House of Representatives
11 June 1902

1st Parliament · 1st Session



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

page 13514

QUESTION

ALLOWANCES TO PUBLIC SERVANTS

Mr WATSON:
BLAND, NEW SOUTH WALES

– It is stated by the Argus that, according to a return which was laid upon the table yesterday by the Minister representingthe Prime Minister, the Chief Parliamentary Reporter has received the sum of£64 by way of travelling allowances. I should like to know how that sum has been made up, and what are the circumstances under which the moneywas granted? I understand thatthe officer in question has not been out of Melbourne since the session commenced.

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

– The honorable member is correctly informed as to the amount ; but it is distributed among various officers, and represents their travelling expenses when joining the staff. TheChief Reporter has made no journey upon official business since the opening of the session, but during the months of March and April, 1901, when engaged upon theorganization of the reporting staff, and the arrangements for their accommodation in the Parliamentary-buildings, he travelled twice from Sydney toMelbourne, and, when taking up his residence here, the expenses of the removal of his furniture were paid upon the scale allowed to other Commonwealth officers. Since the commencement of the session he has incurred no travellingexpenses, nor has he received allowances of any kind.

page 13514

QUESTION

MEMBERS’ TRAVELLING ALLOWANCES

Mr POYNTON:
SOUTH AUSTRALIA, SOUTH AUSTRALIA

– The Victorian Minister ofRailways,Mr. Bent, is reported to have said, at a public meeting at Brighton, Victoria, on Friday last, that -

It cost more to convey the wives and families of members of the Federal Parliament about the country than the Kyabram League hoped to save by the reductionof members scheme.

Is there any truth inthat statement?

Mr DEAKIN:
Protectionist

– I do not know that we need take notice of remarks bypersons who are not members of this House. I cannot understand upon what information the statement was based, because the Minister for Home Affairs informs me that, so far as he knows, the expenditure under this head for the eighteen months since the inauguration of the Commonwealth has been only about £700.

page 13514

QUESTION

TRANSCONTINENTAL RAILWAY

Mr KIRWAN:
KALGOORLIE, WESTERN AUSTRALIA

– When the Prime Minister was at Fremantle, be said that he had written to the Minister representing him here asking him to expedite the appointment of a committee of experts in connexion with the construction of the Western Australian transcontinental railway, and, in reply to a question which I asked him a week ago, the Minister referred to said that he would inform the House of the intentions of the Government upon the subject as soon as a few preliminary matters had been attended to. Is he able to make any communication to the House on the subject now’

Mr DEAKIN:
Protectionist

– The matter was considered by the Cabinet, and, after some discussion, referred to the Minister for Home Affairs to obtain more information, especially in regard to certain water-boring proposals which had been made by the Government of Western Australia.

page 13515

END OF SESSION

Mr MAHON:
COOLGARDIE, WESTERN AUSTRALIA

– Does the Minister representing the Prime Minister think that the session will end before next Christmas % If not, when may we expect it to end 1

Mr DEAKIN:
Protectionist

– I do not think that my opinion upon the subject carries more weight than that of any other honorable member, but I hope the session will end long before Christmas.

page 13515

QUESTION

PURCHASE OF MILITARY HORSES

Sir LANGDON BONYTHON:
SOUTH AUSTRALIA

– Bearing upon the question which I asked yesterday in reference to the supply of remounts to the British Government, I wish to read part of an article published in the London Daily Mail of 7th May last, under the heading - “ Remounts for the Future : Colonies to be asked for Annual Supply.” The article says : -

The important question of the supply of remounts to the army in pence and war is at last to receive some attention at the hands of the Pall Mall authorities.

Before the war an annual supply of’2,000 horses proved adequate. Since the outbreak of hostilities that number has been multiplied a hundredfold annually ; but the staff for supplying these varying numbers has, unfortunately, not proved sufficiently elastic.

The Secretary of State has, however, tact led j the question with the view to the provision of n remount department that will be able with ease I to supply the peace wants, and also be prepared ‘ in time of emergency to increase this supply up to as many as a quarter of a million per annum.

The idea- of breeding their own horses has been ‘ practically abandoned by the War Office, who now consider the registration system is the most practicable, as well as the least expensive. As far as possible, the colonies are to be invited to j supply a certain number of horses annually. Canada Iws agreed to furnish 500 Canadian t horses per annum, which will be full-grown, and trained by the Canadian local troops, at a cost of £20,000 annually. Australia will also supply a proportion of India’s needs.

Registration of horses is to be carried out more extensively and much more carefully, and the services of a special staff of purchasers are’ to be ‘ engaged. They will receive a retaining salary of £3 or £4 per week, which will be largely increased when their services are actually requisitioned.

In view of that statement, I should like to ask the Minister representing the Prime Minister if he thinks it would be wise to communicate with the War Office upon the subject 1

Mr DEAKIN:
Protectionist

– The honorable member knows as well as any honorable member the accuracy of newspaper paragraphs and articles. As only one journal has published this statement, I think he must agree with me that it is merely one of those clever forecasts in which journalists sometimes indulge.

Mr Glynn:

– I think that there was something upon the subject in the Times.

Mr DEAKIN:

– No reference has been made to it here. I am always willing to receive information from any quarter, and shall be glad to make further inquiry upon this subject; birt I have no sanguine expectations in the matter.

Sir Langdon Bonython:

– Will the honorable and learned gentleman send a cable to London t

Mr DEAKIN:

– Not yet.

page 13515

MONOPOLIES BILL

Mr HUGHES:
WEST SYDNEY, NEW SOUTH WALES

– Is it the intention of the Government to bring in a Bill to prevent monopolies, containing the provisions which were eliminated from the Tariff 1

Mr DEAKIN:
Protectionist

– My right honorable colleague hopes to introduce such a Bill as soon .as the measure now before the House has been disposed of.

page 13515

QUESTION

GOVERNOR-GENERAL’S ALLOWANCES

Mr POYNTON:

– I wish to direct the attention of the Minister representing the Prime Minister to the following extract from the report of our proceedings of 28th May last, which is to be found on page 1294:8, of Hansard :-

Mr Poynton:

– Has the Attorney-General the despatches which passed between the present Minister for Home Affairs and the Imperial authorities ?

Mr Deakin:

– I have to-day, at the suggestion of. the honorable and learned member for Corinella, written to the Premier of New South Wales, asking as a favour to have these despatches supplied, with a view of laying them before this Parliament.

Have the despatches been obtained, and, if so, are they available to honorable members for perusal?

Mr DEAKIN:
Protectionist

– I have not yet received a reply from the Premier of New South Wales. I believe that my request was made at the instance, not of the honorable and learned member for Corinella, but of the honorable member for Laanecoorie.

Mr POYNTON:

– I wish further to know from the Minister representing the Prime Minister : - 1 . If it is to be understood that the sum of £5,000, voted by the House yesterday, for the up-keep of the Governor-General’s establishment is to form a precedent for allowances to future GovernorsGeneral? 2. What is the total cost to date of the Governor-General’s establishment, including salary, allowances for upkeep of Governor-General’s establishments in Melbourne and Sydney, and furnishing?

Mr DEAKIN:
BALLAARAT, VICTORIA · PROT; LP from 1910

– The £5,000 voted last night had no reference to future expenditure. It was simply to pay for the lighting, fuel, and other items of that kind up to the 1st Maylast, when the House dealt with the Governor-General’s Establishment Bill. The cost of the up-keep of the Government Houses in Melbourne and Sydney is given in the Budget papers. The total amounts to between £19,000 and £20,000. That sum does not include allowances for furniture, and I am not aware of any such expenditure. The £10,000 voted was to defray the expenditure of the Governor-General during the Royal visit.

page 13516

QUESTION

IMMIGRATIONR ESTRICTION

Mr CROUCH:
CORIO, VICTORIA

– Has the Minister representing the Prime Minister been able to obtain any information in regard to the refusal of the Government of Western Australia to admit a Victorian into that State, and in regard to the detention of Mexicans upon the New South Wales border ? Can he suggest any way in which the immigrants which have been admitted into one State may be allowed to go into any part of the Commonwealth ?

Mr Watson:

– I do not think that that would be a good thing. We do not want the Chinamen and kanakas of Queensland to travel to other parts of the Commonwealth.

Mr DEAKIN:
Protectionist

– The Victorian to whom the honorable and learned member refers was dealt with under the State Act, not under the Commonwealth Act.

Mr Crouch:

– Then a Western Australian Act can prohibit a Victorian from entering the State?

Mr DEAKIN:

– Yes ; under certain circumstances. I understand that the Greeks or Mexicans referred to are still at Wodonga; but inquiry has shown that they are in possession of ample funds in gold.

page 13516

QUESTION

NAVAL AND MILITARY EXPENDITURE

Sir LANGDON BONYTHON:

asked the Minister representing the Minister for Defence, upon notice -

Whether, in view of the retrenchments to take place from the 1st of July next, he will furnish this House with a statement showing -

. Military expenditure for 1901-2.

Proposed military expenditure for 1902-3.

Naval expenditure for1901-2.

Proposed naval expenditure for 1902-3.

Sir WILLIAM LYNE:
Minister for Home Affairs · HUME, NEW SOUTH WALES · Protectionist

– The answers to the honorable member’s questions are as follow : -

In regard to the answers to questions Nos.1 and 3, I may point out that it is impossible to give the exact amounts until the expiration of the term.

page 13516

QUESTION

SOUTH AFRICAN WAR EXPENDITURE

Mr McDONALD:
KENNEDY, QUEENSLAND

asked the Minister representing the Prime Minister, upon notice -

  1. Has his attention been drawn to a statement attributed to Mr. Chamberlain that the Australian States should contribute some £30,000,000 towards defraying the expenses ofthe War in South Africa ?
  2. Whether, in view of the repeatedly-expressed assertions of representatives, Australian politicians, and journalists, that we would spend our “last shilling and our last man” in furtherance of a war of aggression in South Africa, it is the intention of the Government’s representatives at the coining Imperial Conference to be held in London to consider the advisability of relieving the pauperized masses of the United Kingdom from a portion of the taxation required to meet such war expenditure by imposing a tax on land and incomes sufficient to make up our per capita share in the cost of a war by which the Band owners alone have benefited.
Mr DEAKIN:
Protectionist

– I have seen no such statement attributed to Mr. Chamberlain, but a cablegram stated that it came from an Opposition paper. With regard to question No. 2, no such subject has been included in the list of matters to be considered by the forthcoming conference in London.

page 13517

LEAVE OF ABSENCE

Resolved (on motion by Mr. Skene) -

That leave of absence for one fortnight be granted to the honorable member for Wannon, on the ground of ill-health.

page 13517

SUPPLY

Resolutions of Committee of Supply, coveringEstimates and Additional Estimates and works and buildings for the year 1901-2, and arrears and additional arrears for the year 1901, reported and adopted.

page 13517

BONUSES FOR MANUFACTURES BILL

Second Reading

Debate resumed (from 10th June, vide page 13473) on motion by Mr. Kingston -

That the Bill be now read a second time,

Upon which Mr. Watson had moved by way of amendment -

That all the words after the word”now” be omitted, and that the following words be inserted in place thereof, viz. : - “referred to a select committee to consider and report upon the advisability of establishing Commonwealth or State iron works. That such committee consist of the Minister for Trade and Customs, Mr. Batchelor, Mr. R. Edwards, Mr. Fuller, Mr. Hughes, Mr. Kirwan, Mr. Mauger, Mr. Thomson, and the mover.”

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

– It is a matter for regret that a Bill of such importance should have been brought forward at so late a stage of our first session. The Bill contains provisions which must be of very great interest to all honorable members, no matter on which side of the political fence they may sit. We are now in the thirteenth month of this abnormal session, and a large number of honorable members are prevented from attending the House owing to the pressure of private business; therefore the measure is being considered in a thin House, and those honorable members who are present are jaded in mind and unable to give the attention -which the importance of the measure merits. We might very well have allowed the consideration of the Bill to be postponed to some future session, when we shall be better informed and much better able to deal with it than at the present time. The question of bonuses versus protective duties is one upon which some honorable members who profess free-trade principles have been twitted with want of consistency. As a. free-trader I am perfectly willing to consider the question of encouraging certain industries by means of bonuses in preference to affording them the assistance of protective duties, because I believe that if matters are properly managed and are kept free from the influences which are sometimes exerted, an industry may be encouraged at much less cost by granting bonuses than under any system of import duties. To that extent honorable members on this side of the chamber should be prepared to consider the presentproposal on its merits. Thereisno doubt that we possess within the limits of the Commonwealth some very valuable deposits of iron ore, and there is probably small question that these deposits cannot be successfully handled without the investment of a large amount of capital. In orderto induce those who possesslarge capital to embark it, some special encouragement may have to be given, and I admit at once that so far as iron production is concerned, I should be prepared, if all conditions were satisfactory, to vote for some form of stimulus to enterprise. As a free-trader, I believe that I can consistently do that. I must point out, however, that we have already had some experience as to the effect of bonuses. The State of Victoria has granted a number of bonuses, the benefits derived from which have not been at all commensurate with the amount of money expended, and, in the early history of other States, bonuses have been given for the production of cloth and several other articles with results far from satisfactory. I do not believe that the people of the States have received value for their money in these cases, and therefore we should be very careful to safeguard the interests of the Commonwealth before we enter upon such a colossal undertaking as that which is now held in view. The measure is not a welldigested one, or if it is the Minister for Trade and Customs has not made out such a case as he should have done. I quite indorse the remarks made by the honorable member for Gippsland to the effect that the amount of information given to the House by the Minister was meagre in the extreme.

