2nd Parliament · 3rd Session
The President took the chair at 2.30 p.m., and read prayers.
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Senator,PEARCE - I desire to ask the Minister of Defence, without notice, whether, if he intends to proceed with the scheme of holding a combined camp of Federal troops at Albury, as announced in the press to-day, he will take into consideration the advisability of giving facilities for troops from Western Australia and Tasmania to attend, and also inquire whether the steam-ship companies will be prepared to give special travelling facilities to such troops ?
– My attention was called to this matter when I first became Minister of Defence, but it has not been brought under my notice since that time. Certainly it has not been under my consideration of late. In the press I have seen a notice to the effect that a camp would be held at Albury, but I am not responsible for what appears in the newspapers. When I looked into the proposal twelve months ago, I found that the suggestion had been made ‘ to previous Ministers, hut that the cost was prohibitive, and that therefore the idea could not be considered.
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– I desire to ask the Minister of Defence, without notice, whether he can inform the Senate of any promise made by the Minister of Trade and Customs to alter the regulations under the Commerce Act, which were recently laid upon the table?
– No. All I know is that my honorable colleague told me that the regulations I laid upon the table were open to revision, and that he anticipated that some alterations would be made in them.
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Assent reported.
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– I desire to ask the Minister of Defence, without notice, if he has yet received a report as to dissatis faction existing amongst Class B of the Naval Reserve of South Australia.
– I have received a report, which I have communicated to the honorable senator. I anticipated that by this time it would have been in his hands.
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asked the Minister of Defence, upon notice -
Referring to the emphatic statement made on Thursday by the Minister of Defence to the effect that all Border Customs Houses had been abolished, how does he explain the fact that the Estimates for the current year provide for the employment of eleven officers and the expenditure of ,£2,680 expressly for the up-keep of Border Customs Houses?
– The answer to the honorable senator’s question is as follows : -
These are not Border Customs Houses in the sense they were so called before Federation. The officers at these places simply deal with imported goods which are transferred under bond, and collect statistics. They should be styled inland Customs Houses, as they have bo reference to border Customs. The old term was merely continued as a matter of convenience.
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Second Reading. Debate resumed from 10th August (vide page 2667),. on motion by Senator Playford.
That the Bill be now read a second time.
.- I think that the Senate is indebted to Senators Symon, Millen, and Gould for their drastic criticism of the Bill and the searching analyses to which they subjected its provisions, to say nothing of its indebtedness to Senator McGregor for his vigorous defence of it. I had not the privilege of being present whilst he was speaking, but I learn that such was the case. If the interpretation which my honorable friends on this side choose to put upon certain provisions were justified, then the Senate would have but one duty to perform, and that would be to reject the measure. Since the adjournment on Friday, I have had the opportunity of devoting a few hours to the study of its provisions, and I must confess that I see nothing which would justify such doleful apprehensions of disaster as my three honorable friends saw fit to express. The fundamental principle of the rpm is self-defence, and. its object is’ to insure fair competition in trade. A sum of ,£700,000 ‘ a year is annually spent in preparing to defend our shores against aggression. We recognise as a first principle at all times that if we want to avoid aggression we must prepare for war. So it is in the industrial sphere. We have built up some valuable and important industries mainly, if not wholly, by the fostering influence of a system of protection. To show their extent, I shall quote a few figures which have been supplied to me by Mr. Drake, the Government Statist showing the average number of hands employed and the value of the output of the manufactories of the Commonwealth. In 1904, the average number of hands employed was 203,213; the value of the raw material used was £42,500,000; the added value in process of manufacture was upwards of £29,199,298; and the total value of the output was £71,699,298. In that year, the value of the machinery a,nd plant was ,£21,971,512 ; and of land and buildings, nearly £20,000,000; the total being ,£41, 702.509. The industries which have been established are of such gigantic proportions that at least we are justified in taking strong measures to see to their efficient protection. All that the Bill seeks to do in this connexion is to give some assurance that colossal and wealthy corporations, such as exist in America, shall not be permitted to swoop down upon the young and struggling industries of Australia. In other words, we seek to raise a peaceful legislative barrier against all those gigantic monopolistic concerns which may have the intent of destroying our industries.
– I am a protectionist, but I cannot quite follow that statement.
– I am only staling that we are seeking to protect ourselves against any effort on the part of wealthy American or other combinations to destroy our industries. That is the purpose of the T3ill. As from time to time the question has been asked what is the necessity for the measure. I would urge that, by making it known to such vast combinations that we have made legislative provision against any attempt on their part to crush our industries, as they have successfully done in regard to smaller industries within America, we shall prevent aggression on their part. From that stand-point I urge that the measure is one of a prudential character, and wise in its conception. It is one to which, in my judgment, neither free-trader nor protectionist can reasonably object.
– No one did object to that part of the Bill.
– Seeing that that forms the whole of Part II. of the Bill, I do not know exactly what my honorable friend did object to.
– I can only regret that I did not make myself sufficiently clear.
– The honorable senator objected to the use of the words -
With intent to destroy or injure, by means of unfair competition, any Australian industry the preservation of which is advantageous to the Commonwealth.
– Exactly. I have had an opportunity to look through the only speech against the measure which I believe has been circulated in print, .namely, that of Senator Symon, and I was present for a time whilst Senators Millen and Gould contributed vigorous onslaughts upon it. I shall try to deal with some of the principal arguments urged by those honorable senators. At the outset, I totally differ from Senator Symon when he says of the measure that it is - crude, ill thought out, and in its provisions it will not carry out what ought to be the intent tion, namely, to prevent restraints in trade.
After a careful perusal of it, I say that, in my opinion, it is a thoroughly wellthoughtout measure, and wise in its conception.
– That is why some people object to it.
– Undoubtedly. It takes the Sherman Act for its foundation, and seeks to remedy the more important defects disclosed in that Act by numerous American court decisions in connexion with it.
– There is nothing in the Sherman Act in restraint of importation.
– But there is in the Wilson Act.
– The honorable senator said that the framer of this Bill took the Sherman Act as its foundation.
– If the honorable senator1 will allow me, I would say that in America there are three Acts dealing with the objects covered by this Bill. The first is the Sherman Act dealing with trade within the limits of America and with freetrade conditions, the second the Wilson Act. which deals with importations, and the third the Elkin Act, dealing, if I remember rightly, with both internal and external trade. This Bill is founded on those measures.
– The honorable senator said that it was founded on the Sherman Act. I had no desire to interrupt him, but merely to ask a question. If the honorable senator resents that, I shall not interfere again.
– I beg the honorable senator’s pardon. I was under the impression that ‘he suggested that I had stated something, wrongly. I intended afterwards coming to the other two Acts. There are certain objectionable features in the Sherman Act opposed to the general principles of English law, and this Bill eliminates those objectionable American features, and seeks to adopt the principles of English law. It is very important also to’ remember that this Bill is framed with special regard to our jurisdiction and constitutional powers. Where any of its provisions might be the subject of doubt, honorable senators will find that the very words of our Constitution are used. I therefore congratulate the Attorney-General, the draftsman of the measure, on the legal skill and acumen which he has brought to bear upon it. Senator Symon went on to say, with reference to the Bill -
It is not the outcome of any practical need. . . No industries are threatened. . .’ . We have no instance of combines and trusts here. They may or may not exist ; at any rate there is none that is mischievous.
That is a very general statement, but, in my judgment, it is not quire correct. Saturday last furnished us with an answer to it. In the Age and Argus newspapers of that date we saw certain references to Tariff revision, and, amongst other things, the following two paragraphs from the report of the Tariff Commission. I speak subject to correction, but I believe they accord with the general findings of the members of the Tariff Commission, and not merely the findings of protectionist or freetrade members of that Commission -
That there is clear and undisputed evidence that between October, 1904, and October, 1905, there was a trade agreement or combine in existence in Australia to which most of the leading Australian manufacturers qf agricultural implements and machinery, together with the International and Massey-Harris Harvester companies, were parties, and that by such agreement the selling price of stripper-harvesters in each of the States was fixed and determined ; that, as a result, some local firms raised their prices from £70 to £81, and that one firm reduced its price from £83 or ^84.
That we are of opinion that such trade agreements or combines in restraint of trade are injurious and detrimental to the public interest -
I direct the attention of honorable senators to the fact that these are the words of the Bill- and that they should be prohibited by law, especially in a case where duties are in operation tending to limit importation for the benefit and protection of local manufacturing industries ; the importing firms should also be prohibited from entering into such combinations, seeing that they may be utilized for the purpose of lowering prices in order to prejudice and destroy local manufactures.
That as the finding of the Tariff Commission, whose special duty it was to give close attention to this particular subject. Fortunately at this juncture, after full inquiry, they have submitted their conclusions as to the existing condition of things as the result of their investigation. We have also amongst our records a report from the Royal Commission appointed to inquire into and report upon - ,
That Commission has- furnished us with a report, and, while I do not pretend to say that I am in full accord with the findings of the Commission, or that they are justified bv the evidence submitted, I have no doubt that they are honest findings, and the result of an honest (investigation on the part of the signatories to the report. They are, at all events, evidence of the existence of certain grievances, and of the fact thai there is room for some improvement of existing conditions. Clause 4 of the Commission’s report’ says -
That a combine or trust does exist in the industry of the manufacture. . . . That it extends to the business of importation ; that it also extends to the wholesale distribution of locally manufactured and imported tobaccos.
Clause 6 of the report reads -
The prospect of this competition has the effect of driving the principal Australian firms into closer combination, eventually culminating in an arrangement which embraces, not only the chief Australian tobacco, cigar, and cigarette manufacturers, but is also connected with the British-American Tobacco Company of the United Kingdom and America. Each of such manufacturing businesses holds a proprietary interest in every other such business, and also in the distributing firm of Kronheimer Limited.
In clause 17 I find the following: -
As to the effect of the combination on the operatives, four representatives of those engaged in the making of plug and twist tobaccos who gave evidence were in agreement that conditions generally were worse, now than before the combination. These complaints refer to inadequate -and reduced wages, the substitution of female J abour for male labour at lower rates of pay than male labour, humidity of atmosphere of factories, and power of combine to dictate terms and conditions owing to the absence of competitors.
In clause 19 of their report, the Commissioners say -
We find generally that wages have been, in some instances, reduced, and in clause 21 they say -
We find that the effect of the combination on the grower of tobacco leaf has been disastrous’; that better prices ruled when the factories were more numerous.
Those are the findings of a Commission appointed by the Governor-General in Council, and comprising representatives of the Senate. I om not saying that they are justified by the evidence, but the fact remains that in connexion with this particular industry there are causes of complaint and grievances. I need not refer to other combines that are perfectly well known to honorable senators. I think that Senator ^McGregor specially mentioned the monopoly connected with the sugar industry, and we know that there are shipping rings and other combines which have already been referred to. The fact remains that, even in view of our present conditions,’ it is essential that we should have a law of this kind on our statute-book, to check at the very outset their baneful influence. But, apart from that altogether, my contention is that as prevention is better than cure, this Bill as a wise and peacable legislative provision available to meet emergencies as they arise. Senator .Symon, amongst other things, said -
The only bad monopoly that I know of is that which raises the prices of t?ie necessaries of the people. A monopoly of that kind I personally detest. Such a’ monopoly results from exclusive Tights, however acquired, to the sale of a commodity.
The honorable and learned senator went on to say -
And it may be brought about by agreement with the intention to choke competition and capture the market - the objective in point of fact is to raise prices.
I will make but one comment upon that, and it is that this particular class of monopoly, which excites the detestation of my honorable and learned friend, is one of the classes of monopoly proposed to be dealt with by the provisions of this measure. Then the honorable and learned senator went on to refer to what is regarded as rather an important matter. He said -
It will strike at the importation of machinery used largely in the boot trade, which cannot be otherwise acquired.
The honorable and learned senator gave us to understand that this Bill would have the effect of annulling existing contracts for the leasing of boot manufacturing machinery, and that prosecutions might take place as the result. I think that the honorable and learned senator was in error in those conclusions. I say so, of course, with the greatest respect for my honorable and learned friend. I understand that his reference was to the’ Goodyear bootmaking machines. In connexion with this machinery there are throughout Australia various contracts in force with boot manufacturers. They provide for the payment of royalties, and, as I gather, the boot manufacturer is obliged to take from the proprietor of the machines certain material, and the price to be paid for that material is, I understand, 5 per cent, more than the prevailing market price.
– It is not necessarily that. The only restriction is that the lessee shall not buv from any one else unless the lessor shall be unable or unwilling to supply the goods, and at a price not more than 5 per cent, in excess of the price for which the lessee can obtain them t-.f equal quality
– Senator Symon was of opinion that this Bill if passed into law would make those agreements null and void, and that prosecutions might follow. With confidence I express the opinion that the terms of the Bill in no way affect such agreements.
– The AttorneyGeneral has said so in another place.
– Would the Bill not even effect the continuance of such agreements ?
– No; not even the continuance of such agreements?
– How about the renewal of agreements?
– I shall even go further1 and say that, provided they are beneficial- agreements, and not detrimental to the public, they may be renewed, notwithstanding this measure, for the reason that it does not affect them under such circumstances.
– How about any person desiring to enter into a similar agreement ?
– He would be at perfect liberty to enter into any agreement or contract of a beneficial nature; the only contracts or agreements which may not be entered into are such as would be detrimental to the public. Clause 4 mentions any “ person or agent “ who “ makes or enters into any contract”; and I say that these words iri themselves imply the future, and have no reference to the past. That clause goes on to speak of persons who enter into such contracts or agreements “ with intent “ to restrain trade or commerce to the detriment of the public. If a man innocently entered into such a contract before the passage of this Bill, he could not possibly have done so with: the intent to restrain trade under the terms of a measure that was not in existence. Subclause 2 provides that every contract made or entered into in ^contravention of the terms of the Bill shall be absolutely illegal and void. Honorable * senators will see, therefore, that the Bill cannot have any possible reference to existing contracts.
– But supposing some contract were entered into the. day after the Bill became law?
– At present I am merelycontending, that the Bill cannot be retrospective, and, consequently, does not affect, existing contracts, which are a source of such apprehension on the part of the honorable senators with whose arguments I am at present dealing. In other words, the Bill says that a crime is not to be made retrospective; and it is a well known and acknowledged principle that no legislation must make a crime retrospective. I go further, and say that if contracts are beneficial - if they are not to the detriment of the public, and are not made to restrain trade or commerce to t’he detriment of the public, or with intent to destroy or injure by means of unfair competition, any Australian industry, the preservation of which is advantageous to the Commonwealth, having regard to the interests of producers, workers, and consumers - they- may be entered into the day after this Bill lias passed. There is nothing in the terms of this measure that would prevent such a state of affairs eventuating. But I may be referred to the clause which deals with any person who is at present, or continues to be, a member of, or engages in, any combination. That, however, is. not the sort of contract with which I am now dealing. There is an offence mentioned in clause 4 of continuing to be a member of, or engaging in, any combination with intent to restrain trade to the detriment of the public, and with intent to destroy an Australian industry which is worth preserving. The Bill provides that any persons who enter into a conspiracy of that kind shall be guilty of an offence. Could anything be more fair or reasonable? That offence is not retrospective, because the Bill provides that if a person continues to be a member of a nefarious combination, such as is contemplated, there shall be an offence, and that practically means an offence after the measure has been passed. In other words, if a person continues to be a member of a nefarious combination, he is to be treated as though’ he had freshly joined after the passage of the Bill. Tha’t is obviously the position ; and, consequently, if a person continues to be a member of a conspiracy against Australian industries, an offence will be created under the Bill, and there will be a liability to prosecution, as for any other criminal offence. Reference has been made to the Sherman Act; and so far as I could gather from the remarks of the three honorable senators who adversely criticised the Bill, they regard that Act with approval. I do not know whether I am doing Senator Millen an injustice when, trusting to memory, I say that I understood him to tell us that if we had the Sherman Act he would be quite satisfied.
– The honorable senator is not quite correct.
– And am I to understand that Senator Millen would not be satisfied if we had the Sherman Act?
– What I did say was that I was perfectly satisfied to support so much of this Bill as will operate in restraint of trusts and monopolies.
– Do I understand the honorable senator to say that he discards the Sherman Act, and would not be satisfied with its terms and provisions ? If that be so, I am to some extent robbed of the criticism I was about to launch. But I must say that three honorable senators -who spoke on this side of the chamber gave me that impression.
– Senator Symon practically took that view, .because he asked why we were not asked to adopt the Sherman Act.
– I was saying that honorable senators on this side ‘have spoken in terms of approval of the Sherman Act.
– I do not think that the honorable senator is quite correct there ; what was said was that the Government were not justified in representing this Bill as a copy of the Sherman Act.
– I never said that this Bill was a copy of the Sherman Act.
– The Minister of Defence has all along said that this Bill is founded on American legislation.
– The Sherman Act is the foundation, just as it is the foundation of five or six other Acts since passed in the United States, finishing up with the Elkin Act, to which Senator Best wished to refer.
– Just so; the foundation of this Bill is American legislation, including the Sherman Act, and the Wilson Act and the Elkin Act; the Bill is founded on all three Acts. Then I understood honorable senators to say that this Bill does not attempt to discriminate between good trusts and bad trusts.
– Exactly.
– Senator Millen is not prepared to say that he would be satisfied with the Sherman Act - though I understood from the general remarks of three honorable senators on this side that that Act met with their approval - and he now contends that the Bill does not discriminate between good trusts and bad trusts. If these are the views of my honorable friends on this side, I can only say that they cannot have given the Sherman Act, or the decisions under its provisions, their thoughtful and careful consideration. I undertook at the outset to prove, as far as I could, that this Bill eliminates what we conceive, according to our English ideas, to be the harsh and rather unfair provisions of the Sherman Act. I now propose to contrast the two measures. The first section of the Sherman Act is as follows: -
Every contract, combination in the form of trust or otherwise,- or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.
That is .to say, it is a misdemeanour to so contract.
Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanour, and, on conviction thereof, shall be punished by a fine not exceeding $5,000, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the Court.
I desire now to show how the provisions in this Bill are more just. According to the terms of the measure before us, a man cannot be convicted of a crime unless he commits it with intent to do wrong ; whereas under the Sherman Act the most innocent of men may commit a crime unwittingly. In other words, an unfortunate man may. by some inadvertent act on his part, render himself liable to serious penalties. The Bill, in contrast to the Sherman Act, is a guarantee that an innocent man shall not be made a criminal. Under it it has to be proved, not only that the agreement is in restraint of trade, but further that it is detrimental to the public ; whereas under the Sherman Act, all that has to be proved is that the combination is in restraint of trade. The third distinction is that under the Bill it has further to be proved that the intention is to destroy or injure, by means of unfair competition, some Australian industry that is worth preserving. It will be seen that there is a vast difference between the Bill and the Sherman Act.
– And there lies the vast danger of the Bill. .
– The danger that we cannot punish an innocent man !
– That is a gross misrepresentation of what I said - an intentionally gross misrepresentation.
– If the honorable senator says that- the misrepresentation is intentionally gross, I can only reply that he has made a misstatement.
– I desire to go further, and say that the Sherman Act does not discriminate between good and bad trusts, whereas the Bill, before us does. It has been held by) the American Courts under the Sherman Act, that whether the restraint of trade be beneficial or injurious, it makes no difference.
– Quite right; there are no beneficial trusts.
-The only question that the American Courts have to consider is whether there is restraint of trade, which may be intentional or. otherwise. I wish to satisfy honorable senators on this point by supporting what I ‘have said, with the dictum of learned Judges in various decisions. The first reference I make is to the case, The United States v. the Chesapeake Ohio Fuel Company, which is reported at page 105 of the Federal Reports for 1893.
– The honorable senator has made no reference to “ unfair competition “ and its definition.
– The honorable senator may accept the assurance from me that before I conclude I shall give a fairly full explanation on that point.
– Competition cannot succeed at all unless it is unfair.
– Unfair competition is defined in the Bill.
– There is no such thing as fair competition - the competitive system is all unfair.
– Then, if a man were to stand against me for Parliament, he would be guilty of unfair competition ?
– I desire to assure honorable senators that I propose to deal with every feature of the Bill to which exception has been taken’.
– What I have referred to is one important point.
– The point which I am now emphasizing is that the Sherman Act makes no difference between beneficial and injurious trusts, whereas this Bill does. What I am about to quote is the head-note to the judgment in the case which I have mentioned. It says -
It is the declared policy of Congress to promote individual competition in relation to InterState commerce, and to prevent combinations which restrain such competition between their members ; and it is no defence to an action to dissolve such a combination as illegal under the anti-trust law that it has not in fact been productive of injury to the public, or even that it has been beneficial, by enabling the combination to compete for business in a wider field.
The District Judge, Thomson, in the course of his judgment, said -
The important question is, not whether the performance of the contract so far has resulted in actual injury to trade, but whether the contract confers power to regulate and restrain trade upon those charged with its performance.
Later on he said-
Tt is the duty of the courts to condemn every contract which necessarily in its performance involves a. restraint of trade, although it mav not extend to the point of a monopoly of all that trade.
The case finally went to the Court of Appeal, which, in the course of its judgment, said -
It is no defence to a suit to dissolve such a., combination as illegal under the anti-trust law,, that it has not been productive of injury to thepublic, or even that it has been beneficial, by enabling the combination to compete for businessin a wider field. As we understand the decisionsof the Supreme Court of the United States, theconstruction of the statute is no longer an open ; question. At the common law, contracts wereinvalid when in unreasonable restraint of trade,. and were not enforced by the courts…..
In the exercise of this right, Congress has seem fit to prohibit all contracts in restraint of trade. It has not left to the courts the consideration, of the question whether such restraint is reason- ‘ able or unreasonable, or whether the contract: would have been illegal at the common law or not.
There is another case, known as the Northern Securities case - and also known as the great Merger case - where the sameprinciple was laid down. The Court said -
The Act is not limited to restraints of Inter state and international trade or commerce that are unreasonable in their nature, but embracesall direct restraints, reasonable or unreasonable, imposed by any combination, conspiracy, or-‘ monopoly upon such trade or commerce.
So that honorable senators will see that’ the terms of the Sherman Act were so dras-‘ tic that, whether the contract was reasonable or unreasonable, it came within theprovisions Qf the law.
– -Does the honorablesenator think that that principle appliesto the exact wording of this Bill.
– This Bill eliminatesthe principle which I have mentioned, and’, is based upon English principles. I will’ show mv honorable friend in what way,, but before doing so I wish to refer to aremark made bv Senator Symon. My honorable friend Senator Dobson and myself” protested against Senator Symon’s view of the law at the time, and the followingremarks were made. Senator Symon spokewith approval of certain English combinations: -
– There is an authority whichsays that, whether the combinations are reason- ‘ nb’e or not, thev are illegal.
– If the honorable and learned senator thinks that fixing prices- is in restraint of trade he will act on that ‘ opinion.
– There are several cases inwhich the Courts say so.
– There arenot, as Senator Best will find. I have looked” into the cases with some care.
I, too. have looked into the matter with-, some care, and the result of my investiga-, tion is as I have stated. The cases that I”’ have quoted to the Senate distinctly show that whether the contract is beneficial or injurious, reasonable or unreasonable, if it be in restraint of trade that fact in itself is sufficient, and the contract is illegal. ‘ Senator Millen graphically put before the Senate this state of affairs. He said ‘ that the New South Wales Government had entered into a contract with a combination of wire netting manufacturers* in the old country for the supply of some 5,000 miles of wire netting. Holding up the Bill, he said, “ This Bill is going to declare that contract to be illegal, and therefore null and void.” He went on to say, “But I challenge the Minister of Defence, with all his army, to keep that wire netting out of New South. Wales !” I wish to tell my honorable friend that this Bill does not declare a contract of that kind to be void at all.
– My whole argument was that the Bill either meant prohibitionor it was a nullity. Senator Best supports everything that I said, and proves that the Bill will be a nullity.
– I understood my honorable friend to say that under this Bill the contract made by the New South Wales Government would be a nullity. My answer is that such a contract would not be a nullity, unless it could be proved that it was a contract detrimental or injurious to the public. Otherwise it would be- perfectly proper, and would not be affected by the terms of this Bill.
– The honorable senator overlooks clause 6, paragraph b.
– I will undertake to deal with that provision. Then my honorable friend referred to a contract entered into, or about to be entered into, by a number of dairymen with some capitalist, who undertook to erect butter factories on condition that those dairymen gave him their trade. Mv reply to -that is that, unless mv honorable friend can assure me that the contract is injurious and detrimental to the public, it is a perfectly good one, and. if this Bill were passed tomorrow, would not be affected by it in any shape or form.
– It is a restraint upon trade.
