House of Representatives
6 July 1906

2nd Parliament · 3rd Session



Mr. Speaker took this chair at 10.30 a.m.

House counted.

Mr. Speaker read prayers.

page 1105

QUESTION

ADELAIDE ELECTRIC LIGHT WIRES

Remuneration of Linemen

Mr TUDOR:
for Mr.Batchelor

asked the Postmaster-General, upon notice -

  1. Whether it is the rule to allow the use of telegraph poles in Adelaide for hanging partially insulated electric light wires?
  2. Are naked electric light wires carried over and supported from the telegraph poles?
  3. If such ft practice obtains, is it not a source of danger to life and property?
  4. Have cases occurred in which there has been fusion of the telegraph wiresas the result of contact with the electric, light wires?
  5. Have special warnings been recently issued to the linemen in Adelaide of the necessity for exercising particular care in carrying out their duties? 1106 Telegraph Offices: [REPRESENTATIVES.] Closing Time.
  6. What is the object of requiring the linemen in Adelaideto sign an acknowledgment of having received such special warning? 7, Is it a fact that those linemen who are called upon to execute work of such an unusually dangerous character are classified by the Public Service Commissioner at the lowest rale of pay for permanent employes in the Commonwealth Service, i.e., on an equality with totally unskilled labour?

    1. Does not the Postmaster-General think that some higher remuneration should be paid to men engaged in work of specially dangerous character than is paid to ordinary unskilled labourers?
Mr AUSTIN CHAPMAN:

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

  1. Yes, under Approved conditions, and as a means of reducing the liabilityto contact between the wires of the two systems.
  2. No. This is not the practice. Naked wires do pass over the telegraph lines, but they are not supported on the same poles.
  3. There is always some danger where a telephone system and electric light installation cross each otherat so many different points.
  4. Yes, on three occasions; two by telephone wires falling on the electric light wires, and one by the electric light wires falling on the telephone wires.
  5. Yes.
  6. To impress on the men the necessity of ex ercising every care.
  7. No. The Public Service Commissioner has increased the rate of pay from ; £100 to , £120 per annum, and a further increase of £6 per annum to a certain number of the more competent linemen is provided for on theEstimates.
  8. Yes, and payment is already being made accordingly.

page 1106

QUESTION

TELEGRAPH OFFICES: CLOSING TIME

Mr POYNTON:
GREY, SOUTH AUSTRALIA

asked the PostmasterGeneral, upon notice -

  1. Will he inform the House why the recent regulations altering the time of closing telegraph offices in South Australia on Saturday from 5.30 p.m.to 7.30 p.m., to bring that State intoline with other States, is made to apply only to the State of South Australia, and why two other States, whose time of closing is 6 p.m. throughout the whole week, are not similarly brought into line?
  2. Will he rectify this anomaly either by causing all States to come into line or reverting to the system which, prior to the advent of the Commonwealth, was considered adequate to the needs of the various States?
Mr AUSTIN CHAPMAN:
Protectionist

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

  1. The recent instruction altering the time of closing telegraph offices in South Australia on Saturday was made in order to bring that State into line with the other States of the Commonwealth where telegraph offices are open on Satur- days during the same hours as on week days.
  2. The question of making uniform the actual hours during which telegraph offices ore open in the various States is under consideration.

page 1106

AUSTRALIAN INDUSTRIES PRESERVATION BILL

In Committee (Consideration resumed from 5th July, vide page 1105):

Clause 7 -

Any person who wilfully monopolizes or attempts to monoplize, or combines or conspires with any other person to monopolize, any part of the trade or commerce with other countries or among the States, with the design of controlling, to the detriment of the public, the supply or price of any merchandise or commodity, is guilty of an indictable offence.

Penalty : Five hundred pounds, or one year’s imprisonment or both ; in the case of a corporalion, Five hundred pounds.

Every contract made or entered into in contravention of this section shall be absolutely illegal and void.

Amendment (by Mr. Isaacs) agreed to -

That the word “wilfully,” line 1, be left out.

Amendment (by Mr. Isaacs) proposed -

That the words “ the design of controlling,” line 5, be left put, witha view to insert in lieu thereof the words “ intent to control.”

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

– In discussing the amendment, I ask the Committee to consider the nature of a patent right. Is it not a permission granted by the Legislature to exercise a monopoly ?

Mr Watson:

– Conditions are frequently attached as to manufacture and sale at reasonable prices.

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

– There are no such conditions in our Patent Act, for which the honorable member voted.

Mr Watson:

– There are suchcondditions in the patent laws of other parts of the world, as, for instance, of Canada. Our patent law was affected by the freetrade ideas of the honorable member.

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

– There is not much free-trade about the Labour Party now, since last night even the honorable members for Barrier and Maranoa voted for the purely fiscal conditions of the Bill. The possessor of a patent right would, in almost every particular, correspond with the persons described in the clause. He “monopolizes,” and “attempts to monopolize,” and may “ combine and conspire with others to monopolize “ part of the trade among the States or with other countries. A patent right may be world-wide in its effects. In Australia we grant rights which, under certain conditions, protect the. patentee in eveny part of the world, and thus enable him to monopolize, or to art with intent to control the business of the world, so far as the manufacture and sale of the article patented is concerned. But, having provided for the issue of patents, we now propose by the Bill to indict any who may exercise his patent rights. I am, of course, well aware that the effect of a patent, although inevitably, at the first, monopolistic, is eventually diffusive, tending to the invention of devices for increasing human comfort and advancement. Indeed, it seems as if we have concluded- in our minds that we cannot bring new forces into play in connexion with any material concern, which are not at first of a monopolistic character. In the initial stages they tend to concentration and to monoply, but afterwards their benefits become diffused throughout the length and breadth of the community. In the Commonwealth, a patent right may exist for fourteen years, though it may be of a character so revolutionary as actually to hold back the advancement of the community in many ways during its currency. This is not a fanciful statement, but one which everybody who has had any connexion with business knows to be true. I recollect a case in point having reference to the telephone switchboards in use in the General Post Office, Sydney. Years ago when we wished to install a new switchboard there, two firms tendered for the work. One of them claimed to possess a patent right in Australia df certain things which were material to both switchboards. The result was that we had to pay that firm for the switchboard, ^2,000 more than the price at which we could have obtained a very much better switchboard had there been no patent right in existence, and as a result, a very great deal of heart-burning was occasioned to the officers of the Department. At that time there was nothing in our New South Wales patent laws binding the Government in any way whatever with regard to patents. There ‘was, I believe, some provision of the kind in the Statutes operating in the other States, but in New South Wales there was no such provision. But, notwithstanding the fact that there was nothing in the legislation of New South Wales to bind the Government. I took up the position that since the Legislature had conferred patent rights upon individuals, the Government ought not to set an example in the violation ‘ of those rights. Upon these moral grounds the Ministry came to the conclusion that we ought to observe the same rule in regard to patents as applied to private individuals. Then I remember that some of the officers in the Postal Department invented a jack for use in connexion with the telephone switchboard, but again we were met by this claim on the part of the patentees. They affirmed that the difference which we made in the jack was only a minor one, but it was covered by the patent right which they already possessed. In our ignorance we had entered into a contract for the supply of this particular jack before we were aware of the existence of this patent right. The firm took the matter to the Equity Court, and Mr. Justice Owen, who has recently been investigating the land scandals in New South Wales, made an order for the impounding of the jacks. He would not allow them to be landed at all, although they came from a firm in Sydney, which was making them at the time. He would not allow them to be landed upon the ground that they were covered by a patent right which had -been taken out in Australia by a firm at Home. The difference was not sufficiently material, he ruled, to evade the monopoly which the firm in question possessed. As a result we were held up for the time being by the lack of these jacks-

Mr Skene:

– Where were the Government endeavouring to land them?

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

– They were supplied by a Melbourne firm, but they contravened a patent held by a foreign company - that is to say, a British, company. The latter took action in the Equity Court, and restrained them from being landed, and the Postal Department was held up until it made a contract with the individual who held the patent right. That is an illustration of a monopoly actually keeping back, for seven or eight years at least, the installation of an improved switchboard in the. Post Office. That is a common experience. But on the whole the public are deemed to be best served by the enactment of .Statutes of that kind. We have deliberately set up these patent rights. We have done so in this Parliament, and, according to an interjection by the honorable member for Bland, we have not attached to them certain stipulations which’ attach to them in other countries of the world. Why I do not know. I do not understand how anybody who believes in Socialism can concur in the issue of these patent rights for a number of years, seeing that they mean the granting of a monopoly to an individual as against the whole community. However, that is by the way. The fact remains that we do set up these monopolistic enterprises with a certain currency, and that we shield them by the processes of law in every way. Yet they come within the meaning of this clause im almost every particular. There is another expression in the provision under discussion to which I desire to direct attention. It is the phrase “the detriment of the public.” What is the real meaning of it? What do we mean when we refer to “ the detriment of the public “ ?

Mr Higgins:

– What is a public-house?

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

– I do not think’ that the word “ public “ iti this instance means traders. I should rather think that it means the great body of the public, who use and purchase these goods. If it means the consumer, why not say so? But i f the clause read “ to the detriment of the consumer “ we should again open up a long vista of possibilities. What is “to the detriment of the consumer”? Clearly the increase in the price of any article, no matter how slight it may be, is to his detriment. The difference between tea at is. per lb. and tea at is. 0 1/2d. per lb. is to the detriment of those who consume that article, looked at from their stand-point. So it is in the case of the goods referred to in this clause. Yet the cheapening of an article is the ‘ very thing that we indict under this Bill. We say that unless these things can be supplied at a certain standard price, they shall not be supplied at all. Under this clause we absolutely force people to put up their prices before they can enter upon our competitive plane at all. It seems to me to be contradictory to set up a standard which is prohibitive of everything which is “ to the detriment of the public.” and, at the same time, to require people to enter into such arrangements as must lead to an increase in price in relation to the articles sought to be purchased and consumed.

Mr Higgins:

– -Does the honorable member suggest the substitution of the word “ consumer “ for “ public “ ?

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

– I think that it would be very much better.

Mr Higgins:

– That would raise very great difficulties. It would not include the retail dealers. If we used the word “ consumer,” we should narrow the provision somewhat.

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

– I do not think that the word ‘ ‘ public “ means traders at all.

Mr Isaacs:

– We must protect the individual small trader.

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

– Is that the idea underlying the use of the term ?

Mr Isaacs:

– It is one of the ideas, undoubtedly. We do not wish to crush the individual trader, but to protect him.

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

– It may be that that is why the term “ public “ is used. But I take it that the main purpose of this Bill is to protect the public.

Mr Isaacs:

– Yes.

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

– Otherwise there would be no attempt made to interfere in the way of controlling our industries. No matter how large an enterprise may be in itself, its mere size, I take it, is not indicted under this Bill.

Mr Higgins:

– All goods are not “con-, sumed.” For instance, I might mention harvesters in that connexion.

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

– I am afraid that I cannot subscribe to that statement. I think that harvesters are consumed when they are worn out.

Mr Higgins:

– The honorable member would not consume a harvester?

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

– Certainly its usefulness may be consumed. The whole question of the relations of trade to the community is certainly involved in the term “detriment of the public.” It seems to me that the first and the main principle of all these regulative provisions, as applied to trusts, must necessarily entail the fixing of the fair price of .goods. That is involved in any regulative action which may be taken. No doubt the Judge who hears any case brought before him under the provisions of this Bill will fix that price in a negative way. That consideration raises the whole question as to what is a fair price from the standpoint of the great bulk of the public. What, for instance, might be a fair price for a harvester to the farmer when the machine is supplied by any trust might be deemed a “ cut “ price by Mr. McKay. That appears to be the case, indeed1, if we can judge by our recent experience. Mr. McKay, in fixing the price of his machines, does not contemplate extending consideration to the farmer. If he could add £10 to the price of his harvesters to-morrow, and the farmers would allow him to do so, he would be very glad to add it. So would the