Thehonorablememberis aremarkablyshrewd man, and has leanings towards the policy of stimulating the manufacture of iron ; but he says that a sufficiently good case has not been made out to justify the House in entering upon an enterprise which will ultimately cost the Commonwealth a large amount of money. No one will call in question the value of the iron industry. No product of civilized man influences so largely the employment of labour and stimulates to such a great degree other classes of manufactures; and if we could by any means develop the iron industry in our midst we might be warranted in making a concession even of fiscal principles to some extent. I do not think that the Bill will have the desired effect, and therefore I am obliged to vote against it. During the agitation for federation I frequentlypointed out, and I believe others did the same, that one of the greatadvantages weshould derivefromfederation would be that we should ultimately see the iron industry established in our midst. Under the old divided system the market offered by any one State would not be sufficiently large to induce any one to devote a large amount of capital to the production of iron, and we could hardly hope to see that industry established until one of the States had increased its population to about 4,000,000 or 5,000,000. It seemed to me that under federation we might expect to see the iron industry established in one or moreof the States, because those engaged in the enterprise could look to the whole of the States as a market for their product. Apart from any assistance that may be given, I firmly believe that the establishment of such an industry will be only a matter of time. There seems to be a consensus of opinion that we have abundant deposits of iron of good quality ; and, if this is so, capital will soon be forthcoming for its development. If necessary we might be justified in going to the extent of affording some measure of fiscal protection. The offering of bonuses can only have the effect of hastening the establishment of the industry, and it will require strong arguments to convince me that we should be justified in spending a quarter of a million of money for this purpose. Notwithstanding the strong arguments used by the Minister, I hold that any one who entered into the production of iron within the Commonwealth would enjoy a very large degree of natural protection in the form of the freight charges upon the imported material. The argument employed by the Minister for Trade and Customs was a very specious one. The right honorable gentleman claimed that it would cost as much to carry a ton of iron from one State to another as it would from the old world to any port in Australia. But Iwould point out thatthat argument is founded upon the cost of carrying a single ton from one State to another, whereas the rates obtained for the carriage of iron rails from the old world to any port in Australia are based upon very large freights indeed - always 1,000 tons, and sometimes considerably more. These large cargo boats are worked for a certain expenditure, and can be employed only when the rate of carriage is such as will return interest upon their capital cost and compensate the owners for the time absorbed on the voyage. Consequently the natural protection which free-traders contend that our manufacturers enjoy by reason of the distance of Australia from the iron markets of the old world will exist for ever.When we do produce iron in Australia these great steamers will continue to be employed in conveying that product from port to port in the Commonwealth at a rate which is relatively as cheap as that which now obtains from ports in the old world to Australia. This Bill requires very careful scanning, and I strongly protest against the proposal to confer upon the Minister so much power under regulations. In measures of such first-class importance I object to leaving the application of the principle, if not the principle itself, to regulations which may subsequently be framed. It is very well for the Minister to point out that safeguards exist, in thatParliamentis afforded an opportunity of objecting to these regulations, but the fact remains thatsuchacourseis not frequently taken. I think it is far better to leave as little as possible to the Executive in the way of issuing regulations. Turning to the schedule of the Bill, which, of course, is the crux of the whole matter, I wish to refer first to the item of reapers and binders. The Bill provides that a bonus of£8 each, or £4,000 in all, is to be paid for the manufacture of the first 500 of these machines. As a business man, I hold that such a proposal will have practically no effect. We shall simply be making a present of £4,000 to some firm which does not need assistance, and which would manufacture these machines without any monetary inducement being offered. The consumption of reapers and binders within the Commonwealth is very large, and it does not require a bribe of £4,000 to induce enterprising local manufacturers to turn out these machines. To that extent, therefore, I regard this expenditure as extravagant. Similarly, in regard to class 3, I notice that itis proposed to expend £50,000 to encourage the manufacture of galvanized iron and wire netting, notwithstanding that these industries already exist in our midst. The Government proposal is therefore tantamount to making the local manufacturers a present of the amount mentioned. I can understand the basis of a Ministerial proposal to vote even so large a sum as £250,000 for the development of the iron industry, because that industry does not exist within the Commonwealth, but when we are dealing with other items which do not involve such a large capital outlay, there is no sense or justice in selecting those concerned in their manufacture for a special paternal gift on the part of the Government. If we are to give bonuses to existing industries, I can point to a string of them which are employing as much labour and doing as much good to the community as are the galvanized-iron and wirenetting industries,and which therefore have an equal claim to share in any such bonuses. Class 2 deals with the question of making spelter from Australian ore. To those who believe in the system, perhaps some reason might be advanced why we should give a bonus for the production of this commodity. At the present moment marketable spelter is not produced in Australia. But how can we expect to do the industry any good by spending such an insignificant sum as £20,000? The honorable member for Barrier, who knows something about this matter, representing as he does a district where zinc largely exists, declared some time ago, when the Tariff was under discussion, that he knew of the existence of large quantities of spelter which were roughly valued at £4,000,000. Of what use is it to offer £20,000 to stimulate capitalists to deal with £4,000,000 worth of zinc? It would be an extraordinary body of capitalists who would wait for a vote of £20,000 to enable them to deal with such a huge body of ore if chemical science could be successfully brought to bear upon it. The thing is an absurdity. Capitalists would hardly heed the additional inducement which the Government propose to offer. We should be giving these people far more inducement to tackle the great heap of tailings containing this zinc if we remitted the duty upon machinery than we shall do by offering them a bonus of £20,000. As honorable members are aware, it is necessary to replace most of the up-to-date machinery every three or four years, and consequently by the imposition of machinery duties we are periodically penalising enterprise. I am more in sympathy with the proposal contained in class 1, because although the amount of £250,000 is a large one, especially in view of the present financial condition of the Commonwealth, the iron industry is very important. If it can be shown that we can embody in this Bill efficient safeguards for protecting the revenue, I shall be perfectly satisfied. If we can insure that the undertaking will be a good commercial one all round, I shall be prepared to vote for it. At the same time, I hold that we shall do more good by offering a bonus to encourage the industry than we shall achieve by the adoption of any system of protective duties. The proposal of the Government, however, is merely part of one great scheme, the corollary of which is that at a certain stage we shall impose protective duties. To my mind if people are induced to spend large sums of money under the stimulus of the proposed bonus, and they do not happen to make ends meet, application will assuredly be made to the Government to give them more assistance in the shape of protection, and upon the ground that we had already sunk £250,000 in this enterprise, the claim for still further protection would probably meet with some success at the hands of this Parliament. It therefore behoves honorable members to look critically at the provisions of this Bill, and whenthey do so, I am satisfied they must come to the conclusion that the interests of the Commonwealth are not sufficiently protected by it. In connexion with this matter, we should guard against simply assisting one or two special syndicates to engage in company-mongering. We know that certain people who own certain rights to iron deposits, are unable, at thepresent time, to do anything with them. But the moment that this Bill is passed, these persons will be able to go to the English market and say, “We have this property, and also a promise from the Government to grant this bonus, the payment of which is to be followed by mi exceedingly heavy import duty.” This will enable them to float their properties into large companies. I sympathize with the honorable member for South Australia, Mr. Batchelor, who, upon a previous occasion, declared’ that if we intended to deal with this question upon any principle which would involve such a large expenditure as £250,000, we should do well to consider whether it would not be wiser to nationalize the production of iron. The argument used by him was that the States Governments are the largest purchasers of manufactured iron within the Commonwealth, and that, therefore, in the event of the 1 ail ways being eventually transferred to the Commonwealth, it would not be a bad enterprise if the latter devoted the money in question to establishing a national factory in our midst for the production of iron. I would rather do that, and have full control, than risk money in the creation of companies which may or may not prove a success. To that extent I would support a proposal to nationalize the industry, the proposal to be on broad lines, and to carefully safeguard the interests of the taxpayer.’ But we are here brought face to face with constitutional and financial difficulties, which more than anything make me desire that tins measure should be postponed. Early in the session, I was one of the first to raise the question whether the Commonwealth hae power to tax the imports of the States Governments. On that point we have had opinions from different legal luminaries, and, on the whole, the common-sense view, to my mind, is that the Commonwealth has this power. But we ought to have a decision by the Federal High Court before we subsidize the manufacture of iron, or enter upon it as a nationalized industry. We cannot get that decision now, , and it would be far safer to wait until we can. It may be said that even if a decision were given by the High Court, we could not grant those who embark in the enterprise the monopoly of supplying the States with railway material. I do not know that under the Constitution we could, but it is open to the Federal Executive to propose, and to this House to indorse, an agreement between the Federal Government and the States Governments by which the railway material required by the latter shall be supplied by some subsidized company or national I factory. The Federal Government is just as much at liberty to make such an arrangement with the States Governments as with any private individuals ; and that course would offer greater inducements to any legitimate company of manufacturers or investors than a lump sum of £250,000 divided, it may be, amongst several competing firms. Under an arrangement of the kind there would probably be only one company making the iron, whereas, with a bonus, there might be three companies all fighting for the money and unable to make their enterprises pay. For some years we cannot 100K forward to exporting, but must rely on the local market ; and if too many are induced to commence, with the necessary capital, failure may result. Under my suggestion, however, there would probably be one company with sufficient capital to produce iron at a cheap rate, and to make the undertaking pay. Objection may be raised on the ground that there is diversity of interests between the States. Queensland, for instance, might object to taking up contracts at higher prices than rule in England or America, merely for the benefit of works in Tasmania or New South Wales. But the same argument could be used against the granting of bonuses. If the establishment of ironworks can benefit only one State, a system of bonuses can do no more: but I think that the feeling of Australia is no longer divisible, and that the States Governments would be quite willing to enter into such an arrangement as I have indicated, in view of the great benefit that would accrue to the whole of the Commonwealth. In the State in which the works were established markets would be thrown open for the products of the other States; and such a plan would do more than any system of bonuses to solve the difficulties which face us. If the iron companies had long contracts which would constantly increase as the railway systems extended, that would offer the greatest inducement to investors. To my mind the financial difficulties are the greatest. We are in the thirteenth month of the session, and the whole of the loan and other financial Bills are as yet incomplete. It is impossible for the Treasurer, the honorable member for North Sydney, or any other financial expert in the House to say what result our taxing measures may have on the revenue. We do not as yet know the final cast which these measures may take ; and if we desire to carry out the policy contained in the Bill before us, we shall undoubtedly require more revenue. We could not stand the strain with what I believe will be the outcome of the present Tariff, and I feel sure this House is not prepared to resort to any extraordinary source of taxation. In all probability, the majority are determined th.ut we shall continue to look to the Customs as the only source of revenue; and, under such circumstances, we could not provide £250,000 or £320,000 as bonuses for the iron industry. So far as I have seen, the Government have made no effort to secure greater revenue. On the question of the tea duties, they gave way too willingly, although, in my opinion, the House was prepared to grant a tax. on that commodity.

Mr SPEAKER:

– The honorable member must not refer to that question in dealing with the Bill before the House.

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

– The argument, to my mind, was irresistible. However, we ought to await developments, and see what the revenue may be before we commit ourselves to this policy. The mind of Parliament is as yet not made up on the question whether works shall be constructed out of loan or out of revenue. My hope is that Parliament will demand the construction of works out of revenue; and this presents another strain on our resources. There is nothing to be lost by delaying this measure. The iron deposes we have will remain with us, and, in any case, effect could not be given to the Bill within twelve months. We are at the end of a very long session, and it is inevitable that we meet again almost within a month or two. The Government would act wisely if they withdrew this measure, with the object of obtaining more information, and thus sought to obtain the support of men who, like myself, are inclined to regard with some degree of favour the proposal to establish the iron industry, t whatever may be our opinion as regards other less important undertakings. W e require more knowledge of the effect of taxation and other financial proposals, and further information as to the possibility of an arrangement between the States and the Federal Governments, and as to the proposal of the Government in illation to an agreement with any manufacturer or body of manufacturers.

Mr HIGGINS:
Northern Melbourne

– This . is no ordinary proposal which can be haggled about, as we might haggle about a duty in the Tariff. The iron industry is, as I understand it, a pivotal industry, which is well worth some risk. If we cannot risk money in the way j we should like, we may as well see what 1 can be done by means of a measure such as j that, before us. I understand that the honor - I able member for Bland has submitted a ; proposal with which I. personally would i have the strongest sympathy - a proposal to nationalize this industry, which gives rise to j other and dependent industries. But we i may as well face the facts honestly. If there is anything clear about the Constitution it is that it is not permissible or possible for the Federal Government to carry on any industry. I admit that it is a pity that our hands should be so tied. We are “cribbed, ‘cabined, and confined,” and we shall find ourselves even more restricted in the course of a few years. In our. rapid development I have little doubt that we shall find the Constitution an impossible and unworkable instrument of government. In passing, I may say that that is the reason I took the unwelcome course of opposing the adoption of the Constitution. But we, should try to make the best of circumstances. I feel perfectly clear that it is not possible for the Federal Government to undertake the iron industry or any part of it. There is power to theFederal Government to make laws regulating trade and commerce between the States, between private persons, or with foreign countries, but there is no power to carry on any industry. There is no power to trade; there is no power to do commerce ;. and much less is there power to carry on an industry. Under the circumstances what is best to be done ? I do not know any better course than to risk some money in the form of a bonus ; but I should like that money risked with very stringent safeguards as to wages, hours, and the general conditions of labour. When we are giving the hard-earned money of taxpayers to a body of men for-the purpose of establishing an industry, it is not at all unreasonable to require that proper wages, hours, and conditions of labour shall be enjoyed by those employed. I do not think the sentiment of Australia would allow national moneys to be spent in sweating wages.

Mr Kingston:

– The honorable and learned member means that the workers shall share in the benefits of the bonus 1

Mr HIGGINS:

– That is so.

Mr Kingston:

– Hear, hear !

Mr HIGGINS:

– It is not worth while for the Commonwealth to help in creating an industry which does not pay fair wages to the men who live by it. If the second reading passes, I ‘ intend to move as an amendment the addition of the following words to clause S -

And for securing proper wages and hours and conditions of labour.

Of course, I am not bound down to the exact phraseology, though I think that those words will do what is wanted. It will still be optional with the Governor-General in Council, in framing the regulations under which the bonuses are to be granted, to include such conditions : but I think that the sentiment of this House is such that they will be insisted upon. What I suggest is quite practicable, and the regulations must be laid before both Houses of Parliament. I think it is only fair that they should be before Parliament for a reasonable time before coming into force, but I would not insist upon that if the Minister undertook to insert definite and stringent provisions in regard to wages, hours, and conditions of labour.

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

– What is the distinction between the Commonwealth paying the wages and prescribing the wages which are to be paid bv private employers 1

Mr HIGGINS:

– I think there would be a difference between my action in prescribing the wages of the honorable member’s employes and paying them myself.

Mr Conroy:

– But there would not be much difference if the honorable and learned member supplied the money in either case.

Mr HIGGINS:

– If the Commonwealth is going to provide money for the establishment of iron works, we should see that those who are employed by the manufacturers are paid fair wages. I do not think that the House should agree to the postponement of the measure. Of course, we shall have the iron ore to work on in the future, but it seems to me that the sooner we dig it out of the ground and make use of it the better. I have seen in Tasmania almost mountains of iron ore, and I have no doubt that in New South Wales, and perhaps in other States, there are ample supplies available. Our losses in the pastoral industry through the drought should show us that we must not remain as dependent as we have been hitherto upon what are called the primary industries. -I shall support the second reading.

Mr GLYNN:
South Australia

– I regret that the Government are pushing on with such an important measure as this towards the end of the session. During the thirteen months in which Parliament has been sitting we have done sufficient work of importance to justify the Government in postponing the consideration of the issues raised by this Bill for a few months longer. It is a pity, too, that we should be asked to consider it before we really know whether the policy upon which it depends will be indorsed in another place. The discussion of this measure will be merely a waste of time if the Senate refuses to agree to the duties which constitute part of the whole proposition. I am sorry, therefore, that the Government will not yield to the evident desire of. many honorable members for a postponement of the measure until next session, when it could be considered with fresher brains, and at more leisure, and with the knowledge that the policy upon which it depends has been indorsed elsewhere. With regard to the amendment which has been moved by the honorable member for Bland, I am somewhat doubtful as to whether it is really relevant to the Bill. The honorable member proposes, not that the Bill or that its provisions, which is the proper subject of reference, be referred to a select committee to consider and report, but that the “ advisability of establishing Commonwealth or State iron works” be so referred.

Mr Watson:

– The Bill is a measure for the establishment of iron works, not merely for the payment of bonuses.

Mr GLYNN:

– The title of the Bill is - “ The Manufactures Encouragement Act,” and the order of leave under which it was introduced provides for a Bill “relating to bonuses for the encouragement of manufactures.” Therefore it. seems to me that an inquiry as to “the advisability of establishing State or Com- mon wealth iron works “ cannot be considered strictly relevant on a motion for a Select Committee. Furthermore, the Commonwealth can do nothing in regard to the establishment of iron works by a State ; and I am pleased that the honorable and learned member for Northern Melbourne has expressed more than a doubt in regard to the powers of the Commonwealth to undertake the establishment of such works itself.

Mr Watson:

– But the Commonwealth can give a grant to any State.

Mr GLYNN:

– If a State becomes financially embarrassed we can make special provision for relieving its necessities. We could, for instance, at the present time make a special grant to relieve the needs of Tasmania, and, after the five years’ bookkeeping period, could cancel the debt by an apportionment of revenue to Tasmania equivalent to the amount advanced. The Commonwealth could not, however, grant special aid to a particular State for the establishment of iron works. It might pass a general law, of which any State could take advantage.

Mr Watson:

– In the Constitution there is no limitation of the purposes for which money may be voted by the Commonwealth.

Mr GLYNN:

– I think that the honorable member is wrong in his opinion that the Commonwealth could give a grant to any particular State.

Mr Kingston:

– It must be earned.

Mr GLYNN:

– The Commonwealth could agree to a measure of general policy authorizing a State to earn a certain grant ; but under the financial sections of the Constitution it could not make a grant to any particular State for a purpose of this kind. It seems to me that if we agreed to encourage the manufacture of iron in any State, we should be violating, if not the letter of the Constitution, at least its spirit. We should be violating the principle that no differentiation should be made between the States.

Mr Kingston:

– There would not be a differentiation if all were at liberty to take advantage of this assistance.

Mr GLYNN:

– If we passed a law which could be taken advantage of by only one or two States, it would be pretty close to a violation of the principle of the Constitution, and statistics do not show that there is in point of accessibility any large quantity of marketable iron ore in other States than Tasmania and New South Wales.

Mr Kingston:

– South Australia will have a look in, too. Iron ore is to be obtained there in a great many places.

Mr GLYNN:

– It is a strange thing, then, that hitherto it has- been used merely for fluxing in connexion with smelting operations. I think it would be practically a breach of the Constitution to pass a law which could be taken advantage of b)’ only one or two States.

Mr Kingston:

– The- .same objection might be taken to our legislation in regard to sugar.

Mr GLYNN:

– I do not say that what was done in regard to sugar was a violation of the letter or even of the spirit of the Constitution, but the partiality shown to the so-called vested interests of one State came pretty near to a breach of a principle of the Union. The same objection is to be urged against any measure which could be taken advantage of by only one or two States, to the detriment of the other States whose interest as collectors of Customs we are here to protect. I am opposed to the principle of bonuses. They are a sort of half-way house for members who are free-traders by conviction, but protectionists by district necessity. As a free-trader, I cannot vote for the bonus system and remain true to my principles. Wherever bonuses have been granted, they have led to abuses. We have had a recent instance of that in France. A few years ago bounties were granted in France for the production of corn, with the result that after a short time there was an overproduction, and last year the French Ministry proposed to grant export bounties upon corn. The same thing will occur here. If the Government policy brings about a large production of iron, the local demand will be soon satisfied, and then we shall have another proposal, made under popular, or under manufacturers’ pressure, for an export bounty upon iron. Export bounties nearly always succeed bounties upon products.

Mr Thomson:

– In this instance customs duties are to follow.

