House of Representatives
21 October 1904

2nd Parliament · 1st Session



Mr. Speaker took the chair at 10.30 a.m., and read prayers.

page 5937

PERSONAL EXPLANATION

Mr KENNEDY:
Moira

– This is the first occasion since I entered public life that I have asked the indulgence of the House to make a personal explanation. I do so now because of the remarks of the Prime Minister last night as to something which he stated I had said. As I thought at the time that I might unwittingly have uttered what I did not intend, or might have conveyed a wrong impression, I waited until this morning to reply, so that I might see the official report of my speech. I find, on reference to it, that I used these words -

It is the duty of the Government to insist on the reasonable despatch of public business. This is the second occasion on which I have entered my protest, and if the conditions to which I object are allowed to continue, I shall take the very first opportunity that presents itself to express by my vote a very decided opinion about the matter. I have no hesitation in saying that if such an occasion again arises the Government should not allow the Opposition to determine, so to speak, the hour at which the consideration of public business shall cease.

I object to any Government allowing the Opposition fo determine the conduct of business in this House.- I stated last night that I had on a former occasion - I think when a previous Government was in power - protested against the waste of time which we have had this session. What I meant when I referred to my vote was that I felt that I had not done right in assenting to the proposition that the honorable member for Bourke should be allowed to continue a speech to-day which he might have attempted to conclude in the three-quarters of an hour then available to him. I had no- wish to convey to the Government the intimation that I would at some future time vote against the principles to which I am committed, in order to wreak vengeance upon them, and to gratify a feeling- of resentment or pique. Those who know me are aware that, no matter where I may sit in this Chamber, I shall never allow personal feeling to lead me to commit a violation of my principles. I felt somewhat hurt, there fore, that the Prime Minister should have thought that I was making a threat.

Mr McDonald:

– We accept the honorable member’s apology.

Mr KENNEDY:

– I am not making an apology. It will be generally admitted .that I do not hesitate to say what I mean, and what. I wished to convey last night was that I was sorry that I had agreed to allow the honorable -member for Bourke to further waste public time by continuing’ his speech to-day.

Mr REID:
Minister of External Affairs · East Sydney · Free Trade

– At the time, I “thought that the honorable member for Moira was making a threat as to what he would do with the Government, and I am sure that’ he would be the first man to feel that under such circumstances I would have been less than a man had I tamely submitted to it. His observations as to the value of public time, and the need for pushing on with business, are such as no one can take the slightest exception to.

page 5937

QUESTION

FREMANTLE FORTIFICATIONS

Mr CARPENTER:
FREMANTLE, WESTERN AUSTRALIA

– I wish to know from the Minister of Defence if he has any further information to give the House with reference to the gun which is to be transferred from South Australia to Fremantle?

Mr McCAY:
Minister for Defence · CORINELLA, VICTORIA · Protectionist

– In the event of the Fremantle fortifications being proceeded with, it is proposed to transfer there from Adelaide a mark 7, 6-inch breech-loading gun, which is the latest pattern of breechloading gun used for land service by the British Army. The honorable member therefore need have no fear that the weapon will be obsolete.

Mr Carpenter:

– What about the carriage ?

Mr McCAY:

– I forget the technical description of the gun mounting, but I can assure the honorable member that it will be of modern design.

page 5937

MINISTERIAL STATEMENT

Mr REID:
Minister of External Affairs · East Sydney · Free Trade

– I promised last night to make a statement this morning with reference to the conduct of public business, but as I understand that it is the intention of the Opposition to make another attack on the position of the Ministry on Tuesday next, I think it better to postpone what I have to say as to the business of the session until that attack has been disposed of.

page 5938

QUESTION

CONVERSATION IN THE CHAMBER

Mr SPEAKER:

– Since the business of the day was called on, I have been waiting for three honorable members who were conversing across the Chamber to cease before asking the honorable member for Kooyong to proceed with the question of which he has given notice. 1 hope that conversations of this kind will not be repeated. I make that request: in the interests of order, and of honorable members themselves.

page 5938

QUESTION

LETTER-BOX CLEARANCES

Mr KNOX:
KOOYONG, VICTORIA

asked the PostmasterGeneral, upon notice - .

  1. ’ If he. is, aware that the withdrawal of the late clearances of letters’ has created great inconvenience’ in several of the suburbs of Melbourne ?
  2. – As presumably . the Department does not wish to reduce postal facilities to the public, what are his intentions in regard to this matter?
Mr SYDNEY SMITH:
MACQUARIE, NEW SOUTH WALES · FT

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

  1. The Postmaster-General is aware that complaints have been made through the newspapers, that inconvenience has been caused by an earlier clearance of letters in some parts of the suburbs pf .Melbourne, and also that, in - some instances, such complaints .were made in ‘suburbs which were not affected, and in which no change has been made. The earlier clearance has been made experimentally in order that letters posted in the suburbs for Ballarat, Bendigo, and intermediate places, might have the advantage of despatch by the trains leaving at 2 a.m.
  2. It is not the desire of the Department to reduce postal facilities to the public, but rather to increase such facilities, and it is the intention of the Postmaster-General to inquire fully as. to the night clearances, with a view to make them as convenient as possible to the whole of the persons affected, and to ‘secure the early despatch of the letters posted at night in tlie suburbs.

page 5938

MANUFACTURES . ENCOURAGEMENT BILL

Second Reading

Debate resumed from 20th October (vide page 5895), on motion by Sir William Lyne -

That the Bill be .now read a second time.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Some complaint’ was made last wight about what was termed the wilful delay of the Opposition in dealing with this measure, and that sentiment has found further expression this morning. Lt is rather singular that those who have’ made the complaint are for the most part absolutely opposed to the Bill, while those who are supporting it have had nothing whatever to say on the subject. The honorable member for Moira has told the House that I have been wasting public time, and that he felt that he had neglected his duty in not compelling me to conclude my speech last evening. If he feels so keenly about the waste of public time, why did he not protest in his place yesterday when another matter-

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

– Is the honorable member in order in replying to a personal explanation ? , >.

Mr SPEAKER:

– I was on the point of calling the attention of I he honorable member for Bourke to the fact that he must discuss the Bill, and not the conduct of the honorable member for Moira. A personal explanation may not be d’-‘bated.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Of course, I bow to your ruling, Mr. Speaker, but the honorable member for Moira was one of those who complained of my action in wasting public time.

Mr SPEAKER:

– The personal explanation of the honorable member ‘ for Moira may not be debated.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I did not desire to refer to his personal explanation, but to what he said last evening. However, the matter is of no great importance. The fact’ is ‘that a great deal of time was deliberately wasted yesterday by those who complained of my action. I was willing to proceed with my speech, but at twenty minutes tQ eleven .o’clock, when the debate was . ad;journed, the House was tired, and honorable members wished to go home. . The importance of this measure warrants us in occupying same little time in discussing it. Its issues, are so wide, and the amount of money proposed to be expended is, comjparatively speaking, so large, that I, foil one, would be the last to complain of a full and fair consideration _ of the whole , pro’posal. Then, too, the Prime Minister last night made a very vigorous attack upon theprinciples of the measure, and as the report of his speech will be sent all over theCommonwealth, those Who differ from him have surely the right to state their views, at reasonable length. I do not know ‘how the Minister of Trade and Customs feels in regard io the matter ; but I should” think that,’ after the attack which was made on the principles of ‘ protection, and q£ bounties, which I imagine are dearest to his heart, he will be induced to put beforethe House the opinions of the other half of .the Government on this subject.

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

– The honorable member is stating the Minister’s views for him.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– The honorable member for Parramatta reminds me of those insect pests in the district which he represents, which spoil all that they do not destroy.

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

– Very severe; but it comes from an insect.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I asked last night why it is that free-traders who oppose the Bill continue to repeat the question. “Why is there a need for a bonus?” They affirm that our deposits of iron ore are very Large, that their quality has been proved beyond doubt, that there is a certain market here for the iron that may be produced, and that under these circumstances there is a good opening for capitalists without State assistance in any shape or form. These statements are pertinent, and require to be answered, and I shall endeavour, to the best of my ability, to reply to them. The first answer lies in the fact that the business of manufacturing iron is distinct from almost every other. It requires the investment of a large amount of capital - an amount so large that probably no individual would be prepared to enter upon it. Those who might be disposed to combine together upon a co-operative Basis, or upon the share system, would naturally be timid about incurring a large outlay unless they had some assurance that they would be able to obtain a satisfactory price for their goods.

Mr Fowler:

– Are not those good arguments in favour of nationalizing the industry? ; Mr. HUME COOK.- If the honorable member will kindly wait until I have concluded my remarks, he will find it unnecessary to ask that question. Those who are most deeply interested in the iron industry, of Australia are the importers, and we know . from, past experience that whenever an attempt is . made to bring locally-produced goods into competition with the imported article, the- importers combine together with the object of crushing out the local production. Evidence was given before the Iron Bonus Commission, that the price of iron, which stood at £8 per ton, was reduced to ^3 10s. per ton immediately local competition was threatened in New South Wales. As a consequence of this the local iron works had to be closed down, and upon the local competition being swept away price’s were restored to the original figure. Evidence to this effect was given by Mr. Robert Morison,. on the 16th May, 1903, at questions 2259 and 2260. Mr. Morison said -

When we were producing iron in the Fitzroy district, pig iron cost about ,£8 a ton; but afterwards it fell to about £3 10s. a ton, and that caused the works to be closed.

Mr Lonsdale:

– Was not that reduction owing to a general fall in the price of iron all over the world ?

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– No; not at that time. It was the result of an attempt on the part of the importers to crush out the local producer.

Mr Lonsdale:

– The local iron works had not the material with which to carry on.

Mr SPEAKER:

– The honorable member for Bourke is entitled to make his speech without the assistance of the honorable member. If the honorable member for New England, who has already spoken, persists in his present course of conduct, he will seriously interfere with the honorable member for Bourke, and will be acting very unfairly.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– It is well known that tactics similar to those I have mentioned are resorted to in all. cases where local competition is threatened. In view of the conditions to which I have referred, some guarantee must be given to those who engage in the iron industry that they will be protected, for some time, at least, against the unfair tactics resorted to by the importers. In the absence of such a guarantee - such as might be given by the States Governments agreeing to take all their supplies for a time from the local manufacturers - it is necessary for us to grant’ a bonus, or to adopt some other method. It has been stated that if the persons interested in this business could induce the States Governments to co-ordinately agree to take from them all their supplies for a certain number of years; at the average prices now obtaining, they would not require a bonus’; but it- is clear that the States’ Governments cannot or will not enter into such an arrangement. Therefore, we shall need to give the manufacturers such a guarantee as would be afforded by ‘our undertaking to purchase their output from them at a ‘satisfactory average price, or pay them a bonus. Another reason is that our market, though in a sense fairly extensive^ presents better opportunities for the operations of trusts than do the larger markets of the world. After all is- said and done; ;£6, 600,000 worth of steel and iron- goods would be a. mere flea-bite compared with the. value- of similar, commodities annually consumed . ‘in .other parts of the world. Our requirements in that direction could be controlled, in such a country as the United States, probably by one man. Under these circumstances we are justified in stepping, between the producer and the importer in order to secure to the public’ ‘ benefits which cannot be. conferred under ordinary conditions. I find that the average imports of all classes of iron and steel goods, including metals and machinery, into the Commonwealth represent a value of about £5,000,000 per annum. That, of course, is the present importation. If our business grew as it might and should dch- as I” shall presently show - our consumption cif iron and steel goods would increase very rapidly in the near future. Taking, however, our present requirements as a basis, we find that something like 1,500,000 tons of iron ore would have to be treated each year, and in addition to that, 1,500,000 tons of coal would be used in smelting operations. Probably 500,000 tons more would be consumed, because coke is the principal fuel used in smelting operations, and we all know that a certain amount of waste occurs in the conversion of coal into coke. Therefore, we may fairly assume that 2,000,000 tons of coal would be required. Then, again, thousands of tons of various kinds of fluxes would be used. Incidentally, therefore, the iron manufacturing “business would af- ford considerable employment. I am not favouring the granting of these bonuses merely because they would afford employment. If that were our only object, the taunts and jeers of free-trade honorable members would be justified. At the same time, it is satisfactory to know that probably something like 3,000 person’s would find employment in the iron industry, that some 15,000 persons would be sustained by the expenditure in connexion with it, and that the workmen would receive fair rates of wages, according to the Australian standard. If is estimated that fully .£500,000 would be required annually to pay the wages’ of the operatives, and this fact must afford some consolation to those honorable members who observe that the adult population of the Commonwealth is decreasing, instead of increasing.

Mr Fowler:

– Where?

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– All over Australia.

Mr Fowler:

– The population is increasing rapidly in’ Western Australia.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I grant that for the last year there was an increase in that: State.

Mr Fowler:

– And it is still going on.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Even so ; that does not alter the fact that for the whole of Australia the emigrants exceeded those coming into Australia -by over 6,000 persons. I am speaking of the Commonwealth,, and not of any particular State. The advancement of the Commonwealth is our concern, and, although we may rejoice when we see that this State or that is increasing its- numbers, it must be a matter of1 deep regret to know that the adult population of the Commonwealth as a whole is decreasing. It behoves us to find out the cause, and, if possible, to apply, the remedyI believe that we may check the present falling off bv” providing further employment for our people, and, there-‘ fore, the establishment of such an industry as that contemplated would ‘be a step in- the right’ direction. The honorable and learned member for Darling- Downs- has just placed in my hands the population returns for the Commonwealth. These show ‘that there is a slight increase in all the States. But the addition of children to the total population will not make up for the adults lost to it.’ We want, not merely the natural increase of births, but a regular inflow of adult workers in addition. The establishment of the iron industry, would help to find them’ employment. Now it may be pointed! out that a large initial outlay would have to be incurred in connexion with the erection of the necessarybuildings and plant in connexion with the proposed iron works. These alone would provide a large amount of employment. It is not, however, this consideration which leads me to support the measure. I ammore impressed with the ultimate advantages which are bound to accrue from the production of the raw material which forms the very basis of our largest manufacturing concerns. Some reference has been made to Canadian experience. Some honorable members have stated that the iron industry in that country has proved a failure, and” the honorable and learned member for Angas some time ago endeavoured to prove, by quoting statistics, that the payment of the bonus, in Canada, so far from having stimulated the iron industry, had absolutely failed’ in its object. Further than that, lie endeavoured to show that the position of the industry would probably have been better if no bonus had been granted. He showed that the production of iron iii 1885, two years after the establishment of the bonuses, amounted to 29,000 tons, and that in 1:900 the’ output had increased by only 5,000 tons. On the other hand, the exports had been reduced from 54,000 tons in 1885 to 5,500 tons in 1900. These figures are approximately correct, but it is singular that ever since 1900 a very substantial increase has taken place all along the line. I took the trouble to extract from the Canadian Year Book, which was quoted by the honorable and learned member, the figures for 1901. I find that in the year following that quoted by the honorable and learned member, the production of pig iron increased from 5,503 tons to more than 83,000 tons - an increase which is almost unprecedented in connexion with that business. In 1902, 71,664 tons were produced, whilst the exports had also increased by leaps and bounds. In 1901, the export of iron ore amounted to 59,737 tons, and in 1902 it had increased to 527,310 tons - a difference in output of 467,573 tons. Surely these figures afford the best contradiction of the affirmation that there was no substantial increase in the iron output in Canada during the years in which the bonus operated. The honorable and learned member also omitted from his calculation one very important circumstance, namely, the increasing local consumption of the locally-produced article. In the Canadian Y ear-Book, the following footnote is attached to the statistics I have quoted -

The figures represent the excess of the total production of iron ore in Canada over the quantity of Canadian ore used in Canadian furnaces.

