3rd Parliament · 3rd Session
Mr. Speaker took the chair at 3 p.m., and read prayers.
– The honorable member for Boothby having intimated to me that, because of his acceptance of Ministerial office, he desires to be relieved of the duties of Temporary Chairman of Committees, I appoint in his stead the honorable member for Grey, and lay on the table my warrant nominating him so to act.
– I wish to know fromthe Prime Minister if negotiations havebeen entered into with the Government of New South Wales for the acquisition of territory in the Yass-Canberra district,, so that effect may be given to the decision of both Houses of the Parliament that theFederal Capital shall be located in that portion of New South Wales. If negotiations have not been entered into, I ask whether the Government intends to- takeimmediate steps to give practical effect tothe resolution of the Parliament in thismatter?
– I propose referring to- ‘ the subject in a statement of policy which’ I am about to make.
– I wish toknow from the Postmaster-General if an answer has yet been received to a questionwhich I asked relating to the administration of the Postal Department in Sydney-
– The Deputy PostmasterGeneral, Sydney, has furnished thefollowing information : -
– I wish to know from the Prime Minister if he is aware of any precedent for. the appointment of both a Lieutenant-Governor and an Administrator for the same State, Colony, or Territory. Does not the term “administrator” denote an officer temporarily exercising thefunctions of an absent Governor or LieutenantGovernor in whom the Royal Prerogative is for the time vested ? ‘ I wish* to know whether the Constitution empowered the Government to appoint an Administrator for Papua, whether there was any need for appointing such an officer, and whether it is not likely that difficulty will be created by having, in a small place like Papua, a LieutenantGovernor representing His Majesty, and invested with the Royal Prerogative, and a second officer who, by virtue of the title of Administrator, may be presumed to be ‘invested with that prerogative. I know of no precedent for such appointments. Perhaps the Prime Minister will explain why established usage has been departed from in this case.
– I cannot, on the spur of the moment; say what precedent there is in the action of the authorities of any other British community for what has been done; but the terms of section 13 of the Papua Act may assist the right honorable member in coming to a conclusion as to the constitutionality of what has been done in this case. That section reads as follows -
– Only when the Lieutenant-Governor is absent.
– I wish to ask the Prime Minister if a precedent is not furnished in the action of the Queensland Government in appointing as Administrator, Sir William McGregor?
– That is so.
– I desire to know from the Prime Minister whether he does not recollect that his predecessor in office promised that, before these appointments were made, Parliament should have an opportunity to discuss and approve of them. I wish to know if the appointments have been definitely made, and, if so, why we were not previously asked to express an opinion regarding them.
– I shall discountenance in every way the discussion here of the personal qualifications of those appointed to high offices such as these. The Government will take the full responsibility of its actions.
MINISTERS laid upon the table the following papers -
Public Service Act - Regulations Nos. 97 and 147 repealed, and Nos. 5, 24, 27,&c, amended - Statutory Rules 1908, No. 116.
Customs Act - Regulation No. 101 Amended (Provisional)- Statutory Rules 1908, No. 115.
Defence Acts - Military Forces - Regulations Amended (Provisional) -
No. 134 - Statutory Rules 1908, No. 113.
No. 225 - Statutory Rules 1908, No. 114.
The Clerk laid upon the table
Papua - Indented Labourers - Return to an Order of the House dated 19th March, 1908,
Premises Leased by the Government - Return to an Order of the House dated 4th November, 1908.
– In view of the defects in the Lee-Enfield military rifle which have been reported, I ask the Minister representing the Minister of Defence if he will institute inquiries from the Canadian authorities as to why they adopted the Ross rifle, which is said to be one of the best military firearms of the present day, so that, if expedient, we may use that weapon to arm our forces.
– The Minister of Defence has the matter in hand.
– On the 29th October, the honorable member for Adelaide asked the Minister of Defence the following questions: -
What was the establishment of Volunteers in the Commonwealth on 30th June, 1908?
This information has now been received -
Balance of Corps Funds the Light Horse and Infantry Regiments had in hand on 30th June, 1908 : -
– I have given notice, for a future day, of my intention to move for a return, but am informed that the Minister representing the Minister of Defence is prepared to supply the information -now. I should therefore like to know whether the honorable gentleman may give the information, and so clear the business-paper of the notice of motion in question.
– I could not allow business which stands on the notice-paper for a future date to be called on now.
asked the Treasurer, upon notice -
Pending the establishment of a Commonwealth Mint at the Federal Capital, will the Government take the required steps, in pursuance of the protective policy of the Parliament, to commence without delay the coinage of silver within the Commonwealth, provided the States are prepared to supply the necessary plant for that purpose, and undertake the coinage on terms not exceeding in cost the charges fixed by the Imperial Government for similar work?
– The answer to the honorable member’s question is as follows -
The matter has received the consideration of the late and the present Government, but it will not be possible to take any steps during the present short session.
Geelong Post Office : Extra Porter - Telephone : Geelong and Ceres -
Christmas Mail Deliveries - Postage Stamps : Commissions to Queensland Stationmasters
asked the Postmaster-General, upon notice -
– The Deputy PostmasterGeneral, Melbourne, advises as follows -
Mr. WATKINS (for Mr. Crouch) asked the Postmaster- General, upon notice -
– The Deputy PostmasterGeneral, Melbourne, has furnished information to the following effect -
asked the PostmasterGeneral, upon notice -
In view of the fact that mails intended for delivery on Christmas Eve last year were, in many cases, four and five days late, will he take such early steps to provide for the extra business at Christmas time as will obviate the recurrence of such delays and consequent dissatisfaction ?
– The answer to the honorable member’s question is as follows : -
Yes, I am pleased to say such steps are now being taken.
Colonel FOXTON asked the PostmasterGeneral, upon notice -
– I am not aware of the position of this matter, as under the arrangement in force with the Railway Commissioners, payment to stationmasters is not made direct by the PostmasterGeneral’s Department. The Deputy PosmasterGeneral, Brisbane, reports as follows regarding the action of this Department in the matter -
asked the Prime Minister, upon notice -
Whether he will consider the following proposals, with the object of giving Parliament full information before it is asked to settle, upon an equitable basis, the future financial relations between the Commonwealth and the States -
That a Royal Commission should be appointed to consider and report upon the question?
That such Commission should consist of the three members of the Drafting Committee of the Federal Constitution (Sir Edmund Barton, Mr. Justice O’Connor, and Sir John Downer); three ex-Treasurers of the Commonwealth (Sir George Turner, Mr. Watson, and Sir John Forrest) ; one representative (not being a’ State Minister) from each of the States; and the Commonwealth Government Statistician ?
That Sir Samuel Griffith should be asked to be President of the Commission?
That the report of the Commission should be submitted for the consideration of Parliament?
– While not taking a favorable view of the proposal, I shall have pleasure in giving full and careful consideration to it.
– I desire, by leave, Mr. Speaker, to move -
That on each sitting day until otherwise ordered Government business shall take precedence of general business.
I propose on this motion to make a Ministerial statement.
– Is it the pleasure of the House that the honorable the Treasurer have leave to submit the motion?
Honorable Members.-Hear, hear.
– The duty that falls upon me to-day is to give a brief outline of the Ministerial programme for the remainder of the current session. Obviously, if it be intended that Parliament shall be prorogued before Christmas, we cannot look forward to more than fourteen or fifteen sitting days during the remainder of the present session, and necessarily the programme of work in such circumstances cannot be a lengthy one, more especially as there has been neither time nor opportunity for the Government to give to matters of grave public policy that serious and careful attention which they deserve and require. The first question to which a Treasurer must give attention is undoubtedly the a/ll-important one of the finances of the Commonwealth, with the administration of which he is charged. In that -regard, I find, speaking generally, that ‘our financial position is fairly secure on the basis of the Estimates submitted to the House by my predecessor. Inquiry goes to show, however, that there will be a shortage of .£37,000 in the estimated revenue of the Post and Telegraph Department. In other words, the corrected estimate shows that the return from the Department during the current financial year will be £37,000 less than was originally considered likely.
– Who is responsible for the discrepancy in the Estimates?
– The discrepancy, to my mind, is a very small one. I intend to give the House the benefit of inquiries that have been made, and the fullest information available from the officers. As regards the receipts and expenditure of the Department of Trade and Customs, we find that in all likelihood we shall be able to make an actual cash saving of something like £89,000 on the Estimates as submitted. It will arise largely from’ -the partial failure in the production of sugar. As honorable members are aware, if we collect £100,000 less in respect of the Excise on sugar the Commonwealth must be relieved to the extent of £75,000 in the shape of the bounty payable. In that way the revenue of the Commonwealth will be benefited to the extent of £50,000. We shall also be able to make some other savings, including the provision made for the taking over of the Department of Quarantine from the States. It is now admitted that we cannot make all the preparations necessary to enable the Commonwealth to assume control of quarantine during . the present financial year. Altogether it is estimated that ve shall have an actual cash saving amounting to about £89,000 in connexion with the Department of Trade and Customs. Then, again, the Department of External Affairs estimates that it will be possible to carry on during the current financial year with an expenditure of £ io, 000 below that for which- the Estimates already submitted provide. We shall thus have a general credit of £99,800 as compared with the Estimates already submitted, but against that savins; we have to allow for the reduc tion of £37,000 in the estimated revenue from the Post and Telegraph Department. That Department has already received from the Treasurer’s Advance a sum of £20,438 in excess of the estimated expenditure for the year. The deficit, therefore, amounts at present to £57>438, leaving on the whole of the Estimates, which are accepted by the Government, a credit at the end of the financial year of £42,362, I purpose to make use of that surplus by granting to the Defence Department a sum of nearly £11,000, and the whole of the balance, with any further amounts that may come in from all sources, owing to the good season, or by any excess of revenue over the present careful estimate, to the Postmaster-General for general purposes. The position, as I calculate it at present, will enable that Department to have the £37,000 by which it will be short made up to it, and also to meet the £20,438 which it has already had from the Treasurer’s advance^ with, I venture to say, a further sum of over £30,000 if the estimate which is now submitted is borne out by the results. as I ‘ think ‘ it will be. It is a fairly conservative estimate, and has been very carefully drawn up from the reports that have been handed to me.
– I presume the honorable gentleman has taken only onefourth of the Customs revenue.
– I have explained to the House before the technical question of the Sugar Excise and Bounty. If we receive less by £100,000 in sugar Excise, obviously the Commonwealth will benefit to the extent of £50,000. I should not be at all surprised if the amount by which the Commonwealth will benefit through the unfortunate shortage in sugar production, owing to frosts, droughts, and other difficulties with which the sugar-cane farmer has to contend, reaches £70,000 or more.
– It is one of those cases in which the less you receive, the more you save.
– Honorable members know that I have endeavoured to explain that question many times. My calculation is very technical, but is absolutely correct.
– I thought if you got £100,000 you would be able to retain only one-fourth, or £25,000.
– The right honorable member is quite incorrect in this connexion. If we receive £100,000 in sugar Excise, the Commonwealth is bound to return, in the shape of bounty, three-fourths of that sum out of its own share, as the sugar is nearly all grown by white labour now. The Commonwealth’s share of £100,000 received in sugar Excise would be only £25,000, and we should have to pay in bounty £75,000, so losing £50,000. Therefore, in this instance, if we do not get the £25,000, we save the £50,000. Since taking office, I have paid to the trust fund for old-age pensions during this month the sum of £50,000. Even if I have not the pleasure of putting any more money to that fund, I think .that my statement as regards the provision for old-age pensions, based, as it is, on that payment of £50,000, is a very fair proposal in the meantime. From my point of view, and from the point of view of the Government, that part of the finances is regarded as fairly satisfactory, because, owing to last -season being rather a poor one, there are, undoubtedly, indications of a reduction of revenue, both in the Post and Telegraph Department and from Trade and Customs. That being so, honorable members and the country may congratulate themselves on the ability of the Australian people to pay taxes to meet the cost of government. Speaking generally, while we are able to more than meet the Estimates as submitted to the House - more than carry out the promises that have been made to the Departments - I admit that the principal spending Departments, those of Defence and Post and Telegraphs, would cheerfully undertake the responsibility of spending £300,000 more this year if it were available. Unfortunately it is not available, nor could any Government be expected to meet a request for any such amount.’ But the consideration of the question of the granting of extra money to those Departments will devolve on any Government which has the honour and duty of presenting future financial statements.
– Is it not the duty of the Government to provide the money if it is urgently necessary for those works? Why should they not borrow it?
– While ordinarily I have no objection to answer interjections, it would be difficult for me in this my “first effort to answer every interrogation put lo me in that manner. The honorable member for Wimmera will, perhaps, remember that statements have been made to the Postal Commission that money is needed by the Post and Telegraph Department for its requirements to the extent of some millions. It is only a matter of degree how much you intend to do. I have stated, to honorable members, and to the country, that we have accepted the responsibility of the Estimates. We feel that we are able to give effect to them, and to have an actual cash surplus, which we shall be able to devote to the requirements of the Post and Telegraph Department, and which, with what has been already given and what may be given later, may amount to anything up to £75,000. That, taking it all in all, is a fairly satisfactory position for any one who occupies the office that I occupy to be able to announce. Before leaving the question of finance I wish to touch upon the matter of commitments in these Estimates. Honorable members will remember that more than once during the discussion of the Estimates I have drawn attention to the fact that the Committee are often asked to vote small sums on account - perhaps £4,000 or £5,000 - for a large building or work, which must be continued afterwards. I find, on making an estimate of the actual amounts involved, that £160,000 more than has already been voted will be required! . to complete the works.
– More than what is on the present Estimates?
– Yes; but our practice has been adopted in all Parliaments. I mention this fact because, in a previous Parliament, I took occasion to urge that, when we were asked to vote, say, an instalment of £5,000 on account of a work involving £30,000, the Estimates ought to show what balance remained to be appropriated.
– The present Estimates do so in many cases.
– The total amounts can be discovered in the present Estimates from the footnotes, but these may easily escape notice, and there is no document to show the actual total amounts to which we are committed by the items before us. Passing from the finances to the question of the general policy of the Government, . I may say that we are committed fully to old-age pensions. We hope - and we shall see that we are able - to give full effect to the measure already on the statutebook, providing for old-age pensions throughout Australia.
– On a substantial basis?
– I am unable a* the present moment to accept the estimate of the late Treasurer of the amount that will be necessary for this purpose, because, taking all into consideration, I think the amount required will be nearer 1^.1,500,000 than any other that hes been mentioned. At any rate, the Government are committed to the policy ; and if we remain in office, we shall see to it that the necessary funds are available for giving full, fair, and free effect to the enlightened measure which has been passed by this Parliament.
– How will the Government do that?
– By paying the money.
– Where will the Government get the money ?
– That is a fair question. *
– The responsibility for finding the money will remain with the Government. I should now like to refer to a proposition which I think will be agreed to by every reasonable man. I refer to the New Protection. This involves a policy that has) already been decided by this Parliament in a previous measure, which, however, was contested successfully in the High Court and declared unconstitutional. I venture to say that it is the desire of every honorable member that the Commonwealth Parliament should be able to empower a Court of Arbitration to insure that protection should be not only enjoyed by employers and manufacturers, but should be extended to the workers in every industry.
– Does the Prime Minister mean the existing Court of. Arbitration, or some other Court?
– If further Justices are necessary to give effect to the policy, I presume their appointment will follow.
– Then the Government drop the idea of a Commission ?
– On general principles our desire is that a referendum should be taken, so as to empower Parliament to extend to the workers the same protection that is now afforded to the employers. Need I say that we have power now, if we so desire, to adopt the cumbersome method of levying an Excise duty, and paying it back in bounty? But such a method would destroy the whole of the Commonwealth revenue.
– Then we have not the power !
– We have the power I have indicated, if we choose to exercise it ; but why should Parliament do in an indirect way what it can do much better in a direct way, after appeal to the people on a referendum?
– Is it proposed to do that this session?
– It would be obviously futile to seek power for a referendum this session, unless honorable members desire anearly appeal to the country ; because, I think, a Referendum Bill must be passed within six months of a general election. I have no desire to disturb the pleasant feelings of honorable members by suggesting a course which would mean an early election.
– Does the Prime Minister mean an appeal for the transfer to the Commonwealth of all industrial control, or control only as regardsprotected industries?
– I do not necessarily mean the giving to the Commonwealth of all industrial legislative power, but only such power as will enable this Parliament to empower an Arbitration Court to give tothe workers fair and reasonable wages ana conditions.
– We do not quite understand. Does the Prime Minister propose that the Arbitration Court shall have full jurisdiction over all industries?
– I shall repeat, in terms, as clear as I can make them, what I havealready said : The desire of the Government is, when the Referendum Bill is introduced, to give such powers to the Arbitration Court as will insure fair and reasonable conditions to the employes in particular industries.
– What about the consumers ?
– The Prime Minister has already intimated that he desires tomake his statement without interruption, and deprecates interjections and questionsof the kind which are being put to him. I ask honorable members to allow thePrime Minister to proceed to the end of his address without interrupting him with questions which properly belong to questiontime.
– In my present position, I am following a most distinguished gentleman, and it may be my misfortune that t cannot convey my ideas as clearly as I should like to honorable members opposite. However, honorable members may t;s.ke my word that I am doing my very best to make my observations understood. T have now to refer to a question of very great importance, which, I venture to say, has been discussed in this House more than any other question that has come before us. I refer to that perennial problem, the Federal Capital site. This and the other branch of the Legislature have decided by resolution to change the site from Dalgety to Yass-Canberra ; and the Government, adopting the verdict of Parliament, intend to introduce a Bill which will, in proper terms, take power to have an investigation made as to the most suitable part of the latter territory for the Federal Capital and Seat of Government.
– That, I suppose, will beleft to experts?
– There will be power taken in the Bill to have an investigation. It is the intention of the Government, while conserving the full powers of the Commonwealth, to act, shall I say, as genially as possible in regard to the other interests involved in the location and settlement of the actual site of the Federal Capital. In that way we shall co-operate, as well as we can, with the Government of the State in which the site has been chosen.
– Will the Prime Minister answer a question which I asked earlier in the afternoon? Have negotiations been entered into with the Government of New South Wales?
