Gallagher, James (1920–83), businessman and politician, was born in Cashel, Curry parish, Co. Sligo, on 12 April 1920, the ninth child (of fourteen) of Matthew Gallagher, small farmer of Cashel, and his wife Margaret (née Reilly). Too sickly to partake in farm work, after attending Moylough national school he left home aged 14, spending three years as an apprentice grocer in Ballaghaderreen, Co. Roscommon. He then went to Enniskillen, Co. Fermanagh, working in a wholesale bottlers firm and later as a barman, experiencing anti-catholic prejudice. Decades later he told a journalist that he absconded in 1939 with the bar's proceeds, but subsequently claimed he had been misconstrued.
BUILDER
Emigrating to England he worked briefly as a clerk on a building site, before realising, as war loomed, that he could earn more getting his hands dirty. He joined his brothers Matt (qv), Joe, Dan and Hubert in Liverpool where they had started a small haulage business, transporting materials needed for building air-raid shelters, runways and factories. When the blitz began in 1940, they widened their sphere of operations and leased a shale pit, hauling landfill to bombsites. The fleet grew from two trucks to ten and they won an eighteen-month contract conveying farm labourers. By 1944 they had one hundred trucks, ninety on hire, and moved into London as V1 and V2 rockets menaced the city, progressing from delivering materials to engaging in reconstruction.
At St Albans, the Gallaghers completed some of the first private homes built after the war, but the Labour government halted all private house building and they fell back on public housing contracts. In 1946 James married Mona (née Gallagher) with whom he had three daughters and two sons. The newlyweds lived in Tottenham along with James's brother Matt and his wife above a restaurant they owned. While Matt was the family leader, James's administrative expertise made him his deputy. Steeped in Irish nationalist rhetoric, the Gallaghers regarded British society with a jaundiced eye while acknowledging its merits, James the most grudgingly.
Deciding in 1947 that Irish entrepreneurs could only rise so far in Britain, which was moreover experiencing an economic crisis, he removed to Dublin to expand the family's interests, later being joined by Matt, Hubert, and the eldest brother, Patrick (qv) (1909–94). Performing all the paperwork and purchasing, also pitching in as a glazier, James began with some small local-authority housing contracts in Dublin, before undertaking a private development at Santry, significantly undercutting competitors. In partnership with two other builders and operating mainly in the capital, the Gallaghers were involved in the early 1950s in large private developments in Dublin at Stillorgan and Drumcondra, supplementing this with local-authority work. When the Irish economy imploded in the mid 1950s, they transferred men and resources to Britain, renewing their private housing business in a reviving market freed from state control.
INDUSTRIALIST
In 1957 James succeeded Matt (who retired) as head of a business that was diversifying into wide-ranging ancillary ventures, partly to resolve supply difficulties, partly out of commercial opportunism. In England the leasing of construction equipment during quiet periods produced a fast-growing plant-hire company, M and J Engineering Ltd. In Ireland, the Gallaghers in 1952 established a builders' providers company in Dublin called P. J. Matthews Ltd, and in 1961 purchased and renovated the International Hotel in Bray, Co. Wicklow. James wished to support his native locality, and Tubbercurry, Co. Sligo, the town nearest to his Cashel homestead, became the focus of various initiatives. There, he founded first a short-lived poultry venture and then, the Gowna Wood Industries joinery (c.1950), which, proving profitless, was given away in 1958.
In 1953 he returned from a business trip to Denmark with the worldwide rights to locks designed by the Basta company and, with his Danish associates providing investment and training, set about creating a lock-manufacturing enterprise at Tubbercurry, broadening the product range to include assorted builders' hardware. Two additional factories were built to supply components and later developed sales to outside firms. During 1955–6 the Gallaghers opened at Tubbercurry the Basta Ltd lock factory, the Industrial Foundries Ltd die-casting factory, and the Tool and Gauge Company of Ireland Ltd precision toolmakers and mould-makers factory.
Gallagher was assisted by the government's imposition of tariffs on imported locks and decision to reduce grants for housing, schools, hospitals and factories if Irish-made locks (i.e., Basta's) were not used. Yet Basta endured a difficult start; its early output proved defective and encountered resistance from the hardware trade. Gallagher was in unfamiliar territory and his employees, many part-time local farmers, were poorly attuned to industrial working practices. These teething problems were overcome by recruiting local emigrants with experience of working in British factories, and the three companies employed 200 workers in 1961. He set up a fourth factory at Ballymote, Co. Sligo, in the late 1960s after acquiring the manufacturing and sales rights for a food-slicing appliance.
