House of Representatives
8 November 1927

10th Parliament · 1st Session

Mr. Speaker (Hon. Sir Littleton Groom) took the chair at 3 p.m. and read prayers.

page 1008



– On behalf of those who mourn their dead, and also others who are suffering anxiety on account of injured relatives, I wish to thank the right honorable the Prime Minister, Mr. Bruce, for his message of condolence, and also to the members of both Houses who have expressed sympathy to me as the member for the district in which lived practically all of those who lost their lives or were injured in the appalling tragedy that occurred in Sydney harbour last week.

page 1008



Motion ofWant ofconfidence.


– I move -

That, owing to its attitude towards the Commonwealth Shipping Line, the Government has forfeited the confidence of this House. The surrender of Government ownership of the Commonwealth Line will act to the serious detriment of Australian producers and will subject the whole community to exploitation by the Shipping Combine against which the Government Line is at present the only effective safeguard.

I have adopted this course because I believe that the Australian Commonwealth Line of Steamers is not being given the sympathetic administration which is necessary to conserve the best interests of the people of Australia. Last Friday I asked the Prime Minister whether the report which had appeared in the daily press regarding a contemplated disposal of the line correctly stated the intention of the Government. The right honorable gentleman replied that in the course of a week or two he would outline to honorable members the policy of the Government on the matter. We cannot afford further delay, because there is ample evidence to justify the conclusion that the frequent declarations which have been made regarding the sale of the Line have hindered its progress. The right honourable gentleman may inform the House that no definite proposal to dispose of the Line is to be made by the Government. In anticipation of such a pronouncement I wish to place before honorable members a statement which appeared in last Friday’s Melbourne Argus. It may be argued that I should not have taken action on a newspaper report. My answer is that if this statement were incorrect it ‘ was the duty of the head of the Government to deny it at the earliest opportunity. It reads -

CANBERRA, Thursday.- The Federal Cabinet has definitely decided to dispose of the Commonwealth Shipping Line. Its policy was endorsed to-day at a joint meeting of members of the Nationalist and Country parties held at Parliament House.

For several years the conduct of the Common wealth Shipping Line has been a source of worry to Ministers, and since the presentation to Parliament of the report of the Public Accounts Committee, which conducted an exhaustive investigation into the Government’s shipping activities, further consideration has been given to the matter by the Cabinet. When members of the Nationalist and Country parties assembled to-day they joined forces, at the suggestion of their leaders, and were addressed at length by the Prime Minister (Mr. Bruce), who, after dealing with the history of the Lino, made it clear that he was of the opinion that it should not be continued as a Government activity. In view of the heavy financial losses that are occurring on the running of the ships under the stringent conditions prescribed by the Australian Navigation Act, he expressed the view that the Line should be disposed of. This view, he stated, was shared by other members of the Cabinet, who had given earnest con-‘ sideration to the report of the Public Accounts Committee.

A similar statement appeared in the Sydney press. “It is idle to contend that that does not justify my action. We should have from the Government a well-defined policy that would leave in the minds of the public not the slightest doubt regarding the future of the Line. The welfare of the primary producers in particular is dependent upon their being saved at all costs from the clutches of the Shipping Combine in the marketing of their products overseas. It is necessary for action to be taken immediately to have the matter placed on a proper basis. I shall endeavour to prove to honourable members that this Government has hampered rather than assisted the operations of the Line. It is most unfair to talk about placing the Line on a proper financial basis. Keeping down freights as it does, it cannot be expected to operate as profitably as a.’ private company. What we have to consider is whether its continuance is conducive to the best interests of Australia, by reason of the fact that it places primary producers and others in a position better than that which they would occupy if the Combine had control of shipping between Australia and the United Kingdom. I shall not trace the history of the Line from its inception, but shall merely relate facts which will enable honorable members to obtain a grip of the position as it exists to-day. The first vessels of the Line wei e purchased by the right honorable member for > North Sydney (Mr. Hughes) when Prime Minister in 1916. Nothing of importance transpired from, that time until November, 1921, when during the discussion of the Estimates for that financial year, certain adverse comments were made regarding the Commonwealth Line. The right honorable member for North Sydney, in reply, pointed out that up to that time the profits which had been returned by the Line to the people of this country amounted to no less a sum than £7,441,819. The present Prime Minister (Mr. Bruce) then indicated very clearly that he was totally opposed to State enterprise in the shipping industry. Ho said -

Something has been achieved, I admit, but it is not very great, and I do not think it is sufficient to justify the continuance of a Government venture. … I cannot vote for continuing to carry on the shipping business.

At that time the right honorable gentleman was a private member, and evidently had no anticipation of becoming Prime Minister within a few months. He was entirely opposed to the maintenance of the Australian Commonwealth Line of Steamers, being a strong supporter of private enterprise. That pronouncement certainly showed that his sympathy was not with the Line. Soon afterwards an election took place, at which many of the Government supporters were defeated. On the other hand, the numbers of the Labour party were considerably augmented: consequently it was impossible for the Government to continue in office. A composite government was formed, and there is no doubt that the retention of the Australian Commonwealth Line of Steamers played an important part in its policy. At that time the Country party was in favour of the continuance of the Line, mainly because its operations had been of immense benefit to the primary producers of Australia. Therefore, a policy was framed to meet that position. On the 4th July, 1923, about six months after the composite government took office, the present Prime Minister introduced a bill providing for the establishment of a Commonwealth Shipping Board, and in his secondreading speech he emphasized that the board would be free from political influence or interference; yet strange to say, shortly afterwards, when a. maritime dispute arose and vessels were being held up, he wrote to the board commenting on its action in entering into an agreement with the maritime unions concerned. Honorable members on this side of the House endeavoured repeatedly but unsuccessfully to ascertain the nature of that communication and its results. The right honorable gentleman, on that occasion, evidently did not consider that the board should be free from political influence. On 24th February, 1925, the Prime Minister publicly announced that pending the confirmation of Parliament the Government had decided to invite tenders for the purchase of the Commonwealth fleet. He said that that course had been advocated by the Shipping Board, which had reported that it was impossible to operate the Line on an effective and profitable basis; that its unsatisfactory financial position was due to the high running costs as compared with those of competing lines, and also to labour troubles; and that consequently, it had been decided that the vessels could not pay while they were’ on the Australian register and covered by Australian industrial awards.- The Prime Minister’s decision to sell the Line under certain conditions undoubtedly lessened the prospect of running it at a profit because shippers, with no certainty of regular shipping space, naturally looked elsewhere for their requirements. It is true that the conditions of sale precluded the possibility of their acceptance, but that made the position worse. The board reported that its vessels were at a disadvantage compared with vessels on other registers, but we must recognize that Australian conditions are altogether different from those prevailing elsewhere. Our seamen receive better wages and treatment, and the crew carried by the vessels of the Line is larger than that of English vessels of similar capacity, but surely that is not to be advanced as a reason for selling the Line. We should be prepared to support Australian conditions. We should not expect Australians to work under conditions such as those existing in Europe and elsewhere. Australia would make little advancement if, when dealing with our national problems, we took the competitive element into consideration. The following is an extract from the report of the Public Accounts Committee: -

Running Costs of Steamers. - The figures placed before the committee showed that under Australian conditions of manning and pay in force last year, a “ Bay “ steamer had tocarry a complement of 170- - at a cost, including overtime and leave, of £3,725 per month, whilst a vessel’ of similar class on the British register would have a crew of 154 only, at a total monthly cost of £1,054. A comparison of the actual wages, &c, paid for the year ended 31st March, 1926, on the live “ Bay “’ steamers and the estimated wages payable for similar vessels on English articles, showed a. difference in favour of the latter of £117,758,. the figures being: - Actual wages paid underAustralian conditions, £204,987; estimated’, wages paid under English articles, £87,229. When the extra victualling cost is considered,, this amount is increased by £9,510, making a total of £127,268, or nearly equivalent to- > interest at 5 .per cent, on the transfer valueof the “ Bay “ steamers.

There is a big disparity between labourcosts on Commonwealth ships and thoseon British overseas ships. Depreciation. also plays a very important part. In addition, there are interest charges to be met, and the Commonwealth Line, unlike any private concern, has to pay 5 per cent, on the capital advanced by the Commonwealth Treasury. A private company operates with subscribed capital, and all earnings over and above running costs represent profits available for distribution; the Conference Line, if it makes only 1 per cent., is still paying its way, but the Commonwealth shipping Line has to earn 5 per cent, on capital before it is regarded as doing so. I have already mentioned that the conditions upon which the Government was prepared to sell the Line were such that no offers were tendered. In support of my contention that the attitude of the Government has been hostile to the Line, that the readiness of the Government to sell the ships has been prejudicial to the Line, and that this great Commonwealth enterprise has not received a fair chance,

I quote from the report of the Public Accounts Committee: -

The attempt made to dispose of the Line in 1925 had had, it was stated in evidence, a detrimental effect on its business, and has tended to shake the confidence of regular shippers ill the Line, and this had taken some considerable time to overcome.

The majority of the members of that committee are supporters of the Ministry, and in those words they testified that the Line had been interfered with and prevented from being the success it might otherwise have been.

Mr Hughes:

– Who composed, the committee that made that report?


– The various members of the committee from time to time were Senators Poll, H. Hays, Kingsmill, McHugh, and Needham, Sir Granville Eyrie and Messrs. Abbott, G. Francis, Gardner, Lister, Parker Moloney, Paterson, Prowse, and E. Riley. The House will be interested to hear the opinions of some men who are directly concerned in shipping. About five years ago when the Commonwealth Line was actually paying its way, Lord Inchcape said : -

Mr. Hughes would be infinitely better advised if he left the business to those in commerce and allowed the people to work out their own salvation. I hope Mr. Hughes will be satisfied with the profit he has- made out of the: ships and will’ dispose of them.

Lord Inchcape represents the shipping combine, and, although the Line was then paying its way, he urged that the ships should be disposed of. The Sun Piotorial of the 28th April, 1925, said :-

One well-known exporter said these vessels had always been run in a business-like manner. Shippers were so well satisfied, that space on “ Bay “ ‘ liners had been fully booked long before the day of departure. The Line had been responsible for a freight reduction which enabled producers to place their goods on tile London market at a reduced cost, and so compete with other countries. Although the Line has lost £400,000 a year, it has saved Australia £3,500,000 in freights. “Under such circumstances,” he said, “ we have been pleased to ship our goods on Australian vessels, manned by Australians, and pay freights into Australian revenue.”

Mr Maxwell:

– That is anonymous testimony.


– It may be, but this man’s statements were corroborated by witnesses before the committee. The Sun Pictorial at that time published a cablegram from London to the effect that there was rejoicing in the Conference Shipping Combine at the news that the Commonwealth had decided to sell some of the ships of the Commonwealth Shipping Line. Could Australia derive any comfort from the rejoicing of the shipping combine? The rejoicing was because a competing enterprise that had prevented the combine from exploiting the Australian people was about to be removed.

Mr Maxwell:

– The men who were said to rejoice are still carrying 93 per cent, of our trade.


– I shall endeavour to convince the honorable member regarding the benefits which the Australian people are receiving from that Line, by quoting information placed before us by the Public Accounts Committee and other authorities. In an interim report dated 10th August, 1926, and signed by Sir Granville Ryrie, the committee said -

In view, however, of emphatic evidence placed before the committee, that, owing to the uncertainty which exists concerning the continuance of the Australian Commonwealth Line of Steamers, its business has been adversely affected, the committee has deemed it desirable to submit to Parliament, prior to the approaching recess, this interim report. “Where could one find more destructive criticism of the administration of the Line? The committee continued -

The committee, therefore, recommends that, in the interests of Australia, the Line be continued. In making this interim recommendation, the committee desires to emphasize the fact that it has not yet completed its investigations; so far as these have gone, however, they indicate the necessity for a review of the present system of financing the Line, and a drastic curtailment of the overhead expenses, including the London office: but until Mr. Larkin has had an opportunity of expressing his views in evidence, the committee does not consider it desirable to indicate the lines along which reorganization should be effected.

A little later I shall endeavour to show that that recommendation was not given effect.

Mr Hughes:

– What is the date of the recommendation ? *


– The 10th August, 1926.

Mr Prowse:

– It was only an interim report.


– That does not affect the fact that the matter was of vital importance to Australia ; so much so that the committee deemed it advisable to make an interim report in order to assist the Shipping Board and the Commonwealth Government. What was the use of that committee making recommendations if it was to be disregarded ?

Mr Hughes:

– What witnesses were examined between the making of the interim and final reports?


– Only Mr. Larkin, so far as I am aware. The committee presented a further report on the 6th May, 1927.

Mr Maxwell:

– That shows the inadvisability of expressing an opinion before hearing all the evidence.


– I - I am endeavouring to present my case, based on the evidence adduced by that committee. I shall quote f rom page 6 of the second report -

For some years, due largely to the then prevailing conditions, the result of .the operations of the Commonwealth Government Line showed substantial profits, and the Line was instrumental in enabling producers in Australia to get their goods to the overseas markets at reasonable rates, because, it was stated, the presence of the Line not only exerted a considerable influence in restraining increases in freights, but in many instances actual reductions in rates made, by the Line were almost simultaneously adopted by the other shipping companies. For example, it was claimed that the reduction of 10s. per ton in freight rates forced by Mr. Larkin early in 1923 had resulted in a saving of over £2,000,000 a year in Australian freight charges.

Mr Prowse:

– Who made that statement ?


– It is remarkable that every time one produces convincing evidence, and is proving his case up to the hilt, some honorable member opposite desires to know, “Who said that?” “Where did it come from ?” The statement is taken from the evidence given before the committee by the people connected with the Shipping Board. If this Line is surrendered, the primary producers of Australia will pay an additional £2,000,000 a year in freights. It is necessary that the Government should consider whether it is advisable to retain the Line and face an annual deficit of £500,000, at the same time indirectly enabling our primary producers to save £2,000,000 a year in freight, or whether it will sacrifice the interests of those producers merely for a financial profit of £500,000 annually. I shall refer to a statement made by Mr. J. T. Brennan, the manager of the Melbourne branch of the Line, whom I regard as an expert on shipping matters, whose pronouncements have considerable weight.


– That is his living.


– T - The honorable member immediately doubts the genuineness of the witness, because shipping is his business. Before adopting that attitude, it is his duty to prove that the statements are incorrect. The reference to Mr. Brennan’s statement is dated the 3rd October, 1927, and it reads -

The manager of the Melbourne branch (Mr. J. T. Brennan), in a statement reviewing the troubles with which the Line had been beset since the war, claimed that it had saved over £2,000,000 a year since 1923 to Australian exporters and importers in reduced freights.

As an indication of the trend of affairs not long after the formation of the Line, the following extract from the Times Trade Supplement, December, 1919, is interesting : -

Freights charged by the Commonwealth Government Line, although in excess of pre-war rates, have always been much below those charged by shipping companies. When ruling rate for wheat to the United Kingdom was 125s., Commonwealth Government Line rate was 120s. Later, when ruling rate was 235s., Commonwealth Government Line rate was 150s.

In March, 1920, it was proposed to increase United Kingdom rates owing to the high price of bunker coal in England, but as our Line would not agree, the proposal was abandoned. Next month, in April, 1920, the North Atlantic lines increased their rates by 25 per cent, on rough cargo, and up to 50 per’ cent, on fine goods, on account of high working expenses; South African lines increased rates by 10s. per ton, the reason given being the price of bunker coal and working expenses generally. The fact that the rates were increased by the North Atlantic and South African lines and not by the lines trading to Australia shows definitely that even then the Commonwealth Line acted as a Check.

Dr Nott:

– How many boats were then in operation?


– Five “ Bay “ and two “ Dale “ steamers. The extract continues -

Lightening the Burden.

In September, 1920, the Conference lines proposed to raise the. freight on scoured wool by Jd. per lb. Our Line would not agree to this,, and rates were not raised.

In 1923, owing to economic conditions, Australian exporters and importers were seriously embarrassed by the ruling freight charges, and to afford them the much needed relief, on 22nd January of that year the Line announced that rates to the United Kingdom would be decreased by 12$ per cent., refrigerated cargo by id. per lb., fruit by ls. per case, and butter by 6d. per box. Freights from the United Kingdom to Australia were simultaneously reduced by 10s. per ton, and in these reductions the Line was followed by the Conference lines.

These reductions resulted in an enormous Saving to the producers and consumers in Australia, and were of very great benefit to the population of Australia as a whole.

Again, on 12th July, 1926, the line announced a further reduction in freight rates from Australia of 10 per cent, on all general cargo, Jd. per lb. on all classes of skins, on wool, and on all classes of frozen cargo; a reduction of Gd. per box on butter and a similar amount on each case of apples and other fruit.

We estimate the average yearly tonnage of exports and imports to and from Australia and the United Kingdom as over 4,000,000 tons and 10s. per ton represents a saving of £2,000,000 per annum, but this figure is very conservative, as the Line has reduced freights by considerably more than 10s. per ton since 1923, besides having prevented increases in rates before that year.

That is a very definite statement from a man who understands his business, and shows clearly what freight reductions have been made by the Line over a series of years. If the Commonwealth Line had been endeavouring to make itself a paying proposition, the management could easily have joined hands with the Conference Line, raised the freights, and in this way showed a. surplus. But what then would have been the position of the primary producers who had to market their products overseas? The right honorable member for North Sydney (Mr. Hughes) has asked me some questions in connexion with this report, and it is unfortunate that we cannot get the evidence; we have only got the committee’s analysis of it, because it was all taken in camera. I do not say that it was wrong to withhold it, because we do not know the facts. Sometimes evidence must be taken in private, and there may have been justification for it in this case. I ask the Country members of the House how they can justify their action if they agree to the disposal of this Line, in view of what it has saved the people they represent. What did they come here for but to look after the interests of country residents and primary producers? As the honorable member for Batman (Mr. Brennan) has stated, they have been swallowed up by the Nationalist party. They have forgotten their own people, they have forgotten the benefits which they received as a result of the operations of this shipping Line, and they have agreed that it should be sold. The Government is paying bounties to enable the growers, including returned soldiers, to market their dried fruits overseas, and the position of the industry is still far from satisfactory. The President of the Dried Fruits Association in Melbourne, who has just returned from abroad, has stated that there is a glut in the market for dried fruits, and he advises the growers in Australia to restrict their planting in order to maintain prices. While there is this thin margin to work oh, and while there is talk of further preferences on the Home market, it is proposed to abolish this shipping Line - a course which would surely lead to freights on produce being raised. No less a sum than £2,014,000 has been paid away during the last four years in bounties. What, I ask, is the use of the Government paying bounties to the primary producers on the one hand, and then, by the disposal of its shipping Line, enabling the private shipping companies to deprive the producers of all the benefits they are receiving from those bounties? If the Line is sold it will be necessary to increase the bounties very considerably, or the producers will be no better off than they would be now if no bounties were being paid. Here is an extract from the report of the committee, which shows the difficulties under which the management has been working

Unfair press criticism and a tendency to give undue publicity to any matters adversely affecting the Commonwealth Line and its operations, exercised, it was stated, an influence on its business. Instances were quoted in evidence of the prominence given in the press to happenings of a detrimental nature on Commonwealth steamers,- whilst similar episodes on other vessels were not mentioned.