– Such a contract would be bad under the Sherman Act, so much admired bv honorable senators who oppose, this Bill, but it would be perfectly good under this measure. I promised honorable senators that I would point out the English principles upon which this Bill is founded. I have shown that under American law any contract in restraint of trade, whether beneficial or ‘injurious, is bad. As regards English law, the principle is laid down in the case of Nordenfelt v. Maxim, reported on page 549 of the Appeal Cases of 1894. Lord Herschell laid down this well-established and fundamental principle -
I would adopt in these cases the test which in a case of partial restraint was applied by the Court of Common Pleas in Horner v. Graves (1), in considering whether the agreement was reasonable. Tindal, C. j., said: “We do not see how a better test can be applied to the question, whether reasonable or not, than by considering whether the restraint is such only as to afford a fair protection to the interests of the party in favour of whom it is given, and not so large as to interfere with the interests of the public.”
Lord Watson said -
It does not seem to admit of doubt that the general policy of the law is opposed to all restraints upon liberty of individul action which are injurious to the interests of the State or community.
So that the British principle is that a. restraint in trade may be reasonable or it may be unreasonable. If it is fair and reasonable, that restraint in trade is good,, according to British law. If it is unfair or unreasonable it is bad. And it is so under the terms of this Bill. It is only in cases where there is, with intent, restraint of trade to the detriment of the public, or where an offence is committed, or a man enters into a contract, or continues in a combination, with intent to destroy or injure by means of unfair competition any Australian industry, the preservation of which is advantageous to. the Commonwealth, having due regard to the interests of producers, workers, and consumers - whose interests are so exclusively looked after by my honorable friends who oppose this Bill - that the action is illegal. This measure, therefore, is founded on British principles. There is another important matter to which I have been asked to make reference, and which requires a great deal of attention. That is the question of our power to interfere with persons who confine themselves to trading simply within the limits of a particular State. The question is : What are ‘the powers of the Commonwealth in regard to triose persons ; and, also, what are the powers of the Commonwealth in relation to foreign corporations that attempt to trade within the Commonwealth? The difficulty will, no doubt, appear to some honorable senators to be more of less intensified when I say at once that I differ from the view of my honorable friend, Senator Symon. I should say, however, in justice to him, that I believe that if he had not overlooked the matter to which I am about to refer, he and I would probably be in complete agreement. Senator Symon said in the course of his speech -
Honorable senators will recollect that we have no power to deal with trade which is confined in its operations to any one State. Our only power in this matter is to deal with trade and commerce between the States and with foreign countries. Clauses 5 and 8 are certainly couched in a form of words which makes it extremely doubtful if an attempt might not be made under this measure to interfere with trade which is absolutely confined within a particular State.
I do not know how we are going to get at a foreign corporation.
He expressed doubts whether clauses 5 and 8 of the Bill, are constitutional, and relied upon certain American cases in support of his view. But my honorable friend overlooked the important fact that our Constitution is not the same as that of America. It is wider. The feature of our Constitution which is not embodied in the American, and which makes all the difference, is paragraph 20 of section 51, which authorizes this Parliament to-make laws “ for the peace, order, and good government of the Commonwealth,” with respect to -
Foreign corporations and trading or financial corporations formed within the limits of the Commonwealth.
That is not in the American Constitution. If it were there, then, in my opinion, we should not have the America decisions to which Senator Symon has referred in support of his contention. Consequently, it is by reason of section 51 of the Constitution, paragraph 1 -
Trade and commerce with other countries and among the States - together with paragraph 20, that we are enabled to enact clauses 4 and 7, which must be read together, and clauses 5 and 8, which must also be read together. I propose to explain as carefully as I can our constitutional powers in regard to these matters. Clause 4 provides that -
Any person who, either as principal or as agent, makes or enters into- any contract, or is or continues to be a member of or engages in any combination, in relation to “ trade or commerce with other countries or among the States.”
That follows the wording of paragraph 1 of section 51 of the Constitution. If hon- orable senators will refer to clause 7, they will see that precisely the same words are, advisedly, made use of as regards trade or commerce -
Any person who monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize, any part of the trade or commerce with other countries or among the States, with intent to control, Fo the detriment of the public, the supply or price of any service, merchandise, or commodity, is guilty of an offence.
That again follows the terms of the provision in the Constitution, so that it will be observed that when dealing with a person as against a corporation, clauses 4 and 7 refer to trade or commerce done by that person, with other countries, or among the States, and not to trade or commerce confined within the limits of any one StateThen under paragraph xx. of section 51 we have power to make laws in regard to -
Foreign corporations, and trading or financial corporations formed within the limits of theCommonwealth.
If honorable senators will refer to clause 5 of the Bill they will see this provision -
Any foreign corporation, or trading or financial corporation formed within the Commonwealth, which, either as principal or agent, makes or enters into any contract, or engages or continues in any combination - to do so and so, shall be guilty of an offence. Then, in clause 8, the constitutionality of which was doubted by Senator Symon, precisely the same words are used again -
Trade or commerce within the Commonwealth,, with intent to control, to the detriment of thepublic, &c.
In clauses 5 and 8 there is no such limita-‘ tion as in clauses 4 and 7. In other words,, the Bill seeks to control the trade or commerce of the corporation referred to, even, if confined to the limits of a State; and,, according to my view, paragraph xx. of! section 51 gives us full power to do so.. So that the constitutional position appears, to be that we, as a Commonwealth, have nopower to deal with or control any tradecarried om by an individual within the limits, of a State. If, however, he attempts, to deal with other States, or with’ trade and commerce beyond the Commonwealth, we have full constitutional powerto control him in the terms of clauses 4- and 6 of this Bill. But let us now take the other contingency. In regard toforeign corporations, I contend we have complete and unlimited control. If a. foreign corporation chooses to establish itself in a State of the Commonwealth, even if it confines its trade to the limits of that State, we have complete control over it.
– Does not the honorable senator think that the Federal power over corporations is necessarily limited by the power conveyed in the trade and commerce provision ?
– No; the power over corporations is given by paragraph xx. of section 51 of the Constitution.
– All under one general provision.
– By the combination of paragraphs 1 and 20 of section 51 we have complete control over foreign corporations, whether they confine their business within the limits of a State or not. My view is that each of the paragraphs in section 51 is covered by the opening words of the section giving Parliament power to make laws for the peace, order, and good government of the Commonwealth ; that each paragraph confers jurisdiction as to the subject to which it refers; that each can be read independently almost as though the other thirty-eight paragraphs were absent ; and what is most important, that the “words or phrases of each paragraph are to be given their fullest meaning, and are to be construed in their widest sense. These are the principles followed in the interpretation of the American Constitution.
– The honorable senator will, get a shock when the point is determined by the High Court.
– What can we do to corporations or combines within the Commonwealth ? We cannot put them in gaol.
– I shall show how they can be dealt with.
– We can touch their pockets sometimes.
– We can touch the pockets of private individuals, but we cannot touch the pockets of corporations and combines.
– I shall deal with that matter if. my honorable friend will allow me. We have complete control over a local or foreign corporation.
– What does the honorable senator mean bv “complete control “ ? ‘
– A foreign corporation, or a trading or financial corporation formed within a State, and confining its trade to the State, comes within the Commonwealth-‘ control and jurisdiction. That is, I think, the proper constitutional view of the matter, and that view is certainly carried, out by the terms of the Bill. Senator Findley has interjected, “ We cannot put a corporation in gaol.” That is quite true; and the Bill deals with a contingency of that kind by clause 9, which says -
Whoever aids, abets, counsels, or procures, or by act or omission is in any way, directly or indirectly, knowingly concerned in or privy to - . (a) the commission of any offence against this Part of this Act; or
If there are any local directors, or if there is a local manager or agent carrying on the * business of that concern, and it has committed an offence, against the Commonwealth, they or he will be liable to imprisonment.
– That is all right; but each corporation will get a secretary who will take those risks.
– That may be; we cannot do impossibilities. We have power to control their goods, so that we could soon stop their operations. I hope that I have made it clear - and I admit that the matter is a subject of much confusion - in what circumstances individuals and corporations will be amenable to the terms of the Bill.
– Why are we restricted in the case of an individual who confines his business to a State?
– Because the Constitution says so.
– No; because Senator* Best says so.
– My honorable friend* need not be offensive. I trust that I am at liberty to give an opinion on this subject.
– Yes ; but it is not cor- rect to assert that the Constitution says so. That is only the honorable senator’s interpretation of the provision.
– In my opinion, the Constitution says so, and I challenge my honorable friend to controvert that view. I contend that we have no control over any individual who confines his trade to. one State.
– Where do 0’. . get power over art individual when he extends his trade beyond .the limits of a State?”
– Under paragraph 1 of section 51 we have power to make laws in regard to -
Trade and commerce with other countries, and among the States.
– The honorable senator says that that is limited to an individual, not to a corporation.
– I do not say anything of the kind.
– The honorable senator said so just now.
– I said that it includes individuals as well as corporations. Senator Symon asks what is the meaning of the word “ service “ in clause 7 of the Bill. He says -
Does it mean labour? I think it is quite clear that the trade unions would come under the provision. I think it means labour.
Again, I have to differ from my honorable and learned friend. The clause says -
Any person who monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize; any part of the trade or commerce with other countries or among the Stales, with intent to control, to the detriment of the public, the supply or price of any service, merchandise, or commodity, is guilty of an offence.
It will be seen that the “ service “ has to form part of the trade and commerce.
– The honorable’ senator does not think that it applies to labour?
– According to my view, certainly riot. The service must be part of the trade and commerce. There are certain American cases which deal with the matter. There is a case known as the United States v. Knight and Company, heard in 1895, and reported in 156 U.S.I:, of which I have a short note - “
American Sugar Refining Co. (N. J. Corp), by buying up four Philadelphia corporations, acquired practical monopoly of manufacture. Manufacture is ‘not commerce. Transaction bore no direct relation to Inter-State commerce.
That means to say that those engaged in manufacture are not engaged in trade and commerce. But then there are certain other cases. There is, for instance, the case of the United States v. the Trans-Missouri Freight Association, in which it was decided that -
Restraint provisions apply to contracts between competing carriers, relating only to rates for transportation.
Not necessary to prove purpose, to restrain, if necessary effect is to ‘restrain.
Application, to all restraints - reasonable or unreasonable.
That is supported by certain other . cases, including the United States v. The Joint Traffic Association, and also the Addyston Pipe and. Steel Company v. United States, . which has already been referred to. So that “ service “ in clause 7, being part of the trade and commerce, means transportation, and, according to my view, cannot have any regard to the labour engaged. I wish to attack another matter of which my honorable friends have made much. They have objected that this Bill is a mere scheme and pretence for further protection, and inquired why do not the Government boldly and honestly introduce Tariff proposals for increased duties.
– That would be much more honest, anyhow.
– I shall try to satisfy my honorable friend that Tariff proposals and this Bill have two totally different objects in view.
– Not according to my reading of the Bill.
– Even if the members of the Government did introduce Tariff proposals, my honorable friends would not be satisfied, but would be equally strenuous in their opposition. The Bill is certainly introduced with the. object of further protection in one aspect, but not as generally understood.
– Canada and New Zealand fell ,back upon protection for a remedy.
– That may be ; but I wish to answer the objection just mentioned. Protection is very important. The object of Tariff proposals is to equalize conditions. We take our industrial conditions and star dard of life, and then we raise a barrier, so as to give our own people a fair show.
– Do not the protec’tionists go a long way beyond that sometimes ?
– Will my honorable friend hear me out?
– I know that they do. I do not mind it sometimes, but it is well to be frank about it, is it not?.
– I hope that I am very frank. The objection of my honorable friends is that all that is sought to be achieved, bv the Bill could be achieved bv Tariff proposals, and that that would be a more honest way of dealing with the subject
– Yea
– The terms and objects of this Bill could not possibly be achieved by Tariff proposals, unless, of course, we framed a prohibitive Tariff, and that point i shall come to later on.
– Then this Bill means prohibition.
– No; that is exactly what it does, not mean, and that is what my honorable friend is disappointed to learn. Its design is to provide for emergencies as they arise, and -under circumstances mentioned in the Bill to prohibit. Tariff proposals are of general application. This Bill is of special application, and is only intended to meet emergencies. Tariff proposals deal only with normal conditions. This Bill seeks to deal with abnormal conditions. Tariff proposals, to a . greater or less extent, encourage trade on fair conditions. This is a Bill to prevent trade on unfair conditions; in other words, it is intended as an emergency measure, with the view that, if Messrs. Rockefeller, or other unscrupulous multi-millionaires of his type, attempt to swoop down upon our industries, we shall have at hand legislation to enable us to cope with them. (Personally, I do not hesitate to say that I object to a prohibitive Tariff. At the same lime, as a protectionist, what I seek to achieve is fair play for our own industries. If we attempted by means of the Tariff to secure what is aimed at by this Bill, we 1 should require to have a general prohibitive Tariff, under which unfair combinations, seeking to do injury to our industries, would be treated only in the same way as the fair trader. Such a thing we do not desire. We desire to encourage, trade on fair conditions, but we will not submit to colossal combinations or trusts bringing goods here- with the object of crushing our industries. According to honorable senators in opposition, in honesty this should only be done by a prohibitive Tariff. But, as we object to a prohibitive Tariff, which would punish the fair and the unfair traders alike, we prefer to resort to the means provided by this Bill. The contingencies proposed to be dealt with are well illustrated by what has taken place within our own experience. I ask honorable senators what it is that the International Harvester Company have attempted to do? I have had put into my hands one or two letters, to which the attention of the Senate might well be directed. Honorable senators are aware that some time ago the International Harvester Company boasted that they controlled 90 per cent, of the trade in agricultural implements.
– In the States.
– That was only the boast of a traveller.
– Is that 90 per cent, of the United States trade?
– I think it was the trade of the world that was referred to, and they had certain designs on the remaining onetenth.
– They claimed to have 90 per cent, of the world’s trade in harvesting machinery.
– The honorable senator could not make that statement on his own responsibility.
– -No, I could not; but I shall read the letter which is my; authority for the statement.- It speaks for itself. This letter has evidently been printed and circulated, and I presume that it is authentic in every way. It is a letter from the International Harvester Company to an agent of the Sunshine harvester, and is dated 3rd February, 1905 -
Dear -sir,
We regret to note that you have the agency for’ the sale of McKay harvesters.
Now that we have not only the most complete but no doubt the best line of harvesting and seeding machinery in Australia, .we would ask you to discontinue McKay harvesters, as we are positive you could do .much better if you handled our goods exclusively. The inducement we offer you in the way of commission and competent salesmen and experts should be an incentive to you to stand by the company, that is not only in a position to give you the largest line of goods to which they are adding every year, 1 but are ever ready and willing to treat fairly with you in assisting you in every way possible to make a success.
You are no doubt aware that the International . Harvester Company of America manufacture and sell 90 per cent, of the world’s output of harvesting machinery, and it goes without saying that this company will continue to grow, and under such circumstances we are sure you would prefer to be identified with a company that will be . the most .useful to you from a remunerative stand-point.
There is also another advantage for you particularly to note, viz., a’ very considerable saving of your time and horse flesh in being able to take care of the whole of your machine business during one visit, with the one salesman of proved ability and experience. There will be a saving of your valuable time on sales and keep: ing accounts and in correspondence.
We feel that our full line should be distinctly represented by each and every agent with whom we contract, and when one of our agents handles other lines of goods that are in direct competition. with ours or part of ours, we feel that our business suffers thereby to a certain extent, and we are therefore inclined to the opinion that should we be obliged to transfer the agency on this account, even if the new agent were unable the first year to sell as many machines of a certain kind asthe former agent did, that in the aggregate he would do a better business for us than the agent who sells only certain lines of our goods to the exclusion of the balance.
We are placing this matter fairly before you in order that you may see it from our view point, and we trust that this letter will be the means of securing to us an exclusive contract with you for the McCormick line.
– Does the honorable senator think that it is unreasonable that a manufacturer should ask his agent to confine himself to the interests of his employer ?
– That might be perfectly legitimate. I am not complaining about that ; but I wish to show the whole of the tactics that were adopted.
– Lawyers sometimes get a retaining fee.
– And they want it.
– Here is another letter addressed to Mr. McKay, and dated 25th October, 1902 -
Dear sir,
I have been offered£70 cash on starting for a Sunshine harvester. Kindly inform’ me if you will accept it, it is going into a new district, and my client has been offered good terms by the International, and intends going for one if you cannot do a Sunshine at this price offered.
I was present when the International representative offered thefollowing terms, viz. : - 1. or 2 machines at… …£60 cash. 3 machines at ……£150cash.
So you can see what is being done. He sold two at£120 to one man. Ofcourse, I could not go near him at your prices. Early reply will oblige.
That is important, because when the Minister of Trade and Customs raised the valuation of these machines for Customs duty to £65, there was a great outcry against his action. I understand that these people set to work to secure the trade by reducing their prices, although at one time they represented that, in view of the cost of “manufacture and expensive sale, they could not sell at a reasonable profit below £81.
– That was when they were in the combine with McKay.
– I have nosympathy with the combine, whether Mr. McKay was a member of it or not.
– He has no sympathizers, but he finds many preparedtoputforward his views.
– I understand that at one stage the International Harvester Company said that they could not sell at a reasonable profit under £81 for each machine.
– They said that they could not sell at a reasonable profit at£8i.
– McKay said the same. Senator BEST. - Notwithstanding that fact,we have it recorded in the letter I have read that they not only attempted to sell, but actually did sell, one of their machines at £60, and three others for £150,or£50 each. What is the object of this? This indicates in a small way whatwe have reason to expect will develop.
– Did McKay never sell a machine for less than £81 ?
– Very likely he did, and 1 remind honorable senators that the object of this Bill is not merely to regulate the International Harvester Company, but likewise Mr. McKay. Mr. McKay’s trade is not confined to one State. It extends throughout the States, and he has also an export trade. Consequently if he transgresses in any way the provisions of this Bill, he will be liable to the punishment provided for offences against the measure. The law is that, if persons conspire for the purpose of committing a criminal offence upon an individual, they will be liable to punishment, and if they conspire for the purpose of injuring any Australian industry, they will, under this Bill, be guilty of a criminal offence, and liable in that case to punishment also. According to my view, the Bill is one which should be supported by free-traders and protectionists alike. I will take, for example, the instance of an industry in New South Wales-if it is possible that any industries have been established there under free-trade, and I do not know whether there have been any.
– What a lamentable want of knowledge.
– Perhaps, or it maybe due to obtuseness. However, let us by a stretch of imagination assume that an industry has been established in New South Wales under free-trade.
– Is the honorable and learned senator certain that there is such a place as New South Wales to start with?
– I believe that there is such a place. I understand that the Federal Capital is to be established in that State. I take, for example, an industry established in New South Wales, if honorable senators please, under free-trade, and I would ask my honorable friends from that State who are opposed to this measure, whether they would quietly stand by if they saw a nefarious effort, on the part of Mr. Rockefeller, to whom I refer as a typical individual, or on the part of the International Harvester Company,, or any other vast capitalistic combines being made with the deliberate intention of wiping out that New South Wales industry?
– - How is the honorable and learned senator to prove the intent?
– If that was not proved the effort would not be punishable under this Bill.
– Then the Bill would become a nullity.
– In that case, the honorable senator should not object to it.
– 1 certainly do object to our wasting time in plastering up ;i. placard.
– The honorable senator’s objection now is to wasting time, but I understood that his objection to the measure was that it would bring about fearful disasters, and that it was for that reason he proposed to vote against its; enactment.
– - The honorable and learned senator must be aware of the fact that he is not correctly stating my objection to the measure.
– Did the honorable senator not predict disasters under the Bill?
– I said that under the Bill one of two things would happen - prohibition, which would mean disaster, or nullity, which would mean waste of time here.
– The honorable senator predicted all sorts of extraordinary disasters from the operations of the Bill ; and now he contends that it will be a nullity.
– Not only now; I made the same contention last Friday.
– If the Bill be a nullity, the honorable senator need not be so terribly fearful and apprehensive concerning it, because it will do no harm. I ask honorable senators whether they would quietly stand by and see aru industry, which had been established in New South Wales, wiped out by a nefarious combination such as that to which I have referred ? 1 say that it would be unpatriotic on their part to do so. I desire to emphasize the fact that the Sherman Act is designed primarily to meet free-trade conditions, and to urge that free-traders ought to support this Bill. As I say, the object of the Sherman Act is to provide against monopolies under the free-trade which exists throughout the United States. Let us assume that Mr,. Rockefeller, or the International Harvester Company-
– Or Mr. McKay.
- Mr. McKay, or ‘anybody else, set to work with the determination to wipe out all opposition and capture the whole of the trade of Australia im any particular department of trade - say agricultural implements, by way of example. Let us suppose that such combination or monopoly, seeing sufficient field for their labours, decided to confine their trade to the Commonwealth alone. Under these circumstances, what would be the value of a prohibitive Tariff?
– What would be the value of the Bill ?
– The Bill would meet such circumstances, but a prohibitive Tariff would not.
– Would the Bill meet the circumstances ?
– Undoubtedly.
– It would, unless the members of the combination were unscrupulous and clever enough to dodge it.
– Which they always are.
– They are sometimes caught.
– I ask again how, under such circumstances, the remedy of a prohibitive Tariff, proposed by Senator Millen, would be of any value? Of course, there is no answer.
– Senator Millen does not propose a prohibitive Tariff.
– Senator Millen said that a prohibitive Tariff would be honest.
– It was I who said that.
– The Tariff suggestion is a mere bogy. The object of the Bill is clearly defined - namely, to prevent any deliberate effort to injure our Australian industries. Before I conclude, I desire to glance for a moment or two at the development of monopolies and trusts, and the
American procedure to combat them. At first, the combination or trust was simplybrought about by an agreement to regulate trade and prices. That agreement was held by the Courts to be in restraint of trade, and fundamentally wrong, and, consequently, it was declared to be illegal. In order to, elude that decision, the next step was taken of vesting the stock in trustees, which it was thought, in the absence of an agreement, would not be a combine. The trustees were empowered to declare how they would hold the stock, and by this means they managed to regulate trade. The Courts, however, again decided that this procedure was in restraint of trade, and therefore illegal. The next step was to form a new company, the business of which it was to hold the stock of other companies ; but the final blow was struck even at this device. It was held, in what is known as the “ Northern Securities case,” that such a holding company was in restraint of trade, and illegal. What I have indicated are the policy, experience, and decisions under American legislation. We have to remember how relentlessly the United States Courts have pursued trusts and combinations, in spite of all the ingenuity and skill of the greatest commercial intellects in the world. It is true that the American Courts have only been able to discount that ingenuity ; but that is no reason why we at the outset of our career, and before combinations and trusts have secured a grasp of the Commonwealth trade, should not take every possible precaution to secure ourselves against the dire contingencies to which I have referred. If we do not curtail the powers and influence of combinations and trusts at the very beginning, they will ultimately become so tyrannical and intolerable as to be an alarming menace to the community.
– Will trusts and combinations not grow, no matter how we legislate?
– They may to some extent; but that is no reason why we should not clip their wings as far as we can. When experience shows that we are unable to effectively deal with trusts and combinations in any one direction, we should take advantage of the opportunity presented to so amend the law as to make it effective, and we should follow these trusts and combinations, as has been done in the United States.
– Has the honorable senator considered the alternative of nationalizing such trusts?
– That course does not meet with my views or approval; but it isa question into which we need not enter at present.
– Six weeks or two months hence will be time enough for that.
– The Bill has been framed with care, with a view to nullifying, all unreasonable restraints, and unreasonable restraints only, on trade and commerce. The suggestion that it may become an engine of oppression, and may inflict all sorts of cruelties, at the hands” of theProtectionist Party, is unjust criticism-. I should now like to deal with certain other objections which have been raised during the course of my remarks. I desire to show’ exactly what would have to take place in a prosecution under this Bill - the proofs necessary before a conviction could be obtained under clause 4. Let us take the case of a man who was charged with making or entering into a contract, or, if honorable senators like, with continuing to be a member of. or engaging in, a combination. The first thing that would have to be proved* would be that the contract had been entered into. I desire honorable senators tofollow me, because I propose to show where presumptions would come in. Then it would have to be proved that the contract had been made with intent to restrain trade or commerce to the detriment of the public On this point, there would have tobe distinct proof - no presumption. Inother words, there should be no presumption- in criminal cases.
– How does the. honor-, able senator propose to prove intent in a case of the kind ?
– How is intent proved* in any criminal case?
– Intent will be proved .inthe same way as in any criminal case.
– By the act and itsconsequences ?
– By circumstantial evidence, and so forth.
– Such proof is essential in every criminal proceeding
– Then there would haveto be proved the existence of an Australian industry which was going to be destroyed or injured, with intent, by means; of unfair competition. This would be ar matter of fact which would have to be proved - no presumption.
– What constitutes an Australian industry ?