So that as a matter of fact the honorable and learned member took no account of local consumption,, and the figures which I have quoted represent an addition to that local consumption. Everybody knows that Canadian manufacturers are progressing at such a rapid rate that they are at once the envy and the admiration of quite a number of people. The proof of their growth is to be found in the footnote to which I have directed attention. . But the most striking testimony that one could possibly obtain of the successful operation of the iron bonus and the duty in Canada is that the American Steel Trust proposes to establish iron and steel works there at a capital outlay of -£2,400,000 in an endeavour to secure the Canadian market against the local manufacturer.’ That trust is the greatest concern of its kind in the world, and if it could successfully compete in Canada without being under the necessity of taking its capital and furnaces there, we may be quite sure that it would do so. It would not incur such an enormous outlay without very great justification. Yet we know that that trust,, recognising the utter impossibility of competing with Canadian manufacturers in their own country, has decided to take its capital, engineers, and employes to the Dominion, with a view to commencing operations there. The same thing may possibly occur in Australia.

Mr Austin Chapman:

– The establishment of the industry will provide some employment. .

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– We should then bring artisans here instead of, as at present, permitting them to send their goods here. Capital would be invested locally instead of elsewhere; I repeat that the greatest tribute which can possibly be paid to the success of the Canadian experiment is the acknowledgment of defeat on the part of the American Steel Trust by its transfer of capital to that country. The honorable and learned member for Darling Downs contributed to this debate not merely a very practical speech, but a very well considered one. He made one point which requires no emphasis at my hands. He dwelt upon the utility of establishing the iron industry from the stand-point of providing means of defence in case of national emergency. But there are other considerations which are almost as important. Within the past few weeks deputations have waited upon the Premier of New South Wales, asking him to give to local manufacturers certain contracts for the supply of engines for that State, or to undertake the work as a State concern. Only to-day the report of an interview with him upon the subject is published in the newspapers. In connexion with our railway construction generally, we are almost absolutely dependent upon oversea supplies. The deputation in question pointed out that during the past’ five years something like ,£400,000 had been paid for engines and railway material in excess of what might have been necessary had there been local production. It would be a substantial advantage to our people to be able to purchase locallyproduced iron. Our manufacturers would not then be under the necessity of carrying such large stocks as they do at present. They would also be able to undertake contracts which they dare not accept under existing conditions, because of the uncertainty respecting supplies. At the present time, many contracts go to the old country, because local firms are not sure that they will be able to obtain a supply of iron, and also because they cannot definitely estimate its cost, or the conditions under which they will receive it. An assured local supply would therefore, mean a reduction in the amount of interest upon the capita] outlay necessary for the purchase of stocks. In connexionwith our railways there would be a very great advantage in the establishment of iron works. Indeed, the marvel to me is that under existing circumstances, one of our States has not seen fit to enter into the industry upon its own account. The largeest consumers of iron and steel in the Commonwealth are the various States Governments. In a great State like New South Wales or South Australia, where large deposits of ore exist, it is a wonder that the Government have not established works upon their own account, in order to supply their own needs.

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

– The honorable member for Hume was in power in New South Wales upon two occasions, and he did nothing in that direction.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– I am not concerned with what individuals may or may not have done. I am merely expressing wonder that those who have been in authority- - irrespective of whether they belong to the free-trade or the protectionist camps - have not recognised the advantages of producing their own iron for local requirements. The Premier of New South Wales, though a free-trader, realizes that something might be done in this direction. Speaking to the deputation which waited upon him in regard to the local manufacture of locomotives, he said -

During the term of office of this Government, it was its intention to take some very vigorous action in the direction of establishing that industry. The Government would not be frightened by being accused pf breaking some of the canons of their old free-trade principles.

To that sentiment, of course, I can ‘only say, “Hear, hear.” I am delighted to know that the New South Wales Government is prepared to take into consideration the advantages which they would derive as consumers of this material. As a fact, the States Governments would be the first to benefit by the establishment of the iron industry. In the next place, those manufacturers whose raw material is chiefly iron and steel would be greatly conveniences by having a local market in which they could purchase local supplies. Then it must be recognised that there will be great openings for a further consumption of iron and steel, not only in regard to our railways, but also in the manufacture of motor-cars. But the chief point which I desire to make has reference to an industry which hitherto has received scant attention in Australia. I refer to the business of shipbuilding. Honorable members scarcely need to be reminded that Australia is an island continent. In my judgment, our people have wisely determined to ‘retain their European characteristics, and to maintain the British standard of living. Now, we are almost surrounded by other countries which are peopled with races entirely different from our own; and to whom at no distant date we shall sell large quantities of materials manufactured by Australians under Australian conditions. When we commence this export trade - as we inevitably shall - we ought to be assured that the ships which carry commodities to our customers shall be made in our own shipyards. Nevertheless, I fail to see how we can ever embark upon the shipbuilding industry unless we first undertake the manufacture of iron. In Britishspeaking countries there is no industry so great as that of shipbuilding. But we shall never succeed in establishing in connexion with Australian- affairs that position of which we sometimes dream ; we shall never make Australia not” merely the manufacturing but the maritime power of the Pacific until we have very largely developed the manufacture of iron and steel. We have a pretty extensive coastal trade at the present time, and if our population increases and our manufactured goods are to be transferred from State to State, that business must also increase. Consequently we shall require to employ a large number of shipping carriers. My ideal is that all these ships should not merely be locally-owned, but locally-built from locallyproduced iron and ‘steel. Not until we have taken into consideration all the giant possibilities of this great enterprise shall we rise to the heights to. which we sometimes aspire. I hold that Australia will some day become the trade centre of the Pacific. It is rather remarkable to note that even now there are very great forces at work which are tending towards the consummation of that great end. In Japan to-day, efforts are being made which will eventually lead to the opening up of a large trade with Australia. The whole of the British-owned press in Japan is strongly advocating the utilization of British and Australian manufactures. Articles are constantly appearing in the newspapers there, urging Australia to wake up to the fact that America is gradually securing the Japanese market, which Australia ought to control. In an article recently published by Mr. J. W. Styles, after a visit to the East, some striking observations are made regarding what may be done in Japan and other countries. He says. amongst other things -

While we are seeking to enlarge our markets . on the other side of the globe, America is in deadly earnest securing for herself what will ultimately prove to be one of the greatest of the world’s markets. As a further indication that she really means business, a huge cargo carrier, the Mongolia, a vessel of 22,000 tons, was on her maiden trip from San Francisco to the Far East.

He says further -

A marked feature of the awakening of the East, is that the wants of the people gradually increase through contact with western civilization. The vast number of troops now being fed, to some extent, on European diet, will have acquired a taste for stronger fare than they have hitherto subsisted on, and will, on returning to their native land, demand bread, meat, and butter.

Those are food supplies which they have not hitherto ‘ been using to any great extent ; but I agree with Mr. Styles that, as the result of the conditions under which they are now fighting, these men, who find that such food is necessary to their warlike operations, will, on returning to their native land, ask for more of our great products. I have mentioned these facts as indicative of the nature of the trade which some day will be done as between Australia, a European-controlled country,, and those who are not so controlled - our neighbours in the East.

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

– Some day.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– If we are as selfreliant as we hope to be, and develop our resources as we ought to do, we shall attract :population to our shores just as the United States and Canada have done, and when’ we have secured an increased population in this way, naturally enough, our surplus products will have to be exported, and where better than to the countries of our near neighbours, who at present are supplied from other places. This question, however,, is so involved with the fiscal issue, that it is almost impossible to consider it without reference to that matter.’ There are honorable members in this’ House who are prepared, I .believe, to vote for the bonus, but who would not be prepared at a later, stage to support the imposition of a duty to assist the industry. Others are prepared to support a duty, but are not willing to vote for a bonus. In my judgment, both will be required. The competition to which I have previously referred, and the unfair tactics and practices of which I spoke in the earlier part of my address, require to be continuously counteracted on behalf of the Australian public. In addition to the payment of a bonus, we shall, therefore, have to impose a duty to maintain the industry, and to secure to the consumer the advantages which local competition always means. But is is rather disheartening to me to know that, although we seem to have established the principle of protection in Australia, there is a never-ceasing assault upon it, and that for a long time to come, no definite stand will be taken similar to that adopted in America tb-day. In that great country, no one dreams of altering the protective policy. The value of a continuous policy is everywhere recognised. Even those who belong to what mav be termed the freetrade party in America, do not go to the length of altering the Tariff, save in such directions as might still be considered in Australia,, at all events, to be protective. My view is that Australia, like America, must have a continuous line of policy. When we have once adopted a policy for

Australia–

Mr SPEAKER:

– The honorable member will recognise that I cannot allow a discussion on the relative merits of protection and free-trade during the debate on this Bill. The Bill provides, not for a duty but for a bonus. The honorable member has been permitted to refer incidentally to the possibility of protection through the Customs being required later on to assist the industry : but that incidental reference is all that I can permit. A general discussion on the question of whether freetirade or protection is the better policy for Australia, is certainly outside the scope of this debate.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– If I had been permitted to complete my remarks on this phase of the question, Mr. Speaker,, I think von would have found that I did not intend to follow the lines which you have mentioned. I merely wished to say that, whether the policy of the country be that of free-trade or protection, we ought to be assured of its continuance, and that a constant change from one policy to the other is most undesirable.

Mr SPEAKER:

– That is a discussion of the fiscal issue, and the fiscal issue, so far as I have been able to observe, is not dealt with in this Bill. As I have mentioned, it is a Bill providing, not for the imposition of duties, but for the payment of a bonus. I waited for the honorable member to develop his line of argument in order to see the direction it would take, and it seemed to me that he was going outside the scope of the Bill.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– Very well, sir. I shall content myself by saying that the payment of a bonus in respect of this industry is really an integral part of our fiscal policy. If we desire to develop those great industries to which the honorable and learned member for Darling Downs referred - the agricultural implement trade and kindred manufactures - we shall require to be assured of a certain consumption of the article to be produced as the result of the passing of this measure. The payment of these bonuses is designed to bring about the production of pig iron from Australian ores, but the production of pig iron would be wholly useless if there were to be no consumption of it, at a later stage, by our manufacturers. We should have the raw material for our iron trade produced locally, and I would not for a single instant countenance the payment of a bonus - the expenditure of these large sums of money, the outlay of the very great amount of capital which is involved, and perhaps the wrecking of some private fortunes, as well as the loss of some public money - if I were not assured that when the pig iron is produced there will be a sure, steady, and certain consumption of it. That is the whole point of my argument. We require to be assured that some continuous benefit will be derived from the payment of these bonuses. If this be not assured to us, we had better abandon at once the idea of paying them. In these circumstances, I think it will be necessary for us to maintain an undisturbed line of policy with respect to the iron industry, and in regard to fiscal matters generally, for unless we do so we cannot and will not succeed in the way that we hope. The only other point I desire i.o make is in regard to the’ control of the industry. Almost every honorable member, has expressed his views on this aspect of the Question. I am quite free to vote either for a State-owned ironworks or for the pay- ment of the bonus to ‘ private individuals, i Speaking for myself - and my previous re-j marks should easily indicate what I am1 now about to say - I should prefer to see one of the States undertake the establishment of this industry ; but I am given to understand that there is no immediate prospect of that being done. In these circumstances, I have to ask myself whether it is advisable that I should insist on the adoption of the course in which I believe, or vote, as I am perfectly free to vote, for the payment of this bonus to any company or syndicate undertaking the manufacture of pig iron in Australia. At this stage all that I have to say on the subject of control is that if it appears to me, after this debate has proceeded, that there is no real prospect of the States taking up the business on their own account, and manufacturing iron for their own use, I shall hold myself free to vote for the payment of the bonus to whatever company or syndicate undertakes the work, provided always that there is room for the State to at any time take the works over, and that whilst they are under private control proper hours are worked, proper wages paid, and proper conditions observed. If, on the other hand, it is shown that there is a possibility of any one of the States undertaking the establishment of ironworks at a reasonable date, I shall feel myself free to vote for a State-owned industry. To put it briefly, I desire to secure further information on the subject before I finally commit myself as to the exact terms for which I shall vote. The establishment of this industry in Australia is to me a matter of no small concern. No more important business could be transacted by this Parliament. I should have infinitely preferred to see this Bill receive the seal and authority of the Government, instead of being thrown on the table, so to speak, and left to any enterprising private member to pilot through the House. I am sorry that any personal matter should have been introduced during the debate. I know that the measure stands in the name of the honorable member for Hume, but it is immaterial to me whether that honorable member or the honorable member for Eden-Monaro be intrusted with the duty of carrying the Bill through. I should have preferred to see it taken up By the Government, for its importance warrants the placing of the Government’s seal upon it. This cannot now be done, but we can at least hope that its passage through this House will bring for its sponsors that return in manufactures and commercial progress which we have so long hoped for and still trust to see realized. ‘

Mr. JOSEPH COOK (Parramatta).The honorable member who has just resumed his seat has delivered a speech that would be most admirable if given before a debating society in one of the suburbs of Melbourne. It was replete with everything bearing upon the theoretical side of the question.

Mr Austin Chapman:

– If the honorable member would father it and publish it at Lithgow it would win a good many votes for him.

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

– The honorable member may leave me to deal with Lithgow. I venture to say that I know more about the iron industry than do those honorable gentlemen who make long orations, and pretend to be familiar with everything associated with the manufacture of iron. If the honorable member had been reared, as I have been, among the ironworks of the old country, he would speak with more diffidence than he does about the possibilities of iron manufacture.

