Sins of the Father (11 page)

Éamon de Valera, Sligo, 5 July 1930.

The Stock Market Crash and subsequent Depression saw governments across the world embracing protectionism with renewed vigour, and by the time Fianna Fáil came to power in 1932, Ireland was ‘virtually the last predominantly free-trading economy in the world’.
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The party initially formed a minority government with Labour Party support, but gained an overall majority after the snap election of 1933. It promised small farmers and urban workers significant changes and a positive difference to their lives. Policies included a campaign to encourage tillage; to break up the large grazier farms and destroy the rancher class; to divide the big farms among the small farmers and landless labourers; to introduce a general policy of protection; and to break the country’s commercial dependence on Britain.

Seán T. O’Kelly was made Minister for Local Government and almost immediately began work on providing social housing for the working classes and agricultural labourers. Seán Lemass, as Minister for Industry and Commerce, was equally enthusiastic, and set about introducing a series of protectionist measures to encourage indigenous industry. Éamon de Valera, as Taoiseach, withheld land annuities to the British government and sparked a tariff war, which led Britain to place 20 per cent duties on all Irish livestock and livestock products, and de Valera, in retaliation, imposing duties on British coal. The tit-for-tat measures put a dent in Fianna Fail’s limited economic reforms.

The most striking aspect of Fianna Fáil’s economic policy, though, was not that the Free State had finally caught up with the rest of the world and was using tariffs to protect and encourage domestic industry, but that, having committed itself to tackling the structural deficiencies in the Irish economy via tariffs, it then decided to fight with one fiscal arm tied behind its back. There was no move to create an independent Irish currency, no move to establish a central bank, and no move to break the crippling parity with sterling. In addition, the ‘bank rate remained at 3 per cent between June 1932 and August 1939 … and though national debt rose, budgets continued to be balanced or nearly so’.
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Furthermore, Fianna Fáil embraced protectionism as a means of creating industries which would produce for the needs of the Free State, and it alone, ‘In de Valera’s particular denomination of the tariff creed, the industries established were not expected to compete internationally, but were to service the home market.’
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He saw ‘little hope of establishing export industries, apart from food’ and freely admitted that this particular brand of protectionism – great effort for little growth – would involve sacrifices. He simply counselled the people to ‘forget as far as we can, what are the standards prevalent in countries outside this’.
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Where this left the opening of letters from emigrants writing home, and sending money to boot, de Valera did not elaborate.

The move to impose tariffs, however, once taken, was quite robust. James F. Meehan, in his 1970 study,
The Irish Economy Since
1922, noted that:

… at the end of 1931, the list of tariffs covered 68 articles including nine revenue tariffs. At the end of 1936 it covered 281 articles including seven revenue tariffs. These figures do not include a profusion of quotas and other restrictions. At the end of 1937 it was calculated that 1,947 articles were subject to restriction or control.
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Irish industry did expand as a result. The number of new industrial jobs generated between 1932 and 1936 was at least 40,000.
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This increase in jobs, along with the substantial increase in house construction, meant that southern Ireland saw not only the first sustained growth in employment since the famine, but also a modest increase in prosperity in urban areas.
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In keeping with the goal of national self-sufficiency, the government passed the Control of Manufactures Acts 1932 and 1934. These made it illegal for any business, unless it had been granted government permission to do so, ‘to make, alter, repair, ornament, finish or to adapt for sale any article, material, or substance or any part of any article, material, or substance’ unless at least 51 per cent of the nominal share capital and two-thirds of share with voting rights were held by Irish nationals. There was also an increase in the Semi-State sector, with the establishment of bodies such as Comhlucht Siúicre Éireann, Bord na Móna, the Industrial Credit Company, Ceimici Teoranta, Aer Lingus, the Irish Life Assurance Company, and the Irish Tourist Board.
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Concurrent with the move towards non-export protectionism was the campaign to encourage farmers to move from pasture to tillage, in particular, grain. ‘A bounty was offered for calf skins, subsidies were introduced for wheat and sugar beet, import controls were imposed on sugar and tobacco, and relief was offered on rates in proportion to the amount of non-family labour employed.’
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Wheat and flour to the value of around £7 million was being imported into the State and Fianna Fáil believed that it was time to redress this imbalance and make Ireland self-sufficient.
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The Minister for Agriculture, Dr James Ryan, argued that increased tillage would see employment rise by as much as 50,000, with an extra £3 million in wages pumped into the economy as a result.
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Again, the main idea was to create self-sufficiency in grain, as well as providing enough employment as to keep people on the land.

