8th Parliament · 1st Session
Mr. SPEAKER (Hon. W. Elliot Johnson) took the chair at 3 p.m., and read prayers.
Mr. CHARLTON took the oath and subscribed the roll as member for the electoral division of Hunter.
– I wish to know if a Deputy President of the Arbitration Court has been appointed, and, if not, whether the Attorney-General will state definitely when an appointment will be made.
– The matter is in hand, and I hope to make a definite announcement regarding it this week.
– In view of the reported arrival at Fremantle of a Mr. Louis Sinclair, honorary secretary to the Committee of the Allied Parliaments of Europe, I wish to know if the Leader of the House has any knowledge of this gentleman, and of his mission to Australia?
– I have heard nothing of Mr. Sinclair’s arrival, but, no doubt, we shall be glad to see him, ‘ and to help him in every way.
– I wish to know why the Australian Soldiers’ Repatriation Bill is now regarded by the Government as not urgent, it having been placed fifth on the business-paper ?
– I hope that when we are ready to proceed with the Bill, the honorable member will assist us to give it the greatest possible despatch.
– I wish to know whether the Oil Agreement Bill and the Audit Bill will be proceeded with in the order of the business-paper? I have given notice of some amendments to the Audit Bill, and if that measure is to come on to-day, I should like to get them circulated.
– I think that the Audit Bill will not come on to-day, the intention being to proceed with the Oil Agreement Bill.
Laying of Foundation Stone at Canberra : Public Holidays.
– Is it a fact that the Prince of Wales has expressed a desire to see our people rather than to occupy his time with official functions? If that is so, will the Minister in charge of the House consider the advisability of omitting from the engagements of His Royal Highness the laying of the foundation stone at Canberra, and permitting the Prince to see some of the country people instead ?
– I think that the function to which the honorable member alludes will provide the best of all opportunities for allowing the Prince to see something of the people of the country.
– Has an arrangement been made between the Commonwealth and Victorian Governments regarding the proclamation of public holidays during the visit of the Prince of Wales? The Telephone Department is communicating with business houses to ascertain what they intend to do, so that the Department may arrange to release as many telephonists as possible during the Prince’s visit.
– So far as I know, nothing has been done in the matter, though it would be well to come to some arrangement. Perhaps some one is concerning himself about the matter.
– Does the Government intend to pay its employees for the public holidays given in connexion with the visit of the Prince, or are they to lose their pay for these days ?
– I ask my honorable friend to give notice of the question. The graining of public holidays may seem a simple matter, but it is one which needs looking into.
– It is compulsory loyalty.
– It is not so much a matter of loyalty as of arrangement.
– It is bad for men to have half-a-dozen holidays and not to be paid for them.
– Yes; but it is not so bad for the Commonwealth public servants to have holidays without pay if they choose to take them, when it is remembered that our employees now get nearly four weeks’ holiday in. the year for which they are paid. However, we shall do the generous thing, I am sure, on this auspicious occasion.
Thanks of Parliament
– Have the Government considered the question of asking General Sir John Monash, and also General Sir Henry Chauvel and General Sir Brudenell White to attend at the bar of the House so that Parliament may present to them the resolutions passed by the House acknowledging its appreciation of the achievements of the Australian Imperial Force?
– My impression is that something of the kind will be done, but the precise form which the delegation will take I cannot say at the present moment. However, I hope it will be thoroughly representative of the whole navy and army.
– I have received a telegram from Perth stating that the Australian Metal Exchange has refused a permit for the exportation of some old horseshoes required for ballast purposes. I would like to know if an outside organization such as this has the supreme power of denying permits for the exportation of goods, and, if so, how long such a system is to continue?
– If the honorable member will supply me with particulars and the purport of the telegram he has received, I shall make inquiries into the matter. For the present I can only say I know nothing of the circumstances.
asked the Prime Minister, upon notice -
- Mr. Balsillie, in his report, emphatically denies any attempt to make rain, and only claims he can stimulate the rainfall. In reply to questions recently, it hasbeen stated that experiments were only proceeding at Hopetoun and Riverina, and that the amounts expended there totalled £2,900. Prior to starting operations at these two stations, there were some preliminary experiments along the transcontinental railway. Arrangements have been made to continue the experiments at these two stations for the present pending further investigation.
Queanbean Electeic Lighting - Visit of Prince of Wales: Laying Foundation Stone of Capitol - Work of Building City
asked the Minister for Home and Territories, upon notice -
– Funds which had to be specially obtained from the Treasury have been granted, and the Federal Capital Director of Design and Construction has been notified of approval of expenditure, and has the work in hand. Electric equipment is at present very difficult to obtain and high-priced. It was accordingly advisable to, if possible, make arrangements with the trustees of the Molonglo Camp to purchase the electrical equipment installed in connexion with the camp, and it was some time before arrangements were concluded. I am not aware of any serious inconvenience to the municipality, as well as loss of revenue to the Commonwealth.
asked the Prime Minister, upon notice -
– The. answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
Whether any fresh arrangements have been made to provide that His Royal Highness the Prince of Wales shall lay the foundation stone of the parliamentary buildings at Canberra duringhis visit to New South Wales?
– Provision has been made for His Royal Highness to lay the foundation stone of the Capitol. An announcement as to the detailed arrangements will be made at an early date.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as fol low: -
asked the Prime Minister, upon notice -
What nations, countries, and peoples are at present included in the League of Nations?
– The answer to the honorable member’s question is as follows : -
According to the Treaty of Peace, the following were the original members of the League of Nations: - United States of America, Belgium, Bolivia, Brazil, British Empire: Canada, Australia, South Africa, New Zealand, India;
China, Cuba, Ecuador, France, Greece, Guatemala, Haiti, Hedjaz, Honduras, Italy, Japan, Liberia, Nicaragua, Panama, Peru, Poland, Portugal, Roumania, Serb-Croat-Slovene State, Siam, Czecho-Slovakia, Uruguay.
The Treaty also sets out that the following States have been invited to accede to the League of Nations Covenant: - Argentine Republic, Chili, Colombia, Denmark, Netherlands, Norway, Paraguay, Persia, Salvador, Spain, Sweden, Switzerland, Venezuela. So far, the Government has been officially advised of the accession to the League of the Argentine Republic, Chili, Paraguay, Persia and Spain.
asked the Minister for Trade and Customs, upon notice -
– The information as desired by the honorable member (i.e., in calendar years) is not available, but particulars for the last four financial years are as follow : -
asked the Prime Minister, upon notice -
Whether, in view of the fact that Parramatta is the oldest town in Australasia, and the first place of residence for the Governor, and also the birthplace of the pastoral and wheat-growing industries in the Commonwealth, arrangements cannot be made for His Royal Highness the Prince of Wales to pay a short visit to that historic town ?
– A brief visit to Parramatta has been arranged for 17th June.
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : -
Attendances at Wheat Board Meetings - Additional Payments on Scrip.
asked the Prime Minister, upon notice -
Will he supply the following information: -
How many meetings of the Australian Wheat Board have been held since 1st May, 1919?
A list of attendances of members?
What are the fees and travelling expenses per diem, also in the aggregate, paid to individual members of the Board?
– The answers to the honorable member’s questions are as follow : -
asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follow : - 1 and 2. This matter is under consideration at present. An immediate answer cannot be given.
Mn BOWDEN asked the Minister for Works and Railways, upon notice -
Whether any steps are being taken to bring about a uniform gauge on the railways of Australia?
If so, what is being done?
– This question is set down for discussion at the forthcoming conference of Federal and State Ministers this month.
Wool Shorn before 30th June, 1920 - Continuance of Pool.
asked the Prime Minister, upon notice -
– I have been supplied with the following answers to the honorable member’s questions: -
But I do not necessarily commit myself to them.
asked the Prime Minister, upon notice -
In view of the vote taken on the continuance or otherwise of the “Wool Pool” having been against such continuance, will the Government state what it intends to do in the matter of leaving the wool-growers to control their own affairs?
– The Government is not in favour of continuing the Wool Pool. If the wool-growers so desire, the Commonwealth is prepared to negotiate with the British Government in order to insure the best opportunities for the sale of the new clip. I have made certain suggestions to the Wool-growers Association, which they are now considering.
asked the PostmasterGeneral, upon notice -
– The answers to the honorable member’s questions are as follow:^
Debate resumed from 6th. May (vide page 1888), on motion by Mr. Hughes -
That this Bill be now read a second time.
.- In order that there may be no doubt in the minds ofhonorable members as to the trend of my argument On this measure, I announce at the outset that it is my intention to conclude with a motion to refer the Bill and the proposed agreement to a Select Committee. I well remember when, in the early stages of this Parliament, a Bounties Bill for the manufacture of iron was introduced by the then Minister for Trade and Customs (Mr. Kingston). Four of the present Ministers were members of the House at that time, and the present Prime Minister (Mr. Hughes), the Minister for Home and Territories (Mr. Poynton), and the Minister for the Navy (Sir Joseph Cook), were amongst those who voted in favour of a motion moved by ‘the then Leader of the Labour party (Mr. Watson) to refer that Bill to a Select Committee. If there was any need for such a reference in connexion with that Bill, there is a much greater need for it in connexion with the measure now before us. The agreement between, the Commonwealth and the Anglo-Persian Oil Company has been already signed, but it will not be binding until it is ratified by this Parliament. If this House agrees to an inquiry by a Select Committee, the agreement will remain in abeyance until Parliament has had an opportunity of considering it in the light of the information obtained by the Committee. In moving the second reading on Thursday last, the Prime Minister said -
It may be said that every increase in the price of fuel is a tax upon industry, and affects wages, which, in turn, affects the standard of living. Not only is oil the very spirit of the life of industry, but in war, as well as in peace, its power is pre-eminent.
In some industries oil may be allimportant; but the figures compiled by the Commonwealth Statistician show that fuel and light, employed in the industries of Australia have not averaged more than 2 per cent, of the cost of production. The Prime Minister says that this is the oil age, and he quoted figures showing how the consumption of oil has doubled since 1910. Will any honorable member say that the consumption of electricity, for power purposes, has not shown a greater increase than that?
– All these things are different kinds of fuel, and that means power.
– It is electricity and not oil that is being employed to operate the most modern railways in the Victorian system. Yet the Prime Minister said that this was the oil age. Twenty years ago kerosene was the principal oil and petrol was a mere by-product. To-day these positions are reversed, and petrol is more important than kerosene. ThePrime Minister said also on Thursday -
It is perfectly obvious that the result must bethat whatever price they like to charge us wemust pay.
He was then referring to the two principal companies engaged in the oil trade in Australia, namely, the Shell Company and the Standard Oil Company. I understand that there is another independent company doing business in Australia. My attitude is that I will not vote for any monopoly but a Government one. I am not prepared to hand over to the Anglo-Persian Oil Company or any other company the whole of the oil trade of Australia, whether it be required for fuel, illuininant, or power. In February last the price of benzine in Melbourne and Sydney, and I think in other capital cities, was 25s. per case of 8 gallons wholesale and 27s. 6d. retail. I shall quote from the Times of the 2nd March, 1920, the report made to the British Government on petrol supplies and prices. The Times said -
The Board of Trade issued yesterday the report prepared by a sub-Committee of the Standing Committee on the Investigation of Prices which was appointed to investigate, costs, prices and profits at all stages in respect of petrol, benzol and other motive fuels.
The price charged for petrol in England in February last was 3s. 81/2d. per gallon as compared with 3s. 51/4d. in Australia. An increase was expected in Great Britain after the production of this report. We have had a slight increase in Australia; I believe our price to-day is what it was in Great Britain in February last. We are told that the people at present supplying Australia’s requirements hold us in the- hollow of their hands, and can squeeze us how they like. I hold no brief for them, but I am not prepared to hand myself and the people of Australia over to another Combine which is no better than that which now exists. I read in the Age to-day -
Hitherto the Commonwealth has been dependent upon three companies - two American and one Dutch. They have charged us what they pleased. They have supplied us when it suited them, and have let us go without when it d,id not.
I ask the proprietors of the Age: Has there been a greater shortage of oil than of other commodities in this country? Has there been a greater increase in the price of oil than in the price of news print, upon which that proprietary is dependent? Has there been a greater shortage of oil than in respect to cotton and linen and woollen-piece goods imported into Australia? “We are told that two companies hold us in the hollow of their hands, and can squeeze us how they like. I would remind the Age that there has been no fixation of oil prices in Victoria for a good. number of years. The last effort in that direction, if I recollect aright, was on the part of the Commonwealth authorities, and it was abandoned. Nothing of the same character has since been attempted or performed in respect of petrol.
– There is a limit to the people’s power, to pay.
– When the people are called on to pay, and do pay, 30s. for a pair of boots, ‘ which would have cost them less than 15s. twelve months ago, and when they pay £10 10s. for an average suit of clothes that would have cost them half that sum a few years back, I am bound to take the view that the only limit which need be considered i3 the price which sellers care to charge for their goods. There has not been a huge increase in respect of oil and petrol prices such as there has been regarding other commodities. We are told that it will, take two years to build the refinery. The Prime Minister stated that from 200,000 tons of crude oil it was estimated that we would get 40,000 tons of benzine per annum; that quantity would represent 12,000,000 gallons of benzine. The Prime Minister said further that, besides the benzine, the refining of the 200,000 tons would supply us with 33,300 tons ‘of kerosene - being the equivalent of 9,990,000 gallons of kerosene ; and 72,000 tons’ of fuel oils- the equal of 21,600,000 gallons of the same commodity. Those latter figures represent more fuel oil than we have used in Australia in any one year; but the figures for benzine and kerosene are equivalent to only about 50 per cent, of our annual requirements.
We have not been told the number of directors of the Anglo-Persian Company. It would be interesting to know how many of them were appointed by the Imperial Government.
– Out of what total?
– Out of fourteen.
– We have not been told the names of the other directors. They may have interests in other commercial ventures by means of which they can squeeze Australia in the matter of shipping freights. I have heard, for instance, that Lord Inchcape - who is fighting this Government and the people of Australia in connexion with shipping - i3 one of the- directors of the AngloPersian Company.
– The honorable member may crucify that gentleman at his leisure, but I will tell him the facts. Lord Inchcape is a nominee of the British Government, and is not a shareholder in the company.
– I remarked that he was a director. I now learn that he is one of those nominated by the British Government. How did Lord Inchcape’s shipping firm raise their freights compared with pre-war days? They own their own vessels, and have their own oil-tank ships. I do not think they have a refinery in Great Britain.
– Yes, they have.
– Then, I do not think they refine very much Persian oil. The Petrol Commission says -
The amount of petrol imported in 1919 was approximately 200,332,648 Imperial gallons, and it is estimated that in 1920 it will reach 250,000,000 gallons. The petrol brought to the United Kingdom in 1919 was produced in the following countries, and the approximate proportion set out below, in gallons: -
Of the 200,000,000 ‘gallons used in 1919, less than 10 per cent, of the requirements, so far as petrol was concerned - according to the Petrol Commission - came from Persia.
Mr. Hookes.; Did I not say, in the course of my speech, that the Burmah Oil Company was the principal shareholder in the Anglo-Persian Oil Company? That is their oil.
– The Prime Minister did point that out. But, if we take the freights charged by the shipping firm to which I have just referred, we find that the pre-war rate from Persian Gulf ports was 36s. per ton. This fairy god-mother, this Anglo-Persian Oil Company, which is looking around the world to see what other country it can enter in order to do it a good turn, fixes its eyes on Australia, and says, “ Let us procure oil for you, and let us erect a refinery at your expense. Let us find oil for you at the expense of the British Government, and of your people.” The Prime Minister’s speech reads like a prospectus for a company. The right honorable gentleman urges us to go in for this business. I say that we must be very careful before we tie up the people’s money and the supply of oil for fifteen years, and before we ‘hand ourselves over to this Anglo-Persian concern for such a long period. As I have just stated, the freight from Persian Gulf ports in pre-war days was 36s. per ton; to-day the freight is 30Ss. ner ton. For northern United States of America the freight prior to the war was 18s.; the Ministry of Shipping Requisition, rate to the end of January, 1919. was 32s.; then the freight was raised to 220s. Every rise of ?7 10s. per ton upon oil means an increase of 6d. per gallon.
Honorable members have not been supplied with the information which should have been available before Parliament was called upon to enter into this agreement. We have never even seen the agreement between the Commonwealth and the British Government concerning the investigation work to be done. .
– That has nothing to do with this matter at all.
– No ; it is a case of “ open your mouth and shut your eyes, and see what the Anglo-Persian fairy godmother will give you.”
– Exploration and investigation for oil should come first.
– Of course; are these people the only experts in the world? It has been rumoured throughout Australia, by the way, that every prospect for oil, so soon as it has been considered good, has been destroyed through the actions of certain interested persons. With respect to the extract which I quoted from the Age just now, I stated that I found myself in opposition to its sentiment. Here is another quotation from the leading article in that newspaper -
The Bill presented to Parliament refers almost exclusively to the supply and refining of crude oil imported to Australia. It does not bind the company to conduct explorations or to expend a certain amount of capital to that end within a given time.
There is not one clause in this agreement which binds the company to spend one penny to explore or develop oil fields in Papua or elsewhere.
– Certainly. That has nothing to do with it. They are employed by us to explore, and the oil will belong to us, and not to them.
– And we pay them for doing it?
– We Day them as you are paid here.
– Yes; and I consider myself very much under-paid at times.
– You are paid what you are worth. If not, say so, and I will hear what you have to say.
