House of Representatives
25 August 1905

2nd Parliament · 2nd Session



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

page 1530

PETITION

Mr. JOHNSON presented a petition from over 60,000 residents of New South Wales, praying the House to enact stringent legislation to prohibit the importation and sale of opium for smoking purposes into the Common wealth.

Petition received and read.

Mr PAGE:
MARANOA, QUEENSLAND

-What becomes of all these petitions? It took two men to carry into the Chamber the pile of documents which constitutes the petition which has just been received, but we hear no more of these petitions after presentation.

Mr SPEAKER:

– All papers laid on the table of the House are preserved among its record’s.

page 1531

QUESTION

IMMIGRATION RESTRICTION ACT

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

– I wish to read from this morning’s Argus what appears to be a report copied from the Sydney Stock and Station Journal. This report, upon which I shall base a question to the Prime Minister, is as follows: -

Last week our contributor “ Merrigang “ was at a horse sale at Inglis’s Bazaar, and fell into conversation with the groom who had brought out some horses for Mr. Livingstone-Learmonth. “ Merrigang “ asked the groom if he meant to stay out here after he had delivered the horses, and received a bit of a shock when informed that “ they won’t let me stay here.” We are all quite willing to admit that we need population, and our Agent-General is trying to induce people to come here, and says he is succeeding. But this groom, a fine specimen of a Suffolk Englishman, said we wouldn’t allow him to stay here, and he’ll go home and spread that news among the Suffolk farmers ; and ill news travels fast.

We sent for the man, and asked him why he would not be allowed to stay here, and he showed the following documents : - (Copy.)

Dalgety and Company Limited,

Head Office. 96 Bishopgate-street Within,

London, E.C., 9th June, 1905.

Mr. W. Gooderham, junior,

S.S. “Miltiades.”

Dear Sir, - As you are proceeding to Australia under an agreement as to wages with Mr. LivingstoneLearmonth, you would not be allowed to land there under the Commonwealth Immigration Restriction Act1901. We have, however, obtained a special certificate of exemption from the AgentGeneral for New South Wales, which we enclose herewith. It is available for six months, from the 9th of June, which will enable you to deliver the horses to the station. It is to be understood that this certificate is only issued subject to the undertaking that you are returning to this country on the completibn of your mission.

Yours faithfully,

For DALGETY & COMPANY LIMITED, (Sgd.) F. B. SMYTH. (Copy.)

Form No. 2.

COMMONWEALTH OF AUSTRALIA. IMMIGRATION RESTRICTION ACT, 1901.

No. 1 - State of New South Wales.

This is to certify that William Gooderham, junior, of Woodbridge, Suffolk, England, aged 36 years, a *groom, is exempted for a period of not exceeding six months from the date hereof from the provisions of the Immigration Restriction Act, 1901.

Dated at 9 Victoria-street, London, this 9th day of June,1905.

*Insert trade, calling, of other description.

A. COGHLAN,

Acting Agent-General for New South Wales.

This certificate must be retained by the person to whom it is issued.

Regulation No. 9, gazetted 3rd January, 1902, slates : - “ 9. Any person who, with intent to contravene or evade the Act, or these regulations, or without just cause or excuse transfers or delivers up to any other person any certificate or credentials referred to in the Act or in these regulations, shall be guilty of an offence against these regulations.”

NOTE. - A person guilty of any offence against these regulations is, under section 18 of the Act, liable upon summary conviction to a penalty not exceeding £50, and in default of payment to imprisonment, with or without hard labour, for any period not exceeding three months.

Then follow some further comments. I wish to know if the attention of the Prime Minister has been directed to this report. If so, has he taken steps to ascertain whether the report is a correct one? By what arrangement or authority was this ticket of leave obtained from the AgentGeneral for New South Wales?

Mr DEAKIN:
Minister for External Affairs · BALLAARAT, VICTORIA · Protectionist

– The report is likely to be correct, because one of the first communications which I received upon entering upon the administration of the Department of External Affairs last month was a letter from the acting Agent-General for NewSouth Wales, asking for authority to issue that permit. He was at once informed by my direction that no certificate of the kind was necessary. Evidently the man referred to in the newspaper report had left England before that time. I am making inquiries to discover under what circumstances the exemption was issued. The initiative in the matter was apparently taken by the steam-ship owners, who seem to think that restrictions which are applied to aliens might be applied also to people of the mother country, although in this case quite inapplicable.

Mr CONROY:
WERRIWA, NEW SOUTH WALES

– Will the Prime Minister, take steps to make as public as possible his announcement that tickets of exemption are absolutely unnecessary under these circumstances ?

Mr DEAKIN:

– I directed inquiries to be made into this matter this morning before coming here.

page 1532

AFFRONT TO A MINISTER

Mr WILKS:
DALLEY, NEW SOUTH WALES

– I wish to read from the Argus a paragraph in which it is stated that a grave insult has been offered to the Minister of Trade and Customs during his tour in New South Wales. Other newspapers refer to the matter more strongly. The paragraph is as follows : -

page 1532

QUESTION

LEGISLATORS NOT WANTED

Wagga, Thursday. - At a smoke social held to-night in connexion with the show the toast of “Parliament” was submitted, but the president announced that no response to the toast would be asked for. Sir William Lyne left the room, saying that this was the greatest insult he had ever received. It was pointed out that last year Sir William Lyne and Mr. Groom, M.H.R.’s, took about two hours to respond to the toast. The committee had therefore decided that no speeches in reply should be made on the present occasion.

Will the Prime Minister have this wandering Minister immediately recalled, so that the Government and the Commonwealth may not be further humiliated at public functions ?

Mr CONROY:

– I wish to ask the Prime Minister whether he will allow the Minister of Trade and Customs to further increase the duty levied upon imported harvesters, in order to punish the farmers of Wagga for refusing to listen to him ?

Mr DEAKIN:
Protectionist

– I do not think that honorable members wish me to take serious notice of their questions.

page 1532

QUESTION

DEFENCE ESTIMATES

Mr McCAY:
CORINELLA, VICTORIA

– I wish to know from the Vice-President of the Executive Council when we may expect to receive the memorandum which is usually circulated with the Defence Estimates ?

Mr EWING:
Vice-President of the Executive Council · RICHMOND, NEW SOUTH WALES · Protectionist

– I shall cause inquiry to be made, and inform the honorable and learned member later on.

Mr McCAY:

– This memorandum should have been circulated already. Do the Government propose to extend to honorable members the courtesy and justice of circulating it on this occasion? The House has a right to the information for which I ask.

Mr EWING:

– I feel the importance of the question, and shall make inquiries into the matter.

Mr McCay:

– The memorandum should be circulated before the Budget debate is resumed.

Mr EWING:

– The honorable and learned member is entitled to the information for which he asks.

At a later stage,

Mr EWING:

– I am now in a. position to inform the honorable and learned member for Corinella that the papers to which he referred will be available on Tuesday.

page 1532

QUESTION

NEW GUINEA REFERENDUM

Mr BAMFORD:
HERBERT, QUEENSLAND

– Will the Prime Minister lay upon the table a return showing the number of papers issued in connexion with the referendum taken in New Guinea two years ago, the number of papers returned, and the result of the voting?

Mr DEAKIN:
Protectionist

– I assume that the information is filed, and will have it looked up at once.

page 1532

QUESTION

ROYAL COMMISSIONS AND SELECT COMMITTEES

Mr WILKS:

– Will the Prime Minister cause to be prepared and laid upon the table a tabulated statement showing the number of Royal Commissions and Select Committees appointed since the inauguration of Federation, and their cost?

Mr DEAKIN:
Protectionist

– Such a return should be moved for. If the motion is made, it will be unopposed.

page 1532

QUESTION

TASMANIAN MAIL CONTRACTS

Mr McWILLIAMS:
FRANKLIN, TASMANIA

– Will the PostmasterGeneral lay on the table any agreement which may have been entered into between his Department and the Union and Huddart Parker Steam-ship Companies for an alteration of the mail service between Tasmania and Victoria?

Mr AUSTIN CHAPMAN:
Postmaster-General · EDEN-MONARO, NEW SOUTH WALES · Protectionist

– There is no objection to laying a copy of the agreement on the table of the Library.

page 1532

PAPER

Mr. GROOM laid upon the table the following paper : -

Pursuant to the Property for Public Purposes Acquisition Act. - Notification of the acquisition of a site for a post-office at Murrin Murrin, Western Australia.

page 1532

QUESTION

ORIENT MAIL CONTRACT

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

– I desire to ask the Postmaster-General whether the papers containing the agreement and correspondence between the late Postmaster-General and the Orient Company have been laid upon the table?

Mr AUSTIN CHAPMAN:
Protectionist

– The papers were laid on the table some evenings ago, and are being printed.

page 1533

QUESTION

INSPECTION OF PAPERS

Mr KNOX:
KOOYONG, VICTORIA

– I desire to ask the Prime Minister a question with regard to the papers which are laid upon the table of the House, or upon the Library table, for the information of members. I wish to know whether some definite place could not be chosen in this House, and also in the Library, where papers would always be available to honorable members who desire to avail themselves of the information contained in them ?

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

– There should also be some definite method of circulating them.

Mr DEAKIN:
Protectionist

– All the papers laid upon the table of this House are, except in cases where they are ordered to be printed, handed over to the care of the Clerk, who can at once produce them to honorable members who desire to see them. The Printing Committee sits regularly, and lays before the House periodically a list of the papers which’ have been printed. These papers are circulated amongst honorable members. The papers laid upon the Library table are in. charge of the Librarian, and are obtainable from him by honorable members who desire to see them.

page 1533

HOUR OF ADJOURNMENT

Mr DEAKIN:
Protectionist

– As there appears to have been some misapprehension in the minds of honorable members as to the usual hour for adjournment, I desire to intimate that from this time forth the usual hour will be half-past eleven p.m. It is proposed that we shall sit until that hour as a rule. We can then devote eight hours per day to the work before us, and dispose as early as possible of the vast mass of business on the paper.

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

– That is a later hour than usual. Eleven o’clock is the proper time for adjournment.

Mr Bamford:

– Honorable members will be unable to catch their last trains.

Mr DEAKIN:

– I am afraid that in viewof the state of the business-paper, the last trains will often be the only ones we shall be able to catch for some time to come. I would say further that the custom that has been followed of rising early on Friday afternoon cannot be understood to apply after this week, if the progress of business requires that we shall sit on.

page 1533

QUESTION

CENTRAL TELEPHONE EXCHANGES

Mr HUTCHISON:
HINDMARSH, SOUTH AUSTRALIA

asked the PostmasterGeneral, upon notice -

What is the minimum number of subscribers each officer has to attend to from 8 a.m. to 6 p.m. in each of the Central Exchanges of each State, trunk lines excluded?

Mr AUSTIN CHAPMAN:
EDEN-MONARO, NEW SOUTH WALES · PROT; LP from 1910; NAT from 1917

– In reply to the honorable member -

Sydney. - 97.

Melbourne. - 37 operators, 100 each; 6 operators, 73 each ; 3 operators, 50 each.

Adelaide. - 100.

Brisbane. - 16 operators, 100 each,1 operator, 56.

Perth. - 8 operators, 100 each; 2 operators, 60 each; and 4 operators, 50 each.

Hobart. - 100.

page 1533

MANUFACTURES ENCOURAGEMENT BILL (No. 2)

Second Reading

Debate resumed from 24th August (vide page 1491), on motion by Sir William. Lyne -

That the Bill be now read a second time.

Mr McCAY:
Corinella

– I do not desire to occupy the time of the House at. very great length, but as I had the honour of being oneof the members of the Commission that inquired into the question of establishing the manufacture of iron in the Commonwealth, I feel it to be my duty to say a few words. As may be easily surmised, I do not, on this question, join forces with honorable members sitting in. the direct opposition, but part company with them for a time, at any rate, in connexion with this measure.

Mr Page:

– So soon?

Mr Thomas:

– Is this a bridge?

Mr McCAY:

– No, it is not a bridge. I should like the honorable member for Maranoa to remember that the late Government itself accepted the statement that the fiscal issue was alive again as the determination” that it could not continue in office as onedisregarding the fiscal issue. The protectionist members of that Government were quite willing to, adopt the course that was followed for the purpose of preserving their right to vote in accordance with their convictions on fiscal matters. I think it must be admitted that if the iron industry can be established in Australia - I have no particular desire that attention should be paid to my remarks, but I do wish to be able to speak without raising my voice to shouting pitch.

Mr SPEAKER:

– Order ! There is sometimes excuse for a little excitement in the heat of debate, but when honorable members begin at this early stage of a sitting to carry on so much discussion and conversation among themselves that it is almost impossible for the honorable member addressing the House to proceed, they are not acting in accordance with the duty which they owe to any honorable member who may be in possession of the Chair. I trust, therefore, that they will listen with more attention to the honorable member for Corinella.

Mr McCAY:

– So long as I have an opportunity of letting Hansard hear what I am saying, I have no desire to force honorable members to listen to me. I do not, however, wish their remarks to be interspersed throughout my speech with the risk that they may be mistaken for my own. We are all agreed that if the iron industry can be established in Australia it will be a valuable thing for the Commonwealth. Any differences of opiniion that may arise do not relate to the object to be achieved, but to the method by which it is to be attained. When we look at other countries, and realize that only in those in which the iron industry has been satisfactorily established and continued has the development of manufactures been considerable, we must all agree that, in’ this continent of ours, where we have such ample resources in the way of ore, coal, and flux, we should do our utmost to secure the establishment and development of that great industry. Consequently, I have no hesitation in. sayang that if we can bring about that result at a cost of £300,000, the money will have been very well spent. There are various’ ways in which it could be clone. One method was suggested some vears ago, namely, that some State - or the Commonwealth itself, if it had the power - should undertake the responsibility. That was a method with which I did not agree then, and I do not agree with it now. The industry might also possibly be established by the imposition of a protective duty, to which, however, at the present time there are obvious objections, even from the protectionist point of view - and that is the only point of view from which I regard this matter. Consequently we have left open to us only a third method, namely, that of offering a bonus, in the safest way in which it. can be offered, viz., payment by results. The question as to the exact rate of bonus to be paid is one that may be discussed in Committee. If I recollect aright, the scale of payment now proposed is different from that suggested in the first Bill. I am endeavouring to work out figures which will enable me to arrive at a conclusion’ as to what the rate of bonus should be; but I have not yet had time to complete my calculations. I do not wish to deal with that aspect of the matter at present. Of course there is always the risk in this, as in every. other matter, that the experiment may not be a success. We cannot expect to have a guarantee of success in connexion with am enterprise of this kind, but in view of the immense advantage that would be conferred upon the Commonwealth by the successful establishment of the industry, we are not only justified in making the experiment, but we are bound by our duty to Australia to do so. Therefore I have no hesitation in supporting the principle contained in the measure. Some honorable members have objected to the Bill on the ground that, according to the evidence given before the Bonus Commission, it would appear that no bonus is necessary, that the industry could be established without the assistance of a bonus, and that if the figures given by various witnesses are correct, ithe manufacturers ought to be able to make a large profit without any assistance from the State. That is a theory based upon a series of inferences drawn from alleged statements, viewed from what I am afraid is not a totally unbiased stand-point. The point, after all, is that the industry has not been established without a bonus, and that so far as one can judge, there is little likelihood of its being entered upon here without State aid.

