as is worth having. We cannot make any great contribution to the world in commerce or industry, but I think we can make it in the realm of literature.

The President expressed to the speaker the thanks of the Club.

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The Economic Conditions and Policies of the Irish Free State


Ways in which Canada is intimately bound up with the Irish Free State. The similar constitutional status of the Irish Free State with that of the Dominion of Canada. The Irish Free State, like Canada, free to determine and work out her own destiny in her own way, without any hindrance from any other country or any other government. Now the Irish Free State and all nations in the British Empire united by the symbol of the British Crown, and what that symbol means. The differences in meaning between "co-equal in stature," and "co-equal in status." Ways in which such co-equality among the different nations forming the British Empire is a guarantee of world peace. The economic conditions of the Irish Free State at present, and the difficulties that the Government has had to contend which. The position of the Irish Free State and Ireland after signing the treaty with Great Britain. The short-lived Civil War. Policing. The organization of the Civic Guard. An overhauling of the judiciary, and reasons for it. The Land Act of 1923 which wiped out the last vestiges of landlordism in the Irish Free State. Exports from the Irish Free State. A butter inspection Act and its effects. Agricultural development. The lack of industry in the Irish Free State. Examples of development. Tariff protection and its results. Wealth from the River Shannon: developing hydroelectric power. Developing the growing of beet for sugar. The financial position of the Irish Free State, which some figures. The establishment of a banking commission, and its endeavours to improve the banking system. Amalgamating the railways. Civil Service in the Irish Free State. The ultimate reunion of Ireland as the real hope of all citizens of the Irish Free State and how that may be achieved. Developing the Gaelic language.