Mr GLYNN:

– Yes ; that is another strong objection to the proposal of the Government. In other places bounties have been given after production had attained dimensions which indicate success and likelihood of stability ; but here the Government propose to give bounties during the period of infancy and immaturity, while the industry is nascent. As soon as it attains success, according to the logic of protection, it does not require any further adventitious aid, but it is proposed by the Government to support it at that particular stage. Their proposition is to encourage it in infancy, and to support it during manhood, thus reversing the usual logie by which all these policies of encouragement, whether protective or otherwise, arc supported. I ask honorable members who are following the Government whether it is not extraordinary that we should first encourage an industry when it is found by the resolution of both Houses to be a success, and no longer deserving of adventitious aid. According to the Government it is then that we are to give it .protection, and .this seems to be pushing all the ideas of encouragement to the very limits of absurdity. One point against this proposition struck me- that is, that we are either giving a bonus to cover a loss or to increase a profit. I do not care upon which alternative the Government rely. If the bonus is granted to cover a loss, and duties are to be subsequently imposed for the same purpose, the public money will be wantonly wasted. An industry that cannot support itself must be supported by the State. If the bonus is intended to increase the profit of those engaged in the industry, where is the justification for it ? If we apply that principle to one industry we must apply it to all. If we apply it to the producers of pig-iron, why should it not be extended to the producers of an)’ other class of commodity?

Mr Ronald:

– Because so many other industries are dependent upon the iron industry.

Mr GLYNN:

– According to that, we ought to encourage the production of men, because all industries are dependent upon them. /If honorable members so go to the root of this matter they will land themselves in a greater absurdity than the Government proposal involves. All industries are interwoven : they are dovetailed one into the other. What becomes of the division of labour if we look upon the production of iron as something different from the manufacture of the finished product? We know that there is absolutely no distinction. The man who makes the finished product is as much engaged in production, and as much deserving of encouragement, as is the man who extracts the crude ore from the earth. Of course, if it were a question of our not being able to obtain the raw material unless it were produced here, there would be some force in the interjection made by the honorable member for Southern Melbourne. There is no reason why we should grant bonuses for the encouragement of this industry which could not with equal force, . and quite as logically, be used in asking for an extension of the policy to other industries. In the United States heavy bounties were granted for a time, and very heavy duties were imposed during the last ‘70 or SO years of the last century. The general result, as described by one American writer, has been that the bounties paid have been given to the monopolists of the soil. Thus, a very considerable royalty on the production of the ore has been paid to the owners of the mines, and the bonuses have not been directed to the encouragement of the industry itself.. It has been stated that the royalties in some cases actually exceeded the total cost of production, and it is quite possible that the same thing might occur here. Deposits of iron may be found, and the bonus may be obtained, not by the person who turns the crude ore to account, but the man who has the monopoly of the- material. That is a monopoly which I am perfectly sure honorable members’ of the labour party do not wish to encourage. As regards this policy being open to subsequent abuses through demands for its extension, we have, apart from the recent instance of the wheat bounty, the fact that a continual expansion has taken place in France since it was initiated. The French Government gives subsidies amounting to £1,500,000 to shipping, and there are special bounties granted, not only for sugar production - with which we are familiar - but for the encouragement of deep-sea fisheries, the breeding of silkworms, silk spinning, flax and hemp cultivation, viticulture, and the production of mineral oils. I simply mention these instances to show that once we commence the policy of bounties on production, we shall leave the way open to preposterous demands for extension which, having confirmed the principle, we cannot logically resist. The Minister for Trade and Customs put his case for these bonuses with a considerable amount of plausibility and force on the ground of the success of the system in Canada. I contend, however, that the bonus system has not proved a success in Canada. Taking the figures quoted by the Minister, it is shown that in 1SS4, 29,000 tons of pig iron were made in Canada from Canadian ore, and in 1900 the production had increased to only 34,000 tons. The object of the policy, as it was introduced, was to encourage the manufacture of pig iron from Canadian ore, and the result, since the Bill was passed in 1883, was to bring about an increase of only about 5,000 tons. The imports, strange to say, increased in about the same ratio. In 1SS4, 52,000 tons were imported1, and in 1900 G5,000 tons. These figures indicate that the increased demand, as expressed not only in the local production but in the importations in Canada was the result, not of the bonuses, but of the necessities of manufacturing. In other words, there was a spurt in internal manufacturing, which led to the ore bodies being turned to account. Production has increased, and the importations into Canada have increased because the manufacturing industries in which pig iron is used as .a raw material have made verv great strides. I would almost say that, so far from the bonuses in Canada having led to greater production, the greater production has led to the payment of more bonuses. The increased general production has led iron manufacturers to take advantage of the policy of giving more bonuses. Production has been stimulated and encouraged, not by the bonuses, but by something else.

Mr Kingston:

– Is i*t quite fair to omit all reference to the 70,000 tons of iron manufactured from Newfoundland ore?

Mr GLYNN:

– I had intended to refer to that. I am now specially dealing with the figures mentioned by the Minister. Between 60,000 and 70,000 tons of ore were imported from Bell Island, and manufactured into iron in Canada. When we consider the small amount of the bonuses, and the tremendous scope of the industry, it is ridiculous to assume that the 67,000 tons of ore was imported from Bell Island in order to take advantage of the bonuses^ The Minister himself told us that the amount required for the starting of the works in Canada was enormous, and that some companies had shown a capital investment during the last five years of 50,000,000 dollars. The importations and the local production were encouraged, not by the bonus, the power of which, in comparison with the extent of the industry, was exceedingly small, but by the increased local demand. Let us look at the figures as regards the payment of bonuses. In 1 884 the bonus was 1 dollar 50 cents per ton, and the amount paid was 44,000 dollars. In 18S9, with the samp bonus, the amount paid was 37,000 dollars.

In five years, therefore, there was a fallingoft’ in the amount paid away in bonuses. What does this indicate1? I am entitled to say that the bonus was a failure for the first five or six years, because it led to a diminished production. I am as’ much entitled to argue from coincident circumstances, that it diminished production, as is the Minister to argue from coincident circumstances that it led toon increased production. In 1892 the amount paid in bonuses, then at the rate of one dollar per ton, was 30,000 dollars; and in 1900, at the rate of two dollars per ton, the amount was 238,000 dollars. What do these figures indicate ? They prove, if we are to rely on the mere synchronism of circumstances, that the bonuses did not succeed down to 1 889, because the production was less than in 1884, as measured by the amount paid in bonuses. There was a very great increase from 1892 to 1900, because manufactures had very largely increased in Canada, and because there were enormous discoveries of native ores, and very large importations from Bell Island. If I am not mistaken, the manufacturers were entitled to a higher bonus for pig iron manufactured from foreign ore than for iron manufactured from native ore, two dollars pelton being allowed upon the foreign ore, and one dollar per ton upon the native ore. But whether that was so or not, there was an enormous increase in bonus payments in 1900.

Mr Kingston:

– A preference was always given to the Canadian ore.

Mr GLYNN:

– Perhaps I am mistaken. Several changes have been made, and it is just possible that I may not have kept pace with them. I repeat that in 1892 the amount paid in bonuses was 32,000 dollars, whilst in 1900 it was 238,000 dollars. Why was that ? The bonus system had been in operation for eight years prior to 1892. Why was it not successful? Because its adoption does not lead to success. It is the fertility of nature, when it is discovered, that leads to success. It was not till 1S95 that large discoveries of ore were made in Canada. According to the Statistical, Register very big discoveries were made in Coleraine, Quebec, in that year. To my mind these figures prove that the payment of bonuses has not been responsible for the increased production of iron in Canada. That increase is the result of the discovery of raw material, and the progress of local manufacturing generally. As a matter of fact, while the bonus principle was operative, there was a diminution in the export of iron, clearly showing that the ore was kept back for local use. In 1885, the year after the bonus principle was recognised by Parliament, Canada exported 54,000 tons, whilst in 1900 she exported only 5,000 tons. Since 1892 the export has never reached a total of 8,000 tons. These figures prove that local manufacture was responsible for the increase in local production, and that the payment of bonuses did not result in any available surplus for export! Why should we set up the United States as an example in this matter 1 In -the previous debate I heard it stated that that country was actually looking across the Atlantic to Australia to see what policy she intended to adopt in connexion with . the production ‘ of pig-iron as if the United States cared i very much about any prospective com- ]petitors. I do not think the idea can be ‘ seriously entertained that the United States statesmen wish to borrow one of Captain Cuttle’s telescopes in order to obtain a view round half the globe, and to discover what are the intentions of Australia in this connexion. In America the position seems to be that nature, not protection, is effective for two of its States - Pennsylvania and Alabama, - produce more iron than all the other States put together. If the payment of bonuses has made the industry a success in Pennsylvania, how is it that it has existed there for 200 years? It was only after 1840 that the production of iron in America assumed very great dimensions, and it was not till 1890 that its production outstripped that of free-trade Great Britain, notwithstanding the local encouragement that was given to it. What was 6he reason of that ? Surely it is somewhat significant that the enormous increase in the production of iron, not only in the United States, but in the United Kingdom, took place about the time that iron and steel were first utilized in the building of ships ! Since 1840, the world’s demand for iron for all purposes, and particularly for shipping, has been enormous. Therefore, we find that from the period in question there has been a very great increase in the production of this commodity in free-trade England, as well as in protectionist America.

Mr Mauger:

– The increases in the two countries are nothing like proportionate.

Mr GLYNN:

– The honorable member has made ‘ a very rash statement. If he looks at the statistics he will find that the proportion of the increase has been almost the same in England as it has been in the United Kingdom.

Mr Sawers:

– No ; I will give the honorable and learned member the figures, which, I think, will stagger him.

Mr GLYNN:

– I have the figures for the United Kingdom. In 1840, the United Kingdom produced 1,370,000 tons of iron, and last year the production was about 14,000,000 tons. If I am not mistaken, the ratio of increase in the United States was about the same. We are told by the Minister for Trade and Customs, upon the authority of Mr. Jacquet, that there are 50,000,000 tons of iron ore in sight in, I think, Australia.

Mr Kingston:

– No; that is only one deposit.

Mr GLYNN:

Mr. Jacquet states that he has seen between 50,000,000 and 60,000,000 tons of marketable ore, but Coghlan, who is another authority, seems to think that the amount in sight in Australia is under 13,000,000tons.

Mr McDonald:

– There is one mountain in Queensland which contains ten times that quantity.

Mr GLYNN:

– At any rate, Coghlan mentions a number of places, including Wallerawang and Rylstone in New South Wales, where iron deposits are to be found, and he declares that the total quantity in sight in Australia is under 13,000,000 tons. But if we have such an abundant supply of ore containing a high percentage of iron, how is it that the industry is not a success ? Must manufacturers wait for this paltry bonus to extract gold through iron from the earth ? Are we going to make Australia rich because of the payment of a comparatively small bonus, when for years past there have been at least 50,000,000 or 60,000,000 tons of excellent ore in sight? Why is the industry not a success 1 Because it does not pay to treat the ore. At the present time the production in America and England is enormous, and the output of Europe is also very great. Yet we are told that despite the facilities for placing iron upon the Australian market at a very low rate, which are offered by ocean commerce - a fact which was acknowledged by the Minister for Trade and Customs - that market will be rendered a profitable one to our producers by granting the petty bonuses contained in this Bill. Is it not significant that at Lithgow, where there is an abundance of coal and flux, which are required for the manufacture of pig iron, they are now manufacturing, not from the ore itself, but from scrap iron? The reason for this is that in Australia the manufacture of iron from crude ore does not pay. It requires an enormous capital to make the enterprise a success, and a tremendous market is necessary to insure a proper return upon the outlay involved. I remember going to view the iron mines at Lal Lal, near Ballarat, some twenty years ago. I saw from the heights of Egerton almost a minature of what has recently occurred at Mont Pelee. A substance resembling sealing wax was tumbling down the hillside, presenting a most picturesque sight. I visited Lal Lal specially to see this wonderful industry which was to revolutionize the social conditions of Ballarat and its neighbourhood.But if one went there to-night he would see nothing but blackness. The iron mines at Lal Lal have vanished with a good many of the hopes of the protectionists of Victoria. I may also mention that some years ago at a place called Fitzroy, near Mittagong, considerable quantities of pig iron were produced. The manufacturers actually obtained prizes at the exhibition ‘which was held in London for iron produced from crude ore. Why was that industry not a success? Shall we be able to revive the industry by means of a bonus ?Do we hope to checkmate the disadvantages presented by inaccessibility of markets, the world’s competition, and the cheapness of imports ? Are we by a little petty bonus to revive these dead industries- to breathe the breath of life into the corpses of the iron industry at Fitzroy and Lal Lal ? There was in South Australia an offer of a bonus of £2,000 for whoever first produced 500 tons of pig-iron made from the ore of that State. The Minister has told us that there are actually “ mountains “ of magnificent iron in South Australia, and he mentioned the Iron Knob. The product of the Iron Knob is considered good enough for flux, but those interested have never attempted to turn out the 500 tons of pig iron from what has been described as an easily-worked ore of high percentage value. That offer of £2,000, I believe, stands to-day for any manufacturer who chooses to be foolish enough to try to earn it, and probably as a monument of the foolishness of the Government which made the proposal. What the iron industry means - what capital outlay there must be in the beginning, and what are the enormous risks incurred owing to the world’s competition - will be seen when I once more remind honorable members of the enormous production in America. Last year the American Steel Rail Trust estimated that they would turn out that year in steel rails alone 2,000,000 tons. How can we compete with countries like America? How can we counteract the handicap of nature’s great accessible bounty, which is not discounted by the cheapness of ocean carriage? What we are attempting is something futile, and something which will lead to abuse. It will lead afterwards to a demand for protection for those industries which we have created under the bonus. According to the Minister’s own admission, duties are to succeed the bounties, and these industries will require protection for ever, seeing that it is to be initiated when the industries have reached manhood, and therefore ought not to require it. If we begin to protect industries which do not require protection - when full strength has been reached - I ask the Minister to explain when the policy is to stop. The policy seems to be indefinite - bonuses first, and indefinite and interminable protection afterwards. On these grounds, the policy of the Government does not recommend itself to me; and I intend to vote against the Bill. I cannot support the amendment, which I regard as dangerous at this stage, becauses it confuses the issues in the Bill. If an amendment is to be tabled to relegate the question to a select committee, the investigation ought to be of much wider scope than that proposed by the honorable member for Bland. Instead of referring the question of the advisability of starting Commonwealth production or State production, we ought rather to refer to the committee the question of general expediency, and of the method of encouraging the manufacture of pig iron from iron ore.

Mr Watson:

– W ould that not be covered by my proposal?

Mr GLYNN:

– It would be better to have the amendment framed in the way I suggest, when it would probably get more supporters than are inclined to favour the present somewhat partial proposal. I acknowledge the logic of the honorable member’s position as compared with the proposal of the Government. The honorable member does not desire monopoly, and contends that his proposal would prevent, whilst the Government proposal would tend to, that result. The honorable member, as I say, is more logical, and yet, for the reason I have given, I cannot support his proposal. I shall vote against the Bill, at the same time feeling myself unable to support the amendment in its present shape.

Mr SPEAKER:

– The honorable member has asked a ruling as to whether the amendment moved by the honorable member for Bland is relevant to the Bill. The title of the Bill is “ A Bill for an Act relating to Bonuses for the Encouragement of Manufactures.” Clearly the object is not to give bonuses, but bonuses are the means to an end, which is the encouragement of manufactures. That view is strengthened by the short title to the Bill as described in clause 1 -

This -Act may be cited as the Manufactures Encouragement Act 1!J02.

In that clause there is no reference whatever to bonuses, but to certain manufactures. Turning to the schedule we see that the largest amounts of money ore proposed to be applied to the encouragement of the manufacture of pig iron made from Australian ore, puddled bar iron made from Australian pig iron, steel made from Australian pig iron, galvanized iron, wire netting, and “iron and steel tubes or pipes, except riveted, or cast, not more than 6 inches internal diameter.” Clearly the general object of the Bill is the encouragement of manufactures, and those, for the most part, of iron. The amendment is, therefore, thoroughly relevant to the purposes of the Bill, but proposes an alternative method of encouraging those manufactures, the method suggested being by the establishment of Commonwealth or State iron works. The amendment is relevant to the subject matter of the Bill under discussion.