The results were mixed. There was increased production of wheat and sugar beet, ‘but at the expense of other crops, not at the expense of cattle’.
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A comparison between the 1926 and 1936 census shows that while the number of people engaged in agriculture dropped by 26,091 (from 670,076 to 643,985), the number of paid agricultural employees – as opposed to family members working on farms – increased by 1,998 (from 138,658 to 140,656). There was an increase of around 5,000 agricultural workers who didn’t live on the farms they worked, but a drop of over 3,000 in agricultural workers who did. Ray Crotty notes that ‘during the decade 1929-39, Leinster, the province with the greatest increase in tillage, showed the largest decline in agricultural employment. In Connaught, by contrast, where the decline in rural employment was very slight, there was a sharp fall in the tillage acreage.’
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It seems reasonable to accept his conclusion that in terms of promoting tillage as a means of increasing employment, there is ‘neither on a country nor on a provincial basis … any evidence whatever that wheat or sugar beet growing had this effect’.
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Cattle production for export had a tendentious hold on all aspects of Irish agriculture.

Land redistribution was another key element of Fianna Fáil’s plans to transform rural Ireland. The 1933 Land Act gave the Land Commission extra powers, while the amount spent on redistribution went from £2.7 million in 1931, to £7.6 million in 1936.
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‘We may be told that a county is rich because of its profusion of grass,’ said the Fianna Fáil TD for Meath, James Kelly, in 1932, ‘but this merely gives us a wealth which cannot be diffused at present amongst our people. In fact, a large percentage of our poverty can be attributed to this cause.’
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In this, Kelly was voicing an analysis which was central to the Ranch Wars, and was an underlying issue of conflict during the 1880s agitation.

In 1936, J.J. Waddell, the chief inspector of the Land Commission, argued that the minimum requirement for sustainable farming was 32.5 acres.
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However, the size of new farms created by the government was limited to 22 acres, not enough to provide anything more than feeder farms for the ranchers, and certainly not large enough to threaten the system of production. Waddell cited the experience of the Rath Carn resettlement in County Meath, where families were given 20 to 200 acres each. ‘Practically every family is sending members across the water to England’ wrote Waddell, ‘to assist the occupiers in living on these holdings and help to pay the annuity and rates, and to exist on them.’
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However, any move to make small farmers economically self-sufficient would affect the supply of calves to graziers and fatteners – not because they would automatically switch to tillage, but because such redistribution would allow small farmers to fatten calves past the time which their present holdings would allow. The pressure to sell a calf after one to two years would lessen, and graziers and fatteners may be compelled to pay more for the product. The ranchers didn’t just want small farmers to produce calves for them, they wanted
poor
small farmers who were not in a position to feed calves for much longer than a year.

By 1938, Fianna Fáil had all but abandoned the land annuities ‘war’ with the British. It is doubtful that Fianna Fáil ever really wanted to tackle the dominance of graziers. The reaction of Britain to the withholding of land annuities by de Valera ended up placing the issue of graziers within the wider remit of the party’s tariffs policy – even though that policy was centred on creating a home industry for the home market. Fianna Fáil’s tariffs were never about diversifying exports. In April 1933 the economist J.M. Keynes gave a lecture at University College, Dublin, in which he praised the merits of protectionism, much to the embarrassment of his hosts, but did so with the proviso that protectionism in an Irish context should be used to build up and diversify the economy – that Ireland’s trade with Britain should be reciprocal in its nature. He criticised the idea of using protectionism to create industry for a ‘self-sufficient’ economy of such obviously limited size as the Free State.