– We are in friendly communication with that Government ; but, as this House is not constituted of children, honorable members probably do not wish to be informed of every detail. We desire, consistently with the position of the Commonwealth, to carry on whatever negotiations may be necessary in connexion with this momentous question, without creating antagonistic feeling to the injury of the public interest and without benefit to any part of the Commonwealth or to any person in it. Although Ministers differ as to which site should have been chosen, we feel that united action must be taken by the Government in this matter to give effect to the will of Parliament.
– This session?
– Yes, and early. Personally, I confess that I should like to have seen some site other than YassCan.berra chosen ; but Parliament having made a decision, the question is now a national one, md I trust that it will be finally settled at the earliest date possible. Another matter which we must submit almost immediately is the agreement made by our predecessors for the purchase of a site in London whereon Commonwealth offices may be erected, wherein the future High Commissioner, appointed to manage the affairs of the Commonwealth in the world’s metropolis, will be housed. I understand that when I finish this speech, the adjournment of the debate will be carried, and the Minister of -External Affairs will then put this matter before the House.
– -Is it to be treated as a party question?
– No. All the papers in the case have been made available to honorable members, and as the time within which the agreement must’ be ratified is limited, we should have a decision as early as possible. It will be necessary to pay a deposit of 10 per cent, on the purchase money, which will come to between £19,000 and £20,000. I do not think there will be any difficulty in finding that sum. Reverting to the Capital site question, I may say that every care will be taken to preserve the rights of the Commonwealth. The Government will ask for an area not less than that provided for in the Seat of Government Act, and I think that it will be cheerfully granted. We *hall also ask for territory which will give us access to the sea, and a port. I do not think that the State Government will raise any difficulty about that. The Government intend to proceed with the Manufactures Encouragement Bill in the Senate, and to propose amendments in it which will more effectually safeguard the Commonwealth’s interests and the policy of the Labour Party regarding the nationalization of the iron industry.
– What has Mr. Sandford * to do with the matter?
– I understand that Mr. Sandford has now no interest in it. He came to Melbourne to give me special information regarding the question. I have seen very little of him, but if he needed testimony as to his character, I could speak of him as a man of high principle.
– I do not know what his information may be worth, but his sworn evidence was not worth much.
– 1 desire that honorable members may have the fullest knowledge regarding my public actions; and, therefore! I say that Mr. Sandford has given me very valuable information. Having spent most of my youth in mining and iron works,I am as much qualified as is the ordinary member to deal with matters of this kind; but I have teen thankful for the information received from Mr. Sandford. The Government will seek to provide for the taking over of the industry by the Commonwealth as well as by a State.
– When the honorable member for Kalgoorlie made a proposition to that effect, it was defeated.
– That is so. The Government will proceed with the Bill, and endeavour to give effect in it to the special policy of the Labour Party; but, failing to do so, will yet go on with the Bill.
– Can provision be made, without amendment of the Constitution, for the taking over of the industry by the Commonwealth?
– Legal opinion is divided as to (he power of the Commonwealth in this matter.
– The Government is taking chances again.
– We can discover our powers only by the review of our legislation by the High Court. The honorable member knows that a matter cannot be r ef erred to the High Court for an opinion until Parliament has passed legislation to give effect to what it believes to be its powers, and the constitutionality of such legislation is questioned. We propose also to put a clause into the Bill which will enable the Commonwealth to obtain information from its officers as to the cost of producing manufactured iron from the raw ore. so that the Government, in dealing with the matter, may be in possession of full and accurate data. I have always taken an interest in the production of iron, and regard it as desirable - and, probably in the immediate future, imperative - that we should have an iron industry. Whilst I should like to see the industry controlled in a certain way, I think that real and substantial benefit will accrue to the Commonwealth if we in any way bring about the manufacture of iron from our ores.
– Does the honorable member wish to have only one iron industry in the Commonwealth?
– My preference would be for an iron industry directly controlled by the Commonwealth Government, but, failing that, I desire to see the iron industry established apart from Government control. We propose also to ask Parliament to pass a Bill empowering Select Committees to compel witnesses to answer the questions asked of them.
– Is that the Bill now before the House?
– Yes. We propose to adopt that Bill’ with slight amendments. I am not a believer in harsher punishment than is necessary ; but Parliament cannot allow itself to be flouted with impunity, if it is to be regarded as an institution entitled torespect. What will be proposed will be that a person refusing to give evidence may be brought before a magistrate, and dealt with summarily.
– Were not the provisions of that Bill tyrannous?
– The Bill as we propose to amend it is not tyrannous. Our Committees should be able to preserve their dignity and respect, and to give effect to the will of Parliament.
– Will Committees be empowered to compel witnesses to disclose their private business secrets?
– I do not think that anything which in the interests of the country should be made known should be withheld from a Committee; but I would safeguard myself by adding that no member of such a body should be allowed to pry into a witness’s private affairs merely forthe satisfaction of his own curiosity. Another small Bill will make captains responsible for prohibited immigrants brought here as stowaways. The officers of vessels coming from abroad must know of the presence of such persons on their vessels, and should be held responsible for their landing here. An amendment of the electoral law is also urgently needed. We do not propose to deal with preferential voting; but we wish to amend many parts of ‘the present machinery, which has broken down in operation. The representatives of large and distant States know how necessary it is that these amendments should be carried out at least twelve months before the next general election. There are many polling places to which it takes a weekto send information from Melbourne.
Colonel Foxton. - A fortnight in many cases.
– There are many cases in which fully a week is occupied in conveying information from Melbourne to a polling place. Sometimes an important telegram, directing an electoral officer to do such and such a thing on polling day, reaches him a week after the poll has been taken. In such circumstances, electoral officers cannot be instructed, unless the information which it is desired to communicate to them is available some time .before polling day. I, therefore, appeal to honorable members to give consideration to this measure, and to pass it this session, so that the Department may have, in order to meet any eventuality, the machinery necessary to facilitate candidates getting to the people and the people reaching the candidates.
– Would tEe honorable member increase the postal facilities “in this regard ?
– I do not think so. There is another small measure to which I must refer, and that is a Trades Description Bill. Honorable members are aware that we have endeavoured, on many occasions, to secure an amendment of the law so as to prevent the community being injured by deleterious importations well known to medical practitioners, and to the necessity for the regulation of which attention has been called bv nearly every learned society. In many instances such importations lead to loss of stamina, and in some cases to loss of life. We, therefore, desire to protect the people of the Commonwealth by means of an amendment of the present law relating to trade descriptions. These, briefly, are the proposals that we shall put before Parliament this session. We purpose proroguing before Christmas, and we shall ask honorable members, in the first place, to agree to this motion, so that the time usually devoted to private members’ business may be given to the consideration of Government measures. We shall also ask honorable members to agree to the number of sitting days being increased.
– On what days is it proposed to sit?
– I should like to consult the convenience of all parties, since it is a ^natter that concerns honorable members generally. If additional sitting days are necessary, it will be open to us to add Mondays to the list. I shall do everything possible to facilitate business, and I promise that the Government will avail themselves of every reasonable means to provide for honorable members any information that they may desire. I have taken counsel of every one who is in a position to give me information regarding the general financial outlook of the Commonwealth, and, whilst the bad season which we experienced last year has undoubtedly affected the revenue returns for the current year, I must say that I believe there is a very hopeful outlook so far as the latter part of the financial year is concerned. A good season is anticipated. The Customs and Excise revenue last year” was certainly phenomenal. Heads of Departments cannot explain why, for instance,, the returns for December, 1907, showed an advance of £300,000. No explanation is; forthcoming of that sudden jump in the returns for one month, and we dare not anticipate a recurrence of the incident. Nevertheless, Ave must consider ourselves fortunate in that Ave have the prospect of a good season, and, as a healthy, vigorous people, we shall be able to meet all our obligations. If more money is necessary for the effective government of the Commonwealth. I feel sure that the people, knowing that it is to be devoted to useful services, will cheerfully give all that is required of them.
– The Prime Minister has made a statement of a most important character, and, Avith his consent, I desire to move the adjournment of the debate.
– If the debate be now adjourned, will it be possible to arrange for honorable members; to give up to GoAernment business the time which, in the ordinary course of events, would be devoted to- morrow to private .members’ business?
– I think so. We might agree as to the time at which the adjourned debate on this motion should proceed.
– It is open to the honorable member to move that the adjourned debate take precedence of all other businessromorrow
– Very we] 1
Debate (on motion by Mr. Joseph Cook) adjourned.
That the resumption of the debate be made an Order of the Day for to-morrow, and that it have precedence.
– I desire, byleave, to move -
That this House approves the purchase of land and buildings thereon situate at the corner of Northumberland Avenue and Charing Cross, London, for the purposes of the Commonwealth, for the sum of£198,000.
May I explain that I am led to ask leave to submit this motion now because of the fact that our option to acquire the site will expire on the 30th inst. But for that I should have given notice of motion in the ordinary way. There is no intention to ask the House to vote on this question to-day.
– Is it the pleasure of the House that the honorable member have leave to submit the motion?
Honorable Members. - Hear. hear.
– As has already been stated by the Prime Minister, the proposal for the purchase of a site for Commonwealth offices at the corner of Northumberland Avenue and Charing Cross, London, was brought to a head by the late Government. They began the negotiations and carried them to the stage at which they proposed to ask the House to ratify their acceptance of the offer made to them by the Messrs. Lyons.
– Order ! I have to ask honorable members not only to discontinue the conversations which are being carried on in loud tones, but as far as possible to avoid moving about the chamber during the delivery of. a speech. It is most perplexing to me, and it must be trying to the honorable member who is addressing the Chair, to find honorable members crossing and recrossing the chamber. They will promote the business of the House by keeping their seats as much as possible, and refraining from conversing in loud tones.
– I can well understand, sir, that the photographs of the proposed site, as well as the plans and maps which are being distributed, are of great interest to honorable members. I was pointing out that the late Government brought this matter to the stage of agreeing to place before Parliament the offer made to them by the Messrs. Lyons. In submitting this motion to-day, however, I desire to say that the Government do not shelter themselves behind the action of their predecessors in office. We take full responsibility for recommending the acceptance of the offer, and we invite the fullest criticism. As the honorable member for Parkes pointed out on one occasion, this is nota party question. The late Government have investigated it, and we propose, after the most careful investigation and the consideration of all information possible for us to obtain, that the Commonwealth shall acquire the site. No question of party arises. I am sure that all parties are at one in the desire that the best site possible for the purposes of the Commonwealth shall be selected, and the decision in this case is not to be governed by any question of whether or not it is possible to inflict a defeat on the Ministry. We desire the fullest and freest criticism of the proposal, and’ wish the House to be placed in possession of all the information that it is possible to obtain. The House will be absolutely free to take whatever action it pleases.
– That is very kind of the Government.
– As the honorable member is aware, propositions are sometimes submitted in circumstances in which the House finds it very difficult to take the responsibility of rejecting them. In some cases Parliament is asked to ratify an agreement to which a Govern- ‘ ment has pledged itself to such an extent that honorable members are not quite as free to deal with it as they would like to be. In this instance, however, the House is free to take whatever action it pleases. I understand that no hint has been given to the owners as to what willbe the attitude of the Parliament with regard to this proposal.
– Do the Government wish us to throw it out?
– Certainly not. I think that by doing so the House would neglect an opportunity to secure what appears to be an exceedingly desirable site.
– The “ opportunity of a lifetime,” as the auctioneers say.
– Perhaps so. Opportunities to acquire in London freeholds of areas sufficient for our purpose do not present themselves even’ day. The site is situated at the corner of Northumberlandavenue and Charing Cross, Trafalgar Square. The superficial area is 8,683feet, and there is a frontage of about 201 feet. The title is freehold. To those who have not been in London, probably that statement does not convey very much. I admit that my own knowledge of London is exceedingly weak, although I know more now through going into these papers than I did a week ago. But every one who has been to England and knows the capital of the Empire at all knows this site. That has been one advantage in making inquiries as to its suitability or otherwise.
– The Post Office opposite is the place from which all distances are measured in England.
– It appears to be the hub of London, as all distances are calculated from this site outwards. The plan which has been distributed will give honorable members a clear indication of its situation and surroundings. It is on one of the main arteries of London traffic, and I understand that there are no fewer than sixty-six theatres within a mile of it. If there is one thing which any man going into the theatre business looks for when he sets up a theatre it is an accessible place where people naturally congregate. Hence, from an advertising point of view, a place which is surrounded by so many theatres must necessarily be exceedingly accessible. This place is also the centre of the official life of London.
– Is it in the financial life of London?
– I will deal with that point later. The site is surrounded by many buildings of great historical interest, and consequently is in the part of London to which visitors go. The British Museum is about 600 yards off.
– More than that.
– I am at a little disadvantage in this matter, because I have never visited the place, and can only judge from the statements made to me by thosewho have visited it, and from the map. The National Gallery, at any rate, is right opposite. I believe it is true, as the honorable member for Darwin says, that the site is not in the financial centre of London. It is not in what is known as the City, where the great stream of London’s financial life flows. But the question we have to consider is the purposes for which we want an office in London. The principal purposes are, first of all, to house the High Commissioner, who must be in touch with the official life of the Empire and handy to the British Government offices, while it should also be an advertising centre - a place where we can advertise the products of Australia. It must also be easily get-at-able to visitors and tourists - a place where visitors are constantly passing and repassing. A building which would probably bear the words “ Commonwealth of Australia “ in large letters across the front, and be seen by every visitor to London, would admittedly be highly desirable from an advertising point of view. So far as concerns the financial work of the High Commissioner, the office would not be so well situated there as if it were in the City, but that, after all, would be only one portion of the High Commissioner’s work, and probably, for all the work that would need to be done in the City, a room and an office bor, as the honorable member for Hindmarsh suggests, may be sufficient. At any rate, we submit that the principal work of the High Commissioner appears to be rather in the direction of assisting immigration and replying to inquirers about this country, and advertising its resources in various ways. He needs an office where he can be in touch with the official life of the Empire. Those appear to us to be the most important functions which he will be called upon to perform. I placed upon the table the other day a number of papers containing opinions given as to the value of the site by Mr. Martin, the expert valuer called in by the Commonwealth. Mr. Martin, in one letter, said -
I ought, perhaps,, to add that I know of no uncovered site in London with advantages of position equal to those of this building, and that, ‘ whenever there is occasion for such a site to be acquired, it is almost invariably the case that it is necessary to pay for it a sum far above its market value, in buying up existing interests and otherwise, in order to clear the site.
In another letter he wrote -
I do not think there is any site in London with equal advantages of position and nearly equal area, at present uncovered and in the market. . ,
Captain Collins says -
Lord Jersey thinks very highly of the position, nor does it appear to Kim, subject to the correction of expert valuation, that the price asked is unduly high, the position being so central, and it will be so much enhanced in value when the new road from Buckingham Palace is opened out into Charing Cross, which will be before long.
In going through the papers I find that Lord Jersey has repeated that statement with some variations pretty frequently, and that Mr. Martin has repeated his statement that the position is exceptionally favorable. Captain Collins has also given expression to his views in no measure.! terms as to the suitability of the site. There seems to be but one opinion about ir. I hs.ve also had the opportunity of consulting men who know London very well, and know the kind of work the High
Commissioner will have to perform. They all without exception think that no better site could be adopted.
– Would the High Commissioner inscribe stock?
– I have admitted in answer to the honorable member for Darwin that for financial work the site would not be so desirable as would a place in the City. We do not wish to make it appear that it commands all possible advantages. No one site in London, or even in the Universe, combines all the advantages of all the others.
– The inscribing of stock costs Australia from ,£30,000 to £40,000 a year.
– How much sp-ce would be required for the work of inscribing stock?
– A good deal.
– Much depends on how much work will have to te done there. We must not allow the fact that part of the work of the High Commissioner will be, as we hope, the inscribing of stock, to govern entirely our choice of the site. We must look at the matter all round and not allow any one consideration to dominate us. It will be admitted that the site is eminently suitable for the general purposes of a High Commissioner’s office for any work in connexion with immigration or advertising the resources of Australia, and .for transacting the general business of the Commonwealth.
– Would the Government have the High Commissioner to live there, close to the theatres?
– Whether the High Commissioner shall live on the premises is a matter of detail which I have not considered. If the honorable member desires an answer, I must ask him to give notice of the question.
– One of the finest hotels in London is right alongside.
– That is so. But however suitable the site may be, the question we have to consider is whether the price is a fair one; because, if the price be not fair, the Government are not justified in placing this proposal before honorable members. Having taken all possible precautions, in view of the fact that negotiations had to be carried on by cable, and that it is much more difficult to arrive at values when separated by thousands of miles, the Government have come to the conclusion, after a careful investigation of the papers, that the price, while not a low one, is not unreasonable. I am not going to say that this is a bargain on the part of the Commonwealth - it is no bargain. But the price is not unreasonable; and that is the only view I can place before honorable members, and, I believe, that that was all the late Government could claim. I understand that some honorable members have raised the difficulty that Messrs. Lyons, who are the other parties to the bargain, are probably making a good thing out of this transaction. Whether that is so or not, it is, of course, impossible to ascertain, because nobody but Messrs. Lyons themselves know what price they paid for their option. Probably Messrs. Lyons are making something out of the transaction, because the papers disclose that they acquired an option over this site before the Commonwealth entered into negotiations.
– Did Messrs. Lyons not secure the option while the negotiations with the Commonwealth were going on ?
– I do not know that that is true; at any rate, the papers do not disclose anything of the kind.
– Did Messrs. Lyons secure the option after the site had been brought under the notice of the Government ?
– I shall place “the matter before honorable members exactly as it appears from the file of papers. Here is the letter from Captain Collins, dated 13th March -
The site is at the corner of Northumberlandavenue, in Trafalgar Square, occupied by the New York Life Insurance offices. No doubt the Minister will recollect this site. The situation is admirable. I attach a tracing of the site.
That is the first intimation of there being any such site available -
It was first brought under my notice by Messrs. Hampton and Sons, who inform me that the total frontage is about 164 feet, with a total ground area of 8,600 feet, and they consider that an offer for the freehold of ^180,000 would be accepted. The present leases of shops, &c, fall in in about 4^ years’ time’, and they think that these leases can be bought out for a sum of ^25,000 if necessary.