Mr SAWERS:
New England

– I desire briefly to give a few reasons why I intend to support the Bill submitted by the Government. I quite admit, as has been urged by many speakers, that this is perhaps as important a question as Parliament has to consider, and we ought to be very careful in giving a vote. I was so much impressed with its importance, and with the necessity for individual and independent inquiry, that instead of blindly following the Government, as a supporter may sometimes do, I devoted’ some time in striving to get information in respect to the bonus system in other countries. I spent portions of several days in the Parliamentary Library of New South Wales, and even in that, which is supposed to be one of the best libraries in the world, I found it extremely difficult, and almost impossible, although assisted by the officials, to find airy satisfactory or exhaustive information. Most of the information I obtained, referred to the Dominion of Canada ; I could find little or nothing about the- United States or the countries of Europe. I had not the opportunity of hearing the Minister for Trade and Customs move the second reading of this Bill, nor did I hear the debate yesterday evening ; but on glancing over the speech of the right honorable gentleman, I find that all his arguments are drawn from Canada, so that evidently he experienced pretty much the same difficulties as I did in my humble way. I find that in 1897 an Act was passed in Canada “fixing the bounty on steel ingots at three dollars a ton, which, of course, is quite equal to the amount now proposed by the Government. This duty was on ingots manufactured from ingredients, of which not less than 50 per cent, of weight consisted of pig iron made in Canada. Secondly, there was a bounty of three dollars a ton on puddled-iron bars made from Canadian pig iron ; and thirdly, a bounty on pig iron - three dollars a ton on the proportion produced from Canadian ore, and two dollars a ton on the proportion produced from foreign ore. I find, further, that the Act passed in 1898 provided that the bounties were to be in force from April, 1897, until April, 1907 - a period of ten years. In the Bill under discussion, so far as iron and steel are concerned, the Government limit the period to five years. In Canada, under the Act, the full rate is paid for five years, but diminishes in the succeeding five years ; that is to say, 90 per cent, is paid in 1902 ; 75 per cent, in 1903 ; 55 per cent in 1904-5 ; and so on until 20 per cent, is reached in 1907. The annual consumption in Canada of steel and iron products has been from 800,000 tons to 820,000 tons, or rather more than has been consumed in the Commonwealth of Australia. In my opinion the bounties have been absolutely successful in Canada, where large works have been established, the most extensive of all having just been completed. In 1900 the bounties paid in Canada were as follows : - 238,296 dollars on pig iron ; 64,000 odd dollars on steel ingots ; and over 1 0,000 dollars on puddled bars. I have already stated that I could obtain no definite information in reference to the United States, but we know that in that country there are bonuses, and also a protective policy. The honorable member for South Australia, Mr. Glynn, endeavoured in vain to show that development in England has been equal to that of the United States. But we find that in 1879 the world’s production of pig iron amounted to 15,865,000 odd tons, of which the United Kingdom produced 6,714,000 odd tons, and the United States only a trifle over 3,000,000 tons. Twenty years later, in 1899, the world’s production had increased to the enormous quantity of 40,000,000 tons, of which the United Kingdom produced over 10,500,000 tons, and theUnitedStatesabout 15,250,000. It will be seen that in 1879 Great Britain produced more than double that of the United States, and twenty years later produced one-third less; and the position in England to-day is worse than when these statistics were prepared. Whether protection takes the form of Customs duties or direct assistance, we have here the object lesson of the United States.

Mr Poynton:

– Does the honorable member not think that royalties have a lot to do with the position?

Mr SAWERS:

– If royalties are responsible, let us have royalties here.

Mr Page:

– What is the honorable member arguing for ?

Mr SAWERS:

– I am arguing in favour of assisting the industry here. The honorable and learned member for South Australia, Mr. Glynn, seemed to be doubtful about the supply of iron ore within the Commonwealth. I have no figures before me in regard to that matter, but I understand that it is beyond controversy that we have an ample supply. Australia has been importing, in addition to over a million of pounds worth of hardware and ironmongery, nearly £7,000,000 worth, or from 600,000 to 700,000 tons, of iron and steel manufactures. No sensible person would assume that if we established iron works within the Commonwealth they would immediately capture the whole trade of Australia, because no doubt there are certain lines in which our manufacturers could not compete ; but surely it is reasonable to assume that we might manufacture locally 400,000 tons of iron? The manufacture of that quantity of iron would mean the conversion of 1,000,000 tons of ore into 450,000 tons of pig iron. On the basis of a ton of coal to each ton of iron ore, 1,000,000 tons of coal would be consumed in that process, and another 1,000,000 tons of coal would be needed to manufacture the pig iron into iron and steel. Furthermore, nearly 200,000 tons of limestone would be required for the purpose of fluxing, and other materials would also be required. Fully 4,000 men would be employed in the production of pig iron and in the manufacture of iron and steel, while the number of those engaged in dependent trades would be in the ratio of twenty to one, making the number of persons immediately dependent upon the iron industry 80,000 men. If we allow a family of three for each worker, we get a total of 320,000, and the wives and families of the various tradespeople dependent upon the industry would represent another 300,000 people : so that altogether, directly and indirectly, the industry would support 620,000 people. Of course these figures are only an approximate estimate, but I believe that they are quite within the mark. To make them still more so, I will put down the number of persons who would be supported by the industry as 500,000, and as trade expanded the number would, of course, increase. Mr. Jamieson, the chairman of the Blyth River Company - a gentleman whom I have known for many years, and upon whose statements I would place implicit reliance - says that there were imported intoAustralia, in 1899, steel rails, rollediron and steel, steel sheets and wire, amounting to 247,475tons. He estimates the amount of ore required to supply the demands of Australia at 614,000 tons, from which he thinks 307,000 tons of pig iron could be produced, while the coal required would amount to 900,000 tons, which is a little below my estimate. Furthermore,he considers that the establishment of the industry would immediately provide work for 3,000 men, and that later on it would give work to at least 5.000 men. In explanation of the slight discrepancy between his figures and mine,

I would point out that he has excluded iron and steel requirements, such as engines, galvanized iron, tinned plates, &c. Is it, or is it not, to - the advantage of Australia that this great industry should be established here ? Is it worth our while to pass a Bill to make an experiment which will so largely increase the population of this country ? This increase of population would mean a great deal to our farmers and traders, because it would so greatly increase their home market. No other classes would benefit more than they would if 500,000 people were added to our population. Furthermore, the establishment of the iron industry here would make us independent of outside supplies, which is a matter of great importance, especially in time of war. Is this experiment worth the expenditure of the sum which the Government wish us to vote 1 I say emphatically that it is. The honorable and learned member for Northern Melbourne has talked of the undertaking as a risk ; but as all we do is tq offer bonuses upon the iron actually produced, we run no risk at all. The honorable and learned member for South Australia, Mr. Glynn, wanted to know how we can expect to compete in the production of iron and steel with the manufacturers of other parts of the world. That is not a question for us to consider. If investors are willing to subscribe £1,000,000 for carrying on an enterprise of this kind, they must be supposed to know their own business, and the risk is theirs, not ours. It appeared to me to be a very weak argument of the honorable member for South Sydney to say that the Commonwealth is not able to find the small sum required, the expenditure of which is to be distributed over some years. I justify my support of the Bill as a protectionist. My idea of protection is the encouragement of native industries in a discriminating way. It is not necessary for the Commonwealth to encourage every pettifogging industry ; but the Bill provides an opportunity for those who wish to encourage a great national enterprise to do so. Industries can be encouraged in two ways - by the imposition of import duties, and by the granting of bonuses. “Whether honorable members support one or the other, they are supporting protection. No doubt the Minister for Trade and Customs does not like me to say this, because in his speech he told the free-trade members of the House that the principles of the Bill are not antagonistic to the principles of free-trade. Of course, every man understands his own principles. I know what mine are, and I am delighted to have an opportunity to support in this national Parliament a statesmanlike proposal of this kind.

Mr SPENCE:
Darling

– I believe that there are extreme socialists who think that, if they were given full power, they could, within a year, make the social system run smoothly, and cause every one to be .happy and prosperous. In the same way the Government seem to think that they can make every one in the Commonwealth rich, prosperous, and happy. I do not, however, see any need to rush into enterprises of this kind before we know what we are undertaking, and where we are to get the necessary money. The other day we were told that the Government had not sufficient money to build new post-offices, to make telephone extensions, and to carry out other necessary works, and that they must borrow the money for the purpose. That being so, it seems to me that, quite apart from our views upon the principle of bonuses, we are not yet ready to deal with this big question. I agree with the honorable member for New England that it is desirable to largely increase our population in the way he has shown, but in my opinion, instead of voting £300,000 to assist monopolists to establish the iron industry, the Commonwealth should start the industry for itself. It has been asserted by some of the legal members of the House that the Constitution does not empower us to do that. I would point out, however, that we have admittedly power to build post-offices and to construct other public works. In carrying out such works we use building materials of various kinds, and it has not been held that we cannot produce those materials for ourselves - that we cannot fell the trees, and cut up the timber that we require for joists and boards. Why, then, should we not smelt the ore and make the iron girders that we require? If we can use iron girders we are entitled to produce the iron from which they are made. If we use bricks we are entitled to take the clay out of the earth and make them, and who is to say that we cannot carry on the iron industry in order to meet our own requirements ? In connexion with the Defence department it has been recommended that we should manufacture all the big guns and rifles and other wai- material that we require. But according to some honorable members we are to continue to be at the mercy of a number of contractors. There is no doubt in my mind that we are perfectly entitled to enter upon this industry if we can see that it will be to our advantage to do so. It may be argued that we cannot manufacture iron and dispose of it to others, but surely we should be entitled to supply the requirements of the States, which are exceedingly large so far as iron is concerned ? If we can supply the States, who are dependent on the same taxpayers as ourselves, what is to prevent us from selling our material to individuals within the ‘ Common wealth ? The honorable and learned member for South Australia, Mr. Glynn, claimed that we could not advance money to any of .the States Governments to enable them to enter upon this enterprise. Section 96 of the Constitution plainly sets forth that we may grant financial assistance to any State on such terms and conditions as we may think fit. This gives us very wide powers. It may be urged that what was in the minds of the framers of the Constitution was the assistance of States which might run short of funds. If a State Government should decide to embark a large amount of capital in the establishment of iron works, they would probably soon be short of money as a consequence, and I claim that we should be clearly entitled under the terms of the Constitution to advance money to that State under such conditions as we might think fit. I would remind Ministers of the general tendency on the part of States and municipalities to conduct large undertakings of a public character hitherto carried on by private enterprise. This course has been followed with great success in many parts of the world, and I deny that State enterprises of this kind have been a failure. We know that the path of private enterprise is strewn with insolvencies, but there has not been a corresponding number of failures in connexion with State and municipal undertakings. I do not argue that everything should be done by the State or by the municipalities, but if there is any likelihood of a business becoming a monopoly the nation or the municipality should take control of it. It has been asserted by the honorable and learned member for Northern Melbourne that if we were to offer bonuses we should impose certain labour conditions as to working hours and wages ; but it has been held by many legal authorities that the Commonwealth has no power to legislate with regard to labour conditions. It has power to impose certain conditions before it advances money for any purpose, but it has not the power to enforce those conditions after the payment of such money

Mr Kingston:

– There is power of legislation with regard to industrial arbitration.

Mr SPENCE:

– Yes, where the labour concerned is employed in more than one State. Personally, I have no doubt as to the power of the Government to do everything that may be required to make the development of the iron industry a Commonwealth enterprise. The general tone of the discussion has been strongly in favour of the amendment proposed by the honorable member for Bland, which provides a method of securing a great deal of information. The honorable and learned member for South Australia, Mr. Glynn, considers that a select committee will not be entitled to deal with all the questions upon which information is desired, but there is no reason why they should not give a very wide scope to their inquiries, and obtain information with regard to industrial undertakings generally. We do not ‘et know what our revenue will amount to. We are told that there will be a surplus, but that this will be required to help the poorer States. If this is so, we are not yet in a position to offer bonuses to private companies. The feeling in favour of State control of large enterprises is very strong, particularly in the States of New South Wales and . Queensland, and I should not be surprised to find the movement in favour of establishing national iron works in New South Wales take practical shape at any time. The proposal made in that State some time ago to enter into an arrangement with a private company was strongly opposed, and the general feeling was in favour of making the production of iron a State monopoly. The New South Wales Government have already started to manufacture clothing for State purposes, and the establishment of State work-shops will be widely extended within a very short time. In Queensland, also, the trend of .public opinion is in the same direction, and this will find more adequate expression as soon as a good Electoral Act comes into operation in that State. Therefore, the Ministry should pause before they follow the old-fashioned method of giving a large lump sum to any company or syndicate to start iron works. If the iron industry were established by a private company, it would partake of the nature of a monopoly, because a large amount of capital would have to be embarked in it. The mere production of pig iron would be only one future of the enterprise. Seeing the enormous capital required to engage in this enterprise with any prospect of success, and having in view the considerable risk incurred, it is not likely that sensible business men will attempt to establish the industry unless the market of the Commonwealth is conserved to them. If a select’com’mittee were appointed to inquire into the question, it might possibly be found that one of the States is prepared to nationalize the industry. I am satisfied that if we leave the production of iron to private enterprise our action will result in the establishment of a monopoly, and all monopolies are bacl. I shall never be found voting the money of the taxpayers for the “ boosting” of a private firm - to enable it to pay enormous dividends. I say nothing about the bonus principle ; probably it is better than the system of continuous taxation which is known as protection. Unquestionably, an industry of this kind could be managed as well by the Commonwealth as by a private company. The Government can secure the requisite brains to supervise the undertaking, and can obtain the necessary money to invest in the most up-to-date machinery at a lower rate than can any private company. Therefore, it should be able to supply the material at a reduced price. The honorable member for New England triumphantly quoted the in- crease which’ occurred in the output of iron in America during a period of 20 years, as against the increase in the production of England. He evidently thinks that the mere quotation of these figures is in itself sufficient to prove that that increase is wholly due to the operation of the bonus system, despite the fact that he previously told us that he could not ascertain that any bonus had been paid in America. Rut I would point out that the growth of population in America during the period mentioned is of itself sufficient to account for the increased production. That development is a perfectly natural one.

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

– When America had 30,000,000 people, she produced scarcely all v iron.

Mr SPENCE:

– That may be so : but it would be an extraordinary thing if amongst a go-head people like the Americans its production did not increase. It is well known that England in the commercial world does not enjoy that supremacy which she formerly held. That is natural enough. Why should a progressive country like America with ali her resources not take up some of the work which was formerly done by England 1 The same remark is applicable to Germany. In some lines of manufactures, however, notably in cutlery, England still maintains her superiority. America cannot produce cutlery equal to that manufactured at Sheffield. That, however, is by the way. The one factor which has very much retarded the development of the iron industry in England is the enormous royalties which are paid to the private owners of land. Upon coal and iron these royalties are so enormous that they have materially increased the cost of the production of iron and steel. The royalty paid upon the coal which carries an ocean liner to America exceeds the wages paid to its captain and crew. In America, where freer conditions obtain, the national character would have been entirely belied if the iron industry had not developed extensively of recent years. In Australia, we have an abundance of coal and iron, and it would be a disgrace if we did not control the utilization of those commodities. I strongly urge the House to adopt the amendment of the honorable member for Bland. There is no need for hurry in connexion with this matter, and the appointment of a select committee would place us in possession of the fullest possible information. If we pass this measure, any State which may desire to ‘nationalize the industry ‘will, be severely handicapped. I trust that the House will defer the consideration of this measure until next session, and will not attempt to regulate all the affairs of the universe in the first twelve months of its sittings, as the Government are endeavouring to do.

Mr. BATCHELOR (South Australia).I am rather sorry that the honorable and learned member for Northern Melbourne is not present, because I understood from his remarks that he sympathized with the amendment, and was generally favorable to the establishment of ironworks by the Commonwealth ; but that because of a constitutional difficulty which he foresees, he thinks it wise not to support that proposal.

I regret that he has adopted that view, because if he has any sympathy with the amendment, he would be better advised ifhe supported it. The fact that we have not the constitutional power to establish ironworks is admitted. At any rate we cannot declare that the Commonwealth has power to establish such works. But I would point out that only a few weeks ago the honorable and learned member himself proposed that inquiries should be instituted amongst the State Premiers with a view to ascertaining whether the Commonwealth should engage in factory legislation. To my mind that is precisely a parallel case. The proposal of the honorable member for Bland is that inquiry should be made regarding the advisableness of establishing national ironworks, and yet the honorable and learned member for Northern Melbourne objects to the adoption of that course, upon the ground that we have not the constitutional power to establish such works at once. I hold that the people are the arbiters in. this matter, and surely the Constitution can be altered if that course is deemed necessary. I hope that we are not going to remain “cribbed, cabined, and confined” - bound hand and foot - by the Constitution. The sooner we inquire whether ironworks should not be established by some State or by the Commonwealth-

Mr Kingston:

– The honorable member suggests that we should inquire whether some of the States ought not to undertake this work. Would not that be a peculiar position for the Federal Government to place itself in ?

Mr BATCHELOR:
SOUTH AUSTRALIA

– Not under the circumstances. The Government propose to establish the iron industry in some form or other. As custodians to the public interest, we have to consider whether it is good enough to allow the iron industry to be established under the control of a few individuals? or whether it would not be better for the States to undertake it. We are fairly entitled to ask honorable members to consent to an inquiry as tothe possibility or practicability of the States taking that course.

Mr Kingston:

– Would the States not prefer to make the inquiry themselves? The bonus will go to the States which establish the industry.

