House of Representatives
25 July 1906

2nd Parliament · 3rd Session



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

TELEPHONE CONNEXIONS.

Mr. POYNTON. - Some time ago a de putation waited on the Deputy PostmasterGeneral of South Australia, and asked for telephone connexions between Lake Wangary, Warroa, and Shiringa. I have since spoken to the Postmaster-General about the matter, but, having received no definite reply, I wish to draw his attention to the following pasagein a letter which I have just received from one of my constituents : -

There was a lady fearfully injured here last Sunday through a bolt, and had to be carted all the way to Elliston for medical aid, whereas if the telephone was here the doctor could have been easily rung up.

If the Postmaster-General cannot give a definite reply now, will he see that the matter is expedited, and that the connexions asked for are made as soon as possible?

Mr. AUSTIN CHAPMAN.- I shallbe glad to make inquiries as to what can be done, andto give a prompt reply to the honorable member’s request for information.

page 1763

QUESTION

OBSOLETE TELEPHONE INSTRUMENTS

Sir JOHN QUICK:
BENDIGO, VICTORIA

– Has the attention of the Postmaster-General been directed to the complaints which have been made recently about the defective telephone instruments in use in Bendigo and other important centres? Mr. Hesketh, in his report, says that the instruments known as the Berthon Ader telephones are obsolete, and that the best instruments are those known as the Ericsson. Will the honorable gentleman take steps to have placed on the Estimates a vote which will provide for the substitution of new and up-to-date instruments for those which are defective and obsolete, not only in Bendigo, but in other important cities?

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

– The matter has been under my attention for some time past. The Department is endeavouring to meet the calls for Ericsson instruments, but it is impossible to at once replace all the old instruments with new ones. I shall take into consideration the representations of the honorable and learned member, and see whether the defects he complains of can receive immediate attention.

page 1763

QUESTION

BRANCH TELEGRAPH OFFICES

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

– Is the Postmaster-General in a position to reply to the questions which I put to him some time ago, as to the removal of instruments from branch telegraph offices in the cities of Sydney and Melbourne?

Mr AUSTIN CHAPMAN:
Protectionist

– I gave an answer to the question in the honorable member’s absence. Although the instruments have been removed from the offices to which he refers, no inconvenience is thereby inflicted upon the public, because telegrams handed in for transmission are despatched even more quickly than was formerly the case. At the Sydney Exchange, one of the offices referred to, I am endeavouring to arrange for the laying down of a tube whereby messages can be forwarded to the central office for despatch more quickly than is possible either by telegraphing them or by sending them by messenger. Immediately a telegram is handed in, it will be sent through the tube to the head office, and despatched from there without delay. Yesterday a temporary ararngement was made which, if accepted by the Exchange authorities, will have the support of the Government, and will meet the difficulty pointed out by the honorable member. I shall be glad to let him know within the next three or four days what is to be done. We are endeavouring to treat all cases of the kind in the same way. There is a tube from the Melbourne Exchange to the head office, and there is no reason why a similar arrangement should not be made in other places where it would be suitable. When a branch office is situated at no great distance from the head office, and it is found that messages canbe sent to the latter for despatch more quickly by messenger boys than by telegraphing, we have, in the interests of expedition, substituted a staff of messengers.

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

– May I ask the Postmaster-General to obtain a comparative statement of the receipts from hotels in which there are telegraph offices and those from the branch offices to which my question referred ? For instance, can he let me know what is the revenue obtained from the telegraph office at Menzies’ Hotel, and that obtained from the Sydney Exchange telegraph office?

Mr AUSTIN CHAPMAN:

– I shall be glad to furnish the information.

page 1763

UNIFORM POSTAGE STAMPS

Mr BAMFORD:
HERBERT, QUEENSLAND

– I wish to know from the Postmaster-General if anything is being done towards bringing about the use of uniform postage stamps. It is a year since the matter was brought before the House, and a promise was made to look into it.

Mr AUSTIN CHAPMAN:
Protectionist

– The subject is under consideration, and I hope to shortly make a statement about it.

page 1764

BUDGET

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

– Is the report in to-day’s newspapers, that the Treasurer, will deliver his Budget speech next Wednesday, correct?

Sir JOHN FORREST:
Treasurer · SWAN, WESTERN AUSTRALIA · Protectionist

– It was my intention to make the Budget statement next Wednesday, but I have since made arrangements to deliver it on Tuesday next.

page 1764

QUESTION

ADJACENT TOWNS LETTER RATE

Mr MAHON:
COOLGARDIE, WESTERN AUSTRALIA

asked the PostmasterGeneral, upon notice -

  1. What is the letter rate between adjacent towns, such as Kalgoorlie and Boulder, in Western Australia, per half ounce?
  2. Does that rate apply to Cue and Day Dawn, which are approximately the same distance apart as Kalgoorlie and Boulder; and if not, will he explain the reason why a higher rate is enforced on letters passing between Cue and Day Dawn ?
Mr AUSTIN CHAPMAN:
Protectionist

– Inquiries are being made, and answers will be furnished as scon as possible.

page 1764

QUESTION

POSTMASTERS’ SALARIES

Mr LEE:
COWPER, NEW SOUTH WALES

asked the Postmaster-General, upon notice -

  1. Is he aware that a number of postmasters in the New South Wales service, with a most honorable career of over twenty-three years’ service, are receiving a salary of£160 per annum, less 10 per cent. deducted for quarters, and other postmasters with many years’ less service are paid over£200 per annum?
  2. Is he aware that a number of reductions were made by the Public Service Board in1896, who graded the offices on a revenue basis.’ Postmasters whose salaries were reduced thereby were not deprived of their seniority?
  3. Is he aware that the Commonwealth Commissioner declines to recognise the services of officers prior to transfer to the Commonwealth, but has ruled that the officer with the higher salary shall be considered senior and have prior claim to promotion?
  4. Is he aware that this ruling will practically debar a number of officers with long and faithful service a chance of advancing from the fifth to fourth grade for probably many years, thereby causing much discontentment ?
  5. Would he place a sum of money on the Estimates to remove the anomalies and advance officers with long service from the fifth to fourth grade?
Mr AUSTIN CHAPMAN:
Protectionist

– Inquiries are being made, and answers will be furnished as soon as possible.

page 1764

QUESTION

CONTROL OF LIGHT-HOUSES

Sir LANGDON BONYTHON:
BARKER, SOUTH AUSTRALIA

asked the Treasurer, upon notice -

Whether the Government intend at once to take over the lighthouses of the Commonwealth; and, if not, why he recently suggested that a new lighthouse should be provided at Point St. Albans, on the coast of South Australia?

Sir JOHN FORREST:
Protectionist

– In reply to the honorable member, I beg to state -

The Government intend to take over lighthouses as soon as possible, and a Bill is now under the consideration of my colleague, the Minister of Trade and Customs, with that object.

In regard to the necessity of a light at Point St. Albans, in Backstairs Passage, I have for years been informed by captains of mail steamers of its necessity. On the 22nd May, this year, I wrote to the Minister of Trade and Customs as follows : -

In voyaging in the steam-ships India and Moldavia, the captains brought under my notice the necessity for more lighthouses on the coast of Australia. Especially did they lay great stress upon the necessity for a light at Point St. Albans, in Backstairs Passage, South Australia.

In regard to the Point St. Albans light, it is an absolute necessity, as there is the Yatala shoal in the middle of the passage, which is only 4 miles wide on cach side. Every time a ship goes through Backstairs Passage on a dark and stormy night there is danger.

When a small 10-mile light is erected, it will not only show the. exact position of Point St. Albans,but will enable the position of a ship to be ascertained at any time by bearings to it and Cape Willoughby light.

page 1764

QUESTION

MAIL SERVICE TO EUROPE

Debate resumed from 24th July(vide page 1709), on motion by Mr. Austin Chapman -

That this House approves the agreement made and entered into on the 7th day of July, 1906, between the Postmaster-General, in and for the Commonwealth, and Sir James Laing and Sons, Limited, for the carriage of mails between Adelaide and Brindisi.

Upon which Mr. Thomas had moved, by way of amendment -

That all the words after the word “ House “ be left out, with a view to insert in lieu thereof the words, “ is of opinion that, in the best interests of the Commonwealth, the Government should purchase and control a fleet of mail steamers capable of maintaining a fortnightly mail service between Australia and Great Britain.”

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

– In dealing with this question, I shall first direct my attention to what is more immediate])’ in front of us, the proposal of the honorable member for Barrier that a line of ‘Commonwealth-owned steamers be established’ instead of ratifying the postal contract which has been entered into by the Government. Before doing so, I must congratulate the honorable member on the ability he has displayed in placing his case before the public, both in the report of the Commission and in his speech in support of his amendment. This is, I believe, his first appearance as a promoter, but ‘lie has shown himself to possess qualifications which should recommend him for a seat on, the Stock Exchange. The prospectus is one of the most brilliant that could have been produced in connexion with the proposition in hand. It is not accompanied by the certificates which are usually brought forward to substantiate the statements of a prospectus, but that is not surprising, because, so far as I have been able to look through the evidence, the weight and bulk of it is altogether against the establishment of a Commonwealthowned line of steamers. The honorable member for Barrier, however, has put forward arguments of his own in support of the .proposition, many of them not founded on evidence, some of them good, and some defective. I will just glance at the much-discussed figures which have been put forward in the Commission’s report as an estimate of the cost of constructing, maintaining, and working the proposed fleet, and show how I think they should be amended. In doing so, I shall not try to put the worst face on the proposal, and will give what I think to be the verv highest estimate of probable earnings and the very lowest estimate of expenditure that may be anticipated. The Commission puts the capital cost of the steamers at ^£3, 000,000. I do not consider that a fleet of eight steamers will Lie sufficient to carry on the proposed service. No doubt, eight vessels could just do the work of a fortnightly service, each spending a fortnight at the terminal port if Sydnev were chosen, or less if thev went on to Brisbane, and a fortnight in London.

Mr Thomas:

– The Orient Company’s service is performed with eight vessels. ‘

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

– The Orient Company can obtain one of the Pacific Company’s steamers when additional assistance is required, but the Commonwealth Government could not obtain help in that way.

Mr Thomas:

– The Commonwealth Government could charter an extra boat if it were needed.

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

– No doubt; but that would increase the cost of the service. If it were attempted to do the work with eight steamers, they would very quickly show signs of wear and tear. At least nine steamers are required if the vessels are to be kept in good order. The honorable member for Barrier admits this. He objected to the argument used in the Age - and I quite agree with him - that ten steamers would be required to conduct the service. Eight steamers, with one in reserve, available to take the place of any vessel that might be laid up for repairs, would be quite sufficient.

Mr Watson:

– The ninth steamer would be laid up for a greater part of the time, and it would not be necessary to make prevision for the payment of any wages to her crew.

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

– That may be so, and I have not included the cost of running her in my figures. I am merely dealing with the capital cost, as estimated by the honorable member for Barrier. At page .1449 of Hansard. ‘he is reported as having said -

Mr. Kenneth Anderson thinks that a fleet of nine vessels is necessary, and while there may be reason for employing nine, it would be absurd to employ ten vessels.

The honorable member there indicates that it might be desirable to have nine steamers.

Mr Thomas:

– I went on to ask whether any private company would employ nine: - whether Messrs. James Laing and Sons would employ that number, or whether the Orient Steam Navigation Com.pany required that number of vessels.

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

– Any company carrying on the service must either have a fleet of nine steamers, or else, in addition to the eight vessels immediately engaged in the service, have another which would be available in case of emergency. The Orient Steam Navigation Companyhave made use of the steamers belonging to the Pacific Steamship Company. The steamship Cusco. for instance, has been repeatedly requisitioned for the Australian trade, and the Peninsular and Oriental Company, who have a large fleet, have occasionally brought down to Australia one of their vessels usually employed elsewhere to take the place of another that is undergoing repairs. If we had to provide nine steamers at a cost of £400,000 each, we should incur a capital outlay of £3,600,000. The honorable member for Barrier estimates the cost of the steamers at £375,000 each, but I do not care to name any amount below £400,000. I think that it will be found that since Mr. Coghlan furnished his estimate, the cost of steamers has, owing to the higher price of metals, rather increased than otherwise.

Mr Watson:

Mr. Coghlan’s estimate, which I suppose came from some shipbuilders, is a very recent one.

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

– Yes, but still the cost of metals has increased in the interval.

Mr Thomas:

– I received Mr. Coghlan’s reply after Mr. Kenneth Anderson had given his evidence.

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

Mr. Coghlan’s information is dated 12th April. I would point out that the furnishing of the steamers would probably involve the outlay of a larger sum than the honorable member has estimated. It must be remembered that provision would have to be made for 1,300 or 1,400 people, and that the bedding and duplicate bedding, towelling, and pantry furnishing, table ware, and so on, would entail a large expenditure. Then provision should be made for the, payment of interest on capital during the time that the steamers are in course of construction. The money would have to be borrowed before contracts were entered into, in order that progress payments might be made to the contractors from time to time. Then, in addition, there would be the cost of supervision, architects’ fees, and so on. Mr. Coghlan recommends that plans and specifications should be prepared, and that tenders should be called for the construction of the steamers. If this course were pursued, we should have to pay architects’ fees, and also employ experienced officers to supervise the construction of the vessels. These items have not been allowed for by the honorable member for Barrier, and therefore I think that we may fairly assume that, adopting Mr. Coghlan’s figures as a basis, the steamers would cost £400,000 each,

Mr Thomas:

– There is a difference of only £25.000 between us.

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

– Quite so. The honorable member will recognise that I am not endeavouring to treat his proposals with undue severity, or to use figures that cannot to some degree be supported. I have already dealt with the capital cost of the steamers, and I shall now direct attention to the question of earnings. The Commission, in their report, estimate that the earnings from the passenger traffic would amount to £701,900. If we analyze the figures, I think we shall come to the conclusion that nothing like that result would be obtained. It will be noticed that it is estimated that £540,000 would be paid in respect to the conveyance of first and second class passengers, and that the balance of £162,000 would be paid for practically an equal number of third class passengers. The steamers would require to carry 146 first class, 71 second class, and 208 third class each way or> every trip, in order to yield the figures estimated in the report. Such expectations would not be borne out if the returns of the Peninsular and Oriental and Orient Companies were carefully examined. We should have to look to the Orient ‘Company’s figures in order to make an absolute comparison, because the Peninsular and Oriental Company do not carry third class passengers. Nothing like the average indicated is maintained by the best of the steamers of that company throughout the year. For this reason I consider that the estimate should be considerably reduced. Then, again, I would point out that credit has been taken for full rates for all the passengers carried.

Mr Thomas:

– - -Return rates?

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

– Yes, but- the honorable member has made no allowance for brokers’ commission, which forms a considerable item; nor has any deduction been made in respect of those passengers who may land at Brindisi, and whose railway fare may have to be partly provided for out of the £112 paid by them. It is well known that passengers who land at Marseilles, for instance, are conveyed to London free of charge, so far as they are concerned.

Mr Thomas:

– We have taken no credit for the coastal trade.

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

– Even including any revenue that might be derived from that source, I do not think that the estimate would be realized. Another reduction would have to be made in respect to combination tickets issued in conjunction with other steamship companies trading in other parts of the world. It is usual for steamship lines to carry pasengers at reduced rates when they take out tickets for an all-round trip, in which other lines of steamers have to be employed. Under these circumstances I think I am justified, and in fact very reasonable, in reducing the estimate of ^,’701,900 to ^600,000. Now, with regard to the cargo traffic. It is estimated that the proposed steamers would carry 4000 tons of cargo each way on every trip. We shall see what relation these figures bear to the total carrying capacity of the steamers. At page 1451 of Hansard the honorable member for Barrier said -

The steamers we suggest would be capable of carrying 5,600 tons of cargo. Space, however, must be allowed for the accommodation of refrigerators, passengers’ luggage, ite, so we allow only for 4,000 tons.

That means that the steamers are expected to have full holds as regards their cargo carrying capacity every fortnight of the year, homeward and outward. No steamer at present running maintains any such average. It is quite true that at times more cargo offers than can be carried by a given steamer, but credit cannot be taken for that in working out an average between the full cargo carried on some voyages and that carried on trips in which the vessel has space to spare.

Mr Thomas:

– We calculate on receiving less than the average freight.

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

– I shall <leal with that aspect of the question presently. In order to carry 4,000 tons each trip, the steamers would require always to have full holds outwards and homewards. Such a condition of things would be out of the question, and I think that I am acting liberally, when I reduce the estimate to 3,000 tons per trip. Now, as to the rates. The honorable member for Barrier states that the calculations of the Commission have been based on a rate of freight lower than the average. In my opinion, however, they have been based upon a higher rate than the average. A great deal of the cargo carried by the mail steamers, such as ore or bullion, from Australia, or ironwork from England, is conveyed at ballast rates. The vessels must have stiffening in the form of a considerable quantity of dead weight cargo. That is the reason why bullion, for instance, is brought round from ;South Australia to Sydney and shipped there rather than taken on by the ,steamer when she calls at Adelaide. If the steamers can obtain such cargo to put in the bottom of the hold, they can carry it at such rates that it pays the shippers to send it round to Svdney. In calculating the rates, the members of the Commission have looked only at the higher paying cargo, and even as regards this they have made an error in their estimate. The honorable member for Barrier has spoken of butter as yielding a rate of 10s. per ton. No doubt butter is a very important item in the cargo of the mail steamers, but, as a matter of fact, a ton weight of butter - and it is at per ton weight that freight is charged - measures if tons of 40 cubic feet measurement. The cargo-carrying capacity of the steamers has been estimated upon the basis of 40 cubic feet per ton. Therefore, if a vessel were loaded entirely with butter, instead of carrying 4,000 tons’, as estimated by the Commission!, she could carry only 2,300 tons. Honorable members will see that that would make a tremendous difference. Nearly all the goods, except metals, upon which’ freight is paid by weight, occupy more than 40 cubic feet per ton. That must reduce the estimated earnings, and also the carrying capacity of the < steamers. Instead of butter yielding £3 10s. per ton, as estimated by the honorable member for Barrier, it will yield only about £2 per ton of forty cubic feet measurement. That being so, he has overestimated the probable revenue from this source, and has certainly failed to give sufficient consideration, to the dead weight cargo - such as iron ore and’ minerals - which is carried for ballasting at very low rates. I take the average earnings, which the Commission estimate at £2 per ton outwards and inwards-

Mr Thomas:

– We estimated an average of £2 sos. per ton on the home voyage, and of j£2 per ton on the return voyage, or an average of £2 5s. per ton per round trip.

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

– Quite so ; the average is £2 5s. Allowing for the fact that goods charged bv weight occupy more than forty cubic feet per ton, I take the average earnings at 35s. per ton, and allow 3,000 tons as the average cargo outwards and homewards.

Mr Frazer:

– Where did the honorable member obtain his information ? Has he the particulars of the actual freights now charged by the shipping companies?

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

– I wish to be absolutely fair in dealing with this question, and except in regard to the measurement of butter, I am taking the figures from the report of the Commission. Any honorable member, by measuring a box of butter for himself, will ascertain that my statement in regard to the space occupied by a ton weight is correct. With the exception of such things as ingots and bars of metal, almost all goods that are carried at so much per lon occupy considerably more than the forty cubic feet which represent a, ton measurement.

Mr Thomas:

– We are wondering how the private companies manage to pay.

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

– I am not questioning the rates cited in the report of the Commission, but I say that allowance has not been made for certain necessary deductions which would greatly reduce the estimated revenue. With an average of 3,000 tons per’ trip, at 35s. per ton - and I feel sure that that is a full estimate outwards and homewards - we have a total of £273,000 in respect of freights. Then the Commission allow for a subsidy of £150,000 per annum, although I do not think that their calculation as to the cost per trip includes the journey from Sydney to Brisbane, in respect of which the Orient Steam Navigation Company now receive an additional subsidy of ,£26,000 per annum. I am prepared to give the Commission the benefit of that additional sum ; but I do not think that there is the slightest warrant for their assumption that we should be able to obtain a loan necessary to provide for the construction of these steamers at 3 per cent. ; 3 J per cent, represents the very best terms that we should be able to obtain, especially for a loan required for trading purposes.

Mr Thomas:

– What difference would it make whether the loan was or was not to be devoted to trading purposes?

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

– It would make a verv material difference. Investors are naturally cautious, and are inclined to look at the object for which a loan is required. When they ascertained that it was proposed to devote the projected loan to a speculative object - to the building of steamers to compete with those of the large steam-ship companies - they would be far more cautious-

Mr Wilks:

– Do they lend money for war purposes at the usual rates?

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

– A higher rate of interest has always to be paid in respect of war loans. Apart from that, however, I do not think that a loan could be obtained for any purpose at less than 3J per cent. That would represent £126,000 per annum in respect of £3,600,000.

Mr Frazer:

– Does the honorable member anticipate that Sir James Laing and Sons Limited will be able to obtain a loan at a lower rate of interest than the Government of the Commonwealth would be able to do?

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

– That is a consideration with which I have nothing to do. If the company chooses to enter into a losing contract - and1 they have not yet entered into the contract-

Mr Bamford:

– It is worth bearing in mind that they have not yet done so.

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

– If they choose to enter into a contract, I am not going to try to impress upon them the view that it will be a losing one. I am dealing with a proposed investment of Commonwealth funds, and I repeat that in the opinion of most people per cent, is the lowest rate at which we would be able to obtain a loan for this purpose. The Commission estimate the cost of running a Commonwealth mail steamer at £29.500 per voyage. It is true that in the report itself the estimate is set down at £35,000, but from that we have to make a deduction of £5,500 in respect of the insurance per trip, since that amount is included in the gross insurance charge. According to the report, the Commission, after full inquiry, accepted Mr. Kenneth Anderson’s evidence as to the cost per round trip. Other witnesses were examined, and apparently their evidence substantiated the statement made by Mr. Anderson. We must not forget, however, that Mr. Anderson’s estimate was in respect of the running of smaller steamers. In a letter to the press, he explains that the cost of running the larger steamers would be considerably greater. He says : -

But, whereas my estimate was for a ship of about 9,000 tons, with a transit of 662 hours, the report contemplates ships of 12,000 tons, travelling at 16 knots. To the shipowner the distinction is rather more than appreciable.

Accepting Mr. Coghlan’s data as to the consumption of extra coal, that alone will account for about ^3,500 per voyage, anil, what with more firemen, a larger portage bill, more food, more housing room, and consequently reduced cargo space, increased canal, port, and pilotage dues, together with conditions as io repairs, wages, &c, laid clown in report, I should be much surprised if the average round voyage did not eat up ^10,000.

The additional wages required in respect of a vessel of 12,000 tons at Australian rates would just about make up the difference between Mr. Kenneth Anderson’s estimated cost of running a steamer of 9,000 tons and the estimated cost of £35,000 per round trip, including insurance, given by the Commission itself.

Mr Liddell:

– What is the difference in regard to the extra coal consumed on the larger steamers?

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

– It would make a difference of about £3,500 per voyage. Then we have to allow for the extra cargo to be handled, and the provision to be made for the additional passengers which one of these larger steamers would be able to carry. The additional expenditure in respect of every £100 increase in the railway returns may amount to £60 or £70.

Mr Fisher:

– But in the shipping trade the proportion is not the same.

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

– It is, but there is an additional expenditure. In these circumstances, I think it will be evident to honorable members that an addition of £5,500 to Mr. Anderson’s estimate is not more than sufficient to provide for the extra cost in respect of coal &c, and the additional cost of the increased trade of the largest steamers.

Mr Thomas:

– Some of the smaller steamers are using more coal than they ought to do, because they have to travel at what is above the economical speed. We had evidence to that effect by Mr. Anderson.

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

– My experience in travelling leads me to believe that if the honorable member expects that economy in respect to coal consumption will be secured by the substitution of turbines for reciprocating engines on steamers having to run at 16 knots per hour, he is greatly mistaken. The owners of the Maheno - a 16-knot turbine steamer- will tell him that she is one of the largest consumers of coal in the Union Company’s fleet.

Mr McWILLIAMS:
FRANKLIN, TASMANIA · REV TAR; ANTI-SOC from 1906; LP from 1910; NAT from 1917; CP from 1920; IND from 1928

– She is described as a “ coal eater.”

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

– That is so. The theory is that the consumption of coal by reciprocating and turbine engines is the same when the rate per hour does not exceed 16 knots, but that when that speed is increased the turbine engine shows to greater advantage. The experience of the owners of a turbine steamer running 16 knots per hour in our own waters is that the coal used in running the turbine en gines is considerably more than would be the case if reciprocating engines of equal power were employed. Of course, everything depends on the nature of the voyage.

Mr Bamford:

– And also on the furnaces. Some steamers will consume twice as much coal as others do.