Irish graziers were once again at the forefront of Irish economic policy. The structural problems remained in place. The Irish livestock export trade to Britain was not capable in itself of achieving economic wellbeing, but at the same time neither was the Irish political system willing to weaken the hold on exports which the livestock industry possessed. ‘Again, following an iron precedent,’ writes Roy Foster, ‘The basic pattern of Irish agriculture showed little sign of change.’
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The plan which Fianna Fáil had for the Irish economy in 1932 was one which saw the expansion of tillage and redistribution of land as taking place alongside the cattle industry, not in conflict with it. The decision by the government to limit new farms created out of Land Commission acquisitions to 22 acres (later expanded to 25 acres) all but guaranteed that the old system of production remained in place – that is, small farmers as breeders, middle-sized farmers as fatteners, and graziers as finishers and exporters. ‘It is most surprising that a Land Commission which for 30 years is committed to a policy of increasing the number of small farms’ wrote the
Irish Farmers’ Journal
in 1952, ‘has never applied itself towards developing a system of farming that would give the 25 to 35 acre man a decent living.’
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The purpose of the tillage campaign, it appears, was to make life on an uneconomic farm that bit more bearable by providing seasonal work for the small farmer and his family. Behind the rhetoric of tackling the ‘old Imperialist policy’ of ‘making the country a ranch to provide cheap food for the English workers’,
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Fianna Fáil had consolidated that system by developing supplements to the income of small farmers and labourers, while bowing the head in deference to the primacy of cattle as the main cash crop. In May 1932, James Kelly told the Dáil that ‘The ranching system [may be] a necessary adjunct to the production of beef … but the division of a larger holding into small holdings will not diminish its beef-producing capacity’.
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Fianna Fáil wanted to develop a home market to sustain the working class and agricultural labourers, and to maintain an export market which would sustain the breeders and exporters. Yet it was not possible to square this economic circle, as in order to create an economy with employment levels high enough to sustain the population, the nature of the cattle trade needed to be changed. As Kelly noted, the livestock did not care if the grass and hay they ate belonged to a famer with 50 acres or 500 – but what Kelly failed to mention is that the problem was not so much one of an imbalance of livestock, but the fact that livestock were the end result. Ireland was still exporting its main raw material to Britain, not only because of the graziers and their hold on the economy, but also because livestock, particularly store cattle, was what Britain wanted.

The Irish government opened discussions with London in the immediate post-war years with regard to signing a new trade agreement. As part of the preparations, the British government requested a statement of agricultural policy from Dublin. To quote the historian Paul Rouse:

[London] demanded, most pointedly: ‘Has the Éire government the intention of ensuring that agricultural development takes place?’ It asked what factors would retard expansion of production, what the fertiliser requirements would be, were there plans to specialise in agricultural industries such as canning, what other countries would Ireland look for markets in, and ‘what effect will the policies proposed here have on the number of Irish workers coming to the UK?’ Similarly, ‘what evidence is there that the past apparently leisurely acceptance of improvements in technique, etc., by the Irish farmer will now give place to more speedy technical development?’ The British missive wondered whether grassland and home-grown feed could be increased to improve stocking and to even out seasonality, and whether such increases would mean more fat rather than more store cattle. [It also asked] what policy as to concentration on beef, dairy and dual purpose cattle is being pursued? … Why have cow numbers not increased in the last 30 years? … it inquired what Ireland’s preference for division on the export of her cattle would be between stores, fats, breeding stock and carcass or canned meats? … Which products would Éire prefer to export? … Will the import of feeding stuffs for bacon production be restricted as a matter of policy? Is it practicable to increase pig production from Éire’s own soil?
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