Then there comes the reference which Hie honorable member for Grey suggests proves that Messrs. Lyons secured the option while the Commonwealth was negotiating -
Since they brought it under my notice, an agent of Mr. Lyons, the well-known caterer, has called on me, and he states ‘that Mr. Lyons has within the last month bought this property from the Prudential Insurance Company, but he would be prepared to enter into negotiations for the lease or for the sale of the freehold.
Whether that was the day after, one cannot tell.
– The letter says that Messrs. Lyons actually bought the property - that it is not an option.
– As a matter of fact, Captain Collins found afterwards that Messrs. Lyons had acquired an option, but had not actually paid for the freehold. Mr. Lyons, the head of the firm, has an agreement which, when submitted to the solicitors acting on behalf of the Commonwealth, was found to be satisfactory. At any rate, Mr. Lyons’ position as vendor is satisfactory ; but what price he gave for the option, we cannot, of course, ascertain, and he would very naturally refuse to disclose it.
– Has Mr. Lyons exercised the option yet?
– I do not know, but . I should say that he has not - that he has not actually paid the cash over. Captain Collins’ letter continues -
On my remarking that I expected Mr. Lyons would want some considerable profit, the agent said he was not sure, but he thought that Mr. Lyons would be prepared to deal reasonably.
The letter then goes on to say -
As I have said, this situation is admirable. The only thing is that the existing building is not such as the Commonwealth Government probably would put up, but it would be very difficult to find a site equally good, and it might be advisable to get an architect’s opinion upon the possibilities of the existing building, and what could be done both internally and externally to make it suitable to the requirements of the Commonwealth.
There is nothing whatever in the papers to lead one to suppose that Mr. Lyons, knowing that the Commonwealth was negotiating for the property, stepped in front and put on an increased price.On the contrary, it will be noticed that there is a difference between the two proposals - between the one submitted by Messrs. Hampton and Sons and the one submitted by the agent for Mr. Lyons - the first having reference to a frontage of 164 feet at the price of£180,000, and the latter having reference to a frontage of 201 feet at a price of£230,000. One cannot argue from that, as I have heard it suggested, that Mr. Lyons is making a clear profit of £18,000 on the bargain. What Messrs. Hampton andSons would have been able to offer to the Commonwealth is only in the realms of conjecture.
– There are 40 feet extra.
– Yes, of frontage; but I notice that the superficial area is about the same.
– It is evidently the same property.
– If it be the same property, it is) very clear that Messrs. Hampton and Sons must have known precious little about the property they were selling when they offered a frontage of 164 feet, while the real frontage was 201 feet.
– I think it will be seen that they only speak of “ about “ 164 feet frontage.
– But that would mean an error of 25 per cent. !
– And Messrs. Hampton and Sons were the agents for the vendor.
– It must be remembered that the superficial area is about the same in both cases.
– Honorable members, as a matter of fact, are in precisely the same position as I am, and no better. I have gone through all the papers very carefully, and I find nothing to justify me in concluding that the same property was referred to by both agents.
– The superficial area is about the same ; and it would appear as though, in the juggling, they have cut a piece off the back and put it on the front.
– We must recollect that Mr. Lyons has property adjoining this, but whether that be on option or not I do not know.
– He is Mr. Lyons, the caterer ?
– He is also a real estate dealer.
– Mr. Lyons, I understand, is a very wealthy man, and, like others in the same position, I suppose he is investing his money in London. It is quite possible that the site offered by Messrs. Hampton and Sons is not identical with that offered by the Lyons firm.
– Is it not more probable that it is the identical site? It is a corner site, and the 201 feet may go round the corner, while the other measurement may go only to the corner, as is the usual way of measuring.
– It would be rather unusual for the vendor of a valuable site not to describe it to the best advantage in the matter of frontage. However, I have placed the matter before honorable members, who can draw their own conclusions. It may be true that Mr. Lyons, by securing this option before the Commonwealth came on the scene, has been able to make some profit, and that the Commonwealth has not been able, perhaps, to buy as cheaply as they otherwise should, but that is all that can be said. There is obviously an absolutely good faith on the part of every official and expert who has been consulted by the Commonwealth. - there is no suggestion in the papers of anything in the way of sharp practice. In to-day’s newspaper there is a letter in which attention is called to the variation in the values attached to this property by Mr. Howard Martin, the President of the Institute of Valuers, London, who was employed to act for the Commonwealth. At first view there appear to be discrepancies, but an examination of the valuer’s reports show his valuations to be consistent. He writes -
In my opinion, the present market value of this site, if in the market, cleared, and free from the existing lease, would be ,£163,750 to builders, speculators, or others willing to buy it in the way of ordinary business.
His previous estimate pf £i54>30° “ f°r the purposes of investment as between a willing buyer and a willing seller” takes account of the existing leases, which run for four years, and reduce the value of the land to any one desiring immediate possession.
– The value of the leases is £16,000.
– £4,000 a year for four years.
– The present value of the leases cannot be regarded as £16,000.
– - That is the amount which they would return in the period for which they have to run.
– In giving a further valuation of from £200,000 to £220,000, Mr. Martin takes another position. He had written that the market value, if the site were cleared and free from existing leases, would be £163,750 to builders, speculators and others wishing to use it straight away, and £154,300 subject to the leases referred to. But, he subsequently added that, having regard to the fact that an unusual opportunity for ac quiring a site specially advantageous for our purposes now presents itself, we should do well in giving up to ,£2 10,000.
– Is it not remarkable that he did not come to that conclusion at first?
– In the first instance, he was asked merely to value the site, not to take into account the special advantages which the Commonwealth might get by acquiring it.
– When making the first valuation he knew what the property was sought for.
– In his first letter to Captain Collins, he said -
I am instructed that the property is freehold, and to be sold subject to a lease for twenty-five years from Midsummer, 1887, with an unexpired term of about four years, subject to a ground rent of £4,000 a year. Assuming the property is free from disadvantageous restrictions and from outgoings other than the ordinary rates and taxes, I am of opinion that, subject to the lease and for the purpose of clearing the site and putting up upon it a new building for the occupation of the purchasers when possession can be obtained on determination of the existing lease, the property is worth, as between a willing buyer and a willing seller, One hundred and fifty-four thousand three hundred pounds (,£154,300).
But we had to consider the actual position apart from the contingencies therein mentioned. Although we had no reason to consider Mr. Martin other than a competent valuer, we thought it advisable to obtain an independent valuation, as a check upon his, and therefore sent this cablegram to Captain Collins -
Obtain and telegraph not later than 23rd November independent valuation Trafalgar site land only, irrespective of buildings thereon, by competent valuator unconnected with Martin.
The valuation of the buildings would have required a close examination of them, which would have made it known that we were having a second valuation made, and we desired an entirely independent valuation, without the knowledge of any one interested in the building or concerned with the previous valuation. The reply received from Captain Collins was -
Referring to your telegram 19th November, employed leading firm valuators who do much Government work.
That is, work for the British Government, I presume. On telegraphing for the name of the firm, we learned that it is Messrs. Weatherall and Green, whose report has been summarized in the following telegram; -
Value to willing purchaser, irrespective ot buildings and in possession, ,£187,000. Prominence of position imparts great value to site ian purposes requiring publicity. Rarely find site such situation free from very long lease.
The Government considers that that valuation supports the statements of Mr. Martin, Lord Jersey, Captain Collins, and others, who have been consulted as to the worth of the site; and we therefore ask Parliament to say that the price asked is not unreasonable. It is desired that we shall pay £198,000 for the land and the buildings, which are now bringing in a (rental of £9,743, or a net return of about £8,000, clear of rates and taxes.
– And allowing for the £4,000 ground rent?
– If we purchase the land, there will be no ground rent to pay, because we shall be tenants in freehold.
– What do the rates and taxes amount to?
– It has been difficult to obtain an accurate statement’ by cablegram, but we understand that the tenants pay rates in respect of 54 per cent, of the value of the property ; the balance would have to be paid by the Commonweal th.
– On taking possession, the Commonwealth would have to pay the whole.
– In that case, it would raise the rents.
– The tenants, while paying rates, no doubt get a reduction in rents. Their rents would be raised if the Commonwealth had to pay the rates. In reply to a question as to what rates are now payable on the property, I received the following telegram -
Existing rate 6s. 8d. per annum we should have to pay on existing buildings this rate on an assessment about £2,200, tenants paying remainder. To compute rate for the future we should not be paying whilst building. Afterwards, assuming building cost ^65,000 to ^100,000, I estimate rates and taxes on existing basis between ^2,500 and ^3,000 per annum.
– The rates must be deducted from the rents.
– The tenants pay rates in respect of 54 per cent, of the value of the property. We are not sure that our information respecting rates is absolutely -accurate in all particulars, but, no doubt, the statement of Captain Collins that we should have to pay rates on an assessment of about £2,200 on existing buildings is correct. The Government in purchasing property outside Australia must rely on the advice of experts appointed by its officials. We cannot despatch a Commission or a member of the Government to London to make inquiries as to the value of the site, and we must be prepared either to rely on the reports of our officers, or to recall them as being incompetent.
– How is it that Mr. Martin reported in one case that the property was worth £154,000, and in another that it was worth £210,000?
– The honorable member is not quite fair. He is trying to bind Mr. Howard Martin to a valuation in respect of which he laid down certain conditions. He said that, given certain conditions, the property was worth £154,000, subject to certain other conditions, it was worth £163,000, and that in other given circumstances there would be no great risk in paying £210,000. for it.
– He did not make that statement until his report was referred back to him.
– That is not’ a material point. He was asked by Captain Collins, on behalf of the Government, to explain the basis of his valuation, and he proceeded to do so. As a matter of fact, Mr. Howard Martin is President of the Institute of Surveyors, and, therefore, one would say, a reputable man. He explains that his valuation of £154.000 was based on the rentals now being paid in respect of the property, together with the value of the leases of £4,000 per annum, which have yet four years to run. He valued the existing tenants’ leases on a 6 per cent, basis, and in this way arrived at a total of £154,000. That would be the present value of the site to a speculator, but the basis adopted is not that on which a valuation is generally computed. The sum of £154,000 represents the value of the property at the present time with its “tumbledown’” buildings-
– They are not “ tumble-down.”
– They are more or less dilapidated.
– They yield a revenue of £9,000 per annum.
– At the same time, we are advised that there would be no difficulty in obtaining a larger return.
– With a big outlay in respect of repairs.
– I admit that ; that is a disadvantage which I do not wish to hide. In considering whether ‘Mr. Howard Martin has over-valued the site in saying that there is no risk in giving up to £210,000 for its, although its immediate value is only £154,000, we have to remember that the building at present on the site is somewhat dilapidated, and is not returning anything like as much revenue as could be derived from it. The value of the site, under certain conditions, if acquired by the Commonwealth, would be much greater.
– It is in a very noisy neighbourhood ; there is a very heavy traffic.
– The more the better.
– The right honorable member for Swan knows more about that phase of the question than I do; he has been in London, and I have not. Entirely disinterested persons whom [ have interrogated during the last week or two have expressed the opinion, without knowing that the Commonwealth proposed to purchase a site there, that Trafalgar Square would’ be a splendid situation for Commonwealth offices, and that it would not be possible to secure a busier site.
– It is one of the most valuable in London.
– Here is yet another testimony to the value of the site.
– It is in the centre of London.
– It is in the centre of London, and I think that we must accept the testimony of our officers. I propose to read to honorable members some statements made by Mr. Martin. He says -
The want of depth of part of the site is, to some extent, a drawback to its value,- but, in my judgment, the present building is not so planned as to turn the site to the best account. As regards position, I consider the site suitable for a much better building, and one of the best in London either for shops or offices or for a public building.
Then, as regards the existing buildings, he writes -
The quality of the materials and workmanship … is not better than is to be found in the better class of speculative builders’ work, and a considerable part of the interior is not in good repair, nor is it arranged to the best advantage.
I do not know that honorable members have seen the following cablegram from Captain Collins -
At interview with Lyons to-day - Jersey, Galbraith present - satisfied with his position dealing with Government. Gives option for two months purchase freehold£220,000, subject to and with benefit of any lease expiring due 1912 at the rent of£10,000 per annum. This lease could be bought for a sum not exceeding £18,000. One hundred and fifty thousand” pounds of purchase money can remain on first mortgage.
– At what rate?
– No rate had been mentioned at that period -
Present rack rental premises between£8,000 and £10,000. Architect’s report with plans posted15th May states position finest, but construction of building inferior; cheap; signs of failure and dilapidation ; roof, flooring defective. Necessary repairs would cost£16,000; alterations suitable probable requirements £30,000 more, whereas new building with additional storey for£65,000.
Mr. Martin reports that the immediate expenditure necessary to put the building in repair is £16,000, and that if we wish to alter it for Commonwealth purposes we must incur a further expenditure of £30,000, or a total of £46,000. On the other hand, if we propose to pull down the whole structure, and erect a new building, an expenditure of at least £65,000 will be necessary. Everything, of course, will depend upon the plans agreed upon. It is obvious that the present building could not remain in use for any length of time without very considerable alterations being made to it. It has been cheaply erected, and would not suit our requirements. I do not know that there is any other point to which I need refer, except that the price of £238,000 which Messrs. Lyons asked for the property is equal to about £28 per superficial foot, and that Captain Collins reports that the London Council paid £28 per superficial foot for a site of about 700 feet in Cockspur-street - an adjoining thoroughfare - which is not so good as that now under consideration. This goes to show - and I give the statement for what it is worth - that the price proposed to be paid is not an extreme one. The arrangement proposed was that the Government should pay a deposit of 10 per cent., amounting to nearly £20,000, and that the balance should remain, as proposed by the Messrs. Lyons, on the best interest obtainable. On inquiry we were informed that the best terms they could offer were 4½ per cent. A cablegram was sent to Captain Collins -
What is the reason for very high rate of interest now proposed? Is it because of large proportion of purchase money left on mortgage, or is it because of indefinite term for redemption ?
The inquiry was made with a view of ascertaining whether any alteration of the proposed terms would secure an agreement as to the payment of a lower rate of interest in respect of the balance due -
What alteration in conditions of purchase would be necessary in order to bring rate of interest down to reasonable rate, Commonwealth being mortgagors? Please telegraph reply.
He replied -
Inquiry Manager, Bank of New South Wales ; also Bank of England confirm Lyons’ offer as lowest likely to be got. Suggested to Bank of England utilization of our floating balance and their advancing against title deeds sum required at rate not exceeding mortgage rate, to which they said that they would give favorable consideration. Manager Bank of New South Wales concurs as being most practical and economical arrangement if bank will do it. Jersey meets me to-morrow, and will go into whole matter and cable.
I have requested Captain Collins to send a further report on this phase of the question, but have not yet received a reply.
– Is the title satisfactory?
– It is. The fact that it is a freehold constitutes one of the chief values of the property.
– Has the Minister a copy of the offer? We wish to make sure that the rental of £4,000 will not be a charge upon the property.
– That cannot be so. Let us assume that A is a freeholder and that B is a leaseholder paying £4,000 a year, and lets to C the occupying tenancies. We acquire the positions of A and B - the positions of freeholder and first lessee. The House, therefore, has to consider only the occupying tenancies. We take the freehold. The freeholder would be entitled to £4,000 a year from the leaseholder, but, as we take the positions of the freeholder and also of the original lessee, that is immaterial.
Mr- Roberts. - Is the Minister quite sure about the site being an absolute freehold ?
– Many areas in London referred to as freeholds carry with them a ground rent in perpetuity.
– This is an area carrying a ground rent up to, I think, 1912.
– There may be a ground rent, and still the property may be referred to as freehold.
– There might have been, but, as a matter of fact, it is evident that our purchase is not subject to a ground rent. It is stated as clearly as possible that the title is freehold, subject to no restrictions.
– Who pays the £4,000 at present?
– The lessees pay the freeholder. I understand that the Prudential Company are the ground lessees, and not the freeholders, but the position we take is that we are absolutely the freeholders, and, of course, not liable for the payment of that £4,000 a year. We come in on the ground floor, so to speak, as the absolute holders of the freehold.
– Is there a house duty on it ?
– There are certain rates and taxes amounting to 6s. 8d. in the £1. How can the honorable member expect me to say whether that sum includes a house duty?
– The rates and taxes are ridiculously small.
– They may be, but that cannot be regarded as a disadvantage to the site. We have telegraphed specially to ascertain the Council rate in the area, and are informed that it is 6s. 8d. in the £1. I understand that in some areas it is nearly twice that for some kinds of property. From a careful investigation of the papers, one cannot come to the conclusion that this is a bargain, but one can fairly assume that we are paying a reasonable price, and that if we want such a site in this position we can expect to have to give more than its actual selling value to get it at any given moment. The freehold in London of an area such as this, in an exceptionally favorable place, is naturally difficult to get hold of. There are not many freeholds in suitable localities to be obtained, because most of the best business sites are subject to very long leases. Every other offer made to the Commonwealth Government of a site at all suitable in any prominent place has been for a lease. This is about the only proposal that has been made for ceding the freehold. The present value of the site is likely to be considerably enhanced when the street which it has been decided to open up from Buckingham Palace to Charing Cross has been completed.
– Is there not great risk of a progressive land tax ‘being introduced soon in London?
– There is always that risk in regard to every site. We cannot dodge a progressive land tax, if one is imposed, by changing the site.
– I think the present Government will dodge one for a while.
– I would suggest to the honorable member that he should not be too sure about it. The Government have carefully looked through all the papers. The President of the Institute of Valuers is an expert whom one ought to be able to rely upon. Lord Jersey, who has a reputation as a financier, and is extremely anxious to assist the Commonwealth in every possible way with advice, also considers that the price is reasonable. In fact, he would have advised the Commonwealth to go to a still higher figure, rather than lose the opportunity. We have also obtained an entirely independent valuation which bears out our belief that the price is reasonable. The site offers, so far as I am able to ascertain, advantages above those of any other that we are likely to have put before us. It will probably increase in value and importance, and it has the further advantage that we can allow the existing tenancies to run ora for some three and a half years. We are not compelled immediately to begin the preparation of plans for a new building. We shall have time to look about us, to pass the High Commissioner Bill, appoint a High Commissioner, and enable him to get to London, and himself arrange for the preparation of the plans for a new building. The building can also be erected in sections. All these advantages connected with the site seem to warrant us in placing it before tbe House and asking honorable members to approve of its purchase.