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

– But that steamer is fitted with up-to-date machinery. I am not taking into account any increased cost in respect of any failure of the turbine steamers to effect the anticipated economy in regard to coal consumption, but on these figures I do not think an estimate of £34,500 per round trip in respect of the cost of running is an excessive one. The honorable member for Barrier will recognise that I am not seeking to deal unfairly with his case. I do not base my calculation on the £10,000 estimate which Mr. Anderson thinks may represent the increased cost per trip of the larger steamers. I add only one-half of what he estimates as the difference. That makes £34,500 per round trip, or £897,000 per annum. Insurance I set down at the. same rate as the honorable member himself, namely, at £187,000 upon a capital of . £3,600.000. For depreciation and a sinking fund I allow £.180,000 as he does. The honorable member for Barrier thinks that he might effect a saving upon insurance. He might, if he were lucky, but I do not think that he would make any saving upon the item, of “ depreciation and sinking fund.” It would take sixteen or seventeen years to accumulate the cost of a vessel, and before that period had expired we might witness an entire revolution which would render those vessels quite out of date. Then I accept the honorable member’s figures regarding managerial expenses, which he estimates at £57.000. Of course, we must recognise that at every port at which the vessels called there would be expenses of this description. The items which I have enumerated make a total expenditure of £1, 440, 000 per annum as against a revenue of £1.023,000 - a deficiency of £417,000. If we accept the honorable member’s estimate of the capital required for the establishment of a national fleet, namely. £3,000,000. that deficit would be reduced to £336,ooo. I am thoroughly satisfied that nine vessels would ‘be required for the service, and I believe that they would cost £400,000 each. But even if eight steamers were sufficient for the purpose - assuming that thev cost £375,000 each - there would be a loss of £336.000 per annum. I now wish brief] v to allude to one or two other matters which were dealt with by the honorable member in the course of his speech’. In one instance T did -not think he was Quite fair to Mr. Kenneth Anderson, the local manager of the Orient Steam Navigation Company, but I do not propose to say anything about that matter, because I think that the honorable member subsequently made his position right by his letter to that gentleman. I think that the Commission of which the honorable member was Chairman acted very unwisely in declining to inspect the balance-sheet of the Orient Steam Navigation Company when the chance to do so was afforded them.

Mr Thomas:

– Of what use would it have been to us?

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

– After having examined that document with any substantiating figures which Mr. Kenneth Anderson was willing to provide, the Commission might have been more assured of the correctness of their own estimates concerning the cost of running these steamers than they otherwise could be. I think that it would have been a good thing for them to have inspected the balance-sheet - if only for their own information - and to have formed their conclusions upon it. Either it would have strengthened their opinions, or it would have modified them. Tn correcting Mr. Kenneth Anderson’s letter, I think that the honorable member for Barrier unwittingly did that gentleman an injustice. Upon page 1449 °f Hansard, the honorable member criticises Mr. Anderson’s statement that not much more than half the freight and passenger fares quoted in the report had been realized by the Orient Steam Navigation Company’s steamers. He then proceeds to show that if that were the case, the Orient Steam Navigation Company must have incurred a verv heavy loss indeed. He says -

That company having only averaged ^540,000 per annum from passengers, fares, and freights -

Mr Thomas:

– I was basing my statement upon the Age report.

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

– The honorable member was replying to Mr. Kenneth Anderson’s statement, I take it.

Mr Thomas:

– My criticism was based upon, the Age newspaper article. ,

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

– If the honorable member’s assertion was based upon the statement contained in the Age newspaper that statement was wrong. Mr. Kenneth Anderson says that the receipts of the Orient Steam Navigation Company, by way of freight and passenger fares, were not much more than half the amount estimated by the Commission. But I would point out that £540,000 is not onehalf.

Mr Thomas:

– I was simply dealing with the figures which were presented in an article which appeared in the Age.

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

– Then I am not replying to the honorable member. I am merely showing that the figures contained in. the Age article are wrong.

Mr Thomas:

– If I did not make myself clear it was mv own fault.

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

– I quite recognise the force of what the honorable member says. I merely desire to point out that £585,000 would be one-half the revenue which is derived from passengers and freight - not £540,000. Of course the subsidy has to be added1 to that amount. Then the honorable member for Barrier went on to say -

Therefore the Orient Steam Navigation Company -

Of course he was basing his statement upon the wrong figures published in the Age newspaper article - have apparently been going back to the extent of ^400,000 per annum for the last twenty years.

Mr KING O’MALLEY:
DARWIN, TASMANIA · ALP

– Thev must be bankrupt ‘now.

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

– They do not refer to the past twenty years, but only to the last four years.

Mr Thomas:

– I was simpy dealing with the Age article.

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

– I do not hold the honorable member responsible. In his evidence before the Commission the manager of the Orient Steam Navigation Company distinctly stated that that company and the Pacific Company had each lost £200,000 in fifteen years, namely, from 1888 to 1903. The testimony of Mr. Kenneth Anderson was that the revenue from freight and passenger fares during the last four years was not much more than half the amount estimated by the Commission. It will thus be seen that it might have been £650,000, which amount, added to the subsidy and the receipts of the Orient Steam’ Navigation Company from trips to Norway and other places, with which the director says they have had to supplement their Australian earnings, would make a very different net loss from that set out bv the honorable member, quoting from the Age newspaper.

Mr Frazer:

– In travelling to Western Australia it is very noticeable that the Orient Steam Navigation Company is not doing one-half the passenger trade. It is not doing as much as is being done by the Peninsular and Oriental Company.

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

– I do not doubt that. The Orient Steam Navigation Company state that- during the past four years they have experienced a very bad time indeed. Freights - especially freights from Colombo to Australia. - have declined very considerably. The company are now obliged to carry for 14s. or 15s. per ton goods for which they formerly received £3 per ton. From their own statement I anticipate that the company’s annual loss during the past four years has been considerably more than the annual loss sustained during the fifteen years to which I have already referred.

Mr Thomas:

– I am glad that the honmable member has mentioned that fact.

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

– I merely wanted to explain the position. My statements are based upon M.r. Kenneth Anderson’s letter to the press. That gentleman deserves fair treatment, because of the way in which he tendered his evidence.

Mr Thomas:

– I have already expressed that view.

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

– Exactly. Mr. Anderson will see that his statement has been misrepresented, not by the honorable member, but by those who prepared the figures which appeared in the Age newspaper. In another portion of his speech, the honorable member for Barrier speaks of the inflexibility of its freight rates as a reason for the establishment of a national fleet of mail steamers. I am quite aware that shippers often say they would rather have steady freights regulated even by a combination ‘than be subjected to freights which fluctuate from day to day and week to week. But that- statement always requires to be qualified bv the proviso, “Assuming that those freights are reasonably low.” No persons engaged in trade which depends on transit advocate inflexible freights, if they are high freights, and there are none who will not take advantage of any flexibility in freights - even if it amounts to only id. or 3d. per ton.

Mr Thomas:

– The importers admitted that it made very little difference to them, because they pass on the freight.

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

– They must do so. Their objection to fluctuating freights is that they are never certain that some neighbour will not reap an advantage. The rate does not matter a rap . to them, if not too high, so long as their competitors are paying the same freight, because that freight is passed on to the consumer. In every merchant’s office, cost-sheets are made up with every shipment of goods, and the freight paid is included in those sheets. The consumer has to pay that freight unless a neighbouring importer, as the result of securing a lower freight, can undersell his competitors. Unless the Commonwealth intended to enter the shipping ring, no inflexibility could be maintained. It is idle to think of it. The honorable member for Barrier also alluded’ to the shipping ring. In speaking of the firm of successful contractors, he said -

If it is not to be a member of that Conference, then heaven help it. It will need all the assistance that a kind Providence can give it to save it from ruin. On the other hand, if it is to be a member of the Conference, the position will be rather serious, so far as the people of Australia are concerned.

The very same remark would foe applicable to a Commonwealth fleet of steamers. If it is to be a member of the Conference, it would be injurious to the interests of Australia, and if it is not to be a member, then Heaven help it !

Mr Thomas:

– I went on to say that behind the Commonwealth Government there are the resources of civilization.

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

– There are the resources of law - of legislation.

Mr Thomas:

– I said, “ of civilization.”

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

– Really, the honorable member should have said, “ of legisIation.” He meant that whenever a Commonwealth concern was being pinched too hard, a Bill could be submitted similar to the Australian Industries Preservation Bill, under which the people would be compelled to pay, by reason of the State refusing to allow competition which would have the effect of reducing freights.

Mr Fisher:

– The Government have not done that in connexion with the cable rates.

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

– They have done it already in the Australian Industries Preservation Bill.

Mr Fisher:

– They could do it in the case of the telegraph rates, but they have not done it.

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

– Because they are al read v losing as much as they care to lose.

Mr Thomas:

– And the commercial classes are gaining.

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

– At a later period, I will deal with the statement that the commercial classes alone benefit by the payment of the mail subsidy. Let us suppose that a Commonwealth fleet of steamers charged inflexible freights. Does the honorable member know what would be clone immediately ? Does he not recognise that the position upon the open sea is quite different from that which obtains upon our railways? If inflexible rates were introduced, a “ cut” would be. made bv opponents upon nil the best classes of freight. That would take the business - unless the Commonwealth were to imitate the worst practices of the shipping ring, and introduce the boycott - and only the. less paying lines would be left. That is what inflexible rates would mean. Although the honorable member makes the fixing of such rates one of the great recommendations for a Commonwealth line, it would be found absolutely impossible to carry them into effect in connexion with an ocean service. The Commonwealth line would have to compete, as other -lines do, for the freight offered. I have not allowed for that* competition in the credit which I have given for what is to be earned. I have taken the present rates, existing under ordinary competition, not what would be the rates under the extraordinary and exceedingly keen competition which would be created by the entrance into the freight market of Australia of a new line of steamships owned by the Government. I may allude now to certain remarks made by honorable members yesterday on the subject generally. The honorable member for Hindmarsh made the extraordinary statement that, if ‘there were a loss in the carriage of goods or mails to Australia, the Government should bear it - that it would not be just to ask the private steam-ship companies to bear it. That was a most extraordinary statement. It is set out in the report, and the honorable member adopted the statement, that the subsidies are now paid out of Customs duties and are borne chiefly by the poorer members of the community, yet he expressed the opinion that, if there were a loss in running the vessels of the Commonwealth line, that loss should fall on the Commonwealth - which means, under our system of raising revenue, chiefly on the poorer members of the community - and not on private firms. I would let the private shipping companies look after their own interests, and have the Commonwealth look after its interests. It is on those lines that I am dealing with the Commission’s figures. Under our system of raising revenue through the Customs, undoubtedly the poorer members of the community must bear the greater share of any loss. That is one of my strong objections to heavy Customs duties. ,

Mr Fisher:

– The honorable member means that they must pay an undue proportion.

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

– Yes.

Mr Thomas:

– The honorable member is not opposed to revenue duties?

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

– I would raise as little revenue as I could by means of heavy Customs duties. The honorable member for Hindmarsh also spoke of a Commonwealth line as affording a splendid means for the importation of immigrants. But, as will be seen by the figures given in the report, the third-class rates of passage money aid the shipping companies very little in making their operations payable. Out of an estimated revenue of £701,000, only £162,000 would be obtained from third-class passengers, although it is supposed that half of those carried would be third-class passengers. Therefore, any reduction in third-class passenger rates might mean ‘ a very considerable loss. Would it not be better, instead of making such a loss by running Commonwealth vessels, to apply a sum’ equal to the estimated loss to the importation of immigrants, if that is considered desirable. It has been said that the management of railways by the Governments of the States affords an example of the way in which a Commonwealth steam-ship line could be run. The circumstances, however, are entirely different. As I have already pointed out, you can have competition on the ocean ; but there cannot in our case be much competition on land, by means of railways, especially when our country is sparsely populated. If our railways were privately owned, we should not get the competition necessary to bring about low rates of freight. But it must be remembered that the Government railways tend to develop and add to the value of Crown lands, and also, in many cases, save heavy expenditure upon the making of roads. Therefore, while the balancesheet of the earnings and expenditure of a Government railway system may not show a. surplus, the lines may indirectly be profitable. On the ocean, however, there can be the freest competition. It is extraordinary that a proposition of this kind should be put forward at a time when competition is having more effect than it has had in previous years in the reduction of freights. The reduction of freights which has taken place of late years shows that competition has had play, notwithstanding the existence of the shipping ring. I entirely disapprove of some of the actions of the shipping ring, and am prepared to take steps to put an end to them. In my opinion, the honorable member for Barrier is wrong in saying in the report that we cannot deal with these evils, because the arrangements are made abroad. I think I know of means whereby they could be dealt with. But the operations of the shipping ring have not shut out competition, and goods are being carried to-day at rates much lower than were previously charged. The companies are finding that lower rates encourage an increased business, and I do not anticipate a return to high rates. It has been claimed that the railways of the States have been well .managed, and that there is no reason why a line of steamships could not be equally well managed by the Commonwealth. But the railways of the States have been well managed only to a certain extent. There have been times when the management has been absolutely bad. There has been a tendency “to drift, and drift into worse conditions year by year, until drastic action has had to be taken to place the finances on a better footing.

Mr Webster:

– Is not that a chronic condition, as a rule, under each incoming Commissioner?

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

– The state of affairs of which I speak has been almost chronic. The honorable member for Kennedy said last night that if a man like the late Mr. Eddy could be obtained to manage a State system of railways effectively, an equally good man could be obtained for the management of a Commonwealth line of steamers. He forgot that Mr. Eddy had one of the greatest struggles that a man could have, not with, those under his control, but with the Parliament which had previously controlled the railways.

Mr Webster:

Mr. Eddy had the greatest chance ever given to a Commissioner.

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

– He had to fight for his position, and was not supported by certain members of Parliament who should have been behind him.

Mr Webster:

– Parliament voted for him enormous sums of money which had been- refused to his predecessor.

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

– That has nothing to do with my argument. The voting of those sums was necessary, because the lines had not been properly maintained. However, I am not dealing with that aspect of the question. The honorable member for Kennedy, when speaking in praise of Mr1. Eddy, and of what he did, forgot the struggle that that gentleman had to accomplish his ends, and forgot that those who opposed him were members of the party to which he belongs’. I do not refer to the honorable member for Bland as one of these members. He was not, I think, at that time in the Parliament of New South Wales, and my experience of him in subsequent Parliaments leads me to think that he supported the Commissioners generally.

Mr Webster:

– The two chief offenders were not members of the New South ‘Wales Labour Party.

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

– Members of the Labour Party tried to break down Mr. Eddy’s control.

Mr Webster:

– Neither Mr. Schey nor Mr. Hoy le’ belonged to the Labour Party.

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

– They were not the only persons concerned ; there were others. Certain members of Parliament tried to break down Mr. Eddy’s control, and to re-establish political management.

Mr Wilks:

– The present New South Wales Commissioners have failed to administer the railways successfully.

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

– Nothing like what has happened in connexion with the relations of the New South Wales Commissioners could have continued so long, under private control.

Mr Wilks:

– Men receiving 30s. a week would have been dismissed if they had quarrelled in the way that the three New South Wales Commissionershave quarrelled.

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

– This is an instance in which a State-owned property has not been as well managed as a private concern would have been.

Mr Webster:

– Does the honorable member admit that in the New South Wales railway service social influence has become as pernicious as political influence?

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

– I do not know whether it has or has not, but, if it has, the fact helps my argument.The Commonwealth Government would be in a far worse position in trying to manage a line of steamers, not only trading in. the States, but to England, the Continent of Europe, the East, and other parts of the world, than that of any one State in managing its railways. Furthermore, as State enterprises grow, political influence increases. Why? Because the employes engaged in those enterprises increase in number, and, being electors, are capable of bringing pressure upon members of Parliament. What happened the other day in Sydney? I am not going into the merits of the case. The Government tramway employes there may be suffering grievances which should be redressed But we find one of the tramway officials doing what would never have been permitted in private service, and subsequently being dismissed.

Mr Watson:

– Similar notices are posted in private establishments all over Australia.

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

– But there were other things as well.

Mr Fisher:

– What other things?

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

– I am not going into that question, because it has nothing to do with the case. Even if such action would have been permissible in a private firm, it is clear that the man in question was discharged. What did he do immediately afterwards? He submitted himself as a candidate for Parliament.

Mr Fisher:

– Quite right.

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

– There is nothing to prevent a man from doing that. I am not objecting to his action so far as that is concerned; but I am showing the natural tendency - a tendency that will increase the more that we bring public enterprises under State control. The honorable member for Bland was on the platform assisting the candidate, who stated deliberately that when he got into Parliament he would go (for the Commissioners.

Mr Watson:

– No. He said that he would endeavour to remedy that particular abuse.

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

– I say that that is a direct attempt to bring parliamentary influence to bear in connexion with the administration of an important State enterprise.

Mr Fisher:

– The general experience is that a man who has a grievance cannot easily get into Parliament.

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

– I am not saying whether or not the man had a grievance. I do not know what his grievance was. Some men are very anxious to get into the service which has those grievances, and anxious not to get out of it.

Mr Webster:

– The same principle applies all round.

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

– I do not know anything about this particular grievance. I am merely indicating the tendency to introduce political control into Stateowned services. It is perfectly natural, and I am not blaming the men, because, possibly, if I were in the service, and had a grievance, I should adopt a similar course. I am pointing, out that the growth of political influence is the natural corollary of the increase of State-owned services.

Mr Watson:

– After all, public opinion will keep us straight.

Mr.DUGALD THOMSON.- Public opinion did not keep our railways straight.

Mr Watson:

– It effected an improvement upon private administration.

Mr Wilks:

– It did not prevent the lands scandals occurring.

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

– The tendency to which I have referred is inevitable, and that is the reason why State undertakings, especially those that are subjected to heavy competition, are not conducted so well as are private enterprises.

Mr Fisher:

– What about the Newport workshops ?

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

– That is an enterprise within a State. I am speaking of those beyond the State, which are subjected to outside competition. The Newport workshops are practically independent pf competition.

Mr Watson:

– They make locomotives in successful competition with private com>panies.

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

– I do not Know anything about that. I should first have to look into the figures.

Mr Watson:

– A Royal Commission that did not include any Labour members found that they had effected a big saving.

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

– That does not affect my argument that, if more services are brought under the State control, and the number of public servants is added to, the tendency must be to increase the scope of political influence. Now I wish briefly to deal with the proposed mail contract. I think that, speaking generally, Ministers have every reason to be satisfied. It is rather surprising to me that they have managed to obtain such liberal terms in the contract, and it will surprise me still more if the service is carried out. There are many features in connexion with the contract that cause me to be extremely doubtful upon this point. It has been stated that the firm of Sir James Laing and Sons are behind the contract; but they are not. £27,500 is behind it, and nothing more. That is the amount that has to be forfeited if the contract is not carried out. I am not quite certain that even that amount is yet behind the contract, because one of the conditions states that it shall not be binding until confirmed by Parliament. It is, therefore, doubtful whether the £27,500 could be forfeited at the present time.

Mr Fisher:

– It would not be fair to forfeit the deposit if Parliament did not ratify the preliminary agreement.

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

– No; but I am not satisfied that the amount would be forfeitable at the present time in the event of the withdrawal of the contractors. J. am rather inclined to think that, until Parliament ratifies the contract, the contractors would be free to withdraw their deposits. Therefore, if they desired to speculate with the contract, they would have a longer period than would be available to them under other conditions. In any case, £27,500 represents the whole of the binding element in the contract. If the arrangement is carried out, it will be a most excellent one for the Government. My criticism of the proposal for the establishment of a Commonwealth mail service will show that I do not think that the contractors have very rosy prospects before them. However, I have nothing to do with that. I am willing that we should take their money for the development of Australia if they are ready to put it down. I think that greater care should have been exercised in the drafting of the conditions of contract, because the agreement seems to me to contain some curious provisions, and to be marked by strange drafting. For instance, clause 5 provides that a request can be made for a reduction of the period of transit, and that, if the reduction is effected, the reimbursement of the contractors is not to exceed £25,000 per annum. No provision, however, is made for enforcing the request for an increase of speed.

Mr Austin Chapman:

– It will not be difficult to remove any ambiguity of that kind.

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

– But is it an ambiguity?

Mr Austin Chapman:

– The honorable member contends that it is.

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

– Is it intended that power should be given to insist upon a reduction of the period of transit ?

Mr Austin Chapman:

– Yes.

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

– The contract does, not so provide at present, and ‘ therefore the Minister will have to amend it. The 6th clause provides -

That if during the sixth year of the fixed period of ten years mentioned in Clause 2 hereof any competing line of mail ships shall then provide an improved and accelerated service from Europe to Australia, the contractors shall, if so required by the Postmaster-General, provide a service equivalent to such improved and accelerated service.

I do not see why the provision should be made to relate specially to the sixth vear of the contract. Should it not also apply to the succeeding years, seeing that an extension of the contract mav be granted if a higher speed is provided? Then there was a great deal of difficulty in arriving at an understanding as to what was meant by vessels of 11,000 tons register. The Prime Minister stated that the matter had been put in that way intentionally. In shipping matters “registered tonnage” usually means net tonnage. 0

Mr Watson:

– No. The Peninsular and Oriental and Orient Steam Navigation Companies advertise the gross tonnage as the registered tonnage.

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

– I am speaking of the practice adopted in legal documents. Of course, the shipping companies advertise the gross tonnage of their ships because of the larger figures. The registered tonnage of a steamer as referred to in legal documents generally means the net tonnage unless it is specifically stated to the contrary. The Prime Minister stated that the provision in the contract had been purposely left in a vague form.

Mr Watson:

– He did not say that it was left in a vague form, but that the terms employed were intentionally adopted.

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

– I asked whether it was intended to mean net or gross tonnage. If it had been intended to mean one or the other, the Minister should have given me a straight answer. He would not say anything definite, but merely told me that it had been purposely put in that way. If his reply was not vague I do .not know what it was. If net tonnage is meant, steamers of the size indicated1 could not pass through the Suez Canal, nor could thev enter Brindisi. And yet the Prime Minister would not tell me what was meant. Either he did not know, or for some reason he was keeping the matter dark - perhaps in order to delude the contractor.

Mr Watson:

– It is contrary ito the rules of the profession to .give an opinion without a fee.

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

– But when asked a question in Parliament, a Minister ought to be able to give a straight answer.

Mr Fisher:

– He should te able to do so in respect of every business matter.

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

– We ought to receive a straight answer to a simple question respecting a business matter of this kind. The Prime Minister says that this provision was intentionally left vague ; but in my opinion the intention should have been distinctly set forth. If the vagueness was unintentional”, then the clause is another illustration of the careless drawing of the contract. I need not discuss the difference between net and gross tonnage, but I would point out that very few vessels of 11,000 tons net are afloat. In clause 34 of the conditions we have a provision - for which, I think, the

Minister claimed credit - that is designed, I suppose, to prevent the preferential carriage of foreign .goods. The clause provides that -

The contractor shall not give or agree to give any undue preference to any company or person outside the British Dominions in relation to the conveyance of or rates to be charged for persons or goods by any mail ships employed under the contract as compared with persons resident within the British Dominions.

I understand that this provision is designed to abolish the practice of the shipping ring in England, for instance, which is prepared to carry goods at a certain rate from Great Britain, and, notwithstanding transhipment expenses, will carry goods at a lower, or, at ali events, the same rate, from Antwerp or Hamburg. But the clause as framed will not do away with that system. Goods imported from Germany and Belgium are often bought by the British agents of Australian firms. Those agents can buy in Belgium or Germany, and even under this condition it will be open to them’ to ship goods so purchased at preferential rates. All that this clause provides is that the contractor shall not give, or agree to give, undue preference to a company or person outside the British Dominions. As a rule, such preferences are given to persons, not outside, but within the British Dominions in respect of goods purchased abroad, and that practice can still be carried on under these conditions. There are one or two other matters with which I shall not deal, but, taking the contract as a whole, I think that the terms are decidedly advantageous, and that if it be carried out, and the conditions observed!, it will give Australia an improved mail and steam’ service that ought to be beneficial to our shippers and producers. It has been stated during the debate that mail subsidies are designed solely for the benefit of the commercial classes. That is not so. As a. matter of fact, defective means of communication with the country whence they import suits the importing classes. Thev can make far more money in the absence of cables and speedy mail services than they can where the means of communication are stood, and information can be disseminated by cable among the smaller buyers.

Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP

– Then whom does the mail subsidy benefit?

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

– The community.

Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP

– What section of the community ?

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

– It benefits the honorable member, among others. Is he not aware of that?

Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP

– No;, and I do not think that the honorable member will be able to show me that it does.

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

– One of the great difficulties under which we labour arises from our remoteness from the markets of the old world. If we were in closer touch with them, Australia would soon be teeming with people.

Mr Fisher:

– And there would be a financial saving, in respect of bills of exchange.