– The “honorable senator knows what an Australian industry is.
– I wish to know the honorable senator’s .idea.
– Seeing that Senator Best did not know whether any industries existed in New South Wales, he may pardon the question.
– Does Senator Best mean an industry employing one hand or an industry employing ten hands, 100 hands, or 10,000 hands?
– It may be, as the honorable senator suggests, an industry employing either ten hands or 10,000 hands. What I am pointing out now is what would have to be distinctly proved in a prosecution. Further proof would have to be forthcoming that the industry threatened was one worth preserving, or, to repeat an expression I used in 1896, not a “ polar tear industry.” In’ determining whether the competition was unfair, due regard would, under the Bill, have to be paid to the efficiency of the management, the processes, the plant, and the machinery employed or adopted in the Australian industry. We have now reached the stage at which presumptions would take place. The onus would now be thrown on the defendant of proving, say, that he was not a member of a commercial trust. He would also have to prove that the competition would not probably, or in fact, result in inadequate remuneration of labour in the Australian industry, or create substantia] disorganization and throw workers out of employment.
– And if he could not prove that-
– Then he must suffer. If it were proved that a defendant had come into the Commonwealth with the deliberate design to crush out an Australian industry, he would deserve to suffer.
– But, supposing the defendant did not come in at all?
– Then he would not come under clause 4- I would point out that those presumptions in the case of unfair competition would not apply in the event of a charge being laid relating to intent to restrain trade or commerce to the detriment of the public, but only when it could be proved that the intention was to destroy or injure by means of unfair competition an Australian industry worth preserving.
– As to that, the jury decide.
– No; by clause 13 there would be no jury except in the case of a second offence. These matters would not be referred to a protectionist tribunal, but would have to be decided by a Judge of the High Court. Clause 13 says -
Any offence against this part o,f this Act (not being an indictable offence) shall be tried before a Justice of the High Court without a jury.
Then sub-clause 2 provides that -
Any offence against this part of this Act committed by a person who has previously been convicted of any offence against this part of this Act shall be an indictable offence, punishable, on conviction, by a penalty not exceeding ^500, or imprisonment for any term not exceeding one year, or both; in the case of a corporation, by a penalty not exceeding £1,000.
So that it will be seen that for the first offence the offender is to be tried by a Judge, and in the event of a second or more cases an indictable offence is committed ; and, according to section 80 of the Constitution, an indictable offence has to be tried by a jury. What is more, to show that this process cannot be frivolously resorted to, the Bill provides that -
No criminal, proceedings shall be instituted except by the Attorney-General or some person authorized by him ; and no civil proceedings shall be instituted . without the written consent of the AttorneyGeneral.
I would also point out in connexion with the case raised by Senator Millen that where no intention can be proved, but where the objects are such as are set out in clauses 4 and 5-
– It is impossible to prove an object ; you must judge by results.
– If the Judge is satisfied that the restraint of trade is detrimental to the interests of the Australian public, and that the effect is to destroy by unfair competition an Australian industry worth preserving - that is to say, if he is satisfied in the language of paragraph- a of clause 10 that the action is - in restraint of trade or commerce to the detriment of the public - arid if he is satisfied, moreover, that the action is, as a matter of fact - destructive or injurious by means of unfair competition to a->y Australian industry, the preservation of which is advantageous to the Commonwealth, having regard to the interests of producers, .workers, and consumers - then the Judge of the High Court, after judicial inquiry, can issue an injunction. I do not propose to deal at length with an amendment which I intend to propose later on; but I think an amendment should be made to meet certain improper practices in connexion with the system of granting rebates. I will show that there is a definite public opinion on this subject. I have here an extract from the Dairy Farmer and Agricultural News, in which it is said -
The notorious Standard Oil Trust evidently means to fight the Commonwealth Government on the Anti-Trust Bill. A few weeks ago it announced the withdrawal of the rebate it gives distributors, provided they make a declaration they have not handled or sold any other oil but the Trust’s. This rebate has again been resumed, and officers of the Trust openly jeer at the ability of the Government to suppress illegal monopolistic practices. The Standard Oil Trust is the parent of the evil brood of Trusts now affecting the world. The Harvester Trust is its progeny, and the Deakin Government would become a laughing stock if it allowed its laws to be so openly defied by this monopoly.
There is an improper practice existing by means of which the Standard Oil Trust insists upon the whole of a man’s trade being confined to it, and, in the event of that trade being so confined, certain rebates are paid to him. I shall move an amendment upon this point in Committee, to the effect that these practices shall be regarded as prima facie unfair competition. I shall confine mv further remarks to the clauses relating to dumping. Thev ‘ are contained in part 3 of the Bill. I point out at the beginning .that rio criminal liability attaches as regards dumping. We have been told during the debate that the effect of the clauses would be to rob consumers of the cheap goods and bargains which hitherto have been a feature of some forms of trading. In my view importers can trade under these clauses just as freely as at present, provided that they do not so trade with the deliberate intention of crushing local industry. Ordinary normal trading, including the selling of cheap goods and bargains subject to the Tariff, may go on precisely the same i,ri future as in the past.
– A tradesman or merchant never has that intention. His idea is always to make a profit.
– If he has no deliberate intention of doing so, he will not be affected.
– What is the good of the clauses, then?
– They are excellent provisions. If my honorable friend thinks, that they will be of no use, he cannot reasonably complain if a number of other honorable senators think that they will be of substantial value.
– I am not- complaining about them.
– Then I do not realize what the honorable senator’s objection is.
– I wanted to bring out further argument.
– My contention is that under these provisions trading can go on as hitherto, provided that it is not deliberately injurious to any Australian industry. So much is made clear in, clause 19.’
– Where does the honorable senator find the word “ deliberately “ ?
– The word “ intent “ covers that. The clause provides that -
The Comptroller-General, whenever he has received a complaint in writing, and has reason to believe that any person . . ‘ . either singly or in combination … is importing into Australia goods . . . with intent to destroy or injure any Australian industry by their sale or disposal in unfair competition with any Australian goods, may certify to the Minister accordingly.
My honorable and learned friend, Senator Symon, said that the goods would be held up. Thev may or ma<- not be held up. If they are, it will be largely the fault of the importer. First of all, they are not to be held up during the consideration of the matter by the Comptroller-General. It will be his duty to give the importer notice to enable him, if he can. to clear himself. If he does not, the certificate of the ComptrollerGeneral will go on to the Minister.
– The goods would be held up because the importer could not pass them through the Customs.
– According to mv view there is nothing in the Bil] which says that the goods shall be held up while the ComptrollerGeneral is acting. -> Senator Millen. - The Customs will refuse to give clearance.
– Whatever powers the ‘ Customs possess thev mav exercise, but I am talking about this Bill. There is nothing in it which says that the goods may be held up.
– If the goods may be cleared from the Customs, what is the use of subsequent action?
– Clause 20 says that they shall not be imported.
– That is after the Minister has come to the determination to refer the matter to a Judge of the High Court. The next point is that if the importer wishes to have his good’s he can give a bond. Then he can continue his trade as hitherto. I point out. further, that the Judge is to be guided by - . - good conscience and the substantial merits of the case without recourse to legal forms “and technicalities, or whether the evidence before him is in accordance with the law of evidence or not.
The question which the Judge will have to decide is whether the goods are being imported with the intention alleged, and if so, whether the importation should Le prohibited absolutely or limited. If we are ready to commit to our Courts the decision! of our various differences on other business matters, and if we have confidence in their justice, why cannot we trust them to say whether these goods are being imported with the view of injuring any Australian industry, or not? Surely the decision of the Court on a matter of that kind may be reasonably and fairly accepted. I will conclude by a few remarks in reference to -what was said by Senator Symon upon the wording of clause 21. That clause says that-
The Justice shall proceed to expeditiously and carefully investigate and determine the matter.
Senator Symon observed that to talk of a Judge of the Supreme Court in that fashion was not complimentary or courteous. But it is a coincidence that the same words are used in an Act which Senator Symon, himself ultimately put through this Legislature. In section 23 of the Conciliation and Arbitration Act, those very words are used -
The Court shall in- such manner as it thinks fit carefully and expeditiously hear, inquire into, and investigate every industrial dispute of which it has cognisance.
So that when Senator Symon takes exception to the words used in the Bill before us, it is a fair retort that he is at least equally responsible for the same words being used in this Act.
– He merely took’ control of that measure; it was not drafted by him.
– At any rate, he put it through.
– He and his Government were afraid not to put it through. .
– In concluding. I simply point out that, as the result of investigation and careful thought, I have come to the conclusion that this is not a measure from which the disasters that have been predicted will accrue, but that it is a fair and .reasonable precautionary measure, which it is wise that we should adopt. It is complementary to the system of protection that already exists in the Commonwealth. According to my view, it is therefore wise and prudent to thus further protect our industries, and I think that, with possibly a few verbal exceptions, the Bill can be commended as one which is in the best interests of the Commonwealth.
– The operation of trusts and rings is now a world’s problem. It has attracted a great deal of attention, not only in Great Britain and Australia, but also in. and perhaps principally in, the United States of America.. But even there, although they have had three Acts on the subject, they have not yet arrived at a true solution of the difficulty. They have only succeeded in a verv partial manner in interfering with the operations of the trusts and combines in that country.
– But the Socialists are moving in the right direction, too.
– What the Socialists desire is to nationalize the monopolies held by the great trusts, because they say that then they would be carried on in the interests of the public only. The opinion which is held by the President of the. Republic, and I believe by very many of the earnest thinkers in the United States, is that, while it seems to be almost impossible to overcome the operations of these trusts, if they cannot be abolished they can be controlled by law, and that will be, I think, the true solution. This question has naturally engaged the attention of the Commonwealth Government, almost from the first, and a great deal of attention was drawn to it ‘at the time when the Tariff was passing through Parliament. It was argued frequently by those who were opposed to protective duties that, under the operation of protection, rings and trusts would be formed, which would have a tendency to raise prices to the consumer, and various suggestions were made as to the means which might be taken to overcome any such tendency. There is one remedy which appears at first sight to be almost obvious, but when it is looked into it is found to be attended by such disadvantages that it has to be put on one side. It has been pointed out that under the operation of a high protective Tariff manufacturers or producers might combine together and raise the prices of articles right up to the limit at which they could be imported. And it has been urged that the natural remedy in that case would be, either by Act of Parliament or by Executive action under the authority of an Act of Parliament, to lower the duty until the operations of the combination had been met - that is to say, to compel a reduction to lower prices to the consumer by allowing the goods to come in at- a reduced duty. That looks like an obvious remedy. But it is open to two almost insuperable objections. One objection is that, in endeavouring to defeat the operations of a ring by that means, we should be destroying smaller men in the same trade, who, perhaps, were being equally crushed by the ring; and the second objection is that if we succeeded in defeating the ring, we should probably be injuring our own producers and manufacturers bv admitting importations which were the produce of a big ring outside. I believe that no means have yet been devised to meet rings operating in that way to the disadvantage of the consumer. If they have been devised, I should very much like to know what they are. These are the rings and combinations which, it seems to me, we should be most earnest and anxious to endeavour to defeat, if possiNe. I shall show directly that they are not dealt with in any efficient manner in the Bill.’ and perhaps we have not power to do it. When I was in England, thirteen or fourteen years ago, there was brought under mv personal notice an instance of the operation of one of these rings or combines, such as I think ought to be dealt with in some way. In the depth of winter, when the thermometer fell 20 degrees below freezing point, the price of coal suddenly went up, owing, I was told - and I do not doubt the statement - to a combination on the part of the coal merchants when it was in ‘great demand. I saw the carts going about the streets of London, and selling coal in sixpenny worths and threepenny worths to poor people. In that- way the price of coal .was raised to the poorest of the poor at the very time when the severe cold was compelling them to part with almost their last pence in order to purchase fuel. That- is the sort of combine upon which I think all the resources of civilization should be brought to bear.
– If we could.
– Yes; if we could.
-Even to the extent of nationalization.
– No, because that would not be necessary. I should justify any’ Government action which would enable the necessaries of life to be. conveyed to poor people at a reasonable rate, if they were being withheld from them by a combination.
– Bad as that is, it is not so bad as a corner in the essentials of life - in, for instance, wheat.
– Combinations, I have no doubt, are formed in the same way in regard to wheat, some of them so large that perhaps they would not be touched under the Bill. I do not know whether they would or would not be. Any combination to raise the price of the necessaries of life would not be met by the Bill, for this reason : that its operations would always be confined within a State. Where the object was to raise the price in, a retail market it would not be a matter of a combine extending from State to State. It would be a combine within a State, and would not be dealt with under the measure.
– Probably it would consist of one man.
– I do not think that one man could do it.
– But a corporation could.
– That would be hardly probable. It would be more likely to be a combination of a number of corporations or a number, of individuals for that express purpose. When the necessities of the poor were greatest they would raise the prices.
– Does the honorable senator say that, if half-a-dozen coal merchants in Melbourne were to do that, they would not come under the scope of the Bill?
– Certainly they would not.
– Why? ‘
– Because in clauses 5 and 7. dealing with persona combaning, there is no limitation. It only deals with the case of trade or commerce among the States, or with countries outside Australia.
– Pardon me; look at paragraph 20 of section 51 of the Constitution.
– The Bill purports to give power to deal with a case like that, if the operations are being carried on bv a foreign corporation, and not by a British corporation. I wish to make it perfectly clear that the combinations I have referred to cannot be dealt with under the Bill, because they would be operating within a State. Let me now deal with Senator Best’s point about the Constitution. The Government and the draftsman of the Bill must have taken the view that is taken by the honorable and learned senator with regard to the power given to us in the Constitution to deal with foreign corporations. Section 51 tells us what our powers are. It says -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to - (i.) Trade and commerce with other countries and among the States.
I contend that in this paragraph are included the whole of our powers to deal with trade and commerce with other countries and among the States. If it were otherwise, the framers of the Constitution would have extended the paragraph, and made the limitation less severe. They would have told us what other powers of trade and commerce we had. But as they give in that paragraph no powers in regard to trade or commerce, except with other countries and among the States, I contend that those are all the powers we have. Of course, I quite agree that if we found any subsequent provision in the Constitution which clearly contradicted that, and gave us any other power with regard to trade and commerce, then,- following the well-known rule of interpretation, the latter would prevail, and our power would be increased. But we are not to assume, when we find a subsequent provision which may be. regarded as somewhat ambiguous, that the intention of the framers of the Constitution was to extend the powers given in paragraph 1. of section 51. I now come to paragraph xx. of that section, under which we have the right-
To make laws for the peace, order, and good government of the Commonwealth with respect, to- - (xx.) Foreign corporations, and trading or financial corporations formed within, the limits of the Commonwealth.
The Government and’ Senator Best havetaken the view that under that paragraphwe have power to deal with all mattersconnected with the trade and commerce of foreign corporations. I suppose that at some time or other the point will come before the High Court for decision.
– What meaning does the honorable and learned senator attach to-“ “trading”?
– My interpretation of the paragraph is that it gives all1 the necessary power to make lawscorresponding with the Companies Actswhich have been passed in the various States, and which contain provisions regarding the formation of corporations, the way in which the shares shall* be held, the number of officers who shall beappointed, whether there shall be a registered office, and all those other provisions; which are necessary to identify acorporation, and make it a corporate body which can sue and be sued. Foreign corporations are mentioned specially, as well as trading and financial institutions, -which are British institutions, because it is well known that in the case of” foreign corporations it is necessary to havesome different provision, in consequence of the fact that the bulk of their capital is; held outside of Australia.
– Have we no further powers with regard to foreign corporationsand trading and financial corporations:, within the Commonwealth than those whichthe States had exercised at the time of the passing of the Constitution?
– I should think not.
– Than those which the States had exercised or might have exercised.
– Yes. that is so.
– They might have exercised these powers.
– Not with regard to the whole of Australia.
– No; each State within its own borders.
– Each of the States, up to the time of the formation of theCommonwealth, had passed Companies;
Acts and Foreign Companies Acts dealing with these matters. The Constitution now gives us power to make laws of the same character with regard to the Commonwealth for foreign corporations or for British corporations.
– To make laws “ for the peace, order, and good government of the Commonwealth.”
– Senator Best’s interpretation would land us in this position : That the Imperial Parliament, in granting us our Constitution, gave us the power to discriminate in trade matters between a British corporation and a foreign corporation doing business within a State. That is unthinkable. When in the Constitution, from first to last, we draw so clear a dividing line between Commonwealth and States interests, and endeavour, wherever possible, to leave States interests to the States Governments, it is unthinkable that, while preventing us from making any difference between a British and a foreign trader within a State, it should give us the power to discriminate between a British corporation and a foreign corporation within the Commonwealth.
– What is the honorable and learned senator’s interpretation of the expression “foreign corporation.”
– 1 understand that paragraph xx. gives us the power to make laws of the nature of the Companies Acts which have been passed, I think, in all of the States, to provide for the way in which such corporations shall be represented here, where thev shall have their offices, and possibly whether they shall be called upon to give security.
– Is not a British corporation a “ foreign corporation “ within the meaning of the paragraph ?
– Does not “ foreign corporation “ include all non-Australian corporations?
– -I beg the honorable and learned senator’s pardon. I misunderstood his objection. “Foreign” means “ non-Australian.” certainly. As I read the paragraph, it refers to all those matters which are dealt with in the Companies Acts which have been passed in the various States. The matter is not being, discussed now for the first time. My contention is that, under paragraph i of section 51, our powers with respect to trade and commerce are limited to trade and commerce with other countries and among the States, and paragraph xx. does not give us any additional power with regard to trade and commerce. It does -not involve any alteration of the limitation of our powers with respect to trade and commerce, but simply provides for legislation with respect to those matters already embodied in the companies laws of the States. Paragraph xx. provides that we may deal with foreign corporations and trading or financial corporations in the way in which they are dealt with in the Companies Acts of the various States. In Queensland we have Companies Acts and British Companies Acts, and I suppose the same may be said of Victoria. Only a few years ago an Act was passed in Queensland amending the British Companies Act, and making some alterations with regard to the status of such companies. The view I take is that this simply refers to the status of these particular corporations.
– Does the honorable and learned senator not think that that would have been expressed if it had been intended ?
– I think that it is perfectly clear, and that, if the other view had been intended, it would have been stated. I think that, if it had been intended that trade and commerce, as referred to in section 51, should not be limited1 to trade and commerce between the States and with foreign countries, that would have been stated. It has not been so stated. However, there is little use in talking at length on this matter. We might talk for a month on this, particular question without agreement, and the High Court will eventually have to decide it.
– I have no desire to interrupt the honorable senator, but he will allow me to say something by way of illustration. It was only a very few years before the Commonwealth came into existence that we began to legislate in the States in anyway with regard to a director’s personal liability. It might be that in the next ten or fifteen years some alteration of companies legislation of that character might be necessary. Does the honorable and learned senator contend that we could not introduce that legislation?
– Certainly we could, under paragraph xx. of section 51. We had a British and Foreign Companies Act passed in Queensland only a few years ago.
– How does the honorable and learned senator draw the dividing line as to our powers? Does he contend that they are those which were exercised by the States at the time of the establishment of the Commonwealth?
– I should say so. In the same way, it will be remembered that I argued with regard to trade marks that the definition which we must accept, is the meaning under British law attached to the term “trade mark,” at the time the Constitution was passed.
– That is precisely analogous. I hold the contrary view.
– I am aware that the honorable and learned senator does.
– Suppose paragraph 1 were not there, how would the honorable and learned senator then read paragraph xx. ? He must know that each of the sub-sections confers, separate jurisdiction.
– We must read each paragraph with reference to the others.
– That is not my view.
– We must always remember that the Constitution must be interpreted as a whole.
– Section. 51 includes paragraphs 1. to XXXIX., and each confers separate jurisdiction.
– Generally speaking, each paragraph deals with a separate matter. Paragraph 1. deals with trade and commerce, and paragraph xx. with a separate subject.
– But each is complete in itself.
– This dialogue between two lawyers who flatly contradict each other, is very interesting.
– I ask honorable senators to allow Senator Drake to continue without interruption.
– I hope that I have made it clear that this Bill does not deal with the particular kind of combination which I think is most objectionable. But all through the measure it is very clear that there is an effort made to prevent combinations from reducing prices to the consumer. Remembering, the discussions which have taken place here with respect to harvesters and such things, there can be no doubt that the main object of .the Bill is to prevent combinations which would reduce prices in such a way as would compel local competitors to reduce their prices also, and render them unable to pay the rate of wages and to comply with the conditions we require for our Australian workers. It cannot be doubted that that is the main object df the Bill. We are seeking to repress combinations in restraint of trade, and behind the Bill there seems to be a combination between the workers in certain specific trades and the capitalists carrying on those trades, to raise prices to the consumer, and to share the profits between them.
– Or to prevent prices being reduced.
– Yes, or to prevent prices being reduced*
– Has the honorable and learned senator gone into the question of the legality of our attempting to settle wages by this Bill ?
– There is no provision to deal with wages in this Bill. They are dealt with by Factories Acts and Wages Boards.
– They are dealt with also in this Bill.
– There is no provision in the Bill dealing with wages, but if wages are disturbed by outside competition, that is to be a factor for consideration.
– Is not that an indirect way of dealing with wages?
– It is not likely that any such reduction as that would be brought about to any considerable extent by a combination within the Commonwealth. It is more likely that the lowering of prices to the consumer, which would affect Australian industries injuriously, as contemplated by the Bill, would arise from importation. Therefore, we have to look more particularly to what are called the “dumping” clauses of the Bill. Dumping may be of two kinds. There is the dumping which consists in the practice generally adopted by manufacturers of sending their surplus products to some other country, and selling them- there at the highest price they can get, and if they cannot get the price they desire, at whatever they will fetch. That is the form of dumping which is carried on very -largely by ourselves in our butter and meat exporting industries. In the course of the debate we have heard a great deal about manufacturing industries, harvesters’, and so on, and suppose, for a change, we turn our attention to mutton and beef. These are the particular articles in which my constituents are more directly interested. We send our meat to the English market, and sell it for what it will fetch.
– We dump it there.
– We dump it. I am sorry to say that very often, in consequence of the state of the Home market, it fetches very low prices indeed. But week by week our beef and mutton is poured into the London market.
– Dumped.
– “ Dumped,” if the honorable senator pleases. If honorable senators will look at the trade circulars they will see that the prices realized are sometimes very low indeed. We do not like that, but we accept it as in the natural order of things. I do not know whether the people engaged in the cattle industry in the United Kingdom like the importation of our meat in large quantities, but they do not appear to complain of it. We have been very anxious to find a market for our meat on the Continent of Europe, and we have considered ourselves very harshly treated by France, Austria, and Germany, because we have been practically kept out of their markets by means of their hostile tariffs. I have no doubt that we should be very pleased if representations were made to” the Governments of those countries asking them not to interfere with our practice of dumping meat in foreign markets. It would certainly look strange if we were to make such a request, and accompany it with this Bill. .
– Have the people of the old country ever made any objection to our sending them food stuffs?
– None whatever; but we have been dumping our produce, and this must be against the interests of the people engaged in the old country in these particular trades. .But, supposing the people at Home did raise some objection) what should we be able to say then, in view of this Bill ? I have not the slightest doubt that if we took the opinion of the people of Australia generally, as to whether they were in favour of an International law against dumping, it would prove to be an adverse opinion. They would say that they preferred to keep the power to dump their produce wherever they chose ; and certainly the interests of our people, in connexion with this power or permission to sell their produce in any market for what it will fetch, are much larger than the interests sought to be considered by the Bill.
– The honorable senator must admit that it is rather a farfetched illustration to use the word “ dump ing” in relation to the sending of food stuffs to the old country.
– I do not make any such admission. What we send to the old country is our surplus, and we sell it for what is will fetch in competition with the beef and mutton producers there. If a man engaged in this particular industry at Home, went to Smithfield and saw his produce selling at id. per lb. less than it would have brought had he had possession of the whole market, could we not understand him using the same arguments that are advanced in support of this Bill ? Could that man not say that the dumping of produce on the market reduced the value of his productions, and prevented him from paying wages and complying with the conditions of labour he would like to observe?
– The most rabid protectionist in the old country has never applied the word “ dumping “ in the sense in which it is being used by the honorable senator.
– But protectionists at Home have asked for protection time and again.
– We have seen the time when free-trade was so worshipped in Great Britain that a man scarcely dared acknowledge himself a protectionist. Evidently the tide has now absolutely turned ; and the people of England may yet be asaidently protectionists as they were free.traders when I was a young man. Events march rapidly nowadays, and it is not at all impossible that five, .ten, or twenty years hence, when this Bill is in operation, the men engaged in the grazing industry in England, mav complain about the dumping of our beef and mutton on their market?
– But the vast population at Home desire cheap beef and mutton.
