3rd Parliament · 3rd Session
Mr. Speaker took the chair at 3 p.m., and read prayers.
– Has the attention of the Minister of Defence been called to the statement in this morning’s Argus that a marker was seriously injured yesterday on the Nowra Rifle Range, through the use, it is supposed, of defective bullets, and will he have inquiries made to ascertain the cause of the accident?
– I have seen the statement in the newspaper. The alleged cause of the mishap is at present a supposition; but instructions have been given for an inquiry into the accident, and I shall inform the honorable and learned member of the result as soon as it comes to hand.
– I wish to know from the Prime Minister whether it is proposed to take practical steps during the life of this Parliament towards assuming control over ocean lights, buoys and beacons.
– Last week the honorable member for Barker asked the following questions -
The Commandant in South Australia was telegraphed to, and has replied -
The new rifles have been forwarded to “ G “ Company, Scottish, Mr Gambier, to replace old. Twenty rifles, magazine Lee-Enfield, have not yet been returned by that Company and these could have been used for rifle matches stated. Any delay in supply is due principally to pressure of work armourers’ staff.
asked the Prime Minister, upon notice -
What was the total tonnage passing through the Suez Canal in 1907, and of this what amount was British and British trading with Australia respectively ?
Seeing the great tax this charge is on Australian commerce, can he see his way, now that his other representations with the Canal Company have apparently failed, to confer with the other British communities interested as to the possibility of a second Suez Canal, which shall be entirely British owned and controlled?
– The answers to the honorable member’s questions are -
asked the Minister of Defence, upon notice -
– In reply to the honorable member’s questions -
asked the PostmasterGeneral, upon notice -
– The Deputy PostmasterGeneral, Melbourne, has furnished the following information in reply to questions i, 2, 3, and 4 : -
The answer to the last question is -
Debate resumed from 1st October (vide page 688), on motion by Sir William Lyne -
That the proceedings on the Bill intituled “ A Bill for an Act for the Encouragement of Manufactures in the Commonwealth,” which were interrupted by the prorogation of Parliament last session, be resumed at the stage then reached in connexion with the said Bill, and that the further consideration of the Bill in Committee of the whole House be made an Order of the Day for the next day of sitting.
Upon which Mr. Foster had moved by way of amendment -
That the words “ next day of sitting “ be left out with a view to insert in lieu thereof the words “ day after a financial statement has been made to the House.”
– I shall not occupy much time in addressing myself to the motion, because the measure with which it is concerned is not a new one, having been brought forward nearly every session since the Parliament was established, and my attitude towards it is generally known. I am astonished at the change of front in regard to it on the part of a number of honorable members. Their present attitude is evidence of the demoralizing effect of duties and bounties. Last session the honorable member for Dalley unblushingly stated - and he still adheres to this position - that he will vote for a bounty on the production of iron .solely because the granting of bounties and the imposition of duties for the encouragement of industries has benefited other electorates, and if there is “ boodle “ about, he is going to get some for his constituency.
– That is honest, at any rate.
– It is a .shameless admission of very doubtful morality. Parliament will be in a very demorali’zed state when that is regarded1 as a proper position. I have no sympathy with either the motion or the amendment. The party to which I belong has always objected to the granting of a bounty for the encouragement of the iron industry, apart from all financial considerations, holding that the industry should be nationalized. Only a few years ago the honorable member for West Sydney signed a very strongly worded dissent from the recommendation of a Royal Commission in favour of bonuses for the production of iron. That dissent was as follows -
We, the undersigned members of the Commission, are against the passage through Parliament or the Bill for the payment of bonuses by the Federal Government for the establishment of the iron industry within the Commonwealth.
It was signed by the honorable member for West Sydney, the honorable member for Illawarra, the honorable member for South Sydney, and the honorable member for Parramatta. They declared that the Canadian experience of the operation of the bounty system as applied to the iron industry had been an extremely unsatisfactoryone. That system had been established in the Dominion in 1883, the intention being that it should be continued for a limited period only. But, as a matter of fact - even if existing legislation be not reenacted - Canada will be saddled with that system’ until 1910. There the amount paid in bonuses has been just sufficient to make the industry a paying, instead of a losing, venture. The chief advocates of the Bill which we are now discussing support it from similar motives. They affirm that unless the Commonwealth aids the iron industry, by means of the bounty system, the existing! works at Lithgow must close down. Let us look at the circular which has been issued by the firm in question within the past two or three days.
– If the honorable member will look at the business-paper, he will see that the question now before us - and to which, of course, I am obliged to confine the debate - is whether the words “next day of sitting” shall be omitted from the motion, with a view to insert in lieu thereof the words “the day after a financial statement has been made to the House.” Therefore, the only question which is open to discussion is whether the Bill shall be restored to the business-paper now, or whether it shall be so restored on the day after a financial statement has been made. After the amendment has been dealt with, it will be competent for any honorable member to debate the considerations involved in the main question, and subsequently honorable members will he at liberty to discuss the general question. But at this stage I cannot allow the general question to be debated.
– I am merely endeavouring to show that a financial statement has really nothing to do with this Bill.
– Of course if the honorable member can connect his remarks with the amendment, I shall be perfectly satisfied, but so far I have failed to connect them myself.
– I shall not experience any difficulty in doing that. It is claimed by the author of the amendment that the condition of the finances at the present time does not warrant the payment - by means of bounties to the iron industry -of the large amount specified in this Bill. In a circular which has been forwarded to honorable members, the parties who are chiefly interested in this measure declare that the- financial position of the industry is not nearly so serious as it has been represented to be by those who oppose the restoration of the Bill to the noticepaper. They assert that the payments which the Commonwealth would be called upon to make during the first year of the operation of the measure - assuming that the present plant installed at Lithgow were not increased - would not exceed £33,000 This amount is made up as follows : - Pig iron at 12s.* per ton, ^19,968 ; puddle-bar iron, 3,000 tons, £1,800; steel from furnaces, including furnace in course of erection, 10,000 tons, at 12s. per ton, £6,000; and galvanized iron, 3,000 tons at 10 per cent, on value, ^5,400. They also affirm that last year the company sustained a loss of ^15,000. They are therefore asking this Parliament not only to make up that deficiency, but to hand over ‘to them an additional ^18,000 - in other words, a sum more than double the amount of their actual -loss.
– Do they not also say that if proper allowance had been made foi depreciation last year, the loss sustained by them would have been considerably greater?
– I understand that the honorable member intends to support this proposal.
– I shall speak for myself at a later stage.
– The position taken up by the honorable member is a most inconsistent one, seeing that he has consistently opposed every proposal of a similar character.
– Even the payment of a bounty upon salt.
– No proposition for the payment of a bounty upon salt has ever been submitted to this House. Further, there is no salt factory in my electorate. There is, however, an iron foundry in the constituency represented by the honorable member. In mv own electorate there is one of the largest deposits of iron ore to be found1 in any part of the Commonwealth. If the Government are willing to hand over to the firm at Lithgow ^30,000 annually for the purpose of enabling it to cover a loss of -£15,000, I have not the slightest doubt that the Broken Hill Proprietary Company will be equally ready to accept its share of what the honorable member for Barrier calls the “boodle.”
– Not “boodle.” “Loot” is the word.
– I suppose . that I could make out quite as good a case on behalf of that company as the honorable member for Nepean can make out on behalf of the firm whose works are established at Lithgow. But to do so would be to act inconsistently with mv political views, and in opposition to every vote that I have registered in this House. The position taken up by the Labour Party upon every occasion that this Bill has been under consideration has been prompted, not by the financial position of the Commonwealth, but by the fact that they have always advocated, and still advocate, the application of the principle of nationalization to the industry. They believe that it has been carried on for a great number of years at the public expense’, and that if controlled by a private company any ultimate good that may result from, it will benefit that company only, whereas, if nationalized, the industry would become the concern of all. However, I am not here to “stone- wall.” I am only sorry that the Bill has reached its present stage, because it does not contain even a. provision to protect wages.
– It does. I moved one.
– That provision is very weak. If the honorable member is satisfied with what is in the Bill he is very easily satisfied. I shall oppose the amendment moved by the honorable member for New England, and reserve to myself the right to assume whatever attitude I think best when that proposition is disposed of.
– I shall support the amendment of the honorable member for New England, because I am strongly of opinion that ways and means ought to be a very prominent feature of a measure of this kind, more particularly when we reflect that the measure which we are asked to restore to the business-paper is one ,which will benefit only one State, and, indeed, practically only one particular centre in that State. No one by any stretch of imagination could call this an Australian proposition. It is really a proposal to hand over a considerable proportion of the public funds to a trading organization centered in a particular locality. Does the Treasurer, who apears to have taken this foundling under his wing with even more than ordinary paternal affection-
– I have tried in all ways to get it through for the last five or six years.
– The Treasurer has shown an amount pf energy and industry in trying to “bullock” this Bill through Parliament that might well have been applied to measures which would have been of much more advantage to the community as a whole.
– Is the honorable member really serious in making that statement ?
– The honorable member knows perfectly well that I have never hesitated to express my own opinion in this House. The position that I am taking up is strictly in accordance, not only with the principles to which I am pledged as a member of the Labour Party, but also with the interests of my own State, and, I believe, with the interests of Australia as a whole. Surely that is quite enough justification for my addressing these remarks to the House on this occasion. I should like the Treasurer to explain, if he can, how he anticipates that this measure will be of any advantage to the State of Western Australia?
– By providing for the supply of Australian iron and steel.
– If the Treasurer knew anything at all about Australian commercial conditions he would realize that it is practically impossible for a hundredweight of iron so manufactured ever to reach the Western State, so long as freights are what they are along the Australian coasts. The raw material for our iron manufactures in Western Australia - and I am glad to say that we have them in that State - if introduced from Lithgow will have to pay in transit to Fremantle or Albany more than double the freight which would carry the same raw material from Europe to Western Australian ports. It is, therefore, practically impossible for even a hundredweight of this material ever to enter that State. Any part of Australia which is in such a primary condition of development as is that great western State - and this applies more or less to the whole of Australia - requires its raw material of the very best quality and at the lowest possible price. No obstacle whatever ought to be placed in the way of a supply of such raw material under conditions best calculated to develop the industries which depend upon a supply of cheap and good iron for their continuance.
– Is not that an argument for the bounty rather than a duty ?
– It is an argument directed, in the first instance, against the imposition of a duty, but the honorable member must understand that the proposed bounty is to all intents and purposes a duty, because the money to pay it must be first taken out of the pockets of the general community. In that way there is applied to all the States of Australia, and particularly to my own State, taxation which goes into the pockets of a few private individuals, while in return not a single hundredweight of their production would ever reach the shores of Western Australia.
– Does the honorable member wish to stop any development in all the other States because it does not happen to affect Western Australia?
– I desire to see the Treasurer give his attention and energy to the development of conditions which will apply equally to all the Australian States, and not to the development of a sickly industry, which I believe will still, after all this money has been expended upon it, be tottering if left to stand upon its own legs. The honorable member for Macquarie spoke the other day of the necessity and advantage of Australia supporting the industry, and used words that were more expressive than he perhaps thought at the time. If our object is to develop the iron industry of Australia, I am sure we shall have to resort to a totally different way of doing it. because if we pay a bounty, as is indicated in the measure which the Government wish to bring before the House, I am sure that at the end of the term, when the money has been expended, the industry will require Still further support.
– Will the honorable member connect his remarks with the motion before the Chair?
– I wish merely to indicate the necessity forfurther consideration of the whole question, and the necessity for honorable members to support the amendment moved by the honorable member for New England, in order to give an opportunity for that further consideration. Another reason that has been urged for immediately replacing the measure upon the business-paper is that it will supply a considerable amount of labour in and around Lithgow. That argument will always have considerable weight with “me, but another consideration that has to be applied to all propositions for stimulating labour, either by a bounty or by a duty, is whether the labour so stimulated will have a natural and healthy growth, or will be merely parasitical, and exist only by drawing its life blood from other industries.
– Order. The honorable member will see that I am bound to carry out the Standing Orders, which require that, in such a case as this, the amendment before the Chair must be discussed, and not the main question, which, for the time being, is superseded. It would not be proper for me to assume that the amendment has been moved simply with a view of blocking the measure. I must, of course, assume the absolute sincerity of the honorable member for New England in being anxious that this matter should be dealt with after, and not before, a financial statement has” been delivered. That is the point upon which the debate must be concentrated.
– It is necessary that Ways and Means should be indicated to the House before we proceed any further.
– The honorable member may discuss that phase of the question if he please.
– I am- showing the necessity for the submission of proposals for financing the policy of the Government, which will be satisfactory not onlyto the Treasurer and his colleagues, but to the whole of Australia ; and particularly to the State from which I have the honour to come. If the Treasurer insists upon having this Bill restored to the business-paper it will mean that, in order to give employment to comparatively few men in and around Lithgow, practically the whole of the workers of Australia will be taxed to supply the wherewithal to carry on operations. Speaking as a representative of labour, I must confess that such a proposition does not particularly attract me. I should rather be inclined to oppose any policy that would give to labour in any particular part of the Commonwealth employment which could be furnished only at the expense of other industries. The position that we have reached seems to be this. We are asked to supply a very considerable sum of money to keep a tottering industry on its legs a little longer. I believe that the workers of Western Australia, in common with the intelligent workers throughout the Commonwealth, recognise that there is a. much better and more straightforward’ method of helping the iron industry than this clumsy and expensive method proposed by the Treasurer. The policy to which I refer is that of nationalization. If the Treasurer would modify his Bill in that direction, would bring down a scheme for the comprehensive” nationalization of the iron industry, and would apply its advantages to the whole Commonwealth, I, for one, should be very glad to give the proposal my support. But in view of the fact that the Government hesitate to commit themselves to a policy of that kind I feel bound to support the amendment of the honorable member for New England. I am rather surprised that the Government do not recognise the advantage of adopting the principle of nationalization in view of the fact-
– The honorable member surely forgets that on a previous occasion we applied to all the States in regard to the matter.. We, as a Commonwealth, . cannot nationalize the iron industry, and the States refuse to do so.
– I think that we can.
– I really cannot permit this discussion, which would be. quite proper upon the main question, and upon the Bill itself, but which is not proper on the amendment. The honorable member will recognise that that is so. If he will discuss the question before the House I shall he glad to hear him. Otherwise I must call upon some other honorable member.
– It is just possible that I am going beyond the limits of strict order, and I am obliged to you, Sir, for keeping me to the point. I have indicated my principal reasons for supporting the honorable member for New England, in his desire to see the financial proposals of the Government with regard to this measure before we proceed further. But, though I shall’ vote for the amendment in its relation to the Bill, I still retain to myself full liberty to take such action as I believe best calculated to further the interests of the Commonwealth as a whole, including those of the electors of Western Australia, who have sent me to this Parliament.
.- I intend to support the amendment of the honorable member for’ New England, who I consider was perfectly right in his contention that a financial statement ought to be made before we proceed further with the consideration of this Bill. We have heard from the Treasurer that there is financial peril ahead of the ‘Commonwealth. He foresees that large expenditure will be necessary in the future - and not in the distant future. He considers it to be neces sary to keep the sharpest eye upon the expenditure of his colleagues in the various Departments. He has found it to be expedient, for example, to starve the Jost and Telegraph Department. We now learn that an expenditure of ^2,000,000 or ,£3,000,000 will be required to place our Post and Telegraph services in a proper state of efficiency.
– I think that the Post and Telegraph Department had betterput itself in a proper state first.
– If that be the honorable gentleman’s opinion, he should move -a vote of no confidence in the Administration of the present Government. Why did he not vote alongside those who supported the appointment of a Royal Commission last session? He now tells us, as Treasurer, that the Post and Telegraph Department, under the control of one of his own colleagues in the present Ministry, is in such a state of chaos that it badly needs to be put in order.
– The facts would never have come out, except for the full and thorough investigation which is going on now.
– But the Government opposed the investigation in the first instance. What is more, the Commission was appointed by themselves. Its members were their own selection. It is a body according to their own heart. They first of all said that it was only necessary to have a Cabinet inquiry. Then they learnt that it was necessary “to institute a more thorough investigation by means of a more powerful and influential body, which should take the Commonwealth into its confidence and conduct a complete inquiry. I know that I shall not be in order in pursuing this subject, but I am merely replying to the irrelevant interjection of the Treasurer.
– It was not irrelevant .
– Order !
– The Government were not ready to lead until they were shown the way.
– The Treasurer expects us to believe his statement ; and I should be the last to reflect on any statement that he made.
– My statements are all sincere.
– But they are inconsistent; at one time the Treasurer is pleading with the House to curtail expenditure on the Post and Telegraph
Department, and in other directions, and next he is asking us to hand over £250,000 to some estimable gentlemen who are conducting a private speculation. What are we to believe? That there is such an overflowing Treasury that the Treasurer is prepared to hand over a sum of money to some private gentlemen, who find that they are unable to otherwise make their business pay ; or, that there is some financial peril in front of us, which necessitates our watching most carefully every penny of expenditure? Under the circumstances, the House is warranted in demanding a plain, straightforward financial statement.
– Cannot we afford some money to start the industry at the Black Knob? I desire to induce some one to start there.
– Is the Minister “pulling my leg?” Apparently, the honorable gentleman knows so little about the possibility of establishing the industry in South Australia that he is not even aware there is no such place as “ Black Knob,” but that the proper name is the Iron Knob - his only knowledge of the industry and the prospects of its establishment is confined to the enterprise of Messrs. Hoskins, at Lithgow. I prefer to believe the Treasurer when he assumes the attitude of warning us against any large expenditure, without carefully reviewing the whole situation, rather than when he is in a profligate mood.
– I am never that.
– That is the mood of the honorable gentleman so far as this Bill is concerned. We are told that the Government are very serious in their defence proposals, which will involve we do not know how great an expenditure if we are to arm all the men of Australia between the ages of eighteen and twenty-six.
– We are going to make our own arms; and why not produce the rawmaterial as well ?
– Yes, I believe that a small arms and ammunition factory is to be established in the same district. But even if we could, without expenditure, create a citizen army comprising practically the whole of the adult male population, we could not provide ships - though we might sailors - for an Australian Navy for nothing. And yet a navy is one of the projects of this Government.
– The Government have never acknowledged that that is one of their projects.
– At any rate, the Government have taken credit all over the world for a project to start an Australian Navy, though, of course, they may mean nothing.
– The honorable member is very severe !
– It is unfortunate for the Ministry if a truthful statement as to their position is felt to be severe. Quite apart from old-age pensions, for which this House is pledged to find the money, the Government are committed to huge expenditure in the near future. One almost wonders whether the Government are serious in the proposal to take over the Northern Territory, and to proceed with many other undertakings which must involve immediate expenditure. But, as I have already said, we ought to have a financial statement showing how the money is to be raised. It can be easily seen from the circulars which have been distributed that the proposed expenditure under this Bill is not to be for one or two years only, but is to be recurrent. It is perfectly clear, on the assertions of those who have prepared the case for the bonus, that the industry can pay on the present output only so long as the Government provide the money to enable it to pay - it will not pay of itself. We are told that those who conduct the industry are at present losing 3s. per ton, and they state that the enterprise cannot possibly pay for some years to come.