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

– I shall deal with that point presently. Anything which tends to reduce our remoteness from the markets of the old world is beneficial to our people. If the time of transit be cut down by days it makes a great difference to us, whilst a difference of a week is of still greater importance. Such a saving of time has a great effect on the carriage of perishable products, for even when they are kept in cool chambers they are liable to deteriorate. Then again, a great saving in interest is effected by the shortening of the time occupied. If honorable members were to reckon up the larger return secured by our exporters as the result of that saving of interest, they would find that even if it does not altogether cover the subsidy of £125,000 per annum, it goes a long way towards it. Another consideration is the saving to the merchant who sends drafts to Great Britain ; the shorter the time the less the interest to be paid. That saving, in one sense, goes into the pockets of the merchant, but in another sense it does not. In these days of competition, except in relation to the product of a monopoly, all mercantile business is conducted on the basis of adding to the price of merchandise all charges in respect of it, and securing over and above those charges a profit sufficient to compensate those engaged in the trade. The trader gets more than is sufficient to compensate him if he can do so. but he will not continue in the business if there is no profit. The exchange on drafts constitutes one of the charges so added to the cost of goods. Any increase in charges means an increased cost, and the exchange on drafts appears as regularly in the cost-sheets as does freight or any other expense incurred. If a merchant finds that his goods including these charges cost him a certain sum, and that he can afford to sell them at an advance of 5 per cent., he adds that as being sufficient to cover his profit.

Mr Fisher:

– Four per cent, or 5 per cent, is a good return.

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

– That shows how little the honorable member knows about business matters. I do not wish to introduce personal matters, but the firm with which I was connected for a number of years never, during that time, made more than 5 per cent, on its import overturn. Nevertheless, it did very well, because it turned over its capital three or four times a year. Five per cent, on an overturn would mean not 5 per cent, on capital, but something more. Honorable members, however, in discussing these matters, often make a mistake in this regard. Five per cent, is not an unusual profit for an importer to make; but, as a. rule, it would be too high an estimate. One per cent., 2 per cent., or even 1 per cent, on very large lines will thoroughly satisfy most importers.

Mr Watson:

– That is not the difference between the- landed cost and the cost to the retailer.

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

– Often it is not ; but as a rule a man will not secure 5 per cent, on imported goods.

Mr King O’malley:

– A profit of more than 5 per cent, is secured in respect of imported spirits.

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

– That is a special line of business. On some lines a return of 100 per cent, is gained, but I am speaking of ordinary trading. In such cases a return of 5 per cent, pays remarkably well. If the honorable member for Wide Bay were an importer with a capital of ,£40,000 - and I am dealing with this matter because it affects the question of the mail service - and could turn over that capital four times a year, making a profit of 5 per cent., he would secure 20 per cent, on his capital, so that he would have an excellent return. The cost of a Stateowned mail service such as is proposed by the Commission would be considerably more than the honorable member for Barrier has suggested, and, even assuming that the management was as good as that of a private company, and that there was no political interference, the earnings would be consi derably less than is estimated by the Commission. In these circumstances, therefore, I cannot vote for the . amendment. I am not going to say that under certain conditions there .might not be justification for a State-owned service. If we found persons taking advantage of a monopoly which they had established, and making it absolutely injurious to the interests of Australia, some action might have to be taken, but I do say that nothing of that kind has arisen, nor is it likely to arise with the free competition of the ocean. As we shall do much better under this contract than I believe we could possibly do with a State-owned line of steamers, I shall vote against the amendment.

Mr McLEAN:
Gippsland

.- So far as the mail service is concerned, I think that the Government have made a very good bargain, but I regret that under this contract no provision is made with regard to the carriage of perishable produce during the next ten years. That is one of the most regrettable, features of the agreement. We all know what the export trade has done for New Zealand. It has lifted it from a state of depression, and made it one of the .most prosperous, if not the most prosperous, colony in Australasia. We are aware also of the possibilities of our export trade. The future prosperity of Australia will depend very largely upon the volume and the quality of our exports. It seems to me that we have missed a very great opportunity to make favorable arrangements for the carriage of these perishable products. We know that any company which enters into a contract - irrespective of whether it be for the conveyance of our mails or of perishable products - must believe that it will make a profit out of the undertaking. If it can make a profit upon both lines, it can afford to make a much less profit upon each. If it makes an equal profit upon both lines, it necessarily follows that it can charge a lower freight upon each than would be possible if it were confined to one line only. I do not know whether it is too late for the Government to reconsider this matter, but in mv opinion it constitutes a very serious omission. I think that a favorable arrangement for the future conveyance of our perishable products is of quite as much importance to the people of the Commonwealth as is a favorable arrangement for the carriage of our mails.

Mr KING O’MALLEY:
DARWIN, TASMANIA · ALP

– It is of far more importance.

Mr McLEAN:

– There is no doubt that our export trade has a great deal more to do with the prosperity of the country than has a favorable mail service.

Mr Frazer:

– Does the honorable member think that a fleet of steamers engaged upon the run from Great Britain to Australia would have any chance of succeeding, unless they made that provision?

Mr McLEAN:

– At any rate, they are not compelled to make any such provision for the carriage of our perishable products. The contractors are not under any obligation to carry those commodities at a particular rate. Any arrangement that we may now make will be of a one-sided character, because we cannot give the mail contract to any other line of steamers which may enter into competition with them.. When once this contract has been ratified, the opportunity to make favorable arrangements for the carriage of our perishable products to the markets of the world will have passed for a period of ten years. I do hope that the Postmaster-General will look into this matter, with a view to seeing if it is not possible, even at this late hour, to do something in the direction suggested. I can assure him that it would make the contract very much more acceptable than it is to the people of Australia, and very much more profitable. There is another matter upon which I should like to say a word or two. Although I am aware that nothing can be done at the present time, I cannot allow this opportunity to pass without expressing mv regret that we have made it impossible for Australia to enter into a joint contract with the mother country for the carriage of our mails. When we were jointly interested with the old country in the carriage of our mails, the subsidy which we were called upon to pav was very much smaller than it is now. When the honorable member for Bland was in office, he was informed by the manager of the Orient Steam Navigation Company that the maintenance of our White Ocean policy had nothing whatever to do with the increased subsidy demanded by that company. But I know perfectly well that when the Ministry of which I was a member was in office some time later, that very question cropped up upon every occasion, and it was made very manifest to us that that policy had a very great deal to do with the increased subsidy which was demanded. We cannot get away from the fact that we have been paying a very much higher subsidy from the moment we passed the legislation in question. I am as strong a supporter of a White Australia as is any honorable member. I think that it is a policy for the maintenance of which we are warranted in making sacrifices, because the purity of the race is involved. But the question of the maintenance of a White Ocean does not affect our people in any way. We may rest assured that if we prevent anycolored aliens ‘ from being employed upon our mail steamers, their places will not be filled by Australians. The latter, 1 am pleased to say, can earn much better wages than those which are paid to persons of the former class. But, to my mind, the most serious aspect of the matter is that it causes a great deal of embarrassment to the mother country. Probably one of the greatest problems of the present age is the manner1 in which Great Britain governs some 300,000,000 of naturally brave people by means of a handful of Britishers.

Mr SPEAKER:

– Does the honorable member think that his remarks have any relevance to the proposed mail contract?

Mr McLEAN:

– I think that they are very intimately connected with it. My remarks have a great deal to do with the price that we are asked to pay in connexion with that contract. I do not think that I am out of order in referring to the different aspects of the question, and in showing why we should take some steps to repeal that section in our Postal Act to which I have directed attention.

Mr SPEAKER:

– The honorable member will be perfectly in order in doing that, but I understood that he was dealing with another point.

Mr McLEAN:

– My remarks have a direct bearing upon that question, as 1 think I shall be able to show. I was pointing out the difficulty which Great Britain must experience in governing those people whom we are excluding from employment upon mail steamers subsidized by the Government - people who are British subjects. It is only by satisfying them that they are being fairly treated by the mother country that she can hope to govern them with a mere handful of white men. If any number of them feel that they are being deprived of their employment by reason of our interference, they -will regard our action in the light of a vindictive persecution. We know that the great Indian Mutiny had for its origin much less provocation than is afforded by our action in depriving these people of the means of earning their livelihood.

Mr Carpenter:

– What nonsense !

Mr McLEAN:

– Will the honorable member say that the incident of the greased cartridges constituted as serious a matter ?

Mr Carpenter:

– Yes.

Mr McLEAN:

– The honorable member is welcome to his opinion, but it seems to me that to deprive men of the means of earning their livelihood is one of the most serious offences of which we can be guilty.

Mr Mauger:

– We have not deprived anybody of his means of earning a living. All that we say is that we will not / subsidize vessels which employ coloured labour.

Mr Frazer:

– When that provision in the Postal Act was passed the Orient Company was not employing black labour.

Mr McLEAN:

– The Orient Company was not in the combine. I am pointing out that the Postal Act prevents us from joining with Great Britain in providing a service for the carriage of our mails and of our perishable products. The war in South Africa was the result of withholding the franchise from our countrymen there, and that, I contend, was not nearly so serious an offence as is that of depriving men of their means of livelihood. We should not endeavour, by any wanton act, to embarrass the mother country, upon which we depend for our defence. I draw attention to this matter, because it is as well that those who are opposed to that clause in our mail contract should be reminded of it. So far as the provision which has been made by the Government for the carriage of our mails is concerned, I regard it as most satisfactory. The amount of the bond is verv small, considering the magnitude of the interests involved, and the great cost that would accrue to Australia if by any chance the contractors failed to carry out the undertaking. It appears to me that, if the firm in question entertains no doubt of its bona fides, .it could just as well give a bond for £100,000 as for £25,000. No money deposit is demanded ; only a bond is required, and that bond should have been large enough to put the matter beyond the possibility of doubt. However, I suppose that the Government have satisfied themselves upon that point, and I do not wish to labour it. With regard to the amendment of the honorable member for Barrier. I can only say that he made the verv most of his case. He delivered a very able speech, and I certainly think that he made the best use of the material at his disposal. But to-day the honorable member for North Sydney has shown how very flimsy that material was.

Mr Frazer:

– He merely quoted one opinion against another.

Mr McLEAN:

– The honorable member for North Sydney brought his own experience to bear”, and placed before us figures which absolutely discounted the value of those quoted in the Commission’s report. The honorable member for Barrier himself did not attach much importance to the figures upon which his estimates were based. He admitted that they were not capable of any proof.

Mr Frazer:

– The honorable member for North Sydney said that he disagreed with them, and that about represents the position.

Mr McLEAN:

– Before we enter into a contract which will involve an expenditure of over a million sterling, we should have something more than admittedly faulty estimates to go upon.

Mr Frazer:

– Where shall we get them from ?

Mr McLEAN:

– It is not for me to determine the means by which they shall be obtained at the present moment; but the fact remains that they are obtainable. For instance, the honorable member for North Sydney gave us some very excellent information to-day. I venture to say that, if it is analyzed, it will be found much nearer the actual figures than is the estimate submitted to us the other day. It has been argued with some force that it is as reasonable for the Government to control transport by sea as to control land transport. I have no objection to the principle of the proposition, if it could be justified on its merits. I do not oppose it on political grounds. But it must be admitted that the Government railways have a monopoly, whereas a Commonwealth steam-ship line would not have a monopoly, but would have to face the keen est competition. Besides, the Governments of the States did not undertake the construction of railways with a view to obtaining profits upon the carriage of goods and passengers. Their lines were made chiefly with a view to opera up the country and develop its resources.

Mr Wilkinson:

– Does not the giving of communication with countries oversea help to do that?

Mr McLEAN:

– Yes ; but we have such communication now. If there had been private railways in existence, opening up the country, and giving the producers access to markets, I doubt if the Governments of the States would have constructed other lines in competition with them. The State Governments were compelled to build railways, because of the absence of private lines.

Mr Wilkinson:

– The first Victorian railway - the Hobson’s Bay Company’s line - was a private concern.

Mr McLEAN:

– That was only a suburban railway, and the population of the suburbs being dense, the suburban lines have paid handsomely, although for many, years the country lines were losing £1,000 a day. I do not think that honorable members who are supporting the amendment have paid due regard to the fact that our needs in the matter of ocean transport are already served by private enterprise. If we had no means for sending our produce to the markets of the world, I would be as much, in favour of a State-owned steamship service as I am in favour of Stateowned railways. I join issue with my honorable friends of the Labour Party only when they propose to take from private individuals the enterprises which they have built up by their industry. I do not object to State enterprise in legitimate directions. However, I do not think that the honorable member for Barrier intended his amendment to be taken seriously. His object was, apparently, to ventilate the question.

Mr Frazer:

– In making that statement, the honorable member does am injustice to the honorable member for Barrier, who is serious about this matter.

Mr McLEAN:

– I think that if he had been serious he would have been better prepared with data.

Mr Frazer:

– The honorable member has just congratulated the honorable member for Barrier on his speech.

Mr McLEAN:

– I congratulated the honorable member for Barrier upon the manner in which his speech was made. No doubt he did the best he could with the material at his disposal, but that material was defective

Mr Wilks:

– His material was defective, although a Royal Commission spent a good many months in inquiring into the whole subject.

Mr McLEAN:

– I rose to draw attention to the need for making arrangements in the contract for the conveyance of perishable produce, and I hope that, even at this late stage, the Postmaster-General will consider the possibility of opening up negotiations with a view to making such provision.

Mr Wilkinson:

– For the conveyance of perishable produce from Brisbane as well as from other ports.

Mr McLEAN:

– From the whole Commonwealth. I do net advocate the interests of one place in opposition to those of another. I attach very great importance to this- matter, and regard the omission as a very serious one. I know that it will be so regarded by all interested in rural enterprises throughout Australia, and it is generally admitted that rural industries constitute the foundation upon which our prosperity must rest.

Mr FRAZER:
Kalgoorlie

– I wish to congratulate the honorable member for Barrier on the speech which he made in moving the amendment, and to say that I also listened with considerable interest to the able address of the honorable member for North Sydney. I think that it is general lv recognised that, whenever the honorable member for North Sydney speaks, he imparts to honorable members a great deal of information in regard to the subject under discussion. But before dealing with his remarks, I wish to devote a few words to the position which has been reached in connexion with the conveyance of mails from Australia to Great Britain. The Postmaster-General, when moving the ratification of the contract which has been entered into with Messrs. Sir James Laing and Company, told us that in 1897 we paid a. subsidy of £72,000 for a service of 696 hours, under an. arrangement to which the States, the British Government, and the Orient and Peninsular and Oriental Steam Navigation Companies were parties. The possibilities of trade then, however, were not equal to what they are now. There has been a considerable increase in the Australian trade of late years, but that fact has not had the effect of reducing the amount asked as a subsidy for the conveyance of mails between this country and Great Britain, and it is now proposed to pay a still higher subsidy. Owing to the action of the shi npi ng ring, the Commonwealth was forced to pay a subsidy of £.120,000 per annum to the Orient Steam Navigation Company for the conveyance of mails under the contract now in existence, and Ave are asked to increase the subsidy by £5,000 under the terms of the contract now under discussion.

Mr McCay:

– What subsidy is asked, for in connexion with the proposed Commonwealth line?

Mr FRAZER:

– The Commission estimates the receipt of £150,000 from the Postal Department, which is only £4,000 more than the total amount now received by the Orient Steam Navigation Company from the Commonwealth and Queensland Governments.

Mr McCay:

– But the amount estimated for is mo:ie, not less, than that asked for under the contract.

Mr FRAZER:

– The money would be put into a Government undertaking. I ask the honorable and learned member whether he would not rather vote to expend £5,000 on a Government undertaking than to expend it on a private undertaking?

Mr McCay:

– That is too vague a question for me to answer.

Mr FRAZER:

– The honorable and learned member does net answer it because he does not wish to commit himself definitely to either private or Government enterprise.

Mr McCay:

– Before answering the question, I should wish to know the reason for the expenditure.

Mr FRAZER:

– In my opinion, a subsidy of £125,000 for a mail service to Europe is excessive. It is true that under this contract, the mail steamers will occupy sixty hours less on their trips than was stipulated for bv the contract under which a subsidy of £72,000 was paid.

Mr King O’Malley:

– What difference does that make to the people generally?

Mr FRAZER:

– The taxpayers of Australia are being asked to pay .£50, 000 or about £1,000 an hour, for that acceleration of service.

Mr Harper:

– The gain is sixty hours each trip, not on the aggregate number of trips.

Mr FRAZER:

– In my opinion, the number of those in communication with other parts of the world, to whom quickness of transit is of great importance, is verv small, putting out of consideration those connected with banking institutions, and the commercial classes of the community. The proposed subsidy is to be paid to benefit the banking and commercial institutions of Australia.

Mr McCay:

– Would the honorable member advocate the abolition of subsidies?

Mr FRAZER:

– I would substitute the poundage system referred to in the Commission’s report.

Mr McCay:

– Then the honorable member is opposed to the establishment of a Commonwealth line ?

Mr FRAZER:

– No, not necessarily. I am dealing now with the question of subsidy, and will explain my position in regard to the amendment in my . own good time. The Secretary to the Postal Department, in giving evidence before the Commission, pointed out that, under the poundage system, the cost of an oversea mail> service would be about £40,000 per annum, so that a saving °f £85,000 per annum could be effected upon the proposed subsidy. The possibility of so large a saving is deserving of consideration. It may be argued that, if a poundage system were adopted, the service would not be so regular as that secured by the payment of a subsidy. No doubt it is quite possible that the steamers would not start punctually, as they do now from Adelaide, at 2 o’clock every Thursday afternoon. Thev might, indeed, leave as late as 6 o’clock on the days specified for their departure. But no line of steamers trading between England and Australia could successfully carry on its operations in the face of the competition which it would have to meet if it did not advertise months beforehand the date and hour of the departure of its vessels from the various ports of call. If it omitted to dp so, or departed to any great extent from the time-table laid down, the travelling public would cease to patronize it. But, even if we did not secure quite so regular a service as we now get, the saving which, would be made bv the adoption of a poundage system is worthy of consideration, and would justify us in facing the difficulties which are anticipated in connexion with such .1 system. The PostmasterGeneral tried to make a good deal of capital out of the fact that the vessels of the company which it is proposed shall, for the next ten years. carry our mails, will fly the Australian flag. No doubt,’ we may congratulate ourselves upon the probability of having a fleet of vessels trading between Australia and England which will fly that flag: but the honorable gentleman might also have made provision for the manning of the ships with Australians or Britishers, ‘to be paid Australian rates of wages. The honor able member for Kennedy last night showed what extraordinary changes have taken place of late years in the character of the British mercantile marine. He said that, while in 1.860 the foreigners employed on British ships were 9 per cent, of the total, in 1900 they numbered 47 per cent.

Mr Harper:

– But there has been an enormous increase in our mercantile marine during that period.

Mr FRAZER:

– That does not affect the percentages with which I am dealing.

Mr Harper:

– The quotation of percentages is very misleading, unless all surrounding facts are given.

Mr FRAZER:

– Even the honorable member for Mernda cannot dispute the statement that, if 40 per cent, of those employed on British ships are foreigners, it means that nearly half the total number of men there employed are foreigners.

Mr Fowler:

– Even the British Conservatives are becoming alarmed at the increasing number of foreign seamen employed in the mercantile marine.

Mr FRAZER:

– Yes ; and they ought to be alarmed. ya we hear the honorable member for Gippsland deploring the fact that we will not subsidize ships upon which black labour is employed. It seems to me that any one who takes that view must be entirely out of sympathy with the object that we have in view, namely, to increase the number of white British subjects employed in our mercantile marine. I would infinitely prefer to see Danes, Germans, or Swedes, rather than lascars, employed upon British ships.

Mr McCay:

– What proportion cf. the 48 per cent, of foreign seamen employed in the British mercantile marine are coloured men?

Mr FRAZER:

– According to the return handed to me by the honorable member for Kennedy, there were, in i860, 334 lascars employed on British ships, whereas in 1900 the number had increased to 36,000.

Mr Thomas:

– There are more .than that now.

Mr FRAZER:

– I think that indicates a position sufficiently alarming to induce us to seriously consider whether we should; not insist that none but Britishers should be employed upon any steamers subsidized by us.

Mr McLean:

– Does the honorable member think that Great Britain should deny means of employment to her coloured subjects ?

Mr FRAZER:

– I think that her duty to her white subjects should come uppermost, particularly in connexion with the mercantile marine, upon which she may have to depend at some critical period of her history. We should all feel much safer if we knew that our mercantile marine was manned by Britishers instead of by lascars, who can have no sympathy with our aspirations.

Mr Wilks:

– Should we not be in an equally weak position if we substituted Scandinavians for lascars in our ships - would not the Scandinavians fight against us in time of war?

Mr FRAZER:

– I should prefer to depend upon Scandinavians rather than lascars. The least we could expect would be that any foreigners working upon vessels flying the Australian flag would become naturalized citizens of the Commonwealth.

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

– If we were at war with Germany, the honorable member would prefer our ships to be manned by Germans rather than lascars.

Mr FRAZER:

– The honorable member is suggesting an extreme case. At present, we are at peace with all the great powers, and I should prefer to see white foreigners rather than black British subjects on our ships. We could get over the difficulty so far as foreigners are concerned by insisting that they should become naturalized subjects, which throws on them the obligation of having to defend bur country. I do not see any insurmountable difficulties in the way of adopting the amendment of the honorable member for Barrier. It has been admitted by those who should be in a position to know, that there is no reason why the Commonwealth should not successfully Jim a line of State-owned steamers. Mr. Kenneth Anderson stated that it would be as easy ‘for the Commonwealth as for a private company to obtain the services of expert and experienced men to manage their enterprise. It has always been urged by those who are opposed to the Government taking over paying concerns, that Government control and supervision is not satisfactory, except where a monopoly can be brought about. I would point out, however, that more than one case could be quoted1 to prove the contrary. For many years politicians in Victoria held the view that the Government* railway workshops could not successfully compete with the Phoenix Foundry Company, at Ballarat, in the manufacture of locomotives. Experience showed, however, that under capable management and strict supervision the Government- workshops could hold their own against all the manufacturers of locomotives in Australia. It was. demonstrated that they could turn out as good an article as could private manufacturers, and at less cost. Further, at the Government railway shops, at. Eveleigh, the officials have shown that they can carry on their work more economically than it can be performed in private establishments. The experience gained in these establishments seems to me to furnish an effective reply to. the remarks of the honorable o member for North Sydney. The honorable member was not successful in his attempt to show that the esf.imat.es put forward by the Shipping Service Commission, are unreliable. He disagreed with them, but was not in a position to give us facts and figures in support of the position he assumed, and, therefore, all his protestations were useless. The honorable member for Barrier has devoted close attention to the subject for many months, and has had the advantage of listening to the evidence given by many of the most highlyqualified men in Australia. After close study and investigation, he has prepared a report based upon the best available testimony, and has produced estimates which we are justified in accepting until they can be shown to be unreliable. To my mind’, he has made out a. very strong case in favour of the establishment of a Stateowned line of steamers, and, therefore, I shall vote for his amendment. I think it will be preferable for us to pay £125,000 per annum by way of subsidy to a Commonwealth undertaking, in the profits of which the general public would share, rather than to a private concern. The proposed new contract, although no doubt, in many ways, better than that now being carried out by the Orient Company, appears to call for an altogether exorbitant subsidy. I believe- that a service equal in many respects, and inferior in very few, to that proposed could be obtained by paying for the carriage of the mails upon the poundage system, at the rate of, say. £40,000 per annum. Therefore, I do not think we should be justified in ratifying the agreement.

Mr KING O’MALLEY:
Darwin

– I see very serious objections to the ratification of the proposed contract. It is intended to enter into an agreement for ten years. Within a decad’e, millions of persons are born and die, and wonderful improvements are effected in the industrial arts, and in the means of transit, and so on. We may reasonably expect that, before the next ten years are past, we shall have steamers running between Australia and Europe within very much less time than is now occupied in the carriage of our mails. Only lately the steamers employed on the large lakes in America have been able, by the use of oil as fuel, and other means, “to accelerate their speed to such an extent that they can make as good time as the railway trains. We are proposing to enter into a contract under which we should be denied the advantages of any improvements such as I have indicated. The Postmaster-General, who ought to be the guardian of the people’s rights and interests, has entered into an agreement which will not bind the company to give special rates for the carriage of Australian products to the markets of Europe. Brindisi is to be the European terminus, whilst Adelaide is to be the Australian stopping point. We .guarantee to pay the company a subsidy of £.125,000 a year, so that at the end of ten years we shall have paid away £1,525,000, inclusive of interest at the rate of 4 per cent. We have no guarantee, however, that the company will in any way improve the condition of the producers of Australia bv giving them better facilities for the carriage of their exports than they have hitherto enjoyed. This is a serious matter. The farmers, manufacturers, and business men of Australia generally cannot1 enter into direct agreements with the company, arid the Postmaster1 General, as the representative of the whole of the people, should have inserted in the contract a clause requiring the company to give our producers reasonable terms. It should have been stipulated that in the event of the company and the Government rinding it impossible to make satisfactory arrangements in this regard, the whole matter should! be submitted to arbitration. A subsidy of £125,000 per annum should be a. bait, enabling the Commonwealth to make a splendid contract from the stand-point of the producers, and yet nothing is to be done for them under this agreement, which will extend over ten years. Where shall we be at the end of that period? It is all very well to say that the vessels of the company must call at Melbourne and Svdney, in order to secure the cargo necessary to enable the company to create a profit, but the fact remains that no such condition has been made. As the Age points out this morning, the company might prevent other steam-ship companies entering the Australian trade, and, having once destroyed opposition, they would be able to charge whatever rates they pleased. I should infinitely prefer to devote the subsidy to the establishment of a State-owned line of steamers as proposed by the honorable member for Barrier.