– This proposition has my hearty approval. I have seen the spot where it is proposed to have the Commonwealth office, and, although I agree that it is not the best site in London, I believe it is the best that can be secured. In these circumstances the House should readily agree to affirm the bargain or contract which has been made. It is necessary to have a central position for such an office or series of offices, and when it is remembered that this site is within a stone’s throw of Charing Cross station, where thousands of people are brought every hour into London, and is on the direct route from that station to Regent Street and the great business centres in the West End, honorable members will realize that it occupies a very central position, and that a large number of people will be constantly passing and re-passing our offices if this site is selected. It isalso at the very centre of the official life of London. Around it we have the Admiralty and the Horse Guards ; and a little furtherdown Whitehall are the Houses of Parliament. Here again are additional advantages which should commend the site to honorable members. To us, who have been accustomed to calculate prices at from £10 up to £100 per foot, £1,000 a foot seemsa very large sum, more especially as thedepth is so small compared with what we are used to in the case of similar blocks in Australian cities ; but we must realize theenormous value of land in the great centre of the Empire. There land is really sold* by the square foot or square inch, rather than by the foot frontage. It matters little what the depth may be, so long as the position is considered desirable. In the negotiations which have taken place the Commonwealth has been extremely well served* bv its London representative, Captain Collins, and also by the Earl of Jersey, who, as the Minister of External Affair.1? said, always shows such a keen interest inthe welfare of Australia and Australians. We are exceptionally fortunate in having the assistance on this and many other occasions in the city of London of men of the financial capacity and high publicposition of the Earl of Jersey. His words of advice to the Government, and through him to this Parliament and the people of Australia, should* not be -lightly cast aside. By their interjections while the Minister was speaking honorable members apparently wished to indicate that for one reason or another the site was not so desirable or as good as the Commonwealth should acquire, but it will be utterly impossible to secure a site combining ail the advantages which honorable members desire. We should make the best of what is offered to us. If the Government will take the opportunity, when the site is selected, of placing upon it buildings consonant with the dignity and importance of the Commonwealth, and” at least partly made from Australian materials, I feel sure that there will not be a vacant room in them. Honorable members have heard that the State of New South Wales “is already anxious to secure accommodation, and it would be only a matter of time before all the other States, except Victoria., which has already made other arrangements, would be anxious and willing to rome in as tenants of the Commonwealth. That is a matter which emphasizes the national aspect of. the question. We must remember that if we purchase this site and incur further expenditure on the building, we are dealing with the money of the people of Australia; and if by so doing we provide better accommodation for the various States, the expenditure will be largely justified. One point to which too much weight cannot be given is that a new thoroughfare is to be opened right through the corner opposite this building. This new thoroughfare will come down from1 the Mall from the direction of Buckingham Palace and terminate opposite the proposed site; and, of course, that would nave a potent effect on its future value as a commercial property. Doubtless there will be a repetition of what happened in the Strand when the King’s Way was proposed. Buildings, which for many years had been at about the same value, increased enormously in demand, and, when the road was thrown open, the higher values were maintained.
– The new road is on the opposite side of the Square from the proposed Commonwealth buildings.
– That is not so; it is on the opposite side of the road. The road comes from St. James’ Park, so that practically the Commonwealth buildings will face the end of the new roadway. If the buildings are of the character we desire, we shall secure a standing advertisement of immense value. I heartily commend this proposal, because I feel satisfied, from my personal) knowledge, that if we waited for a century we could not procure a more suitable site.
– I agree with the Minister that this is a question which should not have the slightest party aspect, but which ought to be regarded solely in the interests of the Commonwealth. If we concede that the Commonwealth ought to have a site in London for the erection of offices, the one question for members, no matter in what part of the House they mav sit, is whether the site is suitable, and, if it be so, whether the price is reasonable ? I . say at once that, in my opinion, the situation of the site is an excellent one,, although’ I know that many have a preference for a site in the city. It is, however, quite impossible to get a city freehold site of any area and1, if we are to have the co-operation of the States, now or at any future time, we shall need considerable space. In the heart of the city there are seldom if ever freehold sites of any area on the market. If there is a site obtainable it is generally one the lease of which has expired, and the owners of which desire’ to make a fresh lease, usually on considerably higher terms. We are, therefore, almost compelled to go further afield, and. as I have already said, I can take no exception to the situation now under discussion. It is prominent, easy of access from almost any part of London, and in that way suitable. But there arises the question of value; and I must say that I think there have been some smart men at work in this connexion. It is very evident that the valuation given in the first place by Mr. Howard Martin was something close to the mark, namely, £154,300. Mr. Martin says in his communication -
Assuming the property is free from disadvantageous restrictions and from outgoings other than the ordinary rates and taxes, I am of opinion that, subject to the lease and for the purpose of clearing the site and putting up upon it a new building for the occupation of the purchasers when possession can be obtained on the termination of the existing lease, the property is worth, as between a willing buyer and a willing seller, one hundred and fifty-four thousand three hundred pounds (,£154,300).
The conditions there indicated are those on which the negotiations are now. being carried out, the Commonwealth to enter into complete possession in 1912. In my opinion, as I say, that valuation was fairly near the mark; but then an operator, who knew the Commonwealth was looking out for a site, came on the scene. What that operator has got the property under offer for I cannot say, but he has taken the opportunity, for which I do not blame him, to make a greater or smaller profit.
– We must admit that that is possible.
– My opinion is that the difference in the measurement of the frontages in two separate offers does not indicate that they do not refer to the ‘same property. Very often when negotiations are opened, accurate measurements are not obtained ; but it is very unlikely that there are two properties of this area in , the same position for sale. I do not blame the representatives of the Commonwealth, but I think that if we had got in earlier, we could have purchased the property at a very much . lower price. However, I admit, with the Minister, that if another person has “come in “ he may secure a profit, and that the Commonwealth ought not to injure itself on that account, if we are getting good value and suitable premises. The position may be unfortunate, and I am sorry that any one should be able to make a profit as between the present owners and the Commonwealth ; but, even in such case, the question for the Commonwealth is whether the property is worth the money, and the site entirely suitable, as it should be, considering that we are binding ourselves to it for ever. As to the value, I can only say that this property is cheaper than that which was offered to us by the London County Council. The sites offered by the County Council rangedfrom 15s. to 18s. and 19s. per square foot rental, though, I believe, the Premier of Victoria obtained one block at about 13s. 1 am speaking of the Aldwych site in the Strand.
– I was offered land there at a price not exceeding 13s. per square foot,; but a meeting of the County Council Committee could not be arranged. That was when I was in London.
– I do not think that the honorable member for Hume has had that land offered at 13s. since he returned to Australia.
– No; but it was offered to me by the official who spoke on behalf of the London County Council.
– And the Victorian Premier closed at that price.
– The Premier of Victoria, when certain alterations had been made, got the land at under 12s.
– I do not think that the honorable member will say that hecould lately have closed at 13s.
– Certainly not ; though we were prepared to close at that price. I think the London County Council asked 16s.
– Well, taking the price at 16s. per square foot, and comparing that with the price of the Trafalgar Square site, and allowing 3½ per cent. on the capital value of the latter as rental–
– There is the great difference that the Trafalgar Square site is freehold, whereas the Aldwych site is leasehold.
– At any rate, the Trafalgar Square site, at 3½ per cent. on the capital value, works out at 16s. per square foot. But we must remember that, in the case of the leasehold land, the buildings would have to be abandoned at the end of the period, and that that loss would have to be added to the rental ; and, therefore, I think that the freehold land in Trafalgar Square is the cheaper.
– Was not the Aldwych land on a ninety-nine years’ lease?
– Yes; but there wasa provision that it must be sold in 1959.
– And then the Commonwealth would have to become a competitor, and to keep the land would probably have to pay a high price. Now,. I come to my real objection to the Trafalgar Square site ; and that is the formation of the land and its measurement. To my mind it is a most unfortunately shaped piece of ground. A frontage of 201 feet can only be got by extending the measurement around the corner. There is really a frontage to two streets. In Australia it is usual to sell land on the frontage to one street.
– The land does notrun to a corner.
– Its frontage follows the outline of a half circle, or of a boomerang.
– All the frontage is useful.
– I understand that the land contains an area of 8,683 square feet, its depth, which varies from 41 or 42 feet to 82 feet, averages between 43 and 44 feet.
– It does not go below 42 feet.
– From the plan, it will be seen that the conformation of the ground is extraordinary. In my opinion, additional land will be necessary if we are to erect buildings suitable for our purpose. How, otherwise, can we house the representatives of six, or at the least of five, States, and the Commonwealth, and make a display of the products of all parts of Australia? Another objection to the position is that, being right on a main thoroughfare, it is very noisy, and it will be impossible to build back rooms away from the street, because the depth of the building will be only that of an ordinary suburban shop. It is not surprising that the present building is unsuitable, because it would be very difficult to erect any suitable premises on the land, its shape being so peculiar. If we are to make good use of the property, we must buy additional land at the back. That would be impossible, at least in one part, because of the presence there of the National Bank, which the proprietors would not wish to remove. As the depth of the land is so little, the offices in the building would be very inferior.
– Not for advertising purposes.
– I admit the value of the site for advertising purposes ; but we require ground on which to erect premises to suit the needs, not merely of the moment, but of the future, and, if possible, we must bring the States and the Commonwealth under the one roof. The representation of Australian interests in London will not be satisfactory until that has been accomplished. If the .Commonwealth alone is to be considered, the proposed heavy expenditure is not required ; we should not undertake this liability unless in the hope of getting the States to co-operate with us. Plans of the land should have been made more generally available to honorable members.
– This matter is now being discussed in another place.
– Nevertheless, the Department could have supplied a number of reproduced copies of the plan. Those who have not seen it, do not know the difficulties which the conformation of the land presents. However, I do not wish to delay a vote on the matter. I think that the Commonwealth is paying more than it might have had to pay had we got into treaty in the first place with the owner of the property. The proposed site is, however, cheaper than the Aldwych site, though, the latter, having a greater and more regular depth, would have provided better for the needs of both the States and the Commonwealth. I am in favour of the situation, but the area is not, in my opinion, suitable for our purposes.
– I shall not take up much time in discussing this matter, because I realize that it should be dealt with without delay. I shall therefore not speak as to the price, or as to how the valuation was arrived at, though honorable members generally feel that a number of matters connected therewith are not satisfactory, in the light of the information to hand. The honorable member for North Sydney has shown clearly that the configuration of the land presents a serious difficulty, the shape of the block being such as will make it troublesome to design a building which, when erected, will do credit to the Commonwealth, and, while providing for the effective display of Australian products, give facilities for the transaction of the manifold affairs which will come within the jurisdiction of the High Commissioner’soffice. I wish to speak chiefly upon the value of the site for our purposes, having regard to its locality. The four great functions of the High Commissioner’s officewill be the dealing with immigrants, the official relations ‘between the Commonwealth and the Mother Country, the inspection of Australian produce in London, and the management of our debts. Of these four functions, the greatest is the financial one. It is generally held that the Australian Governments should arrange directly for the conversion of loans and the issue of new scrip, although this work has hitherto been done for them by great financial institutions in London. If Australia federalizes her debts, as I assume she will, the financial function will be one of extreme importance.
– In the distant future.
– I do not think that the federalizing of the debts lies far in the future. Many schemes for bringing it about have been evolved by the late Government and private members, and, no doubt, the present Government will soon add to the number. If effect is given to any such scheme, we shall at once be faced with the question - Is the proposed site the best place for an office in which to deal with Australian stock?
– It will not be the best place for an office for the transaction of financial business.
– The transaction of financial business, if it is to be done efficiently, must take place in an office in the City, miles from the present site.
– About a mile.
– It must take place in an office situated somewhere near the Bank of England.
– The great financial operations of London are all carried on within a stone’s throw of the Bank of
England, where there is a different atmosphere, and a different world, from’ those surrounding the Trafalgar Square site.
– That part of London is a sort of rabbit warren.
– That may be, but we must take the world as we find it. My honorable friend is impatient, but, under the circumstances, I must bear with him. What he terms a rabbit warren is the financial centre of London.
– And of the world.
– Yes. If our debts are to be federalized, and the supervision of conversions, the issue of stock, and other financial work is to be done in the High Commissioner’s office, a considerable number of clerks must be employed, and they must be located somewhere in the City. Therefore, even if we purchased the Trafalgar Square site, we must rent an office in the City - where rents are, perhaps, the highest in the world. For this reason, the Trafalgar Square site is not a desirable one for the performance of the chief of the four main functions of the High Commissioner’s office. As to the inspection of Australian produce, that, at present, is done by officers appointed by the AgentsGeneral, who perform their work at the docks.
– The proposed site is nearer to where Australian produce is landed than a site in the City would be.
– It is nearer to where the honorable gentleman stayed when in London, but further from the docks.
– Our produce is landed nearer to the proposed site than to any city site.
– If the honorable member knew his London as well as he knows the Hotel Cecil, he would be aware that Australian produce is landed, not in the West End, but at the docks in the East End, where it is inspected to see whether the conditions of shipment are conformed to. If the High Commissioner’s office is intrusted with the work of inspection - as I hope, in the interests of our producers, it will be, because obviously there should be one authority, and no duplication and reduplication of inspection - the Trafalgar Square site will be unsuitable for an office for those doing the work. Therefore, on two counts, the verdict must be against the proposed site. I now come to facts which tell in its favour. It is situated in a quarter where most of the shipping con>panies have offices.
– Not all of them.
– There are a great many shipping offices close to Trafalgar Square.
– Especially offices dealing with passenger business.
– Yes. For the Chief Immigration Office, this site would be as convenient as could be chosen.
– Nearly all the shipping companies have their offices near the Bank of England.
– Most of them have branches near Trafalgar Square.
– A shipping company usually carries on two branches of business, the transport of freight and the conveyance of passengers; and chiefly passenger traffic is dealt with in the vicinity of Trafalgar Square. If immigration is to be brought about by means of a London office this is about the most convenient site for such an office -that could be chosen. But if we are to get immigrants of the right sort we shall have to look for them; we cannot expect them to walk into our office. What we require to foster immigration far more urgently than an office is an organization, and so far as the actual address of that organization is concerned a small office in the locality proposed would do just as well as a star building. I have to deal with only one moire function to be discharged in the proposed London office - I refer to the official relations between the Commonwealth and the British Government. This site is fairly adjacent to the Imperial Government offices, and so far as that work is concerned I think would do reasonably well. I have given honorable members as clearly as I can the considerations which, in my opinion, should govern them in the choice of a site. On the one side we find that the site is fairly convenient for an’ immigration office and for an office at which our official relations with the British Government may be conducted; but it is supremely inconvenient - it is about as unsuitable a locality as could be chosen - for functions which require an office quite as urgently as do the others to which I have referred. I allude to negotiations in connexion with our financial arrangements and to the supervision of Australian products landed in London. The burden of advantage and disadvantage in this question of locality rests against the site proposed to be acquired, and I feel that in the circumstances I cannot support it as the best available. A ‘number of honorable members are supporting the erection in London of a large building from a sort of vague hope that some advertisement to the Commonwealth will accrue therefrom. If I know anything of London and of Londoners, my experience is that no one there ever thinks of looking at a building. Any one who has been in that great city realizes that the one impression he carries home with him at night is that of the thronging crowds in the streets and the vague indefinable mist which seem to be their proper accompaniment. Even the stranger in London does not think of looking at the buildings, and it is ridiculous to think of a Londoner taking the trouble to view a £60,000 building such as is proposed to be erected by the Commonwealth!. If we desire an advertisement we can obtain for the same money a far better one by means of a system of effective organization than is possible by the erection of a fine stone edifice in a city which is full of buildings that must overshadow a structure erected at the moderate cost proposed to be incurred, and the inhabitants of which have hardly any regard for the buildings in the streets they use. It is said that just as an Englishman’s home is his castle, so is his office his refuge. I. have often noticed that the English business man in proceeding from the one to the other looks neither to right nor to left, and gives no attention to anything save his desire to reach his destina.tion as expeditiously as possible. The erection of the proposed building for purposes of advertisement would do us no good. Those who inspect such offices are people like the honorable member for Hume, who are visitors at hotels in the vicinity, and who, perhaps, in their idle moments, look out of their hotel windows and count the neighbouring advertisements. The people we wish to interest are not visitors to the city of London, they are not our trans-Atlantic cousins, or our South! African friends, or New Zealanders, who happen to be stopping at the palatial residential hotels of London. We wish to secure the interest of the great agricultural and commercial classes of England, but we cannot hope to do so merely by the erection of a building in a part of London which is chiefly celebrated for its theatres, music halls, and hotels. I do not think that the Commonwealth will secure a good advertisement by spending a large sum of money on a site which does not seem to be in the most convenient locality for our various functions. We certainly shall not secure the advertisement which so many honorable members seem to hope will accrue, as if this £60,000 building were to be erected in the city of Bendigo instead of amongst the monuments in the heart of the six 01 seven millions who constitute the city of London.
.- Whilst I recognise the necessity of providing as speedily as possible a habitation in London for the High Commissioner of the Commonwealth, I think that we should approach very cautiously the consideration of this proposition, involving, as it does, the expenditure of a very large sum. It would ‘be interesting to know what became of the negotiations that were in progress a short time ago for the acquisition of another site in London, which the honorable member for Hume, who was then Treasurer, described as an ideal one.
– So it is.
– What has become of that ideal site?
– The London County Council refused to sell it at the price that we desired to pay for it.
– That information should have been forthcoming before. As to the new site, to the purchase of which we are now asked to agree, we have to examine the character of the information relating to it which is contained in the memorandum that has been circulated. We find, in the first place, a serious discrepancy between the first and subsequent valuations made by Mr. Howard Martin. On the 26th June he sent to Captain Collins a letter in which he estimated the value of the site at £154,300. Within less than a week he made a further valuation showing an advance of nearly £10,000. In regard to his first estimate he wrote -
Assuming that the property is freehold, subject to no outgoings other than the ordinary rates and taxes, and to no disadvantageous restrictions on the user, I am of opinion that, subject to the lease already referred to, it is worth One. hundred and fifty-four thousand three hundred pounds (£154,300) as a site and building for the purposes of investment as between a willing buyer and a willing seller.
It will be seen that in making that estimate on the 26th June, Mr. Martin had regard to the value not only of the land, but of the building erected upon it.
– Order. I hear conversations proceeding from several parts of the chamber.