– Does not the honorable member think that the output will largely increase if a bonus be given, and as the industry secures the Australian market?
– The honorable member is asking two questions - whether the output will increase if the bonus be given, and whether the output will increase as the industry secures the Australian market - and I believe I can answer thelatter, though not the former, in the affirmative. If this industry secures the market, the production will be cheapened, and the industry will probably pay; but the granting of the bonus will not secure the Australian market, which can only be the result of cheap production or a duty.
– Production will go on if the bounty be granted, but under present circumstances the industry may have to close down.
– But the industry can go on only so long as we provide the money to enable it to do so. Does the honorable member think that, when the bonus period has expired, we shall not be in precisely the same position as we are today ?
– I am afraid of that, but there is a possibility of the Australian market being secured in the meantime.
– Every man in his senses must necessarily be afraid of such a result. This is not a proposal to develop a new industry, but to enable certain gentlemen, who are conducting an already established industry, to obtain profits which they cannot at present earn.
– Would the honorable member give those gentlemen protection?
– Of course; the honorable member knows I am a protectionist, and I believe that the local producer of iron is one to whom we might fairly give protection.
– I was beginning to think that the leader of the Opposition was speaking !
– I do not know what attitude the leader of the Opposition adopts on this question. I have not heard his present views on it.
– I think I am safe in saying that the right honorable gentleman supports the proposal.
-Then he can scarcely be called the leader of the Opposition in this case.
– Does the honorable gentleman expect the right honorable member for East Sydney to lead the opposition from the Labour corner?
– I expect that the right honorable gentleman will do what he believes to be right, but the fact that he has abrogated his functions as leader of the Opposition so far as this Bill is concerned renders it necessary that some one else, who does not believe in it, should speak against the proposal. I admit that the case for a bounty on the production of iron is very much strengthened by the fact that, unless the Bill is carried, it is possible that a large number of men may be thrown out of employment. I should regret it exceedingly if any vote I might give in this House should result in the loss of employment to any number of individuals, but we have to face that kind of thing in parliamentary life. I remind honorable members that, if we vote for this bounty, it is certain that in three or four years’ time the number of men employed at Lithgow will have been increased, and, should the bounty then be withdrawn, the trouble would be greater than that which is likely to arise now. It is of no use coming to this House to ask for a contribution to bolster up an industry which without assistance cannot be shown to be a payable industry.
– The honorable member is now departing from the question.
– I think, sir, you will agree that I am entitled to show that this measure is likely to involve recurring expenditure, and that that is an additional reason why we should ask the Treasurer to say how the expenditure involved is likely to be met.
– The honorable member is entitled to do that.
– That is the consideration I wish to submit. I should be the last to adopt any “stone-walling” tactics in dealing with the matter before the House.
– The honorable member is not “ stone- walling,” but “ iron- walling “ just now.
– I do not think it is so very long since the deputy leader of the Opposition expressed himself as strongly opposed to this proposal. I have some recollection of the honorable member most eloquently stating the case against the proposed bounty. I do not know whether he still opposes it, but let me say that I hope he is keeping up his reputation for consistency. I repeat that we have a right to know how the money required to finance this proposal is to be raised year by year. If the Treasurer’s hopes of the establishment of industries as the result of the imposition of a protective Tariff are realized, we must look forward to a decreasing revenue, and yet, in this time of financial peril, the honorable gentleman asks us to resuscitate a Bill to enable some private gentlemen to carry on profitably a business which, without the assistance proposed, could not be profitably conducted. Unless the Treasurer can show that the proposal, if adopted, is likely to confer some great national benefit, or is one of extreme urgency, the Bill should not be resuscitated.
– I should not have spoken upon this matter but for some remarks which have fallen from the honorable member for Boothby. The honorable member asked if I was going to keep up my reputation for consistency. Might I ask him the same question, particularly in regard to this matter of the payment of bounties? Every one knows that the honorable member has consistently voted for bounties on every occasion.
– Including a bounty on olives.
– I find on looking up the records that only a year or so ago the honorable member for Boothby voted for an appropriation of £530,000 for the payment of bounties.
– The honorable member will find that I opposed a number of proposals then made.
– I find that, later on, the honorable member voted for bounties on the production of coffee, rice, cotton, and several other things. The honorable gentleman is supposed to be a representative of labour. I do not say that with any idea of making use of a term of opprobrium, because no one respects the honorable gentleman or his sincerity and consistency as a labour man more than I do. He is supposed to represent the interests of labour, and, let me add, of well-paid and wellplaced labour. He has voted for a bounty to foster the coffee industry, which has never in this world paid high wages; to bring into existence the cotton industry, which nowhere in the world to-day pays high wages ; but he jibs at a proposal which is intended to foster an industry which does pay high wages.
– Order ! The honorable member must discuss the amendment.
– I am replying for the moment to a charge of inconsistency made against me.
– I did not make any such charge. The honorable member is fitting the cap on.
– My honorable friend does not, after all, appear to be a paragon of consistency, even in this matter of bounties. When an expenditure of £530,000 was proposed for the payment of bounties we did not find that a single member in the Labour corner voted against the proposal.
– The honorable member will not find that I voted for it.
– I must say that I do not see the name of the honorable member for Grey recorded in the division. I am referring to a division which was taken on the 26th July, 1907, and, for the information of the honorable member for Boothby, let me quote the proposition which was then voted upon -
There shall be payable out of the Consolidated Revenue Fund, which is hereby appropriated accordingly, . the sum of£530,000 during the fifteen years commencing on the first day of July.
– How many industries was that to cover?
– That was to cover a number of industries.
– If the honorable member looks into the matter he will find that I was paired against the proposal.
– Order ! I cannot allow the honorable member to go into that matter.
– It appears to me that it deals with the question of bounties.
– That is just where the honorable member misunderstands the matter. The question before the House is not a question of bounties in the abstract, but whether the further consideration of this Bill shall or shall not be postponed until after a financial statement has been made. The question has been narrowed down to that, not because of any ruling given by me, but in consequence of the amendment moved by the honorable member for New England.
– I was dealing, sir, with arguments usedin the course of the debate. I shall not pursue the question further, except to say that I recall an occasion when my honorable friends of the Labour Party were so anxious to vote away public money that they were even prepared to agree to a bounty to encourage the production of high-grade cigars. They were so anxious to see people smoking high-grade cigars, that they actually voted a bounty for their production.
– Who did that?
– The Labour Party, led by the honorable member.
– Why not nationalize the industry and have done with the question?
– The attitude of my honorable friends in the Ministerial corner seems to be devoid of consistency. Although they have voted consistently for almost every other kind of bounty, they now make a dead set against this proposal.
– Does not the honorable member know that our effort to give the workers some of the benefits of protection has failed?
– That question is not before the Chair.
– If that accounts for the attitude of honorable members of the Labour Party, I would remind them that they have in their armoury a much more effective weapon for meeting the difficulty, and that they decline to use it.
– We should be the best judges of what we ought to use.
– I am sure that the party are the best judges. We know, however, that whatever the honorable member may say of this Government, he will help to keep them in office.
– Will the honorable member discuss the question?
– I am replying to interjections.
– The honorable member knows that our contention has always been that the industry should be nationalized.
– That question is not before the Chair.
– I understand that various reasons have been alleged why this motion should stand over pending a financial statement by the Treasurer. I have heard honorable members say that the attitude of the Labour Party is due to the fact that they are beginning to feel nervous concerning the old-age pensions fund which is accumulating under the Surplus Revenue Act.
– Hear, hear.
– The Chairman of Committees says “ Hear, hear . “ to that statement, but other members of his party have said that the question of nationalization is involved. And, again, it seems to me that their action is not consistent. I should have thought that a principle of such commanding importance to my honorable friends as is the nationalization of the iron industry ought properly to have been raised upon the second reading of the Bill, and not when the Bill is nearly through Committee.
– Will it be news to the honorable member to learn that it was raised ?
– My honorable friend may well say that it was “ raised,” but what is the good of raising the wind if one does nothing more?
– I utterly fail to understand why the position has not become clear to the House. If honorable members will turn to the notice-paper, they will find that the first Order of the Day is the resumption of the debate on the motion that the resumption of proceedings on the Manufactures Encouragement Bill, at the stage reached last session, be made an Order of the Day for the next day of sitting, and upon the amendment moved by the honorable member for New England -
That the words “next day of sitting” be left out, with a view to insert in lieu thereof the words : - “ day after a financial statement has been made to the House.”
On that amendment I cannot permit a discussion of the desirableness of establishing the iron industry, or of helping it in any, way ; nor can I permit a discussion upon the merits of the bounty system as applied to either the iron industry or to any other undertaking. All that I can permit is a discussion of the question whether or not a financial statement should precede any further dealing with this measure. I ask honorable members to discuss that question, and that alone; and I would point out that interjections are not a sufficient excuse for an honorable member being led away from this “clear path.
– I am unfortunate, perhaps, in replying to the statements that have been made, but may I say, sir, that the ruling you have just given comes rather late in the day ? The arguments referred to by you as not being permissible are the very arguments that have been used, I am told, in support of the opposition to this motion.
– The honorable member will recollect that I called the honorable member for Perth to order when he attempted to depart from the course I have outlined, and that I also called the attention of the honorable member for Boothby to the danger of his adopting a certain line of argument. I have checked every honorable member who has sought to depart from the line of discussion laid down, and I cannot allow the fact thai other honorable members, notwithstanding my protest, have made certain statements, to justify an entire departure from my ruling.
– Under your ruling, sir, I cannot say much more. I have listened carefully to the reasons urged by honorable members against dealing with this motion in the same way as every other motion of a similar kind has been dealt with, and I must say that I do not regard this as an important stage of the Bill. The motion is one which, so far as I know, has always been freely conceded as a matter of form and of courtesy to a Bill in this stage. We cannot begin to discuss this question seriously - particularly under the ruling just given - until the Bill itself is before the House, and we. come face to face with it in its proper parliamentary order.
.-I disagree with the statement made by the honorable member for Parramatta, that, as a rule, we allow a motion of this kind to pass without debate. We all know that there is a strong objection to the incorporation in the permanent Standing Orders of that order which allows the procedure now attempted to be followed. The debate on a motion to restore a measure to the notice-paper generally lasts longer than that on the second reading of the Bill itself. I shall not, however, pursue that matter further. A few nights since I asked whether we were ever likely to reach a time in the history of this Government when they would know their own mind for a few hours. I may put that question again to-day, with added emphasis. When this question was before us on a previous occasion, we were told distinctly that a financial statement would be made before the Bill was proceeded with. What was the financial statement submitted to us? When the further consideration of this motion was called on, the Treasurer rose and said, “It is all right. I have the money, and I shall be able to finance the Bill.” That was the “ financial statement ‘ ‘ made to us, and I think that it was a deliberate insult to the House. Already the Government are backing down from the position that they took up on Friday last.
– What is the position now ?
– I understand that, whereas the Government were prepared originally to agree to an appropriation of £304,000 for the payment of bounties under this Bill, they now propose, for financial considerations, a reduced appropriation of about £100,000 or £150,000. A statement on this point has been made by the Prime Minister. According to a report in this day’s issue of the Age, Mr. Deakin was spoken to on this very point. He was asked whether it was not the intention of the Government to revise the amounts of the bounties to be paid. He did not make a direct statement, but he said -
Ways and means have to be jealously scrutinized this year. The Treasurer is therefore preparing a scheme for redistributing the amounts in the schedule of the Manufactures Encouragement Bill - possibly involving curtailments - which is now under consideration.
The position taken up by honorable members in this corner is that, owing to the large number of financial’ obligations which the Parliament has undertaken during the last year or so, it is necessary for the House to obtain from the Government, at the earliest possible moment, a full and complete statement as to the position of the finances, and the probable situation in the event of the passage of this Bill appropriating the sum of £304,000. Does it not strike every honorable member that it is a remarkable thing that although three months have passed since the expiry of the last financial year, we have not yet had a financial statement made? Taking into consideration the fact that the House met late in the year, I hold that as soon as the Address-in-Reply had been passed, it was the bounden duty of the Government to make a financial statement, so that the House might know the exact position. The Government have not adopted that course; but we have the Treasurer saying, “ Iam not prepared, at the present time, to deliver a financial statement.” Is it not, I repeat, an extraordinary thing that three months from the close of the last financial year, he is not in a position to let the House know the exact state of the finances ? That is an attitude which no Treasurer should take up, and I hope that it will not be taken up again. We shall have ample opportunity to discuss the details of this Bill at the report stage, but we are entitled to receive from the Treasurer some information concerning the financial question. Suppose that the proceedings on the Bill are resumed at the stage at which it was dropped last session. We shall then find ourselves in the position of having voted nearly the whole of the amount required. We have already sanctioned an expenditure of £250,000 in connexion with the production of pig-iron, puddled bariron, and steel ; and we have yet to consider a proposal to appropriate . £50,000 for bounties upon the production of galvanized iron, wire-netting, and wire, and iron and steel tubes or pipes. We are in this unfortunate position, that we are asked to restore to the business-paper a Bill in which we have already appropriated more than three-fourths of the amount which the Government originally asked for. It was their duty to have made at an earlier date some form of financial statement. Last year, when the Tariff was under consideration, we had a statement from the Treasurer, and one which I think deserves full consideration. He told us that he had had prepared an estimate of the probable loss of revenue from the imposition of the Tariff. He mentioned that during the present year there would probably be a considerable loss in that regard, that in the following year it would amount to about £1,500,000, and that, in the year following that one, it would amount to over £2,000,000, as compared with the revenue obtained last year.
– I believe that the honorable member who moved the amendment before the House voted for the highest duties in every instance, in order to destroy the revenue.
– I cannot help that. It is purely a matter for his consideration. If I thought that I could stop all revenue from coming in by voting, as that honorable member did, I should do so, so that we could force the Government to impose direct taxation. Honorable members need make no mistake about the position I take up in this matter. I did not have an opportunity to vote when the Tariff was under consideration. I do not believe that it will have the effect upon the revenue which the Treasurer then anticipated. I believe that, in many cases, the duties will prove ultimately to be neither more nor less than revenue duties. However, we were told by the Treasurer that a sharp falling off in the revenue must be expected. In these circumstances, is it not reasonable that honorable members should desire a financial statement to be made at the earliest possible moment? Of course, I must not go into the merits of the Bill, but I would , point out that this procedure, if adopted, will have the effect of practically preventing one member of the House - it might have barred half-a-dozen honorable members - from discussing the second reading, or voting on the principle of the Bill. The least which the Government might have done was to have supplied to the House all the information that it was possible to obtain, and thus afforded to honorable members an opportunity to so vote on this question as in no way to interfere with legislation already passed. The Government have announced their intention to ask Parliament to take over the Northern Territory. We know that that will entail a loss of about £250,000. It is certainly a proposal which deserves to re ceive full consideration at our hands. We are also told that it is intended to take over the lighthouses, and complete the quarantine arrangements. All these things will involve the expenditure of a considerable sum. Last, but not least, is the question of old-age pensions.
– Mr. Speaker, is the honorable member in order in discussing that question?
-I think that the honorable member will be perfectly in order in showing that unless an allowance be made for the payment of old-age pensions, the system may be endangered.
– I understood you, sir, to rule just now that I could not refer to the question of old-age pensions. I was proceeding to do so when you stopped me.
– If the honorable member will recall the circumstances, he will see that they are wholly different now from what they were then.
– I do not think so.
– I had no intention of saying anything about old-age pensions or the principle.
– I was not allowed even to refer to it.
– Order !
– I was going to point out that as a considerable sum is required in connexion with old-age pensions, and as the Government have, so far, made no direct proposals in that direction, we are not justified at the present time in voting a considerable sum the appropriation of which will be likely to jeopardize that measure. I was going to advance that as another reason why a full and complete financial statement should have been made to the House. It is generally believed that there will be a considerable decrease in the revenue this year, and it may be that there will not be sufficient money available for the payment of Commonwealth old-age pensions if we vote £250,000, or some other large amount, for the encouragement of the iron industry.
– The Treasurer says that only £15,000 will be required in the first year.
– In that case, he must intend to ask the company to decrease its output. It is well known that it could increase its output to 1,000 tons per week, and, at a very small outlay, double that output, in which case it could demand as much as £62,000 a year from the Government.
– Would it not be a good thing for Australia if the company’s output were so largely increased?
– Yes ; but it would not be a good thing for the country to give the company over £23,000 a year to put into its pocket.
– How much will it pay in wages?
– Honorable members are trying to induce me to enter upon the discussion of a matter with which I would gladly deal were it in order to do so. The present output of the company is about 700 tons a week, on which the bounty would be about£21,840 a year, while, if the plant were worked to its full capacity, the output would be 1,000 tons a week, and the bounty still larger than the sum which I have named. As the Treasurer has given us no estimate of the financial obligations which we are being asked to undertake, there has been ample justification for the debate which has taken place on the motion to reinstate the Bill. Even now, on the amendment, the Treasurer has an opportunity to afford us the fullest information.
– Is it reasonable to ask me to make a financial statement at this stage, seeing that I intend to deliver my Budget speech within about ten days ?
– It is more reasonable for us to ask the Minister to take that course than it is for him to ask us to pledge ourselves to expenditure of which we have not been told the amount, although he possesses information upon the subject.
– I do not ask the House to pledge itself to the expenditure.
– Had it not been for the opposition of honorable members of the Labour Party, and others elsewhere, the proposal would Have been carried without any intimation from the Treasurer.
– Information would have been given.
– Why has it not been given already ? The Treasurer says, “ You may take it from me that I can find the necessary money but that sort of financial statement is hardly what the House requires.
. -It was refreshing to hear opposition to the Government from members of the Labour Party. Many of the speeches from that quarter which have been delivered on this motion might well have come from the direct Opposition. In my opinion, the Government has not acted quite wisely in seeking to reinstate the Bill at the stage where it was dropped last session. The reinstatement of financial Bills in this manner is undesirable. Financial conditions often change within a few months, and the House may well desire the opportunity for a second criticism of an important Bill. It may be contended in this case, however, that the position of Australia has not changed since last session to an extent warranting a more pessimistic view than was taken in February last. Apparently the Government, seeing how short the session is to be, wish to push forward as much work as possible. The desire of Ministers, I take it, is, not to gain an advantage in regard to the Bill - because, even if it is reinstated as proposed, there will be opportunities for opposing it in Committee, at the report stage, and on the motion for the third reading - but to do what is possible to expedite its passing before Christmas. I am always ready to help them when I approve of their proposals, and should be very sorry to offer factious opposition to any Government.
– What has the right honorable member up his sleeve?
– My desire is to assist in the passing of a measure which is of great importance to the interests of Australia. I understand that the Prime Minister has promised that the Bill shall not be proceeded with until the Budget speech has been delivered.
