2nd Parliament · 3rd Session
Mr. Speaker took the chair at 10.30 a.m., and read prayers.
– I wish to ask the Acting Postmaster-General, in reference to the changes in the post and telegraph service of Western Australia referred to by the honorable member for Kalgoorlie last night, and more particularly in reference to the statement that officers were appointed to the positions of other officers removed on their report, whether, in laying on the table the papers which he has promised, he will also obtain from the Public Service
Commissioner an explanation of what appears to be a somewhat serious anomaly, which has already caused consternation in the Public Service?
– While I do not object to give the House all the information obtainable in the matter, I do not wish it to be thought that, in my opinion, the Public Service Commissioner has acted’ in any way contrary to ‘his duty. I do not wish to toe understood as making any statement at all in regard to his actions
– It is stated in the newspapers that the Government intend to make amendments in the Australian Industries Preservation Bill, and I wish, therefore, to know1 if they are willing to provide that die prohibition of imports shall be subject) to an undertaking on the part of the local employers thereby protected, that their employes will be paid Australian rates of wages, and’ allowed to enjoy just and reasonable industrial conditions.
Mr. ISAACS. Consi deration for rates of wages and reasonable industrial conditions is one of the reasons for the Bill, but regard will be paid to the subject by the Government under all circumstances.
– Is the Acting PostmasterGeneral in a position to inform the House whether the Government intend to accept tenders for an ocean mail service before the report of the Shipping Commission has been presented?
– I am satisfied that any action by the Government in the matter will be taken with due regard’ to the report of the Royal Commission.
– Is the Acting PostmasterGeneral aware whether it is a fact that the private letter boxes supplied to the various post-offices are made in America? Is it not possible to make these boxes, or parts of them, in Australia?
– I do not know where the boxes are made ; but it is the policy of the Government to have everything that can be made in Australia made here, and there should be enough ingenuity in the Commonwealth to provide for the manufacture of such boxes here.
– When will the return showing the goods imported by the Government be laid 00 the Table? .1 wish to see what they are importing, and what they are using of goods made, here.
– The Government will endeavour to allay the honorable member’s anxiety on the subject at the earliest moment.
– Will the Government bring in a Bill to prohibit all importations into Australia, and to prevent the immigration of men, women, and children? That is apparently what is wanted by some honorable members. Where would the honorable member be now, if he had not been imported ?
– I was not imported.
– I wish to ask a question of one of the members of a Royal Commision.
– To what Commission does the honorable member refer? The Standing Orders permit questions to be asked of any .private member in relation to business before the House of which he has charge.
– I should like to ask the honorable and learned member for Illawarra, or the honorable member for Perth, if either is willing to answer the question, whether the Tariff Commission is likely to report soon on the question of metals and machinery?
– I should not like this case to be made a precedent. As the Tariff is, in a sense, the business of the House, I should have little hesitation in permitting the Chairman of the Tariff Commission to reply to such a question, but I doubt the propriety of permitting another member of the Commission to answer the question in his absence.
– Then I withdraw my question.
– Personally, I object to giving any information in regard to the doings of the Commission, because I think that such information should come through the Chairman.
asked the Acting PostmasterGeneral, upon notice -
– The Acting Deputy Postmaster-General, Sydney, has furnished the following information : -
asked theActing PostmasterGeneral, upon notice -
– The Acting Deputy Postmaster-General, Sydney, has furnished the following information: -
Debate resumed from 20th June (vide page 496), on motion by Sir William Lyne -
That the Bill be now read a second time.
.- Through the courtesy of the honorable and learned member for Illawarra, I am able to precede him in saying a few words on this Bill ; but, as I spoke on a similar measure last year, I do not intend to do more than make a cursory reference to some of the points which, in my mind, indicate that there is really no necessity, on the ground of urgency, for a Bill of the far-reaching character of that proposed. If my memory serves me right, we were told by the Minister of Trade and Customs, when he introduced the Bill of last session, that the legislation was urgent, because there were some 2,000 harvesters afloat on their way to Australia, and, like the companies which fear their importation, they are apparently still afloat. We were also told, at the time of the appointment of the Tariff Commission, that an alteration of the Tariff was necessary for the preservation of certain industries ; but it seems to me a reflection on the House which suggested the appointment of that Commission to ask it to deal with matters specially referred to it before the report and minutes of evidence have been presented.
– It is certainly a gross reflection on the Commission.
– The sooner the Commission reports the better, in my opinion. I, like other members of the Opposition, am prepared to deal fairly with the facts produced in evidence and the reports based on them, and, so far as the little leisure at my disposal will give me the opportunity, I have already made myself acquainted with that evidence, having some months ago read some of the 1.6,000 or 17,000 questions and answers then recorded in respect of certain industries. But I have not discovered any justification for the immediate introduction of this Bill, or for the fears of certain honorable members that the iron industries of Australia cannot be preserved without a measure of this sort, or except by prohibitive duties. So far from the iron industry being prejudiced by the Tariff of 1901, I find that in Victoria the number of iron workers increased between 1896 and 1904 by over 30 per cent., that the hands employed in the making of agricultural implements increased from 852 to 1,496, and that the value of the implements made increased1 from ^244.000 to ,£431,000. Notwithstanding the clamour which has come from this State for an alteration in the Tariff, those figures do not indicate a declining energy, or a want of return for capital invested. Mr. Moore, a representative of the firm of Messrs. Robinson and Co., was, I think, put forward as an exponent of the views of the manufacturers of agricultural implements, or, at all events, of that branch of the trade whose business is the manufacture of harvesters. He was asked -
How do you put your case?
And he answered -
Briefly. I claim that a duty should be imposed which would cause the importation of stripper-harvesters to be discontinued.
The effect of this ‘Bill, will, under political pressure, probably be to carry out that policy of stopping importations. At all events the power proposed to be given is a dangerous one to place in the hands of any Minister. We must remember that those who are engaged in these industries are being organized. A number of peripatetic politicians have been stumping the country dealing with these matters, not merely on the public platform, but in the establishments, with a view, to inducing the employes to use their influence to secure the duties suggested and the powers conferred by this Bill. According to the evidence that has been published the duty of 12A per cent, that has to be paid on. harvesters according to the valuation fixed by the Minister of Trade and Customs - that is the value at the place of export plus 10 per cent., or in all £65 - amounts to j£& 2s. 6d. Under the former valuation the duty amounted to 6s. The charges, it is said, amount to £14 7s. ; that is the actual additional value that is given to the machine during its transit from the port of export to the warehouse in Australia. That has to be added to the duty. I am speaking subject to correction, but these figures are in accordance with the best evidence that I can obtain. They have been published, and the estimates are sustained by the evidence given before the Tariff Commission. Testimony has also been given by representatives of local harvester manufacturers, from which it would appear that the cost of producing a machine here does not exceed £40. Again, I am speaking subject to correction. It was stated that the cost of materials used - £26 or £27 per machine - represented 75 per cent, of the total cost, and that the value of the labour represented about 25 per cent, of the cost. According to this, the total cost of a machine would be something less than £40. The duty and the import charges that I have mentioned represent a total of a little less than £23 per machine upon an article which, according to the evidence, is sold for £81 cash, or for ^86 or ^87 on credit.
– That is not too much to pay for a machine.
– I do not know whether it is or not. I am merely stating the facts as given in evidence. Whilst I desire to deal fairly with the local manufacturers, and to prevent any possibility of foreign trusts pushing them out of the market, it seems to me that, in the face of the figures I have quoted, there is no urgent necessity for a Bill such as that now before us. A report was presented to us last year showing that from rst January, 1905, to 30th November, 1905, the value of the harvesters imported was ,£100,000, and that during the same period there had been exported from Australia harvesters valued at £30,000. If the figures given by the Minister of Trade and Customs last week are correct, there has been a shrinkage in the value of the harvesters imported since these figures were presented.
– The honorable and learned member is quoting last year’s figures - no figures are yet available for this year.
– I understood that the Minister estimated that the value of the importations during the present year would be £85,000. If that estimate be correct, there has been a shrinkage in the importations. I fully realize that the profits made by the local manufacturers vary with their output, the scope of operations of particular firms, and other circumstances. But it has been given in evidence that manufacturers make a profit of about £18 per machine.
– Yes, a clear profit of from £16 to £18 per machine.
– If it be true that there is a local consumption of 5,000 or 6,000 machines, and that the three firms who are turning out the greater number are making a profit of from £16 to £18 per machine, the conditions in which the industry is placed do not strike me as being disastrous. The industry is not, as far as I can see, in imminent peril, and there is nothing to call for a Bill of this character, which would put it in the power of any complaisant Minister to stop the importation of any goods, and would substitute for the Tariff Commission a jury whose standard would vary according to its personnel, and a board, the members of which might, perhaps, in time, become experts, because the personnel would not be so mixed as would that of the jury.
– The industry in South Australia has been almost crushed out.
– Could the honorable and learned member say how many machines would be represented by the imports valued at £85,000 ?
– No. I believe that last year, or the year before, 400 machines were exported from Australia. The .Minister of Trade and Customs, says that the industry has been crushed out in South Australia.
– It has sustained very great injury.
– I should be only too anxious to protect the industry there if the Minister’s statement were correct.
– It is correct.
– I have two or three manufacturing centres in my district, and naturally I should like to db everything I could to help them.
– Are Clutterbuck Brothers in the honorable and learned member’s electorate? It is through them that the manufacture of harvesters has been: nearly stopped in South Australia.
– I know a little more than the Minister seems to think about this matter. I should do my best to protect the industry if I thought the fears of the Minister were justified, seeing that in my district there are three centres which are concerned in the manufacture of harvesters. Naturally, I should do my best for the industry, consistent with a due regard for the interests of the people as a whole. Again, at question 15901 of the evidence given before the- Tariff Commission, Mr. Moore was asked -
Can you say of your own knowledge, whether firms are suffering loss from the operation of the Tariff? - None that I know of are losing.
At question 161 7 5, he was asked -
Are you now getting no more than the same rate of profit that you did before? - Perhaps a little more.
Nevertheless, he asked for a duty of £25 per machine, and 2 1/2d. per lb. upon duplicate parts, which would bring the protection upon a machine of standard weight up to £30. That is the evidence of Mr. Moore, the manager for Messrs. Robinson and Company, who was put forward as a man fairly conversant with the business, and as a representative of the local manufacturers. That evidence was given on the 20th April, 1904. Mr. Moore said that at that time the American machines were not underselling those of the local manufacturers. There has been a reduction in the price since. I think that the price of the International Harvester Company’s machines in Australia is now £76.
– Less than that.
– I have made inquiries into this matter, having been engaged in a case against an importing company, and, so far as I can understand, the present price is £76, or a little more for extended credit. Previously the price was £81 cash, or £86 on credit.
– I know of machines having been sold for much less than£76.
– I am not speaking merely from hearsay, but I am stating facts that are actually in print, or are within my personal knowledge as a lawyer. I am not going to rely upon evidence of the class that has been accepted by the Minister of Trade and Customs, such as ex parte declarations as to what will probably result from the competition of the International Harvester Company. At question 15900, Mr. Moore stated that the local manufacturers had not suffered from the Federal Tariff, but that they had expected greater expansion of trade. He was asked what was his complaint, seeing that the firms were not suffering, that the number of hands had increased, that the output had increased, and that the profits were slightly better than before. He stated that they had not secured the extension of trade they had anticipated, and that hence they wanted a duty that would prohibit importations. The word “prohibit” was used by Mr. Moore. It seems to me that we have to look at the interests of the consumers as well as at those of the manufacturers. I am only too anxious to see the continuous development of Australian industries, and to insure that our manufacturers are treated fairly. We have to remember, however, that strong protests against the suggested duties have been presented by the representatives of the Farmers’ Association. I find, for instance, that Mr. George Henry Osborne, commission agent, from St. Arnaud, and secretary of the local Agricultural Society, expressed the views of 250 delegates, who attended’ a meeting in Melbourne in connexion with the Tariff Commission inquiry, and passed resolutions in opposition to the proposed increase of duties. There are, I believe, in Australia from 276,000 to 277,000 farmers. The output of the agricultural, pastoral, and mining industries is valued at£76,000,000 per annum. The output of our manufacturing industries is valued at£28,000,000 per annum; that is something to be proud of, and we hope that the figures will grow. But we must consider the industries that would be seriously affected by the stoppage of the importation of machinery, and whose preservation is so largely associated with the welfare of the Commonwealth’. The total number of persons employed in industries which come into competition with imports is 86,000, but against that I put the fact that there are 276,000 farmers, whose interests, in cases, might be prejudicially affected by the adoption of a policy so extreme as that advocated by some of the agricultural implement manufacturers, or as that embodied in this Bill.
