House of Representatives
12 February 1902

1st Parliament · 1st Session



Mr. SPEAKER took the chair at 2.30 p.m., and read prayers.

page 9930

QUESTION

STATEMENT BY SENATOR FRASER

Mr O’MALLEY:
TASMANIA, TASMANIA

– I wish to ask the Attorney-General, without notice, whether, in view of the charge made by Senator Fraser in the South Melbourne Town Hail, on Monday evening lost, that five members of this House are traitors to their King and country, the Government intend to ‘ vindicate the rights of this House, or to have the five honorable members referred to arrested for treason?

Mr DEAKIN:
Attorney-General · BALLAARAT, VICTORIA · Protectionist

– I am not aware that the statement to which the honorable member has referred was made, nor do I know the sense in which the words were used. I am sure that if such a charge was made, no member of the public, and no member of this House, attaches the slightest importance to it

page 9930

QUESTION

HIGH COMMISSIONERSHIP

Mr HENRY WILLIS:
ROBERTSON, NEW SOUTH WALES

– Is it the intention of the Government to appoint a High Commissioner before the King’s Coronation?

Mr DEAKIN:
Protectionist

– Before such an appointi ment is made, it will probably be desirable ; to introduce legislation. No such appointment will be made prior to legislation without the House being informed of it

page 9930

QUESTION

MANUFACTURE OF ELECTRICAL APPLIANCES

Mr THOMAS:
BARRIER, NEW SOUTH WALES

– Has the Minister for Trade and Customs yet received the report for which I asked a fortnight ago, as to the number of persons employed within the Commonwealth in the manufacture of electrical appliances ?

Mr KINGSTON:
Minister for Trade and Customs · SOUTH AUSTRALIA, SOUTH AUSTRALIA · Protectionist

– Yes.

Mr THOMAS:

– Then, when can we have it.

Mr KINGSTON:

– This afternoon, if I can get it, but if not, to-morrow morning.

page 9931

PAPER

The Clerk laid upon the table

Beet sugar imports - Return to an order of the

House of6th February.

page 9931

QUESTION

INCREASES: SOUTH AUSTRALIAN OFFICIALS

Mr GLYNN:
SOUTH AUSTRALIA, SOUTH AUSTRALIA

asked the Minister for Home Affairs, upon notice -

Why the annual increases payable under the South Australian Civil Service Acts to officers gazetted in December, 1900, as promoted to the 5th and 6th classes, whose promotions dated from January, 1901, have not been paid?

Mr DEAKIN:
Protectionist

– The answer to the honorable member’s question is as follows : -

The matter will be fully inquired into. The practice is to pay increases of salary which are a statutory right, but those which have been recommended by the Ministry and placed upon the Estimates are held over pending the passing of the Appropriation Act.

page 9931

QUESTION

FEDERAL CAPITAL SITES

Mr CRUICKSHANK:
GWYDIR, NEW SOUTH WALES

asked the Minister of Home Affairs,upon notice -

  1. Will he inform this House of the number of sites arranged to be inspected presently by members of the Senate for the purpose of gathering information regarding the proposed site of the federal capital ?
  2. Will he furnish the name of each site to be inspected, the order of inspection, and the date on which each inspection will take place, in order that parties interested may receive due notice ?
  3. Will he cause an advertisement, for public information, to be inserted in the local newspapers in each of the towns arranged to be visited?
Mr DEAKIN:
Protectionist

– I have been supplied with the following answer -

The itinerary of the Members of the Senate visiting proposed federal capital sites is as follows : -

Tuesday, 11th February. - Leave Melbourne, 4.45 p.m. Arrive Albury, 10.30 p.m.

Wednesday, 12th February. - Leave Albury, 2 p.m. Arrive Wagga, 4 p.m. Leave Wagga, 10 p.m. Arrive Gundagai, 2 a.m. on 13th.

Thursday, 13th February. - Leave Gundagai, 7.30 a.m. Arrive Tumut, 11.30 a.m. Leave Tumut, 3.30 p.m. Arrive Gundagai, 7.30 p.m. Leave Gundagai, 10 p.m. Arrive Yass Junction, 2.30 a.m. on 14th.

Friday, 14th February. - Leave Yass, 2 p.m. Arrive Goulburn, 4 p.m. Leave Goulburn, 10 p.m. Arrive via Granville, 2 a.m., to Orange, 9. 50 a.m. on Saturday, loth.

Saturday, 15th February. - Leave Orange, 3 p. m. Arri ve via Bathurst, 4. 30 to 5. 30 to Sydney 11 p.m.

Sunday, 16th February. - Leave Sydney, 8 p.m. Arrive Armidale, 8 a.m. on Monday 17th.

Monday, 17th February. - Leave Armidale, 8.40 p.m. Arrive Sydney, 8 a.m. on 18th.

Tuesday, 18th February. - Leave Sydney,8.30 a.m. Arrive Bungendore, 1.30 p.m. Leave Bungendore, 9 p.m. Arrive Cooma, 2 a.m. on 19th.

Wednesday, 19th February. - Leave Cooma, 9 a. m. Arrive Dalgety.

Thursday, 20th February. - Leave Dalgety,8 a.m. Arrive Bombala.

Friday, 21 February 8om6a1a

Saturday, 22nd February. - Leave Bombala, 8 a.m. Arrive Eden, 6 p.m.

Sunday, 23rd February. - Leave Eden by steamer. Arrive Melbourne on Tuesday, 25th.

Monday, 24th February. - Leave Eden by coach. Arrive Cooma, 5 p.m.

This information has been disseminated by means of the press, and the mayor of each town proposed to be visited, was advised by telegram of the date of the arrival of the party, and asked to give the matter publicity.

page 9931

QUESTION

POSTAL OFFICIALS’ UNPAID ALLOWANCES

Mr CRUICKSHANK:

asked the Treasurer upon notice -

Whether it is the intention of the Government to make provision on the Estimates for the unpaid allowances which have been promised to certain officers in the Post and Telegraph department ?

Sir GEORGE TURNER:
Treasurer · BALACLAVA, VICTORIA · Protectionist

– If any allowances were promised, they will be provided for by the department in framing the Estimates ; but, at the present moment, I am altogether in the dark as to what my honorable friend refers to. If he will let me have some particulars, I shall have the matter investigated.

Mr Cruickshank:

– I refer to the unpaid allowances to New South Wales officers. The question has been raised every grievance day.

Sir GEORGE TURNER:

– That is a matter with which the Prime Minister is dealing, and I shall therefore be glad if the honorable member will postpone his question until he can obtain an answer from the Prime Minister.

page 9931

TARIFF

In Committee of Ways and Means -

Consideration resumed from 11th Feb ruary (vide page 9930).

Division VIa. - Metals and Machinery. - To come into operation on dates to be fixedby proclamation, and except as to galvanized plate and sheet iron, exempt from duty in the meantime. Proclamation to issue so soon as it is certified by the Minister that the manufacture of iron or of reapers and binders or of any machinery to which the proclamation refers has been sufficiently established in the Commonwealth, according to the provisions of any law relating to bonuses for the encouragement of manufactures : -

Item 77. Iron and Steel -

Scrap Iron and Steel, and Pig Iron, 10 per cent. ad valorem.

Ingots, Blooms, Slabs, Billets, Puddled Bars and Loops, or like crude Manufactures less finished than Iron or Steel bars, but more advanced than Pig Iron (except Castings), 10 per cent. ad valorem.

Bar, Rod, Angle, Tee, Sheet, Plate, and Hoop, except Galvanized Plate and Sheet, 10 per cent. ad valorem.

Galvanized Plate and Sheet, viz.: - Plain, 10 per cent. ad valorem; Corrugated, 15 per cent. ad valorem.

Machinery - Reapers and Binders 15 per cent. ad valorem ; other Machinery referred to in Proclamation, 15 per cent. ad valorem.

Sir WILLIAM McMILLAN:
Wentworth

– Before dealing with the particular item before the committee, the consideration of which will create a very large amount of discussion,I should like to ask the Ministers in charge of the Government business if it would not be better to eliminate Division VIa. altogether. I am as anxious as my righthonorable friends can be to bring the consideration of the Tariff to a close at the earliest period consistent with the fullest debate and investigation, for I do not think any honorable member would desire that in this great industrial crisis at the beginning of our Commonwealth life any item should pass without intelligent discussion. I feel strongly that the division which we are now asked to deal with is something apart from the other divisions of the Tariff.

Mr Mauger:

– It is a very important part of the Tariff.

Sir WILLIAM McMILLAN:

– I admit its importance, but it is questionable whether it would not be better, at this juncture, to eliminate it. The conditions under which it would be brought into operation cannot be foreseen atthepresenttime, and, under those circumstances, it seems to me absolutely absurd - if I may use the word without disrespect - for us to attempt to forcast by any definite decisions in regard to ad valorem duties the conditions under which this great iron industry may become a national industry. If the need of these duties is likely to arise in the near future, the proposals embodied in the division can be brought in, considered, and discussed, without in any way opening up the whole Tariff, though, of course, I do not pledge myself to support anything herein contained. The division embodies proposals for the establishment in Australia of an industry which is at the very foundation of that great class of industries which comprise the manufacture of machinery and metal working. It is an enormous undertaking, and at this early period of our federal existence it can very well be allowed to rest while we turn our attention to other industries which, with the protection which has now been given to them, are at the present time much more national industries. I make this proposal, not in any party spirit, but simply because I am anxious that the committee should get on with the Tariff as quickly as possible. If we do not eliminate the division, it will at least be wise to postpone its consideration for the present. There are trades which are now paralysed by the uncertainty as to our action in respect to those items on the Tariff which affect them, whereas the industry which this division affects cannot come into existence before the expiration of a certain period, and then can be established probably only by the aid of large Government bounties, though, of course, I do not father the Government proposals. I think that we should go on with the consideration of items in which the people of Australia are actually interested at the present moment, and in regard to which they are eagerly watching for our decisions day by clay.

Mr KINGSTON:
South AustraliaMinister for Trade and Customs · Protectionist

– I acknowledge the friendly tone in which the honorable member has addressed himself to this question, but we venture to consider that one of the most important things which can be undertaken by the Government at this time is the encouragement of industries of all descriptions. We yield to none in our recognition of the importance of the mining industry.

Mr Thomas:

– The Government’s proposal for encouraging the mining industry was to impose a duty of 20 per cent. upon all mining machinery.

Mr KINGSTON:

– We further recognise that the iron industry, which may well be said to be the backbone of all manufacturing industries, is the most important of the mining industries, and most needs assistance in its establishment and development. If we are going to do anything to encourage that industry, we should do it at the earliest period of our federal history, and do it thoroughly, and to the fullest extent that is justifiable. It would be a mistake if we devoted much attention to minor matters, and left a matter of that sort untouched. I do not hesitate to tell honorable members that a very large amount of capital is at present awaiting investment pending the determination of Parliament in regard to the Government proposals. I believe that in the case of the Blythe River Company £1,000,000, and in the case of the Eskbank Works £250,000 may be invested if the reasonable encouragement we propose is sanctioned. The largest issues depend upon the satisfactory settlement of this matter. Apart from the figures which I have given, we know that the iron industry is the most important mining industry we can have, and that it is the industry which most needs assistance.

Sir William McMillan:

– .Do not the Government propose to commence by giving bonuses?

Mr KINGSTON:

– We do.

Sir William McMillan:

– That will come first. Therefore there is no hurry about the proposals now before us.

Mr KINGSTON:

– There are two ways of encouraging this industry. In some countries, and notably in Canada, the plan has been adopted of giving a bonus and at the same time placing a tax upon imported material. But iron enters into so many of our industries and the local supply at the present time is so limited that it would be highly injudicious to have recourse to a method of that kind now. It would be infinitely preferable to give a bonus without a duty, so that whilst those who make the iron may be rewarded, there shall be no imposition on those who consume it. Duties of the limited character here proposed will not be resorted to until the iron industry is fully established. There is no doubt whatever that legislation in regard to bonuses will require to be prepared, and we shall introduce it at an early date.

Sir William McMillan:

– The Governare putting the cart before the horse.

Mr KINGSTON:

– I am prepared to indicate generally the nature of our proposals, but in considering the Tariff we must pay regard to the fact that the duty and the bonus go together, although they are not imposed at the same time. In

Canada the duty and the bonus were provided for at once, but here we propose to provide for the bonus first and for the duty afterwards, but each is necessary as an encouragement to those interested to embark upon the industry. I would further call the attention of honorable members to the fact that these duties will not of themselves come into force at any particular time. Tho provision contained here is that on the establishment of the iron industry a proclamation may issue which will call these duties into existence, and the duties are of a character to which little or no exception can be taken. They are less than those provided in the first instance to accompany the bonuses in the countries to which I have referred, and when it is considered that they are only to apply when the industry has been established, and when local production may be said to suffice in some measure to supply local wants, honorable members will realize that they are of a character of which it is impossible to disapprove. As regards the iron industry, the bulk of the duties are 10 per cent., a much lower 7*ate than that provided in other countries, even to the accompaniment of a bonus. Ten per cent, is not more than a revenue duty and is not more than the lowest duty provided in connection with any of the items with which we have previously dealt. I would ask honorable members whether they are prepared to say that they will not sanction the imposition of these moderate duties for the encouragement of so great and national an industry after the industry has been established, and at a time when it is unlikely that there will be any increase of price such as may temporarily follow the imposition of a protective duty under ordinary circumstances.

Mr Thomas:

– The iron industry will not be established for years.

Mr KINGSTON:

– The industry will not be established for years if we put off dealing with it now, but if we promptly show it the consideration now proposed, there is an immediate prospect - I may almost say a certainty - of work being undertaken upon such a scale as will result in everlasting benefit to Australia. I am surprised to hear the honorable member for Barrier interject in that way. The honorable member has posed, and properly so, as an advocate of what he considers to be the best interests of the mining industry. Here we are proposing to make provision to assist in a substantial way that branch of the industry which needs the most assistance. The sum we propose to devote to the encouragement of the iron industry may - possibly will - amount to £250,000, and such a sum of money will be well spent.

Sir William McMillan:

– Who will have to pay the money?

Mr KINGSTON:

– The people of Australia, and the money will be spent for the benefit of the people of Australia in establishing and encouraging the greatest of all the branches of the mining industry.

Mr Thomas:

– Why should iron be treated differently from copper, zinc, or lead?

Mr KINGSTON:

– The honorable member knows that there are about six or seven branches of the metal mining industry. There is gold, which stands in a class by itself, and needs no particular assistance of this character. Then there is silver, lead, copper, and tin, and in connection with these we have only to look at the statistics in order to know that they are flourishing. As regards two other descriptions of mining - zinc and iron - they each stand in need of assistance, and iron requires it to the greatest extent. We propose to provide for iron, and also to give assistance to the zinc industry at a cost of probably £20,000. This expenditure will, we hope, enable zinc to be turned to account in the Barrier district and elsewhere in a way that will result in benefit, not only to those immediately engaged in the industry, but to the entire community.

Mr Wilks:

– Would it not be better to nationalize the industry?

Mr KINGSTON:

– How could we nationalize works of this sort ? If we provide for the proper application of the money I am sure the result we wish to see brought about will soon be achieved.

Mr McDonald:

– It will create a monopoly.

Mr KINGSTON:

– With regard to the provision - at which I have hinted, by way of a tentative suggestion - asto the mode in which the bonus should be distributed, we have on second thoughts come to the conclusion that it would not be well to limit it in the way first proposed. We are providing for a general application of the money to those concerned in the industry in the proportion in which they are engaged, so that each shall receive encouragement to the extent to which he is interested. The system of distribution will thus be free from the objectionable feature to which attention has been called. When we are doing our best, in connexion with this Tariff, to encourage our local manufactures and various local industries, are we to turn a deaf ear and pass by unheedingly suggestions for the benefit of those branches of the mining industry which are important, which are subject to certain disabilities, which depend on encouragement for their development, and which without encouragement cannot confer upon the general community the benefits which would undoubtedly result from enlarged operations ? We all share in the desire that the Tariff should speedily pass into law, but I venture to think that we should make a great mistake if, from a desire to close the session and to get some rest, we forgot or neglected to deal with a question of this sort. What matter is of greater importance ? What are we asked to do now? Only this, to make provision, in connexion with metals and machinery, in the place where we ought to do so - to make such provision that in certain events certain duties shall come into existence. Are the goods which are intended to be subject to these duties worthy of protection ? - surely. Are the duties reasonable ? - certainly. Then what is our duty under the circumstances? Surely to deal with the matter as soon as we can. There is no time better than the present, and we should act at once. No doubt it will be necessary to introduce a Bill, and this will be placed before honorable members with all possible despatch, and in ample time to enable them to deal with it. No doubt we shall have an opportunity whilst the Tariff is being considered by another branch of the Legislature to deal with questions of this sort. When we have parted with the Tariff, surely we can well fill up our time by considering such a subject as that to which I have referred. We are not losing control of this matter, because if we pass the provision contained in the Tariff, the duties will not become operative in the slightest degree until the Bill providing for the bonuses has been passed, and a proclamation has been issued under it. In connexion with the issue of this proclamation, we are perfectly willing that the same principle shall be applied to it as was agreed to in connexion with the declaration of exemptions of machine tools. We have provided that these may issue as ari Executive act, subject to the veto of either House of Parliament. We think we ought, in view of the principle we then conceded, to provide now that the proclamation for the declaration of these duties - for making it known that the industry is established, and that the bonuses will cease and the duties come into force - shall not issue except on the approving resolution of both Houses of Parliament.

Sir William McMillan:

– That is not provided for here.

Mr KINGSTON:

– It is not provided for in this particular part of the Tariff, for the same reason that it was- not provided for elsewhere - because we did not propose it.

Sir William McMillan:

– Does the Minister propose to insert such a provision in this division ?

Mr KINGSTON:

– I do. Having conceded the principle in regard to the declaration of exemptions from duty, we cannot resist its application to the greater question of the declaration of taxation. Honorable members will therefore know that in passing this they will lose no control of the position. They will simply declare that after the Ministry have certified that the iron industry has been established, they shall have an opportunity of deciding that the duties shall come into force. What more can they want 1 Li we are to turn our back upon the proposal now made, will it not appear that we are tired, and are desirous to get to our homes? There are a great many of us who, no doubt, would like to get home. T do not forget that the session has now extended over more than nine months, and that I have not been home more than twice during that time. But, I would ask honorable members, what is our clear duty ? Are these industries worthy of encouragement - can we deny it? What j excuse have we for failing to provide that encouragement ? Here are provisions by which it is sought to afford that encouragement. The session is long, but it would be better to still further lengthen it rather than go home stunned with the reflection that we had ‘Sacrificed our public duty to our own convenience. I do not suggest for a moment that any honorable member would be prepared to take up any such attitude, and I am only using the expression as a figure of speech. The matter is pressing, the industry is important: what we are proposing is the right thing to do, and the sooner we do it the better.

Sir WILLIAM MCMILLAN” (Wentworth). - It is well that the Minister has spoken, although one-half his utterance has been absolutely irrelevant. The right honorable gentleman has given his case away. He tells us that this industry must first be treated under a system of bonuses. He also tells that the bonus system under certain regulations is to be embodied in a Bill which will be submitted to this House. Under such circumstances, I say that this division should find no place in the Tariff. If the Government desire to introduce this prospective arrangement, which I think is altogether bad in principle, it ought to be incorporated in the Bill which covers the bonus system.

Mr Kingston:

– The honorable member knows perfectly well that it could not be done.

Sir WILLIAM McMILLAN:

– It seems to me that we are putting the cart before the horse. We are asked to decide upon a certain rate of ad valorem for the future of this industry before we know anything about the bonus system which is to be introduced. Furthermore, everybody who has not absolutely lost his senses, knows that years must elapse before this industry can attain to the position in which it will be necessary to bring this particular division to play. Have we a right to legislate for the Parliaments of the future ? I say thai we have not. Can any honorable member of this Parliament forsee what rate of ad valorem duty will be necessary to keep this industry going after the bonus system has been in operation ‘( I claim that no man can. To my mind it is absurd to crystallize any particular rate of ad valorem in this Tariff. We do not know that the whole experiment will not be a 1 failure under the bonus system, and therefore it does seem absolutely ridiculous for us to face the situation at the present time. I charge the Government in submitting this proposal with wasting the time of this House, with prolonging the discussion on the Tariff, with keeping the country in a state of irritation, and some industries in a condition of collapse. When we compare different industries in Australia, in relation to items with which we have yet to deal, with this industry which nobody dreams will be established for years to come, I ask where is the principle of which we have been talking so much - the .principle of revenue without destruction? There is practically no such industry in existence at the present moment. During the last week I find that - absolutely against the compact which was made at the last elections - vo have been giving far more attention to possible industries which may or may not be created than to the principle which was then laid down in regard to the preservation of existing industries. This course is absurd. We ought to have the whole scheme of the Government before us, prior to being called upon to deal with this matter. I ask the Government, in the interests of the community, to postpone the consideration of this item. I do not ask them to entirely delete it from the Tariff, but to defer its consideration, and thus prevent a long and possibly unpleasant debate, extending over the remainder of the week. There are hundreds of trades and industries throughout the Commonwealth which are awaiting our decision in regard to other items in the Tariff, and if any discontent exists in the community I throw the blame upon the Government. The consideration of this division could certainly be postponed till the whole of the proposals of the Government with regard to this particular industry are before honorable members.

Mr. BATCHELOR (South Australia).I think that most honorable members will agree with the Minister for Trade and Customs that in regard to the articles covered by this division the proposed duties of 10 and 15 per cent, are perfectly reasonable. There will not be much discussion upon this matter.

Sir William McMillan:

– I do not think that is the point.

Mr BATCHELOR:
SOUTH AUSTRALIA

– I agree that is not the question to which we need address ourselves now. What we have to consider is, whether it is advisable at this stage to declare ourselves in favour of certain duties being imposed in the event of a certain contingency arising. As has been said, this division is not necessarily a part of the Tariff. It can be entirely separated from the other items. It is to be brought into force at some future time, when the Minister certifies that these industries are sufficiently established within the Commonwealth, but I am not at all satisfied that it is wise for us to sanction such a proposal. It seems to me, from the Minister’s remarks, that the whole matter hinges upon the adoption of the bonus system.

Mr Kingston:

– This proposal will not take effect until the industry is satisfactorily established.

Mr BATCHELOR:

– I gather from the Minister’s remarks that the Government proposal is that a bonus should first be given in order to assist in the establishment of these industries. If that is so, they evidently believe that without the payment of this bonus the industries in question will not be established. According to the Minister, the investment of £1,250,000 depends upon the adoption of the bonus system. I am not prepared to commit myself to that system.

Mr Kingston:

– The honorable member does not do so by dealing with this matter now.