Mr Mcwilliams:

– The promoters of the scheme say that they will not establish the industry without a duty.

Mr McCAY:

– They do not go as far as that.

Mr Mcwilliams:

– The honorable and learned member should look at question 2320.

Mr McCAY:

– A single answer to a single question is not conclusive upon a question of this kind. It is a common practice everywhere to select a series of questions and answers . to establishone’s own contention, and to disregard entirely all the rest of the evidence. Fortunately, however, the judicial bodies which usually have the determination of matters, insist that the whole of the questions and answers shall be regarded. I heard a great deal of the evidence, and read the rest of it while my memory was fresh, and I say, unhesitatingly, that the weight of the evidence goes to show that, rightly or wrongly, there is no reasonable likelihood of the industry being established without assistance of some kind.

Mr Conroy:

– Would the honorable member call it an industry if it did not pay ?

Mr McCAY:

– Unfortunately, industries da not always pay, and those who enter upon them are not always sufficiently remunerated. The industry of the honorable a,nc learned member, for instance, is, in his opinion, not sufficiently remunerated. But it is industry all the same. I have commenced three times to say that it appears to me that, rightly or wrongly, there is no reasonable likelihood of the industry being established unless some assistance be given. The reason is obvious. It requires the outlay of a large amount of capital, and those concerned in the matter expect a reasonable assurance that they will get some return for their capital. Let us remember the facts of the case with regard to the production and consumption of iron. In England and in the United States the iron industry has been established and developed to a very large degree. We know that so great are the resources of the manufacturers in the United’ States that it is quite possible for, the output to be increased at any particular time to such an extent as to enable the manufacturers to more than swamp such a market as ours. Consequently, if an attempt were made to establish the industry here without assistance from the State, the result would inevitably be - and it would be a perfectly legitimate market operation - that whatever the price the Australian manufacturer asked for his material, allowing for the cost of production, and leaving a margin for profit, he would inevitably be undersold by his giant competitors. That is a fact which must always influence those who regard the question from the protectionist point of view. There is another important fact in connexion with the industry, namely, that various works turn out special brands of iron, and find it to their interest to keep up a certain quality. There will consequently not be what is called “ the usual prejudice “ against Australian goods, but there will be very great difficulty, at the initiation of this enterprise. in getting the consumers to purchase the Australian article, because they know that if they buy the imported article of a given brand they will be getting a given quality. There is more difficulty in securing a market for Australian iron than there is in the case of any other local manufacture. This is due not so much to prejudice as to a just apprehension that in purchasing the local article the consumers may* not.be getting exactly the quality that they want. Therefore, it seems to me that in the case of a great industry of this character - great in its potentialities, and in its benefits to the community - special difficulties exist both in regard to the possibility of the products of any such enterprise> independently started being undersold and in getting the consumers to use those .products, and for these reasons we are justified in proceeding in the way that is proposed. I quite agree with the statement, which I signed in the majority report, which sets out -

Your Commissioners, however, do not recommend’ the immediate imposition of a Customs dutv, as, pending a local supply sufficient for Australian requirements, the result might be to temporarily raise the price to the consumer, which should be avoided.

Of course, there is always that difficulty in connexion with protection. One man’s raw material m’ay be another man’s finished product. It is that fact which requires a very careful adjustment of the relative rates of duty. In this case, undoubtedly, if the industry were established in such a way as to seriously interfere with the users of its products, it might possibly do more temporary harm than immediate good. But by following the bounty method, and ascertaining whether the industry can be thoroughly established, and a satisfactory article produced, we shall afford those who wish to engage in the enterprise an opportunity of so doing, without in any way interfering with the well-being of the consumers. It is alleged by those who are opposed to the Bill that the evidence taken before the Royal Commission shows that the industry can be established without any state aid whatever. I have ventured to give one or two general reasons which are, to my mind, a sufficient. answer to that contention. Then it is suggested that those who may embark upon this enterprise may possibly make a large profit out of it. I do not suppose - to use an American phrase - that they will enter the business “ for the benefit of their health.” They expect to make a profit, and we should not begrudge them that profit so long as it is a reasonable one.

Mr Conroy:

– We do not begrudge it to them, so long as they, do not take it out of the public purse.

Mr McCAY:

– That is a phase of the question with which I have already dealt. I say, deliberately, that if we can establish the iron industry for an expenditure of £300,000, the project is cheap at the price.

Mr Kelly:

– Would the honorable and learned member like to see the industry nationalized afterwards?

Mr McCAY:

– No.

Mr Kelly:

– That is what will happen under this Bill.

Mr McCAY:

– I hold that if we succeed in establishing the industry it willbe cheap at the price. Any persons who wish to embark upon this undertaking must, in view of the large sum of money which requires to be invested, receive some assurance that they are not going to lose it all. That is our justification for giving the encouragement that is proposed. I assume that those who do engage in the industry see their way to make a profit. I am not a friend of those who wish to make profits by market operations - by the flotation of companies. But we cannot help recognising the fact that a large expenditure needs to be incurred in this enterprise before any return can possibly be received. If, for each£1 that we pay away, a ton of marketable material is produced, that is, after all, the matter with which we are concerned. The way in which the profit is divided among those who find the capital is a matter of small concern to us.

Mr Mcwilliams:

– The promoters will only take 500,000 shares out of 1, 000,000.

Mr McCAY:

– That is the suggestion of the honorable member.

Mr Mcwilliams:

– It is a fact.

Mr McCAY:

– The honorable member ought to know that in all probability they will not get 500.000 shares for themselves. The original vendors do not usually secure the whole of the purchase money. If it can be shown that too much is being offered tothem, that is another matter. AllIsay is that something should be offered to them. In the Bill as it was introduced inthe first Commonwealth Parliament, I think that the rate prescribed was lower than is the case in this measure. What the rate shall be, however, is a mat ter for discussion when we reach the schedule. I merely wish to affirm my support cf the principle that some assistance should be given of a sufficiently substantial character to induce people to engage in this enterprise in the hope of securing a profit for themselves. We should encourage them to embark upon it in such a way as to make it reasonably sure that if their efforts are successful they will mean the establishment of a substantial iron industry in Australia. I shall be no party to allowing the promoters an opportunity to operate in such a way that they will be able to draw the bonus, thus recouping themselves for their outlay, and then to discontinue operations, with a substantial profit at the close of the bonus period. We must guard against that contingency. We must make sure that when they have drawn the whole of the bonus they cannot close down their works and walk away with a profit in their pockets.

Mr Deakin:

– That is the one risk which we incur.

Mr McCAY:

– Exactly. That is a factor which should impel the Government to carefully consider the exact rate which should be given. I do not suppose that the Ministry are absolutely bound to the rate prescribed in this Bill. If it can be shown that it is too high or too low, I presume that it can be altered. It will be observed that the majority report of the Royal Commission makes no reference whatever to tne rate. It simply affirms that a bonus should be granted. We had not before us sufficient material to justify us in declaring what the rate should be. I wish to remind the House that had it not been for a great majority of members of the Labour Party, this Bill would have been law long ago. The reason, we have not a Manufactures Encouragement Act in operation, instead of a Manufactures Encouragement Bill under consideration - the reason we do not know whether the undertaking can be successfully initiated, and whether hundreds or thousands of men can, or cannot, be employed in the industry, is that a majority of the members of the Labour Party were fonder of their socialistic doctrines than thev were of their protectionist principles. It is due to that fact alone that this Continent does not at present possess an iron industry. I admit that there were one or two honorable members of that party who realized that the prosperity of Australia was more important than the abstract theories of ownership of which they are so fond. But the great bulk of members of the Labour Party, including its leader, the honorable member for Bland, are alone responsible for the fact that there is no Manufactures Encouragement Act in operation to-day. It speaks volumes for the charity of my honorable friends above the gangway upon the Ministerial side of the Chamber that they can so readily forget all the past in connexion with this matter. I say that the greatest enemy which the iron industry in Australia has had up to the present time has been the Federal Labour Party. It may be a fact of which they are proud, but it is nevertheless the truth. When we endeavoured to pass this measure in 1902, it was the bulk of the members of the Labour Party, headed by the honorable member for Bland, who insisted upon declaring that the industry should be nationalized, or that there should be no industry at all.

Mr Ronald:

– They were assisted by some of the free-traders.

Mr McCAY:

– That is so. But I would point out that the free-traders were justified in opposing the Bill in any shape or form. It is the action of those who call themselves protectionists that I am challenging in this connexion. I think that the honorable member for Southern Melbourne was one of those who was true to his protectionist principles, and who endeavoured to get the Bill passed. But the honorable member for Bland, a protectionist member of the Labour Party, and other members of that party, acted as they have always done when protection has come into conflict with their Labour platform. They flung theirprotectionist doctrines upon one side, and stuck to their pet theories, which they now tell us are theories applicable to the distant future. Consequently, it is they alone whom Australia has to thank for the fact that we are still discussing this Bill, instead of watching with anxious interest the development of the iron industry in Australia.

Mr Mcwilliams:

– Then they have justified their existence by that action.

Mr McCAY:

– If the honorable member thinks that, he had better join them.

Mr Carpenter:

– Does not the honorable and learned member forget the great American steel trust?

Mr McCAY:

– I am more concerned with seeing the Australian iron industry established, and Australian workmen re ceiving Australian wages for doing Australian work - I am more interested in seeing Australian manufacturers using Australian iron, than I am in the operations of the American steel trust. Whether it be State-owned or privately-owned, I am satisfied that unless the Commonwealth comes to its assistance, there will be no iron industry in Australia. The American steel trust is strong enough to stop that. I thank the honorable member for Fremantle for mentioning the name of that particular corporation.

Mr Deakin:

– Most trusts are “ steal “ trusts.

Mr McCAY:

– Possibly. I do not know whether or not the Prime Minister is referring in that connexion to public ownership. I have only one other observation to make. A good deal of stress has been laid upon the answer which was given by Mr. Sandford to a question put to him before the Commission in regard to the cost of the production of iron at Lithgow, which he set down at 35s. per ton. I thought then, as I do now, that his estimate - despite the fact that he is a gentleman who should know what he is talking about - was extremely low. At any rate, it was unsupported by the testimony of any other witnesses. All the rest of the evidence given before the Commission goes to show that the cost of production is very much higher than he stated it to be. Even at Pittsburg it is 32s.5½d. per ton; at Middlesborough it is 52s. 2d. ; and Mr. Jaquet estimated that the cost at Lithgow was 47s. 7d. per ton.

Mr Mcwilliams:

– The f.o.b. price at Glasgow is 50s. per ton.

Mr McCAY:

Mr. Jaquet’s estimate will be seen by reference to question 350 of the official report of the evidence. The price at Glasgow’ f.o.b. is 50s. per ton, for some iron.- But there are a good mamqualities.

Mr Mcwilliams:

– That is the price of the iron which is imported into Australia.

Mr McCAY:

– It is the price of some of it.. The honorable member must knowthat the prices vary. Is he not aware what a delightful vehicle for stock exchange gambling are the Middlesborough iron warrants? One of the happy hunting grounds of speculators is to be found in the varying prices of iron. I repeat that the aualities of the iron vary enormously. To sav that anv particular article is sold at 50s. per ton f.o.b. at Glasgow, and to assume that that is the average price of the average quality produced, is, I venture to think, entirely a mistake.

Mr Mcwilliams:

– That is the evidence of the man who proposes to float this syndicate.

Mr McCAY:

– The honorable member will have an opportunity of stating his views later on. A good deal of stress has been laid upon Mr. Sandford’s statement. I have a distinct recollection of the occasion upon which he gave that answer. The Commission were sitting in the room which is now occupied by the Labour Party, and I remember that Mr. Sandford was asked what was his cost of production. At first he seemed disinclined to answer. He became very excited, and the honorable member for Parramatta suggested that he should retire for a few minutes, and consider the matter.. Mr. Sandford appeared to be a gentleman of an excitable disposition, and undoubtedly no member of the Commission treated him with greater courtesy and consideration than did the honorable member for Parramatta, although he is strongly opposed to him on this particular question. Mr. Sandford went out of the room, but returning far. sooner than we had anticipated,, he rushed to his chair, and commenced to speak. I do not believe that from that time until the close of his examination he mastered and marshalled his facts as an ordinarily careful witness would have done. It was because I observed that he was highly excited that I asked him again and again whether the quotation hehad given included all costs of production. Although apparently he adhered to the statement that it did, the fact remains that there are a number of charges which bring up the total cost to far more than 35s. - to 50s. or 55s. per ton.

Mr Watkins:

– Nearly 60s. per ton.

Mr McCAY:

– One or two of the suggested charges could not be fairly included in the cost of production ; but, at all events, whether the cost to Mr. Sandford is 35s. or 65s. per ton. I assert most emphatically that he would have to maintain a most strenuous fight for a long time against the steel trusts and other great corporations concerned in this industry. Whilst on the one hand we should not make the bounty so high and give it under such conditions as would render it possible for those engaged in the industrv to simply earn it, and then go out of the business, making a profit, it is equally important on the other hand, that it should not be so low as to render it impossible for them to withstand the market competition, which will be fiercely forced upon them for some years by the American steel trust and other corporations. We are on the horns of a dilemma. We maymake the bounty so high that the industry will not be established, or on the other hand we mav make it so low that it will be impossible to develop it. It is necessary for us to arrive at a happy via media, which will enable us to guard against injustice to the Commonwealth and at the same time to secure the development of the industry. I hope there will be no unreasonable delay in passing this measure. It will evidently require to be discussed fron: the protectionist stand-point, as well as from the free-trade point of view, but for the most part that discussion may well take place in Committee. I have merely risen to express my continued adhesion to the principle of the Bill, although, as I have already said, I am not prepared under any circumstances to nationalize the industry.As a protectionist, I trust that we shall have an opportunity, by means of this Bill, to establish what is perhaps the basic industry of all our great enterprises, and one which certainly, cannot be described, even by the most pronounced free-trader, as other than a primary industry. It is as much a primary industry as is the growing of grain, or the raising of wool.

Mr Kelly:

– Can any industry that cannot stand alone be a primary one?