Mr BATCHELOR:

– We should have no objection to the States making the inquiry themselves. The Commonwealth can only inquire generally for the whole of the States, who may possibly be rivals in this matter. The question was raised by the. honorable and learned member for Northern Mel bourne whether the Commonwealth has power to take up factory legislation; and the objection suggested would apply equally to the matter of inviting an inquiry. The honorable and learned member for South Australia, Mr. Glynn, agreed with the honorable and learned member for Northern Melbourne in the belief that it would be straining the Constitution to give anything in the shape of a bonus to the States - that it would be a breach of the spirit of the Constitution. But surely it would be no greater breach of the Constitution to give a bonus to a State than to give it to some syndicate? There are a great many advantages connected with the proposal of the honorable member for Bland as compared with the proposal of the Government, the latter of which is to lose or pay out of the revenue £250,000 in order to develop the iron industry. Of course, I know that if the enterprise be successful the money will not be lost ; but, in the meantime, it is taken out of the revenue. If the iron industry be successful under the proposed bonus, it must mean a monopoly. More than three or four companies will not begin operations, and in these days of easy combination, it is not reasonable to suppose they will damage the interests of one another by competition. Even a dozen companies could come to an arrangement with the greatest ease, and we may look forward to the establishment of only one company, or a very early combination. The recent shipping combination presented gigantic difficulties as compared with those attending the combination of a few iron-works. If there be a monopoly, as. there undoubtedly will, it will control the iron supply in Australia, and thus largely dominate our railway systems. To give into the hands of any private company the power of fixing the prices at which the States maylay down railways, would, in my opinion, be a most dangerous proceeding, which would have an important and lasting effect on the railway policy of Australia. The Government propose to bottlefeed the iron industry in its infancy, and coddle it in its childhood, and the great danger is that in manhood it will prove a monster of tyranny. I draw a marked distinction between this and many other industries which have been established or assisted by means of bonuses.

The iron industry must necessarily be a monopoly, while other industries which have beenassisted in the same way do not present that feature. For example, the butter bonuses in Victoria and South Australia have been most successful.

Mr Sawers:

– Parliament could take away the 10 per cent. duty.

Mr BATCHELOR:

– Parliament could never take away the amount which in the first instance enabled an individual to impose tyrannical conditions on the people. Look at the enormous damage done to the progress of humanity throughout the world by the monopolies in America.

Mr Mauger:

– That is exceedingly “casual.”

Mr BATCHELOR:

– I am first of all for the improvement of the condition of the people, and secondly for protection.

Mr Mauger:

– I think the monopoly under discussion would be found to be in the interests of the people.

Mr BATCHELOR:

– Wherever protection or free-trade leads to monopoly, with disastrous results to the people, I shall oppose either. I should like to draw the attention of the Minister for Trade and Customs to a more enlightened policy which he some years ago undertook in South Australia. In that State, £10,000 was given as a bonus to Messrs. Fulton and Company on the construction of iron piping. The Minister for Trade and Customs was not responsible for the giving of chat bonus, but he was responsible later on for the establishment of a State pipemaking factory, which proved more successful than the private factory. The State factory turned out the goods more cheaply, gave better wages, and provided better conditions for the men in their employ, than had resulted from the bonus. The £10,000 was absolutely thrown away in an attempt to build up an industry for a few private individuals, and a few years later the State introduced the more enlightened policy to which I have referred.

Mr Kingston:

– I should be delighted to see a State earn this bonus.

Mr BATCHELOR:

– If we want the States to earn the bonus, do not let us set up a rival in the shape of some syndicate which will take much quicker advantage of the offer of the Government than would any State. If we want the States to have the advantage of the bonus the claws of the syndicate must be kept off.

Mr Kingston:

– The right way is not to drive the States.

Mr BATCHELOR:

– Are we to sit down and twirl our thumbs while a great monopoly is grabbed by some private syndicate, from whom the States will eventually have to buy back at an enhanced price the deposits of ore? In the interests of Australia generally, no barrier should be imposed to the Commonwealth or the States under taking this great iron industry. In South Australia the Government enabled a private firm to establish locomotive shops in Gawler by contracting with them for the supply of a large number of locomotives, to be delivered over a period of years, at a price, I think, 30 per cent. higher than that at which they could have been obtained from abroad.

Mr Kingston:

– The company have also built locomotives for use in Western Australia.

Mr BATCHELOR:

– Now that these works have been established, however, pressure has been exerted upon the Government of the State during the last few weeks to give the firm a contract for the supply of a considerable number of boilers, in order to prevent Gawler from going down, and the men employed there being compelled to go elsewhere to find work. At the same time, however, the State workshops put in a tender for the supply of the boilers at prices lowerthan those which are to be paid to Messrs. Martin and Company. That case shows how, when a private firm has been built up by Government assistance, interests delevop round it which become strong enough to cause the Government to continue increasing their endowment. It would have been very much better, if at the first there had been no prejudice in South Australia against the Government building the locomotives they wanted, and turning them out as they were required. I admit that there are disadvantages in connexion with State control, and it is idle to say that all large undertakings can be done better by the State than by private individuals. But it seems to me that there are many undertakings which should be under State control. Certainly it is worth our while to cause an inquiry to be made to see whether the iron industry is not one which should be controlled by the Government, just as are the post and telegraphs and the railways. There is no doubt as to the supplies of ore, coal, and the other raw materials available within the Commonwealth. We know, too, that we can get the necessary men. The only question is, should the Commonwealth undertake the business, or should we give special aids to individuals to enable them to do so? The honorable and learned member for South Australia, Mr. Glynn, seems to have some doubt about the iron ore of South Australia.

Mr Glynn:

– I do not doubt either its quantity or its quality, but I do not think it would prove profitable to convert it into pigiron.

Mr BATCHELOR:

– There are large deposits of iron ore in South Australia in other districts besides Iron Knob. One of these districts is Oodlawirra. These deposits are very large, and are said to be as rich as any in Australia or elsewhere. To me the important thing is that no private individuals shall be enabled by an Act of this Parliament to lay hold of the iron industry of Australia, but I fear that that will be the result if the Government proposal is carried. In my opinion it would have been better to keep back the Bill until after the Tariff had been dealt with. In regard to the constitutional power of the Commonwealth to undertake an enterprise of this kind, I would point out that a year or two ago it would have been unconstitutional for this Parliament to assemble and pass legislation. Since then, however, the Commonwealth Constitution has been assented to. Is it to be supposed that that Constitution will never be altered ?

Mr Kingston:

– How long does the honorable member think it would take to bring about an alteration of the Constitution which would enable the Commonwealth to manufacture iron?

Mr BATCHELOR:

– While I should like to see the iron industry established tomorrow, it would be better to have its establishment deferred for two, three, or five years than to allow the control of our iron deposits to pass into the hands of private syndicates. If the delay that would be caused is the only objection which the Minister sees to making this a Commonwealth enterprise, he should encourage the growth of public opinion in favour of an amendment of the Constitution which would allow it to be done, or would allow the States to do it with the assistance of the Commonwealth. A very bad instance of the improper acquirement by private individuals of opportunities and resources which should belong to the community has recently occurred in South Australia in the case of the Snow Tramway scheme, and I shall not support any measure which would bring about a similar result. I have been asked by the honorable member for Bland to move an amendment upon his amendment. He wishes to insert the word “ also” after the word “ report,” so that the committee may consider and report upon the Bill, and also consider and report upon the advisability of establishing Commonwealth or State ironworks. He wishes also to add the name of the right honorable member for Tasmania, Sir Edward Braddon, which he inadvertently omitted, and to substitute the name of the honorable member for Parramatta for that of the honorable member for Illawarra, at the latter’s request.

Mr SPEAKER:

– The amendment will have to be moved when the question, “That the words proposed to be omitted stand part of the question,” has been dealt with.

Mr. L. E. GROOM (Darling Downs).I shall support the Bill. I have no serious apprehension that it is likely to bring into existence a monopoly which will have the terrible results depicted by the last speaker. In. any case, the Minister for Trade and Customs has already promised to bring in a measure which will prevent monopolies arising under our fiscal legislation.

Mr Fowler:

– It is easier to create than to kill a monopoly.

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

– If a monopoly is created by the restriction of competition through the operation of protective duties, we can by removing those duties kill it. If iron and steel is produced so much more cheaply in other parts of the world than it can be produced in the Commonwealth, even with the encouragement of a bonus, we have an easy remedy at hand should a monopoly arise. I am sorry I cannot support the amendment proposed by the honorable member for Bland, because I feel that, as a Commonwealth, we have not the constitutional power to establish iron works for our own purposes. Under section 81 of the Constitution Act it is provided that -

All revenues or moneys raised or received by the Executive Government of the Commonwealth shall form one consolidated revenue fund to be appropriated for the purposes of. the Commonwealth in the manner and subject to the charges and liabilities imposed by this Constitution.

Under this Bill, it is proposed to appropriate money for bonuses, and it is suggested that we have the power to appropriate money from the consolidated revenue fund, not for the purpose of establishing an industry in connexion with anything incidental to our powers under the Constitution, but for the purpose of carrying on the general business of iron manufacturers. The question is, can we, under the powers granted to us by the Constitution, set up in business as iron manufacturers. In the first place, I am perfectly sure that when the Constitution was framed, it was never contemplated by the people to confer upon the Government the power to establish industries for the manufacture of iron or other products. Certainly under section SI the only power we have is to appropriate . money for the purposes of the Commonwealth, in the manner and subject to the charges and liabilities imposed by the Constitution. I should not like now to give a decisive opinion upon this point, but I contend that the revenues of the Commonwealth should be applied for the purposes of such objects oE legislation or administration as the Constitution has conferred. Now letus see what powers we have under other sections of the Act. Section 51 gives us a general power to make laws, but I doubt if it confers specific authority to set up industries. We have power to regulate commerce between the States, to pass banking laws, to legislate regarding taxation, and the borrowing of money, and so forth, and sub-section (39) confers power to legislate regarding -

Matters incidental to the execution of any power vested by this Constitution in the Parliament, or either House thereof, or in the Government of the Commonwealth, or in the federal judicature, or in any department or officer of the Commonwealth .

I do not think any one could successfully contend that the Constitution confers any express power to create any industry such as that now proposed, and under section 51 we have no power to make any laws to bring into existence any such industry. Then the question arises have we any power incidental to any of our specific legislative powers’! Historyis only repeating itself in this matter. The same question presented itself in the early stages of the history of the United States. Hamilton, in the early days, presented a report advocating the establishment of a national bank. The question had been discussed in the Convention, but no power had been given to create a bank. Hamilton set up the doctrine of implied powers, and urged that, although no express power was given by the Constitution, the establishment of a national bank was one of the incidental matters arising out of the powers conferred by the Constitution. The American Constitution contained a provision similar to our own, giving “ power to make all laws which are necessary and proper to carry into effect the powers” granted by Congress for the Government of the United States. It was held that under the Constitution there was power to bring into existence a national bank, because that power was incidental to their legislative functions relating to the borrowing of money, taxation, and such powers. The point which I desire to emphasize is that we can only incidentally create a manufacturing industry if it is for the purpose of carrying out some of the express powers conferred by the Constitution itself.

Mr Watkins:

– Could we not establish a small-arms factory ?

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

– I am coming to that point. It is set out in Storey’s book, The Constitution qf l/ie United States, that if you have the power to make war, you can exercise all the powers proper and necessary to the carrying on of war, and that, therefore, incidentally, the United States Government had the right to create arsenals, docks, and so on. That is just the position I am putting here. Can we, by any means, bring the proposed iron-works within the scope of sub-section (39) of section 51 by showing that the power to establish iron works is incidental to the express powers conferred by the Constitution. In a recent report «of the department of Education for the United States, the question was raised whether the Government could start a University. A special report was presented, in which it was pointed out, among other reasons, that although there was no special power to establish a University, the power to establish it might be regarded as incidental to powers expressly granted under the Constitution, inasmuch as a University could be used as a means of training civil servants. Assuming that the committee referred to in the amendment of the honorable member for Bland recommended that the bonus proposal should be withdrawn, and that the Commonwealth itself shouldestablish an iron industry, I regret to say that so far as I can understand our Constitution I incline to the opinion that we have not the power to giveeffect to such a proposition. The idea is not to establish an industry as an act incidental to the exercise of the powers given under the Constitution. We are not asked to establish a factory to manufacture guns or material for defence purposes, but to carry on general iron works which would embrace all the various articles of manufacture referred to in the schedule. The establishment of a general iron works could not be regarded as merely incidental to the exercise of the powers mentioned in the Constitution. With regard to the Bill itself, I do not think that there is any straining of the Constitution in the way suggested by the honorable and learned member for South Australia, Mr. Glynn. Under section 99 of the Constitution it is provided that -

The Commonwealth shall not by any law or regulation of trade, commerce, or revenue, give preference to any one State or part thereof over another State or any part thereof.

At the same time we are distinctly authorized by subsection (3) of section 51 to legislate with respect to bounties on the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth.

Mr Glynn:

– I quite agree with the honorable and learned member.I was replying to an interjection with regard to a special grant to a particular State.I expressly said that ageneral law could be taken advantage of by the States.

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

– I agree with the honorable member for Bland that this Bill should be so framed as to give the States Governments’ an opportunity to take advantage of any bonus which may be offered if they should see fit to establish theindustry. Assuming that the Commonwealth were to take over this industry, we should be placed in a very awkward position. The question would arise whether the Commonwealth Government should comply with the States laws relating to mining, to the employment of labour, and to taxation in connexion with mining. Then, again, what position would be occupied by thepersons employed by the Commonwealth Government in carrying on such ironworks? Would they come under the jurisdiction of States laws as general employés, or would they be regarded as public servants of the Commonwealth? The Bill should be framed in such a way as to give the States Governments a chance to benefit by its provisions. I understand that the Minister agrees to this.

Mr Kingston:

– It is clear that the States Governments can take advantage of the bonus.

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

– The Bill would have to be amended, because the term “persons” does not include the States Governments. It has been suggested by the honorable member for Bland that we should ascertain from the States the extent to which they are willing that we should take up this manufacture, but as far as we can gather from the attitude taken up by the various State Parliaments, there is a tendency on their part to stand by the Constitution, and not to allow any addition to their powers by the Commonwealth. They clearly have power to engage in industrial enterprise for themselves, and they have already exercised it in some cases. The honorable and learned member for South Australia pointed out that if we were to grant bonuses to the iron industry, we should have claims made upon us for bounties by those engaged in other undertakings. That constitutes no objection in my eyes. I look upon the system of granting bonuses as part of the policy of protection, and I should be disappointed to learn that the Government intended to apply the bonus system to the iron industry only. I regard the present proposal as the first instalment of a policy which will be largely extended, and I hope that the Government will not forget the agricultural producers of the Commonwealth, who have as strong a claim to encouragement as have any section of the community. I understand from the honorable member for Bland that it is his desire that the committee should report upon the constitutional question, but it seems to me that the honorable member is asking the committee to take upon themselves the functions of a High Court. The only way in which the House can be advised upon the constitutional aspect of the matter is by obtaining the opinion of the Attorney-General. I shall support the Bill as it stands.

Mr HUGHES:
West Sydney

Considering the enormous issues involved, it would be absurd to suppose that any industry which would come under the operation of this Bill could be established’ in less than three years from the time of its being passed. Therefore, under this measure, any such industry could hope for only two years >of encouragement. The Minister for Trade and Customs declared that £5,000,000 is invested in the Canadian industry ; but it would be ridiculous to suppose that any syndicate would be induced by the bonuses offered by the measure to sink that amount in the iron industry in Australia, seeing that they could hope for its continuance for only two years. On the other hand, if incentives already existed, these might turn the scale, and an industry might be established. But, as the honorable member for South Australia, Mr. Batchelor, has pointed out, the chief consumers of iron are the States Governments, and therefore we should be foolish to the last degree if we departed from a system the necessity for which has grown up in many of the States, and is extending every day. For example, in New South Wales the Railway Commissioners have found it necessary to obtain a blue metal quarry of their own. Before long they will be compelled to secure coal mines. I In every State the same tendency is observed. The honorable and learned member for Darling Downs has urged that the power to nationalize the iron industry does not come within the scope of the Constitution. I do not altogether follow his reasoning, nor do I agree with what I did follow. It seems very clear to me that every power which is directly conferred by the Constitution carries with it the power of doing anything which is incidental to its exercise. For instance, sub-section (5) of section 51 gives the Commonwealth power to control and regulate the postal, telegraphic and telephonic services. Obviously that power carries with it a right to construct post and telegraph offices and to establish telephonic communication. We might even embark upon the manufacture of switchboards and all electrical appliances, such as dynamos, &c. Many of these things are manufactured from iron, and nearly all of them from metal. To me it seems perfectly .clear that the Commonwealth may manufacture such ironwork as is necessary for the postal, telegraphic an I telephonic services. Similarly, we have power to control and regulate the nava and military defences of the Commonwealth, and consequently to manufacture rifles, cannon and everything incidental to the defence of the States. The Constitution also confers upon us authority to take over lighthouses, lightships and buoys, and therefore we are at liberty to construct them. We are authorized to construct railways and extend them into any State, with the consent of that State. Therefore, to urge that we have no power to manufacture rails, engines, and other necessary appurtenances,before the consent of the States has been refused, is rather extraordinary. Obviously, under sub-section (34) of section 51, we are entitled to construct railways, and, therefore, we have the power to manufacture everything incidental to their construction. I contend that the amendment cannot be ruled out of order on the ground that it is beyond the scope of the Constitution. I would further point out that sub-section (39) of section 51 provides that Parliament shall have power to make laws upon -

Matters incidental to the execution of any power vested by this Constitution in the Parliament, &c.