– The article also says-
Obviously the Government cannot expect Parliament to ratify the agreement now under the notice of the House of Representatives before the exact nature and terms of the Papuan explorations have been defined, or before the obligations of the company, in return for the concessions it demands, have been set down in irrefragable, unmistakable conditions.
Further on it states -
It might possibly suit the company, which has costly developmental work elsewhere, to treat the Papuan prospects in an indifferent, procrastinating way, while secure in the knowledge that it is safe from possible Papuan competition.
Once we hand ourselves over to them there is no need for them to do anything so far as Papua is concerned. They can defy the Government. They can use their own oil. They can charge what they like in freight.
– No, they cannot.
– Yes, they can; they fix the price.
– No, they do not.
– They do, according to the terms of the agreement ; and they fix it two years ahead.
– I do not mind you speaking at large when you have not the facts, but look at the agreement.
– I have looked at it, and I say they can fix their freight at what they like.
– They cannot.
– I shall be pleased if the honorable gentleman will show me the clause in the agreement to prevent them from doing so.
– It says “ current rates.” What is wrong with that?
– Fixed by the AngloPersian Oil Company.
– Why do you not go into a shop and fix the price of the clothes you are going to wear, or come into this Parliament and say how much you are to get? It is ridiculous nonsense.
– We say as a whole Parliament what we are to get. I object also to the agreement giving us only three directors, and them four. What is the advantage to the Commonwealth of holding a majority of the shares if we are not to have four directors out of the seven? The company will have all the expert knowledge. If we had four directors we should be in a better position, but even then we should not be in as good a .position under the- agreement as I think we are entitled to hold.
– Why do you not start a refinery of your own.?
– Why does not the honorable member do so?
– If I did, you would find some objection to it.
– The honorable member happens to be at the head of the Government, and while he has a majority the Government can do no wrong.
– You mean the Government can, do no right.
– I have never said so. If we go on with the agreement in its present shape, Australia will regret it once, and that will be always. We shall hand control over to the company.
– How can we hand anything over to them when we have a majority of the shares?
– They have a. majority of directors.
– What has that to do with it? The shareholders can do anything they please to any company they like.
– They cannot. The Commonwealth will not have the opportunity of electing the majority of the directors, and the majority of the directors will fix the policy of the company. They can do what they like regarding two things - th© cost of crude oil, which they can fix themselves, and the cost of freight to bring it to Australia. They may do that on the same basis as they fixed the carriage to England. They increased the freight in that case tenfold from prewar rates to the present time. That is what this beneficent company did, so far as Britain was concerned.
– Great Britain is getting half the profits. Who is getting the whole of the profits of the Standard Oil Company? Is it the American Government or Rockefeller ? Is there no difference between the whole of the people and an individual profiteer ?
– Yes, there is a difference. That is why I want the whole of the people to have the benefit of this business, and not to hand it over to the company.
– Then why don’t you make your suggestion ?
– My suggestion is to have a further investigation into the matter. The Prime Minister seems very touchy this afternoon about the agreement.
– Any one would be . touchy. What is the honorable member talking about? Here is a man, supposed to be leading an advanced party, and what he is saying might come out of the mouth of the most Conservative reactionary in the country.
– The Prime Minister is getting into very bad company in backing up the Anglo-Persian Oil concern. Let m© read to’ him what the Board of Trade Commission said about it. Of course, he does not want to hear that.
– If it will make you smile, read it.
– Certainly; but it will not make the Prime, Minister smile.
– I do not know that it would make the honorable member smile if he had a cold such as I have.
– I am very sorry for the honorable member’s health; but because he has a cold, is that any reason why we should be asked to pass this proposal right through without any inquiry ?
– If I thought it would be a reason, I would have a much worse cold.
– Notwithstanding what I feel for the honorable member, I intend to say what I have to say about this iniquitous agreement, which should never have been entered into. Parliament has a right to ask that further investigation be made before we agree to it.
– The real trouble is that you cannot find anything wrong with the agreement.
– The honorable member may judge that after I have finished. He telle me that the British Government holds half the Anglo-Persian shares.
– No; I said they had a majority of votes.
– If they have a controlling interest, they must have a majority of the votes. This is what the Board of Trade Petrol Commission say -
We feel strongly -that when the AngloPersian Company (in which His Majesty’s Government hold a controlling interest) is free to market its own production, steps should bo taken by His Majesty’s Government to insure that the products are sold at a reasonable figure in this country, without reference to the excessive prices ruling in other fields. We attach great importance to this point, as we are of opinion that, when the existing contracts, by which the Anglo-Persian Oil Company are bound, expire in 1922, it will be in the power of His Majesty’s Government to give substantial protection to British users of petrol, and thereby to confer substantial benefits on the whole community of this country, to whom the cost of all commodities must be enhanced by any rise in the cost of petrol. In our opinion, it is far more important that the Government should secure for British users of petrol a reasonable price than that it should participate, as a shareholder in the company, in excessive profits made at the expense of the British public.
– Very sound.
– We are asked to hand over Australia to this Anglo-Persian Company-
– We are asked to do nothing of the sort. The honorable member has said that several times, but that circumstance does not make his statement any truer.
– If we get 200,000 tons of crude oil annually from this company it will mean that we shall get 72,000 tons of fuel oil, 40,000 tons of benzine, and 33,000 tons of kerosene.
– The commodities mentioned other than fuel oil will be sufficient to supply only one-half of our requirements. Therefore, the enterprise will not be a monopoly.
– So far as fuel oil is concerned, 72,000 tons annually represents 50 per cent, more than we now use.
– But we require that quantity for our Navy.
– We have no right to hand over to the Anglo-Persian Company half the profits accruing from this enterprise, and to allow them to run it just as they choose. It is for this reason that I intend to move that the Bill and the agreement under it be referred for consideration to a Select Committee. I ask the Prime Minister if it is .possible for honorable members to see the agreement which has been entered into between the British Government and the Commonwealth Government in regard to prospecting for oil in Papua, and in respect of which we shall have to pay a sum of £50,000?
– Certainly. It is very simple. It merely provides that the British Government shall contribute £50,000 and the Commonwealth Government an equal amount for the purpose of exploring for oil in New Guinea.
– What do they get out of it?
– The British Government puts in £50,000 for nothing?
– You cannot understand that, can you?
– When this miserable by-play has ceased I would like to remark that it will be interesting to see the agreement in question. I remember that when speaking upon the sugar agreement the honorable member for Flinders (Mr. Bruce) doubted the wisdom of entering into that agreement for three years, because during that time the whole of the sugar produced in Australia was to be handed over to the Colonial Sugar Refining Company. What does he think of this agreement, which will give a particular company better terms than any other oil company which may he desirous of erecting an oil refinery here? And this agreement will last for fifteen years. If the Standard Oil Company or the Shell Company wish to erect an oil refinery in Australia, will they get as advantageous terms as are being given to the Anglo-Persian Company?
– No, because they are foreign companies.
– Are they?
– Certainly. ‘
– During the war the British Government had an interest in the Shell Company, and they admitted in a booklet issued by the Shell Company which was circulated amongst honorable members during the last Parliament that the Allied Governments were greatly indebted to that company for the excellent work which it did in connexion with the war. They said that had it not been for the action of the company in shifting its distillery from Rotterdam to Portishead they would not have been able toget the requisite quantity of T.N.T. This distillery was erected in six weeks, and it would usually take six months. The Government added that- the explosives produced by the company at Portishead and Barrow-in-Furness represented 80 per cent, of the explosives used during the war. Yet we are now asked to turn down that company on the ground that it is a foreign company.
– We do not turn it down at all. We merely give a preference, as we do in our Tariff, to Britain.
– Under the proposed agreement we shall absolutely shut out any other competitor with the AngloPersian Company.
– We shall not. It will supply us with only half the petrol and benzine that we require.
– I prefer to make my own . speech in my own- way.
– Look at paragraph 14a of the agreement.
– Quite so. We say that we will penalize any other competitor with this particular company by raising our Tariff against it. If another company desires to erect a refinery here, this Parliament can impose a duty of 5s. per gallon upon all the oil brought to Australia by other companies. Why should we not give them all an equal opportunity to start operations here? The Prime Minister says that the companies I have mentioned are foreign companies. May I direct the attention of honorable members to paragraph 14 of the agreement contained in the schedule to the Bill, which reads -
In order to insure the full success and development of the oil refining industry in Australia, the Commonwealth will, so long as the prices charged by the refinery company for the products of refining are considered by the Commonwealth fair and reasonable -
exercise or cause to be exercised such statutory and administrative powers as it deems advisable to prevent dumping and unfair competition by importers of refined oil from other countries;
refund to the refinery company any Customs duties paid by the refinery company uponthe importation into Australia of crude mineral oil purchased from the oil company and refined in Australia by the refinery company; and
cause to be introduced into the Parliament of the Commonwealth, and supported as a Government measure, a Bill providing for the imposition, of Customs duties on crude mineral oil whenever in its opinion such action is necessary or advisable to prevent unfair competition with the products of crude oil refined in Australia by the refinery company.
If that provision be retained in its present form, I shall not regard myself as being bound by it. I am not going to vote for an oil monopoly unless it bea Government monopoly. It is distinctly unfair to allow the Anglo-Persian Oil Company to charge just whatever prices for oil it may choose.
– It cannot do that.
– It can. When once the agreement has been ratified there will be no escape from it for fifteen years. When Mr. Glynn, was in charge of the Department of Home and Territories, why was not the agreement regarding the exploration of the oil resources of Papua, into which it was then . proposed to enter with another company, ratified?
– I know nothing of that.
– The Prime Minister may have been absent from Australia at the time. But honorable members will recollect that, according to the press, the British Imperial Company, which is the representative of the Shell Company in Australia, made certain representations to the then Minister for Home and Territories, and submitted certain proposals to him. I think it was stated at the time that that company was prepared to undertake all the exploratory work in Papua at its own expense, and that when a company was subsequently formed it was willing to give to the Commonwealth 60 per cent of the shares in it.
– Does the honorable member mean to say that we should part with the fee-simple of the rights to oil? A monstrous proposal!
– I have said nothing of the kind. I am merely asking that honorable members may be informed of the proposals which the representatives of the Shell Company made to the Government at that time. Any honorable member who gives his assent to this agreement without first fully investigating the matter will not be doing justice to the Commonwealth. I believe that there are papers in the Department of Home and Territories dealing with the proposals submitted by the Shell Company to the Government, and we ought to be permitted to see them. We are told by the Prime Minister that Canada had increased her refineries from seven to fourteen - I presume they are privately-owned concerns - but I do not think that any refining has been done in Great Britain.
– The Anglo-Persian Company recently erected a refinery, I believe, at Swansea.
– According- to the figures supplied by the Prime Minister, there is a waste of about 15 per cent, m the treatment of the crude product, as the 200,000 tons of crude oil is expected to produce 40,000 tons of benzine, 33,300 tons of kerosene, and 9,040 tons of lubricating oil, 72,000 tons of fuel oil, 4,500 tons of wax, and 9,000 tons of pitch. In America, according to an article which, I think, appeared in a recent issue of the Saturday Post, it is the practice of a group of independent small companies, or oil borers, to have the refining done by a separate company in proximity to the supply of crude oil, thus eliminating the element of waste. Therefore, it behoves us to be careful in relation to this agreement. I realize the difficulties to be encountered in securing experts to carry on this work independently of the big oil companies. Our ex perience has shown that machines procured from America, although supposed to be admirably suited for the work, were frequently short of certain parts, and other parts which were supposed to last for months, lasted only a few days. In the language of the Assistant Minister for Defence (Sir Granville Ryrie), we found that somebody “ had sold us a pup “. The representatives of these big oil companies, it has been said., took good care that nobody would succeed in developing the oil resources of the Commonwealth, or its Territories. Whether this allegation is true or not, I cannot say; but we should know. We should know, also, whether the controlling interest which the British Government at present hold in the Anglo-Persian Company is likely to be limited or permanent.
– They ‘hold the controlling interest as the result of purchase.
– Then there is no time limit for this control.
– They may buy or sell like ordinary shareholders.
– And they may cease control. Some interesting information on the oil situation was contained in a cable message to the Melbourne Age and A Argus of yesterday. The paragraph states -
In analyzing .the oil situation in Mesopotamia, the Observer declares that the future efficiency of the Empire depends on oil for vehicles, ships and aviation, yet the Empire produces only 2 per cent, of the world’s supplies. The vital need is sane co-operation with other countries for ten years until the Mesopotamian field is developed. Therefore we must have definite alliances with foreign enterprises on reciprocal terms.
The London ‘limes of 2nd March, dealing with the report of the Royal Commission on oil supplies, stated that this should be one of the first questions to be submitted for consideration by the League of Nations. The Prime Minister, in the course of his remarks last Thursday, also pointed out that the world supplies were not keeping pace with the rate of consumption, and that it was not right to hand over to two or three rich companies control of a product absolutely necessary for the well-being of the community. The cable continues-^ “As America must become an importing nation,” the article proceeds, “ our maximum security depends on alliances with the Shell Company and the Royal Butch Corporation, which are associated concerns, and do not depend on any one part of the globe, drawing from the Dutch Bast Indies, Mexico, South America, Roumania and Egypt, while the Venezuelan field will soon begin to operate. Hence the only sane British policy for the next five years is to encourage a Dutch-British alliance, but it is preposterous to suggest that we should co-operate as before with foreign interests, while shutting them out from the use of our fields. The development of Mesopotamia can be best done through an AngloDutch alliance. As direct government exploitation is impossible, the experts saying that private energy can double the output, and as France is entitled to a large share in the oil yield, a satisfactory, sensible settlement might be drawn up associating the AngloPersian Company and the Shell group -with the Dutch, the Allies and France, guaranteeing a maximum of commercial efficiency.
If those who were responsible for the cabling of this information knew that we were dealing with this question, and what we proposed to do, they could not have furnished us with a stronger argument for further information. The cable concludes - “ ThS Mesopotamian agreement has been approved by the Petroleum Controller, the Admiralty, the Foreign Office and the Board of Trade. The Empire was never presented with a wiser or fairer bargain, with which the French Government concurs. The only alternative is the throwing of Mesopotamia open to a new scramble for concessions, which would risk the whole of the transport and air services of the Empire.”
Incidentally the Observer notes that Mr. Lloyd George paid a tribute to Sir Robert Home in regard to the agreement, expressing the opinion that he was the ablest of all his colleagues.
According to this statement, British opinion is not inclined to shut out a company which has been denounced by the Prime Minister as a foreign concern, and with which he says we ought to have nothing to do. I hope honorable members Will realize that we should not rush into this agreement blindly, because, if it be finalized in its present form, there will be no chance of review for at least fifteen years. I object to the creation of any capitalistic monopoly. What would be said by the shipping companies at present operating on the Australian coast if Commonwealth vessels were placed in the trade and the Government imposed a tax of £5 per head on every ticket issued by competing companies to Inter-State travellers? Such a proposal would be just as fair <as the one embodied in this proposal.
– People do not bring crude oil to Australia for refining.
– The Government are preventing them-
– They have had a hundred years in which to start a refinery.
– The Anglo-Persian Company would not come into the business until it had a monopoly.
– It would not erect a refinery in Australia :and compete with others on fair terms. Under the present proposal the Government, under the clause in the agreement which I have already quoted, will hand back to the company the total amount of duty which it pays on oil brought into Australia merely ‘because they are partners in the business. The Government are penalizing the competitors of the Anglo-Persian Oil Company, and, as a result of this arrangement, they will increase the price of oil to every one in the community. The Prime Minister has stated that the shares that were worth £5 each are now worth £50.
– I said the figures were £50,000,000, as compared with £5,000,000.
– Very well, the shares which cost the British Government £5,000,000 are now worth £50,000,000.
– In a period of five yeaTs.
– Exactly; and that is another reason why we should know why these shares have become so valuable. There are only two ways in. which we can make money.
– I am rather interested in this. What are they?
– By exploiting the people in charging higher prices, or by compelling their employees to work harder at lower wages. Which of these has the Anglo-Persian Oil Company done? Is there any reason why these shares should be more valuable ? If the shares are worth £50,000,000, what will they be worth now the company has a monopoly of Australian trade?
– Is the honorable member saying that the investment of £250,000 in an undertaking of this sort would affect the price?
– I do not say that for a moment, but it will be a great advantage to the company to have a monopoly in Australia.
– We should have a monopoly.
– But have you? It is merely a question of the Government saying, “Take as much as you can from the people, but you must give me onehalf.” That is exactly what is being done under this arrangement. Before we give further consideration to the agreement between the Anglo-Persian Company and the Commonwealth Government we have a right to know the effect of the exploratary and developmental work to be done in Papua and other such territory. As the Age newspaper has correctly stated, the company can merely “ sit down.” There will be no working conditions such as there are in a mining proposition, and the company need not do any exploratory work at alL
– They can sit down now.
– Of course they can, this agreement places them in a favoured position; but while they hold a monopoly others are prevented from doing work of an exploratory character. The Government of which the Prime Minister and I were members decided that such work should be reserved for the Government. The Prime Minister has stated that the company will go on with exploration work, but experts and technical men will have to be found to carry it out. The company’s advisers are being paid by the Commonwealth, and the company will not ‘ have to spend a single penny.
– They are looking for oil for us.
– One may, perhaps, be permitted to use a sporting term, and say, “ They have the oil,” and, so far as this proposition is concerned, they certainly have.
– People have been looking for oil as long as I can remember, and how much oil did they find? It could easily be placed in an inkpot.