– According to Hansard, the Prime Minister stated that the Bill would not be proceeded with until a financial statement had been made.
– That promise should be satisfactory.
– What is gained by reinstating the Bill now, if it is not to be proceeded with until the Financial Statement has been made?
– There can be no harm done by reinstating it. I so strongly desire the establishment of the iron industry in Australia, that I am willing to take risks in connexion with the enterprise. Therefore I shall support the motion, although I do not think we should, as a general rule, adopt the practice of reinstating financial Bills. As I have said, there are exceptional circumstances in this case which warrant the reinstatement. Of course, something must be risked for the sake of a great industry like the iron industry. The people of Western Australia are contributing towards the upkeep of the sugar industry in Queensland, and will have to pay their share of the proposed bounties for the encouragement of the iron industry at Lithgow, without being directly interested in either; but, although they get no direct quid pro quo, their turn will probably come later. In any case, Ave must be Federal, and consider first the interests of Australia. I certainly think that the establishment of the iron industry, not at Lithgow merely, but wherever iron ore is plentiful, even though it may cost a good deal at first, will be very beneficial to our people, and therefore I shall support the motion, and oppose the amendment.
.- The speeches of some ofthe members of the Labour Party against the motion have been such as might be expected from the ultra free-trade members of the Opposition. Never have more pessimistic arguments been advanced by honorable members. Has the Commonwealth come to this, that it cannot afford to spend £15,000 a year for the establishment of a great national industry? That this is a national industry is admitted by the members of the Labour Party, because the party has decided that it is an industry which should be nationalized. Cannot we raise £15,000 a year?
– To establish a private monopoly.
– Then why does not the honorable member deal with the sugar industry in the same way that he desires to deal with the iron industry?
– Order !
– The honorable member for Boothby is attempting to draw me off the track. He knows that I am nervous, and that is why he is interjecting.
– Would the honorable member impose an Excise duty upon iron?
– I would not. I do not desire to fetter any industry. If I wished to kill the iron industry, and to throw out of employment those men who are engaged in it at Lithgow, I should vote for the amendment. But I am not going to rob any man or woman in the Commonwealth of a day’s work. That is the feeling which permeates me. The arguments which have been advanced in support of the amendment by a number of honorable members who supported the Bounties Act, which authorizes the payment of £520,000 in respect of various commodities, fairly stagger me. Upon that occasion they did not advance the pessimistic view that the measure should be delayed until a financial statement was forthcoming from the Treasurer.
– They did not desire to postpone the payment of a bounty upon peanuts.
– No, nor upon mohair. That is the irony of the situation. The Treasurer has promised that if the Bill be restored to the business-paper it will not be proceeded with until he has delivered his Budget. What more do honorable members require? We have not heard from the honorable member for Boothby anything about the necessity of imposing an exceptionally high duty upon the iron produced in Carnegie’s foundries in America, or upon Swedish iron, for the purpose of encouraging the industry in Australia. But directly a proposal is submitted, which will have the effect of providing employment to a large number of men, a labour member comes forward with a proposal that its consideration should be deferred. Such a course of action is cruel in the extreme. It is all very well for honorable members sitting upon these luxurious benches to defer granting the iron industry much needed encouragement, but we ought to recollect that the workmen engaged in it at Lithgow are dependent upon their employment for their bread and butter. I trust that the amendment will not be carried.
– The argument of the honorable member is that whenever men are in danger of losing their employment, because of the unstable position of any industry, it is the duty of the Government to come forward, and bolster up that industry with financial support.
– If the honorable member knows of an industry in which a thousand or thousands of men were engaged - an industry which threatens to close down on account of its unstable position - and refuses to grant it assistance to enable it to tide over its period of adversity, he is wrong to proclaim himself a representative of labour. I entertain the most kindly feelings for the men who have invested their money in this enterprise at Lithgow. I am surprised at the attitude adopted by the honorable member for Boothby.
– Has not the honorable member himself said that it would be cheaper to pay the men who are engaged in th”e industry so much per week, than to authorize the payment of the proposed bounty ?
– I have, and I still maintain that. I shall not go back upon any Statement that I have made. I am satisfied that the arguments advanced by the honorable member for Boothby do not reflect the sentiments of his heart, because I know that his sympathies are. always with the workmen. I ask honorable members to extend to this industry - notwithstanding that it is situated in New South Wales - the same treatment that they would accord to it if it were located in Victoria.
– - The Treasurer has told us that he will deliver his Budget within ten days, and 1 do not know that it would not be wise to defer the restoration of the Manufactures Encouragement Bill to the business-paper until after his financial statement has been made. The condition of the Commonwealth finances at the present time is very different from what it was when this Bill was previously under consideration. Even within the past two days, revelations have been made which show that the expenditure of a very large sum is required to put only one Department upon a proper footing.
– That fact was known a very long time ago.
– There was a rumour to that effect, but now we have absolute proof of its accuracy. If the fact was known to honorable members opposite, why did they not move in the matter?
– We did move, and the honorable member blocked us.
– I am not aware that honorable members opposite moved in the matter. It is true that when some other honorable members and myself were anxious to obtain certain information, the deputy leader of the Opposition helped us, but he did so with an entirely different object in view.
– I must ask the honorable member not to discuss that question.
– I desire to confine my remarks to the question before the Chair. The honorable member for Maranoa has declared that we ought to remember that the iron industry at Lithgow affords employment to a certain number of workmen. Seeing that the imposition of a stiff protective duty upon iron would have the effect of providing a still larger measure Of employment in that industry, the hon orable member ought to adopt the same attitude as I take up. At the present time the industry is firmly established. Those who have embarked upon it themselves, admit that within a margin of about 3s. per ton, it is paying. They inform us that they get the cheapest coal in the world, and that presently they will be able to obtain it at a still cheaper rate. They are about to secure coke at a lower cost, and they intend to increase their output, which will have the effect of still further diminishing the cost of their output. In the light of these facts, where is the necessity for the Commonwealth to aid the industry by the payment of a bounty? It appears to me that the question which we have to consider is merely that of providing it with a certain market, and I am willing to give it that market. It is true that at one stage I voted for the payment of a bounty upon iron ; but I did so because the industry was not then established. Now that it has been placed upon a firm footing, and that it only requires an extension of the existing plant at Lithgow to make it remunerative, I fail to see that any bounty is required. I know that a large number of honorable members entertain the same opinion that I do. They do not wish to see the industryinjured, but they wish to see it “coddled.” They desire that the firm at Lithgow shall be induced to spend1, say, an additional ,£20,000 or £^50,000, and that it shall afterwards be in a position to say to this Parliament, “ We have sunk more capital in the industry with the result that we are occupying exactly the same position that we previously occupied from the stand-point of the loss sustained upon our output.” I cannot at this stage enter into a discussion of the whole question, but I do say that the House is entitled to a full financial statement from the Treasurer, not only in regard to the Department which I have mentioned, but also in regard to the payment of old-age pensions, and the expenditure that will have to be incurred by the Commonwealth if the Manufactures Encouragement Bill becomes law. At the same time we must not forget our duty to provide lighting facilities around our coasts, and that we contemplate taking over the Northern Territory. If that territory be accepted by the Commonwealth we shall have to provide not merely for railway communication with it, but also for the construction of roads. Lavish as we have been in regard to the payment of bounties the necessity for granting them has exist ;d because the industries which we seek to encourage have not yet been established.
– Will not the honorable member give a national industry a show in place of granting a bounty upon peanuts and mohair?
– I desire to give the iron industry a better show than does the honorable member. I have made it clear that the adoption of the course which I favour would afford more employment than would be provided under the bounty system which he advocates. I would give the industry the benefit of a larger market, and that is all that Mr. Sandford wanted.
– All that the men engaged in the industry require is the local market. They do not want any outside market.
– But the honorable member will not give them the local market.
– I am endeavouring to do so.
– No, the course which the honorable member advocates will - if adopted - not provide them with an opportunity to sell an extra ton of iron in the Commonwealth.
– The honorable member is not discussing the question before the Chair.
– I shall endeavour to discuss that question at a later stage. I suggest to the Treasurer that it might be advisable for him to withdraw this motion until after he has delivered his Budget, so that those who desire to help the industry may be afforded an opportunity of doing so in the light of the information which will then be available. I do not desire to block the restoration of any measure to the business-paper, but I would point out that this is a most exceptional case, the circumstances having entirely changed since the Bill was last before the House.
– I fail to see how the amendment, if carried, would materially delay this matter. The position of the Government, if I understand it aright, is this: “If you allow us to reinstate the Bill, we will do nothing until the Financial Statement is made.” What delay could’ be caused by adopting the reasonable proposal that before the Bill is reinstated the House should be told where the money is to come from to pay the bounty? Speaking from memory, afterthe Treasurer moved the second reading of the Bill last session, it was allowed to stand over until the last day of the session, when, about mid-day, the debate on the second reading was called on again ; there were very few honorable members present, and the Bill was carried by quick stages up to practically the last stage in Committee. In fact, I believe it was almost taken through Committee. During last session, the financial position of the Commonwealth had been pointed out by one or two honorable members, but, since we dealt with the Bill last, I agree with the honorable member for Hindmarsh that honorable members have realized to a much greater extent than they did before the seriousness of the financial outlook. There are now before the House, in one shape or another, proposals which I think will involve an expenditure of, at least, £2,000,000 more than we have made provision for. We were asked last year to vote a sum of over £300,000 for iron bounties, and now, within a few months, a proposal is made to reinstate the Bill and reduce the bounties by half. In all proposals under which we incur any considerable financial obligation, the commonsense and proper course is for the Treasurer, in introducing the Bill, to show - as briefly as he likes, so long as he satisfies the House - that the finances are in a position to provide the necessary money, and also to meet the financial obligations which the House has already freely undertaken. I shall support the amendment, because I do not think it would cause any delay in dealing with the Bill, and also because it is fair to demand that before we undertake further financial obligations the whole aspect of the finances of the Commonwealth should be explained to honorable members.
.- I take it that the only question before the House at present is the restoration to the business-paper of a measure which was discussed last session, and which it is the desire of the Government to bring before the House at the stage then reached, without going through the previous preliminaries.
– If the honorable member will look at the business-paper, he will see that that is not the question before the House.
– I was about to add, sir, that to that motion an amendment had been moved by the honorable member for New England to delay the restoration of the measure to the business-paper until after a financial statement had been submitted to the House. I suppose that we are not entirely confined in this debate to the amendment. I presume it will be quite competent to give reasons why it would be wise to restore the Bill to the businesspaper forthwith.
– The actual position, which any honorable member can verify from the Standing Orders, and from the well-known practice of Parliament, is this : When the motion was moved by the Treasurer ‘that the Bill be restored to the business-paper, a certain scope of ‘debate was opened to the House. That was fairly wide, and under it honorable members could deal with the urgency of the case’, and to a large extent with the principles underlying the measure. That question was then reduced, by the moving of an amendment by the honorable member for New England, to one simple issue, the other being for the time entirely superseded. The issue which the honorable member for New England brought before the House is whether the matter shall be postponed until after a financial statement has been made to the House, or whether it shall not. I have been ruling consistently all the afternoon, over and over again, on those lines, and, of course, I cannot now depart from them.
– I shall have no difficulty in saying all I have to say on the amendment. It is simply an invitation to the House not to restore the Bill to the business-paper at the present time.
– That is not the amendment. Its effect is that the further consideration of the Bill in Committee shall not be resumed until after a financial statement is made.
– The amendment does not touch this stage at all.
– All that we are now debating is practically whether we shall proceed to put the Bill on the business-paper at present or not. The words used are, “ after a financial statement has been made to the House.” If the House agrees that a financial statement shall precede any dealing with the Bill, that will cover the whole difficulty. .
– I rise to a point ot order. I will take your ruling, sir, as to whether the amendment is in order at all. It provides, as I understand it, that the advisability of proceeding with the Bil] in Committee shall be considered after a financial statement has been made to the House. Is it in order, at this stage and on a motion of this kind, to so direct the proceedings of the Committee, as the amendment unquestionably does? The amendment is not relevant to the proposal to restore the Bill to the business-paper. It contains a direction that something shall be done when we are in Committee, and after the restoration of the Bill to the business-paper. I submit, therefore, that it: is altogether out of order.
– The honorable member will see, if he reads the’ original motion moved by the Treasurer, that it had a double” purpose - first, to direct that a certain Bill be restored to the business-paper at -the stage which it had reached before the prorogation, that- is to say, in Committee ; and, secondly, that a day should be fixed when that Committee stage should be taken, which day was proposed to be the day of sitting next after the carrying of ‘the motion. It .is, therefore, perfectly in order to direct that the Bill shall be restored1 to the business- paper, but that its further consideration in Committee shall be an Order of the Day for the next day of sitting, not after the motion has been carried, but after the making of a financial1 statement. The amendment is, therefore,, quite in order, and very clear.
– That ruling limits me to a statement of the advisability of adopting: the amendment, or adopting the proposition of the Government. The whole question is simply one of procedure. No principle can be raised on the issue at all. Honorable members well know that I am entirely in favour of the “nationalization of the industry. It would, of course, be out of order to discuss that aspect of the case indetail, and I simply mention the fact. There was some reason for the amendment moved by the honorable member for New England, because a distinct and absolute promise was made by the Prime Minister that a financial statement would be made before the restoration of the measure wasasked for. The Treasurer has since publicly supplemented that statement - I think it was on Friday - by saying that he was quite prepared to make a financial statement before the Bill was. proceeded with. Although I do not at all believe in the principle of restoring measures to the business-paper in this way, I do not desire to prevent the restoration of t this measure, and I strongly advise my honorable friends to allow it to be restored, without even therestriction that a financial statement must, first be made. But, while I say that regarding this stage of the proceedings, I reserve the full right to criticise the action: of the Government and their position on the Bill, in every possible way, when it has been restored to the business-paper.
– I believe that the honorable member for Boothby was rather anxious to know my view of the present position of affairs. I suppose he was slightly nervous lest we might join with some of my honorable friends below the gangway to create a somewhat inconvenient position; but it is rather a novel idea that my honorable friends should be so suddenly and acutely sensitive on the financial question in connexion with this Bill. We have not heard any nervousness expressed about a policy that is to cost two or three million pounds for torpedo boats, and some mysterious new brand of soldier. We have heard not a word of anxiety over gigantic departures of that sort; but when it is a question of a bounty to the ironworkers of Lithgow, whose position deserves some consideration, and merits, at least, that the Bill should be restored to the business-paper, in order that the question shall be fully considered, to block that proposition is a course that I cannot approve of. Of course, if the Prime Minister made a promise to my honorable friends which he has broken, they naturally resent it; but all I can say i’s that they need not feel any astonishment about it.
.- It is certainly, as the right honorable member for East Sydney said, very novel and refreshing to find honorable members in the Labour corner expressing so much anxiety over the financial situation.
– We were always the keenest financial watch dogs of any Parliament, before the honorable member knew anything about Parliament at all.
– I have only been in this Parliament; but from its very beginning, the attitude taken up by the Opposition, and especially by the honorable member for Flinders, has been to demand, that the Government should give honorable members some idea of the state of the finances before any proposals for appropriating money were brought forward. Yet that demand has never received the support of the members of the Labour Party. Now, all of a sudden, when a proposal to restore this Bill is brought forward, although there is no difference in the finances of the country - for we all knew before the immense commitments to which we were pledged, and attention was called to the facts from this side of the House - at this late hour, the necessity for a statement of the finances is brought forward as a reason for delaying the Bill. It appears to me that the opposition of those honorable members to the Bill, by means of the amendment, is absolutely insincere and hypocritical. If that is unparliamentary - and I should not like to offend my honorable friends opposite by using an unparliamentary expression - I will say that the reason which they give is not their true reason for opposing the measure. The whole basis of the opposition to the Bill is really their desire to nationalize the iron industry. They are perfectly justified in desiring to bring about that end; but they should not try at this late day, in this Parliament, to gain a certain amount of kudos for financial prevision on entirely false grounds.
– It is a new-born . zeal.
– It is quite new-born.
– The honorable member ought to be ashamed of himself. The honorable member for South Sydney dealt with the question before the honorable member came here.
– The honorable member for South Sydney, no doubt, did deal with the question a year or two ago. He told me himself that he did.
– It was frequently discussed by honorable members in this corner before the Opposition took it up.
– It must have been discussed privately. I have sat in this chamber as regularly as have most honorable members - I have not been often away - and during the whole of the time we have occupied in .passing other measures which have been really forced on the Government by the Labour Party, and which have involved immense commitments, not a word of request to know what the financial position actually was, has come from them. Many of us have agreed with the proposals of the Government. All that we said was that we should know where the money was to come from. At the end of . last session, it was only in consequence of the pressure exerted by the Labour Party that the Government were forced to rush through several proposals that might very well have been left over until the present session.
– Old-age pensions, for instance.
– The Old-age Pensions Act is a case in point if the honorable member likes to put it in that way. Although we were in favour of that measure, we considered we ought to know where the money was to come from. This very newborn zeal for financial information is particularly refreshing, and, coming from the Labour Party, which has pushed and lashed the Government to comply with its extreme demands without knowing what financial measures were to be taken to meet them, ?s all the more welcome. I understand that I am not permitted to go into the merits of the question, but I am prepared to accept the statement of the Government that they merely desire to have’ the Bill restored to the business-paper, and that they will not ask the House to deal with it in detail until a financial statement has been made. That statement, I take it, will be full and sufficient.
– I do not desire to say much, but . I refrained from speaking while the amendment was under consideration, as your ruling, Mr. Speaker, prevented me from referring to two or three matters-
– I rise to order. You will recollect, sir, that the Prime Minister moved the motion for the restoration of the Bill on behalf of the Treasurer. I ask whether, the Treasurer having already spoken to the motion, he can speak again ?
– I am much obliged to the honorable member for calling my attention to the fact that the motion was not moved by the Treasurer. It was moved for him by the Prime Minister; and therefore, of course, the right of reply belongs, not to the Treasurer, but to the Prime Minister.
Question resolved in the affirmative.
Mr. SPEAKER reported the receipt of a message from His Excellency the GovernorGeneral, recommending an appropriation for the purposes of the Manufactures Encouragement Bill.
– I move -
That this Bill be now read a second time.
In this Bill, Parliament is asked to exercise its power under section 51, paragraph xiv., of the Constitution, which provides -
The Parliament shall, subject to this Constitution, have power to make laws for the peace order and good government of the Commonwealth with respect to….. insurance, other than State insurance ; also State insurance extending beyond the limits of the State concerned.