The committee itself had specific examples during its investigation. In one case a paragraph appeared in a Melbourne paper that passengers on a “ Bay “ steamer had complained that the food was poor during the voyage. The editor was asked if he could indicate the source of the information, and whether the names of the passengers were available, but a reply was received regretting that, although he had inquiry made, no such particulars could be fur. nished. In another instance a Sydney newspaper published, during the course of the committee’s investigations, a paragraph headed Federal Ships - Do they pay - May all be sold,” and then proceeded to quote, in heavy type, an opinion expressed by the Prime Minister, when a private member of Parliament, some three years previously.

The committee’s report states that for the financial years’ ended 31st March. 1925- 26-27, the Bay steamers showed a profit from the outward voyage from the United Kingdom to Australia of £72,83S, £44,309, and £64,974, respectively. On the homeward voyage from Australia to the United Kingdom, the returns for the three years under consideration were: - 1925, a loss of £26,775 ; 1926, a profit of £52,720; and in. 1927, a loss’ of £74,989. These losses are attributed to conditions prevailing at the time, and not necessarily to lack of support. Nevertheless, the very thing I have been complaining about, the doubt existing from time to time as to whether the Line would continue operations, or be disposed of, certainly had some effect upon the earnings. Possibly that effect was not sufficient to account for the entire loss, but it was certainly responsible for some of it. The profit on the voyages from the United Kingdom to Australia for the period under review amounted altogether to £182,121, while on those from Australiato the United Kingdom there was a loss for this period of £49,014.


– It should have been the other way about.


– I a I agree with the honorable member for South Sydney that the results should have been the other way about; if the people had been loyal to their own Line there would have been a different tale to tell. Fancy there beinga substantial profit made each year on the trips from the United Kingdom to Australia, and a loss on those from Australia to the United Kingdom! The Government is paying bounties to the primaryproducers, and that course is justified, but the people as a whole should, in return,, support the Commonwealth Line that isdoing so much for them. No effort is being made to reduce the overhead expenseson the lines suggested by the committee. A typist has been dismissed, and £50 a year taken .off the salary of somebody else; yet when the board was appointed there were 52 ships to manage, and for some time past there have been only seven. No commensurate reduction, however, has been made in the cost of administration. The losses on the Line for a period of four years, including balances on pending and closed voyages, total £1,882,960, which works out at £470,240 a year. Against this loss, the Line has saved approximately £2,000,000 ‘ a year to the primary producers. Therefore, Australia as a whole is £1,500,000 better off as a. result of the operations of the Commonwealth Shipping LineIn the interim report which was presented to Parliament on the 11th August, 1926, the Joint Committee of Public Accounts referred to the necessity for the drastic curtailment of the overhead expenses of the Line. Practically nothing, however, was done in the direction of economy. Evidently there was reason for the use of the pruning knife. The administration expenses, according to the committee’s report, were as follows : -

Statements placed before the committee indicated that when the board was established in September, 1923, the office staffs consisted of 169 males and 79 females with salaries totalling £64,387 per annum, whilst in February, 1926, there were 144 males and 53 females, with salaries totalling £64,298.

These figures included the board expenses, comprising the salaries of two directors < £0,500), with their private secretaries (£875), and the secretary and chief accountant (£l,00p); the salary of the third member of the board (£3,000) is charged to Cockatoo Island Dockyard - the dockyard accounts being kept distinct from those of the Shipping Line. There were also general managers in Australia and in England, each on a salary of £2,000 per annum; branch managers at Sydney (£800), Melbourne (£1,100), Brisbane (£G50), Adelaide (£800), and Fremantle (£1,000) ; and an assistant manager in London (£1,000). Other principal officers of the Line included, at both Sydney and London, a marine superintendent and an assistant, and a superintendent engineer and an assistant.

That shows that the cost of administration is high. Does anybody imagine that such a huge expense should be incurred in conducting a Line consisting of five “ Bay “ and two “ Dale “ steamers ?

Mr Maxwell:

– That is characteristic of State enterprise.


– If the Government found that the board was not giving effect to the interim recommendation of the Public Accounts Committee, the Government itself was responsible. What is the use of appointing committees to investigate such matters from a financial point of view if no steps are taken to see that their recommendations are acted upon? The committee fully realized the benefits accruing from the operations of the Line. It pointed out, on page 17 of its report -

Apart from the financial results of its actual trading operations and its war-time necessity, evidence was placed before the committee indicating that benefits, in addition to those already referred to through its influence on freights, had been derived by Australia through the establishment of the Commonwealth Line and its presence on the United Kingdom to Australia berth. By the building of the modern “ Bay “ and “ Dale “ steamers the Commonwealth Line had impelled other owners to improve their ships and services: and by the provision of experimental refrigerated chambers in its ships, it had encouraged and rendered possible the successful marketing of Australian soft and citrus fruits overseas. Goods carried in these chambers, it might be mentioned, pay no freight unless they arrive at their destina tion in good condition.

Amongst both exporters and importers the Commonwealth Line was said to enjoy a good reputation for its efficient handling of cargo, and many communications from merchants confirming these views were placed before the committee in evidence. This condition applied particularly to shipments of tea from Colombo to Australia, in which trade the Commonwealth Line took a prominent part.

Here are the recommendations -

The proposition which the committee recommends for the future of the Commonwealth Line is for the establishment in Australia, by Australians, of a company which would be free from the influence of any outside shipping combines or associations to take over from the present holders the ships comprising the existing fleet and to run the Line under the control of such company’s shareholders and directors, on business lines, with the utmost possible guaranteed support of the Government in such directions as the granting of mail contracts, the sea carriage of Government goods and material, the transport of immigrants coming to Australia under the control, or with the assistance of the Government, and in such other ways as may, from time to time, . suggest themselves.

To deal with the assistance which might reasonably be expected from the Government, it is suggested that the already generously written-down transfer value of ships forming the Commonwealth Line should bc further reduced on handing them over to the proposed company, if and when formed, on the distinct understanding that interest and depreciation should be actually paid, and not merely owed, to the Commonwealth Treasurer; that all possible assistance should be afforded by the Commonwealth Bank and its branches, as in the case of the raising of Commonwealth loans, thus materially reducing the cost of flotation; that an undertaking should be given that all business within the control of the Commonwealth Government should be given to the proposed company, and that all necessary legislation to further all or any of the above objects should be introduced as required.

I am surprised at such a recommendation. In the first place, before taking the evidence of Mr. Larkin, the committee favoured the continuance of the Line. Then it made a recommendation that the Government should reduce the capital cost df the vessels handed over to the proposed company, and give it all the Commonwealth business, such as the carrying of mails and immigrants. The committee did not think of suggesting that the Government should grant that concession to the Commonwealth Line, nor did the Government attempt to enter into an arrangement for the conveyance of mails and other goods by Commonwealth ships. Australia pays £130,000 per annum as a mail subsidy. I do not say . that a mail steamer could be run every week; but surely a vessel could be despatched bi-weekly.

Mr Atkinson:

– They were carrying mails on a poundage basis. The private companies, by mutual arrangement, at one time provided a weekly service.


– But they do not now give us a weekly service. Now that a recommendation has been made that the Line be transferred to a private com- pany, it is proposed to give the latter all the advantages that were denied to the Commonwealth Line. It i3 to have a mail contract and to be permitted to carry immigrants and government material. Had the Commonwealth Line been granted these adv.ant.ages, it would have been able to present a. much more favourable balance-sheet than it has presented in the past. Let the capital cost of the vessels be further reduced, as the committee has recommended, and the financial position of the Line would doubtless be much improved. A minority report was presented by the three members of the committee who represent the Opposition side of the House. This report is found on page 23, and it states, inter alia -

Tlie loss made by the Canadian Mercantile

Marine for tlie year ended 31st December, 1.924 (the last figures which arc available) was as follows: -

Is the Canadian Government talking of selling or abolishing its Line? No, notwithstanding the fact that it lost three times as much as the Commonwealth Line did in that year.

Mr Seabrook:

– ls that a good reason why our Line should be kept going?


– The fact that the Canadian Government Line is main tained, despite the loss shown on the balancesheet, is indicative of the great benefit thought to be derived from it by the Canadian people. Again,! Lord Inchcape stated -

The reports from Australia and India speak hopefully of crop prospects, but unfortunately there is little indication so far of improved rates of freight. . . . We are also suffering from the uneconomic competition of certain State-owned ships.

Although the company was paying a net dividend of 12 per cent., . Lord Inchcape expressed the hope that in future higher dividends would be paid. With the Commonwealth vessels out of the way they would be able to increase their profits. It is idle for the committee t”o say that the ships would be taken over by a company on the terms it mentions. No investor will put his capital into a company to purchase the Line if there is to be any restriction on its operations. The people of Canada, realizing the value of their line of steamers, are prepared to suffer, in connexion with it, losses far greater than those incurred by the Australian Commonwealth Line of Steamers. The Sydney Sun of the 10th May, 1927, contains an article by Mr. Mark B. Young, who has had considerable banking experience, in which the following striking statement appears : -

If the Bruce-Page Government abolish the Commonwealth Shipping Line, they will certainly serve the interests of the combine, but at the expense of the people of the Commonwealth. Regrets will be vain. It will not be even a return to the old days, for then there was some competition. If the Commonwealth Line goes there will be none. It was an accident of war that it was established. The producers of this country will long look in vain for another opportunity to retrieve the mistake if they supinely allow all that now stands between them and a soulless shipping monopoly to be destroyed.

I endorse those remarks. The producers of this country will suffer if the Line is disposed of.

Mr Gregory:

– Does the honorable member consider that the vessels should be placed on the British register?


– They should be Australian vessels, run under Australian conditions. The value to Australia of the Australian Commonwealth Line of Steamers has been made clear by Mr.

Russell Rayson, the Superintendent Engineer of Perfect Food Process Proprietary Limited, who states -

The frozen beef industry of Australia is in a very bad way, and the export has fallen off from millions sterling to a few hundred thousand per annum. To ship frozen beef to-day in largo quantities is not a payable proposition, as frozen beef is practically unsaleable. This condition was brought about through the Argentine educating the public to eat chilled beef.

Having had long experience in the chilled beef trade, I was engaged to carry out experiments from Australia as superintendent engineer. The first was made on the C. and D. liner Port Darwin, time, 03 days at sea. This consignment was sold within¼d. a lb. of the Argentine prime chilled. The second shipment was on the s.s. Port Auckland, of the same line, from Brisbane and Wyndham, Western Australia, 53 days at sea. This was all sold at prices from1d. to 2d. higher than frozen beef. The second-grade beef from Wyndham brought 2d. per lb. higher than the first-grade frozen; in fact, most of the frozen went into store, there being no sale. The third shipment was made on the s.s. Port Hardy, 65 clays at sea. This shipment met a glutted market, owing to many chilled beef steamers being held up by fog in the North Sea, This shipment was sold, and brought within½d. perlb. of the prime Argentine. Had this consignment been frozen, it would probably be in store now. Frozen beef was offered on the market at the time at1s. 2d. per stone8 lb.

Now, my point of view is : I made a voyage from London to Melbourne on the Moreton Bay to get first-hand knowledge of the Commonwealth ships for this trade. I came to the conclusion they were the finest ships afloat for the chilled beef trade; their decks are just what are wanted ; they have definite dates of sailing, which is essential to this trade; lastly, they have the speed, and are fitted with the brine circulation system, and are also installed with fans. For a small cost, these ships could be fitted up with the latest appliances for the chilled beef trade, and thus recapture for Australia this lost trade.

The recapture of our lost beef trade is a matter of importance to Australia.

Mr Manning:

Mr. Rayson . carried out his experimentswith the assistance of a private line of steamers, not the Commonwealth Line.


– His statement continues -

Graziers are at their wits’ end to know what to do with their cattle, and works are closed down in Queensland, as it does not pay to ship frozen beef. The Continent and Mediterranean ports arc now asking for chilled beef in place of frozen. Australia used to do a large business with the latter ports. With the Commonwealth Line of Steamers the trade could be saved. On the ship-owner’s, side chilled beef is a good freight.

It may be news to honorable members, as it was to me, that there is no market in England for frozen beef because of the demand of the people for chilled beef. I desire to emphasize that Mr. Rayson’s sample shipments took from seven to nineweeks to reach England, whereas vessels belonging to the Australian Commonwealth Line of Steamers can do the journey in from 30 to 32 days. It is therefore clear that if those vessels were utilized to carry our chilled beef to the Old Country, the results would be better than those obtained by Mr. Rayson. Honorable members should weigh Mr. Rayson’s statement that if the vessels belonging to Australian Commonwealth Line of Steamers were fitted for the carriage of chilled beef, Australia would recapture her lost beef trade.

Mr Manning:

– That is a very ambitious statement.


– In the interests of our primary producers, it would be worth while to give Mr. Rayson the opportunity to prove his contention. In the Melbourne Age of 26th October last, reference is made to the proposal to sell the Line in the following terms: -

page 1017



Keen Interest in London.

LONDON, 24th October.

Conference line circles do not disguise their keen interest in the decision to sell the Commonwealth Line. At present these circles are very anxious owing to the varying prices and reports, and desire to know the precise conditions under which the ships will bo offered. Their view is that the ships must be permitted to run on the British registry, with British rates of pay. The buyer, it is claimed, must not be bound down never to raise rates in view of the ever-mounting handling costs in Australia. They also seek the withdrawal of the condition that the buyer shall not be associated with the conference. In this connexion it is pointed out that the Commonwealth Line for several years has fixed freights and other conditions of business in conjunction with the Conference Lines.

It is clear that those opposed to the Line want it sold without any restrictions being imposed on the purchasers. The facts that I have given are sufficient to show that the Government’s attitude towards the Line has been far from satisfactory. We should have regard not only to the financial returns from the Line, but also to its value to the country. Only in that way can we be in a position to say whether the Line should, or should not, be retained. The Minister for Markets and Migration (Mr. Paterson), who, it is reported, favours the disposal of the Line, was responsible for the Paterson butter scheme, which, in- order to assist Australian dairy farmers, increased the price of butter to Australian consumers. Realizing the difficulties confronting our dairymen, and the value of the dairying industry to Australia, no strong objection has been taken to that scheme. I ask the Minister whether he has considered the effect on the primary producers of the disposal of these ships. I remind him that the Line was responsible for a reduction in the freights on butter, and ask him whether he realizes that increased freights will be inevitable if the Line is disposed of? What will be the result? If the Line is pur-‘ chased by - one of its competitors the freights will be increased immediately, and the price of butter to Australian consumers will also be raised, thus further increasing the present high cost of living. The position is becoming intolerable. The primary producers, many of whom I represent, do not wish the Government to dispose of a line of steamers which has been of great assistance to them in keeping down freights, because the other shipping companies will at once raise the freights to the detriment of the primary producers and consumers generally. What is the attitude of the members of the Country party in regard to our export meat trade in connexion with which an export bounty of £146,482 has been paid during the last four years?


– A l A large tonnage. How can Parliament, which provides bounties on certain commodities, dispense with a line of steamers which protects producers from, a shipping monopoly? Under the present system, meat exporters have some opportunity of making a financial success of their operations; but if the Shipping Combine obtains control of the Australian Commonwealth Line of Steamers, and immediately increases freights, the bounty will be valueless. It would be interesting to hear the opinions of some members of the Country party - one-half of the portfolios are held by representatives of that party - many of whom when elected to this Parliament two years ago were strongly in favour of the retention of the Line, because they admitted that it was a means of keeping down overseas freights. They do not appear to see the position in its true perspective. They regard only the profit and loss account, and pay little attention to the indirect benefit of the Line to the whole community. Apparently, the members of this party are now under the influence of the Prime Minister, and will support the preposterous proposal which the Govern.ment intend to make. I again remind honorable members of the opinion expressed by a prominent authority in the meat trade, who said that freights should be as low as possible in order to assist Australian exporters. If that is the case, why should we’ allow the Line to be acquired by the shipping combine? It is the duty of the Prime Minister to say whether the Government intends to dispose of these ships, and I hope that in his’ reply he will make the position quite clear. We have also to consider the position of fruit-growers, especially those who are drying their product for export. Year after year the Government has been assisting thousands of men, including returned soldiers, to settle on the land, many of whom have failed owing to the unsatisfactory prices obtained for their product. Fruit-growers in Australia have to compete with the growers of products from southern Europe where labour is cheaper and freights to the large consuming centres lower. What prospects have our fruitgrowers of making a success of their operations if freights are increased? They are now working on only a small margin. When in London I discussed with a leading business man the question of preference to Australian dried fruits, and was informed that if Ave supplied our product at a price at which it could compete with that from other’ countries, it would sell well. He concluded his remarks by saying “ But business is first with us “. What chance would the Australian fruit-growers have of successfully competing with fruit producers nearer to the markets of the world if freights were increased? It would be absolutely impossible. Notwithstanding the position with which fruit-growers, dairy farmers and meat exporters will be confronted, the members of the country party intend to support the proposal.


– Rather.


– I expected such a remark from the honorable member; but the members of the party which I represent can at least say that they have done their duty in placing the facts before the people.

Mr Seabrook:

– What of the losses that have been incurred?