– The figures of the honorable and. learned member include the whole of the farming population?
– No doubt.
– Wheat-growing is the principal industry in those parts of Victoria which were dealt with by the witness.
– The importation of harvesters may have been the chief cause of the introduction of this Bill, but the scope of the measure is very much wider than that, affecting as it does every line of industry that may come within the provisions of the clause. As to the Bill itself, it may be effective in stopping imports, but it will not be effective in preventing the formation of local trusts. According to the admission of the Attorney-General, apart from the operations of Inter-State or external trade, it cannot touch persons, though it may - indeed, he affirms that it will - touch corporations. I doubt it. We have power under the Constitution to deal with corporations, but whether that power is so extensive as he says - whether it includes the passing of any law relating to production or to the conditions of distribution by corporations - is a matter of some doubt. Certainly the measure cannot touch a firm, and there is nothing to prevent local companies from being wound up and formed into large firms. In that case the provisions of this Bill could not touch them. In America the Sherman Act is directed not against importers, but against local trusts, which is significant. When it was introduced in 1890 it was directly aimed at interested carriers. There is a special Act in operation there which is known as the Wilson Act, and which deals with importers. Its provisions are much milder than are those of this Bill. The trouble in America has not arisen in connexion with imports, but in connexion with Inter-State commerce. The provisions of the Acts in force in America are not so drastic as are those contained in this Bill. To me it does seem to be a curious policy to hand over for determination by casual juries and boards to be appointed from time to time by the Minister, questions of political economy. These bodies will Have to decide when any interference has taken place with local employment, or when, in point of fact, certain imports are likely to interfere with the remuneration of local labour. In such cases they will have to determine whether the importation of these competing commodities shall be stopped. It seems to me that the evidence upon which they will act - assuming that they have the capacity to apprehend and apply it - will be far more extensive than will be the evidence likely to be brought before them. I can easily imagine a case coming before one of the Courts in which a view of political economy was presented by the Attorney-General, and another view by the leader of the Opposition. Fancy a jury, after a series of challenges - because I recognise that before a jury was struck, there would be a good many challenges dictated by political leanings - being called upon to decide abstruse questions of political economy - questions which are surrounded with so many elements of uncertainty that some universities decline to adopt a chair of political economy at all. Such a jury might be composed of the ablest men in creation, but at the same time their knowledge of the factors that govern commerce, and the conditions of the particular trade under consideration would not be sufficient to guide them to a proper conclusion. This Bill does not recognise what occurs in all industrial developments, namely, that from time to time there is a shifting of labour .from one particular branch of trade to another. When the stage coach was introduced it dislocated the whole of the carrying trade. It was one of the phenomena accompanying industrial development. In 1840 the export of local produce from Great Britain was valued, I think, at £50,000,000 ; in 1884 it had increased to £240,000,000. Right throughout that advance, there were fluctuations in certain Wades, and there were variations in the relations between supply and demand throughout all associated trades. For instance, in 1840 the value of cotton represented 33 per cent, of the total export of local produce, but .in 1884 its value had shrunk to 25 per cent. The labour displaced in that industry after a short time found its way into other avenues of trade. If there was a comparative and temporary shrinkage in cotton there was ?n increase in the output of iron, or as Giffen put it - something else increased - the stream of industrial advance was continuous.
Under this Bill, however, the importation of certain goods under conditions which must exist, and which are continually recurring wherever! prosperity exists, will ‘be stopped. Consequently the measure seems to me to be an exceedingly dangerous one. Whilst I am anxious to deal fairly with the facts presented in evidence to the Tariff Commission, and to encourage the development of our local industries, I think that this Bill is altogether of too extreme a character. It is a dangerous instrument to put into’ the hands of any Minister, and I regret that I am unable to see any justification for its introduction at this stage.
– I have listened with very great interest to the speech of the honorable and learned member for Angas. I agree with him that this Bill is a dangerous one, especially in view of the extreme powers which it will confer upon the Minister of Trade ‘ and Customs. I think that all honorable members desire to insure the preservation and development of our Australian industries. But under this measure, ib appears to me that no consideration has been extended to those industries which have made Australia what it is to-day. In short, the measure is merely designed to conserve the interests of the manufacturers in the big centres of population. It must have been verv galling to the Government to listen to the criticism of the measure in which the leader of the Labour Party indulged’ the other evening, especially in view of the fact that it has been placed in the very forefront of the Ministerial programme for the purpose of placating that party. The honorable member for Bland declared that in his opinion the Bill would absolutely fail to achieve the object for which it has been introduced. His criticism of it was, in my judgment, the most destructive that has been levelled against it. I should like to draw the attention of the Minister of Trade and’ Customs to the definition of a commercial trust. That definition reads - “Commercial trust” includes a combination, whether wholly or partly within or beyond Australia, of separate and independent persons (corporate or unincorporate), whose voting power or determinations are controlled or controllable by -
The Minister is well aware that some years ago a vend in connexion with the coal mining industry was established in the Newcastle district. Its object was to do away with the cut-throat competition which had taken place between the various mines, and to fix the price of coal at a figure that would be remunerative to the colliery proprietors, and at the same time enable them to pay a fair wage to the miners engaged in the industry. The wage fixed was to be regulated by the selling price of coal from time to time. Although that vend is not in existence to-day, I am informed that steps are now being taken to form a similar organization there. I should like to know whether, in the opinion of the Crown law authorities, such a vend would come within the definition of a “commercial trust.” Then, again, from time to time the representatives of the dairying industry in New South Wales, who are the sellers in the city of Sydney, meet and fix the price of their commodities. I desire to ascertain: whether these gentlemen would come within the scope of the definition. If these matters have not already presented themselves to the mind of the Minister, I hope that he will give them his earnest consideration. I venture to say that it will be almost impossible for any jury to decide whether competition “ probably or does, in fact, result in a lower remuneration for labour,” as is provided for in paragraph b of clause 6. In this connexion the evidence which will be brought forward is bound to be of an unsatisfactory character. One great difficulty I see in connexion with the operation of this Bill is that no matter how anxious a jury may be to decide honestly and fairly on the evidence submitted to them, that evidence will be given by persons specially interested in having one side of the case presented. Dealing with Part III. of the Bill, I should like to say that the sole reason for the introduction of the measure would appear to be a fear, real or assumed, that the harvester industry of Australia is likely to be exterminated by the International Harvester Trust. The Tariff Commission devoted many weeks to the consideration of the circumstances connected with industries covered by the Tariff division “Metals and Machinery,” includ ing the manufacture of harvesters. I do not propose for a moment to refer to anything that happened in connexion with their proceedings, but in view of the fact that this question’ has been exhaustively investigated by the Tariff Commission, I urge upon the Minister of Trade and Customs that, before any decision is arrived at in connexion with this important Bill, it would be only fair that an opportunity should be given to honorable members to learn the exact position of the harvester industry. The Minister has, in my opinion, given no justification for the haste shown in proceeding with this measure. In dealing with the third part of the Bill, the honorable gentleman referred to the harvester question, and quoted a portion of the evidence given before the Tariff Commission. He referred to the commissions paid on the sale of imported machines, and then made a long reference to American trusts, and’ especially to steel trusts in America.. But he gave no proof that any dumping was taking place, or that the Australian harvester industry is in any danger of being annihilated. The only matter to which the honorable gentleman referred in support of his position was a declaration by a Mr. Coxon. He did not explain who Mr. Coxon is, and the House knows nothing about that gentleman or the circumstances in which his declaration was made. We do not know what influences were at work to secure that declaration, but we know that it was presented to the Tariff Commission by Mr. H. V. McKay, who isan interested party. Yet the Minister, on that single declaration presented in the circumstances I have mentioned, expected honorable members to believe Mr. Coxon’ s statement. I merely relate the circumstances in which the declaration was received, and I ask whether honorable members are justified in accepting it as evidence of the existence of a menace to the harvester industry of Australia? In justice to honorable members, this measure should be delayed until the report of the Tariff Commission is presented. As a member of the Tariff Commission, I am unable to say when the report will be laid on the table, but the Chairman of the Commission is available, and if communicated with will be able to give some indication of the time at which the Commission will be able to present it. It is a matter of common knowledge now that in connexion with their inquiry, the Tariff Commission have entered upon the last lap. The Minister of Tradeand Customs has given no proof that the industries of Australia are in any danger, and certainly none that the harvester industry is in danger from operations aimed at inPart III of the Bill. This measure will practically put it into the hands of the Minister to prohibit all importations, and justifies the expression used by the honorable member for Perth that it is “protection gone stark, staring mad.” In view of all the circumstances, its further consideration should certainly be postponed until the report of the Tariff Commission has been laid on the Table.
.- The introduction of this measure and the grip it seems already to have on honorable members, is the strongest possible evidence of what may be achieved by persistency. In my opinion, Mr. McKay, the manufacturer of the Sunshine Harvester, is entitled to congratulate himself upon what he has accomplished, because there is no doubt that the introduction of this measure is the outcome of his agitation. He has been sufficiently shrewd to decline to produce his books to show in what way his industry has been affected, but it is well known that it has increased by leaps and bounds, and I am safe in saying that to-day he controls at least one-half of the total output of harvesters manufactured in Australia. It is admitted that those engaged in the manufacture of harvesters have done well. Any statement to the contrary might easily be contradicted by a simple reference to the enormous growth of the industry. Mr. McKay makes no secret of the fact that what he desires is prohibition of imports, and the nearest road to that is disclosed in this measure. I wish at once to enter my protest against this most objectionable method of dealing with the Tariff. If a majority of the members of this House are in favour of Tariff reform, I shall be prepared to bow to their wishes if given expression to in a constitutional way by an amendment of the Tariff. That is not what is proposed. We have here a proposal to place in the hands of the Minister of Trade and Customs for the time being the power to hold up any imports, under the plea that they are the products of industries carried on under conditions of lower wages and longer hours of labour than prevail in similar industries in Australia. The Attorney-General made no secret of the fact that the hours of labour and! the wages paid in an industry are to form the test by which the admission or prohibition of goods is to be decided, and notwithstanding all the clap-trap we have heard from Ministers about preferential trade with England, there is not a single line of British manufactures the introduction of which might not be objected to if that is to be the test applied.
– What does the New Zealand Act provide?
– In the New Zealand Act there is an explicit provision under which British manufactures are exempt from prohibition.