Mr Salmon:

– We shall have some control over the company

Mr KING O’MALLEY:

– The control we shall have will be something like that which this Parliament is supposed to exercise over three-fourths of the revenue of the Commonwealth. We may talk a lo.t, but talk is cheap. I think that the contractors have outgeneral:ed the Government. It will be open to them to determine the contract in the event of this Parliament passing legislation which in their opinion diminishes their income-

Mr Higgins:

– They will have to prove that it has diminished their income.

Mr KING O’MALLEY:

– What constitutes a diminution of income? If a member of the Labour Party moved that an improvement be made in regard to the carriage of produce, or if some other proposal relating to shipping were carried, the company would be able to say, “ This is a violation of the spirit of our contract; the course proposed is detrimental to us,” and it is impossible to say what the Commonwealth would have to pay in order to recoup the company the resulting losses. The agreement provides that if, as the result of legislation passed by the Commonwealth, the company loses at least £5,000 a year, thev are to be recouped. What is £5.000 to a big steam-ship company. It would represent produce that could be stowed away in so small a space that one would need a microscope to find it. And yet this concession was made as an inducement to the company to enter into the contract. This is one of the most dangerous provisions that has ever come before this House. We shall find that it is something like the solicitor’s bill of costs in connexion with the

Butter Commission’. Five thousand pounds seems a very small sum, but when the time comes for us to fight over the question of losses, it will certainly grow. If we ratify this contract, and subsequently pass a Navigation Bill in accordance with the recommendations of the Navigation Commission, the company will be in a position to demand from us an increased payment.

Mr McWilliams:

– If the Bill interfered with the contract they would be able to do so.

Mr KING O’MALLEY:

– And no doubt it would interfere with the contract. If, as the result of the passing of the Australian ludustries Preservation Bill, a stop were put to dumping, and the volume of our imports was in that way reduced, the company might claim that it had suffered a loss which the Commonwealth should recoup. I believe that this contract is a trap for the Labour Party. I can see dangers throughout its provisions, and yet the Government smilingly ask us to accept it as a good thing.

Mr Salmon:

– The Chamber of Commerce also says it is a good thing.

Mr Knox:

– If carried out it certainly will be.

Mr KING O’MALLEY:

– I am not quite sure, but I believe that a number of gentlemen connected with the Chamber of Commerce were rather sweet on the “ butter business.”

Mr Knox:

– I do not think the honorable member has a right to make that statement.

Mr KING O’MALLEY:

– We have shipping rings, and industrial and banking rings, all over Australia, as well as in other countries. I believe there is only one company to tender for the mail service between Tasmania and the mainland, and all the shipping companies are members of rings. When the honorable member for North Sydney asserts that it would cost the Government more than it costs a private company to run a mail service, I feel constrained to ask how private companies manage to carry on? According to the honorable member, the Orient Steam Navigation Company has been losing money ever since it started, and yet it is not bankrupt. It is like a bookmaker. When one speaks to such a man, one is always assured that he is losing money, and yet, although he produces nothing, he invariably lives in a fine house. And so with Melbourne merchants. If these private companies are constantly falling behind, is it not time for the Government to come to their rescue and to take the whole business out of their hands, in order to save them from complete bankruptcy ?

Mr McWilliams:

– That is not a good argument.

Mr KING O’MALLEY:

– I put it from a philanthropic stand-point. Perhaps my socialistic tendencies will not permit me to go far enough. It is said that we have a duty to perform. We should say to those gentlemen who have been operating these private corporations for years, “While you have grown fat, and lived in palaces, your companies have been losing money, and before we allow you to become absolutely bankrupt we will take over the mail service in which they are engaged.” It would be far better for the Commonwealth to face this problem now, and to establish its own fleet without delay. Our banks are paying from 10 to 15 per cent. by way of dividends. Their coffers are full, and the country is prosperous.

Mr Knox:

– What banks are paying from 10 to 15 per cent, in dividends?

Mr KING O’MALLEY:

– Occasionally I pick up the balance-sheets issued by the banks, and see what they are paying. The Australasian Insurance and Banking Record declares that those dividends are being paid, and shows that the banks have millions sterling in their vaults. All this money is lying idle. Surely they cannot have a better investment than would be afforded by the opportunity to sink that capital in Commonwealth stock at 3 per cent. ? I can borrowmoney at 4 per cent., and surely the Commonwealth ought to be able to get it at 3 per cent.

Mr Higgins:

– The honorable member wishes us to incur our first loan for the purpose of establishing a national fleet of mail steamers ?

Mr KING O’MALLEY:

– No. I am opposed to loans; but I can tell the honorable and learned member how this difficulty can be overcome. A national fleet of steamers could be constructed if the Commonwealth adopted the example of the United States, when they fought the War of Secession.

Mr McWilliams:

– By means of “ Greenbacks “ ?

Mr KING O’MALLEY:

– By issuing as legal tender Commonwealth notes based upon the products, the properties, and the revenues of the Commonwealth. We should not then have to dependupon the moneymongers, pawnbrokers, and Stock Exchange gamblers of Europe. The project can be financed in such, a way that Australia will prosper. I shall vote with the honorable member for Barrier, and if the Government is not high enough to be seen across its own wife’s kitchen, let it step out. I am willing to conduct the show. I believe that the Postmaster-General has the courage to support the establishment of a Commonwealth line of mail steamers. He sees that this country is rich enough and strong enough to own, not only steamers running to Europe, but vessels trading all round Australia. We should then be able to prevent the continuance of the cursed system of granting rebates and of making discriminations. Under present conditions, the little man has almost been dispensed with. Nowadays nobody wants him. There is no room for him in Australia. We want a system which will help the little producer, the little distributor, and the little trader - a system which will pick up the people who are cast out by the big institutions. Unless the Postmaster-General consents to the insertion in. the contract of a clause which will make it impossible for the contractors to recover damages from the Commonwealth in case we enact legislation which is unacceptable to them, it should be rejected. It is very easy to get oneself into trouble, and very difficult to get oneself out of it. I do not want to see lawsuits entered upon after this contract has been ratified. Under the terms of the agreement, if we demand an improvement in the service during the currency of the contract, the contractors may demand an extension of their contract at an advanced rate.

Mr Wilks:

– The honorable member should vote against the agreement.

Mr KING O’MALLEY:

– I shall have to do so unless the Postmaster-General can give me an emphatic assurance

Mr Austin Chapman:

– Do not vote against it.

Mr KING O’MALLEY:

– I shall be guided by what the honorable gentleman has to say regarding the manner in which he proposes to deal with this matter.

Mr Wilks:

– Does not the honorable member think that five years is a sufficiently long period for the contract to cover?

Mr KING O’MALLEY:

– I think that three years is long enough. If a similar contract had been entered into before the dis covery of steam, and if the application of steam power to locomotionhad been introduced immediately after it had been ratified, we should have had our mails carried by stage coaches for nine years whilst the trains were running alongside of them. I want the Government to recognise that they must do something for the producers. They must endeavour to obtain conditions which will insure that the contractors shall charge the producers reasonable prices for carrying their produce to the markets of Europe, and the Australian people reasonable prices for the conveyance of their goods from Europe. After the next election I hope to see a Tariff Bill introduced into this House which will discriminate between Australia and the cheap labour countries of the world. If such a Bill were submitted, as a protectionist I should feel bound to support it. If by means of such legislation we enabled the Australian people to manufacture all that is necessary for their own requirements, would not our action diminish the income that would otherwise be derived by the mail contractors, in which event they would be able to terminatethe contract or demand an increased subsidy from the Commonwealth, or take legal action. I wish to say that the Court which gave judgment in the Taff Vale case would not have much hesitation in giving a verdict against the Commonwealth.

Mr Wilks:

– No provision ismade in the contract for the conveyance of perishable products.

Mr KING O’MALLEY:

– Exactly. It really seems to me that there is something wrong with the Government. I confess that during the past year I have been sitting back like a well-saddled back. I have remained silent, and have always been prepared to vote. The Government have not always been able to depend upon themselves, but they have had the knowledge that the Labour Party was like a rock of ages behind them. Yet what has the Postmaster-General done for the potato-growers on the West Coast of Tasmania or for the fruit-growers of Franklin ? We are asked to pay a subsidy to a private company which may at any time join a great combination and so bring about our destruction. If we paid that subsidy to the Commonwealth it would be sufficient to cover the interest upon the money required for the construction of a national fleet of steamers, and to provide a sinking fund, so that eventually the fleet would become our own. The estimates put forward by the Shipping Commission are reasonable from every stand-point. Why should the Government be required to insure its property with private institutions? The honorable member for Barrier has estimated insurance at ^£150,000 per annum, and he has allowed i similar amount for a sinking fund. I think that his calculations all round are splendid, and by establishing a national fine of mail steamers we should be acting far more wisely than we shall be by throwing away £,1,525,000 upon the proposed contract. Under the Government proposal our last condition will be worse than our first. I intend to vote for the amendment of the honorable member for Barrier, and, if it be defeated, I shall endeavour to reduce the term of the contract to a period of five years. I shall give notice of an amendment with that object. I may say that this is not intended as an expression of want of confidence in the Government, because I do not want the job of Minister for the next three months, since it would not be worth while to accept it for that period.

Mr WATSON:
Bland

– I d° not agree with those who argue that only a small class of the community benefits by rapid mail communication, or that the payment of a subsidy, or the incurring of loss in some other way, is not justified to secure that end. I agree with the honorable member for North Sydney that rapid communication with other parts of the world for the conveyance of our mails, passengers, and produce, is of advantage to the whole Commonwealth, although the direct benefit may appear be confined’ to a comparatively small section of the population. I think it worth while for this community to make some effort to insure rapid and regular communication, with a view to cheapening commercial transactions, and am content that that should involve a loss, such as in most cases is sure to be involved where communities are as isolated, and as distant from the markets of the world, as we are.

Of course, we may pay too great a price for the benefits of rapid communication.

Mr Wilks:

– Would the honorable member make a contract for a period’ of ten years ?

Mr WATSON:

– I will deal with that matter in a moment. I am not in favour of paying an exorbitant mail subsidy such as, in relation to the benefits received, we have paid in the past. But, assuming that it is a right thing to make some sacrifice to secure a rapid and regular mail service, I am bound, in contrasting the terms of the present contract with the conditions which have previously obtained, to say that, while some of these terms are ambiguous, and should, before the completion of the arrangement, be made more exact and clearer, the contract seems to be a vast improvement on all that have preceded it. It is claimed that the Orient Steam Navigation Company has done good work for Australia, and I should be the last to deny that claim’. It entered into the trade when there was comparatively little encouragement to competition, and has served the community reasonably well. But we cannot ignore the fact that most of its boats are now -comparatively obsolete, their speed being low, and the facilities they offer not being such as the trade and position of Australia justify us in demanding. The steamers to be employed under the new contract are to be of a minimum tonnage of 11,000 tons register, which I take to mean gross register, because, as the honorable member for North Sydney has pointed out, vessels of 11,000 tons net register are very few.

Mr Wilks:

– A vessel of 11,000 tons net register would be about 17,000 tons gross register.

Mr WATSON:

– I think that it would be even larger than that. Vessels of a tonnage of 11,000 gross register would be of about the size of the White Star steamers or the largest Norddeutscher-Lloyd steamers which now visit our ports.

Mr Deakin:

– They will be larger than any of the Peninsular and Oriental Steam Navigation Company’s steamers which come here.

Mr WATSON:

– They will be larger and a little faster than the largest of the Peninsular and Oriental Steam Navigation Company’s steamers which come here, and may, therefore, be expected to afford greater facilities for the carriage of produce, while the saving of two and a half days on the journey will be of considerable moment, and an advantage which it is worth while to make some little sacrifice to secure. The honorable member for Dalley asked whether I favour the making of a contract for a period of ten years. In my view, it would be idle to ask a syndicate or com.pany to construct vessels for a service of this kind without offering at least a ten years’ contract, because it must be remembered that these vessels will be of a special class. They must be constructed to carry a larger quantity of coal than is carried by the steamers crossing the Atlantic, because of the longer distances which they will have to travel at a comparatively high rate of speed.

Mr Deakin:

– And because they will have to pass through the Suez Canal.

Mr WATSON:

– Even if they came by way of the Cape of Good Hope, and maintained the speed which we ask for, they would have to be given special bunker space to enable them to carry the coal necessary ffor the voyage.

Mr Tudor:

– The vessels (trading between Australia and England coal at various ports along the route.

Mr WATSON:

– Yes; but they cannot coal as frequently as do the vessels crossing the Atlantic.

Mr Johnson:

– The proposed vessels must not draw more than 30 feet of water.

Mr WATSON:

– I think that the depth of water at Brindisi, and even at Sydney, does not exceed 30 feet.

Mr Mcwilliams:

– The other day a vessel drawing only 28 feet had to leave Sydney, and finish her coaling at Hobart.

Mr WATSON:

– I am glad to be able to say that the shallow patches in Port Jackson can be deepened at a comparatively small cost, and I -am under the impression that the Sydney Harbor Trust is now taking steps to get rid of the small difficulties to navigation which now exist there. For all these reasons, it will be necessary to build boats of a special class, and it would be idle to ask any firm to do that, and to enter into competition with the companies already in the trade, without offering something like reasonable security of tenure. Therefore, under the circumstances, I do not regard a period of ten years a9 too long.

Mr Wilks:

– Assuming that the boats have to be built.

Mr WATSON:

– Yes. Even if the Orient Steam Navigaion Company had tendered on similar terms regarding size and speed, it would have had to get boats specially built. In any case, we must contemplate the construction of new vessels, and be prepared to offer reasonable inducements for the use of the right class of vessels. In my opinion, the proposed new service will give conveniences to the Commonwealth far greater than we have hitherto obtained. The only question which remains, therefore, is whether its terms are likely to be fulfilled. A great deal has been said about the possibility of the tenderers being merely a speculative syndicate, which has obtained the concession with a view to hawking it through the financial world, London, and is willing to risk a certain amount because of the probability of success. I do not know sufficient of the firm of Sir James Laing and Sons to be able to express an ‘Opinion on the subject.

Mr Johnson:

– A good many of us feel 1 doubtful upon the point.

Mr WATSON:

– Those of us who are not members of the Cabinet must necessarily be at a disadvantage in trying to arrive at a conclusion on this head. ‘ If the Government have not assured themselves of the likelihood of the contract being carried out, they have no right to ask us to indorse it, because it would be an exceedingly serious matter if we approved of the contract, losing the chance of securing other tenders, only to find that it was not to be carried out. In that case, we should have to make hurried arrangements at the last moment, and might find ourselves cornered. Therefore, it is important that the Government should know that the tenderers are me’n of substance, and not men of straw ; and they must be held responsible for the stability of those with whom they have contracted. Private members have not access to the sources of information which are available to the Government, but it is only reasonable to suppose that they have taken all possible steps to satisfy themselves that the contract, if approved by Parliament, will be carried out.

Mr Higgins:

– If it is not, we can still fall back on the poundage system.

Mr WATSON:

– I regard the poundage system as likely to be unsatisfactory.

Mr Higgins:

– Still, we are not likely to be cornered.

Mr WATSON:

– No; but. the probability is that, a few months later, we shall be in a worse -position to make a satisfactory contract than we a.re in now, when the present contract has yet some time to run. As I have said, several of the clauses in the contract appear rather ambiguous. That which relates to the making of an extra payment to the company, should the Commonwealth pass laws relating to shipping, might be mad.e much clearer. I have no doubt as to the intention, and I believe that the contract with the Orient Company contains a similar provision ; but we must look to the possibility of litigation arising, and of claims being made, under this provision. I do not anticipate that laws will be passed which will materially affect the position of oversea companies ; but there is that contingency, and the provision to meet it should be clearly expressed. It should be stated that the laws referred to in the contract are laws directly relating to shipping. Two or three other points with which I shall not deal have been brought forward by the honorable member for North Sydney and others, and the Government will do well to give them attention before the contract is finally ratified. There is before the House an amendment moved by the honorable member for Barrier, consequent, I assume, to some extent upon the information which he has gathered as Chairman of the Royal Commission which recently took evidence throughout Australia on this subject. The Commission did excellent work in making public information which was either not generally known, or imperfectly understood, by the great body of the people. It seems to me the appointment of the Commission has been abundantly justified bv the results of its investigations into the methods of the coastal steam-ship companies, which interfere with legitimate trade. In its inquiries as to the action of the Shipping Conference in England, and its effects upon Australian trade, and into the conditions of the rebate system, and in various other directions, the Commission has also done excellent work, and I am glad to join other honorable members in complimenting its members on their report, and the information contained in it.

Mr Johnson:

– I do not think honorable members complimented the Commission on their report, but rather congratulated the Chairman upon having delivered an excellent speech based upon such flimsy material.

Mr WATSON:

– Honorable members have certainly referred to the valuable information contained in the report itself, and I think that a great deal of it will prove useful, even to honorable members who may not agree with the conclusions arrived at by the Commission. With regard to the amendment, I do not sympathize with some of the objections put forward byhonorable members opposite. I have no fear whatever of Governnent ownership. Honorable members in their references to our railway management, appear to me to have shot very wide of the mark.

The railways of Australia, although they may not always have been managed with the best results, have on the whole proved of incalculably greater benefit to the people of Australia than would have ‘been the case if they had been in private hands. ‘ The honorable member for Parramatta not very long ago, when addressing a public meet.ing, spoke about the losses that hae- been incurred in carrying on our railways, and in running our Post and Telegraph Department. When speaking of the losses involved in connexion with the Post Office, for instance, one has to look at the whole of the surrounding circumstances. It would be an easy matter to wipe off the loss to-morrow - and no one knows that better than does the honorable member for Parramatta - by cutting out the unproductive and expensive services that are now maintained upon the outskirts of civilization. But who would deliberately advocate that these conveniences, such as they are, should be withdrawn from those who are performing pioneering work in the interior of the country? So it is also with the railways.

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

– As a matter of fact, we have imported railway managers who have cut down the outlying services in order to produce a good balance-sheet.

Mr WATSON:

– I was speaking of the Post and Telegraph Department.

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

– I say that the Post and Telegraph Department could be made ro pay.

Mr WATSON:

– Of course it could, but who would wish to make it pay bv adopting the most obvious means of bringing about that result - a means of which a private company would avail itself to-morrow ? It would immediately cut down the unprofitable services in connexion with which possibly it might cost half-a-crown. or even five shillings, to deliver a letter.

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

– That is not the only way in which the Department could be made to pay.

Mr WATSON:

– That is the means which, would at once appeal to a private syndicate or company. Sneaking of the railways in New South Wales, I mav point out that we have frequently run branch lines into districts, before thev were developed, with the object of opening them up, and naturally, for a time, we have incurred a, loss upon such services. A number of the so-called losses upon branch lines, however, do not really exist. The Commissioners in New South Wales - and, I suppose the same principle is adopted in other States - credit the branch lines only with their proportion of the revenue derived from the total mileage of freight, ignoring the fact that the branch lines are most important feeders of the main lines, and bring to them traffic that otherwise would not be carried on them at all. Many of the branch lines show an apparent loss, but if the railway service were considered as a whole, they would show an absolute profit. Although the loss incurred upon many branch lines aggregates hundreds of thousands of pounds, the earnings of the main lines are, in someyears, more than sufficient to counterbalance the loss That was the case lastyear. I admit that where there is a deficiency in the returns from the branch lines which do not contribute to the main-line traffic, the loss is absolute. However, the so-called losses upon branch lines frequently do not exist, and are evidences of good management rather than bad management. With all the mistakes that have been made on our railways, and with all the inefficiency that may be here and there apparent, the results, so far as the taxpayers are concerned, have been beneficial. Let us contrast the action of the States railways - the socialistic railwavs, as some people call them - during the last drought, with that of two privately-owned railways in New South. Wales.

Mr McWilliams:

– And also contrast it with the action of this Parliament.

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

-And of the honorable member and his party.

Mr WATSON:

– If I remember aright. I formed one of the deputation that waited upon the Minister of Trade and Customs and asked for the suspension of the fodder duties at the time of the drought.

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

– I bee the honorable member’s pardon. I thought that he had voted against the suspension of the duties.

Mr WATSON:

– I do not remember as to that, but I am sure that I was a member of the deputation. I was about to point out that during the last drought, the Railways Commissioners in New South Wales reduced the freight charges upon starving stork and fodder down to an absolutely non-paving point. They carried fodder for any distance up to 1,000 miles for 2s. 6d. per ton, and conveyed stock at similarly low rates, in order to save the pastoral interests.

Mr Johnson:

– Nevertheless, the railways are not socialistic.

Mr WATSON:

– I think they are. The man who does not appreciate that fact, cannot know what Socialism is.

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

– They do not represent the ultimate objective of the Labour Party.

Mr WATSON:

– The honorable member is fond of deliberately twisting the ultimate objective of the party. As I was stating, the State railways of New South Wales carried stock at an actual loss, whilst the company that own the line between Deniliquin and Moama, earned the largest profit ever made by it. They did not make the slightest reduction of freights, but took the fullest advantage of the desperate condition of those dependent upon them. So it was also with the Silverton Tramway Company. In the same way, every private syndicate is prepared to take advantage of any conditions that may operate in its favour. However, I shall not pursue that subject further. After all, it is only a side issue.

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

– The honorable member is not how at Surrey Hills, describing all private enterprise as sweating and robbing.

Mr WATSON:

– That is another instance of the honorable member’s misrepresentation. I did not say that all private enterprise was sweating and robbing. I should be sorry to say anything of the kind, and I certainly did not make that statement at Surrey Hills.

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

– The honorable member is reported as having said it.

Mr WATSON:

– I do not care what I am reported to have said. I said nothing that could bear any such construction. It would be such a silly thing to say. As I have before stated, I have no fear whatever of Government ownership. I believe it can be attended with as good results, from a business stand-point, as can private enterprise, whilst better results can be secured to the general public. It has been proved that an absolute monopoly exists in connexion with the Inter-State shipping trade, and immediately there is a prospect of success, I am prepared to vote for the taking over of the coastal shipping services, in order that they may be run on behalf of the public. I am convinced that the shipping companies are now bleeding consumer and producer alike, and, whenever an opportunity occurs, I am prepared to help to nationalize these services, because I believe that that course would be in the best interests of the people. It has been proved that a monopoly exists, and that overcharging has taken place. For this reason, I think that it would conduce to the welfare of the people if they could have the service in their own hands, instead of their being at the mercy of a set of private individuals who, no matter how well-intentioned they may be, are primarily looking after their own pockets. I do not agree with those of my colleagues in the Labour Party who believe that there is the same grave necessity ‘ for the Commonwealth purchasing or constructing steamers in order to establish a State-owned oversea service. In the first place, it has not been demonstrated in my view that, with respect to the oversea trade, there exists a monopoly to anything like the same degree that obtains along our coasts. My conception of the necessity of Government interference, so far as the nationalization of services is concerned, is that we should undoubtedly take over a proved monopoly that may be, or probably is being, used to the detriment of the people, and that,’ in cases where it is demonstrated that the services could be more economically performed on behalf of the people if they were run by the Government, we should be prepared to extend the sphere Government operations. It has not been demonstrated to my satisfaction that a monopoly exists in respect to our oversea trade.

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

– I thought that the honorable member said recently that the trade was governed by the shipping ring in London.

Mr WATSON:

– A shipping conference exists, but whether, as a united body, it exercises common control over the freight of the mail steamers I am not prepared to say.

Mr Thomas:

– It exercises control over all outward cargo from England, but not over our exports.

Mr WATSON:

-That shows that there is some little flaw in the organization of the monopoly. They have not been able to arrange for the full control of the cargo from Australia. Whilst I know that a great ship-owners’ ring exists, and that the freight steamers work under some arrangement, the distinct’ competition! that has lately taken place between the mail steamers and ordinary cargo tramps, indicates that there is not a monopoly in the same measure that such exists in connexion with our coastal trade.