– When the honorable member for Kalgoorlie (Mr. Mahon) was Minister for External Affairs I remember him having in his room a small bottle supposed to contain oil, but I never ventured to open it–
– Yes, the fruits of Government enterprise in New Guinea.
– How long is it since the Prime Minister has opposed Governments undertaking such work t
– The Government are doing it.
– The Government pay for the exploration work which this company may carry out how and when it likes.
– It cannot.
– That is net in the agreement.
– I defy the Prime Minister or the Minister for the Navy (Sir Joseph Cook) to contradict what I am saying, as there is not one word in the agreement concerning exploration. We have to contribute a certain amount, and the experts can please themselves what they do, and how they do it.
– Does the honorable member know of any really reliable oil experts ?
– If the honorable member knows of any such persons the Government will be pleased to give them employment.
– I do not know of any.
– r-Neither do I.
– I do not” think the Prime Minister does. I am not going to criticise the experts who have visited the field, and who are supposed to know something concerning oil.
We have been told that, in the event of war, our Navy would be in a much better position if supplies were available locally, and if crude oil were obtainable in Papua, it might be an advantage. But if we have to rely on supplies from Persia, oil tanks coming to Australia would be a special target for enemy vessels. Enemy countries would know that our Navy would be helpless without oil, and every effort would be made to prevent supplies reaching Australia. It is not a good agreement, and I consider further investigation necessary. I do not object to the Anglo-Persian Company, or to any other company or person coming here as an ordinary trader and building up a business. We have been told that under the agreement the Anglo-Persian Oil Company is to be allowed to bring in crude oil duty free. Is it to be exempt from income taxation?
– Certainly not. The Government will get 50 per cent, of the profits under the agreement, and about another 25 per cent, by way of income taxation. We do not get anything from the Standard Oil Company.
– We get income tax from the Standard Oil Company just as we get it from other companies trading here.
– No. . The profit is made in the refining of the oil, and that is done elsewhere by the Standard Oil and other companies.
– Perhaps the honor able member for Flinders could say whether the manufacturer or the distributor of an article makes the more’ profit.
– In this case the manufacturer is also the distributor.
– There is this point to be considered: Tank steamers bringing oil from Persia or elsewhere would have to return in ballast, whereas the Commonwealth vessels that have been trading with America have taken there our wool, wheat, and other products, and have earned -between £750,000 and £1,000,000 in freights.
– Is it not a good thing to establish industries in Australia?
– It is; and I, perhaps, have done as much as any other member to that end since the Tariff of 1901 was introduced. I am ready to vote for a bounty or a duty for the encouragement of any industry, provided that all persons are given the same opportunity to take advantage of it. Of course, in some specialized lines it would he impossible, or almost so, to excite competition. I doubt whether there would be more than two or three competitors, if as- many, for a bounty for the production here of refined oil, but what .is proposed by the Government is the payment of £250,000 to the Anglo-Persian Oil Company to make the Commonwealth a partner in its business, and the giving of that company an advantage over every, other. I do not think that fair to the people of Australia, and I would object to the proposal, whatever company might be concerned. We have no right to confine to one set of persons a benefit like that which it is proposed to give to the Anglo-Persian Oil Company.
– Let the monopoly of Australia be offered by tender, to see what it will fetch ! i
– That would be Australia Unlimited. There was an offer made, I believe, for the Northern Territory.
– Remembering all thatthe honorable member has said against the Standard Oil Company, and listening to what the honorable member is saying now in favour of that company, I think that he is doing pretty well.
– I have not said anything in favour of either the Standard Oil Company or the Shell Oil Company.
– I never heard a better defence of those companies. If the honorable member were to add a word or two on behalf of the Beef Trust, we might all be perfectly happy.
– I do not hold a brief for any company; I desire that all may be placed on the same footing. The Commonwealth should not go into a partnership which will give one company an advantage over its competitors. When the first Bonuses for Manufactures Bill was before Parliament, the then Leader of the Labour party, the Honorable J. C. Watson, moved to refer it to a Select Committee. I propose to take in regard to this measure action similar to that taken by Mr. Watson, and I thereforemove -
That all the words after the word “That” be omitted, with a view to inserting in lieu thereof the words “the Bill and the proposed agreement be referred to a Select Committee.”
– The honorable member’s proposal should be the subject of a substantive motion after the second reading of the Bill has been agreed to. Standing order 163 provides that -
After the second reading, unless it be moved “That this Bill be referred to a Select Committee,” or unless notice of an instruction begiven, the House shall forthwith resolve itself into a Committee of the whole for the consideration of the Bill.
If the honorable member wishes to havethis Bill referred to. a Select Committee, he can move a motion wi’th ‘that object before the House goes into Committee of” the whole. The procedure followed on the occasion to which the honorable member has referred was not an amendment, on the motion for the second reading of a Bill.
– I desire to say at the outset, and before I have stated my objections to the Bill, that 1 am disposed to criticise it with the utmost generosity, because of its objectives. Of these, the first is the establishment of the oil refining industry in Australia, to which it behoves every honorable member to give every encouragement and assistance. The second objective of “the measure is to make Australia selfcontained; and a third objective is to provide a .supply of cheap oil . for our industries and Navy. The Prime Minister did not overstate the case when he said that oil is the spirit and’ life of the age. This is indeed an oil age, and every encouragement should be given to proposals directed towards securing a cheap and abundant supply.
The Leader of the Opposition (Mr. Tudor) has raised the objection that it is proposed to create a monopoly. He says that the oil refining industry should be established by the Government alone, without any connexion with a private concern. But it would be extremely difficult, if not impossible, for the Government to do that. The highest technical skill is essential, and only individuals of the highest training and experience can undertake the work. Therefore, if oil refining is to be established here, I am prepared to make some sacrifice to- encourage private enterprise, which cannot be expected to enter upon industries here unless given substantial concessions.
– Is it known approximately how many men would be employed in refining oil in Australia?
– The number of men to be employed must depend on the quantity of oil to be refined. A highly skilled technical staff must be associated with the industry.
– Is not that so with all modern industries ?
– No. Without a highly trained staff to direct operations, the prospect of establishing the oil refining industry here is remote. Therefore it is obvious that Parliament should’ give all the encouragement it can to private enterprise as in this case. Of course, there are limits which we should not exceed, and the obligation and responsibility is cast upon us of carefully scrutinizing the agreement put before us for our approval. I am in sympathy with the objection that we have not been given sufficient information to enable us to properly consider the measure, and before we can be expected to come to a decision on its important clauses we should be supplied with much more information than has up to now been placed at our disposal. We must con sider, too-, in dealing with the Bill, the agreement which has been entered into between the Imperial and Commonwealth Governments, and which we have not yet seen, because to the Anglo-Persian Corporation and its experts has been committed the duty of exploring the oil-fields of Papua and other places.
– There is nothing, in -tha agreement about Papua.
– But it must be borne in mind that the Anglo-Persian Oil Company has been engaged to carry out exploration work ‘there under an agreement between the Imperial and Commonwealth Governments. This is purely a refinery agreement, and has not the slightest connexion with the exploration agreement ; but in considering it we must bear in mind the duties which, under the previous agreement, are to be performed by the skilled experts of the AngloPersian Oil Company.
My chief objection to this agreement with the Anglo-Persian Oil Company is that if it should prove more profitable to the company to. import its own crude oil the chances of the early and vigorous exploration and development of our own oil-fields in Papua or elsewhere are discounted; and When I remember that under the terms of the agreement all the producers’ profits and those derived from the freightage of the crude oil imported into the Commonwealth,’ together with a proportion of the profits made by the refinery, belong to the Anglo-Persian Oil Company, I perceive that the chance of developing our own oil-fields is all the more remote.
– We could send our own vessels to bring the oil here.
– Tank vessels are required, and we have none. The corporation will be entitled to bring the crude oil to Australia, and under this agreement they are obliged to supply 200,000 tons per annum.. But what I want cleared away is my fear that this agreement in ay retard the rapid and effective exploration of our own oilfields.
– I presume that the chief expert in the exploration field will be a Commonwealth officer.
– Not at all. We are told that there is an agreement in existence between the British Government and the Commonwealth Government - we have not seen it yet - and that the Anglo-Persian Oil Company are responsible for the conduct of that exploration.
– But could not the Commonwealth representative act in conjunction with their expert?
– I have already explained that it is only highly skilled technical men who are capable of conducting this work.
We are entitled to know whether this company is to have an exclusive right” in regard to exploration for oil. My anxiety is to see the field thrown open to all companies, and particularly to British companies, because we want to find oil in Australia or its territories. If we find it in sufficient quantities, its commercial value will be inestimable. I have nothing to urge against the Anglo-Persian Oil Company, and I do not attribute any mala fides to them, but I urge that ordinary business precautions should bs observed. The Auglo-Persian Oil Company should not have an uncontrolled discretion which may be exercised in its own interest. While giving them every encouragement, we should also give encouragement to every enterprising oil company that is prepared to conduct explorations for oil in Australia, and then come to terms with it.
– An Australian oil company was formed the other day.
– This Bill will cut them out.
– That is just the point I am emphasizing. This Bill may seriously retard the exploration and development of our own oil-fields. It is claimed that we are giving this company a monopoly; but our ultimate protection in this regard lies in the fact that at the end of fifteen years the whole enterprise may be taken over by the Commonwealth; and if by that time the refinery has been made a commercial success, and we have had the good fortune to get our own oil-fields developed, I think we are justified in paying for that success by a degree of concession to these people who are spending their own capital with that object in view.
– But suppose it is not in their interest to develop our oilfields?
– I want, if possible, to make it their interest to do so; but I am afraid that the Bill rather tends to discourage the . development of our own fields. However, to some extent, a monopoly for a period of fifteen years may be justified.
The Leader of the Opposition (Mr. Tudor) has commented strongly upon several of the clauses of the agreement, among others the provision that, in order to insure the full success and development of the oil refining industry in Australia, the Commonwealth will exercise, or cause to be exercised, such statutory and administrative powers as ft deems advisable to prevent dumping and unfair competition, and will refund any Customs duty paid on crude mineral oi! purchased for the Oil Company, and imported into Australia, but he omitted to make reference to the words of the clause which govern these sub-clauses. The clause provides that “ in order to insure the full success and development of the oil refining industry in Australia, the Common wealth “ - I emphasize these words - “will so long -as the prices charged by the Refinery Company for products of refining are considered by the Commonwealth fair and reasonable” give the relief mentioned by the Leader of the Opposition. It is only when the Commonwealth Government comes to the conclusion that the Refinery Company is charging fair and reasonable prices that it will be open to it to relieve the company of Customs duties, and protect it against dumping. However, this is a provision which is capable of abuse, and further safeguards should be inserted.
The Leader of the Opposition also made persistent reference to the price to be charged. The provision in the agreement is that “the price, payable by the Refinery Company to the Commonwealth and to the Oil Company respectively for indigenous oil, and for crude mineral oil, shall from time to time be fixed by agreement between the Commonwealth and the Oil Company, and shall be based upon the contents of the oil.” In my opinion, this clause is very vaguely drawn. I can quite understand what is in the mind of the Leader of the Opposition. He would say that the company would definitely fix their price at, say, 5s. per gallon, and the Commonwealth Government would reply that the oil was only worth 2s. 6d. per gallon. The company will insist upon being paid the higher price and an impasse is at once created. No basis for arriving at a fair price is provided, as, for instance, that due regard must be had to the current market rates, and no limitation of prices is prescribed. The answer to that argument is, of course, that the Bill includes an arbitration clause, which may, with a certain amendment, effectively dispose of my objection. My point, however, is that the clause itself should lay down some basis upon which the price can be arrived at. We should not leave it to the company on the one hand to say, “I insist upon a certain price,” and for the Commonwealth Government upon the other hand to say, “We shall not pay it.” That is not a business way of arriving at a fair price. Parliament is placing itself in the hands of the arbitrator in this connexion; he will be at liberty to do exactly as he pleases, and it will be he who will ultimately fix the price.
The agreement provides that the Commonwealth, shall supply to the refinery company indigenous oil to the . quantity of 200,000 tons per annum. I desire to call the attention of the House to an important feature affecting the price to be paid for the oil. The oil will probably be brought from the Persian Gulf in tank steamers belonging to the oil company, and for such vessels there will be, and indeed can be, no back loading. Therefore the freight on the oil from the Persian Gulf to Australia must be high enough to cover the double journey, and that must have its influence upon the price to be paid by the refinery company for the oil. It is provided that the freight shall be fixed at the current rates, but there can be no current rates for voyages of that’ kind. Therefore it will be within the power of the corporation to impose very heavy charges for freight, and there will be no means of saying whether they are fair and reasonable, but regard will have to be paid to them in fixing the price to be paid for the commodity.
There is another important aspect: I was informed by an expert to whom I was speaking yesterday that in the refining of crude oil there is an absolute waste equivalent to about 15 per cent., representing on the total of 200,000 tons per annum an annual loss of approximately 31,000 tons.
– That is what the Prime Minister’s figures show..
– -I believe they do. That is to say, that after the final st age of refinement, and when the bitumen or asphaltum has been recovered, there will be still a waste residue of 31,000 tons. What will be the effect of that wastage over a period of fifteen years upon the freights to be fixed under the conditions to which I have already referred?
– The by-products of oil refining will be very valuable.
– After all the by-products have been removed, there will still be an absolute waste of 31,000 tons. ‘That quantity must be carried yearly between the Persian Gulf and Australia in the specially-constructed tank vessels belonging to the AngloPersian Company and heavy freights paid therefor. In other words, they will be conveying to Australia each year 30,000 tons of waste material for which there will be absolutely no return. That means that the industries of Australia will be taxed with the freight of 30,000 tons of waste per annum. That is a very serious point which we cannot altogether ignore.
There is another matter that I desire the Government to take into consideration. I think we are all anxious to have the oil industry established in Australia and to offer every encouragement to that end. It is provided that the technical and commercial management of the refining operations shall be left entirely in the hands of the company, which must forthwith, after registration, erect, equip and operate in Australia a modem re- finery. We dare not place ourselves in the hands of this company any more than we are obliged to do ; the best interests of the Commonwealth may be gravely endangered unless we take the necessary precautions. The company will employ in the refining of the oil a highly-skilled staff, and I shall endeavour to provide in the Bill that there shall be within the refinery nominees of the Australian Government whom the company shall be obliged to instruct in this highly skilled and technical work. I shall suggest the insertion of a provision to the following effect -
In the case of each important division in the technical management of the refinery, an Australian understudy shall be appointed by the company under nomination by the Commonwealth Government, the Government undertaking to pay half the salary in each instance.
I consider it most important that we should have understudies in the various divisions of this very technical work, so that at the end of the fifteen years for which the agreement is to run, if the Commonwealth desires to take over the control of the refinery, we shall not be left in the lurch through lack of a technical staff. We should exercise every precaution to protect our interests in that regard.
I have just been handed a note by Major Bird, which says, “ This agreement stipulates for a quantity of oil not exceeding 200,000 tons. The refinery which is to be erected to treat 4,000,000 gallons per month will, therefore, treat only 179,000 tons per annum. The refining loss on 179,000 tons is only 6 per cent. There is, therefore, only a loss of 8,000 to 10,000 tons, and not 30,000 tons.” That is a point that requires investigation, but from the Prime Minister’s figures it would appear that there will be a wastage of 30,000 tons per annum, and I am assured by an expert that that will be so. Such a loss would be very serious.
– There should be an inquiry into the agreement.
– I certainly require more information.
– But assuming that the correction is right?
– Whether the loss be 30,000 tons or only 10,000 tons, it will be still very serious. Looking through the agreement I notice that several of the clauses require amendment from a strictly business stand-point.
– It is a good agreement for the company.
– I do not for one moment attribute any bad faith. I have criticised the agreement solely from a rigid business stand-point. I started upon the premises that, having regard to the objective in view, the agreement is entitled to the generous consideration of honorable members. If we desire to establish the oil industry in Australia we must give every encouragement to any company or corporation, particularly a British corporation, that is prepared to come amongst us, or to any Australian company that is ready to engage in the enterprise. Therefore, I urge that the points which have been raised by the Leader of the Opposition (Mr. Tudor) and myself shall receive full consideration from the Government. We are entitled to the most complete explanation, and to the fullest information, in order that we may be enabled to come toa fair and just decision.
.- I desire to preface my remarks upon this measure by a reference to the matter of waste iu the distillation of crude oil. I have before me the work of a recognised authority, whose conclusion is that the refiner turns every content of petroleum to commercial account - except the smell. With respect to the loss which takes place, it is not really a loss at all in actual residuum. The residuum is used right up to the last. There may be in actual distillation a loss in volume or weight, but when it is considered that crude oil is worth about 4s. a barrel, and that refined petrol is worth in Australia to-day nearly 4s. per gallon, it will be realized that we could afford to lose a certain amount of volume in freighting the crude oil to Australia, and still not be at a loss by the fact of a refinery having been established here. Every oil distilled has a residuum, and each usually has its own specific value. For instance, Mexican oil would have a particular constituent in its residue, while Trinidad oil would have another, of a different value. The point is, however, that there is really nothing wasted.