*Australian Industries* [6 July, 1906.] *Preservation Bill.* 11 09 retail trader in disposing of any provisions that he might have to sell. His aim is to get the largest price that the public will give. When we set out to interfere with these competitive enterprises, we do not know what will be for the ultimate good of the public at large. We may believe that this and that section of the public will benefit, and yet it may be that the interference with the whole network of our competitive concerns will result in a larger aggregate loss to the public than is compensated for by any temporary or sectional gain. When we set out upon broad inquiries of this description it is not to be wondered at that the end and purpose of such legislation should be defeated by the machinations of men of skill and ingenuity interested in the defeat ofits provisions. {: .speaker-F4R} ##### Mr Watson: -- Is this another " stonewall "? {: #debate-2-s1 .speaker-10000} ##### The CHAIRMAN: -- Order ! {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I appeal to you, sir, to take some notice of the honorable gentleman's remarks.For the last three days he has done nothing but interject impertinent remarks. {: .speaker-10000} ##### The CHAIRMAN: -- I am sure the honorable member will withdraw the remark. {: .speaker-F4R} ##### Mr Watson: -- I was unaware until now that it is out of order to ask an honorable member a question like that. If the honorable member considers the question offensive, I shall certainly withdraw it. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I do not consider the question offensive, but I take the inconsistency of it as constituting an offence. I am sorry that I should have to discuss these matters, but there is. a conspiracy of silence in the Labour corner. {: .speaker-F4R} ##### Mr Watson: -- I have spoken four or five times. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- No matter what aspect this Bill bears, fiscal or non-fiscal, honorable members of the Labour Party are solid for it the whole time. {: .speaker-F4R} ##### Mr Watson: -- That is not a fact. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- With one or two exceptions. It is time for somebody to speak when we find the honorable member for Broken Hill going solid for protection. The man who of all others in this House has taunted protectionists on every occasion, is now voting solidly upon every fiscal aspect of this measure. {: .speaker-K8L} ##### Mr Thomas: -- Why does the honorable member turn on me? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- I am not turning on the honorable member. I should not say a word on the subject, but for the fact that, feeling himself secure in the solid support behind him, the honorable member's leader is becoming impudent. Honorable members are aware that one of the troubles of those engaged in the fruitgrowing industry in New South Wales, and I suppose also in most of the other States, is that a great proportion of the fruit crop ripens at about the same time. As a consequence, the market is immediately glutted, prices fall to zero, and the whole industry is disorganized. It is one of the constant aims and ideals of the fruit-grower to so control his market as to secure a fair price for his crop, and from time to time co-operative enterprises are entered into for that purpose. Does not this constitute a monopoly in restraint of trade? Possibly the purchaser of fruit would say that it is to the detriment of the public also. Here we have a product, the market for which is regulated by a process of combination or monopolization, if honorable members please, for what I consider a very wise and proper purpose. Unless some such course is adopted, much of the fruit must go to the rubbish tip, or be sold without any profitable return. Though the action taken may be held to be to the detriment of the public, as a matter of fact, it is not ultimately detrimental, because, if the supply of fruit were at once exhausted, a demand would be set up for fruit which must be supplied from other quarters, and it is then that the detriment to the public would come in as exemplified by the increased price which they would be called upon to pay, by reason of scarcity. I hold that the regulation and control of the fruit industry in the way I have described is quite legitimate, but it corresponds in every particular to what is indictable under this provision, when it takes place on any large scale, and might be dealt with accordingly. The. clause reads - {: type="1" start="1"} 0. Any person who wilfully monopolizes or attempts to monopolize or combines or conspires with any other person to monopolize any part of the trade or commerce with other countries or among the States, with the design of controlling, to the detriment of the public, the supply or price of any merchandise or commodity, is guilty of an indictable offence. All this shows the need for exempting the primary industries from the operation of a Bill of this kind, as was proposed by the honorable member for Echuca. It is not intended to deal with small matters of voluntary co-operation, and the Committee made a great mistake when it declined' to exclude from its operation these innocent fair and legitimate enterprises of the country, as to which there can be no monopoly in the large sense of the word, but which might, nevertheless, be brought under this Bill, by reason of the width of its provisions, and the scope of its intent. What I have described might happen in the apple industry in Tasmania, and wherever there is a glutted market for fruit or produce of any kind, and the attempt is made upon reasonable and fair co-operative lines to control the market, so as to procure a fair return for the enterprise expended in the industry. I say that as to all these matters of voluntary concern, this Bill should leave them free and unrestricted, particularly where corners of the kind cannot be established to the lasting detriment of the public. I, therefore, hope the Attorney-General, before the consideration of the measure is completed, will place some limitation upon the scope of its operations, and will try to make its provisions more fair. There is another matter connected with the penalties attaching to offences under this clause. Sub-clause 2 provides that - >Every contract made or entered into in contravention of this section shall be absolutely illegal and void. "This question was raised the other night, and I do not intend to pursue it now, but I do think that even here the AttorneyGeneral might consider an amendment which would prevent ordinary legitimate practices entered into by innocent persons from being penalized under this provision, to the detriment of their businesses and enterprises. If a contract is to be cut into at harvest time in connexion with the suppi v of some agricultural implements the innocent are going to be made to suffer as well as the guilty. I do not think that is the intention of honorable members, or of those who introduced this legislation, but that must be the effect of the measure unless it is altered. {: .speaker-KJI} ##### Mr Isaacs: -- It does not touch any innocent contract at all. {: #debate-2-s2 .speaker-KCO} ##### Mr GLYNN:
Angas -- I am not quite sure how this clause is going to apply. Its form differs from that of the similar provision in the Bill of last year. It is wider in its scope than the clause in that Bill. If honorable members will turn to clause 11 of the Bill of 1905 they will find that the combinations dealt with under the provisions of the clause similar to thiswere combinations between trusts or between a person and a trust. The reference to the trust is omitted from the clausein this Bill, so that the combination might be a combination of. any two persons aswell as a combination of corporations or trusts. Again, from the. way in which thisclause is drafted, it is quite open to this interpretation : That you .must prove the intent to do the act to the detriment of the public. In other words, that there must be in the mind of the* person doing the act the idea that he was to injure the public by doing it. I am speaking merely of the criminal effect of the clause. If so, it would be very hard to get a conviction. What the draftsman may have meant wasthat, so long as the act does result in detriment to the public, assuming that the other conditions of the clause are complied' with, the guilt of the person charged is established. {: .speaker-KJI} ##### Mr Isaacs: -- No. {: .speaker-KCO} ##### Mr GLYNN: -- The principle adopted in construing crdminal statutes is that if a section of an Act is capable of an innocent interpretation, which would result ir» the acquittal of the accused person, that interpretation is accepted. {: .speaker-KJI} ##### Mr Isaacs: -- There is no doubt about it. I do not desire that any man should bebranded a criminal unless he has a criminal intent. Later on, in some modifications of the Bill which I have circulated, I show that I think there should be a power togrant an injunction, irrespective of intent, where there is shown to be anything detrimental to the public ; but so far as criminal liability is concerned, there should benone, in my opinion, unless criminal intent is proved. {: .speaker-KCO} ##### Mr GLYNN: -- It seems to me that, aswe go along, the Government are becoming rather shaken in their faith in the morality, as well as in the efficacy, of this measure. {: .speaker-KJI} ##### Mr Isaacs: -- We have held the same view of that matter all along. {: .speaker-KCO} ##### Mr GLYNN: -- The Attorney-Genera* now admits that my reading of this clauseis correct, and that it does not mean that a monopoly must be proved to be to the detriment of the public, but that the accused, in entering into combination, intended the detriment of the public. It does? not matter what the character of the combination is so long as there was no wilful design to acquire such a monopoly) as would result in the detriment of the public. If that design is not proved the fact that the monopoly does result in the detriment cf the public has no bearing on the question of guilt or innocence. If that is what is meant by the Government, it only goes to show that they do not believe in their own clause, because such a reading of the provision would in almost every case destroy all possibility of getting a conviction. This was not in the Sherman Act, and I do not think that it was in the Bill submitted here last year. In America the guilt is established by showing that the operations of the contractors or of a combination will injure the public. Under this clause it must be proved that there was intent to do so. {: .speaker-KJI} ##### Mr Isaacs: -- Yes; for criminal purposes. {: .speaker-KCO} ##### Mr GLYNN: -- I again say that these words are not in the Sherman Act, and it seems to me as if the Government are now putting into the Bill provisions in order to practically nullify its operation, as if thev had modified their; former degree of faith. {: .speaker-KXO} ##### Mr Page: -- The honorable and learned member ought not to object to that. {: .speaker-KCO} ##### Mr GLYNN: -- I am merely pointing out, as I go along, what the measure amounts to. {: .speaker-KJI} ##### Mr Isaacs: -- There will be no nullification of the operation of the measure. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- When the Bill is through it will be harmless as to trusts and effective as to fiscalism. {: .speaker-KCO} ##### Mr GLYNN: -- Again take the assumption that the clause really will apply as affecting trade and commerce. The Sherman Act was directed against carriers. I acknowledge that its scope may be wider. {: .speaker-KJI} ##### Mr Isaacs: -- It has been decided in <case after case to be wider. {: .speaker-KCO} ##### Mr GLYNN: -- I cannot find these cases. {: .speaker-KJI} ##### Mr Isaacs: -- I gave them the other day. For instance, the *Sugar Refining* case, and the *Beef Trust* case. {: .speaker-KCO} ##### Mr GLYNN: -- I think it was decided in the *Sugar Refining* case that it did not come under the anti-trust law. {: .speaker-KJI} ##### Mr Isaacs: -- Oh, no. {: .speaker-KCO} ##### Mr GLYNN: -- The *United States* v. *Knight* is the case to which the Attorney-General refers. In the *Merger.* case, which was decided on the 14th March, 1904, **Mr. Justice** Harlan - a Justice of the Supreme Court who, in all cases, wanted to extend the operations of the Act - gives a summary of what he considers to be the rules of law Reducible from the cases up to that date. He says - >In *United States* v. *Knight,* it was held that the agreement or arrangement there involved had reference only to the *manufacture* or *-production* of sugar by those engaged in the alleged combination ; but if it had directly embraced Inter-State or international commerce, it would then have been covered bv the Anti-Trust Act, and would have been illegal. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable and learned member, of course, appreciates the difference. The *Knight* case was decided as it was, because the facts only showed that they dealt with the manufacture, and not with the sale. {: .speaker-KCO} ##### Mr GLYNN: -- I have read the decision of **Mr. Justice** Harlan. He says that it referred to the manufacture and production, and he does not talk about the sale. What he does say is that if it had directly affected Inter-State or international commerce, it would come under the Act. {: .speaker-KJI} ##### Mr Isaacs: -- Exactly. {: .speaker-KCO} ##### Mr GLYNN: -- Sale is not referred to. It is a strange thing that in every one of the cases mentioned in the summary, the ground of the decision was because the operations of Inter-State or international commerce were affected. The very titles of the cases show the . limitation of the law because there is the *United States* v. *the Trans-Missouri Freight Association.* Similarly the *Addystone Pipe Company* v. *the United States* had to do with InterState traffic. {: .speaker-KJI} ##### Mr Isaacs: -- The *Addystone* case answers the honorable and learned member's objection. {: .speaker-KCO} ##### Mr GLYNN: -- In the case of *Pearsall* v. *the Great Northern Railroad Company* it was the consolidation of two railway companies. In his summary of the *Sugar Trust* case Chief Justice Fuller says - >There was nothing in the proofs to indicate any intention to put a restraint upon trade or commerce, and the fact, as we have seen, that trade or commerce might be indirectly affected was not enough to entitle complainants to a decree. {: .speaker-KJI} ##### Mr Isaacs: -- Exactly. {: .speaker-KCO} ##### Mr GLYNN: -- It seems to me then that very few cases will come under the operation of the measure. It must really relate to the actual transit of goods. The AttorneyGeneral says that a mere sale is 1112 *Australian Industries* [REPRESENTATIVES.] *Preservation Bill.* sufficient, but I have not yet seen a case deciding that. It is significant that the object of the law is to put down competition between carriers or shippers in the Inter-State trade to the detriment of other shippers or carriers, and that almost all the cases, certainly all that I have seen, are cases turning upon the question of freights. That being so, it is obvious to honorable members that this clause is particularly limited in its operation. However, as I said, it is difficult to amend it, so that I suppose it must go for what it is worth. {: #debate-2-s3 .speaker-KRQ} ##### Mr SKENE:
Grampians -- I think that this clause is practically the mainspring of the Bill. Had it not been for the harvester matters receiving so very much prominence, very probably we should not have seen a Bill of this kind 'for a good many years. I feel that I can speak with a certain amount of freedom, because when the question of harvesters was before the House, I took considerable interest in the discussion, and did all I could to assist the local manufacturers in receiving a larger amount of protection than was proposed in the Tariff. I did sofor two reasons. In the first place, the harvester was an Australian invention, and the inventor had not been able to receive anything like a comprehensive patent. In the second place, I foresaw the difficulty which has arisen in regard to the matter of invoicing. At that time my proposal was that there should be a fixed duty of *£10.* It would have been carried here, I believe, but for the fact that at the last moment some one converted the honorable member for Maranoa. {: .speaker-KZH} ##### Mr Robinson: -- The honorable member for Wimmera. {: .speaker-KRQ} ##### Mr SKENE: -- And the honorable member for Maranoa also. I 'feel quite sure, however, that we shall be found voting together on this occasion. We need concern ourselves very little about the matter of the harvesters if there is anything in the statement of the Minister of Trade and Customs. He has told us that he practically broke down the combine by raising the *ad valorem* duty from£5 to *£8* 2s. 6d. I am quite sure that the farmers of Victoria would not object to a fixed duty of *£10* {: .speaker-KXO} ##### Mr Page: -- Would that protect the harvester ? {: .speaker-KRQ} ##### Mr SKENE: -- I think that it would protect the harvester amply. At that time **Mr. McKay,** who is not a constituent of mine, and whom I only knew as having in troduced this machinery, came to me, and asked for a fixed duty of *£15.* I pointed out to him that he was asking for too much, and the reason why I had fixed upon a duty of£10. The honorable and learned member for Bendigo had moved to have a fixed duty of *£15.* I could not support that duty, because it seemed to me to be too high. I thought that if the manufacturers of harvesters received a fixed duty equal to 12½ per cent. upon the selling price, they would get a very fair protection indeed, and, accordingly, I moved in that direction. The position was that the duty was to have the effect of steadying the market here; at any rate, for our local harvesters. Butwe had no sooner passed the Tariff in that respect than they joined the combine. I suppose that they would have taken that step even if they had got the higher duty. IT the Minister can say that by raising the duty to *£8* 2s. 6d. he has broken down the combine, of what use is this Bill? I believe that a great deal could be done in that particular way. I wish to refer to some remarks made by the honorable and learned member for Angas the other night with regard to a conference of farmers, held in Melbourne, some time ago. He referred to some evidence given by **Mr. Osborne,** the secretary. I saw that gentleman on the subject at the time of the meeting. He simply gave evidence to show that he was secretary to a conference, which represented so many agricultural bodies. The meeting did not receive the attention which it would otherwise have got, for the reason that practically two meetings had been called for that evening in the same room - a meeting of dairy people as well as the meeting of the conference. There were also persons sent there who were interested in the harvester combine, and who did their best ina quiet way to render the meeting of very little value. The value of that meeting to me. however, was that it was presided over by a gentleman from my electorate, Councillor Reseigh, of St. Arnaud Shire Council, who is one of the most consistent protectionists whom I know. He and I are very intimate personal friends, but I do not suppose that I received his vote. Both there and before he said that the agitation was being carried to such an extent that he had not only spoken against it in the district, but had come down to preside over that meeting. That was enough to show me that a reaction had taken place. Those connected with the harvesters had *Australian Industries* [6 July, 1906.] *Preservation Bill.* 11 13 been asking for a fixed duty of £25. They started here by asking for a fixed duty of *£15.