– This measure does not provide for that. I should like to know if the Minister will agree to exempt British goods from the operation of the Bill? That would be a proposal in the direction of preferential trade which we could understand. We are asked in the Bill to do something to check the threatened raids of a monster from outside, but there is in the measure machinery for the creation of a greater monster within our own borders. We know that there are many very powerful trusts and combines in America, and the experience of that country is that they have never yet been able to put them down. I ask honorable members to consider the operations of the great beef trust. They have so manipulated the trade that only one price is offered for cattle in the whole of the American markets. By systematic methods they succeeded in three years in reducing the price of cattle by $8 per head, whilst in the same period, through the operation of their packing houses, they increased the retail prices by 5 cents per lb. They have succeeded in absolutely ruining forty private banks that had advanced money to graziers for com to top up their cattle. Their operations have been followed by desolation, and in some instances by suicide. Quite recently a Committee was appointed, whose chairman was) a Mr. Garfield, who, I presume, is a descendant of President Garfield ; but its inquiries failed to produce any good result; and, singularly enough, it has been left to the writer of a novel to do more for preferential trade than has been done by the speeches and actions of all the statesmen in the Empire. Not only has the publication of The Jungle called the attention of the public to the objectionable methods of the Beef Trust, and incensed the people to such a degree against those who are responsible that better conditions will probably obtain in the future ; but it has done more to bring about preferential trade than has been done in any other way. The decision of the Imperial authorities to obtain in future from the British possessions- all the supplies of meat required for the British Army, is a great thing for Australia and New Zealand, from which these supplies will be chiefly drawn. I asked the Prime Minister, in all seriousness, a question relating to this Bill, which he treated with indifference. 1 wished to know if he would favour the making-of it a penal offence to charge abroad for articles manufactured in Australia lower prices than are charged within the Commonwealth. We have both States and Commonwealth legislation insisting that only our primest produce shall be exported’. We send the very best of what we produce to other countries, but, strangely enough, it is often sold there for prices lower than the people of the Commonwealth have to pay for similar or inferior produce. Prior to Federation a South Australian candlemaker was selling his candles at Broken Hill for 2d. a lb. less than he charged to the people of South Australia, who were paying for the protection of his industry, and, at the present time, the Colonial Sugar .Refining Company is selling its sugar in New Zealand at prices lower than are charged in Australia. If it be right to prevent, in the interests of our manufacturers, the inundation of our markets with dumped productions, is it not equally right to try to protect our consumers from imposition on the part of the local manufacturers? Manufacturers are the same all the world over, and will always be human enough to fake advantage of any legislation which will enable them to make higher profits. Consequently, if, under this measure, the importation of certain goods is prohibited, the effect will be, not to reduce, <but to increase the prices of those goods in this market. It may be said that that will not happen, but experience shows that it will happen. The man whom I regard as the father of this” Bill, Mr. McKay, was quite willing to combine with the companies of which he is now complaining, in order to keep up the price of harvesters in this market, and. although he now declares the Harvester Trust to be a menace to Australian industry, he was at one time quite prepared to sell his business interests to it.
– The honorable member would not prevent a man from making a sale .which would be to his interest ?
– No ; but I am pointing out the hypocrisy of his present declarations. ‘ If he believes that the International Harvester Trust is a menace to the manufacturers and producers of Australia, why was he ready to hand over to it, at a price, the control of his business? I notice that a certain gentleman is going round this State, at the instance of the manufacturers of Victoria, giving lectures, and organizing. I presume that he is paid by them.
– To whom does the honorable member allude?
– To Mr. Trenwith.
– He is not paid by any manufacturer.
– It is very strange that he should travel all over the country at his own expense to do this work.
– He is not being paid by the manufacturers for the work which he is doing. He has given his life to the cause.
– He is working for an organization which has certain funds, and is collecting for it. To whom does the money go?
– Not to the manufacturers.
– If Mr. Trenwith does not get it, some one else must get it, because the money must be spent.
– Are not the secretariesof trade unions paid? Cannot workmen, if they choose, pay a man for doing otherwork? What is the difference?
– There is a differencebetween the payments made by tradeunions and those made by manufacturers.
– Tens of thousands of workmen are interested in this matter.
- Mr. McKay hasstated that, if the Bill is passed, or a duty °f £25 each imposed, he will give anundertaking to reduce the price of his harvesters by £5 this year, and £10 next year. That is the bribe held out to the farmers to support legislation of this kind. But what is the value of such a guarantee?’ Within two or three months after the passing of the measure, he could sell out the whole of his interests. We shall make a mistake if we pass the Bill before we get. the report of the Tariff Commission on the whole question of Tariff reform. It was alleged, at the time of the appointment of that Commission, that the state of the iron industry and of the agricultural implement industry, necessitated some change in the Tariff; but it seems a farce to deal with this matter before we can obtain the reports of the Commission, whose investigations have already cost the country £10,000. When the Commission’s reports come to hand, I am sure that honorable members, if the evidence shows the necessity for such action, will be ready to do whatever is necessary to prevent Australian industries from being destroyed by the tactics of manufacturers abroad in dumping their goods here. I, as a freetrader, would be ready -to protect local manufacturers against dumping, but I object to legislating on this matter in the dark, especially when we shall soon have the report of the Commission which was appointed to inquire into it.
– We are asked to legislate on the assumption that there is dumping, but we do not know that dumping exists.
– If there is no dumping, the provisions of Part III. cannot be brought into operation.
– Just imagine a board composed of men of the type of the honorable member for Melbourne Ports. Before such a Board it would be the easiest thing in the world to prove that goods were produced under such conditions as to justify their importation being prohibited. Different decisions would probably be arrived at by boards appointed in New South Wales and Victoria respectively. I venture to say that the members of such boards would be distinctly biased - unconsciously, it may be - and would probably arrive at directly opposite conclusions with regard to the same class of articles. However, I understand that it is intended to substitute a Judge for the proposed board - an arrangement that will be less open to objection than the one proposed under the Bill. I fear, however, that delays will take place, and that trade will be hampered when certain goods are being refused admission to our markets pending an inquiry. One of the most objectionable features of the Tariff administration has been the delay in arriving at a decision with regard to imports in relation to which some question has arisen as to the amount of duty payable. The importers have not objected to the payment of the highest amount of duty for which they could be held liable, but their trade has been seriously hampered, and they have been greatly harassed by the delay in obtaining delivery of their goods. I am afraid that similar difficulties will occur in connexion with the administration of this Bill. I .shall vote for the second reading, but when we reach the Committee stage, I shall hold myself free to vote as my judgment dictates. I would suggest that the final consideration of the measure should be delayed until we can obtain a report from the Tariff Commission with regard to the imports that are likely to be most seriously affected by the present proposals. It is due to honorable members that they should have placed before them information of a far more specific character than that now available. If the Commission can show that imports are unfairly interfering with our industries, I, as an Austraiian, and as one who is anxious to support local industries, will do everything I can to afford the local manufacturers protection. At the same time, I do not wish to encourage any industry, however good it may be in its own way, at enormous cost to the consumers.
– I desire to place before the Government and the House my view as to the character and scope of this measure. I disclaim any intention of making what I may term a political speech. Inasmuch as the House has apparently decided to accept the principle of the measure by passing its second, reading, I feel greater freedom in expressing my personal opinions, which differ from those entertained by many honorable members on both sides. I have given .some consideration to this question, and as I have had a long business experience, which enables me to form some definite opinions as to how the measure is likely to affect trade and commerce, I feel that it is my duty to lay my views before the House. I do not represent any organized body, nor have I received any communication from the Chamber of Commerce, the Manufacturers’ Association, or the Employers’ Union. I shall deal with this question entirely in the light of my own knowledge. I speak as a protectionist and a supporter of the Government, and, although my views may differ from those of Ministers, I do not attribute to them any intention to injure the best interests of the country. I take it that their object is a legitimate one, and that they consider that such legislation is necessary. I think it is rather unfortunate that this measure should have been introduced at the present juncture. The Bill will be far-reaching in its character, and will afford the traducers of this country, who are misrepresenting it at every turn, further opportunities for making misleading statements as to the scope and character of our Federal legislation. It is to be regretted that, at a time when we are doing all we can to remove the stigma that is now resting upon us, as the result of a hurricane of misrepresentation, a measure of this kind should have been brought forward. At the same time, I admit that if the Government felt that they were being urged on by a great public necessity it was their clear duty to introduce the Bill. At this stage I would ask whence the necessity arises for the proposed legislation. The objects of the .Government are, first, to prevent what may be termed predatory competition directed against industries which are established1, or may be established in this country, and, in the second place, to prevent imposition upon the public by the operations of associated capital. I assume that it is not desired to interfere in any way with ordinary trade operations, or with those legitimate combinations which are more or less necessary in all branches of business. I would ask honorable members to .consider the circumstances, of this country, and the representations which have been made with regard to the operations of combinations and trusts. One of the reasons advanced for the introduction of the Bill is the alarm that is felt that we shall be raided by certain formidable foreign trusts, and that our industries will suffer. One particular industry has been adverted to by the Minister of Trade and Customs, but I do not intend to enter upon any criticism of the harvester trust or the Sunshine Harvester Company. I shall merely refer to them by way of illustration. The primary reason for the introduction of the measure is the apprehension that certain foreign trusts of great financial power and ability may enter this country, and, by predatory attacks upon local competitors, destroy or coerce them so as to establish practical monopolies. Incidentally the question has arisen of the possible creation in Australia of similar trusts or combinations of capital. During the recess - knowing that this matter was to engage our attention - I devoted myself to a somewhat extensive inquiry into the position of the so-called trusts which exist in the United States. The extent of the literature upon both sides of this question is surprising, and I confess that to me it was somewhat confusing at first. But having obtained from various sources the latest publications dealing with the matter, and having read and considered them with a perfectly open mind, the conviction was borne in upon me - and last night the honorable member for Echuca also emphasised the circumstance which had come under his own observation during his recent visit to America - that the backbone of the trust system in that country is to be found in the control which certain trusts have obtained over the means of transportation. I think I may be permitted, without trespassing too much upon the patience of the House, to allude briefly to the growth of the great Standard Oil trust, which is typical of a certain number - although by no means of all - of the trusts in America. After I have given a resume of its rise, its progress, and, in my opinion, the main cause of its success, I shall endeavour to apply the principle of the illustration to our present circumstances. The trust was originally formed by Mr. Rockefeller at a time when, owing to want of organization in the trade, and to the keen competition’ which existed between various producers, the oil industry, within a few years of the discovery of the use of petroleum for lighting purposes, had been reduced to such a position that nearly every one connected with it was being ruined. The story of its origin and development is told in Mies Tarbell’s History of the Standard Oil Company, a most interesting book, which I would commend to the attention of honorable members. Mr. Rockefeller is one of the most capable men of business that the world has produced. Had his abilities been devoted to the military profession he would undoubtedly have been a great general. He saw that the only possible way in which to put the oil industry upon a proper basis was by uniting a number of the competing establishments, comprising some of those which were in the lead both from the point of view of the quality of the article they produced and from the extent of their operations. Having united a number of these, under the name of the Standard Oil Company, he set to work to deal with the difficulties of the position upon lines which, were consistently pursued until recent legislation interfered with them. By this union of interests the Standard company became by far the largest “shipper “ by “the railways, as they term it in America, and Mr. Rockefeller determined that he would exact from the railways .certain rebates or preferential terms. From his stand-point the position he took up was a reasonable one. At first there were two competing railways, and afterwards four, all of which naturally desired to get hold of the great trade in the carriage of petroleum oil. As a result, they immediately began to compete with each other to obtain the large and continuous shipments produced by this powerful company. The natural result was that, in the course of time, Mr. Rockefeller was able to make absolutely his own terms with the railways. He waa in a position to offer them an enormous quantity of oil - some 60,000 barrels per day - which enabled the railway companies to make up daily freight trains to run right through to New York, and to bring their trucks back within ten days, instead of thirty days. This enabled the railways to make a large saving in the cost of carriage of the Standard company’s consignments, ‘as compared with those of small shippers, and Mr. Rockefeller claimed the benefit in the form of a differential rate. At first, Mr. Rockefeller said to the railways : “ To any shipper who ships as much oil as we do you are at liberty to accord the same rate as we pay, but no concession must be allowed to any smaller shipper.” He well knew that no other single shipper could comply with this condition. Later on, Mr. Rockefeller not only succeeded in getting heavy rebates for his own company, but he exacted from the railway companies the payment to his company of the difference between what the Standard company paid and what was paid by other people on their consignments. Upon the huge quantities of oil that were shipped the profits from these rebates were enormous. Subsequently, on the establishment of pipe-lines, which to a considerable extent superseded the railways as a means of transportation, the Standard company, by most extraordinary and clever manipulation, secured exclusive control of them, and the oil business was theirs. It is through the control of the means of transportation that the Standard Oil Trust, able as are its managers - Vanderbilt, who was no mean judge, and who wast president of one of the railway companies with whom they dealt, said that its managers were the smartest men he had ever come across, and were much too smart for him - occupies the position it does to day. The same remark is applicable’ to the methods of the beef trust. That trust secured possession of all the meat trucks - in fact, it owned them - and by an arrangement which it made with the railways it was enabled to get its trucks upon the various lines, and to delay or run off all others. That is the secret of the strength of these organizations, and some others. In passing, I may say that the term “ trust “ is one that is very much misused. It is true that at first many of the American combines, such as the Standard Oil Company, were “trusts.” The individual companies composing them, while retaining their separate identity, surrendered the control of their businesses to trustees, to whom the stock of the separate concerns was transferred in exchange for trustees’ certificates. Eventually, the law courts having declared this mode of conducting the business of corporations to be illegal, it was abandoned. Now, however, with that misuse of language which seems to be one of the characteristics of the day, the word “trust” is often applied to any concern which has attained large dimensions. Owing to the success of the Standard Oil Company and others), the trust idea caught on in America, and all sorts of industrial combinations have been formed. The company promoter and the stock-jobber came into the field, just as they did in the boom time here, and just as they have done many a time in mining matters. The company promoter approaches the proprietors of some of the larger concerns engaged in the production of a commodity, and points out the advantage of combining their undertakings, and so secure the advantages of large production and the lessening of competition, in order to improve their profits. The company promoter, having secured their adhesion to his plan, arranges the formation of a new company to purchase the different businesses concerned at prices satisfactory to the owners, and generally much in excess of their intrinsic value. In exchange for their businesses1 they obtain bonds and share stock of the new company, the promoter taking care to be well provided for by a large premium, which is added to the already greatly inflated stock of the company. The cessation of competition for x time enables the combine to make large profits and pay high dividends. The shares and stock are consequently enhanced in value, and the holders are enabled to pass their stock on to the investing public. By the time new competitors, generally better equipped than the combined company, are able to enter the competitive field, the original holders of the stock have cleared out, and collapse ensues, to the disappointment and disgust of the new shareholders. Thus a vast number of so-called trusts were formed, not with the intention of destroying any industry, but merely with a view to making money out of their formation. There are in America three kinds of combined organizations. There isi, first, the trust which, by the control of the means of transportation, makes large profits; then there are the combines, which are stock-jobbing concerns, and have the seeds of their dissolution in them, from over-capitalization from their inception j and, finally, there are the amalgamations of firms or companies arranged as the result of business acumen, to secure increased output and the legitimate advantages and savings of large as against small production. The last class, I take it, ought not to be interfered with. The second class will pass away. An illustration of the danger which, besets the overcapitalized combine is referred! to in Professor Ripley’s book, Trusts, Pools, and Corporations, page 462 -
Early in 1893 the lead trust owned all the establishments in the country except two. In 1894 there were in existence independent plants producing as large a product as the whole trust. The trust had a capitalization of $30,000,000, and the independent companies employed a capital of only $2,000,000. Yet the $2,000,000 concern was in a position to turn out as much lead as the $30,000,000 concern.