– The honorable member appears to overlook the fact that the Line has been of great indirect benefit to the people, and that if it is sold, development will be retarded and our immigration policy most seriously affected. The Prime Minister has; always been in favour of private enterprise as against govermental control. The right honorable gentleman favored a similar proposal in 1921, and the action which he subsequently took with regard to the sale of the Commonwealth ships under certain conditions, when there was some difference between the members of the Nationalist party and the members of the Country party, showed that his opinion was then unchanged. At that time some members of the Country party were still on the brink, but now they have gone right over the precipice. The members of that party once suggested that the ships of the Australian Commonwealth Line should be sold to a company which would compete with the shipping companies, but they do not make any such stipulation to-day. Even if the vessels are not purchased by the combine, it will see that they are acquired by some company, which will enter into an arrangement with it whereby they will virtually be under its control. What is to become of our developmental policy, and our migration scheme if primary products cannot be carried from Australia to t,he home markets at a reasonable rate ? As the step which the Government proposes to take will be disastrous to th future welfare of this country, I confidently submit the motion, trusting that it will receive the support of all honorable members who wish this great Commonwealth to be developed, and its industries to expand.

Prime Minister and Minister for External Affairs · Flinders · NAT

– At the beginning of his speech the Leader of the Opposition (Mr. Charlton), referring to his action in submitting a motion of want of confidence, suggested that I might point out that there was no need for such a motion at the present juncture. Having heard the speech of the honorable member, I say that he would have done much better had he waited for the Government to announce its policy in regard to the Australian Commonwealth Line of Steamers. Then, if he had seen fit, he could have moved a motion of censure on the Government, because of the course proposed to be followed. The discussion of such a motion would have been of greater advantage to the people than is possible when a motion of want of confidence in the Government is being debated. We all recognize that overseas transport is a vital problem to Australia. It is imperative and essential that Australia should have the most efficient service at the lowest possible freights for the conveyance of its produce to overseas markets. The Leader of the Opposition regards the running of a governmentcontrolled line of steamers as the only means of achieving such a result. To him government enterprise is a fetish, and the solution of every trouble that affects the community. I ask him not to approach the problem of marketing Australia’s produce overseas in the belief that government enterprise is its only solution. He is correct in saying that from time to time I have expressed my opposition to government enterprise and have advocated private enterprise. I believe that private individuals can conduct an industry more efficiently than can a Government. But I have not made a fetish of my belief. Wherever I have found the people of Australia being exploited by private enterprise, I have been willing to employ government enterprise to save them from that exploitation. The present Government is responsible for the Commonwealth Oil Refineries. The honorable member will recollect the sharp conflict of opinion some time ago between the Government and certain oil interests in Australia. The Government believes that the most efficient way to conduct industry is by private enterprise; but I can assure the honorable member that no fetish of ours in regard to private enterprise will deter us from doing our best to safeguard the interests of the people when we are convinced that government enterprise is the best way in which to ensure the most efficient shipping service at the lowest possible freights, or to prevent the people from being exploited by private enterprise. I appeal to the Leader of the Opposition to follow our example, and not be bound by the doctrine that government enterprise is the solution of every problem. I ask him to realize with others who have sought to apply it in various directions, that it has failed, and that it is time he changed his views, and admitted that government enterprise has not proved a solution for every problem that faces a country. If he does so I am sure he will have the concurrence of the honorable member for Dalley (Mr. Theodore). There are many instances of the failure of government enterprise. Many State Governments have taken direct action in regard to matters of vital importance to the people. One matter of very great importance is the supply of meat to the people. The Queensland Government sought to safeguard its people by the purchase of cattle stations, just as the Leader of the Opposition suggests that the interests of the people can be safeguarded by the utilization of a government line of steamers. But after running its cattle stations for some years, the Queensland Labour Government has come to the conclusion that it is not achieving the object it had in view, and the seventeen stations which it purchased are now up for sale. Between seven and ten - I am not quite sure of the number - have already been sold. I understand that these cattle stations showed a loss of £830,000 from 1916 to 1926, and that the indebtedness of the State Treasury in regard to them is £1,367,000. I do not quote this instance of the failure of government enterprise in any party spirit, or for the purpose of scoring a political advantage; I mention it to show that many wellmeaning people with a great faith in the idea that government enterprise is the solution of every problem affecting the people of Australia, and an effective weapon for the protection of the interests of the people, have had the courage and frankness to recede from that position. I could mention many other examples of the kind in Australia; for instance, the State saw-mills at Craven and Gloucester, and the State trawling fleet of New South Wales; but a more nearly parallel example to the Australian Commonwealth Shipping Line is the State shipping enterprise of Tasmania. It is interesting to note that the State Shipping Line, of Tasmania was instituted by a Nationalist Government, but it was soon realized that it was not achieving the object in view, and in the end it was sold by a Labour Government. Many other examples could be quoted to show that men have changed their views as to the best methods to be adopted for the solution of the problems of transport, and have admitted that the solution is not inevitably to be found on the lines of government enterprise. I have already told the Leader of the Opposition that when I believe it to be in the interests of the people of Australia I am prepared to run an enterprise under government control. As a matter of fact, the Government, as I have already said, is doing this in the case of the Commonwealth Oil Refineries. At the same time I ask the honorable member, when he is convinced that government enterprise is not the solution of every problem, to admit that it might be advantageous to the people to employ private enterprise. We are all agreed that the question raised by the honorable member in* his motion is a vital one, and one which should be considered from every angle, and in order that the House may determine how best to deal with it, I think it necessary to give a brief history of the Australian Commonwealth Shipping Line and to show exactly the part it has played in the past in the development of Australia. We all recognize as a piece of statesmanship the action of the right honorable member- for North Sydney (Mr. Hughes) in acquiring a number of ships during the period of the war for the conveyance of Australian foodstuffs to the mother country, because at that time, owing to the activity of enemy submarines, there was a great shortage of Allied shipping. Moreover, Australia was at a disadvantage as compared with the Argentine, owing to its greater distance from Great Britain. During the same period we also acquired a number of ex-enemy ships, which, too, for a time, earned considerable profits. The second phase of the Commonwealth’s shipping activities opened with the cessation of hostilities. There was then an extraordinarily large surplus of-, world shipping, because during the war every nation had been pressing on with its ship-building programme. All shipbuilding yards were producing to the maximum capacity. Great Britain, being pre-eminently the leading ship-building nation in the world, headed the list with surplus tonnage. Because of the tremendous output in ships, when war ceased there came the inevitable depreciation in shipping values. In 1921 the suggestion was made in this Parliament that the Commonwealth Line should be sold, and consideration was given to that proposal by Cabinet. I should not have mentioned it at this stage but for the fact that the Leader of the Opposition referred to a speech which I then made as a private member. He clearly inferred” that I was out of sympathy with the Line, and that I was desirous of taking such action as would hamper its operations and prevent it from being successful. On the occasion referred to, my purpose in directing attention to the surplus of world tonnage, and the inevitable depreciation that must take place, was to impress on Parliament that if we could dispose of the Commonwealth Government ships, we should be able to show a very large profit on the transaction, as the Line, up to then, had been profitable. I further suggested that the position of Australia might be met if, in any negotiations for the sale of’ the Line, we took the necessary precautions with regard to over-seas freight. However, Parliament did not consider that the wisest course. Parliament determined to continue the Line. Not long after I had made the speech referred to by the honorable gentleman, I joined the Nationalist Government as Treasurer.

It has been suggested, in view of the importance attached to that speech, that the decision of the Government in 1923 to place the Line under independent control was an act of policy for which I, as Prime Minister, was responsible. I wish io make it perfectly clear that that course had been determined by the preceding government, of which I had been a member. In. tlie circumstances the honorable gentleman was hardly fair to me when he endeavoured to persuade honorable members that the change in the administration of the Line was an act of policy and due to my influence as head of the Government. We come now to the constitution of the Commonwealth Shipping Board. The board was appointed because it was felt that the Line would operate more effectively if it were placed under independent management. And because of the suggestion made by the Leader of the Opposition that I have never given the Line a fair chance. I remind him that when it was handed over to the board the value of the ships was written clown substantially. Indeed, at the time :.’ie of the charges made against tlie Government was, not that the values had not been written down far enough, but that they had been written down too drastically, in order to emphasize the losses of the Line and bring it into contempt. Actually, the intention of the Government was to give the Line a chance to succeed. Prices received subsequently from the sale of the ships completely refuted the charge that values had been written down too far. The Line was given every possible chance to succeed. An analysis of accounts on page 6 of the report of the Joint Committee of Public Accounts shows losses amounting to £1,225,000 in connexion with the operations of the Austral ships, the sailers, the “D” and “E” class vessels, the ex-enemy ships for a limited period, and the Bay liners up to the date when they were taken over by the Shipping Board; but the ex-enemy ships, whilst under the administration of the Prime Minister’s Department, showed a profit of £3,673,000, so that, at the date of the transfer to the board, the profit on the Commonwealth’s shipping activities was approximately £2,44S,000. This has to be taken into account as against the amount which was written off to bring the ships down to their then market value. At the date of transfer the book value of the ships was £12,716,000, and the original cost was £14,800,000. During the period prior to the transfer, values had been written down by about £2,100,000, and when the ships were transferred to the board, values were further written down to £4,718,000.

Mr.Anstey. - Did we have to buy the ex-enemy ships?

Mr.BRUCE. - No ; but we had to bring them into account at the time. Altogether the value of the ships had been written down by about £8,000,000. This might, I think, be described as deferred depreciation, and we should bear in mind the £2,500,000 by which the profits exceeded losses over the whole period.

Mr.G.Francis. - Those were voyage profits.


– Yes ; but they cover the point raised by the honorable member for Bourke (Mr. Anstey). The ships which were handed over to the board were unsuitable, and it was definitely understood that they were to be sold. The Australs were becoming old, the “D” and “E” vessels were not suited to the trade. Forty-seven of the ships which were handed over had been sold. I do not think that any person would cavil at that; it was to the advantage of the Line. The present strength of the fleet is seven modern vessels - five “ Bay “ Liners and two “Dales.” The transfer value of the 47 steamers to which I have referred was £1,318,150. They realized £1,103,172. A fact which must be borne in mind is that the Commonwealth has not lost the amount by which the vessels werewritten down. Formerly, there was an asset to off-set against a debt owed by the Commonwealth; that debt still exists, but there is no asset. The result is that an amount in the vicinity of £250,000 has to be found annually. An examination must be made of the results from the time that an independent board assumed control of the operations of the Line, in order to ascertain whether losses may be avoided in future, and what action

The board commenced to function on the 1st September, 1923. The losses carried to the balance-sheet from that date are as follow : - 1st September, 1923, to 31st March, 1924 (seven months),£ 245,474. 1st April, 1924, to 31st March, 1925,. £593,879. 1st April, 1925, to 31st March, 1926, £503,076. 1st April, 1920, to 31st March, 1927,. £593,572. making a total of £1,930,000. The honorable member for Dalley (Mr. Theodore) has asked when the figures for thepresent year will be available. They have been in the hands of the AuditorGeneral for some time. He has advised the Government of the completion of his audit, and the posting of the figures. Type-written copies, which do not vary from those that have been passed by theAuditorGeneral, will be laid on thetable of the House to-day. The only variation from the figures set out in the report of the PublicAccounts Committee is that the loss for the present year has been discovered tohave been £593,000 instead of £575,000. Those results were arrived at after allowance had been made for depreciation. On the assumption that immediately after the writing downthere was. no necessity to take depreciation into consideration, no allowance under that head was made with respect to the seven months which ended on the 31st March, 1924. The figures for subsequent years are as follow : -

Year ended 31st March, 1925, £180,798, representing 4.46 per cent.

Year ended 31st March, 1926, £179,584, representing 5.07 per cent.

Year ended 31st March, 1927, £172,847, representing 5.60 per cent.

I point out to honorable members that there is a fractional difference between thefigures set out in the report of the PublicAccounts Committee and those that appear in the report of the Auditor-General ; but it is so slight that it is not necessary for honorable members to attempt their reconciliation. The question that has to be considered is, whether the depreciation allowance has been sufficient to keep the fleet upon a fair competitive basis, having regard to the period when replacement will be necessary. That is a question which can be answered only by a shipping expert. No complaint can be made respecting the amount of depreciation for the first two years ; but it may be doubted whether a sufficient amount has been allowed for the financial year which ended on the 31st March last. There can be no denying the fact that it will have to be increased in the immediate future. The most significant figures, and- those to which the greatest attention should be paid when considering the future of the Line, are those that relate to the voyage results. All unsuitable tonnage has been disposed of. The “ Dales “ and the *’ Bays “ are eminently suited to the particular trade in which they engage, and it would be difficult to improve upon them. Taking no account of depreciation or interest, the “ Bays “ and the “ Dales “ lost during last” year a sum of something like £106,000. There is also in the accounts a loss, of £18,000. That would appear to relate to some ex-enemy vessels which were running in the early part of the financial year. It must be remembered that certain of the losses of the Line represent a loss of capital which has not been replaced. The proceeds of the sale of the 47 vessels have been used as working capital, to bridge the gap caused by the losses that have been incurred. If all the losses had had to be brought to account that sum would long ago have been exhausted and Parliament would have been called upon to vote additional capital. The interest owing to the Treasurer amounts to £754,000. That sum can be deducted from the losses. Certain reserves also have been created. The amount represented by depreciation has not had to be found in hard cash.

Mr Hughes:

– By what particular class of vessel was the loss incurred?


– The voyage account for the year 1926-27 applies to the “Bay” and the “ Dale “ vessels, and certain ex-enemy steamers. It shows a loss of £106,000. The capital account shows that the selling price of the steamers sold was £1,043,210, and that the expenses connected with the sale amounted to £286,135, which left £757,075 as the net amount of cash available for operating the fleet in commission. The amount absorbed by those steamers was £628,897, leaving a balance of £128,178. I quote those figures to stress the point that the Line cannot continue on the basis of the last three years. The working capital has been exhausted. The proceeds of the sale of surplus assets are on the point of exhaustion. There are no funds upon which the Line- can draw ;.. and if it is to continue, this Parliament will have to vote it a further sum for working capital. That may represent a considerable amount, because it will need to embrace floating capital to cover running costs, capital for replacements which must be made as time goes on, and provision for additional tonnage. It must be obvious to every honorable member that if we are to have a Government-owned line of steamers, there must be a much bigger unit than that which at present exists. In the past, the operation of exceptional circumstances made this small unit of very much greater value than it will be in the future. We have also to consider the reason for tlie losses that have occurred. I am unable to accept the suggestion of the Leader of the Opposition (Mr. Charlton) that the Line has lost a substantial sum because of any action of mine. I do not wish to traverse all the ground that the- Leader of the Opposition has covered, but he suggested that my interference in an industrial question had a great and far-reaching effect upon the fortunes of the Line. I suggest that that episode had not the slightest influence upon the Line, unless it was in the direction of good. As that is a strongly controversial question, I do not think that, in the consideration of the Commonwealth Line, it is advisable for me to follow it very far. The factors set out in the report of the Public Accounts Committee as having adversely affected the Line have relation to the 47 vessels that have already been sold, should, I think, be left out of account altogether, because we must admit that they were unsuited to the Australian trade, and consequently placed a heavy burden on the Line. Therefore, we must confine our consideration to the “ Bay “ and “ Dale “ classes, which consist of modern and uptodate vessels. In regard to these vessels the first factor relates to the difficulty of obtaining cargo due to industrial trouble. Again I do not wish to touch unnecessarily upon controversial questions, but we all recognize that the Commonwealth Line, a unit which is owned by the people of this country, has received extraordinarily bad treatment from the Seamen’s Union. [Debate interrupted under Standing Order 119. Ordered - That all other business be postponed until after the motion of want of confidence now before the House is disposed of.] One of the contributing factors to the non-success of the Line has certainly been the industrial trouble with which it has constantly been faced. We might hope for a betterment of the position in the future, but, unfortunately, up to the present we have seen few signs of a different attitude or spirit on the part of the seamen towards the Commonwealth Line. The second factor relates to adverse press criticism, and we have to recognize that even if this House were unanimous respecting the desirability of continuing the Line under direct government control, there would inevitably be adverse press criticism. Many people in Australia do not subscribe to government enterprise, and any attempt to stifle the public expression of their views would be an interference with one of our greatest traditions, the liberty of the press. The third factor relates to the additional cost of running and provisioning vessels under Australian articles, amounting in all to f 127,268, or nearly equivalent to interest at 5 per cent. on the transfer value of the “ Bay “ steamers. The position is that the cost of running the Line under Australian conditions is much higher than that of running competitive British Lines.


– That applies to our railways, also.