* Some of us were willing to give a fixed duty of *£10,* and we almost succeeded in our purpose. But then they reverted to the original proposal, or rather improved upon it. When I left the room some of the harvester men came to me and began to explain the matter. I told them that there was hardly a farmer in the country who was not under the impression that they were getting a fixed duty of£25. Several farmers said that the harvester people had done themselves great harm throughout the country, so much so that a farmer told me the other day that he would never buy art implement of the kind from them. What has been the result of this harvester disturbance - for it has disturbed the position amongst the farmers very strongly? {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It is a. political whirlwind. {: .speaker-KRQ} ##### Mr SKENE: -- Quite so. I feel that had it not been for this harvester business we should not have seen this Bill at the present time. If any combine can be broken up by means of a duty, as the Minister has said, why not adopt that means now? If I thought that there was a combine here which was detrimental to the interests of the public and to our industries, I certainly would support the imposition of a duty to break it up. {: .speaker-KJI} ##### Mr Isaacs: -- Has the honorable member read the report of the Tobacco Monopoly Commission? {: .speaker-KRQ} ##### Mr SKENE: -- The alleged tobacco monopoly, the honorable member means. {: .speaker-KEA} ##### Mr Kelly: -- The Commission say that it is not a monopoly, that it is only a partial monopoly. {: .speaker-KJI} ##### Mr Isaacs: -- Well, 99 per cent. is pretty close up, anyhow. {: .speaker-KEA} ##### Mr Kelly: -- But it is said to be only 50 per cent. I will get the report and read it for the honorable member's information. {: .speaker-KRQ} ##### Mr SKENE: -- The other day I reminded the Minister of Trade and Customs that in the Governor-General's speech the term " alleged monopoly " is used. The existence of a monopoly in the tobacco industry has not yet been proven. Even if it does exist - and I am not aware that it does - it has yet to be proven that it is not a beneficial monopoly. {: .speaker-KNJ} ##### Mr Mauger: -- It is cheapening the price of labour. {: .speaker-KZH} ##### Mr Robinson: -- That is not correct. In New South Wales the wages have been fixed by the Arbitration Court, and they' have been increased, as the honorable member knows. {: .speaker-KNJ} ##### Mr Mauger: -- It is being done now. {: .speaker-KRQ} ##### Mr SKENE: -- I am very much surprised at the pertinacity with which the Government are pushing on with the Bill. It is not as if arguments had come from only this side. We have had arguments against the Bill from the honorable and learned member for Northern Melbourne, the honorable member for Perth, and the honorable member for Grey, who have shown Ministers what a very dangerous position we may drift into, and how little consideration has been given to this legislation. The honorable and learned member for Northern Melbourne seemed to lay very great stress upon the fact that criminal proceedings may be taken and people landed . in gaol. The terrors of gaol would very soon, I think, cease to exist, because people are not imprisoned merely to punish, but also in order to deter others! from offending. If we treat people as has very often been done in this country in connexion with false statutory declarations, and so forth, the imprisonment will have no effect at all, because gaol will become what **Mr. Bent** has called a club. The argument of the honorable member for Melbourne Ports seems to have fallen very flat. The honorable member, we know, is very strong and pertinacious in his opinions, but he ought to pause in the face of the facts laid before us by the honorable member for Mernda and others. {: .speaker-KNJ} ##### Mr Mauger: -- Where is the opposition in the face of division lists showing majorities of from seventeen to twenty votes ? {: .speaker-KRQ} ##### Mr SKENE: -- A division list does net always indicate what honorable members' real opinions are, because of party considerations. {: .speaker-KJI} ##### Mr Isaacs: -- What does indicate a man's real thought? Is it what he says or what he does? {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That does not affect the argument that the Bill has been criticised. {: .speaker-KRQ} ##### Mr SKENE: -- A division list does not always indicate distinctly individual opinions. Honorable members, I believe, voted for the second reading of the Bill in order that the provisions might be threshed out in Committee, and the discussion in 11 14 *Australian Industries* [REPRESENTATIVES.] *Preservation Bill.* Committee has disclosed so many faults that I am astonished the measure should be proceeded with. {: .speaker-JWG} ##### Mr Fowler: -- The honorable member thinks criticism is more effective than a division list? {: .speaker-KRQ} ##### Mr SKENE: -- I think it is. {: .speaker-KXO} ##### Mr Page: -- Is the honorable member in order in reflecting on divisions taken in this Chamber? {: .speaker-10000} ##### The CHAIRMAN: -- I do not understand the honorable member for Grampians to be reflecting on any division. {: .speaker-KXO} ##### Mr Page: -- What else is the honorable member doing? {: .speaker-KRQ} ##### Mr SKENE: -- I did not introduce this questionof the divisions, and I am afraid that we have drifted into the discussion of the rather abstract question as to whether divisions are an indication of honorable members' opinions. However, I suppose it is of no use appealing to a Government, who have a strong majority perfectly willing to do their bidding. {: .speaker-KXO} ##### Mr Page: -- The honorable member flogged us once, and we do not forget it. {: .speaker-KRQ} ##### Mr SKENE: -- That interjection quite bears out my argument, and I shall not say anything further on the subject. {: #debate-2-s4 .speaker-KEA} ##### Mr KELLY:
Wentworth >The first question which arises in my mind in discussing this clause is : What constitutes a monopoly? The Attorney-General has declared that the report of the Royal Commission appointed to inquire into the tobacco industry shows that 99 per cent. of the tobacco trade is under the control of a tobacco monopoly. {: .speaker-KZH} ##### Mr Robinson: -- That is gross exaggeration on the part of the Attorney-General. {: .speaker-KJI} ##### Mr Isaacs: -- I said that, as regards a portion of the trade, the monopoly went up to 99 per cent. {: .speaker-KEA} ##### Mr KELLY: -- The Attorney-General did not say anything about a proportion " going up" to 99 per cent. {: .speaker-KJI} ##### Mr Isaacs: -- I did. {: .speaker-KEA} ##### Mr KELLY: -- The Attorney-General declared that the proportion of the trade in the control of a monopoly was 99 per cent., and I said that it was 50 per cent. in cases. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable member did not say " in cases"; I challenge the honorable member to say that he used the words " in cases." {: .speaker-KEA} ##### Mr KELLY: -- The Attorney- General may be quite right. If I did not say so, I meant to say " in cases." I have not seen the report of the Royal Commission for about a fortnight, but I propose to read some extracts from it. It is true that I did not use the words "in cases,"' just as the Attorney-General says he meant to use the words " goes up to," but did not use them. The Attorney-General said that the tobacco monopoly has 99 per cent. of the tobacco trade of Australia, and he refused to withdraw the statement. He did not say that the monopoly " went up to 99 per cent. {: .speaker-KJI} ##### Mr Isaacs: -- In tobacco, it does. {: .speaker-KZH} ##### Mr Robinson: -- It does not. {: .speaker-KEA} ##### Mr KELLY: -- I shall now proceed to read exactly what the report of the Royal Commission says on the point, and then I feel sure honorable members will be careful about accepting, without inquiry, *exparte* statements from the AttorneyGeneral. Paragraph 7 of the report of the Royal Commission says : - >We find that the Combine is a partial, but not a complete monopoly. In plug tobaccoes (local and imported) expert witnesses gave the proportion of the Combine's business compared to the total business from 75 per cent. (Q. 7088) to. 99 per cent. (Q. 4229). {: .speaker-KJI} ##### Mr Isaacs: -- Hear, hear ; that bears me out absolutely. {: .speaker-KEA} ##### Mr KELLY: -- The report says " from 75 per cent. to 99 per cent." {: .speaker-KZH} ##### Mr Robinson: -- That is what the AttorneyGeneral suppressed. {: .speaker-KEA} ##### Mr KELLY: -- What the AttorneyGeneral did not say was that in plug tobacco the proportion to the total business was from 75 per cent. to 99 per cent. Paragraph 8 of the report says - >In cigars the proportion controlled appears to be from 45 per cent., statement **Mr. Benjamin** (Q. 5070), to 50 per cent. or 60 per cent. (Q. 4234). {: .speaker-KZH} ##### Mr Robinson: -- Yet the AttorneyGeneral calls that 99 per cent. {: .speaker-KXO} ##### Mr Page: -- This is quibbling. {: .speaker-KEA} ##### Mr KELLY: -- Paragraph 9 of the report says - >In cigarettes about 75 per cent. (Q. 7088, 4236, 1307). Then paragraph 10 says - >Retailers in various cities gave proportion of" total business with Combine at six-sevenths (Q. 4237), 70 per cent. to 80 per cent. (Q. 6850),. 85 per cent. (Q. 6045), and practically all agreed that the majority of the most popular of both local and imported lines were controlled by the Combine. {: .speaker-KJI} ##### Mr Isaacs: -- Read the next sentence. {: .speaker-KEA} ##### Mr KELLY: -- The next sentence is : - >To such an extent does this exist that, so far as plug tobaccoes are concerned, the Combine is. a virtual monopoly. *Australian Industries* [6 July, 1906.] *Preservation Bill.* 11 1 5 If that will satisfy the Attorney-General - the report does not say that it is a monopoly - anything will satisfy him in making extravagant statements. The AttorneyGeneral said that the proportion is 99 per cent. {: .speaker-KJI} ##### Mr Isaacs: -- So does the Royal Commission. {: #debate-2-s5 .speaker-KEA} ##### Mr KELLY: -- So far as the combine as a whole is concerned, I commend paragraph 7 to the Attorney-General's consideration. We find that the combine is a partial, but not a complete monopoly. {: .speaker-KJI} ##### Mr Isaacs: -- Is that the whole of paragraph 7? {: .speaker-KEA} ##### Mr KELLY: -- I have read the remainder of paragraph 7. {: .speaker-KJI} ##### Mr Isaacs: -- Paragraph 7 contains a statement as to the proportion being 99 per cent. {: .speaker-KEA} ##### Mr KELLY: -- As the Attorney-General well knows, I have already read the other part of paragraph 7. {: .speaker-KJI} ##### Mr Isaacs: -- But just now the honorable member left out the other part. {: .speaker-KEA} ##### Mr KELLY: -- I shall read it again if the Attorney-General is anxious for me to do so. In plug tobaccoes (local and imported) expert witnesses gave the proportion of the combine business compared to the total business from 75 per cent. (Q.7088) to 99 per cent. (Q.4229). The Attorney-General may twist and turn as he pleases, but he cannot get away from the fact' that he did say, and repeated, that the business of the combine represents 99 per cent. of the total tobacco business in Australia. That statement is absolutely without foundation, and as the Attorney-General is aware of the fact, I hope he will give us no repetition. {: .speaker-KJI} ##### Mr Isaacs: -- I shall repeat the statement directly with some other observations. {: .speaker-KEA} ##### Mr KELLY: -- I hope the AttorneyGeneral will be able to explain. {: .speaker-KZH} ##### Mr Robinson: -- I bet the AttorneyGeneral dodges ! {: #debate-2-s6 .speaker-10000} ##### The CHAIRMAN: -- I have previously called the honorable member for Wannon to order for disorderly interjections, but he does not appear to take any notice of my requests that they may be discontinued. {: .speaker-KEA} ##### Mr KELLY: -- This report, which says that the tobacco combine is only a partial and not a complete monopoly, is, I think, exclusively signed by members of a party pledged to nationalize this industry, whether or not it foe a monopoly. {: .speaker-10000} ##### The CHAIRMAN: -- Does the honorable member intend to connect these observations with the question before the Committee ? {: .speaker-KEA} ##### Mr KELLY: -- I think my observations are pertinent to the question, namely, what is a monopoly? I am showing that what we have hitherto regarded as one shining example of a. monopoly in Australia, is, according to a labour Commission's report, not a monopoly. {: .speaker-L0K} ##### Mr Salmon: -- It is a virtual monopoly. {: .speaker-KEA} ##### Mr KELLY: -- The report states that it is not a complete monopoly. {: .speaker-KXO} ##### Mr Page: -- When is a monopoly not a monopoly ? {: .speaker-KJI} ##### Mr Isaacs: -- It appears to be when1 per cent. of the trade is not monopolized ! {: .speaker-KEA} ##### Mr KELLY: -- The Attorney-General is harking back again to the 99 per cent. However, the Committee can remember exactly what is stated in the report of the Commission, and I shall not take any further notice of the statement of the AttorneyGeneral. {: .speaker-L0K} ##### Mr Salmon: -- The honorable member for Wentworth may reduce the percentage very considerably by taking in other requisites, such as pipes, supplied by the combine. {: .speaker-KEA} ##### Mr KELLY: -- I am dealing with tobacco only. {: .speaker-L0K} ##### Mr Salmon: -- If the honorable member goes outside tobacco, he may bring in all sorts of fancy goods. {: .speaker-KEA} ##### Mr KELLY: -- But the proportion of fancy goods to the total is less than the proportion of tobacco to the total. {: .speaker-L0K} ##### Mr Salmon: -- Exactly. {: .speaker-KEA} ##### Mr KELLY: -- So that the absolute percentage would be less if I took in all the other different lines. {: .speaker-L0K} ##### Mr Salmon: -- Exactly, but that does not affect the tobacco. {: .speaker-KEA} ##### Mr KELLY: -- No; but the point with which I am dealing does not affect pipes and fancy goods. {: .speaker-L0K} ##### Mr Salmon: -- No one has said there is acigar monopoly, but only that there is a tobacco monopoly. {: .speaker-KJI} ##### Mr Isaacs: -- Hear, hear; that is what I did say. {: .speaker-KEA} ##### Mr KELLY: -- The Attorney-General said nothing of the kind; what he said was that the combine has a monopoly of all the trade. {: .speaker-KJI} ##### Mr Isaacs: -- I did not. {: .speaker-KEA} ##### Mr KELLY: -- What is the meaning of the Attorney-General's interjection if not 1116 *Australian Industries* [REPRESENTATIVES.] *Preservation Bill.* that? There were originally on this Royal Commission certain honorable members who resigned. **Senator Playford** resigned when he became a Minister of the Crown, and **Senator Styles** resigned for some other reason, while **Senator Keating** was away when the report was signed. I am told, though I have not substantiated my authority, that **Senator Keating,** wired saying he could not sign the majority report. The only member of the Royal Commission who took it upon himself to issue a minority report was **Senator Gray** ; but the singular fact is, that none of the members of the Government party to whom I referred - **Senator Playford, Senator Styles,** or **Senator Keating** - could indorse the findings of the members of the Labour Party on the Commission. In considering this clause, I should like to ask the Attorney -General what is meant by the phrase, " any part of the trade or commerce with other countries." Does that mean any fraction of our trade and commerce, or any particular line of trade and commerce? {: .speaker-KJI} ##### Mr Isaacs: -- It means a part; we do not desire to wait until the trade and commerce of the country are monopolized. {: .speaker-KEA} ##### Mr KELLY: -- The Attorney-General sees the difference? {: .speaker-KJI} ##### Mr Isaacs: -- Suppose the monopoly is in one trade or any part of that trade. {: .speaker-KEA} ##### Mr KELLY: -- Let us take a concrete instance. In the case of shoes, must the endeavour be to monopolize the whole shoe trade, or only to monopolize a section of the trade? {: .speaker-KJI} ##### Mr Isaacs: -- To monopolize any part of the trade to the detriment of the public. {: .speaker-KEA} ##### Mr KELLY: -- It might be one consignment of shoes. {: .speaker-KJI} ##### Mr Isaacs: -- Suppose, for instance, the combine said. " We wish to monopolize the whole trade in working men's boots." {: .speaker-KEA} ##### Mr KELLY: -- The whole trade? {: .speaker-KJI} ##### Mr Isaacs: -- The whole trade. {: .speaker-KEA} ##### Mr KELLY: -- That is what I want to ascertain . {: .speaker-KJI} ##### Mr Isaacs: -- "Monopoly" means the monopoly of the whole trade and not a section. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Not when the words " a part" are used. {: .speaker-KJI} ##### Mr Isaacs: -- "Monopoly" means substantially the monopoly of the whole trade. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Not when we say " a part." How would the clause operate in the case of a particular brand of cigars or tobacco? {: .speaker-KJI} ##### Mr Isaacs: -- As to a particular brand - I do not know. {: .speaker-KEA} ##### Mr KELLY: -- The Attorney-General sees there is a difficulty. {: .speaker-KJI} ##### Mr Isaacs: -- Other provisions would have to be made to meet such a case.. {: .speaker-KEA} ##### Mr KELLY: -- I think there is a difficulty in the mind of the Attorney-General. {: .speaker-KJI} ##### Mr Isaacs: -- None whatever. The only difficulty is that the honorable member, naturally, and without any desire to do so, does not give all the necessary factors to enable me to answer the question. {: .speaker-KEA} ##### Mr KELLY: -- It may be my misfortune that I cannot for the moment put a full case to the Attorney-General. I will put it in this way : Let us assume that the tobacco combine has a monopoly in plug tobaccoes. The Attorney-General would penalize it under this clause if it operated to the detriment of the public, and so operated " with intent." May I ask for the attention of the Attorney-General to this argument ? {: .speaker-KJI} ##### Mr Isaacs: -- I am answering a question put to me by another honorable member. {: .speaker-KEA} ##### Mr KELLY: -- It seems to me that it is impossible to obtain courtesy from the Attorney-General. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable member must not think that he has a monopoly of my attention. If another honorable member comes to the table and asks me a question, I shall treat him inthe same way as I treat the honorable member for Wentworth. {: .speaker-KEA} ##### Mr KELLY: -- I always understood that the honorable member addressing the House was supposed to have thefloor. I was about to put a question to the AttorneyGeneral. {: .speaker-KJI} ##### Mr Isaacs: -- Strictly speaking, the honorable member has no right to ask me questions, but I have done all I could to answer questions put to me. {: .speaker-KEA} ##### Mr KELLY: -- I hoped to save time by putting a question, but in future I shall not trouble to ask questions of the AttorneyGeneral. I wish to point out that if these words " any part of the trade or commerce with other countries or amongst the States " are to be retained- {: .speaker-KJI} ##### Mr Isaacs: -- The same expression "any part " is in the Sherman Act. {: .speaker-KEA} ##### Mr KELLY: -- The Attorney-General will perhaps explain what he means. I will give way to him. {: #debate-2-s7 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I should like first to refer to the position taken up by the honorable member for Grampians. In the course of his speech he said that the only suggestion in the way of a monopoly in this country was with reference to harvesters. I have not, up to the present, dealt with that question at all, because I think it is a matter of common knowledge in this community that there are rings and trusts in Australia that require attention at the hands of the Government and Parliament, such as we are giving to them now. But when we hear, in reference to the tobacco trust, unqualified interjections that that trust has only 50 per cent, of a monopoly {: .speaker-KEA} ##### Mr Kelly: -- -No: the Attorney-General made the first interjection. {: .speaker-KJI} ##### Mr ISAACS: -- I made an interjection to the honorable member for Grampians when he said that there was no trust but the harvester trust. I asked1 him whether he had read the report of the Tobacco Commission on that point, and then the honorable member for Wentworth said that it was only a monopoly to the extent of 50 per cent. {: .speaker-KEA} ##### Mr Kelly: -- Nothing of the sort. {: .speaker-KZH} ##### Mr Robinson: -- No. {: .speaker-KJI} ##### Mr ISAACS: -- I said, "99 per cent." We shall have the honorable member's speech here afterwards, and we shall see whether he did not say " 50." {: .speaker-KEA} ##### Mr Kelly: -- After the Attorney-General said " 99." {: .speaker-KJI} ##### Mr ISAACS: -- The honorable member is wrong about that. {: .speaker-KEA} ##### Mr Kelly: -- I am right. {: .speaker-KJI} ##### Mr ISAACS: -- Whether the honorable member said it or not, I feel confident that I am right. The point is that he said that the trust had only 50 per cent, of a monopoly. We know perfectly well that the main trade of the tobacco company in question is in plug tobacco. The principal thing in tobacco that concerns this country is plug tobacco. Cigarettes and cigars are not the commodities which the bulk of the smokers of this community like to consume. When we talk about a monopoly in tobacco we mean practically plug tobacco. I shall read, in order that we may have it on record, the testimony of the Tobacco Commission, so that it may never again be said in this House that no harm is done by the trust, and that there is no need to regulate it, and in order that there may be no suggestion here that there is not a trust that requires attention at the hands of Parliament. I am going to ' read the report of the Commission as to the operations of the trust, its constitution, its ramifications, and its effect upon the public, upon the employes, and upon the tobacco growers of this country. I shall omit the references to the numbers of questions in the evidence. The Commission says : - >Your Commissioners find - That a Combine or Trust does exist in the industry of the manufacture [see statement by **Mr. L.** *V.* Jacobs, statement by **Mr. H.** R. Dixson, and statement by **Mr. William** Cameron] that it extends to the business of importation **[Mr.** Jacobs, also **Mr. L.