Sir William Lyne:

– When the honorable member returned from a trip to the old country he wrote a letter advocating the local production of iron.

Mr Webster:

– Oh, that letter !

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

– That letter, seems to cause honorable members some concern, but it occasions me not the slightest trouble.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– The honorable member merely spoke of what he saw with his own eyes.

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

– That is so; and if the honorable member would speak only of the things that he has seen with his own eyes he would not make such a ridiculous political ass of himself as he constantly does in this Chamber.

Mr SPEAKER:

– Order !

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

– The honorable member for Bourke has expressed surprise that nothing has been done before this date by the protectionists of New South Wales to assist the industry. He ought not to be surprised. It only shows his complete ignorance of the political history of New South Wales. If he consulted Mr. Sandford, who is particularly interested in this matter, he ‘ would find that the protectionists in New South Wales have done infinitely less for this industry than the free-traders have done.

Mr Webster:

– That is because the freetraders have been more protectionist than the protectionists.

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

– Nothing of the kind ; but they have shown a sincere sympathy for the industry, and have tried to help it in every legitimate way, while the protectionists have done nothing but make long platitudinous speeches. This great and earnest protectionist, the honorable member for Hume, who is so devoted to Australian industries generally, and to the iron industry in particular, allowed to remain in existence during the whole of the time that he occupied the position of Secretary for Public Works in New South Wales, a rule under which local tenderers were not allowed to compete for the supply of iron required by the Government of the State.

Sir William Lyne:

– That is not correct. One of the Ministers of the honorable member’s own party made that rule.

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

– The honorable member made it. and it was in force when the Government in which he was a Minister was succeeded by the Government of the present Prime Minister, in which I was a Minister.

Mr SPEAKER:

– The question before the House is not the conduct of the honorable member for Hume, or of any State Government, but the second reading of the Manufactures Encouragement Bill. I ask the honorable member for Parramatta to confine his remarks to that question.

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

– I am simply replying to the statement of the honorable member for Bourke, that he is surprised that the people of New South Wales have not already done something to encourage the iron industry, and to some references which were made as to the conduct of the present State Government in relation to it. He argued that if the Governments of the States guaranteed a permanency of orders, the granting of a bonus would not foe necessary for the establishment of iron mills ; and I am pointing out that more sympathy has been shown towards the industry by free-trade Governments than has characterized protectionist Administrations.

Sir William Lyne:

– That is not cor,rect

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

– The first thing that the New South Wales Government of the present Prime Minister did when it succeeded that in which the honorable member was a Minister was to abolish the absurd rule which had obtained in the Works

Department under his administration, which prevented Mr. Sandford from tendering for the supply of iron to the Department.

Sir William Lyne:

– That is not true.

Mr SPEAKER:

– The honorable member for Hume must withdraw that statement.

Sir William Lyne:

– I withdraw it; but I would point out that the honorable member for Parramatta is repeating what I have said is incorrect.

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

– I feel certain that the Prime Minister will support the statement I have made. I cannot accept the disclaimer of the honorable member for Hume, because the facts are as I have stated them.

Sir William Lyne:

– No, they are not.

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

- Mr. Sandford, if appealed to, would confirm all that I have said. The present attitude of the Government of New South Wales is only in keeping with what has been done by previous free-trade Administrations. May I remind the honorable member for Bourke of what is on the tapis in that State now ? The arrangement which its Premier is trying to- bring to completion is similar to that which the Government of the right honorable member for East Sydney made with Mr. Mitchell some time ago.

Sir William Lyne:

– That arrangement was made by a previous Government, in which I was Secretary for Public Works.

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

– Nothing of the kind. .The honorable member is making rash statements, for which there is not a tittle of foundation. The arrangement was made with Mr. Mitchell by. the Government of the right honorable member for East Sydney, and would be in operation to-day but for Mr Mitchell’s death.

Sir William Lyne:

– It was proposed three years before the right honorable member had anything to do with it.

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

– The honorable member cannot produce proofs of the truth of that statement. When members of the Opposition express surprise that nothing has been done in New South Wales to encourage the iron industry, I would remind them that two protectionist Administrations there certainly did not lift a finger to assist them, and that what was done was not done by the protectionists. -

Mr Reid:

– We had come to an absolute agreement with Mr. Mitchell.

Sir William Lyne:

– The arrangement was proposed three years before the right” honorable gentleman had anything to do with it.

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

– The public, then, knew nothing about it, nor were there any records in the Government Departments concerning it.

Sir William Lyne:

– There are records.

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

– I have no intention to discuss the provisions of the Bill now before us, because they have been discussed ad nauseam in this Chamber during the past three years. Not a single fact, has been adduced during the present debate which we have not heard before. The statements which have been made with regard to Canada were only repetitions of what we had been told previously by the right honorable member for Adelaide. Those who profess to be anxious to establish the iron industry in Australia have taken the right way to secure the rejection of this proposal, because they know that not much more time can be spared for the consideration of the measure this session. It would’ be all very well to debate the matter in a highly intellectual -and academic manner, if it were one of no immediate practical concern; but as the question is ripe, for treatment, the sooner we arrive, at a decision in connexion with it the better. The honorable member for Bourke spoke of the American trusts/ and their relations with the Canadian trusts, as if he had been at their board meetings, and knew all their motives. It is amusing to hear an honorable member who, I believe, has never left Australia, professing to know exactly the springs of action which govern great industrial enterprises in other parts of the world. He has spoken of orchard pests ; but he reminded me of ‘an insect crawling over a vast cathedral, ‘and criticising the proportions and symmetry of the huge building, which it was utterly impossible for him to appreciate. I appeal to honorable members to come to” a decision on this matter. If the Bill be lost, and there appears to be a likelihood of that, the fault will be with those who profess to be its friends. ‘

Mr KNOX:
Kooyong

– Every honorable member must regard this “measure as one of too much importance to be rushed through without full discussion. No one deprecates more than I do unnecessary debate; but in this ‘instance we are dealing with a new departure in Commonwealth policy which is of the first importance.

Reference has been made to the maladministration which has taken place under the Victorian Butter Bonus system, but, notwithstanding the exposure which has recently been made, it must be admitted that the granting of a bonus for the production of butter has had beneficial results in fostering the industry in Victoria, and it would be wrong to decry a method for assisting primary industries, merely because of maladministration in the past. I think, however, that a measure which provides for the expenditure of so large a sum as £[324,000 should not be in the hands df a private member. I do not undervalue the abilities of the honorable member for Eden-Monaro, but I say that a measure of such importance should be introduced by a Government. Last night, however, the Prime Minister spoke very strongly against the principles of this Bill, while we know that the honorable member for Gippsland, and some of the other Ministers, support them. We are entitled to hear from that- honorable member and from the Treasurer a statement of their views in regard to the proposal. The Treasurer was the only member of the Government who took upon himself original responsibility in connexion with this measure. It is due to honorable members that a definite statement should be made as to the way in which funds are to be provided for the payment of the proposed bonuses, and the probable effect of such an appropriation upon the States finances.

Mr Austin Chapman:

– The Treasurer has approved of an appropriation, and will vote for the Bill.

Mr KNOX:

– I consider that a proposal to appropriate such a large sum of money should have been presented to the House by a responsible Minister, and I still venture to hope that some member of the Government mil place the position clearly before us. I desire to say a few words upon the practical aspect of the question. I know something of the steps which have been taken to open up one of our large iron .deposits, although I have no direct or indirect personal interest in .the enterprise. I also have some idea of the cost that would be involved in erecting the works necessary for the manufacture of iron upon up-to-date lines. I would point out that the bonus is not likely to affect more than two undertakings, namely, that of Mr. Sandford, of the Eskbank works, and that of those gentlemen who are seeking to develop the Blythe River iron mines in Tasmania. Any honorable member who imagines that the granting of a .£250,000 bonus is likely to result in the establishment of more than one ironworks can have no knowledge of the enormous amount of money that will have to be invested. in equipment.

Mr Webster:

Mr. Sandford says that the amount offered will prove sufficient.

Mr KNOX:

– I do not know what Mr. Sandford’s position may be; but I would point out that one Pittsburg furnace of the most recent design would cost £125.000. As was pointed out by the Prime Minister, the success of the iron industry in the United States has been due to the enormous quantities of ore treated in immense furnaces in which oil is used as. fuel, and in connexion with which the material is handled by means of powerful mechanical contrivances involving the employment of the minimum amount of labour. It is the greatest mistake in the world to suppose that the establishment of the iron industry here would provide employment for a large number of men. The equipment of the works must be thoroughly up-to-date in order to insure success. I have stated from the outset that, in my opinion, we shall never assume our proper position as a nation until we are able to turn put pig iron sufficient to meet our own requirements in tha event of our supplies from, abroad being cut off. The iron deposits in Australia are equal in quality and extent to any in the world, and should be turned to profitable account. I propose to vote lor the second reading of the Bill, but when it reaches the Committee stage I shall propose or support amendments having for their object the establishment of a perfect understanding as to the way iri which the money granted by us is to be applied, and as to the amount we shall vote. It is perfectly idle to suppose that the bonus will benefit more than one or two firms, and it is necessary that we should stipulate that those who are to derive the benefit of the bonus shall give ample proof of their bona fides, and show what they are prepared to do in the future. I would be no party to granting bonuses which would merely have the effect of assisting the promoters of a gigantic company. Provided that the Government demand specific and satisfactory guarantees, we should be justified, upon national grounds, in appropriating a certain amount of money for the encouragement of the iron industry. If, however, the bonus granted in the first instance is to be merely the forerunner of further grants, I shall not countenance it. It must be understood, from the outset, that we cannot grant application after application for further assistance. An abundant supply of cheap pig iron is undoubtedly the basis of industrial prosperity in the United Kingdom and the United States, and we must not hamper our manufacturers by restricting their opportunities for obtaining raw material at the lowest possible rates. Therefore, we must not impose any undue surcharge upon them. Take the mining industry, for instance. Honorable members know how largely iron manufactures enter into mining operations, and, therefore, if any heavy duty were imposed upon such commodities, that industry would be seriously interfered with. The agricultural’ industry would also be injuriously affected. I shall vote for the reduction of the bonus, and if, after the Bill has passed through Committee, its provisions are not, to my mind, clear and satisfactory, and such as will prevent the creation of a monopoly prejudicial to the nation, I shall hold myself perfectly free to vote against it upon the third reading. Reference has been made to the bonus proposed to be granted for the production of spelter. I have just come from a meeting of the directors of the company which can produce the largest amount of zinc concentrates in Australia ; in fact, it is the seventh largest zinc producer in the world. What is the use of talking about giving us £20,000? We do not want it. and it is the greatest rubbish in the world to suggest such a thing. Since Mr. Courtney gave evidence before the Iron Bonus Commission, a complete transformation has taken place in connexion with the treatment of zinc ores. The companies interested in the production of zinc have spent three times £20.000 in carrying on their experiments, and need no bonus for spelter. We desire to be left free to carry on our work peaceably, and that’ reasonable consideration shall be shown for the enterprise and ability of those in charge, who are now producing satisfactory results. In connexion with the bonus proposed for galvanized iron and wire netting, I understand that the industry carried on by Messrs. Lysaght and Company, in Sydney, is being seriously affected by the Tariff. We have adopted a moderate protective policy, and if the industry referred to is suffering in the way that has been represented, the whole ‘ mat- ter should be referred to the Tariff Commission. We should not be asked to deal with this matter until we have complete information before us. The Prime Minister has proposed a rational scheme. He wishes to appoint a Commission composed of practical business men to investigate the operation of the Tariff. This, is one of the questions which should be submitted to that body, because we have had a number of ex -parte statements put before us. which may or may not be correct. Of course it may be urged that a Commission has already investigated this matter. But I would point out that that body was equally divided upon the question. I wish to make my position absolutely clear. In, my judgment, we shall never become a nation until we are in a position to produce pig iron for our own requirements, and that result can never be achieved by individuals promiscuously, because of the enormous expenditure which would necessarily be involved in establishing this industry. The cost of erecting a Pittsburg furnace, without any accessories whatever, would be £125,000. Inasmuch as I believe that the iron industry, in its initial stages, is deserving of support, I feel that I shall be justified in supporting the second reading of] the Bill. At the same time, I think that before any parties are allowed to participate in this bonus, we should insist upon their clearly establishing their bona fides. I donot for a moment wish it to be understood, that [ am in favour of the proposal to. nationalize the industry. My whole career; is evidence of my opposition to such a suggestion. It is impossible to point to a’ single industry, the nationalization of which, has proved a success. At the same time,.’ if there is any industry which might fairly be managed by the State, it is the production of iron. I base my support of this-‘ measure upon national grounds, although I cannot see that the establishment of iron works in Australia will provide a very large amount of employment. I trust that in Committee we shall insert some provision which will secure a quid fro quo from thosewho participate in the bonus.

Mr WILKS:
Dalley

– The. honorable member for Kooyong, as a practical business man, has stripped this proposal of all sentiment. He has declared that there isno question of patriotism involved in the. Bill. He says; in effect, that the idea of nationalizing the iron industry does not commend itself to thoughtful men, and that those who wish to secure’ a bonus upon the production of iron, do so purely from commercial motives.

Mr Conroy:

– Pure and simple.

Mr WILKS:

– They are pure, but they are not simple. As representatives of the people, we are called upon to consider, not merely the sentimental aspect of this question, but also the practical trend of kindred legislation elsewhere. The honorable member for Kooyong scorns the idea that the Broken Hill Company, in which he is interested, should receive assistance from the Commonwealth. He affirms that the commercial experience of its directors, demonstrates the absolute futility of granting it a bonus of £20,000. He proposes to give a sort of left-handed support to this measure. In that respect he is not singular. There is scarcely a member of this House who has straightforwardly declared himself a believer in the bonus system. Instead, honorable members have hedged round their support of this measure wilh all sorts of qualifications. Some have stated that they will vote for its second reading, but will slaughter its provisions in Committee. As an opponent of the bonus system, I prefer that it should be slaughtered upon its second reading. Some honorable members have declared that they desire to place the industry under the control of the State, and others again insist that it should contain a provision for the payment of a minimum wage. Some go so far as to say that unless we have a guarantee that the industry will be permanently established we shall not be justified in expending such a large sum of public money. The whole-souled supporters of the Bill can be numbered upon the fingers of one’s hand. The honorable member for Eden-Monaro, as a staunch protectionist, is quite justified in taking up the position that he has. Similarly, the honorable member for- Hume has for years advocated the establishment of the -iron industry. I remember the time in New South Wales when a proposal was made to give certain contracts to Mr. Joseph Mitchell. I quite agree that the honorable member for Hume was right in his correction of the statement which was made bv the honorable member for Parramatta. The latter, I take it, was referring to the first occasion upon which the Premier of New South Wales officially recognised the iron industry.