This class of so-called trusts are purely stock- jobbing concerns, which come to grief because they are over-.capitalized. People have been swindled, and the proper course would have been to deal with the promoters of those concerns. That I am correct in what I have said concerning them is proved by the fact that last year no less than forty-four of these amalgamations went into the hands of the receiver. After they get into the hands of the receiver, the promoters of these over-capitalized concerns may buy them back for very much less than the capital they represent. So far as predatory combinations of .capital, like the Standard’ Oil Company, which are really the combinations to be feared, are concerned, they could not exist here, because we have State-owned railways, and they would be unable to control the means of transportation. Because certain things have happened in America in totally different circumstances, it does seem to me to be a pity that we should be asked to legislate in a panic-stricken fashion, as if we were in danger of having the same things here. The Minister gave some instances in support of his fears, but although I am in touch with commerce, I confess that* I have not heard of any of the dreadful things to which the honorable gentleman alluded. If in this country we maintain our present attitude with regard to the means of transportation, and our railways are conducted by the States on business lines, so that every one complying with business conditions shall be given the same opportunity, the successful existence of a huge combine for any length of time is a matter of impossibility. That I am right in my view that’ control of the means of transportation is the main cause of the success of these great combinations is shown in Miss Tarbell’s History of the Standard Oil Company. As early as 1874 the Windom Committee dealt with this evil, and at page 168 of Vol. I. of Miss Tarbell’s work I find that so serious did the Windom Committee consider the situation that they made the following radical recommendations: -
The only means of securing and maintaining reliable and effective competition between railways is through National or State ownership, or control, of one or more lines which, being unable to enter into combination, will serve as a regulation of other lines.
One or more double-track freight railways honestly and thoroughly constructed, owned or controlled by the Government, and operated at a low rate of speed, would doubtless be able to carry at a much less cost than can be done under the present system of operating fast and slow trains on the same road ; and being incapable of entering into combinations would no doubt serve as a very valuable regulator of existing railroads within the range of their in. fluence.
I could give many other illustrations showing the correctness of that position. After many attempts to meet the difficulty, the Sherman Act was passed in 1890. That is the Act upon which the Government have, to some extent, based the present measure. It is, I think, the Act upon which the only provisions! of this Bill which are based upon experience are founded. “Most of the clauses are new and experimental, and ha.ve been devised to meet our local conditions. Although the Sherman Act does not specifically mention railways, it was intended to deal mainly with railways. The leading idea in the minds of the framers of that measure was the desire to stop the system of giving rebates to huge concerns, which, by combination and the unscrupulous application of capital, were destroying the industries of the country.
– The honorable member is not right about the intention of the Sherman Act. There were over 100 different proposals before .Congress to deal with trusts in various ways.
– I am right so far as my statement goes. There were many attempts made to deal with trusts, but I am speaking of the scope and intention of the Sherman Act, and all the authorities I have seen are agreed that what bulked in the minds of those who dealt
Avith that Act was the question of transportation.
– It was one great question, but it was not the sole question.
– It was the great and almost the sole matter dealt with by the Act. That Act has been brought into force, and it has had some effect. In his work Trusts. Pools and Corporations. Professor Ripley, at page 282 says -
The situation is much improved in respect to transportation discriminations within the last two years. This is the result first of a determined effort on the part of the Government to apply existing laws in an effective way against discrimination : and second, to the fact that some of the higher-minded railroad managers of the country had exerted their large influence in the direction of equitable dealing with the shippers of the territory which thev serve. Whether it is a consequence of these influences or a mere coincidence, it is nevertheless stated on high authority to be a fact that the embarkation of new capital in enterprises in competition with the supposedly controlled industries- within the period named probably equals the capital of the trusts. The effect of certainty of protection against predatory competition can be safely prophesied to increase this figure.
That is an illustration in support of my statement that if we take away the control of the means of transportation we must break the back of the strongest combine that can be formed. If, without some such advantage, any attempt is made to unduly raise prices, and it is continued for any length of time, new capital comes into the industry concerned’. The combine mav continue to be conducted with antiquated machinery and old methods of administration, whilst a new concern comes into the field with a new equipment, and the trust goes into the hands of the receiver. Unless these combinations have behind them some natural monopoly, something beyond mere capital, they must and will be checked by the natural evolution of business. Men who have in all probability been brought up in these concerns, and who know their weak and strong points, get capital behind them, and with their experience start a new concern, and the combination is burst up. I think I am fairly entitled to say that the Government have not made out a case to prove that in the present circumstances of Australia this legislation is necessary. That is my conviction. I propose now to deal in some detail with the provisions of the Bill. It is due to the Attorney-General to say that 1 think the House is indebted to the honorable and learned gentleman for his masterly explanation of the scope and intention of the Bill, in terms which the meanest capacity mav understand. But he and the Minister of Trade and Customs passed over the first part of the measure very lightly, although to my mind it contains a great deal that merits attention. It defines, amongst other things, what is termed a “ commercial trust.” As defined in this clause, a commercial trust includes a combination of separate and independent persons, corporate or unincorporate, whose voting powers or determinations are controlled or controllable by the creation of a trust, as understood in equity, or by a corporation the trustees of which, hold’ the interests and shares of the component parts of the trust, or by a simple agreement. Let me deal with the words “ a combination of separate and independent persons, controlled or controllable by an agreement. ‘ ‘
– - Whose voting power or determinations are controlled so that they are not free agents to determine as they like, having agreed beforehand.
– I think that the word “ determinations “ is too wide.
– The wording refers to individuals who cannot determine at the moment as they would like to do, their determinations being governed for them bv an agreement made beforehand.
– Governed, not for them, but by them, which is a very different thing.
– They have formed their determinations beforehand.
– I wish to have this point cleared up, because it is a very important one. A commercial trust includes a combination of separate or independent persons, whose determinations are controlled or controllable by an agreement which they themselves have entered into.
– The force of the provision lies in the words “controlled or controllable.”
– I am not a lawyer, but, although I have listened with respect and interest to the honorable and learned member, I confess that I am unable to understand the position. Men effect many agreements which are necessary in the conduct of business, and with which, I am sure, the Attorney-General and the Minister of Trade and Customs do not wish to interfere; but it seems to me that the provision to which I am referring will cover a multitude of such arrangements or agreements - they may be termed combinations in a sense - necessarily prevailing in every business in the interests of both producers and consumers. I am not referring to arrangements for the pooling of interests, nor to combinations preventing manufacturers or merchants competing with each other ; but to what I may term business, or trade boards, or committees for settling the prices, terms of sale, and so on, of commodities. As an instance, I would mention the Flour Millers’ Association. That association, as I understand it, is formed of competitive members ; but, as the wheat market rises or falls from day to day, it fixes and publishes prices, the arrangement being perfectly defensible from every business aspect.
– Unless prices are unduly raised.
– That cannot take place, because, as there is no cohesion between the members of the association, and nothing to keep them in line except, perhaps, some 1 rifling penalty, if an attempt were made to take advantage of the public some of the members of the trade would break away and get all the business.
– It is the same thing with the coal vend.
– Yes. In Adelaide, there is an association of retail grocers, whose articles of association I hold in my hand, the object of which is to promote the interests of the trade, and it fixes selling prices. These associations do not mean that the members of a trade are banded together to swindle the public. As a matter of fact that is not their object, and, if it were, they would be unsuccessful. It must be remembered that predatory competition is not confined to trusts, and is often most destructive in connexion with small concerns, started by persons who do not properly understand their business, and do not know the cost of the article with which they are dealing. In their desire to cut into the trade of those who are trading on fair lines, they lower prices, until they have brought about a state of confusion and almost business anarchy, for which there is no reform until an association is formed, and their mistake pointed out to them, when, perhaps as the result of moral suasion, all the competitors are brought into line, and the business is put on a sound basis again. The public, instead of suffering, benefits by these arrangements, because without themthe smaller men would be destroyed, and the bigger men would remain, competition would be lessened, and the whole of the business would be in the hands of a few. I do not think the Minister of Trade and Customs, or the AttorneyGeneral, wish to prevent these arrangements ; but it seems to me that they might be prevented under the provisions of this Bill. I have known of tyranny, as bad as anything Rockefeller ever did,committed by small storekeepers against their neighbours, one cutting against another, to run an opponent out.
– In Australia?
– Yes. These cases show that human nature is the same whether a man is rich or poor. We must deal with the facts of the position. It is absolutely necessary, in nearly every business, to have some such board as I have been speaking of, or to make some other arrangement to secure fair and reasonable competition, and to prevent what my friends of the Labour Party would call black-legging. If it is necessary to have trade unions to compel the workers to standby each other, it is equally necessary that the smaller, and even the larger, traders, for that matter, should protect themselves from predatory competition similar to that which has been so justly denounced in this Chamber.
– The honorable member would defend an arrangement for keeping up the price of groceries, but inferentially he condemns an arrangement for keeping up wages.