** P. Benjamin]; that it also extends to the wholesale distribution both of locally manufactured and imported tobaccoes. We find (hat this Combine originated in 1900, so far as its Australian branch is concerned, among certain manufacturing firms, by their securing joint interests in companies previously in competition with them. On the establishment of Inter-State free-trade consequent on the coming into operation of the Commonwealth Tariff, these interests were still further consolidated. The Australian Tobacco firms were brought- into conflict by the establishment of Inter-State free-trade, and tha competition became more acute, owing to a section of the lmneri.il Tobacco Company, or British Tobacco Trust, having commenced to manufacture in Sydney. The prospect of this competition had the effect of driving the principal Australian firms into closer combination, eventually culminating in an arrangement which embraces not only the chief Australian tobacco, cigar, and cigarette manufacturers, but is also connected with the British-American Tobacco Company of the United Kingdom and America. Each of such manufacturing businesses hold's a proprietary interest in every other such business, and also in the distributing firm of Kronheimer Limited. The Australian firms completed their combination in 1903, and the final arrangement was completed in February, 1904, see **Mr. H.** R. Dixson's statement. We find that the Combine is a partial, but not a complete monopoly. In plug tobaccoes (local and imported) expert witnesses gave the proportion of the Combine's business compared to the total business from 73 per cent, to 99 per cent. {: .speaker-KEA} ##### Mr Kelly: -- That is 75 per cent., does the honorable gentleman see? {: .speaker-KJI} ##### Mr ISAACS: -- Yes; not 50 per cent. {: .speaker-KEA} ##### Mr Kelly: -- I did not say 50 per cent, in that connexion. {: .speaker-KJI} ##### Mr ISAACS: -- The main business of the trust is in plug tobacco. The report goes on - >In cigars the proportion controlled appears to be from 45 per cent., statement **Mr. Benjamin,** to 5.1 per cent, or 60 per cent. In cigarettes about *7$* per cent. Retailers in various cities gave proportion of total business with Combine at sixsevenths. That is about 85 J per cent - >And practically all agreed that the majority of the most popular of both local and imported lines were controlled by the Combine. To such an extent does this exist that, so far as plug tobaccoes are concerned, the Combine is a virtual monopoly. As regards the making of cigars, the Combine appear to have a monopoly right of very valuable labour-saving machinery, which gives them an immense advantage over their competitors, and is apparently rapidly eliminating competition. In cigarettes the Combine has a practical monopoly, so far as machinemade cigarettes are concerned. As regards Question Number 2 - Your Commissioners find that the amalgamation of interests, the centralizing of factories, and concentration' of distributing agencies has resulted in great economy of production, and must have consequently largely increased profits to those firms comprising the Combine. There was generally a decided objection on the part of the witnesses interested in the Combine to disclose its profits. Returns supplied by **Mr. Fergusson,** Chief Inspector of Excise, Melbourne, show in 1903 t2 tobacco, 75 cigar, and 16 cigarette factories ; in 1904 return shows that these had decreased to rr tobacco, 68 cigar, and 14 cigarette factories, a decrease of 10 factories in one year. That this decrease was not due to any fallingoff in demand or production is shown by the fact that the local manufacture of all forms of tobaccoes increased from 6,601,015 lbs. in 1901 to 7,556,416 lbs. in 1903, and to 7,790,157 lbs. in 1904; and the number of employes increased from 2,662 in 1903 to 2,816 in ^04. Fifty per cent, of the leaf used in New South Wales in 1904 was worked in one factory ; in Victoria nearly 80 per cent, of total leaf was worked in one factory ; in Queensland 60 per cent., and in South Australia 80 per cent, was so worked, showing that the figures in the return as to the number of factories in existence are largely illusory, the great majority of them being small cigar manufacturers, and the output of their factories being insignificant when compared with the factories controlled by the Combine. The return alluded to shows that one other substantial factory has been closed in the year 1905, whilst six small manufacturers have used no leaf for that year. I turn to the question of the effect of the trust upon the operatives. The report says - >As to the effect of the combination on the operatives, four representatives of those engaged in the making of plug and twist tobaccoes who gave evidence were in agreement that conditions generally were worse now than before the combination. These complaints refer to inadequate and reduced wages, the substitution of female labour for male labour at lower rates of pay than male labour, humidity of atmosphere of factories, and power of Combine to dictate terms and conditions owing to the absence of competitors. In other words, this combine, not only has in its grip the consumers of this country, but also the operatives. {: .speaker-KZH} ##### Mr Robinson: -- How can it be so, when there are Wages Boards and an Arbitration Court? {: .speaker-KNJ} ##### Mr Mauger: -- No Wages Board in this trade in Victoria. {: .speaker-KJI} ##### Mr ISAACS: -- The report goes on - >Explanations were given by witnesses for the Combine in respect .to some of these charges, but were unsatisfactory to the Commission, and inspectors gave qualified contradictions to the statements *re* humidity of atmosphere. We find generally that wages have been in some instances reduced ; that the number of females employed has increased ; that in some cases they receive less than men on similar work; that the atmosphere in two of the principal tobacco factories is kept at a high state of humidity (see..... a > >Return handed in in reply to Q. 5034, showing an unusually high percentage of sickness among the employes of one of the factories) ; and that the lessening of, the number of competing employers has placed the employes more completely under the control of the dominant employer. Now comes the effect upon the Australian grower - >We find that the effect of the combination on the grower of tobacco leaf has been disastrous; that better prices ruled when the factories were more numerous. Evidence has been given of co-operation among the manufacturers in fixing the price of Australian leaf prior to the formation of the Combine ; the gradual decrease in the number of factories giving greater facilities for such co-operation. The culminating combination of all the large buyers in the Commonwealth has practically placed the growers absolutely at the mercy of the Combine. The establishment of Inter-State free-trade should have been of immense benefit to the growers, but the evidence shows that not only has there been no improvement, but their position is worse than formerly. The growers complain that they are practically restricted to one buyer ; and much of the evidence given tends to prove that the Combine has used this advantage to give less than a fair value for the leaf. Then the Commission gives a paragraph with statistics about the quantity of tobacco grown, which I pass over. Then we come to the consumer. The Commission says - >As to the effect on the consumer we find that prices have been raised to the retailer, and by a reduction in the size and weight of the plugs or sticks this increase has wholly or partially been passed, on to consumer. The Combine attributes the rise to the alteration effected by the Federal Tariff. We find, however, that the result of that Tariff was generally to improve their position by (a) giving them free access to all the States in the purchase of Australian leaf ; (i) giving them access to all the States in the sale of their manufactured products with substantial protection against imported tobaccoes. In addition to this one brand of nl ug tobacco was raised in price in May, 1903, obviously not by the operation of the Federal Tariff. We also find that, whilst there have been slight increases in some lines of imported cigars, controlled by the Combine, there has been great cutting of prices by them in cigars locally made, and controlled by them. We find that in some States there has been a deterioration in the quality of the tobacco manufactured. Conclusive evidence was given showing that the Combine has laid down a rule that *Australian Industries* [6 July, 1906.] *Preservation Bill.* 1119 no purchases can be made from the factories controlled by it, but all goods produced by them must pass through the distributing firm of Kronheimer Limited. I should like honorable members to notice this in particular - >The connexion with the British-American trust enables the combine to carry out the same system in regard to imported goods the product of that trust ; and the popularity of the goods thus controlled, together with the effective organization, enables the Combine to enforce terms and conditions of sale which the independent firms are unable to obtain, thus giving the combined firms a still greater financial advantage over the independent firms. In paragraph 31 of the report, the Commissioners say - >Your Commissioners are of opinion that it would be utterly useless to attempt to regulate this combine by any alteration of the Tariff, as the evidence shows that the chief tobacco firms of America and the United Kingdom are connected with the Australian combination ; in one case are the chief shareholders in the Australian company ; in others hold large proprietary interests; and the competition would, therefore, be that of allied interests. In the main department of the business of the trust they control about 99 per cent. of the trade, and in other departments about per cent. {: .speaker-KZH} ##### Mr Robinson: -- The honorable and learned gentleman sticks to has statement that the combine controls about 99 per cent. of the tobacco trade. {: .speaker-KJI} ##### Mr ISAACS: -- I stick to the statement that it controls about 99 per cent. of the trade in plug tobaccoes, and I have read every word, I think, material to the justification of those figures. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Has the honorable and learned member read the evidence ? {: .speaker-KJI} ##### Mr ISAACS: -- Not the whole of the evidence attached to the report, but I have glanced at it casually as it has appeared from day to day. I have read the finding of the Commission, and whether the actual figures are right or wrong, that finding ought to be respected by the Committee. It shows that there is strong reason to believe that there is in our midst - I am stating the case very mildly indeed - a great aggregation of commercial power, which is being used for the benefit of individuals, utterly regardless of the effect upon the people of Australia, as consumers, producers, workers, or traders. It would be a lamentable thing for the country if we did not attempt to cope with this evil, and I am very proud to be associated with a measure which makes the attempt. I have been asked to say what I understand by the term monopoly. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The monopoly of part of a trade. {: .speaker-KJI} ##### Mr ISAACS: -- I will deal first with monopoly alone. Monopoly has been defined as an attempt to secure or acquire an exclusive right in trade or commerce by means which prevent or restrain others from engaging therein. It was said this morning by the honorable member for Parramatta that a patent is a monopoly, and, in one sense, it is; but it is not a monopoly in that sense. A man is given a patent because he has discovered something which would not have been invented or discovered but for his efforts, and, in return for the patent, he gives to the community the benefits accruing from his discovery or his ingenuity - the work of his brains. He gives in return for his patent something which the public would not be able to enjoy if they did not get it from him. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It is something which he could keep from the public if he chose to do so. {: .speaker-KJI} ##### Mr ISAACS: -- If an inventor did not choose to disclose his secret, the community would be so much the worse off ; but he says, in effect, " Here is something I propose to give you, but on terms." {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- After an inventor has disclosed his secret, he may, if he patent it, withhold its advantagesfrom the community, supposing that he chooses to do so. {: .speaker-F4R} ##### Mr Watson: -- Only for a limited time. {: .speaker-KJI} ##### Mr ISAACS: -- Yes. The law says, to encourage persons to seek out inventions for the benefit of the public, that those who, by exercising their brains, evolve some new thing for the benefit of their countrymen and of the world at large, shall have the exclusive right to use it for a certain period. It must be remembered that an invention is the inventor's own property ; but a monopoly occurs when some one says to his fellows, not " I will give you something," but " I will take away , 'from you something which you possess." {: .speaker-F4R} ##### Mr Watson: -- The monopolist creates nothing. {: .speaker-KJI} ##### Mr ISAACS: -- That is so; and he takes from others something which they have a right to possess. That is the distinction. A patent is a monopolistic right, given to an inventor as a reward for a valuable discovery, which he must, eventually at all events, share with the public, to whom the arrangement is beneficial. {: .speaker-F4R} ##### Mr Watson: -- It would probably be beneficial even if the community had to wait fourteen years before it could use the invention. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That does not affect my statement that a patent is a monopoly. {: .speaker-KJI} ##### Mr ISAACS: -- It is a' monopoly only in something which has never been available to the community. {: .speaker-F4R} ##### Mr Watson: -- A man has a greater right to monopolize something which he himself has created than to monopolize the product of another's brain. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- That is individualism and anti-Socialism. {: .speaker-KJI} ##### Mr ISAACS: -- There is a radical distinction between the granting of a patent and allowing a man to usurp the field where others' rights are concerned. It is the monopoly with which we wish to deal. When we speak of a part of the trade, we say, in effect, that we shall not wait until a man has declared that he is going to grasp the whole of the trade of the Commonwealth, but that, if he takes any part of it belonging to other persons, and endeavours to exclude them to the detriment of the public, he will come within the scope of the Bill. I do not know that there is any other question to which my attention has been directed, and, under the circumstances, I ask that the matter may be decided as soon as possible. {: #debate-2-s8 .speaker-KZH} ##### Mr ROBINSON:
Wannon .- The Attorney-General's reply to the remarks of the honorable member 'for Wentworth was characteristic. He at first denied that he had said that the tobacco combine controls 99 per cent, of the trade ; then he quoted from the majority report of the Royal Commission on the tobacco industry, and he wound up by declaring that it is true that the combine controls 99 per cent, of the tobacco trade. Thus, in a short speech, he went from "yes" to "no," and back to "yes." Let us' consider! what he referred to as the evidence upon which he based his statement. He had the effrontery to say that the majority report of the Commission is evidence df the facts which he alleged to exist. All that it is evidence of is the opinion of those who signed it. If we refer to the evidence attached to the report, to which he has not paid the slightest attention', we shall see that the facts are not as he has stated them to be. He knows that the four gentlemen who signed the majority report were pledged to the nationalization of the. tobacco industry before they accepted their commissions. {: .speaker-10000} ##### The CHAIRMAN: -- I understand that the honorable and learned member wishes to show that the tobacco combine is not a monopoly, and should not come within the operation of the clause. He will be perfectly in order in doing that, but I cannot allow him to discuss the report of the Royal Commission on the tobacco industry. {: .speaker-KZH} ##### Mr ROBINSON: -- I do not wish to discuss the report. I am about to show that the statements of the Attorney-General are not borne out by the evidence given before the Commission. {: .speaker-KJI} ##### Mr Isaacs: -- I did not raise that question. {: .speaker-KZH} ##### Mr ROBINSON: -- The honorable and learned gentleman quoted the majority report as evidence that the tobacco combine controls 99 per cent, of the trade. Paragraph 7 says that - >In plug tobaccoes expert witnesses gave the proportion of the combine's business compared to the total business from 75 per cent, to 99 per cent. The honorable and learned gentleman declared that that statement proves that the combine does 99 per cent, of the plug tobacco trade, but, on turning to the evidence, I find that the statement which I have read is based upon the statement of a dealer in *tobacco to* the effect that 99 per cent, of his business is done with the firm of Kronheimer Limited, or with the combine, not that 99 per cent, of the trade is controlled by the combine. {: .speaker-KNJ} ##### Mr Mauger: -- That is not the only evidence. {: .speaker-KZH} ##### Mr ROBINSON: -- That is the evidence relied upon by those who signed the majority report. There i3 substantial evidence for the conclusion that 75 per cent, or thereabouts of a particular trade is in the hands of the combine ; but in saying that 99 per cent, of the whole trade is in their hands the Attorney-Genera] was making a statement which is without justification. When pressed he said that the trade in cigars and cigarettes is trivial, and such as no one would take notice of; but if he had read the evidence, or even the report, he would know that the manufacturing cost of the tobacco made is .^384,000. of the cigars .£66,000, and of the cigarettes ^171,000, so that the manufacturing cost of cigars and cigarettes is about 40 per cent, of the total manufacturing cost, and their production cannot be deemed an unimportant branch of the industry, because the manufacturing cost is a rough guide to the proportions of the various manufactures to the whole trade. If he had read the report, instead of merely glancing at paragraphs picked out for him, he would know that 425,000,000 cigarettes and over 18,000,000 cigars are annually made in Australia. {: .speaker-F4R} ##### Mr Watson: -- The combine has a practical monopoly of the tobacco trade of Australia, and the honorable and learned member cannot deny it. {: .speaker-KZH} ##### Mr ROBINSON: -- I do not deny that the bulk of the trade in plug and cut tobacco is in the hands of the combine. {: .speaker-F4R} ##### Mr Watson: -- And in the manufacture of cigarettes and the distribution of cigars. {: .speaker-KZH} ##### Mr ROBINSON: -- I do not deny that the greater' proportion of the cigarette trade is in the hands of the combine. {: .speaker-F4R} ##### Mr Watson: -- Practically, the whole of it. {: .speaker-KZH} ##### Mr ROBINSON: -- The honorable member is in error there, because the most popular brand of cigarettes in Australia is the hand-made manufacture of Messrs. Snider and Abrahams, a firm which, notwithstanding the combine, has grown from very small dimensions to be a prosperous business. {: .speaker-F4R} ##### Mr Watson: -- At least 75 per cent, of the cigarette trade is in the hands of the combine. {: .speaker-KZH} ##### Mr ROBINSON: -- I have not denied that. {: .speaker-KJI} ##### Mr Isaacs: -- The Commission says so. {: .speaker-KZH} ##### Mr ROBINSON: -- The AttorneyGeneral means that the majority of the Commissioners say so. **Mr. Benjamin,** a member of the combine, stated that its proportion of the cigar trade is about 45 per cent. Let us now *, deal* with the alleged iniquitous operations of the combine, which have been put forward as a justification for the Bill. I say without hesitation, having read more of the evidence than has been read foy any other honorable member, that the statements in the majority report are not borne out by the testimony of the witnesses. In justification of that assertion, I will refer, first, to what is said on the subject of wages and the conditions of labour. The majority report on this question is an absolute travesty of the evidence. {: .speaker-10000} ##### The CHAIRMAN: -- If the honorable and learned member wishes to use arguments to show that the combine is not a trust, he is at liberty to do so; but I cannot allow him to discuss the report of the Commissioners. {: .speaker-KZH} ##### Mr ROBINSON: -- All I wish to do is to refute the statement of the AttorneyGeneral that the evidence taken before the Commission discloses the fact that labour has been crushed by the tobacco combine. {: .speaker-KNJ} ##### Mr Mauger: -- It has 'been shamefully crushed. {: .speaker-KZH} ##### Mr ROBINSON: -- The wages paid and conditions observed in the tobacco trade in Sydney were recently reviewed bv the Arbitration Court of New South Wales. {: .speaker-KNJ} ##### Mr Mauger: -- Never mind Sydney. {: .speaker-KZH} ##### Mr ROBINSON: -- I shall presently deal with Melbourne conditions, too. {: .speaker-10000} ##### The CHAIRMAN: -- Is the honorable and learned member endeavouring to show that this is not a monopoly ? {: .speaker-KZH} ##### Mr ROBINSON: -- Yes, and that the baneful effects of its operations, alleged by the