– The Australian railways do not compete with the railways of other countries. We have to face these facts in arriving at a solution of the problem. The Leader of the Opposition quoted figures as indicating certain handicaps under which the Line was suffering and which, he said, might explain the losses. I entirely agree with much that he said, but, in addition, we have to consider whether in the interests of the people as a whole we are justified in incurring these additional losses, which have certainly been a contributing cause to the non-success of the Line. It is estimated by the committee that the additional cost of running the seven steamers now in commission as compared with a similar number of vessels of the same class on British articles, would approximate £220,000 per annum. That is a substantial increase, and must be taken into consideration when deciding what action we shall take. Another factor against the success of the Line is the uneconomical conditions under which the oversea shipping trade of the Commonwealth is conducted, it being stated that there is more than double the tonnage on the berth from the United Kingdom to Australia than is necessary to carry the cargo offering, and in consequence the ships rarely carry full cargoes. A great number of people in Australia fail to recognize the significance of that. If our ships are running without full cargoes, it is inevittable, unless with a freight war tending to drive shipping off our coast - that high freights must be charged. In the interests of the Commonwealth, the ships should be running with full cargoes, and maintained on a well-organized basis, since by that means only will freights be lowered. Another factor to be considered is the administrative expenditure, and the Leader of the Opposition has dealt with that at considerable length. Those expenses the’ committee found to be high, and there would appear to be considerable justification for the suggestion that they should be substantially reduced. I entirely decline to accept the charge made by the Leader of the Opposition that I am responsible for the administration. At the opening of his speech he said that my interference with the Line had caused it to be transferred from government control to that of an independent board; but later he took an entirely different view by asking why, if the administrative expenses were too high, the Government did not step in and reduce them. I am afraid that the Leader of the Opposition cannot have it both ways. We have to consider what are the prospects of the Line, and what can be done to reduce the existing administrative expenses of £90,000. It is quite evident that even had the management of the Line been changed from the most inefficient to the most efficient, it would have done extraordinarily well to reduce expenses by 25 per cent. ; but any such reduction, although an amazing performance, would bc no solution of the problem, and would not ensure a decreased loss in the future. It is obvious that if the Line continues, there must be a substantial loss, and, in coming to a decision, we have to consider everything, including additional wages, capital and interest. We can gather a little information from other nations and their experience of government shipping enterprise since the war. The fleet owned by the Government of the United States of America offers us an excellent example, because its losses have been colossal, amounting to over ?600,000,000 The establishment of the Commonwealth Line was a war necessity, and if we have made losses, other nations have made many more. We should recognize that, and not decry Australia and its efforts so much as many of us do now. What is more significant and serious in America is that the proportion of cargoes carried has been substantially reduced year by year, despite the fact that Americans do all in their power to keep their trade for their own people. In 1921 their governmentcontrolled fleet was carrying 49 per cent, of America’s foreign commerce; in 1922, 48 per cent. ; in 1924, 41 per cent. ; in 1925, 37 per cent. ; and in 1926, 25 per cent. Most of us are agreed that any action we take must as far as possible benefit the producers and the people of Australia as a whole, but by continuing the Line it is not altogether clear that we shall be doing that. If the Line were employing a considerable number of Australian seamen, and its operations were of inestimable value to Australia, there would be some reason for its continuance even at a loss, but the committee’s report is to the contrary. Prom it we find that out of a total complement of 1,034 sea-going personnel, 514 are domiciled in Australia, and 520 in the United Kingdom. An examination of the figures shows that the difference is even greater than at first appears. There are 27 apprentices, all domiciled in Australia. Of the masters, five are domiciled in Australia and two in the United Kingdom, and of the officers 57 are domiciled in Australia and nineteen in the United Kingdom. Coming to the deck complement, we find that in almost every section the majority is domiciled in the United Kingdom. To give two typical examples, of the deck complement 85 are domiciled in Australia and 140 in the United Kingdom, and of the victualling complement 173 are domiciled in Australia and two in the United Kingdom. We are to-day paying ?220,000 a year more than is necessary in order to keep those ships on the Australian register, with the basic idea of building up an Australian mercantile marine. But die figures I have quoted show that that disbursement is really for the benefit of a very limited number of seamen, and is of no benefit to the primary producer. The Leader of the Opposition almost burst into tears when he was referring to the primary producers; if they are the people about whom we are mainly concerned, it is perfectly obvious that the primary producer will be more greatly advantaged if we get on to a true economic basis and save that ?220,000 a year. It is worthy of grave consideration whether Australia is receiving any real benefit from that payment, which I believe is helping very little towards the building up of an Australian mercantile marine. We are told that the Commonwealth ships operating under Australian conditions are of tremendous advantage in the interstate trade. There have been one or two instances in which the Common.wealth Line steamers have been of assistance in that direction, but they certainly do not offer a solution of the problem presented to us by the interstate trade. That is generally recognized. The Navigation Royal Commission went fully into the subject, and the minority report, signed by Senators Duncan and Elliott, stated -

It is not expected! that the oversea vessels will enter largely into the cargo carrying side of the industry, at least in thu more thickly populated centres. They did not do so before the inauguration of the Navigation Act, and they have no desire to do so to-day.

Mr. Anstey in a supplementary memorandum said

Overseas ships have not, except in isolated instances, carried interstate cargo on the Australian coast for many years. Only one overseas ship during twenty years carried interstate cargo out of Tasmania. That was in 1921 when the Red Bridge lifted 115 tons of timber for Fremantle. Sir Owen Cox, representing overseas ship-owners, told the Sea Carriage Committee of 1920 that “ oversea vessels have never catered for the coastal cargo trade and would not do so.” The representatives of the timber industry told the commission that the industry had not chartered an oversea vessel for coastal trade during the last twenty years. The chartered oversea vessels for local trade was a thing of the past, many years prior to the Navigation Act. The regular oversea liners never did carry interstate cargo. It would interfere too much with the loading or unloading of cargoes to or from oversea ports. It was not a paying proposition, and so they left it alone.

We cannot justify this Line either For the sake of the Australian mercantile marine, or as a means of solving the interstate shipping problem, which is one of the most difficult we have to face.

I come now to the benefits that the Line has conferred, and the question whether it can be relied upon to continue those benefits, and whether because if something it may do in future, Ave shall be justified in paying the large amounts which must be expended, and incurring the large losses that will be inevitable. For my own part, I admit that the Line has been of considerable advantage in improving the tonnage trading to Australia. It has accelerated an improvement that was bound to come, rather than brought -about a change which, without it, could have been indefinitely avoided. Just after the war the great surplus of tonnage was mainly British, and the shipping companies were not inclined to incur large expense in the creation of new tonnage that would possibly be more suitable for the Australian trade and more advantageous to our exporters. The Commonwealth Shipping Line, by building the “ Dale “ ships, and accelerating the pace of the “ Bay “ steamers, did a great deal to stimulate private companies to undertake progressive building programmes more rapidly than they otherwise would have done. But the “ Dale “ and “ Bay “ ships have served their purpose; their day is almost past, if the Line is to be placed on the most modern basis. “We are approaching the period of the Diesel engine, and from that we shall pass on to the engine driven by super-heated steam. If the stimulus towards improvement is to come from the Government we shall have to build a large number of modern vessels at once in order to put the Commonwealth Line “ahead of the rest of the shipping world. There is no necessity for us to do that, because a large number of other companies are building extra ships and placing them on the Australian route. Those competitors disappeared for a time during and after the war, but they are beginning to return, and to increase, and I quote the following illustrative figures: -

In addition to the new ships which are being built in Great Britain, these competing companies are moving forward and improving the types of their vessels. I agree with the honorable members who at times have said that shipping companies are reluctant to expedite the improvement and modernization of their services. They hold to their existing fleets as long as they economically can in order to avoid the heavy depreciation that changes involve. But the Diesel engine is being adopted almost the world over for the cargo trade, and, although the very heavy expenditure involved will be serious for some companies, they cannot avoid it. Similarly, when the day of the super-heated steam engine comes, the shipping companies will be obliged to fall into line. It would be very difficult for the Commonwealth Shipping Line to be the pioneer of all improvements and in the vanguard of progress all the time in order to move the private companies to provide the modern tonnage Ave require, and I believe that such action is rendered unnecessary by the increasing competition all over the world as shipping conditions gradually return to normal..

What benefit have the people of -the Commonwealth received from this Government Shipping Line ? What influence has it had in reducing freights or preventing their rise ? I shall not deny that it has done a certain amount to effect a reduction of freights and prevent rises, but the Leader of the Opposition rated the attainments of the Line too high. I have already alluded to the tremendous surplus of tonnage after the war; many of the ships had been built under war conditions at very high prices, and as prices fell those vessels-had to bear a very heavy depreciation. Many ships were coming to Australia - probably twice as many as we needed. Such a hopelessly uneconomic condition inevitably tended to increase freights. In ordinary circumstances, a trade war would have been waged amongst the British companies, but postwar conditions were such that they could not afford to fight, so they endeavoured amalgamate and arrange for the elimination of the surplus tonnage so that the business might gradually be placed on a more profitable basis. During that period the Commonwealth Government Line came on the scene, and it did much to force the private companies to reduce freights faster than they otherwise would have done. But when we have said that we have said all. The Leader of the Opposition conveyed the impression that this Line had reduced freights repeatedly over a number of years, and that the private companies had not done so. In only one instance was the reduction by the Commonwealth Line not common to all the shipping companies within the combine. If the honorable gentleman had merely expressed his belief that the Commonwealth Line had done something to check the rise in freights and effect, n reduction, I would have agreed with him : but when he gave the Line credit for having been wholly instrumental in keeping down freights between Australia and Europe, he fatally overstated his cas<-. According to the report of the Public Accounts Committee, the “ Bay” and “Dale” liners carry 7 per cent, of the total inward and outward cargo. I was inclined to accept that estimate, but I have just received from the Commonwealth Statistician some figures that are rather startling. He says that of the total imports into Australia from all countries, 7.13 per cent, was carried by vessels on the Australian register, and the corresponding proportion of outward cargo, carried by vessels on the Australian register was 7.82 per cent. These figures refer to the year 1925-“26. A special analysis of the figures of all cargo shipped to the United Kingdom during 1926-27 shows that about 2.7 per cent, was carried by the “ Bay “ and. “ Dale “ boats. These figures, of course, include all charter cargoes.

Apparently the 7 per cent, mentioned by the committee included some other vessels which did not belong to the Commonwealth Line. There may have been charters that were actually on the Australian register. But even if the Line carried 7 per cent, of the total cargo on the route, we could hardly suppose that it could dictate freights and fares as the Leader of the Opposition said it did. He proceeded to say that on 4,000,000 tons of cargo the people of Australia had effected a saving of 10s, per ton, or a total of £2,000,000 a year, through the instrumentality of the Line. As I have already stated, the Line has exerted an influence in reducing freights, but the effect of the post-war conditions on shipping which I have outlined would certainly have resulted. in freight reductions even if the Line had not been in existence. The Leader of the Opposition mentioned wheat, and quoted figures for 1919-20, the just-post-war period, indicating how well the Commonwealth Line had done. The honorable member would have been fairer had he brought his figures up to date. The. Commonwealth Line carries approximately 1.2 per cent of the wheat exported from Australia, therefore that commodity does not enter into the question. The ships of all countries of the world are carrying our wheat, the carriage of which is usually negotiated by charter. That procedure keeps wheat freights within reasonable bounds, and the position would not be improved even if the Commonwealth Line extended its wheat-carrying operations. Similar remarks apply to the carriage of wool, of which the Commonwealth Line handles only about 3 per cent. *When it is remembered that wheat ‘and wool, according to statistics available, represent approximately .45 per cent, of the total Australian exports, it must be realized that those two products cannot enter the picture when we are considering the future of the Commonwealth Line of steamships. We may rest assured that international competition will stabilize freights on those two commodities. Undoubtedly, the Commonwealth Line has done something to secure the establish- ment of better rates and the stabilizing of freights, but it has done only a limited amount of good, and that under very favorable circumstances. Our duty now is to consider the future. British shipping companies have arrived at the stage when they have dealt with the tremendous depreciations which had to be faced to meet the war-time costs. There has been a progressive decrease in freight rates, and the establishment of a better organization, which now enables British shipping companies to fight strenuously for business, lt is evident that competition in shipping circles is growing. The Scandinavian countries, Germany, and Italy, are making determined efforts to consolidate and extend their mercantile marine activities, and are causing Britain a considerable amount of anxiety. We have to consider whether, in the circumstances, it is essential for us to maintain and extend the Commonwealth Line in order, as has been suggested, to safeguard the people of Australia. 1 suggest that it is not, and 1 shall give my reasons. I have dealt with the position as it affects the export of our staple products, wheat and wool, and am now dealing with refrigerated tonnage, which mainly concerns Australia at present. Other commodities may be left to look after themselves, as we can obtain for them all the tonnage that we need. The Commonwealth Government has given the subject a great amount of consideration, and has realized that, if the Line is continued, it will impose on the people of Australia an annual obligation of £500,000, which amount must necessarily increase if we contemplate the extension of the Line, particularly as freight now tends to decrease. At present sufficient refrigerated tonnage is available. Should it at any time be necessary to safeguard our position the annual saving of £500,000 could be utilized for the purpose. My impression is that there is not yet the slightest necessity to pay anybody.

Mr Scullin:

– What is meant by £500,000 for refrigerated tonnage.


– By conserving that money we are not left at the absolute mercy of the shipping companies. Suppose we found that we were being exploited in freights on refrigerated tonnage, we should have available an amount by which we could subsidize or take any action we thought fit in order to safeguard the position. I remind honorable members that things are moving very rapidly in the shipping industry. Some time ago proposals were submitted to the Government for the building of larger and faster ships for service on the Australian route. Those proposals were fully considered, and I said then, and repeat now, that if any one will submit to this Government a proposal for an improved shipping service on a basis satisfactory to the Government, and prove that he has adequate finance behind it, the Government will be prepared to favorably consider letting its mail contracts to that company, and assist it in every practical manner. Unfortunately, the money for the scheme which was submitted could not be found, and it was suggested that the Commonwealth Government should find a great portion of the money. To this suggestion I was unable to agree.

The Government, after most exhaustive consideration, considers that the proper and wise course is to dispose of the Australian Commonwealth Line of « Steamers, if a reasonable price is offered. Such a step would be subject to the conditions that the Line is maintained on an Empire register, and that the purchaser undertakes, to maintain, for a period of ten years, at least equivalent services in ‘ regard to passenger, cargo, and refrigerated space. In considering any tender that might be received, preference would be given to any proposition having Australian finance behind it, as suggested by the committee. The Government also welcomes the suggestion of co-operation that is contained in the report of the committee. It approves of the idea, that the project should “ receive the support, both in money and influence, of all associations of producers, both primary and secondary, as well as of the individual members of all Chambers of Commerce, and of Manufactures, industrial and other unions and associations, and of importers and exporters throughout Australia.” The Government, when considering tenders, would pay particular attention to the provision of refrigerated space in substitution for the service at present provided by the Australian >

Commonwealth Line of Steamers, and will give preference to any proposals for the safeguarding of the interests of Australian importers aud exporters in regard to freight and passenger rates. Those are the terms on which the Government is prepared to sell, the rigid condition being that the Line shall have an Empire register. On a previous occasion the Government offered the Line subject to certain conditions, which were not accepted. We now feel that possibly a number of interests would be prepared to make acceptable offers, and to give a service which would be not merely the equivalent of the present one, but very much improved aud widened. It appears to us desirable to leave it to tenderers to make such an offer as they may see fit. It is much better that the tenderers should be invited to submit to the Government proposals for the service they are prepared to give, than that we should stipulate the service we require; but the absolute minimum acceptable is an equivalent of the existing service. As I said previously, preference would certainly be given to the tenderer who offered the best service, particularly in regard to refrigerated tonnage, and who made proposals in which the interests of the producers of Australia were expressly and definitely safeguarded. I regret that the Leader of the Opposition (Mr. Charlton) had not an opportunity to hear the Government’s proposals before making his speech upon what he terms a motion of want of confidence. I ask honorable members to consider this matter in the interests of the people of Australia, with a view to ensuring what is absolutely vital to us, the best, most efficient, and cheapest method of transport overseas. If the problem is viewed from that angle, I am certain that it will be recognized that the Government’s proposals are those best calculated to suit our requirements, and honorable members will vote unhesitatingly against the motion of the Leader of the Opposition.


.- I congratulate the Leader of the Opposition on having brought this motion forward, because it has had the effect of extracting from the Prime Minister a plain declaration of the policy of the Government in regard to this shipping line.

This Parliament and the Australian people have every right to be informed by the Government of the decision which was conveyed to its supporters at the party meeting last week. In view of the want of frankness on the part of the Government the Leader of the Opposition is to be complimented on presenting this motion. Just prior to the last federal elections a secret agreement, or understanding, was entered into between the Nationalist party of Australia, with Mr. S. M. Bruce at its head, and the big shipping interests on the other side of the world. A very short time after the making of that agreement the people of Australia were able to see its results, the first of which was the British shipping strike, and the laying up of ships as a consequence in Australia on the eve of the election. The Nationalists, with a cry of “ Law and Order,” and by declaring their determination to stop industrial strife, were able to snatch a further three years’ life in office. The British shipping companies having rendered a service to the Nationalists by creating the shipping stoppage, it became necessary for the Prime Minister (“Mr. Bruce) and his Nationalist supporters to pay the debt of gratitude which they owed for that service. The argreement received the support of the wealthy people of our country, and it was not long before we had evidence of the manner in which the Government set out to repay those who had assisted it. First of all we find that relief has been afforded to the wealthy pastoralists by a limitation of the land tax. We see further that the Commonwealth Bank has been sacrified and strangled in order to play into the hands, and add to the profits of the huge banking corporations of this country. We also remember the un-Australian policy of the present Nationalist Government when it set out to placate the wealthy shipping interests of Britain by letting the large and valuable contracts for the construction of two cruisers to shipbuilding firms in the Old Country. Now we have the Government’s final proposal To sacrifice the Commonwealth Line of ships. The Prime Minister is at the head of a party which calls itself “ The Nationalist party.” There is nothing whatever of a national character about the party or its leaders. It coined its name at a time when Australia was in the throes of war. The Nationalist supporters cried from the housetops that Australia, as a result of its participation in the war, had attained to nationhood. They prided themselves on the fact that the Australian soldiers were the best-equipped soldiers in the war, and were the best fighters. They said that the country was engaged in a war the successful conclusion of which would open up for the people of Australia a. wonderful new era of development and prosperity. But all Australia has got out of the war is a government, headed by the great imperialist, the man who asked the Australian people to think imperially, and who is now asking them to act in furtherance of wealthy imperial interests at the expense of our young nation. The Australian people, at the earliest opportunity, will show in no unmistakable manner their disapproval of the imperialistic policy enunciated by the Prime Minister. It appears that the Prime Minister now considers this country unable to build its own battleships, its own cruisers, and its own submarines, and unable to manufacture even the ordinary commercial products from our raw materials which it requires. He would have us continue to be the wood and water joeys of Great Britain, and is even taking the necessary steps to prevent Australia from having a national shipping line. I consider it my duty, as a member of the Joint Committee of Public Accounts, to address myself to this most important question. The committee, in its inquiry, examined 30 witnesses, who gave evidence relating to the activities of the Line. Of these, 29 were examined before the committee presented its interim report. The last witness was the chairman of the Shipping Board, who has been associated with the Commonwealth Shipping Line since its inception, and has oft times spoken of the benefits to Australia through the existence of the Commonwealth Line. In the interim report presented to the House on 10th August of last year, the committee made certain unanimous recommendations. Among other things, the report stated -

In- view, however, of emphatic evidence placed before the committee that, owing to the uncertainty which exists concerning the continuance of the Australian Commonwealth Line of Steamers, its business has been adversely affected the committee has deemed it desirable to submit to Parliament, prior to the approaching recess, this interim report.