POLITICIAN
The decision to locate these factories in the west of Ireland is explicated only by sentiment and political ambition. He unsuccessfully contested the Fianna Fáil nomination for the four-seat Sligo–Leitrim constituency in 1957 and thereafter dedicated himself to becoming a TD, being well served by his garrulous and ingratiating manner. With his employees and their families providing ample ballot fodder, in 1961 he won both the party nomination for Sligo–Leitrim and a dáil seat in the general election. He retained it in 1965, and in 1969 was returned for the redrawn, three-seat Sligo–Leitrim constituency (comprising Sligo and north Co. Leitrim). His electioneering was controversial, and a political rival noted that most candidates did not win votes by spending £3,000 and promising families free petrol.
Similarly, Fianna Fáil benefited from his generous donations and dispatch of senior employees to party headquarters during elections. The grateful ruling party made sure that his manufacturing and trading interests were underpinned by state grants and contracts, while his building activities were abetted by financial aids for homeowners. In return for deriving commercial advantages from political wire-pulling, he accepted employment-creating (and -sustaining) obligations, declining to run his businesses on strict profit-making lines.
Politics was a personal obsession, not simply a means to an end. Relishing political intrigue and partisan jousting, Gallagher admired his party leader Seán Lemass (qv) for his efforts to create a modern industrial infrastructure and derided the opposition, particularly the Fine Gael leader James Dillon (qv), as unable to conceive of Ireland as other than an agricultural backwater. He vigorously supported Lemass's reforms, which opened Ireland up to foreign investment and trade. If indigenous companies were to survive they had to export and he led by example, displaying ingenuity and initiative in developing far-flung markets for his companies from the mid 1960s.
In 1969 he invested £1.15 million in expanding the Tubercurry factories, and employment there peaked at nearly 500 in the mid 1970s. By the late 1970s, Basta Ltd was exporting 70 per cent and the Tool and Gauge Company of Ireland 90 per cent of their output. Ireland's first contract tool-making company, Tool and Gauge included IBM, Rank Xerox and Ford among its clients; Basta, however, was reliant on uncertain markets such as Iraq and Nigeria.
THE FAMILY BUSINESS
Distracted by politics and dividing his time between Dublin, where he had a mansion at Sandyford and an office on Mount Street, and Tubbercurry, where he had a house at Rathscanlon, he could not strictly supervise the Abbey Group, as the Gallagher conglomerate became known. It evolved into a dynastic confederation operated by four of the Gallagher brothers. James dealt with the industrial activities, Hubert with the Dublin homebuilding operations and the hotel in Bray, Patrick with the builders' providers firm in Dublin, and Charles (qv) with the English homebuilding and plant hire operations.
James could often outwit but never overawe his headstrong, combustible siblings, lacking his brother Matt's daunting charisma. For long this mattered little as, thanks to a long housing boom in Britain and Ireland, annual group profits rose from £150,000 in 1963 to £2 million in 1973. By then, Abbey employed 1,400 workers (with another 500 on contract), boasted a £17 million turnover and was building some 650 houses a year in England and about 450 in Ireland. Abbey also pursued commercial and apartment developments in Cyprus in the early 1970s, which, however, came unstuck when war erupted on the island in 1974.
Catering for first-time buyers in the low- to middle-income bracket, Abbey was one of the biggest housebuilding firms operating in Dublin's fast-growing suburbs, and a medium-sized English building operation, concentrating its activities on London's vast hinterland and developing shopping centres on the larger English housing estates. In Dublin, James was particularly adroit at assembling large, well-situated sites, seemingly having good contacts within the catholic church, which held some of the city's most prized properties. Abbey built relatively superior houses, but those in England were finished to a higher standard than those in Ireland; like many building concerns it was remiss in fulfilling pledges to provide properly landscaped and laid-out estates.