Sir William Lyne:

– In 1891 we invited tenders for the supply of 175,000 tons of steel rails.

Mr WILKS:

– The statement of the honorable member puts the position in a nut-: shell. Even’ one is aware that immense, deposits of iron exist in Australia. It has been alleged that if we produced our own iron we should provide a good deal of employment. To my mind that theory has been successfully combated. Moreover, ‘.ve have the statement of Mr. Jean, secretary of the Steel and Iron Association, that if the iron industry were established, only 2s.’ 6d. out of every pound would be absorbed by wages. Consequently labour membersdesire to insert a clause providing for the payment of a minimum wage. That, in itself, shows that the theory that the industry would provide a large measure of employment is without foundation. The idea that we should support the measure from patriotic motives is thus absolutely destroyed. The mere fact of paying the bonus will not increase wages. The bonus proposed will be a free gift to the syndicate which is lucky enough to capture it. We all know that the iron masters are the wealthiest capitalists in the world. Seeing that we possess such vast deposits of iron ore, is it not strange that they have not attempted to establish the industry here, especially if the enterprise is likely to prove so profitable as honorable members suppose? To them a bonus of £320,000 represents merely a drop in the bucket. Why, in America, one syndicate alone has a capital invested of £70,000,000. The same remark is applicable to the tobacco industry. The iron masters of the world would not require the encouragement which is offered by the proposed bonus if they knew that they would have a market for the product. The greatest users of iron in Australia’ are the States Governments. They own the railways, and railway material comprises the bulk of the iron that is consumed within the Commonwealth. We have no guarantee that the States Governments will purchase their railway supplies from this syndicate. They reserve to themselves the right to purchase them in the open market. When we bear that fact in mind we must realize how small is the balance of our consumption. I represent a district which contains an industry which is the largest user of iron in Australia. Am I to vote for the imposition of stiff charges upon its raw material ?

Mr McCay:

– A bonus will not increase the cost of the raw material.

Mr WILKS:

– It is suggested that upon the expiry of the bonus period, a protective duty should be imposed. The Minister knows perfectly well that the industry cannot stand without State assistance. Otherwise where is the need for granting a bonus ? It will require either the imposition of protective duties or the direct assistance of an additional bonus to enable it to compete with the foreign manufacture. Every effort will be made to further coddle the industry, either by extending the bonuses or by imposing Customs duties. The bonus system, after all, is simply the gilded pill of protection. It is only right that I should remind the House of the vigorous attack which the Prime Minister made on the bonus system^ - an attack which was in keeping with the attitude taken up by him for many years. He warned us that if we passed this Bill we should hand over money for the establishment of one industry and neglect others. If we were to give a bonus to assist the iron industry, he asked, why should we neglect to help any other industry in a similar way? Would honorable members be prepared to vote a bonus to encourage shipbuilding in Australia? That is a work in which my electors are particularly interested, and if such a proposition were made I should seriously consider it. I might also ask honorable members whether they would be prepared to grant bonuses in this way for the encouragement of the deep sea fisheries of Australia. That is an industry which, like the iron industry, might easily be supported on sentimental grounds. The waters of Australia are to-day teeming with some of the finest fish in the sea, and if a bonus were given to encourage deep-sea fishing, factories for curing fish, and dealing with them in other ways, might be established, and a large export trade built up. If it be true that it will be necessary to expend millions of pounds to insure the establishment of complete iron works, how can it be said that a paltry grant of ,£320,000 would be of any assistance? The suggestion that if we grant £320,000 in this way, works will be established on which millions of pounds will be expended is mere moonshine. The sooner we remove the mask the better. We should say openly and squarely that the gentleman interested in the industry is afraid that he will not be able to form a syndicate unless these bonuses be granted. The people of Australia are prctically asked to head the subscription list with a grant of ,£320,000. The position’ reminds me of. the politician of Baratari’a who, in resigning office after many years’ service, thought it about time the electors recognised his philanthropic efforts in their behalf by raising a fund to present him with a testimonial, and, in order that a movement in that direction might be successful, headed the subscription list with a donation of .£25. However enterprising this gentleman may be, we know that his object is to induce capitalists to subscribe to the erection of iron works, and he thinks that the granting of this bonus would be of assistance to them. We are asked to head the list of subscriptions in order that a company may be floated with this object in view. I am absolutely opposed 10 the Parliament doing anything of t’.’.e kind. The experience of Victoria in regard to the bonus system has not been a happy one. At the present time the members of a Commission are remuneratively employed in inquiring into malpractices arising from the system. The introduction of the bonus system in France and other countries led to malpractice, and legislation was necessary to cope with the evil.

Mr King O’Malley:

– Hear, hear.

Mr WILKS:

– The honorable member for Darwin says, in effect, that it means plunder. That is an out-spoken statement, and in these days of syndicate mongering, plunder is the proper word to describe the system. The people may be disposed, from national considerations, to build up an industry in this way; but, time after time, the public have been plundered by those who have obtained State bonuses.’ In France an attempt” was made to deal with industries on scientific lines. Bounties were given to encourage the production of corn, and, after a certain high point of production had been reached, a request was made for the imposition of a bounty on exports, in order to keep the trade in a healthy state. Similar results might follow the establishment of the iron industry in Australia. When the bonuses provided for in this Bill had been exhausted, those interested in the industrywould appeal to us for a further vote. It would be urged that they had just got their works into running order, and that if the bonus were extended for a further period of three or four years they would be able to complete their coup, and to do without further assistance. In that event those who believed in the bonus system would, undoubtedly, support the request, while those who were opposed to it would find themselves in an awkward position. It would be said that a further bonus of, ‘ say, £6o,poo, was necessary in order to keep the works going, and that if we did not grant it, £320,000 of public money, spent in this way, would be absolutely lost for all time. That would be the bait held out to us, and we should be practically compelled to throwgood money after bad. The Prime’ Minister last night put the case very fairly when he urged that if we were prepared to coddle the industry for all time we should, by all means, vote for the second reading of the Bill ; but that we must not shut our eyes to the. fact that once we started these works we should have to keep them going. If we did not grant them assistance, by way of increased bonuses, a’ request would be made for a duty.

Mr Johnson:

– We shall have a big crop of Oliver Twists asking for more.

Mr WILKS:

– If we passed this Bill we should have a larger crop of Oliver Twists than of iron twisters in Australia. Day after day changes are being made in the plants of the great iron works, and the powerful ironmasters of England and America would not allow those embarking in the industry in Australia to prevent the rapid development of their works. The fight to-day is so keen that the plants of the large ironworks are completely, revolutionized every two or three years. The honorable member for Kooyong gave us a simple illustration of .the position when he spoke of the. changes made., in the treatment of spelter. He mentioned that a new process was. recently discovered, . and that those engaged ,in the business in Australia found it necessary for their own gain to immediately adopt it. And sp .with the iron industry. Changes must be made in the plants from time to time. If it were simply, a matter of looking out for loot, I should readily .vote for . this Bill. New South Wales would undoubtedly be the chief gainer by. the establishment of the industry. For the most part,. this .money would be spent in that State, so -that if I were to adopt a short-sighted policy, and to say, “The other States have done. very well out of the Tariff. ‘ Now is the time for me to wade in, .and take all I can get,, because this Bill would give immediate assistance to New South Wales,” I should be found assisting the honorable member for EdenMonaro to pass the measure. In passing I may -say that the honorable, member for

Hume is a well-known and trusted protectionist in New South Wales, and that I am certain he will not allow any petty jealousy to deter him from helping the honorable and learned member for Eden-Monaro to pass the Bill. Whatever slight political differences these honorable members may have, I feel confident that they will work together for the establishment of the iron industry. On the other hand, whilst I recognise that New South Wales is to-day in a very parlous state so far as employment is concerned, and that the expenditure of money in that State, which would immediately follow the passing of the Bill, would temporarily relieve her, I feel that I must look further. I have to consider, not merely those who might receive immediate assistance from the passing of this Bill, but the people of New South Wales generally, who would have to pay an enhanced price for their iron, and would be at. the mercy of the syndicates controlling the works. If J voted for this Bill, I should not. be able to refuse to support the giving of a bonus to any other industry. The shipbuilding trade, to which I have referred, would employ more men, and give a higher wage fund, if Australia could see its way clear to. establish it on a healthy foundation, than would all the iron industries that might be created here. The leader of the Opposition, who is a well-known protectionist, signed that section of the report .of the Commission which disagrees with the proposal to pay these bonuses to private individuals. That part, of the report deals briefly with the position. Those who signed it say that this Bill would make a present of £324,000 of the people’s money to a syndicate without any commensurate gain to the State. It is admitted that no hostile witnesses were examined by the Commission. It is certainlyremarkable that while those who gave evidence were all favorable to the establishment of the industry, and wedded to the bonus system, the -Commission was nevertheless equally divided, and that even those members who supported the granting of a bonus, imposed the qualification that the Bill should provide for the payment of a minimum rate df wage, and for reasonable conditions of labour: The* other six members of the Commission, including the honorable member for” Bland, a strong and active protectionist, were against the granting of this money’ to private individuals.-

Mr Johnson:

– It was not thought necessary to call evidence in rebuttal.

Mr Watkins:

– That is not correct.

Mr WILKS:

– Perhaps it was felt that even allowing for the evidence of those who favoured the proposal, the information obtained by the Commission would not warrant them in recommending the adoption of this system. When the Bill was before the last Parliament, I said that I would vote for the appointment of a Select Committee to collect the necessary data, and that if the information so obtained showed that I had been misled as to the possibilities of the industry being established without loss, I would follow the decision of the Committee. A Committee was appointed, and subsequently became a Royal Commission; but I -find -myself to=-day in the same position as before. The opinions which I then expressed have been verified by the information secured by the Commission. There is another point which I should like to emphasize. It may toe a coincidence that this measure was introduced at the fag end of last Parliament. History is now repeating itself, and the Bill has again been brought before a wearied House at the fag end of another session.

Sir William Lyne:

– It was. introduced at the commencement of the session.

Mr WILKS:

– Yes, but the debate was adjourned, so that this is the first opportunity that we have had to discuss it. The bonus system always leads to abuses. That is an irrefutable statement, in support of which I need only instance the revelations made by the inquiry into the working of the Victorian butter bonus. Then we have no guarantee that, even if the iron industry were established by the granting of a bonus, it would not be necessary to continue to give it assistance ; and the people of Australia are certainly not prepared to spoonfeed an industry for all time. Besides, men do not embark in industries of this kind for patriotic reasons. They invest their money as a commercial speculation, in the hope of obtaining a profitable return. Of course, if Parliament is prepared to make a gift of £300,000 to those who wish to promote a company for the smelting of iron ore, I do not blame them for taking the money. But if we make this gift to those engaged in one industry, why should we not make similar gifts to those engaged in other industries? Why. for instance, should not the poor unfortunate laundry-woman - it is just as well to be pathetic now and again, because members of the Opposition are al ways ready to be emotional - get a bonus? I may be told that I do not take a proper view of this subject, because the iron industry is a national one. In reply may I ask why is it more than any other industry a national one? The only really national industry is that in which you and I, Mr. Speaker, are both engaged at the present time. Every industry, of course, is national in so far as it benefits the nation. The development of the deep-sea ‘ fishery would, no doubt, give employment to those engaged in catching the fish, to others engaged in its transport, and to still others engaged in its sale. Therefore, that industry might well ask for assistance, and similar requests might be made by every industry, which would reduce the whole thing to an absurdity. The honorable member for Eden-Monaro, who is in charge of the Bill, will not be able to reply to the criticisms which have been passed upon il, because he did not move the. second reading; but, no doubt, the honorable member for Hume will do his best to repel the attacks which have been made on its principles, and I hope that he will give some reason for the apathy which has been shown in regard to the proposal, not on the part of himself and the honorable member for Eden-Monaro, but on the part of other honorable members. I do not like te suggest that that apathy is due to the fact that the industry, if established, would be located not in Victoria or South Australia, but in New South Wales; but such is the case. Furthermore, it is significant that, notwithstanding that fact, at least eighteen of the twenty-six representatives of that State are not asking for a bonus. The honorable member for Parramatta might well be excused for advocating the proposal, because there are in his electorate numbers of men who would benefit by the granting of a bonus. He, however, thinks too much of his free-trade principles to stoop to personal considerations, and his attitude in the matter does great credit to him. At the same time, we all acknowledge that if the Bill were passed, and there were an opportunity for his constituents to get this bonus, he would be a fool to stand in their way. Mr. Sandford is a man whom to know is to admire, though he probably would rather have o.ur votes than our admiration. For twenty, or thirty years past he hast in spite of the most formidable obstacles, been carrying on an iron business, and now he wishes to extend it, and to become the iron- master of Australia’. Apparently he thinks that, if the Commonwealth votes this bonus, he will be able to get support from persons in the old country. It is not our business, however, to help him, or Mr. Jamieson, or any one else, to float a public company, however worthy its objects may be. If it were absolutely certain that the granting of this bonus would establish a profitable iron industry, I might view the proposal in another way ; but as it is I see no reason for voting the money. Even if iron mills were established, we have no guarantee that those who use iron as their raw material would bind themselves to take the local product, and surely even the leader of the Opposition would not try to retard the development of Australia by requiring the users of iron to pay an increased price for. it, or to limit the operations of the Governments of the States by increasing the price of railway material. The honorable member for Eden-Monaro is sanguine of carrying the second reading, but his troubles will commence when, the Bill gets into Committee, because it will then be altered beyond recognition. Most of those who promised to vote for the second reading have stated, either that they think that the industry should be under State control, or that they desire to impose such qualifications as neither Mr. Sandford nor any other man would accept. The debate -will show that honorable members on this side are not , prevented from expressing their opinions on fiscal subjects, and that the free-trader is not as extinct as the dodo.

Mr Watson:

– He is very nearly extinct.

Mr WILKS:

– He is no more extinct than the honorable member is extinct as a protectionist. Although he is nominally the leader of the Labour Party, he will, on provocation, express strong protectionist views, like the sleeping volcano which may at any moment burst out into eruption. However disquietening the speech of the Prime Minister last night may have been to those who support the Bill, it shows that he is a man who keeps to his principles. I can imagine the howl which would have come from the Opposition if he had wavered in the matter, or had watered the expression of his views. There would not have been room in the columns of the Age this morning for that newspaper’s opinion of his conduct, while next week honorable members opposite would be jumping up like rockets to remind us of it.