– I come now to the letter written by Mr. Martin on the 2nd July, less than a week later. Apparently some communications had passed in the meantime between him and Captain Collins, but as to their nature we are left entirely in the dark.
– Order. A fewmoments ago I called attention to the numerous conversations proceeding, but there has since been scarcely any abatement of them. I can hear words uttered by honorable members in different parts of the chamber. These conversations are most impolite, to say nothing of their being contrary to the Standing Orders. I ask honorable ‘members to give the honorable member for Lang an opportunity to make himself heard.
– On the 2nd July, Mr. Martin wrote to Captain Collins as follows -
Dear Sir, - As you desired, I write in explanation of the paragraph in my report concerning the value of the property as a site for a special building.
T do not think there is any site in London with equal advantages of position and nearly equal area, at present uncovered and in the market. … In my opinion, the present market value of this site, if in the market, cleared and free from the existing lease, would be £163,750 to builders, speculators, or others willing to buy it in the way of ordinary business. But. as the site (like, I think, every Other site of equal area and advantage of position in London) is at present covered with occupied buildings, I think no one for whose purpose this position is specially suitable, and who requires the whole site for the purpose of immediately erecting a building for his own occupation, could expect to buy the property and get vacant possession for less than from £200,000 to £220,000; and if you could buy it with vacant possession on completion of the purchase, say, in six or nine months, for any price within those limits, I am of opinion that the Commonwealth would be wise to take the opportunity of doing so.
I do not know exactly what is meant by that report. In an earlier portion of his report, it is stated that the property now offered to the Commonwealth by Mr. Lyons comprises an area of 8,000 superficial feet. * and is being sold subject to a lease of twenty-five years - of which the unexpired term is about four years - subject to a ground rental of £4,000. Does that mean that the freehold is being sold subject to a continuation of the payment of £4,000 per annum in respect of the remaining four years of the leasehold, and has Mr. Martin in his. amended estimate allowed for the cancellation of that leasehold condition, and in some way capitalized the advantages which the non-payment of that rent would confer on the purchaser of the site? He may have been swayed by such considerations in making this increased estimate, although I hardly think so. There is, evidently, something suppressed or withheld’ in connexion with this second valuation. We certainly do not know what led to the great discrepancy between Mr. Martin’s first and second valuations. The property could not have acquired that additional value in the time, and some reason not disclosed in the paper before us must have caused him to increase his estimate from £154,300 to £i<53>75°-
– It is a different computation.
– That is quite obvious ; but he must have had some reason for the increased estimate, and we are entitled to know that reason. The Minister has not explained, and nothing in the papers laid on the table makes it clear.
– I explained it when speaking.
– I did not understand the Minister to make it clear that the difference in the estimates was based on the capitalization of the four years’ ground rent. I understood him to say, although even this he did not assert positively, that the Commonwealth was not buying the freehold subject to any obligation as to leasehold ground rent. Even that is not clearly shown by the papers which have been presented to us. On the contrary, it seems that the purchase was to be made subject to the payment of a ground rent of £4,000 a year.
– Not by the Commonwealth. The purchaser of the freehold cannot have to pay ground rent to anybody else.
– I am informed that even freehold ground tenures in Great Britain have life leases attached to them - that a certain amount of ground rent has to be paid to somebody in perpetuity even under a freehold title. The land laws of Great Britain are not exactly the same as ours, and if there is any such land tenure it would be as well to make certain that we are not buying this property subject to any lien of that kind. Mr. Martin, in his letter of 2nd July, after stating that the site for speculative builders or others willing to buy in the way of ordinary business would-be worth £163,750, adds -
Hut as the site, like, I think, every other site of equal area and advantage of position in London, is at present covered with occupied buildings, I think no one for whose purpose this position is specially suitable, and who requires the whole site for the purpose of immediately erecting a building for his own occupation, could expect to buy the property and get vacant possession for less than from£200,000 to £220,000; and if you could buy it with vacant possession on completion of the purchase, say, in six or nine months, for any price within those limits, I am of opinion that the Commonwealth would be wise to take the opportunity of doing so.
That is a most extraordinary process of reasoning. Here is a site which, for people who want to turn it to commercial advantage for ordinary business transactions, is not worth more than £163,750 on that amended estimate, although a week before it was worth only £154,300, including buildings; but, because the Common wealth Government happen to want it for their own offices, he considers that they would be justified in paying £65,000’ more than the actual value. That is an astounding business proposition to be entertained for a moment, let alone suggested, by any business man. If a similar offer were made of any site in Australia, and the same reasons advanced why the purchaser, whether a private individual, a company, or a Government, should agree to increase the purchase money in that way under such conditions, it would be scouted as absolutely untenable. I think it is untenable. It is monstrous that we should be expected to pay from £200,000 to £220,000 for a site which a week before the same valuer considered to be worth only jQ 154, 300. In view of that discrepancy, there is room, and need, for very much closer investigation than appears to have taken place.
– That is the reason ivhy we got another valuer’s report.
– I know; but, whilst I do not wish to suggest that there is anything wrong in the transaction, it commonly happens, as a matter of business, that when a person valuing a property is making his inquiries, he will naturally try to make something for himself out of it if the transaction comes off. In a very large deal of that kind, most people, if they see an opportunity-
– A firm of professional valuers would hardly do that kind of thing.
Their fee is big - 300 guineas for a valuation.
– Even so; here is a discrepancy involving a sum of £65,000, and it is certain that some one is going to make a big financial gain out of the difference, perhaps more than one person.
– If a man in that position did such a thing, it would soon be known, and he would not be able to command such high fees.
– These things are often difficult to detect. I am simply looking at the possibilities. I understand that this valuer has now made a valuation of £187,000.
– Apart from the buildings.
– And yet Mr. Martin’s valuation of £154,300 was inclusive of the buildings. In any case we have to consider that this is the purchase merely of a site because it is admitted that the buildings are not to be taken seriously into account. They will have to be pulled down, and new buildings erected, so that they have to be sacrificed, and can only be regarded as worth what they would bring as old material. According to the report, they are not of a high-class character. Indeed, they seem to be of the jerry-built type. If they are retained, it is stated in the memorandum that a sum of £16,000 will have to be paid for repairs, in addition to the purchase money, while in the event of the Commonwealth wishing to occupy them as Government offices, the estimated cost of the necessary alterations is £46,000. All these sums have to be added to the purchase money, while, if the old buildings are pulled down, and new buildings erected, with an additional story, the estimate of cost is £65,000. In the light of the estimates laid on the table regarding the cost of the proposed site in the Strand, it will be found that we shall not be able to erect a building for anything like £65,000. It will probably run into considerably over £100,000.
– Colonel Owen’s estimate is, I think, £80,000.
– During last session, as the Minister will remember, plans were laid on the table in connexion with the Strand site. I forget what the estimate was for that building, but I know it ran into very much larger figures than those given in this document. We may reasonably expect that an ornate building with a facade and elevation suitable to the dignity of Commonwealth offices, will not be erected for very much under £100,000. Indeed, it is reasonable to expect that it will cost considerably more.
– That, of course, would give a commensurate return.
– Of course, we should have to get a rental for it, but that would not lessen the outlay. The present rental for the existing buildings is set down at £9,740 per annum. The Minister admits that the share payable by the Commonwealth of the rates and taxes would amount to £2,200. I take it that that £9,740 is the gross and not the net rental.
– It is the gross rental ; the net is just on £8,000.
– The net rental would bc much less. The Minister has explained that the tenants pay about 54 per cent, of the rates at present. The total rates may be anything from £2,500 to £3,000 per annum, and of that the Minister stated that the Commonwealth’s share would be £2,200.
– 46 per cent, of £2,300 cannot amount to £2,200.
– I am taking the Minister’s own figures. A payment of £2,200 for rates and taxes brings the net rental down at £7,540, but the cost of insurance, caretakers, upkeep, wear and tear, maintenance, and so on, may fairly be put down at £540, leaving a net rental to be received bv the Commonwealth up to 1912 of only £7,000 per annum. All these are mere matters of conjecture, but I do not think an estimate of £540 per annum for insurance, caretakers, maintenance, and so on, is at all excessive.
– Even after expending £100,000 on a new building, the estimate for the rates is only £2,500 to .£3,000.
– I understood the Minister to say that the total of the rates, including tho’se which will have to be paid by the Commonwealth, and those at present paid by the tenants, was between £2,500 and £3.°°°-
– About .£2,200 at present.
– The rates under the London County Council amount to 6s. 8d. in the £c, and when we deduct that rate from the rental, and add the cost of the insurance, maintenance, and so forth, I do not think that we can count on a net rental of more than £7,500.
– That is calculating the rate of 6s. 8d. in the £1: on the rental. °f £9>74° at present received, but 54 per cent, of the rates is paid bv the tenants.
– Even the Minister’sestimate of the net rental will not give 5 per cent, on the expenditure, so that it does not appear to be a very inviting business transaction.
– I do’ not think we shall make a lot of money out of it.
– But we do stand to lose a lot. Passing from that aspect of the question, I may point out that Mr. Martin, within a week, jumped from a valuation of ,£1.54,300 to one of .£163,750, and then advised the Commonwealth to pay anything up to £220,000. Then, in :,.ddi.tion, so far as I understand, there is> liability for a ground rental of £4,000 per annum for at least the next four years.
– That is absolutely not so.
– The memorandum) does not make it clear that that is not so, and, apparently, the Minister has no definite information on the point.
Sitting suspended from 6.30 to 7.45 p.m.
– I should like to have the Minister of External Affairs present, and to that end I desire to call attention to the state of the House. [Quorum f aimed.’] The Minister seems to think that if we pay £198,000 we shall really buy out the lease, but Mr. Martin’s letter of the 20th August to Captain Collins, does not appear to coincide with the Minister’sview. The letter states -
I should think that £20,000 would probably buy out all the occupying tenants, though, of course, this is merely a rough guess, as I have not the data for any even approximate estimate. This being so, in my opinion, you would do well to give £210.000 to include the £4,000 a year lease and take the chance of getting out all the occupying tenants for a reasonable sum and within a reasonable time.
– That coincides with what I said.
– But Mr. Martin suggests the higher sum of £210,000 to buy out the lease.
– Not to buy out the lease, but to buy out the occupying tenants.
– That is not so. Mr. Martin says that he has no data for evenan approximate estimate of how much itwould cost to buy out the tenants, and he leaves that as a matter to be dealt with after the purchase has been effected. and the suggestion is that the larger sum of £210,000 would include the £4,000 a year ground rent, and that we have to take our chance of buying out the occupying tenants. It is clear that, under these proposals, the Commonwealth will be saddled with £4,000 a year for at least four years, which will mean an additional sum of £16,000.
– The honorable member is putting a construction on the word ‘ include ‘ ‘ which is not compatible with the rest of the correspondence. In some cases it is definitely stated that the price is exclusive.
– If the £4,000 is not a charge that the Commonwealth has to pay, then I fail to understand the reference to that sum in the very last communication that was received by Captain Collins from Mr. Martin. Evidently Mr. Martin’s previous valuation did not include the £4,000 per annum for ground rent,- or there would have been no occasion to advise the payment of the larger sum to include it. What we are really proposing to do is to purchase the ground for £198,000, plus £4,000 a year for the four, years remaining of the existing tenancies, plus also £46,000 for alterations, and probably £100,000 for a new building ; plus also rates, taxes, insurance, maintenance, and other charges, amounting to a large annual sum. Evidently the negotiations seem to have got noised abroad, whether or not through Captain Collin’s office I do not know, and certain speculative individuals became aware that the Commonwealth was in search of si site. Before the Commonwealth had time to come to any arrangement, owing to the difficulties of full and complete rapid communication between Australia and England, a wealthy firm interested in land speculation amongst other things acquired an option, with a view to making a few thousands by the transaction. All the facts known to us suggest that through a leakage somewhere, a speculator came upon the scene between the time when Captain Collins acquainted the Deakin Government about the site and the opening up of negotiations for its purchase. The Minister Kel ls us that he has sought to safeguard Commonwealth interests by instructing Captain Collins to obtain the valuation of another expert. But Captain Collins had indorsed’ Mr. Martin’s recommendations.
– Captain Collins is our representative in London. To whom else should we go?
– Had there been a considerable discrepancy between the new valuation and the purchase price recommended by Captain Collins, discredit might have attached to him for his want of business acumen.
– Does the honorable member suggest that Captain Collins has worked the confidence trick on the Commonwealth ?
– No. I am merely pointing out that, although the Minister has asked for a second valuation by another firm, the information has come to him through the same channel as Mr. Martin’s valuations.
– We must trust some one.
– Yes. But I do not put much reliance upon this means of checking Mr. Martin’s valuations.
– The honorable member could not make a more serious suggestion in regard to Captain Collins.
– I do not suggest anything improper on his part ; although I do say a valuation might have been obtained independently of him.
– He is the representative of the Commonwealth in London.
– If the honorable member were purchasing through an agent, and wished to verify that agent’s valuation, would he ask him for a second valuation to check his first one ?
– We did not go to Mr. Martin for the second valuation.
– The Minister went to Captain Collins.
– Captain Collins is our representative, not our agent in this matter. He has not submitted a valuation.
– All the valuations, have come through him.
– Only in much the same way as they have come through the Post Office.
– A check valuation, if one was thought necessary, should have been obtained through another channel. It is very natural that the new valuators should go to Lyons and Company, ascertain what they propose to sell at, obtain a history of the previous transactions, and then submit a valuation in the light of all the negotiations carried’ on previously, especially as Captain Collins had the appointment of the new valuator.
– What else could we have done?
- Mr. Coghlan, might, perhaps, have been asked, privately, to get the check valuation. The circumstances surrounding this transaction call for more investigation than they have received.
– Should a Royal Commission be appointed to inspect the site?
– The honorable member may be desirous of serving on such a Commission.
– Does the honorable member suggest that Captain Collins has acted in collusion with others for a monetary or other consideration ?
– The honorable member merely suggests that Captain Collins is not to be relied on.
– If what I have said is to be regarded as a suggestion that Captain Collins is not to be relied on, the action of the Minister in getting an independent firm of valuers to check the first set of valuations received from Captain Collins is a still more serious suggestion of unreliability.
– Captain Collins is not responsible for any of the valuations. I did not propose to put any check on what he has done.
– We must trust some one.
– We are chiefly concerned in ascertaining the real value of this site. Mr. Martin submitted two valuations within a week, one about ,£10,000 higher than the other, and later recommended the purchase of the site at an amount which was an increase of £65,000 on the sum first named. It would be most unbusiness-like to ratify this agreement without fuller information. It seems as if, for some reason, a good deal of information has been suppressed, only the most meagre details having been supplied to honorable members. I believe that a plan of the site and a photograph of the buildings on it has been circulated, but I have not seen them, and they have only recently been produced. We should not rush into an expenditure of £200.000, plus, perhaps, £16,000, plus, perhaps, another £100,000, for the erection of a new building, plus rates, taxes, and other charges, without the fullest examination of all the facts. In my opinion, it would be better, instead of purchasing a site now, to rent suitable premises, even at a charge of £5,000 a year, leaving it to the High Commissioner, when appointed, to ascertain our requirements, and recommend the purchase of what he considers the best site. In view of the present straitened condition of our finances, the fact that our revenue is shrinking and our liabilities increasing, it would be very unwise to commit ourselves to this expenditure without much fuller information.
.- I think that we ought to have fuller informationIn a paragraph printed in the Sydney Morning Herald, dated 28th January last,. I find it stated that -
At the Australia Hotel last evening Mr. OC. Beale invited a number of representative gentlemen to meet Messrs. Montague G luckstein and Albert M. Marks, directors of Messrs. ]. Lyons and Co. Ltd. of London. The visitors arc interested in placing Australian produce on the English market, and are at present engaged in a tour of the world.
That fact was not brought out by theMinister.
– I know nothing of:’ the matter.
– The papers bearOUt a strong prima facie case of sharppractice. A few months later, when thisproperty was being offered to the Government, Messrs. Lyons and Company stepped in and secured an option which is. now enabling them to . show their interest in Australia by attempting to squeeze more money out of it. These gentlemenwhen here made arrangements with. Mr. Beale for the purchase of twenty pianos manufactured by his firm. Thereare in Victoria and South Australia today several men who can verify that statement. We knew nothing, however, of that arrangement until the publication of a cablemessage from London stating that the Messrs. Lyons had selected from the many pianos on exhibition at the Franco-British Exhibition, twenty manufactured by Bealeand Company for the hotel that they wereabout to furnish. When Mr. Beale was passing through Adelaide on his way toEngland, he gave several gentlemen tounderstand that he could not incur the expense of sending twenty pianos to England for the purpose of showing them at the Franco- British exhibition, but for thefact that Lyons and Company had actually ordered them, through their representatives,, who were here last January. In Mr..
Beale’ s advertisement, however, we have the statement that the hotel in question was to be the largest in the world, and was to be beautifully furnished by Messrs. Lyons and Company, who had selected from the many pianofortes on view at the FrancoBritish exhibition, twenty manufactured by his firm. It may be a mere coincidence, but it seems to me to be “ cronk “ that these fellows should put in an appearance whilst the Commonwealth Government were conducting negotiations with others for a site. There is another phase of this question which has not yet been touched upon. We have before us’ a proposal to expend £198,000 on the purchase of this property, but it is doubtful whether that sum would cover the whole of our liability. Assuming that it would,, the proposition is that 10 pei cent, of the purchase money shall be paid as a deposit, and that we shall pay 4 per cent, on the balance. The arrangement in the first instance was that we should pay per cent.
– Those were the terms that were suggested, but there was no arrangement.
– The money could be obtained for 31 per cent.
– The statement we had from the Minister in charge of the motion was that the money could be obtained for 4 per cent. What is the position? This Parliament has boasted of the fact that we have hitherto refrained from borrowing; yet we are now asked to enter into what is really a borrowing transaction, and to establish as a precedent the payment of 4 per cent, interest on Commonwealth loans. I venture to say that if such an ar- rangement is made, State Treasurers and every one in opposition to the Commonwealth will point to it as an illustration of what will happen when we take over the debts of the States. If we pay 4 per cent, interest, we shall have in that respect alone a liability of £7,920 per annum, and the rents now obtainable from the property, after deducting rates, commission on the collection of rents, and the wages of a caretaker, lift attendants, and others, will not be anything like sufficient to meet the interest bill on the money to be borrowed. We have the evidence of an expert that an expenditure of at least £46,000 will be necessary to make the building suitable foi our purposes. If we add an additional story, we shall have to expend at least £6 5; 000
– And that additional story cannot be erected without the consent of the owners of the adjoining property.