Mr McCAY:

– Certainly. As a matter of fact, no industry stands alone. The existence of financial institutions, which collect money from those who have ‘saved it, and lend it to those who wish to employ it, shows that no industry can stand solely on the capital of those who are actually engaged in it - the entrepreneurs. They cannot find all the necessary capital’. The only question in this case is whether the necessary assistance is to come, as some of my honorable friends desire, only from private individuals. There are few individuals, however, whocould find the hundreds of thousands of pounds required to establish the iron industry. It is, after all, only a question of the source of the assistance to be given. I admit that we are bound, when we propose to devote public funds to a given object, to point out in what direction the public will be benefited. I think we can prove that the expenditure of public funds in this case will be justifiable. No industry can stand alone in the sense that those who are engaged in it can work it entirely on their own capita

Mr Page:

– What protection does the pastoral industry receive?

Mr McCAY:

– I did not say that it received any protection. As a matter of fact, however, the pastoral and agricultural industries of every State receive Government assistance in the shape of reduced railway freights.

Mr Page:

– I should like to know of one instance in which that assistance has been given.

Mr McCAY:

– Wherever the State-owned railways of Australia are not paying, the’ cause may be found in the fact that freights on the country lines are unremunerative. The suburban lines always pay. Those engaged in the pastoral and agricultural industries receive assistance in various forms from the States. Some of my honorable friends speak of this as Socialism, but it is no more Socialism than it is individualism.

Mr Page:

– In what case have those engaged in the pastoral industry received any assistance ?

Mr McCAY:

– I am not so familiar with the railway freights of the different States as to be able to readily quote a case in point ; but in this case we are considering a national asset. We have a right to step in and assist in the utilization of that asset. Here is an undeveloped’ national asset at present lying useless in the earth. And it is because it is a national asset, because the nation will benefit by its development, because its development will increase the resources of the nation, its wealth and its population, and make us independent of outside sources for the carrying on, in time of peace as well as in time of war, of the ordinary operations of our national life, that we should support this proposal.

Mr KELLY:
Wentworth

– After the most closely reasoned and able speech by the honorable and learned member for Corinella to which we have just listened, I must at the outset express my regret that, in spite of the number of questions upon which honorable members of the Opposition think in common, I find that on this question I cannot be in agreement with my honorable and learned friend. My honorable and learned friend put his chief reasons for supporting this Bill in a few catch phrases - such as “Australian wages for

Australian workers,” and “An Australian bounty for an Australian industry.” These phrases are uplifting, if unconvincing. Why not, might I ask him, also “ Australian terriers for Australian watchdogs ‘ ‘ ? These catch phrases remind me of those which were very prevalent in New South Wales when the Federal Constitution Bill came to be discussed. One distinguished gentleman, who is now in England, told us of all that Federation was to do for Australia. We were told that it was to give us one people, one language, and one destiny ; and now we find that it is also to give us one High Commissioner, who, that most distinguished gentleman wishes us to believe, could most conveniently be that most distinguished gentleman himself. The honorable and learned member who preceded me made as telling an indictment against the Bill as it stands - not against the principle of protection - as any honorable member of the Free-trade Party could possibly make. He stated most distinctly that, whereas he was in favour of supporting the iron industry of Australia for private enterprise, he was strictly opposed to a proposition to nationalize it. Now, sir, I hold that every one who analyzes this Bill must recognise that its result will be, not to give an impetus to private enterprise in the production of iron, but to bring about the nationalization of the industry. I have no sort of satisfaction in being able to say to the present Government, “ I told you so;” but in dealing with their policy speech I took the line that the Manufactures Encouragement Bill would be made a bridge over which the supporters of the giving of a bounty to private enterprise could walk into the camp of our socialistic friends, who will have nothing to do with any enterprise of a private character. I think that forecast has been abundantly justified by the Bill now under discussion.

Mr Watkins:

– Will the honorable member tell us of the bridge that was constructed to enable one party in the House to join another in putting out the Labour Government ?

Mr KELLY:

– It is out of consideration entirely for my honorable friend’s and the Government’s feelings that I do not refer to that ancient treachery of theirs. I only wish to say at this stage that every estimate formed on this side of the House as to what would be the action of the Government in regard’ to its legislation has proved correct. We know - and I am glad to see that the country is awakening more and more every day to a knowledge of this fact - that, under the guise of introducing a very innocent type of measure, the Government, in the first Bill submitted to us, have brought forward a proposal that is acceptable only to one-third of the House and to a tenth of the people of Australia.

Mr Page:

– To what Bill does the honorable member refer?

Mr KELLY:

– The Trade Marks Bill. In the Bill now under discussion we find that they are not proposing to honestly grant some encouragement to private enterprises, but that they are hedging the proposition round with all sort’s of-

Mr Watkins:

– Safeguards.

Mr KELLY:

– I shall not say “safeguards,” because the provisions in question are not put forward straightforwardly. Safeguards are usually found inserted in Bills in a straight-out, honest way, but we have to analyze the clauses of this Bill very closely before we find what is their real intention.

Mr Page:

– Would the honorable member take up shares in a company promoted under this Bill?

Mr KELLY:

– No; and I do not think the honorable member would.

Mr Page:

– That is so.

Mr KELLY:

– The honorable member gives me the proof for which I have been asking. He and his party realize that a company could not be formed under this Bill to work the iron industry.

Mr Page:

– That is my personal view.

Mr KELLY:

– And I think it will be the view of any honorable member who impartially considers this measure. We are here, not to consider the exigencies of a Government who are kept in office by the goodwill of a party who wish to nationalize all industries, but to see whether this Bill is really an honest expression of a sincere conviction. We know that one-third - or possibly more - of the people of Australia have protectionist leanings, and that they may possibly desire an honest effort made to give expression to their views on this important question. We know also that another party, whose only ambition is the co-operative commonwealth, will have none of the undiluted idea of protection, and is now forcing the Government it supports to its own ends. We know, therefore, that this is not an honest effort to give expression to the protectionist principle, but is designed really to lead to the realization in particular of the socialistic aspirations common to one-third of the members of this House. The Government came into office with a false pretence of virtue misunderstood. The fact that it was not misunderstood becomes more and more apparent to Australia every day. It is, perhaps, only natural that as the Government was born so it should live - by false prefences and deceit.

Mr SPEAKER:

– The honorable member must not charge honorable members in that way.

Mr KELLY:

– I am making a charge, not against honorable members individually, but against the Government.

Mr SPEAKER:

– The honorable member must not make such a charge against the members of the Government.

Mr KELLY:

– Shall I be in order, sir, in saying that this Bill is a false pretence to carry out the protectionist policy in Australia ?

Mr SPEAKER:

– The honorable member may allege political false pretences.

Mr KELLY:

– I am speaking of the Government purely in a political sense.

Mr SPEAKER:

– Then it is purely a matter of taste as to whether the honorable member should so describe it.

Mr KELLY:

– Exactly, and as I am the judge of the propriety of my own actions in these matters, I shall so describe it. The Bill is entitled, “ The Manufactures Encouragement Bill j” but I hold that it should be called, “ The Nationalization of Manufactures Encouragement Bill.”

Mr Page:

– Then why does not the honorable member amend the title?

Mr KELLY:

– I shall move such an amendment in Committee, and shall expect the support of my honorable friends on the corner benches. The Commonwealth, however, cannot nationalize an industry until there has been ah alteration of the Constitution, and to attempt to alter the Constitution would be to direct the attention of the people to the fact that it is proposed to start a great socialistic concern. If the citizens of Australia were asked if they wish to see started here a great socialistic concern, they would say most emphatically that they do not. Therefore it is not openly proposed to start such ari institution, but clauses have been placed in the Bill which will make it impossible for the production of iron to be undertaken within the Commonwealth by private industry, or will, if started, make it so unprofitable that eventually the State in which the works are situated will have to take them over to save those connected with them from starvation. To begin with, the men employed in the works must be drawn from other avenues of. employment within the Commonwealth, because under Federal legislation which my honorable friends in the corner initiated lt is impossible for any man to come to Australia under contract.

Mr Bamford:

– That is not correct.

Mr. KELLY. ~A man may come here under contract only for the performance of a class of work for which competent men are not obtainable in Australia. It will thus be impossible to obtain iron workers unless we take them from other occupations. Then, we find that, under clause 9, these men are invited, when they become accustomed to their new avocation, to make such claims as regards wages as will, if the measure is administered as my friends in the corner would like to see it administered, prevent the carrying on of the industry with profit by private enterprise. When that happens, the works will have to be resumed by the State, because the only choice of the State will be either to have a number of unemployed on its hands, or to make the best of a bad bargain, and to run the industry itself. In this way, I say that clauses 8, 9, and 10 practically make provision for compelling the State to nationalize the industry. If that is not the intention, what is the need for these clauses ? Every State of the Union has power of its own sovereign will to nationalize any industry within its Own borders, and it is an insult for this Parliament to state what a State can or cannot do. Furthermore, the effect of the granting of the bounty will be, by restricting the area of competition, to create a monopoly, and is it not declared by my friends in the corner that all monopolies should be nationalized ? They are now proposing the creation of a monopoly, in order that, later on, it shall be nationalized. But do honorable members imagine that any company will undertake this enterprise under the threat that if it makes a success of its undertaking, all chances of profiting by its enterprise will be taken from it?

Mr Page:

– Is there anything in the Bill which would prevent half-a-dozen companies from embarking in the industry ?

Mr KELLY:

– Yes. The production of one blast .furnace is very large. The Duquesne Works,, at Pittsburg, which employ only 492 men, turn out 600,000 tons of raw iron per annum. Now,- inasmuch as the private requirements of the Commonwealth amount to only 150,000 tons per annum, and the various Governments take at the most 300,000 tons per annum, the . aggregate weight of iron required by Australia annually will be, at the very most, 450,000 tons per annum.

Mr Conroy:

– I think that in one year 470,000 tons were used.

Mr KELLY:

– It may be so. I am speaking entirely from memory; but I think that 450,000 tons is a fair statement of our annual requirements. On the Pittsburg figures less than ‘400 men would be needed to produce that iron.

Mr Page:

– There are more than 400 men engaged in one foundry in Melbourne. They would be affected indirectly.

Mr KELLY:

– I am speaking now only of the production of raw iron for the encouragement of which ^250,000, or fivesixths of the whole bounty, is proposed. One company would certainly manufacture all the iron needed in Australia.

Mr Page:

– Could not iron be produced here for export?

Mr KELLY:

– My honorable friend, as a labour free-trader, knows that if it is impossible to produce iron locally without a bounty,, it cannot be produced with one for export. The object of the measure is to so restrict the area of competition as to create a monopoly. My honorable friends in the corner will then insist on the nationalization of that monopoly, and the Government who are their humble servants in all matters political, will, when the time comes, be prepared to act accordingly. As the honorable and learned member for Corinella has declared himself to be opposed to the nationalization of this industry, I hope that he will vote for the amission of the clauses to which I have referred, and if other protectionists who object to State Socialism do the same, we shall get a true declaration of the policy of the Labour Party in regard to this matter from my honorable friends in the corner. This Bill differs considerably from other Manufactures Encouragement Bills which have been before the Chamber. There is very little difference between the first Bill introduced by the right honorable member for Adelaide and the second Bill introduced by the honorable member for Hume, the chief difference being that, while the first Bill provided for the granting of bonuses, the second provided for the granting of bounties. This third Bill, however, departs altogether from the plan of the other two, and contains a number of alien principles, with one or two of which I should like to deal. One of the most peculiar provisions in the Bill is that which says that the Minister may at any time, but not oftener than once in six months, refer to the President of the Commonwealth Court of Arbitration and Conciliation the question of fair wages to be paid. That gentleman is to decide all questions of rates of pay and wages in the Australian iron industry. He will have the power to definitely fix the wages to be paid, or to decide that the wages shall be upon the same scale as the highest obtaining in any State j but at the same time, under the Bill he will have no authority to regulate the conditions of labour. We know that high wages with bad conditions are almost as undesirable as low wages with’ good conditions. Let us suppose, for instance, that the conditions of employment in the iron industry became so obnoxious as to cause the men to appeal to the State Arbitration Court. If that Court decreed that the conditions must be ameliorated, we may fairly assume that the cost of production would be increased, and that the syndicate would find that it could not afford to pay the highest wages current in any State and also to make the conditions of labour such as the ) State authority insisted upon. They would then be compelled either to reduce the wages of their employes or to forfeit their security bond.

Mr Bamford:

– It does not necessarily follow that the cost of production would be increased.

Mr KELLY:

– The honorable member must admit that that probably would be the result. The manufacturers would then either have to sacrifice their security bond, or defy the State authorities, and run the fisk of having their works closed down. The State authorities would then be called upon to nationalize the industry, or take the responsibility of opening up relief works to absorb the men who had been dragged from their natural avenues of employment into the iron industry. We know that the rate of wages varies very considerably throughout Australia, and we also know that under section 5-1 of the Constitution it is provided that the Parliament shall have power to make laws with respect to bounties on the production or export of goods, but so that such bounties shall be uniform throughout the Commonwealth. It is obvious that if the wages fixed by any tribunal of the Commonwealth were calculated on a different basis in different States, the bonus would operate unequally. Therefore this Parliament would be put in the position of paying a bounty contrary to the terms of the Constitution. It is very clear that one of two States will probably be selected for the establishment of this industry in the first instance. The choice will probably lie between New South Wales and Tasmania. Let us suppose that the industry is started in the latter State. The President of the Commonwealth Arbitration Court would probably decide that the wages to be paid in the industry should be the highest wages paid for kindred work in Tasmania. Suppose, then, that a new company afterwards started operations in New South Wales. The President of the Commonwealth Arbitration Court would then decide either that the wages paid should be the highest wages paid in New South Wales or the highest paid in Tasmania. If the Commonwealth authority decided upon the latter course, and the Tasmanian rates were lower than those prevailing in New South Wales, the New South Wales Arbitration Court could step in and insist upon the wages being brought up to the State standard. If, on the other hand, the Tasmanian wages were higher than those prevailing in New South Wales, and the Commonwealth Court decided that those rates should prevail in the iron industry in New South Wales, the enterprise subsidized by the Commonwealth would, owing to the increased rates of pay provided for, unduly draw men from other industries in the State. If, on the other hand, the wages paid in the subsidized iron industry in New South Wales were lower than those prevailing in kindred industries there, the name of the Commonwealth enterprise would become a by-word for all that was undesirable in connexion with the conditions of employment. These are the difficulties with which’ we are beset in connexion with the regulation of the industry. It is clear that if the Justice intrusted with this most important duty is, by fixing wages on the scale obtaining in each State, to carry it out in such a way thai the bounty-fed iron industry will not become a subject for either contempt or envy among neighbouring industries, he will have to so regulate matters that the bounty will become unconstitutional, and, therefore, subject to immediate revocation. I desire now to refer to the power with which it is proposed to invest the President of the Commonwealth Arbitration Court to assess the compensation to be paid by a State, in the event of its resumption of the works. I take it that this is a deliberate interference with the self-governing rights of sovereign States. The provision relating to the fixing of wages is a deliberate interference with the right of the States to manage their own industrial affairs, and the provisions, to which I am now referring, are a further trespass upon the sovereign right of a State to decide what compensation it shall pay in respect to any property it may acquire. Suppose, for instance, the industry were started in Western Australia, and the State Government were to decide that it would be profitable to take over the works, should it be bound by the Commonwealth Arbitration Court as to the amount to be paid to the company ? Surely Ministers are sufficiently cognizant of the powers of the Commonwealth under the Constitution to know that it could not act in the manner provided for in the Bill. Are these clauses inserted in order to guard those who invest their capital against being robbed by the States, or are they intended merely as a sop to the feelings of the protectionists? It is a pity that so few honorable members should be present when matters of this kind are being discussed. Honorable members have not given this matter the close attention they should have done, but they have left it to members of the Opposition to think for them, and to point out the unworkable character of many of the provisions of the Bill. The dutv will afterwards devolve upon those honorable members to explain to their constituents why they advocated a Bill in the nature of a bridge over which the avowed champions of protection might march into the camp of Socialism.