I am entirely in accord with the view expressed by the Leader of the Opposition, the honorable member for Yarra (Mr. Tudor), with respect to the necessityfor appointing a Select Committee before Australia is committed to any agreement. Although I disagree with the remarks of the honorable member, to the effect that it is immaterial whether a foreign or a British company refines the product in Australia, yet I agree that there are many other points upon which Parliament should satisfy itself. The Anglo-Persian Oil Company stands in rather a different category from most other oil concerns, so far as concerns the establishment of a refinery in Australia. The company was formed in the first place, I ‘think, on the basis of two-thirds of the capital being put in by the British Government to begin with, so that the half-share represented by the company’s activity in Australia would have one-sixth private capital, while the remaining five-sixths would be either Australian or Imperial Government capital.
– Out of £17,500,000, there is only £5,000,000 of British Government capital in the concern; that is to say, less than one-third.
– In 1918, of a capital of £5,000,000, over £2,000,000 had been furnished by the British Government.
– I have quoted from the figures furnished by the Prime Minister himself, when introducing the Bill.
– I understood the right honorable gentleman to say that there was about two-thirds British Government capital in the original company. From the inception of the Anglo-Persian Company it has’ displayed elevated Imperial ideals, in that it has sought to make the Empire self-supporting as regards its oil supplies. In its original prospectus the policy was set out as follows : -
Jo get an all-British company, with the Government as a controlling influence free from taint of any kind to deal with development of all fields outside British Isles. It might absorb all existing combinations, and at the same time undertake the examination and exploitation, as far as concessions are obtainable, of all’ the known oil territories of the world, particularly directing its attention to British colonics and dependencies and those countries whose friendship can be relied on.
It recognised that the preponderance of the Empire’s oil requirements were drawn from alien sources. I might add that it is one of the very few companies which has had the distinction of being mentioned in despatches, by reason of the manner in which it stood by the British Navy throughout the war. In 1918 the company approached the Commonwealth, and, in the proposition, which it placed before the Government, it answered most of the objections which have been raised to-day regarding its attitude upon finance. It proffered three alternatives: First, the company offered to enter into an agreement exactly similar to that which the Prime Minister is now placing before Parliament for approval. That is to say, the Commonwealth Government and the company were each to find half the capital.
It also offered to allow the Government to finance the whole undertaking of refining; or, as a third alternative, that the company itself should finance the project. I am of opinion that the basis on which the Government have presented the agreement - that is, sharing half and half - is easily the most favorable from the view-point of the Australian public.
– Would not the better policy be to try to find the oil first?
– It is essential that there should be a refinery established in Australia before, oil is found; otherwise, there might possibly be enormous wastage. One of the reasons why I am glad that this company came to the assistance of the Commonwealth Government is that it has been proved beyond question that, although the United States of America possesses the great bulk of the world’s oil refineries and wells, and has turned out the greatest number of engineers, the American engineer, by very reason of the fact that oil is abundant in that continent, is not a good man to send out to prospect new country. It has been proved that the British geological surveyors and oil prospectors have been very much more successful in finding oil in regions which have not hitherto shown indications. I am glad that there is to be an opportunity for the Anglo-Persian Company to place its surveyors, prospectors, and trained engineers at the disposal of the Commonwealth Government in order to try to locate that big oil field which, I am satisfied from my own experience of Papuan residents, actually exists in New Guinea.
The Anglo-Persian Company should exist largely as au oil-refining concern rather than as an oil-producing company. There should be included in this agreement provision for the protection of the rights of Australians, or, indeed, of any one who might secure the requisite licence to prospect for oil throughout Australia and its territories. The necessity for some such action as that now proposed being taken before oil is discovered is shown by the fact that in America oil discoveries have often been in the nature of gusher wells. The oil has been struck and has poured out in millions of barrels per day. The result would be that, if there is no trained organization available to immediately control the construction of adequate containers and the proper handling of the commodity in bulk, enormous quantities are “wasted. The same consideration applies in respect” of possible Australian discoveries. If, for example, oil were struck in Papua tomorrow, it would probably be a matter of six months before we could begin to save one-fourth of it. If the AngloPersian Company, or any other company - and I hold no brief for. the Anglo-Persian except that it is a British concern - were in a position to promptly control and direct matters, the oil which, might be tapped would be very considerably preserved. I would like to see the proposed agreement modified so that oil could be refined in Australia within the very near future, if the necessity arose, and in order that there might be a trained staff available till the time. It may surprise some honorable members to know that of the total supplies received for refining by the American Standard Oil Company, only 15 per cent, is drawn from its own wells. That is to say, 85 per cent, is derived from other sources. The custom in America, as I hope it will be in Australia, is that the refiner is compelled - in America, by competition, and will be here, I trust, by Government regulation - to offer to the producer the guaranteed market rate for his product. If provision to that end is made in the agreement now before Parliament it will meet with most of the objections raised by the honorable member for Kooyong (Sir Robert Best), to the effect that the refinery, when it is established in Australia, might never handle any Australian oil. If oil should be discovered in Australia the refinery will be required to take the oil at very definite rates which can be fixed and adjusted upon the world’s parity. After all, the oil producer is a primary producer in the best sense of the term, and should be protected as such. The alterations which I regard as necessary in the agreement in order to make it acceptable bear first upon the question of establishing the refinery in Melbourne. If Papua should become the main source from which our crude oil supplies are to be derived, it will be only fair that the most suitable point - that is to say, one which is near to the source, and which can be adequately safeguarded in time of war - should be chosen. Other things being equal, I suggest that Bowen, on the north coast of Queensland, should be the site for the refinery. We understand that iron deposits in that neighbourhood are now about to he exploited by the Queensland Government, and that there are also big deposits of coal in the vicinity.
– Bowen would not be a bad place.
– I am not advocating any particular site. The matter should be carefully considered by a Select Committee. The question of the location of the refinery is one of the reasons why a Committee should be appointed. There may be in the electorate of the honorable member for Dampier ‘ (Mr. Gregory) on the western coast, spots which would be more suitable for the establishment of an oil refinery than there are on the eastern coast. These are all matters which should be determined by a Select Committee only after very careful examination and consideration of transport, and handling of both crude and refined products.’ In the second place, there should be provided in this Bill, without any element of dubiety, absolute freedom for everybody to prospect for, and develop, oil in any part of Australia or of the islands. In the third place, there should be some assurance that the company, if protected in the way proposed, will purchase crude oil from any producer in Australia at current rates.
– Is not the best market the open market?
– Will there not be an open market under the agreement?
– When I speak of current rates, I mean world’s parity rates, after deducting freight and other charges for getting the oil away. That is the condition that holds in all other parts of the world, and no part of Australia wants preferential treatment over any other country. All we ask is a fair field and no favour, for every man who puts his money into the business. Boring and sinking for oil are matters for the small capitalist. It may cost anything from £1,000 to £10,000, or £15,000, whereas refining is a matter of £500,000 or £1,000,000 sunk in machinery and plant. There is every reason why the small capitalist and producer should be safeguarded in any agreement with a big company such as this is. Further, some definition of “current rates:” is required. That is the term which the Prime Minister used in his speech on the Bill, and some definition of it should be put into the agreement, so that there may never be any element of doubt as to what was actually intended. In the last place, I think the Crown should always retain the royalty. I fail to see how there can be any question of profiteering in an agreement of this nature, in which the Crown has such a large amount at stake, and such a large element of control.
– It ha6 no control of the management.
– In that regard, I confess I do not quite understand the position.. The Crown holds one more than half the total number of shares, and it has a right to nominate three of the directors, but the Bill is not sufficiently explicit to show whether the Government shares have any say in the voting for the remaining four directors. If they have, we have no reason to complain1 as regards the control. For the reasons I have given, I am heartily in accord with, and will support, the amendment moved by the Leader of the Opposition.
.- This is a most important Bill, and one which can do incalculable damage or good to the industries of Australia. I would urge every honorable member to consider very carefully before he casts a vote for the agreement in its present form. My Leader will submit a motion referring the Bill to a Select Committee, and I sincerely hope that such a Committee will be agreed to.
– Perhaps the Government will accept the suggestion.
– I hope they will, because it is very necessary. One important factor is the wastage of oil. This House must know something about the wastage, and its connexion with freight. That, in itself, is a big question. We must have it definitely laid down what’ freight shall be charged, but it is not so laid down in the agreement. No member of the House possesses the highly technical knowledge required to give any information on that point. As was remarked by the honorable member for Cowper (Dr. Earle Page), we have to determine which is the best place for the refinery. All these questions cannot possibly be solved by the House, and until that highly expert and technical knowledge is placed before us per medium of a Select Committee, it is not even fair to ask the House to vote on the agreement.
Bound up with the agreement are the activities of the Commonwealth and British Governments, and the agreement between them for exploiting the Papuan oil deposits. For the last three years several members have vainly endeavoured to get from the Government, in this and the last Parliament, information regarding the Government’s intentions and policy in this direction. Away back in 1917 rumours were current as to what was to be done with the oil deposits of Papua, and from time to time myself, the honorable member for South Sydney (Mr. Riley), the honorable member for Herbert (Mr. Bamford), and the honorable member for Maribyrnong (Mr. Fenton) asked questions on the subject; but neither in this nor the last Parliament did the Government give one answer that conveyed any information to the House. I have gone carefully over the whole of the questions and answers again, and if other honorable members who wish to speak on the Bill go over the whole of the statements made regarding oil within the last three years, they will see that it has been the policy of the Government to prevent the House from getting information. On the 17th July, 1918, I asked the then Minister for Home and Territories (Mr. Glynn) whether he would give the House an opportunity to discuss the proposed agreement ‘ with the British Government regarding oil development in Papua. He said that he could not give any assurance with reference to discussing the agreement. The honorable member for South Sydney attempted to obtain information a little while afterwards about the intentions of the Government, and so did the honorable member for Herbert; but no information was given in rePly. Then we depended upon the newspapers to learn that two companies had made certain proposals to the Commonwealth Government. One was the Anglo-Persian Company, the other was the American
Oil Company. -We then endeavoured to learn what the offers were. Surely the offers made to the Australian Government by those companies were not secret, yet we were refused information. Absolutely no information was given to the House, or to inquiring members, as to what was proposed to be done. Coming right down to a recent date, honorable members had to depend on the newspapers to learn that an agreement had been entered into and signed between the British Government and the Commonwealth Government. Why this secrecy? That agreement is in operation. Has any member of this or the other House, apart from the Ministry, had an opportunity of perusing it? None. Only about two weeks ago the Minister for Home and Territories (Mr. Poynton) was asked whether he would lay that agreement before the members of the House. He said “ Yes.” It has not been laid on the table of the House, and it would appear as though the Government are afraid to give it to us. Why? Today I interrogated the Minister for the Navy (Sir Joseph Cook) whether there was anything to hide in that agreement. Hereplied, “There is nothing to hide, and there is no reason why the agreement should not be placed on the table.” He left the chamber with the expressed intention of getting the Minister for Home and Territories to place it before us. The Minister for Home and Territories wandered through the chamber with a handful of papers, and that is the last we have seen of him. This debate is now going on, and I have no opportunity of seeing what the Anglo-Persian Company are called upon to do under that agreement. There is now placed before us an agreement to provide for the monopoly of the oil supply of Australia for fifteen years. It stipulates that until such time as the Commonwealth Government can supply to the oil company 200,000 tons of oil per annum, the company will do it. Until such time as the Australian Government can supply the company with that 200,000 tons per annum, the same people who are going to develop the Papuan oil-fields are to do it for its. It is highly necessary that a Select Committee shouldbe appointed to show whether it will not pay the company better to sell us the oil than to find deposits in Papua. I urge upon the Minister now in charge of the House that the Government should in fairness lav the whole of their cards upon the table, and that even at this late hour, one month, or less, after the agreement between the British Government and the Commonwealth Government has come into operation, they should give the H ouse the information. What is there to hide in it? Possibly there is nothing to hide.
– Nothing at all.
– I am glad the Minister has arrived, because I wish to tell him that until we have that agreement before us we cannot discuss this question as we should. He promised, something like two weeks ago, That he would give us the agreement.
– I do not think it was two weeks ago.
– It may have been last week, but he distinctly gave the promise, and he certainly should keep it.
– I intend to.
– Then why is the agreement not here ?
– Echo answers “Why?” Mr. BLAKELEY.- The Minister may think he is treating the House courteously, or he may think that it does not much matter what honorable members think of his conduct, but he has a responsibility not only to his Government, but to every honorable member of the House., If the Government desire honorable members on both sides to debate this question., they should remember that honorable members cannot do so without that agreement being given to them, in order that they may judge the working of it in con- . junction with the agreement that is now before us. I hope the Minister will allow the information to be made available this afternoon. Otherwise honorable members can come only to one conclusion - that there is. something to hide in it. A monopoly of the whole of the oil of Australia is, I venture to say, a plum which is making the mouths of the shareholders of different oil companies of the world water. In France an oil monopoly has been established, and I think that it is making something like £1,500,000 per annum by way of profits. Hera in Australia we have an opportunity to establish a similar monopoly. Ifwe do not establish a monopoly in some such article as oil, we snail experience great difficulty in paying our debts. We have been most unfortunate in the development of the oil resources of the Commonwealth. Notwithstanding that we have spent something like £120,000 in Papua, we have obtained very little oil - between 2,000 and 3,000 gallons. Our total expenditure to date in connexion with prospecting for, and the production of, oil in Papua is £120,920. This amount covers all expenditure since the financial year 1912- 1913 in salaries and wages, purchase of plant, purchase of steamers, clearing, boring, sinking, and general maintenance. At the last stocktaking, in June, 1919, the realizable assets were valued at £24,500.
– Has the honorable member looked up the expenditure which has been incurred in other parts of the world ?
– I have not. But what I know, and what the Minister for Home and Territories knows, is that there have been, mysterious, influences at work, not only in Papua, but in Australia.
– In what way?
– Four bores have been put down in Queensland. The honorable member for Maranoa (Mr. James Page) will be able to give us some inside information in regard to one of them which is situated at Roma. In boring there, gas was struck, and this gas became ignited. Later on, another company put down a bore for a distance of something like 3,000 feet. But at a stage when the developments were becoming very interesting one of the drills got loose, and boring had to be abandoned. Subsequently, another bore was put down a distance of 2,500 feet, when the drill again got away, with the result that operations had to be abandoned. Then, in December last, the Queensland Government, with the aid of American drillers, sank a bore between 3,000 and 4,000 feet. When that depth had been reached the drills once more got away; thereupon the Government sent to New South Wales to obtain the assistance of experts from the Artesian Drilling Department, to enable them to recover the drills. So far as I can learn, they have not yet recovered them.
– Those operations are being carried out under a Labour Government.
– Has .the honorable member any suspicion about them?
– Not of the Labour Government, but I have grave suspicion of the influences at work. I am not the only person in Australia who is suspicious of a certain influence in the development of our oil (resources, not merely in Queensland, but in Papua. Take, for example, the work which has been accomplished in this connexion, not only by the present Commonwealth Government, but by previous Governments. After all the money which has been spent, the fact remains that we have got nowhere. Boring operations have been held up for six months at a stretch, and the reason for this can be clearly traced to America. It cannot be traced to any source in Australia, but it can surely be traced to America. After operations had been in progress in Papua for some time, it was found necessary to get a percussion rotary drill from America. This drill was ordered, and two American drillers were engaged to accompany it to Australia. Upon their arrival in Sydney, to the amazement of everybody concerned, it was found that certain very necessary parts of the drill bad been left in America. Again, strange to say, those parts could not be manufactured in Australia. Notwithstanding that we have manufactured oil engines here, that we are manufacturing steam turbines at Cockatoo Island, and that quite recently aeroplane parts were manufactured in Queensland, these missing parts of this rotary drill could not be made in Australia. So the happy thought struck those in charge of the boring operations in Papua that it would be wise to send one of the drillers back-to America to get the missing parts. Three or four months after he had left Australia, this expert resigned his position, and, consequently, did not return here. Later the missing parts of the percussion rotary drill came to hand, so that after an interval of twelve months boring operations were resumed. Sinking, however, had proceeded only for some 200 or 300 feet, when it was found that the bore could not get through the mud. I am satisfied that in the Commonwealth we have good Australians who, if they were placed in charge of the whole expedition in Papua, would produce far better results than will be achieved by Dr. Wade and his American drillers. The Minister for Home and Territories (Mr. Poynton) has asked what influence is at work. The fact remains that in Papua boring operations have not proceeded for three months out of every twelve, and that every stoppage which has occurred can be traced to America. I have no desire to go any further in regard to the development of our oil resources in Papua, or in regard to the influences which have undoubtedly been at work in Australia and in that Possession. In New South Wales and Queensland are to be found as good drillers as can be obtained in America - men who are acknowledged by American drillers in the employ of the New South Wales Government to be quite equal to, and probably more efficient than, the average American driller. The men can be obtained here without going to America, and when the Government propose to hand over this particular enterprise to a company which may find it more convenient to sell oil to Australia than to produce it in Papua, it behoves us to inquire which course would be likely to pay the Anglo-Persian Company the better. The Prime Minister spoke like a man who desired to float a mine, when he spoke of the agreement embodied in this Bill, which will give to the AngloPersian Company a monopoly in the production of oil for Australia for fifteen years. I believe we have the brains and’ initiative in Australia,-
– Where is it stated in the Bill that there is to be an absolute monopoly ?
– It is not so stated; but honorable members persist in saying that it is.
– In the first place, a Government which would enter into an agreement under which it will receive more than half the shares in the proposed refinery company, but will allow the Anglo-Persian Company to nominate more than half of the directors, is not capable of fixing a price with that company.
– But the honorable member spoke about a monopoly. Where is that provision contained in the Bill?