Attorney-General as a reason for this clause, do not exist. The Judge of the Arbitration Court of New South Wales, in declaring the unanimous verdict of the Court, said that the operatives in the trade are among the best paid of any in an industry in Australia, and that they work under the best conditions. {: .speaker-KNJ} ##### Mr Mauger: -- He did not say that in reference to the male operatives. {: .speaker-KZH} ##### Mr ROBINSON: -- I have read the judgment very -carefully, and I say that the unanimous decision of the Court was that the operatives, both male and female, enjoyed better conditions of labour and more holidays than almost any other body of employes in Australia. Coming to Victoria, both the evidence given before the Commission, and the records taken "from the wages books of the various factories, showed a steady increase in the remuneration of the operatives. It is a fa:t that, although the employers in the industry have recently said to their men, " Ask the Government to appoint a Wages Board, and we will back up your request; you have our written consent to the appointment of a Wages Board," the latter have refused to take action. {: .speaker-KNJ} ##### Mr Mauger: -- I will tell the honorable and learned member. why. {: .speaker-KZH} ##### Mr ROBINSON: -- Evidently it is because they do not think they would obtain any better wages than they are receiving today. {: .speaker-KNJ} ##### Mr Mauger: -- They have refused to take action because the law provides that the average wage of the trade shall be the standard, and there is no average other than that fixed by the combine. {: .speaker-KZH} ##### Mr ROBINSON: -- The honorable member is again making a statement which is not correct. Increases in wages have been granted throughout the trade. The records of the wages sheets were produced before the Commission, and sworn to. {: .speaker-KNJ} ##### Mr Mauger: -- What is' the average wage that is now being paid ? {: .speaker-KZH} ##### Mr ROBINSON: -- It is about 12J or 15 per cent, better than it was five years ago. {: .speaker-10000} ##### The CHAIRMAN: -- Does the honorable and learned member for Wannon think he has yet shown that the question of the wages paid in the tobacco industry is relevant to the clause under consideration? {: .speaker-KZH} ##### Mr ROBINSON: -- The AttorneyGeneral mentioned what he called facts, but what I designate fictions, for the purpose of showing that this clause was necessary. I wish to prove that his statements are not in accordance with facts, and that, consequently, there is the greatest possible justification for limiting the operation of this clause. {: .speaker-10000} ##### The CHAIRMAN: -- The honorable and learned member will be perfectly in order in doing that. {: .speaker-KZH} ##### Mr ROBINSON: -- I now propose to deal with the question of the prices of tobacco in Australia. In passing, I may remind the Committee that there were seven members appointed to tEe Tobacco Commission, including two members of the Government. Neither of the latter, judged by their demeanour throughout the hearing of the evidence, evinced the slightest inclination to sign any report in favour of the nationalization of the industry. The minority report states- {: .speaker-KJI} ##### Mr Isaacs: -- Who signed the minority report ? {: .speaker-KZH} ##### Mr ROBINSON: **- Senator Gray.** The Attorney-General's colleague was absent at the time getting married, and he sent a telegram to the Commission saying that he had married a wife, and therefore could not attend. He also stated that he could not' sign the majority report. **Senator Styles** resigned his position upon the Commission a few weeks before its labours terminated. {: .speaker-KJI} ##### Mr Isaacs: -- **Senator Styles** has the courage of his opinions. He has rendered verv good service to this country. {: .speaker-KZH} ##### Mr ROBINSON: -- The minority report, in referring to the question! of prices, says - >It was not denied that there had been a slight increase in the price of tobacco of recent years, and the manufacturers claimed that the increasewas due to the Federal Tariff. It then goes on to show that the import and excise duties upon tobacco were raised by the Federal Tariff. It points out that in .New South Wales the duty on imported manufactured tobacco was increased by 3d. per lb., and the duty and excise on tobacco locally manufactured from imported leaf by a similar amount. In Victoria the duty on imported manufactured tobacco was increased by 3d. per lb., and the duty and excise on tobacco locally manufactured from imported leaf by 9d. per lb. In South Australia the duty of imported manufactured tobacco was increased by 6d. per lb., and the duty and excise on tobacco locally manufactured from imported leaf by 10 1/2d. per lb. These figures show a very heavy all-round increase in the duties levied upon tobacco. The report continues - >These increases of duty far outweigh the benefits conferred by Inter-State free-trade. Anessential fact in this regard has also been ignored, and that is the rise in the price of American leaf which would undoubtedly have caused a further rise in price to the consumer, but for the economies which combination enabled the manufacturers to effect. The report goes on to show. that the independent manufacturers themselves, including Messrs. Dudgeon and Arnell; and the Tobacco- Company of South Australia,, raised the prices. Why? They were not in the combine, but they were compelled to raise their prices because the cost of their raw material had been increased, and because of the extra duty which they were required to pay. Yet the Attorney-General would have us believe that the reason underlying the increased price of tobacco was that the combine was extorting more money from the public. I say that a perusal of the evidence of the independent manufacturers who are hostile to the com.bine, shows that the increase in price was due to circumstances entirely beyond the control of the manufacturers, irrespective of whether they were inside or outside the combine. Then we have been told that the effect df the existence of the combine is disastrous to the grower. The Minister of Trade and Customs made the same *Australian Industries* [6 July, 1906.] *Preservation Bill.* 11 23 statement during the course of his speech upon the second reading of the Bill. {: .speaker-JX9} ##### Mr Frazer: -- It is a fact, too. {: .speaker-KZH} ##### Mr ROBINSON: -- There is no statement which has been more frequently repeated, and I venture to say that there is none which has been made with less justification. To assume that the combine is doing its best to kill the local growers of tobacco is to assume that it is voluntarily paying£480,000 per annum for the sole purpose of destroying a few individuals, and of forcing them into dairying or other pursuits. Does any man with an ordinary grain of common sense believe that the combine would pay away such an enormous sum each year if it were not compelled to do so? The tobacco growers in Australia number only some 200 or 300 at the most. Surely the proposition is the most absurd one that has ever been advanced ! IT the evidence tendered to the Tobacco Commission be scrutinized, it will be found that a number of growers declare that they are at present getting a better price from the combine than they have received for many years past. I do not assert for one moment that the combine is composed of saints and angels, but I do say that the statements made by the Attorney-General, and by others, to the effect that, by reason of its existence, the conditions of the operatives in the industry have been made worse, that wages have been lowered, that the growers have been driven off the land, and that prices have been raised to the consumer, are not borne out by the evidence. I tell the Attorney-General that he would not dare to bring the combine before any Court for a breach of the law upon the evidence tendered to the Tobacco Commission. When we analyze that testimony, we find that most of the allegations made against the combine are either based upon hearsay evidence, or relate to something which took place many years prior to the formation of the combine. I say unhesitatingly that no evidence was forthcoming which would lead any Justice of the High Court, or of the Supreme Court, or of the County Court- indeed, I might include even the most newlyappointed justice of the peace- to regard the combination as being hostile to the growers. To assume that it is hostile to them is to assume that the combine does not know upon which side its bread is buttered, and that it is not in the business for the purpose of making money. There was absolutely no evidence forthcoming that any in crease in the price of tobacco has been due to the action of the combine, but there was overwhelming testimony to the contrary. Consequently the allegations of the Attorney-General do not justify the inclusion in this Bill of the clause under consideration. The honorable and learned gentleman, having raised the discussion, is himself to blame for the fact that time has been occupied in exposing his inaccurate statements. {: #debate-2-s9 .speaker-KEA} ##### Mr KELLY:
Wentworth -- I desire to make a personal explanation. The Attorney -General this morning interjected, while the honorable member for Grampians was speaking, that one of the reasons which had prompted the introduction of this Bill was that 99 per cent. of the tobacco trade of the Commonwealth was in the hands of the tobacco combine. In reply, I went to the other extreme, and said that the combine did not control more than 50 per cent. of that trade. The Attorney-General now says that my statement preceded his. Through the courtesy of the leader of the *Hansard* staff, I have obtained a copy of the interjections bearing upon this portion of the debate, which were recorded by the *Hansard* reporter. I find that the first of these interjections was made by the Attorney-General, who asked - >Has the honorable member read the report of the Tobacco Monopoly Commission? Thereupon the honorable member for Grampians replied- >The alleged tobacco monopoly, the honorable member means. I then interjected - >The Commission say that it is not a monopoly, that it is only a partial monopoly. The Attorney-General then said- >Well, 99 per cent. is pretty close up, anyhow. And in reply, I stated - >But it is said to be only 50 per cent. I will get the report and read it for the honorable gentleman's information. I was partly wrong in saying that the combine controlled only 50 per cent. of the tobacco trade of the Commonwealth, and I withdraw the statement. But the report which I have read shows that the AttorneyGeneral's statement as to the percentage of the trade which the combine controlled was made before I said that it controlled" only a very much lower percentage. {: .speaker-KJI} ##### Mr Isaacs: -- I do not dispute that. {: #debate-2-s10 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 .- Now that this little dispute 1 124 *Australian Industries* [REPRESENTATIVES.] *Preservation Bill.* between the honorable member for Wentworth and the Attorney-General has been satisfactorily settled, perhaps I may direct a few remarks to the clause itself. It seems to me that the provision differs from previous clauses with which we have dealt, in that unfair competition is not required to establish the fact that a monopoly is detrimental to the public or to an Australian industry. The simple circumstance that a monopoly exists with the intent of controlling, to the detriment of the public, the supply or price of any wares or commodity makes an indictable offence. It has alreadybeen pointed out that the portion of the clause which refers to " a part of a trade," is very vague indeed, and the Attorney-General, in his replies, did not throw much light on the matter. For instance, the honorable and learned gentleman was asked whether if a particular portion of the boot trade was monopolized by one manufacturer, that would bring him under the penalties ofthe clause. His reply was that it would if the manufacture of workmen's boots was entirely monopolized byone maker, and he committed the offence of controlling the supply or price to the public. {: .speaker-KJI} ##### Mr Isaacs: -- To the detriment of the public. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -Just so, tothe detriment of the public. I will submit a further illustration. Parts of a trade are often controlled by brands. The tobacco monopoly, to which the honorable and learned member has alluded, is largely one of brands. Because of the superiority of the article, better advertising or greater enterprise in pushing of the goods, certain brands obtain a hold on the market, and the manufacturers who hold those brands become monopolists, not by any direct action of their own, but as the result, it may be, of superior business qualifications. They may raise the price of these goods, and the public may be prepared to pay the increased price, but the question is whether under this clause that would be considered a monopoly detrimental to the public. {: .speaker-KJI} ##### Mr Isaacs: -- We should require more facts to decide that. I do not think it possible to imagine a case unless you have all the facts. This clause does not. of course deal with the monopoly of brands, but with the monopoly of goods - trade and commerce. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Yes, but the tobacco monopoly is largely one of brands. The honorable and learned gentleman may be acquainted with the business. {: .speaker-KJI} ##### Mr Isaacs: -- I have not much knowledge of the tobacco business. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Not perhaps as a. consumer, but the AttorneyGeneral may have come in contact with the business, and may know that monopoly is largely secured in this trade by ownership of certainbrands which are popular with the public. In the majority report of the Tobacco Commission, we find the statement made that the most popular goods are in the handsof the trust. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable gentleman will see that there may be a rightful control of brands, which everybody who has a trade markhas, but if the trader uses that, and its popularity, and also endeavours to prevent other persons selling other goods of the same kind, though under a different name, it is clear that he is endeavouring to monopolize the trade in those goods. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The words "part of the trade" in this clause introduce some very complicated questions. {: .speaker-KJI} ##### Mr Isaacs: -- I may add, in answer to the honorable gentleman's question, that the very fact that a trader has got a particular brand, might be one of the instrumentalities by which he would be enabled to monopolize the trade in the goods. He would not know exactly whether his goods, orother people's goods, were being sold. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Might I point out to the honorable and learned gentleman that this is a perfectly legitimate monopoly. In just the same way the Attorney-General, possessing certain high qualifications for the practice of his profession, may, at the Bar, by reason of these qualifications, monopolize a portion of the business or a particular branch of the business in which he is engaged. {: .speaker-KJI} ##### Mr Isaacs: -- But I must not say to those who employ me - " You must not employ anybody else." {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Certainly not. But if a brand obtains a reputation it does so because its quality suits the taste of those who use the goods, and if, owing to that reputation, it monopolizes a considerable share of the business, which is largely the case in the tobacco trade, that is not a monopoly, unless it is shown that' some action is taken by the trust or firm handling the article which prevents the competition of other brands, or which pre- vents the sellers of a particular brand giving the public an opportunity to obtain similar goods bearing that brand. {: .speaker-KJI} ##### Mr Isaacs: -- All I can say is that you get the facts and apply the section. If there is a monopoly or an attempt to monopolize, or a combination to monopolize " any part of the trade on commerce," and so on with the intent to control " to the detriment of the public the supply or price," and so forth4 it comes within the section. I cannot say any more. We must apply the section to the facts. I should like to add that if the honorable member will look at the corresponding section of the Sherman Act, he will find that our clause is much milder. There is no reference to intent in the Sherman Act. There is a reference to a part of a trade, and. to attempts to monopolize, but our clause is much milder, because, I believe, as I said before, that there should be no criminal consequences without criminal intent. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I might say, with reference to the honorable and learned gentleman's remarks in connexion with the tobacco monopoly, that the report from which he quoted was that of the majority of the Commission, and it is the report of the honorable members who were committed before they took their seats on the Commission to the nationalization of the industry. {: .speaker-KJI} ##### Mr Isaacs: -- I can appeal to the honorable member, who speaks fairly on the subject, to do them the justice of saying that the question of remedy has nothing to do with the finding of the existence of any evil. The mere fact' that some honorable members thought that an industry should be nationalized would not influence their minds in such a way that they would be induced to find facts contrary to the evidence submitted to them. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- From the opportunities I have had to look through their report, I think that some of their findings are absolutely contrary to the evidence. I am not defending the operations of the tobacco firms. As a. matter of fact, when the Tariff was before us, I voted against the Attorney-General and others, and in favour of reducing the advantages proposed to be given them, and which largely enabled them to establish a partial monopoly. Had the duty been reduced as I desired, the combine would not have had the same opportunities to establish their partial monopoly, that they had in the high preference given to them under the Tariff. But if we are to have many Commissions like the Tobacco Commission, which, from one cause or another, dwindled down to four members- {: .speaker-KJI} ##### Mr Isaacs: -- Five. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Four committed to a certain view, and one only who was not committed to that view before the inquiry was started. Such Commissions must be not only expensive, but also valueless for the purpose for which they are appointed. There is another point to which I direct the attention of the AttorneyGeneral. It seems to me that the clause as it stands might interfere with the rights of a patentee under a patent. This will be the later legislation, and it distinctly provides that a person shall not monopolize or endeavour to control the supply or price of merchandise to the detriment of the public. Patentees, or those selling under patent rights, usually obtain large profits on the articles which they sell. That, of course, is, in one way, to the detriment of the public, and a reduction of those profits would be to their benefit. Is that to be considered wrong under this clause? {: .speaker-KJI} ##### Mr Isaacs: -- It does not come under it. The honorable member must see that to monopolize in the sense implied by the use of the word in this clause, means to take away from somebody else what he has. If I have a patent and have the exclusive right to use it from the beginning, nobody can suffer loss who has never had that right. I cannot monopolize from any one else what he never had. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- But it would be possible to monopolize a trade or part of a trade in consequence of the possession of a patent right. As a safeguard against the difficulty I have pointed out. I suggest to the honorable member that it might be desirable to make it clear on the face of the clause, that operations under a patent right cannot come under it. {: .speaker-KJI} ##### Mr Isaacs: -- If we put in patents we must put in trade marks and all sorts of things, and we might thus give a meaning to the clause in some unexpected way which would put in peril the people whom the honorable member desires to protect. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It occurred to me that we might insert after the word "person" the words "not acting under patent rights." {: .speaker-KJI} ##### Mr Isaacs: -- I do not think that is necessary for the honorable member's purpose, and it might lead to danger. If you express one thing and do not express everything, there is a danger that things might crop up unexpectedly which might be held to be within the section. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That is an argument I used against the honorable and learned gentleman himself at an earlier stage of the Bill, in regard to the jury. {: .speaker-KJI} ##### Mr Isaacs: -- Whether or not it is a good argument depends entirely upon its application. I yielded to what the honorable gentleman said on the occasion to which he refers. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I should' like to be sure that the Attorney-General is absolutely satisfied that the operation of this clause will not interfere with rights under a patent. {: .speaker-KJI} ##### Mr Isaacs: -- I am as satisfied as I can be. I fully think so. There is no suggestion in America' that that difficulty arises, although the words are used in the same way in the American Act. No one there has ever suggested that they would apply in the way mentioned by the honorable member. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- If the clause would so apply, the honorable and learned gentleman will admit that, appearing in a later Act, it would override the provisions of an earlier Act. {: .speaker-KJI} ##### Mr Isaacs: -- Yes, it would. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I think the honorable and learned gentleman might look into the matter. {: .speaker-KJI} ##### Mr Isaacs: -- I shall look into it very carefully, and shall satisfy myself on the point so far as I can. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The AttorneyGeneral should' satisfy himself that the clause will not interfere with patent rights. I trust that if on examination he finds that there is any danger he will make such provision as will secure the maintenance of rights under patent. . {: #debate-2-s11 .speaker-L1D} ##### Mr HENRY WILLIS:
Robertson -- I find that the Minister is still persevering in his endeavour to pass this legislation, notwithstanding the arguments used last night against its enactment. I did hope that he would! come down to-day with amendments different from those which he has brought forward, although certainly there is an improvement in what he has proposed this morning. I have gone through the amendments very carefully, and I can see that he has yielded a little. {: .speaker-KJI} ##### Mr Isaacs: -- I do not mind doing anything to meet the views of honorable members, so long as we keep to the essential1 principles of the Bill, and leave it effectual for what we want. I do not wish to do anything more than is necessary. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I wish the Minister could see his way to carry out the wishes of the Opposition, who he must admit are in earnest, and make the Bill to suit them, because their object is the same as his own, I take it - that is, to stamp out destructive monopoly. He is an astute lawyer, but he cannot possibly have had the same experience as honorable members on this side, who have devoted a lifetime to commercial affairs, who know the intricacies of business, and the value of trade secrets which are used in connexion with all kinds of . manufacture, and who are well aware that if he persists in carrying the Bill as here drafted it must end in the destruction of manufactures and industries rather than the development of them. When a man starts in business, is it not his object at first to make a living? In the making of that living there is an increasing demand for his goods, until at last he can employ a great many more men than he did at first. But in the beginning the product of his labour is his wages. A man will work for what he can earn;. If by competition from outside his earnings are small, it may be said by the Minister that the man is not getting a living wage, but because he works so much longer and gets a smaller yield than formerly he was able to obtain, any competitor - for instance, a keener man of business, with wider experience- {: .speaker-KXK} ##### Mr Webster: -- Or a meaner man of business. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- By that term I take the honorable member to mean a man who is sparing in the use of everything, so as not to give to his goods quite the quality which another man is able to give bv his more primitive process. Very often the product of a primitive process of manufacture is a superior article, but it evokes no demand, because it is so much more expensive to produce. Take the primitive process of making boots, bricks, pottery, or any other article. The products may be much superior in quality, but they could not possibly be produced in competition with the yields of up-to-date machinery. It is possible for the maker of a high- class cigar to command a trade for his brand. It is quite possible for a man in a small way of business to acquire ai monopoly in the manufacture of certain cigars. It is also possible 'for a man to have a monopoly in the curing of the leaf, which is an important element in giving flavour to the cigar. Under this Bill, the Minister would stamp out these industries, which are in fair competition, because a man has a monopoly in the curing of the leaf - the very thing which is required in the tobacco industry of Australia. I have been all through Australia where tobacco leaf is grown. An imported Chinese is able to produce the tobacco plant much more effectively and successfully than a European. But the latter can cure the leaf much more advantageously and satisfactorily than can the former. One would have a monopoly in producing the plant, and the other in curing the leaf. . Again, one man might have a monopoly in the production of cigars, and another in the production of plug tobacco. Under the provisions of this Bill, a fine of ^500 would be inflicted ' upon a man who was perfect in the manufacture of plug tobacco or superior cigars. Take a mild cigar, for which there might be a large demand. If a brand became known as the brand of a mild cigar, it would be asked for by persons who could not smoke strong tobacco. But the producers would be indictable, and under this particular provision liable to a fine of ^500. The effect might be to stamp out the small producer, because he had a monopoly on a particular part of the industry. A scientist has discovered a most interesting process by which white lead can be produced at an infinitesimal cost. By mere accident he discovered that by putting pig-lead into a vat with certain chemicals, the lead would come out, and that after a process of grinding it was fit for use as white lead. I had the opportunity of sending samples of this white lead to England, where expert chemists testified to the fact that in quality it is equal to the best Champion's white lead, which is worth from *£1%* to £20 a ton. But under this Bill the discovery could not possibly be put into use in Australia without laying the chemist open to a fine of *£500,* and if he persisted, the whole of his plant, and the output of his factory would be seized, and he would be charged as a criminal, or, as the Attorney-General put it last night, he would be classed with, the garroter. As a trader he would becalled a traitor, or, as the deputation pointed out to his colleague, he would be regarded as a rogue and vagabond. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable member ismistaken* {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Would not this Australian scientist have a monopoly of the Inter- State trade in white lead? {: .speaker-KJI} ##### Mr Isaacs: -- He would only have a monopoly of his own invention. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I inspected the process of extracting the lead from Broken Hill ore, and converting it, at a trifling cost, into white lead. There is nothing at present to prevent this gentleman from starting a factory and acquiring a monopoly Qf the Australian' trade in white lead. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable member can comfort 'his friend with the assurance that he will not come within this Bill at all. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Would not this scientist kill all the old processes of producing white lead here, and perhapsthrow many men out of employment? {: .speaker-KJI} ##### Mr Isaacs: -- He will not come within this Bill. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- In twentyfour hours this man could produce as muchwhite lead as 100 men can produce in a year. The Bill is offering a premium to ignorance; it is keeping back the process of industrial development in Australia. I can quote other instances. At one time in Victoria there wasa secret process by which white leather could be produced, and which gave a certain manufacturer a monoD01 of the whole of the Australian trade, and threw out of work hundreds of men who had been employed at the older process. He secured a monopoly of the trade; but at length the nature of the process became known, and to-day the consumer is benefited from the fact that the monopoly has ceased to exist. {: .speaker-K99} ##### Mr Johnson: -- The Bill offers a premium to obsolete methods of production. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Yes. On the last clause the Minister admitted that, because he accepted an amendment of the honorable member for North Sydney to get over a difficulty. That amendment was the best which could be introduced into a "crude measure. There is only one way in which the Bill can he properly amended, and that is by striking out this clause. There are other processes of producing leather which are trade secrets. {: .speaker-L0Y} ##### Mr Wilkinson: -- How did that one cease to be a monopoly? {: .speaker-L1D} ##### Mr HENRY WILLIS: -- By means of prying it was discovered by some persons how the process was worked. As soon as the information leaked out, the monopoly ceased to exist, and throughout Australia to-day the production of white leather on a large scale can be carried out at infinitely less cost than it was under the old process. *Sitting suspended from i to 2 -p.m.* {: .speaker-L1D} ##### Mr HENRY WILLIS: -- This clause is directed against wilfully monopolizing, or attempting to monopolize, industries as between the States. Would it apply to the quarrying industry carried on at Pyrmont, in New South Wales? No stone like that quarried at Pyrmont is to be found in any other part of Australia, so that there is a monopoly which enables the proprietors to command their own price. This stone is exported to the other States bv financial and other institutions for the erection of important buildings in the principal cities, and, if this provision does apply, the effect cannot fail to be to throw hundreds of quarrymen, carters, and others out of employment in those States. The Pyrmont stone is of various qualities, one quality, which is obtained from a place called "Hell-hole," being known as " Hard-as-Hell " ; and, as I have said, nowhere else in any pari of the world can such stone be found. It is being used in the erection of the magnificent buildings for the Australian Mutual Provident Society, at the corner of William and Collins streets, Melbourne, and also for the beautiful banking establishment now raised at the corner o'f North-terrace and King William-street, Adelaide. It may here be said that wherever the stone is used it beautifies. In this industry we have a real monopoly, and I ask whether it will be prohibited under the Bill ? {: .speaker-KJI} ##### Mr Isaacs: -- Certainly not; it will be as safe as the white-lead trade. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- In the whitelead trade there has been introduced a wonderful invention, for which no less a sum than £500,000 has been offered ; but, according to the Bill, this industry will not be permitted; seeing that it must constitute a monopoly, with the effect _ of stamping out' all others in the same line of busi ness. In what position will the people be placed who are interested in the application of this new invention to the whitelead industry in Australia? {: .speaker-KNI} ##### Mr Harper: -- In gaol. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- The honorable member for Mernda knows a good deal about starch, and he is aware that the importation of rice has the effect' of supplanting the trade in various meals now produced in Australia. This rice is also used in the manufacture of starch; and in the latter commodity we have a monopoly which may be said to be detrimental to the public. The monopoly raises the price of starch, and already has' had the effect of throwing out of employment scores of women formerly occupied in laundries. Persons who at one time could afford to send their garments to a laundry, have now, owing to the excessive price charged for colonial starch by the monopoly in Sydney and Melbourne, to wear their linen roughly washed. Is the starch monopoly to be prohibited under the provisions of the Bill ? In my opinion, the starch industry will have to " go under," although it has been bolstered . up for so many years by high protective duties in Victoria. The honorable member for Northern Melbourne has told us that there is. a monopoly in the production of beer. I am aware that beer brewed at the Waverley Brewery, Sydney, and known as Resch's Lager, is taking the place, not only . of a great deal of the imported article, but also of locally-brewed beer in the various States. The effect is that men who formerly drank, in many cases, cheap, disagreeable beer, are now supplied with a better quality, but in smaller quantities. There is no doubt that the production of this lager beer will throw out of employment many men now engaged in the brewing industry throughout Australia ; and here, again, we have a clear monopoly. The beer is produced in Sydney by a firm possessed of plant that no other brewery yet commands, and experts in every branch of the business are employed. No doubt this monopoly is to the detriment of somebody, and I ask whether it will be safe under' the Bill. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable member sees what the words of the clause are. The question is whether a monopoly has been established with the intent to control an industry to the detriment of the public in *Australian Industries* [6 July, 1906.] *Preservation Bill.* 1129 the supply or price of the commodity. If it has, then it will come under the Bill. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- There is no doubt that this monopoly is to the detriment of the men who are thrown out of employment, and also of the people who have put their money into the various Australian brewing companies. {: .speaker-KJI} ##### Mr Isaacs: -- To come under the Bill, a monopoly must be formed with the intent to control the price of a commodity to the detriment of the public generally. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- The very introduction of this particular beer must do an injury to somebody. It is beer which formerly could be produced only in Germany, where, I may say, it could not have attained its present excellence, but for the assistance of Pasteur. At the present moment, there is a representative of Pasteur in Australia, and the promoters of the monopoly to which I refer might invoke his assistance in order to further strengthen their position. It appears to me that under the Bill this monopoly is not safe, although it is most desirable to have a beer which is not made of glucose or other disagreeable ingredients, detrimental to health. Then, again, a process has been discovered by which, with the aid of electricity, new wine can be converted into what is commonly called old wine, with all the qualities, medicinal and otherwise, of the latter. If what is practically old wine of good quality can be supplied at a lower figure than is the commodity at present produced, tens of thousands of people must be thrown out of employment, and the effects felt by tens of thousands of others who have invested their money in the wine industry, to say nothing of the results to the growers of grapes. This process is admitted by the *Lancet,* and other authorities, to produce an article equal to good old invalid port, and that can be done in twenty-four hours. Then **Mr. Edison** has recently made a discovery that, by making a holder for electricity of certain light, tough, metal, higher force can be concentrated in the chamber, and he expects by this means to revolutionize electrical processes throughout the world. By these and similar inventions and discoveries, present machinery and methods may be rendered obsolete; and it would be interesting to know how monopolies created by such means will fare under the provisions of this Bill. The Attorney-General has accepted amend ments which would not have been made except for the criticism of honorable members on this side of the chamber. {: .speaker-KJI} ##### Mr Isaacs: -- I have always said that I am glad to receive suggestions from any quarter. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I quite believe it. I myself have taken some pains to study this subject. What will be the position of Australia in regard to new inventions? Shall we be excluded from benefiting from them ? Inventions must be monopolies. There are monopolies in patent rights. {: .speaker-KJI} ##### Mr Isaacs: -- In America the question whether patent rights are monopolies under a measure of this kind has been tried, and it has been decided that they are not. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- I suppose that *if* the inventions were not patented in Australia they would be excluded. {: .speaker-KJI} ##### Mr Isaacs: -- They would not be monopolies within the meaning of this Bill. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- There is necessarily a monopoly in the output of an article in the manufacture of which an invention is used. {: .speaker-KJI} ##### Mr Isaacs: -- That is the very question that has been tried and decided. The point raised was whether a monopoly arising from the use of a patent came under the operation of the trust law, and it was decided that it did not. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Then I understand that such an invention may be used in Australia? {: .speaker-KJI} ##### Mr Isaacs: -- Undoubtedly. {: .speaker-L1D} ##### Mr HENRY WILLIS: -- Notwithstanding that it tends to stamp out other industries ? {: .speaker-KJI} ##### Mr Isaacs: -- I do not think that inventions will have that effect; but in any case they would not be affected by this Bill. Would an invention be to the detriment of the Australian people? {: .speaker-L1D} ##### Mr HENRY WILLIS: -It might be to the detriment of a large section of the working classes. The workers are specially mentioned in this Bill though I do not see that that was necessary. How can you have a producer who is not a worker ? Is the Attorney-General always thinking of a producer as wearing a black frock-coat and a belltopper?. In drafting the Bill the honorable gentleman has gone out of his way to mention the artisan classes and I cannot see how it can be contended that a section of them would not be injured by a patented article which threw them out of employment. Amendment agreed to. {: #debate-2-s12 .speaker-JWA} ##### Mr CARPENTER:
Fremantle -- I intend to ask the Committee to insert a word in> this clause which will have the effect of extending its scope. I move - >That after the word " merchandise," line 7, the word "service" be inserted. Honorable members will see at once what this extension implies. So far, we have been dealing with commodities, and have not touched a monopoly in the carriage of goods. But the carriage of goods by sea in Australia is at present in the hands of a . shipping monopoly. Complaints have been loud and bitter as to the practices of this combine. The Bill would not be complete - in fact, we should have omitted to do an act of justice to the commercial classes- - if, while seeking to restrict monopolies in respect of certain practices, we allowed another body of men who are intrusted with the carriage of goods by sea, and control about 98 per cent, of our coastwise trade, to operate injuriously to our producers. I;f we failed to legislate against such a monopoly, we should not have put our finger upon what is acknowledged to be one of the most dangerous monopolies in Australia to-day. {: .speaker-JUV} ##### Mr Mcwilliams: -- Would not such a monopoly be reached without such an amendment ? {: .speaker-KJI} ##### Mr Isaacs: -- It could be dealt with under another clause, but not under this one. {: .speaker-JWA} ##### Mr CARPENTER: -- I should have preferred, knowing what I do of the practices of this combine, and' how much wrong has been occasioned by it, to introduce a special clause dealing with it, with the object of checking the granting of what are called " deferred rebates." But I have the assurance of the Attorney-General that the inclusion o'f the word " service " in this clause will cover the ground. {: .speaker-KJI} ##### Mr Isaacs: -- " Assurance " is a big word. It is my belief. {: .speaker-JWA} ##### Mr CARPENTER: -- If it is proved that the shipping combine is a monopoly acting in restraint of trade, we should strike at it. Under the American legislation - the Elkin Act, I think it is - provision is specifically made against the granting of deferred rebates. A few days ago a cablegram was published showing that some of the persons connected with a trust in the United States had been either lined or imprisoned for breaking the law in that regard. In case come honorable members have not familiarized themselves with this subject, I should like to refer to the report of the Royal Commission on the Navigation Bill in support of the amendment which I am asking the Committee to adopt. I will quote from a letter which was sent from the Melbourne Chamber of Commerce to the Prime Minister on the 9th November, 1904. Amongst other things, the following statements are made : - >I am also directed by my Council to bring under your notice a most pernicious system that has of late years grown up in shipping circles, under the name of " Freight Rebates." These rebates, in fair and honest trading, are absolutely unnecessary, and in many instances are a gross injustice to consignees. Where goods are sent by a producer who is some distance from the seaboard, to be shipped by an agent at the shipping port, these rebates too often take the form of a secret commission ; and where the rebate is allowed to a shipper direct, it is granted only on the understanding that he confines his business to certain companies within his shipping ring or trust. The conditions under which this rebate is allowed are that the company, whilst collecting the freight on a *cash* basis when the goods are shipped, will only return the percentage of the freight after twelve months has elapsed, and, during which time, the shipper, as pointed out, must confine his shipments to the ring. Tn this way the shipper is not able to avail himself of any opportunity of a lower rate of freight offering by any outside company, for the reason that he is not able to afford to lose his rebate, as he would then be placed at a disadvantage as compared with his competitor. Competition in the freight market is therefore stifled. {: .speaker-JUV} ##### Mr Mcwilliams: -- That state of things exists in Tasmania. {: .speaker-JWA} ##### Mr CARPENTER: -- I think it applies to the whole of Australia. I know that it has been a burning question among the merchants of Fremantle. The letter which I have quoted sums up the position very well. Whilst this is a matter of complaint, so far as the. merchant is concerned, I question whether he suffers as much as the general public do. I believe I am correct in saying that when goods are shipped and received in this manner, the merchant disposes of-them on what is called a c.i.f. basis. Whatever it has cost him to ship the goods, is added to the price, and an equivalent amount is taken from the pockets of the general public when the goods are sold. {: .speaker-JUV} ##### Mr Mcwilliams: -- In the export of produce, that system rules verv largely. {: .speaker-JWA} ##### Mr CARPENTER: -- If that be so. it is the consumer who really pays the re- bates; the shipping company merely making use of the power which the system gives it, as a lever to compel shippers not to ship by any competing line. So that this is not merely a matter of wrong and injustice to the commercial classes, but to the whole of our people who have to pay this surcharge - an extra 10 per cent., or whatever the amount may be - that goes to give the shipping combine its power over the shipper. **Mr.** McPherson, the representative of the Melbourne Chamber of Commerce before the Commission,, illustrated by the following evidence the manner in which the rebate is worked : - 3964. Will you be good enough to explain the system ? - In 1903, when I had 300 tons of iron to ship to Fremantle, I went to the shipping people to learn the rate of freight. They held a meeting, and then they gave me a quotation. They said, " You will have to pay 18s. a ton now, but in twelve months' time if you confine all your shipments to the ports on the north and .the west t j the companies within the ring we shall grant you a rebate of 20 per cent." In other words, I had to leave with them a hostage of 3s. 6d. a ton on the 300 tons, and let it stay in their hands for twelve months. Had I not agreed to confine all my shipments to the association, I should have had to charge 18s. a ton for the freight of the iron, and probably I should have lost the business. Of course I said, " Very well, if those are your terms I shall accept them. I shall pay thy 1 8s. per ton now." But when I quoted a price to my customer I quoted on what is known as the c.i.f. basis. I paid the freight to Fremantle, and last month I got from the shipping people a cheque for ^75. **Mr. Alexander,** a Fremantle merchant, told the Commission that the shipping combination controls some 98 per cent, of the coastal shipping trade of Australia. If his figures are anything like correct - and I have no reason to doubt their correctness^ - they show the completeness of the monopoly enjoyed by the Shipowners' Federation. The evidence of **Mr. McLennan** is peculiarly valuable, because he was at one time connected with one of the firms now in the combine, and is a representative of Messrs. J. and A. Brown and Company, shipowners and colliery proprietors, who are competing against it. It shows how shippers are now penalized by the comparative absence of competition on the coast. 24342. In spite of your offering to carry cargo at a lower rate, people still prefer to ship by the other companies ? - Yes. 24343. Why ? - Otherwise the bonuses, which amount to 10 per cent, on the freight of all cargo that had been shipped during the previous twelve months, would be forfeited. 24344. If you can carry all their stuff for 30 per cent, less, surely it will pay them to give up their bonuses? - In some cases it would not pay them if we carried the cargo for nothing. {: .speaker-L0R} ##### Mr Lee: -- The reason why shippers willnot send by Messrs. J. and A. Brown is that they are afraid that that firm may join the combine. {: .speaker-JWA} ##### Mr CARPENTER: -- If we take from, the combine the power to manipulate freight charges as they are now doing, it will not matter who joins it, or who stays out of it. I do not object to the action of the shipowners in combining. I have no wish to be unjust to them, and am prepared to give them all necessary protection. Within certain limits, combination on the part of our. shipowners may be beneficial, not only to themselves, but to shippers' as well, because of its results in steadying rates anr! preventing cut-throat competition. But the abuse which has taken place by reason of the adoption of a system of rebates must be ended in the interests of those who, indie long run, have to pay the piper. **Mr. McLennan** was asked why shippers will not use the steamers of Messrs. J. and A. Brown and Company if their cargo is car ried for nothing, and he said - >Some of the shippers have, say, £I,000 in the hands of the steam-ship companies at one time inthe shape of bonus, so, supposing they offered us a couple of hundred tons of cargo, and we carried it for nothing, they would lose £1,000 If honorable members look through the report of the Commission, they will find that the rebate system is the cause of very general complaint.- The Commission consisted of Senators de Largie, Guthrie, and Macfarlane, and the honorable members for West. South, and North Sydney, Darling Downs, Melbourne Ports, and Kooyong. They made the following important recommendation, from which the only dissentient was **Senator Macfarlane:** - >As your Commissioners consider that the rebate system is open to grave abuses, and calculated to seriously prejudice the commercial and industrial interests of the Commonwealth, they recommend the introduction of legislation at an early date, making it illegal for the owners, master, or agent of any vessel to give rebates or other advantages to- any shipper or consignee of goods, if the condition of such rebates or advantages is that there shall be exclusive shipment by a certain vessel or vessels. Although we do not wish to interfere unnecessarily with the business of the shipowners, we must protect shippers and the general public from the abuses of the rebate system. It has been argued that if we prevent ship-owners from using this means of stopping competition, there will be a repetition of the cut-throat competition of some years ago, which is said to have led to a heavy reduction in wages, and to have been the cause of most of our maritime troubles. The present rates of wages were being paid for a considerable length of time before the bonus or rebate system became what it is to-day, and, as there are, moreover, in some of the States, Arbitration Courts, which can fix rates of wages, I do not think that free competition would justify the lowering of the present rates. We cannot, however, afford to protect either wages or profits byallowing a small body of men to control the coastal shipping trade, which is a large part of the whole of the shipping trade of Australia. I hope that the Committee will prevent that, by agreeing to the amendment which I have moved. {: #debate-2-s13 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I' see no reason for objecting to the amendment. The shipping companies can come within the terms of clauses 4 and 5, and the insertion of the word " service " in clauses 7 and 8 will put them on the same footing as other companies. {: .speaker-KNI} ##### Mr Harper: -- May not the amendment have a wider effect than is intended ? {: .speaker-KJI} ##### Mr ISAACS: -- It will bring within the Bill other services in addition to shipping services, but I do not see that its effect will be injurious. The service rendered to the community by the carriage of commodities, though not technically an act of commerce, is substantially so, and the American Courts have universally held that transportation services form part of the trade and commerce of the country. They have, indeed, declared telegraphic services to be an instrumentality, and therefore part of its trade and commerce. The amendment has been clearly explained by the honor able member for Fremantle, to whom we are much indebted for drawing attention to the matter. The report of the Commission is very direct, and I can perceive no reason for omitting these services from the operation of the measure. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The amendment would' apply only to such things as come within our constitutional powers. {: .speaker-KJI} ##### Mr ISAACS: -- We cannot go beyond our constitutional powers. The clause is limited in its operation to trade and commerce with other countries, and among the States, and cannot interfere with internal means of transport. It is as im portant to provide fair play for the transportation of goods as to secure freedom of entry for the goods into the States. It seems to me very unjust that these secret rebates should be granted. It is very hard indeed if power is used by a combine to fix a certain rate of freight, and to declare that not only the party who sends goods by other than its own vessels will be refused a rebate, but also the person who receives goods by other ships, notwithstanding that such goods may have been so forwarded without his consent or concurrence. That is a very severe penalty to impose, and one which shows the intent of the combine, which is to crush out competition. I thoroughly agree with the honorable member for Fremantle that we ought to deal with such cases, and I am veryglad to have this opportunity of giving effect to the recommendation of the Shipping Commission. {: #debate-2-s14 .speaker-JWG} ##### Mr FOWLER:
Perth .- In supporting the amendment of the honorable member for Fremantle, I wish to say that in watching the attitude of the Government towards the Bill, my suspicion is being confirmed that this particular gun is not loaded with shot, but is merely intended to go off at election time with a g,?eat deal of noise and smoke, for the special benefit of those electors who are satisfied with that sort of thing. {: .speaker-KNJ} ##### Mr Mauger: -- It is very easy to say that. {: .speaker-JWG} ##### Mr FOWLER: -- Seeing, however, that the Government intend to persevere with the Bill, I think we should make the very best possible' use of it by introducing provisions dealing with such matters as the honorable member for Fremantle has brought under our notice, in order that when it has been tried and found wanting, the 'fact of these provisions having! been . inserted with a view to remedying existing evils may lead to more effective measures being ultimately adopted. So far as the shipping ring is concerned, I believe a separate Act of Parliament will be required to bring it down to its proper level. At the same time I think that in this Bill we ought to indicate to the public that that combination is one which is injurious to them. So far as Western Australia is concerned there is not the least doubt that the combination in connexion with the Inter-State sea-borne traffic is exceedingly, disadvantageous to the interests of consumers. Fur- *Australian Industries* [6 July, 1906.] *Preservation Bill.* 11 33 ther, I say - after having listened to the testimony of a great many business men who have appeared before the Tariff Commission - that the effect of this shipping combination upon Australian industries - and especially upon those industries which are endeavouring to obtain an Inter-State trade - has been much more injurious than has any foreign competition which has been brought against them. Time and again witnesses who have appeared before the Commission with a request for the imposition of higher duties, have urged, as their justification, the fact that more is charged by way of freight between two Australian ports than is charged for bringing cargo from the other side of the world. Under these circumstances, something requires to be done, and that as early as possible. So far as the rates of freight are concerned, there is no doubt that this Bill cannot touch them. In that respect it would absolutely fail, even assuming thatit were brought into play against the shipping combine in other respects. But as the Government intend to press on with the Bill, by all means let us make it as effective an indication of the need for stringent legislation upon the subject as we possibly can. For that reason I hope the Committee will agree to the amendment. {: #debate-2-s15 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I have just asked the honorable member for Fremantle to withdraw his amendment, with a view to inserting the word "service" before the word " merchandise." instead of after it. so as not to separate the two expressions " merchandise " and "commodities." {: #debate-2-s16 .speaker-JWA} ##### Mr CARPENTER:
Fremantle -- I am quite prepared to agree to the suggestion of the Attorney-General, and therefore I ask leave to withdraw my amendment. Amendment, by leave, withdrawn. Amendment (by **Mr. Carpenter)** agreed to - >That the word " service " be inserted after the word " any," line 7. {: #debate-2-s17 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I move - >That the word " indictable," line 8, be left out. This proposal forms part of a new set of amendments which I have circulated, some of which are intended to 'be inserted in clauses 4 and 5, with which we have already dealt. In his speech the other evening, the honorable member for Bland suggested that, inasmuch as the Government had circulated an amendment to the effect that the penalty of imprisonment should not attach to a first offence under this Bill, and that in case a conviction was recorded, power should be vested in the Court to grant an injunction to restrain the defendant from continuing to offend, the decision of any offence, in the first instance, should rest with a Justice of the High Court alone. He urged as a reason in support of his suggestion that its adoption would secure uniformity of decision. He further argued thatthe determination of cases would not then depend upon the particular State in which they were tried. Although I was not able to entirely agree with his argument, the necessity for considering it will be prevented by the adoption of this amendment. Apart altogether from the question of whether a jury is likely to be influenced by the locality in which it sits, there is something in the argument that we can obtain uniformity of decision by having these matters determined - in the first instance, at all events - by the HighCourt. Where the penalty of imprisonment is not attached, we need not make an offence an indictable one. Consequently, if we omit the word " indictable," a Justice of the High Court will have power either to acquit the defendant altogether or to fine him up to £500. He may furthergrant an injunction restraining him from continuing his offence. If subsequently the defendant commits the same offence, the case will, of course, go before a jury-. The penalty of imprisonment is retained for a second offence. I do not think that anybody will object to that. In the list of new amendments which have been circulated, it will be noticed that, as we are increasing the penalty wich may be imposed upon an individual for a second offence, we also increase it in the case of a corporation. Amendment agreed to. Amendment (by **Mr. Isaacs)** agreed to- >That the words " or one year's imprisonment or both ; in the case of a corporation, Five hundred pounds," lines 9 to11, be left out. Clause, as amended, agreed to. Clause 8- {: type="1" start="1"} 0. Any foreign corporation, or trading or financial corporation formed within the Commonwealth, which wilfully monopolizes or attempts to monopolize, or combines or conspires. with any person to monopolize, any part of the trade or commerce within the Commonwealth, with the 1134 *Australian Industries* [REPRESENTATIVES.] *Preservation Bill.* design of controlling, to the detriment of the public, the supply or price of any merchandise or commodity, is guilty of an indictable offence. Penalty : Five hundred pounds. {: type="1" start="2"} 0. Every contract made or entered into in con travention of this section shall be absolutely illegal or void. Amendments (by **Mr. Isaacs)** agreed to- >That the word "wilfully," line 3, be left out, and that the words, " the design of controlling," lines 6 and 7, be left out, with a view to insert in lieu thereof the words " intent to control." Amendment (by **Mr. Carpenter)** agreed to- >That the word "service" be inserted after the word "any," line 8. Amendment (by **Mr. Isaacs)** agreed to- >That the word " indictable," line 9, be left out. Clause, as amended, agreed to. Clause 9 - >Whoever aids, abets, counsels, or procures, or by act or omission is in any way, directly or indirectly, knowingly concerned in or privy to - > >the commission of any offence against this Part of this Act; or > >the doing of any act outside Australia which would, if done within Australia, be an offence against this Part of this Act, shall be deemed to have committed the offence. > >Penalty: Five hundred pounds, or one year's imprisonment, or both ; in the case of a corporation, Five hundred pounds. Amendment (by **Mr. Isaacs)** proposed - >That all the words after "pounds," line11, be left out. {: #debate-2-s18 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I should like to ask the Attorney-General whether the provisions of this clause will apply to lawyers or barristers who may be employed in drawing up an agreement? It is just possible that it might include even a clerk who wrote out a copy of an agreement. {: #debate-2-s19 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- No man will be exempted from the operation of this clause merely because he is a lawyer. But no person is brought into the criminal arena unless he has a guilty mind. If a lawyer sits down to draw an agreement with a guilty purpose, he has the intent to enter into a conspiracy with his client, and ought to be punished in the same way.. But if he honestly thinks that he is right in the advice he gives to his client, he will not be liable. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- He may honestly think he is doing no wrong. {: .speaker-KJI} ##### Mr ISAACS: -- Then he will not be liable. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It might be declared afterwards that what he advised was wrong. {: .speaker-JWG} ##### Mr Fowler: -- Would the advice of a lawyer to a client who desired to drive a coach and four through the Act be considered as evidence of a nefarious combination ? {: .speaker-KJI} ##### Mr ISAACS: -- If he gave the advice with a guilty mind it would. I am sure we all recognise the anxiety which honorable members exhibit to preserve the rights of lawyers. Amendment agreed to. Clause, as amended, agreed to. Clause 10 - >The Attorney-General or any person thereto authorized by him may institute proceedings in any competent Court exercising Federal jurisdiction, to restrain by injunction the commission or continuance of any breach or contravention of this part of this Act. {: #debate-2-s20 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I wish to direct the attention of honorable members to this very important provision. Up to the present we have very carefully provided that no man shall be attacked as a criminal unless he has a guilty mind. In other words, we say that there must be the intent to do wrong. But the honorable member for Hindmarsh pointed out that great injury might be done by allowing' the operations of combinations and contracts detrimental to the public to continue. I think the dividing line should be that, if a wrong is being done, it ought to be stopped, but no man ought to be attacked as a criminal unless he has a guilty mind. So far we have protected the individual from criminal attack unless he has a guilty mind. Under clause 10, as it now stands, it might be impossible for the Court to stop the operations of the most devastating trust unless proof could be given of guilty intent. Considering the whole position, the view we have taken of the matter is that, while adhering strongly to the principle that no man ought to be attacked as a criminal unless criminal intent on his part is shown, still if there is a combination which, in fact, is in restraint of trade to the detriment of the public, the Court should be able to prevent its further continuance, and to say to the parties concerned : " You must not proceed, in the public interest." To that extent, we think that the Sherman Law should be adopted for civil proceedings. To give an analogy, suppose any one of us has a landed property, and some one enters upon it *bona* *Australian Industries* [6 July, 1906.] *Preservation Bill.