– Such importations would not be against the interests of the public of England.
– They would be against the interests of a section of the public.
– Whenever the people of England are distressed by the dumping of goods they will object.
– We must remember that we are a Federation of States, and that our legislation should, as far as possible, be in the interests of the whole of Australia, and not of any one State only. I do not say that we should not pass a law because it would give greater benefit to one State than to another.
– That cannot always be avoided.
– That is so; but, still, the interests pf the whole of the States ought to be fairly considered. There is no doubt that this Bill - and I do not say this with any feeling of unfriendliness - is really in the interests of the people of Victoria, because that State is at present the manufacturing centre.
– In the interests of one man in Victoria
– T shall not discuss that point. It is nearly a year since the cry was raised about the “ strangled industries ‘ ‘ of Victoria, and we were told that measures were necessary for their rescue. The Bill before us is, I think, intended to come to the relief of some industry, which is said to be not so prosperous as those engaged in it would like it to be, but which is certainly not in an unprosperous condition. One honorable senator, in the course of the debate, has quoted statistics showing the increased number of hands employed in the factories of Victoria since Federation. I am very glad to hear off that success, because it affords a justification of our Federal conditions, and the Tariff we all assisted to pass. But it must be remembered that this great prosperity in Victoria has to a great extent been obtained at the cost of some of the other States. I have not the figures here, but there has been a continual falling off in the number of hands employed in manufacturing; in Queensland from the time of Federation.
– The Federal Tariff is much lower than the State Tariff was.
– We had a very high Tariff in Queensland prior to Federation.
– It was the next highest to that of South Australia.
– Quite so; and the result in Queensland has been that the importations from the south, more particularly from Victoria, have taken the place of goods which previously were imported from oversea. This hits Queensland in two ways. In the first place, it restricts our manufacturing operations and closes our factories ; and, in the second place, it deprives the State Treasurer of the revenue which formerly resulted from the duties on the imported goods. I am not stating these facts by way of complaint, and I do’ not believe that my constituents would complain, because what is disclosed is the natural operation of a uniform Tariff. We consented to that Tariff for the benefit of the whole of Australia, without taking into consideration the effect it might have in Queensland. But is it not strange that, under these circumstances, the State that has derived most advantage from the Tariff should now be crying, out about strangled industries,” and urging for a Bill of this kind, which confers such extraordinary powers? This is a Bill which ostensibly has a general application, but which is clearly intended to have a partial one.
– I think the honorable senator was a member of a Ministry which agreed to bring in such a Bill.
– No ; never !
– I fancy that such a Bill was mentioned in the Governor’s speech when he was a member of the Government.
– That was an AntiTrust Bill.
– This in an AntiTrust Bill.
– There were no such provisions in that Bill as we find in the Bill before us. I have never been a party to a Bill of this kind. This measure will never be used in order to assist an industry in any of the outside States.
– What does the honorable senator mean by “outside States”?
– I mean such States as Queensland and Western Australia, which, in a manufacturing sense, are outside; that is, they are away from the centre. Supposing, there were a growing industry in Queensland, and that it was in some danger in consequence of dumping, would there be the slightest chance of getting any assistance under this ‘Bill at the hands of the Minister of Trade and Customs ?
– Why not?
– I know very well why not. If, for instance, there was a coffee-growing industry in Queensland carried on by means of white labour-
– Then there would be a bonus.
– Yes ; a bonus of a whole id. per lb., given on condition that white labour was employed at the usual wages, and on the usual conditions.
– That bonus would represent about one-sixth of the value.
– Not nearly.
– That would be equivalent to a duty of 15 per cent. ; compare it with the duties advocated by Senator Trenwith !
– But the id. per lb. would be a bonus and not a duty.
– I do not desire now to discuss the merits of such a case; but assuming that the importation of coffee had made it impossible to carry on the industry in Queensland, even with the bonus of id., does any one suppose that the importation of coffee into Victoria and New South Wales would be stopped ?
– Yes, if good cause could be shown as in any other case.
– ,1 am strongly of opinion that if the people of Queensland made any such application, the answer would be that the question of coffee growing had been before Parliament, that a duty had been imposed on imported coffee, that a tonus had been granted, and that that was sufficient.
– There has been no ungenerous treatment of Queensland so far as the sugar industry is concerned.
– I never said there had been. What is the use of introducing that question, which has been dealt with by Parliament by means of an Excise duty and a bonus?
– And now we propose to deal with that industry by means of another legislative act.
– By prohibition.
– No.
– The Bill means prohibition, and it is unreasonable to suppose that any Government would stop the importation of such an article as coffee into the southern States of Australia because that importation was interfering with an industry in Northern Queensland.
– We have stopped the importation of sugar, subject to certain conditions.
– No, there is only the duty.
– Subject to certain conditions; and that is all that would be done in the case of other trades.
– As a protectionist, I was in favour of higher duties, which I have always voted for, because I consider they represent the proper method of dealing with these matters. I have no desire to discuss fiscalism more than I can help, but I must say that this Bill means prohibition if it means anything; if it operates at all, it must operate by prohibition. I do not quite appreciate Senator Best’s nice distinction between stopping an article and preventing it from passing the Customs until security has been given for the whole of its value.
– These are the terms of the Bill.
– The question to be decided by the Justice would be whether, for certain reasons, an article should be declared prohibited ; and, if such a declaration were made, then all the consequences would follow. If the article had gone into consumption, then the persons who had given the security would lose their money.
– What are the findings of the Justice to be first?
– What I said was that if the Bill operates at all it means prohibition.
– In certain circumstances, yes.
– It is of no use to interrupt me by saying that the Justice may find that it is not “ unfair competition. Now, I want to say something on the question of protection. I have always held that protection means the adoption of a scale of duties that will insure fair competition, having regard to the rate of wages that we pay and our standard of living. But I have never understood protection to mean such duties as will absolutely exclude competition from outside. That is a very important point. I think that protectionists in supporting a measure of this kind are giving up one of the most powerful arguments they have. If one reads Carey, who is the most philosophical writer on protection that America has produced - though he is now considered, perhaps, a little out of date - one finds that he, and almost all the other, writers of his school, argue that protection does not raise prices to the consumer. I dare say that my honorable friend Senator Trenwith has often used that argument.
– Hear, hear ! I go further, and say that it reduces prices to the consumer.
– In what way ? What is the safeguard which the consumer has? It is that the adoption of a system of protection in a country creates competition between the goods produced outside and those produced by the local manufacturers.
– No ; it creates internal competition, which is more effective than any external competition can be.
– I differ from the honorable senator, and the great protectionist writers differ from him also in that respect. Their argument is that the competition which insures cheapness for the consumer is that which arises between the goods manufactured’ outside and the goods locally produced. It is that competition which insures that prices will not be unduly raised to the consumer. This Bill, so far as it operates at all, will deprive us of that advantage altogether. The protectionists are losing the very argument that Senator Trenwith and others have often put before the public to convince them of the soundness of their policy. The Bill means keeping foreign goods out of the country altogether when thev appear to injure an internal industry. That means, consequently, doing away with the competition upon which the consumer has mainly to depend to insure that prices will not be unduly raised against him. I should like to point out that sub-clause 3 of clause 18 is distinctly ambiguous. I was very doubtful as to its meaning when I first read it, and I notice that some speakers have interpreted it in one way and some in another. The subclause reads -
In determining whether the competition is unfair, regard shall be had to the efficiency of the management, the processes, the plant, and the machinery employed or adopted in the Australian industry affected by the competition.
I understand that the position of the Government is that that provision means that it shall not be deemed that there is “unfair competition “ if the local factories are not up-to-date,. If that is what the clause is intended to convey the meaning should be made clear. It is so ambiguous in its present form that it might be read to mean that especial tenderness is to be shown to an industry that is working under very different conditions.
– Is not that a question for settlement in Committee?
– It is a question for Committee : but we range through a Bill on the motion for the second reading, and generally direct attention to matters that are not clear. It seems to me that the subclause ought to be made to read that there shall be no unfair competition unless the industry is carried on under the most modern conditions. If that is what is really meant, I have no objection’ to the subclause. Otherwise, the prohibition spoken of in the Bill would be most injurious. It would be running protection up to the extreme of prohibition in such a way as to enable a local factory to be carried on under conditions that -were out-of-date. Protection should never be carried to that extent, or a distinct premium would be given to factories to work with old machinery, and to use out-of-date processes. No nation at the present day can afford to do that. The world is growing smaller and smaller, and we should soon drop behind entirely in the race if we did not adopt the most modern appliances and the most uptodate machinery. The provision will operate most unfairly, if it operates at all, in regard to a State like Queensland. Suppose that we wanted foreign coffee to be prohibited for the benefit of a small coffee industry in Queensland.
– If it were a small industry it could not supply the whole of the wants of the Commonwealth. The importation of coffee would not be prohibited for the benefit of a small industry like that. It would be absurd. We should stop all coffee drinking if we did that.
– Then, is this Bill only going to affect manufacturing industries that are prepared to supply the whole of the wants of Australia?
– In a question of food like that, I should say so.
– If that be soothe Bill can only be intended for the benefit of some manufacturing industries in Victoria that consider themselves capable of supplying all Australia. The small man may struggle on and perish. This Bill will not help him. It will only affect industries that are capable of supplying the trade of the whole Commonwealth. Yet this is a Bill to suppress monopolies ! If that” be so, my objection to the Bill is even stronger than ever. Let me show how it will operate. Take the case of galvanized iron. I believe that there is a galvanized ironmaking industry in New South Wales. There may be such an industry in Victoria. I will assume that there is a local combination or ring which is prepared to supply the wants of all Australia under certain conditions. ‘
– The Bill does not say anything about that.
– That is what the Minister says.
– He did not mean it literally.
– We will suppose that the Bill is intended to assist concerns that are small at. the present time, but which may grow until they are able to supply the wants of all Australia. Galvanized iron is an article that is largely used as a roofing material in Northern Queensland. Suppose that the people engaged in making galvanized iron complained to the Minister that the importations were preventing them from carrying on their industry at the rate of wages they were paying, and under the conditions they were maintaining; and suppose that they asked the Minister to prohibit those importations. If the Minister took any action he would have to put a notice in the Gazette. From the time it was inserted the importation of galvanized iron would.be practically stopped. It could only go into consumption if the person importing gave security practically to the value of his importations. What that amounts to is this : The factory that is manufacturing galvanized iron is not able at present to supply the whole of Australia. It merely hopes to be able to do so, if it gets a monopoly. But the people in Northern Queensland want this material for building purposes. They have entered into building contracts. They want roofs to cover their heads. They, however, cannot get the material they require, because a little factory, say in Victoria, finds that it cannot stand the competition from outside, and has .asked the Minister to put this Bill into operation. The Minister cannot put it into operation partially and stop the importation of galvanized iron into Victoria, so as to give the Victorian factory a start at the expense of the people of this State. If he acts at all, he has to prohibit the importation into the whole Commonweal th .
– He has to act under clause 17.
– If there is a manufacturer who is paying ordinary Australian rates of wages, and working under ordinary conditions, but finds that he cannot carry on in the face of the foreign competition, can he not apply to the Minister ?
– The consumers have to be considered; and the Minister would know that the consumers in Queensland would be affected. All that has to be taken into consideration. The honorable sena tor is arguing as though the interests of the consumers would not be considered.
– What are the consumers’ interests? According to Senator Trenwith, galvanized iron would become cheaper if the one factory secured a monopoly of the trade. The argument of those interested in the industry would be, “ Give us prohibition now, and eventually our article will be cheaper to the consumer than it is at present.” The point which I ‘ am dealing with is : What is going to happen after the notification is put in the Gazette? Will the one factory be able to supply all the demands of the States? Certainly it will not be able to supply them except at prohibitive rates for a long time. In the meantime the people will be put to the greatest possible inconvenience. If that is the way the Bill is to operate it is not fair, equitable, and reasonable to all the States of the Commonwealth, and, seeing that Victoria, of all the States, has benefited most from our protective Tariff, I think it comes with a very bad grace that she should ask for a Bill that gives her absolute prohibition. It is a very unfortunate thing from the protectionist point of view that this should be done. If there were a particular reason for prohibiting the importation of an article the matter could certainLy be dealt with by Parliament. There is the case of the Harvester Trust, which has been before the country for twelve months, and Parliament is now in session- The second part of my definition of dumping is, where a big ring or organization outside deliberately sets itself to destroy an industry, and to do that sends in its goods, probably at less than cost price ; and then, having obtained a command of the market-
– That is what the Bill is intended to meet.
– If that is all that the Bill is intended to meet, there is no reason why a case of that kind should not be brought before Parliament.
– After the mischief is done !
– In the very matter of harvesters, we hear now that probably an application will be made by the Government to Parliament to deal with it in another way. The managers of the biggest organization which could be named could not, by sending in one, two, three, or four shipments, crush a local industry. They have a capital amounting to millions sterling. They know that they would have to carry on the business of sending in their goods at a lower price for, perhaps, three or four years before they could destroy a local industry. If so, why cannot a case of that kind be dealt with by Parliament?
– Will not this Bill deal with it?
– No; it will allow the Minister and a Judge to deal with such a case, and that is where the mischief comes in. If the Government could come down and prove that such an attempt was being made, Parliament could, if it liked, deal with the case efficiently. Thereason why the subject is dealt with in the form of a Bill is because the protectionists think that by that means they will be able to get the Minister to do what Parliament itself would not do.
– But the Minister would be responsible to Parliament.
– We have heard that statement over and over again. But Ministers do a number of things of which Parliament does not approve. I must remind honorable senators that, although the unwritten law in regard to impeachment has never been repealed, it has fallen into desuetude.
– It is practically dead, because there is a more effective method available.
– We have another power, that of turning Ministers out of office.
– I think that, in the interests of the Commonwealth as a whole, the prohibition of goods should be left to Parliament, and . not in any case to the Minister of Trade and Customs. Only one case, and that a hypothetical case, has been brought before Parliament; and there is no reason why it should not say exactly what course it considers justifiable. If it can be shown that there is an effort on the part of manufacturers in any country to deliberately destroy one of our industries, then it should be met by the ordinary method of increasing the protective duty. I see no reason to provide for prohibition of imports. I have given a reason which I think will justify me in voting against the Bill.
– Against the whole of the Bill?
– I shall vote against the second reading of the Bill.
– The first part is reallyanAnti-Trust Bill.
– It does not touch the case which I consider ought to be dealt withby the Government. It does not deal with combinations to raise prices against the consumers.
– Surely it does.
– Undoubtedly it does.
– Not within a State. I have gone all through the Bill. A combination to raise prices to the consumers in the retail market must almost of necessity be formed within a State. It is almost impossible to conceive of a case of merchants or owners in more States than one coming together to raise prices to the consumers. In every case where an effort was made to raise prices, it would be made by a local combination acting on a local market.
– It would be just the reverse. I do not think that a combination within one State could do much damage to the consumer.
– The honorable senator was not here when I commenced my remarks.
– Yes, I was.
– I cannot conceive of a combination extending over several States for the purpose of raising the prices of the necessaries of life to the consumers.
– It is done all over America.
– Perhaps the honorable senator will be able to tell us how he would deal with a combination that arose within a State ? Because, if the law could touch men in several States who combined together, we may be perfectly sure that they would not form a combination which would bring them under its provisions.
– I believe that the honorable senator is right as to the law, but I do not think that a combination within a State would do the damage which he fears.
– A combination formed within a State to raise the prices of articles, especially, necessaries of life, to the consumer, would certainly be operative however injurious it might be. These are the combinations which I want to see touched by the Bill. There is a further reason why I should vote against its second reading, but it does not apply to honorable senators generally. When the first Deakin Government went to the country at the end of 1903 we did so on a policy of fiscal peace. I addressed perhaps a dozen meetings, more particularly in New South Wales, at which I advocated fiscal peace. I do not know whether I went beyond the views of the Government, but I told the audiences that fiscal peace meant a period of rest from fiscal toil for the duration of the Parliament then about to be. elected.
– Yet that Government appointed a Royal Commission to open up the subject.
– That was a most proper thing to do. The policy of the Government, as announced, was a policy of fiscal peace - that during a period of three years there shouldbeno re-opening of the fiscal question, and that during that time the people of Australia should have an opportunity of seeing how the Tariff would work.
– Does not the honorable senator think that the act of appointing the Royal Commission was a re-opening of the fiscal question ?
– No.
– It has not only reopened the fiscal question, but a report is now before Parliament in consequence of such action.
– How can the honorable senator say that? Has the harvester matter anything to do with the inquiries of the Tariff Commission ?
– Yes.
– The Government would not wait for the report of the Tariff Commission before proceeding to deal with the importation of harvesters.
– What Senator Trenwith said was that the report of the Tariff Commission is now before Parliament.
– The Government distinctly declined to delay this Bill until the report of the Commission on that question was forthcoming.
-The point is that the report of the Commission is before Parliament before the expiry of the three years of fiscal peace.
– Yes, but that does not necessarily break the fiscal peace.
– Of course it does. What is it before Parliament for?
– The object of the three years of fiscal peace was to make inquiries as to the effect of the Tariff, and to find out whether there were any anomalies and hardships which ought to be dealt with. But whatever the late or any other Government may or may not have done, it will not alter the effect of what was promised to the constituents. I told the electors that “ fiscal peace “ meant that for a period of three years the Tariff would not be disturbed ;in other words, ‘ that it would not be disturbed until the time came for the members of the other House to go before the electors again and ask them what was their will as to the future. It seems to me, therefore, that to consent to that which is not a protectionist measure, but which apparently is designed to carry out the purpose of protection in another way, as I think the Minister of Defence himself said-
– No.
– It goes further than protection, because it really authorizes prohibition, and in that respect. I think, it cannot be said to be in accordance with the promise of fiscal peace. For these reasons, I think that I for one would not be justified, during the continuance of this Parliament, in voting for any measure which would disturb the promised fiscal peace. I do notsay that it is for that reason only that I shall vote against the second reading of the Bill, because there are other reasons which I have given, perhaps at somewhat too great length. If I felt that I could pass over my first reason for objecting to the Bill. I should still feel some doubt as to whether I ought to vote for the second reading ; but I have no doubt on any ground as tomyduty to vote against the motion.
– - I think I can safelysay that if the Parliament had not been sitting in Melbourne, this Bill would not have been seen. I feel sure that it is an evidence of the preponderating influence which the political atmosphere of this State has over our deliberations, especially when it is remembered that the agitation which has led up to the introduction of the measure has been purely local, that outside Melbourne there has been no demand for the Bill, and that no cases have been cited in support of its enactment. That is not an argument against the Bill, because if it could be shown to be necessary for one State orcity. that would be a good reason forpassing it. But it does seem to me to incidentally show the desirability of this Parliament meeting in some
– Outside any State.
– Outside any State capital, where the influence of each State would be equal so far as its deliberations were concerned. In view of the importance of the agitation, and the facts which have been brought forward to back it up, I do not think that any other State would have been so fortunate as to get a similar Bill put through the other House on such a slender foundation. I occupy a very peculiar position. I am not in the slightest degree, enthusiastic about the Bill. I look upon it as a mere trifling with a disease - which is certainly present and which will become accentuated as time goes on - and I feel sure that it will be ineffective. The criticism which has been directed against the Bill makes me think that possibly we are dealing with the subject in a way which may lead to some of the consequences which have been foreshadowed. It: does seem to me that it contains provisions which, so far from curing the evils at which they are aimed, will give rise to greater evils bv injuring legitimate trade within the Commonwealth. The first part of the measure is ostensibly aimed at monopolies both local and foreign, and the second part is aimed at dumping. Most of the criticism in connexion with monopolies has been grounded on a knowledge of similar legislation in the United States. There is one thing which we should always remember in dealing with a question in connexion with which an analogous condition of things is assumed to exist in the United States, and that is that in Australia we have the one great protecting power against monopolies, and it is the only effective power so far discovered, and that it is absent from the United States. In the United States there is a condition existing which vitally affects commerce and trade, and which does not exist in Australia. This difference of conditions is emphasized when we remember that almost all the cases which have been tried in the United States have hinged largely on a condition existing there which does not find a parallel in Australia. That is to say, that in the United States, the railways are privately owned, mrt. in many cases, by the trusts, whilst in Australia, they are owned bv the people, and trusts have no control ever them.
– That is an important factor, but it is not the only one.
– It is a very important factor. The laws of the United
States have been directed to a condition of affairs which has grown up primarily and largely owing to the fact that in that country the very highways of commerce are in the hands of private individuals, and are liable to trust management.
– The arteries of commerce.
– Yes; the arteries of commerce.
– A number of the trade and commerce cases hinge upon that.
– I may say that 75 per cent, of the cases that have come before the United States Courts have been cases in which combines have exercised their powers through the control of the railways, and generally of the means of transportation.
– That could not affect the seaports.
– So far as our seaborne trade is concerned, we are in exactly the same position as the United States.
– I doubt whether anything like 75 per cent, of the American cases hinged upon the control of the railways.’
– I have read many of the cases, and it seems to me that quite 75 per cent, of them have been case’s in which the trusts have exercised their power by the control of the means of transportation.
– Where that has been a factor; but there have been other factors.
– It has been the main factor contributing to the evils which have been brought before the notice of the courts. That in itself would suggest that if in the United States, _ where they have passed some sixteen anti -trust laws-
– They have passed hundreds of such laws in the States.
– I am speaking of laws passed by Congress.
– I do not think that more than five or six of such laws have been passed bv Congress.
– The honorable senator is wrong. If he will refer to Snyder’s Annotated Trust Laws of the United States, which can be obtained from the Library, he will find that there have been fourteen or sixteen trust laws passed bv Congress. For many years Congress passed them at the rate of one each year, so rapidly did thev discover loop-holes in previous legislation. They passed an antitrust law in one year, and in the following, year had to pass another to remedy some defect discovered in it.
– The first was passed in 1887, the second in 1890, the next in 1894, and there were three passed in 1903.
– Those must be only the more important laws.
– The others must be very small.
– My authority is the work to which I have referred the honorable senator, and he will find that my statement is borne out. The great trusts in manufacture and production in the United States have been enabled to successfully exercise their powers very largely, because of the fact that they have been in a position to secure a controlling influence in the management of the railways leading to the places at which their manufacture or production is carried on.
– There is no doubt about that.
– If we take the instance of the Coal Trust we shall find that to-day that trust practically dominates the railways in the Pennsylvania district. Having a dominating influence in the management of those railways, and the area of coal production in their hands, thev are able to command the whole of the coal trade of the United States. Such a condition of affairs could never arise in Australia. It is impossible to imagine a coal trust in Australia owning the coal area, and also ‘the lines of communication leading to it. We are, therefore, in Australia in a far more favorable position, in which to cope with trusts, than are the people of America, because we hold the principal means of transportation. In the United States, notwithstanding all their activity in passing this legislation, and the tremendous public opinion behind the Legislature and the Judicature - because these trusts have public opinion in the United States very strongly against them - the trusts continue to exist to-day as strong as ever they were, and I shall prove before I sit down that in the very case quoted bv the Minister in introducing the Bill the trust referred to continues to flourish, notwithstanding the injunctions of .the Court. In this connexion the thought has occurred to me that whilst the United States have tried to gi apple with trusts bv the methods proposed in this Bill, in Australia we have been able to deprive them of one of their greatest power by the adoption of a certain method which would appear to be the only method yet discovered to cope with them, and that is the ownership of the industries themselves. That is proved conclusively with respect to railways. In Australia, bv the State ownership of the railways, we have not only done nothing to injure the people, but have aided beneficently every industry in the country, and have stimulated the production of wealth.
– An absolutely justifiable piece of State Socialism.
– All State Socialism is justifiable.
– At any rate a prima facie case is made out for considering whether the same means should not be adopted to cope with trusts when they have reached the stage they have reached in America in many instances, and are rapidly reaching in Australia. I shall return again to the question of monopolies later cm; but I should like to say now with regard to the dumping provisions of the Bill that they appeal to me more strongly than does the first portion of the measure. That may seem somewhat singular to those who know that on questions of fiscalism mv views are in the direction of free-trade. I think it as well to be frank in these matters, and I wish to say that when I consider the question of dumping, I have to admit that there is no weapon in the free-trade arsenal that can effectually deal with that condition of things. Where it is a question of the production of wealth, I believe it is possible to prove that you can have just as great a production of wealth under free-trade as under protection. Otherwise, I should not have been a free-trader. But when we are dealing with dumping we are dealing not with a normal condition of affairs, and real !v not with trade at all. So far from being trade it is Letter designated as war or murder. Therefore, while one set of conditions might be applied to trade carried on under normal and fair conditions, it would be unwise to apply the same conditions to trade which is not normal, and which is unfair. I recognise that freetrade, when faced with this question of dumping, provided that it is proved to exist or is possible, leaves a country defenceless. It is on that account that 1 am inclined to view the second part of this Bill with more favour than the first part.