– Provided that the price is right, the Anglo-Persian Com pany, ‘by reason of its having more than half of the directors in the enterprise, will control the whole of its technical and commercial operations, . notwithstanding that the Government will hold more than one-half of the shares in the venture. The agreement provides that regulations shall be framed which will prevent any other company dumping its oil in Australia. I do not know whether Ministers pretend that such a provision does notmean the granting of a monopoly to the Anglo-Persian Company ; if so, the agreement has been very badly drafted. The obligations of the company and of the Commonwealth are clearly set out in the schedule to the Bill. Paragraph 14 of the agreement reads -
In order to insure the full success and development of the oil refining industry in Australia, the Commonwealth will, so long as the prices charged by the Refinery Company for products of refining are considered by the ommonwealth fair and reasonable-
Do the Government consider it fair that the Commonwealth, which will hold more than one-half of the shares in the Refinery Company, should give to the AngloPersian Company four directors out of seven ?
– If the prices charged for the Refinery Company’s products are “ fair and reasonable “ the enterprise cannot be a monopoly.
– Does the Minister for the Navy say that it is “ fair and reasonable” that the Commonwealth, which will hold more than half of the shares in this enterprise, should allow the Anglo-Persian Company to have four directors out of seven? I now propose to show what the Government are prepared to do in order that this, company may have a monopoly. They are to -
Yet we are asked by the Minister for the Navy “Where is a monopoly established?” :Sir Joseph Cook. - Will the honorable member allow me to ask him a question ?
– I will not. If the Minister for the Navy considers it “ fair and reasonable” that the Anglo-Persian Company should have four members upon the directorate of this Refinery Company, although the Commonwealth will hold a majority of the shares in it, L can quite understand why he fails to see that a monopoly will be created under this peculiar and .extraordinary agreement.
– I want to know how an arrangement can be injurious if the prices fixed are “fair and reasonable”?
– The Government’s idea as to> what is fair and reasonable is quite different from that of other people. Evidently they think it a “ fair and reasonable” arrangement to take greater financial responsibilities in connexion with the refinery company, and have less control. But I do not.
– The Government have the power of veto.
– Yes, and I suppose they will exercise that right with about as much wisdom as they displayed when they entered into this infamous agreement. The arrangement is not fair because ifc gives to the Anglo-Persian Company something which they should not have, namely, a monopoly of oil in Australia. Whoever heard of a, majority of shareholders in a private company not being able to control the directorate ?
– The Government can veto, and also control.
– The arrangement is an extraordinary one. If the House will not agree to the proposal to refer it to a Select Committee in order to get accurate information about what is a highly technical business, I have no doubt that honorable members will at least make some substantial amendments of the Bill in Committee.
– You want to destroy what little hope the enterprise might have.
– I think the honorable member must be looking at this project from a different angle. I say ifc will not be a good thing to allow the Anglo-Persian Company to get the people of Australia by the throat, as will be the case under this agreement.
– I do not want to let them.
– Apparently the honorable member believes that the Bill is all right.
– No, I do not.
– The Government, I repeat, would be well, advised to allow this arrangement to be inquired into by a Select Committee, so that the fullest information a.bout the technical and commercial side of oil may be in the possession of honorable members before they are asked to finalize the agreement.
.- I am afraid the honorable member for Darling (Mr. Blakeley) has misunderstood my interjection. I am very much opposed to the Bill, and I think it should be referred to a Committee. I am not at all satisfied about the wisdom of establishing a refinery in Australia just now. But if the Government are going to be put to the expense of £250,000 in connexion with this arrangement, we should see to it that the best brains available are on the directorate of the company; and I would like to know that the experience and knowledge of the Anglo-Persian Company controlled the project. The development of petroleum deposits in Australia is of the greatest importance, and, therefore, the Government should do all that is possible to encourage prospecting. We have not done very much hitherto. By an announcement recently in the Commonwealth Gazette the Government intimated their intention of paying a reward of £10,000 to the discoverer of a valuable oil deposit in Australia. But I put it that any person who discovers oil in commercial quantities will not stand in need of Government assistance. This assistance, if it is to be of any real value, should be given in the prospecting stages. So far as possible, we should avoid creating any monopoly in oil, and therefore we should give every inducement to prospecting parties. During the last fifteen years a considerable amount of work in this direction has been done in Western Australia, so far without success; but it is surprising what faith a great number of people have in these ventures. Large sums of money have been expended in boring operations, and in one case a bore has been put down to 1,700 feet. Those interested in these projects firmly believe that oil will be struck somewhere between Albany and the Leeuwin, as bitumen is found all along the coa3t between these two points, and bitumen, as honorable members know, indicates the presence of oil. The State Government have given a good deal of assistance to prospecting parties, but so far the Commonwealth Government have not.
I doubt if one honorable member thoroughly understands what the Bill means. I believe it gives a big monopoly to the Anglo-Persian Company. This is not right. We want oil badly. . Nothing could be of greater importance for the development of our resources. INdo not want to reflect upon anybody, but recently an application for the right to prospect in the Northern Territory did not appear to receive sympathetic consideration, a rental of £13 per block being demanded. In Western Australia, when I was a State Minister, no rental was charged to any person who desired to prospect for oil. A small registration fee was sufficient for a large reservation which the Minister had power to cancel, but this power was not exercised if he were satisfied that the people were prospecting in a bond fide manner. When I was in Western Australia during the last election campaign some gentlemen who are interested in the oil project, brought under my notice a report by Dr. Basedow, who certainly thinks the prospects are most promising. I had no personal interest in the Northern Territory application to which I have referred. The people who approached me assured me that they could get plenty of money from friends in the Old Country, and all they wanted was the right to prospect over a given area, but all sorts of difficulties were put in the way. I tell the Government plainly that’ it is no use offering a reward of £10,000 for the discovery of oil, because the discoverer will not need the reward. He should, however, be free from all interference other than insistence that he should legitimately prospect, though I am afraid there will be a great deal of wretched restrictions, such as we have experienced hitherto in connexion with mining mat- ters. We Avant an open market for oil in Australia, always, of course, provided that the interests of the Commonwealth, from a defence point of view, are safeguarded.
– There is no open market for oil to-day.
– It is a pity. I thought from what I had heard about the Anglo-Persian Company that there had been an open market. So far as America is concerned, there has been control for some time, but prior to the war a combine reduced the price to the consumers, as we were able to get kerosene for about ls. per gallon. I do not know what effect it had upon producers, though I believe many were crushed out of existence. I believe in the open market, and I believe in encouraging the prospector. Very few honorable members understand the difficulties and troubles of prospectors, who go out on their mission with little or nothing to guide them. It might take years to discover oil, but when it is found the successful prospectors should get the full reward for their enterprise. Paragraph 11 of the agreement states -
The price payable by the Refinery Company to the Commonwealth and to the oil company respectively for indigenous oil and for crude mineral oil shall from time to time be fixed by agreement between the Commonwealth and the oil company, and shall be based upon the contents of the oil.
I object to this proposal. It is all very well to talk about starting new industries. Any development along these lines should not be at the expense of’ the man who makes the discovery. When the Bill is in Committee, honorable members should make it quite clear that the price to be paid for the oil shall be world’s parity. We demand world’s parity for our other primary producers, and we should also have world’s parity for our oil.
– The Anglo-Persian Company will see that the price is fixed at world’s parity.
– No, it will not. Is there anything in the Bill that would lead one to believe that any special effort will be made to develop the oil-fields in Papua or in any of the other Pacific Possessions?
– Oil boring is proceeding at present.
– By the Government?
– By the same company.
– There is nothing to that effect in this proposal. .
– There is another agreement.
– I cannot deal with that. If it is the intention of the Government to grant a monopoly to the Anglo-Persian Oil Company, I am going to oppose it as strongly as I can.
– It is not intended to give the company a monopoly. It is merely our boring agent.
– Will the Minister for the Navy say what area, if any, is to be handed over to the company?
– The company is conducting boring operations there at present.’
– For the Commonwealth?
– Yes’, and for the British Government.
– I believe in giving concessions over limited areas for prospecting purposes, but the Anglo-Persian Oil Company should not be granted a monopoly. The representatives of this concern understand their work, and I believe they will make a legitimate effort to discover oil; but at the same time I object to an endeavour being made to create a private or governmental monopoly, because during the last four or five years we have seen, with regret, the results of so-called Government enterprise. I oan not in a position to say that money has been wasted, or that there have been unnecessary delays, because a layman does not know the amount of effort that has been employed. I have, however, read reports in connexion with works of this character, and from recent information I received from Papua, it would appear that, up to the present, very little deep boring has been carried out there. If private companies had been in control, and had had a similar amount of money at their disposal, I believe bores would have been sunk to a depth of at least 1,000 or 2,000 feet, and that by now we would have known definitely whether oil could be produced in payable quantities. I am not in favour “of Governments undertaking prospecting work, as I have seen too much of it in Western Australia, where, in most cases, the results have been most unsatisfactory. Exploratory work of this nature should be carried out by individuals, assisted by the Government - Federal or State- as under such circumstances prospectors are always anxious to obtain something for themselves. So long as enterprises of this character are under Government control, they will be doomed to failure.
The next point I wish to raise in objection to the Bill is in’ regard to the restrictions to be placed on other refineries and producers. There are other refineries in Australia at present refining large quantities of fuel oil for use in industries that are likely to be extensively developed. Such industries need to be protected, and I am not. sure whether the creation of a monopoly of this nature will not be detrimental to the interests of such undertakings. Even if they are not likely to be prejudicially affected by this measure, it would be wise to refer the Bill to a ‘Select Committee to enable honorable members to be in possession of the fullest possible particulars. Certain private information has been given to me, and it appears that there is a slight danger of the measure seriously interfering with the operations of certain industries already established. In view of all the circumstances and the necessity of having the fullest information, I hope the Government will agree to refer the Bill to a Committee of inquiry. The honorable member for Cowper (Dr. Earle Page) seems to be in favour of the measure, but I can see very grave dangers to the interests of the primary producers. Paragraph 14 of the schedule reads -
In order to insure the full success and development of the oil-refining industry in Australia the Commonwealth will so long as the prices charged by the Refinery Company for products of refining arc considered by the Commonwealth fair and reasonable -
exercise or cause to be exercised such statutory and administrative powers as it deems advisable to prevent dumping and unfair competition by importers of refined oil from other countries.
I have seen a good deal of what has happened when Ministers have been allowed to exercise statutory and administrative powers, particularly in connexion with metals, during the war period, and I am strongly opposed to such practices.
– It should be quit* clear to the honorable member that a private company would not come here unless it was protected from the Standard Oil Company. No company could live here unless it had some protection.
– If the Minister for the Navy considers that some protection is necessary, why should it not be embodied in a separate measure placing the power in the hands of Parliament instead of Ministers? I” think the paragraph I have quoted is quite clear.
– I think the honorable member is wrong.
– The paragraph reads -
The Commonwealth will . . . exorcise, or cause to be exercised (a) such statutory and administrative powers as it deems advisable to prevent dumping and unfair competition by importers of refined oil from other countries.
– It says “ such statutory and administrative powers.”
– That . is so; such “ administrative powers as it deems advisable.” In connexion with the metal industry, an outside organization - the Australian Metal Exchange - with, no statutory powers, even by regulations, has absolutely refused to grant a permit for the export of certain articles from this country. When we hear of such occurrences it naturally makes one suspicious - I do not use the term offensively - concerning measures of this sort. The Government may be acting in what they consider the best interests of Australia, but I strongly object to statutory powers being placed in Ministers’ hands. If the Government are to prevent dumping they will naturally interfere with competition by other companies. I can easily understand the attitude of the honorable member for Kooyong (Sir Robert Best), who believes in Protection even to the extent of erecting a stone wall round the country to prevent anything coming in.
– The honorable member has never heard me advocate prohibition.
– Perhaps not; but the honorable member will probably support the Government in placing an embargo on the importation, into this country of certain articles of which he knows that Australian manufacturers cannot produce sufficient to meet our requirements. I desire honorable members who represent primary producers to realize that in the future oil fuel is to be largely used for traction purposes in connexion with the development of farming areas, and we can easily realize what the result will be if this power is placed in the hands of the Government. Sub-paragraph c of paragraph 14 reads -
The Commonwealth will . . .
cause to be introduced into the Parliament of the Commonwealth and supported as a Government measure a Bill providing for the imposition of Customs duties on crude mineral oil whenever in its opinion such action is necessary or advisable to prevent unfair competition with the products of crude oil refined in Australia by the Refinery Company.
All the primary producers are to have is an oil refinery somewhere in Australia. The measure provides for the imposition of Customs duties on crude mineral oil to prevent unfair competition with the products of the Anglo-Persian Company. I do not think that is a fair proposition.
– We have that power at present.
– But this is a special pledge, and when these powers are exercised it will mean dearer oil.
– How can it?
– We have oil companies here now.
– Very small concerns. 1
– Can the Minister for the Navy explain how we are to derive any benefit from the establishment of an oil refinery in Australia? There has been a good deal “of kite-flying, and promises have been made to those who could discover oil in payable quantities. I am anxious to do all I can to promote the search for oil, but when it is discovered it will be time enough to start a refinery.
– That will take two years.
– We have been twenty years searching for oil, without success, and the proposition now is to penalize the people because it will take two years to erect a refinery. I think that is hardly fair.
– Who said that we were going to penalize the people? We are going to cheapen the price, I hope.
– I do not think that this proposition will be the means of reducing tie price. The Anglo-Persian Oil Company is a big concern, and has, I believe, done some fairly good work.
– The Anglo-Persian Oil Company supplied the British Navy with oil during the war period at less than one-half the price we had to pay.
– But I am referring more particularly to the benefits, if any, likely to accrue to the consumers in Australia. The AngloPersian Oil Company offers to put £250,000 into the new concern that is to be formed under conditions that seem very fair. To my mind, it is reasonable that the company should have control of the directorate, because brains and ability are essential to the success of the enterprise, and for these it is safer to look to experts than to Government nominees, who not only might have no practical knowledge, but also, as sometimes has occurred, might be appointed because of pressure exerted on their behalf. The company has been carrying on operations in different countries; it has a staff specially trained for its work, and understands all the ramifications of the oil industry. Its people, therefore, should control the refinery. But it is also right and safe to provide that the Government shall have a controlling influence by possessing the majority of the shares, so that no alteration may be made in the articles of association. The company is not to contribute to the expenses incurred in prospecting for oil. It may be provided under another- agreement that it is to find experts for that work, but I decline to consider that matter, because the only thing that we have before us is the agreement contained in the schedule to the Bill. On the other hand, the company obtains the profits on the crude oil, and the profits on the shipping freights. As has been pointed out, special tank steamers must be used for the conveyance of the oil, and as they will be unable to take back loading, that will be taken into consideration in fixing the freights. I believe that the company will act fairly towards the Government, but they will undoubtedly get a good profit on the shipping business. Furthermore, they risk nothing from loss of cargo in transit, because the oil is to be purchased f.o.b., and the insurance charges therefore will be met by the concern that it is proposed to form. I have been informed that in the refining of the crude oil there will be a reduction of bulk amounting to 32,000 tons in every 200,000 tons, which means that we shall have to pay freight on a larger quantity of oil than will go into’ consumption. That, however, is a matter into which I do not propose to enter, the question that really concerns us being what shall we have to pay for the oil. Will oil cost more than it costs now ?
– It would not be worth while to enter, into the agreement under other circumstances.
– The matter is one that should be thoroughly inquired into, and practical men should be called to give evidence on a number of points. The subject is too technical to be dealt with by the members of this House, who have no special knowledge regarding it. All the information available should be obtained before Parliament commits the country to an agreement which may put upon it a very heavy obligation. “Undoubtedly we need oil for the development of our industries. The motor car has become an essential in the back country, and oil engines and tractors are being more and more used there. To reduce working costs, machinery must be employed wherever possible, and oil is now one of the principal sources of motive power. In my opinion, the Government should have done more than has been done in the past to encourage the production of fuel oils in this country, though that sort of thing takes time, and sometimes it is well to go slowly. I hope that, in the interests of the country, the Government will allow the Bill to be referred to a Select Committee for investigation, so that members may be satisfied that, in sanctioning the agreement, they will be doing the best thing for the Commonwealth.
Sitting suspended from 6.29 to 8 p.m.
.- The agreement covered by this Bill is one of the most momentous that has ever come before the representatives of the people of Australia for ratification. I have had a close connexion with oil during the war, .both medicinally and from the point of view of its use in driving inanimate bodies, such as ships. In my own small unit of some eighteen oil-driven vessels of the submarine motor chasers squadron, we took in every week 54,000 gallons of No. 1 petrol, and altogether the whole motor launch unit used as much as 2,400,000 gallons weekly. The Prime
Minister (Mr. Hughes) was right in referring to the war as a petrol war, and when we take into consideration thenum- ber of aeroplanes, seaplanes, tanks, airships, motor cars, ships of the Royal Navy, tractors, and the hundred and one machines driven with petrol in use, we can well understand that it might have been impossible for the Empire to carry on the war if it had not been for petrol and the help given by the Anglo-Persian Oil Company. By way of interjection this afternoon the Minister for the Navy (Sir Joseph Cook) informed us that during the war this company had supplied the British Navy with oil at about half the cost at which we got it here, and I know that if that company had not interested itself in the war on behalf of the Empire we could not have carried on. It was about 1901 that Admiral Lord Fisher “first brought under the notice of the British public the absolute necessity for the Empire being as nearly as possible self-contained in regard to oil supplies for defence and offence, but it was not until about 1913 that the British Governmentsecured a controlling influence in the AngloPersian Oil Company. Some doubt has been expressed by honorable members as to why such an influential company should bother to come to Australia, and the suggestion has been put forward that it is a matter into which we should inquire, but as far as I can see, the company is coming here for thepurpose of endeavouring to find new fields for its operations, and we ought to consider ourselves very fortunate in being able to secure the assistance of such an expert company in the matter of getting those oil supplies which we must have here, if only for defence purposes. Taking into consideration the enormous quantities of oil required on the other side of the world during the war, we can see that if we had another war, which is quite probable, we must have oil supplies in Australia. Let us hope we shall find them in Papua and also on the mainland.