The report goes on to say -

To arrive at a decision, apart from the question of Government policy, as to whether the Commonwealth Government Line should be continued, there must be considered what benefits have accrued to the country by “the establishment of the Line, and wheher such benefits have outweighed any financial loss incurred as a result of its trading operations The evidence so far placed before the committee indicates that not only has the Commonwealth Line been directly responsible for actual reductions in freights, but that the presence of the Line has exerted a material restraining influence against proposed increases. Whilst it is difficult, in fact, almost impossible, owing to the many factors to be considered, to indicate in figures the actual gain to Australia by such action, it appears to the committee, from the evidence already heard, that the shippers and primary producers of Australia have derived much bene; fit from the establishment of the Commonwealth Line of Steamers. The committee, therefore, recommends that, in the interests of Australia, the Line be continued.

That recommendation was a unanimous one, and it was signed by the ex-member for Warringah (Sir Granville Ryrie). This report was very distasteful to the Prime Minister, who had repeatedly expressed his determination to get rid of the Line, and it did not fit in with the views of Lord Inchcape, and the representatives of the wealthy shipping interests in the Old Country. Therefore, steps were taken to have the decision of the committee reversed. The first step was to appoint Sir Granville Ryrie, High Commissioner of Australia. That gentleman told me on a number of occasions, and also expressed the view in public, that . the Shipping Line should be retained. He had taken the platform, he said, in support of the right honorable member for North Sydney (Mr. Hughes) and had told the people that it would be a boon to Australia. How, then, could he afterwards tell the people that it was of no use? The Government knew his views, and he was therefore relieved of his position as chairman on the committee, and was sent the other side of the world as High Commissioner. Here is an extract from the Daily Telegraph of 30th September, 1927 :–

Sir Granville Ryrie, High Commissioner for Australia, interviewed by the Australian Press

Association, stated that lie was not the least surprised at the recommendation to sell the Commonwealth Line of Steamers.

He must have imagined that the other members of the committe were as ready as he to turn a political somersault.

Personally, he favoured unconditional sale. He was satisfied that the Line could not be made to pay, as long as it remained under the Australian register, entailing Australian labour conditions. He recognized that unconditional sale might involve the removal of the vessels from the Australian run, or even purchase by a foreign company. Nevertheless, he thought that outright unconditional sale at a reasonable price would be justifiable, as he did not believe that the presence of seven Commonwealth Line ships on the Australian run in reality affected ‘ or checked the Conference Lines, with their huge fleet catering for the Australian freight and passenger traffic on various routes.

A month or two ago I read reports of the launching of an Orient steamer in Great Britain. The ceremony was attended by the High Commissioner. Lady Ryrie launched the vessel, and both she and Miss Ryrie received handsome presents from the private shipping company. The High Commissioner was rather indiscreet when he made reference to a controversial political question. He remarked that he did not believe that the presence of seven vessels of the Australian Commonwealth Line on the Australian run could check the Conference Line. Let me remind honorable members that the last proposal by the Conference Line for increased freights was successfully resisted by the Australian Commonwealth Line when it had only seven vessels. I feel it my duty to say that confidential details placed before the Public Accounts Committee indicated that the operations of this Line had led to substantial reductions in freight. On other occasions, its refusal to agree to increases, proposed in one instance by both British and foreign ship-owners, had a successful result. To my mind the committee’s recommendations are so much camouflage, and are designed to pave the way to the treacherous act of selling the vessels of the Line. The committee has recommended that the ships be handed over to an Australian company; but it suggests all sorts of guarantees of co-operation between the Government and the company. I notice that the committee did not urge that the same measure of support be accorded the present shipping board, as it proposes should be given to the new company. The committee stated -

The benefits now accruing to the country by its existence as a governmental concern are more than outweighed by the heavy losses already sustained, and which, it must be reluctantly admitted, are likely to continue.

I disagree with the views of the majority of the committee, and also with the opinion expressed by the Prime Minister. The committee further recommended -

To deal with the assistance which might reasonably be expected from the Government, it is suggested that the already generously written down transfer value of ships forming the Commonwealth Line should be further reduced on handing them over to the proposed company, if and when formed, on the distinct understanding that interest and depreciation should be actually paid, and not merely owed, to the Commonwealth Treasurer.

If it was right for the committee to make such a recommendation as that, is it not fair to expect a similar concession to the board now operating the Line? During the last three years, the Line has not had a chance. Much press propaganda has been indulged in, and this has been inspired by those anxious to bring about its downfall. To enable honorable members to record a proper vote on the subject of the continuance of the line, they should be in possession of the confidential cables exchanged between the London office of the board and its head office in Australia relating to proposed increases in freight. I am not at liberty to disclose the contents of those cables; but, as a member of the Public Accounts Committee, I am in possession of certain information which the Government should make available to honorable members. After perusal of those cablegrams, honorable members would be quite satisfied that the Line has been, and still is, a determining factor in the adjustment of freights. Unfortunately, much of the evidence taken by the committee was heard in camera, and we had to depend on the Government making available documents, the contents of which I cannot reveal. The committee, in bringing forward its recommendation, has exceeded its powers. It would have been quite proper for it to inquire into the expenditure of public moneys, review such expenditure, and submit observations or recommendations regarding them; but it has brought in a recommendation in this ease that affects public policy, which should be determined, not by the committee, but by the Parliament and the Government of the country. Let us consider what other dominions are doing in regard to the Government shipping lines. The Daily Guardian of the 18th March last, stated -

While the Federal Government is still .marking time in regard to the future of the Australian Commonwealth Line, the Canadian Merchant Marine, of somewhat similar origin, is milking rapid forward strides. In connexion with the recently concluded trade agreement between Canada and the West Indies, which provided for the inauguration of a fast passenger and cargo service by the Canadian Government between Eastern Canadian and West Indian ports, the Canadian Government Merchant Marine has now arranged to operate this service, and, with this object in view; plans and specifications are being drawn up, and tenders will be called for at an early date for the construction of five 14-knot vessels of approximately 10,000 tons each, with up-to-date accommodation for first, second, and third class passengers. These vessels will bo fitted with Diesel engines, and will be equipped with modern refrigeration for the carriage of fruit, which will he one nf the principal features of this trade. ]u addition to these five ships - two of which it is anticipated will be built in Canada and three in England, and which will bc ready for service during .1928 - the company intends to purchase a smaller vessel and convert two vessels of its present fleet with Diesel engines, in order to properly cater for the West Indian trade. The enterprise runs regular services to Australian ports from the cast and west coasts of Canada with fast cargo steamers, and may extend their Diesel-engined passenger efforts to these services at a later date.

The total gross tonnage of the Canadian Line is over 200,000, and the net tonnage over 125,000. It is still losing money, but there is no suggestion that its activities should cease. The minority report of the Public Accounts Committee dealing with the Canadian Government Line of Steamers shows that the loss on the voyage operations, plus administrative expenses, amounted for i lie year ended 31st December, 1924, to £297,0SS; interest for the year on Government notes and advances, £920,S04; and depreciation £604,038, making a total loss of £1,821,981. The Commonwealth Government Line for the year ended 31st March, 1925, the nearest equivalent trading period, showed a loss on voyage operations, together with administrative expenses, amounting to £209,364; interest on debentures, £203,717; and depreciation, £180,798; a total of £593,S79, or less than one-third of the total loss incurred by the Canadian Government’s shipping activities. It is also interesting to note that the Dominion of Canada is determined to carry on its shipping line, to provide new tonnage, and to build some of the ships in its own country, while Australia, which is spending three times as much as Canada on defence, is not prepared to shoulder a loss of roughly half a million sterling on its shipping activities. South Africa has adopted an opposite attitude from that taken up by the present Commonwealth Government. A cablegram from Capetown, published in the Daily Telegraph News Pictorial of the 20th October last, states -

A dramatic turn was given the South African freight war by the intervention of the Union Government. The new Conference Lines recently decided to give a special discount to shippers of wool from South Africa, provided these shippers would employ exclusively the vessels of the Conference. The Government warns the Union Castle Company that such methods arc a deliberate and open violation of the mail contract, and declares that they must be stopped immediately, otherwise the Government will nut only take action to terminate the mail contract, by giving the necessary year’s notice, but will also exercise its powers under the Post Office Act, and impose countervailing dock charges.

Since the publication of that report, the South African Government, I have been informed, has taken certain other measures to deal with the Conference Line”. I am not at liberty to disclose their nature, except to say that they differ entirely from the proposal now put forward by this Government. To give an example from the United States of America, let me quote from the Daily Telegraph News Pictorial of the 28th April last -

That the United States Merchant Marine is a permanent venture is the tone of New York advices. To remove from shippers’ minds the impression that the Government concern was a transitory and makeshift affair, the name Emergency Fleet Coroporation has been superseded by the title of United States Shipping Board Merchant Fleet Corporation. It was claimed that the former name of the organization acted as a deterrent to shippers by its implication of temporary existence, and made them reluctant to sever old connexions and give it business.

Under the authority of an act of Congress, Mr. A. C. Dalton, President of the Fleet Corporation, and Mr. W. S. Hill, Shipping Board Commissioner, in the absence of the chairman, Mr. O’Connor, signed a statement declaring that in future the organization charged with the management of Shipping Board properties shouldbe known as the Merchant Fleet Corporation.

The board states that the American Merchant Marine is on the seas to stay, and is confident that any future action of Congress dealing witli that organization will be such as to ensure its permanency.

That is the kind of encouragement that the Commonwealth Shipping Line has been crying out for during the last three or four years. Its future has not been definitely assured. No statement has been made by the Government to place it beyond doubt that the line has come to stay. The Shipping Act placed 54 steamers under the control of the board; less than 50 per cent. being operated by the board ; the remainder being considered unsuitable, they were laid up for disposal. I propose to deal with the “Bay” steamers and the ex-enemy vessels - the “ Bays “ because they are apart from the “ Dales “ the latest addition to the fleet, and the ex-enemy vessels on account of their unsuitability and the huge losses incurred by them. The result of the first period of trading - from 1st September, 1923, to 31st March, 1924 - showed a profit of £17,126 on the “Bay” steamers, and a loss of £115,351 on the ex-enemy vessels. For the twelve months ended 31st March, 1925, there was a profit on the “ Bays “ of £40,996, and a loss on the exenemy ships of £118,050. For the following year the “Bay” vessels showed a profit of £94,604, and the ex-enemy ships a loss of £43,122. The profits made by the “Bays” total £152,776, whereas the total losses incurred in connexion with the ex-enemy vessels amount to £276,523. Those figures show the extent to which the exenemy vessels burdened the Line; even the best of them could not earn sufficient to cover voyage expenses. Of the 54 vessels transferred to the board, only seven were capable of being operated at a profit. Many of the remaining 47 ships were never operated. Moreover, much of the time of the board and its officers was devoted to their disposal rather than to the profitable utilization of the remaining vessels. I do not know who was responsible for framing the legislation governing the operations of the Australian Commonwealth Line of

Steamers, but it was certainly framed by no friend of the Line. The act provides that each year the board shall find the sum of £236,282 as interest, that amount representing 5 per cent. on the debentures issued to the Treasury for the total cost of the fleet. The value of the fleet still remaining is £3,400,000. With the exception of interest on any cash balance remaining from the sale of old tonnage, £170,000, being 5 per cent. on £3,400,000, is all the board should be expected to pay. It will, therefore, be seen that the act requires the board to pay £66,000 per annum interest on steamers which have not bean used. The seven vessels which are capable of being operated at a profit, to earn sufficient to cover interest and depreciation, as at present required by the act, must return voyage profits amounting to over £400,000 per annum. That is impossible in any circumstance. The unsuitable tonnage - the ex-enemy vessels, the “Australs,” and the “D” and “E” steamers - have been an encumbrance; and their disposal both troublesome and costly.

Sitting suspended from 6.14 to8 p.m.


– Under the Commonwealth Shipping Act the Commonwealth Shipping Board has had to charge interest upon the capital cost of the ships transferred to its control in 1923. In order to illustrate the extent to which this provision of the Commonwealth Shipping Act has affected the finances of the Line, I may instance the Emita, which was transferred to the board on the 1st September, 1928, when the board was established, at £38,500; but which on the 2nd July, 1926, was sold for £18,750. The expenses incurred on the vessel prior to the sale amounted to £9,632, making the net proceeds £9,118, or, roughly, 25 per cent. of the transferred value. Interest at the rate of5 per cent. per annum, credited to the Treasury in connexion with this vessel, from the date on which she was transferred to the board up to the present time - roughly four years and two months - is equivalent to £1,925 a year. A sum of £8,020 has thus been credited in this way instead of £608 per annum, which would have been the amount payable, had interest been charged on the net amount realized as from the date of sale, namely, 5 per cent, over a period of one year and four months. I also wish to refer to the action of the Government in increasing the value of the “Bay” boats by £100,000, after a leading firm of ship valuers in London had valued the vessels early in 1923, at £500,000. For some unknown reason the Government or the general manager of the Line, decided to increase this valuation of the five “ Bay “ steamers to the extent I have mentioned, and this in spite of the fact that ship values declined between the time of valuation, and the transfer to the board. I have not been able to discover the reason for such action; but I say unhesitatingly that such a policy has detrimentally affected the finances of the Line to the extent of £25,000 per annum, representing 5 per cent, on the amount of the increased valuation for four years, or a total of £100,000. It has also been necessary for the board to provide for depreciation on the higher valuation which, at the rate of 5 per cent., shows that the accounts of the Line have been affected to the extent of £200,000. This has materially assisted in prejudiing the Line in the minds of the public. Honorable members opposite are opposed to a continuance of Commonwealth shipping activities, principally because the vessels under the control of the Commonwealth Shipping Board are not paying interest and depreciation on the capital cost; but they must also remember the direct and indirect benefit these ships have been to the Commonwealth, and the manner in which they have prevented the exploitation of shippers by other companies. We do not expect the vessels of the Royal Australian Navy to pay interest on their capital cost. We realize that they are performing necessary and valuable work in protecting Australia’s trade routes and assisting in ensuring the safety of the nation. In the same way, we have to admit that while the Commowealth Line has not been able to provide for interest and depreciation it has protected Australia from the aggression and exploitation of the Conference vessels. The prolonged absence of the chairman of the board (Mr. Larkin) from Australia has also had a detrimental effect upon the board’s activities. For the first three years of the board’s existence, the chairman spent only ten months in Australia. As a result of his prolonged absence many differences of opinion and misunderstanding arose between the chairman of the board and the two Sydney directors, Admiral Clarkson and Mr. Farquhar. The consideration o£ important matters of policy as held in abeyance or unnnecessarily delayed owing to the absence of Mr. Larkin, who endeavoured to control the Line from London. In these and other ways, the chairman has not acted in the best interests of the Line, and has not applied himself to his important duties in the manner in which the Australian people expected. He should have controlled the Line from Australia instead of from London, where he was in close touch with Lord Inchcape and generally in an atmosphere antagonistic to our shipping interests. When Mr. Larkin returned from ‘Great Britain some time ago one of his first utterances on reaching Fremantle was to the effect that unless there was a discontinuance of industrial troubles on the vessels, the Line would have to go out of existence. That utterance showed clearly that he was doing the work of Inchcape and trying to hasten the time when it would be necessary to sell the Line. It has always been the policy of the chairman to irritate unionists at every possible opportunity, in an endeavour, I suppose, to create industrial turmoil. When secretary of a trades union twelve years ago, I was brought into contact with the deputy chairman of the board, Sir William Clarkson, whom I always regarded as a stern man. When he came before the committee as a witness during the chairman’s absence, I was not leaning his way ; but I must say that he endeavoured to conduct the Line in the best interests of the Australian people. When the Line was under the direct control of Mr. Larkin, there were continual delays; but on his return to Great Britain, Sir William Clarkson, the deputy chairman, conferred with the representatives of the maritime unions in an endeavour to prevent or minimize industrial troubles. Frequent reference has been made to the manner in which the vessels under the control- of the board have been held up owing to industrial disputes, but as there have been no such disputes for two and a half years so far as this Line is concerned, honorable members opposite will not be able to urge that as a reason for the sales of these vessels. Differences of opinion arose between the chairman and the other two members of the board on many points. For instance, the two Sydney directors said that as the service to the west of England coast was unprofitable it should be discontinued at the earliest possible date; but the chairman contended that if such a policy were adopted the usefulness of tlie Line would diminish, and its prestige would ‘be affected. The Sydney directors, who maintained that this unpayable service, in which losses to the extent of £400,000 have been incurred should be discontinued, were unable to convince the chairman as to the wisdom of this, and that it should be discontinued. Last year £56,000 waa lost by the “ Dale “ boats in this service, although Sir William Clarkson and Mr. Farquhar maintained that it was impossible to make the service pay. Moreover, ex-enemy vessels were employed on this route, although they could carry only half the tonnage and took twice the time that the “ Dale “ steamers did to do the trip. Any one who has had experience in that trade, or who has reviewed the financial results of the Line, would recommend the immediate discontinuance of the service to the west coast of England. The directors also differed in regard to the laying up of unsuitable tonnage. It is only right to say that the two Sydney directors maintained that ships which could not possibly earn voyage expenses should not be allowed to continue in commission. Although every voyage made by an ex-enemy vessel meant the piling up of losses, the chairman of directors could not see the wisdom of putting the old ships out of commission. There was also the question of whether the vessels of the Australian Commonwealth Shipping Line should co-operate with those of the Conference Line. The Sydney directors maintained that the vessels under their control could carry on to greater advantage without such cooperation; but with that view the chairman of directors did not agree.. I refer to these instances to show the un desirable and harmful results arising from the chairman’s absence from Australia for such long periods.

Mr Charlton:

– Who, of the directors, refused to lay up the boats which were not paying?


Mr. Larkin. The deputy chairman, Sir William Clarkson, and Mr. Farquhar, were in favour of the west coast service being discontinued, and the unsuitable tonnage being laid up; but to such proposals the chairman would not agree. The Sydney directors considered that it would be better to have their vessels in the Australian-United Kingdom service fully loaded at reduced rates than to continue the existing tonnage in the trade half filled at existing rates. Failing, however, to persuade the Conference Line, they determined on a further reduction of freight. It is an undoubted fact that the Australian Commonwealth Line of Steamers is filling a most useful purpose. It has certainly made the loss which has evidently formed the base of the decision of the Government to sell the Line, but I think we should look upon it as being in the nature of a subsidy to Australian industry. Last year on exported primary products the Government paid £781,000 in bounties. I do not propose to mention the whole of the industries assisted in this way; it is quite sufficient to refer to the enormous bounty paid on exported wine. This bounty, which is paid at the rate of 4s. a gallon on exported wine, amounted last year to £442,410 on 2,212,000 gallons. If this country can afford to spend such a huge amount of money to assist the export of wine, surely it can afford to bear the loss incurred in running a line of steamers which renders such valuable assistance to all primary industries. Referring to tlie work of control boards, the Treasurer in his budget speech said -

The average annual export of the products now subject to organized systems of marketing totals, approximately, £9,500.000.