Mr Wilks:

– Would not the honorable member like a quorum to be present? [Quorum formed.’]

Mr KELLY:

– When I was interrupted I was endeavouring to show that the pro visions in this Bill regarding the compensation to be paid by a State in the event of the resumption of the industry must have been inserted for the express purpose of hoodwinking the people of Australia. I now propose to discuss the basis upon which these bonuses are to be computed. I find that upon a certain class of article a definite price is to be paid. A bonus of 12s. per ton is to be paid upon the production of pig iron, puddled bar iron, and of steel made .from Australian pig iron. A clause in the Bill provides -

No bounty shall be authorized to be paid unless the manufacturer of the goods furnishes proof to the satisfaction of the Minister that the goods are of a good and merchantable quality,, and that the requirements of this Act and the regulations have been complied with.

It is clear, therefore, that after the iron has been produced the Minister is to be vested with the power of determining whether it is up to standard. That consideration recalls, to my mind, the excessive powers with which it is proposed to invest the Minister under the provisions of measures which have recently been placed before this Chamber. In the two previous Bills dealing with this bounty which have been discussed by the House, provision was made that “satisfactory proof “ of the quality of the iron produced should be forthcoming. That meant, I presume, proof which would be satisfactory to an expert. Now, however, “ the Minister is to be satisfied as to the quality of the product. How can the Minister possibly know what is the quality of the iron produced? His statistics have been proved to be so absolutely fallacious that I do not think we are justified in intrusting to him the power of declaring what is the value of the article in question. We know how easily he allowed his imagination to run away with his discretion upon the question of the f.o.b. value of harvesters imported into Australia. If his imagination can be stretched so far upon such a simple matter of fact, it might be strained very much further in determining the quality of any article produced by the iron industry. In the case of galvanized iron, wire netting, iron and steel tubes or pipes - except riveted or cast - being not more than six inches interna] diameter - it is proposed that a bounty of ro per cent, on their value shall be allowed. How is the_ Minister to assess the value of those articles ? If it be difficult for him to appraise the value of the crude product, how much more difficult will it be to assess the value of the finished article? Under the provisions of the Bill the Minister is to decide as to the quality of all these articles. No bounty is to be payable upon them unless he is satisfied as to their quality. Why should this House frame any Bill in such a way as to allow of political pressure, if not political maladministration, being applied to defeat the ends of legislation. Let us assume that the iron industry was started! under the spur of this bounty. The men who would be engaged in the enterprise would be justifiably anxious to better their condition. Their employers, however, would not be able to make up for an improvement in the labour conditions by raising the price of the article to the consumer. They are forbidden to increase its cost-

Mr Bamford:

– The price is not mentioned in the Bill.

Mr KELLY:

– The measure contains a provision relating to the question of price. I refer to clause 4, which, I may observe in passing, has been drafted in a very slovenly way. That, however, is a matter which can better be considered in Committee.

Mr Page:

– Why not let the Bill get into Committee ?

Mr KELLY:

– If the honorable member will permit me a free opportunity cf expressing my opinions I shall not occupy half the time that I otherwise should do. The position is that the employers in this industry will not be able to increase the price of their goods in order to compensate them for the cost of any improved conditions which may be granted to their employes. Consequently, the industry will be compelled to depreciate the quality of the article supplied. The Minister will then be placed in this position : If he. draws attention to the fact that the quality of the articles supplied is not up to standard he will probably cause a number of men who are engaged in the industry to be thrown out of employment bv reason of the cessation of operations. I can well understand the political pressure which, under such circumstances, will be applied to him. We nil know the influence which members of Parliament, and the press can exert. All these influences will be brought to. bear with a view to inducing the Minister to declare that the quality of the product’ has not depreciated. I come now to the consideration of another point. Can one establishment for the production of iron supply the needs of Australia in competition with the outside producers ? Let us suppose, for example, that the industry was started in Tasmania. We know that the question of freights must be considered in a matter of this kind. How are those freights governed ? They are governed more by volume of trade than by distance. We know perfectly well that the freight from Tasmania to Western Australia is considerably higher than that from England to Western Australia. Therefore, even if this bounty were effective in allowing the Tasmanian manufacturer to supply the needs of that State, it is apparent that he could not supply the wants of Western Australia and possibly some other States in competition with the English article. That is absolutely clear. It is extremely improbable that more than one iron works will be started in Australia as the result of the payment of this bounty. Consequently, it is obvious that the bounty will be of advantage only to the State in which the industry happens to be started. Let us assume that one State, alone is to have control of this industry. Why should another State be taxed for its advantage? If, as the result of this Bill, the industry is started in New South Wales, why should Victoria be taxed for the advantage of that State? Or, if the industry is to be established in Tasmania, why should New South Wales be taxed in respect of it?

Mr Austin Chapman:

– There are large deposits in every State.

Mr KELLY:

– I have already shown that 492 men in Pittsburg can turn out more crude iron than the whole of Australia could consume. What is the use of talking about vast deposits of iron, existing in all the States in view of our limited consumption? We might turn out immense quantities of iron; but if that which we could not consume had to be thrown into the sea, what useful purpose would be served? No one is more anxious than I am to see our iron deposits worked if that can. be done profitably.

Mr Groom:

– How does the honorable member propose to develop them?

Mr KELLY:

– Have all the industries of Australia been started under protection ? Have the pastoral and agricultural industries of New South Wales been protected?

Mr Austin Chapman:

– Yes.

Mr KELLY:

– Are not honorable members aware that in New South Wales we built up a boot industry under freetrade, which was healthier even than the boot industry of Victoria? It does not require a bounty to build up an industry. If assistance be given to an enterprise, that enterprise claims a vested right to the continuance of the assistance. I do not wish to be led into reading the evidence taken by the Commission, but we know from the report that the consensus of opinion on the evidence submitted in favour of the Bill is that the iron bonus will not be effective unless it be followed by a duty. What is the use of talking, about the iron bounty as one that is going to establish the industry ? For nearly forty years industries have been fostered in Victoria under the belief that they can be placed on their feet in this way. They have been a very long time, however, in getting on their feet - almost as long, so to speak, as some of my honorable friends opposite have been- in rising to defend this measure.

Mr Tudor:

– We have not had an opportunity.

Mr KELLY:

– Are my honorable friends in the Ministerial corner anxious to discuss the Bill? *

Mr Tudor:

– The honorable member will know when he resumes his seat.

Mr KELLY:

– We have to consider the question of where the capital to be invested in this industry will come from. If the necessary capital is to be raised in Australia, what advantage will the Commonwealth derive ? How are the people to be benefited by shifting money from one . field of enterprise in Australia to other avenues of investment? It does not matter to Australia as a whole where she invests her money, provided that the investment is equally productive. Surely those of the people of Australia with money to invest are the best judges of what field offers the most productive opportunity for investment. If, on the other .hand, the capital to be put into this industry is to be introduced from abroad, it is obvious that interest will have to be sent out of Australia in return. The return from the money introduced to start the industry will have to leave the Commonwealth. We all know that money makes money. Bringing money into a country makes money in that country ; hut that is not the only point in this case. We are told by those who are asking for this assistance that capital will not be invested in the industry unless we grant ,£300,000 to make up the interest on that capital investment. That ,£300,000 will be the first of the money that must leave Australia as the result of granting these bounties. This £300,000 is to be the first return on which the investor can reckon, and that return will go where the capital came from. Consequently, as the result of the passing of this Bill the people of Australia will be ,£300,000 poorer than they otherwise would have been. Having received the assurance of my honorable friends in the Ministerial corner that they are anxious to explain what these proposals really mean, I do not intend to take up very much more of the time of the House in dealing with them. As a freetrader, I naturally object to the Government seeking to make the Treasury a source of profit to any syndicate. I naturally object to tax the whole people to benefit a chosen few. I object also to wasting the national energies on industries that cannot stand alone, and cannot therefore at the present time, at any rate, be natural. As a free-trader, I notice with considerable alarm that the bulk of the evidence shows that the bounty cannot continue without a duty to back it up, and that duty must inevitably increase the difficulties in the way of our natural productions. I know further that the iron bounty will entice men from natural industries where they are earning a livelihood beneficial to the! country - either on the wharfs-

Mr Ewing:

– Or shifting sand.

Mr KELLY:

– That is what they will be called upon to do if this industry be established on the terms that my antisocialistic friend is so anxious to provide in this Bill, if only to retain his present Ministerial position.

Mr Ewing:

– I was only reminding the honorable member that some men have been employed in shifting sand.

Mr KELLY:

– The honorable gentleman seems to think that is a reason why we should induce other men to follow- that unremunerative occupation. In addition to my natural objections to this measure from the point of view of a free-trader, I say that if I were a protectionist I would also have nothing to do with it. Upon an analysis of the Bill it must be seen that it is not designed in the interests of the Protectionist Party of Australia. It will frighten away capital. It will advertise Australia as a country which cannot herself start this venture, but is prepared, under this verymeasure, to rob of the results of their enterprise and pluck those who may be so foolish as to enter upon the industry^ if that enterprise and pluck in seeking to establish the industry are crowned with success. If the venture is a failure - unless good money is to be thrown after bacl to keep it on its feet - the Bill means that £300,000 is to be thrown up the spout. Even if the venture is successful this Bill will be only a. means of finding administrative billets for my socialistic friends in the Ministerial corner, and for all these reasons I shall resist it to the utmost of my power.

Mr HENRY WILLIS:
Robertson

– I propose to vote against this measure, first of all because I am a free-trader, and secondly because I believe that it is simply designed to promote speculation. I should like to say at the outset that a free-trader is not opposed to the establishment of such an industry as that which this Bill is designed to assist. On the contrary, he would hail its establishment with great satisfaction, and many persons would not oppose the payment of the bounty, holding that it constitutes the least objectionable form of assisting the industry. But what I fear is that even after its establishment the industry will be granted protection that it really does not require. I have consulted the Minister of Home Affairs, and learn that it is the intention of the Government to move in both Houses that the industry shall be brought under the operation of the Customs Act when payment of the bounty ceases. I wish to say definitely that I would be in favour of the establishment of the iron industry by means of a bounty if it could not be established in any other way, as in my opinion that is the least objectionable form of assistance that could be given, and one would know what it would cost. But by passing this Bill we shall at once give Our assent to the imposition of a protective duty of 10 per cent, on iron production scheduled herein. On the face of it the Bill suggests that the least objectionable form of protection is to be extended to the enterprise, because it does not show that after the bounty ceases direct protection will be granted to it. In my opinion, however, the iron bounty will simply offer a premium to the speculator; who at present has this matter in hand. We know very well that it is suggested that something like £1,000,000 will be expended in the estab lishment of the industry if this Bill be passed. The iron-masters of England assert, however, that a plant costing less than £500,000 would be almost sufficient to turn out enough iron to meet the consumption of steel rails, not of Australia alone, but of England itself. The special pleading in support of the measure on the part of those personally interested in the project is really beside the mark. We have had a statement by the promoter that the establishment of the industry would find employment for 3,000 men, while the very next interested party that we meet tells us that it would £,ive employment to 13,000 men. This seems to show that the persons most concerned with the venture are anxious to throw dust in the eyes of the people. I have had a very great deal to do with a project of this kind in the past, and I was in the very thick of the movement in connexion with which a proposal . was made to the Government of New South Wales, to establish the iron industry there on a freetrade basis. Mr. Joseph Mitchell then had the matter in hand.

Mr Austin Chapman:

– What did the honorable member advocate then?

Mr HENRY WILLIS:

– I advocated the establishment of the industry on a freetrade basis. I was of opinion that there should be open competition, but that the steel rails mad’e in Australia should be purchased at the lowest English price, plus freight and charges - the natural protection.

Mr Wilks:

– The industry under that scheme would have been established upon business lines.

Mr HENRY WILLIS:

– Upon freetrade business lines.

Mr Ewing:

– What are free-trade business lines?

Mr HENRY WILLIS:

– Business lines by which trade “is untrammelled. English capitalists were prepared on the occasion to which I refer to invest £500,000 in plant and works, and in the buying of properties in Australia for the successful carrying on of the industry .

Mr Ewing:

– What was Mr. Mitchell to get?

Mr HENRY WILLIS:

– I do not wish to go into particulars which may not interest honorable members or the public; but I may say that Mr. Mitchell would have made a very large fortune ‘if the venture had succeeded ; and that is what the promoters of the scheme connected’ with the introduction of this Bill hope to do. He would have floated the company in England, and the necessary properties and coal mines would have been transferred to those who invested money in them. I personally own those properties to-day. I am the owner to-d’ay of all the properties that were necessary for the conduct of that enterprise. The necessary funds could be obtained, and the industry started now but for the fact that the Government are dangling before English capitalists this offer of £250,000. I went pretty exhaustively into the whole question some years ago, when the first Bill was introduced, and proved my bona fides by documentary evidence. When a similar Bill was being discussed some years back, I was in communication with London capitalists, whom I represented in Australia, and they told me that money would be forthcoming for the establishment of this industry, but they said, “ You must not expect the capitalists of England to refuse £250,000 if they see any chance of getting it.” While this offer is before the English public they will not invest in a scheme for the establishment of the industry on a free-trade basis.

Mr Tudor:

– It is strange that something was not done before this offer was dangled before English capitalists.

Mr HENRY WILLIS:

-The money was not put up for the establishment of the industry on a free-trade basis, because it was stipulated that a sufficiently large sum should be invested in plant whose capacity for output would largely exceed the requirements of New South Wales. Those who were interested in the concern felt that it would be useless to establish works if a market could not be found for their output, and they therefore asked for a guarantee that the other Colonies - this was prior to Federation - as well as New South Wales, would agree to take steel rails from them. If the State of Victoria had agreed to take its supply of steel rails from the New South Wales works, that would have been sufficient.