The agreement covered by the Bill is distinct from theother agreement for the exploration and discovery of oil in Papua. I quite agree there is a great deal in the point raised by the honorable member for Kooyong (Sir Robert Best) that the adoption of this agreement might, in , a way, lessen the efforts of the Anglo-
Persian Oil Company in its exploration of Papua, but I do not think that it will do so, because, owing to the shortage of the supplies of oil, especially petrol, all over the whole world, new fields must be found. For the sake of the interests the company will get under’ this agreement, I think it will be most eager to find new oil beds in Papua and on the mainland of Australia. Under the agreement the Commonwealth is to get half the profits from the operations of the refinery in Australia, and as the Prime Minister has pointed out, in addition to the treatment and sale of 200,000 tons of crude oil, we shall supply more than half of the benzine and kerosene now imported. However, honorable members are perfectly right to look into every paragraph of the agreement, and see whether there is a flaw in it which might “ hit up “ the Commonwealth. I have run through it, and I think it is very well drawn, and an agreement into which the Commonwealth should enter. We must have oil supplies here for defence purposes, apart from commercial uses. I can remember the vast containers at Invergordon containing millions and millions of gallons of petrol and lubricating oil. The gentleman who erected them is now in Sydney. From these immense containers pipes ran to the wharfs, where the ships backed in and were filled with oil in an hour and a quarter, and got away to sea. again. We should, have these tanks in Australia not only for war-ships, but also for our mail steamers. At present, I ‘ am strongly in favour of ratifying this agreement.
.- This agreement is essentially one for the consideration of those honorable members who represent country interests, especially the Country party, because if there are any people in Australia who want to procure cheap mineral oil, it is those who live in country towns away from electric light plants, gas works, and other means of giving illumination and power. I am not too sure that Australia will be any better off under the AngloPersian Commonwealth Oil Refining Company. If we are to substitute an AngloPersian monopoly for the American monopoly, and the general public are not to get cheaper oil, what is the use of entering into the agreement? Our experience of Government ownership of steam-ships has not-helped us very much, because the. Commonwealth line of steamers charge high prices just as do steam-ship owners anywhere else. And when the Government have entered into the sale of worsted, they have been guilty of profiteering just as much as any one else. Unless there is a clause in the agreement that the price to be charged shall be a fair and reasonable one fixed by a body such as the Inter-State Commission, I shall be afraid to enter into it. Ministers tell us that there is. another agreement whereby the Anglo-Persian Oil Company and the Commonwealth are. to endeavour to find oil in commercial quantities in Papua, and it appears to me that , we ought to take that agreement first. We are told that the Anglo-Persian Oil Company have taken over the staff we have prospecting for oil in Papua, and I notice in the press that Dr. Wade, our chief oil expert, has gone to London to occupy a position there under the company.
– That is not correct.
– Where is he now?
– I saw him, to-day.
– If the Anglo-Persian Commonwealth Exploration Company do not do better than we have already done in Papua, since we began prospecting for oil, there is not much, prospect of our developing the Territory.
– I quite agree with the honorable member in that regard.
– I have met several people from Papua, who declare their belief in the excellent prospects of obtaining oil there, but say that we have been wasting our energies in putting down bores all over the place, and not prosecuting any one of them to finality. There must be some reason for this.
– And there must be a reason for the breakages of machinery and the missing parts.
– In that connexion, the honorable member for Maranoa (Mr. Page) and I can relate the experience of some people at Roma, Queensland, in their efforts to discover oil there. About a dozen years ago the town of Roma was reticulated, and supplied with a natural gas. The gas gave out, but in the bore there- appeared to be oil, and certainly there was a distinct odour of kerosene. As the State Government would do nothing in the matter, a private company was formed with a capital of about £100,000, which engaged an expert in America, and commenced to bore for oil. When the bore was down some hundred feet, gas was tapped, and it became ignited, and burned with a flame about 60 feet high for several weeks. Eventually it was extinguished, and boring was recommenced. Then operations were delayed for several months, because certain tools had dropped down the bore. When this obstruction was successfully removed, boring commenced again, and again the boring tools were lost sight of. Finally the company went insolvent, and had no more money; but there was a feeling in the Roma district that certain influences were at work to prevent the discovery of oil on this continent of ours, and it is possible that there are influences at work in Papua to prevent the discovery of oil there. Its discovery and production in payable quantities on the mainland, or in Papua, would be of tremendous benefit to Australia, and it seems to me that our first duty is to endeavour to get some company by agreement with the Government to attemptto discover oil in Papua, for if there is to be no production of oil here, there will be very little advantage to the Commonwealth, whether it is the Standard Oil Company, the Vacuum Oil Company, or the Anglo-Persian Company, which refines crude oil here, and sells it to the general public. It would appear to me from the terms of the agreement that those who use mineral oils here are not likely to get them at a very cheap rate. In fact, I think they would be more likely to get them at a cheap rate if there was a fair field and no favour to any one. In the circumstances’, I support the proposition of the Leader of the Opposition (Mr. Tudor) to refer the Bill to a Select Committee for report.
– There are several aspects of this agreement which were not touched upon by the Prime Minister (Mr. Hughes) in the lecture he delivered ‘ to the House and in regard to which I desire enlightenment. There is a great deal about this agreement which appears to me to be very suspicious. We are dealing with an oil proposition, and, naturally, we expect to find some slippery business connected with it. I am disposed to believe that there is something about this agreement that the Prime Minister wishes to keep back from honorable members. When the Leader of the Opposition (Mr. Tudor) was speaking to-day, the Prime Minister sought to bluff him in regard to much of the information he was seeking; but this is a matter concerning which the whole of the facts should be given to the House. The Minister for the Navy (Sir Joseph Cook) said that this Bill will not create a monopoly. If I understand what a monopoly means, I cannot see how any other interpretation can be placed on the agreement. If it is accepted there will be no opportunity for any other company to engage in the oil business in Australia on the same terms as are offered to the Anglo-Persian Company. If that is not giving a monopoly I do not know the meaning of the word. When all other companies are to be denied the privileges conferred by this agreement there can be no other interpretation placed on this Bill than that it will give a clear monopoly to the Anglo-Persian Company. Paragraph 5 of the agreement provides that -
The technical and commercial management of the refinery company shall be left entirely in the hands of the refinery company.
– There may be a very good reason for that. The company has the brains.
– We shall show that we have no brains if we consent to this agreement.
– I quote that paragraph of the agreement in reply to the statement that the Commonwealth Government will have a controlling influence in the refinery company. How that can be contended in face of a definite provision that the technical and commercial management shall be left entirely in the hands of the refinery company is entirely beyond ray comprehension. It is said that the Government will hold the majority of the shares in the refinery company. Whilst that is so, the Commonwealth will have only three directors on a board of seven. Superficially, the arrangement that the Government shall have a majority of the shares looks all right, but this refinery company is to be merely the offspring of the Anglo-Persian Company. The Government will not have a controlling influence in the parent company. It will be only in the subsidiary company that the Government will hold the majority of shares, whilst on the board of directors the Government nominees will be in a minority. The point cannot be too strongly stressed that the company will have the controlling influence in the whole of the operations, and that the Commonwealth Government will be in the minority on the directorate, which will be the only body to count for anything.
I doubt whether it is generally known that Lord Inchcape, a man whose name is familiar to most people as that of the head of the Shipping Combine, is on the board ‘of directors of the AngloPersian Company. And a very powerful influence does that gentleman exercise. The question naturally occurs to one’s mind as to why Lord Inchcape, as a director of the Anglo-Persian Company, is so anxious to get these privileges from the Commonwealth.
– He is the British Government’s representative on the board of el iirectors.
– I do not know that that fact is any recommendation of him. It may be said with truth that the British Government were during the war, and are still, amongst the greatest profiteers. In any case, Lord Inchcape has been a most uncompromising opponent of the Commonwealth line of steamers, and I am just a little suspicious that he is one of the prime instigators of this agreement in order that be may have a greater opportunity to drive a nail into the coffin of the Commonwealth steam-ship service. This agreement will enable fuel oil depots to be established along the Australian coast, and I can imagine nothing more pleasing to Lord Inchcape, as head of the great Shipping Combine, than that these depots shall be established at convenient places in order that they may be used for the fuelling of his fleet. I can see, and no doubt he can, great possibilities of advantage to his fleet from the establishment of these depots.
– How does that affect the agreement?
– Since the Commonwealth line of steamers was established at the beginning of 1918 they have earned over £1,000,000 for the carriage of oil to Australia. If this agreement becomes operative and the AngloPersian Company obtains a monopoly of the carriage of crude oil from Persia the trade that has hitherto gone to the Commonwealth line will become the exclusive perquisite of the company. Thus Lord Inchcape will have an opportunity of diverting to his own fleet a trade that hitherto has been enjoyed by the Commonwealth line.
– The Anglo-Persian Company has a fleet of its own.
– And Lord Inchcape is one of the directors of the Anglo-Persian Company.
– I do not think we have one ship that carries crude oil.
– Who says that Lord Inchcape is a director of the AngloPersian Company? I would be surprised to hear that he is.
– The Prime Minister admitted this afternoon that Lord Inchcape is one of the British Government’s representatives on the board of directors of that company.
– The interjection by the Minister for the Navy reveals how little is known about this agreement.
– I am certain that I do not know nearly as much about it as does the honorable member.
– I am quite satisfied that Lord Inchcape knows all about it, and as he is an uncompromising opponent of the Commonwealth line of steamers the suspicion enters my mind that he is anxious to bring about this agreement in order that he may by his controlling influence drive a nail into this shipping enterprise of the Commonwealth Government.
– The Commonwealth line of steamers has never carried crude oil.
– I have already stated that the Commonwealth line of steamers has earned over £1,000,000 from the carriage of oil - presumably case and barrel oil. . If this agreement is consummated there will be no further necessity for such trade; the Anglo-Persian Company with its own ships will have a monopoly of the carriage of crude oil to Australia, and the Commonwealth line will not carry a gallon of case or barrel oil.
Another objection which I see is that by giving the Anglo-Persian Company a monopoly, we shall be simply restricting the supply of crude oil to Persia, instead of having some claim upon the resources of the world. The Prime Minister said, in regard to this agreement, that one of the benefits would be that in time of war we would have ample supplies of oil. I cannot follow him along that line of argument. If we give a monopoly to the Anglo-Persian Company, we shall render ourselves entirely dependent for our supplies upon Persia, and there is scarcely a more unstable part of the world than Persia to-day. If we are to look to that source of supply, we shall be deliberately placing ourselves at a disadvantage..
– This company has oil in other parts of the world besides Persia.
– It has been said that Great Britain could take all the oil’ of this company at present, for the reason that the demand is so great. That being so, why does not Great Britain appear to be anxious to do so? It strikes me that when the Imperial authorities are apparently so careless of their interests, there must be something wrong with the standard of the company’s oil.
– It is much more difficult and costly to refine it.
– There may be something in that point. Certainly there is the suggestion in my mind that something is wrong with AngloPersian oil. If there is to be a monopoly in Australia, it should become a Government monopoly.
– This oil is quite good enough for the British Government, and is supplied to it to-day at less than 60s. per ton. We pay £9 per ton.
– Then, why does not the British Government take the whole of the output? Is it because it has had experience of the commodity, and does not want much of it 1
– It is, I presume, because it does not control the whole of the supplies of Great Britain. The Imperial Government takes all the oil it wants from this company, and no other.
– I do not admit that it takes all the oil it wants.
– It got only 19,000,000 gallons from Persia last year, out of ii total of 200,000,000.
– In those circumstances T say, with the Minister for the Navy (Sir Joseph Cook), that Great Britain, ‘takes all it wants from that source; it does not want any more of this Anglo-Persian oil. But I am suspicious that if Great Britain secures such a relatively small percentage of its requirements from the Anglo-Persian Company there must be something wrong. I would not object if the Commonwealth Government were to retain the monopoly.
Another consideration is that, if oil is to be used instead of coal, a blow will be struck at our coal-mining’ industry, which may have a crippling effect upon employment in Australia.
– That was not the effect in the United States.
– It is almost a natural corollary of the substitution of oil for coal fuel. Altogether, considering the possible effects upon our coal industry, and its consequences in associated respects, such as shipping, and remembering that a monopoly is to be given away instead of being held by the Commonwealth Government, the whole proposition becomes objectionable to me. I understand that the vessels which are to bring the crude oil will not be capable of taking away Australian produce ; they will have to return in ballast. Hitherto, vessels which have brought case and barrel oil to Australia have been able to carry back up to 5,000,000 bushels of wheat, on an average. Have the Government thought of that factor, and- have they taken any steps with a view to replacing the lost tonnage?
– -But there are tankers coming to Australia now.
– Very few.
I wish to know something regarding exploration for oil. If this work is to be conducted solely by the employees of the Anglo-Persian Company, why are they to be paid out of the funds of the Commonwealth and British Governments? That point was not referred to by the Prime Minister, but this Parliament is entitled to full information. It would appear that the company is to use the plant of the Commonwealth, and that all the money necessary for repairs and upkeep and payment of wages is to be drawn from the Commonwealth and
Imperial Exchequers. The company, in fact, will be on a very good wicket. Lord Inchcape also will be on a very good wicket, because he will be able to use his position to divert trade to his own fleet, while the money for the exploring work and the plant and its upkeep will be found by the Commonwealth Government. The Commonwealth Government will be supplying the funds that will enable that gentleman and his shipping company to go a very long way towards destroying the Commonwealth line ‘ of steamers, because it will be handing over a monopoly to the Anglo-Persian Oil Company, of which Lord Inchcape is a very influential director.. I heartily agree with the proposal to appoint’ a Committee to investigate fully the agreement with the company, particularly in regard to exploring. I cannot see the necessity of rushing on with this proposal. There is a great deal about it that honorable members desire to know. Its effects are so far-reaching that I cannot see the justification for hurry, especially when the Government do not show any desire for haste in connexion with many other of their measures. Why this hurry-scurry to get the Bill through? The whole thing makes me very, suspicious of it. Before we commit ourselves to an agreement with such farreaching effects, the ‘Government should stay their hand. If they are not prepared to do so, there should surely be a majority in this House, if not totally opposed to the agreement itself, at any rate ready to’ say that we should defer final action until we are able to make a further examination of the whole scheme.
.- This matter is certainly of very great importance, and is one on which it is necessary that we should have the’ fullest and most ample debate, in order to discover the real opinions of honorable members, who have to carry the eventual responsibility for a very far-reaching contract. In regard to the sugar contract recently submitted to the House, and for which we were asked to take the responsibility, I had considerable criticism ‘to make of the way in which the Prime Minister (Mr. Hughes) presented his case. It appeared to me then that he did not give sufficient facts to enable honorable members to form their own views, and I considered that it was almost impossible .for us to take the responsibility of that contract on the information that he vouchsafed. I do not know whether that debate had any effect upon him, but on this occasion, whether his case is right or wrong, he has at least taken the trouble to present some facts in support of what he wishes us to do. I think the case he. has made out .is strong in certain respects. He has distinctly established the perfect accuracy of his statement that this is a petrol age. The honorable member for Yarra (Mr. Tudor), like a true and good leader of the Opposition, said it was not the age of petrol, but the age of electricity. There is no question that it is the age of petrol, whether for peace or for war. All of us who were at the Front during the recent war, and saw how completely and totally the armies were dependent upon petrol for every stage of their operations, must admit that in these days, before the League of Nations is an accomplished fact, if we ‘ in Australia are to be in a p .osition to protect ourselves we must take every step possible to insure a full and ample supply of oil. The same thing applies to peace. To-day we are dependent upon oil, and it is essential for the commercial, agricultural, and every other interest in Australia that we should have a full supply of it.
But there is another fact that we have to bear in mind - that we should have supplies at a reasonable price. That, I think, is the determining factor which we must consider in regard to this agreement. There are certain great oil interests in the world. The Prime Minister has indicated them all, and has suggested - I remind the House that on this- occasion, with admirable restraint, he has only suggested - that these great concerns are more or less working in combination, and control the whole of this absolutely necessary supply from one end of the world to the other. I admire that attitude in the Prime Minister, that he put the facts before us for our own judgment, and only suggested what I have stated. But the First Lord of the Admiralty in Great Britain, when the original Persian contract was under consideration, was swayed by no such restraint as to the responsibilities, of his position. He said straight out and emphatically what he saw the position to fee with regard to these great Oil Combines. What he said then is perfectly true today. We have another great oil company in the world, in the shape of the Anglo-Persian Oil Company, but those other Combines are in the same position, and are working in the same way to-day. This is what the First Lord. of. the Admiralty said on that occasion about the experience of Britain with regard to prices -
We have experienced, -together with private customers, a long, steady squeeze by oil trusts all over the world, and we have found prices and freights raised steadily against us, until we have been forced to pay more than double what a few years ago we were accustomed to pay.