Mr Johnson:

– The debate is a clear indication of the perfect fiscal freedom of honorable members on this side.

Mr WILKS:

– Yes. Of course there is no advantage to be gained by riding one’s hobbies to death. Recent events have shown that free-traders can associate with protectionists, because, apart from the fiscal question, they have much in common. That, however, does not compel them to sink their fiscal views. But, while honorable members may speak about national ideas and aspirations in the drawing-room, they get back to the kitchen and the ordinary every-day apartments of the house when they are be- fore their electors. However much they may like to display themselves in their fancy clothes as statesmen elsewhere, they have, in their own constituencies, to study the immediate necessities of their electors. In the Dalley electorate there are che’mical’ works, wire-netting manufactories, docks, and other robust industries, which have established themselves in the face of great difficulty without Government assistance. At Mort’s Dock, where from 2.500 to 3,000 men are employed, I am sorry to say that the position of affairs is now worse than at any previous time in its history.

Mr Tudor:

– Why ?

Mr WILKS:

– Because of the protective duties which were insisted upon by some honorable members of this House.

Mr Watson:

– The manager of the -dock does not say that, but quite the contrary.

Mr WILKS:

– I know what both the manager and the men say in regard to the matter. I could not go back to my constituents and tell them that after having advocated free-trade for years I had consented to the granting of a bonus for the encouragement of the iron industry. I should not be able to justify my action unless bonuses were granted in a general way, irrespective of the character of the industry. I see no reason why we should ask the people of Australia to pay £250,000 for the encouragement of one industry. No reasons in support of sucha proposition have been advanced by the Iron Bonus Commission. The report of the Commission - or of that section of it which included the leader of the Opposition - is opposed to the granting of the proposed bonuses, and I trust that the Bill will be so mutilated in its passage through Committee that honorable members will see fit to vo.te against it at the third-reading staged

Mr KING O’MALLEY:
Darwin

– I am not quite in accord with those honorable members who have condemned the honorable member for Eden- Monaro for having taken up this measure. Whilst we all regret that the honorable member for Hume has been deposed from his position as themember in charge of the Bill, I am satisfied that that result was not brought about with the connivance or by the scheming of the honorable member for Eden-Monaro. I am sure that that honorable member would no more think of grabbing the Bill than he would of abstracting a sixpence from the pocket of a Christian. When the Prime Minister found that his mixed Ministry were divided upon the subject of the Bill, he showed excellent judgment in handing it over to a private member. I believe that the time is not far distant when we shall elect our Ministries, and go on for the three years for which each Parliament is returned, without anyfighting over the positions on the Treasury bench. I intend to vote for the second reading of the Bill, but my support of the measure at subsequent stages will depend upon the shape it assumes. . I am very suspicious of trusts and combinations. I have in my possession a great deal of information with regard to the operations of the great American shipbuilding syndicate, which is now being proceeded against by Governor Odell, of the State of New York, who is seeking to recover £220,000, put of which he claims to have been swindled. The syndicate includes some of the leading financiers of the United States. When a capitalist has to choose between men and sovereigns he invariably prefers the gold and sets the men on one side. To-day there are two greatirreconcilable armies facing each other - the army of the capitalists, which is solidly organized, and the army of the workers, which is only partially organized. Capitalists are purchasers who wish to Duy their raw material in. the cheapest markets, whilst labour is a seller seeking to obtain the highest possible price. Capitalists buy labour in the same way that they purchase other raw material. The promoters of the scheme for the establishment’ of the iron industry in Australia are asking us to grant them £300,000, but they have given us no guarantee that the whole of the money . handed over to them will be invested in plant. From the report of the proceedings in connexion with Governor Odell’s case, it appears that the shipbuilding syndicate of New York, which started with a capital of only £600, floated a shipbuilding company for £14,000,000. The whole of that amount, with the exception of about half-a-million which was devoted to the purchase of plant, passed into the pockets of the syndicate, and tens of thousands of persons in England, as well as in America, have been plundered by these Christian monopolistic gentlemen. Under these circumstances, we should be particularly cautious in our dealings with large companies or promoters of large industrial enterprises. The honorable member for Kooyong has stated that one large blast furnace would cost £125,000, and I find on reference to the records of the blast furnaces of Duquesne, in Pennsylvania, that such a furnace would turn out 700 tons of iron per day. Multiplying that output by 365 days - -

Mr McCay:

– The honorable member should not include Sundays.

Mr KING O’MALLEY:

– Oh, yes. The blast furnaces are worked on Sundays just as on other days, because the capitalist pays no respect to the law, and has no regard for the Sabbath.

Mr Knox:

– But the furnaces inust be kept going continuously in order to insure successful results.

Mr KING O’MALLEY:

– If we multiply the daily output by 365 we find that one furnace would produce 255,500 tons of iron per annum, which would be sufficient to supply the requirements of the whole Southern Hemisphere. If iron works of such a large capacity could be established at an outlay of £125,000, there should be no necessity to grant a bonus. The honorable member for Kooyong and myself might embark upon the enterprise, and conduct it for the benefit of the Commonwealth. The fact that we are 10,000 or 12,000 miles away from the world s markets should be sufficient to show honorable members that we could not possibly manufacture iron for export. Therefore, it would be absurd for us to assist a private company to establish a monopoly. In view of the fact that the States Governments are the ‘ largest purchasers of iron manufactures in the Commonwealth, it would be better for us to establish works under State control. If the manufacture of iron were under private control, and we were cut off from outside ; sources of supply by an outbreak of war, the manufacturers could - as they did in the United States in 1861 - demand their own prices for the war material which would enable the Christians of this country to shoot down other Christians. We should thus place in the hands of half-a-dozen gentlemen the control of our power to protect ourselves against aggression. I was educated in America, and the idea strikes me as ridiculous.

Mr Johnson:

– And yet they do similar things in America.

Mr KING O’MALLEY:

– They have been mad there, but they are waking up now. A proposal to municipalize the tramways of Chicago was recently carried by a majority of 80,000 ratepayers. The proposed ironworks would not afford direct employment to more than about 500 men. They would, of course, prove of indirect advantage to a much larger number of persons, but I am sure that the benefits conferred would not equal those arising from the operations, carried on at the Mount Lyell mine in Tasmania. This Bill contemplates .taking £”324,000 from the taxpayers of the Commonwealth and placing it in the pockets of five or six good respectable gentlemen. That amount is to be a sort of charitable donation to them. The honorable member for Kooyong has already pointed out that one up-to-date furnace is capable of supplying 255,500 tons of iron per year. According to the report of the- Royal Commission, Australia consumes only 142,000 tons of pig iron annually, so that one blast-furnace would, supply al] our requirements by working about six months out of the twelve. Under this beneficent scheme for the encouragement of private enterprise, the artisans employed would be engaged only six months in the year. Any one who is familiar with the history of the United States knows that when the North was at war with the South those who had possession of the Pittsburg mines did not sell their product to the Government at its cost price, but at the highest price charged, in the world. They doublebanked that Government to such an extentthat the latter was called upon to spend more than $1,000,000,000 in excess of what it would have expended had it been able to supply its own materials for carrying on the war. No consideration of patriotism is involved in this question. It is one of coldblooded boodle. All my life I have been associated” with the finest Christian millionaires - men who would climb a greasy pole to get a shilling. But these same individuals will contribute .thousands of pounds towards the despatch of missionaries to convert the Chinese. Take the case of the great magnate of Boston, Mr. Lawson, who is a partner of the millionaire Rockefeller. He describes how in ons day Mr. H. H. Rogers made a profit of $36,000,000, and addressing Mr. William Rockefeller, said, “ William, I feel as though I had done an honest day’s labour.” It appears that they bought a copper mine for $33,000,000, and, by means of cunning, sold it within three hours for $79,000,000. That was a good “ honest day’s work.” We are asked to create the same sort of institution in Australia. The power of money is so great that these men do not need to buy the President or the legislators of the United States. They can control legislation without that. Nobody claims that the legislators of America are to be bought any more than are those of Australia. Look at the way in which Tattersalls sweeps have been conducted in Tasmania. To say anything against that institution in the island State is almost as much as one’s life is worth. Yet that enterprise is, comparatively speaking, a small one. Should I have been required to put up the fight that I did at the last election if I had declared myself in favour of Tattersalls sweeps?

Mr Mauger:

– Did the supporters of that concern oppose the honorable member?

Mr KING O’MALLEY:

– I had every man who favoured the granting of a bonus upon the production of iron, and every individual who believed in Tattersalls sweeps, slandering me, morning, noon, and night. I am under no obligation to those gentlemen. I am not prepared to take £300,000 from the pockets of the people for the benefit of a few individuals, and to condemn the taxpayers as a whole to the payment .of £12,000 annually to “the money lenders of England for all time. If we start this industry it will have no permanency ‘ unless it be bolstered up by the State.’ Whilst I oppose the Bill, I am perfectly willing that we should vote £”300,000’ to settle 3,000 young, ablebodied men upon the good lands of Australia under a system of perpetual lease: That would represent an expenditure of £100 per man’. An outlay of -£.200 per man would settle 1,500 farmers upon good agricultural land. They would be permanent producers, and would supply the railways of Australia with products which would enable them to put a big amount into the Commonwealth exchequer, and thus to benefit the whole community. I remember the time- when people were settled at River- side, in Southern California - many of them by private subscription. To-day the railway which traverses that country is crowded with produce, and ships are engaged in conveying it to all _parts of the world. “Unless the iron industry is controlled by the State, the money which it is proposed to spend by way of bonus can be expended to far better advantage.

Mr Wilks:

– If the industry be placed in the hands of the State, it will not require a bonus.

Mr KING O’MALLEY:

– According to the honorable member for Kooyong, the proposed bonus will equip the enterprise with the latest and best machinery. It will enable a real American to be brought from Pittsburg to “ run the show.” Should the State subsequently desire to impose -a protective duty against the outside world, it will be in a position to do so. Personally, I would much prefer to impose a duty of 15. per cent, upon iron than to offer this bonus, because I know that, when the period during which it will be operative has expired, it will be necessary to protect the industry. The one thing is the natural corollary of the other. Of course we might do as the Japanese have done - take over the mines. We might imitate their example by nationalizing them, just as the Russians have acted in connexion with the whisky interest. The Commonwealth would not then be called upon to continue manufacturing for a profit, in order to pay dividends upon watered stock. The curse of nearly every commercial enterprise in the world is that the money subscribed is never put into the venture. Instead, seven or eight Christian brothers meet in a nice, quiet room, and arrange - “ This is your bit, and this is my bit.” They split up the profits. If £1,000,000 is subscribed for the establishment of ironworks in Australia, and if £500,000 finds its way into the pockets of seven or eight individuals who own the plant, they will be called upon to pay dividends upon the former, and not upon the latter, amount. Who pays the dividends? They are paid by the toil and sweat of the workers of the Commonwealth, who never buy or sell stocks, and who do not run the broad palace pawnshops which are to be found in this country upon the corners of the best streets - places where human souls are pawned for gold. I claim that we should hesitate before we encourage this private enterprise.

But rather than that the iron industry should lie dormant, and our resources not be utilized for the purposes for which the Creator intended them, I shall even vote for the second reading of the Bill, provided I can obtain a guarantee that if one dollar foe taken out of the subscribed capital, and put into the hands of a private individual, except in the form of wages, the bonus shall be forfeited. But I shall want to have .these capitalists in steel bonds - in gridirons. Honorable members who have lately read the proceedings in connexion with the Butter Bonus Commission must realize what a beautiful system has obtained in Victoria. Not a member of . the Labour Party was concerned inthat matter. Not a member of that party made a dollar out of it. That inquiry has revealed the fact that pig-grease, or hog-fat, has been branded as “ prime No. 1 butter,” with stamps stolen from the State Government, and forwarded to London. We have been told that the Labour Party is ‘ruining the English market. In 189 1-2 the banks and building societies of Sydney and Melbourne - not including the twelve banks of issue which suspended payment - failed for £25,067,663, repre,senting money of the people subscribed on the good faith of prospectuses. Of this sum, .£3,952,000 was British money - the money of widows and of orphans, sent out for investment in these various building societies and banking institutions, just as the money of such people would be invested in this industry if we handed over these bonuses to private enterprise. These widows were robbed and plundered. Over £25,000,000 was thrown in the gutter, and except for one poor little man, without friends, who suffered a year’s imprisonment, not one of the financiers of Australia was sent to gaol in connexion with this business. That is a serious matter from the stand-point of the credit of Australia. The Pall Mall Gazette, and some of the great financial journals of England, have declared that the Labour Party has come to save the Commonwealth. We are determined that this Parliament shall not enable private individuals to secure the investment of funds in this undertaking on the good faith of Australia. If we granted these bonuses, the syndicate would say to the English investors, “ The Commonwealth backs up this undertaking to the extent of £320,000. Do you think that it would do so if it were not a legitimate and honest pro- posal, having a solid foundation? Would the Commonwealth support the establishment of the industry if the ore were not in Australia? You must see that the ablest men of the Commonwealth are backing us up.” The result would be that hundreds of widows in the old land would realize their securities, and send their money to Australia for investment in this industry, solely for the benefit of the boodle barons of the Commonwealth. I am opposed to the payment of these bonuses for the encouragement of private enterprise, but I am determined to vote for the second reading of the Bill. The question to be determined is, who would be benefited by the payment of these bonuses.? We must deal with the whole matter as a business transaction, and ask ourselves what benefit would accrue to the people from the passing of this measure? What are the farmers of the North west Coast of Tasmania, or the miners of the West Coast of that State, to receive out of the £320,000 to be paid away in this fashion?. What are they to receive out of the perpetual mortgage of £12,000 a year for all time that this would involve for interest alone? No one ever thinks. at the present time, of paying off the national debt, but I believe that we ought to make a start in that direction. The time has come for the imposition of a tax, with a limitation of £2,000, on unimproved land values, and with the money so obtained we should form a sinking fund to pay off our debt - that is, if we wish to place the credit of our country on a solid basis. Does it not seem strange that the great ironmongers of Australia should not be prepared to put their money into the venture without any assistance from the Commonwealth ? As an honorable member has said, they are among the richest men in Australia. It is unnecessary for them to go to England or the United States for money ; there is plenty of it here. There are honorable members in this House who would be glad to invest money in these works if they considered the undertaking a legitimate one. It is plain, however, that it is not a legitimate industry for private enterprise. I confess that I think it would be wise for the States to take up the business. It would be right for the Commonwealth or for any of the States to carry on ironworks upon a small scale, if only that we might be independent in time of invasion. There is no danger, however, of inva. sion. Whenever a move is made to invade a country we quickly hear all about it. We hear every day what is happening in Manchuria, thousands of miles away, so that I do not think we have anything to fear in the shape of a sudden invasion of Australia; but I do believe that if ever there was an industry which should be taken up by the States, it is the iron trade, inasmuch as they own most of the local institutions that have use for the raw material. If we allowed great combinations to obtain control of our primary industries, or of those things that the whole of the people require, we should enable the few to plunder the many. If we agreed to the Bill as it stands, a state of affairs might be created in Australia similar to that which obtains in America as the result of theoperations of the great shipbuilding company, which is supposed to have a capital of $70,000,000. The only difference between this proposal and the formation of that company is that those who were interested in the latter did not ask the Government of the United States for a penny. They started to plunder the people for themselves. They said to the Government, “ Give us fair play. All we ask is that you give us police protection, and we will do the thieving ourselves.” The Government of the United States of America gave them that protection, and they were legally authorized to steal $70,000,000, or 14,000,000 guineas,” from the rest of the people of America. Do honorable members desire to have anything of the kind in the Commonwealth ? The Governor of the great State of New York - a State which has a population of 8,000,000, and is richer than any other State in the world - is now bringing an action against this company for the recovery of $200,000. I do not imagine that the Governor of this State would invest in the Australian iron industry, because, perhaps, he would not have in it that faith which a native of New York would have in his State. I have an extract from a newspaper, which I wish to read in order to show what might happen if we allowed fifty or sixty capitalists in this country to run the whole show. Can anv one deny that about fifty men hold the best part of the Commonwealth in the hollow of their hand ? Fifty bank managers run the whole show, and the people are their helpless slaves. These fifty men can absolutely close up any business, shut up any shop, burst up any institution, and compel any number of men to go on the highway with swags on their backs. All this is the result of private enterprise. Let me tell you. Mr. Speaker, as a politician of considerable experience, what may be done by these men. If a man does anything with which his bankers do not agree, they will at once call upon him to reduce his overdraft. I do not care what security he may have ; but if he takes one action which they consider to be against their interests, he is called upon to reduce his overdraft, and if he cannot do so, his securities are sold, and he is turned out on the highway. It is for these reasons that I believe that the time is coming when we should own not only the ironworks of Australia, but the whole banking system of the Commonwealth, so that special privileges shall not be enjoyed by any individual. No man should have the right to ruin another, because of his political creed, or because of actions taken of which he may not approve. Here is the heading of an article from an American newspaper -