Mr Thomas:

– They have a monopoly of the cargo from England to Australia, but not in respect of that from Australia to England.

Mr WATSON:

– Until this new company entered the arena there did seem to be a combine between the various companies interested in the running of mail steamers. That was evidenced by the fact that when, some eighteen months ago, we invited tenders for the carriage of our mails to Europe, we received practically only that sent in by the Orient Steam Navigation Company. I take it that the advent of this new company is an indication that the monopoly is not complete

Mr McDonald:

– The PostmasterGeneral will not promise to insert in the contract a clause that the company shall not join the combine.

Mr WATSON:

– I intended to refer later on to that point. I repeat that the advent of this new company is an indication, to my mind, that the monopoly is not yet complete, and that is why we should gather more information in regard to the whole position before entering upon the construction and running of a Commonwealth line of mail steamers.

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

– Meantime, the general election will be over.

Mr WATSON:

– I dare say that the honorable member is already congratulating himself upon the fact that at the next general election the opposition shown to the Labour Party by steam-ship owners engaged in the coasting trade, whose concerns should be nationalized, is likely to be more strenuous than that which will be shown to us by the few people interested in steamers trading between Australia and England. The honorable member must have a very poor idea of electoral possibilities if he pretends to believe that my attitude is dictated by considerations as to the next general election. If I were out for voles, and desired to disarm opposition, I suppose that I should sooner vote for the nationalization of this service than for the nationalization of the shipping services engaged in the coastal trade. I should be quite prepared to risk the course suggested by the honorable member for Barrier if the only alternative were that there should be a continuance of our dependence upon one company, already a member of the shipping conference.

Mr Thomas:

– I do not think that this agreement will come off, so that we may yet claim the honorable member’s vote.

Mr WATSON:

– That is another question. The agreement now before us places a different complexion upon the matter. I am faced with the position that, under it, the Government will have power to at any time take over the vessels of the company. At any moment the Government may step in and say, “ This service shall be nationalized.” The Postmaster-General is also to have the right of supervising in some degree the building of the steamers necessary for the service. I take it that he will be able to insist on any alterations necessary to make the vessels suitable for this service.

Mr Thomas:

– There is no answer from the Minister.

Mr Austin Chapman:

– The whole matter is explained in the papers.

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

– Then, notwithstand ing the denials, it is, after all, a socialistic sop.

Mr WATSON:

– If it is2 I think that it is a very good provision.. The honorable member for Parramatta said yesterday that he was not opposing the amendment moved by the honorable member for Barrier because of theoretical reasons - he opposed it because, in his opinion, the figures submitted did not demonstrate its practicability. The honorable member for North Sydney also said this afternoon that he did not deny that a time might arrive when it would be absolutely necessary for the Government to take over the vessels of the company, and conduct the service. He said, so far as I can remember, that if it were shown that there existed a monopoly which was detrimental to the interests of Australia it might be necessary for us to step in.

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

– In fact, there is nothing between us.

Mr WATSON:

– If that be so, there are surely abundant reasons for providing that the Government shall have’ the power to step in and resume these vessels when sufficient cause is demonstrated. I am faced with the position that, on the one hand, we have an opportunity to secure a contract that is far and away superior to that now existing, whilst the alternative is to vote against that contract in favour of a proposal to nationalize the service, although we know that there is not a majority in the House to carry that proposal into effect. It is clear that there is not a majority in the House in favour of nationalizing the service, so that if I were to vote against the acceptance of this contract I should stand ai fairly good chance of sacrificing the substance for the shadow. The substance is of such value to the people that I am prepared to accept it, conditionally of course, on the assurance of the Government that the contract will be carried out - that those behind it are men of substance, and able to insure its ‘fulfilment.

Mr Mahon:

– We ought to provide for Australian seamen being employed on board these steamers.

Mr WATSON:

– I agree with the honorable member, just as I think that the British Government will, later on, find it necessary to insert in their own postal contracts a provision for the employment of a minimum proportion of British subjects on their mail steamers. A stipulation of that kind ought to be made in connexion with all subsidized lines. If we are to be guided by articles which have appeared during the last, year or two in the press and the magazines of Great Britain, there has arisen there a strong feeling that an effort should be made to maintain the reserve upon which the navy must depend in the event of any real trouble arising.

Mr Thomas:

– That is a recommendation by a Select Committee of the House of Commons.

Mr WATSON:

– It is a very proper one. Every other nation attends to the matter, and I fail to see why we should be any less exacting in that regard. The power to take over the vessels engaged in the service tides us over any difficulty that may reasonably be advanced. If the1 new company joins the shipping conference, and takes part in an attempt to exact unfair conditions from our producers - if it fails to give reasonable facilities for the transport of perishable products to the old world - then, under the terms of the contract, as soon as there is in Parliament a majority in favour of the Government stepping in, the will of that majority can prevail. In spite of all that the so-called anti-Socialists may say, I have no doubt that, if the monopolistic system that has obtained were continued by the new company, there would be found in Parliament a majority iri favour of action being taken in that direction. It would be most unfortunate for Australia if the producers were allowed to be at the mercy of any combination of private.individuals in respect of the oversea trade. This very useful provision offers a way out, as soon as it is found that a majority of the Parliament are of opinion that the Government should step in. In all these circumstances, I intend to vote for the acceptance of the contract.

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

– I wish to make a personal explanation. I made an allusion a few minutes ago to a speech delivered at Surrey Hills recently by the honorable member for Bland. I think I said that on the occasion in question the honorable member referred to private enterprise as being synonymous with sweating and robbery, and I find that I made a mistake in regard to only one word. What the honorable member said was this–

Mr Watson:

– What I am reported to have said.

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

– Yes.

Mr Watson:

– Perhaps the honorable member will allow me to state what I did say.

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

– I am quoting from the Worker.

Mr Watson:

– The Worker is not more accurate than is any other paper.

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

– It seems never to be accurate, according to the honorable member.

Mr Crouch:

– On a point of order, I wish to know, Mr. Speaker, whether, since the honorable member for Bland has denied the statement attributed to him, and has asserted that he was misreported, it is competent for the honorable member for Parramatta to read from a newspaper an absolutely contradictory statement.

Mr SPEAKER:

– I do not know what the honorable member for Parramatta intends to read, but he claims that he has been misunderstood or misrepresented, and is therefore entitled to make an explanation.

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

– What the honorable member for Bland said in the course of what is described as “ an eloquent exposition of the labour platform “ was this -

Mr. Reid, who was afraid to declare his policy for fear some one should steal it; Mr. Joseph Cook, Sydney Daily Telegrafh, and the rest of them, supported and advocated private enterprise with its sweating conditions and pay…….

I am justified in assuming from that statement that the honorable member used the two terms as synonymous.

Mr Watson:

– No.

Mr Webster:

– Oh, no ; it would apply only to the honorable member for Parramatta.

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

– I am glad, at all events, to have the Webster revision of the speech. The honorable member for Bland said, at any rate, that those who believed in private enterprise believed in sweating conditions and sweating pay. Clearly the inference is that the two terms are synonymous.

Mr SPEAKER:

– Order ! I would point out that any honorable member has a right to make a personal explanation in order to remove a misapprehension, but he is not entitled, under cover of a personal explanation, to attempt to prove something that has been disputed. If the honorable member desires to do that, I cannot allow him to do so.

Mr HIGGINS:
NORTHERN MELBOURNE, VICTORIA · PROT

– This debate, although long, has not been unduly protracted, having regard to the importance of the subject, and more particularly to the very grave and novel departure in the direction of the establishment of a State-owned line of mail steamers, which is proposed by the honorable member for Barrier. That project would involve the expenditure of , £3,000,000 or£4,000,000, since at least eight steam-ships would be necessary. Having regard to the distance of Australia from Europe, mail contracts are of greater concern to us than they are to any other country, and we could scarcely give too much attention to what is being done in connexion with them. I confess that when I read the contract I began to be very suspicious. I thought that the terms were too good to be true. The contract orovides for a speedier service at a cost only slightly in excess of that provided for under the existing agreement. I recognise that the honorable member for Barrier and his colleagues upon the Shipping Commission have rendered the community a very great service by investigating the whole question of the conditions relating to the carriage of our mails, and of the best means of serving the people of Australia in that respect. But I say. without hesitation, thatI intend to vote against the amendment, because it would involve the credit of the Commonwealth 10 the extent of£3,000,000 or £4,000,000, and because to borrow money for a project of that sort would be one of the worst evils that could befall us.

Mr DAVID THOMSON:
CAPRICORNIA, QUEENSLAND · ALP

– What about the Western Australia railway? No project could be worse than that.

Mr HIGGINS:

– The construction, of railways is a very different matter. We’ can run railways without being called upon to face any competition, and, moreover, they traverse our own territory all the time. ‘ But it is quite a different thing - and I am not saying a word against the proposal of the honorable member for Barrier when the time is ripe for it - to enter into a competitive business, and’, at great risk, to borrow a very large sum of money for the purpose of building ships, because, no matter whether the money be raised by means of a paper currency, or by the issue of debentures, it will be raised by borrowing. It would be disastrous to the credit of the Commonwealth if we were to borrow at this stage for any such purpose. The honorable member who preceded me, and who always speaks reasonably, pui’ the position very clearly indeed. If we vote against the proposed contract, we shall not secure the establishment of a national line of steamers. We shall simply lose the contract, and we shall also lose the possibility of securing anything in the nature of a Commonwealth fleet such as the honorable member for Barrier desires. I sincerely hope that honorable members will not be entrapped into voting against the proposed contract, seeing that they cannot obtain anything better.

Mr Wilks:

– Is the amendment of the honorable member for Barrier a trap?

Mr HIGGINS:

– I do not say that it is. At the same time, many a man falls into a trap which has not been laid for him. I have not the slightest objection 10 the State undertaking operations where they seem likely to be sound-

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

– They are grand things with which to obtain votes.

Mr HIGGINS:

– I am sorry to say that the honorable member more than any other honorable member demeans the House by imputing motives. Those who have discussed this proposal, from both sides of the Chamber, have, upon the whole, spoken unselfishly, and with a full regard to the interests of the country, and not to votes. I have no objection whatever to a sound State enterprise, but I claim that nothing would so tend to damage all efforts in the direction of securing for the people, as a whole, the benefit of the industry of the people, as a whole, as would a possibly disastrous undertaking rashly entered upon. Such an undertaking would set back for years any movement of the character suggested by the honorable member for Barrier. The Government propose that the contract shall continue for a period of ten years. Having regard io the fact that the steamers required for the service have yet to be’ built, and that their construction will occupy three or four years, I maintain that the term covered by the contract is not a year too long. Indeed, I am surprised that the contractors were content to accept an agreement wilh a currency of only ten years, because it must be remembered that we have power to determine it if it is not faithfully carried out.

Mr Thomas:

– Is not that power contained in every contract?

Mr HIGGINS:

– By no means. A man may break a contract, but the other party may not be able to determine it, although he may be in a position to recover damages. Unless it is expressly stated, an individual has not the power to terminate a contract should it be broken by the other party to it. In the second place, under the proposed agreement we are at liberty to purchase the steamers engaged in the service at any time if we deem it desirable to do so. Then the contractors have also to comply with the provision in our Postal Act in regard to the employment of white labour. In this connexion, I desire to congratulate the Parliament upon the fact that all those gloomy vaticinations concerning the effect of that section upon the mail tenders have been proved to be absolutely unfounded. This House has vindicated its position, and it has been demonstrated that no loss has resulted from the operation of the provision in question. I am very anxious to hear what the right honorable member for East Sydney will have to say upon the matter when he again refreshes us with his presence. I am interested in learning whether he will withdraw his statements regarding the effect of the section in the Postal Act to which I refer. Now I may ask, “ What will happen if the contract be not carried out?” Not only have we the power to determine it, but a clause in the agreement provides that the contractors shall forfeit a sum of £25,000. “Of course, it may be urged that we know nothing about the contractors. It is only a limited company with which we are concerned, and. we do not know whether it has any assets or not. We ought to be given some information upon that point. But, in this connexion, I am reassured when I recollect that we have not to rely upon the solvency of that company alone. We have two sureties, and these must be approved by the Postmaster-General. Consequently, if any breach df the contract takes place we have not to look to a limited company, which may have all its assets mortgaged and all its capital called up. We have two sureties. I think that the Postmaster-General should tell us whether he has made inquiries into the constitution of the company. We do not care what is the position of Sir James Laing and Sons. What we desire to know is the position of this limited company. I am informed by the solicitor who is acting for the contractors, that the company has a great deal of capital which has not been called up, but I think that the House should be .informed as to how far the Postmaster-General has inquired into its financial position. Under the proposed contract there is one grave danger, to which reference has been made by former speakers. I refer to the possibility of the Commonwealth being “ cornered.” As the contract will begin upon 1st February, 1908, let us assume that in january of that year the contractors were to say- to the Commonwealth, “ We will not go on with it.” If they were persuaded by the Peninsular and Oriental and Orient Companies to decline to proceed with the contract upon being indemnified, it might be said that the Commonwealth would be in a corner. It would have nobody to carry its mails from the 1st February, and it merely possesses the power to determine the contract, and to mulct the contractors in a penalty of £25,600. The Peninsular and Oriental and Orient Companies would then practically be in a position to dictate their own terms to the Commonwealth, and they might easily ad’d to their tenders an amount which would be more than sufficient to indemnify the contractors for the loss which they had suffered.

Mr Austin Chapman:

– But we have a right to call up another £25,000.

Mr HIGGINS:

– I did not understand that, although I have read the agreement very carefully.

Mr Austin Chapman:

– We have £27,500 in hand now, and we have a right to demand another £25,000 if satisfactory arrangements are not made to carry on the contract.

Mr HIGGINS:

– But the first instalment of £25,000 is only deposited until the bond is given.

Mr Austin Chapman:

– We have a right to demand a second £25,000.

Mr HIGGINS:

– I shall be glad to be assured upon that point, because I understood from the agreement that the guarantee of £25.000 was only to continue until the bond was signed, and that, after it had been signed, a separate sum of £25,000 was to be deposited. But whether the amount be £50,000 or £25,000, it might be urged that, in the circumstances which I have outlined, the Commonwealth would be cornered, and compelled to accept the terms dictated by the Peninsular and Oriental or the Orient Steam Navigation Company. But if the “worst had to be faced, we would still have the right to demand that bur mails shall be carried under the poundage system. Consequently, I feel that the Commonwealth can never be absolutely cornered, and I rather think, from what the PostmasterGeneral has told the House, that the firm of Sir James Laing and Sons Limited would not operate in that sinister way.

Mr Wilks:

Sir James Laing and Sons are only the shipbuilders.

Mr HIGGINS:

– That is a mistake. It is true that they are shipbuilders, and that they will construct the vessels required for the new mail service; but I would point out to the honorable member that they are also the contractors for the carriage of our mails.

Mr Wilks:

– Then they will run the service ?

Mr HIGGINS:

– They are bound to run it. They may assign the contract, but no assignment can be effected without the consent of the Postmaster-General. Of course, he will see that there is a good assignee. In sanctioning any assignment of the contract - and it is quite possible that Sir James Laing and Sons may endeavour to assign it - the Government must be careful to keep their sureties bond. If the new company is simply to do what it likes, we shall be at the mercy of the contractors. The more I see of this proposed agreement the more I like it, and the more I think that the Government are to be congratulated upon it.

Sitting suspended from 6.30 to 7.30 p.m.

Mr BATCHELOR:
Boothby

.- There seems to be a pretty .general concensus of opinion- that the agreement entered into by the Government with Messrs. Sir James Laing and Sons is a good1 one, so far as the Commonwealth is concerned, and that very little exception can be taken of it, the criticism which has been expressed having been directed chiefly to the point that the guarantee required may not be sufficient to compel the tenderers to proceed with the service- Therefore, I shall not discuss the contract itself, but shall confine my remarks to the amendment of the honorable member for Barrier. I am in favour of the principles of that amendment, that is, I think that, in the interests of Australia, the Commonwealth should have a line of mail steamers, in order to prevent the creation of a monopoly in the means of transport between this country and Great Britain, and to avoid the possibility of difficulty arising in the carrying on of the mail service. The existence of cheap and efficient means for the transport of goods is of the greatest interest to users and consumers alike, and the lack of them is a justification for both the construction of State railways and the control of steam-ships bv the Commonwealth. I do not think, however, that it is advisable to agree to the amendment in place of approving the proposed contract. If the honorable member for Barrier had put his proposition before the House as a distinct motion. I could have voted for it by way of affirming the principle which it embodies, but, having placed it before us as an amendment upon, the motion of the Postmaster-General, he asks us to decide between approving the contract and passing a resolution in favour of the establishment of a Commonwealth line of. steamers. In my opinion, the injury done to our producers and consumers by the Inter-State shinning combine is more immediate than anr other, and. if a choice has to be made between a number of reforms, we should seek to carry out first that which is most pressing. It is a mistake to try to carry too many reforms at the same time.

Mr Thomas:

– We must not save the world too soon.

Mr BATCHELOR:

– I think it better to do things bv instalments. We cannot save the world in one act. A beginning must be made somewhere.

Mr Thomas:

– Let it be made by the establishment of the proposed mail service.

Mr BATCHELOR:

– I think the honorable member is starting at the wrong end.

Mr Thomas:

– The honorable member can commence at the other end. I should support him.

Mr BATCHELOR:

– I am sure that the honorable member is sincerely anxious to reform the world, particularly by providing means for the sea-carriage of ,goods on Commonwealth vessels, and is ready to support the taking over of the Inter-State as well as the oversea shipping service. The Inter-State shipping service is an actual evil, which is inflicting loss and suffering upon the community, and a monopoly which should be taken over by the Commonwealth. The tobacco and sugar monopolies should be similarly treated, by being taken over at the earliest moment possible. In carrying out reforms we should begin with monopolies which actually exist, and can be shown to be inflicting injury on the community. Unless we can prove that actual damage is being done to producers and consumers, and the community generally, we have not much ground for appealing to the public to support the taking over of a service, and the making of it a national one. If the ratification of the contract would prevent the Commonwealth from carrying on the mail service later on, should that be thought advisable. I would vote for the amendment, but, as a matter of fact, a clause in the agreement enables us to take over the service if we find it necessary to do so.

Mr McDonald:

– Under that provision the Commonwealth may take over the vessels used in carrying on the service, but it cannot take over the company’s business. The company could still continue in the trade, by using chartered vessels, and could continue running the mail service. The clause to which the honorable member refers is useless to us.

Mr BATCHELOR:

– I do not think that it is. I dc not think that the company, if the Government took over its vessels, would charter other vessels merely to retain a subsidy of £125,000 per annum. Besides, the Government have power to terminate the contract if the service is not being carried on satisfactorily. Those two provisions will enable us to take over the service if that is found to be necessary: However, I shall not argue the matter at any .greater length. I rose merely to give my reasons for not supporting the imme- diate putting into practice of a principle of which I am in favour, namely, the public ownership of means of sea-carriage as well as of land carriage.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

.- I wish to say, at the outset, thatI am not prepared to support the amendmentof the honorable member for Barrier, though I congratulate him upon the excellent speech which he made, considering the material which he had in hand. I have read some of the evidence given before the Royal Commission, and fail to see that it justifies the conclusions arrived at. In any case, I think that the time has not yet come when the Commonwealth should obtain a fleet of steamers for the carriage of mails and produce between Australia and Europe. I listened with considerable interest to the speech of the Postmaster-General in moving the motion, and, having since read it in Hansard, congratulate him upon the clearness with which he has explained the provisions of the contract. But I am greatly disappointed that Brisbane has not been made a port of call. So far as the arrangements for the carriage of mails are concerned, the contract, as nearly every speaker has admitted, will provide a very good service, if its terms are duly carried into effect. I am convinced, however, that its framers had in mind, not only a mail service, but also a service fcr the carriage of produce from the Commonwealth, to the home markets. If that is not so. why is it stipulated that steamers of not less than1 1,000 tons register shall be employed. Vessels of that tonnage are not required merely for the carriage of mails. Then there is the stipulation as to refrigerating space. I understand that the steamers which are to be built will have a capacity for the carriage of perishable produce three times as large as that of the vessels of the Orient . Steam Navigation Company. That stipulation does not relate to the mere carriage of mails. My chief objection to the contract is that it is not required that the steamers shall proceed as far as Brisbane. I made the same complaint last year, when the Orient Steam Navigation Company’s contract was being discussed, and, I think, angered the Postmaster-General by the persistency with which I stuck to my point.

Mr Austin Chapman:

– I was not angry. I admired the honorable member’s persistency.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I am glad that to-night the honorable gentleman wears a smiling face, and I hope that he will continue to do so when I have concluded my remarks.

Mr Tudor:

– It is not stipulated in the contract that the vessels carrying on the service shall come to either Melbourne or Sydney.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I shall deal with that matter directly. I do not find faull with the amount of the subsidy to be paid, although it is a large one. We must pay a big sum of money to secure quick and regular communication between Australia and the old country. My complaint is that preference has been given to Melbourne and to Sydney at the expense of Queensland, to some extent. The contract is to have force for a period of ten years. The new contract will not be more satisfactory to Queensland than that which is now being carried on by the Orient Steam Navigation Company. Ten years is rather a long term for which to enter into an arrangement for the carriage of our mails. For a decade at least we shall not ‘be able to make any other arrangements for the carriage of our produce to the world’s markets. In all probability many improvements in shipbuilding will take place in the immediate future, and long before the contract has expired the steamers now proposed to be built will have become obsolete. I should have preferred to pat the Government on the back for having made a good bargain, and I am sorry that, instead of doing that, I have to urge a complaint. I find it very difficult to understand why Queensland should always be ignored in connexion with a mail contract. The Government should have obtained an assurance from the contractors that the mail steamers would proceed to Brisbane as well as to Melbourne and Sydney. I am sure that they would never have entered into the agreement but for the fact that Mr. Croker, the representative of the contractors, had written a letter, stating that the steamers would call at Melbourne and Sydney. The Government could not have afforded to overlook the claims of those capitals. I am perfectly aware that the Postmaster-General was away from the Commonwealth at the time that the contract was settled, and I am not blaming him personally for the mistake that has been made. As a member of the Government, however, he must bear a certain amount of responsibility, and I would urge him to endeavour to arrange to make Brisbane a port of call for the mail steamers. If the steamers do not go on to Brisbane, the feelings which Queenslanders now entertain towards the Federal authorities will become even less cordial. We endeavoured to persuade the Barton Government to include Brisbane as a port of call for the mail steamers, but they absolutely refused to. comply with our request. Queensland has ever since had a grievance, and I think that it is time that the injustice under which she has been labouring should be removed.

Mr Thomas:

– That object could be achieved if we ran our own vessels.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– Queensland has to pay a subsidy to the mail steamers which now come on to Brisbane, and has also to contribute a much larger proportion than she should be called upon to pay towards the subsidy necessary to insure that Melbourne and Sydney shall be made ports of call.

Mr Austin Chapman:

– We hope to see the steamers go on to Brisbane.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– That is merely a hope, and is not sufficient. We wish Brisbane to be placed upon the same footing as the capitals of the other States. I think that some consideration should also be given to Tasmania, .which occupies very much the same position that Queensland does. Although Queensland will receive little or no benefit from the new mail service, she will have to contribute £16,287 1 os. per annum towards the subsidy. She will also be required to pay £1,000 per annum for the carriage of mails by rail from Adelaide to Brisbane. Of the latter sum, New South Wales will receive .£2,89 os. 7d. ; Victoria, £267 7s. 4d. ; and South Australia, £271 5s. 2d.

Mr Austin Chapman:

– I am going to knock all that off.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I am very glad to hear it. I am beginning to think very well of the Postmaster-General.

Mr Austin Chapman:

– The arrangement recently made at the Postal Congress will render it .unnecessary for the States to make any further payments under that head.

Mr Cameron:

– Will Tasmania share in the benefits of that arrangement ?

Mr AUSTIN Chapman:

– I am speaking of railway charges.

Mr Cameron:

– Do not the charges for the conveyance of mails by steamer come within the same category ?

Mr Austin Chapman:

– The honorable member must give notice of questions ®f that character.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– Altogether, Queensland will be required to pay £17,287 10s. - a very substantial sum, considering that she will not receive the same benefit that will be conferred upon Victoria and New South, Wales. Either the amount payable by Queensland should be reduced, or the other States which are to be specially benefited under the new contract should be called upon to contribute any additional subsidy that may be required to insure Brisbane being made a port of call. At present Queensland is receiving differential treatment, utterly opposed to the letter and spirit of the Constitution, which distinctly lays down that no discrimination shall be made between the States.