Due to heavy investment in the Tubbercurry factories, Abbey ran out of land in Dublin in 1970 as the market boomed. Irish building profits faltered, whereas those in England nearly quadrupled during 1968–72, straining relations between James and his brother Charles who felt that his operations were carrying the group. He had a point, as James was much diminished by a heart attack in 1969, after which standards in the manufacturing division declined precipitously. More fundamentally, his perpetuation of grant-dependent pocket industries in a peripheral region reflected how his political career had turned Abbey into a medium for 'parish-pump' patronage.
BUSINESS AND POLITICS
Opposition TDs regularly targeted James in dáil exchanges amid rumours of unsavoury financial dealings between Fianna Fáil and builders. These suspicions were borne out by subsequent revelations, most pertinently the admission in 1999 of George Redmond, long-time head of planning for Dublin Corporation, to providing advice on planning matters to Abbey and to Matt Gallagher's building concern, the Gallagher Group, from the mid 1960s in return for receiving £10,000 to £15,000 per annum from Matt, James and Hubert Gallagher at a time when his annual salary was £10,000. Redmond was hardly the sole recipient of their covert benefaction: certainly Fianna Fáil treated the Gallagher building groups as favoured instruments in the push to enlarge the home-owning middle classes. However, in the 1970s assorted Abbey projects were subject to lengthy delays as preservationists and residents of Dublin's increasingly congested suburbs mounted more determined and organised opposition to developments, obliging formerly facilitative local-authority officials and politicians to trim accordingly.
Courting further controversy, James justified and participated in the brutally unsympathetic redevelopment of Dublin's city centre. During 1967–72 he accumulated a huge four-acre site, known as the Earlsfort site, off St Stephen's Green, with a view to commercial development, dismaying preservationists by demolishing some Victorian buildings and by neglecting (likely vandalising) protected eighteenth-century houses on Leeson Street. In 1981 the parapet of one of the houses collapsed onto the street narrowly missing pedestrians and prompting Dublin Corporation to order its demolition. Due to a recession and disagreements among the brothers, the site remained derelict for well over a decade, enabling them to extort planning concessions from authorities desperate to be rid of Dublin's worst eyesore.
Following the 1970 arms crisis, James sympathised with the republican dissidents, emerging as a vocal proponent of a united Ireland. Moreover, two of the sacked ministers, Neil Blaney (qv) and Charles Haughey (qv), were at the heart of the Fianna Fáil–builder nexus. Gallagher was one of eight TDs to oppose Blaney's expulsion from Fianna Fáil in November 1971. However, his nationalism was tempered by the activities of the Dublin Housing Action Committee (DHAC), a left-wing group linked to the Official IRA, which engaged in civil disobedience as a means of publicising housing shortages.
In May and again in June 1970, DHAC activists occupied an Abbey property acquired for commercial development in Ballsbridge, being forcibly removed by gardaí on both occasions. Soon after, arsonists gutted the Dublin premises of Abbey subsidiary P. J. Matthews. During 1971–2 Gallagher spoke forcefully in favour of legislation directed against squatters and republican paramilitaries, notoriously declaring that justifying homeless squatters was like defending the right of a starving man to steal food.
RETIREMENT INTERRUPTED
Following medical advice, he temporarily retired from business and the dáil in 1973, failing to get elected to the senate. As an intended valediction to his business career he served as president of the Dublin chamber of commerce for 1972–3, and in May 1973 floated Abbey on the Dublin stock exchange. To facilitate the Gallaghers' avoidance of estate taxes, the float entailed the reverse takeover of a tiny, publicly quoted stationery company.
Financial institutions were wary, but small Irish investors responded enthusiastically to the largest share issue attempted in Ireland. The offering was oversubscribed four times over, and made Abbey Ireland's third largest publicly quoted industrial company. The four Gallagher brothers retained 76.5 per cent of equity and pocketed over half the £5.13 million raised therein. James emerged with £915,000 in cash and, as the largest shareholder, his 24.7 per cent stake was worth £5.5 million.
Almost immediately after his resignation as Abbey chairman in December, the group was rocked by a property slump in England and Ireland. With site values and house sales collapsing, Abbey gearing reached a near terminal 145 per cent during 1974. (The only salve was that the loss-making, but fully insured, International Hotel was consumed in a suspiciously providential fire.) This crisis stoked simmering tensions with his brother Charles, by then Abbey's managing director.