Therefore we may exercise any power relating to matters which are incidental to the execution of any other power. It appears to me extraordinary that, whilst it is admitted that we have the right to grant bonuses to encourage manufactures, it should be urged that we have not the right to embark upon manufacture ourselves. Sub-section (3) of section 51 provides that bounties on the production or export of goods shall be uniform throughout the Commonwealth. I believe that is the power upon which this Bill rests. That provision seems to indicate that it is desirable to encourage industries in the States, and surely it is not an unnatural deduction to draw, that we may therefore manufacture ourselves instead of giving bounties to encourage production. The honorable and learned member for Darling Downs wished to know whether the Commonwealth would be subject to mining regulations if it engaged in mining, or to factory laws if it engaged in manufactures. I did not understand that the State had less power than the individual, and unless it can be pointed out that our powers are restricted in any direction, I apprehend that the Federal Government has the same powers - except they be residuary in the States - that are possessed by the individual, and, therefore, we may engage in manufacture. Anyhow, it is for those who deny that the amendment comes within the scope of the Constitution to prove their contention. Since there is no court to decide the matter, unless we appeal, to the Supreme Court of one of the States, it is clearly for the House to determine whether or not the amendment comes within the scope of the Constitution. If a point of order had been taken by the Minister for Trade and Customs it would have been for Mr. Speaker to say whether the proposal of the honorable member for Bland was outside the scope of the Constitution or not ; but until that point is taken, I apprehend that the House will be the arbiter. For my own part I decline to accept the deduction of the honorable and learned member for Darling Downs that our powers are circumscribed to the extent that he wishes us to believe. It appears to me that under sub-section (34) of section 51 we have the power to construct railways under certain circumstances. Therefore I believe we may very readily say that the proposal to appoint a select committee to consider this question is in order, and comes within the scope of the Constitution. Furthermore, section 96 of the Constitution provides -

During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

If it were decided that the Commonwealth as such had no power to institute the manufacture of iron, it is very clear that we could give such assistance for that purpose as would enable each or any State to undertake the enterprise. If New South “Wales, for instance, having an abundance of iron ore, desired to establish the iron industry and applied to us to make good any deficit, or for any other assistance, we could undoubtedly lend the money. It appears, first, that, under section 51, the Commonwealth has powers which are incidental to those expressly vested in the Commonwealth, and, under section 96, may assist any State. What is the alternative T This Bill is a measure for the encouragement of manufactures, and it has to operate for five years. The whole object is to encourage the mining and manufacture of iron from the native ore; and, as I have already said, the scheme appears to me to be largely chimerical. I do not suppose that there is any serious intention that the measure should be effective, or otherwise its operation would not have been limited to five years. It is practically an impossibility to establish an industry of such dimensions within a less period than three yea.rs, when there would be an assurance of only two years’ benefit under the BUI ; and nosyndicate of capitalists would invest their money on a security so slight. There are other reasons why the State should control this enterprise. In the first place we are every day advancing to a more steady appreciation of the fact that the rights of labour form so serious a factor in the establishment of an industry that, they are not likely to be neglected by any investors of capital. These rights are fairly sufficiently safeguarded in Australia by manhood suffrage. It does not appear to me, seeing the trend of industrial movements here and elsewhere - but particularly elsewhere - that there is any third course between control by a trust and control by the people. Theestablishment of an industry of so gigantic a character by an individual is out of the question ; it must be by ‘a syndicate, whowould have a monopoly. There can be no competition, for the simple reason that the investment of a sufficient amount of money to purchase the plant necessary for the efficient production of iron can be repaid only by complete control of the markets of the Commonwealth. Possibly the Government may contemplate the establishment of rival works and the development of healthy coinpetition ; but, as a matter of fact, no second body of men would dream of investing the necessary capital, if one firm were already in the field. We are, therefore, face to face with the fact that we must create a monopoly of some kind, either by the State or by a trust. The movements and machinations of trusts in America are hardly likely to inspire the people of Australia with any degree of admiration. Every day we see those trusts steadily enmeshing all the minor industries, until within our own lifetime, I have no doubt that we shall see the whole of the industries -of the great sister Commonwealth in the hands of a few individuals, whose numbers may be counted on one hand. In Australia there is still greater room for the operations of a single trust, directing all industries. Here there is required none of that intricate financing which marks the giant operations of America. If this Bill should be effective, as soon as one firm is established here, no other firm can start, because one can supply practically the whole of the requirements of the Commonwealth. I do not know whether the Minister realizes that there are firms in England, to say nothing of America, any one of which could supply the whole of our requirements. One firm, and one firm only, with the very latest up-to-date machinery and abundance of available capital, could hope to compete against the importer. Either these bonuses will be a sheer waste of public money in order to pay for the production of so much iron, with no permanent industry as a result, or else there must be established an industry with a vast amount of money behind it, and with command of the whole market. There are many arguments against State monopolies, and to these I do not shut my eyes : but State control has many virtues, one of which is that its faults may be modified or eradicated, if necessary, by the people. That cannot be done in the case of a trust, which has its vested interests, and every man employed in connexion with it, no matter how humble his position, has strong motives for keeping it going. [House counted.] I have, so far as to me Appears necessary, pointed out the advantages of the scheme recommended in the ^amendment of the honorable member for Bland. The Bill is, to say the least, incomplete, and it cannot, without some amendment of a radical character, attain the object of the Ministry. Under the circumstances, the Government might very well accept the amendment, which would no doubt result in a report of a very useful and interesting character.

Mr CONROY:
Werriwa

The Ministry are always to be found on the side of the big battalions. They assume to be democratic in sentiment in order that they may be the better able to filch money from the public purse and devote it to the benefit of special individuals. That is exactly what will be the result of passing such a Bill as that now before us. It has been very fairly pointed out by the honorable and learned member for .South Australia, Mr. Glynn, that the Bill will practically make a gift of a quarter of a million of money to a particular firm, company, or syndicate^ Yet we are told by the Minister that this will be for the public benefit. That is a piece of political clap-trap, because the benefit in this case is not to be conferred upon the public, but upon halfadozen or more people. [House counted.] The Government* have been very successful in carrying out their policy, but I do not suppose that they will face the electors at the next election, and tell them that it is for the benefit of the great mass of the people that they should be taxed in order that profit may be secured by a few individuals, ls there any reason why an exception should be made in favour of those engaged in the production of iron ? While freedom of exchange exists iron has no greater value than any other commodity. The establishment of the iron industry is not expected to demonstrate any specially useful fact. We have no doubt that iron can be smelted from the ore here, and there is no reason why the man who is engaged in delving for gold should not receive as much encouragement as the State is willing to offer to those who are engaged in iron production. We know that iron can be smelted, and the question as to whether- our deposits are of value to us is dependent entirely upon the expense involved in converting the ore into a marketable commodity, and the relation which such expense bears to the ultimate value of the product. What right have Ministers to guarantee to those who engage in the production of iron that they shall make no loss upon their operations? The Ministers, as the guardians of the public purse, have no right to withdraw money from the whole of the people of the Commonwealth and hand it over to one or two individuals. Because certain individuals come along and say that they have a million of money to invest, but will not make use of it unless we give them £250,000 out of the public exchequer, the Government propose to collect the sixpences and shillings of the people, many of whom have not 5s. to call their own, and hand it over to those who are already welltodo. [House counted.] The Government have no right to ask us to consider this Bill until the Tariff has been passed, because all our labour in connexion with this proposal may be brought to nought by an amendment of the Tariff Bill. If this matter is of such importance as the Minister for Trade and Customs seems to think, it should not have been brought forward at this stage of the session, when honorable members are in no fit state to consider it. I am pleased that an alteration is to be made in the form of the amendment proposed by the honorable member for Bland. The select committee to be appointed will be asked to hold an inquiry, and to consider the evidence given for and against the Bill, and, in addition, it is proposed that they shall be asked also to report upon the advisableness of establishing the iron industry, either under the control of the individual States or of the Commonwealth, and a great deal of valuable evidence may in that way be brought before us. I think it was the honorable member for Parramatta who, when Minister of Mines in New South Wales, obtained a very valuable report from the geological surveyor of the department in reference to a great man)’ matters which. ought certainly to be put before us. We know that there are deposits of iron ore all over Australia; but the question is whether they consist of large bodies containing sufficiently pure ore to enable the manufacture’ of iron to be carried on at anything like reasonable rates. No one would contend for instance, that if 100,000 tons of pig-iron were produced at a loss of 10s. per ton, it would be a good thing for us to increase the output by 1,000,000 tons. Little as the Ministry are acquainted with the principles of political economy, I do not know that they would carry their doctrines as far as that. They betray an indifference in dealing with the public funds, but if they were expending their own money, the)’ would not dream of putting it out at a loss. If they were growing fruit for example, at a cost of £5 per acre, and obtaining a return of only £4 per acre, they would not perform that peculiar feat in arithmetic for which the honorable member for Melbourne Ports is particularly famous. They would not say, “£5 is the cost of production, and we get back £4, therefore,- £5 and £4 make £9.” Yet’ it was a very long time before we were able to explain to the honorable member foi- Melbourne Ports, that any one who adopted that system would very soon become bankrupt. If the Minister for Trade and Customs paid £1 in mining calls, and received a return of 10s., he would say it was nonsense if he were told by some of his protectionist friends that he was thus better off to the extent of 30s. He would consider that he had lost 10s., and that the whole community had lost by the transaction, because the money would have given employment, year after year, if spent upon a productive undertaking. We know, however, that that principle is sometimes followed with other men’s money, and that those men prosper least who are most regardless of that insidious protection which the privileged classes, with the help of certain people, like the Minister for Trade and Customs, are generally so ready to bestow. This Bill’ is simply protection in another form : the only difference is that the money proposed to be paid away will come from the whole community, and therefore will not be so much of a class tax as are certain other taxes. When the great bulk of the people understand what the proposal means they will ask why they should be called upon to contribute to an industry carried on by a certain man, when that man does not contribute to their undertakings. I have contributed very largely towards gold and copper mining, but the Government have never offered to reimburse me, although surely I am as much entitled to consideration as any one else. There is no reason why they should not give me the right to collect from the people £300,000 this year, and a further £300,000 next year ; for, according to their doctrine, I would spend all that money in the country, and give employment to the people. The real point is that not one of us has a right to call upon the people to contribute to industries carried on by lis from which they derive no benefit. They, will derive no benefit from these industries, because even if they are productive, the profits will go into the pockets of those interested in them. There is no more risk in iron-mining than there is in gold-mining; indeed I doubt whether the risk is so great. If we take into consideration the element of chance and the attractiveness of gold-mining, we shall find that as a rule more money is spent on labour connected with the production of gold than in any other branch of the mining industry. I do not say that it is altogether a good thing, but I contend that every penny which is spent unproductively is a loss to the community. It was only recently that we learned that the Ministry carried their doctrine so far as to say that what is one man’s loss is another man’s gain. That is a false and pernicious doctrine, under which nations and people have suffered. We know that the true doctrine is that one man’s loss is every man’s loss. We realize that the loss now being suffered by the pastoralists in New South Wales and Queensland is a loss to the whole community, and why cannot honorable members see that if a community produces a thing at a cost of £1 which is worth only 18s., there is an absolute loss of 2s. 1 It is true that in this case men will not readily perceive that fact, because the money will be spent over a large area ; but it is none the less an economic fact. Let me give an illustration which may be within the limited capacity of the Ministry to understand : If a small municipality raised a sum of money from each of the ratepayers, and proposed to impose a permanent tax for the purpose of keeping an unproductive industry going, the people who were engaged in productive work there would very soon say, “We cannot keep this unproductive work going.” The principle in this case is the same. Why should the whole community be asked to keep going what may be an unproductive work? If it is unproductive, the less the community have to do with it the better it will be. If it is productive, these large sums of money which it is proposed to expend upon it will not be returned to the people. The Minister of Trade and Customs will say, “We have drawn that money from the whole community, and handed it direct to the manufacturers. Now we will go still, further, and if we are successful in getting other proposals finally accepted by Parliament, under the disguise of protection, we will make a particular class continue to contribute to these industries.” The difference between the bonus system and protection is in name only. A bonus is a sum contributed by the whole of the community, and in that sense it is less objectionable than protection, because every one can see what is being done ; but under the protective system a sum of money is taken from the particular class which happens to use the article taxed. [House counted?] If this Bil is carried, the money proposed to be expended under it can come only from the producing classes of the community. But they have already a sufficient burden upon them. If we go on increasing taxation year after year men will find it impossible to obtain employment, as people will not go in for production if taxation is made to press so “heavily upon them. The moment that taxation exceeds a certain limit the people will relinquish the struggle in which they have been engaged, and go elsewhere. We could i not have a better example of that than is provided b)’ the State of Victoria, where taxation has pressed so heavily upon the people that -they have left the country. If we continue to exact large sums of money from the taxpayers, the time must come when they will be unable to endure the pressure. The Government ask the House to Vote £300,000 to assist in the development of the iron industry. Why do they not give that money to the farmers of the country, who have lost their crops and stock as the result of drought ? If they adopted that course, increased wealth to the community would result. But no. They say to the poorer classes of the community - “ Hard up as you may be, we intend to collect another £300,000 from you and hand it over to some one else.” Assuming that the consumption of iron in Australia is 500,000 tons annually, and that there is a loss of 10s. per ton upon its production, the communitywillbe called upon to contribute £250,000 a year in this connexion. That loss has to be borne by those engaged in the production of wealth, and yet we are told that under the operation of the bonus system additional wealth will be created. I object to this Bill upon the ground that we have no right to guarantee to any man a return upon his capital. We cannot guarantee to the workman that he will continue in health and find constant employment. Why, then, should we guarantee to one or two syndicates a return upon their capital ? If the Ministry are anxious to disburse money it should be in the direction of assisting the great mass of the people who are unable to help themselves. But the policy of the Government is to grease the fatted pig.

Mr Wilks:

– They will have to raise £1,200,000 in order to provide the amount which they ask for.

Mr CONROY:

– Yes; owing to the system which compels us to collect all the. revenue we require through the Customs house, we shall have to exact £1,200,000 from the taxpayers before we can obtain the £300,000 which the Government propose to disburse under this Bill. If the Commonwealth is already spending all that it is entitled to draw-

Mr Kingston:

– Which it is not.

Mr CONROY:

– It will not be very long before it does, unless great care is exercised. A Loan Bill for £1,000,000 has already been introduced to the notice of the House. Whenwill the people secure relief from taxation? I believe that that result can be brought about only by a change of Ministry. Until we get a body of men who understand that they are the guardians of the public purse there can be no sound administration. Surely it will not be argued that, because iron will probably command a high price in the near future, wages will also be high ? In this connexion Thorold Rogers says -

High prices do not raise wages. Those who assert that they do or will, speak either ignorantly or dishonestly.

No doubt the Ministry will call that “ theory,” quite forgetful that theory is the explanation of the relationship which facts bear to one another. In any system of raising revenue, it is the great mass of the people who have to contribute, as is shown by the fact that it is never suggested to levy duties on articles which are not in general use. The Treasurer cannot be blamed for that ; but my objection is to the poorer classes being made the victims year after year. At the very outset of the Commonwealth, we are met with this call for £300,000 ; and I am sure that it will not be denied that the suffering farmers of the country have just as much claim to a bonus as have two or three individuals. The Government do not apply these bonuses merely to industries which have to be established, but also to industries which have for some time been carried on at a profit. It is true that a very large quantity of galvanized iron is not made here, but the fact remains that the industry is in existence ; and, as for wire netting, that has been produced in New SouthWales for seventeen years, for a greater part of the time without any duty, and certainly without any bonus. Iron and steel tubes and pipes are also made in the Commonwealth. The Bill simply means handing over a certain sum of money at once to a number of men who are fortunate enough to be first in the industries I have mentioned. The honorable member for New England, after some extraordinary calculations by a mathematical process known only to himself, has said that about 600,000 people will be employed in consequence of the establishment of the iron industry, but he would have been as near the truth if he had made the number 6,000,000. The real idea of the Government is to collect money from 600,000, and distribute it amongst half-a-dozen. The honorable member for New England said not one word about the greatmass of the people who have to contribute this money, nor did he suggest that bonuses should be given to men who have suffered greatly in other branches of industry. There is no doubt that the profits from the manuf acturer of iron are infinitely greater than those enjoyed by any farmer.

Mr McDonald:

– The last dividend of the steel trust was 18 per cent.