Mr Austin Chapman:

– Brisbane is receiving exactly the same treatment as Sydney and Melbourne.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I do not think that that is quite correct. Before the contract was signed the Prime Minister had in his pocket a letter from Mr. Croker, representing the contractors, to the effect that the mail steamers would go on to Melbourne and Sydney, but to no other ports. All I desire is that Brisbane shall be treated in the same manner as the capitals of the other States.

Mr Thomas:

– The business men of Brisbane told us that the postal service should terminate at Adelaide, and that any trading arrangements should be left to private enterprise.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– The new company will not receive any special subsidy from Victoria or New South; Wales, and if any additional amount is required by the contractors as a consideration for proceeding on to Brisbane, the Commonwealth should provide it. The PostmasterGeneral stated that the contract provided that Adelaide should be the terminal port, and that no objection could be raised to that provision. That is quite true so far as the carriage of the mails is concerned, but Adelaide will not be the terminal port for the steamers. It was not thought possible that before agreeing to the contract the Prime Minister would have in his pocket a letter , giving an assurance that the steamers would go on to Melbourne and “Sydney, but to no other ports.

Mr Austin Chapman:

– We should also be glad to have an assurance that Brisbane would be made a port of call.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– Had pressure teen brought to bear by the Federal’ Government the company would doubtless have consented to make Brisbane a port of call. I should be the last representative^ of Queensland to ask for a favour in v her name, and I am satisfied that the public of that State would resent anything in the shape of a favour being extended to her. All I ask is that Queensland shall be placed on an equal footing with the other States. We have a right to make that demand.

Mr Austin Chapman:

– So it will be. It is on the same footing at the present time.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I regret to contradict the Postmaster-General, but under this contract Queensland is not on the same footing with the other States, since Brisbane is not made a port of call.

Mr Cameron:

– Would .there be a sufficient depth of water to allow of these steamers going to Brisbane?

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– They could go to the port just as they could go to Tasmania. Apparently, however, the Federal Government is utterly indifferent to the needs and the wishes of the State of which I am a representative.

Mr Austin Chapman:

– I do not think that is. a fair statement.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– That, at all events, is my opinion. The whole arrangement is nothing more nor less than a piece of political hypocrisy, so far as Queensland is concerned. If it were not so, Queensland would share with the other States .the advantages of the service. The value of a mail service relates not merely to the .regular delivery of letters and papers, ‘but to the provision made on the steamers for the carriage of perishable products in cool chambers. In that respect the contract appears to be a failure. The Postmaster-General, is aware that Queensland is now paying to the Orient Steam Navigation Company a subsidy of £26,000 per annum for making Brisbane a port of call. That expense had’ to be incurred because of the failure of the Federal Government to provide in the contract with the company for the vessels of the service calling at Brisbane. The charge is a most unfair one to be imposed on Queensland, and ought to be taken over by the Commonwealth. I’ must admit that it is paid as the result of an arrangement made by the Queensland Government, and that there may be something in the contention of the PostmasterGeneral, who sought last year to excuse the action of. the Commonwealth Ministry by saying that it had been entered into without reference to them. But I desire the Federal Government to provide under this contract that the vessels engaged in the service shall call at Brisbane, and that the cost of the extended service, whatever it mav be, shall be borne by the Commonwealth.

Mr Austin Chapman:

– Has the honorable member read the remarks of the Premier of Queensland? They do not fit in with his statement.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I have read them, and intend to refer to them presently. If the Commonwealth Government said, “ We shall make arrangements with the new company for Brisbane to be made a port of call, and will bear the increased cost, whatever it may be,” it would act justly to the northern State. I know that the company expect to receive an offer from the Queensland Government, but I sincerely trust that if an offer is to be made it will come from the company itself. Instead of a subsidy of £26,000 per annum being paid to the Orient Steam Navigation Company, I should prefer to see a revival of the system under which some years ago Queensland paid a subsidy of £50,000 or £55,000 to the British-India Company for an independent service to London. That was money well spent. The trade of Queensland to-day must be seven or eight times greater than it was at that time, and if we are to have a line of steamers of out own-

Mr Thomas:

– Hear; hear.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– For several years I have advocated that we should renew the arrangement under which Brisbane was the terminal port, and under which every Queensland port up to Thursday Island would be touched.

Mr Bamford:

– Why do the Queensland Government not go in for such a scheme?

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I believe that we shall have it. Although I do not expect that Queensland will be treated with any generosity by the Federal Government, I feel satisfied that, as the result of this contract, we shall have an independent service between Brisbane and London; that the steamers engaged in that service will proceed from Brisbane to Rockhampton, Mackay, Townsville, Cairns, Cooktown, and other ports up to Thursday Island, and thence across the Arafura Sea to Tanjong Priox, the port of Batavia, Java. That was the old route, and it was an excellent one. I am informed by the Prime Minister that the present contract, unlike that made with the Orient Steam Navigation Company, does not provide for the mail steamers calling at Melbourne or Sydney, so that if the company chooses it need not send its vessels beyond Adelaide.

Mr Austin Chapman:

– No; but they would require twice the subsidy if we bound them not to send their vessels beyond that port. Every one knows that they could not afford to stop there.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– But they might go on to New Zealand, and not touch at Melbourne or Sydney. If that were done, however. I think the Federal Government would find a way of compelling the company to revert to the old system.

Mr Austin Chapman:

– We also desire them to make Brisbane a port of call.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– And the Federal Government ought to provide that the steamers of the service shall call there. Some consideration should also be given to Tasmania. It appears to me that the new company expects to secure a very substantial subsidy from Queensland. In the Argus of 16th instant the following statement appeared: -

When interviewed yesterday, Mr. W. A. Croker, who conducted the negotiations with the Commonwealth Government, stated most emphatically that up to the present the only subsidy which the new association had been promised was that which the Commonwealth would pay, viz.,£125,000 per annum. The statement made by the Shipping Gazette is, perhaps, anticipatory of arrangements being concluded between the new association and the Queensland and New Zealand Governments, for the steamers to call at Brisbane and Wellington. If this extension of the mail service were arranged the Queensland and New Zealand Governments would possibly supplement the federal subsidy by the payment of£100,000 for the services rendered.

Whatever influence I possess will be used in the direction of preventing Queensland giving a subsidy to the company. In Queensland generally, and particularly amongst the commercial community, the way in which Brisbane has been treated is strongly resented. I have here the report of a deputation which waited on the Minister of Agriculture, Mr. Denham, with regard to this question. It is headed Queensland’s Position: Strong Speech from the Minister,” and reads as follows : -

Brisbane, Saturday. - A deputation, consisting of representatives of the co-operative butter factories’, which waited upon the Minister for Agriculture (Mr. Denham) to-day, presented a resolution agreed to by them at a meeting held this morning : -

That this meeting regrets to note that the interests of Queensland producers have been ignored in the acceptance of a mail contract which does not include Brisbane as a port of call.

Mr. Denham, in the course of his reply, said that on this occasion the Commonwealth authorities had most astutely protected themselves. On the previous occasion there was an implied condition that steamers should come on to Victoria and New South Wales ; but this time they only contracted with them to come to Adelaide. Up to the present they in Queensland were quite in the dark. There were some communications’ going between the Premier and Mr. Deakin, but there was nothing more in them than what they had seen in the press, that Brisbane might be a port of call. The new company evidently expected to be able to bleed Queensland for coming here. Speaking personally, his own opinion was that they should not pay one penny royalty or bonus for steamers coming here. It would be infinitely better for the State to have a service going up the coast, calling in the East, then going toEngland. They were evidently going to play a waiting game in trying to bleed the State of Queensland, but he would use all the influence he possessed to prevent the subsidy from being given.

Mr Austin Chapman:

– Will the honorable member read what Mr. Kidston said ?

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– I shall do so later on.

Mr Austin Chapman:

– It is a more recent utterance.

Mr R EDWARDS:
OXLEY, QUEENSLAND · PROT; FT from 1913; ANTI-SOC from 1906; LP from 1910

– The question is too serious to be treated frivolously. I have here an extract from a leading article in the Brisbane Courier, which puts forward very clearly the position of Queensland -

There are two points clear : that the mail service is to be between Brindisi and Adelaide, and that the contractor guarantees that the steamers shall continue the voyage to Melbourne and Sydney. The reference to Brisbane is that the steamers will “probably” come here. “Probably” is not sufficient; it means that they will come if we give a special subvention as in the case of the Orient steamers, at least so we lake it, making the usual estimate of commercial enterprises, and taking the usual meaning of words as applied to business affairs.

It mav be candidly said that the main interest of Queensland as Jar as this mail contract is concerned is in getting the steamers to Brisbane for cargo purposes, and chiefly for the butter trade. It is vital to the butter industry that there should be speedy and regular delivery. Without regularity the sale of the product cannot be made direct to the distributor; it must be left to the speculator who is prepared to take a market risk. And the element of speed is essential, both from the financial point of view and the consideration of quality. To insure regularity at any rate, there must be a penalty clause in the contract, and no shipping company or association of persons will submit to a penalty clause without a subsidy. These facts are mentioned so that it may be made perfectly clear that the requirements of Queensland are such that the suggestion of any steamship service inferior to that given by the mailboats would be an unacceptable alternative. And in the matter of butter freights Queensland with her remarkable expansion is interested more in looking carefully to the future than either New South Wales or Victoria. In those States the industry seems to have reached something like its culminating point; all land for dairying is utilized. But in Queensland we are only on the fringe of the production and export. In 1900 our butter export was of the value of ,£51,729; last year it ran to over half a million sterling.

I feel certain that there will be just as big an increase in the production of butter in Queensland during the next five years. The article continues - lt is important to note the expansion in the principal States, and the exports to the United Kingdom for the year ending 30th June, as compared with the two previous years.

I do not propose to quote the figures which are then given ; it will be sufficient for my purpose to say that the export of butter from Brisbane in the year 1903-4 was 1,804 tons; in 1904-5, it was 2.635 tons; and in 1905-6, 4,005 tons. The article proceeds -

The Queensland export, it will be seen, is increasing very rapidly - much more rapidly than in either Victoria or New South Wales - and it may be mentioned - and as an important point - that we -have a large Inter-State and South African trade, account of which is not taken in the figures here given.

The paragraph concludes -

Our increase is largely owing to the fact that we have had the benefit of speedy and regular communication with the London market; the improved facilities for transport have stimulated production. It requires no rhetoric to emphasize this : if last year it was found so necessary to have the rapid and regular transit by sen that Queensland was prepared to shoulder a special subsidy of ,£26,000 a year, how much greater will the necessity be two years hence, when the new contract will come into operation? Without unduly inflating the prospects of the trade it may be said that within two years, in all human probability, our export of butter will equal that of New South Wales.

Thus it will be seen that the importance of Queensland being placed on the same footing as Victoria and New South Wales in connection with the new mail contract is not a matter of mere sentiment. There are other business considerations than those we have mentioned, but it is not necessary to refer to them at present. The Prime Minister, we are told, has a letter of guarantee that the new liners will call at Melbourne and Sydney, and “ probably “ at Brisbane, and there is interest in the statement that the steamers will also “under certain conditions” proceed to New Zealand. So far as we are informed as to the present position, Queensland, one of the States of the Commonwealth, is placed, upon the same footing as New Zealand, which is outside the federation altogether. No doubt when the contract is tabled, if there is no satisfactory statement made respecting the extension of the service to Brisbane, the Government of this State will take up the line of protest, and follow it up in a move vigorous manner than marked the Queensland attitude in the matter of the Orient contract.

I hope there will be no need for the Queensland Government to take up that attitude, or to do more than send an ordinary protest to the Commonwealth authorities. Upon more than one occasion, the State from which I hail has suffered very considerably as the result ot having joined the Federation. For instance, she has never received her full three-fourths of the Customs and Excise duties collected within her borders, and there is no hope of her deriving from; the mail contract the benefit which will be conferred upon the other States. I protest against such injustice being meted out to Queensland. I know that it is idle for me to appeal to the Government to remedy that injustice, but I do appeal to honorable members to remove it by inserting in the proposed contract a provision that the mail steamers shall make Brisbane a port of call.

Mr DEAKIN:
Minister of External Affairs · Ballarat · Protectionist

– I hope to occupy the House for but a very short time. Indeed, I had intended to delay addressing myself to this question until the main motion was under consideration. But upon examining the amendment submitted by the honorable member for Barrier, I find that it involves the whole proposal of the Government, and that the vote which I hope will shortly be taken, will be one either for or against the contract which is being submitted to the House. Under these circumstances, if appears proper that I should now address myself to a few general considerations to which we desire to call attention. So far, the whole tone of the debate has been entirely satisfactory to the Government in respect of the all-important question of the business character of the proposed contract. The honorable member for Barrier, and those who with him have strongly urged the adoption of another course, have not entered any serious objection to this contract, as a contract, provided that private persons are to be dealt with. Honorable members who have criticized the Government proposal from the opposite side of the Chamber, have almost, without exception, indicated that their chief apprehension was that it appeared to be so favorable to the Commonwealth that they were justified in expressing some doubt as to whether the contractors would think fit, to proceed with it. In short, the consensus of opinion is that this is the best bargain - so far as Australia is concerned - which has ever been embodied in a mail contract.

Mr Wilks:

– The same thing is said in reference to every contract.

Mr DEAKIN:

– When the last contract was under consideration I have a vivid recollection that many honorable members claimed that its acceptance involved an increased expenditure and was less favorable to Australia than the then existing contract. “ However, it may reasonably be claimed that the proposed agreement with Sir James Lamg and Sons is the best mail steamer bargain ever made on behalf of the people of Australia. In this connexion it has to be recollected that one of our earliest acts by the Postmaster- General upon his assumption of office was to give notice to the Orient Company of his intention to cancel the present contract. In the view of the Government, the time of transit under that contract, the amount of the subsidy, and the size of the steamers employed in the service were all. capable of improvement years ago. Under the changing circumstances of ocean traffic, and in face of the increasing needs of this country, it washeld that the contract was so unsatisfactory that its existence could not be justified for a longer period than was necessary to enable us to invite fresh tenders. Practically under the instructions of the House, tenders were then invited for a purely postal contract. The complaint was made that in previous instances, whilst the contract was nominally one for a postal service, it in reality permitted certain ports in Australia and’ certain States to reap an advantage which two of the States, namely, Tasmania and Queensland, did not enjoy. The consequence was that when the last contract was entered into, Queensland, at its own expense, made an arrangement for a continuation of the voyage of the Orient Steam Navigation Company’s steamers to Brisbane - a fact to which the honorable member for Brisbane has just alluded at some length. Consequently we called for tenders for a purely postal contract, which, so far as we were concerned, should be fulfilled by the delivery of all the mails from the old world at Adelaide. Beyond’ that port the course of the vessels lay within the discretion of theirproprietors. We should then provide an accelerated railway service to distribute the mails from there over the whole of the eastern Commonwealth. It was felt, however, that it was not sufficient for us to remove the objections which were urged against previous contracts, and that an endeavour ought to be made to obtain better conditions. We felt not only that the service should be speedier, and that the vessels engaged in it should be of a superior character, but that, if possible, economies should be effected. All that, I think, we can claim to have effectually accomplished.

Mr McWilliams:

– Does the scheme for the distribution of the mails to which the Prime Minister has referred include Tasmania ?

Mr DEAKIN:

– We shall distribute the mails from Adelaide over the eastern Commonwealth by means of the railway service. The special circumstances of Tasmania have not been forgotten, as the honorable member will find when some other matters come before the House for consideration. Our object hasbeen to secure a Commonwealth contract based upon broad Federal principles, establishing equality throughout the whole of the continent, and, so far as is compatible with the immense area to be dealt with, placing the people of the States upon a fair and’ equal footing. This was a great deal to attempt, and a courageous facing of what was at the time apparently an extremely hazardous step. There is no occasion to delay the House - though it might afford a good deal of amusement to a sarcastic commentator - by recapitulating the criticism with which our original tenders were favoured Honorable members will recollect the prophecies which were indulged in to the effect that we should receive no offers outside those of the present mail companies, that they would demand an increased price for continuing the service which we were already obtaining, that we were not large enough as a community to make a demand for better service, and that we ought to be content to accept what we ha.:l and to pay more for it. From that time to the ‘present outside critics have been striking the same key, and in a great variety of tones, prophesying disaster. So far as we can judge, after careful investigation, we are about to obtain not only a better contract, not merely larger steamers and a speedier and cheaper service, but also great advantages which were not included in the terms of the tender - which were not imposed upon the contractors, but from which we shall undeniably reap very considerable benefit. The vessels will be constructed according to plans to be submitted to this Government, and provision of the most recent and effective design is to be made for cool storage, probably three times as large as that of the vessels of the Orient Steam Navigation Company, and twice as large as that of the biggest Peninsular and Oriental steamers visiting our ports. It is very important that perishable produce shall obtain rapid transport to the mother country. Now, in addition to affording larger space for such cargo, a quicker service will be given than, is now possible. The recent inquiries of a committee in London show that any deterioration that takes place, generally occurs during the last week or ten days of a voyage, and, consequently, every day by which the journey can be shortened is so much gained. But, although, in providing for a postal service, we did not lose sight of these incidental advantages, it is not suggested that the proposed increase in accommodation will meet the export needs of Australia during the busy season, and we do not claim that by this arrangement we have done all we expect to do for the improvement of the means of sea carriage from Australia to Great Britain. The charges for rapid transit are necessarily somewhat higher than those ruling for transport by vessels of less speed,- taking, it may be, a longer route, as, for instance, the White Star liners, which journey by way of the Cape. But it was always our object to cope with the requirements of the export trade in perishable produce, of which the mail steamers will carry only a pant, and, therefore, on the 20th April ‘ to]-* last I sent copies of the following letter to the Premiers of the several States: -

Sir, - I have the honour to invite your attention to the proposal put forward by me at the recent meeting of the Conference of State Premiers, to the effect that the Agricultural Departments of the States should be urged to immediately communicate with the exporters of perishable products, or others interested in them, in order that we might arrange to guarantee cither the whole or a certain proportion of the cold storage accommodation which will be provided by the steamers to be employed in the mail service between Australia and Great Britain.

The matter is one of considerable urgency, as the Postmaster-General expects to receive the tenders for the mail service next month. Unless some early intimation is received through the State, Governments of the wishes of the producers, it will not be possible to make this a condition of the contract with the successful tenderers, and an unique opportunity may be lost for making most favorable conditions for an Australian export trade of products, for which the quickest possible transport is desired.

Under the circumstances, may I ask that you will give instructions for the matter to be considered at the earliest possible date, both as to the quantity to be shipped, and the rates to be obtained ?

As the tenderers for the mail service could not expect that their subsidy would be more than an inconsiderable part of the earnings necessary to cover the expenses of their- operations, we thought that they would naturally desire to place themselves in the best position in respect to other competitors by making arrangements in advance for the supply of cargo. While it might have been somewhat risky for the Government of any one State, or even of two States, to undertake beforehand to fill a certain portion of the cool storage accommodation provided, it seemed to us that all the States together might make an advantageous bargain for it with the tenderers, because it would be only under the exceptional circumstance of a wholesale falling off in production throughout the Commonwealth that the accommodation could not be used. We left it to the States to adjust among themselves whatever cool storage accommodation they might deem, it fit to reserve jointly.

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

– Suppose one State had reserved the whole of the space available ?

Mr DEAKIN:

– It was intended that each State should agree to reserve so much, and that they should draw up amongst themselves the conditions under which it was to be used according to circumstances. We thought that by making a bargain beforehand, cheaper rates could be obtained, especially for the whole space, than by individual bargains made later at current rates.

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

– If there were a surplus, how would the States arrange with the different shippers without giving a preference to some?

Mr DEAKIN:

– We left it to the Agricultural Departments of the States to say what would be the minimum space required for each State. The distribution of that space reserved would have been for the States to arrange as they pleased.

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

– I am merely pointing out the difficulty with which the States were faced.

Mr DEAKIN:

– I admit the difficul ty, but it is surely not insurmountable. It appeared to us to be worth the effort to obtain advantageous terms for our producers. In reply to my letter, the Premier of Tasmania forwarded this resolution from a meeting of fruit-growers -

This meeting of the Derwent Valley Fruit Growers’ Association views with great concern the proposal of the Federal Government to arrange for the freight of fruit to F.ngland, and desires to strongly deprecate such proposed action.

He added that a similar resolution had been passed at Hobart, and thought it “ undesirable to disturb the satisfactory arrangements which exist as far as producers of this State are concerned,” regretting that his Government could not cooperate. The Premier of South Australia replied that it was impossible to estimate the requirements of his State, “ as so much depends upon how the season may turn out.” The Premier of Queensland forwarded a resolution of Queensland exporters, asking that the mail service should provide refrigerating space available for each State of the Commonwealth. The Premier of New South Wales forwarded the report of an officer of the Agricultural Department of the State, summarized in these words -

The conditions in this State do not seem to be favorable to the taking up of freezing space on steamers by Government authority.

The Victorian Premier replied that -

This Government regrets it does not see its way to guarantee to fill a certain quantity of space.

He added that they would favour a line giving special facilities even at slightly higher rates than those ruling under their present contract. The Premier of Western Australia said that Western Australia is not in a position, at the present time, to make any reliable estimate of the cold storage space which would be required. Unfortunately, not one of the Agricultural Departments of the States found itself in a position to enter into what seemed to us a promising arrangement, whereby space might have been secured at less than the current rates likely to rule if no agreement is made. Without some such arrangements, when the space is most wanted, it will cost most to obtain it.

Mr Mcwilliams:

– There are four or five competing companies.

Mr DEAKIN:

– Competition exists, but I am informed that it is restrained within certain limits.

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

– The present rates are verv low.

Mr DEAKIN:

– I wish now to deal with an alternative proposal which, on the 30th April, we submitted to the States Premiers, in the following terms: -

Sir, - In connexion with my communication of the 20th instant, I have the honour to invite your attention to the further suggestion made by me at the recent Conference of State Premiers, with reference to the export of produce generally, and particularly of produce requiring cold storage.

My previous letter dealt only with the mail steamers, but there is another class of vessels in respect of which it may be possible for the Commonwealth to make arrangements which will offer better facilities to producers at lower rates than those to which they have been accustomed. Vessels of the type to which I. allude would be capable of carrying far larger cargoes than can find space in the mail steamers, though their route will be longer. Thev have, or could provide, passenger accommodation suitable for the conveyance of immigrants to Australia on favorable terms.

It is possible, if the companies concerned can be assured of sufficient business, that they will provide steamers larger and of a higher class than have hitherto been employed in the Australian trade.

What is asked bv our exporters, both those who require the use of freezing chambers, and those who do not, is a reduction of freights, and this I have reason to believe may be secured if shipping proprietors can be supplied with some assurance that a certain amount of space will be regularly taken. This assurance need not necessarily be in the form of a binding guarantee, but might be rather of the nature of an undertaking to supply cargo, filling a specified space, for either a certain number of months or the whole of the year on the voyage from Australia to England.

The difference in the climatic conditions of the States, and the fact that unfavorable seasons rarely affect more than a part of the Continent, would enable the undertaking to be fulfilled much more easily and regularly if all the States were acting together. Arrangements could be made for the distribution among the shippers of whatever space is allotted; which arrangements could be altered from time to time according as the quantity of goods available for export increased or diminished in any particular locality.

It would be an additional inducement if an approximation could be made of the number of immigrants who- would be passengers on the re- . turn voyage.

No definite suggestions can be made until i have further information from you, but I shall be glad if you will consider the matter, and favour me with your views, together with those of the producing and exporting classes, or their associations, with whom your Agricultural Department may be in touch in order that, if possible, proposals of a federal character can be prepared for submission to ship-owners.

Even if no agreement be attained at once, an endeavour to induce the exporters of Austraiian produce to act conjointly for the furtherance of their common interests, must have useful results in the future.

The advantages of united action in this matter are so great that this Government cordially relies on the co-operation of all the States in the effort to secure them. >

I may say at once that the replies received were practically the same as those previously sent to us. Several of the States gave us precisely the same answer, but Victoria added that it was felt that nothing could be done in the matter until a definite offer had teen received. My letter was not sent merely as a result of a theory of our own. I had actually had interviews with the representatives of more than one large shipping company partially represented here, and in one case with the representative of a company at present doing business ih Australia. These gentlemen gave me certain information as to the character of the present trade, and the facts governing prices, which made it appear very undesirable for a new company, unless extremely powerful, and prepared to sustain extraordinary competition, to enter into such a trade as this without some guarantee as to the support it would be likely to receive from this side.

Mr Johnson:

– May not the replies indicate a want of confidence on the part of the States in the Federal authorities?