Mr BATCHELOR:

– For all practical purposes I should be committing myself. The Minister declares that the imposition of the proposed duties depends upon the satisfactory establishment of these industries within the Commonwealth, and that, in any case their establishment is dependent upon the payment of a bonus. Therefore I argue that the whole scheme depends upon the adoption of the bonus system. If I commit myself to this proposal, I am in duty bound to support the other part of the Ministerial policy which alone can bring these duties into operation. If I were satisfied that the bonus system is a proper one to introduce, I should be prepared to support the Government proposal, though I do not think it would be necessary to adopt it now, because - as has reasonably been put - it must take a considerable time before the iron industry can be sufficiently established to warrant the imposition of these duties. It seems to me that if a bonus system were sanctioned by this Parliament, and the iron industry became established, there would be no difficulty in the way of bringing down these proposals during some future session. There appears to be absolutely no urgency about the passing of this division. It is not a question of honorable members being tired. It is not a matter of the length of the session. I maintain that the whole matter hangs upon the adoption of the bonus system. Every word uttered by the Minister was in that direction. The right honorable gentleman said that the Ministry propose to spend £250,000 in the payment of bonuses to encourage the iron industry alone. After thinking the matter over very carefully, I am not prepared to agree to expending that amount of Commonwealth money in order to establish that industry under the control of a few individuals or of a company. 1 admit that it is exceedingly beneficial to a country to have a large population, but a great deal more depends upon the conditions under which the people labour than upon the number who are employed. I am not prepared to support the payment of a bonus to private individuals, to enable them to control an immense industry such as the iron industry is likely to be. I go so far as to question whether it might not pay the country better to spend £250,000 in establishing the industry itself.

Sir William McMillan:

– This proposal will not help the mining industry a jot.

Mr BATCHELOR:

– If we can afford to give away a quarter of a million Of the taxpayers’ money to encourage this industry, we can afford to lose that amount in establishing it throughout the Commonwealth, and we would then at least have some assets. I think that the views which I hold are shared by a large number of people. I am not prepared to vote for the adoption of this division without considerably more information than I am in possession of at present, because it seems to me that upon it hangs the question of the payment of a bonus, and I am not disposed to commit myself to such a system.

Mr THOMAS:
Barrier

– I think that the request of the acting leader of the Opposition is a very reasonable one. The Minister for Trade and Customs has said that these duties will become operative only after the iron industry is established, and the most sanguine must admit that it will be years before the industry can be satisfactorily established in our midst. But I would point out that there are a certain number of existing industries within the Commonwealth which are anxiously awaiting our decision upon various matters in this Tariff which vitally affect them. There are shiploads of timber in bond at the present moment, the owners of which are waiting to learn whether the high duties which the Government propose are acceptable to the committee.

Mr Poynton:

– Is there any timber intended for Broken Hill ?

Mr THOMAS:

– Yes, some of it is at Port Pirie. There is a lot of machinery also in bond. The mining community are waiting to know what the Government intend to do, and it seems to me that we might more profitably consider existing industries than those which may or may not be established in the years to come. This is not the first occasion upon which the question of the iron industry has cropped up. In the New South Wales Parliament it has been brought forward several times. Honorable members were told that millions of money were to be invested in it. In the last Parliament of that State one of the final matters dealt with was a big proposal having reference to the supply of steel rails. The Government were asked to undertake the purchase of a certain quantity of rails, and Parliament was assured that if they did so this great iron industry would be established.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– It was the same Blythe River Company, too.

Mr THOMAS:

– Yes. The New South Wales Parliament agreed to the proposals of the promoters, and since then nothing has been heard of the matter. Now, however, the same people are asking this Parliament to grant bonuses, and to levy these duties, on the assurance that if we do so a million of money will be invested. I confess that I should like some more definite guarantee that they are likely to carry out their undertaking. Then, again, the whole question hinges upon the adoption of the bonus system. I am strongly opposed to that system. I do not ask for the mining industry any protection which I am not prepared to grant to any other industry in this country. I have voted against protecting the manufacturers of Australia every time a division has been taken. In my opinion, the only way in which the mining industry can be protected is by the payment of a bonus, and I, for one, will not ask for that form of protection. All the protection I ask for is that they shall not be handicapped, but may be free to utilize machinery to the best advantage. As a representative of a mining community I say that it is an unfair thing to ask the Commonwealth Parliament to put its hands in the pockets of the tax-payers to bolster up the mining or any other industry. The Minister says that the Government is prepared to grant £20,000 in bonuses for the development of the zinc industry. If that is their idea we might just as well keep the £20,000 in the pockets of the people or spend it more profitably. We have upon the dump heaps in Broken Hill 1,000,000 tons, containing 25 per cent of zinc which to-day is practically useless. At the present price of zinc, say £16 per ton, that material is equivalent to £4,000,000 worth of zinc. Mining men know it is there, and if a company will not work it without a bonus of £20,000 they will not work it at all. If they could work it at a profit plus the £20,000 bonus, I venture to say that they would work it without the £20,000. When dealing with £4,000,000 worth of stuff, £20,000 is a mere drop in the bucket. Let us have our mining machinery, our electrical appliances, and every advantage that science can discover for us, free of duty, and that would be of more advantage to the zinc industry than a bonus of £20,000. As regards the iron industry, I hold that the Government should place upon the table full reports as to the iron deposits. They may be wonderful deposits, but, if so, I am inclined to think that they would have been worked before now I remember hearing a statement made in the South Australian Legislative Council by, I think, Mr. Gordon, to the effect that all the land in a certain district that was worth anything had been taken up. The honorable Mr. Angus wanted to know why he made such a statement, and Mr. Gordon replied - “Because if there had been any good land available in the district I am sure you would have taken it up.” Good iron mines may have been discovered ; but if so, private capital should have been provided to work them. Even if iron deposits are discovered I am not prepared to go as’ far as the Government recommend. If capitalists cannot work the iron mines without a subsidy, let them remain where they are. Why should we treat the iron industry differently from any other - differently from the copper mining industry, for instance. W e are told that some copper mines are being worked, whilst others have had to close down simply because the quantity of copper raised at the price obtained has not been commensurate with the expenditure upon raising it. If we are going to subsidize every non-paying mine, it may be an excellent thing for the shareholders, but a very poor investment from the point of view of the Commonwealth generally. Again, what guarantee have we that the Blythe River Company are not merely trying to float another company on the strength of the money which the Federal Parliament may be disposed to pay 1 If so, by the time this great industry is opened up the benefit of the bonus may not be derived by the shareholders of the present company. Some one else may be in possession, and the original promoters may have been able to sell out at a very fair profit. The Minister says that this advantage will not be given until after the industry is started It reminds me of a story which honorable members have heard time after time, of the young man and the young woman who were engaged to be married. They were discussing what occupation their children should follow, and they split upon the profession of the fifth child. Because they could not agree whether he should be a doctor or lawyer they did not get married at all. At the present time, when there is so much business to be done, and so many people are anxious to know exactly what the Tariff is going to be is it wise that the committee should be discussing something which cannot be effective for a considerable time to come 1 We ought to discuss the whole of the items of the Tariff with the exception of those now before us, and let these wait until the end. The whole discussion is a waste of time: Let us first have a Bill providing for granting a bonus before us. Let us deal now with those items that affect the interests of the country. We need not discuss the bonus system now, and I do not intend to do so at greater length, except to say that when a definite proposal comes before us I shall be opposed to the granting of all bonuses.

Mr McCOLL:
Echuca

– lam somewhat surprised at the attitude of the honorable member for South Australia, Mr. Batchelor, in regard to this proposal. I am not astonished at the attitude assumed by the ‘ honorable member who has just sat down and by the acting leader of the Opposition, because ever since the Tariff was introduced they have pursued one persistent line of conduct obstructive towards every possible Australian industry.

Mr Thomas:

– We voted to give a duty on three-legged glue-pots. We were inconsistent there !

Mr McCOLL:

– The honorable member for Barrier says - “ Give us our electrical machinery and mining appliances free, but do not. do anything to assist their manufacture in Australia.” That is his policy. He does not want to see them made here, but wants to see the work given to the workmen of other countries. I notice that whatever business the Government happen to bring forward, the acting leader of the Opposition is always prepared to suggest something else. He now holds that something else should be gone on with instead of the item before the Chair. He has developed a newborn zeal for the trades that are languishing in consequence of the Tariff not having been carried, whilst at the same time he has been pursuing a course of steady obstruction in regard to Tariff business.

Mr Thomas:

– I rise to a point of order. Is the honorable member for Echuca justified in using the word “ obstruction “ in connexion with the action of an honorable member ?

The CHAIRMAN:

– The honorable member for Echuca was not quite in order.

Mr McCOLL:

– Instead of saying obstruction, I will say that honorable members opposite have pursued a policy of destruction of our industries. Perhaps that will suit the honorable member for Barrier. I think that no items of the Tariff have been received by the community generally with greater favour than have the present proposals, which are entirely new to Australia, but at the same time seem to me to meet a want that is felt. All people are desirous of promoting Australian industries, but if we promote this particular industry simply by putting on a duty, between the time the duty is imposed and the establishment of the industry probably higher prices will require to be paid for the products needed by that industry before it is properly established. Under this provision a guarantee may be given to those who are prepared to put their capital into the establishment of an expensive industry the permanence of which will be secured to them. A bonus is given to them which will operate for only a certain time, and will not be anything like the amount of capital required to be invested. But we also, by passing such proposals as the Government now submit, give the investors the guarantee ‘that, when the bonus is exhausted and their capital is expended, they will not be left to the unrestricted competition of the cheap labour of other countries. That is the proposal before us, and it is a simple one. The Government are perfectly consistent in bringing it before the committee in connexion with the Tariff, because the one thing hangs upon the other.

It is not likely that persons will incur a large outlay of capital unless they obtain a guarantee that they will receive something like protection in the market upon which they expect to operate. I think the Government are pursuing a creditable course in bringing forward the proposal now, and am somewhat surprised at the opposition they are encountering. There is no industry in the country that it will pay Australia better to develop than the iron industry. Of course the honorable member for Barrier scoffs at iron and everything else that is calculated to find work for the very class of people whom he is sent here to represent. If honorable members look at the list of articles included in this division they will admit that it .must be of the greatest advantage to Australia to have industries for their manufacture established here. The list, includes all kinds of iron and machinery. For myself I have no desire to see machinery introduced from other countries if we can make it here. We should at least try to make the machinery we require for ourselves, and so keep within the Commonwealth the money at present paid for imported machinery.

Mr THOMSON:
North Sydney

– As to the part of the Opposition in the delay which has occurred in connexion with the Tariff, I remind the honorable member for Echuca that since we resumed after the Christmas recess the delay has been due almost entirely to lists of exemptions brought forward by honorable members, and the honorable member for Echuca and other honorable members on the Government side have distinguished themselves by the length of the lists they have brought forward, and also by the insignificance of some of the items they submitted. Surely the request made by the leader of the Opposition for a postponement of this item is a reasonable one. The Ministry have themselves on one or two occasions asked that particular items should be postponed, and those requests have been assented to by the Opposition. There are stronger grounds for a postponement in this case. Surely the Ministry will not make this a . party question. It is merely a question of the order in which business will be taken, and they may very well yield to what, if all party bias is removed, I feel must be the almost universal desire of members of the committee; and for the very good reason that the scheme, put forward by the

Government is an entire scheme. It is composed of two parts - the bonus part and the duty part - and surely we cannot properly consider the scheme until we have the parts before us, and can consider them in relation to each other. The first portion of the scheme to be put into operation is the granting of the bonus, and I have no hesitation in saying that we should discuss that matter before we proceed with the discussion of these duties.

Mr Mauger:

– I rise to a point of order. I am sorry to have to interrupt the honorable member. My point of order is that really we have no question before the committee at the present time. The item has not been stated, and no motion for a postponement of any item has been proposer!. The consequence is we may have two debates. On the question of postponement we may have the whole question brought under debate, and we may then have a debate upon the items.

Mr Thomson:

– I am not aware that there is no motion before the chair, but certainly the Minister has dealt fully with this question, and we on this side have had to reply. I am prepared to move that the item be posponed if that is necessary to put myself in order, but I have no wish to push such a motion to a conclusion.

Mr McDonald:

– I understand that item 77 is before the Chair. I think I have a recollection of the Chairman of Committees distinctly putting the question. The acting leader of the Opposition subsequently suggested that the discussion of the item should be postponed.

The CHAIRMAN:

– At the moment the point of order was raised, I was considering whether the debate should be allowed to go any further upon its present lines, or whether honorable members should not be confined strictly to the discussion of the item.I have allowed a certain latitude which is always allowed in such cases, and I must now ask the honorable member for North Sydney and honorable members who may follow him, to confine their remarks to the item submitted from the Chair.

Mr THOMSON:

– I move-

That Division VIa. (Metals and machinery) be postponed.

The motion is not moved with any intention of pushing it to a division, but I merely desire the postponement of certain items.

Mr Kingston:

– I think that as regards any matter we postponed, it was giving effect to the wishes of the committee.

Mr THOMSON:

– It was giving effect to the wishes of Ministers themselves, though there may have been a suggestion from an individual member or from a section of the committee that a certain item should be postponed. Reasons have been given for the postponement of items, but stronger reasons may be given for the postponement of this division. It must be remembered that we are giving no assistance to the great iron producing industry if we pass this division. We shall, in fact, be doing nothing. We shall not impose any duty. The Ministry could not impose a duty if we passed it. The matter has to be brought before Parliament, and, what will practically be a Bill, must be passed by both Houses of Parliament to make the duty operative. In passing this division we shall be doing nothing but expressing an opinion that, under certain circumstances, there should be such and such a duty. We should express that opinion in the full light of the Government scheme, and the measure proposing these duties should be accompanied by the bonus proposals. Another reason for postponing the division is that we shall more quickly enable traders, and others anxiously awaiting decisions upon more important items, to carry on their operations, and we will be assistingthe Treasurer, who will have abetter idea of what revenue he is going to get. There is no question of present revenue under this division, and surely it can be better discussed after we have dealt with other items of the Tariff. Another strong reason for the postponement of the division is that though we may agree to the duties proposed in it, we may not be able to apply those duties to Government importations. Even from the protectionist stand-point it must be admitted that, if these duties are not to be applied to Commonwealth Government and State Government importations of iron goods, the protection afforded to the establishment of the industry under these duties will be of little or no value. We ought to postpone this division until we have dealt with the exemptions proposed of State and Government goods. We must treat the two things together. The whole proposal of the Government hinges upon that, and why not bring them together in our consideration.

The request for a postponement is I think a very reasonable one, in view of the fact that if the division is not postponed by carrying it now we shall settle nothing, and we shall decide nothing until the bonus proposals of the Government are. submitted. I am merely asking for a postponement of this division to a time when it can be better dealt with.

Mr KNOX:
Kooyong

– As the motion moved is one for the postponement of the division, it precludes a discussion upon the general question. I am one who believes that the manufacturing industries of the Commonwealth will be upon a very insecure basis unless iron works are established here. The debate in respect of two matters may have given rise to a misapprehension in the minds of honorable members, which I think ought to be removed. It should, I think, be stated that there are deposits of iron within the Commonwealth of Australia as excellent for the purposes of manufacturing as are the iron deposits in any other part of the world.’ There can be no doubt as to that. As to the particular body of men referred to as interested in the Blythe River ironworks, I desire to remove from the minds of honorable members any idea that these men have any other purpose in view than the establishment of this industry.

The CHAIRMAN:

– The honorable member cannot debate that question upon the motion now before the committee.

Mr KNOX:

– I thought it right that these explanations should be made. For the reasons which have already been stated, I strongly favour the postponement of the consideration of this division until Ministers are able to give some information as to how these bonuses are to be applied. The honorable member who last spoke also referred to the important fact that, unless there is to be some provision by which rails and other large iron importations of the States and of the Commonwealth are to pay duty, the proposals here made will be practically ineffective. For these reasons, and without attempting to deal with the general question, I urge the Minister to postpone his proposal until such time as he is able to lay before honorable members a complete scheme, when, I believe, both sides of the House will assist in establishing a large and necessary industry on a fair basis.

28 0

Mr WILKS:
Dalley

– We have been led to the belief that Division VIa. can be looked at only in the light of an electioneering placard. It has been admitted by the Minister that he is dealing with a nonexistent industry, and that he proposes to do something later on by means of a Bill. But I, as a free-trader, refuse to allow the item to pass without some further information. We have had similar experience in regard to the item of sugar, and I contend that existent traders, who are so much concerned in the speedy passage of the Tariff, should be- considered first, and this matter allowed to stand over. It can now beplaced on record, as has been claimed timeafter time, that the Commonwealth have to thank the Opposition for the speedy passageof the Tariff ; and I now ask the Ministerto take a diplomatic stand, and allow the postponement proposed.

Mr SKENE:
Grampians

– The Government proposal is in itself comparatively innocent, but it is far reaching in connexion with other matters ; and I join honorable members in the request for a postponement. The Minister for Trade and Customs has urged that he is doing his best for the local manufacturers ; and that is a very honest way of putting -the matter, because it is certainly only for the local manufacturers that anything is being done. This item raises the old subject of primary industries. It has been said in the committee: and I have been told elsewhere, that no enterprise in the iron industry will be entered upon unless a duty is placed on steel rails. The matter was left in abeyance, because the constitutional authorities in the House could not agree among themselves whether such rails, when used by the State Governments, will be dutiable. That is a question which should be taken into consideration, not only in connexion with the Government proposal, but in connexion with the matter of a bonus, because, if a duty of 15 percent, is to be imposed, itsimply means that there will be an increasein the cost of construction and maintenanceof railways, and a further disability will fall” on those who are engaged in primary industries and who use the railways.

Mr McCay:

– If the cost is increased by the amount of the duty, has the honorable member any idea what that increase will be?

Mr SKENE:

– I have a slight idea because I looked into the matter, though only in regard to one particular railway, which had to be constructed of very light material.

Mr McCay:

– The increase will be a good deal under £100 per mile.

Mr SKENE:

– It is somewhere about that. But I am a Scotchman, and I believe in saving in small things ; no man ever made a large fortune without taking care of small beginnings. It maj’ be contended that this increase is an inconsiderable item, but I am afraid it will be found to mean a very large amount ; and if a duty be placed on steel rails it will press on those industries which are getting absolutely nothing out of the Tariff. All the points I have indicated ought to be taken into consideration, and, therefore, I favour a postponement. As to the bonus, £250,000 seems a large amount, <ind this and the question whether the Governments shall be charged duty on the steel rails, together with other considerations, all hang on this very innocent-looking proposal of the Government. A duty of TO per cent, is not worth much debate, but there are other questions which should be debated in the face of the fullest information.

Mr CRUICKSHANK:
Gwydir

– In the course of “my political addresses to the electors, this is the one of the very few items in connexion with which I favoured a bonus. In view of the fact that some 250,000 tons of iron is annually imported into Australia, and that the State Governments obtain what they require free of duty, some assistance should be given to the development of our iron mines.

Mr Wilks:

– I rise to a point of order. It has been ruled that honorable members must confine themselves to the amendment, and I should like a ruling now as to whether the honorable member for Gwydir, to whom I mean no disrespect, is in order in discussing the general question.

The CHAIRMAN:

– I was about to direct the attention of the honorable member for Gwydir to the fact that the question before the Chair is that the item be postponed.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I submit that there should be similar latitude allowed in discussing the question of postponement as would be allowed on an amendment that a Bill be read this day three months.

Sir George Turner:

– If we are to discuss the whole question, what is the use of moving the postponement ?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I submit that the honorable member for Gwydir is quite in order in declaring his belief that a bonus is requisite. We cannot decide whether the question ought to be postponed except on a consideration of the merits of the industry.

Mr Cruickshank:

– What is the ruling of the Chairman 1

The CHAIRMAN:

– The honorable member for Gwydir is not in order in discussing the merits of the item on the proposal of the honorable member for North Sydney. The point of order taken by the honorable member for Parramatta is whether it is competent for an honorable member to traverse the whole question of item 77 on that proposal, and I rule that it is not. Remarks must be confined to reasons why the item should or should not be postponed.

Mr CRUICKSHANK:

– I was out of the Chamber when the proposal for postponement was submitted, but I sat here most of the afternoon, and heard a very widespread debate on the question, which I regard as most important. The acting leader of the Opposition debated the whole question of the iron industry and the prospective result of the granting of a bonus, and it appears to me that we ought to be allowed a little latitude in discussing whether, in the interests of the Tariff and of the public, this matter should be dealt with immediately or postponed. lii ‘the past I have made statements to the effect that this matter would have to be dealt with on the bonus principle, and that this was probably the only item in the Tariff which should be dealt with in that way ; and, with other honorable members, I feel that in discussing the question of postponement, we cannot avoid referring to our natural resources and the advantages of the industry. However, I do not wish to take up time, because I consider that the question of postponement is one entirely for the Government, whom I shall support in whatever step they take in this connection. I hope, however, that after that point is decided, we shall have an opportunity of dealing with the whole question on its merits.

The CHAIRMAN:

– The honorable member for Gwydir is a little in error. When the acting leader of the Opposition was dealing with the merits of item 77, the question before the chair was the item. Since then, the honorable member for North Sydney has moved that the item be postponed, and hence I rule, that the discussion mustbe confined to reasons for or against apostponement.

Mr Kingston:

– I suppose that if the honorable member for North Sydneywere to withdraw his motion, the greater latitude, which seems to be desired, would be afforded.

Sir WILLIAM McMILLAN (Wentworth). If there is to be apostponement, there is no use in wasting timein debating thegeneral question. I assure the Government that I support the proposal for postponement in the friendliest possible spirit, and in the interests of a large body of people all over Australia who are now in a state of irritation. Would it not be better to postpone the matter?

Mr Kingston:

– Thatreally means that we shall have to shelve it.

Sir WILLIAM McMILLAN:

– The Government have asked honorable members to consent to postponements, at different times. The question of the sugar duty was postponed in order that it might be seen what was decided about the excise. Then the items of tea, rice,and starch were postponed in order that the Treasurer might see what effect future votes might have onhis revenue. To these postponements theOpposition agreed,and I consider that there is just as good reason for postponing the itembefore us, in view of certain statements which havebeen made, as to embodying in a Bill the proposal for a bonus. This is an isolated item which may very well be postponed, and then we can deal with industries which do exist, and in connexion with which it is desired that something definite should be done . If the Government aregoing to consent to a postponement, they had better say so, and so prevent present debate. The Opposition have no desire to take, the business out of the hands, of the Government, or to put this question of a postponement to a vote. If the Government will not consent , to a postponementwe, of course, cannot help that; I would remind them that, on every occasion I have always shrunk from such an extreme action as, taking, the business out of their, hands.

Mr KINGSTON:

– While the Government, have every desire to meet the wishes of honorable members opposite, we are of opinion that we should press for a decision in regard to this division. If the committee are against it, we must bow to their decision ; but if they agree to it, we shall be all the more delighted. Having proposed the division, toprevent it from going to a vote is impossible.