– No. I have not said anything at all on the subject. In my opinion, the small shopkeepers and producers are often the greatest sweaters, and it has struck me, in reading of the great
American trusts, that it is never suggested that they do not pay their employes well, nor do I remember to have heard of protests from their employes. Those who are always cutting into the business of other people, and reducing prices so low that the payment of decent wages becomes impossible, are the chief .sweaters. I think that it has been stated, in connexion with the operations of the tobacco trust, that distributers dealing with the trust are compelled by agreement to sell tobacco at not less than certain prices. I do not know whether that arrangement exists or not, because I know nothing of the operations of the trust ; but it has been condemned as an attempt to injure the public. I know, however, that many1 large manufacturers, doing business all over Australia, insist upon scales of prices below which they will not allow retailers to sell. This is done, not at their initiative, but at the initiative of the retailers’, who complain that certain men sell at prices leaving no profit, and that they could not compete with them without loss. Of course, it is to the advantage of the manufacturer to prevent underselling, because if the retailers are forced by unfair competition to sell any article at a price which gives them no profit, they try to find a substitute which they can sell to better advantage to themselves, and thus the sale of a particular manufacture is injured. It may be said that these arrangements are arrangements in restraint of trade, and to the injury of the public; but I submit that they are not.
– Then they would not be affected.
– I shall show how they would be affected. I am seeking to aid the Government. I believe that men who are engaged in commerce can best appreciate the probable effects of legislation of this kind. I know that it is not the intention of the Government to interfere in cases such as I have indicated, but I am explaining the position, as I understand it, so that they may know how far-reaching the measure will be.
– The question as to the fixed price would surely be determined by whether it was fair. If it were fixed so that it demanded too much from the public it would be unfair, and it might also be open to question if it demanded too little from the public.
– There are a number of other trade arrangements that would be affected by this provision. For instance, we know that the brewing trade of Melbourne is in a bad way, nearly all the companies engaged in it being almost in a state of insolvency. Out of the wreck of one of the companies a co-operative concern was started, and this has led to a combination of all the large brewing concerns.
– Was not the embarrassment of the brewing companies due to overcapitalization ?
– No. It was due to incautious speculation at the time of the boom. The breweries made large investments in hotels at inflated prices with borrowed money, upon which”, of course, they had to pay heavy interest. When the hoorn collapsed, and property had decreased in value, the interest charges which the breweries had to meet swept away their profits. An attempt is now being made to bring them together, and under the Bill such a combination, may, in my opinion, be held to be in restraint of trade.
– The question is, would the combination be to the detriment of the public ?
– It might be so held; but I shall deal with that point later. I read with interest, and thorough approval, some remarks made by the Honorable” P. C. Knox, the Attorney-General of the United States - the man who has? been fighting the trusts in America - in a report to the Honorable George F. Hoar, Chairman of the Committee on the Judiciary of the United States Senate, in January, 1903, which I quote from Ripley, page 280. I should like honorable members to mark what Mr. Knox says as to the way in which trusts should be dealt with in America, where they have a full-grown predatory animal to deal with, and not merely a small tiger whelp such as some honorable members have referred to as existing here. Mr. Knox said -
The end desired by the overwhelming majority of all sections of the country is that combinations of capital should be regulated, not destroyed, and that measures should be taken to correct the tendency toward monopolization of the industrial business of the country.
I assume a thing to be avoided even by suggestion is legislation regulating the business interests of the country beyond such as will accomplish this end?
He also says, at page 286 : -
Of course, the general scheme of legislation to correct trust abuses, should be developed with great care, for it is not nearly so important to act quickly as to act wisely.
– I think that we have acted according to his advice.
– I certainly think that the Government have acted quickly, but I am doubtful whether they have acted wisely. I think most people will agree with me that there was no urgent necessity for the Government to act so quickly as they have done.
– I think that it was necessary to deal with the shipping combine.
– I shall deal with that at the proper time. I now wish to refer to Part II. of the Bill, which provides, in clause 4 -
Any person who wilfully, either as principal or as agent, makes or enters into any contract, or is a member of or engages in any combination to do any act or thing, in relation to trade or commerce with other countries or among the States -
Clause 5 deals with foreign and local corporations, in the same way that the previous clause deals with individuals. The Prime Minister stated that combinations such as I referred to, if they were not detrimental to the public, would not be interfered with by the Bill. But if the Bill becomes law it would be impossible to say beforehand that any combination was beyond its scope. In clause 6 provision is made that, in the event of unfair competition being charged, the onus of disproof shall be thrown upon the person charged.
– Unfair competition does not enter as an element into paragraph a of clause 4, which deals with restraint of trade to the detriment of the public.
– Yes ; I had overlooked that point. Do I understand that that is a matter for the jury?
– Yes; no onus is thrown upon the accused, except as to unfair competition. It rests with the prosecution to prove that an industry is being destroyed, and that the industry is one that should be preserved.
– I understand that in regard to paragraph a of clause 4 the question as to whether any contract is in re straint of trade to the detriment of the public can only be settled by an application to the jury.
– By application to the jury in a criminal case, and by application to a Judge in the event of an injunction.
– It will not make very much difference whether the application has to be made to a Judge or to the jury. It appears to me that, unless such business arrangements as I have indicated are expressly excluded from the operation of the Bill, some business competitor might urge that a certain combination was being entered into to fix prices to the detriment of the public, and that the parties to that combination might be haled before the Judge or the jury to show that they were justified in doing what every citizen of the British Empire has a right to do. It might be difficult to conceive that the operations of the combination could be detrimental to the public, and yet those concerned might be subjected to the most serious annoyance, inconvenience, and loss. One can scarcely over-state the far-reaching effects of a measure of this kind, and I trust that the point to which I have directed attention will receive the consideration of Ministers. With regard to paragraph b, it is proposed to make it an indictable offence to enter into any contract with the design of destroying or injuring by means of unfair competition any Australian industry which it is considered should be preserved. If the defendants be a “ commercial trust,” as defined only in this Bill, consisting, it may be, of only two individuals, they will have imposed upon them the almost impossible task of proving a negative. They will have to prove that what they are doing will not affect Australian industry.
– The honorable member is wrong. All that the defendants have to prove is that the competition is not unfair. The onus of proof in regard to all- the other elements lies on the prosecution.
– As I read clause 6, it appears to me that if two persons make an arrangement to do certain things, which, rightly or wrongly, are held to involve unfair competition and a design to destroy Australian industry, they will be haled before a Judge, and will have to prove that what they are doing is not detrimental to the public.
– That is not so. If if were proved that the competition were unfair, that would not be sufficient to convict the defendant. The prosecution would have to go further, as I have indicated.
– My point is that if the onus of proof that the competition is not unfair will lie upon the defendant, it will have imposed upon it what, in many cases, may prove to be an impossible task.
Sitting suspended from 1 to 2 p.m.
– I think we should have a quorum. [Quorum formed.]
– When the sitting was suspended, I was dealing with Part II. of the Bill. I was pointing out that under it individuals who were joined together for the purpose of carrying on legitimate operations which were not to the detriment of the public, might be placed in the unenviable position of having to justify their action by proving a negative, which, in many cases, would be impossible. For example, it would be competent for anybody, rightly or wrongly, to raise the question of whether they were not doing something which was inimical to the public interests, and having been constituted by Part I. of the Bill a commercial trust, the onus would be thrust upon them of proving that the allegations made against them had no foundation in fact. I am sure that the Government do not intend that. I apprehend that such a position needs only to be understood in order to be condemned. The principle which it involves is foreign to our whole system of law.
– It is embodied in the Customs Act.
– It may be, and perhaps it is rightly contained in that Act. But I would point out that in the Customs Act the offence is clearly defined, and the person against whom any charge is made is in a position to refute it. I do not intend to labour this point any further. Under clause 7, the question arises of what constitutes a monopoly. It seems to me that the term “ monopoly “ is very frequently misused. Originally it implied a State monopoly - that is, some right which was given by the Government to certain persons to do certain things to the exclusion of all others. I quite admit that in modern times that strictly legal definition has been, to some extent, modified, and that a monopoly may now be created by means other than a State grant. I have already shown that in the United States a monopoly may be obtained as the result of control of the railways, which are in private hands, for the exclusive advantage of certain persons. In that way monopolies have been acquired just as effectively as if the United States Government had enacted legislation conferring upon certain individuals the right to trade in petroleum oil to the exclusion of everybody else. But this Bill goes immensely beyond anything of the kind, and, therefore, I should have liked a clear definition of the term “ monopoly.” I have heard it stated that the Colonial Sugar Refining Company is a monopoly. De facto it is not a monopoly in the sense that it has behind it any advantage which is not enjoyed by everybody else.
– It puts up the price of colonial sugar almost to that of the imported article, and nobody can prevent it from doing so at the present time.
– At an earlier stage I intimated that I did not intend todiscuss the details of the harvester business, nor do I feel disposed to deal with the position of the Colonial Sugar Refining Company. I hold two shares in that company, so honorable members will recognise that in what I am about to say I am not seriously interested. I repeat that the Colonial Sugar Refining Company is not a monopoly.
– It regulates the price of sugar, absolutely.
– It fixes the prices for its goods, as every firm has a right to do, but other firms can, and do, undersell it if they choose to do so. For instance, there is a refinery in Port Melbourne, which is doing a large portion, of the business in Victoria, and which frequently undersells the Colonial Sugar Refining Company. There are Queensland refineries which do the same. The company has taken no action to prevent it, being apparently content to act upon the sound principle of “live and let live.” When the Minister tells me that the Colonial Sugar Refining Company puts up the price of the local article almost to that of imported sugar, their reply is that they are compelled to do so, because the protective portion of the existing Customs duty finds its way into the pockets of the cane-growers. As a matter of fact, I know that the relations existing between that company and the majority of the cane-growers are of the best. The company has grown from very small beginnings. About fifteen or twenty years ago it had a most unfortunate experience in pioneering the industry, the result of which was that the shareholders in both Sydney and Melbourne were so hard hit that their shares fell far below par, and a reconstruction of the company had to be undertaken. That is a matter of history. The company is not in any sense of the word a monopoly . It seems to me that we are gradually losing our appreciation of the true significance of that term. We are too prone to regard as a monopoly any business which attains large dimensions. In this connexion, I desire to point out that large profits made by a company or firm do not necessarily imply that those concerns are robbing the public. Let us suppose that A and B each possess a capital of £20,000, and that the former has an annual turnover equal to the amount of its capital. After paying all expenses, its members naturally desire to secure a fair return upon their outlay - say, 6 per cent. Upon the other hand, B. concern may have a turnover of its capital, not once, but twelve times in the year. There are businesses, I am informed - which small men frequently complain threaten to wipe them out of existence - whose turnoveris twelve times in the year the amount of their capital stock. “ A’ ‘ company overturn their capital value once a year, and make a profit of 6 per cent., equal to £1,200. “B” company, with the same capital, turn over the value of their capital stock twelve times in the year, selling at the same prices as “A” company, and make a profit of twelve times as much, £14,400. Would any one say that, because the magnitude of their business enables the proprietary of “ B “ company to earn a profit equal to twelve times that earned by “ A “ company, though they sell their goods at the same prices, they can be said to be robbing the public? I do not think they can. Suppose the proprietary of “B” company say, “We do not desire to make more than £6,000 a year, or 33 per cent, on the amount of our capital, and we shall sell our goods at prices’ which will return that amount, and no more.” “A” company may feel aggrieved, and complain that “B “ company is trying to exterminate them. “B “ company, owing to the magnitude of their business, and not by exacting extra profit from the public, contrive to earn a very much larger profit than “ A “ company, and by reducing prices give to the public a part of the profits they can legitimately earn. Should such a concern be brought into Court to show all the details of its business to show that, in reducing its prices and selling at a lower rate than its opponents, “A” company, it was not doing so to injure the business of the opposing company, or to the detriment of the trade of the country ?
– Would the same argument apply to importing companies ?
– Of course it would. This example shows where the advantage of what is called large production comes in. Are we going to legislate in this country against large production? If we do we shall be deliberately restraining trade to the detriment of the public, the very thing which this Bill is professedly introduced to prevent.
– No combination can be interfered with unless it is shown that its operations are to the detriment of the public.
– The honorable member does not understand my argument. I am glad of this opportunity to say a word about commercial morality. Whenever they hear of any individual or firm making a large income, some honorable members in this House at once jump to the conclusion that it can only be done by robbing the public.
-They are very often right, too.