– That appears to be so. In addition to that, in order to obtain immediate occupation of the premises, we shall have to pay the existing tenants something like £25,000 to give up possession. In other words, we should incur in this way an expenditure of about £283,000.. Then there is some doubt as to the continuation of the payment of a sum of £4,000 for the next four years.
– Not the smallest possible doubt.
– In a letter addressed by Mr. Martin to Captain Collins we have the statement -
This being so, in my opinion, you would do well to give ^’210,000, to include the ,£4,000 a year lease, and take the chance of getting out all the occupying tenants for a reasonable sumand within a reasonable time.
That statement creates in my mind a doubt as to the continued payment of the sum, of £4,000 per annum in respect of the’ lease. Then again I do not think that we should be able to erect at a cost of £65,000 a building of the character that we desire. The estimates of the experts show us that, not taking into- account the £16,000 in respect of the leasehold, concerning which there is some doubt, this proposal will involve an expenditure of £283,000. At the present time the Post and Telegraph Department is in need of an increased expenditure of from £200,000 tj £300,000, for which we cannot provide. We scout the idea of borrowing for works in connexion with the Department, yet we are now asked deliberately to borrow at 4 per cent, nearly one-third of at million to enable us to secure a property that we cannot use for the next four yearsLet us have a look at these valuations.
– The valuation looks “fakey.”
– It is the most extraordinary valuation that has ever come under my notice. Mr. Martin wrote on 26th June -
I am of opinion that, subject to the lease and for the purpose of clearing the site, and’ putting up upon it a new building for the occupation of the purchasers when possession can be obtained on the termination of the existinglease, the property is worth, as between a willing buyer and a willing seller, One hundred and fifty- four thousand three hundred pounds (£154,300).
What does he mean by “ a willing buyer and a willing seller? “ Does he not refer to the most favorable circumstances under which a deal could be made? In such circumstances, he suggests that .£154,300 should be paid for the property. That valuation, apparently, did not suit the “ powers that be,” and it was referred back to Mr. Martin. We do not know what occurred between him and those who sent back his report to him, but we know that on the 2nd July - six days after the writing of the first report - Mr. Martin wrote as follows to Captain Collins -
Dear Sir, - As you desired, I write in explanation of the paragraph in my report concerning the value of the property as a site for a special building. I do not think there is any site in London with equal advantages of position and nearly equal area at present uncovered and in the market.
I am not questioning the desirableness of the situation. There appears to be a consensus of opinion that the situation is right, provided that the area is suitable for the purpose j but there is grave doubt as to the shape of the block being the most desirable. Mr. Martin went on to say -
If any public body or wealthy corporation required such a site it would probably have to pay, in acquiring outstanding interests in the various buildings upon it and otherwise, from 20 to 40 per cent, more than the mere site value, in order to get immediate vacant possession ; and, as a matter of fact, that has happened in providing sites for most if not all the large public buildings erected in London in modern times.
In my opinion, the present market value of this site, if in the market, cleared and free from the existing lease, would be £163,750,
I wish to draw special attention to the fact that the first valuation of £154,300 was, in this case, increased to £163,750. The Minister’s explanation is that the increase represents the difference between liability for ground rent and freedom from it. The ground rent, however, represents £16,000, or considerably more than the difference between the two valuations. Mr. Martin went on to explain that this sum of £163, 7 50 was the value of the site - to builders, speculators, or others willing to buy it in the way of ordinary business. But, as the site (like, I think, every other site -of equal area and advantage of position in London) is at present covered with occupied buildings, I think no one for whose purpose this position is specially suitable, and who requires the whole site for the purpose of immediately erecting a building for his own occupation, could expect to buy the property and get vacant possession for less than from £200,000 to £220,000.
May I ask whether this gentleman, when he was engaged to make a valuation of the property, was not well aware of all these facts? Did he not know, when he wrote his first report, for what purpose the Commonwealth desired to acquire this property ? Why did he not say that in his first report? Why was it necessary to refer it back to him for an explanation on this particular point before it occurred to him that the property was worth .£220,000? I venture to say that in any ordinary business transaction if one got a valuation of this character and within a week got another valuation from the same gentleman with a jump of ,£65,000, one would come to the conclusion that the man was either a rogue or a fool. The whole transaction from the moment that these gentlemen jumped in in front of the Commonwealth to secure an option over the site has a very crooked appearance. If I got a valuation like this, I certainly should have nothing further to do with that valuer. I should get a valuation entirely free and independent even of the very source from which he ‘got his instructions. I say that without casting any reflection, but that sort of thing has happened before, and history repeats itself. There was a chance to make a huge amount of money in this transaction, ‘ and while Captain Collins, our direct representative, may be perfectly innocent of it, there is a possibility that some leakage occurred. I venture to say that there must have been a leakage before those gentlemen stepped in and secured an option over the property when the Commonwealth was negotiating for it.
– And if there was a leakage in the first place, why not another in the second case?
– That is also quite possible. With this transaction as it stands before us, and with the fact, which the papers prove, that our claim was jumped, the best thing we can do is to let the matter stand over. If we do so and deal direct with the owners of the land, we shall come in at bedrock, and have a better proposition than this is. I feel very strongly on this matter. I do not hesitate to say that I have very grave suspicions. I want the House to believe that I am not imputing any motives to individuals here, but any man calmly reading these papers, and having the information that I have in reference to those gentlemen coming out here, can come to no other conclusion than that this thing ought to be left alone, and that if we want to negotiate for this property we should deal direct with the owner, or let Mr. Lyons put up his cash and buy the property- a thing that he has not yet. done. Mr. Lyons is a very smart business man. Those gentlemen came here and.no doubt, they have their tongues in their cheeks at present over this proposition. They did not get an option over the property, or come from England to Australia, for the benefit of the Commonwealth. They came out expressly-
– For their health.
– And it will be a very satisfactory trip from a monetary standpoint also if this deal comes off. In the circumstances I must conscientiously do all I can against the proposition, and shall, therefore, vote against it.
Colonel FOXTON.- (Brisbane) [8.30]. - I entertained some doubt from the first whether it would be desirable to ratify the provisional contract for the purchase of this site, more especially when I read the correspondence which has been printed any placed before us, and which discloses a certain amount of confusion, to say the least of it, in the valuations placed upon the siteby the gentleman specially employed by the agent of the Commonwealth to value it. If anything was required to confirm my doubts it lias been supplied by the facts put before the House by the honorable member for Grey. I understand from him, and take his word for it, until it is contradicted, and the contrary is shown to be the case, that prior to Messrs. Lyons and Company appearing on the scene the property was under offer to the Commonwealth or there was some talk about the Commonwealth becoming the purchaser.
– That is not correct.
Colonel FOXTON.- Why did not the honorable member for Hume interject that it was not correct when the honorable member for Grey was speaking?
– I was not listening to him.
Colonel FOXTON. -The honorable member might have learnt something to his advantage if he had. How does the honorable member for Hume know that it is not a fact?
– I have known the history of it from the beginning.
Colonel FOXTON. - Is the honorable member in the confidence of Mr. Lyons?
– I do not know him. I cast back the honorable member’s insinuation.
Colonel FOXTON.- How does the honorable member know that there was notalk of the Commonwealth purchasing the property ?
– The honorable member said it was under offer to the Commonwealth.
Colonel FOXTON. - I said either it was under offer to the Commonwealth or there was some discussion as to the Commonwealth becoming its purchaser.
Mr.Batchelor. - There is not the smallest evidence other than that which I read this afternoon.
Colonel FOXTON. - Then I am at liberty to infer that there was some such proposal.
– The honorable member is not at liberty to do so, and I say it is not true.
– Order ! Will the honorable member for Hume withdraw that remark?
– I did not say that what the honorable member for Brisbane said was not true. I said it was not true that the property was under offer to the Commonwealth.
– If the honorable member for Hume says that he did not refer to the remarks of the honorable member for Brisbane, I accept his statement.
Colonel FOXTON.- After the graceful way in which the honorable member forHume has met your interposition, Mr. Speaker, I need say no more about that point, except that I am at liberty, as everybody is, to draw my own inference from the fact - which I presume is not denied by the honorable member for Hume - thatit was contemplated some time ago that the Commonwealth should purchase the property. If that is so, and the honorable member does not deny it, it is significant that some smart business man was able to step in and obtain an option over the heads of the Commonwealth’s representatives.
– It was offered first by a distinct other firm, as the papers show.
Colonel FOXTON.- I have not had an opportunity of seeing the papers. Until the. honorable member for Grey spoke I could only judge by the printed matter placed before us, which is most meagre. There is a great file of papers which I have not had the opportunity of goingthrough. The honorable member for Grey states that the site was placed under offer to the Commonwealth Government by persons other than Messrs. Lyons, and .that Messrs. Lyons afterwards acquired the option.
– I made a full statement of everything that appeared in the papers.
– This i’s all manufactured in the brain of the honorable member for Brisbane.
Colonel FOXTON. - Whatever the honorable member for Hume may say it is very significant that after there had been some proposition by some persons other than Messrs. Lyons, Messrs. Lyons obtained an option over the property over the head of the Commonwealth, and offered it as separate vendors altogether for our consideration.
– The papers are available for every honorable member.
Colonel FOXTON. - I did not know until this afternoon that the question was to be submitted to-day. Certain papers have been printed and circulated to honorable members, and upon those I relied. I am not bound to go to the Minister’s office to inspect other papers when a State document is placed in my hands. I have a right to assume that that contains everything of consequence. I admit that the site would be a most desirable one to acquire, always assuming that we are satisfied that we are not being penalized as to price. There are certain objections to it, and certain advantages in its favour. It i’s about two miles from the Bank of England, the Mansion House, and the Royal Exchange. The Aldwych site, which was previously’ submitted to the House, and then alleged to be the best obtainable in London, ,Vas about a mile from the Bank of England, and the right honorable member for Swan, who is entitled to speak on these matters with some authority, urged that it was undesirable because the financial business of the Commonwealth could not be transacted at so great a distance from the centre of the money market. This site is quite three-quarters of a mile further west, and for that reason, from the point of view urged by the right honorable member for Swan, is even less eligible than was the Aldwych site. I admit that eligible freeholds are not obtainable every day in London, and that, although certain disadvantages in regard to the transaction of the financial business of the Commonwealth in London may attach to this site, it has compensating advantages owing to the fact that it is situated so close to the great Imperial Government offices, and is undoubtedly very prominent. The building conditions connected with it render it also disadvantageous. There are other buildings, the Grand Hotel on the opposite corner of Northumberland Avenue, for instance, which completely overtop and overshadow the building at present on the site. We are told distinctly in the printed correspondence that it will be impossible, without buying out certain rights to ancient light, to erect on this land a building of greater elevation than the existing one. Apparently, the £198,000 is merely for the purchase of the site, subject to the lease of four years; and we may have to pay £220,000 or £230,000, as suggested by our own valuer, in order to get rid of the particular encumbrance to which he refers.
– That is, if we desired to start building straight away.
Colonel FOXTON. - Quite’so, or otherwise we should have to wait four years.
– It is three years and a half.
Colonel FOXTON.- That time would have to expire before we could pull a brick out of the building. In my opinion, the building, as shown in the photographs, is altogether unsuitable, both internally and externally, for Commonwealth purposes. It would require about two years to complete a suitable building, and, altogether, it appears to me that we are entering on a transaction the fruits of which will not be reaped for five or six years hence. I am strongly of opinion that we should first of all appoint a High Commissioner, house him in rented premises, even if we have to Pav £5>00° or ££>> 000 a year rent, and allow him to wait an opportunity to purchase some eligible site. Under all the circumstances, I have resolved my doubts in a way which will compel me to vote against the proposition.
– It is a good many years since I suggested in this House that there should be a Commonwealth building in London. At that time my intention was that the building should be in the financial centre. I have an idea that finance is government, and that government is finance ; and I never dreamt for a moment that the building was not to be regarded as an investment. I shall conclude with a proposal; but, in the meantime, I desire to say that, when I look at this matter from a business point of view, I feel that I am wandering in the golden land of dreams. In fact, it would appear that one of our Ministerial magicians has only to wave his magic wand in order to make intricate financial difficulties disappear. The complex problems of modern finance are simply forgotten in the indescribable fascination of the simple solution afforded by Australian financiers. Would any person invest his private money in such a transaction as that proposed ? We are the national trustees in this House ; our constituents sent us here because they regarded us as the best men coming forward in our various districts. If we put the money of the people of Australia into a venture that would not attract private money, we are not carrying out our trust, and are not fit to be here. What is this building for? The Minister of External Affairs has told us that the officer who occupies it will not have much to do in connexion with finance - that it is in a centre to which thousands of people come to attend theatres. But what people do business at night-time when attending theatres ? I had hoped that this building was to be the head-quarters in London of the Australian National Postal Banking Department. I had hoped that our inscribed stock, consols, and various investments would be offered to the British public for sums as low as £5. I had hoped that English, Scotch, and Irish people, who had accumulated a little wealth, would be able to go to the Commonwealth building and buy consols, and that the money could be transferred here by bills of exchange, in order to carry on our industries. To-day, however, I hear that there will be no financial business done at the building. Why are we sending a High Commissioner to England? Is he merely to be a sort of representative of Australia? Have we not had enough of that with our Agents-General ? The Labour Party in this House have opposed borrowing ; but if we pay £20,000 as a deposit on this building, and owe £178,000, does that mean a loan, or what does it mean? If this building were put up to auction, and did not bring sufficient to cover the £178,000, would the taxpayers of Australia be responsible for the difference? If so, then there is a loan to the Commonwealth at 4 per cent. ; and the difference between 31 per cent, and 4 per cent, on £1:78,000 is £890 annually, which would represent the increased price we are paying for money, as compared with the States. Yet this is said to be the highest type of Australian finance. Is it any wonder that all over the world Australian public finance is the laughing-stock of financial men? The purchase money is £198,000, the rentals amount to £9,740, the estimated cost of repairs to the building is £46,000, and the estimated cost of a new building is £65,000
– What sort of building would it be?
– That money would not provide the foundations of such a building as I should desire. I may say that I have had banking training in the United States, so that I know something about the “game.” I do not think that the Government ought to pay more than private persons, or should run a business in order to enable private individuals to make fortunes. I understand that after Messrs. Gluckstein and Marks left Australia, and hurried through Canada to England, in order to get the option, the transaction was not completed until after Mr. Beale went home. Is that so, or not ? If we add £46,000 for alterations to the present building, to the purchase money of £198,000, we have a total of £244,000 ; while, if we add £65,000, as the cost of the new building, to the purchase money, we have a total of £263,000. Interest at 3^ per cent., taking into account the cost of alterations, amounts to £8,540, while, if we calculate the cost of the new building, the interest amounts to £9,205. In the parish of St. Martin’s, where this building is, the rates are 6s. 8d. in the ,£i on the annua,! rental ; and I desire to know whether the tenants will always have to pay those rates.
– Yes, until the end of their tenancy.
– When the Commonwealth takes over the building, will the tenants still have to pay the rates ?
– And will the Commonwealth always make the tenants pay the rates?
– How do I know what the Commonwealth will always do?
– Are the tenants liable for the rates ?
– Some of them.
– Fire insurance will probably amount to at least 5s. in the £100 ; and I desire to know whether the tenants are responsible for that?
– Some of them.
– The annual repairs may be set down at 5 per cent. ; are the tenants liable for that?
– Most of them.
– Then allowance should be made for depreciation at the rate of½ per cent. on the cost of the building - are the tenants responsible for that?
– - I do not think so ; but they have to keep the building in repair.
– Besides 5 per cent. for repairs, a business man would put ½ per cent. aside to replace the building at the end of 87 years.
– But he would not call upon the tenants to do that.
– The Minister represented to us that the tenants have to make all these repairs, and, as a landlord, whose experience is different, I should like to know the true position. Is the sum of £9,740 gross or net rental?
– In England there is what is termed a house duty. What will that come to on this property ?
– I do not know.
– How would the value of the property be affected by an Imperial tax on unimproved land values ?
– That would depend on the tax.
– What compensation has the Government promised to give the present tenants for the determination of their leases?
– How long will it take to effect proposed repairs? What amount of interest will the Government lose while repairs are being carried on?
– That depends upon the extent of the repairs.
– At a cost of £244,000, the landlord paying everything, the money invested would not earn 2.1 per cent., while at a cost of £263,000, the return would be only 1.18 per cent. Adding £46,000 to £198,000, the return would be only 3.9 per cent., the tenants paying rates and taxes, &c.
– If a new building were substituted for that now on the land, the rents would be different.
– Speculators, in erecting a building on a site like this, put up premises which will produce the highest return obtainable. The Government could not put up enough rooms to. get a larger rental. If £65,000 were spent on a new building, the return would be only about 3.4 per cent. on the basis of the present income. Is that a good investment? We pay 3½ per cent. to borrow at par in the open market. It must be remembered that I have not allowed -a cent for the rates and taxes to which a. property in a great city is liable.
– This is not to be regarded as an investment.
– Then what is it ? When an insurance company puts up a large building in Melbourne or Sydney, does it do so for amusement, or to obtain 3, 4, 5, or 6 per cent., and free office accommodation ?
– A building is sometimes erected to secure an advertisement.
– In addition to the advertisement, questions of cost and return are concerned, and buildings are regarded as investments. The Equitable Buildings in Collins-street are a big investment. At certain seasons of the year, when business is dull, money accumulates in the Australian banks, and, instead of it being loaned at low rates of interest to the Australian producers and business people, it is sent, by means of bills of exchange, to be deposited in London banks, where it will produce interest. This makes money plentiful in London, and most of this money is utilized by being loaned out on Stock Exchange “ collateral,” callable at option at any time. The London banks must make up the interest they have to pay on the deposits, and they must utilize the money in such a way that there will be no delay in getting it when the Australian banks demand it. It is loaned on “ call “ and “ call loans “ are speculative loans, or loans made to exchange houses or stock and share brokers. The glut of money in London generates wild speculation, while thousands of our Australian farmers and merchants perish for the want of sufficient currency to meet their legitimate business needs. The Minister says that we can use the money which we have in the Bank of England to pay off part of this mortgage. Apparently, we are keeping £100,000 in the Bank of England when it could be utilized in Australia to produce £10,000,000 of credit. Very little money is needed to give a large amount of credit where you have the control and regulation of your money volume, and the manage- ment of your currency. The £100,000 now locked up in the Bank of England would give £10,000,000 of credit to the Australian producers, farmers, and business men, who, at certain seasons, are nearly perishing for the want of it. Yet the Minister says that the London buildings are not to be used as a financial institution.