It will be recognised that this power is expressed in wide terms. It gives Parliament full power to deal with insurance, whether it be life, fire, marine, or industrial, or any other form of insurance that we may think fit to legislate with respect to. So far, Parliament has only .exercised its powers under this section by dealing with industrial insurance. That subject was dealt with in the year 1905, when we passed a Life Assurance Companies Act dealing with insurance on the lives of children. In this instance, the House is asked to legislate with reference to marine insurance. The position at the present time is this. In each of the six States of the Commonwealth, there prevails a branch of the law known as marine insurance. The insurance law is a branch of that general body of law known as the common law. The origin of marine insurance is exceedingly uncertain. It was introduced into England by the Lombards. In England, it has been associated with Lombard-street and with the Royal Exchange for some centuries. Many of the principles of insurance law were developed under the influence of Lord Mansfield. The whole body of marine insurance law- developed as part of the general body of the common law, and1 was a restricted branch of that law with respect to contracts. At the present time, in each of the States of Australia any one who desires to ascertain what the law as to marine insurance is, has to consult the common law authorities and decisions. Of these there are no less than 2,000 in existence. Under . these circumstances, of course the law is in some cases difficult to ascertain. In some instances, the authorities are uncertain; on some points where certainty is required, no certainty can be gathered ; and some decisions rest upon old conditions which have now become obsolete. The law generally is in a condition which can only be described as unsatisfactory. Marine’ insurance is’ a highly technical branch of the law. It requires for the complete mastery of it years of careful research and practice. At the same time it is a branch of the law which greatly affects the commerce of our people. It is, therefore, above ali things highly desirable that this branch of the law should be made clear, definite, and certain. In England, the position was for many years regarded as unsatisfactory ; and Sir M. D. Chalmers, an eminent lawyer who had distinguished himself by the preparation of several codes, some of which are in practical operation in various parts of the British Empire, approached this subject, and prepared a digest of the whole law with regard to marine insurance. That eminent draftsman had already achieved considerable distinction for his work of codifying the law in connexion with the Bills of Exchange Act and the Sale of Goods Act. Those measures have been enacted by the various .States of .Australia, and also by Parliaments in various parts of the British Empire. Sir M. D. Chalmers drafted a Bill to deal with the subject of marine insurance, the Bill being a code or declaration of the then existing principles of the law of marine insurance. That measure now exists in the form of an Act which is known as the Marine Insurance Act 1906. A Bill upon the subject was first introduced into the House of Lords in 1894. It was again introduced in 1895, 1896, 1899, j 900, and, lastly, in 1906, when it became the law of the land. During the time when the subject was ‘before the Imperial Parliament, the Bill was very carefully considered bv two Committees, one of which was appointed by Lord Herschell and the other by Lord Halsbury. From the memorandum attached to the present Bill, honorable members will observe the names of those who sat on those Committees and considered the Bill. In the House ot Commons it was sent to a Grand Committee, and it finally passed both Houses, and was assented to in December, 1906. The Bill now before the House is practically a reproduction of the English Act. That Act was adopted in Western Australia last year, and it has also been adopted by the New Zealand Parliament. The desire now is that this very important branch of law shall be dealt with by the Commonwealth Parliament. If this Bill becomes law, the whole of the States systems will pass away, and their Acts will be . entirely superseded by this one measure. The law of the Commonwealth of Australia, instead of consisting of six diverse systems, will be unified, and we shall have one common practice with reference to marine insurance in the Com- monwealth. The Bill deals with the Imperial Acts known as the 19th George 11., Ch. 37, and 28th George III., Ch.
– Will the AttorneyGeneral explain whether we can repeal Imperial Acts that apply to Australia?
– The Constitution gives us power to make laws inconsistent with those Imperial Acts which came over aspart of the body of general law8 and with States Acts. Although we may not have power to repeal, we have power to effect the same purpose by making laws inconsistent with those Imperial Acts which have hitherto applied to Australia. Turning to the States Acts affected by this measure, the Bill declares no longer applicable section 17 of the New South Wales Life Fire and Marine Insurance Act 1902 .; Part 3, Division 1, of the Victorian Instruments Act 1890 ; the whole of the South Australian. Prohibition to Reassurance Repeal Act, 1867 ; and the whole of the Tasmanian Policies of Marine Assurance Act 1869. Those particular Acts are not very far-reaching. In -one instance, the Act in question simply repeats the prohibition against gambling and wagering, and, in another instance, it deals with the assignment of marine insurance and! with the power of an assignee to recover on a policy. The Bill purports, as I say, to be simply a code, and, as such, it ‘ has been subjected to the close criticism of experts in Great Britain, and has been carefully investigated in New Zealand. Copies of the Bill were last year sent out to fifty or sixty public bodies in Australia, inviting their consideration and suggestions; but, so far, we have received only one acknowledgment, so that we may conclude’ it meets the conditions of Australia.
– I have had a communication from the Geelong Chamber of Commerce, stating that the Bill is so satisfactory that no improvement can be suggested.
– Copies of the Bill were sent to Chambers of Commerce, the Underwriters’ Associations, the Merchant Service Guild, and other public bodies, so, that there might be full expression of opinion. Honorable members will see that the Bill sets out in very clear and distinct terms the principles of law on the whole subject. The object of the measure, speaking generally, is really to declare the law relating to marine insurance. Of course, so far as we, as a Commonwealth, are concerned, the Bill does something more - it not only declares the existing law, but makes that law applicable as one system over the whole of Australia. The measure indicates to those concerned what the law is in the absence of express agreement. There are certain provisions in the Bill relating to forms of policy, and so forth, which are compulsory, but, speaking generally, the parties are free to vary the terms and conditions as they think fit. But in those matters on which the parties do not express themselves, the Bill declares their rights and duties in respect of each other. As the Bill is one essentially of details I will only briefly refer to the ground it covers. Marine insurance in clause 7 is thus defined -
A contract of marine insurance is a contract whereby the insurer undertakes to indemnify the assured, in manner and to the extent thereby agreed, against marine losses, that is to say, the losses incident to marine adventure.
Losses may be sustained either on sea or on land and a contract of marine insurance may extend to losses on any land risk incidental to any sea voyage. Clause 9 subclause 2 provides -
Subject to the provisions of this Act, every lawful marine adventure may be the subject of a contract of marine insurance.
In particular there is a marine adventure where -
any ship, goods, or other movables are exposed to maritime perils. Such property is in this Act referred to as “ insurable property “ ;
the earning or acquisition of any freight, passage money, commission, profit, or other pecuniary benefit, or the security for any advances, loan, or disbursements, is endangered by the exposure of insurable property to maritime perils ;
any liability to a third party may be incurred by the owner . of, or other person interested in or responsible for, insurable property, by reason of maritime perils:
The clause then proceeds to define” maritime perils “ as follows - “ Maritime perils “ means the perils consequent on, or incidental to, the navigation of the sea, that is to say, perils of the seas, fire, war perils, pirates, rovers, thieves, captures, seizures, restraints, and, detainments of princes and peoples, Jettisons, barratry, and any other perils, either of the like kind, or which may be designated by the policy.
– Does this Bill affect the Sea Carriage of Goods Act?
– I do not think so; but I shall consider the point. Honorable mem bers are aware that no person can enter into a contract of marine insurance unless he has an interest, or what is called an “insurable interest.” The policy of the law has been to discourage gaming contracts. Accordingly by clause 10 it is provided -
Every contract of marine insurance by way of gaming or wagering is void.
That is following on the line of the English Act, and particularly of the Acts passed by the various States. Clause 11 provides -
Subject to the provision of this Act, every person has an insurable interest who is interested in a marine adventure.
There is then set forth the different kinds of insurable interests - defeasible, contingent, or partial - and provision that the assured may reinsure. The lender of money on bottomry or respondentia bonds, the master or crew in respect of their wages, and the person advancing the freight, all have an insurable interest. The assured even has an insurable interest in the charges of any insurance he may effect, and the interests of the mortgagee and the mortgagor are’ provided for - all these interests may be made the subject of a contract of marine insurance. Division 3 of Part II. of the Bill deals with the subject of insurable value, which is ascertained in the manner set out in clause 22. I shall not detain honorable members by entering into details on this point, they being rather for the Committee than the House. Division 4 of Part II. deals with disclosure and representations, and clause 23, which contains a fundamental principle in insurance, provides -
A contract of marine insurance is a contract based upon the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party.
The conditions in relation to disclosure to the insurer by the assured or his agent during the negotiations for the contract are fully set forth in this division. Division 5 of Part II. is rather an important one, declaring as it does what are the essentials of a policy.Clause 28 provides that’ a contract of marine insurance is inadmissible in evidence, unless it is embodied in a marine policy in accordance with the Bill, and, further, that a policy may be executed and issued either at the time when the contract is concluded or afterwards. Clause 29 defines what a policy must specify, in- eluding the name of the assured,” the subjectmatter insured, and the risk insured against, the voyage or period of time, or both, as the case may be, covered by the insurance, the sum or sums insured, and the name or names of the insurers. Clause 30 sets out that a marine policy must be signed by or on behalf of the insurer ; and this part of the Bill provides that a policy may be either “ valued “or “ unvalued “ or “floating.” Under clause 36 a policy may be in the form in the second schedule if the parties think fit. There is no compulsory form under the Bill, but the form set out in the schedule referred to is that known as “ Lloyd’s S.G.” policy, the same as under the English Act. The parties may or may not adopt that form just as they choose, but if they do adopt it, certain rules are set out for the construction of the policy, so that they may have some definite principle or guide.
– How is it proposed to deal with over insurance, where the object is evidently to insure at any cost, and have a disaster - where there is reasonable supposition of a sinister motive?
– Such circumstances would enable the policy to be attacked, because there would be ground for suspecting fraud. As a rule, a policy will be either a “ valued “ or an “ unvalued “ policy, and in the case of the latter, the contract being a contract of indemnity, the insured can recover only the absolute loss sustained, while in a “ valued “ policy the sum is fixed. In case of the amount being obviously in excess, there would be ground for avoiding the policy because of failure to disclose material circumstances.
– I do not see any provision made in the Bill.
– I shall deal with that in Committee.
– I have in my mind the loss of a yacht very recently in New Zealand, and there are other cases which might be cited.
– Of course, the onus is thrown on the insured of establishing his claim. Division 7 of Part II. deals with warranties, which may be express or implied. Division 8 deals with questions relating to the voyage, which it is necessary to specify in the policy, and provisions are made with respect to deviations and the circumstances under which deviation is allowed. Part III. of the measure sets 0 forth the conditions under which a policy may be assigned, and it is provided that the assignee is entitled to sue in his own name, and the defendant tq set up any proper defence he might have had against the original insurer. Part IV. deals with premiums. Unless otherwise agreed, the duty of the assured or his agent, and the duty of the insurer to issue the policy to the assured or his agent are concurrent conditions. The insurer is not bound to issue the policy until payment or tender of the premium. Part V., which is very important, deals with loss and abandonment. A loss mav be either total or partial, or either actual or constructive. What amounts to a constructive loss is set out fully in clause 66, as follows - (1.) Subject to any express provision in the policy, there is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incurred.
Part VI. sets forth “ measure of indemnity, “ and shows the extent to which the insurer is liable for loss. Part VII. deals with the question of the return of premiums. The principle of mutual insurance .is recognised, by clause 91, in the following words - (1.) Where two or more persons mutually agree to insure each other against marine losses there is said to be a mutual insurance. (2.) The provisions of this Act relating to the premium do not apply to mutual insurance, but a guarantee, ‘ or such other arrangement as may be agreed upon, may be substituted for the premium.
So far as is necessary, the provisions of the Bill are made applicable to mutual insurance. Clause 6 provides -
This Act shall apply to marine insurance other than State marine insurance and to State marine insurance extending beyond the limits of the State concerned.
That clause simply confines this Bill strictly within our constitutional powers. If a State undertakes to carry on marine insurance within its own borders, this Bill will not apply under the Constitution, but it will apply if the State attempts to extend its business of marine insurance beyond its limits. The Act will not apply to contracts, of insurance made before the commencement of the Act. The Bill is one which covers many important matters of detail, which can be best considered in Committee. I think, therefore, nothing is to be gained by a lengthy explanation at this stage.
Question resolved in the affirmative-.
Bill read the second time.
In Committee :
Clauses1 to 15 agreed to.
Clause 16 -
The lender of money on bottomry or respondentia has an insurable interestin respect of the loan.
– The Minister might explain the meaning of the terms “ bottomry “ and “ respondentia.”
Mi-. GROOM (Darling Downs- AttorneyGeneral) [5.40]. - By the law of the sea a master of a ship may, in case of necessity raise money on the security of the ship, freight and cargo. The condition of the loan on bottomry or respondentia is that the money is not repayable if the ship or cargo does not arrive. The lender is entitled to insure his interest in respect of the loan.
Clause agreed to.
Clause 17 -
The master or any member of the crew of a ship has an insurable interest in respect of his wages.
– Will the Minister say to what extent of the wages?
– The law is that a person can insure to the extent of the interest he has in a particular maritime risk. A seaman can therefore insure to the extent of the wages due to him. If, for instance, a seaman has £50 due to him in wages, he can insure to the extent of £50 to cover the amount.
Clause agreed to.
Clauses 18 to 21 agreed to.
Clause 22 (Measure of insurable value),
.- I ask the Minister to consider whether we are not to some extent rushing this important measure through. I am aware that it has received at his hands very serious consideration, that he has consulted all the bodies particularly interested in it, and that it is regarded as a valuable measure which it is desirable should be passed. But I direct attention to the fact that there is only a very small number of members present, and it seems to me that we can hardly call it legislation to rush such a measure through in the way we are now doing. It is with very great regret that, in the circumstances, I feel justified in calling attention to the state of the Committee. [Quorum formed.’] The Minister must be aware that honorable members require his assistance in dealing with so technical a measure. I have no particular comment to make on the clause immediately before the Committee, but I wished honorable members generally to understand that the Bill was being rushed through, and to enter my protest against that.
– In reply to the honorable member for Kooyong, I must be allowed to state that the Prime Minister announced last week that the Government intended to proceed withthis Bill to-day. Honorable members will find that it has been taken up in its order on the businesspaper.
– That is so.
– I am pointing out that full notice has been given to honorable members that it would be proceeded with. The Bill was distributed to honorable members last session, and was very freely circulated. I have personally consulted several insurance experts, and find that the measure meets with their approval.
– The usual argument from the other side is that the Government have no work to go on with.
– This Bill has been most carefully considered.
– I said so.
– In the circumstances, I see no valid reason why we should not proceed with it to-day.
– Go on with it.
– It is all very well for the honorable member for Maranoa to say “ Go on,” but I will guarantee that the honorable member knows nothing about the Bill.
– I know nothing about the Bill, but it was really at my instigation that honorable members were called in to know what was going on.
– The honorable member says, “ I know nothing about it, but go ahead with the business.” I should like Australia to know how legislation is being put through in this Parliament.
– I must do the honorable member for Maranoa the credit of saying that he was asking for information upon the Bill just now.
– When I left the chamber a little while ago, I was under the impression that the Attorney-General was to move the second reading of the Bill, and that, after his speech, its further consideration would be postponed to a future day.
– I asked the AttorneyGeneral to postpone the further consideration of the Bill in Committee, but the honorable gentleman declined to do so.
– That is a most unusual thing.
– Order ! I direct the honorable member’s attention to the fact that clause 22 is before the Committee.
– I move-
That the Chairman do now leave the chair.
Question put. The Committee divided.
Majority … … 7
Question so resolved in the negative.
.- When the Attorney-General was moving the second reading of the Bill, I inquired whether provision was made fordealing with cases of excessive insurance where there were reasonable ground’s to suspect that the object was to lose a vessel for the sake of securing the insurance money. Cases have happened in Australia and New Zealand waters that have given rise to such a suspicion, and, in some instances, legal proceedings have followed.
– An opportunity to consider that question will occur in connexion with the next clause.
– I confess that I have not seen this Bill, and I protest against this method of rushing business through the House.
– It was the honorable member’s business to see it, and to know what it contained.
– Several honorable members cheer that statement, although they have not seen the Bill, and know nothing about it.
– I cheered it, and I have seen the Bill, and sent copies of it to some of my constituents.
– The honorable member is well able to see this and every other Bill, but he is the only member who is. I have not seen it.
– The honorable member has had two copies of it. He had one last session, and he has received another this session.
– I must ask the honorable member to discuss the question before the Chair.
– I was under the impression that after the secondreading speech made by the Attorney-General - and, by-the-bye, it was about the shortest on record in connexion with a Bill of this kind-
– I spoke for about twenty minutes.
– I thought that after the Attorney-General had spoken the debate would be adjourned in the usual way. Instead of that, I found on returning to the chamber after a few minutes’ absence, that the second reading had been agreed to, and that twenty-one clauses had already been dealt with in Committee.
– I must ask the honorable member to confine his attention to the clause, and would remind himthat if I permitted him to enter upon a general discussion of the Bill I should have to allow the same latitude to others.
– The Government may have it, so far as I am concerned.
Clause agreed to.
Clause 23 -
A contract of marine insurance is a contract based upon the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party.
– This clause and the next affect the question raised by the honorable member for Lang. A contract of marine insurance is based upon the utmost good faith, and every material information has to be given to the insurer at the time a contract is made. Gross over-valuation without any disclosure of the fact would be a ground for voiding the contract. Chalmers and Owen, in their text-book on the English Marine Insurance Act of 1906 - and Chalmers drafted the Bill on which it was founded - give the following as an illustration-
Policy on goods which are grossly overvalued. The assured does not disclose the over-valuation. The insurer may avoid the contract.
That is merely a declaration of the law.
– It would be difficult to prove over-valuations after a vessel had gone down.
– Many questions of fact are difficult of proof. The insurer sometimes has to take the risk of over-valuation. He has the opportunity sometimes of making an inspection of them before he accepts the insurance.
– We are thinking, not of goods, but of human life.
– This amendment relates merely to over-insurances.
– But human life is often involved in over-insurances.
– If an individual is so wicked as to deliberately wreck a vessel for the purpose of gain-
– That has been done.
– It may or may not be done, but the law is. as I have said. This clause is simply a declaration of the English law, and of what has been the law in all the States. If the insurer declines to pay or to satisfy a claim, the person insured must go into Court and establish his insurable interest. Mr. Justice Willes laid it down, in a memorandum written in 1867, that-
It is only when the over-valuation is so exaggerated” as to show to the satisfaction of a jury that it must have been designed in order to obtain more than a just and complete indemnity that the insurance is void.
– But “the honorable member must recognise the difficulty of proving after a vessel has gone down that it was over insured.
– If the insurer declines to pay the amount covered by a policy, the person insured must go into Court and prove his case in order to recover. Where he proves his case, the insurer is bound to indemnify him for the loss he has sustained.
– There is a question of life involved. .
– Regrettable incidents have occurred, but I do not know that that is a reason for altering this particular provision.
.- Are we to understand from the Attorney-General that, under this clause, the whole responsibility of proving loss is thrown upon the person insured, and that no obligation isthrown upon an insurance company to ascertain that the goods in respect of which it issues an insurance policy are actually in existence and in the possession of the person insuring? I think some such provision should be made. The question is one that relates to every-day fire insurance. Companies are prepared, without question, to insure property for any amount that maybe desired, but when a claim is made upon them under a policy they raise all sorts of quibbles and demand proof that the goods in respect of which that policy was issued were in the possession of the policyholder at the time of their destruction. That is a one-sided system. We should require the insurance companies to see that diegoods in respect of which a policy is issued actually exist. If they fail to do so, they should suffer. I know of many cases in which companies have been disposed to encourage over-insurance.