Mr V L SOLOMON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– A postponement would not mean that?

Mr KINGSTON:

– It must mean that or nothing. As all the duties, when they have been dealt with by this House,must be sent to the other House for approval, and will take effect in the same Bill, there can be no advantage to any particular industry by postponingthe consideration of this, division, unlessthe postponement is made with a view to its elimination.

Mr.KNOX (Kooyong). - I cannot allow the Minister to suggest that when I said that I was in favour of a postponement I had the slightest wish for the ultimate elimination of the division. I think that the Government proposals deserve fair and full consideration, and I shall do what I can to see that they get it. My object in asking for a postponementwas in order that honorable members may obtain, the information which we are entitled to receive as. to how the bonuses will be applied.

Sir WILLIAM McMILLAN (Wentworth). - My original proposalwas that the division should be eliminated, and I expected the Government to assent to that proposal after consideration ; but as they refused to do so, I suggested that, in the general interests, it would be better to postponeit until after the consideration of the rest of the Tariff. It is sheer nonsense to say that a postponement of that kind means elimination. Havetheproposeddutiesupon starch, tea, and kerosene been eliminated because they have been postponed ? I think it would be better to postpone the division, in the interests of the general community, until we have dealt with the other items in the Tariff.

Mr KINGSTON:

– The remarks of the honorable member f or, Kooyong were not in my mind when I was speaking , upon the suggestion for elimination ; Iwas, alluding to what was said by the acting leader of the Opposition. Asthe advocated withsome forcethe elimination of the division, I may be excused for haying thought that, his subsequent suggestion for postponement, was a mild and modest way of attempting to secure the elimination which he desires.

Only an elimination could have any effect in facilitating the final settlement of the Tariff.

Mr. THOMSON (North Sydney).- As I moved my amendment only to put myself in order, and intimated that I did not intend to press it to a division, I now ask leave to withdraw it.

Amendment, by leave, withdrawn.

Amendment (by Mr. Kingston) proposed -

That the words “ except as to galvanised plate andsheet iron “ be omitted.

Mr. JOSEPH COOK (Parramatta).The manufacture of iron consists of two stages. The ore is first converted into pigiron, blooms, and so on, and it is then manufactured into bar, rod, angle, tee, and other iron. Do the Government propose that the bonus shall apply only to bar, rod, angle, tee, and other iron made from pig-iron manufactured from native ore?

Mr Kingston:

– Yes.

Mr Glynn:

– Would it not be better, before we proceed to amend the division, to take a test vote upon the question whether it should stand?

Mr Kingston:

– If honorable members desire to take a division on the question whether the division should stand, I shall raise no objection.

Mr McDONALD:
Kennedy

– I do not see that any good purpose will be served by retaining these provisions in the Tariff, as nothing can be done until the Government introduce a Bill to provide for the bonuses. The discussion on the general question might very well be deferred until then. I have something to say on the general question of bonuses, but I do not see that any good would be served by addressing the committee on that subject now.

Amendment, by leave, withdrawn.

Mr GLYNN:
South Australia

– I move -

That the words “ Division VIa.” be omitted.

I do this for convenience of discussion. I am opposed to the granting of bonuses, and no provisions in the proposed Bill would lead mo to change my opinion. From what I can gather, after having looked up this question of bounties, it seems that once they are started there is no end to them. Canada is the only country I know of that has granted bounties for the production of iron from native ores, and I think I can show that the experience of Canada has not been such as to encourage us to adopt a system of bonuses coupled with import duties. I do not know of any other country in which a bounty of this class - that is, a bounty on production to be followed by a duty on importation to protect a manufacture when it is started - is in existence at the present time. We know that a system of bounties is in operation throughout Europe, and that Franco spends from £1,250,000 to £1,500,000 per annum in bounties for the encouragement of sugar production, and also gives about £500,000 or £600,000 per annum to five or six other industries. It would not be pertinent to go into the details of these bounties now, but it can bo shown that the whole of them, and the greatest is the sugar bounty, have been failures. In Germany there is an agitation at the present time for the abolition of the bounty on sugar, and I believe the Government would be quite willing to abolish the bounty if the other countries of Europe would agree to adopt the same course. If it can be shown that the bounty system which has been tried - though not as regards iron - in Europe has not been a success, I do not think that we should follow a similar course. I have been endeavouring to get some information regarding the Canadian system, upon which the Minister for Trade and Customs seems to be relying to support his policy. The system of granting bonuses was established in Canada in 1884, and was directed to the encouragement of the manufacture of iron from the native ores. I find from the Canadian StatisticalYear Book for 1900 that a bounty of three dollars per ton is given on certain classes of iron manufactured from the pig-iron of Canada. There is also a bounty of 3 dols. per ton on another class of Canadian-mode pig-iron, and a bounty of 2 dols. a ton on iron manufactured from foreign ores. The Canadian policy seems to be to encourage local manufactures from iron made of Canadian ores. Now, has that system been a success ? In 1885, the year after the first bounty was granted, the production of iron from Canadian ores was 29,593 tons, and in 1900 it had increased to only 34,618 tons. Therefore, notwithstanding the bounty, the production did not keep pace with the increase of population, and the system stands condemned - by these statistics, at all events.

Mr Harper:

– The statistics do not cover the ground.

Mr GLYNN:

– Not the whole of it, perhaps, but they do to some extent. Notwithstanding that the bounties had been going on from 1885, the production of iron had not been appreciably increased up to the year 1900. That indicates the failure of the bonus system. To push the matter a little further, we may inquire whether the bounty has led to the exportation of iron manufactures or iron generally from the Dominion. I find that the exports of iron in 1885 amounted to 54,367 tons,’ and that instead of increasing they decreased to 5,523 tons in 1900. In no year since 1892 did the export of ore from Canada reach as high a figure as 8,000 tons. The statistics show as clearly as anything can do that the bonus system is not a success in Canada. Its operation has been accompanied by diminishing exports of iron, and, as I have already mentioned, the production of locally manufactured iron or iron manufactured from Canadian ore has not kept pace with the increase of population. Then why, after the experience of Canada, should we try to encourage the manufacture of iron by a system of bonuses f

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– Is the honorable and learned member opposed to bonuses 1

Mr GLYNN:

– Yes. I am equally opposed to bonuses and import duties.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– Then the honorable and learned member disagrees with hia leader.

Mr GLYNN:

– The leader of the Opposition is not in favour of bonuses, but he says that he would prefer bonuses to protective duties upon imports. He does not advocate bonuses as against pure freedom of trade.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– The right honorable gentleman said that ho was always in favour of encouraging industries, but that such encouragement should be given by direct grants from the exchequer.

Mr GLYNN:

– That was when he was discussing the question of import duties, and a mere casual observation during a discussion ought not to bo taken as an emphatic and deliberate statement of policy. However, I am not bound by the obiter dictum of the leader of the Opposition. I disapprove of both import duties and bounties. Even assuming that the bounty system has been a success, we cannot hope to produce iron as they do in Canada, because there they have some of the finest iron deposits in the world. We have no right to expect that we shall be able to achieve the same success as has been secured in- the United States. There the import duties have ranged from 40 to 100 per cent., and not only are there extraordinary deposits of iron, but coal-fields adjoining them, as there are in Canada.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We have that here.

Sir William McMillan:

– The United States have the market afforded by a population of 80,000,000 of people.

Mr GLYNN:

– If import duties lead to an increase of iron production, how is it that the great production of iron in America has been confined practically to Pennsylvania and Alabama ? Pennsylvania produces alone’ as much as do all the other States put together, for the simple reason that nature has been wonderfully bountiful there. Although protective duties have been in force in the United States for 100 years, it was not until 1890 that the proproduction of pig iron in the United States exceeded that of Great Britain, which up to that point had the maximum production under an absolutely free-trade policy. Therefore, even in the United States a high rate of duty has not stimulated production. If it had, an enormous production might have been expected in tho first generation of the last century. In 1824 the import duties in the United States were increased to 100 per cent., because the lower rates of duty had been ineffective, but it was only in 1890 that the United States were able to beat England in iron production. We cannot hope to compete with countries like the United States of Canada, because wo have not so far discovered deposits of ore in any way equalling theirs. Some time ago an expert who was representing a company, of which I forget the name, visited Australia with a view to ascertain the extent, and value of our iron deposits, and I under - stand that he reported that there was only one place in Australia in which iron deposits could be found sufficient to keep manufacturers going for anything like half a century. Probably some other honorable member will recollect what are the facts, but if my memory is not at fault, he mentioned that up to the present time no iron deposits had been discovered in Australia which would not be exhausted after 50 years working.

Mr A C GROOM:
FLINDERS, VICTORIA · FT

– He said 30 years.

Mr.L. E. Groom. - How long ago was that?

Mr GLYNN:

– Within the last twelve months.

Mr.Knox. - What was his name?

Mr GLYNN:

– I cannot recall his name. The matter has only justrecurredto my mind. But, as I have previously pointed out, the iron deposits in Pennsylvania have been worked for the past 200 years, and the production there is still enormous. It is equal to the production of the whole of the other States of America. My point is that we have not deposits which justify us in giving this bonus for theproduction of iron. If any artificial stimulus to production is likely to be effective, whyhas it not been effectivein theStates of America other than those of Pennsylvania and Alabama ? Simply because nature has not been bountiful to them. All the bonuses which we can give will not lead to productionunless we have enormous deposits. Moreover, when the demands of the local market have been supplied, are we to export iron in competition with America, Canada, Great Britain, and Germany? If so, the result will be that a bonus will be asked upon its exportation. The home market will he very easily supplied if the iron industry ever becomes a success, and then will follow a demand - such as has been made inFrance in connexion with the export of wheat- for a bonus upon exportation. The principleis an exceedingly bad one. If we grant a bonus to the iron industry, we shall beexpected to confer a similar privilege upon other industries. The statistics which I have given in regard to this particular industry show that there is not much likelihood of itsproving successful within the Commonwealth.

Mr KINGSTON:

– I do not think any honorable member can doubt that it would be of great advantage to establish the iron industry here. That renders it unnecessary for me to discuss at length the suggestion that we do not possess the deposits necessary for its establishment, which was the chief point raised by thehonorable and learned member for South Australia, Mr. Glynn.

Mr O’Malley:

– The biggest iron mine in the world is in Tasmania.

Mr KINGSTON:

– I venture to think there is not a State in Australia which does not produce iron inquantities and of good quality.

Sir WILLIAM McMILLAN:
WENTWORTH, NEW SOUTH WALES · FT

-Victoria does not.

Mr KINGSTON:

– Yes, she does. I am not going to attempt to specify the States which produce what I think is the best iron. The whole industry is in its infancy. But iron, intrudesitself upon our notice wherever wego Amongst the best known iron mines in Australia at the present time is the Blythe River mine, where they speak ofhugequantities of ore of excellent quality –

Sir William McMillan:

– Where is that?

Mr KINGSTON:

– It is in Tasmania. Then there is the Eskbank mine, near Lithgow. But I do not wish to trouble honorable members with details. I am indeed sorry that we think so ill of ourselves that our depreciation of our men as regards their capacity for industry extends also to the depreciation of our country as regards its resources. I invite the attention of honorablemembers to page 62 ofthe “ Annual Report of the New SouthWales Department of Mines” for last year, where the fact is mentionedthat Mr.Jaquet, of the Geological Survey Branch, has completed avery interesting paper upon the iron deposits of New SouthWales, of which I have a copy. If honorable members have not seen that report I shall be very pleased to place it at their disposal.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I had the honour of despatching him upon his mission.

Mr KINGSTON:

– I congratulate the honorable member, and if his action has assisted in inducing me to advocate the course which I am now advocating he must in some degree be held responsible. The report states -

Mr. Jaquet reports that the iron ore deposits are for more extensive than was previously thought tobe the case, and estimates the amount, of ore in sight at not less than 50,000,000 tons - an amount sufficient to supply all the requirements of Australia for many years to come. Moreover, it is known that vast deposits of good ore occur inTasmania and other States, and that these ores will most probably be smelted in blast furnaces erected upon the New South Wales coalfields, and there is every indication that a permanent iron-producing industry will shortly be initiated in this State.

So that point No. 1, raised by the honorable and learned member for South Australia, Mr. Glynn, that we do not possess iron in a sufficient quantity, or of such good quality as to justify us in granting a bonus to the industry, disappears in view not only of our own knowledge upon the subject, but of the official testimony to which I have referred. As to our lack of iron and of means of utilizing it, is it necessary for me to quote figures 1 I think not ! The iron industry is the base of all manufactures. If we can assist in developing our iron deposits so as t& turn out the article which is available for manufacturing purposes, I think we ought cheerfully to do so. In this connexion I have certain figures, and I was rather amused just now at being scolded for not having supplied honorable members with this information, seeing that I had not had an opportunity of doing so, because the discussion in the first instance was limited to the question of whether or not we should postpone the consideration of this item. Let me further tell the committee that in connexion with a huge matter of this sort, I do not pay very much attention to statistics. The temporary acquaintance which I have had with statistics during my brief term of office has not satisfied me as to their absolute reliability. Of course I take every care to supply correct figures, and it is sometimes surprising how many errors creep in before they are brought under Ministerial attention. I find that the total value of pig iron, scrap iron, bar and steel imported in the shape of material for other industries during 1900 ‘ was 155,013 tons, valued at over £1,000,000. The value of the importations of the leading lines of iron products during that year was about £6, 500,000. Thus I venture to think that a consideration of the quantity of comparatively raw iron which we have to import for local purposes,, and of the figures relating to the quantity of iron products which is also imported-

Mr V L SOLOMON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– What does the Minister include in the term “iron products V

Mr KINGSTON:

-I include anything made out of iron, as opposed to the rawer materials of bar, scrap, &u.

Mr V L SOLOMON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– Then it really applies to manufactures of metal ?

Mr KINGSTON:

– I am speaking simply of. iron. The two sets of figures emphasize the fact that ample means exist for utilizing our iron if we can only produce it locally. Upon the question of production a variety of things depends. Looking at history, I have been struck by the fact that no country has satisfactorily established the iron industry except by giving it financial aid. We all know the duties which were imposed in America, and which are of a character to which I need not specially refer. Perhaps we forget, in connexion with the iron industry, that England herself was at one time far from oblivious of the necessity for protecting it. Of course, for a period, she has reverted to the free-trade heresy. But the history of England from 179S to 1825 records most substantial assistance in the way of a protective duty to the iron: industry. I find- that- during the period mentioned it averaged about £3 1 2s. pelton.

Sir William McMillan:

– - Is the criminal code the same now as it was then 1

Mr KINGSTON:

– No it has been improved. The difference is that in the one case there has been a retrograde movement, whilst as regards the criminal code it has been improved. From 1819 to 1825 the duties varied from £6 4s. per ton upon iron imported in British ships to £7 12s. pelton upon iron imported in foreign ships.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– What was the output in that period ?

Mr KINGSTON:

– I am not going to trouble the committee about that.

Mr V L SOLOMON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– Has not the Minister any details about the years b.c.?

Mr KINGSTON:

– No doubt the honorable member’s imagination will be able to supply the omission. AVe know what has happened since - that America has continued in her policy of protection, and has outstripped Great Britain in iron production. Great Britain, on the other hand, has adopted the policy of. free-trade, with . the result that her supremacy, as compared with America, has disappeared.

Mr A McLEAN:
GIPPSLAND, VICTORIA · PROT

– In 1840 Great Britain’s output of iron was 1,390,000 tons, whilst France, Germany, and the United States together, only produced 810,000’ tons.

Mr KINGSTON:

– What is the position to-day? I was only yesterday looking at a paper which gave some particulars as to the American Flint-Eddy Company. It was stated with regard to the iron production of this company -

It is estimated that we are now producing pigiron at the rate of 10,850,000 tons per annum as against 13,789,000 tons in 1900, yet the stocks in hand are small, and the production is not yet as great as the consumption.

I do not want to raise any unnecessary differences of opinion or to introduce anything in the slightest degree resembling bitterness of spirit in connexion with this discussion. I do not think I am adopting a style which should be in any way productive of anything of the sort. But there is no doubt whatever that the American development in connexion with iron has been of the most wonderful character.

Mr Thomas:

– Look at her wonderful resources.

Mr KINGSTON:

– But I venture to think in regard to our mineral resources - our gold, our silver, our copper, and our tin - that we have no reason to be ashamed ; and even as regards iron I believe that our resources are of a similar character, and that we should at this stage in our industrial development do all we can for the purpose of encouraging all concerned in using them. It may be said that there is little parallel between America and Australia. I venture to think that there is a good deal of resemblance.

Mr V L SOLOMON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– Let us hope not !

Mr KINGSTON:

– I see no reason for that sneer. Great Britain respects America and the Americans respect her ; both spring from the same stock, and I hope that the two nations will always maintain the excellent relations which at present exist. But although there may be a little difference of opinion as to whether the proposal before the committee is justified, I think that exception will not be taken to the proposition that there is a fairly close parallel between Australian conditions and those which exist in another Britishspeaking community. I allude to Canada. That parallel exists both as regards the number of her people and her general conditions and resources. Canada has devoted her attention for a considerable time past to the encouragement of this particular industry. She has encouraged it to an extent far in advance of what the Government are now proposing. We are proposing bonuses for the local manufacture of iron and steel. The suggested bonus is 12s. per ton on Australian pig-iron - that is, pig-iron made from Australian ore. Here I may explain that I do not think it will be necessary to introduce the qualification that exists in Canada, and to provide for a bonus on iron which is not produced from local ore. I think that within the limits of Australia we shall be able to find all the ore that is requisite for the production of iron. In regard to puddled iron and steel made from Australian pig-iron, the bonus is to be also 12s. per ton, the total bonus not to exceed £250,000 ; commencing on the 1st of July, 1902, and continuing only for five years. Of course the bonuses would expire on the expenditure of that amount of money, or on the conclusion of the term. I venture to say that such a sum is not at all too much to be spent upon the encouragement of an industry such as that which we are now considering. I also call attention to the fact that the assistance we are now proposing is considerably less in some respects than that which is provided at the present time by America and by Canada.

Sir William McMillan:

– Does the Minister propose that the duties shall not commence until the end of the bonus period of five years?

Mr KINGSTON:

– At the end of the bonus system lasting for five years or upon the expenditure of the money, the duties will commence. I may put it further than that. I do not want the two things - the bonus and the duties - to be running at the same time.

Sir William McMillan:

– The question is whether the bonuses are to be established until the end of the five years, and whether then the ad valorem duties come in ?

Mr KINGSTON:

– That is so. What is the encouragement given to local industry in America” I quote from a circular which has been sent to honorable members. I must apologize for referring to it, but it seems to me that it conveniently sets forth the facts. The amount of protection there on pig iron is 4 dols. a ton, or16s.8d. In Canada the bonus is 10s. 5d. per ton.

Mr Glynn:

– A diminishing bonus.

Mr KINGSTON:

– The bonus is now diminishing. It was originally 12s. per ton. The duty which we are proposing - 10 per cent. - is at the present price of pig iron equivalent to 6s. per ton.

Sir William McMillan:

– How does the Minister calculate the price ?

Mr KINGSTON:

– At £3 per ton. There is to be no bonus while there is any duty, and no duty while there is any bonus. So that honorable members see that in this case we are proceeding on very economical lines, but upon lines which I hope and believe will have the effect of inducing a large and successful employment of capital in the development of the industry. Apart altogether from the Canadian instance - that is, first giving duty in addition to the bonus - our rate by no means compares with the United States import duty. We simply provide for a bonus - but subject to certain limitations - until the industry is established ; and after the industry is established we provide for the power of Parliament to call into existence a protective duty. I must say, as regards this, if honorable members consider it, as I hope they will, from two stand-points, there will be no fear as to the result. The first is - is the industry worthy of encouragement?and, secondly, is the proposed amount of encouragement too much to give? If the industry is worthy of encouragement, I know of no other way which has been adopted by civilized communities than either a bonus or a moderate duty, or a bonus and a moderate duty combined. In Canada, our sister federation, provision was made for a bonus and a moderate duty combined. We depart entirely from that course. We believe that to put a duty on iron immediately - iron being so often the raw material for other manufactures - when the supply from local production would be limited, might have the result of seriously harassing local manufactures. We therefore propose out of the general exchequer - in accordance with lines which have been favoured by some distinguished freetraders, and to which we do not except - to assist in calling the industry into existence by a bonus, which comes out of the general taxpayers’ pockets. We believe that this will be a good thing for all, not bearing too hardly on the persons who have to use iron as a raw material - not, in fact, bearing upon them any more hardly than upon any other members of the community. AVe also propose that the import duty shall not come into existence until after the bonus has ceased. I ask the question - shall we pass by this industry and do nothing for it ? It is impossible for us to argue with those who come to that conclusion. But I venture to think that there are few indeed who will come to such a conclusion. Honorable members must regard the importance of the industry, and will surely come to the conclusion that it will be a great mistake not to do all we can for it. Then the simple question is - by what other means can we help the industry ? There are nope. There are two means open to us, or two combined. We reject the idea of combining the two. We take the one, the result of which must be not to press hardly on those who have occasion to use the iron ; and we only bring the import duty into existence at the time when the industry is established, and there cam be no fear of that rise of price which might be the effect if the duty were imposed before the local production was in existence, and was of such a character as to be able to meet local requirements. What has been said in regard to this matter in Canadian history ? It has been pointed out that the duty on iron was first called into existence in 1S83, The Government then in power in Canada was that of the late Sir John Macdonald. I was lately reading with interest the utterances of some of those who spoke in the Canadian House of Commons when the duty was proposed, and I wish to put before honorable members some of these utterances, because I realize that there is no industry more important than this from the industrial point of view, and from the point of view of the employment which the industry would give to those who have to earn their living by their daily work. The matter is put most strongly by–

Sir William McMillan:

– Prejudiced persons.

Mr KINGSTON:

– It is put strongly by those who have had the duty and responsibility of introducing a policy which they believe, and Canada believes, to be for the good of that country, and to which Canada continues to adhere to-day. Sir Leonard Tilley was, I think, the Treasurer of Canada at that time, and he introduced the subject to the notice of the Canadian House of Commons. He remarked -

Strong pressure has been brought on the Government to provide additional protection or encouragement to develop the iron industries of Canada. Ore of the highest quality in all parts of the Dominion. . . .

So I think the case is here -

Our object is to establish the industries of the country, since we have plenty of ore to produce all the iron we want.

He further says -

No industry employs so much labour from the time of the excavation and removal of the ore to the place where it is burned to the time of finishing the product. Coal has to be converted into coke. Smelting, rolling, and everything connected with it is work from beginning to end. Even if it costs us more for the iron for a short time than otherwise would be the case, it is to aid in building up a great industry. If the dirty on pig-iron were materially increased, it being a raw material that forms the basis of a great many manufactures, the result would be that the increase in price would require a change in the duties on the articles manufactured from pig or bar iron.

We avoid that difficulty as I have indicated.