– Would the honorable senator define what he means by “ dumping “ ?
– I shall come to that later. The second part of this Bill contains provisions which do not, in my opinion, interfere with trade, so long as it is fair, and is conducted on normal lines. They will be put into operation only when fair and normal lines are departed from. It is difficult to define “ dumping,” because there is some legitimate trade which in its effect is the same as dumping, but which is not the same in intention. Dump- : ing I take to be the action of a foreign firm in sending into this country manufactures or productions, and selling them in our market at below cost price for the purpose of destroying a local industry.
– Could not that be dealt with by a special Bill ?
– This is a special Bill.
– I point out that a special Bill would be altogether too cumbrous a weapon for the purpose. We must have some weapon ready loaded, to be discharged at the proper moment. To be effective it must be discharged before the local industry is destroyed. If we had to depend on the passing of a special measure to deal with dumping, the local market might be captured, and the injury done before the legislation necessary to prevent it had been passed. Whilst giving mv interpretation of dumping, I admit that there are many difficulties in the way as to when and where it should be applied. For instance, an Australian merchant goes into a foreign market, and, by the possession of keen business ability, is able to buv goods at great advantage, and to sell them in our market at below the cost price of those goods manufactured in Australia.
– He might be able to do so, because of the circumstances ruling in the foreign market.
– That is so. I have some consolation in this matter from the fact that under this Bill when a charge of dumping is made, it must be proved to the satisfaction of an impartial court. A court that is not interested in trade, and of which the interested parties are not members, will determine the question whether what is complained of is legitimate trade or dumping. I think that we can certainly trust such a court to deal with the matter. I do not believe that the Minister of Defence quite grasped the meaning of the Bill when he said that it would not apply, except where a manufacturer was in a position to supply the whole of the Commonwealth.
– I did not say that. I was at the time referring to ari industry such as the cultivation of coffee. It would be absurd to apply it in a case like that.
– It would apply to manufactures, and riot to produce.
– We might have manufacturers carrying on an industry in the Commonwealth on which other industries were vitally dependent. One of those manufacturers might take action, and if the Attorney-General took up his case, and instituted a prosecution, the importation of those manufactures would be immediately prohibited. The local manufacturers would be unable to supply the demand, and the dependent industries would suffer. In such a case the consequence would be that an infinitely larger number of people would be injured by the action taken under the Bill than would be benefited bv the prohibition of the importation of the goods.
– They get prohibition because they cannot get protection.
– That is all guarded against.
– Yes, by the Court.
– No. As I read the Bill, when the Attorney-General has been approached, and a prosecution instituted
– But before that the Comptroller-General has to make inquiries.
– As I read the Bill, when a prosecution is commenced, the importation must stop, or, if it continues, it must be under a bond. While a case is being heard the particular trade is at a stand-still; and when we remember the ramifications of commercial life, and how industries inter-depend, we may easily conceive of numbers of cases in which infinite harm might be caused. And who has the key to the problem? The importer of the particular goods; and unless he takes the personal risk of giving a bond, importation must cease.
– But importation ceases only so far as the baneful importer is concerned. There may be one hundred other importers against whom there is no complaint.
– Surely the stoppage of importation operates all over Australia?
– The case cannot be as stated by Senator Trenwith, because otherwise the Bill would be ineffective.
– Other importers might not be selling at ridiculously low prices.
– But if the importers were selling at low prices, would they all be cited as parties to the case? If so, then trade would be stopped just as effectively.
– That is not likely to occur.
– We ought to approach this matter cautiously, in order to see if there is not some possible way out of the difficulty.
– I have heard of such a thing as a test case.
– Whether there be a test case or not, it would be serious for trade if the importation of a particular article had to be absolutely prohibited pending the decision of the Court. The Government ought to seriously consider whether some method cannot be devised to allow a trade, under the circumstances, to continue, subject, it might be, to certain restrictions. Senator Drake, I think, put his finger on a weak spot when he said that we have a limited power, in that we can deal only with trade between States and oversea trade. Senator Best’s argument that we have power to apply the Bill to foreign trading corporations formed within the Commonwealth seems to me somewhat weak. If we have power so to apply this Bill, which deals with methods of sale, and incidentally regulates those methods according to the’ industrial conditions under which industries are carried on, I am satisfied that we have full and ample power to deal with the industrial laws of the Commonwealth. In my opinion, it would be desirable to have that power, and I only hope that Senator Best is right ; but I am somewhat afraid that the honorable and learned senator would not himself be prepared to go so far. To me, ag a layman, however, that seems to be the logical outcome of the honorable senator’s arguments. If we have power to say to a trader in a State that he shall not sell goods in that State at certain prices, because thereby he is monopolizing trade - that such a trader shall not carry on a system of rebates - then we have also power to say to him that he shall not employ his men during certain hours and at certain wages because in another State other employers are paying higher wages and affording more favorable conditions.
– So we could if we were not specifically prohibited.
- Senator Trenwith must remember that the power we have relating to arbitration is a special power as to trade disputes. The Bill does not deal with trade disputes between one employer and another as to the conditions of trade, but it may deal with a case in which all the employers except one are satisfied with the conditions. Let me cite a case in point. I was asked to submit an amendment to the Bill, but I declined, on the ground that we have not the power to make such a provision as was desired. In Victoria a certain manufacturer of self-raising flour issues a coupon with each packet, and ‘ I was asked to submit an amendment by another employer, who stated that he could just make a fair profit by selling at the same price as his rival, and without issuing any coupons. I may explain that purchasers who collect the coupons are allowed a rebate of so much on returning them to the manufacturer. The amendment I was asked to submit would, if carried, have had the effect of making this coupon system illegal ; and undoubtedly t is a system of rebate.
– In South Australia we have done away with coupons.
– That was done by State law, and I am now talking of Federal law. I believe that under this Bill we could prevent such’ a system in Inter-State trade; but will any honorable senator, layman or lawyer, tell me that we have power to carry into effect such an amendment as that I was asked to submit?
– According to the advocates of this Bill, it would have to be proved that the issue of the coupons was injurious to the public.
– According to Senators Best and Trenwith, it would have to be proved that in the issue of the coupons there was intent to injure the public.
– We could not prevent the issue of these particular coupons by means of this1 Bill.
– The gentleman who asked me to submit the amendment is a con- stituent of Senator Best and Senator Trenwith, and I refer him to them.
– I have heard all about the case.
– I told the manufacturer that, according to my limited legal knowledge, it would be impossible for the Federal Parliament to deal with such a case. To return to the main question, my opinion is that trusts, combines, and monopolies are not the creation of political conditions such as those brought about by freetrade or protection. It is often said that trusts are the result of protective Tariffs. I believe that a protective country is more congenial soil for trusts ; but it is too sweeping an assertion to say that they are the result of protective Tariffs.’ We find trusts in freetrade, as well as in protective, countries.
– We find that trusts originate in free-trade countries and spread to protective countries.
– I am not prepared to indorse that statement, though Senator Trenwith may be able to prove that the fact is as he states. In my opinion, trusts are the legitimate outcome of economic conditions.
– As naturally as day is light.
– The day that science and machinery were applied to production trusts became inevitable. Trusts are merely the outcome of conditions which have prevailed and developed until we have our present-day system ; and the movement that they typify will not be checked, and cannot be altered by political action. Trusts are the outcome of economic conditions, and they can only be checked or altered by the alteration of the economic system.
– The result of improper economic conditions.
– They are proper economic conditions arising from the system of capitalistic production. No other results could be expected.
– How can we alter economic conditions without political action ?
– In reply, I ask whether any political action for the last too years had anything to do with the introduction of machinery into production. Is it not a fact that the introduction of machinery has led to aggregation of capital ? Was it possible under the old hand-labour system to have a trust or combine ?
– I asked how we can alter economic conditions except through political action ?
– I say that other economic conditions are growing up - that the ‘ capitalistic system itself, apart and independent altogether of any political conditions, is bringing about a system of Socialism. It may be that political action will be needed to transfer the ownership of that system from the few to the many ; but political action never could create the system, and, therefore, cannot stop it. The only thing that political action can do is to decide the question whether we are to have capitalistic Socialism or collective or State Socialism. In view of the fact that I hold such views, honorable senators will not wonder when I say that I am altogether sceptical - altogether an unbeliever - as to the first portion of the Bill. In my opinion, the conditions which this Bill proposes to regulate are altogether beyond the power of this or any other Parliament, and that any action on our part in that direction would be futile. Even the trusts themselves are helpless in the grip of circumstances. The owners of the industries involved in the trusts have been forced into their present position, in many cases against their own free will, by the economic conditions. It was either trusts or extinction.
– Is it impossible to carry on the production of oil without a big trust ?
– I have here WiZshire’s Magazine, published in New York in July, 1906. in which appears an article headed “ The ‘ System ‘ and Competition.” as follows : -
We have often tried to show by theory and fact how competition of the small dealer with the trust has become practically impossible.
Here are some facts developed last month that may interest our readers : -
How the Pennsylvania does it. (New York American.) ,
The “ Pennsylvania” is the trust which Senator Playford said had been wiped out.
– I said nothing about that trust.
– The quotation continues -
Philadelphia, 25th May. - Alexander J. Cassatt was boldly charged by a once wealthy coal producer, testifying at the Inter-State Commerce Investigation of Pennsylvania Railroad Graft, and alleged blackmailing methods to-day, with being, not only the author of his woes, but as having issued orders to grafting subordinates which have driven scores of independent operators to the verge of ruin.
Another sensational feature of the probing today was sworn testimony by Chief Engineer Joseph V. Crawford, of the Pennsylvania Railroad, that his partners in the ownership of a 60,000 acre tract of coal and lumber land in West Virginia were Vice-President Rea, of the Pennsylvania, and Effingham B. Morris, a Pennsylvania director.
Amazing as it may appear, Effingham B. Morris was yesterday chosen one of a committee of five Pennsylvania directors to investigate the accused corporation.
Asked by the Commission why his business has slumped from an output of 125,000 tons in 1 goo to less than 17,000 tons last year, the witness exclaimed dramatically - “ The Pennsylvania Railroad put me out of business. I was deliberately frozen out through orders. Somebody way up gave those orders, which were obeyed implicitly all down the line.” “ You believe, then, that high executives of the road gave these orders?” asked Government counsel. “ High executioners, not merely executives,” was the angry correction. “ I believe Alexander J. Cassatt is the man responsible. I also believe he controls the Reading, the Baltimore and Ohio, the Chesapeake and Ohio, and the Norfolk and Western Railroads, through the community of interest plan. That pernicious combination is what has enabled a few favoured companies to prosper enormously, and crush out scores of independent operators.”
Pent-up indignation, caused by years of oppression on the part of the vast Pennsylvania system, struggled for expression as the speaker went on to tell how his three collieries - the Lorraine, Reakirt, and Penn - had been running at a disheartening loss for thirty-six months.
Because of merciless discrimination shown by the Pennsylvania, one of the results was, he said, that large quantities of coal which he had contracted to sell at $1.12 and $1.15 cost him $1.48 a ton to deliver. He added, with a show of feeling, that he had remained in business, hoping against hope that some remedy would eventuate and save the wreck of his camp.
Here was a man who was forced to become a victim of the very system which he was partly condemning. Now I will come to the Standard Oil Company, which Senator Playford seemed to think was a beneficent trust. I have shown that when an organization of this kind secures a monopoly, or practically a monopoly, it is able to force even an unwilling person to become a member. The Standard Oil Company had a small beginning and we all know what it has become. The following extract is taken from the New York World, and is dated 25th May, of this year : -
The Standard Oil Company has its own telegraph system, leased or owned, extend ing to nearly every part of the country, was the one revelation out of the ordinary at to-day’s session of the Inter-State Commerce Commission. The rest of the testimony had to do with the Oil Trust’s characteristic tricks, such as giving oil away, compelling merchants to sell Standard products under threats of ruining their business, sending boys on bicycles to “spot” deliveries by the independents’ waggons, underbilling of freight, and so on down the Standard’s category of business morals.
George L. Lane, of Mansfield, O., who was employed by the Standard for fourteen months in 1901-2 for the purpose of driving independents out of business, was a most entertaining witness - excepting for the trust lawyers. He said he was employed by C. M. Lyons, of the Cleveland office of the Standard to go to certain designated places and use every means, fair or foul, to force the independents to quit.
– Before whom was this evidence given?
– There was an investigation ordered by the United States Government. “
– It was not before the law courts?
– No. The evidence was taken by a Commission presided over by Mr. Garfield, a son of President Garfield. The quotation continues - “My instructions,” Lane said, “were to kill them, and 1 was told that if I could not do the job somebody else would be sent to take my place. In all of the towns, with the exception of Youngstown, the independent peddlers were forced to abandon their business. In Youngstown a man named William H. Vahey was encountered, and despite everything we could do, he held his trade. We gave oil away by the barrel and tank load, but it did no good. Vahey’s customers threw it away. “ Of course we could not give a preacher money, but we gave him oil. When we started to give oil away, we gave first one gallon, then two, if it was ‘ all right,’ and increased it up to 100 gallons if necessary. We judged the ability of our 1 spotters ‘ by the number of gallons they gave away. At one time, taking al] expenses into account, it cost $6 a gallon to give the oil away. “ Our rivals were followed during their distribution by boys on bicycles or men on foot. Spotters were also sent secretly from Cleveland, and if I did not find all the independent customers I got called down.”
When he entered the independent field, Lane said, “ Standard Oil men told him they would give away groceries if necessary to kill him off. He charged that a system of rebating to consumers was put into operation, and that the practice continues even now in certain parts of north-western Ohio. They told me they would not let me live,” said Lane, “ and they have been trying to starve me ever since, but I am still alive.”
This is the way in which the matter is summed by the newspaper from which I quote -
It does not seem to matter whether you are a rich owner of 60,000 of coal land or a poor owner of only an oil peddler s cart, you are -a marked man unless you wear the trust collar. The beauty of it all is that the monopolist is in the same boat as his victim, forced to do as he does, or be a victim himself. The clerk of the Standard Oil will be fined if he does not exterminate the peddler who peddles “ independent “ oil in his district. It’s diamond cut diamond ; if he does not starve the peddler then the peddler starves him. Again, if the Standard Oil does not extermine its competitors when they are weak they may grow up to be strong and extermiruite it.
That is the problem we have set ourselves to deal with in this Bill. And how do we propose to deal with it? We propose to drive the trusts back again into the state of competition and the condition of affairs from which they originated. We have just as much chance of making the earth stand still as carrying out that idea. That is why I am sceptical as to the success of this Bill. I now come to Senator Playford’s statement that the Sherman Act in America has “teen successful. He said that the authorities had been successful in getting an injunction under it. As a matter of fact, the trusts continue to laugh at the authorities in spite of a hundred injunctions. They defy the courts, they defy the United States Government, and they continue in spite of the Sherman Act. The Coal Trust and the Beef Trust, which the honorable senator quoted as victims of the anti-trust law of the United States, are flourishing to-day, and are as powerful as ever they were.
– The sausages of the Beef Trust have lost their character lately !
– I think that the revelations referred to have done more harm to that trust than all the United States legislation.
– They are continuing under a private arrangement amongst themselves that no one else knows anything about.
– That is what I am coming to. ‘ They continue without any parchment agreement, but they have what they call “ a gentleman’s agreement “ amongst themselves. Here is a quotation from the Argus’ American letter published on 1st May; I suppose it is genuine, and was not written in the office: -
President Roosevelt and his Attorney-General have suffered a serious reverse in their campaign against the great combinations commonly called trusts, and it is due in part to the President’s own extraordinary published argument of some months ago in defence of his friend Paul Morion, at the time when the latter withdrew from the Cabinet to become president (by the act of Thomas J. Ryan) of the Equitable Life Assur ance Society. Our great beef companies (the Armours, Swifts, Cudahys, Morrises, and one or two other concerns) have for a long time done business in accordance with a private combination agreement, thus maintaining what is practically a monopoly, and squeezing the public at both ends of the trade by keeping down the price of cattle and holding up the price of meat. Such combinations are forbidden by law unless they exist under a single corporate charter.
Three years ago the Government procured injunctions restraining the companies from acting in combination. This was a beginning. Two years ago, at the suggestion of Mr. Roosevelt, Congress created the Bureau of Corporations, headed by a commissioner empowered to obtain, for the President’s use, information from the great corporations as to their affairs. Over this bureau the President placed a young lawyer, James R. Garfield, son of the President of the same name who was assassinated in 1881 by Guitean. Garfield and his agents began to collect information by personal application to the corporations. Under instructions from Congress they got a lot of it from the beef companies, with the understanding that a part of it should be held in confidence. They published a report which was quite favorable to the trust. But a part of their information was not printed.
The Government resorted to the Courts, and procured the indictment of the Armours, Swifts, Cudahys, and Morrises for violation of the antitrust law of 1890. There were sixteen of these accused men, representing the greatest incorporated beef and packing industries in the world, at Chicago, Omaha, Kansas City, and other places. At the outset they interposed the plea that under the constitution they were entitled to immunity, because they had been required by Garfield to give testimony against themselves. He had promised, as they proved, that their testimony should not be used against them, but it had been so used in procuring the indictments.
The letter goes on to say -
Great efforts were made by the Government to save itself from defeat at the hearing in Chicago on this plea for immunity. AttorneyGeneral Moody himself went to that city, and argued strenuously in Court for two days, say-‘ ing that if the accused men should escape trial it would be a calamity to the Government and the country. But all in vain. Three days ago Judge Humphrey, of the Federal Court, accepted the defendants’ plea, gave them immunity, and discharged all of them.
That is the end ofthat case. The article goes on -
If now the corporations shall be found guilty, their punishment will be only a fine of a few thousand dollars.
Senator Playford boasted that this Bill was almost a- copy of the Sherman Act -
Mr. Roosevelt ought not tocomplain, for in preventing the prosecution of his friend Morton he (and Attorney-General Moody) argued that it was the corporations, rather than their responsible officers, that should be prosecuted and punished.
Is not that a “ lame and impotent conclusion,” that the great United States, after years of effort - because the case originated in 1903 - should find that the accused are all acquitted and allowed to- go free, and’ that even the prosecution against them had to be based upon- their own admissions - that the men in the dock had to supply the evidence for their own prosecution?
– That was the reason for letting them off-
– That is the reason why they were let off, and if a Government like that of the United States is unable to get evidence except that which it obtained from the members of the trust, in strict confidence, does it not show how impossible it is to put such a law into effective operation?
Sitting suspended from 6.30 to 7.45 p.m.
– Before the adjournment for dinner I made a statement which the Minister for Defence did not seem prepared to accept as to the number of laws on this subject which have been passed by Congress. I have since been able to verify my statement, and I find that, so far from having over-estimated, I under-estimated the number. From Snyder’s Annotated InterState Commerce Act and Federal AntiTrust Laws, I find that between 1887 and 1903 Congress passed twenty-one Acts, each dealing in some measure with the question.
– They must deal very slightly with the question, then.
– Some of the Acts deal very slightly with the question, but they are all in some measure amendments of the original Act. The honorable senator quoted a case in support of his contention that this kind of legislation has been effective in the United States. On page 161 1 of Hansard he is reported to have said -
In January, 1903, Mr. Gaines, a member of the Federal House of Representatives, for Tennessee, said - “ This Coal Trust was destroyed. Yet the honest coal business survives, and is thriving in Kentucky and Tennessee, and coal is selling there to-day at S3. 50 to $3.75 - and why? The laws are enforced. Our Anti-Trust Statutes are enforced. The people are on top.”
He inferred from the extract, and gave us to understand, that what is known as the Coal Trust of America has been broken up.v
– No; only so far as those two States were concerned.
– The case which the honorable senator cited applied to a small coal trust which had been formed in that State ; but the great coal-bearing, State of America is not Tennessee, but Pennsylvania. In 1890 the latter State produced over 90 per cent, of the total output of coal in the United States, and the Pennsylvania Trust has never been broken up. Presently I shall quote some facts from an American journal proving that it is not only in existence, but is pursuing its nefarious career as a vampire towards the other industries of the country. But, first of all, as the Minister quoted a number of cases which he seemed to think proved the efficacy of the law, I wish to show that the Sherman Act - the most stringent of all the American Acts - has on several occasions failed where, prosecutions have been instituted under its provisions. For instance, in 1894, an action was taken against the Sugar Trust, and although it was proved that it controlled 98 per cent, of the trade, the prosecution failed. The case is reported on page 253 of the Annotated Inter-State Commerce Act. Again, in October, 1898, the ‘Beef Trust was charged’ before the Circuit Court of the United States with being an illegal combination. The Circuit Court gave am injunction, but that was afterwards reversed by the Supreme Court. I have already dealt with the case which was instituted subsequently, and which the Minister traced up to a certain stage as having succeeded, but which actually failed on a very vital point. As regards the two cases which I have just quoted, their failure arose from this fact - that, while it was proved up to the hilt that there was a restraint of trade, it was a restraint of trade within a State. The prosecution was unable to prove restraint of trade between the States, and therefore a conviction could not be secured. As regards the Coal Trust of Pennsylvania, the American Review of Reviews for June, 1906, contains an article, from which I make this short extract -
Perhaps the most complete monopoly now existing in America is the Anthracite Coal Monopoly, and it will be next to impossible to break it up.
This trust is very interesting, because of the form in which it exists. In order to show the impossibility of this legislation to reach that kind of trust, I propose to quote from an article which is entitled “ The Coal Trust, the Labour Trust, and the People who Pay,” and which appeared in Everybody’s Magazine for May last. It says -
The Coal Trust is the most effective “gentlemen’s agreement “ ever employed to evade the spirit of the law. No contract is needed to hold its members together. The power that combination gives them to make enormous profits by levying on the public an unjust tax of from fifty cents to one dollar a ton in the price of coal, is an adequately strong bond of union.
The article goes on to say -
In the enthusiasm born of good-fellowship and the pleasures of yachting, increased by the admirable food and the unlimited champagne, the gentlemen embraced one another, making proclamation that they were brothers at heart, and that the interest of each one of them was the cause for which they, united, would strive. Each one gave his “ sacred word of honour as a gentleman,” pledged in the sparkling yellow wine, that thereafter all warfare among them should cease. There were to be no” written contracts, no bonds. They were gentlemen. “.A gentleman’s word is as good as his bond.”
How would it be possible to prosecute a trust of that description ?
– How does the honorable senator know that that statement is accurate? Does it not sound like a statement in a novel ?
– The statement is proved to be accurate by the failure to get a conviction against the trust. That the trust is in existence is proved by the results that flow from its operations, by the dearth of competition between these gentlemen, by the complete co-operation amongst them in carrying on their business arrangements, and the absence of any known agreement or business contract between them. After dealing with the methods which the trust had adopted, the article goes on to say -
Thus the coal barons had yielded to the mightiest, and he had become king. He was in the saddle and ready to ride at the head of his forces in 1900. He brought about a general recognition of the Reading interests ; organized a’ holding company, which owns the stock of the Philadelphia and Reading Railroad, the Central Railroad of New Jersey, the Philadelphia and Reading Iron and Coal Company, and. various other affiliated concerns: and made himself president, not only of the parent company, but of the stronger subsidiary ones. Remember that the’ Reading Company owns sixty-three per cent, of all the unmined hard coal in the world, and that ever since Franklin B. Gowen unmercifully thrashed the Pennsylvania Railroad in a legal battle in r8/g, the latter has acted in concert with the Reading in all hard-coal matters.
– It is transportation.
– Yes; it is not only a coal trust, but a railroad trust.
– Transportation is the secret of it.
– It is not altogether the secret of it, as I shall point out presently.
– It is largely so.
– The fact that the trust controls railroads gives it an enormous power which no trust in Australia could secure. I propose to quote certain extracts, because I desire to show honorable senators that in Australia there is ‘a trust which, so far as it is able, is acting on precisely similar lines. A man named Baer took a prominent part in the formation of the Beef Trust, and his part in the transaction is described in the following manner : - ‘
Directly the trust, now a tangible thing, was in working order, Baer set about securing control of the selling machinery, which was in the hands of powerful wholesalers, or sales agents. (Remember, in this connexion, that the strength of the Beef Trust and of Standard Oil rests almost wholly upon their control of the selling machinery.) The railroads organized sales departments of their own, or made contracts which placed the wholesalers under their direction; and the rule was established - and it is enforced relentlessly - of cutting off the supply of any dealer, wholesaler or retailer, who should depart from the schedule of prices fixed by the trust. So far as the railroads in the trust were concerned, the outward semblance of independent action was carefully maintained, as it is now. For instance, Presidence Baer, President Truesdale, President Thomas, and others would meet, quite by accident of course, in the Lawyers’ Club, in New York, for luncheon. They talked about business - men of affairs always do that - and it was pure chance that the coal price-lists issued by each railroad after these luncheons were exactly the same. It was merely a general understanding. Here you have the “ gentlemen’s agreement “ in its perfected, purified form.