Mr Wilks:

– Would the honorable member like to have a quorum to hear these statements ? Quorum formed,]

Mr HENRY WILLIS:

– I am not particularly anxious to have a large House to hear my speech on this occasion, because I was fortunate in having an excellent attendance when I delivered an exhaustive speech on a similar measure some years ago; but I feel that I must not allow the

Bill to pass without saying something upon its principles. The giving of a bounty for the establishment of this industry would not be such a very extravagant thing to do if all that has been claimed for the scheme were realized. But we know that that will not happen. The Minister of Trade and Customs told us, when making his second-reading speech, that Australia imports 7,000,000 tons of iron material annually, and that our requirements could be satisfied by a local industry. It does not follow, however, that anything like that output, including various kinds of manufactured ironmongery, would be the result of the establishment of local ironworks, nor is it necessary that they should have such a large output. Thousands of industries mus.t be established in Australia before we can hope for a local output of 7,000,000 tons of iron manufactures. The honorable gentleman also said that the establishment of the industry would give employment to 13,000 men, though at the most only 300 men would be employed, and it is questionable whether Australia could use all the iron which they could produce. I do not think that it is stipulated in the Bill that a larger sum than is necessary shall be invested in plant, but a great deal will be required for the purchase of properties necessary for the proper conduct of this business. While it is contended that all the ore required may be obtained from Tasmania, I am of opinion, from the reports of experts who visited Australia to inquire into this matter some years ago, that several States . will be drawn on for different kinds of ore. The establishment of the iron industry here would be an excellent thing for Australia, but it is not necessary to give a bounty of £250,000 to bring it about. £500,000 has been mentioned as the sum necessary to establish the industry, and the Minister said that ;£i, 000,000 would be put into it. I quite believe that £1,000,000, if not more, will be put into it; but for what purpose? To pay out the promoters of the scheme. There is a huge fortune awaiting them. All those who hold properties necessary for the carrying on of this industry will be able to get fabulous sums for them. Parliament, however, should not unnecessarily vote ,£250,000 for the establishment of an industry which might be established on free-trade lines, if we said that Australia would not grant this bounty. Australia is a young country, and our requirements of ironfortheconstructionof railways and other public works are very great. There is certain to be a large demand for iron here, and all that the promoters of the iron industry shouldwant is a guarantee that the steel rails used by the States Governments will be taken from them. I do not expect the measure to, pass; and I hope that when it is set aside, we shall wait a jfew years to see if capitalists are not prepared to put their money into the industry in connexion with a free-trade venture. As I have shown, they will not do that so long as there is a prospect of getting this £250,000 bounty. The Bill may get into Committee, in which case it will require amendment ; but all I am concerned about now is its main principle, which I shall oppose.

Mr McWILLIAMS:
Franklin

– lt is not my intention to unnecessarily delay proceedings, but, as this proposal is an entirely new departure for the Commonwealth, one who conscientiously objects to it has a . perfect right to express his opinion upon it. I am not prepared to shape my opinion according to the views held by any other honorable member. I contend that it is nothing less than a swindle to hand over £300,000 of the taxpayers’ money to a company, the promoters of which are to receive 500,000 shares out of the 1,000,000 shares constituting its capital.

Mr Frazer:

– No company is mentioned in the Bill.

Mr McWILLIAMS:

– No ; but a certain company is mentioned in the evidence taken by the Bonus Commission, and it is well known that in the event of a bonus being granted, it is prepared to immediately proceed with the establishment of the industry.

Mr Hutchison:

– The company will have to produce iron before they can claim 1s. of the bonus.

Mr McWILLIAMS:

– Some time before I entered this House the question of the establishment of the iron industry was discussed, and I took a considerable interest in what was going on in regard to it, and also in the proceedings of the Bonus Commission. The general opinion was expressed, that, if the bonus were granted, the company that had practically been formed to establish the industry would obtain the greater quantity of ore required from Tasmania. It was stated last evening by the honorable member for Hindmarsh that the leader of the Labour Party at one time objected to the bonus being given to a private company, because he had hopes that the industry would be nationalized, but that he was not at present opposed to the granting of a bonus.

Mr Hutchison:

– I did not say that he was not opposed to the granting of a bonus.

Mr McWILLIAMS:

– I shall quote from the report, which was signed by the honorable member for Bland and also by the honorable and learned member for West Sydney after having heard the evidence adduced before the Bonus Commission. The whole of the witnesses who were called were, with the exception of one or two ironmasters, favorable to the passing of the Bill. The opening paragraph of the minority report, which was signed by the honorable member for Bland, among others, reads -

We, the undersigned members of the Commission, are against the passage through Parliament of the Bill for the payment of bonuses by the Federal Government for the establishment of the iron industry within the Commonwealth.

Mr Hutchison:

– Some of the members who signed that report desired that the industry should be taken up by one of the States Governments.

Mr McWILLIAMS:

– There is no authority for putting such words into the mouth of the honorable member for Bland.

Mr HUME COOK:
BOURKE, VICTORIA · PROT

– The honorable member is ignoring what the honorable member for Bland has since said in this House.

Mr McWILLIAMS:

– I have too high an opinion of the honorable member for Bland to suppose that he would put his name to a report which expressed views that were not shared by him.

Mr Hutchison:

– Surely he can alter his opinion if circumstances change. It is well known now that none of the States will undertake to establish the industry.

Mr McWILLIAMS:

– The honorable member is seeking to twist the words of the honorable member for Bland out of their plain English construction. Why was the honorable member for Bland opposed to the Bill ? Because it provided for the payment of £324,000 of the public money to private individuals. We cannot feel assured that the proposed bonus would result in the permanent establishment of the iron industry , although there is very little doubt that it would probably act as an inducement for the formation of a speculative company, and yield a considerable profit to the promoters. The report from which I have already quoted proceeds -

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.

One of the witnesses, Mr. Sandford, managing director of the Eskbank Iron Works, New South Wales, stated that he had made an agreement with an English syndicate to spend £250,000 in extending the Lithgow works if the Bill passed. In answer to another question, Mr. Sandford said that to make pig iron he wanted a plant involving an expenditure of from £100,000 to £125,000. This estimate is less than half the sum proposed to be paid in bonuses.

According to the evidence of the promoters of the scheme a company has already been formed with a capital of £1,000,000. At page 35 of the report, questions 706 and 707, the following occurs: -

By Mr. Watson. - I understand that so far you have not formed the proposed company? - The company is in existence at the present time. It contains 1,000,000 shares, 500,000 of which are issued to the owners of the mine, and we have to put up £30,000 as well.

By Mr.McCay. - What is the value of the shares?- They are £1 shares.

Mr Austin Chapman:

– Is the honorable member prepared to say that it would be a scandalous proceeding to establish art industrv in Tasmania?

Mr.Mcwilliams. -I say that it would be a scandalous proceeding to establish an industry under conditions which would involve our handing over to a syndi- cate£304,000ofthepublicmoney. According to the evidence of the promoters of the company, they are to have the benefit of one-third of the bonus for themselves.

Mr Hutchison:

– They will have to give value for it before they can handle one penny of the bonus. What does it matter to us if we get the iron?

Mr McWILLIAMS:

– What a change has come o’er the scene. It is nothing to the honorable member if, by legislation intended to establish the iron industry, a monopoly is created, and £304,000 of the taxpayers’ money is handed over to a lot of syndicate-mongers. There is another point to which I wish to direct attention. The honorable member for Melbourne Ports has taken a very great interestin the business of the ironmasters of Victoria and the other States, and he has told us that their industry is in anything but a flourishing condition.

Mr Mauger:

– Quite so; it is in a very bad way.

Mr McWILLIAMS:

– And yet the honorable member proposes to help that industry by creating a monopoly, which will hold all those who use iron in the hollow of its hand.

Mr McCay:

– How could the granting of a bounty give a monopoly to any one in Australia?

Mr McWILLIAMS:

-I propose to show that there is not the slightest hope of a company being formed to establish the iron industry unless an assurance is given that when the bonus period terminates a duty of per cent. will be imposed on imported iron.

Mr Mauger:

– If a company is not likely to be formed, whv should we not pass the Bill, and have done with it?

Mr McWILLIAMS:

-I presume that we have something better to do than to discuss measures which are not likely to have any practical outcome. I take it that the Bill has been introduced seriously, and with the object of accomplishing some practical results. We have the evidence of Mr. Jamieson that a protective duty, as well as a bonus, will be required to establish the industry upon a firm foundation.

Mr McCay:

– It is not proposed under the Bill to grant both a bonus and a duty.

Mr McWILLIAMS:

– No, but we know very well that if the industry be established owing to the granting of a bonus, we shall probably have an appeal made at a later stage for help by way’ of a protective duty for an enterprise that is being strangled. I object to the imposition of a duty upon the articles which constitute the raw materials of a vast number of our manufactures.

Mr Mauger:

– There is no objection to a duty on iron if a sufficient margin is allowed by the imposition of a higher duty of, say, 35 per cent., on the manufactured article.

Mr McWILLIAMS:

– lt is well that honorable members should understand that the protectionists aim at imposing a duty of 35 per cent. upon all ‘the tools of trade of the agricultural and other industries of Australia.

Mr Mauger:

– The more duty that is imposed, the cheaper the articles will become.

Mr MCWILLIAMS:

– Then the best thing we could do would be to erect a Chinese wall round the Commonwealth, and shut out everything. I cannot reconcile with my views tha idea that the Commonwealth shall, by legislation, deliberately take from the pockets of the people the sum of £304,000 and place it practically to the credit of a syndicate which, upon its own showing, is to receive 500,000 shares of £f each out of a company with a capital of £1,000,000.

Mr Groom:

– The bonus may be earned by other companies.

Mr McWILLIAMS:

– The estimates put forward by Mr. Keats, Mr. Darby, Mr. Sandford, and Mr. Jamieson, are all based upon the assumption that the companies in which they are interested enjoy an absolute monopoly, so far as the production of iron in Australia is concerned. I challenge any honorable member to produce one tittle of evidence to the contrary. As a matter of fact, I find that, in reply to question 2341 - which will be found upon page 115 of the official report of the evidence taken before the Commission - Mr. Keats, the gentleman who has had the sole control of the operations of the syndicate in London, and who visited the old country for the express purpose of floating a company upon the terms outlined in this Bill, was asked by the honorable member for Melbourne Ports -

Do you think there is room for more than one iron works in Australia?

His reply was -

Yes,if Ave had our works established they would be practically steel works, because our iron is suitable for the manufacture of steel ; but there could be no other works to produce foundry iron.

I want honorable members to reflect seriously upon these proposals. Only last night a motion was submitted in favour of the appointment of a Select Committee, with the avowed intention of breaking down what its author thought - and what I think - is becoming a very dangerous monopoly in Australia - I refer to the steam-ship owners’ “ ring.” There is nobody in this House who entertains a stronger feeling against monopolies and trusts than I do. In this Bill we are asked to deliberately subsidize a huge monopoly by means of the payment of £304,000 of the taxpayers’ money. The whole of the evidence taken before the

Commission is to the effect that one company - a company which will employ only a very small amount of labour - can produce the whole of the iron that is used throughout Australia. That is the testimony of the expert who was called, not to give evidence against the Bill then before the House, but upon behalf of those who advocate the payment of the bonus. I repeat that every estimate placed before the Commission was based upon the assumption that a single company enjoyed a complete monopoly of the iron trade of Australia. It was further stated that this was a preliminary company, and that a second company would require to be floated in order to provide the necessary capital. Are the 500,000 shares, to which I have referred, contributing shares, or paid-up shares? But, altogether apart from that consideration, Mr. Keats admits that after the stock of the company has been watered the flotation will be worth £200,000 to the owners of the mine. They are to receive £200,000, in addition to half the bonus. In other words, we are asked to hand over £350,000, including half the proposed bonus, to a syndicate which is to control the whole of the iron industry in Australia. The honorable member for Melbourne Ports put the question to several witnesses, “What will be the effect upon the ironworkers of Australia if a duty be imposed at the termination of the bonus period ? “ Mr. Jamieson admitted that the probability was that it would increase the cost of the raw material to the ironworkers of the Commonwealth. I wish to say that I have never read any evidence given before any Commission which impressed me as being more truthful upon its face than does that tendered by Mr. Jamieson. I believe that he divulged the whole of his mind to the Royal Commission, and I base my’ case absolutely upon His testimony. We all recognise that the moment we begin to tinker with the Tariff, we affect industries which are interdependent, and to which its ramifications extend. Mr. Thompson, a member of the firm of Thompson and Co., ironmasters, of Castlemaine, stated -

Every new impost on raw material is an additional cost to the manufacturer of machinery in the iron works of Australia.

He also pointed out that this company only proposed to lay down an exceedingly small plant when contrasted with the establishments to be found in Canada, England,

Scotland, Germany, and the United States. Mr. Thompson continued -

We do not think that the classes of iron which would be outlined here are. sufficient for the trade. lt is well known that no industry requires at times a greater “ fluxing” - if i may use that term - in its different grades than does the iron industry. One ironmaster has informed me that he is often obliged to import three or four grades of pig-iron in order to carry on operations. It will be impossible, i claim, to smelt the different grades of iron in the furnaces which it is proposed to erect in accordance with the scheme outlined before the Commission. Are we to impose a handicap of12½ per cent. upon the users of iron throughout Australia, in order that we may protect another grade of iron, when the works are not able to produce the very grade upon, which we levy the duty? In Victoria the iron trade is in the most depressed condition. i make that statement as the result of personal inquiries. Shall we improve the condition of the ironworkers of the Commonwealth by imposing a duty of 12½ per cent., upon their raw material? The baneful effects of such a proceeding have been evidenced in Tasmania in connexion with the jam trade. The duty which is levied upon sugar under our Tariff is equal to 40 per cent. upon the raw material of the jammakers, and it is working disaster to the fruit-growers in that State.

Mr Wilkinson:

– But the raw material of one part of the Commonwealth may not be the raw material of another part.

Sugar is a natural product in Australia.

Mr.McWILLIAMS.-Of course it is. Just as it is wrong to impose a duty upon one industry at the expense of another, so it is wrong to levy an impost upon iron which is used in every iron manufactory throughout the length and breadth of Australia. i have no desire to labour this matter. There are one or two points with which i propose to deal when the measure reaches Committee. The report, which was signed by the honorable member for Bland, the honorable and learned member for West Sydney, the honorable and learned member for Illawarra; Mr. Kirwan; Mr. Winter Cooke, and the honorable member for Parramatta, states -

We, the undersigned members of the Commission, are against the passage through Parliament of the Bill for the payment of bonuses by the Federal Government (or the establishment of the iron industry within the Commonwealth.