Take the coal necessary out of the mine, that is converted into coke, in order that you may put the ore in a condition for smelting, rolling, and everything connected with it is an industry which should be developed.

Sir William McMillan:

– How is the right honorable gentleman going to define the different kinds of pig iron ?

Mr KINGSTON:

– There are various descriptions, as the honorable member knows, and almost complete specifications of the various articles to which they refer.

Sir William McMillan:

– The right honorable gentleman will trust to the people who are to get the bonus ?

Mr KINGSTON:

– No ; we will trust more to official caution. But perhaps the member of the Canadian House who put the matter most strongly in this connexion was Sir Chas. Tupper. He said -

My honorable friend stated that the iron industry was one that the Government judged to be of great importance, for the reason that the wealth created by the development of this kind of industry is almost wholly devoted to payment for labour. Thus it became an industry almost above all others that deserved a fostering care of tho Government, if, 03’ public aid, parties could be induced to bring in their capital and develop the enormous resources which Providence has given us in the vast deposits of iron ore that exist in the different parts of the Dominion.

There is our position. We have the deposits beyond question.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– What has been the result of it all in Canada ?

Mr KINGSTON:

– I have no desire to detain honorable members more than is necessary, and I hope I shall not be drawn away from the matter I have in hand. He urther says -

I know of no measure, after the most careful investigation of this question that cnn be adopted - no single points to which my honorable friend can turn his attention as inviting and developing industry, which will give a greater amount of employment, in proportion to the industry itself, to the people of this country - than the protection proposed to be given to the development of our iron industry. Two dollars a ton cost the country something, but they all contribute to it - it will be taken out of the general Treasury. But if we can put thousands of men to’ work in mining our ores, in a development of our coal, and in converting it into coke, and the smelting of this iron, we create a large industry in the country. We give employment to the people, who will eventually get their stuff as cheaply as before. That is the policy of the Government, and this is the outcome of that proposition.

I might quote at greater length, but that is the policy which they adopted in 1883, and have seen fit to continue since. At the present time the duty they impose amounts to 3 dols. a ton, subject to a provision for tapering off and an absolute disappearance in 1907. I am sanguine, from all we know of existing conditions, that it will not be necessary to continue the assistance, so far as the bonus is concerned, for so long a time. The prospects appear to be of such a character that it is difficult to sup pose that the industry can fail to be established, and that to the satisfaction of Parliament, at a very early date. We know what our liability is. It is fixed.

Mr Poynton:

– How much is it ?

Mr KINGSTON:

– Not more than £250,000, and that will be money well spent if, as I venture to hope, it is spent in the establishment of an industry which may at an early date repay the Commonwealth the amount expended scores and scores of times.

Mr Thomas:

– Why limit it to a quarter of a million if it is going to find work for all these people t

Mr KINGSTON:

– Why limit it 1 Because we do things in reason, because whilst it is reasonable to spend a certain amount, it is not reasonable to spend a much larger sum, because we have the right to make a venture of this character within certain metes and bounds. Ministers do not propose, and I do not think honorable members would agree to, an absolutely unlimited outlay in this connexion ; but I think that what we do propose will be sanctioned by honorable members generally.

Mr Poynton:

– Where is the right honorable gentleman going to get the money 1

Mr KINGSTON:

– From the Federal Treasury. I do not wish to bandy words with honorable members ; but the first question put is whether we have got the iron 1 We have got it. The next question is, where are we to get the money ? The Commonwealth is not bankrupt, and as this will certainly be for the good of the Commonwealth at large, and of each of the States, we venture to propose it. As regards the production in Canada, I find that in 1883-4, the number of tons produced was in round numbers 29,000. I find that in 1S9’7-S; - the latest figures at present before I me - the production amounted to 75,000 tons, and as regards the proportion of local production, it increased from 36-2 per cent, in 1883 to 60-9 per cent, in 1897.

  1. Glynn. - The right honorable gentleman is stating the figures wrongly. He is giving the manufacture from Canadian ore.
Mr KINGSTON:

– If I am wrong I shall be delighted to be put right, but the figures I have show that there has been an increase in the proportion of Canadian local production of from 36-2 per cent, in the first year, 1883, to 60-9 per cent- in 1S97, the latest return available.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The right honorable gentleman is wrong.

Mr KINGSTON:

– The honorable member knows that I am quoting the figures with a sincere belief in their authenticity, and I shall be delighted to check them later on with the honorable member. Under these circumstances the Government are sanguine that honorable members will not be disposed to turn their backs on the iron industry and suggest that nothing whatever should be done.

Mr Henry Willis:

– On what system would the right honorable gentleman pay the bonus ? Upon the production of iron, or iron ore ?

Mr KINGSTON:

– The money will be available for the payment of bonus until the amount stated is expended. I read the details just now, and they will be printed and available for honorable members.

Sir William McMillan:

– I suppose the right honorable gentleman does not mean that there shall be a sum of £250,000 a year spent in bonuses ?

Mr KINGSTON:

– No, I do not.

Mr O’Malley:

– Would not a direct duty of 15 per cent, be better?

Mr KINGSTON:

– I am inclined to think that the industry is probably too young at present to justify the imposition of a large duty.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I thought the right honorable gentleman’s policy was to encourage infant industries.

Mr KINGSTON:

– AVe recognise that in the encouragement of industries, we may impose, for a time, some disadvantages upon the community, and we strive to avoid that in this case, in view of the great extent to which pig-iron is required for raw material, by providing for bonuses until the industry is established, and then bringing a protective duty into force. AVe are proposing the bonus during the infantile stage of the industry, and the imposition of the duty when the industry is established, when the bonus disappears. Honorable members have complained that the Government should have introduced the bonus proposals first. I think I have generally indicated, at least as regards iron, the nature of our proposals, and when exception is taken that I did not indicate their nature before, honorable members upon re-consideration will recollect that I had not an opportunity of doing so, as we were discussing only the question of postponement. There are two inducements to capitalists sometimes given, as in Canada, at the same time. Here, it is proposed that they shall be given one after the other, one continuing until the other is called into existence, and then disappearing upon the appearance of the other. When honorable members say that I ought first to have introduced the bonus proposals it seems to me that it would be very inconvenient to delay the Tariff, and the insertion of proper provisions in this connexion, whilst the bonus proposals were being considered. I think I have given sufficient information upon the subject now, and honorable members should not have much difficulty in coming to a conclusion as to what the proposals of the Government are.

Mr Poynton:

– In how many years does the right honorable gentleman expect to expend the £250,000 ?

Mr KINGSTON:

– What is an estimate from me, or from any of us, worth upon such a subject ? The amount proposed to be provided may be paid away in five years or in ten years. I should of course be very much delighted to find that it was disposed of in five years or less. There are other proposals in connexion with bonuses, to which I may shortly refer, and particularly as regards spelter. Honorable members know that zinc ores are found in large quantities, and are very difficult to treat, and that the plant necessary for their successful treatment involves a very considerable expenditure - an expenditure which many persons might be loth to undertake. The matter has been brought under our notice by one of the Broken Hill mines especially, and we have good reason to believe that by the granting of this particular bonus that company will be led to embark upon the treatment of these ores. Honorable members who know the importance of zinc, and the difficulty of. its treatment for the purpose of turning out marketable spelter, will agree that if that can be brought about it will be of very great advantage to Australia.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Is the Minister aware that spelter is one of the most costly ingredients in the manufacture of galvanized iron, on which he has refused to impose a duty ?

Mr KINGSTON:

– That is one of the best things I have heard for a long time. In taunting me with not having imposed a duty upon galvanized iron the honorable member forgets that we did propose a duty upon it, but the honorable member and his friends were successful in defeating our intention in that respect, and he now taunts me with a proposal to tax the raw material. We are not going to do anything of the sort. AVe are going to give a bonus for the production of galvanized iron.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The right honorable gentleman was talking about spelter just now, and I was pointing out that spelter was the raw material for the production of galvanized iron.

Mr KINGSTON:

– And we are going to encourage its production, so that those engaged in the manufacture of galvanized iron will be able to get the raw material for their operations cheaper than they could get it before. As regards galvanized iron, we propose a bonus of 10 per cent., and a similar bonus on iron and steel tubes and pipes which are not subject to duty. It was shown that some of these articles are not made here, but that it is desirable they should be ; and we propose a bonus of 1 0 per cent, on their local manufacture. The bonus is to be computed, as in the case of foreign imports, on the foreign value, the whole bonus not to exceed ±’50,000, and to cease, in any case, in three years from 1st July, 1902. We also hope to do something for the encouragement of the manufacture of reapers and binders, by means of a bonus of £S each on the first 500, commencing from the 1st July, 1902, and ceasing on the 1st January, 1904. If the bonuses are to be given, as we hope and believe they will be, the sooner that is done the better.

Mr Thomson:

– I thought reapers and binders were being produced here?

Mr KINGSTON:

– Not reapers and binders. There was some discussion about the combined, fertilizer.

Mr Thomson:

– What about harvesters ?

Mr KINGSTON:

– I do not consider harvesters the same as reapers and binders.

Mr Thomson:

– They are used for the same purpose.

Mr KING O’MALLEY:
TASMANIA, TASMANIA · IND; ALP from June 1901

– The Government will be delighted to hear arguments on that point. If there is one thing which evokes our sympathy more than another it is the difficulties of local manufacturers in regard to agricultural machinery. Inventions are produced here which are of the utmost local advantage and specimens of the machinery are sent to America, there copied, and sold. The inventor here gets nothing, though these implements may be introduced here under conditions altogether disastrous. That, I believe, has occurred in regard to some of the harvesters, in instances the particulars of which were only laid before me to-day.

Mr Thomson:

– Why do local inventors not patent their inventions ?

Mr KINGSTON:

– They do their best in that connexion, but it is not possible to do everything, and every slip is availed of by the sharpness of those against whose machinations our people have a right to look for protection. The bonus, as proposed, cannot exceed £250,000 for iron; £20,000 for steel ; £50,000 for galvanized iron and wire netting - the latter of which I forgot to mention - and £4,000 for reapers and binders. I venture to think that money thus spent will be well spent, and that the House will resolve that if we cannot now benefit industries of the character by protective duties, at least aid will be given of the character we propose, and that at the will of Parliament protective duties will be imposed, when needed, for their further continuance and encouragement.

Mr. THOMSON (North Sydney).- The Minister for Trade and Customs has, I shall not say evaded, but, at any rate, has not dealt with one very important question in connexion with this division. Will the right honorable gentleman tell the committee whether this duty, if passed, can be imposed on goods used by the Australian Governments? If the duty cannot be so imposed, does the Minister consider that the duty of 10 per cent, will give protection such as to induce manufacturers to carry on the iron industry ?

Mr Kingston:

– I do.

Mr THOMSON:

– On the metal-work used by others than the Australian Governments ?

Mr Kingston:

– I consider that this bonus, which of course evades the difficulties of the duty, will have the effect contemplated.

Mr THOMSON:

– The Minister proposes to give a bonus on “ Ingots, blooms, slabs, billets, puddled bars and loops, or like crude manufactures, less finished than iron or steel bars, but more advanced than pigiron, except castings.” Why are people going to produce these materials ? Simply for the purpose of manufacturing into other forms. These forms are not going to be produced for export, and we need not so anticipate ; so that the bonus will encourage production only to the extent to which manufacturers can use this crude metal for manufacture into more finished articles. What are the more finished articles named by the Minister? They are - “Bar, rod, angle, tee, sheet, plate, and hoop, galvanized plate and sheet.” These are the articles on the production of which the bonus will be paid. There will be no more produced in the crude form than is sufficient to meet the demand for the more finished article. But the far larger proportion of the consumption of these finished articles will, I think, be by the State Governments, and to a lesser degree by the Commonwealth Government.

Sir William McMillan:

– Especially under this Tariff.

Mr THOMSON:

– If these Governments have not to pay duty on these articles, how can the proposed duties provide sufficient inducement to manufacturers, who, if they are to be successful, must get the whole trade of ‘the Commonwealth? How can the Government provide sufficient inducement to manufacturers, if the major portion of the articles consumed come in duty free ? If the Commonwealth Government were the sole consumer, that Government might say - “ We will forego the advantage of direct importation, and make ourselves subject to the duty.” But we are dealing with the State Governments ; and if the provision in the Constitution compels freedom from duty of the articles imported and used by those Governments, the effect must be continued importation and loss to the industry of the larger outlet for the produce. We ought now to know what is to be done, and this is why I suggested that the matter should be postponed, whether the Constitution provides, in the opinion of the Minister, that these goods for State Governments shall be exempt ? That is the first question ; and if we, as a deliberative assembly, cannot get this information, we are deciding in the dark. If it be the fact that, so far as the Minister knows, the Constitution does provide that these goods shall come in free, or if he be uncertain on the point, the next question he ought to answer for the information of the committee is - if these goods used by the State Governments, are excluded from the proposed protection, is there sufficient inducement to establish a large iron industry in Australia ? It must be remembered that it is not the bonus that is the great inducement, but it is the knowledge that after the bonus ceases there will be sufficient assistance continued to maintain what the Minister has called this “infant industry.” That is from the protectionists’ standpoint, and every protectionist, before he decides on this question, ought to have some answer to the questions I have put. Are we to decide - if it is an absolute certainty that the goods for State Governments must come in free, or even with a doubt as to their being dutiable - that this bonus shall be given ? If so, we run a risk of simply throwing away £250,000.

Mr Watkins:

– The Government might as well spend the money in establishing the industry themselves.

Mr THOMSON:

– That might be done if the Government were certain of success, but I doubt whether an industry of the sort could be successful under Government management.

Mr Watkins:

– Ownership and management are quite different.

Mr THOMSON:

– There is a good deal in the question which the honorable member for Newcastle raises - if tins money is going to be spent should the Government spend it themselves, or give it to other people?

Sir George Turner:

– No company is likely to start unless they know they are going to get this particular trade.

Mr THOMSON:

– I quite agree with the Treasurer that without this particular trade there is no room for a large iron industry in Australia.

Mr Kingston:

– For five years at least it does not matter what the State Governments pay, seeing that they get it back.

Mr THOMSON:

– The right honorable gentleman is right to a certain extent, but it does matter, even during the five years. I can tell the committee how it matters to the railway commissioners of New South Wales. Each year a certain sum of money is voted by the New South Wales Parliament to the railway commissioners of that State for repairs and certain alterations, such as the straightening of curves j and, it is to the advantage of those commissioners to escape the duty during the bookkeeping period, and so make the vote of £200,000 or £300,000 go so much further.

Mr Kingston:

– That is departmental bookkeeping.

Mr THOMSON:

– It is to the advantage of the commissioners, who are only responsible for their own department, not to pay the duty.

Mr Kingston:

– How much will New South Wales be worse off?

Mr THOMSON:

– Does the Minister not see that the railway commissioners would be foolish not to take advantage of the saving of this duty in their department ? If the duty be 20 per cent., 10 per cent., or 15 per cent., the commissioners, if they do not pay it, will have so much more money to expend.

Sir William McMillan:

– Even allowing the argument of the Minister for Trade and Customs, it only applies for five years.

Mr THOMSON:

– After the five years’ period the States will be very particular about this matter. The State Governments will then say - “If we pay, the money will be distributed, not on the basis on which we pay it, but amongst the States on a population or other basis, which will not return to us anything like the amount we pay in duty.” That is a serious question, and it is one which touches the root of the whole matter. We are trying to establish the iron industry, but at the very outset we are met with the fact that the State Governments are the largest customers of our ironworks ? If their custom is lost, I am satisfied from what I know of the matter, having looked into it on previous occasions, that the imposition of a duty of 10 per cent, upon the importations of private individuals and firms will not be a sufficient inducement for the establishment of the iron industry.

Mr Kingston:

– We can get a final and decisive answer to the honorable member’s question only from the High Court: but we can give him the opinion of the law officers of the Crown.

Mr THOMSON:

– I should be glad to have that, and to know the opinion of the Minister.

Sir William McMillan:

– The Government have not thought about the matter.

Mr THOMSON:

– I do not say that.

Mr Kingston:

– I think it was discussed about a fortnight ago.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– It was raised in reference to the taxing of municipal property.

Mr THOMSON:

– Yes ; it was referred to on that occasion. I hope that the Minister will give us the advantage of his opinion. I am perfectly sure that a duty of 10 per cent, upon imports other than the imports of the State Governments would not be a sufficient encouragement to the iron industry. What happens ? Suppose we pay £250,000 in bonuses. We know how these bonuses are sometimes earned. We know that sometimes they do not give the results which are anticipated. Works may be started upon such a small scale that the money paid by the Government will go a long way towards their capital cost, and in that case we shall have no security that the industry will continue on a successful footing. The chief certainty for that would be the fact that there is a sufficiently large outlet in Australia for the productions of ironworks. But, unless the State Governments obtain their supplies locally, the outlet will not be sufficiently large. Yet we are asked to decide this matter without knowing whether the supplies of the State Governments will be drawn from the local works - whether the duty which is to force demands upon the local works -will apply to the State Governments. There are other arguments which could be urged against this proposal, but, even from the standpoint of honorable gentlemen who believe in protection, it is evident that we can be certain that results, equivalent to- the proposed expenditure, are likely to flow from it, only by knowing that all the ironwork required in Australia, and especially that used by the State Governments, will be obtained from the local works.

Sir JOHN QUICK:
Bendigo

– I do not see what advantage is to be gained by postponing the consideration of this item. I hope that the scheme embodied in the division will be carried, because I heartily approve of it.

Mr Thomson:

– The committee has decided against a postponement.

Sir William McMillan:

– What is the honorable and learned member’s view of the constitutional question 1

Sir JOHN QUICK:

– Legal experts may differ at the present stage, but I think that we may assume, for the purposes of this discussion, that under section 114 of the Constitution, the Federal Government cannot tax the importations of the States.

Sir William McMillan:

– That is my opinion too.

Sir JOHN QUICK:

– There are those who think that the point is arguable ; but we cannot decide it. Even if we passed an Act of Parliament declaring that State importations, like other importations, should be dutiable, that would not settle the matter, because the High Court would have a right to examine the validity of the Act.

Mr V L SOLOMON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– The point does not affect the question much during the bookkeeping period.

Sir JOHN QUICK:

– No ; but I think that our experience in the past justifies the hope that when the State Governments invite tenders for rails, pipes, and other manufactures of iron, they will, by the form of their tender, encourage the use of locallyproduced iron. That has been done, I believe, even in free-trade New South Wales. I am glad that the Ministry are standing firmly by their proposals. If they did not, they would lose credit and prestige. There can be no doubt that the policy foreshadowed in this part of the Tariff is one of the most important features of their Tariff scheme, and if they abandoned it they would be open to the charge of want of sincerity. This is not a new proposal, nor one which originated with the Ministry ; it is a proposal which has been supported by protectionist bodies throughout Australia.

Mr Ewing:

– And by most free-traders. The leader of the Opposition made a similar arrangement with Mr. Mitchell.

Sir JOHN QUICK:

– That is a strong argument in support of the proposal. The great protectionist conference, which was composed of leading protectionists throughout Australia, and which sat in Adelaide, Melbourne, and Sydney some time before the completion of federation, discussed the question of encouraging and developing the iron industry in Australia. That conference passed the following resolution -. -

That in view of the enormous benefits which may reasonably be expected to accrue to the Australian Commonwealth from the establishment of iron and steel industries within its borders, this conference recommends that such industries be encouraged by bonuses from the Federal Government for a stated period, to be fixed thereby, of 12s. per ton for every ton of pip-iron or steel ingots and bars, rods and sheets, whether of iron or steel, the produce of native ores and fluxes. That in order to encourage the manufacture of iron and steel goods, for two years after the imposition of the Federal Tariff, and no longer, a rebate equal to the amount of duty paid should be allowed on all pig-iron and steel ingots, puddled bor and steel blooms and billets imported and actually used within that period in the manufacture of iron and steel goods of any class and character.

That proposal is fairly outlined in Division VIA.

Mr V L SOLOMON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA · FT

– But the conference did not touch the question of duties.

Sir JOHN QUICK:

– It referred to the question of duties, because it contemplated that duties might be imposed upon imported ironwork during the first two years, and it suggested that rebates should be given to manufacturers to the extent of the duties.

Mi-. V. L. Solomon. - They did not want a 10 or 15 per cent, duty in addition to a bonus.

Sir JOHN QUICK:

– Undoubtedly the resolutions suggested first a bonus and then a rebate of the duty. Both propositions were embodied in these resolutions which were the outcome of the deliberations of a number of thoughtful men who take a greatinterest in the welfare of Australia. The development of the iron industry of Australia is one of the most important matters that could possibly engage our attention. It is impossible to exaggerate or overstate its importance. We have had examples recently of the immense prosperity attained by nations in which the iron industry has been developed - particularly Canada and the United States. In an article published iu the Times of 27th December, 1900, attention is drawn to the great strides which have been made in the United States within the last few years in the development of the iron resources of that country. The time was when Great Britain held the command of the iron trade of the world, but now, according to this article, Great Britain has fallen to third place in the production of steel, and the United States and Germany have each passed her in the race for supremacy.

Mr Poynton:

– The honorable and learned member knows the reason of that.

Sir JOHN QUICK:

– Of course we know the reason of it. It is because of the immense importance attached to the iron industry by the Governments of Germany and the United States, and the assistance given to it by the Government of these countries.

Mr Poynton:

– The royalties killed the iron industry in England.

Sir JOHN QUICK:

– That may be so, but the Governments of the United States and Germany have done all they possibly can by means of highly protective and scientific Tariffs to develop the iron trade in those countries. The Times says : -

There seems now to be dawning the period foretold, for American makers are sending their surplus product, not only to markets that are common to both this country and themselves, but are attacking us in our strongholds at home. The (glasgow correspondent of Engineering writing at the early part of November, says - “ Steel rails continue to be very much depressed, most of the export orders being absorbed by the American mills at prices which British manufacturers cannot at present touch.”

The article certainly affords striking testimony, not only as to the local importance of the industry, but also regarding its national importance, and concludes with this significant observation : -

The abnormal demand of the United States for its own engineering products is fast slackening, thus bringing the marvellous increase of American manufacturing capacity of the last five years - perhaps more especially the last three years - to bear on foreign markets. It is a question to us paramount to all others. Even the efficiency of the navy is subsidiary to it, for if we lose our engineering supremacy our naval supremacy will follow.