– I did not say so. I mentioned the terms as a way suggested for arranging for the balance.
– We should erect the building in a financial part of London, where every man who has a sovereign to invest might see it as he passed, and go in and buy a consol.
– A site could not be obtained in the city of London for the amount asked for the Trafalgar Square site.
– It is not necessary to buy a site to-day. London will last for another four or five years at least. If we send Home a first-class High Commissioner, possessing correct ideas in regard to Australian business requirements, he will keep his eyes open, and when he discovers a mortgage on a big property, will secure the equity, and obtain it. Captain Collins has been referred to as a financier, and so has Lord Jersey. With all respect to the latter, I do not regard him as a financial expert.
– He belongs to a banking house.
– He has no time to attend to the business of the bank. He may be a signer or a stamp licker to a man under him, but he has no banking experience. When the Globe Company was started by Whitaker Wright, many of the big lords in England went smash because they knew nothing about business. In the United States, financial men run these shows. The lists of big names on the directorates of English companies’ are ridiculous. I would think as much of Fleming as a financial authority, and would as soon have the opinion of a Yarrabanker on any financial question as that of some of these gilded roosters. My contention is that the Commonwealth will have to pay rates amounting to £3, 247, insurance amounting to £163, a sinking fund for renewals of £325, £487 for repairs, ar”3 £487 for collection, making in all £4,709. Deducting that amount from £9.7.4o, you get £5>°3i- Yet this is called an investment. I admit that you may do the faking and fishy business.
Lincoln once said, “ You may fool all the people some of the time, and some of the people all the time, but not all the people all the time.” I therefore move, in view of the facts which I have laid before the House -
That all the words after the word “ That “ be left out, with a view to insert in Heu thereof the words, “ further consideration of a site in London be deferred to allow of such additional information being furnished as will enable this Parliament to form an opinion of the value of the offer as a business proposition.”
.- The Ministry, in asking us to ratify this agreement, has taken up a remnant of tlie work of the Deakin Ministry, but has advocated the proposal with a warmth and zeal such as one would have expected only in connexion with a proposition of its own. No Minister could have proposed this transaction more earnestly, or occupied more time in its defence, than did tlie honorable member for Boothby, though at the same time he took care to say that the question was not a party one. It is no thanks to him that it is not a, party question. The expenditure of £200,000 ofl the people’s money is a people’s question. The most severe attack on this proposal has come from the supporters of the Government. The honorable member for Grey scarified it, and asked his fellow members to reject it. He also made a strong personal appeal to the Minister. He said that, though the Minister may have felt bound to bring the matter before the House, he was not required to fight so warmly for a remnant of the Deakin policy. There are one or two features in connexion with this matter which I should like to emphasize. In the first place, I draw attention to the fact that we have a Labour Administration glorifying the possession of freehold. Ministers say, “ By all means let us secure a freehold in the City of London.” Yet as private members they told us that there should be no such thing as freehold.
– The people should always get freehold, but never grant it.
– According to the Minister, while it is not right for individuals to have freehold, the Commonwealth should have it.
– We all try to obtain freeholds for ourselves.
– Honorable members know their value. I wish I had more freehold. But while on Tuesday Ministers say that they do not believe in freehold, on Wednesday they advocate buying it.
-The honorable member is perfectly free to discuss the relative advantages of a freehold or a leasehold property for the purpose now under consideration, but he is not in order in discussing generally the abstract question of the relative advantages or disadvantages of freeholds as against leaseholds.
– I did not intend, sir, to discuss the general question. I merely desire to illustrate the anxiety of the present Ministry to obtain a freehold instead of a leasehold property.
– That question is not before the Chair.
– We have had before us a proposal to acquire a leasehold, and we now have submitted to us a proposition that the Commonwealth shall acquire a freehold. I shall not, however, pursue that phase of the question further.
– Does the honorable member think that we should have refused to submit this motion?
– The Government could not very well have refused to submit it, but the Minister of External Affairs might have refrained from earnestly advocating its adoption.
– I put the whole position before the House.
– The honorable gentleman said that he did not think that wc should secure a bargain, but that the price was reasonable, and that the sooner we closed -with the offer the better.
– I think so still.
– If that is not a strong advocacy of the proposal to acquire this property I do not know what is. We are told that it is always well to secure your cage before you catch your bird ; but in this instance I think we should first catch our bird - in the shape of the High Commissioner - and let him choose his cage. The High Commissioner to be appointed should be shrewd enough to pick the best cage, or, in other words, the most suitable site for offices for the Commonwealth. We are told that the Government are supported by a reliable authority in advocating the acquisition of this site. The only reliable authority to whom the Minister is able to refer, however, is the temporary representative of the Commonwealth in London, Captain
Collins. As an illustration of his reliability in this regard, I would remind honorable members- that some six months ago, when we had under consideration a proposal to acquire a leasehold in the Strand, Captain Collins reported that it was “ the most suitable site” in London. We did not choose that site, and to-day we have the same officer declaring that another, two miles away, is “ the most suitable.” Honorable members who are anxious to support the purchase of this property have not at their disposal information of a sufficiently reliable character to justify their doing so. As has been pointed out bv the honorable member for Grey, we are not prepared at present to provide the whole of the purchase money, and we shall therefore have to resort to what is really a process of borrowing. The first Parliament of the Commonwealth declared itself strongly opposed to borrowing, and surely a Labour Ministry should not be the first Administration to thrust upon this Parliament a policy to which they have individually declared their opposition. If we purchase this property for £198,000, we shall have to finance at least £180,000 of the purchase money. We shall have to pay interest on that amount, and the course to be adopted means in effect raising a loan. I would ask the Prime Minister whether he has examined the schedule in the report presented by Mr. Howard Martin showing the rents paid by the tenants of the present building. We are told that the site is the best in London. I have not had the privilege of visiting that great city, and have not met in this House any one who knows his London as well as did Dr. Johnson. The Attorney-General may know it ; but as I have not been there I propose to test the statement as to the value of the site by referring to the rents paid for shops and offices in the building.
At page 4 of the official memorandum we have a schedule showing that a shop on the ground floor occupied by the Aerated Bread Company is let at a rental of £400 per annum. Could a f.hop in a busy part of Sydney or Melbourne be obtained for such a rental ?
– This shop is on the first floor, and the tenant pays rates and repairs and 15s. insurance.
– It would be impossible to obtain a shop in the busy part of Bourke street or Collins-street for double that rental. Why is it that only £400 per annum is paid for a shop said to be in the most suitable part of London?
– The shop has an area of only 234 superficial feet.
– Many shops in Collins and Bourke streets, for which more than £400 per annum is paid, have not so large an area.
– It would be impossible to have a large shop on the site.
– That is so; the average depth of the land is only 44 feet. That is one reason why I urn opposed to its purchase, and I am also opposed to it because I do not think that we should be warranted in incurring the proposed expenditure. I sim not satisfied that Captain Collins is a. reliable authority to deal with a matter of this kind. The honorable member for Grey said that the proposal suggested jobbery ; that the least he could say about it was that it was “cronk.” That means that the most he could say about it would be that it is “an infernal swindle.” We certainly dd not find the Lyonses, the Markses, and the Glucksteins willing to give the Commonwealth a bargain. They do not usually allow a man to secure a bargain simply because they knew his father. They do business because it pays them to do it, and no doubt Messrs. Lyons and Company are prepared to unload this property on the Commonwealth at a profit to themselves. We are told that if we select this site we shall secure a great advertisement. I am inclined to think that if we do acquire it we shall advertise our foolishness in jumping at an offer simply because it has the recommendation of a recent Ministry. The present Minister of External Affairs said that he knew nothing about London and simply took up the proposal as the work of his predecessor. It would be far better for him to withdraw the motion, pending the appointment of a High Commissioner, or until he is able to take a trip to London. He’ might well make a visit of inspection during the recess rather than take, upon insufficient information, an action that may besmirch the name of a Ministry that is supposed to live for everything that is good and radical. Had he said that he could not take the responsibility of recommending the Parliament to agree to the purchase of this site until he had personally inspected it, I should have supported him, believing that he could in that way do far better work for the Commonwealth than by remaining in his office during the coming recess. I do not suggest that he is anxious to make the trip ; but having regard to the enormous expenditure which this proposal involves, I think that he might well make a. personal inspection of the property. We cannot make use of the site for the next three or four years. The building is in a dilapidated state, and, according to the experts, an immediate expenditure of manythousands is necessary to put it “in repair. I have seen a photograph of the building and it reminds me of a Paddy’s Market in Australia. All that I could see upon it was a placard advertising “Bovril.” The schedule submitted by Mr. Martin does not show that it is occupied by leading business firms. If it is such a valuable site in the great city of London why is it used for comparatively insignificant business purposes)? The schedule shows that a suite of three rooms gives an estimated return of £75 per annum. In what building in Melbourne could such residential quarters be obtained for that rental? Everything seems to point to the value of the property being less than that which has been put upon it. The experts estimate that an expenditure of £45,000 on the present building would1 ‘-‘be necessary to make it suitable for public offices. The intention is that the Commonwealth office in London shall house, not only the High Commissioner, but the Agents-General of all the States, together with their staffs. There would be a further charge of £65,000 for erecting a new building with an additional story, but Ministers admit that before a ; ^newstory could be added the consent of the adjoining owners must be secured. That is another drawback. If this is to be such a splendid bargain for Australia, does the Minister mean to tell me that Messrs. Lyons and Company would be acting the part of hucksters and taking it all round the world? Would not the shrewd people of the shrewdest city in the world have snapped it up long ago? Are the business people of London asleep?
– Is Lyons the proprietor ?
– Lyons has an option over the property. He is “ jobbing “it. If it is such a fine site, and such a fine bargain, would the cutest business men in the world let Australia come in on such good terms? We threw out the other idea of a leasehold, refusing to pay so highly for that property, and on the same ground, I will vote for any proposition to destroy this motion. The Minister will be well advised to accept the suggestions made by members of his own party. They are not unanimous about it, nor is the Minister himself certain that it is a bargain. All that he can say is that he has taken over the work of a past Ministry. What call is there for him to do so? What right have the Government to ask the House to take over the work of the previous Government ?
– I say that the proposal has to stand on its own merits, apart from any Ministry.
– If the Minister is satisfied with it on its merits, he cannot shelter himself behind his previous statement that he knew nothing about it. I do not see much virtue in Australia going into the London market as a freeholder. I advocate the early appointment of the High Commissioner. Let this be part of his good work. If he is a shrewd man, he will bustle round London and will soon pick out a good site. I should not leave it to Captain Collins, who recommends us two sites in six months, both of them on unsuitable terms. The Minister stated that he cabled for an independent valuation, and, according to his statement, the. independent valuers were the valuers for the Government of Great Britain ; but does he mean to say that Messrs. Lyons and Company, or Mr. Martin, would not be aware of what those people were doing? Does he believe that valuers in London do not work in the same way as they work in Australia? We know how things are done here, and the mere employment of another valuer, therefore, proves nothing.
– Then, according to the honorable member, it is impossible to get a fair valuation in any circumstances.
– It is impossible at this distance.
– Therefore, the Commonwealth, according to the honorable member, is bound to be “ had “ whatever it does.
– No. The Commonwealth should decide whether it will acquire a freehold property, and if it decided to do so, it would be good business for the Minister himself to take a trip to London. He could then secure a proper valuation, but he would not disclose who he was until his mission had been completed. It would ‘be prudent for the House to refuse to pass the motion, not only on account of the shortage of money, but on account of the sudden increase of price, and the risk of the Commonwealth being plunged into a borrowing policy when there was no necessity for it.
– According to one of the letters from Captain Collins, this site was offered by Messrs. Hampton and Sons for £180,000, as a freehold, on 13th March, 1908. A little later, Captain Collins wrote that one of Messrs. Lyons and Company’s agents had called upon him and stated that they had purchased the freehold from the. Prudential Insurance Company. That isthe position as I understand it, and, although I had intended to support the purchase of this site, because I believed in it, yet, owing to the statements made by the honorable member for Grey and other statements which have been made, I feel that it would be wise for the Minister to ask leave to withdraw the motion until further particulars have been obtained, especially in view of the fact that the price has now been increased to £198,000. The Ministry should consider that aspect of the matter most carefully. I do not wish to reflect upon them, nor, so far as I can see, is there anything underhand in the transaction, but a certain firm appear to have been shrewd enough to see a large profit sticking out, and immediately stepped in and purchased the property.
– They got the option over the property.
– They are practically in the position of vendors. If the Minister will defer this question he can get a special report, and then the principals can approach the Government. That would be a, wise course to adopt. The honorable member for Dalley stated that Captain Collins had previously recommended the Strand site as the best site possible. I suppose at that time it was the best available, but not the best possible. I agreed with the proposal to ‘lease that site, because it was the best available, and I say to-day that it is a magnificent site; although the one in Trafalgar Square now before us is far superior. It is absolutely necessary for us to recognise our responsibility, and no longer to procrastinate. I commend the Labour Ministry for submitting this proposal to us, because we have already deferred action too long. We have been losing, instead of gaining, population. We should appoint a High Commissioner, and establish a London office. If the ground floor were turned into a small exhibition of our agricultural, grazing, mineral, and fruit products it would attract attention, and, instead of everybody flocking to Canada, probably ai large percentage of the floating population of Great Britain who wish to better their positions would come to Australia. For that reason the Government should not allow any further delay, although in view of the facts which I have mentioned we should defer action in this instance until fuller particulars can be submitted to the House. I want to see the Government purchase a site somewhere in the locality. I do not think that if we searched the heart of London we could find one more suitable. Although it is not in the financial centre, it is in one of the greatest arteries of the city. It is in the main centre to which all the population flocks for amusement at night. It is in the vicinity of all the theatres and play-houses. We could light up the ground floor at night to show what we can produce in Australia, and so attract the attention of would-be settlers. That would be a valuable advertisement for Australia. According to the honorable member for Dalley, the rule generally is first to get the cage and then catch the bird, but in this instance the honorable member suggested that the procedure should be reversed, and I agree with him. We should appoint the High Commissioner first. Tn the meantime, while negotiations for the acquisition of a permanent site are proceeding, let the Government rent a building so that we could start on a small scale to advertise our products and resources. I want to support this proposal, but fuller and more exhaustive inquiries should be made, so that we may know that we are not paying more than we should pary, in view of the fact that the site was previously offered to us at a much lower figure. If the Minister would look at the matter from that point of view, he might well accept the amendment. I ask him to do so in the interests, not only of the people of Australia, but of the Government to which he belongs. We advocate the appointment of a High Commissioner and the purchase or erection of a building in London because we want to establish a bureau of information for the people of Great Britain who wish to come here, and whom we desire to see here. We want, not to continue to stagnate, but to progress. For that reason, if it had been shown that this was the lowest possible price, and if the site had not been offered to us previously for less, I should have supported the motion most heartily, because I do not think there is a better site available, nor do I know any other that I would choose in preference to it.
.- It was mv misfortune that a sudden summons called me from the House at a time when, apparently, a view of this transaction was submitted, based upon some statements in the documents, and also upon some statements which have no foothold in the documents or anywhere else. It appeared to me unnecessary to speak earlier, because no statement could have been more ample or fairer than that made by the Minister of External Affairs in submitting the motion. He concealed nothing of the circumstances of the purchase, or of the character of the site, or of the consideration for the sum required for it.
– He was very earnest in his advocacy of it.
– He was earnest, and properly so, because it seemed to him that, regarded as a business proposition, this was an excellent undertaking for the Commonwealth. In that, and no more, I cordially agree with him. No one pretends that this is a great bargain. No one pretends that the price asked is not a full price. We have yet to learn that it is more than a fair price, but we have also to learn why the Commonwealth should expect to get this or any other site below its value. The real question is whether the sum asked is above its value to us. Upon a passage in a letter, which is somewhat ambiguous, it has been insinuated that this particular property was in the hands of other agents prior to its being submitted by Messrs. Lyons. That is just a possible construction; but, as the Minister pointed out, there are two obstacles to that view. What Captain Collins says is that the site was first brought under his notice by Messrs. Hampton and Sons, who said that the total frontage was 164 feet, with a ground area of 8,600 feet, and that they considered that an offer for the freehold of £180,000 would be accepted. It seems to me the most natural interpretation that this property was not actually in Messrs. Hampton and Sons’ hands. Though they knew something of it, they did not know the frontage, but they knew the general area; and they gave an opinion as to the price that might be accepted by the owners.
Colonel Foxton. - They might be speaking of the frontage only to Northumberland Avenue.
– That would not apply to this property, which also has a frontage to Charing’ Cross. Consequently, we are not certain that it was this whole property to which Messrs. Hampton and Sons referred. It appears to me that it was not in the hands of Messrs. Hampton and Sons, and, for all we know, may have been already in the hands of Messrs. Lyons, of whom it was said that they had purchased it within a month - a very vague phrase. We are not clear, however, that this was the property that was afterwards offered; and it appeared to be, so to speak, guess-work on the part of Messrs. Hampton and Sons, who were not the agents or vendors, but had some knowledge that the property was in the market.
– Surely Messrs. Hampton and Sons must have had some authority before they spoke as they did.
– I suggest that they had some knowledge, just as there are land agents in the city of Melbourne who have knowledge of properties which have not been placed in their hands. If Messrs. Hampton and Sons had had the property in hand, they would undoubtedly have submitted it at that, time, or immediately afterwards. But Messrs. Hampton and Sons do not appear again; and it is certain that they would not have retired in favour of Messrs. Lyons if they had seen a chance of getting the business. The fair inference is that they had no right to do business themselves, and merely made an assumption as to a price which might be accepted.
– This property is not in the list which Messrs. Hampton and Sons submitted.