With the disappearance of the Commonwealth steamers, and the immediate in- crease of freights that is likely to follow, many industries which now receive assistance from the Government will be obliged to come to this Parliament for further aid. When talking of the losses on our Line of steamers it is just as well to remind ourselves of other, ways in. which public moneys are being spent. For instance, tlie department of the Postmaster-General loses £270,000 each year in the despatch of press telegrams. The Government and i ts supporters are content year in and year out to incur an annual loss in the despatch of press messages to inform people in the city of the most trivial happenings in country districts, yet they baulk at a loss of £200,000, or even £500,000, on a national shipping line. It is just as well to review some of the benefits that Australia has enjoyed through the existence of the Australian Commonwealth Line of Steamers. In January, 1923, the Line brought about a reduction of about 10s. a ton in freight. One of Australia’s largest meat exporters told the Public Accounts Committee that this reduction, which amounted to -Jd. per lb. on rabbits, beef, mutton aud lamb, when made by the Commonwealth Line was followed a fortnight later by a similar reduction by the Conference Line. In 1925, against the strenuous opposition of the Conference Line, the Australian Commonwealth Line took a full cargo of canned fruits at 50s. a ton. There was a big surplus of canned fruit to be exported, and the prevailing rate at the time was 70s. a ton, but since then it has remained at 50s. a ton. As 25,000 tons of canned fruit are exported from Australia each year, the saving on that one item alone is £25,000 a year. From August, 1925, the Sydney directors of the Australian Commonwealth Line endeavoured to bring about a reduction in freights. Numerous cablegrams and other communications were exchanged with the chairman of the Board who was at the time in London, but no finality could be reached until the Sydney directors, over the head of the chairman, issued instructions to the London manager to announce certain reductions of freight to take effect from the 12th July, 1926, lt has been said that the reductions in freight made by the Australian Commonwealth Line have been simultaneous with those made by the Conference line. That such has not been . the case can be proved by what happened at the time of the reduction in July, 1926. At a meeting of the Conference held in London on 9th July, 1926, there was a point-blank refusal to approve of the reductions proposed by the Sydney directors of the Australian Commonwealth

Line. The meeting adjourned on the Friday and was not to assemble again until the following Tuesday, but upon the receipt of the cablegram from the Sydney directors’ of the Australian Commonwealth Line giving the instructions I have mentioned to the London manager of the Line, the Conference was able to meet during the week end and announce a simultaneous reduction of freight. The Conference people were not able to specify exactly the items affected or the amount of reductions to be made, but they were able to announce their reductions simultaneously with those of the Australian Commonwealth Line. That is a clear instance in which the Australian Commonwealth Line was responsible for forcing a reduction in freights. The Sydney members of the board had for the best part of twelve months been struggling to get the Conference Line to agree to a reduction. In December, 1925, there was a proposal to increase freights by 10 per cent. The chairman of the board of directors of the Australian Commonwealth Line, who was in England at the time, was agreeable to an increase, but as the Sydney directors refused their consent the increase did not come about. In October, 1926, the Conference Line and foreign ship-owners agreed to an immediate advance of 15 per cent, on outward freights. The excuse they put forward was that an increase was justified by the coal trouble then in existence. The Sydney directors, however, knowing that their seven oilburning ships could not be affected by any coal trouble, did not avail themselves of the excuse to increase freights, and owing to their determined attitude, the increase was not made. Last week I asked the Prime Minister whether he would make available to honorable members the confidential cablegrams that passed between the London and the Sydney offices of the Australian Commonwealth Line. If honorable members had an opportunity to peruse those documents, they would find that they bear out every statement I have made regarding the influence that the Australian Commonwealth Line has had on the freight question. In the minority report of the Public Accounts Committee it is recommended that, in lieu of agencies, the Australian Commonwealth Line should have branches. That recommendation refers particularly to the agency at Colombo, and was made with a view to removing some of the difficulties and obstacles that militate against the successful working of the Line. The Australian Commonwealth Line carries more tea from Colombo than does any other line. In fact, it has earned a reputation for the manner in which it carries this particular cargo. Prior to the formation of the Shipping Board in 1923, an arrangement was made between Mr. Larkin, the chairman of the board, and the Conference, to limit the number of calls of vessels of the Australian Commonwealth Line at Colombo to fifteen per annum. Our seven vessels could make eighteen calls each year at this port: but owing to this arrangement they cannot call whenever profitable cargo is offering. This has had a very serious effect on the earning of our steamers, because tea is the most profitable cargo they can carry. Some time back there was trouble with the native labour at Colombo, and as a result one of the “Bay” boats was not able to get its cargo of tea when it called. The management of the Line decided to despatch a “Dale” boat to pick up the cargo offering, but the agents of the Line in Colombo, who are also agents for the Conference Line, said that they could not load a “Dale” boat without the permission of the Conference Line. I have drawn attention to this in order to show how the activities of our steamers have been hampered, and how foolish and costly it is to employ as agents men whose business it is to find cargo for the Conference Line instead of striving to get cargo for the Australian Commonwealth Line. In order to show what some of our commercial men think of the Australian Commonwealth Line, and particularly of the way in which it handles tea shipments, I shall quote a copy of a letter sent to «the Commonwealth Shipping Board by one of the largest of our tea importers. It is dated Sydney, 15th June, 1926 -

The Manager,

Commonwealth Line of Steamers, 15 O’Connell-street, Sydney.

Dear Sir,

Adverting to the call yesterday of your marine superintendent, we have pleasure in confirming our verbal statement that we are very satisfied with the manner in which our tea cargoes have been handled by the Commonwealth Line of Steamers, and in furtherance of this we enclose extract from a letter written to our Colombo agents on the 10th February last, four months before the call of your marine superintendent.

Wo find that by the “ Bay “ Line of Steamers the percentage of broken packages is much smaller.

Secondly, that our claims arc met much more promptly than by other companies, whoalways endeavour to evade paying claims if possible.

Thirdly, the sorting of the various marks is done much more efficiently.

Fourthly, since the other Lines have had the competition of the “ Bay “ Line they have improved very considerably their standard of shipping, and are now taking special care of tea cargo, where previously no care wa3 taken. Claims are met much more promptly than heretofore, and the stacking certainly has improved, although it is even now a long way behind the “Bay” Line.

Fifthly, the “ Bay “ Line has always been able to give us more freight in Colombo than we receive by the other steamers, which very often would only lift half the cargo we required carried. We think this is one reason why tho “ Bay “ steamers are carrying the tea better, because they have proper stowage room, where as some of the other boats stack our tea on top of cargo from London, and it lias consequently to be removed two or three times to land other cargo at Fremantle, Adelaide, and Melbourne, and this extra handling results in a much larger percentage of breakages.

This letter was signed by a director of one of our largest tea importing firms. He also forwarded for the information of the Line the following copy of a letter addressed to the Colombo agents of the company, under date 10th February, 1926 :-

Messrs. Heath & Co., Colombo.


We note from yours of 22nd January that the Cathay had no space available, and the Otranto only 250 tons, but that the Esperance Bay has plenty of space for all requirements. We are rather pleased than otherwise, as the “ Bay “ Line of Steamers carries tea much better than any other Line. Their sorting this end is much better, and the percentages of broken packages is practically nil; whereas the P. and O. do not sort out lines nearly as well, and their percentage of broken packages is much greater. Whenever there is a “ Bay “ steamer leaving about the same time, we would much prefer you to ship by it, and one wire strapping is quite sufficient for packages shipped by this Line.

The following summary of the Commonwealth shipping activities clearly sets out tlie position : -

As a set-off against this the Line has saved the primary producers and importers’ a considerable amount in freight rates. The Line forced an all-round reduction in rates of roughly 10s. per ton in January, 1923. Since then the Line has carried approximately 800,000 tons of cargo into Australia, representing, at 10s. a ton, a saving of approximately £400,000. The Line controls roughly 10 per cent, of total imports, therefore’ the saving to importers to date is approximately £4,000,000. Since January, 1923, the Line has carried approximately 850,000 tons of cargo from Australia to the United Kingdom, representing, at 10s. per ton, a saving of £425,000, and, as the Line only carried 10 per cent, of exports, the total saving to primary producers has been approximately £4,250,000. Again, in August, 1926, the Line forced another reduction in. rates to the United Kingdom, which approximated 10s. per ton. The Line has carried from that date 150,000 tons of cargo from Australia, representing a further saving of £75,000, or a total savings on all exports of £750,000. Thus it will be seen that our primary producers have benefited to the extent of £5,000,000, and there has been a saving to primary producers and importers and exporters of £9,000,000. Deducting from this sum, the amount lost on shipping activities, £5,298,000, we find that the Commonwealth Line has, at a modest estimate, benefited Australia generally to the extent of approximately £3,702,000. The Commonwealth Line carried^ roughly, £1,500,000 worth of freight each year. It follows, therefore, that if it is to go out of existence, this amount, less loading and discharging costs, which approximate 20 per cent, of the total, will pass into the pockets’ of the Inchcape group. This explains the interest shown by the Australian representatives of the. Conference Line in the development of the Government’s policy. The Prime Minister this afternoon held out very little hope that the earnings of the Line would improve. I do not share his view. I believe that the Line has turned the corner, and that, as the result of discontinuing the unprofitable trade with the west coast of England, the disposal of unsuitable tonnage, and concentrating on the London to Australia trade, its prospects were never brighter than they are to-day. I feel ‘sure that earnings in future will cover riot only administrative expenses, but also make available an amount towards interest and depreciation. I should like to point out, however, that it is impossible, with only seven ships to comply with the whole of the requirements of the act. To do that, voyage profits to be earned by the seven ships should reach at least £400,000 per minim

The vessels of the Line are doing exceptionally well on the London to Australia run. The Ferndale and its sister ship the Fordsdale, are the finest cargo vessels engaged in the Australian trade. In April last the former ship left London with the largest cargo ever loaded by any steamer for Australia from that port. The Bay Liners, as honorable members are aware, come out from the United Kingdom full of passengers and carry about 20 per cent. of the passenger traffic between Australia and the mother country. The majority report of the committee discloses little or no concern for the welfare of the Line, or for the benefits derived by the Commonwealth. One firm of shipping agents at Australia House controls the whole of the passenger arrangements in connexion with migration. There is no reason why the Commonwealth Line itself should not do the work, and so add to its earnings. This money should not go into the pockets of private shipping companies. At first sight it may appear extraordinary that greater support for the Line comes from the United Kingdom instead of Australia; but when we remember that certain business firms, such as Dalgety’s, which are largely concerned in the wool industry in Australia, and finance the man on the land, are also shipping agents, it is easy to understand why the Line lacks a full. measure of support from this end. Such firms are not likely to do anything that will lessen their profits as shipping agents. Therefore, they influence shippers at this end to patronize other lines. The Government has indicated that it intends to sell the Line. I regard this decision as a tragedy. The Line has been struggling for the last three years under a cloud of uncertainty. The Government has been neglectful of its interests. The Prime Minister should have made a definite declaration that the Line was here to stay. The Ministry should not have allowed this feeling of uncertainty as to the future to interfere with the earnings of the steamers. Shippers are not likely to patronize the Line if there is a risk that it will go out of existence in the course of a. few months. In the United Kingdom, however, shippers are free to patronize any vessels that are off ering, but it is well known that the Conference Line has endeavoured to bring pressure to bear on them. It is on record that spies employed by the Inchcape group have been found on the wharves and in the sheds at the London docks, obtaining particulars of marks on the various packages and parcels shipped by the Commonwealth Line. Obviously it is the intention of the shipping combine to even up matters when the Commonwealth Line goes out of existence. This is a lamentable state of affairs. The present propaganda for the sale of the Line is the culminating point after years of sabotage by an unsympathetic Government and the shipping ring, aided very ably by poisonous statements inserted in the newspapers in Australia and overseas. The following cable published by the Sydney Morning Herald on 26th October, 1927, is a sample -

page 1039



British Interest

LONDON, 24th October.

Officials of the Conference Lines do not dis- . guise their keen interest in the recommendation of the Federal Public Accounts Committee to sell the Commonwealth Line of Steamers. They are at present anxious, owing to varying reports, to know the precise conditions under which the ships will be offered. Their view is that the ships must be permitted to be placed on the British registry and to be worked on British rates of pay. They urge thatthe buyer must not be bound never to raise rates in view of ever-mounting handling costs in Australia. They also seek withdrawal of the condition that the buyer shall not be associated with the Conference. In this regard they point out that the Commonwealth Lino for several years has fixed freights and other conditions of business in conjunction with the Conference.

That statement is not true. I have already pointed out that in January, 1923, the Commonwealth Line forced a reduction of 10s. a ton in freight rates from Australia, and that the Conference Line followed suit as quickly as possible. Regarded from the point of view of ship-owners who are anxious to increase freights, the continual cry of increased labour costs in Australia is quite understandable. I point out, however, that in recent years the only increases which have taken place are those which have been due to rises in the cost of living, in accordance with statistics that are compiled by the Commonwealth Statistician. The truth of the matter is that the Australian Commonwealth Line of Steamers has compelled certain reductions in freight rates, and on other occasions has prevented increases.

Representatives of the overseas steamship companies were invited by the Public Accounts Committee to give evidence before it. Either they had none to tender, or they were content to leave the matter in the hands of the Prime Minister and his supporters. If the Line is sold to a private Australian company, the Conference Line will experience no difficulty in smothering it very quickly. All it will have to do is- to so arrange its schedule of sailings as to blanket the Australian company, and eventually crush the private company. The existence of the Commonwealth Line provides a means for determining whether importers and exporters are being exploited by other companies that engage in the Australian trade. Its retention would also be beneficial to Australia in the event of an outbreak of war, because the seven vessels of the fleet have been so built that they may be transferred into auxiliary cruisers. It must be borne in mind that the recent Geneva Conference was a complete fiasco. It is common” knowledge that the nations were not able to arrive at an agreement on the question of disarmament. In the light of the conditions that at present exist in the world, the sale of this Line would be nothing short of treachery. If its vessels were handed over to a private concern and placed on ‘the British register they would be commandeered by the British Government in the event of an outbreak of hostilities, and would not be available for the carriage of our produce or the transport of our troops. We would thus be compelled to shoulder another foolish and costly expenditure in the purchase of, perhaps, wooden ships from America. The Kidmans and the Mayohs would be given a further opportunity to make profits totalling thousands of pounds out of the construction of ships with dummy bolts and other questionable features. Just as it is necessary to have an Australian Navy, so it is also necessary to have a Commonwealth Line of Steamers. The advances that are being made by foreign shipping companies are reaching serious proportions and cause me, as an ex-member of the Australian Imperial Forces, grave concern. When I consented to take a part in the last conflict I be- lieved the statements that were made at the time that it was a war that was to end all wars, and make the world safe for democracy. The returned soldiers have a right to be heard on this matter. In view of the strong hold that is being obtained by German, Norwegian, and other foreign companies, we should strengthen rather than weaken our position in the shipping world. The following is an account of a new German steamer that I have abstracted from the press: -

The recently launched German steamer Main, second of the seven 12,000-ton liners being constructed by the Norddeutcher Lloyd Company for the Australian trade, reached Melbourne on her maiden voyage on Saturday. She is a sister ship to the liner Alter, which left Sydney last week with 20,000 bales of wool for the United Kingdom.

It is desirable that our wool and other products should be carried overseas in our own ships and not in foreign bottoms. The Government prates- a great deal about its patriotism and nationalism. If these vessels are disposed of there will be the danger of their eventually coming into the possession of a neighbouring foreign power. When we realize that the five “Bays” and the two “Dales” were specially strengthened to enable them to carry armaments equal if not superior to those of our cruisers, we must admit that it would be an act of treachery to sell them. The economical speed of both the “Bays” and the “Dales” is 14* knots, but in case of emergency the former are capable of 16 and the latter of 17 or 18 knots. I am quite prepared to leave the decision to the people of Australia, confident of their refusal to sanction such a treacherous act.