Apply this principle to Australia. We hope within the next few years to lay the foundations of an Australian navy, and we also desire to see Australian ship-building encouraged and receive a great impetus, but how can we hope to see the beginnings of an Australian navy or of an Australian shipbuilding industry unless we lay the foundations in the shape of a successful iron industry ? We have had testimony in this chamber and outside that our iron resources are great and magnificent, but capital and enterprise and encouragement are required for their development. How can Australia stand against the United States unless some protection and encouragement is given to our iron industry ? The advantage of the Government scheme is that although it does not lay down any final lines, it foreshadows certain principles, which those who are interested in the development of the iron trade may accept as a sort of assurance or guarantee that those who make preparations to launch into the development of the industry will receive the sympathy and support of the Federal Parliament. If the scheme now outlined - however fragmentary it may be as it stands - is rejected, the owners of iron mines and others who might have felt disposed to enter into enterprises of this kind and start iron works, will accept our decision as an intimation that no assistance whatever is to be expected from the Federal Government or Parliament. If, however, the Government scheme is adopted they will know - and notice will be given to the whole world that all comers may participate in the bonuses - that substantial assistance is to be given. The bonuses will not be restricted to one firm, but all who feel disposed to embark in the iron industry will be able to operate in a fair field. It has been suggested that the whole of the money would go to one syndicate or firm, but that does not follow. Every one who has an iron mine will be at liberty to compete and to participate iri the benefits conferred by bonus. When the Bonus Bill is brought down it will, no doubt, contain sufficient safeguards to prevent anything like favoritism or monopoly. Parliament will very carefully examine the provisions of the Bill with a view to insure that every enterprising syndicate shall have an opportunity of participating in the benefits to be offered. As a representative of Victoria I am sorry to say that up to the present no evidence has been afforded of the existence of extensive iron deposits in that State; and, therefore, I can speak with perfect disinterestedness. I believe there are immense iron deposits in New South Wales and Tasmania.

Sir Malcolm McEacharn:

– We have them in Victoria, too.

Sir JOHN QUICK:

– I have not heard of any iron deposits in Victoria of the same value or extent as those in New South Wales and Tasmania. I desire to do all I possibly can - and, I am sure, every representative of Victoria will join in that statement - towards the development of the primary industries, especially of the iron industry of Australia, wherever situated, because I feel that the progress and destiny of Australia depends very largely upon the successful establishment of that industry.

Mr DEAKIN:
AttorneyGeneral · Ballarat · Protectionist

– I do not think the committee will fmd a legal discussion fruitful at this juncture, but the point raised by the honor- ( able member for North Sydney is so important that perhaps a word or two in relation to it is called for on the part of the Govern ment. We could never have included in our proposals the particular proposal now under discussion, if it had not been for the conviction that the power to tax the imports of the States existed under the Commonwealth Act. To go to the root of the matter, let me refer honorable members to the report of the sittings of the Convention in Adelaide, in 1897. At page 1002, Mr. Henry, a representative of Tasmania, said -

I would like to raise a question as to the right of the Commonwealth to tax materials for State purposes. In the event of a colony importing rails, machinery, engines, &c, for State purposes, I would like to know whether such exports tire to be free from Customs duties. Will the Federal Parliament have a right to levy duties on materials imported for State purposes?

Mr BARTON:
Minister for External Affairs · HUNTER, NEW SOUTH WALES · Protectionist

– This is a matter that was discussed very f fully in the Constitutional Committee, and I think my honorable friend, Sir George Turner, will remember that I consulted the members of the Finance Committee upon it, intimating to them the opinion of the Constitutional Committee on the point. The words “impose any tax on property “ -

These are the words referred to by the honorable member for North Sydney - do not refer to the importation of goods at all, and- any amendment to except the Customs would be unnecessary. This clause states that a State shall not, without the consent of the Parliament of the Commonwealth, impose taxation on property of any kind belonging to the Commonwealth, meaning by that property of any kind which is in hand, such as land within the Commonwealth. That has no reference to Customs duties.

The Convention accepted that reading, and therefore its intention was that the Commonwealth should retain within its own hands the power to tax imports for the States when this particular section was adopted. Since it has been adopted, the question has been raised whether the words actually used carry out the intention of the Convention.

Mr Thomson:

– That is borne out by the provision in the Tariff.

Mr DEAKIN:

– Which can easily be dealt with. 28 p

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– But the marginal note in the Tariff shows the condition of mind of the Cabinet.

Mr DEAKIN:

– That exemption is only consistent with the doctrine that if the Tariff did not contain a provision that goods imported by the States should be free, they would be dutiable. I do not wish to intervene or prolong the debate, but simply to point out now that the language of the Act has been challenged, that the question can - as the honorable and learned member for Bendigo very properly remarked - only be finally determined by the High Court, when established. This is one of the many questions which will await the decision of that body - questions of the greatest importance to the industries and interests of the Commonwealth. In the meantime, the section having been adopted by the Convention in this form, and with a clear intention, and having been held by the highest authorities to fulfil that intention, the Government are justified in including the proposal now before the committee, lt must be granted to the honorable member for North Sydney, that if the opinion adverse to the view adopted in the Convention were to prevail, it would have a serious effect on the proposal in regard to the iron industry unless, as the honorable and learned member for Bendigo has suggested, the States were to take such action as they have in the past, enabling the local manufacturers of iron rails to supply the requirements of the State railways.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The point upon which the Attorney-General has just spoken is a very important one, and honorable members will recognise that it involves a strange change of front on the part of the Government. When railway iron was being discussed I raised this very question, and contended that, instead of the Government taking it upon themselves to determine that the Constitution made the States liable to the Commonwealth and then freeing them on the Tariff, the question should be left open until the federal court had had an opportunity of deciding whether or not the States were liable to the. Commonwealth. I pointed out at the time that the very general phraseology contained in the Constitution - “ property of any kind belonging to a State” - was so broad that it was quite possible that the federal court would determine that the States’ importations were free. The honorable and learned member for Indi, who is perhaps one of the most acute legal members in the Chamber, expressed the opinion that the possibility of the federal court determining as I suggested was so entirely out of the question, that he hardly thought it debatable. I was contending that although our Constitution provides that the property of the States, “of any kind,” shall be absolved from taxation by the Commonwealth, it was quite possible that it would be held that, inasmuch as the word “ property “ had certain specific connotations in legal phraseology, the subsequent words “ of any kind” would be dealt with under the doctrine of ejusdem generis, and that, therefore, notwithstanding the apparently intentional drag-net involved in these very general words, the court might still hold that they did not absolve the States from the payment of duties. The honorable and learned member for Indi then expressed the opinion, as Hansard will show, that the words are of such a general character that there could not be any doubt about the matter. I still persisted in the view that, until the question was determined, the Commonwealth should not take it upon itself to deliberately absolve the States from this obligation. I went on to urge that in the earlier history of the Commonwealth we should assure ouselves that every entity, whether of a constitutional or legal character, should stand upon its own financial feet, so that we might know from time to time how the States and various corporations with which we might come into contact stood in relation to us. The whole question then took another turn, because members of the committee will recollect that the Minister for Trade and Customs and the Treasurer, who are both members of the legal profession, now take up a strong and opposite position with regard to the meaning of these words. They took up the position which was assumed by the honorable and learned member for Indi, namely, that the question . was hardly debatable. The honorable and learned member for Indi will recollect that my contention was that, if legal men differed as to the possible interpretation of these words, it was far better to allow the Federal Court to determine whether or not the States were absolved from the payment of duty, and if they were liable to leave it to the Parliament to absolve them from the payment of any duty which we impose. Theproposition which is before the committee tostrike out “ Division VIa.” really raises the issue as to whether or not the proposal of the Government to impose an ad valorem duty of 10 per cent, some five years hence-‘ should be dealt with by the committee at the present time. Going away from thelegal question for a moment, it seems to methat there are very strong reasons why thecommittee should not embark upon such a step at this juncture. I think it will begenerally admitted that it would be an improper thing for the committee to enter upon any important phase of the fiscal question which was really not put before the people of Australia. In this connexion I have no hesitation in affirming that the question of the payment of bonuses was neversubmitted to the people of Australia at the general election. When the Prime Minister delivered his first Maitland address, over which we have had a good deal of discussion, and into which I do not now propose to go in detail, he made a reservation, under which this Tariff is alone justified. Whilst recognising that the primary purpose of the Commonwealth Parliament was to raise revenue to meet the requirements of the States, he declared that he would not be a party to the destruction of existing industries. But I challenge any honorable member to point to any passage in that speech in which he indicated that it was intended to deduct money from the aggregate income derived from these revenue duties for the purpose of granting bonuses to create new industries. Now, the distinction is a very clear one, because whilst the whole of Australia was ready to recognise the necessity for raising revenue in order to supply the wants of the States, it was generally understood that the primary purpose of the Tariff - indeed, its only purpose - was to raise revenue, and that if any protection to industries resulted from its operation, it should be regarded as incidental to that primary revenue purpose. But unless some such passage can be pointed to in the first Maitland utterance - such is really the manifesto of this Government which went forth to the people of all Australia as embodying the principles and policy of the existing Ministry - unless some passage can be pointed to in that speech which shows clearly that it was contemplated not merely to prevent the destruction of existing industries, but to create new ones, by taking money from the revenue which it was our primary purpose to collect, it is impossible to say that the people have ever been consulted or have had an opportunity of expressing an opinion upon this subject.

Sir John Quick:

– It was a part of the protectionist manifesto.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– To what manifesto does the honorable and learned member refer?

Sir John Quick:

– I read it.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Would the honorable and learned member tell me to what he is referring ?

Sir John Quick:

– I am referring to the manifesto of the protectionist party.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Surely the honorable and learned member recollects that, so far from advocating protection in the sense in which we understand the word, the Vice-President of the Executive Council, in the most distinct terms, deprecated the dragging in by the free-trade party of the fiscal question - the “ fiscal wrangle” as he termed it - because, he urged, the fiscal question was not at issue. I would also remind the honorable and learned member for Bendigo that the Prime Minister, in his first Maitland address, distinctly said -

I and my colleagues are protectionists - which statement was repeated during the second Maitland speech. But in the second speech the Prime Minister forgot, or omitted to remind the people, that following upon his first statement were these other expressions - but we must forget our policy and remember our country. The Tariff must be such as no protectionist and no free-trader can accept apart from the financial conditions of the different States.

Mr Mauger:

– That is exactly the case now. This Tariff is neither fish, flesh, fowl, nor good red herring, so far as protection is concerned.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We are not dealing with groceries now, but with the iron industry. If the Prime Minister were right in telling the people of Australia that although he and his colleagues were protectionists, they must forget their policy - which means that they must forget protection - and remember their country - which means the whole of the Commonwealth, and not the protectionist portion of it - and if, further, “the Tariff was to be of such a character that neither a protectionist nor a free-trader could accept it apart from the financial requirements of the States,” I should like to know whether the principle of granting bonuses to non-existing industries can be said to be a forgotten protectionist policy, or a policy which no protectionist can accept?

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– It has been accepted by free-traders - by the honorable and learned member’s own leader.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– This sudden descent from the general to the particular has no bearing upon my speech. When I am talking of the utterances of the Prime Minister at Maitland, I am suddenly brought down a distance of two years, and told that the leader of the free-trade party has accepted the principle of granting bonuses. I do not care if 50 leaders have accepted it. I am talking of principles. I want to say that the Government are not merely ignoring the promises which the Prime Minister made to the people of Australia, but are going back upon them, and seeking to impose upon us a system of unqualified protection which has never been announced up to the present time.

Sir John Quick:

– Many honorable members on this side of the committee advocated the payment of bonuses. I did so, for one.

Sir William McMillan:

– That does not make it right.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I know that there was conduct of the most inconsistent character during the elections. I am aware that whilst the Prime Minister was telling the people of Australia - and I ask honorable members to notice the dimensions of his audience - that though he and his colleagues were protectionists, they must forget their policy and bring in a Tariff for revenue purposes, that no protectionist could aceept-the Attorney-General, the Minister for Trade and Customs, and the Treasurer were preaching what I have called undiluted protection, not to the people of Australia, but to their particular constituencies.

Mr Deakin:

– It is not true.

Mr Poynton:

– I rise to a point of order. I ask whether the statement of the AttorneyGeneral that what the honorable and learned member for Parkes said is “untrue,” is parliamentary?

Mr Kingston:

-Is the honorable and learned member entitled to misrepresent the facts?

Mr Poynton:

– I am not addressing the Minister for Trade and Customs. I am asking the Chairman whether the AttorneyGeneral, in stating what the honorable and learned member for Parkes said is “untrue” is in order ?

The CHAIRMAN:

– I did not catch any remark of the Attorney-General, attributing si want of truth to the statement made by the honorable and learned member for Parkes. If the Attorney-General did use the words in that connexion I must call upon him to withdraw them.

Mr Deakin:

– I withdraw, sir.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– While the Prime Minister was speaking to the people of Australia, and delivering a message to four millions of people in this Commonwealth-

Mr McCay:

– I rise to a point of order. We have heard the honorable and learned member on the Maitland speech for about a quarter of an hour, and, if my recollection does not serve me wrongly, quotations from that speed) have been forbidden frequently during the course of the discussion upon this Tariff.

The CHAIRMAN:

– The references made by the honorable and learned member for Parkes to the Maitland speech were, in my opinion, incidental to the question of granting bonuses, which is before the committee. He was showing that the Prime Minister had not made a certain statement in his Maitland speech concerning these bonuses. Therefore, I cannot rule him out of order.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– What I want to emphasize is that the Government ought not to endeavour to impose upon the country a matter of policy of this kind, which has not been promulgated by the Prime Minister. In the whole of the Maitland utterance - which, after all, was the programme of the Government, a sort of menu of what we were to have during the present Parliament, and of what the Government were going to do - there was no reference to bonuses. Far from justifying a protective policy, the Maitland pronouncement merely signified the intention of preventing the destruction of existing industries. The reference to “pattering feet” meant the feet of the young or old people who were now engaged in industries, and who might possibly be thrown out of employment by the taking off of protective duties. Throughout that manifesto, I challenge, any honorable member to point to a single passage indicating that the revenue of the Commonwealth, which it was our primary purpose to collect, was to be used for the purpose of fostering nonexistent industries, or for creating them in the future. There is nothing of the sort in it ; and therefore this is an entirely new proposal. I would invite honorable members to say whether it is desirable that, in doing business in this Chamber, the Government should be not merely allowed, but encouraged, to bring upon the country a proposal of this sort, which was not foreshadowed in their programme. We know of course that in the speech delivered by the Minister for Trade and Customs he spoke of bonuses ; and if reference is made to Ilansard it will be seen that a great many observations were made at the time with regard to the new principle which this idea of bonuses introduces. If ever there was a time when honorable members should avoid considerations of party it is when a great principle like this arises, which means that the Government is to be justified in suddenly bringing before Parliament a proposal which they never foreshadowed in their authorized programme. Apart from that, what does this proposal amount to 1 Honorable members will see for themselves that it is practically asking us to impose a duty which cannot be effective until the next Parliament is elected, of which none of us may be members. Because, if I properly understand the speech which has been made by the Minister for Trade and Customs, the proposal now is that some five years hence - that is to say, during the next Parliament - a duty of 10 per cent, shall be put upon iron as a sort of coping stone to five years of bonuses which are not before us at the present time. I submit that we have nothing to do with what takes place five years hence. I listened to some part of the speech of the honorable and learned member for Bendigo upon this question when he dealt with the advantages of bonuses and the effect they had had upon certain industries in the United States ; but I submit that that has nothing to do with the question. The proposal before the committee is surrounded with difficulties. The one I have mentioned is the most important; it is an entirely new proposal, contrary to the spirit and derogatory to some extent to the primary purpose of this Tariff, which is to raise revenue. We are to raise revenue on the one hand by levying duties upon imports, and we are to use a part of the revenue raised in order to promote new industries, and bring them into existence. A second objection is that we are being asked to legislate for a time when we may not be Members of Parliament. The time will arrive when a new Parliament will be in existence, and questions concerning it ought not to be dealt with at the present time. I trust that mere party feeling will not induce even honorable members opposite to support this proposal, but that they will have regard to the important consideration which bears upon the future legislation of the Commonwealth, that unless a Government chooses beforehand to promulgate to the country what it proposes to do, the country must not be supposed to have elected members to deal with questions which that Government raises. Take the question which has been proposed with regard to additions to the salaries or expenses of members. How could that be dealt with now, when it has never been mentioned to the people of Australia ? We ought not to go outside the manifesto of the Government, and should not deal with questions affecting a Parliament of which we may not be members.

Sir Malcolm McEacharn:

– Then we are to stand still, are we1!

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– There is enough business in the published programme of the Government to last this Parliament another two years.

Sir Malcolm McEacharn:

– This is part of it.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Will the honorable member say where it was foreshadowed”! I think the less the honorable member for Melbourne says about a protectionist policy the better it will be, if he will allow me to say so. I trust that the committee will take a sensible and non-party view of this question, and negative the proposal.

Mr. L. E. GROOM. (Darling Downs).I should like to refer to one effect which I do not think the honorable member for South Australia, Mr. Glynn, intended his proposal to have. He proposes to strike out the whole of Division VIa., but his remarks were entirely directed to the question of granting a bonus for the production of iron. As a matter of fact, this division deals with more than iron. It also refers to reapers and binders and other machinery. If the whole division is struck out, the effect will be that reapers and binders will be removed from the division.

That surely is not the honorable member’s intention.

Mr Thomson:

– That could be dealt with afterwards.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– As regards the imposition of duties, there is an extraordinary position. Honorable members opposite have attacked the Tariff proposals of the Government on the ground that they were really protectionist, and some of them have drawn a distinction between the

S3”-stem of protection by duties and other systems which were lawful means of encouraging industries. The charge made against protection was that if a protective duty is put on we really tax the person who buys the article upon which the duty is paid, .for the benefit of the manufacturer. Some honorable members opposite have drawn a distinction in favour of bonuses, because they regard the bonus system as a better way of encouraging an industry.

Mr Thomson:

– Whom does the honorable member include in “they “1

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– I presume that when an honorable member opposite rises as the leader of a party he gives expression not only to his individual views, but to the opinions of those whom he represents.

Mr Thomson:

– Not in detail.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– This is not a question of detail, but of important principle. Let me refer honorable members opposite to the views of their own leader upon this matter; because I think it is a fair thing to expect them to show loyalty to their leader. I will read the right honorable gentleman’s remarks on the 15th of October, 1901, during the debate on the motion of censure -

The Minister for Trade and Customs was simply immense upon a policy which he hopes to introduce at some future date in reference to the iron industry. I have always been one who would like to see the iron industry firmly established, but my method of effecting this would be by giving it direct encouragement from the national exchequer. M3r reason for so doing would be that as it is a national industry the nation should pay the expense of encouraging it. The man who uses the iron ought not to ber compelled to do that. A national benefit should be paid for out of the national funds. Why should not the whole community pay this bonus to the iron industry if the establishment of that industry confers a national benefit ?…….

A national advantage should be paid for out of the national exchequer, and not out of the pockets of the particular individual who happens to encourage the production of a particular article.

The CHAIRMAN:

– Under the standing orders, an honorable member is not in order in reading extracts from any speech made during the same session.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– The leader of the Opposition attacked the Government on that occasion because the Tariff imposed duties for the encouragement of the iron industry, and he advocated the principle of granting money to that end out of the national exchequer. That practically is the Government proposal. What is proposed is that for a certain time a bonus shall be granted, and that subsequently a protective duty shall continue as a benefit to the industry established. We are really discussing two propositions - encouragement by way of bonus, and the continuation of that encouragement by means of a protective duty. The honorable and learned member for Parkes raises the point that we have no right to impose a bonus, because that system was not mentioned by the Prime Minister in one speech delivered by him at Maitland.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The speech.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– “ The speech “-the opening speech of the campaign. But whatever there may or may not be in that speech, other honorable members did not abstain from advocating bonuses. The leader of the Opposition and others attacked the Prime Minister for advocating protectionist principles, and now they state that part of the protectionist principle is the imposition of a bonus. If that be so, then the Prime Minister is simply carrying out the protectionist principle. On the other hand, however, the leader of the Opposition says that a system of bonuses is not protection.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Our attack will not add to the policy of the Government.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– But the attack raise’s an issue. The question of granting bonuses was raised in Queensland, and it was pointed out that under the Federal Constitution bonuses would in the future be granted only for the whole of the Commonwealth. At the time, attention was drawn to the fact that bonuses were being granted for various industries by the Government of Victoria, but it was held that the Commonwealth would have to institute a uniform system of bonuses, in order to secure uniform administration for all citizens. Personally. I can speak f freely on this matter, because, when I stood for election, I advocated bonuses, as I believe did also at least one other honorable member for Queensland. On the whole I submit that the members of the Opposition, if they profess loyalty to their leader, should rather assist the Government in this proposal to grant a bonus, though I could understand their desiring to strike out the provision for a duty of 10 per cent.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– This is not a proposal for a bonus.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– The bonus principle underlies the proposal before us, and if the proposal be accepted, we may expect the Government to come forward with a Bonus Bill ; in fact, the Minister says that he will do so.

Sir William MCMILLAN:

– The defeat of this proposal does not necessarily do away with bonuses.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– Not at all, but if this proposal be carried we may presume that it will lead to bonus legislation. If the Opposition desire to strike out any part of the proposal, I suggest they strike out that relating to customs duties, if only to show that they follow their leader and believe in bonuses. The honorable and learned member for Parkes always takes a strong and logical position, and be follows other free-traders who do not believe in bonuses, on the ground that such a system is really an artificial interference with methods of production. Other free-traders, however, hold different views, and I hope that by their votes they will adhere to their principles. The iron industry is one deserving of every encouragement. There are vast deposits of iron ore, not only in New South Wales, but in other parts of the Commonwealth.

Mr O’malley:

– In Tasmania.

Mr L E GROOM:
DARLING DOWNS, QUEENSLAND · PROT; LP from 1910; NAT from 1917; IND from 1931; UAP from 1934

– In Tasmania and Queensland also ; and I believe that the bonus system will lead to the establishment of a large industry which will be of immense benefit to the whole of the Commonwealth.