Mr CONROY:

– That, as Mr. Bryce observes, was wrung out of the people by the aid of Congress, the members of which entirely failed to do their duty to the general community : and such is the system we are asked to perpetuate here. The invitation is - “ If you can show that you have half a million of money to invest, the Government will help you with money taken from the people.” Do -we ever see the door of the Minister for Trade and Customs crowded by the poorer people ? No; the only people who get audience are those who are the lucky possessors of half a million or a million of money ; and when they walk in the Minister says - “Yes, Mr. Syndicate, owing to our positions as Ministers we shall be able to pass an Act under which your enterprise will be assisted by a bonus raised from the people.” If the Minister would only listen to the opinion of the great bulk of traders as to the justice of his actions, he would not be sitting here listening so calmly, but would be engaged in. an explanation interesting to at least two or three outside this Chamber. Why does the Minister not tell his supplicants, “ If you have a million of money, you can get along very well without any help : or if you cannot get along with that sum, just change places with any of 3,000,000 people around you, and )’ou will see how quickly they will undertake the enterprise.” That is the principle on which we should act. If the State has to bear any loss, the State ought to have control, or if there is any profit the general community ought to have the benefit. But before any such enterprise be undertaken by the State I should like to see a few experts employed and the greatest care exercised. The lesson we learn more and more every day is that we are “ our brother’s keepers,” and we ought not to take money from the poorer sections of the community, and add to the possessions of those who are already wealthy. . I do not argue that I would grant aid to men who will not work. I would follow the words of St. Paul - “Whoso will not work neither shall he eat.” I hold strongly with the doctrine which was enunciated at the time of the French Revolution, that the inalienable right of every man is to enjoy the profits of his own labour ; and I object to any part of that profit being filched. In matters like this we cannot assist everybody ; it is not in the power of any men, simply because they call themselves a Parliament, to make people wealthy. It is not by the wax and parchment of lawyers, who are ignorant of the principles of political economy, that a nation can- advance. We perpetually find lawyers dealing with public questions as if the mere writing on the paper, and. the stamp of their approval, would change the whole course and conduct of men. We do not rightly understand our limitations ; and of that fact we have frequent evidence.

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

– The “ writing on the paper” is very effective, so far as tile Customs is concerned.

Mr CONROY:

– It may be effective for evil ; acts cannot always tend to good, and they may do a great deal of harm. Ministers cannot put wealth into the ground, they cannot create it. They cannot claim that we should give a bonus for the production of iron, because that industry has never been carried on successfully before. If they had proposed to give a bonus for the profitable production of aluminium, there might have been some reason for their action, because we know that if aluminium could be produced at even five times the cost involved in the production of iron it would, on account of its superior qualities, entirely supersede iron for almost every purpose for which it is now used. The Government might then have claimed a little foresight, but the chances are that they have entirely overlooked the matter. They must travel along the mustyfusty lines of the past. They are doubtful whether iron can be produced at a profit within the Commonwealth, and, therefore, they propose to take £300,000 of the public money and hand it over to a few capitalists to protect them against loss. The Minister referred to the fact that the bonus system had been adopted in Canada and America ; but he did not show us that it had proved of benefit to the people of those countries. So far as wire-netting is concerned, there is no doubt that it can be made here, because wire-netting factories have been in operation for some years. [House counted.] If there is more than one firm engaged in the manufacture of wire-netting, it should be clear to honorable members that there is no need to encourage that industry. If on the other band only one firm is making wire-netting within the Commonwealth, is there any reason why we should call upon the whole of the people of the Commonwealth to contribute money for its benefit? On what grounds could such a firm claim from us a grant of £50,000 ? We should not be justified in recouping any loss that has been sustained by any of these manufacturers. How many men have invested from £10,000 to £50,000 in the pastoral industry and lost every penny? We hear no word about re-imbursing them, and the Government adopted quite a different attitude from that which they are now assuming when they were recently asked to make some concession to the pastoralists who were suffering from the effects of the drought. They were satisfied to know that employment was being afforded to a number of men in skinning dead sheep and cattle. It is proposed to give a bonus of £8 for each of the first 500 reapers and binders manufactured within the Commonwealth. When the Tariff was under discussion, we were told that there were a large number of manufacturers engaged in making reapers and binders. No doubt any one of these would like to have a gift of £4,000 made to him, but what right have we to so misapply the public funds? [Mouse counted.] As the bonus is to be given to those first in the field, we shall be giving the existing manufacturers an advantage over those who come later. But why should we give a man £8 for every reaper and binder which he produces, when we know that a complete harvester, transcending the mere reaper and binder, is manufactured here ? We were told during the discussion of the Tariff that hundreds of these machines had been manufactured here, and one gentleman engaged in the trade was log-rolling here to a considerable extent. If a man thinks he can persuade honorable members sitting behind the Government to vote him any sum he mentions, he has a perfect right to come here and ask them to do so: but I object to honorable members proposing to vote him, not their own, but other people’s money. They have absolutely no right to do so. We are told that we must adopt this course because the whole community will benefit. I should like to know in what way. If we encourage the production of these things by one big firm we shall practically create a monopoly, and place the control in the hands of the manager of the syndicate. I have the greatest respect for syndicates formed for the purpose of producing wealth, but I object to a syndicate going to the State and saying - “ We have control of a certain amount of capital, but we want a little of the State money.” If the representatives of a syndicate went to the Ministry, and said - “We have £1,000,000 with which we think we can profitably employ a.number of people in one line, but we want you to guarantee us interest on our money,” the Government would say that they could not do anything of the kind. But when a man comes in a cleverer and more cunning way, and says - “I have £1,000,000 with which I can ‘give employment to thousands of men, who, in turn, will employ thousands of others, and all I want is a guarantee that I shall not lose a penny,” the Government are misled. If an honorable member expended £10,000 upon the purchase of sheep and. cattle which would increase the wealth of the community, the Government would not give him any guarantee of a return for his money, neither would they guarantee a farmer any return for his crop. Yet the employment given by means of the expenditure of £1,000,000 on farming is infinitely greater than would be given by these industries. But, if the Commonwealth is going to help this particular class of individuals, we must exercise the right of controlling them in their works. As a body of men, we are, as a rule, ignorant of the facts in relation to the great trades and commerce generally, but it is too late now for any man to say that he is against the interference of the State in any industry, because circumstances are too much for him. Those who say they are against any undertakings being controlled by the State, should vote against State management of railways and seek to do away with the State control of the Postal and Telegraph departments. We often speak as if all advanced legislation was to be found only on this side of the globe, but in England there is an amount of genuine solid legislation on some of these subjects which perfectly astounds one. There the Government control a clothing factory for the manufacture of clothes worn by the Government officials, and the factory seems to be working uncommonly well. They leave the management of it to trusted officials and there is no political interference. That portion of the proposal of the honorable’ member for Bland which provides for an inquiry into the whole question might well bc supported. Even honorable members who are opposed to the Bill can vote for that. I do not suppose that any honorable member will go so far as to condemn all control by the Government. Of course, it may be argued that, as a rule, enterprise cannot be managed so well by the- State as-, it ,can by private individuals. In thousands of cases that is absolutely true. But there is no reason why the State should not obtain the services of men to conduct enterprises for it, so long as it exercises control over them. The advantage of such a system has been evidenced in connexion with the management of the New South Wales railways. Those railways, when managed by the Government, were not a financial success, but immediately the management was intrusted to commissioners who were qualified and skilled men, under the control of the Government, they became reproductive, though the Government of course still exercises control. Why do not honorable members act upon the principle that we are all interested in the production of wealth, and ought not to endeavour to divert capital from its proper channel ? The Constitutional aspect of this question was referred to by the honorable and learned member for Darling Downs, who relied upon paragraph 3 of section 51 of the Constitution, which says that Parliament shall have power to make laws with respect to -

Bounties On the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth.

I hold that we are at perfect liberty to grant bonuses in the manner proposed by the Government. What was contended was that if a particular State took control the money could not be paid to that State. That may seem merely a technical difference, but still it is a difference which must be observed; and under the circumstances there can be no payments by the Commonwealth to further the State management of any particular industry. State control has in some instances proved advantageous, although it possesses certain drawbacks, and until we know the particular industry in regard to which it is proposed to legislate, we cannot say offhand whether we are in favour of such a step being taken. Section 51, sub-section 3, of the Constitution, to my mind, prevents the Commonwealth paying a bonus to a State ; the Commonwealth itself must take control. Nor do I agree with the contention of the honorable member for Bland as to the powers conferred under section 96, which I think refers merely to general financial assistance. If an appeal were made to the Federal High Court, I do not think- it would be ‘held -that the section justifies the rendering of assistance such as is now proposed. I altogether object to the Bill, and shall vote against it. I shall support the amendment of the honorable member for Bland, the first part of which merely provides for an inquiry; and it cannot be said that the facts are sufficiently before us at the present time. As to the second part of the amendment, no one can object to a report, because we must not prejudge the case. By recording my vote in favour of the amendment, I do not express my opinion that under all circumstances and conditions the Commonwealth or the States are to take everything under their control or management. There are many instances in which that should not be done. I support the amendment as a means of eliciting information to guide us in our decision.

Mr CAMERON:
Tasmania

– In my opinion it was a mistake on the part of the Minister for Trade and Customs, and also on the part of members sitting behind the Government, to introduce the word “protection “ in connexion with the proposed bonuses. As a revenue tariffist, when I hear the word “ protection “ it is liable to make me suspicious. At one time I had decided that I could not support these bonuses ; but on taking into consideration the fact that the system has operated very favorably in connexion with the butter industry of Victoria it seems to me possible that it might have similar results in regard to the iron industry. I was somewhat surprised by the fear which has been expressed by several honorable members that a monopoly will be created if we vote these bonuses. That fear, appeal’s to me to be absurd, because if by any chance a monopoly were created, and prices unduly raised, it would be perfectly possible for the Federal Government to admit iron duty free, and at once bring the Syndicate or company into competition with outside sources of supply. The honorable member for South Sydney was inclined to support the Bill, but in the face of the fact that not even the Treasurer can tell what the revenue is likely to be during the next twelve months, he has some doubts as to the wisdom of taking that course. But misgivings of that kind need not agitate the minds of honorable members. Even if the bonuses were to come into operation tomorrow, probably a year and a half would elapse before the plant could be in full operation. If the Treasurer’s Estimates are correct, there will be a certain surplus this year, and as prosperity returns with good seasons, the revenue will become more elastic. If the majority of honorable members believe that it is a good system to encourage industries by means of- bonuses, there need be no delay from any fear of our not,being. able to provide the money when required. There are immense bodies of ore in several parts of Australia, including Tasmania, and the smelting industry has already been tried. Nearly 20 years ago, something like £100,000 was invested in that industry in Tasmania, but. I am sorry to say that failure was the result. The ore which has been discovered since is totally different to that treated in Tasmania; but we cannot hope to induce men to embark in industries of the kind, unless there they are shown some reasonable prospects of success. I should never support any form of protection ; but knowing that we are, comparatively speaking, a young country, with immense sources of wealth in a state of nature, which we have not sufficient capital ourselves to develop, and knowing that capital will flow from every part of the world if there is reasonable prospect of a profit, I am, as a taxpayer, prepared to make some sacrifice in “the hope of benefiting the community as a whole. It seems to me that the bonus system is about the fairest that could be evolved with this object ; and I am perfectly prepared, so far as the iron industry is concerned, to support the proposals of the Minister. I want it to be clearly understood, however, that if at the end of the term provided in the Bill, any further pro.posals for assistance are introduced, I shall, if a member of the House, oppose them. A fair and straightforward course for the Ministry to take would be to say that while they are prepared to give a syndicate assistance for so many years, in the shape of a bonus, they will not be prepared to continue that assistance any longer. To grant any extension would be neither more nor less than protection. On these terms I shall support the second reading; but while I shall vote for bonuses being extended to pig-iron, puddled bar-iron, and steel, I cannot see my way to give the assistance promised to the manufactures contemplated in classes 2 and 3 in the schedule. The spelter industry has already been established. Welsh workmen and experts have been introduced, and I see no reason why assistance should be rendered to those interested.

Mr Watkins:

– Does that objection not also apply to the manufacture of iron 1

Mr CAMERON:

– I do not know that iron is being manufactured in any of the States. It was tried some years ago, and those interested, who were Australians, were ruined by the lamentable failure. Since then fresh vast deposits of iron ore have been discovered, and proved to be exceedingly rich and valuable; but .the first failure has prevented the investment of Australian capital. I know very little about galvanized iron, but I understand that its manufacture is carried on in Victoria at the present time, and as that commodity is at present the subject of a protective duty, which assists the industry to some extent, I am not prepared to extend any further assistance. In regard to wirenetting, we know that a large factory has been in operation in Sydney for some years, and as the proprietors, Messrs. Lysaght Brothers, have acquired control of the whole of the markets of Australia, I fail to see why they should need any help. I am not prepared to give special support to industries which have already been successfully established, but the bonus system might, be extended to a number of enterprises which are not likely to be embarked upon unless some special encouragement is afforded.

Mr Wilks:

– The ship-building industry, for instance.

Mr CAMERON:

– If we could manufacture the iron plates necessary for use in ship-building we might offer a bonus to assist those engaged in that industry. The production of mineral oil is also a” matter that should engage our attention. I shall support the Bill so far as it provides for bonuses for the encouragement of the iron industry, but I shall not be prepared to grant any extension of the bonuses beyond the period specified in the Bill.

Mr WATKINS:
Newcastle

– I listened with a great deal of interest to the speech of the honorable member for Tasmania, Mr. Cameron. The honorable member told us that he was returned as a revenue-tariffist, but I do not see how any revenue is to be derived as the result of passing a Bill of this description. Bonuses and protective import duties are alike protectionist devices, and I congratulate my honorable friend upon his intention to give a protectionist vote in favour of the proposal to grant such bonuses as will prove of direct benefit to the people of his own State. I do not agree with; honorable members who think that the Government have done wrong in bringing forward this proposal at the present time. It was understood when the Tariff was before the House that this question would be submitted to us at the very first opportunity. The iron industry is of such importance as to call for our consideration without delay. It is one upon which nearly all other industrial enterprises depend, and no nation has ever achieved greatness in manufactures without having established the iron industry in its midst. In no other industry is so large a proportion of money spent in the employment of labour. Large numbers of workmen are engaged, not only in iron works themselves, but in procuring the iron ore, the coal, and other minerals required. Whilst I desire to see the iron industry established at as early a date as possible, I think that a committee of inquiry should be appointed to ascertain how far the State Governments are prepared to assist in the movement. The State Governments are the largest users of iron of all classes, and in at least one of the States several proposals have been made to establish the iron industry under State control. It has been pointed out that the output of two or three mills would be sufficient to meet all the requirements of the Commonwealth, and the scheme of the Blyth River Company provides for carrying on operations on such a scale that the product of their works would be sufficient to meet half the needs of the Commonwealth. As the State Governments are the largest users of iron, I see no reason why one of them should not embark in this industry, if the Commonwealth itself cannot do so. It is no new thing for a Government to engage in the iron industry, because the German Government have large iron works, where they producepig-iron sufficient to supply practically all the needs of that country. Why should not one of our State Governments act similarly ? The Government of New South Wales are considering this matter at the present time, and as the States not only own their railways but also build them, they will extend their functions to only a small degree if they decide to establish iron works.

Mr Kingston:

– We have the utmost sympathy with the idea that the State Governments should engage in this work. A State Government could collect the bonuses as well as any company could, under the provisions of the Bill as it stands.

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

– If not, the measure might be altered to meet the case. If a committee of inquiry is appointed by us it will probably induce one or other of the State Governments to deal more promptly than might otherwise be the case with the question of establishing the iron industry. Even in England we find numbers of cases in which great benefits have been conferred upon the public by municipal bodies which have undertaken large public works and have conducted huge business concerns. We have notable examples in the cases of Glasgow and Birmingham, where the municipal bodies have taken over the control of the waterworks, the electric lighting systems, and the tramways, with much benefit to the people of those cities. The Manchester Ship Canal is another case in point. We find further that the municipal bodies have been able to effect wonderful improvements in the housing of the poorer classes by purchasing large areas of city lands and erecting model dwellings thereon. The success which has attended the operations of the Glasgow City Council has been such that within fifty years the municipality will be absolutely free from debt, and the ratepayers will then be released from any further taxation. Many of the municipal councils have been able by embarking in these enterprises to pay off the whole of their indebtedness. If we were to offer a bonus for the establishment of the iron industry by private individuals the money would probably be paid over to one or at the most, two companies, and in every respect I regard it as preferable that a State Government should undertake the work. The New South Wales Government have already done excellent work in connexion with ship building and repairing at their dock-yard in Sydney, and their success will no doubt stimulate them to a large extension of operations. In the circular issued by the Blyth River Company it is pointed out that in the case of war it is of the highest importance that there should be established works producing large quantities of the main lines of iron and steel goods for the production of the necessary war materials, and for the building of vessels, and for supplying the needs of those engaged in general business. If we reach the stage of establishing works for the manufacture of large and small arms, or for building war vessels, it will be better for us to trust to our own works, or to those of a State Government for the supply of the necessary iron, than to private companies or firms. The very protracted debate which has taken place upon this particular item shows its importance, and in view of the difference of opinion which has been expressed, even among the legal members of this Chamber, the appointment of the proposed committee can do no harm. If we ask the committee to take evidence, and to consider the probabilities of the manufacture of iron and steel being undertaken by any of the State Governments or by private individuals, great good will be done.Therefore I propose to vote for the appointment of the committee. There may be a difference of opinion in regard to the whole of the items included in the schedule. The honorable member for Tasmania, Mr. Cameron, pointed out that he was prepared only to go to the extent of giving a bonus to one industry in which Tasmania is really alone interested. He stated that spelter made from Australian ore was being produced in the Commonwealth at the present time. It is questionable, however, whether it can be said that it is being commercially produced here when we remember that the people who have been endeavouring to solve the problem have spent something like £130,000 or £140,000 in connexion with it ; I refer to the owners of the Cockle Creek works. The first machinery erected there, which was designed to carry out the Ashcroft process, cost upwards of £100,000. The process proved, however, to be too costly, and the whole of the machinery had to be laid aside. Under the new system between £30,000 and £40,000 has been expended, and with one furnace they are now producing a few ingots of zinc spelter. If we give a bonus for the manufacture of iron - and the production of iron is certainly a very extensive undertaking - I fail to see why we should not also give a bonus on the manufacture of spelter from Australian ore.