Identifying the English housing market as Abbey's best prospect, Charles was infuriated by his brothers' unwillingness to transfer resources from Ireland and took a dim view of the Tubbercurry factories, which struggled under free-trade conditions from 1970. James defended his Tubbercurry retainers and criticised Charles for overseeing extensive land purchases at the top of the market in 1972–3 as the dispute became increasingly bitter and personalised, resulting in at least one fistfight.
A HOUSE DIVIDED
With Abbey at the mercy of its bankers, Charles isolated himself by refusing to admit the need for retrenchment. Supported by Hubert and Patrick, in July 1974 James dismissed Charles from all his positions in Abbey, appointing Kieran Flynn, a professional accountant, as managing director. Flynn laid off workers and reduced land purchases as Abbey changed tack, building in smaller batches and operating on a greater number of smaller sites. The English homebuilding and plant-hire division was neglected but left to its own devices: continuing to bear Charles's stamp, its subsequent impressive showing was for James both a godsend and an embarrassment.
Charles angrily disrupted a succession of Abbey AGMs and announced in 1975 that he intended selling his near 20 per cent shareholding. James's efforts to remove this millstone around Abbey's stock valuation by either purchasing or brokering the placement of Charles's stock came to naught. Having floated at 96p, the share fell to 8p in 1976, languishing thereafter between 20p and 50p – well below asset backing, but symptomatic of the group's dysfunctional ownership dynamics. The siblings' mood cannot have been improved by the consequent evisceration of their paper wealth, and while James, Patrick and Hubert held together sufficiently to keep Charles at bay, their bickering moved observers to dub them 'the Three Stooges'.
Despite withdrawing from formal management roles in 1974–5, the Gallaghers remained firmly in charge. In 1976, James's pre-eminence and restored health were confirmed by his return as chairman and Hubert's resignation from the board. As Abbey's situation improved, James vetoed Flynn's economising initiatives, particularly those relating to Tubbercurry, which remained a financial burden and a managerial distraction. The group was also generous with its dividends, most of which went to the Gallaghers, and in 1978 Abbey controversially purchased land from James for £500,000, provoking Charles to cry foul at the EGM held to sanction the deal.
Such meddling and self-seeking moved several executives to quit, including Flynn soon after the aforementioned EGM. Gallagher declined to appoint a replacement, becoming executive chairman and advancing his son Seamus as his designated successor. Dogged by ill health, he was incapable of providing strong leadership and Abbey drifted along with two managing directors, one for Ireland and one for England, while James's personal assistant and members of the Gallagher dynasty pursued roving roles. This chaotic authority structure complemented a ragbag of manufacturing and trading interests, including the stationery company, which was retained after the 1973 flotation, and a barn-manufacturing concern purchased in 1977 and soon overwhelmed by a farming crisis.
POLITICAL COMEBACK
Meanwhile, James set about regaining his dáil seat, facing resistance from Fianna Fáil members in Sligo–Leitrim. Against all expectation, in June 1977 he prevailed at the nomination convention when the party organisers (ostensibly through incompetence, but probably by design) contrived a melodrama whereby some of the Leitrim delegates were initially denied their voting rights, enabling Gallagher to protest vociferously and claim both the credit for the restoration of those votes and the overwhelming support of the Leitrim contingent.
His election was not assured, given his constituents' distaste for his devious convention tactics and conspicuous deployment of personal wealth for campaign purposes. Near polling day, he placed a personal advert in a local newspaper suggesting that gardaí had mistreated republican prisoners and advocating the abolition of the Offences Against the State (Amendment) Act (1972), which he had previously supported. This intervention drew extensive media coverage and condemnations from party leader Jack Lynch (qv) and running mate Ray MacSharry (whose votes Gallagher was flagrantly endeavouring to poach). Regardless, the ploy secured his seat, the support he received from Leitrim republicans compensating for a poor showing in his Sligo heartland.
He did not make a speech in his final dáil term while remaining influential as the most visible and outspoken representative of the builders' lobby. As such he endorsed reckless public-spending policies and was at the forefront of construction industry efforts to further stimulate the housing market by bringing political pressure to bear on banks and insurance companies to provide mortgage financing. (Abbey also pioneered the relaxing of Irish house-lending criteria, arranging 90 per cent mortgages for customers from the mid 1970s.) This gambit was only partially successful as the financial institutions initially focused on high earners, prompting Abbey (and others) to move upmarket, erecting more luxurious residences located closer to the city in affluent Dublin suburbs.