Mr WILKINSON:
Moreton

– I regard this as one of the most important economic and industrial proposals which the Government have introduced. No matter how we may protect manufacturing industries in which iron is the raw material, before we can be said to be truly a manufacturing country, we shall have to successfully get ore from the soil. I rise more especially for the purpose of contradicting a statement made by the honorable member for South

Australia, Mr. Glynn whom I understood to say that it was not known that there were any very large or rich deposits of iron ore in Australia. As far back as 1S66, Mr. Daintree, the then Government surveyor for Queensland, and not a geologist to be despised, reported on a deposit of red hematite iron ore within 30 miles of the city of Brisbane, and within 6 miles of the town which is the centre of my electorate and in which I was born. I know the spot and the quality of the ore, which Mr. Daintree described as the richest deposit of the kind known at that time in the world. That may appear strong language, but I am perfectly satisfied that so far as the raw material is concerned, Australia need have no fear. On the same area of land we have coal, from which coke has been made, and sent to Broken Hill, where it has stood the test and come out “on top” against the best Welsh coke. On the same land, or adjoining, there is rich limestone, which is used as a flux in the iron industry. I know that I am not speaking of isolated instances with regard to these mineral deposits, because what is to be found there is to be found in many other parts of Australia. On the main range dividing the constituency of Darling Downs from that which I represent, there are also rich deposits of this iron ore: in fact, I do not think any one could go far wrong iri looking for it. To encourage the development of iron or coal deposits is really of far more importance than to encourage the search for gold. No doubt gold induces a very large influx of population to places where it is discovered, but it is admitted that only a passing prosperity results. We find that the nations which have come to the front in modern times are those whose power is really built on iron, such as Great) Britain, the United States, Germany, Japan and Canada, which is one of the growing provinces of the British Empire. .Japan recently has learnt the importance of this industry ; and we in Australia ought to be self-dependent and self-supporting, as I hope we shall be, not only in respect of our food supplies, but in respect of all our wants in the future. I do not think that it is the wish of honorable members that in times of stress, should they ever come, we should have to send abroad for the material we require to carry on our detente. We should have possibilities within of making all we require; and if we have to go abroad for the necessary pig-iron and steel, we cannot be said to have the elements of self-defence and self-dependence within our own borders. The m’aterial is at our hands, and the skill is with us ; and if we do not do something to encourage this industry, those who come after us will sa)’ that we missed an opportunity of which we ought to have taken advantage. The proposal before the committee, although it has been described as somewhat premature, seems to me to be necessary at this particular time. We may offer bonuses, but if people do not know that they are to be protected to some little extent after their industry is established they will be more reluctant than otherwise would be the case, to enter upon the industry. I take it that the object of the proposal is to remove that reluctance, and I hope the committee will see their way clear to support the Government. I know that in my constituency, at any rate, there was a decided opinion in favour of bonuses. It was felt that in regard to industries which require the expenditure of a large amount of capital, and which only have a limited market, the Commonwealth should assist in their establishment. During my election campaign I advocated the system very warmly in connexion with iron, cotton, and other products, and I found that, in this, I had the support of a majority of the electors. The expense of thus establishing industries is borne by the people, but the people reap the benefit. We must not forget that in the establishment of an industry such as that of iron we are not only providing employment for iron smelters, iron rollers, and so on, but also giving employment to a large number of coal miners, coke burners, and men in other occupations. It is impossible for us to calculate the amount of employment that will be induced by the establishment of large iron works. The only argument I have heard against the proposal of the Government in this respect, fell from the lips of the honorable member for North Sydney. The honorable member referred to the limited market there would be for the disposal of the produce of any iron industry that might be established. The argument would seem to tell somewhat against the immediate establishment of any large industry of this kind, as the various State Governments are certainly the largest consumer of these productions at the present time. We all hope, however, that all the machinery which enters so largely into our industrial life is going to be made, from the raising of the ore to the completion of the finished machine, by our own workmen, and within our own borders, and I therefore hold that money spent in the way the Government here propose will be well spent. I shall vote in favour of the Government proposal, but I hope they will not limit these bonuses to iron and steel.

Mr WATKINS:
Newcastle

– I think it right here to refer to a phase of the question to which I endeavoured to draw attention when the item of machinery was before the committee. It seems to me that, just as I had expected, if the proposals of the Government are carried as at present stated, some very large industries of the Commonwealth will have to be carried on under absolute free-trade for a considerable time, even though they may be producing more material and employing a greater number of hands than numbers of other industries for whose encouragement we have agreed to very high protective duties. That seems to me to be very unfair. As I understand it, the intention of the Government under this proposal is to give a bonus for the production of iron from the native ores. I take it that the bonus will have to be paid solely upon pig iron as produced from the native ores. But the schedule as here set forward would lead honorable members to believe that the bonus will be paid upon the production of bar, rod, angle, and other iron. It will be seen at once that if it were paid upon the pig iron and then upon the bar, rod, angle, and other iron we should be paying the bonus for some of the iron over and over again. If, on the other hand, it is to be paid only upon pig iron produced in the smelting works which may be established, the other iron articles referred to in this schedule will not get the benefit of this duty until the money provided for the payment of the bonus is exhausted. That is what I have understood the Minister for Trade and Customs to say. I desire to point out that that though Division VlA.does not deal with separate industries there are two distinct branches of the iron industry included in this group. The first paragraph in the division covers articles which are really the produce of smelting works, while bar, rod, angle, tee, sheet, plate, and hoop iron are really the products of rolling mills. ‘ In framing this Tariff we have agreed to a duty of 20 per cent, on machinery, and to high duties affecting small industries, such as barbed wire and nail making.

Mr Mauger:

– What does the honorable member call high duties? If there is a 15 per cent, duty on the manufactured article and 10 per cent on the raw material, what becomes of the high duty ?

Mr WATKINS:

– In this case, according to the arrangement, the raw material will in many cases be absolutely free. The principle adopted so far in the consideration of the Tariff has been to tax raw material when it can be produced within the country. At the present time there is a very great deal of the raw material in connexion with this industry produced within the Commonwealth. ‘ I find that the output from four of these establishments in the Commonwealth last year amounted to 17,140 tons, of a value of £214,6S0, and that £7S,853 was paid in wages in the industry last year. This is an industry which is to be left practically unprotected, while almost every other industry has been well looked after by the Government. We have four of these ironworks established, two in New South Wales and two in Victoria.’ I point out that in order to secure the standard of iron required for general use it is necessary to use scrap-iron and mix it with pig-iron in the smelting. Iron is a metal which becomes better the more it is worked, and the better the scrap-iron, and the more of it that is combined with the pig-iron, the better will be the material produced for the purposes of the rolling-mills.

Mr Bamford:

– Does the honorable member mean to say that there are any of these works in Victoria ?

Mr WATKINS:

– According to the statement I have there is some iron-rolling done here. I believe they are rolling iron in nearly all the required shapes in Victoria.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– From scrap iron?

Mr WATKINS:

– Out of scrap and imported pig-iron. But while there are 185 hands employed in the trade in Victoria there are 410 employed in it in New South Wales at the present time.

Mr Wilks:

– Under a free-trade policy.

Mr WATKINS:

– Not altogether under a free-trade policy, but by virtue of considerable State assistance through the Railway Commissioner.

Mr Kingston:

– The honorable member may call it a bounty.

Mr WATKINS:

– I desire to know from the Minister whether these particular industries must suffer in the meantime, and be absolutely without the protection of any duty.

Mr Kingston:

– If they are sufficiently established, they can be proclaimed.

Mr WATKINS:

– We had it from the Minister that the iron must be produced from the native ores of the colony.

Mr Kingston:

– Certainly not, as regards the duty.

Mr Mauger:

– That is only in regard to the bonus.

Mr WATKINS:

– I understood the Minister to say that these duties will not operate until the bonus has ceased to exist, and that that will bc in about five years’ time.And we are led to understand that this particular industry, which is at present paying wages amounting to £’7S,000, is to be allowed to go by the board so far as &ay protection is concerned, until the expiration of at least five years.

Mr Kingston:

– If the industry is sufficiently established already, it will be a question of whether its products should be included in Division VI. or VIa.

Mr WATKINS:

– That is what I wish to clearly understand. The point is whether the articles to which I have referred will at once receive the advantage of the 10 per cent. duty. Because honorable members must at once see that they are not affected by the bonus at all, and being placed in this division, they are in such a position that they will not get the benefit of either the duty or the bonus for five years. I may add further that in one of the works to which I have already referred, there were no less than 23,296 tons of coal burned last year.

Mr Mauger:

– To which articles does the honorable member refer ?

Mr WATKINS:

– To the articles below the first paragraph of the division - bar, I rod, angle, sheet, plate, and hoop iron. ! These arc the articles which are made at the works to which I refer, and honorable members must admit that it is only a reasonable thing that they should have the advantage of a 10 per cent, duty at once.

Mr Mauger:

– What I object to is that there should be a margin of only 5 per cent, between the raw material arid the duty on the finished article.

Mr WATKINS:

– That means that so far as the honorable member is concerned, in order to save an industry established in his own particular State, he is prepared to allow these works to go down absolutely.

Mr Mauger:

– I have not said that.

Mr WATKINS:

– The honorable member has said that if there were a duty of 10 per cent, on these articles, a duty of 15 per cent, would not do for the articles of machinery manufactured in Victoria. Before we take a vote upon the proposal, I would like the Minister to let us know clearly what is intended, because it seems to me that many of these articles have been misplaced in being included in Division VIa., and they should be transferred to some other division, in which the duty proposed upon them would become immediately operative, and those concerned in their manufacture would get the protection which is afforded to the manufacturers of other classes of goods.

Mr FOWLER:
Perth

– I am one of those members who think that the Government are somewhat previous in putting forth these far-reaching proposals of theirs, and at the same time giving us so little information as regards minor, but nevertheless equally important parts of their proposals. The honorable member for North Sydney indicated, as one of his most serious objections to the Government proposals, that first of all we had to discover whether the Federal Government could demand duties from the various States in respect of importations of productions included in this division. There is a good deal of force in the argument of the honorable member that if these duties cannot be levied upon the importations of State Governments there is really very little use in imposing them at all. But there is another side to the question. Assuming that the Federal Government can lev)7 duties upon importations by the States, it becomes a serious matter for our consideration as to what the result of levying these duties may be, especially in the case of a State which, like the one I represent, has the greater part of its railways yet to build. If it means that 15 per cent, is tobe added to the cost of the iron roads by which we open up our country, and which lead to a development which benefits the whole Commonwealth, we have a right to ask. whether the Government are justified in putting forward such a proposal at the present time? Surely this question is as important as the question of placing glue-pots and paper patterns upon the free list. If the people of Western Australia have the cost of their railways increased by 15 per cent., there will be even fewer representatives of that State on the Government benches after next election than there are now. If the Federal Government are able to levy duties upon the importations of the States, the State Governments will have to pay the highest prices for all the ironwork they require, because there is no likelihood of many firms being engaged in the production of iron. At the present time wc hear of one only, and I feel sure that for a considerable period there will not be more than one firm engaged in the industry, inasmuch as any ordinary plant will be able to supply all the requirements of the Commonwealth. That being so, we shall be constituting a gigantic private monopoly which, like all such monopolies, will take good care to extort the highest profit possible from the community. The honorable and learned member for Bendigo has a remarkably simple plan for developing the iron industry. His idea is to build an Australian navy. No doubt that idea would prove a success if the money necessary to pay for the ships were forthcoming as easily as his suggestion. I cannot conceive, however, that after we had built our navy, and the iron industry was beginning to languish again, the people would be very willing to allow the Minister for Defence to give an order for another half-dozen warships at the cost of, say, a million each. The honorable and learned member’s proposal for establishing the iron industry recalls the method by which, according to the story related by Charles Lamb, roast pork was originally procured in China. I think that for some time to come we should be ill-advised in endeavouring to establish the iron industry as a private monopoly. Years hence, I have no doubt the railways of the Commonwealth will be federated, and then, just as some of the States now manufacture a considerable portion of their rolling stock, it will be within the bounds of possibility that the Federal Government may take in hand the manufacture of rails and other iron works as well. With that possibility before me, I cannot pledge myself to support the proposals of the Government.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I listened with some interest to the remarks of the Minister in connexion with this proposal, but the more I consider it the more incomprehensible it is to me why it was introduced by so strong a protectionist. Why does he not treat the iron industry like any other, instead of making these mysterious proposals in regard to it? We have been told by the Ministry that one reason is that it is too young to be encouraged by the imposition of duties. Is not such a statement a complete subversion of the protectionist theory that infant industries should be taken under the regis of the State until they become old enough to be left to their own devices? Last night the Minister tried for hours to get the committee to impose a duty of £10 a ton for the benefit of the beet-sugar industry, although no beet-sugar is being grown within the Commonwealth, and not a single man employed. The Victorian Government possesses a plant which is of use only to tell the tide of the disaster which befell the Victorian attempt to establish the beet-sugar industry. While the Minister refuses to assist an industry which is in existence, and which has been shown by the honorable member for Newcastle to employ hundreds of men, and pays £75,000 a year in wages, he was anxious to establish an industry which at the present time is non-existent. He tells us that £1,000,000 is ready to be embarked on one iron-works, and £250,000 in another, and yet he hesitates to propose a duty upon iron. One begins to wonder what mysterious influences can be at work to induce him to mete out such different treatment to two industries. He tells us that the proposals in Division VIa. are to come into operation upon dates to be fixed by proclamation - that it is tobe left to him to say whether a proclamation shall issue, and if so, when.

Mr Thomson:

– The Minister proposes to alter that.

Mr Kingston:

– Yes.

Mr Mauger:

– The Government tried to impose a duty of 10 per cent upon galvanized iron, but the committee would not allow it to be done.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Because the protectionist members of the committee abandoned their principles and refused to vote for it. If the Government sincerely believe that the iron industry can be established only by duties in Australia, why do

I not they propose a duty upon iron ?

Mr Kingston:

– The duties are to be called into existence by the issue of a proclamation in accordance with a joint ad- - dress passed by both Houses.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Does the Minister think that he will be in power five years hence? By that time he will be relegated to political oblivion. This Tariff will kill him. This proposal is not a straightforward one, but is intended to extricate the Government from the awkward situation in which they have placed themselves owing to the protection which other industries have received at their hands. It has been claimed that the leader of the Opposition has approved of the granting of bonuses. The leader of the Opposition must speak for himself.

Mr Ewing:

– Did not the honorable meinber approve of granting bonuses ?

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I have uo recollection of it.

Mr Ewing:

– The honorable member’s memory is bad.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Perhaps the honorable member knows when I approved of granting bonuses, but I do not. I have a distinct recollection of a proposal which was introduced into the New South Wales Parliament for the granting of bonuses to certain persons, who were said to be willing to embark a million of money in the iron industry if a certain undertaking were given by the Parliament, but I voted against that scheme.

Mr Ewing:

– I am referring to what was done by the Reid Government.

Mr. JOSEPH COOK. The only proposal that I remember for a bonus to the iron industry was brought forward by Sir William Lyne, under which certain concessions were to be made to the Blythe River Company. The New South Wales Parliament insisted that certain guarantees should be given and certain labour conditions fulfilled, and the proposal was dropped. The same company are now knocking at the door of this Parliament, and more power to them if they can secure the concessions which they seek.

Mr Chapman:

– The honorable member for Richmond was referring to the action of the Reid Government in connexion with Mr. Mitchell.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The only offer made to Mr. Mitchell was to pa)r for locally manufactured rails a price equivalent to the cost of rails in London plus the expense of bringing them to New South Wales. If that is protection, I do not think there is a single free-trader in this committee who would not be prepared to go to the same length.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I made a similar offer to Mr. Mitchell when I was Minister for Works in New South Wales.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The bonus which the Government propose to offer will involve an expenditure of £250,000 per annum, and it will be time enough for us to consider the proposal when it is brought before us in the shape of a Bill. Then we shall be able to lay down the terms and conditions upon which the money shall be taken out of the taxpayers’ pockets for the purpose of encouraging the manufacture of iron. Ample guarantees should be given to those who supply the labour for carrying on such an industry that they shall be justly dealt with and receive their share of an3r benefits that may be conferred by State grants. The proposal now before the committee means, nothing, and no company or syndicate would embark capital in the iron industry on the faith of an abstract proposition. There would be nothing to guarantee to such a company that protection would be forthcoming at the time they required it. I thoroughly agree with the Minister as to the importance of the iron industry, and I hope that in the near future great industrial enterprises will be established with the object of supplying all our requirements with iron made from native ores. The honorable member for South Australia, Mr. Glynn, was incorrect in stating that no evidence bad been afforded of our possession of iron deposits sufficiently large and valuable to enable the iron industry to be successfully established here. We have abundance of iron ores situated alongside large coal pits, and in proximity to rich deposits of lime stone. . At Lithgow all these materials lie close together, and, indeed, everything requisite for the manufacture of iron on a large scale has been placed there by nature. I think I have some claim to speak on this matter, because I first instructed Mr. Jacquet to make a close investigation of the iron deposits in the State of New South Wales, in order to determine whether they were of any real value. The inquiries made by that gentleman established the fact that there was abundance of iron ore, in addition to everything else required for the manufacture of iron. In Tasmania also they have some excellent iron ores, and I understand that the Blythe River Company propose to win ore in Tasmania and convey it to New South Wales for smelting purposes. Then again, there are mountains of iron ore in New Caledonia, and honorable members may make their minds easy as to the natural resources of this continent and of the regions of the South Pacific in regard to the development of the iron industry. Whether the industry would be best developed by the introduction of high protective duties or otherwise is the point upon which the whole question hinges. The Minister was rather unfortunate in his references to Canada, because the statistics show that whereas in 1 884, when the protective proposals of the Dominion Government were introduced, Canada was annually producing 29,000 tons of iron from her native ores, in 1900 after the duties had been in operation for sixteen years her output had increased to ‘only 34,000 tons.

Mr Kingston:

– The honorable member is wrong.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I am referring to the iron made from native ores, and the Minister doubtless has in his mind iron manufactures which are quite different. In the United States - to which honorable members usually refer as furnishing bright examples of what can be done in the encouragement of industrial enterprise - although high protective duties were imposed from the beginning of the last century, it was not until the middle of the century that the iron industry began to make any great strides. It is only within recent years and since the United States have become thickly populated, that the manufacture of iron and steel lias developed. It has developed there, as everywhere else, in order to supply the wants of the people and of the various industries which have sprung up throughout the length and breadth of the country. The production of iron can never be stimulated beyond the requirements of the people, but as the necessities of the United States increased so the manufacture of steel expanded until to-day, owing to their ingenuity, their great natural resources, and their unlimited market, the Americans are in a position to make steel at prices which enable them to compete easily in all markets of the world. The Minister for

Trade and Customs referred to the proposal of the Government as providing for a bonus at the rate of 6s. per ton on the pig-iron produced. It is estimated by Mr. Jacquet that the labour element i in the production of pig-iron in America

I to-day represents only 2s. per ton.

Mr Poynton:

– That is less by one-half than the royalty in England alone.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Yes; and the I labour cost in England for the same pig- ! iron is 4s. per ton. Honorable members therefore have to get over the fact that in America, where wages are stated to be high, the labour cost of production is cheaper by one-half than it is in England. That is a singular fact, and it is accounted for by the immense natural resources of the country, and the extreme capabilities which its ! people display in the production of iron and ! steel from their native ores. I am afraid it j is idle to say that we can emulate the example of America in this regard whilst we possess such a sparse population. When ! we have 70,000,000 or 80,000,000 of people upon this continent, that will be the time for capable and effective production upon the same large and cheap scale as now obtains in America.

Mr Poynton:

– They do not get any of their supplies for the States free of duty.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I do not suppose that they do. The reason an enterprise of this kind has never sprung up in Australia is simply that there has not been a market to attract it. The industry would have been established in the Commonwealth long , ago had there been a sufficient market to absorb the product. But it is well known that the requirements of any one State would not keep an up-to-date modern plant continuously working for more than one month out of twelve. To lay down appliances capable of cheap production would simply have meant ruin to those who attempted it on account of the lack of a market. But now that the whole of the Commonwealth is open as a market, people are busying themselves in enterprises of this kind, and I believe that before long, irrespective of whether there is any duty operating or not, and altogether regardless of whether a bonus is paid or not, we shall see the ores of the continent made up into pig-iron and manufactured again into marketable iron. But if, as alleged, the Commonwealth Go- Ivernment cannot impose duties upon State. requirements, a very serious question is opened up in connexion with this particular industry, because for many years to come the market of this continent will depend largely upon Government orders. Steel rails will be the staple of the industry, and unless some guarantee is given to these companies that all the requirements of the States will be taxable, there will be no inducement in the shape of a Tariff for them to lay down expensive plants. Therefore this matter should be definitely settled by the Government before they offer what otherwise would be an absolutely empty proposal so far as protective duties are concerned. As I say, the supply of steel rails forms the chief inducement to companies to lay down efficient plants and to enter largely into the manufacture of iron. I shall have no hesitation whatever in voting against the Government proposal, because it means nothing. By supporting it we should be committing ourselves to a proposal of which we know absolutely nothing ; and it will be time enough to consider the proposition of the Government with regard to the granting of a bonus to this particular industry when their plan is before Parliament in all its details, so that we may see exactly what is intended. The honorable member for Newcastle has said that there is nothing in this proposal so far as the existing iron industries are concerned. “We were told by the honorable member that these industrial occupations to-day were disbursing £75,000 annually in wages. There is a slight difference between that amount and the sum which is disbursed by the wire-nail industry, in which the honorable member for Bourke is interested.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I have nothing whatever to do with the wire-nail industry.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– In my own electorate alone upwards of 300 hands are employed in the manufacture of iron.

Mr Mauger:

– The honorable member would not vote for it when he had a chance.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I commend that remark to the honorable member for Newcastle, who seemed so enthusiastic to-night in regard to this particular industry.

Mr Watkins:

– I was not here.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member would have voted against the duty proposed to be levied upon galvanized iron had he been here. His party originated the motion which led to its defeat. The manufacture of that class of iron alone represents half the total labour employed in these works. As to the other articles covered by this item, the proposal of the Government means leaving them out of consideration also. It cannot affect them until these works are established and have their product upon the market of Australia. That cannot be within the next five years. The Government, in spite of all their protestations of affection and sincere anxiety for the industries of the continent, deliberately propose to leave out of consideration one of the largest of those industries, and are content to submit a proposal to the committee which means nothing except an abstract resolution which may be varied or modified out of existence at any future time. They ask us to commit ourselves to the carrying of a resolution which may or may not have effect, and which may or may not be modified so far as its terms are concerned. They practically invite the committee to take a leap in the dark, in the hope that they may induce those engaged in these manufactures to believe that they have some sort of anxiety and solicitude for their industrial welfare.

Mr. CRUICKSHANK (Gwydir).- I cannot say that I have very great sympathy with the bonus principle generally, but in connexion with the iron industry I certainly favour its application. In New South Wales we have frequently paid higher prices to enable ironpipes to be manufactured within that State than those for which we could have imported them from other parts of the world. I believe that New South Wales was prepared to make concessions to Mr. Mitchell, at the time he proposed to establish works for the development of the iron industry in that State.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The only concession which Mr. Mitchell asked was a guarantee that he would get the work.

Mr CRUICKSHANK:

– I understood that he demanded more than that. I feel that we ought to develop the mining industry. In the New South Wales Parliament we have repeatedly voted money for the encouragement of mining. We have paid large sums to aid prospecting wherever we have thought that the expenditure would assist in the development of our mineral resources, and provide employment for the people. I understand that about 250,000 tons of iron are annually imported into these States, and that its manufacture, if the industry were successfully established in our midst, would give employment to 6,000 or 7,000 people. If we could provide that number with employment, I think that the sum of £250,000 would not be a large one to distribute over the Commonwealth. There is a great difference between developing a big industry such as the iron industry, and subsidizing - as is here proposed - the makers of agricultural machinery in the form of reapers and binders. T regard this matter as an abstract one, because the imposition of these duties is so prospective that probably I shall not be here when they become operative. The vote which I am going to give to-night will be ineffective so far as they are concerned. I repeat that I am in favour of granting bonuses to encourage the development of our iron industry. Iain quite alive to the fact that, for developmental purposes of any kind, we must spend large sums of money, and particularly for the development of the iron industry, which is so prominent a feature in the wealth production of countries where large deposits of ore exist. The great wealth of many of the counties of England is directly attributable to their iron mines. The experience of other parts of the world has been the same ; and it is for this reason that I feel that, having iron in these States, we should spend money for the purpose of assisting in the development of the iron industry. When we ask it to stand on its own legs, I feel sure that whatever money we have expended will have done a good deal of good. I shall record my vote in favour of the bonus system for the development of the iron industry.