– My honorable friend, no doubt, thinks so ; but I am giving sound reasons why any thoughtful man who is not so prejudiced as to refuse to consider facts when they are presented to him must come to the conclusion that there are other explanations. As one who has spent his life in commerce, I assure honorable members that, notwithstanding the improper proceedings of individuals which are occasionally brought to light, nine-tenths of the commercial community are as strongly opposed to such proceedings as is any member of this House, and as little disposed to practice such methods. They are, in fact, only too pleased when those who resort to despicable and predatory actions are found out and punished. There are various ways of accounting for a reasonable profit’ on capital invested, but in modern business the secret is that the business shall be done well shall satisfy the public requirements, and to do this the object is to secure as large an overturn as possible. The man who has a big overturn is able to undersell a competitor having only a small overturn, and in doing so he shares the profits which he might secure as a trader with the public. Such a man may be accused by those ‘who, because they are not so competent to conduct a business, or for someother reason, cannot compete with him, of predatory acts which should not be so described, and which, on the contrary, may be shown to be clearly for the benefit of the public, and to assist in the development of the trade of the country. Because a business is large it is not necessarily a monopoly. If people try to establish a monopoly bv buying up other concerns, and by excluding others- from trade, their preeminence in the line of business which they follow can continue for but a short time unless, as I have previously said, they have some State concession or natural advantage, which others do not possess. In business life I have time and again- known of attempts being made to monopolize some trade, business, or industry, and in nearly every case those’ who have depended upon the adoption of such tactics as I have described have come to grief. A business can only be conducted in a large way by following sound principles, selling -at a reasonable rate, and supplying, a good article, which meets with public approval. Having dealt with the first two parts of the Bill. I do not intend to say very much with regard to Part III.’, dealing with the prevention of dumping. To my mind, the clauses of this part of the Bill as they stand are little short of fantastic. Avoiding the surplusage of the Bill, under clause 15, when- the Comptroller-General has reason to believe that any person, either singly, or in combination with any other person, has imported goods with the intention that they may be sold, offered for sale, or otherwise disposed of, in unfair competition with any Australian goods, he may certify the Minister. Then the Minister is to appoint a Board of three persons to settle whether the goods are being imported with the intention aforesaid. I must admit that I was profoundly amazed when I first read that clause. The whole proceedings must be based, first of all, upon a suspicion on the part of the Comptroller-General as to what some one is going to do. If he has a suspicion that A. B. is going to do a certain thing, he certifies the Minister, who refers the matter to a Board or a Judge. I can well understand the objection which any sane Judge would have to being asked to decide the question. Under this Bill the question to be decided is the intention which may be in some one’s breast to do a certain thing before he has done it. It appears that there is to be a Board, or a Judge, or a jury, to decide whether some person intends to do a certain thing. In such a case a corporation is required to prove that it is not its intention to do what is alleged. It seems to me that to state such a clause in plain terms is sufficient to condemn it. In this part of the measure the Government are trying to do an. impossible thing, and the attempt to do it ma> work grave injustice to individuals, and cause serious disturbance to business without attaining any adequate result. I have tried to put myself in the position of the ComptrollerGeneral under this part of the Bill. I have said, “ If I were Dr. Wollaston, and had to work under this part of the measure, how should I proceed? I suppose the first thing I should do would be to listen to every story brought to me bv interested parties.”
– The Comptroller-General would be doing nothing else all his time.
– I quite agree with the honorable member, who is possessed of commercial knowledge and experience. The Comptroller-General will have to listen to this kind of story - “ I heard that So-and-so, of Flinders-lane or Collinsstreet, intends to import 500 cases of goods, and is bringing these goods here in order to slaughter my industry.” In the first place, is it not a most objectionable thing that the Government should encourage espionage of that sort, and rely upon statements of that kind to hale people before the Court to prove that it is not their intention to do what has been alleged against them. The members of the Commonwealth Parliament of Australia, if they respect themselves, will not,. I am sure, make themselves so ridiculous in the eves of the world as to pass such a. provision into law. The Comptroller-General is to act upon information received. He calls up the party against whom some wrongful intention is alleged. Suppose I am the party. The Comptroller-General will say, “ Mr. Harper, I am informed you are going to do so-and-so.” I might reply, “Who told you that?” The Comptroller-General may or may not reply. If the statement is true, I say, “ I am going to get certain things out.” and then the Comptroller-General will probably say, “You are going to dump these goods to interfere with an industry.” My reply would be, “ I am going to import these goods, and get the best profit on them that I can.” Honorable members must understand that traders, as a rule, do not wish to smash anybody, but they do desire to make as good a profit as they can. My answer to Dr. Wollaston would probably be, “ I have made a good bargain. I bought these goods very cheaply. I can see profit in them. I am not going to smash any one, but I will sell them at the best price I can get. If I can get the price current for them, I will get it, and if not, I shall sell as near to that price as possible.” What will he do then? He may hale me before the jury or the Judge, and there will be cast upon me the duty of unfolding my business relations with people on the other side of the world to possible competitors in my business. The proposal is most unjust, and I do not need to say more on the subject. Here is a point to which I wish to direct the very special attention of the Government, and of honorable members. In Part II. of the Bill, clauses 4 and 5 are ingeniously framed so as to attempt to deal with individuals as well as corporations. Clause 4 says that any person who, either as principal or as agent, wilfully makes or enters into a contract in restraint of trade, or with the design of destroying or injuring an Australian industry, shall be guilty of an offence. In this part the act must be in relation to trade or commerce with other countries, or among the States. The position is different when it deals with companies formed within or without the Commonwealth. The Attorney-General, in response to an interjection by the honorable and learned member for Corinella as to the application of this clause, made the intention quite clear. By section 52 of the Constitution, sub-section 1., the Parliament of the Commonwealth controls trade and commerce with other countries, and among the States, and under sub-section xx. it has power with respect to foreign corporations and trading or financial corporations formed within, the limits of the Commonwealth. But while the Commonwealth Parliament has, under the Constitution, the right to deal with incorporated companies, either external or internal, it has not the right to deal with private partnerships, or with individual traders. These are controllable only by the States. The clause endeavours to bring both incorporated companies and private partnerships and individuals in, but the attempt cannot, I think, be successful. A private partnership, or [nl- 2 individual, even if it carries on a predatory business in any one of the States, cannot be interfered with by the Commonwealth, but the AttorneyGeneral seems to think that, if it sends its goods from one State to another, it can be interfered with. I am not a lawyer, and, as I am not competent to express an opinion on the legal interpretation of the Constitution, I shall assume - although I do not agree with him - that, under such circumstances, the Commonwealth could deal with private companies. It is admitted that, so long as it confines its operations to a State, it could not be dealt with by the Commonwealth law. Assuming, for the sake of argument, that the honorable and learned gentleman is correct, I shall show what could be done by a combination like the International Harvester Trust, should it intend to enter upon a predatory competition to establish a monopoly. I know nothing about the operations of that trust. I am not aware that it is a predatory company, and intends to destroy its competitors here.
– That is what it is trying to do.
– I intend to show what it could do under the ‘Bill, if- that is its intention. If I were the managing director of that trust, with some millions of capital at my back, this is what I could do in defiance of the provisions of the Bill.
– Is it wise to make these suggestions to the trust?
– The honorable member need not suppose that we can suggest anything to them which they do not know. I am dealing with the matter merely as a student of the Bill. If I and my colleagues came to the conclusion that it was to our interest, putting aside all considerations of ethics1, to acquire the whole of the harvester business of Australia, we could evade the provisions of the Bill in this way : We could select one or two of our best men, send them to Victoria - or to one of the other States - and there establish a factory for the manufacture of harvesting machinery of all kinds, in their own name, as a private firm.. Their instructions would be to employ the best men obtainable, and pav the highest wages, and, until they received other instructions from headquarters, sell the harvesting machines they produced at, say, ,^25 each.. Of course, the trust would secure its interests in the capital invested by a mortgage over the whole concern, or in some other way. If these instructions were carried out, it would be found that the farmers would buy the cheap machines which were being offered, and there would be no necessity to pay the big commissions which the Bill seeks to get arid of. Immediately there would be an outcry from all the other manufacturers in the State, and an appeal would be made to the Government for relief. The AttorneyGeneral, if he were consulted, would have to say, “ I am sorry, but the law cannot interfere with the operations of this firm in this State because it is a private concern, and not a corporation; but we shall under the Bill prevent it sending its machinery to the other States. I do not agree with the honorable and learned gentleman that that could be done, because, under the Constitution, trade among the States must be absolutely free, whether by internal carriage or by sea. But, even if the AttorneyGeneral were right, the officers of the trust could get over the difficulty by arranging with agents in the other States to buy their machines deliverable at the factory door, and these machines would be taken by them, and sold in competition with the machines of the local makers.
– There are persons who could evade any law. That is why there are so many Socialists.
– It is a depressing thing that there are in this Chamber honorable members who seem absolutely incapable of following an argument. I am not now dealing with Socialism ; I am merely showing how the Bill, if passed, would be ineffectual to prevent a predatory company from doing what we wish to prevent it from doing. This Bill, which may hamper every industry to an unknown extent, and will have effects which those who ares supporting it: do not intend, will, I contend, while doing much mischief, have no effect in preventing huge concerns like the International Harvester Trust, if they so determine, from doing that which is the raison d’etre of the Bill to prevent. It is foreign combinations only we have to fear, and the Bill will not prevent foreign trusts carrying out their predatory intentions if they mean to carry them out. The AttorneyGeneral admitted the other night that private companies and individuals doing business within a State cannot be interfered with by the Commonwealth, and so long as this is the constitutional position, unless a law is passed preventing business from being done except at prices fixed by the Government, the sort of thing which we wish to stop cannot be hindered. Any law that we pass will not affect one section of trade without affecting all others. I fear I have trespassed too much on the time of the House. In speaking as I have done, I am actuated by the best feelings towards the Government. Having studied this question, and having personal knowledge which enables me to form definite opinions with regard to the proposals embodied in the Bill, I have considered it my duty to- express my views, in the hope that the Government, if they do not put the Bill aside, will at least place it low in the list of business,’ so that honorable members, and the public outside, will be afforded an opportunity to realize and to consider the possible consequences of such legislation. It is necessary that we should fully recognise what too many people forget, namely, that there are many objects which cannot be achieved by Act of Parliament. After all, the great trading operations which this Bill will interfere with, and which the Socialists think can only be properly controlled by the system they advocate, are all based upon natural economic laws, which no legislation can supersede. Socialistic legislation might hit certain individuals, injure* certain interests, and upset society, but human nature would assert itself, and natural economic laws would inevitably prevail. Australians pride themselves on their freedom, and I ask whether we, who possess a Constitution intended to be the freest on earth, are prepared, whilst endeavouring to cure some particular evil, to impose upon ourselves’, shackles which mav prove most disastrous to the best interests of the country whose prosperity we all desire to promote. It is inconceivable that the people of Australia would, “if they could thoroughly understand the position, agree to anything of the kind. In conclusion, I should like to refer to what I regard ais an unfortunate feature of our present political system. It is not often that I occupy the attention of the House, but I think I may, without impropriety, remark that it is unfortunate that a measure of this importance should evoke so little attention that speaker after speaker has to address a bare quorum of members. As one who has spent nearly thirty years in public life, I cannot help contrasting the present condition of affairs with that which obtained during the early struggles and fights in which I and others engaged in this Chamber as members of the State Legislature. At that time, members were in their places and listened with interest to the arguments addressed to them. They showed, at any rase, that they had some desire to obtain from others the knowledge which they might not themselves possess. Another point is that, owing possibly to business exigencies, debates of this character, which so vitally affect the whole of the people, are not reported in the press so fully as formerly. In times gone by, parliamentary debates were well worth taking part in, and members were fully rewarded for the trouble they took to make themselves acquainted with a subject, iso as to speak with some reasonable degree of authority. They not only had an appreciative audience in the Chamber, but were able, through the press reports, to communicate their views to an interested public. I hope that we shall soon have a change. Otherwise there will be a danger of the utter atrophy of Parliament. Another branch of the same subject might also be referred! to in connexion with this Bill, and without special reference to the present Ministry. Every Government that has been in office since the Federation was established has apparently acted on its own initiative, without consulting the members of the party supporting it or availing itself of the knowledge that was at command among the rank and file of its supporters.