That statement was made in June, 1914, and the Minister’s summary of the position, with no restraint whatever, was that the two great controlling factors in the oil business were the Standard Oil Company, which controlled the New -World, and the Royal Dutch “ Shell “ Group, which controlled the Old. At the time those remarks were made one man rose in the House of Commons and said that they were not true. That man, significantly enough, was the brother of Sir Marcus Samuel, who was the leading and controlling spirit in the “ Shell “ Oil Trust. There was considerable noise outside about it, but nobody really fought the case that there was not a Trust, except the Petroleum World, or some such paper, which was edited by a man named Devorkivitch, and which was notoriously financed .and run entirely by the oil interest. Nothing has happened from that day to this to alter the position, save that the AngloPersian Company has come into existence, and has grown in strength. On the same occasion the First Lord of the Admiralty said that, as , against the Standard Oil Company and the Royal Dutch “ Shell “ Group, amongst the many British companies that had: maintained! a completely independent existence, the Burmah Oil Company, with its offshoot the Anglo-Persian Oil Company, was almost the only noticeable feature. Those words were uttered by a responsible Minister. These statements were challenged, but never seriously, and they certainly were never refuted. The position to-day is the same. We have the Standard Oil Company and the .Royal
Dutch “Shell” Group, and it is into those hands that we have sunk. We are in those hands today. There is ito question whatever about it. The Prime Minister made his case with regard to prices, and I need not remake it. The prices are all quoted in Hansard, and the record shows how they have gone against us. It has been said that tie price of everything has gone up the world over, and naturally also in Australia; but I would remind honorable members that while the price of petrol, a thing that comes home to us most quickly and easily, has gone up in Australia to an extraordinary extent, it has not gone up in America, which is the home and source of supply. There it is still at the same figure, and, consequently, the argument that, as the price of things has gone up the world over, it is natural that we in Australia should be paying higher prices, is not borne out in the case of oil.
I was a little startled to hear the Leader of the Opposition as almost an apologist for those companies about which, I venture to say, if one had the time and industry to refer back to some of his more illuminating statements, one would find he has said as bitter, as biting, and as merited things as anybody else has uttered in this chamber. But I suppose one must recognise that it is. not quite fair to criticise the honorable member for having done this to-night, because he is an admirable and excellent Leader of the Opposition, whose job is to oppose. On the present occasion he has done his job well.’ He has opposed, and it is a matter of sincere regret to me that, in the course of opposing, he has had to defend those against whom I am sure he has as great an animus as anybody in the community.
– It is only fair for the honorable member to state that I said I did not apologize for either of those companies, but I objected to any monopoly that was not a Government monopoly.
– I quite agree that my honorable friend said all that, but do not let us have bits of his speech again. I merely suggest to any who think I have not been quite fair, or have not interpreted correctly what he said, that they should read the honorable member’s speech. They will there find that the honorable member dealt with those companies in a way rather different from that in which he generally handles them.
We have now to decide whether we are going to continue on the present basis, and intend to leave ourselves in the hands of those two forces, the American and the Dutch, or to strike out, and perhaps place ourselves in the hands of another corporation. There is this to be said, that at least it is a corporation which is British-owned and British-controlled, and one in which, so far as the Australian side of it is concerned, we are going to be active partners, and from whose operations we are to receive certain benefits. We propose now to enter into an agreement, and we have to decide, after weighing the merits and claims of the AngloPersian Company, whether it is to become the supplier of oil to Australia until we get our own supplies. We must also think what is going to be the position in the future if we decide to do this thing. I should like to remind the House exactly of the position of this company. It is purely and simply a British concern. It comes really from the Burmah Company, who owned the whole of the assets until the British Government stepped in.
– We were promised the articles ‘ of association, but have not got them yet.
– We should be all interested to see them. This company was then practically taken over by the British Government so far as capitalizing it was’ concerned. ‘That Government found the capital, and holds the majority of the voting rights.
– Can the honorable member give us any idea of who are the private shareholders in the Burmah Company ?
– I do not know who they are. But the private shareholders in the Anglo-Persian Oil Company are apparently non-existent. It consists of the Burmah Company, the British Government, and the trustees of the late Lord Strathcona. The company is a purely British one, and though its capital has been enormously increased it has preserved the same ratio, and the British Government is still in the position of controlling a. majority of its shares. In regard .to its operations, I would point out one fact which seems to have been overlooked, namely, that the whole of its management and control has been left in the hands in which they were when it was owned by the Burmah Company. A provision operates in the case of that company similar to that which is embodied in the agreement now before us. Under it the British Government have directors upon its board of management, and exercise a veto up to ‘a certain point. Under this agreement the Commonwealth is to have three directors out of seven - a point which has been very much criticised to-day- In this connexion it must be remembered that the British Government entered upon a similar enterprise in which they now have invested over £5,000,000, although they have only two directors out of a total of fourteen. The fact that they considered that number sufficient to safeguard their interests suggests to me that we shall have adequate protection if we have three directors out of seven, as is proposed in the Bill. ,That number with the power of veto is quite sufficient, and it is very much better that the control and management of this company should be left i n the hands of experts who are likely to make a success of it instead of being placed in the hands of Government nominees.
– Does the honorable member say that the powers of veto which the British Government exercise in regard to the Anglo-Persian Oil Company are similar to those which are embodied in this Bill?
– They are substantially the same, and I expect that the provision in this Bill has been copied from the British agreement.
– Does the British Government exercise control so faT as a majority of the shares are concerned, and yet give the Anglo-Persian Company the greater number of directors?
– Yes. The British Government have the right to put their foot down whenever those ‘directors appear likely to do anything which is against the policy of that Government.
There are a number of things in the agreement which, it seems to me, require to be altered. At the same time, I shall not vote to refer the Bill to a Select Committee, and I will give my reasons why I consider that course should not be adopted. We are here as a Parliament with an Executive which the country has been misguided enough - if that will suit honorable members opposite - to put into power. Surely it is the job of the Executive to do something! That Executive has made an agreement with the AngloPersian Company, and has submitted it for our approval. We have the power to alter that agreement as we think fit. Yet it is now suggested that we should refer it back to another executive, a Select Committee, which we are asked to create in place of the Cabinet. I am not prepared to do that. I am prepared, however, to strenuously advocate the making of certain changes in the agreement. I believe that one or two of those alterations are of so vital a character that if they are not embodied in the Bill I shall vote against its third reading. But before we have attempted to put the agreement into shape, it is suggested that we should refer the measure to a Select Committee. I am not such an extraordinary believer in special Committees as to become a party to that proposal. With regard to the actual contract itself, I am hopeful that we are going into Committee to discuss it clause by clause. There are, as I have said, one or two points which certainly need to be discussed.
It is contemplated that this company shall have a capital of -£500,000. I cannot agree that that can conceivably be the capital required to run a concern of the magnitude of the proposed refinery. I think that the history of similar concerns in this connexion is rather illuminating. If one takes the history of the Anglo-Persian Company itself he will be struck with the small commitments with which Britain entered into that enterprise, and the large commitments with which she is now confronted. This fact raises the question of whether £500,000 is not an absurd estimate of the capital required for the proposed enterprise.
– Is not the honorable member making out a good case for referring the matter to a Select Committee ?
– Quoting the case of the Anglo-Persian Company itself, I would remind honorable members that before the British Government entered into an agreement with it in 1914, its capital was £2,500,000. That was made up of £1,000,000 worth of 6 per cent, preference shares, of which £999,000 worth were issued to the Burmah Company, as well as £1,000,000 worth of ordinary shares, and there was a debenture debt of £600,000. The British Government became a partner in the enterprise in June, 1914, when the share and debenture capital was at once taken to £4,799,000, made up of 1,000 preference shares to the Government, and 999,000 to the Burmah Company, 2,000,000 ordinary shares to the Government, and 1,000,000 to the Burmah Company. The debenture debt in respect of the Government was £199,000, and £600,000 was divided amongst outsiders, making a total capital of £4,799,000.
– What was its turnover as compared with ours ?
– Heaven only knows. I am merely quoting our case as possibly a parallel one, for the simple reason that where. £4,799,000 was a small capital for such . an enterprise as’ that upon which the British Government embarked, £500,000 is an equally small capital for such: an enterprise as ours. I have not been able to get the last figures for myself - I am quoting those given by the Prime Minister the other day. The present issued capital of the Anglo-Persian Company is £17,500,000 out of a total capital of £20,000,000.
– Is that all genuine capital, or have the shares been watered?
– There has been no watering. The debentures at the present time total £5,000,000, and there can be no watering of debentures. The 6 per cent, preference shares represent £5,000,000, and the ordinary shares £7,500,000, of which the British Government hold £5,000,000 worth. The history of that enterprise rather indicates that the capital proposed for this new venture is altogether too low.
There are other factors that we ought to take into consideration. This refinery company, I presume, will do what the Vacuum Oil Company and other companies have done, namely, become its own distributor. I do not think that any of us would become parties to the agreement if that were not so.
– That is provided for in the Bill.
– If the company is to become its own distributor, I should say that it will probably require the whole of that £500,000 capital to cover its outstanding book debts. It must be remembered that it has to establish its refinery, its depots, and its whole distributing organization, and that it will have to carry week by week book debts because all its transactions cannot be upon a cash basis.
– The honorable member is making out a good case for referring the Bill to a Select Committee.
– Perhaps I am making out a case for honorable members opposite, but I fail to see it. However, all these points can be dealt with in Committee.
We have also to consider what will he the position here until this refinery has been built. The best estimate is that it will take two years to get the refinery into operation. Is the Anglo-Persian Company going to behave like a gentleman during that term by stepping into the breach, and distributing its refined products here at a reasonable price in competition with the Standard Oil Company and the Royal Dutch “Shell” Group? Or is it going to wait until the plum falls into its own mouth, and in the meantime to leave us at the mercy of those Combines? If so, God help us.
– What would the honorable member do if he were given two years’ notice to clear out?
– That is a point which ought to be considered. As the AngloPersian Company is getting a good agreement - although it is one which I approve - I think that most certainly we ought to embody in that agreement some provision to the effect that it will help us through the two years we shall be obliged to wait for the erection of its refinery, and for its own fuel oil and refined products to come into competition with those of the other great Trusts of the world.
Mr.Fenton. - Even then it cannot satisfy the Australian demand.
– The honorable member means, I presume, that its refined products will only suffice for half our Australian requirements. Whilst that is so, we must not forget that if the Standard Oil Company or any other company wishes to trade here, they must do so in competition with this particular company. If they will not do that, but put their prices up to such an extent that we are being hopelessly robbed, the spur will be put upon the Anglo-Persian Company to increase its refining plant. There is no doubt that that company has more than sufficient oil to supply all our requirements if we are going to persevere with this refinery proposition. .
Another point which has to be carefully considered has reference to the price of this oil. I quite admit that under the agreement set out in the Bill, and subject to arbitration, we can get a lot of things. But it seems to me that the agreement itself might go a little farther in the way of determining what is fair. Let us consider the position of the Anglo-Persian Company. It is going to sell us oil f.o.b. at port of shipment, and I think there is some hope for us there. We have to remember that it is from the purchase price and freights upon the crude oil that that company will get its profits. We are not entering into this scheme for any other reason than to obtain cheap oil. The Anglo-Persian Company is controlled by the British Government, which lately reeeived some admirable advice from the sub-committee of the Board of Trade, which was referred to this afternoon by the Leader of the Opposition (Mr. Tudor). I intend to quote that advice again, ‘because I think it furnishes an argument which we may use in order to induce the company to be very reasonable towards us. The Board of Trade sub-committee stated -
We feel strongly that when the AngloPersian Company (in which His Majesty’s Government held a controlling interest) is free to market its own production, steps should be taken by His Majesty’s Government to insure that the products are sold at a reasonable figure in this country without reference to excessive prices ruling in other fields. We attach great importance to this point, as we are of opinion that, when the existing contracts by which the Anglo-Persian Oil Company are bound, expire in 1022, it will be in the power of His Majesty’s Government to give substantial protection to British users of petrol, and thereby to confer substantial benefits on the whole community of this country, to whom the cost of all commodities must be enhanced by any rise in the cost of petrol. In our opinion, it is far more important that the Government should secure for British users of petrol a reasonable price, than that it should participate, as a shareholder in the company, in excessive, profits made at the expense of the British public.
All over the worldan intense hatred against the profiteer has been engendered-, and I am inclined to think that the British Government are going to take that advice, and include in the agreement provision for the supply of cheap oil fuels to Great Britain. They can do it by their control, and I suggest the incorporation of a similar safeguard in this agreement by adding this proviso to clause 12 of the agreement -
But the price shall not exceed the price paid by the Britian Government f.o.b. at the same port of shipment.
The inclusion of this provision in the clause would go a long way towards insuring cheap fuel oil for Australia.
There is another factor which, I think, presents great possibilities for cheap oil. The Anglo-Persian Company is under some restriction as to profits, but owing to the fact that the agreement with the British Government was for the supply of oil for navalpurposes, neither the amount to be supplied nor the price to be paid, so far as I can ascertain, has even been disclosed, nor have the terms of the contract itself. There is, however, some provision restricting the profits which the Anglo-Persian Company can make out of its sales to the British Government, and the only information I have been able to get is the statement by the First Lord of the Admiralty when introducing the Bill, that there would be automatic reductions in price down to 25 per cent, in excess of the amount necessary to pay preference dividends and 10 per cent, on ordinary shares. What that means it is difficult to say, but it seems to imply that the profit ‘to be made by the company in any year is limited to a figure 25 per cent, in excess of the amount required to pay all its debenture obligations and preference dividends, and 10 per cent, on ordinary shares. Another reference to this matter is contained in the speech made by the chairman of the company, who said he could not give details of the agreement, but he mentioned a sliding scale in relation to profits. No doubt the Commonwealth Government are in the position to find out, aud so I suggest that they ascertain what provision the British Government inserted in the agreement as to the amount of profit which the Anglo-Persian Company could make, and then they might consider the insertion of a similar provision in this agreement with the refinery company. We can do nothing with the AngloPersian Company. That concern is in the hands of the British Government; but the refinery company will be under the control of the Commonwealth Government. I do not think any one is . bold enough to suggest that the company should be encouraged to make excessive profits so that heavy dividends might be paid into the Treasury, to the relief of taxpayers, instead of providing cheap oil by means of which out primary and secondary industries may be stimulated.
– Cheap power is the great desideratum.
– Absolutely. We want the refinery company to be a sound commercial venture,- in which money will not be lost; but on the other ‘hand we do not want it to make excessive profits out of the people, for while one-half of the profits will go to the Treasury, the other half will go into the pockets of the AngloPersian Company. For this reason, I suggest the insertion in the agreement of some provision such as that which I have mentioned.
Another matter referred to in the agreement is the basis of freights at current rates. It must be obvious that the clause is too loose. There is no basis of current freights from a wild part in Persia to Australia, and so the clause bearing on that question should be modified. -
The principal clause is probably that providing against dumping, and I can clearly define my attitude on that matter. If we enter into this agreement, I am, quite prepared to protect Australia against dumping, with the proviso that the people must be* safeguarded, by Parliament, and not by the imagination of a Minister. If it is made clear that this matter will be dealt with by Parliament, I will accept it: but if there is any suggestion that it is to be left to the whim of a Minister, acting under administrative powers, I shall not accept it. We have had too much of that sort of thing in this country.
The only other point to which I desire to refer is the question of finding oil in Australia, or in some part of its Territories. This is a vital clause of the agreement, and until such time as we discover oil, I am quite prepared- to go on with this proposal for the establishment of refineries. I am confident we shall find oil some day, and unless we have put our house in order, and. have our refineries ready, the discovery will be useless for many months, perhaps for years.
With regard to the arrangement by- the Imperial and Commonwealth Governments to put up £50,000 each for the purpose of exploring for oil, and to hand over the administration to the AngloPersian Company-
– An arrangement of which this House knows nothing.
– As I see it, this agreement is one which places the AngloPersian Company in a somewhat invidious position, as under the refining agreement they will have an outlet for 200,000 tons of crude oil per year from the Persian fields, which will cease as and when indigenous oil is discovered. I have, however, sufficient faith in the commercial morality of a respectable trading concern such as this is to feel no anxiety about the discharge of their obligations. I am satisfied that, as the servants of the British and the Commonwealth Governments, they will do everything in their power to find oil in Papua, and that we are perfectly safe in their hands. I am sure we shall have a fair and square deal. The undertaking could not have been placed in the hands of better people, as the history of exploration teaches us that the British as a race have more aptitude for this class of pioneering work than the people of any other nation, and I would sooner see this matter in their hands, under British management and control, than under the best American experts that could be brought to Australia.
.- The honorable member for Flinders (Mr. Bruce), who has just resumed his seat, has made .a very strong case indeed for an inquiry by a Select Committee. It is quite true that he made complimentary references to this proposal, and stated that he is prepared to indorse the action of the Executive, but he also, peculiarly enough, stated he is not prepared to trust one important Minister of the Cabinet with the administration of a single clause of the agreement. If there is any point at all in his remarks concerning the capital of the proposed company, it is evidently not a bona fide statement of the amount necessary, for the honorable member has told us it is inconceivable that any organization for the refining and distribution of oil could be set up for any such amount as ie provided in the agreement. He also referred to the question of freights, and again made out a case for a proper examination by a Committee. The agreement states that the freights chargeable for the carriage of crude oil shall be on current rates, and the honorable member, who has had, large commercial experience, has told us that “there is no such thing as current rates for the carriage of crude oil between Persia and Australia, so that part of the agreement also must be so much camouflage. The Prime Minister (Mr. Hughes) must know just as well as does the honorable member for Flinders that there is no basis in this case for current freights.