That was the opinion of the honorable member for Bland and of a great majority of the Labour members who sat behind him when this Bill, in its original form, was under discussion. Where are those honorable members now? They have sat like mummies and allowed the whole of the opposition to this measure to fall to others. I can just imagine the fiery orations of the honorable member for Darwin if the late Government had proposed to grant a bonus equal to £300,000 to any company. “Boodler” is the mildest term which he would have employed. Honorable members sitting on the Ministerial benches, as well as those in the Ministerial corner, have so far allowed the whole of the criticism of the Bill to devolve on the Opposition.

Mr Carpenter:

– We have heard denunciation, but not criticism.

Mr McWILLIAMS:

– I do not think that is a fair statement, so far as I am concerned. I have endeavoured to deal seriously with the Bill, and have offered no factious opposition to it. I hold, however; that, as a representative of the people, it is my duty to carefully examine it, and that honorable members opposite, even if they are prepared to allow the measure to pass without discussion, have no right to stigmatize fair criticism as mere denunciation. I shall vote against the second reading of the Bill; but if it be taken into Committee, it will be my duty to attempt to remove what I consider are some of its anomalies. I warn the House that if this Bill be passed, it will simply hand over £304,000 to a syndicate, which will receive practically £750,000 as the result of their venture, and that we shall thus create one of the most serious monopolies that has ever existed in Australia. I am not one of those who believe that the State should interfere with private enterprise more than is absolutely necessary ; but, rather than that the Bill should pass in its present form - especially if the taxpayers of the Commonwealth are to be swindled, and their money taken from them in this way - I should prefer to vote for the bounty going into the coffers of the State. I should prefer to see the State swindle the public rather than allow a syndicate to do so.

Mr KNOX:
Kooyong

– The honorable member who has just resumed his seat has used some very strong expressions, and has spoken of an attempt being made by a syndicate to swindle the public.

Mr Mcwilliams:

– I should like to explain that when I used the word “ swindle “-

Mr SPEAKER:

– The honorable member cannot make an explanation at this stage.

Mr Mcwilliams:

– I should not like it to be thought that I used the word “ swindle “ in relation to any particular individual.

Mr KNOX:

– Every honorable member is justified in forming his own opinion with regard to the proposals contained in the Bill, and if the honorable member for Franklin considers that he was right in using the expression to which I have just referred, I can take no exception to it. But, inasmuch as the name of Mr. William Jamieson, who gave evidence before the Commission, has been frequently mentioned during the debate, I think I am entitled to say that if it was intended to apply the word “ swindler “ to him, or to those associated with him, no more unjust or uncalledfor observation could have been made. If honorable members will take the trouble to read the evidence which Mr. Jamieson gave before the Commission, they will at once see that it is that of a straightforward man, who -desires to conceal nothing.

Mr Mcwilliams:

– Hear, hear. I have said exactly what the honorable member now says of Mr. Jamieson.

Mr KNOX:

– I am glad to hear it. I repeat that no one would be justified in applying the word “ swindler “ to Mr. Jamieson. I trust that it is needless for me to explain that, although I am associated with various mining enterprises, I have no interest, direct or indirect, in the Blythe River syndicate. Whatever may be the designs of others who wish to benefit by this Bill, I am able to say that the promoters of the Blythe River scheme are imbued only by an honest desire to create a legitimate enterprise. The syndicate was formed, not to exploit Governments, or shareholders, ot any one else, but simply to provide for the establishment of a stronge creditable enterprise in Tasmania. Mr. Jamieson, to whose evidence frequent reference has been made, has been associated with some of the most important mining undertakings in Australia. He was one of the first interested in the Broken Hill Proprietary Company, and is now connected with other extensive mining undertakings. I can honestly say that he stands in the very front rank of capable and upright business men, and that his evidence before the Commission was characterized by the utmost frankness and candour. I knew nothing about the details of the scheme which the Blythe River syndicate have in view until a day or two ago ; but when reference was made to it in the House I felt it my duty to see that reflections were not unjustly cast upon the members of that syndicate. I consequently made inquiries, and learned that the gentlemen in question enlisted the services of Mr. Darby - who is considered to be one of the most prominent iron experts in England - to inspect the Blythe River iron deposits, and to advise them as to whether it was possible to establish an enterprise in connexion with them that would be financially successful. Mr. Darby furnished an elaborate report to the syndicate, and I propose now to give a summary of it. I find that in his opinion the first step necessary to place the enterprise in anything like a sound position is to expend £17,108 in opening up the mine. If it were not for the fact that the deposits on both sides of the river are easy of access, ,£117,000, instead of .£17,000, would be necessary for this purpose. In the circumstances, however, all that is needed for the proper working of those magnificent deposits is the erection of machinery at the cost I have mentioned. Then, again, it was estimated by Mr. Darby that a sum of -,£26,649 would have to be expended in providing sidings, approaches, and ore-loading docks at Burnie. Honorable members are aware that coal and fluxes must be obtained as cheaply as possible, in order to enable the enterprise to be worked successfully, and with that object in view Mr. Darby suggested that the company should purchase steamers of its own to convey flux and coal to the works. This he estimated would involve an outlay of ,£122,000. A further outlay of £45,137 would, he held, be necessary to provide wharf and1 unloading arrangements at Sydney. The syndicate had secured the option of acquiring land which is very close’ to one of the large coal mines at Newcastle. Coal bins, washery, and coke ovens would involve the expenditure of ,£106,796, and ore and coke bins, blast furnaces, and auxiliary plant, £215,182. A hot metal mixer and open hearth steel plant would cost ,£133,172 ; and mills and auxiliary plant, £175,934; while Mr. Darby also estimated that the general expenditure would be £57,706; making a total of £899,684. It was thought that the syndicate would be justified in raising sufficient capital to provide for the payment of four months’ wages to the hands employed, not only at Newcastle, but on the steamers of the company, and’ in other directions, which ft” was estimated would mean an expenditure of £10,000 per week, or a total of £160,000. Then it would be necessary for the company to connect the mine with the port at Burnie by means of a double railway line, and this work, together with the provision of additional wharf accommodation, would mean an expenditure of £50,000, or a grand total of £1,109,684. These figures were not compiled for the purpose of giving information to the Parliament. They are the figures of an expert who was brought out to Australia to advise a syndicate of considerable financial strength as to what was necessary to place these great works on a sound and proper footing.

Mr Johnson:

– All the details are given in the report of the Commission.

Mr Chanter:

– The figures quoted by the honorable member for Kooyong do not bear out the statement that has been made that the industry would not give employment to labour.

Mr KNOX:

– I have no personal interest in the matter, but am submitting these figures to the House on information that has been supplied to me, and with a knowledge of the bona fides of the gentlemen concerned. If the estimates are inaccurate, the responsibility rests, not with me, but with those who have furnished them to me.

Mr Johnson:

– The Commission had all these figures before them when making their report.

Mr KNOX:

– If they did so much the better. But it is important that the House should have the assurance again and again, if necessary, in order that the character and position of an honorable man may not be miscalled, either here or elsewhere. The statement continues -

I am sure that the above amount is necessary to properly equip and start works capable of producing 150,000 tons of steel and iron products, such as steel rails, sheets, plates, girders, &c.

The promoters reckon that, in connexion with their steamers, the obtaining of coal, and other work consequent upon the pro- duction of iron and steel, at least 3,000 men would be employed. These are figures which have been given to me by reputable persons, who know what they are speaking about. Honorable members have said that the only men employed will be the thirty or forty men required in connexion with one iron furnace. I admit that the number of n en connected with any of these big furnaces is small. If one visits Broken Hill or Mount Lyell to-day, he will see only two or three men at work in attendance on each furnace. But, I ask, how many others are there employed in obtaining materials to feed the furnaces, and in other subsidiary occupations? Although at Broken Hill there are only two or three men in attendance on one of these great furnaces, there are employed, if we take into account those associated with the enterprise at Port Pirie, no fewer than 6,000 men.

Mr Mcwilliams:

– But what is the difference in the percentage of metal between Broken Hill and the Blythe River ores?

Mr KNOX:

– I do not recognise the pertinence of the question. If it is desirable to give assistance, it is more desirable to give it where the percentage of ore is low than where it is high. The figures which I have put forward are not fancy figures, but have been prepared by men whose reputation is known throughout the mining world of Australia, on the advice of a capable and competent expert, who was brought here to make a proper inquiry intothe whole subject. Honorable members will, therefore, see that any statement made by Mr. Jamieson is the statement of an honest man, who is not likely to say what will not be borne out by facts. Although it is stated that one furnace would produce all the iron required in Australia, I would point out that in Great Britain, there are various classes and qualities of iron ore from which are produced different kinds of pig iron, and it is necessary to have several furnaces for the production of the various kinds of iron and steel. No doubt one of the large Pittsburg furnaces produces a very great quantity of iron ; but if we establish the iron industry in Australia, it will require several furnaces to produce the various grades of iron that we need. Large sums have already been spent in Australia in exploiting iron. Near Launceston £200,000 was spent in such an enterprise ; but it was unsuccessful, because those engaged in the undertaking had not proper guidance and advice. Their ore contained a material called chromium, and the iron was proved to be too brittle to be of any use.

Mr Mcwilliams:

– They had one of the best experts obtainable.

Mr KNOX:

– He was a good man, but he made a mistake.I do not hold a brief for the Blythe River Company ; but I cannot listen silently to representations affecting the reputation of Mr. Jamieson, who is too honorable a man to make statements which this House may not accept. I was rather staggered to hear it said that there are not sufficient deposits of iron ore in Australia to justify the establishment of the iron industry here. The Blvthe River deposits in themselves will be sufficient to supply the requirements of theCommonwealth for many years to come ; but every other State as well as Tasmania has large deposits of iron ore. The Broken Hill Company has connected a railway with one of the largest of these deposits - what is known as the Iron Knob deposit - but they are not asking for assistance to work it, because they have other undertakings which are a source of profit to them. If there is any part of the world in which there are excellent deposits of iron ore. it is Australia. In Northern Queensland, and in th’e northern part of South Australia, the deposits of iron ore are so enormous as to make our potentialities for future work simply unspeakable. Some of this ore is thought to be so good for certain specific purposes that efforts are being made to obtain freights sufficiently low to enable it to be dealt with in some of the great English furnaces’. Honorable members are aware that I have consistently expressed my belief in the desirability of establishing ironworks in Australia, though it is impossible, because of the immense capital necessary, to get people to go into the enterprise without assistance. Whether the assistance proposed in the Bill is the right kind of assistance is a subject which I hold myself free to discuss when we come to consider the details of the measure. We are, however, justified in trying to discover what steps are necessary to enable us to turn our iron ore into a serviceable and useful article. I feel that, in view of the small margin of profit which exists in the production of iron, we shall be justified in seeing how far we can assist this industry, though it will be necessary at the same time to see that we do not thereby seriously interfere with other industries which are already established.

I have repeatedly said that I think a bonus properly applied, and properly safeguarded, would be justified inorder to secure the establishment of the iron industry. I entirely disapprove of some of the provisions in the Bill, and will do my utmost to secure their amendment. If I cannot succeed in denuding the Bill of its objectionable features, I shall vote against it on the motion for the third reading. Rather than give any concession to an unsubstantial company, from which no good results could be reasonably expected, it would be better for the Commonwealth, or for oneoftheStates, to embark inthe enterprise ;but in the first place we should endeavour to secure the establishment of the industry upon sound business lines under private enterprise, and with the assistance of a bonus under conditions which will safeguard the interests of the taxpayers. At the same time, we must take care not to interfere with the great primary industries which it is our desire to encourage in every possible way. It is undoubtedly a reproach to us at present that we have not yet established in our midst an efficient and complete ironworks capable of utilizing the enormous quantities of excellent ore and other necessary materials for ironworks which lie ready to our hands. I urge that the iron industry should be established, not so much on the ground that it would afford employment as for the reason that it is absolutely necessary for our success as a community that we should make good use of our undoubted rich resources, and become self-reliant.

Mr Wilks:

– Does the honorable member think that the granting of the bonus will have the effect of increasing the cost of iron ?

Mr KNOX:

– No, I do not think so, because the iron will be produced on such a scale that, with the assistance of the bonus, the company will be able to place it on the market at as cheap a rate as that at which imported iron is now being sold. 1 say this, with the full knowledge that pig iron can be imported here at very low rates of freight. I feel satisfied that until some State assistance is granted, ironworks cannot be successfully established here, and I regard myself as perfectly justified in voting for the second reading of the Bill in the hope that reasonable representations will induce honorable members sitting on the Ministerial benches to abandon its objectionable features.

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

– I understand that some implied complaint has been made with regard to the criticism by members of the Opposition of measures brought forward by the Government. I can only say that those measures which are not of a controversial character have received every consideration from members of the Opposition. But if the Government bring forward proposals which nin right across the principles of a. number of honorable members, and, so far as we can judge, also run counter to their own professed principles, they must expect them to be subjected, not to obstructive, but to clear and full criticism.

Mr Austin Chapman:

– We have no objection to full and clear criticism.

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

– So far as I know, nothing more has been offered ; but I understand that an indication to a different effect was given by the Prime Minister this morning.

Mr Austin Chapman:

– The members of the late Ministry, when they were in office, also gave some similar indication.

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

– If the pages of Hansard are referred to it will be seen that the late Ministry had far greater provocation. I do not propose to occupy time in indicating my previously expressed objections to the principle of bounties. I would only say that, in connexion with this particular industry, it seems absolutely absurd to suppose that a bounty of £250,000 will have any good practical result. If the industry is to be successful, it will develop into one of the largest undertakings in the Commonwealth, and no question of £250,000 will decide matters one way or the other. Any genuine investors will, in the first place,1 have to satisfy themselves that there is a prospect of carrying on successfully .without a Bounty, or without even duties, because it is quite uncertain that duties will be retained on iron, seeing that it constitutes the raw material of so many industries. Those who contemplate investing their capital in ironworks will therefore have to satisfy themselves that the industry can stand by itself independently of any such contribution as that now contemplated. They will not be induced by the granting of a bounty to start the industry if they believe that, after the bounty ceases, the industry will not be able to stand against the competition of the world. What has been the experience in other countries ? Where the iron industry has been estab- lished by means of bounties those interested in it have found themselves compelled to go to Parliament again and again and ask for a renewal of the grants, in order to enable them to continue their works. Unless investors anticipate that there will be a renewal df the bounties now proposed, it is unlikely that they will come forward.

Mr Storrer:

– The woollen industry of Tasmania did not require a renewal of the bonus.