Mr Cameron:

– One industry is established and the other is not.

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

– The one is established practically to the same extent as the other. If iron works are to be encouraged by the

State, it matters not to me in what part of the Commonwealth they are established.

Mr Cameron:

– It is not proposed to establish them in Tasmania.

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

– The works will not be there, but iron ore will be taken from that State. If the problem of extracting zinc spelter from the low-grade ores of Broken Hill is solved, many hundreds of men will be employed in dealing with ores which in the past have proved unprofitable.

Mr Cameron:

-What about wire-netting?

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES · ALP; FLP from 1931

– I tell my honorable friend candidly that I should have preferred to have seen the local production of wire - netting encouraged by means of a 10 per cent. duty - just as we have dealt with other industries - instead of a bonus being offered. The whole problem is of such importance that a rigid inquiry is necessary as to the best method of establishing these industries in the Commonwealth. The possibilities are great, and the dangers of creating a monopoly are great. If there is to be a monopoly, I should prefer to see it in the hands of the Government of one of the States, or of the Commonwealth, rather than that it should be held by private individuals. For these reasons I shall support the amendment submitted by the honorable member for Bland.

Mr POYNTON:
South Australia

– I am not one of those who think that we have not deposits of ores in the States sufficient to enable these industries to be established. Of course it is questionable whether we have a population sufficient to warrant the establishment of the iron industry, but what I desire to impress upon the Government is that there is no reason why the passage of this measure should be violently hurried. The finances of the States are now in a very peculiar position. It is all very well to say that we shall have a surplus of £700,000 and that these bonuses will be paid out of that surplus. But it is impossible for anyone to say at the present time how we stand financially. It seems to me that the Government are adopting a suicidal policy in pressing on this Bill. I favour the bonus system as against protection, but I should prefer to “ gang slowly.” The latest returns show an enormous shrinkage in the revenue collected in several of the States.

Mr Kingston:

– The returns for last week are a little better, although, of course, we cannot go upon the returns for any one week.

Mr POYNTON:

– I admit that. Until the Tariff, as finally passed, has been in operation for some time we shall not know how our finances stand.

Mr Kingston:

– I told the honorable member what the effect of the remission of certain duties would be in South Australia, but he thought that I was wrong.

Mr POYNTON:

– As a matter of fact, up to the present time more revenue has been collected in South Australia than was collected under the State Tariff.

Mr SPEAKER:

– I will ask the honorable member not to discuss that question.

Mr POYNTON:

– With due respect to you, Mr. Speaker, I am referring to the financial position of the States as a reason why the Bill should be postponed.

Mr SPEAKER:

– Standing Order 270 reads as follows -

No member shall allude to any debate of the current session in the Senate, or to any measure pending therein!

Seeing that the Tariff is distinctly pending in the Senate, it is improper for the honorable member to make anything more than incidental reference to it.

Mr POYNTON:

– The fact that the Tariff is still pending in another place i3 a good reason why we should not be dealing with this measure. We do not know what the Tariff will ultimately be. The finances of the different States are in a very unsatisfactory position, not only in relation to the revenue received through the department of Trade and Customs, which has been taken over by the Commonwealth, but because of legislation which we have passed, and which we propose to pass. According to the authorities in some of the States, there will be a considerable shrinkage of revenue under the Postal Rates Bill, with which we have yet to deal, and we were told the other day by the Minister representing the PostmasterGeneral that an enormous loss had been sustained in the Postal department owing to the suppression of “ Tattersalls.” All these things lead me to believe that this Bill is premature. It is unnecessary that in one session we should do work sufficient for at least four or five sessions. Yet Bill is still being piled upon Bill. Certain measures which we have passed must necessarily affect the revenues of the States. For instance, the bonus on sugar grown by white labour will mean a loss of revenue in respect of the duties on sugar of from £400,000 to- £500,000. Then we have the shrinkage of revenue in other directions which I haveindicated ; and the increased expenditurewhich must occur in connexion with proposals contained in certain Bills now beforeParliament. It appears to me that itwould be well for the Government to allow this measure to stand over for a time. I. do not desire it to be understood that I should not vote for it if it were brought, forward at some future time, but I do not think that, at this stage, we should pledge the finances of the States to the extent of £250,000. The manufacture of iron and steel in Australia can only be a success with the co-operation of the States. We have noguarantee that the States will undertake totake their material from the manufacturers of iron and steel who are to be supported by these bonuses, and certainly we have noprospect of the successful establishment of the iron industry in Australia unless theState Governments agree to take from thelocal producers the material which they require for the construction of railways and bridges. If they do not, our money will be practically thrown away. Is there to beno termination to the present session? Apparently not. AVe have been told that aBill to prevent monopolies among manufacturers is yet to be introduced, and we have to deal with the Electoral Bill, which hasalready passed through another place. I thought that honorable members would becalled upon to-day to deal with that measure, and if there is any work which we should undertake at the present time it is thatwhich has been completed by the Senate. It seems to me to be absurd for the Government to introduce a contentious measure like this at the present stage, especially asthere may be an honest difference of opinion whether these industries should .be undertaken by the Commonwealth or whether State assistance should be given to private enterprise. The Postal Rates Bill has passed through the. Senate and we should deal with it, while the Electoral Bill, which is a. very important measure, should be passed as speedily as possible, because I believe that at least two years must elapse before a single roll is compiled under it. In the course of his remarks this afternoon the honorable member for New England repeated the old fallacy that the decay of the iron trade in England was the result of the adoption of a protective policy in

America. I interjected that the royalties exacted in England were an important factor in the decline of the industry. My statement is corroborated by the report of a commission which investigated the causes of the decay of the iron trade in Britain in 18S6. That document shows that, whereas in the mother country it costs from 3s. to 6s. per ton for royalties upon the material necessary to produce one ton of pig iron, in other parts of the world it costs only from 5d. to 9d. per ton. It also points out that in England a number of furnaces were closed down, not because of the operation of any particular fiscal policy, but because of the royalties charged. These blast furnaces were driven to America as a result of the enormous taxes levied by land-owners upon both coal and iron. Indeed, it was actually found that to import iron ore from Spain and manufacture it in England was cheaper than to manufacture it from the crude English ore. The report mentions one instance in which a land-owner has received over £3, 000,000 in the shape of royalties. I do not desire to quote extensively from that report, but I can prove beyond question that the royalties charged in England were a great curse in connexion with the iron trade. The enormous increase of population in the United States has been a potent factor in -the successful establishment of the industry there. In Australia, however, we have a very small population. I hold that the consideration of this Bill may well be deferred till next session, when possibly we may know the exact position of our finances. In deciding that a number of public buildings in connexion with our Postal department shall be constructed out of revenue, we have recently departed from the policy which has hitherto been adopted in the various States, and until we know exactly what the Tariff will produce in a normal year, we shall not be in a position to judge what money is available for experiments in connexion with the development of the iron industry, or of any other industry.

Mr FOWLER:
Perth

– The condition of honorable members who have survived this debate, .and especially of those upon the Government side of the House, appeals very strongly to my humanitarian tendencies. I do not intend to make a long speech, because I believe - despite what has been said to the contrary - that the 38 0 z

Minister for Trade and Customs is at all times open to conviction, and that arguments which are worthy of consideration will receive due attention from him. I have heard it said of the right honorable gentle-t man - although the comparison may be somewhat uncomplimentary - that in one respect he resembles a very popular animal in the Emerald Isle, which, when being taken to market, is usually driven by its owner in the opposite direction to that which he desires it to travel. Possibly, in the long speeches we have heard there may be some deep-laid scheme to enable the Minister to continue to his eventual confusion upon the course which he has evidently mapped out for himself. However, by putting my views as temperately and briefly as possible, I hope to prove that the popular opinion regarding the right honorable gentleman is altogether unjustified. I think that the suggestion of the honorable member for Bland is one which is so reasonable that the Minister need have no hesitation in accepting it. We are asked to decide a very important question upon extremely short notice. Admittedly, it has been before the House for some little time ; but when one considers the magnitude of the issues .involved, and the lack of knowledge which’ exists concerning the quality of the iron deposits throughout Australia, it seems absolutely necessary , that we should possess more definite information before being asked to commit ourselves to any particular course. I am aware that deposits of iron are known to. exist throughout the Commonwealth which are likely to prove of commercial value, but there are some portions of the continent where deposits occur which have not yet been tried, and which ought to be tested by the Government before we are asked to deal with this matter. For example, in Western Australia there are excellent deposits of iron, so far as one can judge from a superficial examination. But I know perfectly, well that iron ore may, to all intents and purposes, appear to be everything that one could require, and yet an examination of it by a competent chemist may reveal the presence of some chemical which renders it utterly useless for commercial purposes. That is one consideration which ought to make the Government pause. We have also to consider the minerals which are used with the ore in the production of pig-iron. In America the great secret of success has, been the ability to bring the raw materials together at a very low cost ; and we have to consider the flux and coal as well as the iron. While I have no doubt that there is at least one company prepared to go on with the industry if the very munificent proposal of the Government is accepted by the House. I hope it will not bo established merely in one particular State. I do not see that Western Australia would derive any particular advantage from the expenditure of the money, say, in New South Wales, or even in Tasmania.

Mr Kingston:

– What about the Australian point of view ?

Mr FOWLER:

– I am speaking as a Western Australian representative who considers the general interests of the Commonwealth : and if I can show that the Government proposal is neither to the interest of the general community nor to that of my own State, I go far to justify the vote I shall give. Either the conditions are favorable to the establishment of the iron industry at the present time, or they are not favorable ; and if they are favorable I fail to see why a bonus is required. Wherever conditions exist which are likely to enable capital to be advantageously employed, there capital will go ; we see that all the world over. One reason which has prevented Australia entering on this industry is, in my opinion, the fact that a very large consumption is necessary before investment of the capital required can be justified or undertaken. 1 doubt whether, even at the present time, the consumption of iron in Australia is sufficient to justify the expenditure necessary to establish the industry.

Sir William Lyne:

– That has been proved over and over again.

Mr FOWLER:

– I doubt it very much. We may have one company starting in a kind of way, but it- would be nothing short of a calamity to Australia if the industry were attempted in any but the most uptodate and thorough-going manner. If the time is not suitable for the establishment of the industry, do the Government imagine that a bonus will overcome the difficulty? Supposing a temporary impetus were given to iron production, are the Government prepared to come down and ask ‘for still further assistance when the present bonus has been expended and further help is said to be necessary? I do not think it would be safe for the Government to attempt any such course. If the industry cannot be started without a bonus, it -is certain that a further sum of money will be required as soon as the term mentioned in the Bill has expired. It takes a considerable number of years to establish an industry of this magnitude in the proper way ; it is not a case in which a man may commence operations today, and turn out his material for sale tomorrow. We have been told of the large amount of capital expended purely by way of experiment, and I feel sure there will be many difficulties to overcome, and that we must expect much expenditure which, in a sense, will be money thrown away, before the actual commercial production of iron is established in the Commonwealth. The Government ought to hesitate before they commit themselves to a course which will inevitably mean a set-back for the iron industry, or a demand for more assistance. Under the circumstances, the very least the Government should do, in their own interests, is to have an inquiry, to enable them to lay before the House and the country some definite information which would possibly justify us in taking the very course they propose. I do not wish to deal with the fiscal question, although it is very hard not to refer to it incidentally. I should like to say, however, that even in the United States, which is held up to us as a striking illustration of the benefits of a protectionist policy, the shrewdest and most capable thinkers - even the great economist, Carey - are pretty well agreed that the conditions which enabled that country to develop such a magnificent iron industry were essentially, first, her natural resources, and, secondly, the development of her population. Those were the two conditions required, and when the increase of population justified the step, the industry was undertaken on a sound and, at the same time, very large scale. From that time until now the progress of the industry, has been in proportion to the general development of the country and the increase of population. In England there has been some decline in the industry, and the causes have been very clearly shown. There it is largely a matter of royalties - the owner of the natural resources coming in to exploit the community.

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

– There has been only a temporary decline in England.

Mr FOWLER:

– And the reasons are those which I have indicated. If the British Government will take the necessary steps to remove these depressing and oppressive charges, the iron industry will be revived to its old magnitude at the very least.

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

– It has revived.

Mr FOWLER:

– The industry has a good deal of leeway to overtake yet. In Great Britain and America it is not so much a question of fiscal policy as, first, a question of the accessibility of the raw material, and, secondly, the increase of population. In view of the problem we have to solve, the Government ought to take time to consider whether the necessary conditions exist in Australia to justify our embarking on this very large venture. An honorable member has expressed the opinion that if influences hostile to the people as a whole were created by the policy of the Government, the fiscal barrier could easily be removed. But it is very difficult indeed to remove such a barrier when once it has been created ; it is much easier to create an evil ofthe kind than to kill it. In the United States the people are seriously considering the gigantic task of killing these trusts and syndicates which exploit the community. Although here and there some action has been taken - and in one particular instance the Government took very strong action successfully - it is undeniable that these trusts and syndicates are likely to continue to flourish to a degree which it will tax the utmost resources of that resourceful people to overcome. During a recent debate honorable members had a lesson as to the effect of developing industries by the means now proposed. If we follow a policy of artificial development, wo shall create a Frankenstein monster which will ultimately rule even the Commonwealth Parliament. I for one would hesitate before committing myself, even tentatively, to a policy of the kind. The alternative proposal is one which by no means can bo regarded as wildly experimental. I refer to the proposal that this particular industry should be made national, in the sense of being owned and regulated by the Commonwealth or by one of the various States. The time has gone when the principle of collectivism needs to bestrenuously defended. That principle is actually being vindicated by those who are most strongly opposed to it in the United States. Even the syndicates, which are composed of men who urge freedom of contract and private enterprise, are essentially carrying out the principle. A few years ago it was the fashion to decry anything that savoured of socialism, as being opposed to the spirit ofprivate enterprise, which had built up many marvellous industries, especially in the mother country. But in the United States the magnitude of the industries surpasses even many in the mother country, and the former are essentially the result of collective action on the part of individuals - essentially the operations of a scheme which is socialistic to a very high degree. At one time we heard a great deal about the necessity of commercial schemes being supervised and controlled by those directly interested in them. That argument can no longer be applied, for the simple reason that a syndicate is in precisely the same position as a State in respect to any enterprise it may have undertaken. A syndicate would hand over its responsibilities of management entirely to a paid individual, in just the same way as a State Government would do. If it were considered desirable for the Commonwealth or one of the State Governments to establish the iron industry, we could easily obtain the services of one of those marvellous captains of industry in the United States who would undertake to produce iron on commercial principles under the control of the Government, just as he would perform the same service for a syndicate. It would not be wise for the Government to engage in the production of iron, except upon a reasonable commercial basis. We cannot escape from the commercial principle, however much we might like to do so. I believe, however, that iron could be produced under such conditions of nationalization as would enable those who require the raw material to obtain it from the Government as cheaply as they could procure it elsewhere, and at the same time to secure the Government a considerable profit. I see nothing in the alternative proposal that need make any honorable member hesitate to accept it, providing that we are satisfied that a reasonable amount of success will attend our efforts. Without such evidence, I shall not agree to the present proposal, and I hope, therefore, that the Government will accept the amendment of the honorable member for Bland.

Debate (on motion by Mr. Fuller) adjourned.

page 13554

ADJOURNMENT

Suspension of Fodder Duties

Motion (by Mr. Deakin) proposed -

That the House do now adjourn.

Mr FULLER:
Illawarra

– I desire to know from the Minister representing the Prime Minister, whether he has received any intimation from the Government of New South Wales, in reference to the suspension of the fodder duties?

Mr DEAKIN:
Protectionist

-I have received no intimation from them whatever.

Question resolved in the affirmative.

House adjourned at 10.35 p.m.

Cite as: Australia, House of Representatives, Debates, 11 June 1902, viewed 6 July 2017, <http://historichansard.net/hofreps/1902/19020611_reps_1_10/>.