– I am obliged to the Minister for that further testimony in the same direction. On that ambiguity, to build a suggestion that a property, which might have been obtained for £180,000 is now offered at £18,000 extra profit, is wandering far from, the purpose. The question is not whether the property might have been got cheaper at an earlier date. It would be just as good an argument to say that the property may become dearer if we now delay.
Colonel Foxton. - It might be cheaper yet, because Messrs. Lyons might forfeit their option.
– They might, of course ; but a vendor is not likely, in face of the valuations which we have obtained, to lower his price by anything worth mentioning. However, that is merely a contingency, which I do not think worth discussing. The question is whether’ the price- proposed is a fair one, and the site the best available. The price suggested by the unauthorized agents was £180;, 000, and we are asked to pay £18,000 more.
– Those agents must’ have had something to go on.
– Of course; just as I could give the prices of various properties in Melbourne, with which I have not the slightest business connexion.
– But the honorable member for Ballarat could not offer to sell those properties at a fixed price.
– Nor did the unauthorized agents ; they refrained from doing so, merely expressing an opinion that an offer for the freehold of £180,000 would be accepted, not by them but by some one else.
– There is no doubt that those who obtained the option got it for less than the price we are asked to pay.
– I should assume that’ is probable; there may be a very small margin, or no margin. As a matter of fact, the price asked by Messrs. Lyons at first, was, I think, £238,000, which was reduced to £230,000, and then lower still. But the question is whether the price now asked is unfair, having regard to all the circumstances of the situation. We have had the valuation of the Chairman of the Board of Valuators of London, who, we are informed, is of the highest reputation and standing; and his valuation is higher than the price it is proposed to pay.
– That i’s hardly so; he said the price, as between a willing buyer and a willing seller, would be £1.68,000.
– But he went on to explain afterwards that he meant a purchase for speculative purposes ; and the words used, I am informed, have a technical meaning in London, and indicate an exceptional set of circumstances. They mean that two men meet each other, one eager to sell and the other eager to buy, and that, under such circumstances, bedrock price is reached.
– No; what is meant is the fair average price as between buyer and seller.
– I am told that in London the meaning is that I have indicated. I presume that if there were a willing seller and no buyer, the willing seller might come down in price; but when the business basis is reached, under the circumstances I have described, it means bedrock price. The valuator I have mentioned has given reasons for placing a higher valuation on the property than the sum we are offering, having special regard to the purposes of the Commonweath. Here we have a valuator of the highest standing; and the suspicions which have been carelessly cast upon him are, in my opinion, not justified by the knowledge we possess. This valuator knew the purchaser and all the circumstances, and he deliberately advises and defends an offer of a much higher price. Then this Government, with a wise caution for which they deserve every credit, noticing these various explanations, and very properly desiring to place themselves and the House in an impregnable position, obtained another valuation from another high-class and independent valuator, with the result that the offer now being made was borne out. What reason, then, is there for all those imaginings and suggestions which I understand have been spun in the chamber since dinner? These suspicions are built on mere surmise, and in the teeth of valuations by two honorable professional men, who stake their reputations on those valuations. But the most extraordinary thing of all is to find the honorable member for Grey associating, in some mysterious manner, with this purchase, the name of a manufacturer of this country, with whom he has had some passages of opposition. I think it very unfortunate that on so slender a basis, the honorable member should have connected that gentleman’s name with the business.
– The honorable member does not deny that the two gentlemen I mentioned were working with Messrs. Lyons
– I doubt it; because those gentlemen and Messrs. Lyons are keen rivals in the city of London. The peculiar circumstance is that, during the months of these negotiations, while I have been stopped in the street, and in other wa.vs communicated with by many Australians who know London, and, while I have received dozens of letters from people in
London, recommending the present site, only two letters have objected to the present proposal. The strongest of those letters was written by Mr. Beale.
– Does the honorable member deny that Messrs. Gluckstein and Marks are directors of Messrs. Lyons and Company ?
– I do not know anything about the relations of those particular firms, but have been told, I do not know by whom, but on what I regarded as good authority, that Messrs. Marks and Messrs. Lyons are rivals and business competitors as caterers.
– The newspaper report distinctly says that these gentlemen aredirectors in Messrs. Lyons’ company.
-Of that I cannot speak ; but I am told that they are rivals. However, whether they are rivals or colleagues does not matter; and I repeat that it happens that the strongest letter I received in opposition to the site now proposed, and in favour of the Strand site, happened to be from Mr. Beale.
– Why is that letter not included with the other documents?
– It is a private letter, but I shall have no objection to show it to the honorable member if he desires. What we are faced with is the question whether the price offered is a fair price. If, instead of being parliamentary representatives of the people, we were simply directors of a company which proposed to invest part of its capital in suitable London buildings, I think, the testimony of two leading expert valuators like those I have mentioned would be sufficient to justify us in making tlie purchase.
– We would never make it on Mr. Martin’s report.
– We are not dependent only on Mr. Martin’s report, because the Government very wisely obtained an entirely independent valuation from another expert valuator, whose report bears out the price now being offered.
– - There is only one report from Mr. Martin.
– In the papers submitted, but ‘die Minister of External Affairs read the cablegram which he had sent to Captain Collins, and the reply he had received, giving the valuation of Messrs. Weatherall and Green, who do work for the British Government, and are valuators of high standing. That, as I say, was an independent valuation made without the knowledge of the other valuators; and it practically confirms the price now being offered.
Colonel Foxton. - Did Mr. Beale deal with the question of price?
– Not that I remember: I think his objection was almost entirely to the location. Amongst all the people who have criticised the site, and of the dozens who have communicated with me directly or indirectly, all but two consider that the site now under discussion is better than that offered in the Strand. Do honorable members require other evidence that they are not making a bad bargain ? If so, let them take the lowest price which my colleague was able to obtain on offer from the London County Council, and reduce it to a freehold basis. The Aldwych site, though good in itself, is inferior having regard to Commonwealth purposes.
Colonel Foxton. - It is a mile nearer to the city.
– It is a better site, according to the late Treasurer.
– Then I have found three authorities, out of many dozens, who are of that opinion. As I was pointing out, if the Strand site be put on a freehold basis, it will be found to be dearer than the Trafalgar Square site. Unler those circumstances how can it be said that we are making an unreasonable bargain? I do not say that we have got anything remarkably cheap, because I regard the price offered as the full price; but the site is worth it to the Commonwealth of Australia. As to the Strand site being nearer to the city, I questioned a number of authorities on this matter in London, and was told that in these days of taximotors, a distance like half-a-mile or a mile is nothing. The property in question is less than three-quarters of a mile from the City.
Colonel Foxton. - I was alluding to its value, not to its eligibility. I admit that this is the better site.
– Values do not rise as one proceeds from Trafalgar Square to the City. In London values are high in certain localities. For instance, they are high in the City,, and again at Trafalgar Square. It would take too long to enumerate the reasons why in the future the Commonwealth will need a City office. When it undertakes its full financial obligations, it will certainly require one. But it already needs a general office, which should not be located in the City; such a site would be useless for most of the purposes we have in view in establishing Commonwealth offices in London.
– The two great centres in London are, first, the City proper, in which the financial transactions of the Kingdom and of a great part of the world are carried on, where it is most desirable for those engaged in finance to have an office. The other is the district about Trafalgar Square and Parliament House, where most of the public Departments, with which the High Commissioner must keep in touch, now cluster. Trafalgar Square is the great centre of populous and travelling London. It is close to the Charing Cross railway station, and to the station of the new “ Twopenny “ tube, which daily absorbs thousands more than any of the other stations on that line. If you wish for a place where the public eye can be (.aught and the popular mind impressed, where you will come into touch with the masses of London and its visitors, go to Trafalgar Square.
– What a grand auctioneer the honorable and learned member would have made.
– That is uncomplimentary.
– I accept the remark as a compliment. My capacities are so few that the discovery of another is welcome. There remains the fact on which the honorable member for North Sydney built his case, that the conformation of the site is most inconvenient.
– Especially for a building to accommodate the offices of the five States as well as the Commonwealth.
– We can erect a building six or seven stories high.
– There are the rights to light to be considered.
– I understand that the present building is six stories high.
– There are five stories above the ground floor, and a basement.
– That makes seven. No doubt another could be added.
– With the consent of the owners’ of the adjoining properties.
– I think that there are only three to be consulted, two banking companies and the proprietors of the Victoria Hotel. They do not at present get light from the direction of this building. On a frontage of 200 feet, varying in depth from 40 to 80 feet, a building seven stories high would give a considerable amount of accommodation, especially if we placed our financial offices in the city.
– The 200 feet is really made up of two frontages.
– It is measured round a curve, but the price asked for it is not dear, on the showing of two independent valuers, and in comparison with that of an equal area at Aldwych.
– There will be a space of only 8,600 square feet on each floor.
– With seven floors, each containing 8,600 square feet, we could provide for the needs of the States and the Commonwealth, so far as immigration and the purposes of central offices are concerned. To indicate what the Premier of New South Wales thinks of a Cannonstreet site, which, if not in the heart of the City, is in its neighbourhood-
– The building occupied there by the New South Wales Government is like a greengrocer’s shop.
– That is so; but its position is much nearer the City than that of the proposed site. Yet the Premier of that State wrote to me on the 5th November last -
This Government has had under consideration tlie question of removing the offices of the Agent-General for New South Wales in London from their present location, 123-125 Cannonstreet, to a site more in consonance with existing requirements, and in view of this fact, I have the honour to inquire if you are now in a position to furnish me with information regarding the situation of the proposed Commonwealth offices in the city named, and, at the same time, state whether or not the Federal Government is prepared to provide this State with accommodation in the premises referred to when available. For your guidance in considering this matter I may say that New South Wales would require about six or seven rooms, with a window on the ground floor capable of being utilized for advertising purposes and facing the chief street.
He received an encouraging reply, and has communicated with the present Government, asking if they indorse my letter.
– There is nothing very definite in what he says.
– The point is that he is satisfied to move from Cannon-street to a site further from the City, and is readyto occupy part of the Commonwealth building. It is highly desirable that the offices of all the Agents-General of the States shall be in the Commonwealth building. There should be unity in Aus- tralian representation in London. The Premier of Victoria has also stated that, notwithstanding that his State has acquired premises in Aldwych, he would be prepared to consider the advisability of occupying offices in a Commonwealth building. That offer will probably stand good if another site is chosen, but as the Victorian building will shortly be completed, the State authorities should have early intimation as to our probable action. There is a measure of urgency in connexion with the settlement of this question. Without desiring to paint the attractions of the proposed site in rose colour, or to exaggerate its importance or value, I say that all who know London will admit that it is central,, and unsurpassable for our purposes. The Mall will be extended to its full breadth to enter Trafalgar Square right opposite the site, which, if it suffers at all, now does so, because on the opposite side of Parliament-street the buildings are old and unsightly, having behind them another series of similar structures, which’ will be swept away when the Mall is extended. The Commonwealth building will then be a conspicuous object from all quarters, in a neighbourhood through which there is an immense traffic. That we are asked a price which is not extravagant is shown by the fact that the present building produces a rental of £,9,100, and we can obtain the necessary overdraft at 4 per cent. However, I understand that the Prime Minister has information that in another place a decision adverse to the ratification of the agreement has been come to, and that will spare honorable members a process of conviction to which they are rapidly submitting.
– Notwithstanding the announcement of the honorable member for Ballarat that the Senate has rejected this proposition, we are bound to consider whether the site is a suitable one for our purpose. Honorable members seem to think that the decision of the Senate will not be reversed ; but if we come to the conclusion that this site should be secured, no doubt the sensible tiling will, be done by the other House. Those who know London say that this is a suitable site, and the description of it given by the ex-Prime Minister should commend it to all who take notice of his words. He has seen the site, and knows from beginning to end all that has taken place in regard to it. lt is about time that a High Commissioner was appointed. It is contended by the Minister controlling Colonial Affairs in London that, although he has made representations to the Australian Government in respect of many matters, no action has been taken, and there can be no doubt that Australia is greatly disadvantaged by the nonappointment of a High Commissioner. It has been urged that, as a financial proposal, the motion is objectionable. From all points of view, however, I fail to see that the transaction would not be a profitable one. It is proposed to acquire the property for £198,000, and interest on the balance of the purchase money at 4 per cent, would be something like £8,000, whereas the revenue from rents receivable would be £9,740 per annum. We should thus have a balance of over £1,700 in favour of the Commonwealth. Assuming that the present buildings were considered unsuitable for the purposes of the Commonwealth, and a new structure were erected at a cost of £127,000, we should have to pay further interest amounting, at 4 per cent., to £5,080, or a total of £13,080. On the other hand, the present tenants are paying within a few pounds of £10,000 per annum, so that, on that basis, we should secure offices suitable to the requirements of the Commonwealth at a cost of little more than £3,000 a year. That would not be an excessive rental. It must be remembered, however, that the States of the Union would rent offices in the Commonwealth buildings, and, as they would doubtless be prepared to pay a fair proportion of the cost of maintenance, the expenditure that would accrue to the Commonwealth would not be more than about £2,000 per annum. I fail to believe that in any of the big cities of Australia we should be able to secure for anything like that rental business premises suitable for our requirements. To obtain a desirable building in London at that figure is a proposition that commends itself to me.
– The site is not in the City of London.
– London is so great that it is both urban and suburban. What the honorable member would describe as the City of London is that part of it which is in the vicinity of the East End.
– Temple Bar and the Strand are the City limits in that direction.
– At all events, the site is in the centre of a very populous part of London. It is an imposing situa tion. Nelson’s monument is in the vicinity, and the present building is surrounded by many public institutions. There is also plenty of open space. I do not profess to be a judge of the situation, but I know it, and should say that it is most suitable foi our requirements. Although it may not be actually within the City of London, it is surrounded by a population numbering some millions. It is said that London is empty after September in each year, although one can still find millions roaming its streets. This site is in the centre of the business and official part of London, and I think that we ought to acquire it. Honorable members in another place have thrown out the proposal, but, on further consideration, they might be disposed to reverse their decision if this House agreed to the motion.
.- I do not intend to occupy the attention of the House for more than a few minutes, since the announcement made by the honorable member for Ballarat has practically knocked the bottom out of the debate. It is evident, however, that there is in this Parliament considerable dissatisfaction in regard to the way in which information is prepared for our use. It appears to me that many honorable members are not satisfied that this proposal has received the careful attention that so great a business transaction demands. We have not in London to-da.y any one upon whom we can implicitly relyto carry on our business arrangements there.
– That remark is entirely unjustifiable.
– The opinion I have expressed is entertained by more than one honorable member, and it is unfortunate that such should be the feeling. I make these remarks as leading up to the point that, even if the motion is not carried, some good will have been done bv its submission if, as the result of the debate, the absolute necessity for the early appointment of i«. High Commissioner is clearly shown. We shall have no satisfaction until we have in London a representative who is prepared to take upon his own shoulders the responsibility for vast Commonwealth undertakings - until we have there some one of ability and skill, on whom we can rely.
– Would the honorable member be prepared to approve of the actions of a High Commissioner?
– I should be prepared to trust a High Commissioner, where I should not be prepared to have confidence in a gentleman who was simply the head of one of our Departments. I do not think that any one man, isolated as our present representative is, and having comparatively limited experience, should have thrust upon him so great a responsibility. I have, nothing to say. as to his ability to fulfil the duties of the position that he occupies, but it is to be regretted that he should be in London alone, and have to rely, so to speak, upon a casual tap on the shoulder from Lord Jersey, or some one else, for support of his recommendations. We find him cabling information that Lord Jersey thinks that this is a desirable site, but has Lord Jersey sent to the Government any official cable message? No. He has simply expressed an opinion to . Captain Collins, and we are called upon to accept that as sufficient justification for this proposal.
– lord Jersey has been consulted throughout these negotiations.
– Quite so; but his view is not so valuable as would be that of a man whose opinion would carry with it a heavy responsibility. As to the suitability of the site, we must remember that we have to carry on in London two differing classes of business. We must have, as it were, a shop window - a building to which the casual tourist and the traveller will be attracted - and also an establishment in the city, where business of more moment may be transacted’. We should have such an establishment somewhere in the vicinity of the West End. I am not wholly satisfied that this is the best site available. If we examine the map, we find that it is in a sort of backwash. The visitor to London, standing in Trafalgar Square, or 00 the steps of the Grand Hotel, sees a great stream of vehicles passing to and fro, and rendering it very difficult for pedestrians to cross from one side to the other. It is because of this heavy vehicular traffic that very little business is done by the shops in the vicinity. The schedule to the report supplied by Mr. Martin shows that the building contains district messengers’ offices, a shop occupied by the Aerated Bread Company, and some small offices. It is on the wrong side of the road for business purposes. It is down the hill, and somewhat out of the way. It is certainly in a part of London to which people go when they wish to book their passages to various parts of the world. Shipping companies have established offices in ‘ the
West End for the convenience of tourists, and many people visit that quarter of the city.. I shall say nothing about the value of the property, believing that on that phase of the question we should. have the advice of responsible officers.
– It is a very difficult matter to decide at this end.
– I think that the whole question has been somewhat hurriedly dealt with, and that the information at our disposal is insufficient. The motion has had what may be described as doublebarrelled Ministerial support. We have had it submitted ‘ by a member of the present Administration, and supported by the leader of the late Ministry. The speech delivered this evening by the honorable member for Ballarat was the most plausible to which I have ever listened ; I do not think that anything could have been cleverer.’ The honorable member for Grey brought certain facts under our notice, and I must compliment him upon the way in which he handled the material at his disposal. Having listened to his speech, it’ would take more than the eloquence of the late Prime Minister to convince me that there is not in connexion with this proposal something in the nature of what I have seen recently associated with other public transactions.
-, As the matter is dead, might I suggest that the honorable member should not discuss it further. Parliament, and not only one Chamber, must approve of the agreement.
– It is just possible that the decision of another place may be reversed I have heard quite sufficient tonight to convince me that it would be unwise to support the motion, and I should prefer to support the amendment.
Debate (on motion by Mr. Fisher) adjourned.
House adjourned at 10.24 p.m.
Cite as: Australia, House of Representatives, Debates, 25 November 1908, viewed 22 October 2017, <http://historichansard.net/hofreps/1908/19081125_reps_3_48/>.