Colonel Foxton. - Before a house is insured it is inspected by a representative of the insuring company.
– In many cases companies are prepared to accept a mere statement as to the contents of a house in respect of which a policy is desired. As a matter of fact, my furniture is insured, but it has never been inspected by a representative of the insurance company. I object to a proposal to throw upon one of two parties to a bargain the whole responsibility in respect of it. Companies are sometimes prepared to collect for years without demur premiums in respect of overinsurances, but in the event of a claim, being made upon them they raise all sortsof technical objections. We should see that both parties to the bargain arefairly treated.
– I. do not like the wording of the clause* The same style of wording seems to run- through many Bills. We find such words as “serious and wilful,” “reasonable,” “knowingly,” and “the utmost good faith.” What is meant by the words, no one can understand. One has to go to law every time to ascertain the true meaning of phrases used in our laws. Why are our laws framed in such a way that persons have to appeal to the Judges to ascertain the true interpretation of them? Surely we ought to be able to draft clauses in language which the average intelligent man could understand !
– These words are defined.
– I have known of many cases where words have been defined ; but entirely different interpretations have been put upon them by different Judges. We should try to get our measures drafted in such a form that they could be easily understood.
– What is the honorable member’s difficulty now?
– I do not and cannot understand what is meant by the phrase “ the utmost good faith. “ One cannot possibly understand an insurance policy which is issued at the present time. All fire insurance policies contain what is known as an average clause, and it leads to all kinds of robbery of the’ public. Suppose that a man has £10,000 worth of goods on his property. They insure his goods for £8,000 ; but afterwards they say to him, “ You took a £2,000 share in the risk.” Although he paid a premium on the value of £8,000, they deduct the value of £2,000 if the whole of the goods have been destroyed. It seems to me that this Bill is no improvement upon the laws of the States on this subject. I should like to see the Federal law of marine insurance made far plainer than is done in this Bill.
– I heard the Minister’s explanation in reference to the point I raised about excessive insurance, but I do not see that it is covered”, or, at “any rate, adequately covered, by this clause. What do the words “ the utmost good faith” imply? Do they imply that the insurer must accept without question any statement that the person insuring chooses to make? Suppose that the insurer refuses to have the utmost good faith in the person insured, or to accept in the utmost good faith any statement as to value or other circumstance which he puts forward in, his plea for insurance. Is tha’t to be taken to avoid a contract into which he has entered ? ;
– If one man says that the other has not exercised the utmost good faith, that will void the contract unless, of course, he goes to law.
– Surely .some proof of that should be required. No proof is provided for here. So far as I can read the clause, a man will only have to say that the other man has not observed the utmost good faith for the whole contract to be voided. The Minister has stated that this clause, taken in conjunction with clause 24, will cover the case of excessive insurance, where the insured person has taken out a policy obviously with the object of defrauding the company. But, after carefully reading the two clauses, I cannot see any provision to meet a case of that kind, and, if anything, clause 24 rather helps a person to carry out a fraudulent desire. I suggest that the Minister should carefully go through the clause again. I doubt very much whether many honorable members will be found ready to accept the view which he takes as to this clause covering the contingency I raise. Later on, unless he proposes to go into the question himself, and to reconstruct the clause »to meet a case of that kind, I propose to submit an amendment.
.- I can bear out the statements of the honorable member for Grey in regard to matters of fire insurance. I know of more than one case where the insurance company has taken the risk with no inspection - merely on an oral statement and plans and drawings. No inspection of either the property or the goods was made.
– Yes, But they did not pay up to the value.
– No. I move-
That the following words be added : “ but the insurer must satisfy himself of the existence of the bottom or goods or risk or value to be insured, and failing to do so must pay on the full value insured.”
The honorable member for Fawkner has reminded me of the case of a man who insured his wool at £15 per bale. When the vessel became a total loss, he put in a claim, but the company said, “Oh, the value of wool now is only £13 per bale,” and, although he paid the premium on a value of £15 per bale, he received only £13 from the insurer. There may be attempts made by interested persons to insure bottoms which practically do not exist. Of course, it would be a fraud to do such a thing; but the fact remains that it can be done. Once, when I was moving about a seaport town in England, I came across a number of old sea captains who had invested their savings in i-64th shares of various vessels. When I was walking down the street oneday with one of these men he met an old sea friend. After exchanging greetings one asked the other this question - “ Have you heard that the Mary Ann has blobbed?” “Oh, no,” was the reply, “ I did not hear that.” Both of them were smiling and looking very pleased at the idea that the Mary Ann had blobbed. Presently one said to the other - “I hope that nobody was lost.” “No,” replied the other, “nobody was lost,” both of them looking very happy indeed. Their i-64th shares had gone down on the coast of Norway, and they were delighted because the Mary Ann had been insured to her full value. My opinion is that the voyage was intended to be her last. Five holders of i-64th shares in the Mary Ann may have had full knowledge of that intention, but the remaining number might have had no such knowledge. I should like to know how the interests of. innocent shareholders in a ship are to be protected. They have no knowledge of the intention to blob the vessel.
– What does the term mean ?
– To “blob” means to become a total wreck. The term is well known to those who hold shares in vessels. I believe that blobbing has occurred in many parts of the world at various times. Every one knows that it is dishonest and should not be indulged in. Of course satisfaction is expressed when no lives have been lost, but there is always a possibility that lives may. be lost when blobbing is resorted to. There is another case which crops up. A majority of those persons who are interested in the business, and who are perfectly honest, have to suffer a loss because of the guilty knowledge of other parties. What has been done apparently in the past has been to give the insurer an amount of protection which is going rather beyond the mark, and the insured is the person who suffers. Suppose that a ship goes to sea with certain goods on board and blobs. When the goods are lying at the bottom of the ocean a man has no possible chance of proving anything which the insurer may dispute. We should protect an insured person against a company which might take advantage of him in that way.. In these circumstances,
I think that the Committee would be wise in accepting the amendment I have moved.
.- The clause now under discussion reads as follows -
A contract of marine insurance is a contract based on the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party.
If anything ought to satisfy the Committee that a good parliamentary draftsman is wanted, I think that this clause should.
– It was drafted by the best English parliamentary draftsman.
– It is a good clause to be referred to the High Court for interpretation, as most of our legislation has been. I do not agree with my honorable friend that the insurance companies are very lax in their methods. I have had a good deal of experience with them, and I am sure that they always institute the most careful inquiry before effecting the insurance of any property. The trouble is that, as a rule, they exhibit an indisposition to settle claims without a good deal of quibbling. I trust that the Government will agree to the excision of this clause.
– I also desire to see. this clause excised. The Bill follows closely upon the lines of the English Act, and no doubt the AttorneyGeneral can give the Committee some information as to the number of cases that have occurred under its operation. I have always protested against the use in Acts of Parliament of such words as “reasonable,” “wilful,” &c., because their employment frequently necessitates recourse to a Court. The Attorney-General ought to be in a position to tell us the number of cases which have come before the English Courts in connexion with the operation of the Imperial Act.
– I do not think that a single case has arisen under that Act. I could not discover one to-day. The Act was passed in December, 1906, so that it has been in operation about eighteen months.
Mr.Reid. - They have not come to understand ityet.
– I venture to say that it will never be understood until twenty Judges have given twenty conflicting decisions in regard to its provisions., That has been the experience under every Act which contains similar language. Why cannot we pass a Bill under which the assured will be able to insure his goods for so much, and the insurer will be able to say, “I am prepared to accept a risk to that amount unless’ I can prove the wilful destruction of the property insured “ ? The time has arrived when we ought to deprive insurance companies of the power to wriggle out of their obligations under all sorts ot excuses.
– The honorable member ought to support my amendment, which would have that effect.
– We ought to reduce insurance to a matter of simple contract under which the risk will be covered to the full extent.
– Will the honorable member move in that direction?
– I ‘shall vote to excise the whole clause.
– How many fires has the honorable member had? He seems to be speaking from a lot of experience.
– I have not had any, but some of my friends have. What is known as the “ average “ clause has been the cause of more trouble and loss than any other provision in our Insurance Acts. I have known of cases in which a large firm has had property insured to the extent of two- thirds of its value. When, however, the whole of the property was destroyed they were called upon to bear not merely the loss represented by that portion which was uninsured, but a portion of the risk over the whole of the stock. That, I contend, was grossly unjust. I do. not think it is necessary to retain this clause, because I believe that the sooner we abolish doubtful terms from Acts of Parliament the better it will be for all parties. If we compelled an insurance company to accept any risk the position would be quite different. But we do not, and consequently, if they accept a doubtful risk, and the property covered by it is destroyed, they ought to be made to pay the full amount of the claim. In the past I have had to pay exorbitant fire insurance premiums on account of my- premises being situated close to other premises which contained .inflammable materials.
– Clause 33 appears to provide for what the honorable member desires.
– If that be so, it is all the more reason why we should omit the clause under consideration.
– No, no.
– An assured person might have a clause inserted in his policy under which the insurer would be called ‘Upon to pay the total amount of the loss.
– If that be so, why not make the condition absolute?
– Surely even that sort of policy ought to be entered into in good faith.
– Good faith merely means that the insurer has to be satisfied. If he is satisfied he accepts the risk
– But suppose that he is satisfied as the result of false representations ?
Sitting suspended from 6.30 to 7-45 p.m.
– I am afraid the honorable member for Hindmarsh and the honorable member for Barker do not realize that clause 23 is the very basis of all insurance law, and has been most carefully drafted. The honorable member for Barker declared that it was an extraordinary piece of draftsmanship, but, as an actual fact, it was drafted by the most eminent draftsman in the British Empire. The honorable member took exception to the words “ utmost good faith,” and complained that nobody knew the meaning of the term. If any words are well known to the Judges, who have to interpret the law, those words, or the Latin phrase, uberrimae fidei - of which they are a translation - are. That phrase has been known for centuries. The provision means that when two parties are entering into a contract the insurer is bound to make the fullest, frankest, and most complete disclosure of every material circumstance which is likely to influence the mind of the insurer, and the insurer is similarly bound. That is the mutual obligation cast upon each part)’. This is a definition of good faith given by Lord Mansfield in an insurance case -
Good faith forbids either party, by concealing what he privately knows, to draw the other into a bargain from his ignorance of that fact and from his believing the contrary. The policy would be equally void against the underwriter if he concealed; as if he insured a ship on her voyage which he privately knew to be arrived, an action would lie to recover the premium.
The honorable member for Hindmarsh asked why we could not have a law framed in such a way that when a man insured for a certain sum he should be entitled to get that sum if he had paid his premium for it. The honorable member overlooks the fact that there are two forms of insurance policies, known as the valued and the unvalued. In one case, if the assured is afraid of not getting his £5°°> say, for goods on board a ship, he is entitled to go to the insurer and say, “ I want a con-‘ tract so made that if I insure for £500, and anything happens to the ship, I shall get that value.” That is a common policy, known to the law as a “ valued “ policy. The unvalued policy arises where the assured himself does not know the exact value of the goods. He has, in many instances, to leave it an open policy. He knows that certain goods are coming out by a certain boat. He says to the insurance company, “ I want to insure those goods; I do not know their value, but I want a policy to- cover them.” If, then, the goods are lost he has only to establish the amount of the loss he has sustained. There is no necessity to insert a provision such as is suggested by the honorable member for ‘ Hindmarsh, because the law, as declared by this Bill, already provides what the honorable member is seeking for. The honorable member for Lang urges that the assured might be guilty of fraud by not having “anything in the boat, or by excessively overvaluing what he has. In that case the insurer is entitled to call upon the plaintiff to prove value. The law is such that if the assured insures grossly over the value, he is guilty of concealment, is not keeping the “ utmost good faith “ with the company, and, in those circumstances, cannot recover. The company has the right to declare the contract void. ,
– Over-valuation is difficult of proof afterwards. .
– Many things are difficult of proof, but the assured may have to sustain his valuation in Court., The honorable member for Corangamite has moved an amendment which is practically the reverse of what the honorable member for Lang wants. It is often impossible for an insurer to satisfy himself of the facts set out in that amendment. The company can protect themselves if they like by checking the goods, but if they will not, it is not necessary to make provision in this Bill to compel them to do so. It often happens also that the goods are not in the country where the insurance is effected. I may send to England for goods to be despatched to Australia. I say to a company, “ I want a policy made out to cover my risk.” In that case, how could a provision such as the honorable member proposes be complied with, even if it were inserted? All that this Bill does is to declare the existing law. It has been examined on the one side by the shippers - the Chambers of Commerce - who are the persons concerned in the importation and insuring of goods, and on the other side by the insurance companies and underwriters, and they have certified that they are satisfied with this declaration of the law. All we ask is, that instead of those concerned having to hunt for the law, as is the case now, in perhaps two thousand reported decisions, they shall be in the satisfactory position of knowing that the whole law on the subject is contained in these few clauses. The Act has been accepted in other countries; it is a fair declaration of the law, and I ask the Committee not to agree to the amendment, but to allow this provision to pass.
.- I am inclined to support the amendment of the honorable member for Corangamite, because it supplies an obvious deficiency in the Bill, but it does not go far enough, and does not fully cover another contingency that I have in my mind. . If the Attorney-General had had some nautical experience, hie would know that both steamers and sailing vessels have been sent to sea which -were Known amongst sailors as “ coffin ships.”
– That was in the days when the world was wide.
– It is true also to a more limited extent of the present day. It is a popular fallacy to suppose that those days are past. The practice was rife, not only in England, but in other countries, and for all I know, may be rife to this day, of over-insuring, not only vessels, but supposed cargoes which never existed, and sending those vessels away to sea with their crews, although their owners had an understanding, either expressed or implied, with the captains that they did not expect to see the vessels back in port. Yet such vessels have been insured, and over-insured, and the insurance companies have taken the risks and insured cargoes which were never in the ships. I do not believe that that sort of thing obtains in Australia, and I am not prepared to say whether it obtains now to any large extent in older countries. But it was a matter of common talk in nautical circles that it had been the practice for many years in the Old Country, and had become a grave and disgraceful scandal.
– My experience of insurance companies is that they are well able to take care of themselves.
– I am thinking not so much of the insurance companies as of the unfortunate people who ‘ ‘ go down to the sea in ships.”
– Will this proposal remedy that state of things?
– The amendment will not alter it, but I propose to move a further amendment which I hope will cover cases of that kind. I was informed only last week by an. old master in the Australian coastal service that at present vessels are sailing out of Melbourne that ought not . only to be refused insurance, but ought never to be allowed to leave the harbor.
– Surely that is a matter for the Navigation Bill?
– Persons knowing little or nothing about shipping can, if they go about the port of Melbourne occasionally find vessels here whose unseaworthiness is obvious. Such persons could discover rottenness in the vital parts of those vessels, and could see that their gear is rotten.
– Such a state of things argues deficient inspection of shipping.
– The vessels to which the honorable member refers may not be insured.
– That may be so, or it may be otherwise. The harbor authorities are negligent of their duty if they allow such vessels to proceed to sea, or even out into the open bay, and the proposal which I am making would, if adopted, afford means by which, the danger of such neglect could be minimized, inasmuch as it would make such vessels uninsurable.
– Do not insurance companies have vessels surveyed before insuring them?
– Apparently, in the Old Country, the practice has been to let vessels go to sea without a special insurance survey. I cannot move my amendment until’ that before the Chair has been got rid of, and if the present amendment is negatived, I shall have to alter the word ing of mine. What I propose to move is to add the following words -
But, after the passing of this Act no vessel or cargo shall be insurable unless, after special survey by a duly qualified marine surveyor and valuer, such vessel carrying such cargo has be,en certified to be safe and seaworthy in every respect, and, if the vessel be a steamer supplied with a single propeller only, such vessel shall be uninsurable unless provision is made for sufficient sail or other auxiliary power to render her navigable in case of accident to the machinery.
It is within the knowledge of honorable members that the number of vessels which have broken down at sea of late years is alarming. Fortunately, in most cases the accidents have happened at some distance from land, and in waters not beset with reefs or other dangers to navigation. But such accidents might at any moment happen on a lee shore.
– That should be provided for in the Navigation Bill.
– There is no provision of the kind in the Navigation Bill, although I propose to move the insertion of such a provision in that Bill, unless the Government does so of its own volition. But such an amendment may, and probably will, be opposed by Ministers. We have an opportunity now to minimize the risk of accidents of this kind by making these vessels uninsurable. We must do, in the most effective way, what we have in view.
– What the honorable member proposes will not prevent the insuring of vessels.
– It will go a long way towards preventing it.
– There is nothing to prevent a life insurance company from insuring the life of a man obviously consumptive.’
– We know that insurance companies will, and do, take risks. I wish to prevent the loss of life by reason of the greed of gain on the part of insurance companies or ship-owners. Neither passengers nor crew have any remedy when a vessel goes down and their lives are lost ; and as I. wish to do what I can to prevent the employment of vessels which are not seaworthy, or supplied with means for tiding over a catastrophe.
– Provision is already made for the insurance of seamen.
– The Government should protect seamen as much as they can be protected by legislation. They themselves do not think much about these matters, and the nature of their calling makes them more careless of risks and dangers than is the case with landsmen.
– Under a contract of insurance a vessel must be seaworthy. That is always an implied condition.
– I have travelled in vessels certified to as seaworthy through whose plates I have been able to push a penknife. There should be an independent survey by a competent officer before a vessel is allowed to be insured.
– But the honorable member’s proposal should be discussed in connexion with the Navigation Bill.
– It should be discussed now, as it is a proposal relating to marine insurance; it can also be dealt with in connexion with the Navigation Bill, which at present does not contain any similar provision. Probably if I were to drop my proposal now, I should be told, when the. Navigation Bill was being discussed, that the proper time to deal with the matter was in connexion with this Bill. Vessels which -have broken their tail shafts have drifted about for weeks, and in some cases for months, before being picked up.
– Can the honorable member cite a case in which a vessel has drifted about for months?
– The Perthshire did so.
– She was drifting for eight weeks.
– I think the time was even longer. If vessels were provided with sail or other auxiliary power, they would not be helpless in the event of their tail shafts breaking.
– Could a 10,000-ton steamer spread enough sail to enable her to be navigated.
– No, not as at present rigged, because modern steamers are not provided with the necessary spars. But it is only of recent years that masts have been reduced to mere flag poles, and spars done away with. Now, however, vessels are sent to sea provided with a single propeller, and if the shaft breaks they are at the mercy of the wind and waves.
– Could not this matter be better provided for in the Navigation Bill ?
– We cannot be sure that we shall be able to provide for it in that Bill. It is not now provided for there.
– Does the honorable member wish his provision to apply to the insurance of oversea vessels, such as those of the White Star and Orient Companies?
– To all new vessels engaged in the Australian coastal trade, or registered in Australia. The steamers of the companies named are mostly provided with twin screws.