* 1135 *fide,* and takes possession, the owner can go to Court, and, if it is found that the property is not his, the Court will restrain the trespasser merely because he is wrong. But the Court would never think of putting the man in gaol, so long as it was clear that he was an honest man. If a man appropriates property knowing that it is not his own, he is a thief ; if he takes it honestly believing it to be his, he is not, and his action is a mere civil matter. That is the principle we desire to apply in this clause. If the operations of a combinationproceedinghonestly, and formed without intent to do detriment to the public, are still found to be detrimental to the public, and to be breaking down industries by unfair competition, the Court should have power to stop those operations. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Is that after trial ? {: .speaker-KJI} ##### Mr ISAACS: -- It would be after full investigation, and the hearing of evidence by such methods as the Court adopts in ordinary cases. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The combination concerned should be found guilty before such action is taken. {: .speaker-KJI} ##### Mr ISAACS: -- Not necessarily guilty of an offence. If the honorable gentleman owned a mine, and some one else claimed it, the Court, on hearing the whole of the facts, would grant an injunction preventing the defendant trespassing upon the mine. If the defendant, without any claim or right at all, and actuated by mere felonious intention, were to take gold from the mine, he should be convicted. All the difference between civil and criminal procedure consists in the honesty of purpose, but if the action taken results in damage to the public, and has an injurious effect, there should be a power to restrain and stop it. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- A conviction mightnot follow the investigation. {: .speaker-KJI} ##### Mr ISAACS: -- There is no question of a conviction under clause 10, which provides for purely civil proceedings. We have now dealt with criminal proceedings, and have left those matters. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That is so, but the Court would have to say whether what was being done constituted a breach of the Act. {: .speaker-KJI} ##### Mr ISAACS: -- The honorable gentleman will understand the. matter better if I say what is proposed to be done with this clause. I propose to strike out all the words after the word " injunction," and insert other words, when the clause will read - >The Attorney-General or any person thereto authorized by him may institute proceedings, in any competent Court exercising Federal jurisdiction, to restrain by injunction the carrying out of any contract or combination which - > >is in restraint of trade or commerce to the detriment of the public ; or > >is destroying or injuring by means of unfair competition any Australian industry the preservation of which is advantageous to the Commonwealth, having due regard to the interests of producers, workers, and consumers. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I wish to know when that will take effect. Is it after a combination or firm is found to be carrying on something which under this Bill is declared to be illegal? {: .speaker-KJI} ##### Mr Isaacs: -- Not necessarily. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I think it should be. {: .speaker-KJI} ##### Mr ISAACS: -- Under the American Act, it is not necessary to get a conviction. This provision, if amended as proposed, will, I think, be to the advantage of the combinations. We do not say to the public that before they can get any protection they must prosecute these people. It is an alternative method of securing the necessary protection of the public without dragging the defendant into a criminal court at all. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Yes ; but it would stick up his business, though there might not beanything wrong in it. {: .speaker-KJI} ##### Mr ISAACS: -- No. It could go on until the Court decided that it should be stopped. The Attorney -General could not stick it up. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- But the Court can grant an injunction before it is decided that the combination is illegal. {: .speaker-KJI} ##### Mr ISAACS: -- No. The Court cannot do so before it decides. - The application under the clause would be to stop the combination, and the Court might say, " We will not stop the combination until you convince us that it ought to be stopped." It will not be stopped until the Court has heard evidence, and has come to a conclusion that it should be, because the combination is, for instance, in the terms' of the first paragraph of the proposed amendment - " in restraint of trade or commerce to the detriment of the public." Until that decision is come to, the Court will do nothing, the business will go on, and there will be no power in the Attorney-General to stop any part of it. 1136 *Australian Industries* [REPRESENTATIVES.] *Preservation Bill.* {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- He can keep the legal proceedings going on for a little time, and can accomplish his purpose while the matter is being discussed. {: .speaker-KJI} ##### Mr ISAACS: -- No. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- May there not be an injunction granted to restrain ? {: .speaker-KJI} ##### Mr ISAACS: -- An injunction will not be granted by the Court until it has decided the matter, and if it is granted it will be upon evidence that the business ought to be stopped. There will be no stoppage of the business until that stage has been reached. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Could it not be stopped on the verdict of the Court without this provision for injunction? {: .speaker-KJI} ##### Mr ISAACS: -- The verdict of the Court is the judgment of the Court after hearing the evidence. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Could it not be stopped without this provision for injunction in those circumstances? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- It could be stopped under clause 16. {: .speaker-KJI} ##### Mr ISAACS: -- That is another part of the Bill. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Yes; but it may deal with the same transaction. {: .speaker-KJI} ##### Mr ISAACS: -- I think we should not, confuse this clause with the part of the Bill dealing with dumping, with which it has nothing to do. I am speaking now of legal proceedings, and I desire to make the matter as clear as I can. If there is a combination which,in the opinion of the Attorney-General, is working: wrong, he can, without instituting any criminal proceedings at all, apply to the Court, and prove, if he is able, that the combination is operating in restraint of trade to the detriment of the public, and thus he may, without entering upon any criminal proceedings, ask the Court to stop its operations. {: .speaker-KRQ} ##### Mr Skene: -- It might only be a passing breach. {: .speaker-KJI} ##### Mr ISAACS: -- Then the Court would probably say, " We will not grant an injunction." {: .speaker-KRQ} ##### Mr Skene: -- Before the AttorneyGeneral could institute proceedings, the whole thing might be at an end. {: .speaker-KJI} ##### Mr ISAACS: -It might, but he could ask the Court to restrain similar proceedings in future. That would not be to the detriment of the defendant in any way. It is necessary, I think, to protect the public. The Attorney-General may not desire to prove intent to the detriment of the public, but merely to prove that there *is* a certain combination in restraint of trade, and the Court might then grant an injunction. Here we desire to provide that if there is a restraint of trade to the detriment of the public, the Court may exercise the same power as is exercised in America in similar circumstances. I think that that is the proper course to pursue. I forgot to mention that the proposed amendment includes a proviso, the meaning of which is simply that in order to keep within our constitutional powers we distinctly say what they are. I move - >That all thewords after the word " injunction," line 4, be struck out, with a view to insert in lieu thereof the words " the carrying out of any contract or combination which - > >is in restraint of trade or commerce to the detriment of the public; or > >is destroying or injuring by means of un fair competition any Australian industry the preservation of which is advantageous to the Commonwealth, having due regard to the interests of producers, workers, and consumers. > >Provided that, except in the case of foreign corporations, or trading or financial corporations formed within the Commonwealth, this section shall only apply to contracts or combinations in relation to commerce with other countries or among the States." {: #debate-2-s21 .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Although the honorable and learned gentleman proposes this amendment ostensiblyfor the protection of combinations, if it is agreed to he need not indict them under this clause at all. {: .speaker-KJI} ##### Mr Isaacs: -- The honorable member means criminally. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- No, civilly. He can proceed against them civilly, and hold their business up. {: .speaker-KJI} ##### Mr Isaacs: -- He cannot hold their business up. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- The AttorneyGeneral must know that, leaving this process out of the question altogether, he can still ring in the dumping clauses, in which are repeated the very words which he proposes to introduce here, and the business of a combination will be held up while the matter is being investigated. {: .speaker-KJI} ##### Mr Isaacs: -- The other clauses can be dealt with when we come to them. {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- Yes. I am, only pointing out now that the honorable and learned member has two strings to his bow, and that while ostensibly he is giving some concession to the traders of the community, still he has these other powers, by the exercise of which he could drop down upon them instantly. Really, *Australian Industries* [6 July, 1906.] *Preservation Bill.* 1137 all that he is doing here is to make it possible for him to also deal with a man in a criminal way. That punishment is to be meted out to individuals in connexion with the whole of these operations is a small circumstance as compared with the restraints on these nefarious businesses. It is conceivable that they might apply to two different classes of cases. It is possible, I should say very probable, that unless an alteration be made in the dumping clauses they would be made to apply to the same class of cases. No matter how wrong the importation might be, still it would be an importation which operated in an unfair competitive way to the dislocation of our industries, and all the rest of it. {: .speaker-KJI} ##### Mr Isaacs: -- Has the honorable member seen the amendments which have been circulated, and which would prevent a business from being held up? {: .speaker-F4S} ##### Mr JOSEPH COOK:
PARRAMATTA, NEW SOUTH WALES · FT; ANTI-SOC from 1906; LP from 1910; NAT from 1917 -- No. In the circumstances, I am willing to let the clause go. **Mr. DUGALD** THOMSON (North Sydney) [3.17]. - I have no objectionto this provision, if it is to operate after the judgment of the Court has beengiven. {: .speaker-KJI} ##### Mr Isaacs: -- That is all. Of course, the honorable member understands that there are proceedings to get a judgment, but the business cannot be touched until it has been given. {: #debate-2-s22 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- We know that in many cases an injunction may be applied for immediately after proceedings have been instituted. {: .speaker-KJI} ##### Mr Isaacs: -- That is the idea of this proposal. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- To stop the person trading? {: .speaker-KJI} ##### Mr Isaacs: -- To stop what is aimed at in the amendment - restraint of trade to the detriment of the public. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- But then there will have been no decision given. {: .speaker-KJI} ##### Mr Isaacs: -- No; but the decision will be given on that application. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- The whole case will not be tried and witnesses for both sides heard before then ? {: .speaker-KJI} ##### Mr Isaacs: -- Yes. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Then judgment will be given? {: .speaker-KJI} ##### Mr Isaacs: -- Yes, a man can ask for an injunction, but he will not get it until witnesses on both sides have been heard. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I regret that this clause has to be discussed in the absence of legal members. It is not an uncommon thing for an injunction to be applied for under various State laws, and granted before the case has been heard. {: .speaker-KJI} ##### Mr Isaacs: -- An interlocutory injunction. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Yes. {: .speaker-KJI} ##### Mr Isaacs: -- I cannot conceive of that being done in this case. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- Would it be possible? {: .speaker-KJI} ##### Mr Isaacs: -- No, impossible. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- We should guard strictly against the possibility of the Attorney-General applying for and getting an injunction to restrain operations before the judgment of the Court has been delivered, declaring the operations to be in contravention of the Act. {: .speaker-KJI} ##### Mr Isaacs: -- I cannot conceive the possibility of any interlocutory injunction being applied for. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- That ought to be made absolutely impossible. Why not use the expression " after judgment by the Court " ? {: .speaker-KJI} ##### Mr Isaacs: -- It must be after judgment by the Court. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- If so, why not say that ? In some cases we have the injunction applied for before a decision is given, and there is nothing in this provision to show that that cannot be done. If the Attorney-General says that it is only intended to be put in operation after judgment by the Court- {: .speaker-KJI} ##### Mr Isaacs: -- Do not misunderstand me. An injunction could only operate after judgment. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- If that is intended, why is it not stated ? {: .speaker-KJI} ##### Mr Isaacs: -- It is necessarily involved. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I am not so satisfied about that. {: .speaker-KJI} ##### Mr Isaacs: -- I know that it is an interlocutory injunction which is troubling my honorable friend. The object of an interlocutory injunction is only to preserve property until the hearing of the case. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It ought to be made absolutely clear that an injunction could not be obtained to restrain parties from continuing the operations complained of until judgment had been given. Otherwise, absolutely guiltless persons might have restraints put upon them in the conduct of their business, and that might mean serious loss, in some cases- ruin. I am sure 1 138 *Australian Industries* [REPRESENTATIVES.] *Preservation Bill.* that the Attorney-General will see the desirability of avoiding a danger of that sort. He will have a successor, however long he may occupy his office ; and he should make provision to prevent a successor from doing what, in his view, would be improper. At any rate, if he does not make that provision now, I think that he might give the Committee the opportunity of again considering the clause, and in the meantime draft a provision which wouldbe a safeguard in that respect, and yet would place no restriction upon the proper operation of the Act. It would be a very serious position if an injunction could be granted before judgment. {: .speaker-KJI} ##### Mr Isaacs: -- I quite agree with the honorable member that it would be. {: .speaker-KNI} ##### Mr Harper: -- Could not the AttorneyGeneral put in something to make it clear ? {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I think that he could, but I am placed at a disadvantage in the absence of legal members. {: .speaker-KJI} ##### Mr Isaacs: -- I am quite with the honorable member as to the undesirability of allowing an injunction to be granted until the case has been determined. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- It seems to me that there is no limitation as to when an injunction could be applied for and granted. It should be made quite clear that it could only foe granted after judgment had been declared. It would be a very serious thing if, in addition to the interference which the Bill naturally " created, there should be destruction of business where a man was found afterwards not to be guilty at all. {: #debate-2-s23 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I do not think that there is any possibility of danger ; but I shall seek for some words to al lay the fears of the honorable member, and if he desires to have the clause reconsidered for that purpose, I shall undertake to move for its recommittal. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I am satisfied. Amendment agreed to. {: #debate-2-s24 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I move - >That the following new sub-clause be added : - > >On the conviction of any person for an offence under this Part of this Act the Judge before whom the trial takes place shall, upon application by or on behalf of the Attorney-General or any person thereto authorized by him, grant an injunction restraining the convicted person and his servants and agents from the repetition or continuance of the offence of which he has been convicted." {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- This subclause says "on conviction." {: .speaker-KJI} ##### Mr ISAACS: -- I wish to show my honorable friend the difference between the two cases. If there has been no conviction, one will have to start proceedings, and have the whole thing heard and determined. But if there has been a conviction, an injunction may be applied for at once, without going through the formality of new proceedings. {: .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- I do not object to that where there has been a conviction. Amendment agreed to. Clause, as amended, agreed to. Clause 11 - {: type="1" start="1"} 0. Any person who is injured in his person or property by any other person, by reason of any act or thing done by that other person in contravention of this Part of this Act, may, in any competent Court exercising Federal jurisdiction, sue for and recover treble damages for the injury. . . . {: #debate-2-s25 .speaker-KJI} ##### Mr ISAACS:
Attorney-General · Indi · Protectionist -- I move - >That after the word " Act," line 4, the following words be inserted " or by reason of any act or thing done in contravention of any injunction granted under this part of this Act." If, after full hearing, a combination has been ordered for a Judge not to do anything to the public detriment, and in spite of that they go on and do it, then any one who is injured by that act shall have his remedy. {: .speaker-F4R} ##### Mr Watson: -- Is not the honorable and learned gentleman going to provide in this clause for the initiation of a prosecution to be dependent upon the consent of the Attorney-General ? {: .speaker-KJI} ##### Mr ISAACS: -- No; in a new clause, to be moved later on. Amendment agreed to. {: #debate-2-s26 .speaker-KW6} ##### Mr DUGALD THOMSON:
NORTH SYDNEY, NEW SOUTH WALES · FT; ANTI-SOC from 1906 -- This provision makes it more necessary, I think, for the insertion of an emphatic provision that the injunction shall follow the judgment. Clause, as amended, agreed to. Progress reported. {: .page-start } page 1138 {:#debate-3} ### PAPERS **Mr. EWING** laid upon the table the following papers : - >Military Forces financial and allowance regulations, Statutory Rules 1906, No. 47. Regulations governing the landing of foreign troops, &c., Statutory Rules 1906, No. 48. {: .page-start } page 1139 {:#debate-4} ### ADJOURNMENT Presentation of Address-in-Reply. Motion (by **Mr. Deakin)** proposed - >That the House do now adjourn. {: #debate-4-s0 .speaker-10000} ##### Mr SPEAKER: -- Before the motion is pui, I desire to remind honorable members that at 4 o'clock His Excellency the GovernorGeneral is to receive the AddressinReply adopted by this Chamber. I shall be glad if as many honorable members as desire to do so will meet me at that hour in the Queen's Hall, where the presentation will take place. Question resolved in the affirmative. Mouse adjourned at 3.31 p.m.'

Cite as: Australia, House of Representatives, Debates, 6 July 1906, viewed 6 July 2017, <http://historichansard.net/hofreps/1906/19060706_reps_2_31/>.