Governor Alleges that Promoters of Great Trust retained Large Portion of Money paid for Subsidiary Companies. Mercantile Trust Co.’s Subscription Bogus.

This refers to one of the great financial institutions of America, against whom the Governor of New York has brought an action for the return of $200,000, which he was induced to invest in the company on the good faith of certain men connected with it. One of these men is Mr. Schwab, the great philanthropist. Because that gentleman was a member of these institutions, several widows-

Mr SPEAKER:

– Will the honorable member please discuss the Bill?

Mr KING O’MALLEY:

– I am endeavouring to point out that if this Bill becomes law, the very things which are happening in America in connexion with this company may happen here, and anything I can show that may induce honorable members to refrain from handing oyer the iron industry to private enterprise must be germane to the Bill. The Governor of the great State of New York is alleging fraud against the company. Before I read the statement of the case, I should like to give the House the list of directors of this great institution. It is a very short one.

Mr SPEAKER:

– I must ask the honorable member to connect his remarks alittle more closely with the question before the Chair, instead of merely hinting at the connexion. The question is whether or not we shall grant a bonus for the encouragement of the iron industry of Australia.

Mr KING O’MALLEY:

– The position is that if we decide to give these bonuses for the establishment of the industry by private enterprise, we may have the same system of plunder in Australia as has been associated with ship-building in the United States.

Mr Thomas:

– The same as has occurred in connexion with the Victorian butter bonus system. ,

Mr KING O’MALLEY:

– Exactly. The report states that three of the defendants against whom the Governmnent make such serious charges- are men of immense-

Mr SPEAKER:

– I really cannot permit the honorable member to digress so far from the question under discussion. I must ask him to discuss the Bill, and not questions which, if at all related to it, are so remotely related that I fail to discover the connexion.

Mr McDonald:

– The granting of a bonus would be sure to create a monopoly similar to that referred to by the honorable member.

Mr KING O’MALLEY:

– Yes.

Mr Webster:

– What class of citizens would be concerned in the affair?’

Mr KING O’MALLEY:

– The men who wish to go to London to borrow money on the strength of the Commonwealth grant. If we pass the Bill as it stands, we shall be assisting a few men to raise money to start an industry which must be a failure, and will bring ruin to thousands of persons who will invest their savings in it. The same thing will occur here as has occurred in connexion with the great ship-building company in the United States to which I have referred.

Mr Mauger:

– Have the persons concerned there been prosecuted?

Mr KING O’MALLEY:

– They are being prosecuted now.

Mr SPEAKER:

– The honorable member must either conform to the Standing Orders or resume his seat, and allow some other honorable member to proceed with the discussion. I ask the House to support me in seeing that effect is given to the rules of debate. If the honorable member for Darwin can show that the company to which he refers was granted a bonus by the Government of the United States, or can reasonably connect his reference to it with the question- before the Chair, he will be in order ; but I fail to see any connexion which would justify him in proceeding further on the line which he is now taking.

Mr KING O’MALLEY:

– They do not call them bonuses there; they call them subsidies. That is what I was trying to point out. However, it is not necessary to go into that matter. They got from the United States what was practically a subsidy, because they got the river front.

Mr Thomas:

– Was the land granted to them because they were going to find employment for the people?

Mr KING O’MALLEY:

– Yes; because they were to find employment for thousands, and to bring capital into the country. They brought capital into the country, but it all went into their own pockets.

Mr SPEAKER:

-I understand that, in the instance to which the honorable member is referring, a concession given by the Government of the UnitedStates was exploited by certain persons.; but, as the proposal before the House is not to grant £300,000 for the establishment of a company, but to provide for the payment of a bonus on the production of iron in various forms, the American case is irrelevant to the debate.

Mr KING O’MALLEY:

– Then I will put aside that case altogether. It is claimed that the granting of the proposed bonus will lead to the investment of £1,000,000 in Australia. That money, to enable the investment to be profitable, must earn a return of from £60,000 to £80,000 a year, though it is not likely that more than one blast furnace would be set up. The question we have to ask ourselves is, are we justified in taxing the people of the Commonwealth for this purpose?

Mr Wilks:

– Then why not vote against the second reading of the Bill?

Mr KING O’MALLEY:

– Because I hope that in Committee we may amend the Bill so as to provide for the” work being taken up by a State.

Mr Wilks:

– But why vote a bonus to a State ? It is only taking money from one pocket to put it into another.

Mr Watson:

– If the Commonwealth votes a bonus to a State, it will mean that all the States will have to share the cost.

Mr KING O’MALLEY:

– Yes. I am opposed to allowing six-or seven gentlemen to borrow money onthe strength of the Commonwealth grant, half of which will probably be divided as “ palm “ oil. I should like to see the Commonwealth develop the industry itself ; but we are not justified in taxing the people for the support of a private enterprise. If we grant the bonus, the same thing will happen here as happened in Canada ; every two or three years applications will be made to Parlia ment for another bonus, or for an increased duty. It would be better to agree to a duty of 15 per cent, right away.

Mr Wilks:

– Has the Commonwealth the right to undertake such a work?

Mr KING O’MALLEY:

– If it has not, it can get it, and the ore which has lain in the ground for so many centuries will not spoil while we are waiting. It would be to my interest to vote for this proposal, because it would probably mean the employment of 100 men at Blythe River immediately, and forty or fifty afterwards, all of whom would be my supporters. It is not likely, however, that smelting works would be established there, because the probability is that all the ore would be taken to New South Wales. If the industry is developed by private enterprise, however, those who are concerned in it will not have gone into it for their health, or for patriotic reasons. They will want a cash return, and, consequently, there will be a watering of stock. Then, as no dividends will be forthcoming, we shall be told that the works must be shut up, and hundreds of men thrown out of employment, unless further assistance is granted, and. eventually the Commonwealth will have to take over the whole concern, just as the United States has taken over the Panama Canal scheme. If it were a Government concern, however, those employed would obtain permanent work, because the State could afford to keep the mills constantly going, and to accumulate stock if the market were unfavorable. While I shall vote for the second reading of the Bill, I shall strive to have it amended, so that we shall not be increasing the wealth of the few at the expense of the many ; because I am not prepared to tax the miners of the West Coast, or the farmers of the North West Coast of Tasmania, to enable half-a-dozen gentlemen to live in Mayfair, London, or in Fifth Avenue, New York. I am sorry that I have not been able to refer to the American case, in which a number of high-toned Christian gentlemen conspired to plunder the Governor of a State. Of course, they will not go to gaol, because no one goes to gaol who has got money. Everywhere the rich go to Government House, while the poor go to gaol.

Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP

– I have listened with interest to the voluble speakers who have preceded me, including our Yankee friend, the honorable member forDarwin. I am altogether opposed to the granting of a bonus for the development of the iron industry by a private company, though I should like to see the industry developed. At the present time, the only ironworks in Australia of any pretensions at all are those of Mr. Sandford, at Lithgow, and he does not manufacture pig iron from the ore, but chiefly works up scrap iron. In my opinion, the payment of a bonus alone would not establish the iron industry here. The imposition of protective duties on iron would also be required. I think that instead of offering a bonus it would be preferable to enter into some arrangement with a gentleman like Mr. Sandford, of Eskbank, under which the States Governments would agree to take from him the iron required by them. For instance, if the construction of the Kalgoorlie to Port Augusta railway line is undertaken there will be a large demand for rails and other manufactured iron. If any of the States Governments started iron works it would be necessary for the Commonwealth to impose duties which would have the effect of shutting out imports from countries where cheap labour is employed. Unless something of that kind were done we should not be able to maintain the wages of our workmen at a satisfactory standard. I believe that there is more iron in Central Queensland than in any other part of Australia. The Queensland Government are sending the Government Geologist into that part of the country to report on some of the iron deposits, to which references have been made in the annual reports of the Department of Mines. It is well known to those who have taken an interest in the coal measures of Australia that upon the Dawson River there are valuable deposits of anthracitic coal, which is found in only two other parts of the world, namely, in Wales and Pennsylvania. The Dawson River anthracite contains 80 pei cent, of carbon, and is therefore of very high grade. Some people state that it is only semi-anthracitic coal, but if it runs to 80 per cent, carbon it does not matter much whether it is anthracitic or semi-anthracitic. At present there is no market for this coal in Australia, because it can only be used upon warships using forced draught, or in blast furnaces. In the absence of a market for the article, the development of the anthracitic deposits referred to has been hung up, but an effort is being made to induce the Admiralty authorities to use the coal upon the warships. Bituminous coal is found upon the Mackenzie River, and iron deposits exist at Gladstone, and coal at Callide Creek, and in the Broadsound district, and in many other places along the coast. There is coal close to the ore in nearly every case, and also abundant supplies of fluxing material. There is no prospect of the manufacture of iron being carried on with successful results unless coal, iron ore, and fluxing material are to be found in close proximity. In Queensland Ave have all these materials conveniently situated, and, in addition, abundant supplies of manganese and wolfram. There are good ports close to the iron deposits, and there would be no heavy freight to pay for the carriage of the iron by rail for long distances. If iron works were established at Lithgow, the pig iron, or’ the more highly manufactured products, would have to be conveyed a long distance by rail. Therefore, I contend that Queensland possesses greater facilities than does any other State for the successful manufacture of iron. From a report published in the Queensland Mining Journal I extract the following particulars with regard to some of the iron deposits in Queensland : -

At Iron Island, the ore consists in greater part of cryptocrystalline, magnetite, with massive haematite, and scarcely a trace of visible impurity.’ Its specific gravity is 4.5 to 4.6. Blocks of ore,up to ten feet in diameter, weathering with every appearance of slate, are piled up round the base of the island, as seen in the accompanying photograph.

A rough surface sample was taken from the whole of the . iron ore area, and its. analysis is, given below, together with that of a single specimen from the south part of the island.

The main outcrops of iron ore in the vicinity of Olsen’s Caves are on portion 95 v., Fitzroy, 14 miles north-north-west of Rockhampton, and 5^ miles north-east of the nearest point of the Fitzroy River, which is there navigable for small boats. The road to the river has a down grade all the way. There are five outcrops, from one to five chains in length, and from two feet to two chains across - formed of boulders up to ten feet in diameter. The main bodies lie on north and south’ lines, between portions 2371 and iS v. Owing; to the thick grass at the time of my visit, it was difficult to determine the extent of “the deposits, but it is believed that the areas shown have not been exaggerated. Taking the depth of the deposit as equal to one-half the length, and only considering the three main ones, which are two, two, and four chains long, and two, one, and one-third chain wide, the amount of ore here is over onequarter of a million tons. The ore consists of massive haematite and magnetite (specific gravity 4.8), with scarcely any visible impurity except a little quartz in cracks far apart. A sample from the eastern line of outcrops (that marked, 6, c, d), assays (Mount Morgan) -

(This result is slightly higher than that necessary for pure magnetite.) The ore is thus specially suited for the Acid-Bessemer process, and of value for mixing with phosphoric ores, such as that on Iron Island, to render them low enough in phosphorus to be treated by the same process. . .

Kabra is a junction on the Central railway, eleven miles south-west from Rockhampton and the Fitzroy River. Ore has been worked on portion 973, Gracemere, about a mile north-west of the station, and other small deposits are found capping a ridge running south-east through portion r46 v., Gracemere. . . . The ore consists of massive magnetite of specific gravity 4.75, the analysis of a specimen of which is (Mount Morgan) -

This shows the ore to be quite equal to the Scandinavian product. Were there any large quantity available it would be of value for mixing with the Iron Island ore.

Constitution Hill is three miles north-east of the Mount Morgan terminus, on the eastern side of the Dee River. Between the Dee and the Rockhampton railway line the country presents considerable obstacles to transportation, so that the ore would have to be taken down the river to the terminus in case of it ever being worked. The greater part of the ore on the south is magnetite, of specific gravity 4.53, that on the north is haematite, the former being, as a rule, more siliceous than the latter. Samples of the less siliceous material over an average width of six feet were assayed (at Mount Morgan) for the following results : - 9 x

The ores are thus specially pure, though that from the south-end shows a rather high percentage, of phosphorus - that is, for the Aid-Bessemer process, which is the more likely to be used.