– That does not apply to the Labour Party ; the caucus prevents that.
– I am not referring to the Labour Party, but to the Government. I do not belong to the caucus, and do not intend to. I am mentioning a fact which is noteworthy, because of its important .influence upon what we do in this Parliament. I do not say that Ministers ought to button-hole every member of their party and ask them what should! be done in regard to matters of policy or Bills that it is intended to submit to the House; but I think it is their duty to keep in touch with their supporters, so that they may be able to gather information and knowledge from those who may know more than they do upon certain subjects. No matter what the Ministry may be, its members cannot possess all the talents or all the knowledge. There have been five Ministries in this Parliament, and I have supported four of them. During all these years these Ministries have never once convened their supporters, or consulted them on matters of policy.
– The caucus is the cure for that kind of thing.
– The caucus is a machine devised for the purpose, not of reflecting the opinions of members who are the elect of the people, but for organizing and carrying into effect the behests of numerous irresponsible outside bodies.
– Nonsense !
– This is a serious question. The Barton Government never convened a meeting of their supporters, but there may have been special reasons for that. The Deakin Government did not once consult the members of their party. The Watson Government, no doubt, convened meetings of the caucus, but I do not think they ever invited honorable members such ais the honorable member for Melbourne Ports to join them. Then the Reid Government followed. That was a coalition Government, formed for the avowed purpose of sinking differences and starting upon new lines. They never called their supporters together, even during the crisis which led to the present Prime Minister being accused of treachery and traitorous conduct. I have privately remarked more than once, to honorable members that, in my opinion, if the right honorable member for East Sydney had called a meeting of the party on the Monday after the Ballarat speech was delivered, the present Prime Minister would have been present, and would have made the statement that he afterwards made to this House, and there would have been no break-up and no accusation of treachery. Since the present Government has been in office the position has been the same. What is the moral of all this? The present Bill, with the policy which it involves, has never been submitted to the country. I gave my adhesion to the present Government as a protectionist Administration, whose general policy I approved. I am still in that position. I do not agree with everything they do, but I support them generally, and I have the greatest admiration for the ideals of the Prime Minister. I contend, however, that the Government have done themselves injustice, and their supporters as well, by failing to consult their party before introducing such a measure as that now before us. If I had had a draft of this Bill before me prior to its introduction, I could have communicated to Ministers privately what I have just been saying publicly. Not having had that opportunity, I have done my duty now in giving my opinion. I do not intend to divide the House against the Bill, but I think it is a mistake. I believe that the Bill will fail to achieve its purpose, and that it will embarrass the business of the country, and retard its progress. Therefore, I would appeal to the Government to either withdraw the measure-
– We shall not do that.
– I know that there is a difficulty, because when once Ministers put their names to a Bill it is vain to appeal to them to withdraw it. If, however, they recognise that there is any force in my arguments, especially in my representations that the measure will not accomplish its purpose, I hope that the Government will at least allow honorable members time to master its provisions. I trust, moreover, that before we are asked to agree to the drastic provisions of the Bill we shall have the report of the Tariff Commission before us, and be able to understand some of the reasons which, so far as they have been revealed to us, have led to the introduction of the measure.
– It must be a matter for general regret that the honorable member for Mernda does not more frequently give us the advantage of his extended commercial experience and great ability. Those who have listened to his speech must have been struck with the fact that the honorable member who has had more commercial experience than any man in this House has condemned the measure lock, stock, and barrel.
– All commercial people condemn everything that they think will interfere with them.
– I have a very much higher opinion of the motives which have prompted the honorable member for Mernda than is indicated by the observation of the Minister. I believe that he has spoken, as the result of his practical experience of business matters, and that his remarks will be received in this House, and in the country with the fullest respect. I think that we should first of all consider what necessity has arisen for the introduction of this measure, and, secondly, what result will probably accrue from it. The Minister has failed to show any necessity whatever for the introduction of this Bill.
To my mind, legislation of the character that is now proposed has been the greatest means in America of creating those very trusts which it is the alleged intention of the measure to combat. When the honorable member for Bland was speaking the other evening he made a quotation from a very excellent article which appeared in the Cosmopolitan Magazine upon the treachery of the United States Senate. I suggested at the time that he should also quote the succeeding article, which appeared in the last number of that journal to hand. Had he done so honorable members would realize that the swindling which has occurred in America, has been due to three factors. In the first place, these combines and trusts have secured a monopoly of the means of transport; secondly, they have obtained a prohibition through the Customs House ; and finally, they have commanded the venal support of such members of the Legislature of the United States as could be purchased to further their objects. I was particularly struck with the speech which was delivered by the honorable member for Moira in the course of this debate, and I was exceedingly surprised to hear him, representing, as he does, an agricultural constituency, indulging in the clap-trap arguments that are so frequently heard in the Trades Halt by persons who know nothing whatever about the work of the farmer, but who, nevertheless, imagine that they are able to teach him how to conduct his own business. Whilst the honorable member was speaking, I challenged him to name one line of agricultural machinery which is being sold in any part of Australia to-day at less than a fair price. If the Minister can show that this Bill has been introduced to afford protection to the farmer, I ask him to point to one article in the way of agricultural machinery which is being sold in the Commonwealth at a price below its current value. I can quite understand that the measure has been brought forward to confer a further measure of protection upon the manufacturer. Had it been introduced simply as a Tariff Bill honorable members, would have been in a fair position to fight out the issue. But my contention is that its object is to impose still further disabilities upon the primary producer to the advantage of the city manufacturer.
– Would the honorable member favour the fixing of a maximum selling price in the event of foreign goods being excluded ?
– I am not prepared to accept the alternative. I am not prepared to exclude the tools of trade of the agriculturist any more than I am willing to exclude the tools of trade of any other producer.
– Suppose they were excluded under this Bill, would the honorable member favour the fixing of a maximum selling price to the consumer?
– If we prohibit the introduction of such articles as agricultural machinery it will be our bounden dutyto protect the consumer as well.
– If that were done the honorable member would find a reversal in the attitude of the local producer towards this measure.
– The origin of this Bill is to be found in the McKay harvester. If Mr. McKay had not quarrelled with others engaged in the manufacture of these machines this measure would never have been submitted for our consideration. It is unfair to ask us to deal with this question before the evidence taken by the Tariff Commission upon the subject is available. We have heard a great deal of lamentation to the effect that McKay’s industry is being crushed. How it it that the McKay harvester can compete successfully with the American machine in the Argentine, where there is no duty operative, whilst it cannot compete with that implement here? Since I became a member of this Parliament, I have found that underlying every measure relating to industrialism that has been introduced, there has been a deliberate attempt to penalize the agriculturist to the advantage of the city manufacturer. What, I ask, would’ be the position of the farmer to-day if it were not for the labour-saving appliances that have been adopted within the past two decades? Not only our reapers and binders, but our drills, our disc harrows, and our cream separators - indeed, everything in the shape of laboursaving appliances that has been introduced, has assisted to place the producing industry of Australia in the position it occupies to-day. If we erect a barrier around our shores for the purpose of shutting out the product of the intelligence of the rest of the world, the producer must suffer to that extent. It cannot be too often impressed upon honorable members that the cream separator, the disc plough, and the harvester are as much the tools of trade of the agriculturist as is the anvil of the blacksmith or the knife of the shoemaker. There are very few honorablemembers who are not prepared’ to extend a preference to our local manufacturers. But weare not now dealing with the local market. We must recognise that if it were not for our export trade in wool, wheat, butter, fruit, &c, more than half of our producers would to-morrow have to shut down. They have to compete in the markets of the world, and consequently they must have the best tools of trade that can be secured. Personally I do not object to the local manufacturer receiving fair consideration, ‘but I do say that up to the present time the whole of our legislation has been in the direction of bolstering up our cities at the expense of the primary producer.
– Where has that been shown ? ,
– It was shown very clearly throughout the prolonged debate which took place upon the Tariff. I maintain that any Tariff which prevents the producer from acquiring the most up-to-date machinery is a direct blow to the particular industry in which he is engaged.
– The protectionists are not satisfied with the present Tariff.
– My experience of Victorian protectionists is that nothing will satisfy them. The ordinary protectionist from the other States becomes an absolute heretic the moment that he enters Victoria. The man who is prepared to support the imposition of a duty of 15 per cent., 20 per cent., or even of 25 per cent. - which, in any other part of Australia would be regarded as a stiff protective duty - is regarded as a free-trader in Victoria. Mr.Joshua, the president of the Chamber of Manufactures, in speaking of this class of protectionist, said -
The moderate protectionist is the moderate liar.
If we were to apply that sentiment to men of the Joshua class, and substitute “ extreme” for “moderate,” we should just about fit the bill. I promised an honorable member who kindly gave way to me that I would not occupy the time of the House for more than a few minutes, and I propose to keep my word with him. I do sincerely hope that if the Bill gets into Committee there will be a very strenuous effort made to prevent the whole of the Tariff being placed in the hands of any Minister or any Board. Almost the whole of the political corruption in America has been brought about in that way. There such matters are referred to a Committee. Here the proposal is that they shall be referred to a ‘Board, which is but the same thing under another name. I sincerely trust, therefore, that, should the Bill reach the Committee stage, it will not be further proceeded with until the report of the Tariff Commission is in the hands of honorable members.
– Some honorable members would prefer that we should do no business at all.
– There is plenty of other business which we can do. I remind the honorable gentleman that the Tariff Commission was appointed to investigate the very matters we are asked to deal with in this Bill. In spite of all that may have been said of that Commission, I know of no Royal Commission ever appointed in Australia that has gone more fully into the consideration of the questions submitted to it for report. The members of the Tariff Commission have laboured for weeks and months upon their arduous task, and now, when they have almost completed their labours, and are in a position to present their report within a few days, or a few weeks at the latest, it is distinctly unfair that we should be asked to deal with the very matters which they have spent months in considering before their recommendations, and the evidence they have obtained, are placed before us. I hope that if the Bill is allowed to go into Commitee, it will only be on the distinct understanding that its further consideration will be postponed until the report of the Tariff Commission is laid before us.
– I have listened with much interest to the remarks which honorable members have addressed to the House on this very important subject. Whilst I can heartily congratulate the honorable member for Mernda upon the information ‘which he has placed before us as the result of his investigations, I feel that he. would have concluded a wellthoughtout speech with very much more credit to himself if he had not attempted a criticism of certain parties in this House and had not condemned honorable members for absence from the chamber during the consideration of importantpublic business.
– How does the honorable member excuse his own absences ?
– I was going to say that the honorable member for Mernda should be the last to find fault with other honorable members on this score, because he is very rarely in his place in this chamber to listen to any discussion. With all due respect to the honorable member, it very ill becomes him to set himself up as a critic of the attendance of other honorable members. I may be pardoned for a reference to the honorable member’s complaint that the Governments he has supported have not been in the habit of consulting members of their party before submitting important legislation.’ The honorable member’s statement is. an indication that he thinks that the old system of party government might be improved by the adoption of the methods followedby a party which in this House is not in office nor yet in Opposition. The honorable member’s complaint of the neglect of the Government to confer with himself and others on matters of which they have special knowledge is a testimonial in support of the methods of the Labour Party. In saying that the Labour Party meet, not for the purpose of consulting as to their action with regard to the business before Parliament, but in connexion with their duty to some outside irresponsible bodies, the honorable member spoke of what he did not understand, because the members of the Labour Party do what he has said they do not do. They confer upon every matter of legislation submitted to Parliament, with a view to threshing out the details of each proposal, and coming to a conclusion upon them in the interests, not of any section, but of the whole of the people. I have been interested, amused, and amazed at the varying attitudes assumed by honorable members in different parts of the Chamber in dealing with this measure. Whilst the deputy leader of the Opposition, and other honorable members who have followed him on the same side, have led the outside public to believe that they would spurn a Government that would bring in legislation of this character, and have declared that the provisions of this measure must end in disaster to the trading community, they have concluded their speeches by. assertin that it is their intention to support the second reading of the Bill. During the recess the leader of the Opposition and those’ who support him have from many public platforms denounced anti-trust legislation. The newspapers supporting them have been equally strong in their denunciations of it.