Mr. WILKS (Dalley). - I was in hopes that the Minister for Trade and Customs would address the committee again for the purpose of telling us that he is prepared to postpone this question of giving bonuses. Very strong reasons have been given as to why the matter should be allowed to stand over, and I should like the Minister to intimate whether he is prepared to postpone the item.

Mr Kingston:

– I am sorry that I cannot oblige the honorable member.

Mr WILKS:

– I regret that the Minister assumes that attitude, because the question now raised is not simply one of free-trade and protection, but is a matter of distinct policy introduced for the first time. In the Maitland speech to thewhole of the people of the Commonwealth not the slightest reference was made tobonuses. What was there said was that revenue would be the first consideration, and, in addition, that certain substantial industries would not be destroyed. Nor was any reference made to .this policy in the GovernorGeneral’s speech. The passage I will quote from that document is of great significance in regard to the debate now proceeding -

Revenue must, of course, be the first consideration : but existing Tariffs have, in all the States, given rise to industries, many of which are sosubstantial that my advisers consider that any policy tending to destroy them is inadmissible. A Tariff which gives fair consideration to these factors must necessarily operate protectively aswell as for the production of revenue.

There is the exact position as described by the honorable and learned member for Parkes. I ask even the protectionist members whether they are prepared, against the leader of their own party, and against thepronouncement of policy in the GovernorGeneral’s speech, to vote for bonuses to theiron industry? It must be remembered that if this proposal is adopted, the same policy may be pursued in regard to other industries. There are, for instance, thedeep sea fisheries. That is a national question. Surely the Minister does not intend to neglect all industries but iron mining? There is also the silk industry, which is of considerable importance in some parts of New South Wales, particularly upon theRichmond River. Do the Government intend to propose a bonus in respect of that ? The reference made b)’ the honorable and learned member for Parkes, to “ miserableconstituencies,” was to the miserable condition of the’ people under this Tariff, and not to the constituents themselves. He never intended to say that the people were miserable in their own natures. Honorablemembers opposite have attempted to take shelter behind the leader of the Opposition. I can imagine the severe castigation that that right honorable member would give in regard to the sudden initiation of this policy by the Government. The rules of debate prevent me from quoting what the leader of the Opposition actually said upon this subject, just as the honorable and learned member for Darling Downs was prevented from quoting from the speech ; but I may intimate that what he said when addressing himself to the motion of censure, was that he believed in national industries, and that it might be considered prudent to make a direct demand upon the national exchequer to keep some of them going. At the same time he said, in reference to the iron industry, that it was not desirable to place imposts upon those who use the materials produced in that particular industry, and that he could not defend duties because the users of iron as a raw material would thereby be penalized ; but that it might be considered prudent to take money from the exchequer for a certain period to build up an industry. That is in accordance with the doctrine of John Stuart Mill, who, it will not be denied, was a strong advocate of the principle of free-trade, and who said that if it were proved that an industry was absolutely congenial to a country, and that in a few years it might be strong enough to maintain itself, it might be advisable to afford some assistance to it from the national exchequer. That is the position which the leader of the Opposition put clearly when he used the sentences to which I refer. But that did not tie the free-trade party to the acceptance of bonuses. It is an objectionable thing to pre-date by five years the operation of any fiscal policy What the Government propose is that at the end of five years an ad valorem duty of 10 per cent, shall be placed upon iron and steel. We have to consider what right this Parliament lias to pre-date the operations of any future Parliament. Personally, I believe that the next Parliament will be elected upon freetrade principles, and that, there will be sitting on the Ministerial benches a Government pledged to carry out a free-trade policy. If that be the case it will readily be seen what a mistake it will be to enact now that certain duties shall be imposed five years hence. I do not wish to go into the whole question of the bonus system, but let me put this consideration : There is a largeship-building industry in my electorate. Am I to understand that simply for the purpose of developing the iron industry the ship-builders in that constituency are to be penalized on their raw material ? I have just as much right to ask for a bonus on ship-building as the Government have to ask for a bonus on iron. In New Zealand “ Digger Dick “ Seddon is holding out prospects of a bonus being given to those who increase the population with families above a certain number.

The CHAIRMAN:

– The honorable member cannot discuss the whole bonus system, but only the items in the schedule.

Mr WILKS:

– Do I understand that, because the subject of iron is before us, we cannot make reference to bonuses upon other commodities 1 I am simply doing so to show the position in which we are placed. The whole question is one that

I might bc debated for hours. The honorable j member for Parramatta, in an admirable I speech, has pointed out that his electorate is interested in this question, and he showed that it is not so much the bonus that will develop the industry as secur- ing a market for the enterprise of those engaged in it when the iron is produced. That is an important question. The mere fact that the State Governments of Australia will be placed in a position either tohave their material imported free of duty or to buy their iron from those who produce it within the Commonwealth is a material matter. The largest customers the producers of iron will have will be the various State Governments who require iron for their existing railways, for the lines they are building, and for numerous otherpublic works. To secure the State Governments as buyers would be of more advantage to the producers of iron than the imposition of a bonus. We are referred to history, and told to look at the experience of Canada. The bonus system was established in Canada for the express purpose of accomplishing i what the Minister for Trade and Customs says will be accomplished under the schemewhich he has placed before us ; but during the sixteen years of its operation in Canada, the production of iron there has only increased from 29,000 tons to 34,000 tons, while the importations of pig iron from Great Britain and elsewhere amount to 65,000 tons. There has been an increaseof only 5,000 tons, in the sixteen years, during which the whole people of Canada have willingly submitted to be taxed forthe benefit of this particular industry. In the face of such facts we have a right,, before we take a leap in the dark,, to thoroughly understand the conditionsof the scheme which the Minister for Trade and Customs has indicated.. While “we all naturally desire tosee large national industries developed, we want to know the exact price, and’ i whether the experience of other nations. warrants our adopting the bonus system, which, in my opinion, is disguised protection, and only a little less reprehensible than protection proper, inasmuch as we can measure the cost of the former. For the purpose of stimulating the production of iron, and the encouragement of industries, the Minister for Trade and Customs is prepared to spend £250,000, and that is a fixed amount.

Mr POYNTON:

– How do we know that the bonus system will finish there t

Mr WILKS:

– I am dealing with the statement of the Minister for Trade and Customs, and pointing out that while we may be able to measure the cost of bonuses we cannot see the end of protection. There is no doubt that any company which is induced to establish large ironworks here, by means of this bonus, will ask for further assistance at the end of the five years. The cry in this Chamber, and throughout Australia will then be that as we have already spent £250,000 it would not be prudent to suddenly discontinue that Assistance. It will probably be pointed out that the demand has not been equal to anticipations, and that certain conditions have prevailed which do not warrant the continuance of the works without a bonus, and the then Minister for Trade and Customs will be furnished with a powerful appeal for further assistance. I am thoroughly opposed to any particular industry receiving a bonus. If assistance of the kind cannot be given all round, I do not see why a monopoly should obtain an advantage. This proposal is all a matter of speculation, the Minister only saying that if certain things take place he will do certain things. Indeed, in my opinion the proposal is nothing but a banner for protectionists to flaunt before the constituencies of Australia. The Minister for Trade and Customs rightly says that iron is the basis of all manufacturing industries, but he does not believe that the bonus will come into operation for a few years. If that be so, why should this committee be compelled to discuss the principles of the bonus system, when there is no likelihood of a bonus being required for some time1? The Government are unmistakably trying to trap freetraders into a protectionist position. The mildness of the free-trade opposition to their Tariff, and the assistance which has been rendered by free-traders in passing the items up to date, must have astounded the Government ; but now the Minister is trying to destroy that friendliness, and in doing so may create a fight which will continue for many months longer. I am sorry that the Minister for Trade and Customs supports his fiscal views with such religious fervour.

Mr Mauger:

– What does all this mean 1

Mr WILKS:

– The honorable member for Melbourne Ports has been so accustomed, in the past, to hear his colleagues fighting for individual industries, and showing howa certain factory can turn out a given number of nuts and bolts in a week, that he cannot understand free-traders when they discuss the fiscal question on broad principles. Suppose we grant for a moment that the bonus system is a sound one, how are we to know that the Minister for Trade and Customs is correct in his statement that from five years hence a protective duty of 10 pei- cent, will suffice? We know that a thousand excuses may be made for increasing the duty to 25 or 30 per cent., and I cannot help thinking that the Government have not given sufficient consideration to the details of the -scheme. The protectionists have now dropped the cry of “ infant industries,” and taken up that of “ national industries.” But before I cast a vote in support of the proposal now before us, I want to know whether the system is likely to be extended to deep-sea fishing, ship-building, and other industries which may truly be described as national. Free-trade is the salvation of the poor, whilst protection is the paradise of the rich, but we are not here to waste time in dissertations on free-trade and protection. The Minister for Trade and Customs is answerable for the time which has been occupied in the consideration of the Tariff. His political stubbornness and religious adherence to protectionist views have caused delay and created uncertainty in the trade relations of the community.

Mr HARPER:
Mernda

– It is refreshing to hear the simplicity of faith of our extreme free-trade friends, as expounded by the honorable member for Dalley. When we have a clear idea of only one view of the subject, it is very easy to dwell on it with great force and effect ; but in my experience I have-found, as have other honorable members, that there are generally two sides to a question.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– Six or seven sides sometimes.

Mr HARPER:

– I feel somewhat at a loss to understand the strong objections of our friends opposite to bonuses. I have always understood that even strong freetraders in England admit that there are circuinstances in which a departure from the principles of absolute free-trade is justifiable, and that the proper way in which to take that departure is by the imposition of bonuses.

Mr Wilks:

– It is the lesser evil.

Mr HARPER:

– It may be, but I do not think that honorable members of the Opposition have the right to quarrel with us for taking the same view which leading free-traders take in England, when, having regard to the circumstances of this country, we are dealing with an important industry. I do not intend to occupy many minutes, but I cannot allow the remarks of the honorable member for Parramatta and the honorable member for Dalley to pass unnoticed. These honorable members are opposed to bonuses or protection in any shape or form being applied to the iron industry.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I did not say I was opposed to a bonus ; what I said was that I wanted to see the proposal.

Mr HARPER:

– Then the honorable member is more consistent than I thought he was, seeing that he is willing to entertain the idea of a bonus. Mr. Joseph Cook. - I said I wanted to see the proposal.

Mr HARPER:

– These honorable members have very strong convictions on this question, and those convictions I respect ; but when they try to support their position by references to other countries, and to assume facts which they believe to be facts, they are rather unfortunate. If the honorable member for Parramatta had taken a little more trouble to ascertain what has happened both in Canada and the United States, I do not think we should have heard the speech he made to-night ; and I think I shall be able to show that the facts, or assumed facts, that he placed before us, are anything but correct, that, as he put them, they are misleading. With regard to the experience of Canada, I have not before me the book from which the honorable member quoted, and I am not going to deal with the figures, because, as I interjected when they were being referred to by the honorable member for South Australia, Mr. Glynn, they do

28 Q

not cover the whole case. That was admitted, and honorable members will see that it is not wise to put forward, as the basis of a strong argument, incomplete figures or an incomplete statement of a case. I, however, remind honorable members of what we saw iu. the papers not many weeks ago with reference to the very strong combination of capital that has been formed in England to work the great iron deposits of Canada under her protective system, and by so doing to counteract the operations of the great American Carnegie ring. I believe we are at the beginning of a great development of the iron industry.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member has not touched my figures.

Mr HARPER:

– I am not going to touch the honorable member’s figures, because I say it has been admitted that they are incomplete. I know the honorable member is rather uncomfortable, because he knows that his statement can be proved to be absolutely incorrect.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– The honorable member’s unsupported statements will not prove it.

Mr HARPER:

– The honorable member said with great force and vigour that during the early part of last century the United States had heavy duties upon iron, and made no progress.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Has the honorable member done with Canada ?

Mr HARPER:

-I have done with Canada.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– What has the honorable member done with it 1

The CHAIRMAN:

– I must ask the honorable member for Parramatta not to interrupt.

Mr HARPER:

– The misfortune is that the honorable member’s interruptions make it necessary for me to repeat what I have said before, and so they lead to a waste of time. I have briefly quoted the honorable member’s statement that during the first half of the last century in the United States, under a highly protective system, the iron industry made no progress.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– That is not the statement 1 made.

Mr HARPER:

– That is the honorable member’s statement as nearly as I can convey it. As a matter of fact, during the first half of last century the United States Tariff was by no means protective, and certainly not heavily protective. It was not till 1842 that a duty of any consequence was placed upon iron.

Mr Glynn:

– Prom 1824 to 1S34 it was 100 per cent-

Mr HARPER:

– Honorable members are very impatient. I wish to make my statement, and I shall say what I have to say in spite of interruptions. I propose to” quote a few lines from an authority I would recommend the honorable member for Parramatta to consult before he makes any further statements regarding the iron industry of the United States. I quote from Curtiss’ Protection and Prosperity, for the purpose of submitting merely the statistical facts. In 1842 a Tariff imposing considerable duties was in force, and in 1846 a free-trade Tariff, or what was called a free-trade Tariff, was introduced by Mr. Walker, known as’ the “Walker Tariff.” Curtiss says -

Before going on to the Walker Tariff, or Tariff of 184(i, and its consequences, a glance at the benefit, of a brief interval of protection in what was for the most part a period of free-trade, will be instructive. The year 1842 found us a bankrupt people. A large portion of the iron furnaces were closed, and the product was little more than 200,000 tons; in 1846 and .1847 the production was estimated by the Secretary of the Treasury at 800,000, having quadrupled in four years. Till 1844, not a single ton of railroad iron had been made in the country, yet in 1.845, under protection, we made 50,000” tons, and in 1847, 100,000 tons.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– How long had the protective duties been on at that time ?

Mr HARPER:

– The statement was made deliberately that for 50 years in the earlier part of last century the iron industry of the United States made no progress. It was not until 1860 that really protective duties were imposed, and we shall see what the results were, as stated in official statistical returns of the United States -

The manufacture of steel rails in the United States began experimentally in J 865, and as a commercial product two years later, lt was not till 1870, however, when the industry received adequate protection, that we really began to show the world what we could do. The following ‘ tables will show our production from 1S67 to 1804.

Sir William McMillan:

– What were the duties imposed 1

Mr HARPER:

– I am sorry that the honorable gentleman who is acting as leader of the Opposition does not set a better example to his followers. ‘

Sir William McMillan:

– Surely a. relevant remark is not out of order.

Mr HARPER:

– I think the honorablemember’s remarks are very irrelevant.

The CHAIRMAN:

– I have asked honorable members on several occasions not tointerrupt. I intend to perform the duties of my office towards honorable members on both sides without fear or favour. I do not intend to occupy any other position. I would like the leaders on both sides to assist the Chair in keeping order. I desireat once to remove a false impression, which seems to be in the minds of some honorablemembers, that if an interruption or interjection is relevant it is in order. A standing order made for our guidance lays it down that any interjection or interruption of any kind, whether relevant or irrelevant, is disorderly. Honorable members must bear in mind that in committee they havean opportunity of speaking as often as they choose, and there is therefore no justification for interjection or disorder. I ask honorable members on both sides, and theleaders of the House, to assist the Chair in maintaining order and in making theconduct of the business of the Federal Parliament a credit to all concerned.

Mr HARPER:

– I was referring to the production of steel rails in theUnited States, which was an experimental, manufacture in 1865, and was first protected substantially to the extent of no less than 28 dollars a ton in 1870. Now, what were the results 1 In the year 1867 the gross production of steel rails was 2,277 tons; in 1868, 6,451 tons; in 1869, 8,616 tons ; in 1870, when the duty of 28 dols. per ton was imposed, it rose to 30,357 tons ; in 1880, it had risen to 864,353 tons; in 1890, to 1,871,425 tons; and in 1894, to 1,017,098 tons. Then, when we come, to look at the gross importations during the same years, we find that the importation of rails of all kinds in 1867 amounted to 145,580 tons ; and in 1S77 the quantity imported was only 31 tons. Then in 1881 the importations went up again to 344,929 tons. That was a time of great activity in rail.way making, and also a time of change in the Tariff. In 1890, 1891, and 1892 the imports were respectively 20.4 tons, 253 tons, and 347 tons. These figures show that in a little less than 30 years the production of steel rails in the United States went up from practically nil to over 1,000,000 tons, and the imports dropped from 145,580 tons in 1867 to 317 tons in 1892. The results shown by some of these figures, as exhibiting cause and effect in relation to free-trade and protection in the industry are extraordinary. This writer gives a reference to the number of new ironworks and failures from 1843 to 1850. During the operation of the high Tariff, in 1843, 7 new works were opened, and there were 7 failures ; in 1844, 21 new works and 11 failures; in 1845, 40 new works and 3 failures; and in 1846, 53 new works and 4 failures. Then in 1847, when the people went back to free-trade again, there were 25 new works opened, and 24 failures; in 1848, 17 new works and 32 new failures; in 1849, 10 new works and 41 failures ; and in 1850, 7 new works and 22 failures. These are absolute results of the operation of high and low Tariffs, and they cannot be denied. There must be some cause for them. Taking the production of iron in the decennial period from 1860 to 1890, covering the period of protection in the United States, I find that in 1860 the production of pig iron was 821,223 tons; in 1870, it amounted to 1,655,179 tons; in 1880, to 3,835,191 tons, and in 1890, to 9,202,703 tons. The production of steel in 1870 was 37,500 tuns; in 1880, 1,074,262 tons ; and in 1890, 3,688,871 tons. Account for the facts as honorable members may, they are as I have given them. I should like to know how the honorable member for Parramatta will reconcile them with his fiscal views. I believe that the substantial protection given to the industry led to the reduction of the price of iron in the United States, and allowed that country to take the lead in the world in the production of iron and metals of all kinds.

Mr. KNOX (Kooyong). - I have already indicated that I regard the establishment of the iron industry within the Commonwealth as a matter of the first importance.

The CHAIRMAN:

– It is with very great reluctance that I shall have to throw upon the committee the responsibility of protecting the Chair. On many occasions I have forborne to take action upon hearing constant reflections upon my conduct from the honorable member for Parramatta, made in a voice which the members of the committee as a whole cannot hear. His insinuations are entirely unwarranted. The statement which he makes from time to time, and which he has repeated now, is that I act partially, and will not call upon him when he rises, but give place to some one else. I called upon the honorable member for Kooyong because he has three or four times attempted to obtain an audience. I wish the honorable member for Parramatta to understand that hehas no more rights in this chamber than other honorable members have, and I caution him once again that I shall not brook these constant reflections upon my action in the Chair. There is only one course for the honorable member to pursue if he feels himself aggrieved. The Chair will have to protect itself by throwing upon the committee the responsibility of upholding its dignity.

Mr KNOX:

– My feeling is, and I know it to be shared by every member of the committee, that it is of the first importance that fully-equipped ironworks, capable of dealing with our own ores, should be established as promptly as possible. I cannot consider that we shall have entered upon our national life until within the boundaries of the Commonwealth we are able to supply ourselves with pig iron, which is the basis of all manufactures. In the past the varying Tariffs and local conditions of the States have made it absolutely impossible for ironworks to be commercially successful, and now, unless the Federal Government are able to compel the State Governments to contribute towards the cost of manufacturing rails and other ironwork, it seems to me that, whatever duty is imposed, the iron industry must remain in an unsatisfactory condition. The honorable member for Mernda has referred to the progress which has been made by the iron industry in the United States and in Canada ; but there the railways are owned chiefly by large private corporations, whereas here almost all our railways are State concerns. I hope, however, that the time is not far distant when the railways will become the property of the Commonwealth, because I think that the full advantages attaching to federation will not be obtained until that happens. I must vote for the amendment of the honorable member for South Australia, because I cannot conceive what justification we have in anticipating the will of Parliament five years hence in regard to the imposition of a duty. My feeling is that we are taking upon ourselves something which we are not justified in doing, and that from that point of view the Government proposals are useless. I do not think that any body of capitalists would invest their money under conditions which may be altered within the next five years, merely on the strength of a promise that certain duties will be imposed for their protection. But, as I believe that the iron industry is a necessity of our national life, I should like to see something substantial and practical done for its encouragement. It is idle to suppose that until we get a large population, and therefore require more iron, ironworks will be a large and pronounced success here, because, although it is an indisputable fact that we have in the Commonwealth large deposits of iron ore, not many of these deposits possess the advantages of having cheap coal and limestone close at hand.

Mr KINGSTON:

– There is plenty of limestone.

Mr KNOX:

– Then, too, we have large deposits of iron ore which contain ingredients which prevent it from making satisfactory steel. As the representatives of Tasmania are aware, an effort was made some time ago to establish works near Beaconsfield in that State, but they failed for that reason. In my judgment the only practical way in which to give assistance to the iron industry is by the granting of bonuses. I wish to clearly indicate, now that I am a strong believer in the desire bility of establishing the iron industry, that I shall be prepared to support a scheme for the granting of bonuses, though I reserve to myself freedom of action in regard to the details of any Bill which may be brought in. I shall not go into statistics or details in this matter, because I think that honorable members have all the information which they require. What we want now is a practical indication of the views of each member. I should not have troubled to address any remarks to the committee had it not been necessary for me, in view of the possibility of a division being taken tonight, to clearly indicate what my attitude shall be in connexion with an effort to establish the iron industry in Australia.