– Does the honorable member propose that all vessels having single propellers shall be uninsurable on any terms ?
-.- They should certainly not be insurable while engaged in trade on the coast. There may be reasons which would make it impracticable to apply legislation of the kind to vessels not registered in Australia. Only last week an old shipmaster of this port told me of a breakdown which happened on his vessel, in a gale of wind, when within a mile of a lee shore. Had not that vessel been provided with a twin screw, nothing could have prevented it from being dashed on the rocks, to the loss of every soul on board. Some honorable members will realize the enormous risk now taken every day only when there has been an appalling accident, coupled with immense loss of life. There is nothing to show that the loss of the Nemesis or the Albion was not due to the breaking of the propeller shaft. These and other vessels which have never been heard of again after leaving port may have been lost because of defective machinery, and we should do what we can, by preventing the insurance of such vessels, and in other ways, to safeguard human life and property. I give notice of my intention to move the amendment which I have read.
– It is evident, from the statement accompanying the Bill, that the Minister has followed the latest British legislation on marine insurance, and in doing so he has been quite justified. The legislation is recent, and those engaged in its consideration represented all parties to marine insurance contracts - insurance companies, owners of goods, shipowners, and shippers. It is highly desirable that our marine insurance law should accord with that of Great Britain, especially in view of the modernness of the British law, because Great Britain is the heart of the insurance business, not merely of the Empire, but of the world. Contracts of insurance overlap so much that it would be undesirable, unless absolutely necessary for some particular reason, to have two laws, one applicable to vessels while within our waters, and the other applicable to them when beyond the 3-mi’les limit. It would be almost impossible to effect some insurance contracts under such circumstances. The amendment of the honorable member for Corangamite has a good object, but I am afraid that it would entirely defeat its own purpose. One of the greatest protections against fraud, against the scuttling of vessels, and the destruction of cargo, is that the insurance company is not bound to pay the full amount for which the owner of the goods or of the ship may have insured them. The value has to be substantiated, and if we were to allow substantiation to be done away with, we should offer a premium for fraud
– I propose to throw the onus upon the insurance company.
– But it is utterly impossible for an insurance company to undertake that onus. In many cases, the insurance company would be located in Great Britain, and the ship or the goods insured would be at the other end of the world.
– The company may have an agent in this country.
– But the ship might be at sea when the policy has to be effected or renewed, and it would be quite impossible to do what the honorable member proposes.
– The company would be able to obtain evidence of the true value of the ship or goods before the voyage commenced.
– Of course, Lloyds register is kept, Lloyds agents are all over the world, and surveys of ships are made by Lloyds. The insurance companies take every precaution to ascertain that the risks that they undertake are reasonable and honest. But they are not bound by them even then. They may say, “ Since we had an opportunity of surveying this vessel, or of inspecting her cargo, something may have occurred to affect the risk. Consequently, we require you to prove loss to the amount that you claim, and for which you are insured.”
– But the companies take the full amount of the premium.
– Of course they do; but would it be desirable for us to limit the insurance of vessels or of cargo when at sea? Very often a policy expires while a vessel is at sea, and the owners of the ship may desire to reinsure. An insurance may have been effected for twelve months, and that period may “elapse whilst the vessel is at sea. It would surely not be right to make it impossible to insure the ship while beyond the possibility of making a close inspection. But if we were to provide that when a ship or cargo was insured at sea the company should pay the full amount of the insurance, apart from real value, in case of loss, there would be a temptation for the owner or captain to run the vessel into danger. There are many opportunities which can be seized to get rid of a ship or cargo. Again, a vessel might be insured for an amount that was not more than her value when she left Great Britain. She might cruise about the world for a couple of years, and at the end of that time be worth 50 per cent. less.
– Suppose a ship were loaded with stones, and it was reported that she was loaded with wool?
– According to the amendment, if a ship were loaded with stones, and the company did not know it, and believed that she was loaded with something more valuable - silver ore, for instance - it would, in .case of loss, have to pay the full value for which she was insured.
– That would be a fraud.
– It would be a fraud of a lesser degree to* load a vessel with other goods and put too high a value upon them. It is also a fraud when a vessel has deteriorated from her condition at the last inspection or survey to attempt to obtain the original insurance amount, which, when the loss took place, might be quite excessive. I do not speak as one interested in insurance companies.’ I am not. I have always been a policyholder, and have never been an insurer. But, in the interest of honesty, I say that it is highly desirable that when a loss takes place the insurance company should call upon the assured to satisfy it as to the amount of that loss.
– How could the owner satisfy the company if the goods were at the bottom of the sea?
– There are many ways of satisfying an insurance company. The owner of the goods can produce invoices from the port of shipment. Take the case of fire insurance. A property may be insured for a couple of thousand pounds. If it be destroyed by fire, the owner does not secure payment of the whole amount unless he prove that loss. The insurance is an indemnity against loss up to the amount insured for ; and the actual loss has to be proved.
– But the insurance company takes the higher premium?
-That may be, but it does not affect the point. Insurance companies average their premiums on results. It would be a most undesirable thing that a person should be able to insure a property for any amount, and then to claim the full amount in the event of fire, whatever the actual loss might be. The existing practice affords a safeguard that ought to be preserved.
– An insurance company could charge an owner with fraud if he did what the honorable member has described.
– It is quite right that persons should be liable to be charged with fraud for claiming more than the goods destroyed are worth.
– The companies would take all sorts of care that that practice was not permitted if they knew that they had to pay on the insured value of the property.
– I venture to say that there are many policies in the city of Melbourne to the value of £10,000 in cases where sometimes there are not £1,000 worth of goods in the building in question. The value of stock varies. Sometimes the value may be £20,000, and sometimes it may be far less than the amount for which it is insured. No man can insure his stock for its actual value, as it goes out and in from day to day. He insures for a’ rough amount, which will usually cover his risk. Sometimes the value of his goods may be much below the amount, and sometimes it may be much above. Should he then be allowed to claim for the full amount if a fire took place and the goods in stock were much lower in value than the amount for which they were insured?
– The honorable member mentions a class of case which would not represent 2½ per cent. of the insurances.
– I will guarantee that the greatest amount of goods insurances in Melbourne is represented by such policies as I have described. Almost every stock held in Melbourne is insured on that principle. The honorable member for Lang intends to propose an amendment which I agree with the Attorney-General should not be made in this Bill, and would also be absolutely useless. He does not wish vessels to be allowed to go to sea with a single propeller, unless provided with sufficient sail power to enable her to keep off a lee coast.. That would mean a gigantic sailing power in the case of large vessels. They could hardly carry the necessary canvas. But I will point out how the honorable member’s proposal would entirely fail to meet the case he has put. First of all, many steam-ship companies which own a number of vessels do their own insurance. The . amendment would affect none of those vessels. Secondly, if our own companies were prevented from insuring such ships, other companies would be ready to insure them. Of what advantage would it be to us to compel our own companies to refuse to insure, when it is absolutely impossible to prevent other companies from doing so ? We are not legislating for the world, and the less we legislate in a manner contrary to the insurance laws of other countries, the better. I therefore give the Attorney-General credit for trying to bring our insurance law into line with the most important insurance law in the world. That is the right course.
– Are we to take no steps to prevent life from being endangered?
– The honorable member would not effect what he desired if he carried this proposal. First, he would not touch a vessel insured by its owners - and most of the large steam-ship companies underwrite their own vessels, because, when they own a certain number, it pays them to do so - and secondly, his amendment would not affect the case of a vessel that was prevented from insuring with an Australian company, because other companies would take up the insurance, and would only be too ready to do so. The only result, in the latter instance, wouldbe the transference of the insurance.
– It is a shame that it should be so.
– We cannot help it. We cannot make laws for outside Australia, and this is not a Bill in whichanything of the kind should be attempted. I quite agree that every effort should be made to introduce the double propeller; but to say that vessels with a single propeller shall not sail the ocean, would be exceedingly drastic. Moreover, the owners might reply that their best security would be the erection of wireless telegraphy stations on our coasts.
-. - That would minimize the danger.
– Wireless telegraphy would provide a greater safeguard than the twin propeller. When a greater strain is thrown on the second propeller, owing to the breaking of one, there is a danger, when the vessel meets with rough weather, of the second propeller breaking also.
– There is not so much danger as there is with only a single propeller.
– I quite agree with the honorable member; but the greatest safeguard, in the case of vessels breaking down, would be to have wireless telegraphy stations established in the Pacific and along our coasts.
– There is a great security in the adoption of the twin screw.
– Some of these enormous steamers, if they had a clear run, might be able to sail under canvas, but it would not be sufficient to keep them off a lee shore.
– I regard this as the most important clause in the Bill. When we recollect that the object of the Bill is to bring our legislation into line with marine insurance legislation in other parts of the world, we must agree that the Government have acted wisely in not introducing any new experiments. I regard the honorable member for Corangamite as another example of th6 amateur business man seeking to engraft on an Act of Parliament some provision which has not been tried in any community_such as ours. I am glad to see the honorable member sitting in the Labour corner, because I suppose it means that he is apologizing for “ stealing the thunder” of the honorable member for Kalgoorlie. . The amendment would not only act detrimentally and prejudicially to established insurance companies, but would make the continuance of those companies an. absolute impossibility. The honorable member, as a protector of property, should be anxious to assist those capitalists who have invested their money in these companies in various parts of the world, instead of endeavouring to place a bomb shell at their foundations which would hurl them into financial ruin.
– Does the honorable member not think that the insured ought to have some consideration ?
– The honorable member will be able to deal with that matter when his precious bantling is before the House again; we are now dealing with quite a different matter. I can sympathize with the honorable member in the irritation he feels in having his claim invaded in this fashion by the honorable member for Corangamite. As I have said, it would be impossible for a company of any status to carry on business if it were compelled to observe the extraordinary conditions he seems anxious to impose. The fact that a vessel must necessarily move from place to place, puts it in an altogether different category from that of goods, buildings, and other fixed risks, which can be kept under observation ; and a company which” endeavoured to carry on business under such conditions as are imposed by the proposed amendment would be courting disaster. A vessel has to go from port to port, and the goods are not only changing, as the honorable member for North Sydney pointed out. but are liable to alteration in almost every particular ; and yet the honorable- member for Corangamite desires to compel the insurer, who would probably be located in another part of the world, to prove the absence or decrease of the value of either ship or goods, if he proposed to ,pay less than was claimed. To insert such a provision would be to offer a premium on fraud, holding out an inducement to the dishonest trader to try to “get at” the ordinary business man in a fashion we have not witnessed in modern times. Considering the quarter from whence the proposal comes, I am struck with, amazement that the honorable member should have had the temerity to submit it. In fact, after the honorable member for North Sydney resumed his seat, I waited quite an appreciable time - although I was anxious to say a word or two - in order that the honorable member for Corangamite might have an opportunity to withdraw a proposal which I am sure he must realize by now is ill-advised, and, if persisted in, will stamp him as belonging to a party such as he a little while ago described the Ministerial party to be.
Mr. FAIRBAIRN (Fawkner) (8.36].. - On consideration, I think that the honorable member for Corangamite had better withdraw the amendment.
– Why, the honorable member helped to draft it !
– I do not know what the honorable member means by that, but what “ drafting “ there is has been most extraordinary. If the honorable member persists with the amendment, and it by any accident finds a place in the Bill, it will throw on the insurance companies the responsibility of examining all goods; and that will mean much expense and consequent extra charges on those who insure, because insurance companies are business concerns whose object is to make money. I am not defending the companies, because, like the honorable member for North Sydney, I have always been on the other side of the ledger as a policy-holder. As the honorable member for North Sydney said, a man may ship stones and insure them at the market value of silver. If, in every case, the onus of ascertaining the true value is thrown on the companies, it will necessitate the employment of a whole army of inspectors. At present insurance is effected on the perfect good faith of the shipper; and if the door is opened to the class of fraud which the amendment suggests we do not know where the mischief will stop. We might have a “ ring” loading a vessel with empty cases, and bribing the captain to run it ashore. I agree, however, with a number of honorable members, including the honorable member for Corangamite, that in the drafting of such measures as this there is employed antiquated and extraordinary phraseology, which it is almost impossible for a layman to understand.
– To what is the honorable member referring?
– I am referring to the marginal note ; and I. say that if the Minister understands it, he is the only man in the House who does. If the Minister desires to make his name famous he will endeavour to have the provisions in the Bills he introduces put into simple language, which an ordinary member can understand. If he did so he would confer a boon on the community.
– I am pleased to know that the honorable member for Corangamite has joined the school, which, for some time past, has been endeavouring to give legislative force to the just request of people that when they insure they shall receive, in the event of total loss, the amounts on which they pay premiums.
– Do you think that the honorable member for Corangamite requires educating?
– If he does, he need not look to the honorable member for Laanecoorie, but to other sections of the House. At any rate, the proposed amendment seems to indicate that the honorable member for Corangamite is improving in his knowledge on the question of insurance. The honorable member for Laanecoorie has adopted an attitude of solicitude for the interests of the great and powerful insurance companies as opposed to the interests of those who of necessity have to transact business with them. The honorable member declares that, if we pass legislation compelling the companies to pay the amounts they undertake to pay on the face of the policy, they, will be subject to fraud and deception. Although others have indicated a similar trend of thought, none have been so frank as the honorable member in advocating the interests of the companies ; and it is well that those who have to do insurance business of any kind should know where the honorable member’s sympathy lies - that it lies with those companies who have in the past been able to practice deception in so many cases.
– Does the honorable member think that that is justified?
– From the honorable member’s remarks, I do.
– Then the honorable member ought to go to school - Sunday school !
– At any rate, I have no “desire to join the school of the honorable member, who is so solicitous on behalf of the great and powerful insurance companies. The honorable member seems to think that the principle of paying the face value of a policy is unknown in the insurance world.
– I never mentioned the matter.
– I believe, from that remark, that if the honorable member were asked, half-an-hour Later, he would be prepared to dispute the fact that he had made a speech at all !
– Paying on the face value of a policy is known in fire insurance in some of the States of America, but the companies are abandoning it one by one.
– Has the honorable gentleman the figures?
– I have figures here, but they relate to fire insurance.
– If it is a good principle as applied to fire insurance, unless special reasons to the contrary are shown, it should be applied also to marine insurance. As affecting fire insurance, I believe that this principle is adopted in seventeen of the United States of America, and Justices of the Supreme Court of the United States have intimated that it is the only safeguard which the assured has to enable him to secure equitable treatment from the powerful insurancecompanies of that country. I take the case of a man sending a few bales of wool to the Old Country. He insures his consignment for £100 ; the marine insurance office accepts the risk, and they exact a premium which, based upon their experience in the past, they believe will insure a profit in the transaction of the business. The ship goes to sea and possibly is wrecked, and the assured has then the responsibility thrown upon him of proving that at the time the ship went to the bottom his wool was on board and was worth £100.
– If his goods are not worth 6d., why should he insure them for1s. ?
– If they are worth only 6d., why does the company accept a premium based on a valuation of1s. ?
– They cannot inspect all the goods insured.
– Does the honorable member believe that insurance companies accept these risks without adopting reasonable precautions to discover whether a fair valuation is placed on the goods insured?
– Many of them do.
– If the contention is that the insurance companies deliberately encourage a man to over-value his goods, knowing that in case of loss they do not intend to pay the face value, that is only another way of saying that they are obtaining money under false pretences.
– Insurance has been effected upon cargoes that have never been in the ships’ insured.
– And ships have been insured that they might be sunk.
– The honorable member for Lang, in suggesting that insurances have been effected in order that money may be claimed for the loss of goods that never were in existence, is paying but a poor compliment to the business ability of the people managing insurance firms throughout Australia.
– That may be so, but what I say is a well-established fact.
– I am not going to say that a box of candles may not be missing from a particular insured consignment, but if the practice referred to by the honorable member for Lang was carried on to any considerable extent, does he think that these insurance companies would have become, as they are, the most powerful financial institutions we have in Australia at the present time?
– It has been a common practice in the Old Country.
– I have no doubt that if the honorable member drew sufficiently upon his imagination, he could mention a case which it would be impossible to frame legislation to deal with ; but I say that in the great majority of cases, insurance companies take care that the goods which they insure are of the value placed upon them, and are shipped under conditions which reasonably insure their safe transport to their destination. I am at a loss to understand the extreme anxiety displayed to protect these powerful institutions against the assured, who have so often to fight them for their money.
– Why should other and more powerful companies get more than their goods are worth ?
– I do not think that they should get more than their goods are worth.If we enforce the payment of the face value of a policy, the insurance companies will take all sorts of care that the goods are worth what they are valued at, and are shipped under reasonably safe conditions.
– That is all that the amendment provides for.
– I agree with the honorable member, and I am in sympathy with his amendment.
– If it is carried the shippers will say: “ Save us from our friends. ‘ ‘
– I do not think that they will say anything of the kind. I was describing, when interrupted, the position of a man who insures a few balesof wool for £100 in a ship that is subsequently lost. The insuring company may say : “ There was fluctuation in the value of your goods. When they were lost, they were not worth as much as when we accepted the risk of £100 upon them. We offer you £75 without prejudice.” If the assured does not accept that offer, he has to show that the goods lost when the ship went to the bottom were worth £100, and to prove to the satisfaction of the company and, it may be, of a Court, that all the conditions surrounding their shipment were complied with. He may have to light the case not only in the Courts of the Commonwealth, but before the Privy Council. In the great majority of cases, therefore, the assured decides that it is better to accept less than the insurance company undertook to pay, and get a settlement, than to incur the risk and expense of fighting the company. It is by profits made in this way that these insurance companies have reached the position to which they have attained at “ the present time. I agree entirely with the amendment. If people undertake an obligation, and accept premiums based upon a certain valuation of the goods insured, they should be compelled to pay. what they have agreed to pay. I. believe that the amendment would give the assured less trouble and greater security than he is given under the existing insurance law, and would impose no unreasonable conditions against the insurer.
.- Any one who has had legal’ training will agree that it is impossible for the AttorneyGeneral to accept any of . the amendments which have been suggested. The honorable gentleman must stand or fall by the clause as printed. The amendments, if adopted, would make a serious inroad on the principles upon which the clause is founded. I believe that the honorable member for Corangamite means well in submitting his amendment. The honorable member is thinking of the safety of the crews of vessels, and desires to protect them from the operations of dishonest owners who may have insured their ships after an understanding with the masters that they should be wrecked. To provide that the insurer must pay the full face value of the policy would be to make a very serious departure from one of the wellknown principles of insurance law, that insurance contracts are contracts of indemnity - that is to say, that no matter what value you insure for, you are paid according to the amount of your loss. The honorable member for Kalgoorlie charges insurance companies with fleecing the as sured by paying them less than the amounts for which they have insured their goods. That is the exception, and not the rule.
– Is the honorable member aware that in 1905 the total losses throughout Australia amounted to £750,000, and when the balance-sheets of the various companies were issued claims amounting to no less than £300,000 remained unsettled?