– There is not on the Australian run a vessel that can compare with them. The benefits which the existence of the Line confers upon Australia, cannot be measured in terms of pounds, shillings and pence. The enormous assistance which it renders to our primary producers in particular, and to Australia generally cannot be shown iu a balance-sheet. We should consider the influence that is wielded by the Line rather than the loss of a paltry £300,000. £400,000 or even £500,000. The supporters of the Government are prepared to vote millions of pounds to defray the cost of constructing cruisers. Notwith- standing the huge expenditure on the Australia it was taken outside Sydney Heads and sunk after it had been a unit of the Australian Navy for only ten or eleven years. We must exhibit fairness avid generosity, and not allow the question of loss to overshadow the boon that the Line has been to Australia. The Prime Minister made a lengthy reference to refrigerated space, and said that if need be the Government could subsidize a new company. Each of the “ Dale “ boats has 160,000 cubic feet of insulated space, and each of the “Bay” boats 350,000 cubic feet. Their combined capacity, therefore, exceeds 2,000,000 cubic feet. They are the very vessels of which the Commonwealth should retain possession. Because they have been engaged in the trade between Australia and the United Kingdom a better type of’ steamer has been employed by the other shipping companies. The “ Bays “ carry 750 passengers, providing better passenger accommodation than the Orient and P. and O. Shipping Company’s vessels which carry from 1,000 to 1,250. They are ideal for the transport of migrants to our shores, and if the Government is in earnest with its migration policy, it will reconsider its decision to sell them. If the Line is sold, and freights are subsequently increased, I shall hesitate to relieve the primary producers of any difficulties due to an increase in freights, unless they protest against the action of the Government. If the losses that have been incurred are a legitimate reason for selling, the Government, will find if very difficult to justify the continuance of other services on which the annual loss is greater. The Prime Minister referred to the extent to which the Line had engaged in the carriage of wheat and wool, and said that that was not a factor in the fixation of rates on those two commodities. I maintain that it is a. factor which has been abundantly proved since the Line came into existence. The information which I have is that each year the Line carries between 50,000 and 60,000 tons of wheat and flour, in” about equal proportions. It must, therefore, be considered a factor. The cargoes that it lifts are at least equal to those carried by either the P. and O., or Orient vessels. Whoever may purchase the Line in the event of its being sold, they will not carry one ton more of wheat than is being carried at the present time. Many members of the Country party have argued that the Line is of no benefit to the primary producer, because the middleman derives the advantage that accrues from any reduction in freights. In the event of an increase being made, would it be borne by the middleman in the city? Certainly not ; it is the primary producer who would suffer. Therefore, the Line is a. distinct advantage to him. Members of the Country party will be called upon at the next election to justify the actio:) which they take in respect of this matter. What would have happened to the primary producers during the British shipping strike if there had not been Australian ships to carry their produce to the markets of the world? They would have been in a very sorry plight. Do honorable members imagine that the primary producers are agreeable to the sale of the Line, and the transferrence of the whole of the shipping business ;.o a conference that meets in London and fixes fares and freights without any regard to the interests of this young land? I believe that they are opposed to the taking of such a step. The Prime Minister referred to the carriage of wool. On a number of occasions the Line has been instrumental in securing a reduction in the freight on that commodity. Woolbuyers from the United States of America, Japan, Prance and other continental countries are given instructions by their employers regarding the limit to which they may go. If the freight on wool is reduced by one-eighth of a penny or one farthing a pound, they are in a position to increase their bids to that extent. Thus the wool-grower benefits. The Prime Minister referred also to the establishment by the Queensland Government of State stations, butcher shops, and so on. I place this Line in an altogether different category of State enterprises. I could understand opposition by members of this Government to the establishment of a chain of butchers’ shops or a State bakery, because they are bitter opponents of State enterprises; but seeing that we are 11,000 miles from the markets of the world, there can be no objection to a Commonwealth Shipping Line any more than to a nationally-owned railway system, post office or similar utility. The Prime Minister referred to last year’s loss on the “Bay” boats. Unfortunately we have not the latest figures of the Auditor-General, but I understand that the “Bay” and the “Dale” boats last year showed a voyage loss of £80,000. That loss cannot be taken as a guide for this year or future years, because the whole position has changed. The Shipping Board has dispensed with unsuitable tonnage and unprofitable services. Last year, owing to the drought conditions that existed in Australia, there was a great shrinkage in Australian exports, as shown by the following table : -

Last year there was in our exports a decrease in butter of 31 per cent., in wool of 4 per cent., and in frozen beef and mutton of 35 per cent. That shrinkage must have affected the earnings, not only of the Australian Commonwealth Line, but also of the other lines trading to Australia. There is no reason for basing our exports for next year on those of last year, because the position has undoubtedly improved since. Reference was made by the Prime Minister to the extraordinarily bad treatment that the Australian Commonwealth Line had received at the hands of the Australian seamen. Let me say that there has been no industrial trouble on the vessels of that line for the last two and a half years. Considerable harm has been done to the Line by the criticism of the Australian press, arid the failure of the Government to declare its policy. The Prime Minister referred to the domicile of the seamen employed on the Australian vessels, many of whom are domiciled in the United Kingdom, but I ask, how can we expect the seamen working on the Commonwealth owned vessels to transfer their homes to Australia when they do not know at what moment the Government will dispose of the Line. The “Bay” and “Dale” boats spend more time in English ports than in Australian ports, and therefore the seamen would naturally be domiciled in Great Britain. If the

Government would state definitely that the Line was to be continued, Australian seamen would be eager to apply for employment. In conclusion, let me say, that the day of retribution must surely arrive. If the Government sells the Australian Commonwealth Line, and it is my privilege to he a member of the Federal Parliamentary Labour party when it is returned to power, those whomay have assisted in the disposing of the Line, without a thought for the interests of Australia and our export trade, will receive no quarter or consideration at my hands.


.- It appears to me that as the Prime Minister had already assured the House that the Government would early this week express its intention respecting the Australian Commonwealth Line of Steamers, the submission of this no-confidence motion was premature, and entirely unwarranted. Of course, I realize that the members of the Opposition are anxious to make as much political capital out of this question as possible, but I think that their ardour will be more or less dampened by the opinions of the authorities that I shall quote in respect of Government enterprise. Before proceeding with the history of the Australian Commonwealth Line - and we are mainly concerned with its operations since 1923 - I shall refer to some of the remarks of previous speakers. The honorable member for Cook (Mr. C. Riley) has told us that the Line has turned the corner - whatever that may mean - but I do not think that it will ever enter the “ straight.” The only straits that it will ever reach will be financial straits. He also accused the Government of not beingable to deal adequately with this national enterprise, but it suited his book to eulogize the previous administration, which, in entirely different circumstances, found it necessary during a national crisis, to establish the Commonwealth fleet. I acknowledge that that action was very necessary, but it is apparent that the circumstances to-day are entirely different. The primary producers of Australia undoubtedly owe a great deal to the head of the Government of that day for having made available to them the opportunity to market their produce abroad and to take advantage of the high prices that were ruling at that time. The honorable member for Cook has accused the Government of financial inexperience, but I would inform him that its recent achievement of adjusting the financial relations of the Commonwealth and the States has placed it high in the opinion of the people of Australia, and its action respecting the Commonwealth Line, when thoroughly understood and analyzed, will bring it further kudos. The honorable member also referred to the substantial reductions in freight that had been brought about by the Line to certain cablegrams, and to the members of the Shipping Board. As a member of the committee which submitted the report that is now being considered by the House, I gave serious consideration to the evidence that was adduced, and I honestly could not make up my mind whether the Australian Commonwealth Line was the sole factor in reducing freights, or whether it really had any influence in that direction at all. It was a perfect tangle to me. I could come to no decision respecting the relation of the Commonwealth Shipping Board to the Conference Line. When it seemed to suit the board, it was with the Conference Line, but at other times it suited the Board to be in competition. I believe that the press has already made public the fact that when a certain reduction in freights took place, which a majority of the members of the board believed would have come about in any case, the majority by cable insisted that it should be the first to make the announcement and. thus reap the resultant kudos. That was certainly not a gentlemanly action on the part of the majority of the members of the board. I believe it was the Leader of the Opposition (Mr. Charlton) who said that this investigation should not have been undertaken by the committee. I disagree with him, and wouldremind him that another title for the public accounts committee is the finance committee.

Mr Charlton:

– I did not say that the investigation should not have been undertaken by the committee.


– Then the honorable member for Cook must have made that statement.

Mr.C. Riley. - I said that the committee had exceeded its powers.


– I fail to see how Parliament as a whole could have obtained the details that were placed before the committee. Considerable evidence was taken from the Commonwealth Shipping Board, its staff, and other shipping and commercial interests. The Government has been twitted with being concerned about an annual loss of half a million pounds on the Line, and having no concern about expending millions on bounties. I do not think that the reference to bounties is very fortunate, because they are granted for the purpose of establishing industries in this country and giving employment to ourworkers. In contract, the Line has been operating at a loss of £595,000 annually; no special industry is being established by it, and little employment is being given to Australian seamen. A great deal has been said about the primary producers reaping a direct benefit from the Australian Commonwealth Line.

Mr Watkins:

– The honorable member does not deny that they do?


– They reap some benefit, but it is very difficult to calculate in round figures. The honorable member for Cook mentioned £2,000,000, but that is an ephemeral and not a concrete figure. No business person considering a proposition would accept an imaginary profit and loss account. We must get down to facts and I cannot agree that any sum can be calculated as representing the benefit that has accrued to the primary producer as a result of the operations of the Line. There may have been a reduction of onetenth or one-sixteenth of1d. per lb. in the freight on wool, but one cannot say definitely from the evidence put before the committee that that saving actually went into the pockets of the primary producers, or that the price of wool in the sale room had been affected, because many factors are at work there. In the absence of precise information, it is absurd to fix upon a round sum of £2,000,000 as having been saved to our people, to enter it in a fictitious profit and loss account, and expect business people to accept that statement as evidence. The Leader of the Opposition said that the Line had been detrimentally affected by the uncertainty as to its future. Evidence taken before the committee showed that press propaganda may have created some animus towards the Line. We read in the newspapers from time to time inspired reports, guesses as to what a committee intends to do, and speculations regarding decisions of Ministers. The predictions of a section of the press that the Government intended to sell the Commonwealth ships may have been somewhat detrimental to the Line at that time, but for a considerable period the enterprise has not been prejudiced in that way, and the cargoes offering left nothing to be desired. The committee’s report mentioned that the Line was injured by frequent industrial troubles. The endeavour to place the Line on a business footing was frustrated at the outset by hold-ups and cessations of work. These interruptions continued until June, 1925, and I suggest to the Leader of tlie Opposition that the attitude of the unions did more injury to the Line than any rumour of a projected sale. Reference has been made to the interim report submitted by the Public Accounts Committee in August, 1926. So far as I was concerned, that report was submitted in the interests of the Line. An interim report is never very satisfactory, but the committee thought it wise to prevent, if possible, the Line from suffering in the estimation of shippers through any suspicion that it was unstable. The public knew, however, that the committee had not completed the taking of evidence, or the consideration in detail of that which had been taken, and that its attitude would be known only when it submitted its final report. In comparing the Australian Commonwealth Line with private shipping enterprises, the Leader of the’ OPPO.sition said that the former was handicapped by being obliged to pay 5 per cent, interest on the capital advanced by the Treasurer. Subsequently he referred to a British company paying a dividend of 12 per cent. Surely that dividend was a handicap in favour of the Government enterprise. The Commonwealth Line was required by the act to pay taxation like any private company, but, unfortunately, there were no profits upon which it could be taxed. Its private competitors, however, are subject to a very high rate of taxation, and that gives a further advantage to the Commonwealth Line. Another charge made by the honorable gentleman was, that the Government had not assisted the Line as it should have done. That was a somewhat illogical charge, because the Government more or less staked its reputation on the Line when it transferred it to the control of the Shipping Board. I heard no evidence of the failure of the Government to help this State enterprise. The Leader of the Opposition said that £130,000 is paid to a private company for the carriage of mails between Europe and Australia. As I understand that contract, only £30,000 a year is paid in respect of mails, the balance being a subsidy for the provision of refrigerated space so that perishable primary products may be carried to markets overseas. Another complaint was that assisted migrants are carried on the vessels of private companies. Under the Lang regime, it was easier for a camel to pas; through the .eye of a needle than for migrant to enter the.State of New South Wales. Fortunately, that policy has beer, reversed. I heard no evidence that thi; Government had prejudiced the Line b; not giving business to it. It was not practicable for the present fleet to carr very much mail matter, because the vessels could not maintain the require- ; time-table; neither could they engage : the interstate trade. Deciding to gi… the Line a fair chance, the Government secured the consent of Parliament ir 1923 to legislation that was very definitely of a helpful character. In t-i. first place the ships were to be written down to an amount which subsequent sales proved to have been reasonable Parliament thought it fair to in; pose a condition that 5 per cent, interest should be chargeable on debentures issued by the Treasurer for t taking over of the Line by the board. In one section of the profit and loss account, that interest charge appears, but it was never paid, and the accumulated arrears are now approximately £900,000. In an ordinary business, however, the charge would appear much higher, because compound interest would have been charged on the overdue balance. It is obvious that the board failed to comply with one of the main conditions laid down by Parliament for the control of the Line. Whilst depreciation has been charged in the profit and loss account, no reserve fund has been created for the replacement of lost or obsolete ships. I do not profess to be an authority on this subject, but it is obvious that the depreciation charge was not high enough, and the actual financial position of the Line is much worse than the statement of assets and liabilities indicates. There is a considerable liability for compound interest, and a further charge should be made for reasonable depreciation. On these two accounts some of the profits alleged to have been made by the Line must be considerably reduced. From a commercial point of view, the Line is now in an absolutely unsound position. From time to time we have heard the Leader of the Opposition, and his Deputy (Mr. Scullin) deprecating the present policy of borrowing, and that such should be restricted to the ultmost extent. I am entirely in agreement with them; but after telling the people of Australia that we are borrowing too much money, they would, presumably, justify a loan bill to raise money for the purchase of new ships for the Line. If they did not get the money by loan, how would they get it? .

Mr Charlton:

– If a Labour Government had at its disposal the surpluses which this Government has had year after year, it would manage to buy the ships all right.


– No doubt the Leader of the Opposition carries in his knapsack the portfolio of a future Prime Minister, and we all shall congratulate him when he succeeds in inducing the people of Australia to put him into that position ; but I cannot imagine that even then he will be able to wield some magic wand which will produce money from the skies so that new ships may be bought without recourse to the loan market. For the benefit of the House, I shall quote one of the leaders of the Labour movement upon State enterprises. The fol lowing extract is from the Brisbane Courier of the 10th October last: -

Premier and State Enterprise

Blunt Statement that Certain State Activities have been a Failure.

Mr. McCormack is reported to have said “ I have adopted the policy that we will not continue to lose the taxpayers’ money upon ventures that are unprofitable. We are, generally speaking, setting out to curtail expenditure, and cut losses at every possible point. Most taxation is passed on, and in the last analysis it must be admitted that the greatbulk of the people carry the great bulk of this taxation.

With such a testimony from a Labour Premier, it should not be necessary to carry this debate very far. Apparently Mr. McCormack realizes the futility of trying to conduct State enterprises on sound business lines. Such a damning statement from a leader of a party which advocates the socialization of industry should help members to come to a right conclusion upon this censure motion. In regard to the announcement of Government policy made by the Prime Minister this afternoon, members of the Public Accounts Committee appreciate the fact that, although Ministers have not been able to accept all of their recommendations, effect is likely to be given to some of them. I take it that thefuture of the Line will depend on the nature of the tenders that will be received from persons willing to purchase the ships. The Government has definitely decided that the vessels must continue to be on an Empire register, subject to conditions that will be laid down. All the evidence we have heard goes to show that it is utterly impossible for the Australian Commonwealth Line, or any other line, to make a profit if the ships are on the Australian register. The committee was given a comparison of the cost of running vessels on the Australian register and on other registers. Taking Australian costs at 100, those for vessels of over 600 tons on other registers worked out as follows: -

In this direction we are mainly concerned with vessels on the British register.


– There is no prospect of running the Line on a profitable basis, or with any prospect of protecting the capital invested “while the ships remain on the Australian register. Sooner or later, the Line must become bankrupt, and the Government is bound to consider the interests of the taxpayers. The Prime Minister assured the House that due attention is to be paid to providing refrigerating space. Not only will there be stipulations regarding an Empire register and refrigerating space, but there is to be a guarantee of a ten years’ service for passengers and cargo. When the negotiations are being carried out, I have no doubt that the Government will be able to satisfy the House that the interests of Australia are adequately safeguarded. There are many stalwarts in the defence of the shipping Line on the other side of the House. I do not think they will deny that they are doing their best in the interests of the trade unions on whose behalf this Line has, to a considerable extent, been run, although up to 1925 the industrialists did their best to wreck .it. We, on this side, would be quite logical in asking that the primary producers, if tlie Line has been such a tremendous benefit to them, should be prepared to back the horse of their fancy, and come forward with the money necessary to take the ships over themselves. The same choice is open to the trade unions, and if they had at their command the capital represented by losses caused through strikes, they would have sufficient to buy the Line twice over. Those who consider that they have derived benefits from the operation of this Line, and who think that it ought to be continued, now have an opportunity to acquire the Line for themselves, and to bring it under the British register.


.- I have rauch pleasure in supporting the motion brought forward by the Leader of the Opposition. The action of the Government in attempting to dispose of the Australian Commonwealth Line of Steamers is another illustration of its wrecking policy. The Labour party is the party of construction, and has built up monuments to its greatness in variousState and Commonwealth instrumentalities. Immediately . a Labour Government goes out of office, the wreckers, the Conservatives, the Tories, the die-hards, who dislike any progressive movement, or anything which will affect the interests of their friends, supportersand subsidisers, are at pains to undo thework which the Labour administration has performed. An instance of this was recently seen in this chamber when, for the purpose of further hamstringing theCommonwealth Bank - that great monu- ment to a great party - the general banking branch was separated from the savings bank department, upon a variety of illogical pretexts. Gradually the Commonwealth Bank has been made merely an instrument in support of the private associated banks. The Government has wrecked the Commonwealth Bank, or at least, for the time being, has made it of no value tothe people of Australia, in whose interests it was first instituted. The Government professes to feel very strongly on the point that the people’s money should not be wasted in prolonging the operation of the shipping line, and that is practically the only reason which has been advanced to support its determination to dispose of it. Practically all the arguments put forward have been to the effect that the Line is losing money, and, therefore, it should not be a burden any longer on the taxpayers. A totally different tale was told when Government supporters were looking for an excuse to destroy another Labour institution, the Commonwealth Woollen Mills. The honorable member for Tarra (Mr. Scullin) effectually exposed that scandal. He explained that this property belonging to the people, and valued at £287,000, was sold for £155,000 toan exceptionally lucky syndicate. The value of the land, plant, and machinery of the woollen mills wasestimated at £287,000, but in order that private enterprise should not be burdened! with an over-capitalized institution it was written down by this Government.

Mr Lister:

– It was sold to the highest tenderer.


– The least said by the honorable member on that subject the better. The syndicate of Flinders-lane warehousemen, and others, have done marvellously well because of the refusal of the Government to interfere with private enterprise. Not only does this Government refuse to interfere with private enterprise, but it has gone out of its way to give to private enterprise money that should rightly belong to the people. Over £100,000 was given to that lucky syndicate, and I am wondering how many thousands of pounds will be given to the syndicate which acquires the Commonwealth Shipping Line.

Mr Fenton:

– Over £500,000, it is estimated.


– What is £500,000 to the Government when it is the people’s money? I listened with interest to the excuses and verbal gymnastics of the honorable member for Robertson (Mr. Gardner) when he was endeavouring to explain his attitude in reference to the interim report of the committee. That report, which was signed by the honorable gentleman, is a very strongly worded document, a portion of which reads as follows -

In view, however, of emphatic evidence placed before the committee that, owing to the uncertainty which exists concerning the continuance of the Australian Commonwealth Line of Steamers, its business litis been adversely effected, tlie committee has deemed it desirable to submit Parliament, prior to the Approaching recess, this interim report.