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

– But did not the manufacturers demand the continuance of the duties? If not, their case would be the first of which I have heard in which those interested in an industry established under protective duties have not demanded a continuance of them. I am not alluding to any particular company, but I can quite understand that persons who wished to establish an industry on the market, and did not care whether it was continued in the Commonwealth, might be very gratified to receive a bonus such as is proposed under the Bill. The fact that £250,000 was obtainable from the Commonwealth would be used as a. lever in connexion with the floating of shares on the London market, and no doubt it would prove a great inducement to investors who, perhaps, did not know anything about the conditions of the Bill. I look upon this, not as a Bill for the encouragement of industries, but, from the protectionist standpoint, as a Bill for the discouragement of industries. Any legitimate investor in the iron production df Australia who intended to carry on the industry year after year, and Co bring it to a successful conclusion, would, if he looked not only to the present, but to the future, for his returns, absolutely refuse to come under any such Bill as this. I say to the protectionists in. this House - whose opinions I respect when they are honestly held, as I know they are in many cases, and whose actions I can respect when they are in accordance with their opinions - that, in supporting a measure of this kind, they are absolutely deserting their principles in order to mollify a section of their supporters. What is. the first encouragement that is offered to this company ? It is that a bond shall be given for the whole of the bounty that may be received, and that that bond shall be forfeited if there be any breach of the stringent conditions of the measure. The slightest breach - a trifling unintentional breach - if the company were in the hands of an adverse Government, would render themliable to forfeit the whole of the money which they had received. Under such circumstances, they would have to return that moneyto the Government, even if it amounted to the full £250,000. Surely any man who was handling his own cash would hesitate before undertaking a liability of that description. I do not know whether the Minister in the Chamber can tell me how long the bond is to run,, or if it terminates when the bounty expires.

Mr Austin Chapman:

– To which bond does the honorable member refer?

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

– I am speaking of the’ bond which has to be given by the owners of the works to the Government for a refund of all the bounty paid if there be any breach of the conditions imposed by the Bill. How long is that bond to run ?

Mr Austin Chapman:

– I will give that information later on.

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

– The Bill does not say how long it is to be operative. It may run for ever, but, On the other hand, it may terminate coincidently with the period over which the bounty extends.

Mr Austin Chapman:

– It is to be hoped that the industry will run for ever.

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

-Whether the industry is started at all depends upon the conditions that are inserted in this Bill. The second encouragement offered is that the investor is to be required to pay the wages which may be fixed. If the State were undertaking to pay a considerable sum to the industry, it might be quite reasonable that it should exercise some control over the wages payable. That is another difficulty- a discouragement rather than an encouragement - and for that reason any investor would be acting infinitely more wisely if he entered upon this undertaking with his hands free, and without the aid of any Government bounty. The next encouragement offered is the fixing of selling prices. That is a most extraordinary provision. It is well known to gentlemen who have had anything to do with manufacturing, or mercantile pursuits, that under ordinary circumstances a firm cannot fix its own selling prices. Whatever control it may have over its individual industry, it is occasionally compelled by circumstances altogether outside itself, to accept prices which do not pay, and to take advantage of the market at other times to get larger profits than, usual, to make up for the losses which have been incurred during the period that it was selling below cost. How, then, can the President of the Arbitration Court say what are reasonable prices ? He cannot follow the various fluctuations of the business. Probably he will not concern himself with the past to the extent of recognising the loss which was made when prices were below cost, and the necessity for fixing a correspondingly high price when that is obtainable. All that he will look at is the relation which the profit bears to the cost of any article. If he thinks that that profit is excessive he will cut it down without any reference to the losses which have been previously made. I am perfectly certain there is not a member of this House who would invest his capital in any industry if he knew that that principle was to be applied to it. Then we have another so-called encouragement, in that the works are to be transferable to a State upon the demand of that State, if they prove successful. If they are unsuccessful, we may be sure that the States will leave the industry in the hands of its owners. If, however, through their enterprise and energy - through the possibility of getting cheap ore and converting it cheaply into metal - a profit can be obtained, then, after all the work has been undertaken by the company carrying on the business a State may step in and say, “ We will annex that business, make it our own property, and secure the profits which your skill and enterprise have rendered probable.” Now, I ask, is that an encouragement? Yet the Bill is called a “ Bill for the Encouragement of Manufactures.” It must be remembered, too, that while all the States are to contribute to this bonus, and possibly to a renewal of it, one State can annex the whole industry, should it prove successful. The Commonwealth cannot take it over. It cannot do so under its Constitution. But after all the States may have contributed - over perhaps many years - to the support of the industry, one State can step in and secure all the advantages for itself. The fifth encouragement is that the amount of compensation is to be fixed, as I have already said, by one man - not the most capable individual for that sort of work - and the security that is conferred by the Commonwealth Arbitration Act, which provides that there shall be assessors sitting with the President of the Arbitration Court, is removed. There are to be no assessors. The President is to act upon his own authority, and what is more extraordinary still, there is to beno appeal from his decision. I cannot conceive how honorable members, who profess to believe in the developing power of bounties, can attach such conditions to any Bill. I notice that a gentleman who has been a strong supporter of the party to which the PostmasterGeneral belongs in New South Wales, declares that the Bill is absolutely useless - that the protectionists who support it have abandoned their principles. He affirms that latterly they have allowed another party to rule them with a rod of iron.

Mr Austin Chapman:

– Who says that?

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

– It is the statementofMr.Forsyth, one of the leading protectionists of New South’ Wales. He declares that the protectionists have sold all their principles, and are offering not bread, but a stone to the people of Australia.

Mr Austin Chapman:

– That is not Forsyth the protectionist, but Forsyth the Conservative.

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

– I am speaking of Mr. Forsyth, a leading protectionist of New South Wales, whose support and assistance the Postmaster-General has frequently been glad to receive. That gentleman was president of the Protectionist Association. Another extraordinary encouragement which is offered by the Bill is the fixing every six months - and I believe that the Minister proposes to make the term three months - of wages and prices. In other words, this industry is to be continually before the Court. It is to be before that tribunal at least every six months, and possibly every three months. Not only that, but it will be the only industry in any State off. the Union which will be subject to two Arbitration Courts. After the President of the Commonwealth Arbitration Court has settled the wages and the prices which shall be paid, upon his six-monthly reference, the men engaged in the industry, or the masters, whichever it may be - probably it will be the men, owing to the terms of the Bill - may appeal to the State Arbitration Court, and re-open the whole of the wages question. The Commonwealth cannot prevent resort to the local Arbitration Court. The Bill provides that the industry shall be brought before the Commonwealth Arbitration Court once in six months, if not oftener; and I repeat that after a decision has been given by that tribunal in respect of wages, reference can be made to, say, the New South Wales Arbitration Court - as the smelting portion of the industry is likely to be located in that State, on account of the coal deposits there - to upset the decision of the Commonwealth Arbitration Court.

Mr Austin Chapman:

– There will be no necessity to do that if reasonable wages are paid.

Mr.DUGALD THOMSON.- If the men do not think that the decision of the Commonwealth Arbitration Court is reasonable, they will have a perfect right to appeal to the Arbitration Court in the State in which the industry is being carried on. That impresses me as constituting an extraordinary encouragement. If the Bill passes in its present form, it seems to me absolutely hopeless to expect that capital will be invested in the industry. Any persons who desired legitimately to carry it on, and to make it a permanently profitable industry, would at once say, “ Keep your bonus ; the restrictions which you impose, the difficulties by which you surround us, do not make it worth our while to embark upon the enterprise.” On the other hand, I can understand that a company which was formed really for mining the market - not for mining the ore - would take advantage of the bonus to quote its shares upon the market, where investors would not be fully acquainted with the disabilities imposed by this measure. If the industry be established at all, these conditions must lead to a flotation, that so far from being of advantage to Australia, will be disadvantageous to it. One of our greatest evils here has been - I am sure honorable members will agree with me - the overcapitalization of investments, and especially mining investments. That has been an influence which has retarded many legitimate enterprises, and if we start the iron industry with that serious drawback, I have little hope of its success at this stage in the history of Australia.

Mr Austin Chapman:

– Is there not less chance of over-capitalization if such stringent conditions are imposed?

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

– As I have already said, these conditions make it impossible for men who wish to work the industry legitimately to carry on operations. To the men who do not care whether the industry is successful or otherwise so long as they get a good price for the shares which they receive for the notation of the company, these restrictions do not matter at all. So far as I can see, that is the only respect in which the Bill would encourage investment. We have further to consider that we are lightly asked to commit ourselves to an expenditure of ,£304,000 in the shape of bounties when, as the Treasurer has pointed out, we are about to feel the pressure of the Braddon clause. Our margin of Customs revenue is being rapidly reduced, and we have other liabilities in front of us, because the Departments still remaining to be taken over are for the most part spending rather than income.earning branches of the Public Service. We have the further knowledge that when the value of the transferred properties has been determined, hundreds of thousands of pounds will have to be provided out of our present margin of revenue to pay interest on those properties. Yet, despite all these facts we are proposing lightly to incur an expenditure of ,£304,000.

Mr Ronald:

– Not “lightly.”

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

– At all events, the proposition has been submitted without much consideration. The financial aspect of the question has not been dealt with by the Minister in charge of the Bill. The honorable gentleman has not shown the House how the necessary funds for the purposes of the Bill are tei be provided, having regard to the increasing liability falling upon our restricted share of the Customs revenue. Another provision to which I am strongly opposed is that in which it is actually proposed to make a gift of money to certain individuals. For instance, provision is made in the schedule for bounties amounting to £50,000 for the manufacture of galvanized iron, wire-netting, and iron and steel tubes or pipes. As a matter of fact, these goods are already being produced in large quantities in the Commonwealth. I am informed that the wire-netting industry in New South Wales is so busy . that orders cannot be booked, except for at least six months ahead, and that those engaged in it are actually receiving -C.XI .a ton, or nearly twice as much as thev at one time accepted for their output. Honorable members from Queensland probably know that the company in question took about £i’& a ton for wire-netting from the Queensland Government.

Mr Page:

– That is correct.

Mr Austin Chapman:

– But what was the condition of the industry twelve months ago?

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

– The honorable member for Maranoa supports my statement. Those engaged in the industry in New South Wales are working night and day, and, as I have said, cannot book orders, except for six months ahead. Yet it is deliberately proposed that those who have actually established this industry without any assistance shall receive a large proportion of the sum of £50,000 to be given away in the shape of bounties. Ironand steel pipes are also being made in considerable quantities in Australia, and yet those engaged in that industry are to have a share of this ,£50,000.

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

– Is it not rivetted” pipes that we are now making in Australia ?

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

– Hoskins*, of Sydney, are making cast as well asrivetted pipes.

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

– Perhaps they are making pipes other than those for which the bounty is intended.

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

– I am not sure, but I think I can assure the honor-, able member that they are making pipes of various sizes. They are supplying the gas company.

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

– In view of the words, “ except rivetted or cast,” it seemsthat the bounty is to be paid only in respect of drawn pipes.

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

– It may be that the bounty is to be given only in respect of pipes which are not being made here, but if that be so, the class of pipe the manufacture of which we desire to assist should be specified in the Bill. I can positively say, however, that although the wire-netting industry was not ‘ very prosperous during the drought it is nowworking a full board, and at high rates. I fail to see why it should be singled out for special treatment any more than otherindustries which have been long established’ in Australia. I Have no wish to delay theHouse. I have confined my remarks to matters with which I have not previously dealt, but should like, in conclusion, to know from the Minister of Trade and Customs, who is now present, what is to be the currency of the bond to be given under the Bill. Is it to be a perpetual bond, or is its currency. to terminate with the bounties?

Sir William Lyne:

– I think it is to cease with the bounties.

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

– I informed the Minister a week ago that I should ask this question, as I did not wish to take him by surprise.

Sir William Lyne:

– That is so, but I have overlooked the matter.

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

– If the bond is to be a perpetual one, those who invest in the industry will be called upon to undertake an extraordinary liability. If, on the other hand, it is to terminate with the bounties, the parties concerned1 will then be perfectly free to do whatever they please.

Sir William Lyne:

– I am afraid that the honorable member will have to give me formal notice of his question.

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

– I gave the Minister notice, and he should be able to supply us with this information.

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

– The suggestion is that the bond is to expire with the bounties.

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

– The Bill does not say so. If it is to expire with the bounties those concerned will then be free to do as they please.

Mr Conroy:

– Supposing a man enters upon the industry, and does all that is required of him for two years, is he to lose all that he has earned during that period if he fails to comply with the conditions in the third year?

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

– I have already referred to that point. We ought to know what is to be the currency of the (bond.

Sir William Lyne:

– I think it is made clear in clause 9.

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

– Clause 9 (reads -

The person claiming any bounty shall, before ^receiving the same or the first instalment thereof, give his bond to the Commonwealth in the sum of the aggregate amount of bounty which he may thereafter receive -

I suppose that he is to give a bond for £250,000 ?

Sir William Lyne:

– That would be the case if he were going to do the whole work.

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

– That must ibc so, otherwise the Minister could not fix upon the amount in respect of which the bond was to be given. The clause continues - (hereinafter called the secured amount), conditioned to be- void if he fulfils all the following conditions.

Is he to fulfil these conditions for ever, or only during the period’ over which the bounties are spread? This is a very important question, and it should be answered by the Minister.

Sir William Lyne:

– I think it is answered by the Bill itself.

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

– What is the answer?

Sir William Lyne:

– I shall tell the honorable member when I reply.

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

– The matter should have been explained by the Minister in introducing the Bill. Will he not say in a few word’s now what is to be the currency of the bond?

Mr McCay:

– He does not know.

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

– I had occasion in connexion with another Bill that was under consideration to point out that we were not in possession of certain information, yet in that case, as in this, the Minister would not supply it. So far as the currency of the bond is concerned, we are in the dark, and I am inclined to think that the Minister is in the same position. It ought to be made clear in the Bill. I hope that the Minister will avail himself of an opportunity to decide what is really meant, arid to inform the House accordingly. I cannot conceive that the Bill will encourage legitimate investment in the iron industry. In other words, I do not think it will encourage investment in the enterprise with a desire to carry it through, it may be, years of struggling, to a successful issue. I can only conceive that it will be used, if used at all, as a means of company flotation and over-capitalization on the London market. It will be said, “ Here we have £250,000, which will pay 5 per cent, for ten years on £500,000, and investors are therefore safe.” All the difficulties and all the restrictions imposed by the Bill will not be placed before likely investors, and they may be induced to start an enterprise which any one desiring to carry it out successfully would absolutely refuse to enter upon.