Mr DEAKIN:

– It must be recollected that the States were not asked to put any faith in the Federal Government. All that we offered to do was to act as their agents in securing cargo space, and the States were not called upon to undertake any obligation unless they so desired. We simply gave them an opportunity to enter into a bargain, if they thought it worth their while to do so. The representative of one great line of steamers stated that the risks to which I have referred would have to be run by any company entering into the Australian trade, but that, if his principals could obtain an undertaking - not a binding guarantee, with penalties - that a certain quantity of produce would be shipped by their steamers during a certain portion of the year, they would be prepared to make the venture. It was our desire to make ourselves the medium of communication between these shipowners and the States. The owners came to us because they recognised that it would be necessary for them to deal with more than one State. They considered that competition would be feasible only if carried on by a fleet of steamers at least as large as those now trading to Australia, but they were not prepared to make the venture without some undertaking that their attempt to give us a better freight service , for Australian produce, at rates lower than those now prevailing, would receive support from this side. That was a fair offer, and we communicated it to the States. I am not, even by implication, insinuating that the States Governments are to blame, because the negotiations did not at once prove successful. What is wanting is, apparently, a sufficient spirit of co-operation among those who have produce to send away to the world’s markets. Of course we knew, and the States Governments knew, that there were large business agencies connected with the export trade which might not find it to their interest to enter into any such arrangement as that suggested.

Mr SPEAKER:

– Does the Prime Minister think that he can connect his remarks with the subject of the mair contract?

Mr DEAKIN:

– Yes. It has been stated that the cold storage space for which provision would be made in the new line of mail steamers would be sufficient to convey only a fractional part of our output. I have been endeavouring to show that we have not been blind to the further necessities of the Australian export trade, and that we did not consider that the mail contract met all our needs in regard to shipping communication with the old world. We thought that without interfering with the States, or with the individual freedom of producers, or without improperly trenching upon the business of the agents now engaged in the trade, we could place at the public disposal a cheaper service. We represented to the States Governments the advantages that would be conferred bv such a service, in the hope that the producers would be able to act together to a sufficient extent to afford encouragement for the establishment of a new line of steamers. We contemplated the establishment of a new line of steamers entirely apart from those engaged in the mail service. The proposed cargo steamers would not have proceeded by way of the Suez Canal, and would not necessarily have had any connexion with those who are responsible for the mail contract. Under the proposed arrangement, our produce would have been carried in larger and slower vessels proceeding by another route.

Mr Mcwilliams:

– If the steam-ship companies reduce their freights they will obtain as much cargo as they can carry.

Mr DEAKIN:

– It is scarcely necessary that I should remind honorable members that under the proposed mail contract, we shall gain sixty hours upon the present mail service, as carried out by the Orient Steam Navigation Company, and fifty hours upon the service carried out by the Peninsular and Oriental Steam Navigation Company. When we call upon the contractors, as I hope we shall, at the earliest possible date, probably during the first year of the contract, to provide the accelerated speed which will enable their vessels to convey mails from Brindisi to Adelaide in 6x2 hours, we shall make a saving of eighty-four hours in the time of transit, and thus permit of letters received bv any given steamer being replied to from Brisbane, as well as from Sydney and Melbourne in time to catch the same steamer upon her outward voyage. When this is achieved, we shall have made a great stride, in connexion with our postal communication, and in all its accessories, of the greatest importance to this community.

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

– If the speed is accelerated, we shall have to pay the contractors a subsidy of£150,000 per annum.

Mr DEAKIN:

– That is the maximum - the amount may be a little less.

Mr Watson:

– Would the Prime Minister say whether the second tender, the amount of which, I understand, was £150,000, would have provided for anysaving in time?

Mr DEAKIN:

– Speaking, from memory, no. One tenderer did undertake to effect a saving in time, but there were other difficulties in his way which proved to be insurmountable.

Mr Kelly:

– Does the Prime Minister maintain that under clause 5 of the contract, the contractors could be compelled to accelerate the speed of theirvessels?

Mr DEAKIN:

– Not under clause 5, but under the terms of the contract as a whole, it could be done. I may say that if there is any ambiguity in the terms of the contract Mr. Croker is perfectly prepared to put matters right. He has been keen for his principals, but quite fair to us. In. point of fact, one or two verbal amendments have already been made in the contract which will place matters beyond all possible doubt.

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

– It is not beyond doubt now.

Mr DEAKIN:

– It is in a sense, because the contract of which honorable members have a copy merely reduces to legal form a rough draft in which it was most distinctly provided that the Government should, have power to enforce an acceleration of speed I admit that in the legaily-phrased contract the expressions used might have been clearer. Our object is that this contract shall not only be far better than those that have preceded it, but. that it shall, as far as possible, be of a. Federal character.

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

– Could the PrimeMinister say whether he considers clause6 to be perfectlv clear?

Mr DEAKIN:

– Yes, quite clear, and I. understand that the Attorney-General has satisfied himself that it is effective.

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

– Would the extended period referred to therein, be included within the ten years, or would it possibly carry the contract beyond the ten years’ period?

Mr DEAKIN:

– As I have alreadypointed out, that is quite immaterial,because the House is committing itself to the payment of the subsidy for a period of only ten years. No Government could go bevond that term without coming down to Parliament, and obtaining its assent tothe payment of the subsidy for a longerperiod.

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

– In that case, it would have been much simpler to terminate the contract?

Mr DEAKIN:

– Possiblv. We havebeen subjected to a good deal of criticism in connexion with this contract, due to our adoption of the clauses employed in successive contracts previously entered into the provisions of which were not subjected to the same close scrutiny that has been directed to them during this debate.

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

– If the arbitrators recommended an extension of the contract, and Parliament .did not approve of it, could the Government still demand an acceleration of speed?

Mr DEAKIN:

– Yes, up to the ten years’ limit; but, of course, the question of expense might be an important factor. We have secured the favorable terms provided for in the contract, because it exlends over a period of ten years. We could not have made such a good bargain if the agreement had been made for a term of only four years. As I was saying, a Federal character- will be imparted to the new service, not only by our effort to put the postal service on an absolutely Federal basis, but bv the fact that the steamers will be registered here, and fly our own flag. Moreover, the conditions that thev shall be manned by white seamen will be strictly observed. I have great sympathy with the remarks of the honorable member for Kalgoorlie, who contended that the steamers should be manned solely by Australian or British seamen. The fact that such a provision is not embodied! in the contract is not due to any remissness on the part of the Government. On the contrary, if other proposals made by us to the British Government had been accepted we should have been able to do this, and to bring our shipping service into greater harmony with that of the old country, while more closely studying the requirements of the Empire. Although no stipulation is made in that regard, however, I have yet to learn that the new fleet will =not be manned by British seamen.

Mr Bamford:

– Will the fact of the vessels being registered here render it necessary for the contractors to pay Australian rates of wages?

Mr DEAKIN:

– The payment of Australian rates of wages can be enforced only in our own waters. We may make them apply whilst the steamers are trading on our coasts, but the moment they leave our shores on oversea voyages they pass beyond our jurisdiction.

Mr McDonald:

– Will any shares be held in Australia?

Mr DEAKIN:

– I shall tell presently all I know of that matter. In order to reply to some criticisms as to the expenditure in which Australia will be involved by the acceptance of this contract, I propose to read a few figures which also bear on the development of the shipping of the mother country. There is at present’ on the British Register shipping amounting to 9,000,000 tons, whose value is estimated at £150,000,000, and whose gross earnings amount to £90,000,000 a year. In respect of that shipping the mother country provides, by, vote of Parliament, £1,127,000 a year - £860,000 for mail services, £200,000 for subventions which enable the British Government to claim the services of ships built to her order in time of war, and £53,000 in subsidies for no other consideration than the encouragement of trade. The total payments by the Government of Great Britain therefore amount to about I per cent, on the estimated capital value of the shipping of Great Britain. On the other hand, Germany pays 9 per cent, in subsidies, in addition to indirect concessions by the State railways, as well as in- other directions. To take two concrete examples, I find that a special freight is charged upon German State railways in respect of goods of German origin and manufacture intended for export.

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

– There are special freights on most of our railways in respect of goods for export.

Mr DEAKIN:

– The honorable member refers to the rates in respect to wheat and other products?

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

– We carry all sorts of produce for export at special rates.

Mr DEAKIN:

– Whilst in Germany rails are carried at 3s. 2d. per ton for a given distance, it costs 8s. 4d. per ton to carry the same rails over a like distance in Great Britain.

Mr McDonald:

– The railways in ‘Germany are owned by the State, whilst in Great Britain they are private enterprises.

Mr DEAKIN:

– Quite so. Again, in Germany machinery would be carried over a given distance at 7s. iod. per ton, whilst in the United Kingdom the charge would be 36s. 4d. per ton.

Mr Cameron:

– That is an argument in favour of-

Mr DEAKIN:

– I am now quoting facts.

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

– Where did the honorable and learned gentleman obtain them?

Mr DEAKIN:

– From one of the latest numbers of Dun’s International Review, My point is that, though the British Governmentpays only £ per cent, upon the capital invested in the shipping of the United Kingdom, the German Government pays as much as 9 per cent., and gives other indirect concessions that, probably, raise the total to to per cent, or ri per cent. The remarkable development of German shipping, which is one of the economic features of the present time, is largely due to the fact that it receives ten or a dozen times the encouragement that the United Kingdom has hitherto found it necessary to give to its shipping.

Mr Batchelor:

– The German people are not paying as much as the English people are.

Mr DEAKIN:

– When attention is drawn to the expenditure proposed here, the fair measure is not the country which has, so to speak, the command of the sea, and has reached that proud position by careful State nursing and wise provision for the last two or three centuries, as well as by the industry and ability of its people. We find that people like ourselves who are in the early stages of their naval development, but who feel their dependence on a marine service, are forced for that reason to put forward greater efforts. France not only gives subsidies amounting to 12½ per cent. to her shipping, but affords other encouragement. For instance, an extra duty is levied on transhipped goods imported from abroad in other than French ships.

Mr Glynn:

– The subsidies given by America have not done much for her import trade.

Mr DEAKIN:

– For several reasons which it would take too long to deal with.

Mr Glynn:

– There are fiscal reasons.

Mr DEAKIN:

– They apply in so far as they render America self-supporting, instead of dependent on imports from abroad. The shipping trade of America mainly relates to exports. Its import trade is relatively inconsiderable. That is one disability. But for the Civil War - but for the Alabama and the Shenandoah - I venture to say that by this time the American merchant fleets would have occupied the position which the American navy holds to-day among the great powers of the world.

Mr Glynn:

– That is not the general verdict.

Mr DEAKIN:

– That, and their concentration on more profitable developments, has had the result named.

Mr McWilliams:

– The American Civil War took place nearly half a century ago.

Mr DEAKIN:

– What is Australia doing? It is estimated that we are paying for this contract, over and above the poundage rates, £80,000 a year.

The capital that will require to be invested on the service we are obtaining has been fairly estimated at £4,000,000, and £80,000 on £4,000,000 represents 2 per cent. on that sum. The encouragement, therefore, that Australia proposes to give to this line of oversea steamers is but 2 per cent. as against the 12½ per cent, given by France, and the 9 per cent. given by Germany to their shipping, taking all of it into account, irrespective of other advantages.

Mr Watson:

– Why£80,000?

Mr DEAKIN:

– Because the remainder is estimated to represent the poundage rates.

Mr McDonald:

– Still the company will secure that remainder.

Mr DEAKIN:

– Weshall pay £45,000 for services rendered; we shall pay the other £80,000 per annum for the class of service we obtain. If we, in Australia, separated as we are by thousands of miles from Europe, and requiring, like the United States, far more accommodation for our export than for our import trade, pay only 2 per cent. as. compared with the efforts of other enterprising nations, that is a small outlay for the development of a service of this character.

Mr Cameron:

– Is there not a percentage given for other services?

Mr DEAKIN:

– I have said so. In England, as I have shown, the subsidies in respect of the carriage of mails represent eight-tenths of the total sum paid, and, although large amounts are paid by France and Germany for the purpose of maintaining their naval reserves, the chief expenditure takes the form either of postal encouragement,or direct mercantile development.

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

– Are not the British and foreign payments made in respect of the whole of the shipping of the countries named, whereas the Prime Minister is reckoning the rate in. the case of Australia upon this particular investment.

Mr DEAKIN:

– I am doing that because this is our only investment in this direction. We have practically no other oversea shipping. With what else can I compare it? Thisline is to be registered in Australia. It willfly the Australian, flag. It will be an Australian oversea service, and, so far as I know, the only oversea service flying the Australian flag, and partly, perhaps, in Australian hands. That is why I can only make an imperfect comparison. The honorable member for Parramatta last night questioned the capacity of the tenderers to fulfil the contract. He had been informed that they were merely builders of sailing vessels and tramp steamers. I can assure the honorable member that he is very much mistaken. I gave a list of the various companies for which they have built mail steamers.

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

– The honorable member did not speak of mail steamers. He simply usedthe word “steamers.”

Mr DEAKIN:

– They have supplied steamers to mail shipping companies. I have since examined Lloyd’s Register, and find that they have built a number of mail ships for English, American, and Japanese lines. The last achievement of Sir James Laing and Sons was to build a vessel of 1 0,660 tons - the Slavonia - one of the famous Cunard line.

Mr Thomas:

– A vessel of 10,660 tons would not be a famous Cunarder.

Mr DEAKIN:

– I refer to one of the famous Cunard line, which has never lost a ship. Vessels of twice that size, of course, are built for that line.

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

– Does the Slavonia belong to the Cunard line?

Mr DEAKIN:

– I presume so. I understand that the names of the vessels of the company always end in “ ia.”

Mr Tudor:

– That is so with the vessels of the Allan line.

Mr DEAKIN:

– That is what has been done in James Laing and Sons’ own shippingyard. That firm has a history of more than a century. It has steadily grown from comparatively small beginnings, and become one of the powerfulyards on the East coast. Sir James Laing and Sons, who are the contractors whom we hold responsible for this contract, are not the only persons connected with it, or from whom we hold security. In the first place, our negotiations, necessarily conducted on the spot, were with Mr. Croker of thiscity, who is their representative. He ist as is well known, a professional man of high standing, who represents large shipping interests in all parts ofthe world. Our first contract was with Mr. Croker. He himself is liable for it and under it he undertook that his principals would enter into this present agreement which he has signed as their agent. We have first of all Mr. Croker and his agreement ; we have next SirJames Laing and his agreement, backed up by the bank guarantee of £25, 000 in addition to the£2,500 we have already received. In addition to that, Sir James Laing and Sons, who have taken a leading position as the firm responsible for this contract, are associated, so I am informed - on the authority of Mr. Croker as their agent - with the following eminent British ship-builders : - Vickers, Son, and Maxim, one of the largest ship-builders in the United Kingdom.

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

– Associated under this contract?

Mr DEAKIN:

– Under this contract. They are also associated with Lord Armstrong, representing Lord Armstrong, Whitworth and Company and William Beardmore and Company. We have thus four of the best known and best established shipbuilding firms in England associated in this matter.

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

– Associated in what way ?

Mr DEAKIN:

– They are partners, to some extent, in the tender. Sir James Laing takes the responsibility of the contract, and, after Mr. Croker, we look to him and his company.

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

– That is as to the payment of the £27,500?

Mr DEAKIN:

– Yes. But behind them we look to these firms whose ship-building yards are able, not only to complete this necessary fleet in a short time, but to build any further fleet required. Honorable members appear to have hardly looked at the special guarantees provided in the contract - in articles 33, 38, and 39. We have now £27,500 in hand. For the due fulfilment of the agreement, the contractors must give us a guarantee equal to one-fifth of the amount of the tender. In other words, a bond of £25,000 is required. Then, if the contractors propose to build ships - as they do under this contract -they are required, under sub-clause 2 of clause 39, to “ enter into a joint and several bond with two responsible and approved sureties to the Postmaster-General in the penal sum of £25,000 for the due commencement and faithful performance of the contract in accordance with the tender and conditions by the contractor.” Should the contractor, in the opinion of the Postmaster-General, fail to make sufficient progress with the construction of the vessels, the latter may at once call upon him and his sureties to enter into a new bond to increase the amount from £25,000 to £50,000, and, failing compliance with that demand the PostmasterGeneral may cancel the contract and

Mr Watson:

– What time will elapse before the Government can call upon the contractors to forfeit the final amount?

Mr DEAKIN:

– In the first place they may be required to increase the amount from £25,000 to £50,000 within a week. They must find that sum if such a demand were made, or the contract would be cancelled, .and they would be liable to a further penalty.

Mr Watson:

– What would be a reasonable period to allow before calling upon them to forfeit the final amount?

Mr DEAKIN:

– That is a matter which is left to the discretion of the PostmasterGeneral.

Mr Fisher:

– That means the Government.

Mr DEAKIN:

– Exactly. Consequently we are as well secured in connexion with a contract of this kind as we can be. When tenders were invited it hardly seemed possible that we should be able to secure a fleet of ships of this character, or possibly larger penalties might have been provided. But, considering that with Sir James Laing and Sons it is not a question of money - that that firm has never yet failed in its word-

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

– Does the Prime Minister really think that, these shipbuilders intend to run a mail service, and to enter into competition with other vessels ?

Mr DEAKIN:

– I have the assurance of their representative here that they are concerned in this contract, and I hope and believe that their efforts in Australia will not be confined to this contract alone. Under the agreement an entirely new company headed by expert shipbuilders will enter Australian waters - persons possessing both the ability and the capital necessary to carry out the largest designs. They have evidently realized what the prospects of Australia are. They recognise that its production is likely to increase by leaps and bounds. They have doubtless taken into account the advances which have been made by the steam-ships which are doing the carrying trade of the world, and are ready to provide us with a more progressive service than we have yet enjoyed

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

– Will there be any Australian capital sunk in this venture?

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

– The Prime Minister is not aware whether our coastal companies intend to invest in it?

Mr DEAKIN:

– I see the statements which are published in the press, asdoes the honorable member, but cannot say what foundation there is for them. I dc not know whether the inquiries of the honorable member for Barrier and his colleagues upon the Shipping Commission led them to note the circumstances under which some of the lines now subsidized in Europe? are being carried on. For instance, theNorddeutscherLloyd’s line is not merely 1 supported by the German Government. The Government of that country have taken many steps which probably meet with theapproval of the honorable member for Barrier, but they have not gone to the extent of attempting the State ownership of that company’s vessels. Nevertheless., their control of the NorddeutscherLloyd’sships practically amounts to a State ownership.

Mr Thomas:

– I said so.

Mr DEAKIN:

– But did the honorable member state that the freight rates and the passenger fares have to be assented to by the German Government before they canbe altered in any way ?

Mr McDonald:

– And the shares mustbe held by German subjects.

Mr DEAKIN:

– Also the ships must be built in German yards, and must bumGerman coal1. That is a policy of Germany for the Germans. The German Government, I, repeat, subsidizes those vessels, and assists them to enter into competition with other lines, but makes no attempt to assume the actual control of them.’

Mr Thomas:

– When I was speaking, I said that in the opinion of Mr. Kenneth Anderson, the vessels of the NorddeutscherLloyd’s line were practically owned” by the State.

Mr DEAKIN:

– That is so. But I want the honorable member to recognise that, while that circumstance supports his argument up to a certain point, the very fact that the German Government deliberately stop short there shows that they must have good reasons for so doing. If they believed that their ownership could best be served by themselves taking over the vessels; of that line and manning them, there isnothing to prevent them from doing so.

Mr Hutchison:

– The Socialist section of the Reichstag is not strong enough to compel them to do that.

Mr DEAKIN:

– The fact that so intelligent and thoughtful a people as the Ger- mans stop short just where they do in this particular enterprise which is practically State owned evidences that they recognise the wisdom of going no farther.

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

– It is not a question of what the German Government think, but of what this Government think.

Mr DEAKIN:

– Exactly. Nevertheless, that is an argument that I am justified in commending to the attention of those honorable members. The combination which is behind our proposed contract is strong enough to undertake all the tasks which confront them, and strong enough to enter into that other development of steam-ship communication to which I have alluded. The limits of this debate will not permit me to refer to it further than to say it is my own clear conviction that in Australia we are neglecting one of the finest opportunities for co-operation presented anywhere. By means of our State Agrricultural Departments and State railways, we are brought into such close touch with the producers that they ought to be able, with the help of their representative associations, to act together* in the several States, and to deal through us not only with this new mail company in regard to its cool storage accommodation, but with vessels of a larger tonnage and slower speed - sufficiently swift to place the produce of Australia upon the markets of the world upon much better terms than we have hitherto enjoyed. I believe that the inquiry of the honorable member for Barrier and’ his colleagues has accomplished good in opening our eyes to the influence of sea communications upon the prosperity of a -country which depends as largely as we do upon its export trade. Practically we pay our debt by means of that trade. Nothing of such general interest to Australia as the cultivation of that trade oversea can escape the consideration of its public men. Here is one means - the means of co-operation - which, with the existing machinery possessed by the organizations of producers in the different States, can enable them to offer inducements which will provide them with better and cheaper communication.

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

– And the seasons.

Mr DEAKIN:

– The seasons have to be taken into consideration, but in my opinion, if I may be permitted to use the phrase, we are growing out of the seasons. By means of the new system of dry farming, which has been dealt with by the honorable member for Echuca, b,y irrigation, and by the application of better knowledge, I believe that the production of this Continent will increase four or five-fold.

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

– The Prime Minister had better keep out of the clouds.

Mr DEAKIN:

– I think that I am upon very solid ground in making that statement. What has developed the butter industry in Victoria, except our butter factories, and particularly our co-operative factories? If they had not had a most untoward experience in regard to their bounties they would have, developed that industry still further. When we are afforded an opportunity of obtaining an Australian line of steamers - even if it be only the beginning of larger things - we should avail ourselves of it. I venture to say that that article in the contract in which the Postmaster-General undertakes to use his ,good offices with the States Governments to secure to the new line of steamers the best possible treatment is a very proper provision to introduce. I have heard some expressions of fear lest the new company should join combinations which are said to exist, or should become in itself a monopoly. As has been expressly pointed out, our power to take over the whole of the vessels engaged in the service is our answer to any such fear. When it can be shown that the line which we have assisted to build up commences to injure our trade, honorable members will have much stronger title to ask us to interfere.

Mr McDonald:

– If we purchase the boats from the contractors, should we take over the mail service which they are providing

Mr DEAKIN:

– Necessarily. When we have bought out the other party the contract will be with ourselves.

Mr McDonald:

– Would the contract end if we purchased the boats?

Mr DEAKIN:

– Certainly.

Mr McDonald:

– We have not heard under what clause that . could be done.

Mr DEAKIN:

– The terms are clearlyset forth in the contract:.

Mr McDonald:

– Where ?

Mr DEAKIN:

– They are clearly set out in print before the honorable member. I have already occupied the House too long, or I should read them.

Mr McDonald:

– We may purchase the vessels, but would that end the contract?

Mr DEAKIN:

– Certainly. The honorable member suggests that the purchase of the boats does not annul the contract, though the power is itself a term of the contract, but,, in my opinion, that must be its effect.

Mr Fisher:

– If that is not clear, will the honorable and learned gentleman make it so?

Mr DEAKIN:

– I think that it is clear, but if it is not I shall have it made so. If we are to secure fair terms for our shippers it will be done only by cooperation amongst producers and exporters, assisted by Government action. The treatment which the proposed Australian.’ line will receive from Australia will depend upon the manner in which it treats our producers and exporters, and performs its contract with the Government. I hope that the service will be conducted in such a fair and generous manner that our future Governments and Parliaments will feel justified in using all their influence to foster it. and to give it all the other business we can. An opportunity is afforded to the new company to-day which has been ‘given to no other company, because we are only beginning to appreciate the importance of our sea traffic. If it deals with us fairly and reasonably, not becoming a monopoly, or joining a combination, and fulfils, not merely the letter, but the spirit of this agreement, as I believe it will, because of the names behind it, it will be our duty, in the interests of our producers, to encourage and support it. The Government can, and ought to, stand behind it and help it on. We shall expect its directors to take a manly, independent stand in respect to proposals to combine with other companies, and, if by its means we succeed in breaking down the operations of the oversea rings, as we hope by other means to put an end to any unfair Inter-State combination, we shall perform one of the greatest services which can be rendered to those who live by the produce which they gain bv the sweat of their brow. In this State, at all events, thev have not in the past been too well served by their agents. Thev have been dependent on shipping services in which, though at times competition has brought down rates even unnecessarily low, have often mulcted them, directly or indirectly, of too much of their earnings. We hope to accomplish much for our producers by the establishment of this Australian line, and if, when ratifying the contract, we give the promoters to understand that fair and generous dealing on, their part will meet with a similar return from us, we shall, by passing the motion, have done one of the best acts that this Parliament can perform..