– If the total losses amounted to £750,000, and claims amounting to only £300,000 remained unsettled, I should not say that that established the practice to - which the honorable member has referred as the rule. , The principal insurance companies are always ready to settle claims fully if the assured are able to show that there has been no fraud.
– I ask the honorable, member to contrast the figures I have just referred to with those of the New Zealand State Office, which show that of total losses of £16,000 claims amounting to only £300 remained unsettled when the balance-sheet was issued.
– Does the New Zealand State Office pay the face value of the policy ?
– No, it does not.
– What the honorable member says may be correct, but he should remember that the New Zealand State Office carries on business in accordance with established principles.
– But they show an anxiety to pay, whereas the private companies show an anxiety not to pay.
– Some companies may be slower in paying than others, but the- majority of insurance companies in Australia from my experience pay promptly when they are satisfied that the claims made upon them- are just. I am sure that the honorable member for Lang must see that it would never do at this stage to insert such an amendment as he has foreshadowed. The honorable member is rightly anxious that crews should not be shipped in vessels, that are not seaworthy, but this is not the Bill in which to deal with such a matter. Perhaps the Attorney-General will take a note of what the honorable member for Lang has said, and when the Navigation Bill is before us see that provision is made to meet the honorable member’s objection.
– I undertake to say that he will do nothing of the sort.
– I hope that he will.
– I shall give . the honorable member a hand.
– I can well understand that what the honorable member for Corangamite has in mind is, that the lives of a ship’s crew might be endangered by the action of a dishonest owner who might over-insure his vessel with the intention that she should be lost. The amendment, however, would scarcely be practicable. I do not think that it would be wise to alter the present law, on which a long line of cases has been built up, or the established method of transacting this class of business. Such a change as is proposed by the honorable member would make it impossible for the insurance companies to charge anything like reasonable premiums. If the proposal made by the honorable member for Kalgoorlie were accepted, not only would ordinary business principles be overturned,* but the door would be opened to frauds of all kinds. A premium would be offered to men to insure their property for as much as possible, if we decided that the insurer should either prove that the assured had not sustained the Joss that he claimed, or else pay up the amount of the policy. Premiums would have to be considerably increased; valuations’ that are not made now would have to be made, and altogether, insurance would become too expensive for the general mercantile community.
– I suppose that is why fifteen or sixteen of the States of America have adopted the system I advocate?
– I do not know. much about the American practice, but I see no evidence of such a system being in force in any part of the British Empire. This is a wise provision. The Bill is simply an adaptation- of the English Act, and until some parts of the British Empire show a disposition to depart from the well-known practices of marine insurance, we may well allow the value of the American experiments to be tested before we adopt them.
.- The honorable member for North Sydney, with his usual practical turn of mind, has shown how disadvantageous would be the amendment proposed by the honorable member for Corangamite. It is recognised that in connexion with all insurance contracts, there must be good faith on both sides ; and this clause is simply a transcript of the provision in the English Act. Surely the Select Committee appointed by the House of Commons, knowing that the whole trade and commerce of the Empire was involved, would not have proposed such a provision if it had not felt that it would be in the best interests of shippers, as well as of insurance companies. Like the honorable member for Fawkner, and the honorable member for North Sydney, I am interested in this question as one who has insured against risk. I am also interested as- a director of one of the marine insurance companies doing business here, and I must say that even if it were absolutely correct, as the honorable member for Kalgoorlie has asserted, that at a certain period the unsettled claims of insurance companies doing business here amounted to £300,000, that would represent only a very small proportion of the value of insurances effected upon our oversea and coastal risks.
– It would be impossible for a company to close its financial year without having some unsettled claims.
– That was the point I was about to make. It would be impossible for the directors of a company to say at any one stated period, “All claims are settled.”
– Does not the honorable member think that it is pretty stiff to have unsettled claims amounting to £300,000 out of a total of £750,000?
– No. An ..insurance company could not draw a hard-and-fast line, and. say at any given period that all claims against it were settled. Much must depend upon the good faith of both parties to an insurance contract. As those who are accustomed to large business transactions know, all insurance companies undertake risks under what are called open policies. In that connexion good faith is necessary, and the insurance companies receive from the persons insured a statement of, not only the quantity, but the value of the wool or other produce insured. Those who make single insurances are supported in their applications by their bills of lading, which indicate in some cases the value, and in all cases the quantity, of goods insured. The insurer, therefore, is fully and thoroughly protected. Although the Committee should hear any objections that might be raised to the Bill, I would point out that it has been thoroughly and carefully considered by the AttorneyGeneral. I know that he has taken the evidence, not only of shippers and insurers, but of those representing mercantile bodies, and I think that it would be a great misfortune if we dislocated any part of this very important consolidating measure by making such an amendment as that proposed by the honorable member for Corangamite. My experience and knowledge of the business of a large insurance company convince me that it is an exceedingly rare occurrence for any one who takes out a direct or an open policy to have any difficulty with any of the companies doing business in Australia. The reputation of the English and Australian companies is of such’ a character that any infringement on their part of the good faith referred to in this clause would strike a very serious blow at them. I therefore appeal to the honorable member not to press his amendment. It would place insurers and insured here in a different position altogether from that occupied by the same body of men in Great Britain. Shipments may be made from Great Britain to Australia, and covered by insurance here, while shipments may be made here for Great Britain and covered by insurance there. It is most important that we should have a uniform practice, in order that our commerce may not be placed in a false position. The English Act, on which this Bill is based, is -regarded as a monumental work, and I trust that the homogeneity of the Bill will not be interfered with by. an amendment relating to such a vital point as is involved in this clause.
– I cannot quite recognise the application of the amendment to the clause at present before the Committee. I do not deny that we may insert an amendment wherever we please, but we should endeavour to maintain some little connexion between the new matter introduced and the matter covered by each clause.
– Where would the honorable member insert this amendment?
– If it is desirable to insert it, it should be introduced as a new clause. There may .be something in the contention of the honorable member for Kalgoorlie as to insurance companies refusing to satisfy claims made upon them; but I am bound to say that that is not my experience. I worked for some time in an insurance company’s office, and generally found that the directors regarded it as an excellent advertisement to pay up quickly, and as a very bad one to go to law. That, I think, is the position taken up by most companies, although there may be some that require to be watched. I am prepared, when my honorable friend proceeds with his Bill relating to fire insurance, to hear a case made out for requiring insurance companies to pay on the face value of their policies; but much that can be said for the application of that principle to ordinary fire insurance business cannot be said for its application to marine insurance. I do not think it would be found workable in the latter connexion. It would be impossible for insurers to satisfy themselves of the existence or value of that which they were going to insure.
– The insurance companies have the bills of. lading to start with.
– Bills of lading are not conclusive. If, for instance, a man had in his possession a bill of lading for some goods on the Loch Lomond, which started for New Zealand some time ago, and has not since been heard of, it would not be much evidence of the existence or of the value of the goods to which it related at the present time.
– How is the assured to’ prove his loss?
– Would the honorable member prefer to throw the responsibility, upon the man who had special knowledge as to whether the goods were sent or not?
– I should prefer to do so in those circumstances. Surely the person whose servants handled the goods and put them on the ship would be in a better position to bring direct evidence as to their shipment and value than the other person who could have no knowledge on the subject ?
– He could not produce any evidence.
– He could produce the evidence of his servant who put the goods on the ship.
– He could produce the bill of lading.
– Yes ; and he could produce further evidence.
– How could he prove the value of the goods when they were lying at the bottom of the ocean ?
– He could give the value of the goods at the bottom of the ocean.
– He would get the bill of lading before the goods got to the bottom of the ocean.
– Yes ; he would be the only man who could give evidence as to the shipment and value. . As claims are only made in one case out of a hundred, or perhaps two hundred, . what is the use of requiring strict proof of every shipment when the question would not come up again? It seems to me that such a provision would merely hamper business. To a very large extent, it would have the effect of increasing the rates if the companies wanted to carry on as commercial, and not as philanthropic, concerns. In these circumstances, I think the Committee will be acting wisely in rejecting the amendment.
– There are two views which can be taken of the Bill. Its object is to codify the law of marine insurance. At the present time, marine insurance is carried on in New South Wales under the common law, which has been established by legal decisions for the last 500 years. This was the same in England until the codifying measure, which this Bill proposes to enact for the Commonwealth, was originated in the House of Lords. It took six or seven years to get the Bill passed, and it was subjected to the most careful scrutiny, not only on behalf of insurance companies, but also on behalf of shippers. When an amendment of this description is submitted, we have to ask ourselves whether we should introduce new legislation into a measure which merely codifies the existing law. To my mind, that is not desirable. Although amendments might be introduced which would perhaps have the effect of improving the law, still I am not sure that this is the kind of Bill in which they ought to be made, more especially as it seeks to bring our law into harmony with the law of the Old Country. I think I am safe in saying that what applies to New South Wales as regards acting under the old common law applies to the other States.Iobserve in the amendments which the AttorneyGeneral has circulated that he proposes to repeal a recent Act of the Western Australia Parliament with which I am not acquainted.
– It merely re-enacts the Imperial Act.
– I think that it would be very dangerous to make the proposed amendment. Whatever may be said by the honorable member for Kalgoorlie in reference to fire insurance cannot apply to the same extent to marine insurance.
– It applies tenfold more strongly.
– The honorable member may think so. But may I remind him, for instance, that a marine insurance is often a time insurance, and that when a new policy is taken out the ship may be on the high seas, and that it would be absolutely impossible for the insurer to ascertain where she was on the high seas or whether the goods were in her hold. The proof must rest with the assured, and not with the insurer. With reference to the case of wool which the honorable member quoted, clause 33 provides for a valued policy, and he must know that, as regards wool insurance, a valued policy is the one which is nearly always taken out. It is a matter of common knowledge that wool is practically worth its value at the port of shipment to any bank, and that any responsible firm having wool for shipment can borrow from a bank the full amount of its value, less the discount. The bank must have a covering insurance, and so it takes out a valued policy, and by that means protects itself. It is optional with the assured whether he shall be protected in that way or take out an unvalued insurance policy. It introduces much more complication to enact a provision of this kind in reference to marine policies than it does in reference to fire policies, because it is not very often that one can ascertain the exact value of the goods shipped.
– If a man cannot ascertain the value of the goods then, how could he do so when they were at the bottom of the ocean’?
– If this amendment were passed it would put upon the insurance companies the onus of ascertaining that every package which was included in a marine policy was put on the boat for which it was insured. That would mean a tremendous increase in the expense of insurance.
– Is not all that stated on the bills of lading now?
– That is not conclusive proof that the goods were shipped.
– According to the honorable member’s argument, the assured has to start after the vessel has been lost to prove that the goods were shipped.
– No. My argument is the same as that of the honorable member for Werriwa, namely, that the proof of shipment is with the assured, and not with the insurer. If the honorable member were to insure ten bales of wool from Melbourne to England the proof that it was put on the ship would” not be with the insurance company, but with himself, who, through the medium of his carter, could show whether it was put on board or not. To place the onus of proof on the insurer would be to increase the cost of insurance materially and to work harm to the very people whom the honorable member wants to benefit.
– It pure speculation to say that it would increase the cost.
– It must increase the cost of insurance, because the companies would not carry on their business at a loss.
– Does the honorable member think that a company would insure an article which did not exist?
– No. But I think that if the honorable member wanted to insure any goods the insurance companies would probably take his word that they were put on board.
– If they would be pre pared to take his word then they ought to take his word afterwards, or see that his representation was right before they insured his goods.
– They would need to keep an army of inspectors to find out if goods were shipped or not !
– Suppose, for instance, that so many bags of iron or tin ore were insured, under this proposal, unless the insurance company were prepared to open every bag and see that the ore was in it, they would not be in a position to take the risk. On the other hand, supposing that the company allowed the ore to go on board the vessel, and afterwards found out that a fraud had been worked?
– They would have their remedy at law.
– No. They would have to pay the face value of the policy, although they could prove that a fraud had been worked.
– Why should they not, if they neglected to assure themselves of that at the time?
– One very simple answer to that inquiry is that if such a provision were ‘ embodied in our law, shippers would probably insure, not with Australian companies, but with British companies.
– The old bogy of driving capital out of the country.
– It is no bogy. In these interjections, honorable members are only dealing with the simplest form of policy for goods just shipped. I have pointed out that, owing to its variety of operations, marine insurance covers much wider ground than that ; and even if it were possible, without causing a great increase of expense, to carry this idea out in the case of a simple policy, as mentioned by the honorable member, it could not be done in the case of the more complicated policies - policies effected after the expiry of a time limit, while the bottom was at sea ; policies for goods in a bottom, or the reinsurance of missing ships. The additional proposal of the honorable member for Lang is a proper one for consideration in connexion with the Navigation Bill. I do not think that it should find a place in a measure of this description. If it were carried, it would simply mean that threefourths of the boats coming into Sydney or Melbourne would not be insurable at all.
– But it is only to apply to vessels built after the passing of the Act.
– It might be very desirable to enact that all boats coming into our ports should have twin propellers but the proper measure in which to embody that provision is the Navigation Bill. I trust that the amendment will not be carried.
.- The < attitude of the honorable member for Kooyong towards this Bill has been most peculiar. He has just described it as a perfectly drafted and most desirable measure, and, in fact, could not find sufficient superlatives to express his admiration for it. Yet to him is chiefly’ due the delay which the debate of the last few hours has occasioned. Had he not, earlier in the afternoon, spoken of the seriousness of the measure, and the need for its careful consideration by a full attendance of honorable members, even to the extent of calling attention to the state of the House and having the bells rung, the honorable member for Parramatta would not have attempted to move the Chairman out of the chair to secure a postponement. The honorable member for Kooyong, although responsible for what was done then, walked out of the Chamber, saying that he would not vote for the motion, and he has not yet given us the advantage of his opinions on this clause in detail. When all was smooth sailing, everything going as merrily as a marriage bell, he precipitated a debate which has lasted for some hours, and now he tells us that the Bill is all that it should be. I cannot understand his inconsistent vagaries. I have listened carefully to the criticism of my proposal for amending the amendment of the honorable member foi Corangamite. The honorable member for North Sydney, with whom the AttorneyGeneral is in accord in the matter, has stated that what I wish to do could be done more properly and effectively in connexion with the Navigation Bill. He also pointed out that many steamers nowadays are of such unwieldly proportions, and so large, that it would be out of the question to provide them with sails for beating off a lee shore. I would remind him, however, that there are afloat sailing vessels of some thousands of tons burden which rely wholly on their sails. Besides, I spoke of “ sails or other auxiliary power,” having in mind the possibility of some invention which might supersede both steam and sail power. The honorable member for North Sydney said that the danger which I spoke about could be lessened by the establishment of wireless telegraph stations, with which ships could communicate either directly, or, if too far away from land, through other vessels. Wireless telegraphy would be of great service to a vessel which had broken down far out at sea, but it might be useless to a vessel caught on a lee shore in a gale, when moments are precious, and the question of destruction is a matter of minutes only, as is usual in such cases. A steamer going from Sydney to Melbourne, or from Melbourne to Adelaide, might, when in proximity to a lee shore, break her tail shaft, and become unmanageable.
– Could not tugs be telegraphed for?
– It might take a tug several hours, or a day, to reach her, while the interval between safety and destruction might be only half-an-hour - just sufficient, were she provided with sails or other motive power, to enable the crew to work her into a position of safety. In any case they would have only a chance, but it would be a chance of which they should not be deprived. The honorable member for Nepean supported these arguments. The Attorney-General took the position that my proposition would be dealt with more effectively and more properly in connexion with the Navigation Bill, and I therefore ask him if he will introduce into that Bill a provision to meet cases such as I speak of.
– I .should like to know exactly what is proposed.
– Will the honorable and learned gentleman favorably consider, if he does not himself propose, an amendment’ of the Navigation Bill for minimizing the risk of loss of life and property, through accidents such as I have spoken of ?
– That turns on the question, What is seaworthiness ? which, so far as we have jurisdiction, is dealt with in the Navigation Bill.
– No provision of the kind I desire occurs in the Navigation Bill.
– How far would the honorable member’s proposal apply ?
– To all vessels built after the passing of this measure.
– Would it apply to foreign vessels ?
– So far as we have free jurisdiction over them as traders in our coastal waters.
– The honorable member must recollect that the Imperial Conference agreed to the adoption of a particular course.
– I know that our action would necessarily have to be limited by whatever decisions were arrived at by that gathering. The honorable member for North Sydney has raised a point - .which was also referred to by the honorable member for Nepean - and which is well worthy of our consideration, as, indeed, are all the points raised by him, because they are the result of mature thought and wide experience. He has suggested that an amendment such as that which I have outlined would probably be found to be impracticable, because British insurance companies would not be bound by such legislation and would take the risks. I realize the possibility of that being .the case, and, under the circumstances, do not intend to press the amendment. I will, however, endeavour to introduce some such provision in the Navigation Bill, with a view to guarding against the disasters which I have indicated.
.- My sympathies are largely in accord with the views which have been expressed by the honorable member for Hindmarsh. I cannot understand why our laws are not couched in language which will render them intelligible to the average layman. The clause under consideration has led to litigation.
– To what litigation does the honorable member refer?
– The fact that it has been adjudicated upon is evidence that it has formed the subject of litigation.
– But the Judges have declared what is the law upon the subject.
– The expression “ good faith “ is simple enough, but when used in a Bill of this kind, it becomes full of difficulties. In connexion with half-a-dozen clauses in the measure we have to find out what is meant by “ good faith.”
– That is so. The next clause stipulates various matters which the insurer must put before the insured. ‘ If the Attorney-General wishes to earn lasting fame for himself, he will employ commonsense and every-day phraseology in the Bills which he introduces.
– He has done -that in all cases, and has gone down every time.
– Unfortunately, he belongs to the legal profession. This clause reads -
A contract of marine insurance is a contract based upon the utmost good faith, and, if the utmost good faith be not observed by either party, the contract may be avoided by the other party.
Why not put this provision into plain English, which will be understood by everybody, by declaring -
A contract of marine insurance is a contract based upon the value agreed upon between both parties to the contract.
– That would make it as simple as could be !
– At all events, it would prevent persons from paying insurance premiums upon amounts which they are never likely to receive in case they sustain loss.
– But they do not need to insure for a sum in excess of the value of the goods.
– The insurance companies really accept premiums under false pretences, inasmuch as they never intend, in case of loss, to pay the full values of the policies.
– Unfortunately, that statement is true in regard to fire insurance.
– It is very much easier to prove a loss sustained by fire than a loss sustained on the ocean.
– I would rather undertake to prove the value of a consignment of goods before they were shipped than to establish their value after they had been lost at sea.
– If the honorable member were a regular shipper he would not. It is quite enoughto prove their value in one case in a thousand.