The agreement really provides for a monopoly for the supply of oil to Australia. It is quite possible that enormous profits may be made by the parent company in producing crude oil in Persia, of which we know absolutely nothing, and when the crude oil is brought to Australia for refining there may be little or no profit in that branch of the work. So that the Anglo-Persian Oil Company may make enormous profits from oil sold in Australia, whilst the Commonwealth may make little or nothing.
It is a usual practice with many great industrial concerns to have subsidiary companies in which they have ‘a controlling interest, and to which they sup-1 ply certain goods at their own price. The parent companies draw the life-blood from the subsidiary companies, but the latter may show an actual loss. According to the information submitted to honorable members, the Anglo-Persian Company is, to all intents and purposes, to fix its own freights, and could, therefore, make any charge it liked for carrying crude oil to Australia. Why is this company going to ship crude oil from Persia and refine it here?
– Where does it. say that the company can “fix its own freights”?
– The schedule refers to the price payable f.o.b. port of shipment, but it does not say whether the port of shipment is to be in Persia, China, Russia, or somewhere in the South Seas. We do not know if the crude oil is coming from Persia. The agreement provides that the Anglo-Persian Company shall make all arrangements for freight at current rates to the port of discharge in Australia in respect of crude oil supplied by the company. The Minister for the Navy (Sir Joseph Cook) must remember that one of his best supporters, the honorable member for Flinders, has exploded that argument by saying that there is no such thing as a current rate for the carriage of crude oil from Persia to Australia, and from other outlandish places, and, therefore, the matter is entirely in the hands of the company.
– With the veto of the Government behind it.
– There is nothing in the agreement concerning the Government’s power to veto on the question of freights. The honorable member for Flinders stated that the company would probably make profits out of the freights. It will make a profit out of production, then out of the freight, and lastly, out of the refining, which may be the smallest, and the one in which the Government will share. If I derived two substantial profits from two important activities of a company I would’ not be particularly concerned as to what my share was in the third. In order that the Commonwealth may share in the final operations of the company, namely, the refining, the Anglo-Persian Oil Company is being given a monopoly over the whole of the oil business in Australia.
The honorable member for Yarra (Mr. Tudor) has already shown that since the outbreak of war the AngloPersian Company has increased the freight on crude oil from 36s. to 308s. per ton - ls. per gallon - which is an enormous rise.
This agreement has nothing to do with the production of oil in Australia or the Territories under our control, and if the company brings crude oil from Persia or other parts of the world it may pay it to do so. It may be that their interests are directly opposed to the production of oil in Australian territory, and there is nothing in this measure to safeguard the Commonwealth in that respect.
Reference has been made to the control of the company, and the Prime Minister (Mr. Hughes) was childish when he said that we would have a controlling interest, because we held the majority of the shares. The right honorable gentleman must know that many companies are formed in such a way that a majority of the shareholders do not have a controlling interest, and in this case it would not matter if the Government held threefourths of the shares, because there is a clause which provides that the company shall have the exclusive scientific and commercial control. “What control can there be additional to commercial and scientific control ? There are to be seven directors, three of whom are to represent the Commonwealth; but what controlling power will they have? In this House, so long as the Government have a strong majority behind, them, although we may effectively criticise the measures they submit, we have no power to alter a line or a comma in any Bill introduced. This company will be in a similar position by having four directors, as against the three to be nominated by the Government.
The Prime Minister has stated that the company will be subject to the same control as it is subjected to by the Imperial authorities, but we would like to see the agreement under which the British. Government are operating, and which the Minister for the Navy has promised to supply.
– Here it is.
– I am now in possession of an agreement relating to the boring for oil in Papua, but what opportunity have I now for perusing its provisions?
– I am handing it to the honorable member at the earliest possible moment, and all he does is to grunt.
– It is the Minister for the Navy who is doing the grunting. It is impossible for me to peruse it carefully at this juncture..
– May I lay it on the table now?
– The agreement I was asking for when interrupted, is the original agreement between the .British Government and the Anglo-Persian Oil Company governing the parent company. Instead of supplying a copy of that agreement, the Minister for the Navy interposes with another agreement altogether. I want to know how the AngloPersian Oil Company is constituted, the terms of its memorandum and articles of association.
In the Prime Minister’s speech, as reported in Hansard (page 1885), referring to the oil companies at present in existence, he bracketed the Anglo-Persian Oil Company with the other combinations, and stated, “All the oil companies, including the Anglo-Persian Oil Company, are interwoven.” “We should also know the nature of the memorandum and articles of association of the Burmah Company, which is a concern further back in the genealogy of the Anglo-Persian Company, and which, it is said, holds a controlling interest in that company. Apparently, this Burmah Company, with only .£2,500,000 invested in the £17,500,000 of capital of the. AngloPersian Company, is the real controlling authority.
Honorable members have now been supplied with a copy of the agreement between Che Anglo-Persian Company and the British Government in regard to oilboring in Papua, which should be carefully scrutinized in connexion with the other agreement.
We should also know what companies have made similar offers to that made by the Anglo-Persian Company, because the Commonwealth has not approached the Anglo-Persian Company and made an agreement with it. The Prime Minister has informed us that the company approached the Government. In the agreement now tabled, it is stated that -
Several of the world’s great oil corporations were desirous of obtaining concessions in Papua, and prosecuted a vigorous campaign with this object in view in’ 1918.
Surely that is a pertinent matter for inquiry by a Select Committee, because possibly they submitted better terms than those of the Anglo-Persian Company.
– It has been stated that one company was prepared to do the necessary exploratory work and give the
Commonwealth. Government 60 per cent, of the shares
– According to the honorable member for Yarra, other companies were prepared to offer better terms than the Anglo-Persian Company.
– Were they British companies ?
– They were companies firmly established in the country that won the war for Great Britain and her Allies.
– It does not matter whether they were British companies or not. If any American or European corporation is prepared to undertake this work, I, forone, am prepared to consider its terms. There aresome honorable members of this Chamber who consider that Australia is a mere suburb of London, and that we should have our blood sucked out by the British capitalists. As an Australian. I do not share that view.
– It is lucky for Australia that very few share your views.
– It may be lucky, but the time is coming when Australians will not put up with being exploited any longer. Some honorable members opposite think that by hoisting a flag and howling something about the Crown they are performing a meritorious work; but that is not swallowed by everybody. ‘ Here is one who is not prepared to swallow it.
– The honorable member is prepared to live under the protection of the flag, and takes great care to keep within the Empire.
– I keep within Australia, which is my native country, and assert my rights as an Australian, regardless of the British point of view and the interests of groups of British capitalists.
It is very necessary that a Committee of . investigation should be appointed, so that the representatives of other corporations could have an opportunity of submitting proposals for the development of what we believe to be oil deposits within Australian territory.
A statement was made yesterday by a representative of the Victorian Lubricating Oil Companies as follows: -
Ratification of the agreement made between the Commonwealth of Australia and the Anglo-Persian Oil Company should be held over for further information on many points which appear in the agreement.
– Held over indefinitely, I presume.
– Certainly not. If these companies have any information they should have an opportunity of submitting it.
-Further consideration can be given in Committee.
– It is impossible to cross-examine witnesses or to make a proper inquiry when the House is in Committee, and the necessary information can only be secured by a Select Committee or some such body. There is a stronger case for the appointment of such a Committee of investigation in connexion with this Bill than there has been in connexion with any other proposal submitted to Parliament. The companies to which I have referred go on to say -
National as well as personal objections to the Bill in its present form should be considered.
We should know what the national and personal objections are, and apparently the representatives of this concern have something in their minds that should be placed before a Committee. They go on to say -
Many Australian firms have invested capital and expended effort in building up industries for blending and compounding oils, and view with alarm the prospect of their businesses being handed over to one corporation*.
Apparently they have taken legal advice on the agreement, and now are of opinion that it will hand over their business to the monopoly that is to be established under the Bill.
– That does not follow.
– It follows that we should test these statements.
– Why did not they make that statement in their letter?
– They could not state everything in a letter. We should give them an opportunity to put their case before a Select Committee, and should there test their statements. They say-
By this agreement the Commonwealth places itself in the hands of the Anglo-Persian Oil Company, thus restricting competition.
Let these gentlemen , go before a Select Committee and give the grounds for that statement.
The facts regarding the capital of the Anglo-Persian Oil Company and its distribution, taken in connexion with the speeches made in this Chamber this afternoon, show the existence of much confusion in the minds of honorable members.. We have been told that the greater portion of the company’s capital belongs to the British Government. But that is not so. The company has a capital of £20,000,000, of which £17,500,000 has been subscribed, and of that amount the British Government has paid only £5,000,000.
– Is the honorable member trying to show that the British Government does not hold the majority of the shares in the company?
– What I said is that it does not hold the majority of the capital.
– The honorable member is wrong.
– The Minister has admitted on two very important points that he knows nothing about the Bill. v
– The British Government holds a majority of the shares in the company.
– That is not a majority of the capital. The £5,000,000 subscribed by the British Government is represented by 10,000,000 shares, it holding two shares for every £1 of capital. That is what has caused confusion in the minds of honorable members. The actual amount of capital subscribed by the British Government is £5,000,000, and the British Government’s capital is represented by two shares to every £1 subscribed, whereas the capital of the
Other subscribers is represented by only one share for every £1 subscribed. That arrangement suggests camouflage. Why should the British Government’s capital be represented by twice as many shares as the other capital?
– Probably to give the British Government control.
– The arrangement does not give the British Government control. We have been told by the Prime Minister that it has appointed only two of the fourteen directors on the board. Of the remaining capital, £4,999,000 is held by the British public, though we do not know who the holders are. They may be some of those gentlemen who have had a pretty good dip out of Australia’s primary products during the last few years.
– The British Government has had a pretty good dip out of our products. It has been profiteering very well with them.
– The Burmah Company, which is practically the parent company of the Anglo-Persian Oil Company, holds only 2,500,000 shares in it, and yet has the controlling voice in its management. A little outside company, which has subscribed only £2,500,000 of the capital of £17,500,000, controls the whole concern.
– And manages it very well, too!
– Of course. This is the way in which many modern combinations are built up. A small inside ring starts a little company, and a larger company takes in the public, and the circle keeps expanding until the small inside ring is sucking blood from dozens of subsidiary companies.
We have been told that there is a secret arrangement by which the oil is sold to the British people for Admiralty purposes at a reasonable rate, and at the same time we learn that the £5,000,000 of capital su’bscribed by the British Government in 1914 is to-day worth £50,000,000. The concern must have made fabulous profits for the shares to increase in value at that rate within four or five years.
– The Suez Canal Company has made good profits, too.
– We are not asked to put money into the Suez Canal Company, and are not now concerned with its operations. The increase in the value of these shares is in itself prima facie evidence of profiteering to an enormous extent.
There is another reason why the proposal before us should be subjected to examination by a Committee of inquiry. At the present time members do not know what they are being asked to vote for. Probably, with the exception of the Prime Minister, there is not a member of this
House who knows where the agreement will carry us.
– Nor another member of the Cabinet.
– That is so. It is thought to be infra dig. for a Minister to submit a matter coming within his Department to -the Cabinet; Ministers take the word of a colleague, and, besides, have not time to investigate the affairs of Departments other than their own. Consequently, Parliament is asked to ratify an agreement which comes to it with the authority of virtually only one man, notwithstanding the enormous consequences that the ratification of it may have to Australia.
I have had some experience of the working of companies, and if we are not careful the experience of the Commonwealth in this matter may be similar to my own. I went to a firm of printers with a proposal for the establishment of a newspaper, which they considered a good one, and entered into a company partnership with me for its production. The articles of association seemed very favorable to me, .because, after all expenses had been paid, and the enterprise had been established on a profitable basis, I was to get a good share of the dividends. The printing firm was to print the newspaper in its own office. After I had done the bulk of the work of producing the paper for a couple of years, and had got nothing out of it, I ascertained from other printing houses what the actual cost of printing a publication like ours should be, and having done this, I put my case before the board of directors, on which I had a seat, though no controlling say in the management of the concern.
– Had they more shares than you?
– I do not think so. I think that, like the Commonwealth Government in this case, I had the majority of the shares, but they had a majority of the directors, and that prevented me from having a controlling voice. At a meeting of the board, I said that I was tired of working for two years for nothing. I told them that they were charging from £40 to £50 per week too much for printing the paper. They told me that it meant absolute ruin to them if they lowered their charge. At any rate, after arguing the matter for a fortnight I said to them, “ I do not care what you say; next Saturday is my last day with you if this cost is not cut down by at least £40 or £50.” As a matter of fact, they could not carry on without me, and when I said I was done with them, without turning a hair, they knocked £40 a week off the cost of producing this little weekly paper. It was a similar arrangement to this agreement, but whereas it dealt with a few pounds, thi3 deals with millions.
Another case is that of the Australian Workers Union, which has contributed £79,000 out of a total of £130,000 capital contributed by the unionists of New South Wales for the purpose of establishing a daily Labour paper in Sydney. By the terms of the company the other unions have the right of electing the majority of the directors of the company, and the Australian Workers Union, which has contributed £79,000 out of a total of £130,000 is in a minority in regard to the control of the company.
It is quite useless for the Prime Minister (Mr. Hughes) to say that in this case the Commonwealth will have a majority of one of the shares. It has absolutely nothing to do with the issue. Everything hinges upon the terms qf the articles of association as to who has control of the concern, and under the terms of this agreement the Anglo-Persian Company is to have the control in the company to be formed in association with the Commonwealth .
There is another little sidelight on the operations of big capital. It is now fashionable for big capitalists to set up industries where they can exploit black labour down to the last point, but they have found that they cannot establish a great refinery in tropical places like Fiji, German New Guinea, or Papua, and employ their scientists there. After a couple of years the scientists get malaria or grow tired of living, in a tropical place, and bolt. Now the scheme is to exploit the coloured labour in producing the article up to a certain point, and then bring it from the tropical regions into a place like Australia and do their refining here. Thus they obtain their exploiting profits out of black labour.
We have an instance of that in the operations of the Colonial Sugar Refining Company, which, as . to the production of sugar, . is - not an Australian company, although it has -a refinery here. Its main, business of growing sugar is in Fiji, where it employs nigger labour at1s. a day under the most deplorable conditions. It brings its sugar up to a certain point of preparation by coloured labour in Fiji, and finally refines it in Australia, in some cases reshipping the refined article outside the Commonwealth. It is not paying income tax to Australia on the great bulk of its profits. These people go to a little place like Fiji, where a few interested persons have arranged with’ British capitalists that they can have full control, and where they can conduct their operations with the lightest taxation in the world, and with very little interference so far as labour is concerned. They make fabulous profits out of coloured labour, and although the Colonial Sugar Refining Company finally refines its product in Australia it does not participate in thegeneral government and responsibilities of either Australia or Britain commensurate to its immense dividends earned within the Empire.
Another illustration of the operations of big capitalists is furnished by Messrs. Burns, Philp, and Company. It was an Australian company, which, with the assistance of Australians, built up an enormous business in the southern seas, but it has just formed another company and registered it in Fiji, to which its main office has been shifted’. It has transferred its great business to new territory. To all intents and purposes this company, developed in Australia, has now become a foreign firm. It is an instance of capital leaving Australia, but not while a Labour Government is in power. Its business will now be conducted from outside Australia. It will trade with Australia, but will escape its arbitration laws, and can employ black crews on its ships and develop its industries in the islands with cheap coloured labour, making enormous profits, but avoiding the payment of income tax to Australia.
The Persian Oil Company also illustrates my argument on this point. I have no doubt that we could get evidence upon the fact that they believe there are some rich deposits of oil in the South Sea Islands, and that, for the reasons I have mentioned, they will require a centre for , refining purposes. They will carry, . the crude oil to Australia, making enormous profits, not only by producing it by coloured labour, but also by carrying it here.
– Will it not be of advantage to Australia to have the refinery here?
– Under the terms of the agreement I do not know whether it will be of advantage to Australia or not. I would ‘be much better satisfied if a Select Committee took evidence to determine whether the agreement as a whole is a good one or not. I ask leave to continue my remarks on some future occasion.
Leave granted ; debate adjourned.
Motion (by Sir Joseph Cook), by leave, agreed to -
That the House, at its rising, adjourn until 2.30 p.m. to-morrow.
Sir JOSEPH COOK (Paramatta–
Minister for the Navy) [10.4]. - I beg to lay on the table a copy of the memorandum regarding the co-operation of the British Admiralty with the Commonwealth Government for the development of oil resources in Papua. I move -
That the paper be printed.
,- I call attention to the omissions in- the printed document. It commences -
An agreement made this day of , 1919, and is signed by “ W. M. Hughes, for the Commonwealth of Australia,” but the date given is “ 7th July, 19 . “ There is no signature for the British Government or for the Anglo-Persian Oil Company. If this is the agreement under which we are to pay £50,000 of the £100,000 to be expended on prospecting and exploration work in New Guinea, it is the worst that has ever been submitted to this Parliament.
Question resolved in theaffirmative.
House adjourned at 10.6 p.m.
Cite as: Australia, House of Representatives, Debates, 11 May 1920, viewed 22 October 2017, <http://historichansard.net/hofreps/1920/19200511_reps_8_92/>.