Iron Gully, one of the head branches of Boulder Creek, is six miles west south-west of the Mount Morgan railway terminus, in very rough country. The ore is bright and solid magnetite, with small cavities filled with powdery limonite and haematite. An analysis of a sample from the larger outcrop results (Mount Morgan) -

The iron ore deposits in the Gladstone district are scattered over an area sixty miles in diameter. The only deposits of any considerable size are at Glassford and Many Peaks, but the outcrops at several other points, notably those on the Boyne River, are well worth testing. The places visited are described below, in order, from north to south.

Targinie head station lies nine miles west of Gladstone, a little over three miles northnorthwest of the railway station of same name, and two and a half miles from the shores of Port Curtis. The head of navigable water for small boats on Boat Creek is four miles distant by road. The outcrop of iron ore is half-a-mile southsoutheast of the head station, and has been included in a lease of ten acres adjoining portion 402, Targinie (in which the station stands), on the southeastern corner.

Ore. - The ore is massive haematite and magnetite, crystalline in parts. It sometimes contains epidote and garnet. An assay of ore made forthe lessee gave 94 per cent, of ferric oxide, equivalent to 65.8 per cent, metallic iron. A sample collected by me from the whole of the.outcrop yields (Government Analyst) : -

I believe that the Queensland Government intend to take some steps in the direction of developing the iron deposits in that State. If they establish blast furnaces it might be necessary for the Commonwealth to assist them in some way or other by means of a bonus, or by imposing protective duties. I entirely object to the proposal to grant a bonus to a private company, which would be able to create a monopoly free from any control by the State. The policy of the Labour Party is opposed to monopolies of whatever kind. I shall vote for the second reading of the Bill, reserving to myself the right to endeavour to amend it in

Committee in accordance with my views. I should like to see the enterprise undertaken by one of the States Governments. I know that Tasmania possesses valuable iron deposits, and also coal supplies close at hand. Western Australia is handicapped in not having a coal supply suitable for smelting purposes. Coke is the principal fuel used in connexion with the smelting of iron, but in Queensland we should be independent of coke, because our anthracitic coal would be equally suitable for smelting purposes. If coke were required the coal measures on the Mackenzie River could be utilized. If none of the States Governments take the matter up I trust that an opportunity will be afforded to Mr. Sandford, of Eskbank, who has been struggling for many years without much encouragement from successive freetrade Governments in his own State, to extend his enterprise and make the iron industry what it should be.

Mr MAHON:
Coolgardie

I regret, sir, that mv remark was interpreted as a request for a quorum. I merely wished to protest against a division being taken upon an important Bill in a House attenuated as it always is upon a Friday afternoon. This is a measure which should be dealt with in a full House. No more important Bill could possibly be considered by Parliament than one which proposes to take money from the public Treasury for the encouragement of a private speculation. No measure could possibly be propounded involving issues of a more far-reaching character. It is recognised that the responsibility of the Commonwealth will not terminate with the payment of this bonus. As the Prime Minister so well pointed out last night, a time may come when an appeal will be made to the Legislature on behalf of the labour employed in the iron industry, if it be established by means of State assistance. ls it to be supposed that any Parliament will be deaf to the entreaties of the overtasked and poorly paid workmenand I am supposing a state of affairs which is not impossible of realization - as to refuse them assistance? Consequently, I say that every member of the House should be present when a division is taken upon this Bill. That is why I hope that the honorable member who is in charge of it will not attempt to proceed much further this after- noon. I trust that with the assistance of the Government, he will permit me to continue my remarks on a future occasion, when I should like to address a full House. If by interjection he will indicate his intentions in this respect, he will facilitate matters very considerably. Ever since I have been a member of this House, it has been customary to adjourn upon Friday afternoon a little after 4 o’clock. As a Western Australian representative, who is not in any way benefited by an arrangement made for the convenience of New South Wales and South Australian members only, I have been a party to this continual waste of time.

Mr Johnson:

– It conveniences the Queensland representatives as well.

Mr MAHON:

– Certainly not. I think that the honorable member in charge of this Bill should give the House some indication of his intentions in this regard.

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

– There was an understanding that a division would be taken to-day.

Mr MAHON:

– I was not a party to that understanding. I can assure the honorable member that it is not my intention to conclude my remarks before half -past 4 o’clock. And I would remind the honorable member in charge of the Bill that there are several honorable members upon this side of the House who wish to address themselves to it.

Mr Austin Chapman:

– I have no desire to prevent a full discussion, but I think that we might continue the debate until 4 o’clock. Most honorable members who are absent have arranged for pairs.

Mr MAHON:

– This pairing system is most unsatisfactory. Upon a Bill of this character, it is very desirable that every honorable member should be present, and record his vote. The honorable member for Kennedy, the honorable member for Fremantle, and the honorable member for Wide. Bay desire to explain their attitude towards this Bill before a division is taken. That being so, I appeal to the honorable member for Eden-Monaro not to continue the discussion much further this afternoon. I am surprised that a measure of this kind, which proposes to grant an enormous bounty from the national Trea.sury should excite so little animation in this House. If it is desirable to encourage the manufacture of iron from native ores-

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

– The expenditure proposed represents only about one-fifteenth of the cost of the Transcontinental Railway.

Mr MAHON:

– I do not see that the observation is pertinent. The railway is a national work. The honorable member can afford to be indifferent to a project which is necessary to consummate the union of the States. I do hope that honorable members who represent States which have a long start over others will look a little more generously upon the requirements of the distant States. However, I do not wish to be led away from the thread of my discourse. I wish to point out that to give encouragement to one industry at the expense of the community is a curious anomaly. Why should a few speculators, who propose to produce iron from native ores, receive encouragement which we are not prepared to extend to those connected with other primary industries? Why should a man who produces a ton of iron receive a bounty from the State, whilst the individual who produces an ounce of gold gets nothing?

Mr Webster:

– He gets £4.

Mr MAHON:

– But the man who produces the ton of iron also gets the value of it, plus the State bounty. Upon this occasion I should like to proceed with as little interruption as possible. It is somewhat curious that we are asked to give the iron industry the benefit of a grant of money, whilst the gold-miners, whom I represent, and who live under far harder conditions than those to which the artisans in the iron, industry would be subjected, are to receive nothing. Of course it may be urged that iron has a utilitarian value, whilst gold is merely for exchange and ornamental purposes. But we must not forget that the individual who possesses the gold can always purchase the iron. Let us consider this question closely. Can any one show what benefit the gold-miners of Western Australia will receive from the taxes they are to pay towards the production of iron in Tasmania and New South Wales? Why should the miners of Broken Hill, who are engaged in producing silver and lead, be taxed for the protection and encouragement of a number of individuals who are engaged in the production of iron ? If, in addition to protecting the iron in- 9x2 dustry, a proposal were made to grant a bonus upon every ounce of gold and silver produced, and upon every ton of lead and tin, I could recognise in this Bill a desire to do justice to the bulk of the miners of Australia. Until a provision is inserted in the measure which will have the effect of offering equal encouragement to those engaged in other forms of mining enterprise, it will not receive my support. The honorable member for Dalley made a very pertinent observation when he pointed out that the fishing and the shipping industries of Australia were deserving of bonuses equally with the iron industry.

Mr McDonald:

– And low-grade ore mining also.

Mr MAHON:

– Yes; as the honorable member reminds me. a great many of the mines in Western Australia could be worked at a distinct profit if in the initial stages they could fall back upon the Government for a (bonus.

Mr Fowler:

– There are very many in Western Australia, and, no doubt, many in this State.

Mr MAHON:

– That is so. Why should the State encourage men to engage in the unprofitable work of producing iron when ii refuses to assist them in working gold, silver, tin, or lead mines, which, in their initial stages, may also be unprofitable? If a Government grant be justifiable in the one case it is surely justifiable in the other? I know of a number of mines in Western Australia which are on the verge of the profit making stage, and which, if given a Government grant of £4,000 or £5,000, would be able at once to employ perhaps 100 men, with results profitable not ‘only to the workers, but to the mining investors.

Mr Austin Chapman:

– The States Governments already give some assistance to miners.

Mr MAHON:

– They do. In Western Australia we have a prospecting vote, and Government batteries are also erected to treat ore for prospectors at cost price. That is a very proper provision to make, but the State Government which assists the miners does not propose to pay this bonus. We, as a Federation, propose to ask the miners who are assisted in this way by the States to pay a subsidy towards the encouragement of iron production. The gold mining community, and those engaged in producing silver and lead, will be called upon to contribute to these bonuses, but will derive no direct benefit from them. That is a gross injustice. Parliament should not lend itself to the aggrandizement of any one section of the community. Legislation, and particularly that passed by a Federal Parliament, should fee aimed at equalizing the conditions of the whole of the people, and doing justice to all classes of the community. I put it to the honorable member in charge of the Bill whether this is a measure to mete out equal justice to all classes of producers in Australia. It would be far preferable to encourage the farming industry by a direct vote. As the honorable member for Darwin pointed out just now, if we expended this sum of £320,000 in putting men on the soil, and assisting them to carry, on farming on a scientific plan - if we devoted the money to the education of their sons, so that they might take up farming at a point considerably in advance of that at which their fathers started - we should do something that would be of lasting benefit to the community. Such a proposal would be immeasurably better than is this proposition to establish an industry which, on the admission of its own supporters, cannot be started firstof all without a bonus, and cannot afterwards live without some form of Tariff assistance. These are considerations which, in themselves, should be sufficient to make the advocates of the Bill pause ; but if they turn to the report of the Commission which investigated this question, they will find that it offers no inducement to them to go before the people of Australia and defend this measure. It is, to say the least, curious that no attempt has been made to obtain information about the iron industry from persons outside Australia. Every experiment so far made on the large scale contemplated by this Bill, in the production of iron, has been made in other countries, and when the Commission was being appointed, I certainly understood that if it did not visit America, England, or the Continent, it would at least take steps to collect first-hand information from some of the highest experts abroad. But what do we find? The whole of the information sought by the Commission was obtained from men whose experience is confined almost entirely to Australia. Certain Government geologists and mining engineers were called by the Commission; but, for the most part, the witnesses examined were men actively engaged in the manufacture of iron products. I hope that I am not casting anv undue reflection on these gentle men when 1 say that their financial welfare would be distinctly improved by the passing of this Bill, and by the grant of a bonus from the Treasury. It is extraordinary that any Government, proposing an innovation of this kind, should limit their inquiries to this Continent, and should not obtain the best information available in the outside world. As I have previously pointed out, this will” not be a cheap experiment. It will commit the taxpayers of the Commonwealth, not merely to the payment of the original bonuses, but to the expenditure of a very large sum, and may possibly lead to complications and difficulties which the wisest man in this country cannot clearly foresee. That is the first objection that I take to this measure, but there are several paragraphs in the report of the Commission which show that there are other objections. I propose to refer to what may be called the majority report of the Commission, since the Chairman seems to have exercised a deliberative, as well as a casting, vote. Paragraph 5 in the majority report contains the following most remarkable statement : -

Little attention has hitherto been given to iron mining in Australia, and your Commissioners are of opinion that future operations are likely to result in further valuable discoveries of iron deposits.

We are not told where the evidence upon which this statement is based, is to be found in the report. It reminds me of a little episode which occurred at an early stage in the development of the Western Australian gold-fields. I became interested in a lease not far from the famous Bayley ‘s Reward mine ; and an expert, who was then held in very high repute, was employed to report on the property. There was considerable excitement at the time in the mining market, and great expectations were based upon a favorable report being obtained from this celebrated expert. On the strength of his report, other mines had been floated, and the promoters of this concern were relying very largely upon a favorable report from him to recommend the lease to speculators in the various cities of Australia. The report eventually reached the promoters of the company, and it was found that after a great flourish of scientific, technical terms, the expert, in describing the property, went on to say “ Gentlemen, I see noreason whatever to doubt but that Bayley’s reef does go through your property.” Unfortunately, that did not satisfy those who were expected to take up shares in the venture, because, although the expert “saw no reason to doubt “ that Bayley’s reef went through the property, that which the owners of the lease required from him was some assurance that it did pass through it. This paragraph reminds me of that little incident. In the opinion of these respectable Commissioners - not one of whom I venture to say has ever been down a mine in- his life - future operations are likely to result in further valuable discoveries of iron deposits.

Mr Austin Chapman:

– -The honorable member for Bland has been down a mine.

Mr MAHON:

– I am referring not to the report signed by the honorable member, but to the majority report.

Mr Watson:

– One honorable member who signed the majority report worked in a mine for many years.

Mr MAHON:

– I am speaking, not of a coal mine, but of gold and iron mines. I had forgotten for the moment that the name of the honorable member for Newcastle appeared at the foot of the majority report. In the natural order of things, one might have expected to find him signing the minority report. But here we have the statement that in the opinion of these Commissioners, “ future operations are likely to result in further valuable discoveries of iron deposits.”

Mr Crouch:

– There, is evidence by the geological surveyors of the States in support of that belief.

Mr MAHON:

– The average miner, who is as good as any geologist, will .tell you that he cannot see “ beyond the point of his pick.” That is what his experience teaches him, but these members of the Commission are much more sanguine, and disregard the experience of practical men. I do not think that fRat statement is worth the paper on which it is printed. I invite honorable members now to turn to paragraph 10, in which it is said that this industry - would be an important addition to Australian industries, giving employment to capital and labour. The iron industry is by many well described as the foundation of all other industries.

I believe that to be true. I hold the opinion that the establishment of the iron industry would increase the employment of labour in Australia; but I take it that we ought to inquire first of all, what would be the cost of giving this encouragement. We as a Parliament ought to inquire whether the increased employment so obtained would not lead to decreased employment in other directions. The Commissioners say that the iron trade is at the foundation of all other industries, and, therefore, if we do anything to increase the cost of iron - if we impose a duty, or grant bonuses calculated to result in the cost of iron to the men who use it being increased - the tendency must be to decrease employment in those dependent industries. Paragraph 12 of the report contains the rather extraordinary statement that -

The existence of powerful rival vested interests elsewhere, and the novelty of the enterprise, so far as Australia is concerned, induce some hesitation in investing on the part of capitalists.

I wish to know from any business man who may be present in the Chamber whether the novelty of an enterprise has ever deferred investors from taking up a scheme in which they could see a profit ? The remark which I have quoted is an instance of the absurd statements with which the report bristles. We have capitalists investing in every new invention that is brought out. The fact that inventions ‘ are novelties does not deter people from investing their money in them, but probably is an inducement to many to put money into them. In paragraph 14 of the majority report it is stated that -

Your Commissioners draw attention to the fact that the bonus system of Canada has immensely stimulated iron and steel production in the Dominion, and your _ Commissioners are sanguine that the course now proposed will be productive of good results in Australia.