Mr CAMERON:
Wilmot

.- I offer to the Prime Minister my congratulations on the very able speech which he has just made. If the conditions of the contract are faithfully observed, Australia will undoubtedly have made a very good bargain. But, although the Prime Minister has told us, on the strength of the statements made by the person conducting; the negotiations, that there are three large ship-building companies behind Messrs. Sir James Laing and Sons, that statement demands’ corroboration. Some years ago, when the Tasmanian Parliament was considering a proposal to make a railway on the West Coast, all sorts of statements were made by the person who was trying to bring about the construction of the line > but nothing came of his efforts, because his: statements were found not to be correct. . Therefore I suggest to the Prime Minister that, before the motion is passed, he should obtain assurances from the firms that he has named that they are distinctly interested in this contract, and will see that it is carried into effect. Such a course will1 remove all doubt on the subject. The honorable and learned gentleman made one little slip, to which I feel it my duty to call his attention. He told us that America has no shipping worthy of the name, because she has no import trade. But, if he refers to the Statesman’ s YearBook for 1906, he will find that America is the third largest importing country on the face of the globe.

Mr Deakin:

– Mv statement was made on the authority of one of the best known American magazines.

Mr CAMERON:

– According to the Statesman’s Y ear-Book, England heads the list of importing countries, Germany comes next, and America is third, with an import trade valued at £232,000,000 per annum. When the Prime Minister compares themagazine statement on which he relies withthe figures in the Statesman’ s Y ear-Book, he will find that he has been in error, and, I trust, will admit it. No doubt, his eloquence led him further than he would’ go if he were to repeat his speech. But, as he has been wrong in one statement, it makes it all the more necessary that he should prove that the suspicion that the contract is an attempt to work a little financial scheme is unfounded. It would be, surely, a simple matter to obtain a telegram of confirmation from the firms in question, and thus set all doubts at rest. Because there are many doubting Thomases about - I refer, not to the honorable member for Barrier, but to those who say that the contract is too good to be likely to be carried out. In my opinion, the Governments of the States made a great mistake, in refusing to co-operate with the Prime Minister in making arrangements to secure accommodation on the mail steamers for the conveyance of perishable produce, but we know that they are very jealous of the Commonwealth Government, because of the well-founded fear that this Parliament wishes to usurp the powers of the States, and they are determined not to allow that to be done. To my mind1, the Governments of the States have acted against the interests of their people in not entertaining the Prime Minister’s offer. I cordially recognise the spirit in which that offer was made, and believe that, had it been accepted, rft would have been to the manifest advantage of the people of Australia. The honorable member for Barrier spoke eloquently in favour of his proposal for the establishment of a fleet ot vessels to be owned by the Commonwealth. An argument which has been used to support this proposal is that the States railways have proved beneficial to the people of Australia, and that a. Commonwealth steamship line should be equally useful. I think that that argument will not hold water. When it was first proposed to construct railways in Australia, the population of the country was very small, and not very wealthy. English companies had no inducement to construct railways here without land concessions, or large yearly grants of money. The various States Governments, however, were charged with the means of providing communication between the ports and the interior, and found that they could borrow money cheaply in London for the construction of railway’s to open up the country.

Mr Batchelor:

– If it had been left to private enterprise, Australia would not have been developed.

Mr CAMERON:

– As the Governments of the States had alienated very little land at the time, they were, by making railways, improving their own property. The construction of railways enabled them to settle people in the country, and increase their revenue accordingly. The proposal that we should acquire a fleet of mail steamers is, however, of an entirely different character, because private owners are ready to do all that we require in- the way of providing us with shipping accommodation. If we found it difficult to induce shipowners to send their vessels here, we might reasonably ask the Government to engage in the undertaking recommended by the Commission; but it would be the height of folly for us, under present conditions, to enter into competition which could only end in disaster. “Under these circumstances, I feel that it is impossible for me to support the amendment.

Mr Thomas:

– I am sorry to hear that, because I was reckoning on the support of the honorable member.

Mr CAMERON:

– I can assure the honorable member that when he brings down a reasonable and sensible proposal, designed to promote the best interests of the community as a whole, I shall give him my strongest support. If, however, he submits schemes which can only end in disaster, or can benefit only one section of the community at the expense of the great majority of the people, he will meet with my bitterest opposition.

Mr DEAKIN:
Minister of External Affairs · Ballarat · Protectionist

– - ‘By way of explanation, I desire to say that the authority for the statement I made recently was the writer of an article in Dun’s International Review upon the “ Effect of Subsidies on Merchant Shipping.” The article was written by the editor of a leading English shipping journal, who points out -

All the nations which are not engaged in actively subsidizing their merchant fleets occupy the position of being both large importers and. exporters of cargo, and the key to the situation is found in the fact that their vessels earn money on both the homeward and outward voyages. On the other hand, countries like the United States, which are practically self-contained, so far as manufacturing is concerned, and whose enormous agricultural resources enable them to sell their bulky farm products at rates which defy competition, do not require to import articles which demand plenty of ship room, and the difficulty of finding a single commercial centre abroad to which this consideration does not apply, naturally causes the American capitalists to hesitate before investing their money in shipping.

That statement, dealing chiefly with quantities, is supposed to be refuted by the mere recital of values taken from tables published in the Statesman’s Year-Book, 1906, which it is expressly stated are compiled “ for convenience of reference, not for the purpose of comparison.” According to this table, the imports into the United States for 1904 were valued at £232,815,220, whilst the exports during the same period were valued at £310,780,130. That is only values.

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

– The Prime Minister characterized the imports as trifling.

Mr DEAKIN:

– So they are by comparison, in so far as they are not of a bulky character.

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

– Nonsense !

Mr DEAKIN:

– Will the honorable member say that the goods we import compare in bulk, and therefore in extent of freight, with our meat and various other articles of export ?

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

– Iron pipes and furniture, which figure among our imports, are very bulky.

Mr DEAKIN:

– I have quoted my authority, who is the editor of an important shipping paper, and shows a thorough acquaintance with his subject. The total showing the value of the imports conveys no idea as to the shipping requirements of such goods.

Mr McWilliams:

– The Statesman’s Y ear-Book is a standard work of reference.

Mr DEAKIN:

– Undoubtedly it is, but it holds out the special warning that the tables are compiled for reference, and not for comparison. The statement I have quoted was made toy a gentleman evidently acquainted with the subject, and no mere monetary figures can be regarded as affording any guide as to the extent to which the carrying capacity of the ships conveying the imports is affected. The imports to the United States are very largely expensive luxuries.

Mr KELLY:
Wentworth

.- I had not intended to address the House upon this question, but I desire to put the Prime Minister right in regard to his statement to the effect that the imports into the United States, although considerable in value, are trifling in bulk. Fortunately, the same authority from which the honorable member has quoted, namely, the Statesman’s Year-Book, deals with the nature of the imports into the United States. At page 444, it is shown that the leading imports into the United States in the order of their importance are sugar hides, and skins, chemicals, drugs, and dyes, coffee, silk unmanufactured, cotton, manufactures of, indiarubber, and gutta percha crude, and so on. I need not quote the list any further, but I would recommend it to the attention of the Prime Minister, who has made what appears to be an unwarranted statement.

Mr BAMFORD:
Herbert

.- I wish to say a few words in explanation of the vote I intend to give upon the proposed new mail contract. I am very pleased to notice that the Government have named Adelaide as the terminal port. Honorable members may remember that when the contract with the Orient Steam Navigation Company was under discussion, the Queensland Government were especially anxious that Adelaide should be made the terminal port, or at least that there should be nothing in the agreement to compel the mail steamers to go beyond Adelaide. They took the view that the mention of Melbourne and Sydney as ports of call, and the exclusion of Brisbane, cast a certain slur upon Queensland. In order to give expression to the views of the Queensland Government, I moved an amendment to the effect that Adelaide should be named asthe terminal port, . but, unfortunately, the majority of honorable members were against me. The honorable member for North Sydney, to whom I generally pay the greatest possible attention, because I know that his matter is generally well considered, was very much at fault in his criticism of the figures presented by the Shipping Service Commission. That body did excellent work, if only because it afforded honorable members much valuable information. The honorable member for North Sydney came here with figures which had been raked up within a few hours, and endeavoured to upset the estimates of the Commission in regard to the proposed State-owned mail service. It seemed to me that his efforts were quite unworthy of him. I entirely indorse the views of the honorable member for Oxley, so far as concerns the establishment of a route via Torres Straits. When the previous mail contract was being considered, I expressed the opinion that Queensland, instead of seeking to have Brisbane made a port of call, would do better to subsidize a line of mail steamers which would especially cater for the requirements of that State. Such a service of steamers, trading by way of Torres Straits, would confer upon the people of Queensland very much more benefit than could be derived by them from any mail service via southern ports. The Prime Minister appeared to me to Jay too much stress upon the advantage of quick transit for our perishable products. Possibly, rapid transit may be desirable in the case of Tasmanian apples, but with regard to t!he great bulk of our products, such as beef, J mutton, rabbits, and butter, a few days’ delay in their conveyance to the markets at the other side of the world is of no consequence. The Federal line of steamers, which proceeds by way of the Cape, and occupies from forty to fifty days in making the voyage, ship meat as far north as Townsville, and carry all kinds of perishable products exceedingly well. In view of the fact that we have cold storage, at this end, and also at the principal depots in the old country, a few days more or less occupied in transit is of nc appreciable importance.* 1 think that under the proposed new contract the Government are proposing to pay a great deal too much for quick transit.

Mr Watson:

– Is it not important that we should have quick transport for our mails?

Mr BAMFORD:

– I do not regard that as a matter for very grave consideration, because the great majority of the people of the Commonwealth do not care whether they get their letters to-day or the day after to-morrow. It is a great pity that the Government should have allowed considerations as -to cargo space to influence them in entering into the new contract. They should have aimed at arranging for a mail service pure and simple. Some reference has been made to rebates, particularly in connexion with our coastal trade. If half-a-dozen men engaged on a sugar plantation refuse to work on the terms offered by the employers, the fact is prominently paraded in the press, but we see no references to the rebates which are made by the shipping companies. No complaints are made by the commercial community, for the reason that business men are making money out of the rebates. They pass the extra freight charges on to their customers, but when they receive the rebates they retain them to swell their income, and say nothing. Much stress has been laid upon paragraph. 36 of the contract, which gives the

Government power to at any time purchase the vessels engaged in the mail service. To my mind that provision possesses no value whatever. Similar power has been taken by’ Government and municipal authorities in regard to a variety of enterprises conducted by private companies, but no benefit has resulted from their having the option of purchase. The Commonwealth will be in no better position relatively to purchase steamers in five or six years than at the present time. In the district which I represent, a certain public service is being performed by a company, and the municipal authorities within whose domain the company is operating, have the right to purchase the concern. They might have exercised this power six or seven years ago, but to-day they are in no better position than they were previously, and consequently the business is still in private hands. It is gratifying to learn from the Prime Minister that some of the largest shipbuilding firms in the world are anxious to do business with us, and are ready to join with Sir James Laing and Sons in building the vessels necessary for this service. In view of the statement so persistently made by the Opposition that the insertion in our mail contracts of a clause providing for the employment of only white labour on our mail steamers would result in all the companies refusing to enter into them, it is consoling to hear that these large firms are, metaphorically speaking, falling over one another in their desire to enter into this agreement. Another point to which no re:ference has been made is that, despite the opposition to the amendment, no attempt has been made to refute the figures advanced in support of it. The Prime Minister’s speech should make a great impression in a direction other than that which he intended ; it should induce honorable members to support the amendment moved by the honorable member for Barrier, for it was a magnificent testimony to the advantages of 00-operation. Instead of opposing the amendment, every honorable member should be prepared to vote for it. and the. States themselves should be only too willing to co-operate with the Commonwealth in carrying out the proposal’. In another place, a resolution to the effect that we should nationalize a certain industry has been unanimously carried, while another motion relating to the nationalization of an industry has been debated, and a Royal

Commission has furnished to this Parliament a report on the subject. Some of the best legal talent in the Parliament, and also, T believe, outside, has asserted that under the Constitution we are restrained from nationalizing an industry. That objection, however, does not apply to the amendment. All that is necessary to give effect to it is the passing, of a resolution bv this Parliament. In conclusion, I would point out that, the honorable member for Parramatta has said over and over again, not in the Chamber, but elsewhere, that the Socialistic Party are, so to speak, “drawing in their horns,” and withdrawing their goods from the political shop window.

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

– Hear, hear.

Mr BAMFORD:

– So far .as I am concerned, this proposition for the establishment of a State-owned line of mail steamers is one that, as a Socialist, I have no hesitation in placing in the political shop window, and I intend to vote for it.

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

– The honorable member’s leader has just put up a shutter, and is going behind it.

Mr Watson:

– I am keeping the coastal trade in the political shop window, at all events, and that is a big line.

Mr BAMFORD:

– If the honorable member has put up a shutter, it is merely to remain up whilst he re-dresses the window.

Mr KENNEDY:
Moira

.- I desire to deal briefly with this question, which is of considerable importance to those engaged in the export trade. Although the contract is one really for the carriage of mails, the time is not far distant when it will have a most important bearing on the development of our export trade in perishable products. Practically, no opposition has been raised to the contract, although the honorable member for Barrier has moved an amendment providing for the establishment of a line of State-owned mail steamers- The Opposition say that the contract is really too good, and they are at a loss to know why the contractors should be prepared to enter into it. I hope that the honorable member for Wentworth who has cursorily examined the Statesman’ s Year-Booh, in order to correct a. statement by the Prime Minister, will have no need to draw largely on his imagination in regard to the possibilities of the export trade of Australia. These enterprising firms in the old world are quite prepared to ta&e a more sanguine view of the possibilities of Australia”3 than are the “ stinking fish party.” At this juncture I shall not commit myself to support the amendment. The proposal is unnecessary at the present, but it is certainly time that the State should exercise the fullest possible control over the development of our export trade. Under this contract the Commonwealth will be able to do so. What has been our experience with regard to mail contracts, and the clanger of monopolies arising under them? In passing, I may say that some of the ablest men even in the farming community are earnest and enthusiastic advocates of a State-owned line of steamers. The wisdom of establishing such a line has been forced upon them by their experience. The Peninsular and Oriental Steam Navigation Company and the Orient Steam Navigation Company were to a large extent the pioneers in the carriage of our perishable produce to the old world. Under the contracts entered into with them, however, those engaged in the trade found themselves hampered to a great extent by the charges and the conditions imposed. They were unable to secure redress, and some time ago the co-operation to which the Prime Minister has referred had to be resorted to by the Victorian producers in order to secure reasonable consideration. They had to go outside the contracting mail steam-ship companies and arrange with another line to carry their produce to the old world. It was> declared bv the representatives of the mail steam-ship companies that it was impossible to secure the carriage of butter to England for less than fd. a lb., but our exporters were able to enter into a contract with another company to carry produce of that class at half the rate charged by the mail companies. It is to be regretted that the States Departments, within whose province this branch of business lies, have not seen their way to support the Government, in regard to this contract ; but, for obvious reasons, they may have found it impracticable to do so. It is within my knowledge that at the present time a contract for the carriage of perishable produce from Victoria is in existence, but I cannot say when it will expire. Where we are sending only hundreds of tons to-day we shall, under normal conditions, within the next ten or twenty years, be sending thousands of tons.

Mr Thomas:

– We are sending 40,000 tons away now.

Mr KENNEDY:

– This trade of carrying perishable produce in refrigerating chambers was only started in the early nineties, and only in recent years has it been practicable to get the produce conveyed without loss or deterioration. Under the conditions that prevail to-day perishable produce can be landed in London practically in the same condition as that in which it is put on board in Australia. One does not require a vivid imagination to foresee that in the near future the trade must be doubled, if not trebled. I trust that as it increases our exporters will see the necessity of co-operating with the Government when attempts are made to introduce additional facilities. I hope they will assist to establish the new line on a sound foundation. It has been argued that there is a fear of failure in bad seasons when there will be no produce to export. But looking back upon the history of Australia for thirty years, I think therehas been but one year in which there has been any considerable diminution of our exports. With the experiencethat we have gained with the tetter methods that have been adopted it is notlikely that we shall allow ourselves to be overtakenby the same difficulties again. With the aid of modern appliances the trade must continue to expand. We may therefore consider that the trade is but in its infancy,and that within the next ten years the new fleet of steamers will prove to be inadequate. We have been told that at present the Peninsular and Oriental and Orient Steam Navigation Companies provide more than ample accommodation. As a matter of fact,they arehardly able to take the whole of our produce now under normal conditions. When a new line begins tocompete with them I have not the slightest doubt that there will be ample produce for the accommodation provided. I shall support the policy of the Government, and vote for the ratification of the contract.

Question - That the words proposed to be left out stand part of the question - put. The House divided.

AYES: 40

NOES: 14

Majority … … 26

AYES

NOES

Question so resolved in the affirmative.

Amendment negatived.

Mr AUSTIN CHAPMAN:
Postmaster-General · EdenMonaro · Protectionist

– I desire to move the addition of a proviso to clause 3.

Mr SPEAKER:

– I would point out that the Postmaster-General submitted the main motion, and therefore it will not be competent for him to move an amendment. Probably the Attorney-General will submit the amendment for him.

Mr ISAACS:
Attorney-General · Indi · Protectionist

– I move -

That the following words be added : - “ with the following modifications : -

That at the end of clause 3 the following proviso be added : -‘ Provided that in the event of the Postmaster-General requiring the period of transit on the voyage from Brindisi to Adelaide to be reduced to612 hours, the period of 612 hours shall thenceforth be deemed to be the period of transit for each voyage from Brindisi to Adelaide, and each such voyage shall be. completed within that period.’

That clause 15 be amended by inserting after the words ‘ with the consent of,’ in the second proviso, the words ‘ or subject to approval by,’ and by inserting after the word ‘Parliament’ the words ‘ by resolution.’ “

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

– That is for a voyage only one way.

Mr ISAACS:

– The 612 hours’ service is for a voyage only one way. The amendments have been agreed to by Mr. Croker, as agent for the contractors, so that they will not disturb any of the provisions of the proposed contract. I will, explain what my second proposal, in respect of clause_ 1:5, means. That provision stipulates that, should the earnings of the mail steamers be diminished, or the expense of running the vessels be increased, by not less than £5,000 per annum, in consequence of Commonwealth legislation, the directors of the company shall be at liberty to determine the agreement upon giving six months’ notice in writing to the Postmaster-General. That is the only thing the contractors can do under the clause to avoid loss, actual or prospective. The clause provides that if so required, the contractors are to furnish the Postmaster-General with a distinct statement. There is the further proviso which I had better read in full: -

Provided further that should the PostmasterGeneral with the consent of Parliament elect in writing within one month of such notice being given to increase as from the date of such legislation coming into operation the annual subsidy payable to the contractors by a sum equal to such diminution of earnings and or increase of expenses or by such other sum as may be mutually agreed upon such notice of termination shall be deemed to have been withdrawn and the contract shall continue on the same terms with the exception only of the increased subsidy (if any) payable to the contractors.

The position is that if we pass any legislation relating to shipping which will have the effect named’, actual or prospective, then the contractors may give the notice terminating the contract - that is the only way they have of protecting themselves. But the Commonwealth, through the Postmaster-General, may prevent the contract being put to an end bv saying, “ Very well, we will agree to give that increased sum, or such a less sum as may be agreed upon.” Following previous contracts, the power of the PostmasterGeneral is limited to making that agreement, with the consent of the Parliament within one month of notice being given. If Parliament should not happen to be sitting, the contractors will be in the position of either having to endure a loss, or to put an end to the contract ; and both parties will be utterly unable to continue the contract - there will be an end of it. Because if Parliament is not sitting the consent of Parliament cannot be obtained, it could not, therefore, be obtained withinone month.

Mr Watson:

– What about inserting the word “ directly “ before “ relating to. shipping “ ?

Mr ISAACS:

– There is no agreement asio that, but I should say that no doubt “ relating to shipping” means directly relating, to shipping.

Mr Watson:

– Why not so specify ?

Mr ISAACS:

– We have the words of the contract as taken from other contracts, and there is no agreement to put in theword “ directly.”

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

– Is there nothing, fresh in this provision?

Mr ISAACS:

– I had better first explain what I intend to do in the way of amendment. The clause, if amended, will then read -

Provided further that, should the PostmasterGeneral, with the consent of, or subject to, approval by Parliament by resolution…..

The effect will be that if there is time when Parliament is sitting, the ‘Minister willi come and ask for consent. If, however, the Postmaster-General makes the arrangement in recess, he must do so subject to the approval of Parliament, and this will keep the contract alive if Parliament chooses to ratify it when it meets. This still keeps the control of Parliament, and it prevents the contract dying if Parliament chooses to keep it alive. The words “ by resolution “ are inserted to prevent any contention being raised that the consent of Parliament means consent by Act, and to provide that the consent may be given by resolution.

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

– Are the words “ legislation relating to shipping” in other contracts ?

Mr ISAACS:

– Yes, so I understand. The words were in one copy of another contract which I have seen, and I am told thev are in all other contracts.

Mr McCay:

– The words were in the last contract.

Mr Johnson:

– That is no reason why they should be retained in this contract if we can get words which more clearly express our meaning.

Mr ISAACS:

– At present I am not in a position to say whether the word “directly” can be, inserted, but, so far as I can see, the proper interpretation of the words in the contract is legislation directly relating to shipping.

Mr WATSON:
Bland

.- I do not really see the point of the objection made by the Attorney-General to the insertion of “ directly,” or some equivalent term. If, as, the Attorney-General says, it is clearly understood that laws “ relating to shipping “ must be laws directly relating to shipping - and I am rather of that opinion - it appears to be wiser to have the specific words, so that there can be no possible error. We do not desire to encourage litigation later on; and surely the contractors cannot object to have clearly specified what is at present understood.

Mr Thomas:

– Will the lawyers not have litigation over the word “ directly “ ?

Mr WATSON:

– They might, but, probably, not so easily. I urge on the AttorneyGeneral that the word “ directly “ ought to be inserted, so as to make as clear as possible what we are aiming at.

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

– I rise to a point of order. I understand that the question is to be raised later on on behalf of the honorable and learned member for Parkes, who has drafted an amendment dealing specifically with this matter.

Mr Isaacs:

– Which matter? Not the matter I have mentioned?

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

– No; the matter raised by the honorable member for Bland. Will it still be open to the honorable member for Kooyong to submit the amendment to which I have referred, on behalf of the honorable and learned member for Parkes, after we have amended the clause in the way indicated by the Attorney-General? The rule of Parliament is that, when in Committee, an amendment is made in a later portion of a clause it precludes any amendment afterwards being moved in a prior part. Does that rule apply to this motion, because, if so, the amendment which the honorable member for Kooyong desires to submit will be shut out.

Mr SPEAKER:

– In the first place, the rules which regulate business in Committee will not apply to a case of this kind. In the second place, the proposals of the Attorney-General do not in any way anticipate anything I can see in the notice pf motion to which reference has been made. The suggestion of the honorable member for Bland can, I think, be best dealt with when we come to the amendment of which, I understand, the honorable mem ber for Kooyong has charge. Both matters can then be debated, and, if necessary, a vote taken.

Mr McCAY:
Corinella

– I desire to say a few words regarding the suggestion of the honorable member for ‘Bland in connexion with clause 15 of the agreement. I am inclined to agree with the AttorneyGeneral that the words “relating to shipping “ mean legislation dealing specifically with shipping subjects. But I agree with the honorable member for Bland that it is just as well that the meaning should be made clear. The case which has occurred to my mind is that of an amendment of the Conciliation and Arbitration Act. Of course, under the clause, it would be legislation enacted subsequent to the date of the agreement. Ti, however, we were to have an Act which did deal with wages on sea-going vessels trading to Australia, I think that some very nice questions of law might arise as to whether it was, or was not, legislation “relating to shipping.” I think that whatever is intended ought to be made clear.

Mr Isaacs:

– Would that be legislation “ directly relating to shipping “?

Mr McCAY:

– I do not know whether it would or would not.

Mr Isaacs:

– We should get into very great difficulties, anyway.

Mr McCAY:

– The- House and the contractor should be clear as to what legislation is intended to be meant. I’f it be intended to limit this expression to legislation directly relating to shipping - and I think .it probably does mean that - it is better to make our meaning clear. There should not be any misunderstanding now, so that the contractors could say later on, “ We did not take the view which you took,” and thus give opportunities for differences of opinion. All I suggest to the Government is that, between the adjournment of the debate and its resumption tomorrow - for I do not suppose that it will be concluded to-night- there will be ample time in which to have this particular point discussed between the Postmaster-General and the representative of the contractors. I suppose I may take it that’ the PostmasterGeneral does contemplate taking that course.

Amendment agreed to.

Debate (on motion by Mr. Wilks) adjourned.

House adjourned at 10.43 P-m.

Cite as: Australia, House of Representatives, Debates, 25 July 1906, viewed 6 July 2017, <http://historichansard.net/hofreps/1906/19060725_reps_2_32/>.