There, again, we see the absolute impotence of this legislation to reach an agreement such as that. It would be necessary to put the men in the witness-box, and compel them to convict themselves before it would be possible to break up the trust, or prevent it from crushing out all its rivals in the country.
– That is only an expression of opinion’ by the honorable senator, and I do not agree with him.
– I should like the honorable senator, when he has an opportunity to speak in Committee, to say .how it would be possible to get at a “ gentlemen’s agreement.”
– On the circumstantial evidence a Justice of the High Court could find a fact.
– The Justices of the Supreme Court of the United States have failed to find a fact.
– .That may be, “because in many cases there are obvious reasons which I need not state.
– I do not think that the honorable senator would charge the Supreme Court of the United States with corruption.
– No.
– In order to show the money power of this trust, I quote the following passage from the same article : -
Is this advance which the trust has made warranted by conditions? Is the price we are paying now a fair price? Let us consider some figures. There has been an increase in the cost of mining, due to higher wages and physical difficulties in working lower levels. Evidence before the InterState Commerce Commission showed that the cost of taking the coal from the mine increased from $1.43 a ton in 1900 to $1.96 in 1903. In that time the price of coal increased a dollar a ton, nearly double the increase in cost.
The significant fact is that these trusts, by eliminating competition without increasing prices, are able to enormously increase their profits, and where they find it safe to do so, as in this case, they do not hesitate to increase their prices. I make that statement, .because it is claimed on behalf of one trust in Australia that, so far, it has not increased its prices. But the saving which has accrued to it as the result of the elimination of competition, the centralization of its factories and working staff, and the doing away with needless advertising and staffs of commercial travellers which were necessary while competition existed represents to them a profit which is greater than a substantial increase in the price of the article produced.
– That might be considered fairly legitimate, I think.
– I shall deal with that phase of the question presently. In the last page of this article, I find the following : -
The Coal Trust is a typical instance of what we can see going on about us in every direction : the organization of the productive resources of the country^ and the centralization in a few hands of their direction and control. This trust is an especially interesting and a specially dangerous example, because of the perfection of its organization, and its success in taking advantage of the law.
Is there any justification for this centralization of vast power? Does the community in any way benefit from it? Undoubtedly in that it introduces order, economy, and system in place of confusion, waste, and individual caprice.
Is it dangerous? Yes, because it places a vast power in the hands of a few irresponsible individuals, giving them the privilege of impos ing on the public an enormous tax in the form of profits out of all ratio to the service they perform.
In that last sentence lies the answer* to the objection raised by Senator Mulcahy. It is shown that the profits they make by the saving due to cooperation are out of all ‘ proportion to the services they render to the community. The first part of the quotation I havemade constitutes the defence of the Government in introducing this Bill, but it lies with Ministers to do more than defend the introduction of “the measure. They must prove that it will do what it aims at. The question has been raised whether in Australia we require to deal with these trusts in the manner proposed by this Bill, or by nationalization^ because some doubt is expressed as to their existence. It has been my privilege to act as Chairman of” the Select Committee and Royal Commission recently engaged in inquiring into theexistence of one alleged trust in Australia. Reading these articles, and then lookingover the evidence given before that Commission, one cannot but be struck with the absolute similarity of the methods adopter! by the Tobacco Trust in Australia and the Coal Trust in America. There is, of* course, the difference which is dueto the fact that in Australia it has not been possible for the Tobacco Trust to secure control of any of the railways, whereas in America the Coal Trust has been able to secure such control. I direct the attention of honorable senators to the history of the formation of the Tobacco Trust ifrAustralia as given by Mr. Louis P. Jacobs,, one of the directors of the trust, in evidence taken by the Commission. At page 57 of the Minutes of Evidence, given before the Tobacco Commission, in answer to question 555, Mr. Jacobs traces the formation of the agreement, as he called it, between the various manufacturing firmsHe said : -
An arrangement has been concluded betweencertain firms in the tobacco trade, some of which are Australian and one English, a list of which is given herewith. Under this arrangement, each of the manufacturing companies holds aproprietary interest in every other such company. Every one of the companies concerned, however, carries on its business separately from the other. These manufacturing companies havepurchased an interest in the distributing house of Kronheimer Limited, and have appointed” this firm the ‘ sole distributing agent for their products to wholesale houses, for which service they receive a commission. Kronheimer Limited, however, also do a wholesale business themselves, i’.e., they supply retail tobacconists in competition with the other wholesale houses.
Honorable senators will remember that one of the essential points laid down by the man who organized the Coal Trust in America was that they should get control of the wholesale distribution of their goods. Here we have the Tobacco Trust in Australia doing precisely the same thing - forming a holding company in which each - of the manufacturing companies holds an equal interest, the holding company being responsible for the wholesale distribution of the goods of the manufacturers. Every pound of tobacco, every cigar, and every cigarette made in the factories represented in the Tobacco Trust must go through the holding firm of Kronheimer Limited. No man in Australia engaged in the wholesale or retail sale of tobacco, cigars, and cigarettes, can go to any of the factories represented in the trust, and purchase a pound of tobacco, a cigar, or cigarette there. Mr. Jacobs went on to say: -
It will thus be seen that while the British company obtains a share in the profits made from locally-produced tobacco, the Australian companies likewise obtain a share in the profit made from the sale in Australia of the tobacco of this same company.
He went on then to give the reasons which induced the manufacturers to form the trust, pointing out that prior to its formation there had been unrestricted competition, which had forced down profits and caused tremendous waste in production. He showed that, by coming together, they were able to avoid that waste and enhance their profits, andthat altogether the industry, as the result of the co-operation of the manufacturers, was in a far better position than it was formerly under unrestricted competition. The Bill is aimed against combinations of that kind. This combination is undoubtedly in restraint of trade, because it is practically impossible for any manufacturer in Australia to produce tobacco successfully in competition with the combine.
– Has it injured the public ?
– No, I do not think it has. I am not arguing that it has injured the public, but that, so far as this particular trade is concerned, no rival manufacturer in the Commonwealth has a chance against the combine.
– He must come in, or be snuffed out.
– He must. The point arises here that as, with the exception of a few lines, the trust has not raised the price of its productions to the public, it is claimed that it has not therefore injuriously affected the public. But are we to admit that the prices ruling for tobacco, cigars, and cigarettes prior to the formation of this combine must for all time endure; that, no matter what savings in production and distribution may be introduced, they must never be passed on to the consumer? The defence of those who say that this trust- does not injure the public is that the price of tobacco, cigars, and cigarettes has not been raised. I say that if there has been, by the use of improved machinery or improved business methods in this industry, a great saving in production, the public have a right to a portion of that saving, and if they do not get it the public are injured to that extent, and this Bill; in theory, should break up the combine.
– Then there would* be no saving.
– I was just going to point that out. The success of the Bill in breaking up the combine would involve the elimination of the saving accomplished by co-operation.
– Which the consumer should get, but will not get, if the Bill is effective.
– If this Bill is effective, the consumer cannot get it. The saving has been gained by eliminating the element of wasteful competition, which the effective operation of the Bill would reintroduce. Honorable senators will not in these times find the enormous hoardings at various railway stations covered with beautiful advertisements recommending the use of certain tobaccoes, cigars, and cigarettes. At one time one could scarcely look out of the window of a railway carriage without seeing such advertisements.
– That is injurious to the bill-posting industry.
– And to designers, printers, and paper manufacturers.
– It certainly is. I ask honorable senators to note the judicious way in which the trust advertises to-day. We do not find large advertisements from the trust in every newspaper. It is only in certain influential newspapers, and especially those which used to attack the tobacco combine and write of the operations of the “ tobacco octopus,” that we now fin’d full-page advertisements of the products of the trust. The little uninfluential newspapers that used to get an occasional advertisement from the manufacturers of tobacco get none to-day. I say that, if this Bill is effective in dealing with this trust, it will confer no benefit upon the public, . who will have to pay the same price, and perhaps a higher price, for tobacco, cigars, and cigarettes.
– If the trust is in the position referred to, of having an absolute monopoly of trade, they can, if they choose, raise prices.
– They can do so.
– If they were broken up under the operation of the Bill they could not do so.
– We had one witness before the Tobacco Commission who, when he was asked why the trust did not raise prices, very naively said, “ You do not suppose that we are going to raise prices while the Labour Party are conducting this campaign for the nationalization of the industry? You surely do not think that we are going to give them an argument to use throughout the Commonwealth? We are not , so simple.” For that reason, I think it islikely that for some time they will not use their power to raise prices. I say that if the Tobacco Trust is broken up by the operation of this Bill, no benefit will . be conferred on the consumers. It would1 not be in the interest of the consumer to break up the trust if we are to go back to the conditions prevailing when a number of small factories were producing inferior tobacco, and competing in a ruinous way with each other, which led to no adequate profits to the manufacturers or any benefit to the public. That is one reason why I do not desire that the Bill should be applied to that particular trust. Now I come to the Sugar Trust. So far as manufacture is concerned, the operations of the Sugar Trust are confined to Australia and Fiji. The Colonial Sugar’ Refining Company is undoubtedly a commercial trust within the meaning of this Bill, but it is not a complete monopoly. I think there are two other little refining companies which do about5 per cent. of the trade. What would be the effect of this Bill on the Sugar Trust?
– It need not be a complete monopoly to come under the operation of the Bill.
– The Colonial Sugar Refining Company have undoubtedly ad opted the rebate system in all its worst features. Grocers who take sugar from them are given a rebate under a written agreement that they will take the sugar of this company only. If they break that agreement they will lose their rebates. I am very doubtful whether this Bill could be used successfully to interfere with the Sugar Trust. Does this measure give us the power to fix a selling price ? We have a Tariff against sugar coming into the Commonwealth, and so long as it continues in force the Colonial Sugar Refining Company can fix the price of sugar in Australia, even without their present agreements with their customers. I fail to see how we would benefit the consumers by breaking up the Sugar . Trust. I believe that if we did so the position would be exactly what it is to-day ; the trust would continue to exist in spite of us, and to fix the price of sugar in Australia.
– If we imposed a fine upon the company they could take it out of the consumers.
– That is so.
– When the honorable senator uses the term “trust,” as applied to the Colonial Sugar Refining Company, does he mean to contend that the company is a trust within the definition of the Bill?
– Yes, I do.
– Under this Bill “ trust” has a special meaning. I do not think the Colonial Sugar Refining Company comes within it, though I do not say that it would not come within the purview of the Bill.
– A “ commercial trust,” according to the Bill - includes a combination, whether wholly or partly within or beyond Australia, of separate and independent persons (corporate or unincorporate) whose voting power or determinations are controlled or controllable by -
– The Colonial Sugar Refining Company might constitute a monopoly, but I hardly think that it constitutes a trust.
– If it is not a trust within the meaning of this Bill it will not be affected by it.
– It might be a. corporation acting in restraint of trade.
– In any case I do not see how the Bill could deal with that particular industry. I should like to refer to the kerosene industry, which has. spread from America to Australia, and I hope the Bill may do something to regulate it. The Standard Oil Company to-day compels its customers to bind themselves to take no other oil. In Australia there is another oil company called the Borneo Company, and I have it on the best authority that it is being crushed out of existence by the Standard Oil Company. If a grocer purchases any oil from the Borneo Company the Standard Oil Company may refuse to supply him with any of their product.
– It would have to be proved that the consumer was being affected.
– It would have to be proved that the consumer was being injuriously affected. There is some hope, , 1 think, that the Bill may have the effect of bringing about fair conditions in the oil trade in Australia. Now I come to another industry, and. the most important of all, in my opinion, to which this Bill should apply, if to any. I allude to the Inter-State1 shipping industry, which today is undoubtedly carried on by a trust. I am confident that the industry is controlled by a board on which the various shipping companies in Australia, with the exception of one, are represented. Fares and freights are fixed, and a general agreement is entered into; but what I wish to point our is that the agreement is an open one, there being no attempt at concealment. What would be the effect of this Bill ? It would be to drive the combination .underground, and, instead of an open agreement, we should have a “gentlemen’s agreement,” like that of the Coal Trust. We should then be powerless to sheet home a conviction under this Bill. All that the shipping companies would have to do would be to make an agreement of honour in regard to fares and freights. Some sceptics may say that members of the trust would soOn, break away from such an agreement. But without a written agreement there would be the most powerful compelling force to obedience. Any company in Australia who tried to compete with the combine would have a very hot time. If any of the parties were to break away from the agreement, the other companies could run the recalcitrant one off the coast of Australia, and practically ruin him. Where is the inducement for a steam-ship company to break away from such an agreement? Under the terms of the arrangement the profits are greater than ever before, and interest on debentures and shares is assured. If a shipping company were to revert to the old system of competition, interest and dividends would become uncertain. All the tendency is to abide by the agreement, and endeavour to carry it out to the utmost of their power. This Bill does not hold out a scintilla of hope to the people of Australia, so far as the shipping combine is concerned.
– It is only a union.
– Certainly, and I am not condemning it.
– Is the combination to the detriment of the public?
– I am certain that it is detrimental to the public in its effects. The combine could be made of great service to the public, but, unlike the tobacco combine, it has undoubtedly used its powers. The people of Western Australia are absolutely dependent on sea carriage for their goods from the eastern States, and they consume in that State more foodstuffs than they produce. What happens is that the shipping companies, by reason of their combine, are able to take tribute from the grower of the foodstuffs and also from the consumer in Western Australia; and the freights charged are altogether out of proportion to the services performed. Such a system is unjust, not only to the consumers in the West, but also to the producers in the East.
– Are the dividends of the shipping companies very large?
– During the last few years these shipping companies have been able to build some of the largest steamers on the coast out of the profits. * Senator Mulcahy. - Tax the companies on their profits.
– If Senator Mulcahy considers the dividends paid by those companies he will see that the combine is a most profitable investment. This is a sample of local trusts which, it seems to me, the Bill will be powerless to effectively deal with. There is another phase of the Bill to which I desire to call attention, and which came under my notice as a member of the Royal Commission on the Tobacco Monopoly. There is an agreement in the tobacco trade very similar to that referred to by Senator McGregor as existing in the bootmaking trade. The States Tobacco Company, which is the cigar branch of the Tobacco Trust, have in their possession a number of cigar-making machines, by arrangement with the American trust? To show honorable senators the value of these machines, I shall read some evidence given before the Royal Commission to which I have referred. Mr. Arthur Hirschman, a cigar manufacturer in Sydney> gave the following evidence: - 7091. Where are those machines used? - In Melbourne, in the States Tobacco Company. I produce, for the information of the Commission, what is styled the bunch before becoming a cigar. It is made by hand, or by block. The ten machines would turn out 30,000 bunches a day, which would be at the rate of 150,000 per week. A boy or girl is employed on each machine, and is paid, at most, 15s. per week to work it. That shows the cost of making the quantity I have named in a week would be £7 10s. The cigarmakers of this city have lately had a case before the Arbitration Court, and from the particulars given there, it is seen that the very lowest at which I could make the cheapest cigar would be 2s. 6d. per 100 ; that is, to finish it right out. The rolling means putting on the covers after the bunches are made, and whether they be Sumatra, Havanna, or Mexican, the cost is is. -8d., or two-thirds for rolling, and iod., or one-third, for making the bunches. So that to manufacture 150,000 by hand at iod. per 100 would mean £62 10s., as against the cost by machinery of £7 10s. The rate I have mentioned is as fixed by the Arbitration Court, and is the same as in Victoria for block-work cigars. If taken on the basis of 50 working weeks in a year, it would mean a total wage of ^3,125, as against machinery wage of ^375, giving the trust an advantage of ^2,750 per annum.
– That is an advantage which comes from the possession of the machines, and not from any combination amongst the manufacturers.
– There is a combination. The difference between the case quoted by Senator McGregor and the case I am now citing is that, while any manufacturer in the boot trade may, on’ terms, obtain a complete instalment of plant on application to the boot company, the cigar-making machines cannot be obtained on any terms or conditions, We had evidence from witnesses who had offered to take the machines on any conditions, but were refused.
– That is due to a patents monopoly.
– A witness named Solomon J. de Beer, who was examined in Melbourne, gave evidence as follows : - 6447. Have you made any inquiry as to the possibility of getting those machines? - Yes, and I find there is no chance whatever of getting them. The States Tobacco Company has a monopoly of the only good cigar-making machine in creation. There are other machines to be had which will work what we call “ scraps,” but those are, in addition, “ bunch “ machines. The machines used by the States Tobacco Company are the only ones that actually do the work. 6448. How did they get a monopoly? - I think they pay a royalty rate. 6449. How did you find out you could not get the machines? - I had information from Home that we could not get the machines. My brother inquired into the matter there. 6450. Did he tell you you would have to get them from the States Tobacco Company ? - The reply I got was - “ They are not to be had.” 6451. The States Tobacco Company have got them ? - That he did not say. Since the States Tobacco Company have the machines working, 1 have come to the conclusion that they hold the right to the use of those machines.
Other witnesses told us that the States Tobacco Company have the sole right to the machines, and that when the inventors in America were written to, they referred applicants to the company.
– That is a patent right conferred by the Government on the inventor of the machine.
– It is a monopoly obtained by the misuse of powers under the Patents Act. I do not think it was ever contemplated that any one, not even the original patentee, should have the right to monopolize a machine.
– The right is obtained by purchase from the original patentee.
– It seems to me that this is a monopoly which the Bill might very well be used to rectify, by compelling the owners to allow the use of the machines on conditions. If the case of the boot manufacturers is a hard one, how much harder is that of the cigar manufacturers, who are subject to an enormous handicap by reason of having to use hand labour. This is the kind of monopoly at which the Bill should aim.
– The honorable senator might as well make a charge of monopoly in regard to the carriage of letters* and the conveyance of telegrams.
– The honorable senator may not know it, but monopolies of the kind he mentions have been broken down bv law. I intend to support the second reading of the Bill, notwithstanding my criticism, because I recognise that these trusts must be dealt with. There is in existence in Australia a party known as the Liberal Party, who say that we can control and regulate trusts. We Socialists “say that such trusts are beyond our control and regulation. The Government, who represent the Liberal Party in Australia, submit this Bill as a proposal to regulate industries, and I am prepared to allow them to try their regulating measure. I believe the Bill will fail. I have no faith in the first part of the Bill, because I feel sure it will not have the effect anticipated, but I am prepared to allow the Government to try to regulate trusts. As I said before, I support the dumping provisions, because if there be dumping those provisions will be useful. Although there may be some danger in the measure, still I feel justified in voting for the second reading, in the hope that in Committee the particular provisions to which I refer may be safeguarded in such a way that they will not be used to the detriment of Australian industries.
Senator MACFARLANE (Tasmania) f8.29l. - J was much pleased to listen to the honorable senator who has just sat down, but I am surprised that, after showing the defects of the Bill so clearly, he should lamely end by saying that he is going to support it.
– The honorable senator has to.
– In any case, it seems to me that this Bill has a wrong title, and that it should be called the AntiCommerce Bill. There are several blots upon the measure that ought to be removed if it is to become law. The first great blot in it is contained in clauses 6 and 18, under which a defendant is considered to be guilty until he is proved innocent. How honorable senators opposite can support a provision of that kind I can hardly understand. It seems to me to be inconceivable that Ministers should propose that the old English law, that every man shall be held to be innocent until proved to be guilty, should be turned upside down in this way.
– The provision is in conformity with the principle of the old English Customs law.
– Not the law that is acted upon now?
– Certainly.
– It is common in Customs law. .
– We are not dealing with a Customs Bill, and I cannot understand why clauses 6 and 18 should contain that provision. That is one blot which I should like to see removed. Another is that the Bill contains a device which is no ‘doubt intended to please the Labour Party.
– The Labour Party would not “give a snuff “ for the Bill.
– But they will vote for it.
– I allude to the provision with regard to wages and conditions of employment. This Bill will not restrain monopolies, and if it is to restrain dumping, it certainly ought to say so plainly. It has been asserted more than once that it is intended to prohibit dumping. Yet there is no proper definition of dumping in the Bill. I will read one which seems to me to be very clear. The Chairman of the Tariff Commission, in speaking on this matter not very long ago, expressed his disappointment that Part III. of the Bill was not to be postponed, and said that there was no evidence of dumping in this country
– The honorable senator must not quote from a speech made in the other House.
– I take this from the Argus, and do not intend to quote the speech as a whole.
– The Standing Orders say that an honorable senator must not even allude to a speech delivered in the other House in the present session.
– Well, I may give this as my own opinion. Dumping may be defined to be the export of surplus stock from one country to another, offered for sale at a lower rate than that ruling in the country of origin. Dumping is not importing goods into this country and selling them at a lower price than that at which they are sold in another country, but it is selling them at a price lower than the cost of production. It is quite clear that there is no evidence of such dumping in Australia. If we attempt to stop importations, we shall be entering very treacherous waters. The new duties imposed by many of the provisions of the Bill are likely to take up a great deal of the time of the ComptrollerGeneral. That is another reason why I regard it as faulty in construction. If we intend to prohibit goods, it is better to say so plainly, and to achieve our end through the Customs. Unfair competition is characterized as competition! with intent to secure a monopoly. But any person in business may desire to get a monopoly of his own trade if he can. He need not wish to injure his neighbour, but he wishes to get all the business for himself.
– He wishes to get the’ biggest slice.
– Exactly ; and it is nonsense to try to legislate against it It is human nature that every man should try to do the best he can for himself. Senator Pearce has shown that the operations of trusts will not be stopped under this Bill, and I do not think that dumping will be prevented by it either. Perhaps Senator Pearce will allow me to say, with regard to the Colonial Sugar Refining Company, that I hold in my hand a communication from a high officer of the company, who wishes to explain that it is not a monopoly in any sense of the word.
– Does the honorable senator believe that ?
– Yes, and I will give the facts.
The Colonial Sugar Kenning Company was formed in 1855 with an unlimited liability of shareholders, and was so worked until 1887, when it was registered with limited liability under the Companies Act of New South Wales. In that year, the Victoria Sugar Company, which had lost very heavily in the crisis in the sugar industry in 1884, was amalgamated with the older company, the proprietors receiving shares and debentures in the latter for their interest ; and in 1888 the New Zealand Sugar Company was brought under the same control, as the Colonial Sugar Refining Company already owned two-thirds of its stock. The properties of the new company then consisted of three refineries in Sydney, Melbourne, and Auckland, and eight sugar mills in New South Wales, Queensland, and Fiji. Since then two refineries have been established in Adelaide and Brisbane, and live mills in Queensland and Fiji. The sugar business is divided into two parts, the refining branch and the manufacture of raw sugar from the cane ; and as to the first it may be said : - The refiner has no protection on his sugar, which is refined in bond, full duty being paid on it when it leaves the factory. In addition to our refineries, there is one in Melbourne and another in Bundaberg, while a third is now in course of erection in Sydney. In none of these concerns has this company any interest whatever, and it has not now nor ever had any understanding or agreement with the other refineries with regard to the selling price of sugar, as has been alleged by Mr. Watson and other members of the Labour Party. The large refineries in Hong Kong, which are worked under great advantages in the matter of the cost of the sugar, of labour, and of supplies (there being no Customs duties or Government taxation in that port), also compete for a share of the sugar trade of Australia.
Last week two cargoes of China sugar came into this country.
– -F or whom did they come in ?
– Principally for Poolman and Company, who refine sugars largely imported from Java and elsewhere. That company conducts its business in opposition to the Colonial Sugar Refining Company.
Prices of refined sugar are therefore based on the value in the world’s markets, plus the import duty of £6 per ton.
If it were not so the importations from China arid Java would be largely increased. The price of refined sugar is always based upon the world’s market price, plus our own duty.
In all the States we have a graduated scale of discounts, according to the quantities of sugar purchased ; and in South Australia and Western Australia grant a special concession of 10s. per ton to those traders who confine their business exclusively to bur products, the object of these arrangements being to insure a steady demand, a matter of great importance to a manufacturer.
It is not done to monopolize the trade, but is simply a matter of the company’s own convenience as manufacturers in knowing what the output is likely to be. .
The raw sugars required by the local refineries are either imported from Java or other countries, or supplied by the Queensland and New South Wales sugar mills. If produced from the imported sugar, the refined article is subject to a duty of £6 per ton ; if from the home-grown the Excise is £3 per ton ; but the difference between the two duties is added to the prices paid for the home-grown product, so that it is quite immaterial to the refiner - provided the bonded price is the same relatively in both cases - whether he imports or buys locally the raw material required for his business ; and of the two competing refineries above referred to, one works Queensland sugars only, while the supplies of the other are altogether the produce of Java.
That is irrespective of the Colonial Sugar Refining Company altogether, and shows that there is no monopoly.