Although six of the Commissioners declare that the bonus system has immensely stimulated the production of iron and steel in Canada, the other six Commissioners, who heard the same evidence, watched the same witnesses, and deliberated upon and dealt with the same facts, state that -

The Canadian experience is not encouraging. The bonus system for iron production was first instituted there in 1883. Subsequently, a Bill was passed in 1897 further continuing the system. Another Bill was carried in 1899 providing for the diminution of the bounties by a sliding scale expiring in 1907. In July of this year the Dominion Government decided to postpone the operation of this sliding scale for one year, which practically means a further increase in the bounties paid.

That is a. palpable contradiction of the other statement, and the House is entitled to more information on the subject. We cannot fairly be asked to legislate on the strength of such mutually destructive statements. Paragraph 17 of the majority report reads as follows : -

No evidence has been produced which would lead your Commissioners to believe that any State

Government contemplates undertaking the establishment of ironworks or any abandonment of its position as indicated in the correspondence between the Federal Government and the States laid before the House of Representatives on the 29th July, 1902.

Surely the determination of a State Government is not, like the laws of the Medes and Persians, unalterable ! Since that paragraph was written the personnel of at least two State Governments has been radically changed. There is now in power in Queensland a Government which is largely sympathetic with the proposal that the State should carry on enterprises of this kind on its own account.

Mr McCay:

– Queensland is not likely to have much money for enterprises of this kind for some time to come.

Mr Fisher:

– It would have much less if we passed the Bill.

Mr MAHON:

– That is .so. Queensland’s contribution to the bonus would be considerable.

Mr McCay:

– In any case, it would have to find a good deal to carry on an enterprise of this kind.

Mr MAHON:

– I do not think that the honorable and learned gentleman should assume that the people of Queensland are “ dead broke.”

Mr McCay:

– I do not assume anything of the kind.

Mr MaHON:

– That is the inference to be drawn from the honorable and learned gentleman’s remarks. Although there may be a deficiency in the finances of Queensland, due to the operation of the Federal Tariff, the money is still in the pockets of the people, and it only requires taxation in some other form to extract it. I believe that ‘the resources of that State and the enterprise of its people are equal to the task of establishing ironworks there.

Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

– Without assistance from the Commonwealth Government ?

Mr MAHON:

– Yes.

Mr Fisher:

– At any rate, they do not propose to send round the hat.

Mr McDonald:

– If they can get the money from the Commonwealth Government, so much the better.

Mr MAHON:

– Surely the Minister of Home Affairs will admit that it is better for us to assist a State Government than to assist a private syndicate?

Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906

– I am not in favour of doing either.

Mr MAHON:

– I am hot vary enthusiastic on the subject, but if a choice has to be made between what the honorable gentle man may consider two evils, surely he will admit that assistance can more advantageously be given to a State Government than to a private syndicate?

Mr Spence:

– And to a foreign syndicate at that.

Mr MAHON:

– -I should like to know, before proceeding further, if it is the intention of the Government to take a vote on the question this afternoon?

Mr McLean:

– We intend to keep on until the usual time.

Mr MAHON:

– I would point out that honorable members are somewhat exhausted by the long sittings which we have had during the week. Furthermore, the hours that we sit here are not our only working hours. An honorable member is not necessarily idle because he is not sitting in this Chamber, and, of late, a great many questions have come before Parliament which have required a considerable amount of study. Personally, I feel rather tired, and therefore should be glad to have an opportunity to continue my speech on the next day of sitting; but if the Government will not consent to an adjournment of the debate, I shall deal with one or two other statements in the report. In paragraph 20 of the majority report it is stated that -

Your Commissioners recommend that provision should be inserted in the Bill …(*) securing to the Commonwealth or to the State in which the work for the earning of bonus is being chiefly carried on, a right of purchase of the undertaking after a fair interval, at a valuation.

I think that that arrangement would be altogether inadequate. If we legislated on those lines, and ultimately desired to resume this monopoly, we- might, at the end of the time, be obliged to pay a very handsome sum for the good-will of the concern.

Mr Tudor:

– - If it were successful.

Mr MAHON:

– Yes.

Mr Conroy:

– Perhaps the Government would have to pay for watered stock, too.

Mr MAHON:

– I thank the honorable and learned member for that observation. I was just going to refer to that matter. We might, perhaps, have some ‘clever bookkeeping done, and the stock might be watered several times over.

Mr King O’malley:

– We should have that.

Mr MAHON:

– Furthermore, we might have worn-out machinery thrown on our hands, to be paid for at a high price. Whenever enterprises of this kind have been carried out by private persons, and afterwards resumed by Government, they have been sold at an extravagant price. Several cases of the kind have occurred in Western Australia. The Great Southern Railway, from Albany to Beverley, was built on the land-grant principle, and was afterwards resumed by the State for about j£i, 100,000, or about 50 per cent, more than any private person would have paid for it. Like the present privatelyowned Midland Railway, from Perth to Geraldton, its directors would not move with the times, by giving the settlers a sufficient number of trains, and fair rates for the carriage of their produce, so that the State was absolutely forced to resume it at their own price.

Mr KING O’MALLEY:
DARWIN, TASMANIA · ALP

– The same thing has occurred with the Emu Bay Railway in Tasmania.

Mr MAHON:

– We ought not to deliberately place on the shoulders of the Commonwealth an incubus which we can get rid of later on only at enormous expense. If we are going to give this bonus to private individuals, we should insert in the Bill a clause requiring that where the net earnings of the industry exceed 5 per cent, or 6 per cent., the surplus should be returned to the Commonwealth in repayment of the money advanced. Such a clause would, of course, necessitate very strict inquiry into the transactions of the company, to ascertain what their real profits were, and to insure that they were not writing off an excessive amount for depreciation and wear and tear. Honorable members may laugh at that suggestion, but unless we wish to make an absolute gift to private individuals we must be involved in these complications. Now I come to the minority report, signed by the honorable member for Bland and the other members of the Commission who were associated with him. Here I find a statement which certainly ought to act as a danger signal to those who contemplate proceeding in the direction of subsidizing private enterprise. In clause 3 the Commissioners say -

The Bill provides for the payment of ^324,000 of the people’s money to private individuals engaged in an enterprise for ‘ their private gain. There can be no guarantee that the bonuses proposed would permanently establish the industry, though it is probable the inducements offered might be instrumental in forming speculative companies.

That paragraph lies right across the track of this Bill. The honorable members who constituted half of the Commission, deliberately say that the bonuses proposed would not permanently establish the industry, although it is probable that the inducement offered might be instrumental in forming speculative companies. These honorable members say further -

Nearly all the witnesses examined agreed that the payment of bonuses would be useless unless followed by a duty.

These warnings ought not to be disregarded, because if they are we shall embark upon a course which will involve us in very serious complications. The Commissioners who signed the minority report, say further -

No effort was made to bring forward witnesses against this Bill.

If that be the case, we can imagine how the conclusions at which the Commissioners arrived would have been strengthened if witnesses against the Bill had been called.

Mr Watson:

– Opportunities were afforded to every person who desired to give evidence.

Mr Watkins:

– Every member of the Commission had the right to nominate witnesses. As many persons gave evidence from the consumers’ stand-point as from the producers’ point of view.

Mr MAHON:

– So far as I can see, very few consumers gave evidence.

Mr Watkins:

– A large number of engineers, who are consumers, gave evidence.

Mr MAHON:

– They are middlemen, not consumers. I am reminded of some questions that were put to Mr. Franki, the manager of Mort’s Dock and Engineering Company, Sydney, who is a middleman,and not a. consumer, because he passes on to his customers any charges that He may have to defray. He was asked -

Do you think the proposal justifiable from the point of view of the consumers of raw iron ? - I think that the bonuses proposed are far too high.

It is proposed that a bonus of 12s. 6d. a ton shall be given for the production of pig iron? - That would be an outrageous amount. We now have to pay 82s. a ton for pig iron landed in our yard. I understand, however, that it is claimed that pig iron can be manufactured at Lithgow for 35s. a ton. Adding another 15s. for freight and charges - a very liberal allowance - that would make the price 50s. a ton. If they sold at 70s. the price would be 10s. below what we pay now, and would give the producers £1 a ton profit.

The honorable member for Newcastle says that the witnesses represented consumers and producers in fair proportion, but after having gone carefully through the list of witnesses, I cannot agree with him. I do not consider engineers to be consumers.

Mr Watkins:

– Who are consumers?

Mr MAHON:

– The people who ultimately use the articles, and who have to pay for them, are the real consumers. I am not prepared to accept as impartial the evidence given by middlemen, because whatever charges they may have to bear are merely passed on to their customers.

Mr Tudor:

– A man who kept a boot shop could not be called a consumer?

Mr MAHON:

– Certainly not.

Mr Watkins:

– To the extent to which he used leather as raw material he would be a consumer, and in that respect he would occupy exactly the same position as an engineer who used iron as his raw material.

Mr MAHON:

– It is very significant that the Commissioners who signed the minority report should have stated that “ No effort was made to bring forward witnesses against the Bill.” The report is a very negative kind of document altogether, and I leave honorable members to imagine what shape it would have assumed if witnesses hostile to the Bill had been brought forward.

Mr Wilks:

– They could not make out a case even with favorable witnesses.

Mr MAHON:

– Exactly.

Mr Groom:

– Persons who were unfavorable to the Bill were invited to give evidence, but did not appear.

Mr MAHON:

– That is all very well. The honorable and learned member imagines that every one is as public-spirited as he is, and that all the members of the community are only too eager to avail themselves of an opportunity to testify upon such a subject as that which was being investigated by the Commission. I did not know that any one was free to go before the Commission. 1 am a member of this House, and I did not know what the honorable and learned member assumes every member of the public knew. I thought that the members of the Commission nominated their own witnesses, and, apparently they did, because I do not see any evidence of witnesses having volunteered to give evidence.

Mr Wilks:

– They were all pressed men - hard pressed for the bonus.

Mr MAHON:

– I now return to the original point. We have no’ right, in my opinion, to give away enormous sums of money without first obtaining information from experts who cap tell us if we are proceeding upon right lines. We should have sought the guidance of men who are acquainted with the circumstances attending the establishment of the iron industry in America, or upon the Continent, or elsewhere.

Mr Mauger:

– The Commission should have gone to America.

Mr MAHON:

– I think it should. In any case I contend that bonuses are objectionable. I have in my hand a report which indicates some of the results brought about by the operation of bonuses in the United States. Mr. Thos. W. Lawson, writing in Everybody’s Magazine upon the effect of bonuses upon the political life of the United States, says -

At no time in the history of the United States has the power of dollars been as great as now. Freedom and equity are controlled by dollars. The laws which should preserve and enforce all rights are made and enforced by dollars.

It is possible to-day, with dollars, to “steer” the selection of the candidates of both the great parties for the highest office in our Republic, that of President of the United States, so that the people, as a matter of fact, must elect one of the “steered” candidates.

It is possible to repeat the operation in the selection of candidates for the executive and legislative conduct and control of every State and municipality in the United States, and with a sufficient number of dollars to “ steer” the doings of the law-makers and law-enforcers of the national, State, and municipal governments of the people, and a sufficient proportion of the Court decisions to make absolute any power created by such direction. It is all, broadly speaking, a matter of dollars to practically accomplish these things.

Mr Kennedy:

– The honorable member must admit that there is a distinction between a bonus and a bribe.

Mr MAHON:

– I am not now alluding to bribes. The article refers to the indirect influence which bonuses granted in connexion with the creation of artificial industries in the United States exercise upon politicians at critical times. Mr. Lawson continues -

I shall go further and say that there exists to-day uncontrolled in the hands of a set of men a power to make dollars from nothing. That function of dollar making which the people believe is vested in their government alone, and only exercised under the law for their benefit, is actually being secretly exercised on an enormous scale by a few private individuals for their own personal benefit.

In reply to the honorable member ‘ for Moira, who, I think, misunderstood the effect of what I was’ reading, I should like to mention a concrete case. Suppose that by the operation of this bonus we established, in, say, some part of New South Wales, an enormous industry, employing 5,000 or 6,000 men, who, with those dependent upon them, would probably represent 15,000 or 20,000 persons. Suppose further that a crisis was brought about, such as occurred a week or two ago, when one honorable member held the Government of this country, as he proudly boasted, “ in the hollow of his hand.” Let us try to conceive the extent of the pressure which might be exerted by the representative of the number of people mentioned, if they came here and asked for further concessions. Just consider the illegitimate power that they would be able to exert.

Mr Kennedy:

– That is an argument against the establishment or maintenance of any industry.

Mr MAHON:

– By State assistance, yes. It is an argument against granting State subsidies to industries, because the State has the power to increase a duty, and thereby add to the earnings of the operatives, or to decrease the protection, and bring about an opposite result. The extract which I read referred to the indirect influences exerted by the granting of State subsidies to private enterprises. We need not travel even to the United States in order to ascertain the effects of granting butter bonuses and sugar bonuses.

Mr Kennedy:

– If the bonus now proposed has the same effect upon the iron industry that the butter bonus has had upon the dairying industry in Victoria, there will be no reason for complaint.

Mr MAHON:

– I was referring only to one of the by-products of the bonus system. I believe that so far as the butter bonus is ‘ concerned, it has proved of great advantage to the fanners of Victoria. Unfortunately the farmers did not get all that they were entitled to. I am merely referring to the hy-products of bribery and corruption which have been the resultant of the bonus system, and which I am sure the honorable member for Moira condemns as strongly as does anybody else. I feel certain that he is disgusted with the revelations made by the .Butter Commission, and with the exposure of some “clean.” politicians who have controlled the affairs of Victoria in the past. The House must have felt disappointed that the honorable member for Parramatta, who is one of the most valiant antagonists of the bonus system, confined his opposition to this measure to a few sentences. On a previous occasion he spoke at much greater length, but I doubt whether time will admit the reading of quotations from his address. I therefore ask leave to continue my remarks upon a future occasion.

Mr Kennedy:

– I object.

Mr MAHON:

– The honorable member for Parramatta’s address on a former occasion filled many pages of Hansard. As there are many new members in this House, I think they ought, to be put in possession of the arguments used against this Bill when it was first introduced. Surely, in these circumstances, the honorable’ member for Moira will not persist in his objection to the course I suggest.

Leave granted; debate adjourned.

House adjourned at 4.4 p.m.

Cite as: Australia, House of Representatives, Debates, 21 October 1904, viewed 6 July 2017, <http://historichansard.net/hofreps/1904/19041021_reps_2_22/>.