Critical of the Lynch administration for mishandling the economy, he canvassed on behalf of Haughey who emerged victorious from a leadership contest in December 1979. However, more than a change of personnel was required: rising public expectations and the damage inflicted by incipient globalisation on a crumbling indigenous manufacturing base were placing intolerable strains on the crony capitalist spoils system underpinning Fianna Fáil's electoral coalition. Gallagher cavilled against crippling taxes and pay agreements, but he was part of a horde of rent-seeking interest groups that had inadvertently fashioned this voracious state leviathan. He retired at the 1981 general election for health resons.
BOOM AND BUST
As inflationary building costs depressed profit margins in the late 1970s, he preferred buying and holding on to land in Ireland, dribbling properties, developed and undeveloped, on to a market experiencing steepling price rises due to its narrow geographic focus and a less permissive planning system. Abbey's debt remained high but acceptable relative to its appreciating land bank. The rewards accruing to unproductive property speculation were further illustrated by the Earlsfort site, which James, Patrick and Hubert had retained as a private investment. Costing £700,000, it was worth £9 million in 1981, inspiring the Irish Times headline '£8 million harvest for weed growers' (Ir. Times, 1 September 1981). The Gallaghers repeatedly mortgaged the site to finance Abbey.
When state spending slackened so too did Abbey's Dublin housing completions, which fell from 400 in 1978 to 150 houses in 1981. The reckoning was postponed by a move into commercial property and two Ballsbridge office developments – the first on Pembroke Road, completed in 1978 and comprising 12,500 square feet of office space; the second on Haddington Road, completed in phases during 1980–82 and comprising 82,500 square feet of office space – reached the market as demand from financial institutions for office space surged and were sold at enormous profit.
However, he could not keep pulling rabbits out of hats. The manufacturing division was undone by competition from low-wage economies in the Far East in the early 1980s while high real interest rates caused the commercial property bubble to burst in 1982. As this crash unfolded, the Industrial Development Authority rather questionably took an undeveloped site in Leopardstown from Abbey for £2.5 million in April. James thought he had achieved another coup, and thereby secured his personal finances, in January 1982 when he sold the Earlsfort site to his nephew Patrick Gallagher (qv) (1951–2006) for £9.5 million, the day before a budget expected to impose taxes on speculative property profits. However Patrick went bankrupt in May, having paid only a £450,000 deposit leaving James and his two brothers with a site that was losing value and had no prospect of profitable development.
Abbey was similarly embarrassed, particularly after imprudently buying land for low-cost housing, and his son Seamus discredited his succession prospects by disastrously sanctioning the purchase of one such site in Lucan for £3.6 million. James could no longer count on aid from a deeply indebted state and building in Ireland ground to a halt, rendering Abbey wholly dependent on its English operations. In November 1982 he authorised 130 redundancies at Basta Ltd out of a workforce of 180 and was seemingly moving towards closing the moribund Irish homebuilding division. Irrepressible as ever, he might yet have guided Abbey to safety, but died 12 March 1983 in Cyprus while trying to revive Abbey's development interests there. He was buried in Bohernabreena cemetery, Co. Dublin.
The ensuing power struggle within Abbey culminated in his heir Seamus installing family dissident Charles Gallagher as executive chairman. Charles rescued Abbey by closing down or selling all its Irish operations before falling out with Seamus who agreed to support a hostile takeover bid in 1985. It failed, but Seamus sold his shares for a good price, using the proceeds to develop the Earlsfort site in partnership with his uncle Patrick Gallagher.
ASSESSMENT
Part of the first trickle of foreign capital – that of the British building expatriates – to revive a stagnant post-war economy, the contradictions and incoherencies of James Gallagher's career were those of the 1960s generation of 'men in mohair suits' who forged a new Ireland yet remained bound to the old. The tensions between his roles as businessman and politician occasioned compromises and accommodations, leading to a damaging split with his brother, but were intrinsic to the functioning of Ireland's ruling oligarchy and, moreover, crucial in legitimising destabilising economic reforms. Ultimately, the bid to renew Ireland's homegrown industries failed, and attempts to compensate for this by generating a bloated construction sector proved disastrous. In refocusing Abbey on Britain, his brother Charles simply acknowledged that market discipline could not be elided indefinitely.