The position of the raw sugar production may be stated as follows :- This branch of the sugar industry receives at present a protection of £3 per ton, which will be reduced to £2 from the 1st January, 1907, but this will disappear if the production should exceed the consumption, when the protective duty becomes inoperative. For the sugar purchased’ by us we pay a price fixed on a sliding scale according to the market value of the refined product, such price including the whole advantage derived from the protective tariff. The margin of profit thus secured to us is, notwithstanding wild statements ‘ to the contrary, only a moderate one, and we are prepared, if it be necessary, to prove the truth of this statement. It should be noted in this connexion that our purchases of Commonwealth sugar during the past few years have cost 12s. to 16s. per ton more than Java sugars, which have been used exclusively by Mr. Poolman, the Melbourne refiner, who no doubt for this reason has always found it to his advantage to import his supplies rather than contract for the local products. The sugar produced at our own mills is almost entirely made from cane grown by farmers who, since the protection was given under the federal Tariff, have received 3s. rod. per ton of cane more than before, and the balance of the protection has so far been retained by us to provide against the loss which we will sustain if the withdrawal of colored labour compels us, as we believe it eventually will, to close our factories in tropical Queensland. In proof of the fair treatment which the farmers have received at our hands, it is interesting to note that the price which we have, paid for the cane supplied to our mills in Queensland has, since the advent of Federation, been higher than that given by the Central Mills, whose capital has been provided at a low rate of interest by the Queensland Government.
That .is a very important point, when we hear so much talk of the evils connected with a lar.ge company. This company has given a higher price to the farmers since Federation than has been given by the Government mills.
From the yearly reports of the AuditorGeneral of Queensland, it can be ascertained that, during the seasons 1901^904 inclusive, the Central. Mills crushed 1,237,690 tons of cane at a cost of £961,433, or 15s. 6.43d. per ton delivered at the mills; while our books show that 1,154,713 tons were crushed at this company’s mills at a cost of ,£910,488, or 15s. 9.24(1. per ton, an advantage of £13,520, or nearly 3d. per ton, to the farmers who sold their cane to this company. The difference is actually somewhat greater, because the cost of transporting the cane to our mills is less than to the Central Mills, but accurate figures under this head cannot be obtained. The fact remains, however, that the accusation which has frequently been levied against us, that the farmers do not receive a fair price for their cane, cannot be sustained, if it be considered that the Central Mills, some of which are worked under direct Government control, have paid less than the company for the cane supplied by the farmers. The AuditorGeneral’s report for the 1905 season not being yet available, a comparison of the prices paid for cane cannot at present be made for that year. To those farmers who employ white labour a bonus is paid under the scheme adopte’d bv the Federal Parliament, but this is given direct to the farmers bv the Government, and the mill-owner has no share in such payments. From the foregoing facts it will be seen that we have no monopoly of the sugar trade of Australia, and indeed no monopoly could be created in this trade under present Tariff conditions, for we, in common wilh other local re finers, not only do not receive any protection, but, by reason of the high wages current here, and the heavy duties on machinery and other material used in the manufacture, have to compete on unequal terms with foreign refiners, while our prices must be fixed according to those ruling in the world’s markets. As raw sugar manufacturers, we enjoy a certain measure of protection which’, however, must be set against the loss of capital that will be the sequence of the withdrawal of coloured labour from North Queensland.
With regard to the ownership of the shares in the company, the following analysis is worthy of note : - There are now some 1,300 shareholders, of whom 700, representing half the stock, are trustees, executors, single women, widows, and wives jointly with their husbands ; 3t are employes of the. company, while 1,430 members of the staff and wage earners are interested in the employes provident fund, whicli holds over 3,000 shares; 113 are professional men ; 375 are traders and men actively engaged in ‘business ; and 65 are so-called capitalists, holding altogether 23 per cent, of the stock. Of these shareholders, 8 per cent, reside outside Australasia (nearly all Australians who have gone to England to live), but the percentage of such holdings to the total capital is constantly being reduced, as the board have for a long time been unwilling that any stock in the company should be acquired by those living on the other side of the world while all its interests are here. In conclusion, I would point out that it is generally overlooked by our critics that, besides our investments in Australia, we have important interests in Fiji and New Zealand.
– That does not explain or defend the rebate system.
– The only condition is that in South Australia and Western Australia a rebate of 10s. a ton is allowed if the buyers confine their purchases to the company. But in all the rest of the Commonwealth the buyers are free to buy where they will. Except as regards the sliding scale, no difference is made if a man takes 1 ton or 500 tons. There is no bond against purchasing any other sugar, except in the two States I mentioned. When the Sydney Chamber of Commerce approached the Premier of New South Wales, it expressed its opinion about the Bill in these terms -
That the Bill, while on the one hand seeking to prevent a creation of monopolies, will on the other hand, by empowering the Minister to prohibit certain imports, create the machinery for establishing monopolies by manufacturers within the Commonwealth at the cost and to the detriment of Commonwealth consumers.
I think that the Bill ought to be referred to the people before it is enacted, and I for one intend to vote against its second reading.
.- I think that some of the strongest arguments which have been advanced both for and against the Bill could very well be used by the members of the Labour F arty in favour of the nationalization of monopolies as soon as they became injurious to the general welfare of the community. This afternoon, Senator Best, in a most exhaustive and interesting speech - one which was warmly commendatory of the Bill, which he said he intended to support almost as it is - advanced a number of very strong arguments in favour of the representatives of the people taking hold of a monopoly when it became injurious, as in America trusts have become. While he eloquently advocated the claims of the Bill, he freely admitted that there were enormous difficulties in the way. Its warmest advocates admit that the difficulties might be almost insuperable. As one of those who believe that the best interests of the community as a whole would be served by giving the people, through their representatives, control of industries, Or monopolies, or trusts, or combines, as soon as ever they became injurious to the general welfare, I am not sorry that this Bill has been introduced because, while I do not expect it to do a great deal of good, I believe that it will achieve some good. I shall not put myself in the position of rejecting a crust because I cannot get a loaf at once. Some opponents of the Bill - for instance. Senator Drake, this afternoon, Senator Symon, in a very destructive criticism, extending to three hours. Senator Millen, in another able and also destructive speech, and other honorable senators on that side - have admitted that there are known evils to be dealt with, and that if they could grapple with them in any way they would. They have based their objection to themeasure, and stated their intention of voting against its second reading. purely on the ground that in their opinion it would?1 be ineffective. If they admit that in other countries evils have grown up under theoperation of enormous combines ; if some of them have admitted that there are known tobe such evils here, though, perhaps, in almost an infantile stage, and if others have admitted that if the evils are not here now, they are likely to arise perhaps in the near future - if they believe all these things, and? consider that no great harm- would be doneby the passing of the measure, but that it would tend to check some of the evils which are here now, or which may arise by-and-by,. why should they not be prepared. to give it a chance ? I do not believe that it would” be found effective for a great length of timein dealing with trusts and combines which are going to be injurious, and which, in my opinion, are injurious now in checking that proper growth of Australian industries which we all would’ liketo see take place. But if there is a chance, as I believe there is, of the Bill being an; instrument to control the trusts in some respects, to check even in the slightest degreetheir operations, while the people are being educated to the idea that the most effective way to deal with them is to own them,, and regulate them through their representatives, the measure may effect some good, and that is why I intend to vote for its’ second reading. It was interesting to watch the constitutional differences between the twolawyers who spoke this afternoon. The contest between Senator Best and Senator Drake only serves .to show what an elastic instrument the Constitution is when two legal luminaries, who are both protectionists, and who, therefore, I should say, are both anxious to do what they can reasonably to help Australian industries hold opinions soradically opposed’ to each other regarding the reading of two of its provisions. Senator Best argued that the Bill could be made to apply to such a case as was seen by Senator Drake in London. When the latter drew a harrowing picture of the price of coal being raised in the severest weather to the poorest of the poor, and when he affirmed’ that, in his opinion, such a case, if it happened in Melbourne, could not be dealt withunder the measure, Senator Best took anr entirely opposite opinion. I as a layman am with Senator Best in his reading of the- provision, perhaps because the wish is .father to the thought. I sincerely hope that, if the point is ever contested, a sufficiently broad construction will be placed upon the provision by the High Court to allow such a case as that cited by Senator Drake to be dealt with under the measure. It seems to me that there is a very strong probability that the High Court would read into the provisions a broader construction than that of Senator Drake. That is an additional reason why I shall support the Bill, purely as an instalment of the’ legislation which is coming every day faster and faster, and which must come, in response to the opinion of the people at large, as the kind of legislation which in the end can be the onlymethod to deal effectively with trusts as we desire them to be dealt with. I shall not be able to personally record my vote for the second reading of the Bill, because I have paired with an honorable senator who will be unable to be present during this week. I hope that if the Bill gets into Committee honorable senators on both sides will assist its progress; that those who are opposed to the second reading will then join with those who are in favour of the measure in making it as effective an instrument for the accomplishment of the purpose in view as it can be made.
.- Many objections have been taken to the Bill, which, in my opinion, should have been deferred until we reached the Committee stage. Most of the arguments adduced have not been against the principle of the Bill, but against clauses which, if unsatisfactory, as possibly they may be, can easily ‘be altered in Committee. In discussing the second reading what we have to consider is whether it is desirable to introduce legislation to prevent trusts or corporations carrying on business with intent to injure Australian industries. That is the principle we have tq discuss. If-it is not desirable to introduce “such legislation the second reading of this Bill should not be carried ; but if it is desirable that combinations or trusts, carrying on trade with the design to injure or destroy Australian industries, should be restricted then the second reading should’ be carried. Some objection has been taken to the phraseology of the measure, because it provides that before an offender can be punished for an offence, there must be proof of intent. Surely that is eminently in the interests of fair play? Indeed, it would be monstrous to assume that we would accept legislation that would render it possible to make a person punishable for an act committed innocently, and without any intention of wrongdoing. That would be contrary to the spirit of all British law. This Bill provides that the making of a contract with the design of destroying an Australian industry shall be punishable by fine or imprisonment. It further provides that such a contract being made in contravention of the provision dealing with that offence shall be null and void. There are some persons who, while they offer no objection to the spirit of the law proposed, as applied to future undertakings, are afraid that this provision will be retrospective in its operation, and will affect agreements which have already been entered into. Speaking for myself, I have no doubt at all on the subject. lt is perfectly clear to me that under no circumstances can this Bill affect agreements entered into before it is passed. It is quite impossible that such agreements could have been made in contravention of a section of an Act which had no existence. Still I think the Minister of Defence would be wise if, bv some statement or other, he were to make that perfectly clear to the public mind, so that those who are now nervous on the matter shall be reassured.
– The AttorneyGeneral stated that in another place.
– I think that the Minister of Defence should state it also in the Senate, and in terms as definite as they can possibly be made. It cannot be made too clear. Many persons are nervous and anxious on the subject, and it is as well that their minds should be relieved. I think it is perfectly clear that there is no intention to deal in the way of punishment with persons who have offended against the principle of this measure before it was introduced, because in clause 4, what is distinctly described as the offence is the making of a contract with intent. If such, an offence is committed in contravention of this Bill punishment will follow, and by a natural and proper sequence it will follow also that a contract so made will become null and void. This can have no reference to’ contracts made prior to the passing of the Bill. There has been some effort to prove that the words “ continuing in “ refer in some way to the contract, but obviously they refer to individuals who continue, after the passing of this measure, in combinations at variance with the spirit of the law, or in contravention of its provisions.
– If on the day before the Bill becomes law, I make an agreement for twenty years, it will hold good all that time ?
– I think so.
– Or for 100 years?
– Or for 1,000 years, though none of us are likely to live so long.
– A corporation never dies.
– That may be so, but individuals who make contracts with corporations do sometimes die. I am not now endeavouring so much to reply to objections raised in the Senate, as to remove anxiety which I know to exist in the minds of individuals outside with reference to the possible operation of this measure. I shall not proceed further on the lines of criticism adopted by other honorable senators, and which I have myself followed so far, because I do not think that is the proper course to take. The proper course on a second reading is to discuss the principles of the Bill, and perhaps incidentally to indicate some amendments which mav be sought in Committee. It is certainly not the proper course to object to the second reading of a Bill because the machinery clauses are insufficient or incomplete to give effect to its principle.
– Does the honorable senator think that that is a fair criticism of Senator Best’s speech?
– I should rather apply it to the, speeches made by Senators Millen and Symon. In view of the fact that there has been a departure from what I conceive to be the proper principle of a second-reading discussion, I think that Senator Best wisely, and certainly effectively, referred as a lawyer to some objections taken by lawyers to various clauses of the Bill.
– As to their legal interpretation.
– Just so. A point has been raised which, it seems to me, does not deal with the clauses of the Bill, but rather with our powers in connexion with such a measure. I refer to the constitutional question raised by Senator Drake : the question as to whether we have power, under the Constitution, to make laws dealing with the subject involved in this Bill, other than mere machinery laws for the continuing in existence of a company. In order to arrive at some idea of the true position with reference to our Constitutional powers, I purpose reading from the Constitution in this connexion. First of all. we have to remember that our powers under the Constitution are contained in a section of the Constitution Act which contains thirty-nine distinct paragraphs - each one of which, I venture to say, is independent of the others, and of everything but the covering portion of the section which provides that -
The Parliament shall, subject to this Constitution, have power to make laws for the peace, order-, and good Government of the Commonwealth, with respect to-
We must read that portion into every one of the thirty-nine articles as if the other thirty-eight had no existence. The only possibility in which any one of the other thirty-eight can affect the thirty -ninth which we have in mind is in the event of its being specifically opposed to it.
– Which they are not.
– They are not. Senator Drake relied upon our* powers to deal with trade, and commerce as being contained in paragraph 1 of section 51 of the Constitution -
Trade and commerce with other countries, and among the States;
That is one matter with respect to which we have power to make laws for the peace, order, and good government of the Commonwealth. Then we come to paragraph xx., and we find that we have another power, namely, to make laws foi* the peace, order, and good government of the Commonwealth with respect to -
Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth.
We have to read that bv itself if we are to arrive at a true idea of what our powers are under that provision of the Constitution.
– And we have to give to each of the paragraphs the fullest interpretation.
– It seems to me that that is the only way to read any one of these thirty-nine articles as I have described them. We must read each separately in conjunction with the covering portion of the section conferring the power to make laws for the peace, order, and good government of the Commonwealth.
I venture, as a layman, to say that, though of course, with very great diffidence. I have not so much hesitation in making the statement as I should have, were it not for the fact that lawyers in the Senate differ very much on the subject. I venture an opinion based, I think, on commonsense, that Senator Best’s reading^ and the reading I have just given of our powers under the Constitution are the correct reading. I am, of course, supported in that view by the fact that, obviously, the same reading is followed by an extremely astute and careful lawyer in the person of the Attorney-General. It has been urged, first of all, that this Bill will be of no use, or that it will not accomplish the object Ministers have, in view ; and in some measure I am bound to endorse the latter portion of that view. I arn afraid that it would be very difficult indeed to frame any law sufficient to cope with the genius and lack of scruple exercised by commercial people. Unfortunately all our experience in dealing with commercial men, and in investigating their methods, leads us to the conclusion that to successfully cope with the accomplishment of making profit there must be a verystrong, very careful, and very comprehensive law. But I think that this Bill aims at restricting, retarding, and preventing an. extremely baneful form of commerce. If it fails in its object, that is no argument against it, except as showing that it is not strong enough. It must be remembered that one of the arguments urged against the Bill is that it is, stronger, more drastic, and more far-reaching in its provisions than the American laws, on which it is said to be founded.
– That is Senator Symon’s statement.
– Surely that is an argument in favour of the Bill ? American laws, obviously have failed ; and their design was largely the design we have in our minds. To make a law exactly like the American laws that have failed would be extremely stupid, but to take the laws that have failed as a basis for laws that we hope will succeed, is by no means stupid. We have seen the points on which the American laws have failed, and we are trying in this Bill to build more perfectly, and make a law more efficient on the basis that has been presented bv our American cousins. Failure anywhere, if we are wise, is, not complete failure. Every failure is an indi cation of the road to success, just as navigation is made more secure and certain for the future by every wreck on a previously uncharted rock. A wreck, of course, is a failure in a particular instance of navigation, but a wreck on a rock not previously charted is a success in that it points to the means of avoiding similar wrecks in the future. To that extent the American efforts to control monopoly are not a complete failure, because they are enabling the American people, I hope, to discover some means by which they can completely achieve what they have sought to achieve in the past, and what, unfortunately, they have only partially succeeded in achieving. Senator Symon spent a good deal of time in urging that no necessity or demand had been proved for the Bill, and Senator Millen, in some degree, followed in the same direction. I venture to say that Senator Pearce and others have given very strong evidence that, whether there is power to control trusts - whether there is power to check and retard their baneful operations - there is no doubt as to the necessity. Trusts exist in a form that is extremely injurious to the whole human family. In America the trust in its various forms - and I believe, in most instances, consisting of the same individuals - has taken control of the American people, and is imposing- on them disabilities and taxes of a most monstrous character. Mr. Charles Edward Russell, a writer who may be known to honorable senators, has recently published a most striking book on what he describes as the greatest trust in the world. The general impression is that there is only one greatest trust in the world, and that that is the trust which embraces all the trusts in the United States - that they are not separate institutions.,’ hut one institution under several names. That is the trust with which, before I have concluded, I shall show we have been threatened in a most flagrant, and, unless we take some steps, extremely dangerous, manner. Mr. Russell says in most striking words at the opening of his book -
Iii the free republic of the United States of America is a power greater than the Government
That is what the trusts have come to - a power greater than the Government of 80,000,000 of people - greater than the Courts or the Judges, greater than Legislatures, superior to and independent of all authority of state or nation.
That is the magnitude trusts have reached in America.
– Thatis greatly owing to corruption.
– I am not now concerned with what trusts are owing to; I am dealing with) the fact of their existence.
It is a greater power than in the history of men has been exercised by king, emperor, or irresponsible oligarchy. In a democracy it has established a practical empire more important than Tamerlaine’s, and ruled with a sway as certain. In a country of law, it exists and proceeds in defiance of law.
Therefore, there is some reason to doubt whether this Bill will be completely effective. That, however, is no reason for not passing the measure, but rather a reason for passing it quickly, and finding out, if we can, where lie its defects, and then framing a law which shall not be ineffective.
In a country historically proud of its institutions, it establishes unchecked a condition that refutes and nullifies the significance of those institutions. We have grown familiar in this country with many phases of the mania of money-getting, and the evil it may work to mankind at large ; we have seen none so strange and alarming as this of which I write. Names change, details change ; but when the facts of these actual conditions are laid bare it will puzzle a thoughtful man to say wherein the rule of the greatpower now to be described differs in any essential from the rule of a feudal tyrant in the darkness of the Middle Ages.
Three times a day this power comes to the table of every household in America, rich or poor, great or small, known or unknown ; it comes there and extorts its tribute. It crosses the ocean, and makes its presence felt in multitudes of homes that would not know how to give it a name. It controls prices and regulates traffic in a thousand markets. It changes conditions, and builds up and pulls down industries; it makes men poor or rich as it will ; it controls or establishes or obliterates vast enterprises across the civilized circuit. Its lightest word affects men on the plains of Argentina or the by-streets of London.
In another passage this writer speaks of the operations of the trusts, and says that to refer to the law in connexion with them is to “ make the initiated laugh.” We have had evidence in the last few weeks of the truth of that statement. J. B. Rockefeller, who is said to have an income of £8,000,000; and who lives in such a manner and style as to make.it very difficult for him to hide himself, could not be found when he was summoned by the Courts in America to attend and give evidence. All the power of the American Government and of the Courts could not compel this man to come and do his duty as a citizen ; and he was not found until it was decided that, instead of his evidence, that of some understrapper in connexion with the trust should he taken.
– They did not look for him.
– His influence was sufficient to prevent his being looked for. I am pointing out the awful power of these combinations. However, there was no trouble at all in finding Mr. Rockefeller when it was decided that his evidence could be dispensed with. I refer to those baneful organizations in America to show the necessity for this Bill. It may be said that the facts disclose a reason why something more should be done in America, but that we have no trusts in Australia. Suppose, for argument sake, that that were true, it would not be a reason against the Bill. Legislation is ineffective in America largely because it comes too late. Those trusts had attained such a position, and such power, that legislation has proved ineffective to follow them. Legislation might easily have checked the trusts if it had been in advance, but it has proved ineffective to follow. I venture to say, however,that we have trusts in Australia in active operation, and I shall endeavour to show the method by which they work. It has been frequently declared during this discussion that this Bill is the result of the energy and activity of a single individual, who has been described in various terms of opprobrium as “Hugh Victorious” McKay, “Greddy “ McKay, “ Mean, Grabbing,, and Grasping” McKay.
– And the “ real McKay.”
– And the “ real McKay.”
– The honorable senator knows this gentleman very well.
– I do; I ‘know most of the manufacturers of Victoria very well indeed. I know a good many of the manufacturers of Australia. There are, indeed, many of them who are my own friends, and whom I have known for long. I made it an object of consideration for many years how best wecould assist by legislative action to develop the manufacturing industries of Australia. I do not know that it is any reproach to know manufacturers. I know both them and their workmen very well indeed; and in connexion with this industry, since the present difficulty has arisen, I have been in communication with several thousands of people. Touching this particular individual, it ap- pears, in the opinion of some people, to be an offence that he is now doing pretty well. I am inclined to believe, and certainly I hope, that he is doing well. “
– The honorable senator knows that he is.
– As a matter of fact, I do’ not ; but I have very good reason to believe it. But I do know, from actual observation, that there were very many years when he was doing extremely badly. That was when he was endeavouring, in the face of adverse circumstances, to develop an instrument” of production that has proved to be of value to Australia to the extent of many millions of pounds. At that time, as I say, he was doing very badly.
– In what year was he doing badly?
– It was about twenty years ago. I have known him so long. I know of his struggles of long ago, and am well aware that he had to contend against the most adverse circumstances in the beginning. The invention of which he had possession, partly acquired and partly the result of his own genius, was them imperfect. He had to make trial after trial to get over the difficulties in connexion with it. After he had developed it, and had created a machine that was really effective, he had to contend with the natural conservatism of people who were afraid to risk a large sum of money in what might turn out to be a failure. Although Mr. McKay has been struggling along and doing some business during the last twenty-four or twenty-five years, it is really only six or seven years since this particular machine took hold, and it can only be within that time that Mr. McKay, or any one else in this country, has been doing well out of the industry. But honorable senators do not get up and fume with wrath when they hear of some person who, by reason of his inventive genius, is doing well out of some other industry. It is, for instance, a matter of common knowledge that the inventor of a little instrument that will go into one’s waistcoat pocket, and the useful service of which is merely to prick the end of a cigar, has made a large fortune out of it. I do not hear of any one getting verywrath about that. It should not be a matter for condemnation, nor for the use of foul epithets and offensive names, that an Australian citizen has had the indomitable perseverance to stick to his work _ to hold on in the face of difficulties under which many men would have gone down. I should think that it is rather a matter for approbation and approval - a matter about which we ought rather to be proud - certainly not a matter about which terms like “greedy” and “grasping” should be used. It has been said that Mr. McKay is making .£30,000 a year. I do not know whether that be so. I hope that he is. But. if we remember that, throughout the whole of the early period of his manufacturing career, he was often in serious financial straits, and if we consider his period of well-doing in connexion with the whole extent of his operations, it would not appear to be a very large sum, after all. I merely mention that because I think it is due to ourselves that we should not look upon it as a matter for reprehension that an Australian citizen-
– No one does.
– It has been, urged in this Chamber more than once with an accent of intense bitterness, and interms that are certainly not commendatory,, that Mr. McKay is now making a large sum of money.
– Twenty thousand” pounds a, year.
– I hope so.. Certainly he deserves it, for he has conferred upon this country a verv great- benefit.
– Hear, hear.
– Of course, he did rot do it out of pure patriotism. He did it as a business venture. But the result is that he has conferred an enormous^ benefit upon the arid portions of this Commonwealth, because he has enabled thosed’ry areas to be profitably devoted to wheatgrowing, which could not have been donewith ar.v reasonable prospect of success, except for the introduction of the harvester or a similar machine. I rememberhearing a member of another place, speaking, not in Parliament itself, upon thisquestion, declare as an agriculturist, that it was due almost entirely to thepluck, energy, and invention of the agricultural implement makers of Australia that” wheat-growing in our great northern areashas been rendered possible. That opinion was ‘expressed by the Honorable Thomas Kennedy. Even if Mr. McKay is now beginning to reap the fruits of “his life’swork, no one ought to complain, and he certainly has the right to try to prevent- his labours being nullified and frustrated…
– He is not the only one who has developed the agricultural machinery of the country.