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

– I shall be compelled to vote for the second reading of the Bill, for the reason that I told my constituents a considerable time ago that I would support a proposal to develop the iron industry by the granting of a bonus, in preference to the imposition of protective duties on the production of iron. I have to acknowledge a certain amount of reluctance in making this announcement, because I cannot help feeling that the Bill, as put before the House, is designed to do something more than promote the establishment of the iron industry. I believe that if the Bill had never been introduced the industry would have been established before now. It appears to me that I am placed on the horns of a dilemma. If I refuse to vote for the second reading, and the Bill is rejected, the effect will be to hang up the operations of speculators who are now nibbling at the venture, and they will still hold off, in the hope that some future Parliament will pass a Bonus Bill and assist them to embark upon the enterprise. I think, on the whole, that it would be better for us to agree to the second reading, and deal with the details of the Bill in Committee, rather than to throw it out altogether, and so defer the establishment of the iron industry, probably for some years. I agree with a great deal that the Minister said in introducing the Bill as to the importance of the industry. The Minister hardly made out as strong a case as he might have done, for iron, as Mr. Cobden has said, is the “ daily bread “ of all other industries. One can hardly conceive of an industry to which that remark will not apply.

Mr Conroy:

– Consequently iron ought to be as free as possible.-

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

– Yes ; but there may be circumstances under which freetraders like myself and ‘the honorable and learned member would vote for the granting of a bonus rather than have heavy protective duties imposed. I gather from the reports of experts which have been placed before us that there are, in various parts of Australia, large deposits of iron ore which would pay commercially for working. When the States had each its own Tariff, it was impossible for any State to develop these natural resources ; but the position is altered now that the whole market of Australia is open to the iron produced. I was hopeful that under these circumstances something would be done towards the establishment of a local iron industry, and the only reason I can think of for the delay which has taken place in the exploitation of our iron deposits is that the various syndicates, proprietaries, and persons inter ested in them are staying their hands in the sure and certain hope that something will be done by the Federal Government to assist them. I have said that I am prepared to encourage the starting of the iron industry by granting a bonus for the production of iron, but I am not prepared to give double assistance by voting also for fiscal protection, because that might have the effect of increasing the price of iron to the consuming industries of Australia to an extent greater than they might be able to bear. Whilst, therefore, I am disposed to support the second reading of the Bill, I intend, in Committee, to co-operate with others in making certain amendments in it, and, without entering into minute details, I will shortly give my reasons for taking that course. But, before doing so, I wish to address myself briefly to the general character of the measure. Although we have had to commend the drafting of most of the measures which have been submitted to us, I do not think that even those who are most favorably disposed to the present Government can commend the draftsmanship of this measure, because it is probably the most slipshod that was ever placed before any Parliament. The honorable member for North Sydney has already referred to two or three matters which have struck me in connexion with the looseness of the provision under which a bond is to be exacted from the claimants of the bounty. As he has pointed out, clause 9 does not say how long that bond shall operate, or when it shall expire; and when the Minister was asked the question he was unable to answer it. Clause 9 also provides that the person claiming any bounty shall pay to his workmen the highest wages paid for similar work, though no similar work is being done in Austrafia. If it were Otherwise, we should not be asked to pass this measure. The clause also provides for the charging of fair prices for the iron that is sold. That is a ridiculous provision if it is not intended to propose high protective duties which would give local manufacturers of iron the opportunity to fix their own prices. If the local manufacturers are subjected to the open competition of the world, that competition will fix fair prices; but if it is the intention of the Government . to encourage the iron industry, not only by the granting of a bonus, but also bv the imposition of a protective duty, there may be some reason for enacting by legislation the price at which locally-produced iron is to be sold. Such a provision is, however, a most extraordinary one, The Minister of Trade and Customs is apparently so ill-informed as to the intentions of the Bill that he is not able to answer the simple question asked by the honorable member for North Sydney.

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

– I gave a week’s notice of it.

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

– Yes,, and the honorable gentleman’s speech was an important business criticism of the Bill. Yet the Minister is not ready with an answer.

Sir William Lyne:

– If honorable members will let me reply, I will tell them all that they wish to know.

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

– The Minister should do what he can to assist the passing of the Bill, and I would remind him that I am a supporter of the measure. He could give us this information in two or three words. Either the bond is to last for an indefinite period, or - and this is the more natural conclusion - it is to terminate when the bounty ceases. But, apart from that, the draftsmanship of the Bill is shaky and prolix.

Sir William Lyne:

– The honorable member should tell that to the AttorneyGeneral. I never attempt to draft measures.

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

– I tell the honorable gentleman, as he is in charge of the Bill. Clause 6 says that no bounty shall be paid on certain kinds of iron after certain dates, and the schedule contains a similar provision, set forth in different language. When the Caliph Omar was asked what was to be done with the library at Alexandria, he said that if it contained anything which was not in the Koran it was dangerous, and should be destroyed, and that if it contained anything which was in the Koran it was useless, and should be destroyed. So I say, with regard to clause 6, that if it contains provisions differing in their language from those in the schedule they should be struck out, because otherwise difficulties of interpretation will arise. For instance, clause 6 says that -

No bounty shall be authorized to Be paid on - (a) Fig iron, puddled bar iron, or steel made after the first day of January, One thousand nine hundred and eleven.

While the schedule says -

Pig iron made from Australian ore …. 1st January, 1911.

Under clause 6 the bounty may be paid on pig iron made from imported or from scrap iron. There are other small differences between clause 6 and the schedule, which may give rise to difficulties of interpretation. If in clause 6 the draftsman had adopted language similar to that of clause 5 these difficulties would have been avoided. Clause 5 provides that -

The total amount of the bounties authorized to be paid in respect of any particular class of goods shall not exceed the amount set out in the third column of the schedule’ opposite the description of that class of goods.

Those words are very precise, definite, and businesslike, and their meaning cannot be misunderstood. Clause 6 would have been much clearer, and more succinct, if it had provided that -

No bounties shall be authorized to be paid in respect to any particular class of goods made after thu date set out in the fourth column of the schedule opposite the description of that class of goods.

Such a provision would have given those who may wish to claim bounties, those who will be called upon to administer the measure, and those who may be called upon to interpret it, a clear, definite, and precise instruction as to the intention of the Legislature. According to the schedule, the total amount of bounty which may be authorized for goods of class 2 is £50,000, and that class is made up of galvanized iron, wire netting, and iron and steel tubes or pipes not more than six inches in internal diameter. The rate of bounty on such goods is 10 per cent, on their value. It might happen, however, that A. might claim the £50,000 on galvanized iron, B. on wire netting, and C. on iron and steel tubes. There is nothing in the Bill to say how in such a case the bounties should be apportioned. Of course, it is apparent that the difficulty can be got over by the introduction of a clause providing that if the claims to the bounty are greater than the total amount provided for the class of goods for which a certain sum is voted, the distribution shall be pro rata. Then, again, it is provided that £8 each shall be given for the first 500 reapers and binders manufactured. Free-trader as I am, I look upon the giving of this bounty as, at any rate, a less evil way of stimulating manufacture than is the imposition of protective duties. I should be prepared to support that, and also, as a common-sense business man, to give some little further extension of the period. This Bill cannot become law until about the end df the current year, and those who desired to secure the bonus would have only six months within which to do so. Unless those who support the Bill have some firm “ up their sleeves ‘ ‘ openmouthed and ready to secure the bonus, it must be admitted that this is a ridiculous provision. Six months would be too short a period within which to expect persons with the necessary capital, brains and knowledge to start the manufacture of reapers and binders, and earn the .?4,000 which is offered by way of bonus. To this extent, I think the Bill is badly drawn, and that some provision better calculated to stimulate the industry should be inserted in the Bill. So far as galvanized iron is concerned, the manufacturers already enjoy the benefit of fair protection, and the galvanized wire-netting business has been established under conditions of perfect freedom, so far as the Tariff is concerned, and is now being carried on with the greatest success. The company which is operating in Sydney is so inundated with orders that one cannot very well conceive of a more successful enterprise. Therefore, it appears to me to be absurd to propose to make them an absolute gift of a large sum of money. Therefore, when the schedule is under consideration, I shall be glad to co-operate with those who desire to excise that provision. I do not think the honorable member for North Sydney was entirely correct when he spoke upon the subject of the iron pipes provided for in class 2 of the schedule. Although we are making cast and riveted pipes on a very large scale, and the industry is carried on under conditions which’ are highly creditable to the manufacturers, I take it that the Bill is intended to encourage the production of a Class of pipes which is not at present manufactured here. I refer to the smaller kinds of pipes for water, steam, and gas purposes, under six inches in diameter, or what are known as drawn pipes. The’ Bill is badly drafted, because the definitions are not sufficiently clear; and I think that the intention should be clearly expressed. Turning again to the production of crude iron - puddle and bar iron - I should like to again point to the report of the Bonus Commission, which contains some very valuable information. I think honorable members should carefully study that . report before they proceed to vote the large amounts proposed in aid of the iron industry. Mr. Sandford, who has probably the widest experience of any man in our community upon this subject, stated most distinctly, not once but twice, and in reply to very definite and specific questionsthat he could produce pig iron at Lithgow for 35s. per ton. His statement was most definite, because the honorable and learned member for Corinella questioned him asfollows : -

I am not quite sure that I understand what youmean when you say that pig iron could be produced at Lithgow at 35s- per ton - is that taking, everything into account?

Mr. Sandford’s reply was

I give that as an estimate of the net cost at Lithgow.

That is very definite, and it seems to methat here we have an absolute stumblingblock in the way of any proposal to grant a bonus for the production of iron. If we can produce pig iron in Australia at 35s. per ton, what reason can be advanced for granting a bonus such as that now proposed? I am prepared to admit that I think Mr. Sandford made a mistake. He has corrected that mistake in a certain way,, and has communicated his ideas to a reporter of the Sydney Daily Telegraph. whose report is published in the Age of Monday last. Mr. Sandford said -

A good deal had been made of his statement before the Bonus Commission that pig iron could be made here at 35s. a ton. In giving that figure he had only the net cost in view. He did not reckon interest on capital, about 5s. a ton ; depreciation and redemption, equal to about another 5s. a ton ; freight to Sydney, which was our local1 market and the market for the shipping trade, 8s. 6d. a ton, besides other incidentals, which would bring the cost to 61s. a ton.

At the time Mr. Sandford gave evidencebefore the Commission, he was also communicating his ideas to persons outside, and it seemed to be his idea,, in furthering the objects of those interested in the iron trade, to prove that iron could be produced inAustralia at a very low cost indeed. Apparently, he afterwards came to the conclusion that he had overleaped himself, and” fallen on the other side, and that it was required of him that he should show that others matters had to be taken into consideration before the real cost of iron production could be arrived at. Under Mr. Sandford’s new estimate he claims 5s. perron for interest. I think it is a wellknownaxiom in political economy that interest in such a case as this would mean profit, because either one of two things must happenEither the company must go into the business with subscribed capital of the amount necessary upon which no interest would have to be paid, or it must borrow money, upon which it would have to pay interest. The allowance made for interest must therefore be regarded as profit, or partly profit. Coming back to the report of the Commission, Mr. Sandford stated that he could erect a blast-furnace in New South Wales for£ 1 00,000, and that he could produce up to 1,200 tons per week of crude iron. Let us assume, for the sake of argument, that he could produce 1,000 tons per week. An allowance of 5s. per ton for interest would yield £13,000 per annum, and that amount would represent a return of 13 per cent. upon the. capital outlay of £100,000. That would be independent of any bonus. I can only say that if those who are engaged in many other industries in Australia could feel assured that they would obtain such a return as 1 3 per cent., they would be induced to launch out much more extensively than they do at present. Mr. Sandford then makes a most extraordinary claim. He wants to make an allowance of another 5s. per ton for depreciation or redemption. Speaking as one who has had a good deal to do with laying out plants and building factories, I must say that. I never heard the word “ redemption” used before in this connexion. One can easily see that something more than depreciation is provided for when it is remembered that , £13,900 per annum is to be devoted to redemption and depreciation. If Mr. Sandford could legitimately claim these two allowances, each amounting to £13,000 per annum, the company engaged in the work would not only be able to make a very satisfactory profit, but would within a very short space of time entirely redeem the whole of its capital. This would be entirely exclusive of any bonus. Mr. Sandford says that it costs 8s. 6d. per ton to convey pig iron from Lithgow to Sydney, and I will assume that the average cost of conveying the iron from Lithgow to the various central ports of Australia would average, say, 15s. per ton. It must be admitted that, in dealing with large quantities of material, such as would be handled in this case, low rates of freight could be secured. Adding.15s. per ton to the10s. per ton which Mr. Sandford claims for interest, depreciation, and redemption, we arrive at a total of 25s., in addition tothe 35s. per ton which represents the cost of production at Lithgow, or an aggregate of £3 per ton. Mr. Sandford says that iron is being landed in Sydney at present at£31s. per ton ; other persons quote the average price as more closely approaching £4 per ton. I think, therefore, honorable members will see that Mr. Sandford’s own figures show that we should be very careful before we consent tovote, the large sums of money which it is proposed to expend under this Bill by way of bounties. Nobody is more desirous than I am of seeing Australia make use of her vast deposits of iron ore. But we should be careful that we do not pay too much for our whistle. The Government have made no financial provision whatever for the payment of these large bounties. They are plunging into the experiment almost blindfold, and consequently it behoves us to be extremely cautious when we come to deal with the details of the measure in Committee. I shall support the second reading of the Bill, reserving to myself the right, in Committee, to reduce some of the proposed bounties, to eliminate others, and generally to hedge round its provisions in such a way as to afford less chance than now exists for litigation, and to minimize the evils of a measure which has been badly drawn and badly devised.

Debate (on motion by Mr. Conroy) adjourned.

page 1563

LIFE ASSURANCE COMPANIES BILL

Bill returned from the Senate with an amendment.

Motion (by Mr; Groom) agreed to -

That the message be taken into consideration forthwith.

In Committee (Consideration of Senate’s message) :

Mr GROOM:
Minister of Home Affairs · Darling Downs · Protectionist

– Honorable members will recollect that this Bill was passed by the House last session. It was transmitted to the Senate, where it has been agreed to, with the exception of one amendment, which has been made in clause 6.

That clause provides -

  1. It shall be an offence under this Act -

    1. if a life assurance company pays money on any policy taken out after the passing of this Act on the death of a child under ten years of agc otherwise than as provided by this Act ; or
    2. if a parent or personal representative of a parent claiming money on the death nf a child produces a certificate of the death other than as provided in this Act to the life assurance company from which the money is claimed, or pro. duces a false certificate or one fraudulently obtained or in any way attempts to defeat Che provisions of this Act ; or
    3. if a policyissued under and by virtue of the provisions of section two shall not set forth that the total sum or sums recoverable on the death of any child as assurance moneys or other benefits from any one or more life assurance companies or f riendly societies shall not exceed the amount so specified in the schedule hereto,
  2. For every such offencethe penalty shall be Five pounds.

The Senate has increased that penalty to £45. I move -

That the amendment be agreed to;

Motion agreed to.

Reported that the Committee had agreed to the Senate’s amendment; report adopted.

House adjourned at 4.6 . p.m.

Cite as: Australia, House of Representatives, Debates, 25 August 1905, viewed 6 July 2017, <http://historichansard.net/hofreps/1905/19050825_reps_2_26/>.