– It appears to me that the matter is very much one of usage. Shippers have grown accustomed to this crude and inequitable system which has been carried on from year to year. If we can improve upon it, we shall be rendering the community good service. Clause 33 states that a policy may be either valued or unvalued. If we amend the clause now under consideration - which conflicts with clause 33 - by providing that every policy shall be valued, we shall at least secure certainty as to what is contained in the contract in place of the uncertainty which is the dominant feature of the unvalued policy. There is no reason why we should cling to the old system, which,in practice, has proved to be utterly unworkable and inequitable.
Question - That the words proposed to be added be so added (Dr. Wilson’s amendment) - put. The Committee divided.
Majority … … 11
Question so resolved in the negative.
Question - That the clause be agreed to - put. The Committee divided.
Majority …… 12
Question so resolved in the affirmative.
Clause agreed to.
Clause 24 -
Subject to the provisions of this sec tion, the assured must disclose to the insurer, before the contract is concluded, every material circumstance which is known to the assured, and the assured is deemed to know every circumstance which, in the ordinary course of business, ought to be known by him. If the assured fails to make such disclosure, the insurer may avoid the contract. (2.) Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium, or determining whether he will take the risk. (3.) In the. absence of inquiry the following circumstances need not bedisclosed, namely : -
Any circumstance which diminishes the risk ;
Any circumstance which is known or presumed to be known to the insurer. The insurer is presumed to know matters of common notoriety or knowledge, and matters which an insurer in the ordinary course of his business, as such, ought to know ;
Any circumstance as to which information is waived by the insurer ;
Any circumstance which it is superfluous to disclose by reason of any express or implied warranty. (4.) Whether any particular circumstance, which is not disclosed, be material or not is, in each case, a question of fact. (5.) The term “circumstance” includes any communication made to, or information received by, the assured.
.- Can the Attorney-General favour the Committee with an explanation of this clause, or of some of the terms used in it? Certain of the terms appear to me to require explanation. For instance, can the honorable gentleman tell us what a “ prudent insurer “ is?
– The honorable member for Adelaide will realize that in many instances it is impossible to define exactly what does or does not constitute a prudent policy to adopt, or a prudent course of action ; but there are certain facts which have to be left to jurors or Judges to determine under the circumstances. This clause attempts to summarize the case law upon the subject of what should be disclosed to the insurer by the person who is assured. For instance, he must disclose to the insurer every material circumstance ; but what is or is not material must depend upon the circumstances of each case.
– The clause assumes that the person assuring knows everything.
– He is presumed to know every circumstance which in the ordinary course of business ought to be known by him. That is to say, in the course of his business there are certain facts which he must be presumed to know from the very nature of his occupation.
– In the “ utmost good faith,” he may not know them.
– There are certain things which it is thrown upon him as a duty to know. If a man enters into a contract, it is assumed that he knows of the things material to the making of that contract. We must throw some obligation upon him in that respect. This clause is simply a declaration of the law as it is at present.
.- I think that the honorable member for Adelaide has asked a pertinent question. A number of expressions are used in this clause which it seems to me - with very great respect to the marvellous draftsmanship that has attracted the admiration of the honorable member for Kooyong - are very strange. This expression “ prudent insurer “ is one of the strangest of them. We are dealing with circumstances which are supposed to be disclosed by the assured to the insurer. I think that the use of the word “prudent” is absolutely idle. It introduces an element of discord and difficulty. For instance, an insurer might be shown to have insured during the previous twelve months ships which had gone down, and in respect of which he had had to pay on the policies. It might be raised against him that these losses proved him to be an imprudent insurer. The word “prudent” is unnecessary. The question whether the man who is risking his money is prudent or not is absolutely immaterial. He may have lost sums on the turf a week before, or he may have proved himself an unreliable member of society. The law is not determined in that way, but by the acceptance of a duty on the part of the insurer with reference to the assured without raising any issues as to prudence or imprudence. Suppose the case of a very young gentleman who has taken to the insurance business, and has had no experience at all. Would .there be a different standard of duty on the part of this young insurer than on the part of some seasoned old salt who had been on the Exchange for 100 years? I suggest that the word “ prudent “ is absolutely unnecessary. The standard must not be one having reference to the judgment of individual persons, but must be a standard of duty from one man to another - from the person to be insured to the person insuring - without any question as to prudence. Surely the utmost good faith is to be shown to the young gentleman who has just taken to the business, just as to a more prudent or experienced man who has been longer in it.
.- If the word “ prudent,” as used in this clause, had not a legal significance, I should be inclined to adopt the view of the right honorable member who has just resumed his seat. But I understand that the term “ prudent insurer “ has a legal significance, and that it is taken from the English Act. However difficult of interpretation a phrase may be to us, when it has a legal significance and the interpretation of it is easily understood in ordinary every-day affairs, we should not interfere with it. One may not be able at once to .say what is meant by a mere phrase. Looking, for instance, at the honorable member for Adelaide, who would take it that he came within the comprehension “Socialistic Labour”? Or who, watching proceedings in this Chamber during the last few years, would take it that the few gentlemen who have with such graceful tenacity been occupying the Treasury bench, properly come within the definition of “a Government”? Where we have a definite legal sense attached to any term, and it is quite clear what thai terra means, and where, moreover/ the phrase is copied from the British Act upon which insurance legal decisions are based, we should be wise in standing by it. Therefore, I suggest that the Attorney-General should show that backbone for which he is so famous, and insist on the retention of the phrase in the clause.
– I should like to know by what process of ingenuity the Government have arrived at a definition of “circumstance,” which is said to include “ any communication made to, or information received by, the assured.” I do not know why ali these vague expressions, including “ good faith,” are used in a Bill of this kind; and I suppose their ultimate definition must be left to a jury or the High Court Bench. The man in the street is supposed to know the laws of his country, but here are expressions which we, who make the laws, confess we do not understand.
– Every man knows what ismeant by “good faith.” What does the honorable member mean bv the words?
– I mean the sort of “ good faith “ which the Government do not practise, and have not exhibited in the case of this Bill. My impression is that we ought to have a little time to consider this clause.
.- It seems to me that this clause is framed wholly in the interests of the insurer, and with an absolute disregard of the assured. If we are to be led by recent utterances of eminent Judges, it is the assured who require a little assistance, not particularly from this Parliament, but, it may be assumed, from all the Parliaments of the world, and not the insurer, who, under this clause, is to be favoured in every instance. From start to finish there is scarcely a word but what is directly in the interests of the insurer, making it easy for him to escape the obligation he enters into - in fact, it will amount to no obligation whatever. The provision makes certain that the insurer shall receive the premium, though he will be able to escape his nominal obligation. I had no idea the debate would be given a personal turn, but I fancy I did hear a remark from the honorable member for Wentworth to the effect that, from my appearance, I should never be taken for a Labour Socialist agitator. The honorable member for Wentworth in the “utmost good faith “” has jumped to the conclusion that I come, under a particular heading, and willy nilly he must give expression to it, whether it be correct or not. I think it would be fair to say that, from his appearance, the honorable member for Wentworth might be taken to be a “ prudent “ young man, but I am afraid that, without the “prudent” leadership of the right honorable member for East Sydney, the circumstances might justify an altogether different conclusion. The Attorney-General did not venture to explain the meaning of the word “prudent,” and we are justified in arriving at the conclusion that, despite his legal ability, the learned gentleman does not himself understand its meaning. In the “utmost good faith” I asked the Attorney-General for an explanation, and I was given to understand that it is a term common in the legal world. Then the right honorable member for East Sydney said that there is really no meaning in the word at all, so far as his legal knowledge goes, and that there is no necessity for its use in the clause. Here, at once, we have two eminent legal gentlemen at variance. It has been continually thrown at various Parliaments that they pass measures the nature of which they do not thoroughly understand, and which result in almost endless litigation; and now, before we are through the Committee stage of this Bill, we have two lead.ing legal lights differing as to the meaning of a word. I should like the clause to be so drawn that there may Be, at any rate, some reasonable supposition that there will not be too much litigation, and that the assured will get some return for the premiums he pays in “ utmost good faith.”
– What is the. honorable member’s definition?
– I am not inclined to define the word, but would prefer to see it omitted; in fact, to me it seems impossible to satisfactorily define the word as it is used ; it is, I suppose for a Judge to decide who is “prudent “ and who is not.. I know that this Bill is a slavish copy of the English Act; and, if the word has not yet given rise to litigation, and it does so, it must result in heavy expense, always at the cost of the assured- Honorable members are prepared to accept a clause which places the assured in Australia in precisely the same unfortunate predicament as that in which the assured finds himself in the country in which the law from which this Bill is copied is in operation. I think the word “ prudent “ is unnecessary, and I should like to call special attention to the fact that every material circumstance which is known to the assured is to be made public. Not only what he knows and says he is to know and say in the “ utmost good faith,” but he is to be deemed also to know every material circumstance.
– Not every circumstance; only every material circumstance in the ordinary course of business.
– The ordinary course of business in one instance might not be the ordinary course of business in another.
– A man might be ruined over the definition of the words “ordinary course of business !”
– I could not conceive of his being ruined if the right honorable gentleman were assisting him. It seems to me that under this clause the assured might give all the information of which he has the least knowledge, and then the insurer could say: “ Whether you knew it or not, you are deemed to have known every material circumstance that arose in the ordinary course of business, and . you must therefore lose the amount you were insured for, and for which we have accepted the premiums.” The Attorney-General has quoted the Marine Insurance Act of 1906, and has referred us to the draftsman of that Act, Sir M. D. Chalmers. I have before me the book on the Marine Insurance Act of 1906, by Sir M. D. Chalmers and Mr. Douglas Owen, and I find that under this very clause serious hardship may be done to the assured. The following illustration is given -
The plaintiff’s shipping agent at Smyrna hears that the vessel on which the goods were shipped has been stranded. Instead of telegraphing he informs the plaintiff of this by letter, so that the plaintiff may have time to insure, and here is where the hardship arises. Before receipt of the letter, the plaintiff, of his own volition, the vessel being a little overdue, and having no knowledge in the ordinary course of business of any accident, insures the goods in the r< utmost good faith,” and the gentleman to whose exposition of the law we have been referred by the Attorney-General, tells us -
The insurer may void the contract.
– ;No man can insure against what has already happened.
– But does hot the honorable member see that in the case quoted, the person insuring the goods was not . aware that the vessel had been stranded.
– The accident happened before he insured.
– Just so; but in the “utmost good faith” without any knowledge of any accident having happened to the vessel, and in the ordinary course of business, because the vessel was a little overdue, he insures the goods, and the insurer accepts his premium, and yet, under this clause, in such a case according to the authority quoted the insurer may void the contract.
– It would give rise to a nice series of frauds to permit a person to insure against what happened before he insured.
– The honorable gentleman refuses to see the point I make that the person insuring in the case quoted was absolutely unaware of the fact that the vessel had stranded.
– That is a hypothetical case.
– There is nothing hypothetical about it. I have no doubt that Sir M. D. Chalmers quotes the case in the “ utmost good faith.” The honorable member for North Sydney knows that it is a very common practice when a vessel is a little overdue to insure her or increase the insurance already effected. That is done in the ordinary course of business. A note, explanatory of the use of the expression “ utmost good faith,” shows that it is inserted because special circumstances are not exhausted, and is used to indicate the general basic principle guiding insured and insurer. Yet we have quoted a specific instance where, in the “ utmost good faith,” and in the “ ordinary course of business,” as the honorable member for North Sydney must admit-
– Not the ordinary course of business. Is it not the ground of objection that the ordinary course of business would have been a telegram instead of a letter ?
– It might have been the desire of the plaintiff’s agent in the case quoted to do something wrong; but a man should not be penalized because of the desire of another person. If the plaintiff in the case quoted had received the letter, or had received a telegram, he might never have attempted to insure his goods. But on the basic principle of the Act of which this Bill is a copy, the plaintiff in the case quoted effected an insurance in the “ utmost good faith,” and in the “ ordinary course of business.”
– On the vessel, or on the goods?
– On either.
– That would not invalidate the policy. In the case quoted, there was knowledge on the part of plaintiff’s agent.
– That is so; but the person effecting the insurance knew nothing of the accident to the ship. If the honorable member were the owner of a vessel which was a day or two overdue, would he not feel that he was acting in the ordinary course of business in effecting an insurance upon her, or increasing an insurance already effected ?
– It is one of the hard cases which make bad laws.
– We have now got a little further, and the honorable gentleman admits that the case quoted is a hard case on the assured.
– I admit that it is, presuming that he was absolutely honest.
– I have no knowledge whatever of the case, except that I find it set down in the authority which the AttorneyGeneral has quoted throughout in discussing this Bill. Sir M. D. Chalmers, the draftsman of the section of which this clause is an exact copy,mentions a specific case which might arise under it, and which the honorable member for North Sydney, who is presumably supporting the clause, admits would involve hardship to the assured. Here and there a case may be quoted of an owner sending a ship to sea heavily insured in the hope that she may never return; but in ninety or more cases out of a hundred, it is the insurer who reaps the whole of the benefit. We have only to look at the financial statements of the various insurance companies to thoroughly appreciate that situation and to recognise that, if I may use the term, they stand always on velvet, despite the fact that here and there a ship-owner, regardless of life and property, sendshis ship to sea, heavily insured, in the hope that she will go down. The wording of the clause, however, is designed to prevent even a vessel being too heavily insured. It is in the direction of allowing the insurer to escape from the payment of even the nominal sum for which a vessel might be insured, just as is the position at the present time in respect of the insurance of properties on land. Those who desire that this clause shall be passed to-night, without what seems to me to be the consideration it deserves, admit that it would work hardship, and that it is a provision under which hardship has already been suffered. We shall be justified in delaying the passing of the clause for this evening. I am not prepared to agree to any provision merely because it happens to be in force in some other part of the world. I’ know that the . English Act on which this Bill is based is, in a sense, a codification of laws that have been in existence for many years, and which, unfortunately, have been the subject of very heavy, expensive, and, I might say, endless litigation. There is nothing of a materially new character in the codification to suggest that that litigation may be increased ; but nevertheless the English Act as it exists at present has been in practical operation for less than two years, and there is scarcely sufficient evidence to justify the Committee in accepting the clause practically without comment.
.- I wished at an earlier stage only to make a brief reply to the honorable member for Adelaide, as I understood that there was a general desire that we should report progress ; but the debate continued. I propose now to refer to one point - the suggestion that the word “prudent” should be omitted. To omit that word would be to impair the Bill, and to work very serious injury. The clause sets out that -
Every circumstance is material which would influence the judgment of a prudent insurer in fixing the premium or determining whether he will take the risk.
The position is that when a man desires to insure certain goods he is bound to display towards the insurer the “ utmost good faith “; he is bound to reveal to the insurer all those facts which in the ordinary course of his business he ought to know, and which, if indicated to the insurer, might influence the latter’s judgment in determining whether or not he should accept the. risk. The intention of the law is that every circumstance that would affect not “ any insurer,” but “ a prudent insurer “ shall be disclosed. It is impossible to define what is and what is not prudent.
– Who is to decide?
– A jury would have to decide just -as a jury is called upon in various cases to decide a hundred-and-one questions of fact.
– This practically means filling in a proposal form in which certain questions have . to be answered.
– The omission of the word “prudent” might be detrimental to persons insuring. AH that is desired is that a person insuring shall make a statement of those facts which would affect the average business man engaged in the work of an insurance company. This is not a new principle. Under the law of negligence, it is the duty of every one to take care. We could not define in exact language the duty we owe to our neighbours in every respect. In every case involving such a question the presiding Judge has to give a direction to the jury. He usually asks, in certain cases, ‘the jury to say whether the person concerned took that care which a prudent man in the proper conduct of his business would take. That is a procedure known to the administration of the law all over the world. The clause, as drafted, is the law at present, and I ask honorable members to say whether it is not fair and reasonable. In what way is an injustice done? This Bill will not protect the insurer only.
– The honorable member will find it difficult to point to a sentence in it which protects the assured.
– The insurer, as well as the assured, is bound to disclose all material circumstances. There is a mutual duty cast upon the two parties.
– The Bill provides for a one-sided agreement.
– It does not. As a matter of fact, it does not provide for agreements ; it: merely sets out the law as it exists at present, leaving the parties concerned free to make any contract they may think fit.
– An insurer could contract himself out of all liability under clause 23.
– That is not so. That clause simply provides that where two persons are entering into a contract they shall display the utmost good faith towards each other.
– The development of the insurance system during the last century is one that could not have been anticipated.
A wonderful system has been built up, and it has been of great advantage to men engaged in trade and commerce, who could least afford to suffer what to them would be a heavy loss if they were not covered by insurance. The whole system rests upon absolute good faith. Once we remove the restriction as to good faith - once we offer opportunities for fraud or overvaluation - we shall reduce the protection to those who benefit by the whole system of insurance. Ohe of two things will happen. Either continuance or expansion will be rendered impossible, or the companies, it they have the power which has been stated, will increase the rates to cover the extra risks which will have to be taken. If the companies have the power to impose unduly heavy rates they will retain .it, what: ever insurance law may be in force. I am not acting at all for the companies. I have always been interested in this matterin the other way - as a person insured - but J recognise that in the interests of those who insure we should not Seek to restrict, but to ‘extend the benefits of, insurance.
– And we should have as few technical terms as possible in the law.
– 1 remind the honorable member that this is really a codification, on British lines, of the law which has been in existence in the States. All these terms are well understood, because they have been the subject of decisions.
– Enormous litigation has taken place.
– That is so; but does the honorable member wish to create further litigation by departing from terms which are well known, and which have been adjudicated upon?
– And which have been the subject of different decisions.
– No. I can assure my honorable friend, from personal experience, that there is no more complex thing than marine insurance in one sense, but that, in practice, there is nothing more simple, and no business in which there -are, proportionately, fewer dispute’s, so well established is the law. The companies haw a form of proposal, and practically waive any information which has not been asked for therein. The form is signed by the person insuring, and if he fails to give honest returns in the answers therein asked, he is properly liable for his failure, but if he gives honest answers he is not liable.
– The whole difficulty is as regards the technical terms which are used in the Bill. What does the honorable member think is meant by the word “prudent” in this clause?
– I am not an interpreter of technical terms, but it has been laid down by the Courts that such information as any one insuring knows would affect the insurer’s decision ought to be given, especially when it is asked for. Of course, if it is not asked for, it may be held that there is a waiver; but if it is asked for, it should be given. Upon the honesty of that information depends all insurance, and insurance expansion. We all know that to-day wool can be insured from the sheep’s back to the mill in England or the Continent. All these facilities have been given, and are founded on good faith.
– Yes, but mat is entirely apart from the question of it being prudent or otherwise.
– That is not a new term, but one which has been the subject of legal decisions. If honorable members depart from the term under the impression that they will make things clearer, they will commit a grievous mistake. The result will, probably, be to give ground for scores of law’ cases. I support the Minister’s proposal, not on behalf of the insurance companies, but from the stand-point of the assured.
House adjourned at 10.45 P-m-
Cite as: Australia, House of Representatives, Debates, 6 October 1908, viewed 22 October 2017, <http://historichansard.net/hofreps/1908/19081006_reps_3_47/>.