To arrive at a decision, apart from the question of Government policy, as to whether the Commonwealth Government Line should be continued, there must be considered what benefits have accrued to the country by the establishment of the Line, and whether such benefits have outweighed any financial loss incurred as a result of its trading operations. The evidence so far placed before the committee indicates that not only has the Commonwealth Line been directly responsible for actual reductions in freights, but that the presence of the Line has exerted a material restraining influence against proposed increases.

The honorable member for Robertson, who makes his apologies to-night, signed that document on the 10th August of last year. Only fourteen months have since gone by, and nothing has happened in regard to the shipping line which can justify an alteration of opinion. After the interim report was adopted but few witnesses were examined.

Mr Charlton:

– Only one.

Mr Gardner:

– But that was tlie manager of the Line.


– Yet to-night the honorable member has repudiated that report which he signed. If a ramp is to be put over, if a financial killing is to be made by this Government, Hit should at least be honest about it. The honorable member for Robertson talked about the influence of the Australian trade unions as a reason why the Line should be disposed of, but not one word was said about that when he signed the interim report. He and his colleagues advocate the disposal of the Line because it is losing money, yet he was one of those who voted in favour of selling the Commonwealth Woollen Mills on 21st June, 1923, and he made no apology for such a vote.

Mr Charlton:

– The mills were then showing a profit.


– Yes. It appears that the Government is determined to get rid of instrumentalities that are interfering with private enterprise. If that is so, Ministers should have the manliness to stand up to their principles, and not make apologies for their actions. The Prime Minister this afternoon dealt also with the great losses incurred by the running of the Line. When speaking of the sale of the Commonwealth Woollen Mill he remarked, in referring to the honorable member for Yarra (Mr. Scullin)-

The honorable member has said that there is a direct issue between us, and I believe there is . I cast my vote for the sale of the mill, because I do not believe in governments running trading ventures, and honorable members on this side of the House share that view.

Honorable members opposite say, “ Hear, hear.” Then why are they not honest? They should say outright, “ We do not believe in state instrumentalities, whether they pay or lose.” All this hypocrisy about the loss of the people’s, money and the interference of trade unionism with the Line is so much cant. Honorable members should have the courage to stick to their opinions, and not apologize for them. The Prime Minister also said -

We say that wo do not believe in trading ventures by tlie Government as being the right way to conduct the affairs of this country. Honorable members opposite take a very different view; they believe in the nationalization of industry, production, distribution, exchange, and other things, and it is only natural that they should resent the sale of the woollen mill.

That is quite correct. The Labour party stands for nationalization, which is the ultimate goal of Labour, and of the people. We believe that the time is rapidly approaching when pivate enterprise will not be able to carry on the instrumentalities which arc now being conducted inefficiently by it. The Line was established because of the lack1 of tonnage to Australia supplied by private enterprise during the war. Not only did private enterprise then fall down on the job in the matter of conveying our primary products to the overseas markets, but it also failed in regard to finance. Had it not been for the Commonwealth Bank, an instrumentality established by the Labour party in the interests of the people, which, during the war, raised over £400,000,000, Australia would have been in a sorry plight. But the Government and its supporters have no sort of thankfulness to such an institution ; they are only concerned with the profits of their friends.

Mr Gullett:

– How did other countries get on without such an institution as the Commonwealth Bank?


– Private enterprise in England and every European country, also, fell down on the job during the war. Private enterprise is incapable of carrying on during times of crisis. This Line was established during the war to protect the people, and the Prime Minister admitted this afternoon that it had done so, and had been of great benefit to them. The war is over, and the world has been made safe for democracy ! But who is to say that within the next four, five, or six years, Europe, or even Australia, will not be embroiled in another ‘war ? If that should happen, the need for the Australian Commonwealth Shipping Line will be sorely felt. We should maintain a number of vessels, and continually replace them in order to keep the Line up-to-date. We should be prepared even to lose money over it. As far as book entries are concerned I am convinced that, when all things were considered there would be no loss to the people. If the Line were disposed of, and war broke out again, we should have to re-establish this instrumentality, or “ pay through the nose “ to private enterprise as we have done in the past. I protest against the Government’s hostility and coldness towards the Line. The inefficient condition into which it was allowed to drift was due to the indifference of the Government, who tolerated many things which would not have been permitted in a private business. We have three directors managing seven vessels! This is done under a business government, an economy government, a government of sanity, a heaven-sent government to protect the people. It allowed three directors to draw £9,500 a year, the chairman receiving £3,500, and the others each £3,000 per annum. This is the business act of a Government which brought all its business acumen to bear on the management of the Line!


– The board also controls Cockatoo Island Dockyard.


– Granted the salary of one of the directors is debited to the Cockatoo Island Dockyard; but there are also two private secretaries, each receiving £850 a ye”ar, and on top of £9,500 worth of directors, we have a Sydney manager being paid £800 a year, and a Melbourne manager receiving £1,100 a year. All over the country we have a number of highly paid officials ostensibly for the purpose of managing a Line which could be controlled by one man. There is a London manager, and a Western Australian manager; an agent here and an agent there. This is the way the great Nationalist Government, composed of business men, has allowed the Line to fall into disrepute and debt. Would the Prime Minister allow the firm of Paterson, Laing and Bruce to get into the bungle that this Line has been allowed to drift into, owing to ineptitude and callous indifference? Of course not.

Would that firm, or any other organization with which a member of the Government was connected, be allowed to suffer from over-capitalization, and the creation of fat billets for persons who most of the time did nothing but quarrel with one another? The Line has not had a chance under the administration of the present Government. It was not intended that it should function, when the present Government assumed office. Honorable members opposite have their tongues in their cheeks when they speak of the losses on the Line. After the interim report of the committee had been drafted and duly signed by the Government’s supporters - it was a unanimous report, because it was on the lines desired by the Labour party - some twelve months went by. Apparently it was then thought by the Government that the time had arrived for the Line to be abolished. And so the Government nominees on the committee had to turn a somersault. They did it very gracefully, and, in some cases, apologetically. The majority report, not the Labour, report, states -

Whilst fully recognizing and appreciating the invaluable service rendered to Australia by the Commonwealth Line of Steamers during the war years, and the immediate post-war period, and the influence which it has throughout exercised in reducing and restraining freight rates, the committee considers that the benefits now accruing to the country by its existence as a governmental concern, are more than outweighed by the heavy losses already sustained, and which, it must be reluctantly admitted, are likely to continue.

The interim report was furnished upon the evidence given by 29 witnesses.” One gentleman gave the evidence on which this last report was founded. I refuse to believe that one man, by his eloquence and the weight of his arguments, has caused this complete somersault on the part of the majority of the committee.

Mr Theodore:

– In any case, that witness did not recommend the sale of the Line.


– That makes the position all the more interesting. Whereas the majority report is general in nature, even in its apologies, the minority report gives definite statements showing how the Line has protected shippers to and from this country. It has been, and will continue to be, a factor in keeping down freights and fares. In August, 3926, it was instrumental in securing a 10 per cent reduction in freights on commodities exported from Australia. That reduction benefited our primary producers. Although the Prime Minister sneered when the Leader of the Opposition spoke of protecting the interests of primary producers, there is ample evidence of the practical assistance rendered to Australian primary producers by Labour Governments both Commonwealth and State. For instance, the rural bank in New South Wales is the creation of a Labour Government. The Commonwealth Bank, which has done so much for Australia, was established by a Labour Government with the ambition that it should develop a rural credits branch, and the Labour party since its establishment has endeavoured to widen its scope still further in order to help our primary producers. So soon as the Australian Commonwealth Line of steamers has been disposed of our primary producers will be at the mercy of the shipping combine so far as freights on exported produce are concerned. It is idle for the Prime Minister to say that after the Line has been sold he will protect the people of Australia. In October, 1926, the shipping ring proposed to increase freights by 15 per cent. The Commonwealth Shipping Board was asked to fall into line. Apparently at that time the directors were not quarrelling, for they refused to agree to the increase. Had the vessels then been controlled by a private company such as that to which it is proposed to sell the Line after its value has been further written down, the position would have been entirely different. Private enterprise is concerned with securing big profits and the Government is doing all it can to help in that direction. The Prime Minister has reluctantly admitted that the superior accommodation of the vessels belonging to the Australian Commonwealth Line of steamers - refrigerating space, modern appliances and greater comfort and convenience for passengers - forced private shipping companies to provide similar accommodation on their vessels, to the advantage, not only of shippers, but also of passengers. That fact will doubtless weigh with the people when they are called upon to decide whether the Government acted rightly or wrongly in disposing of the vessels. While it is true that since 1923 the losses on the Line have amounted to £1,900,000 ; it should be remembered that during that period goods to the value of £319,000,000 have been carried to and from Australia. Although only 7 per cent, of that cargo has been carried by the Australian Commonwealth Line of steamers, that proportion has been sufficient to keep down freights on the remaining 93 per cent, with the result that our primary producers have benefited. The Prime Minister endeavoured to ridicule the idea that the Australian Commonwealth Line of Steamers could have any effect in controlling the Conference Line. He also contended that the Line was of little value so far as the export of our two staple products were concerned. The reason that vessels belong to the Line do not carry wheat or wool to any great extent can easily be explained : vested interests have obtained such a hold of the shipping business connected with wool and wheat that they will do almost anything to prevent Government competition with them. Companies like Dalgety and Company Limited, Gibbs, Bright and Company, and John Darling and Son, are not likely to permit any of the wool or wheat which they handle to be shipped by vessels belonging to the Australian Commonwealth Line of Steamers. Honorable members opposite make much of the losses incurred by the Line, but Australia is not the only country which has lost money in connexion with shipping enterprises. Almost every country which has engaged in the shipping business has lost money Canada has lost £1,800,000 on her State-owned steamers, yet there has been not attempt by the Government of Canada to dispose of its ships. It knows that were it to do so the primary producers, and the people of Canada generally, would be left at the mercy of the rapacious shipping combine. That combine is gradually extending its operations; the Inchcape group is already operating on the coast of Australia. It would be interesting to know whether the prize now being dangled before the shipping companies by the Government will be given to a “ pup “ of that combine. Who are the persons, syndicates, or companies which during the last six months have been in negotiation with the Government with respect to the purchase of its seven vessels? If negotiations have been entered into with private enterprise for the purchase of the vessels belonging to the Commonwealth, honorable members should be acquainted with their details. Every honorable member is entitled to know as much about these negotiations as is the Prime Minister himself. What is there to hide. Is something which the general public should not know contemplated by the Government? Do the files contain more than aT~ number of offers for the purchase of’ certain vessels for a specified price? I should, like to know, before the conclusion of the debate, if the Prime Minister will give honorable members on this side of the chamber an opportunity to peruse the correspondence from these potential lucky investors. As a representative in this Parliament of a small portion of Australia, I think I am entitled to the information. If France is not losing a great deal of money in the shipping business, she is at least spending large sums in subsidizing a big line of steamers. Germany subsidizes the NordDeutscher Line, and is spending a considerable amount each year in its support. Italy also supports a line of steamers, and Holland is interested in the Royal Mail Steam Packet Company. Japan subsidizes a couple of large shipping companies, and South Africa has its chartered vessels. Great Britain subsidizes shipping and shipbuilding, and during the war spent, and since has spent, an enormous sum in that direction. As mentioned by the honorable member for Cook (Mr. C. Riley), the fact that Australia had the Australian Commonwealth Line at its disposal during the strike of British seamen, prevented perishable commodities costing hundreds of thousands of pounds from rotting on the wharfs. If shipping is again held up in this way, and this Line is sold to a. company which can register the ships in any part of the

Empire, their operations will be subject’ to the industrial troubles occurring in Great Britain’s shipping industry in which black labour is employed. In these circumstances, such vessels are more likely to be held up than are those of the Australian Commonwealth Line of Steamers, which, generally speaking, are freer from industrial troubles than those of other shipping lines. The committee in its majority report goes on to say -

Having regard to all tlie circumstances -

In this instance “ all the circumstances “ include the removal of at least one member from the committee who was favorable to the retention of the Line, and the appointment of two more with general instructions that the Line had to go.

Mr Lister:

– No such instruction was issued.


– That is unfair and untrue.


– This is the position. One member of the committee which examined 29 witnesses stated twelve months ago that as the Line had been of great value to the people of Australia it should be retained. A report to that effect was signed and tabled in the House. Then the committee having examined another witness, and twelve months having elapsed, some re-shuffling of the committee occurred. Does the honorable member say he was justified in completely altering his opinion.

Mr Lister:

– In the first place I deny that 29 witnesses favoured the retention of the Line.


– I did not say that 29 were in favour of its retention. The majority report of the committee continues: -

Having regard to all tlie circumstances, therefore, the committee is of the opinion that the Australian Commonwealth Line of Steamers should not be retained as a direct Governmental activity.

Influence must have been used upon Government supporters on the committee to bring about such an extraordinary somersault. It requires great mental agility to square the determination of twelve months ago with the majority report of to-day. These members of the committee were then apparently conscience stricken, and realized that Australia was likely to be subjected to the exploitation of the Shipping Combine, as the report states .further -

In submitting this recommendation, however -

A recommendation to destroy the Line - the committee recognizes that this Line of Steamers is an asset belonging to Australia, and the committee has carefully considered how the Line could lie disposed of in a manner which would preserve to Australia the good effects it has exercised in the preservation of reasonable freights and fares between Australia and the United Kingdom.

I have not the slightest intention of being in any sense offensive - that is not my custom - but I submit that the gentlemen who signed that report have, indeed, very elastic consciences. The Prime Minister and his Cabinet, probably in collaboration with the members of the committee, apologizing for having compelled them to turn this somersault, now asks them to support a proposal to sell the ships to a company so long as they are registered within the Empire. I ask these members of the committee what they intend to do about it. Are they going to stand by the report, or once more somersault on the declarations they have made? As they do not appear to be anxious to answer the question, I shall answer it for them. They will remain loyal to the Government and favour the disposal of the ships irrespective of thebuyer or the port of registration. This hypocritical majority report is only so much camouflaging of the real intention of the Government. The consciences of the Government supporters on the committee again commences to work, and the report goes on to say -

The influence for good or evil of worldshipping .upon the prosperity and the commercial development of nations is too evident a fact to need lengthy discussion, more particularly in these latter days when the agglomerative tendencies which have made themselves felt in this particular branch of commerce have resulted in the formation of huge shipping combines of world-wide activities whose underlying motives are often far from being altruistic and occasionally fail to be even patriotic. Either to guard against victimization by these bodies or to supply by establishing reasonable means of communication for their products and citizens with other countries, most of the commercially-important nations of the world have found it necessary to interest themselves in the question of the sea-carriage of goods and passengers.

The section of the committee which signed the majority report says that it is necessary for the nation to interest itself in the sea carriage of goods and passengers. The Government says that it will see that the ships when sold are registered within the Empire. I have in mind British patriots like the Inchcape group of shipowners who, in their patriotic desire to help Britain, fill their boats with Chinese, coolies, lascars and Malays, in fact with men of every coloured race. God forbid that they should employ white men! It would cost money to do so 1 The honorable member for Robertson (Mr. Gardner) and others of his party on the Public Accounts Committee, refer to the subsidies paid by Sweden, Norway and Germany in comparison with the few hundred pounds spent by Australia, and sneer at the idea of Australian vessels observing Australian rates of wages and Australian labour conditions being able to compete with foreign-owned vessels. After all, that is only in keeping with the freetrade tendency of this Government to buy always in the cheapest market - Germany, Japan, anywhere. For that reason the Ministry may also be described as a cheap labour Government. The Prime Minister’s promise about the Empire registration of the company that purchases our ships amounts to nothing. The Australians, Englishmen, Scotchmen, Irishmen, and Welshmen, who man our ships to-day will, within six months, be replaced by coolies. Of course, these coolies will be British. Although they will be fed on fish and rice and paid a pound a month, they will still be drawn from the British Empire. Many sins are committed in the name of the British Empire. The Government will allow our steamers to be manned by lascars so long as the ‘vessels remain on a British register. For what it is about to do the Government must accept the responsibility. We know that the Prime Minister has always frankly stated his hatred of Government enterprise. I respect honest conservatism, but I cannot admire conservatism camouflaged. The extracts from the majority report I have read show that while the members of the Public Accounts Committee who signed it have declared themselves to be acting in one way, their intentions are quite the oppo site. The ships will be sold. It will remain for a Labour Government, probably after the next election, to reconstitute this necessary instrumentality which has already conferred great benefit on the people of Australia. We have lost money on our steamers, as we have on other State instrumentalities, and when Labour is in power, it will continue if necessary to lose money on them. It is true that Mr. McCormack, the Premier of Queensland, has de- clared that in certain cases he will decline to waste any more of the people’s money on State enterprise which do not pay, but that declaration cannot be urged as a reason why the Australian Commonwealth Line of Steamers should be sacrificed.’ I cordially support the motion moved by the Leader of the Opposition.

Debate (on motion by Mr. Abbott) adjourned.

page 1052


The following papers were presented : -

Commonwealth Shipping Act - Common wealth Shipping Board -

Profit and Loss Account for the year 1st April, 1920, to 3lst March, 1927.

Balance-sheet as at 3.1st March, 1927.

Australian Commonwealth Line of Steamers -

Profit and Loss Account for the year 1st April, 1926, to 31st March, 1927.

Balance-sheetas at 31st March. 1927.

Result of working of Fleet for the year 1st April, 1920, to 31st of March, 1927.

Realization of Assets (Surplus Tonnage) Account for period 1st September, 1923, to 31st March, 1927.

Cockatoo Island -

Profit and Loss Account for the year 1st April, 1926. to 31st March, 1927.

Balance Sheet as at 31st March, 1927.

Defence Act - Australian Rifle Club Regulations - Statutory Rules 1927, No. 120.

Lands Acquisition Act - Land acquired at - Parafield, South Australia - For Defence purposes.

Queanbeyan, Federal Capital Territory - For Federal Capital purposes.

Public Service Act - Appointments of -

Seat of Government (Administration) Act - Order for variation of lay-out of the City of Canberra and its environs, dated 29th October, 1927.

House adjourned at 10.27 p.m.

Cite as: Australia, House of Representatives, Debates, 8 November 1927, viewed 22 October 2017, <>.