Yet when honorable members of the Opposition enter this Chamber, and an antitrust Bill is submitted for their consideration, the bulk of them sink the principles to which they have given expression on the public platform, and declare that they in-, tend to vote for the measure. Really the attitude of honorable members who profess to represent the interests of the commercial! community is indescribable. During the debate I have heard with great regret accusations made by honorable members opposite which do not reflect credit upon them or upon this Parliament. In discussing a measure of this kind, it is not unusual for honorable members opposite to charge the Minister of Trade and Customs with being ‘ corrupt, and to leave it to be inferred by the public that he is untrustworthy, and is capable of acting a dishonorable part. There is little wonder that newspapers and people outside should be so ready to besmirch the characters of Members of Parliament when we find honorable members, without any evidence, and without being prepared to make a direct charge, making observations which are calculated to lead the public to infer that the Minister in charge of the Customs Department of the Commonwealth is open to conduct which would disgrace his position. It is easy for honorable members who have no regard for the dignity of Parliament and the honour which should attach to the possession of a seat in this House, to smile at the methods which from time to time are adopted to score off a political opponent. The honorable and Learned member for Werriwa the other night made a statement which would justify the inference that the Minister of Trade and Customs had done something absolutely dishonorable. He inferred that the honorable gentleman was prepared to use his position in such a way that those interested in a mew iron and steel manufacturing company to be established in Melbourne might be led to believe that the company would be enabled to make greater profits as the result of some subsequent action to be taken by the Government, and that as a consequence the shares of the company had gone up to the tune of 100 per cent. If the honorable and teamed member knew anything at all about company flotation, he would have known that it is the history of nearly all public companies that in their embryonic stage various methods are adopted for booming their shares before anything practical has been given to the public as a result of their operations. I am complaining because it Kas been suggested in this Chamber time and again by members of the Opposition that the Minister of Trade and Customs has not acted, and is not acting, honorably. That charge should not be made unless it can be proved, and the man who makes such a charge without substantiating it is a worse enemy than he who would deliberately strike his foe. These suggestions of corruption are discreditable to those who have made them, and who cannot substantiate corrupt charges.
– No charges have been made against the Minister. Members of the Opposition have spoken only of what might be done by future Ministers.
– The Minister has been spoken of, time and again, in a manner which no other man would tolerate. I should be the first to vote for an investigation of any direct charge against a man holding a high public office, but I shall be the last to allow such a man to be attacked in a cowardly fashion by others, who have not the courage to make straight-out charges. It has been said that the trusts and combines which the Bill is intended to regulate Gave been the cause of much evil in the public life of the world. The records of America show that trusts have largely corrupted the Parliaments of that country, whose members have from time to time been bought bv them.
– Only the Senate.
– What does it matter, so long as the corruption has taken place? If trusts are a danger to public morality, why should we not try to avoid that danger here?
– The honorable member’s party says that the State should own everything.
– We have said definitely what we mean; but I do not know that the party to which the honorable member belongs knows what it means. A measure of this kind is necessary, because of the conditions which exist to-day in other parts of the world. It has been asked why should we pass1, legislation of this character, seeing that we have no monopolies in Australia? But we know how injurious are the effects of monopolies, and. therefore, we should not allow them to be established in our midst. The harvester case alone calls for interference by Parliament, in the interests of manufacturers and producers alike. Great injury is now being done to the farmers of New South Wales bv the abnormal prices which they are being charged for the machinery which they have to buy to carry on their industry. It has been said that there is no reason for interfering with the iron industry.; but, only the other day, when the Victorian Government called for tenders for the supply of rails, they were offered rails at $Z7 a ton, landed on the wharf at Williamstown, which were being sold at the works in America for $28 a ton. That is an example of the extent to which a large company will cut down prices in order to get business. Monopoly is the outcome of opportunity, and if we follow the old maxim that prevention is better than cure, we shall destroy this opportunity. The deputy leader of the Opposition spoke of a natural economic law with which we should not interfere.
– I said nothing of the kind.
– The honorable member rarely admits that Re has said what other people have heard him say. The honorable member for Mernda made practically the same statement. Do honorable gentlemen term a natural law that which is only commercial law, due to the evolution of commerce and manufacture ? Do they say. that conditions which have become a menace to the welfare of producers and consumers alike should be allowed to intensify, and that the public should noi take legislative action to protect themselves from them? Why should we not interfere with this so-called natural economic law? Those who have studied industrial progress know that the. tendency of the age is towards the concentration of business control, which leads to monopoly, which, in its turn,’, allows, the most barefaced and flagrant imposition. It is the duty of the representatives of the people to protect the community from these results of commercial evolution. Honorable members opposite do not show us any remedy for these evils, whose existence they cannot but admit, and they are1, therefore, going to accept the Bill which they have condemned so much, although they say that they will amend it in Committee. That is always said by men who wish to get themselves out of a difficult position. We have been told that time will remedy these evils without Government interference. But in deal ing with these matters, we have to deal, not’ with the best, but with the worst side of human nature; with the mercenary spirit which, to gain its own ends, would crush all opponents. The honorable member for Mernda says that no good will come from, this measure; but, while I am not verymuch impressed with it as a means for suppressing monopolies, I do not agree with the leader of my party in not expecting any practical result from it. I think that there are provisions in the Bill which are calculated to remedy some of the evils with which we have to contend, which, if not nipped in the bud, will grow to terrible proportions. The clauses prohibiting the obtaining of unfair profits by importers can, in my opinion, be successfully admdnistere in the interests of the people of Australia. I am not sure that a Judge of the Supreme Court would be the best person to deal with questions arising under the Bill, and fee? inclined to support the creation of a Board” of experts who would thoroughly understand the questions upon which they were, called to adjudicate, and of a jury of experts acquainted with the intricacies of commerce and manufacture. The honorable member for Mernda tried to show1 how it would be possible for the International Harvester Company to defeat the intentions of Parliament. He contended that the trusts would probably take measures to defeat the object of the Bill. He suggested that they would engage men to come to Victoria., and manufacture machines, and that they would then employ agents in the other States to first purchase, and afterwards sell their machinery, and in this* way escape the possibility of beingpenalized under the law. No one can deny that means are very often found for escaping legal liability. In the United States it is complained that no sooner is one hole in the net which has been drawnround the trust stopped up, than another one is made bv the lawyers. President Roosevelt complains that the Sherman Act and the Wilson Act have alike proved ineffective.
– That is owing to thewicked lawyers.
– They are wicked inmany respects. If it were not for thelawyers in Parliament and outside of it we should not need the same number of laws that we have to-day. Our Statuteswould be more clearly understood a. id effective than they are at present. I do not- think that the measure will prove an absolute remedy for the evils complained of, but it will certainly Le in advance of anything that has been placed upon the statutebooks of other countries. The AttorneyGeneral has taken advantage of the experience gained in the United States with regard to trusts, and if the members of the Opposition exercise the wonderful ingenuity which they are known to possess in assisting to bring the Bill into workable shape, we shall no doubt be able to pass a satisfactory measure. I expect that the Bill will put a stop to some of the operations that are now proving injurious to our industries, and that it will prevent other proceedings of a similar kind. The arguments of the honorable member for Mernda, which were directed to showing that the measure would prove ineffective, seem to me to supply the strongest reasons for adopting the policy advocated by the Labour Party, namely, the nationalization of such monopolies as are beyond control by the Legislature. We are prepared to take that course if the present measure should prove unsatisfactory. The honorable .member for Mernda stated that monopolies did not grow out of the concentration of manufacturing operations, but out of the control of transportation. I admit that there is a great deal of truth in that. No doubt the control of transportation enables monopolies to be largely extended. I do not, however, agree with the honorable member that owing to the fact that our principal means of transportation are in the hands of the States monopolies cannot assume large and harmful proportions in the Commonwealth. I maintain that we have injurious monopolies amongst us to-day. The harvesting combine is operating to the detriment of our local industries. The shipping combine is also proving harmful, and I might point to many other large trading enterprises which should be restricted to some extent. We find that in Melbourne a combination is being formed among the brewers with the object of crushing out a competitor that has recently proved successful. The brewers are making “the fullest use of the control which they exercise over certain tied houses.
– The combine has been formed with a view to getting rid of the tied houses.
– That is a detail with which I am not now concerned. As a matter of fact, the brewers’ combination are supplying their tied houses with beer at £3 per hogshead, whilst other houses, which have been taking their beer from the Co-operative Company, are being supplied at the rate of £2 10s. per hogshead. The sole object of this reduction in price is to crush out the Co-operative Company. If the combine succeed, the price of beer will again go up, and the consumer will be penalized. The honorable member for Mernda led us to infer that he could always be depended upon to defend those industries in which he was interested. I do not blame him for taking that course, but I do not think that he has a right to reproach us for not attending to listen to him. The honorable member attempted to show that the sugar industry was not the subject of a monopoly. I do not think that he succeeded, but I shall take another opportunity of refuting his arguments. I shall defer any further remarks I may have to make until the Bill reaches the Committee stage.
Debate (on motion by Mr. Skene) adjourned.
– - I desire to say a few words by way of personal explanation. In the course of my speech, a night or two ago, I referred to the honorable member for Bland in these terms -
Anti-Socialism is against the honorable member’s formula, in which be describes his objective as the condition of things in which we produce for use, and not for profit.
– I did not so describe my objective. The honorable member’s statement, like something else he has said, is untrue.
I said then that I would make no further remark on the subject, but would ask leave to make a further explanation when I had had time to look up the quotation which was then in my mind. I now desire to quote from a report published in the Sydney Worker of 1st July of last year. The report is headed “Labour i’m Politics” - “Splendid Speech by Mr. Watson”“At Sydney Protestant Hall” - “Great Demonstration of Women.” Under the sub-heading of “ Ideal and practice,” the honorable member for Bland is reported as having stated -
The Socialism of the Labour Party was this - they looked forward lo the ideal when collectivism took the place of competition in this world, when production would be for use, and not for profit.
That, I venture to say, summarizes the precise formula of all the Continental Socialists of whom I have read.
-Idonot wish to imply, and I do not think I did imply the other evening, that the honorable member was attempting to deliberately misrepresent what I had said. In regard to the quotation which has just been read, I desire to say that it is not a correct report of what I said on the occasion referred to. I believe that the report - I have not had time to ascertain definitely - is a reproduction of a very much condensed report published in the daily newspapers, and it does not correctly record all that I stated. I have stated on many occasions that Socialism certainly does aim at what is there indicated, but I have not said that the objective of the Labour Party, so far as it is expressed, aims at anything of the kind.
– According to the report, the honorable member said that.
– I did not say, on the occasion referred to, what the Worker represents. The report is very much condensed. My speech extended over about two hours, and the report of my remarks has been condensed into a very short space, and, necessarily, is not quite accurate.
Bill received from the Senate, and (on motion by Mr. Groom) read a first time.
Bill received from the Senate, and (on motion by Mr. Groom) read a first time.
SUPPLY BILL (No.1).
Bill returned from the Senate, without request.
ADDRESS-IN-REPLY : PRESENTATION TO GOVERNOR-GENERAL.
– I have to announce that His Excellency the Governor-General will be prepared to receive the AddressinReply to his speech delivered at the opening of Parliament at 4 o’clock on this day fortnight.
Sir JOHN FORREST laid upon the table the following paper : -
Memorandum by the Agent-General for New South Wales in London as to the transference of States debts to the Commonwealth.
– I move -
That the House do now adjourn.
Perhaps Imay be permitted to say that I do so in view of my concurrence with the deputy leader of the Opposition in his suggestion that this debate should not be brought to a conclusion to-day,so far as the second reading of the Bill is concerned, and will, I trust, be concluded upon Tuesday next.
– I did not make any such statement.
– The honorable member suggested that we should not finish the debate to-day, as I had hoped we should.
Question resolved in the affirmative.
House adjourned at 4.1 p.m.
Cite as: Australia, House of Representatives, Debates, 22 June 1906, viewed 22 October 2017, <http://historichansard.net/hofreps/1906/19060622_reps_2_31/>.