Mr BROWN:
Canobolas

– The proposal of the Government is, I understand, put forward to afford encouragement to the development of the iron industry within the Commonwealth, and I agree with those who hold that that industry is worthy of our special consideration and assistance. The question with me is what direction shall our consideration take. Iron enters into consumption within the Commonwealth to a degree that hardly obtains in any other part of the world. In the back country fencing and buildings of all descriptions are very largely composed of iron, and the State Governments are large consumers of the same commodity. Railways afford the only effective means of communication between the sea-board and the interior, because unfortunately we are destitute of those large water-ways which have assisted so much in the development of America. It has been wisely decided that the railways shall remain under State control, and as the States are such large consumers of iron in connexion with the railways, and as iron will also be largely required in the construction of works of defence, I am disposed to favour the placing of the production of iron under the direct control of the State. If it is wise for our Governments to control the means of transit between the interior and the sea-board, and also to charge themselves with the construction of telegraph lines and with the carrying out of expensive means of defence, I contend that it is equally within the province of the State to take into its own hands the manufacture of the iron which they so largely use themselves, and which enters so extensively into ‘ the necessities of the community generally. The protectionists have practically abandoned their pet theories so far as the iron industry is concerned, and it is proposed to impose only moderate duties and to grant bonuses. As between protective duties and a system of bonuses I have no hesitation in declaring in favour of the latter, as it would be a calamity to impose heavy customs duties for the purpose of assisting the iron industry at the expense of the general community. The bonus system, however, is open to very grave objection and I shall support the proposal foreshadowed by the honorable member for South Australia, Mr. Batchelor, with a view to placing the iron production of the Commonwealth under direct State control. Various opinions have been expressed as to the effect of the protectionist methods of assisting the iron industry which have been adopted in the United States, and there are undoubtedly two sides to the question. I have here a small book, written by Professor Taussig, on the Tariff History of the United States of America. This gives what I believe to be ii fair and judicial statement of the position without displaying any strong bias in favour of one economic theory or another. Professor Taussig shows that in the earlier part of the eighteenth century England was importing crude iron from America for manufacturing purposes. In 1740 England produced 17,000 tons of iron, and she was then regularly importing from America some 2,000 or 3,000 tons of pigiron. The iron industry had thus been established in America to the extent of enabling that country to export iron to England. A great revival of the iron industry was brought about in England in 1750 by the use of coke and the adoption of blast furnaces and other improvements in the treatment of native ores, and later on, in I7S3-4, further improvements were effected by the introduction of Cort’s puddling and rolling methods of treating iron. America did not adopt those improved methods at that time, but continued to follow the old-fashioned processes. The result was that the English production largely exceeded that of America, and England became an active competitor in the American market. Between 1816 and 1S28 legislation was introduced in America to discriminate between the iron produced by the antiquated and expensive methods then in vogue in America, and that made by means of the more up-to-date laboursaving processes adopted in England. To such an extent was this carried, that in 1828 there was a discriminating duty of 100 per cent, levied upon the iron produced in England by means of the use of coke, the introduction of the blast furnace, and Cort’s puddling methods, as against the American iron which was smelted with charcoal and treated by the old hammering process. Free-trade writers claim that the effect of this legislation was to retard the adoption of more uptodate methods, and thereby keep the industry in America considerably in the background. I am bound to say that that is a contention to which the author of this work does not attach very great weight. He attributes the backward state of the industry to the fact that the coal mines in America were far removed from the sources of the iron supply, and points out that when the coal-fields were brought into closer touch with the iron mines, the adoption of more up-to-date methods speedily followed, with the result that

I America was enabled to compete with I other countries. In confirmation of this j view, the writer says - It is worth while to dwell for a moment on the : heavy duty on rolled iron - much higher than that j on hammered iron - which was adopted in 1810 and maintained throughout this period. Congress attempted to ward ofl’ the competition of the cheaper rolled iron by this heavy discriminating duty, which in 182S waa equivalent to 100 per cent, on the value. When first established in 1SI6 the discrimination was defended on the ground that the rolled iron was of inferior quality, and that the importation of the unserviceable article should be impeded for the benefit of the consumer. The scope of the change in the iron manufacture, of which the appearance of rolled iron was one sign, was hardly understood in 181 (i and 1818, and this argument against its use may I have resisted truthfully the animus of the dis- 1 criminating duty. But in later years the wish to protect the consumer from impositions hardly continued to be the motive for retaining the duty, i .Rolled bar iron soon became a well-known article, of considerable importance in commerce. The discriminating duty was retained throughout, and in 1828 even increased : it was still levied in the Tariff of .1832; it reappeared when the whigs carried the Tariff of 1842 ; and it did not filially disappear until 1846. The real motive for maintaining the heavy tax through these years undoubtedly was the unwillingness of the domestic producers to face the competition of the cheaper article. The tax is a clear illustration of that tendency to fetter and impede the progress of improvement which is inherent in protective legislation.

Finally, he sums up the attempt to promote the production of native iron in America by means of the imposition of protective duties thus -

It seems clear that no connexion can be traced between the introduction and early progress of the iron manufacture and protective legislation. During the colonial period, as we have seen, under the old system of production of iron, the country had exported and not imported iron. The production of charcoal-iron and of hammered bar was carried on before the adoption of the Constitution. During the first twenty years after .178!), the iron-makers still held their own, although the progress of invention elsewhere, and the general tendency in favour of heavy imports, caused a growing importation from abroad. The production of iron by the old methods and with the use of charcoal was therefore in no sense a new industry. If the business of making charcoal-iron could not be curried on or increased during this and the subsequent period, the cause must have lain in natural obstacles and disadvantages which no protection could remove. After 1815, the new regime in the iron trade had begun ; the use of coke in the blast furnace, and the production of wrought iron by puddling and rolling, had changed completely the conditions of production. The protective legislation, which began in 1818, and continued in force for nearly twenty years, was intended, it is true, to ward off rather than to encourage the adoption of the new methods ; but it is conceivable that, contrary to the intentions of its authors, it might have had the latter effect. No such effect, however, is to be seen. During the first ten or fifteen years after the application of protection, no changes of any kind took place. Late in the protective period, and at a time when duties were becoming smaller, the puddling process was introduced. The great change which marks the turning-point in the history of the iron manufacture in the United States - the use of anthracite - began when protection ceased. It is probably not true, as is asserted by advocates of free-trade, that protection had any appreciable influence in retarding- the use of coal in making iron.

Where protection did confer a benefit upon those engaged in the industry was not by encouraging the production of iron from the native ores, but by encouraging its conversion into articles which enter into general consumption. This was strikingly seen in connexion with the taxation levied upon steel rails. That was a point which was taken by the honorable member for Mernda in his reply to the contention of the honorable member for Parramatta. But I would remind the honorable member that the Government do not propose to give any degree of protection to the large lines of production upon which he relied in support of his argument that the honorable member for Parramatta had not clearly stated the position. The honorable member for Mernda said that under the Tariff of 1870 the duty upon steel rails .required for railway purposes, which had previously been about 45 per cent., was raised to a specific duty equivalent to 28 dols. per gross ton. The writer from whom I have quoted goes on to point out the effect which later legislation had upon the industry in this particular. He shows that during the years 1880 and 1S81, when there was a great demand for rails by reason of railway extensions in America and elsewhere, when the production of the particular kind of steel used for this purpose had been brought to a high degree of perfection, and cheapened by the adoption of the Bessemer method, whilst iron rails were being sold in England for 36 dols. and 31 dols. pelton respectively, the producers in America were selling their rails for 67 dols. and 61 dols. per ton respectively. The author of this work also points out that, as a result of the protection extended to steel rails for railway purposes, the manufacturers were able to charge these high prices for their rails, and to open up their industries in other directions. To such an extent was this carried, that it excited popular protest, and in 1 883 Congress was compelled to make a considerable reduction of the duty in order to bring about a condition which was more equitable to the consumers of this particular commodity. That, briefly, is the history of the iron industry in America. It shows that the imposition of protective duties there resulted in the retention of antiquated and expensive methods of treatment,- as against the adoption of more up-to-date labour saving appliances. It also enabled a few companies interested in the industry to pile up dividends, with the result that the larger concerns absorbed the smaller, so that the iron industry in America to-day is practically in the hands of a very few individuals. Indeed, it is fast approaching that stage when the Government will have to step in and nationalize it. I do not wish to detain the committee, but I fail to see that the adoption of a strong protective policy will greatly benefit the industry here, by bringing into use our material wealth in this particular. As I have already indicated when it becomes a question- and I believe we have reached that position now - of a bonus as against a customs duty, I should prefer the bonus ; and if it becomes a question of the Government taking the initiative, and attempting to produce the iron which it requires for its own purposes, I shall be prepared to give that method the preference as against the bonus. I want to see the industry assisted. I believe that the whole trouble is to get over the initial difficulties. Many years ago an effort was made to establish the iron industry at Lithgow. Those who originally invested their money in the industry endeavoured to treat the native ores, and as the result of their labours a considerable quantity of iron manufactured directly from native ores was put upon the market. But unfortunately difficulties were met with in the treatment of the ores. It seems to be a peculiarity of Australian ores that they are dissimilar to ores that are met with in other parts of the world ; and very often the knowledge that is sufficient for the treatment of ores - whether they be iron, copper, silver, or even gold - in other places is not able to cope with the problems that have to be faced in Australia. I believe that here, as in other directions, it is only a question of experiment, and that ultimately - perhaps after a considerable expense has been incurred - means will be devised that will enable us successfully to treat our iron ores, and as the result of their treatment to place upon the market an article that will be able to compete with anything that can be imported from outside our borders. When that is done I have not the least fear but that we will be able to produce within Australia iron that will serve our purposes, and be as cheap as any that can be produced elsewhere. Another difficulty that is met with in connexion with many of our mineral problems is that unless there is a sufficient return in respect of the particular commodity the industry will not pay. That return depends upon the consumption. Large returns are necessary to make the industry successful. It is because the consumption has not been sufficient that the investment of private capital has not been directed towards the development of this particular mineral to the same extent and with the same results as has been the case with regard to other minerals. I agree with the position taken up by the Opposition. The mere retention of this provision in the Tariff practically means nothing. It depends upon other legislation which the Government will have to introduce. Further than indicating that that legislation will be in the direction of giving bonuses, we have nothing to guide or inform us as to its particular character. But quite apart from the question of assistance in that direction, these proposed customs charges cannot possibly assist the iron industry to any great extent, and will operate as an embargo upon other industries that have to use and import iron. The duties will form an obstacle, to the extent indicated, to the free use of iron in those other industries. I am prepared to give the iron industry every reasonable consideration on the lines I have indicated. I think, however, that it would be wise on the part of the Government not to press this proposal to a division, but to hold it back till a later period, when they could come down to the committee with their more general proposals. We should then be in a position to judge the matter upon its true value.

Mr. G. B. EDWARDS (South Sydney). The honorable member for Mernda has said that there are two sides to this question, and I interjected that there were more probably six or seven sides to it.

The more I have heard of the debate, the more convinced I have become that there are many sides to the question. I- yield to no one in my desire to see iron works on a large scale established within the Commonwealth ; but I think that we have a far better reason for expecting that such works will be established now that we have federation, than we had previously under the separate State systems. I know that even in the little State of Tasmania, in years gone by, there was some talk of offering bonuses, or otherwise giving fiscal assistance for the purpose of establishing iron works there. A great deal of work was once done at a place called Ilfracombe, near Beaconsfield, and a large amount of capital was expended. But the enterprise came to naught in consequence of the refractory nature of the ore. The hematite iron ore refused to flux with such material as they had in the neighbourhood for fluxing purposes. So long as we were separate States it was almost impossible to establish iron works, because the returns which could have been obtained were utterly inadequate to warrant the expenditure of the large capital involved. But if the question were left alone for a few years I believe that without the aid of the Government we should see iron works established in one or more of the States of the Commonwealth, and that there is a large and growing market awaiting those who successfully start such an enterprise in our midst. But seeing that a protectionist policy has been established by a Government composed of protectionists, and seeing that protection has been given to many other industries, I think it would only be just to this particular industry, from which so much is anticipated, to grant it some sort of consideration in the fiscal legislation passed by this Parliament. To that extent I am perfectly willing to consider any proposal for giving assistance to the iron industry. But we are at once met by two or three facts which we have to weigh carefully in coming to any conclusion as to what the effect of this fiscal assistance will be. If we protect the iron industry we shall be undoing a great deal of what - I am now arguing from the protectionist side of the question - the committee have already done in the way of assisting the dozen and one other industries, all of which will have to pay through the nose for any protection which we extend to iron. It has been pointed out that this protection can have very little effect upon the output of -works of such magnitude as iron works must be if they are to succeed in the Commonwealth; because the chief consumers of iron are the States themselves upon their railways. Some honorable members have found it difficult to come to the conclusion that under our Constitution we are empowered to levy duties of customs on goods consumed by the States. That was one of the questions that I was the first member to touch upon in the main debate upon the Treasurer’s statement. I then said that I did not think that the Constitution forbids the taxing of goods imported by the different State Governments. Not only do I think that the Constitution does not forbid the taxing of such goods, but it is wise and just that we should be able to tax them. Otherwise an unscrupulous State Government might import large quantities of dutiable material and sell it again. Such transactions under the enormous duties we are levying on some goods would yield a great profit to such an unscrupulous Government. For this reason I hold that the view which I expressed on the subject was a good and valid one. It would be much to be regretted if we could not tax goods imported by the State Governments, but I am also firmly of opinion that the Constitution empowers us to tax them ; and I am pleased to note that the Attorney-General has to-day given an opinion - which should have been supplied some time before - in which he has come to the same conclusion. That view has been upheld by some of the other legal members of the House, but I should like to express a layman’s opinion, which I take to be a practical view of the question, from an interpretation of the section of the Constitution which deals with the matter. Section 114 states- -

A State shall not, without the consent of the Parliament of the Commonwealth, raise or maintain any naval or military force or impose any tax on property of any kind belonging to the Commonwealth ; nor shall the Commonwealth impose any tax on property of any kind belonging to a State.

There we have two affirmations of precisely similar import, the wording in each case being exactly the same. The common-sense view is that if this section did not exist, a State would be able to tax any property of the Commonwealth, and the Commonwealth would be able to tax any property of the

State. We know there are other provisions in the Constitution which prevent a State from taxing the imports of the Commonwealth, or any imports whatever, so that the section cannot possibly apply to duties of customs. If it did apply to duties of customs, the section would be meaningless. A further reason why it cannot so apply is that we cannot imagine a body of intelligent men, such as were sent to represent us in the Convention, adopting language so slipshod if the intention was that the Commonwealth should not tax the imports of a State, because it would have been so simple to add one or two words in order to make the meaning perfectly clear. To my mind, the only taxation anticipated by this section was the taxation of real estate or movable property - such taxation as has been levied in some communities, and known as wealth or surplus taxation. The quotations from the Convention debates which were- read by the Attorney-General to-day, and which I have read myself, show conclusively that it was not in the. mind of any honorable member of the Convention that the Commonwealth should be prohibited from taxing goods imported by a State. Of course, if the High Court were called on to interpret the section, it would not for one moment take into account the discussions in the Convention. But it is pretty safe to assume that the High Court would give the interpretation which I call the common-sense interpretation, namely, that if the Convention, or any body of men, in drawing up the Constitution, intended to prevent the Commonwealth Government from taxing the imports of a State, that would have been set forth in plainer language than we find in the section. Consequently, I think the section refers only to the taxation of property, or any other taxes except those which are imposed on imports. The bearing of this is that I believe we cannot give any adequate protection to the iron industry unless we are able to tax the imports of the various State Governments,, which imports largely consist of iron rails. If we were able to tax iron rails we should be able to give some measure of fiscal protection to the industries which may ultimately be largely engaged in manufacturing iron into rails. But when it is sought to make the protection as high as is proposed by the Government, and when it is further intimated that the customs impost is to be accompanied by another act of legislation by which we are to devote the large sum of £250,000 to bonuses, then in the present state of our finances, and in this early day of our history, we are brought face to face with a difficulty which, so far as I am aware, has not been pointed out in the debate this evening. If we are to give £250,000 in bonuses, we shall require to raise the money by means of taxation, and we cannot do so without raising £1,000,000, in order that we may pay three-fourths back to the States.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– We cannot debit it to the States.

Mr.G. B. EDWARDS.- We cannot debit it to the States, because it is not a charge against the Customs revenue, but an extra charge for Commonwealth expenditure, which will necessitate our raising three-fourths more than we require.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Through the Customhouse ; that is the anomaly.

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– There has been no adequate explanation by the Government of how we are going to face this question of raising £1,000,000 in order to pay £250,000 away in bonuses. The scheme of the Government is ill-digested and impracticable. It cannot possibly be attempted without getting into difficulties that no one seems at present to adequately understand. The Ministry talk of the matter very lightly, and to-day for the first time we have had some of the details, which, however, are not complete enough to enable the committee to come to a decision. If these bonuses are to be given, they should be given by the State Governments and not by the Commonwealth. If we establish the iron industry in Tasmania, for instance, what benefit will that be to Western Australia? Similarly, if we establish the industry in New South Wales, what benefit will that be to South Australia ?

Mr Kingston:

– Australia is not one, then ?

Mr G B EDWARDS:
SOUTH SYDNEY, NEW SOUTH WALES · FT

– I know as well as the right honorable gentleman that Australia is one now ; but there is the question of justice, and of not saddling the whole of Australia with protection and bonuses which will be felt all round, in order to establish an industry which we know very well cannot possibly be done for many years. On the other hand, if these industries are left entirely alone, and it is found that they may be made to pay, now that the whole of Australia offers a market, we shall find enterprise and capital willing to take them up. If the Commonwealth owned the whole of the railways of the States, I could possibly see some other way out of the difficulty. In such a case I should never object for a moment to the proposal that the Commonwealth Government should establish ironworks and develop our iron resources, making it our first care to turn out all the rails required for the railways. But while the State Governments own the railways, and while some States own the iron deposits, and other States do not, and whileany expenditure in developing these deposits and manufacturing the iron into marketable commodities can only benefit the States in which the manufacture is established, the fairerand juster principle is to let the bonuses be paid by the States out of local taxation. Any attempt to saddle the whole of the Commonwealth with the cost of establishing these industries at the expense of a large bonus, combined with fiscal protection, is inequitable, unjust, and unworkable, seeing that it will necessitate imposing taxation to the extent of £1,000,000 in order to provide £250,000. For these reasons I very much regret that the Government did not consent to the postponing the consideration of this item, on which so much useless discussion has taken place, and proceed to consider the items of tea, kerosene, timber, and the thousand other commodities, a settlement in regard to which is awaited with much anxiety by all traders throughout the Commonwealth. A system of bonuses such as is proposed cannot come into operation for some years, and yet, whilst other items which require settlement with all decent speed are left in abeyance, we go on with a more or less academic discussion on the merits of industries which we do not know whether we can establish. I regret that we have wasted time, and that the scheme placed before us is so utterly impracticable that it cannot obtain the support even of those who hold protectionist views.

Progress reported.

page 9981

ADJOURNMENT

Employes in Victorian Electric Works - Free Telegrams for Members - Federal Capital.

Motion (by Sir George Turner) proposed -

That the House do now adjourn.

Mr THOMAS:
Barrier

– I should like to ask the Minister for Trade and Customs if he will be good enough to lay on the table of the House, and have printed, the report in regard to the employes in electric works in Victoria for which I asked, and which he has been good enough to show me 1

Ms Kingston:

– I have no objection.

Mr THOMAS:

– There is another matter to which I should like to draw attention. In two or three of the newspapers to-day there are, as there have been on previous occasions, references to free telegrams sent away from this House. One of the newspapers this morning says -

By no stretch of imagination could some of the telegrams received by the Telegraph department from members be regarded as upon public business.

That seems to me to be rather a serious statement, but I for one do not believe that honorable members would send away telegrams on service that were of a private character. But even if members did do so, it is a very serious matter that officers of the department should divulge what telegrams contain. How can newspaper reporters ascertain what is in those telegrams unless somebody divulges their contents ?

Sir George Turner:

– The reporters imagine the contents.

Mr THOMAS:

– It is a serious thing if reporters upon such papers as the Age, Argus, and Daily Telegraph can make such statements from their own imaginationThere should be some inquiry as to whether these telegrams have been sent, and as to whether any officials have been divulging the contents of telegrams. It is to me an extremely important matter to know whether telegrams sent through the office Are treated with the secrecy with which telegrams ought to be treated by the officials.

Sir George Turner:

– I shall mention the matter to the Postmaster-General. I do not think that anything has been divulged.

Mr BRUCE SMITH:
PARKES, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– Some months ago I tabled certain motions with regard to the federal capital, suggesting that certain expert information should be collected and published in book form. As that proposal has since been carried out, and as the information is being collected and published, I desire to have the motions I have tabled on the subject removed from the business paper.

Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917

– I wish to say a word or two on the matter referred to by the honorable member for Barrier. If these members’ privileges are to be treated in this way it will simply mean that no self-respecting man will take advantage of them. If abuses of the privileges have occurred, it is within the power of the Government, and it is also’ their duty to put a stop to them. It is not fair that the matter should be bandied about in this slipshod way in the newspapers. If it is known how many telegrams are sent by honorable members, somebody must be divulging information. Prom the whole tenor of the paragraph, it would appear as if the Postmaster-General were engaged in a constant struggle with members of this Parliament in connexion with these concessions. I do not think we ought to be placed in any such position. Either these concessions should be granted to us freely or the)’ should be withheld, and it is within the power of the Government to control the matter absolutely. From the reports published this morning, it would appear as if there was something like a tussle going on between two Government departments over this matter. I object to it going forth that the PostmasterGeneral is in a state of constant antagonism with the Parliament regarding these concessions. I do not know that there has been any conflict with the Postmaster General, but these statements are correct or incorrect. I take it that the paragraphs are semi-official or inspired, and the Postmaster-General should substantiate his charges, or justify the Parliament in the eyes of the public.

Mr O’MALLEY:
Tasmania

– It begins to look as if the Postmaster-General was a kind of constitutional constable, standing at the Treasury gates to shut out these robbers, who are trying to poach. If that is the case, either the honorable gentleman has had his job too long at too high a salary, or we have had our jobs too long. I am just as honest as the Postmaster-General, or I should be out of this House. I send very few telegrams, but I do not care to be reading every day that we are being guarded and watched ; and I object to our becoming a laughing-stock for the people. Halfadozen persons asked me on the tram to-day whether I was using my privileges as a member of the Commonwealth Parliament to send private telegrams to “the girl.” Either we are entitled to send telegrams, or we are not. There have been a good many little tussles over the matter, and it seems to me that the Postmaster-General would be better employed in putting the telephone service of Melbourne in order than in watching every little telegram a member sends away.

Mr.Mauger. - Is not the PostmasterGeneral away? He could not have had anything to do with this.

Mr KING O’MALLEY:
TASMANIA, TASMANIA · IND; ALP from June 1901

– If he is away the honorable gentleman will be here when he returns, and will then be able to take up the matter. The honorable gentleman was away when these things appeared in the paper, and we are hero to receive the kicks and cuffs of the people of Melbourne on account of them. I want to say straight here that we are about sick of this. We are entitled to these privileges, or they should be abolished, and we should be given a decent salary of £7 20 or £800 a year. If we are given a salary more nearly approaching that given to Ministers, we will pay for our own telegrams. Honorable members know that we are not getting a living wage now, but a starvation wage, and I think the matter ought to be brought under the notice of those having the administration of the Victorian Factories Act.

Question resolved in the affirmative.

House adjourned at 10.52 p.m.

Cite as: Australia, House of Representatives, Debates, 12 February 1902, viewed 7 November 2016, <http://historichansard.net/hofreps/1902/19020212_reps_1_8/>.