– My honorable friend is quite right, but (Mr. McKay has been the only man who has been singled out for attack. The manufacturers as a bodyhave made an appeal. Here are some of the names upon it : T. Robinson and Company, H. V. McKay and Company, Beard and Sisson, the Clyde Engineering Works, New South Wales, Meadow Bank Works, New South Wales, Thomas Martin and Company, Gawler, May Brothers, Gawler, Hawke and Company, Kapunda, Rollin and Company, Nicholson and Morrow, and a number of others. These firms have r.ot been referred to; and that is why I have occupied time in calling attention to what seems to me to be the undue vilification of Mr. McKay in the course of this debate. There is another danger in connexion with trusts which it seems to me we have to consider. Senator Symon says that there are none in this country. Singularly enough, however, he himself has offered strong evidence of the danger. If honorable senators will bear with me for a moment, I will read an extract from his argument, in which he gave very strong evidence of that which he denied. Of course, Senator Symon adopted the attitude of an advocate. It is very Hard, I suppose, to a person who is continually engaged in. the legal profession to escape from the atmosphere of the Courts.
– The honorable senator is copying his example very well in that respect.
– If that be- so, I hope it is a good example, because I like to be “weary in well doing.” Senator Symon tells us in his speech that it has been alleged that the South Australian industry was crushed out. He did not say where that was alleged. I have never heard of such an allegation. I have heard it aliened, and I think the allegation is justified, that there is an extreme danger of not only the South Australian, but the Australian industry in stripper harvesters being crushed” out in the %’ery near future, unless some such legislation, as this is passed. But Senator Symon furnished the evidence in the figures which he quoted. He said -
In 1900, in South Australia, the International Harvester Company sold no harvesters; the
Massey-Harris Company none; McKay of Victoria sold twenty.
If the honorable and learned senator had taken the trouble to inquire he would have found that Mr. McKay was the only person in Victoria making them at that time. He was the man who had persevered against all difficulties until he had made a success of this machine.
– There were other Victorian manufacturers.
– He was the only one of any consequence in Victoria. Senator Symon said -
In 1901 the International Harvester Company sold none; the Mas$ey-Harris Company none; McKay of Victoria, increased his sales to seventy ; Nicholson and Morrow, of Victoria, sold thirty-six; Robinson and Company, of Victoria, ten ; and the South Australian manufacturers sold none.
They had not started to make them.
In 1902 the International Harvester Company sold none; the Massey-Harris Company 52; McKay, of Victoria, 100 ; Nicholson and Morrow, of Victoria, 12 ; Robinson and Company, of Victoria, 25.
The first time that the importers declared that they were going to have this trade in their hands at all costs was in 1902. In that year they sold fifty-two. In 1903 -
The International Harvester Company sold none; the Massey-Harris Company, i2g; McKay, 175 ; Nicholson and Morrow, none ; Robinson and Company, 75; May Bros., of South Australia, 55 ; Martin and Company, 20 ; and Hawke and Company, 20. In 1904 the International Harvester Company sold 25 ; the Massey-Harris Company, 464; McKay, of Victoria, 360 ; Nicholson and Morrow, 35 ; Robinson and Company, 150 ; May Brothers, of South Australia, 200; Martin and Company, 40; and Hawke and Company, 30.
In 1905 - that is the last year for which Senator Symon gave any figures - the International Harvester Company sold 100 ; the Massey-Harris Company, 199 ; McKay, of Victoria, 250; Nicholson and Morrow, 45; Robinson and Company, 100 ; May Brothers and Company, of South Australia, 75 ; Martin and Company, 35 ; and Hawke and Company, 35.
What happened? In South Australia - where the machine is more generally needed and of greater use than it is in other States - the Australians and the importers sold in all 603 machines. Out of that number the. importers sold 290, or very nearly one half. Although one section have been in operation for only two years, and the other section for three years, yet they have already secured very nearly half the trade.
– They will get the other half pretty soon.
– I think, as Senator Symon has shown, that there is a great danger that in accordance with the boast of these people, the trade will be entirely taken in the very near future.
– Did not the importers sell more .in the year before?
– Yes, and so did the Australians, but the fact is that after three years’ operation, these people have obtained very nearly half the trade in stripper harvesters. What the Australian manufacturers declare is that there is a very great danger of this Australian industry being entirely crushed out. Surely these figures indicate that that apprehension is not unfounded, and that is the justification for the Bill.
– McKay is competing against them successfully in South America.
– So far as I know, the outside companies have not started to export to South America. I do not deny that McKay was the first to export to South America. But sv.rely that is not a subject for reprobation.
– Of course not.
– The fact that we have been able to develop an industry which will do an immense amount of good, which will facilitate the operations of our own agriculturists and enable us to initiate an export trade, is rather a matter for congratulation. It is an industry which we ought to exert every energy to maintain and to extend, rather than to condemn and reprobate as has been done.
– No; we do not condemn it.
– It is said that this is a Bill to prohibit cheapness, and prevent the consumers of Australia from getting bargains, and some persons have gone the length of saying that the consumer is not considered at all in its provisions. In this country, there are . very few persons who are not consumers. There are a few lawyers and doctor’s and’ thieves-
– Thieves !
– I do not use this conjunction at all offensively.
– To whom?
– To any one except, perhaps, the thieves.
– It has no application.
– It has an application. The man who will not work, but thieves for a living, is a non-producer. It happens that lawyers, doctors., clergymen, and some other persons are nonproducers - of course, it is not an offence to be a non-producer. In the Commonwealth there are very few non-producers, and therefore when we. consider the interests of the producers, we also consider the interests of the consumers.
– Do not the thieves make work for the lawyers ?
– I. would rather pursue the argument on my own lines ; in fact. I do not want to have attributed to me thoughts which are not in my mind.’ It will generally be admitted that a producer, who, of course, is also a consumer, has interests both as a producer and as a consumer, but it will be admitted at once, I think, that the former are very much greater than the latter, because every producer produces in order to acquire from ‘ day to day what is necessary for him to consume, and, in addition, to put by some money for a rainy day, or to enable him to consume more liberally in times that are to come. Suppose that the accusation is true that in the Bill we are considering merely the interests of the producer. I reply that we are considering the interests of the consumer at the same time. But the statement is not true. The object of the Bill is to liberate the consumer from the machinations of persons who happen to be enthralled, enslaved, and taxed. In reply to Senator Symon the other evening, I interjected that cheapness is often the prelude to dearness. Cheapness is not necessarily an advantage, and it certainly is a disadvantage if the object of the present cheapness is to bring about a period of continued and extended dearness. There are numerous instances where combinations have resorted to cheapness in order to create dearness to be of an Increasing and enduring character. In his book, Mr. Russell says at page 177 -
The city butchers were solidly united, determined, and ably led. The public was aroused ; its sympathies were wholly on the side of the butchers. The people of San Francisco have convictions in favour of transacting their own business in their own way, and they seem to entertain much doubt as to the essential benevolence of monopolies. P.Iain intimations were made that if the trust attempted in San Francisco the methods it had pursued elsewhere, results (I translate freely) might follow inimical to the highest physical welfare of the trust gentlemen.
In their own interest, the people of San Francisco threatened physical violence against a proposed cheapness of the trust which was designed to kill existing competition, with a view subsequently to create dearness, and a recorded instance is given where, in Chicago, a butcher who resisted their efforts, had a shop started next door to him, where meat was given away. That is what my honorable friends opposite are looking for - something extremely cheap. Why did the trust give away the meat? That is what we have to consider, and that consideration underlies the Bill. Its object is to prevent baneful cheapness, initiated with the design of creating a monopoly, that is intended to bring about dearness extremely prejudicial to the well-being of the consumer and the producer. I propose to show very briefly some of the methods which the combination is adopting 5n Australia, as evidence that there is a very grave danger. In a statutory declaration made by Mr. Moore, of T. Robinson and Company, he affirmed that the representative of the American trust said to him, 41 We have 90 per cent, of the world’s trade in harvesters, and we are going to have the other tenth, whatever it costs.”
– Does the honorable senator attach much importance to what the commercial traveller for a company would say?
– No, if it were not part of a chain of evidence; but I shall show presently that there is every justification for believing the statement, from the fact that operations have been entered into in the direction of obtaining at verv great cost the trade of Australia. The statutory declaration is some justification for believing that the statement is truthful. If that were all, I should not attach a great deal of importance to it. But what are the methods adopted? We have also evidence that these companies, in order to sell their goods in our market - a very proper thing to do - have resorted to extraordinary means. They have endeavoured at some cost to belittle the Australian product. Mr. H. V. McKay gave evidence on oath that they purchased some of his machines at a cost of £90 each, and sold them for ^75 each. There must be some other cause for losing ^15 on a machine than merely belittling the product of an opponent. How did this operate ? “ Can I sell you a McCormick or a Deering stripper-harvester?” “Oh, no ; I prefer a Sunshine harvester.” “ Oh, do you? Well, I am astonished to hear that. But if you would sooner have a Sunshine we can sell you one for Do honorable senators see the baneful effect of the method?
– That is very thin.
– It may be thin, but it is true. The statement is made upon oath, and is capable of verification.
– There has been no reply to that statement.
– So far as I know, there has not been a reply to the statement of Mr. H. V. McKay. But that does not appear to be the only instance of the kind. In his evidence before the Tariff Commission, Mr. Mitchell stated that the outside companies resorted to the same method with reference to his machines. Referring to his seed drill, they said, “ Can we sell you a ‘ Superior “ seed drill?” The answer is, “No, I prefer a ‘ Mitchell ‘ drill.” Then they say, “Oh, well, we can let you have a ‘Mitchell,’” and they have, so Mitchell says, purchased his drill in order to have it to sell to a man who declares that he would sooner have a Mitchell drill, in order to prevent him from making a sale. He declares, and his evidence was given on oath, that on the back of their conditions of contract they have a provision that if purchasers do not like the “ Superior “ they can change it for a “ Mitchell “ drill. These are methods which cannot be described as generous. I do npt think they can be described as fair.
– Do they offer to sell the “ Mitchell” drills at a lower price than that for which Mitchell sells them?
– I am unable to say. That is not stated, but with respect to the harvester it is stated that they gave ^95 cash for it, and sold it at ,£75.
– That is good business for McKay.
– It would be, of course, if all the business were to be conducted on similar lines, but when the object of that business - the purchase of a few machines - is to belittle all the machines which McKay makes, and to create an impression that is not right, it is not good business for McKay, and it is not fair or honest business for the International Har- vester Company, or for any one else who adopts it.
– They, do not make McKay’s machines less effective by selling them for £20 less.
– But they do this : If Senator Mulcahy, having no knowledge of these machines, desired to buy one, and some firm told him that they had a machine for sale at £&o or ,£90, and another which they could sell for ^75-
– And which he had asked for. I am quoting the honorable senator’s own story.
– I am sure the honorable senator will permit me to continue. I use the illustration that he is looking for one of these machines. He hears that there are two on the market, one selling at -^80 or £81, and the other at £75, and being anxious to have the best he would very likely do as people often do, and as I frequently do myself, when I go to purchase anything of which I have no particular knowledge, and that is, assume that the best is the higher-priced machine.
– Then the higher the price which McKay puts on his machines the more people will look for them.
Senator TRENWITH. _ That is my honorable friend’s police court method of arriving at a conclusion.
– That is the conclusion from the honorable senator’s logic.
– The fact is that that is ‘what was done, and it naturally might convey another impression extremely baneful. McKay was selling his machines in Victoria for £84 cash, and landed in South Australia for £90 cash. If the International Harvester Company or the Massey-Harris Company could sell them f°r £l 5> the inference might very naturally be that McKay was treating his own customers unfairly.
– No, the inference, according to the honorable senator, would be that the Massey-Harris machine was not as good, because the price was lower.
– Clearly if a person had to give McKay £90 for a machine which he could get from the. MasseyHarris Company for £75, the inference would be that McKay was giving these companies an unfair advantage, and that might naturally raise a certain amount of indignation in the minds of prospective customers and lead them to say, “We will not have his machines at all.”
– That is not the way in which the honorable senator was reasoning just now.
– I do not suppose that even Senator Drake believes that the International Harvester Company gave £95 for McKay’s machine, and sold it at £75 for the good of their health.
– The honorable senator was contending, that if a machine was sold cheaply, it would not be considered so good.
– I believe that people would naturally say if the MasseyHarris Company or the International Company could sell for £t5, what they had to pay £95 for to McKay, those companies would be getting an unfair advantage as compared with the legitimate customers of the Sunshine Harvester firm. At any rate, there was an object in view, and I say that it was to belittle, to undermine, and to destroy the Australian industry.
– Hear, hear; anybody could see that.
– I go further, and I say from their own figures that they are now selling, and for many months have been selling harvesters at a loss of from £10 to £12. Are they doing that for the good of their health?
– The honorable senator will find it verv difficult to prove that.
– I shall try to prove it from their own figures. They may not be capable of telling the truth, or they may resort to untruths as a method of diversion. I do not know, but they certainly ought to know, and I propose to quote their own figures, from several communications from themselves. Honorable senators will remember that the International Harvester Company sought to get their machines through the Customs at an invoice price of £26.
– They did get them through at that price for a time.
– I was not aware of that, but I know that they sought to do so, whether they succeeded or not, and I am now testing their credibility. They _ sought to get their machines through at an invoice price of £26. Subsequently the valuation was raised to £38 10s., and later to £65. They made no demur of any importance to the raising of the valuation to £38 ios., but when it was raised to £6$, they said that that was monstrous, and they issued copies of a circular with a very badly drawn apple tree, which they circulated throughout Australia in tens of thousands.
– For fun, I suppose.
– For the good of their health. There is on the circular a representation of two machines, with the words -
These are the harvesters the local manufacturers are afraid of. The ones that sell foi ;£Si, and are invoiced to us at ^38 10s. iod.
I wish honorable senators to remember that. If that is true, they could not have been speaking the truth when they said that they were invoiced at £26.
– It may have been quite true. The £26 is the value on the ether side, according to the requirements of the Customs Act.
– The invoice is the value on the other side, but the Customs adds 10 per cent, and’ charges duty on the value on the other side, plus 10 per cent. But what I wish to nail down just now is this-
– The. honorable senator omits the freight.
- Senator Pulsford will pardon me. I know that what I am saying is very irritating to a man of his temperament.
– I am more amused than irritated.
– Then I am glad to hear it.
– The honorable senator is very anxious to defend the swindler.
– I rise to a point of order. Is Senator McGregor in order in saving that I wish to defend the swindler?
– I do not think the honorable senator is in order. I did not hear the interjection, but the honorable senator ought not to make such an observation.
– I withdraw it.
– I would not charge Senator Pulsford with a desire to defend any person in wrong-doing. I do not think the honorable senator would do that. I do not wish to be drawn away from the point. What I desire to nail down is that these people declared that the machines were invoiced to them at £26, and in this circular they say, “ invoiced to us at .£38 10s. iod.” Of course, both of those state ments may be lies, but they certainly cannot both be true.
– The honorable senator is not putting the case correctly.
– Then I should like the honorable senator presently to put it correctly. What I am stating are facts. They sought, and some people say, that they actually achieved the passage of these machines through the Customs at a declared invoice value of £,26, and yet in this circular they say “invoiced to us at -£38 IOS- i°d-“ All I say, with respect to that is that, while both these statements cannot be true, it may easily happen that both are untrue.
– Is the honorable senator referring to identically the same machines ?
– The reference would not be to identically the same machines, but to the same kind of machine.
– Then both statements might be true.
– For the gratification of Senator Drake I will permit the honorable and learned senator to think that both, statements are true, because I have no power to do anything else. It appears to me that these two statements cannot both be true, though both may be’ untrue, and subsequent statements of the company lead us to the conclusion that possibly they are both untrue. They give in the circular a number of figures, and they say - and hence reduce our profit as shown above to Ss. gd.
– The honorable senator should do justice to the circular.
– Will Senator Findley suggest in what way I can do it more justice than I am doing?
– The honorable senator must be aware that the expense of ^27 referred to in the circular is in accordance with a statement made by Mr. McKay, and not by the International Harvester Company.
– They indorse it, and thev put it down as representing the whole of their expense.
– They say, “ If that be so.”-
– Are these McKay’s figures again?
– No, this circular is a combined advertisement of the International Harvester Company and the Massey-Harris Company.
– The later figures referred to in the circular are those supplied by Mr. McKay.
– The honorable senator is wrong, but he will have an opportunity to speak later on. These companies say in this circular - ami hence reduces our profit as shown above to 5s. nd.
That is, after all these charges ; and they add pathetically -
Is that too much ?
I venture to say that it is not. I admit that at that time they were carrying on business at a very moderate profit. But it appears that it was too much from their point of view. Subsequently an effort was made by the local manufacturers to secure an alteration of the Tariff from their point of view, and at a deputation the local manufacturers stated that if an adequate Tariff were given to them they felt confident that the increased output would enable them to reduce the price of their harvesters at once by £5. They made a promise to do that if the duty they asked for were imposed, and. further, to reduce the price bv another £5 at the expiration of a period of twelve months, making a reduction of £10 in all. The International Harvester Company and the Massey-Harris people immediately issued this circular : -
On 4th October, 1905, a deputation of local manufacturers of harvesters waited upon the Minister of Customs, and intimated that if a prohibitive Tariff were declared upon harvesters they would reduce the prices then ruling by £5 the first year, and another £5 the second year. They were, however, so far as can be learned from press reports, suspiciously silent about what the third, fourth, and subsequent years were to bring forth re harvester prices.
They go on to say -
On 7th October the harvester buyers of Australia got action - they got performance instead of promises, they got something substantial now instead of vague, illusory promises to be realized on in the dim future ; for on that date we made an open quotation on our harvesters as follows : -
Then follow various prices over periods with which I need not trouble honorable senators -
That is a “ cut “ of £12 10s. per harvester.
If thev were getting 5s. 9d. profit when they sold the harvesters at -f$t, what profit are they getting when they sell them at j£i2 ros. less? That is rather a difficult problem to solve. I am giving these figures as they appear under the authority of the trust or combine, of which we have every reason to be afraid. I shall quote another document to show how far we may rely on the members of this combine for truthful statements.
– Do I understand the honorable senator to be arguing that there is a trust in existence here?
– My argument is to show that there is such a trust in operation, and that there is great danger to be apprehended from it. I thought I had made that point sufficiently clear. In a letter containing a reply to a leading article in the Melbourne Age - but which letter the Age did not publish - the Harvester Company say -
We wish to refer to leading Article in your issue of 17th inst., in which you criticise our recent action re harvester prices : -
You quite aptly state that it is evident that either our former price of £81 was exorbitant, or that our present price of £yo is a “ dumping” price.
Listen to’ what they proceed to say -
We have no hesitation in admitting that the former price of £81 was artificial, but we most emphatically deny that £70 is a dumping price, and in proof thereof would state-
– May I ask if the /ISi. which they admit was excessive, was the Price at which the combine, including Mr. McKay, agreed to sell ?
– Yes ; and in order to sell at that price Mr. McKay had to reduce his charge by £3. This shows that Mr. McKay’s entrance into the combination was. followed by a reduction in price from £84 to £81. Here we find a company which has no hesitation in admitting a lie.
– Oh, no.
– The company declared that it had insufficient profit at £8.1. and then had no hesitation in admitting that that was an “artificial” price. I have endeavoured to show, first of all - what is not disputed, indeed - that there is such a combination in America, and that its operations have extended to Australia: I have also shown by the figures presented by Senator Symon that there is a real danger of this combination crushing out our industry, in view of the fact that, after two or three years’ operations, the combine has secured very nearly half the trade.
– What nonsense !
– Senator Symon’s figures show that to be the case in South Australia.
– Yes, in South Australia only.
– I am now speaking of Senator Symon’s figures in relation to South Australia, which is the State where harvesters are more generally required than elsewhere in Australia; and in that State the company has obtained nearly half the trade. I am in a position tosay in answer to Senator Symon, that there isvery serious complaint from the manufacturers of South Australia. I have a letter from Messrs. May Brothers, who assure me that their output this year is more than 50 per cent. less than it was lastyear, and this they attribute to the operations of American competitors - the foreign trust. Messrs. McKay recently, at a reunion of their work-people at Ballarat, declared that they have made 350 fewer machines this year than last, and this they also attribute entirely to the action of the Harvester Company.
– But the importation of harvesters is falling off rather than otherwise.
– The honorable senator cannot make that statement on the figures which are available. The importation of harvesters in 1904 was between 400 and 500, while, according to a return presented to the House of Representatives, it had increased in 1905 to 1,700. I have not the figures for this year, but those I have quoted show a very alarming increase. Honorable senators say that, if we check the importation, we shall injure or ruin the farmer, and that, after all, we must consider our great producing industries. Senator Gould urged that the producing, industries are much more important than are the manufacturing industries, and that, whatever we do, we should be careful in fostering the one not to injure the other. I quite agree that in fostering the one we ought to be careful not to injure the other ; but I contend that in fostering the one we are advancing the interests of the other. There is no doubt that Senator Gould was wrong when he said that the agricultural, pastoral, and dairying industries together were more important than the manufacturing industries, measured by the magnitude of the output. The honorable senator was wrong, not only in reference to the whole Commonwealth, but in reference to his own State, which is amongst the least developed in manufacturing production.
– According to its possibilities, at any rate.
– As a matter of fact, New South Wales is amongst the least, if not the least, developed in this respect. The agricultural, dairying, and pastoral industries of New South Wales onlyaggregate a little over , £21,000,000.
– The honorable senator is immensely wrong.
– I am quoting from Coghlan, though I dare say Senator Pulsford is a better authority.
– That is very likely.
– Coghlan gives the pastoral and dairying income for 1902 as something over £15,000,000, and the average agricultural income for the preceding five years at a little over £5,000,000, a total of something over £21,000,000.
– What year is the honorable senator taking for the figures in regard to manufacturing?
– So far as I know, the year given is 1902.
– Does the honorable senator regard that as a typical or normal year for pastoral pursuits ?
– In order to be quite sure–
– Why does the honorable senator select the most disastrous year New South Wales has had? Because it suits the honorable senator.
– I did not select the year, which happens to be the last for which figures are available.
– That is not by any means the last year for which figures are available.
– It is the last year, so far as I know, for which there are complete figures.
– Would the honorable senator like me to give him the figures for last year, when the manufacturing industries in New South Wales represented £10,000,000, and all other industries £36,000,000 ?
– What does the honorable senator call “ manufacturing industries” ?
– All manufacturing industries.
– I venture to saythat the honorable senator is quite wrong. Although I have not the figures, I cannot conceive it possible that the manufacturing industries of New South Wales should have declined from an output of £22,000,000 to £10,000,000.
– The honorable senator is including the cost of raw material.
– Does not the honorable senator take the original cost of raw material into account in estimating the yield of the pastoral and dairying industries? There cannot be an output from pastoral pursuits and agriculture without land and stock, and the cost of this raw material must be taken into account. In giving aggregate returns, I adopt a course that is equitable, whereas Senator Pulsford does not show a fair comparison. Further, in reference to the argument that if we are not careful we shall injure the producer, I desire to point out that in the States where this kind of interference has been greatest, agriculture has been developed to the largest extent. The most highly developed agricultural State in Australia is Victoria, where there have been more restrictions of the character referred to than in any of the other States. Senator Symon, when arguing the other evening that we should be careful in imposing such’ restrictions, proved at the same time that where they have been most resorted to the people have been the most prosperous. Senator Symon declared that the prosperity of Victoria is the greatest in the world, and, in proof, showed that the earning power in Canada is £16 5 s. per head, in the United States £14 14s. per head, in the United Kingdom £7 18s. fid. per head, and in Victoria .£27 19s. 6d. Surely we ought not to be afraid of passing this Bill because it might mean some apparent restriction, and thus injure the farmer. As a matter of fact, Victoria, compared with New South Wales, has many disadvantages as a farming country. Victoria has about one-third the area, and is something like half the age of New South Wales, and yet the former State, has over 1, 000,000 acres more under cultivation. At the same time, the average yield per acre is of more value in New South Wales than it .is in Victoria. The only reason why Victoria is so advanced is that she has had a different kind’ of legislation in which so-called restriction has been a large element. There is another very interesting comparison between New South Wales and Victoria that may be very proper! v given without any reflection on either State. The Savings Bank returns may he said to be an index to the diffusion of prosperity amongst the people. Thev are an index of the power of the poorer section of the community to out bv something for a rainy day. Although New
South Wales is more, than three times as large as Victoria, and although she has a splendid agricultural and pastoral country^ the advantage of an enormous land revenue, and has borrowed during the last thirty years considerably more money than Victoria, yet, whilst 25 out of every 100 in New South Wales are depositors in Savings Bank, 37 out of every too are depositors in Victoria.
– Which people have the most money in the Savings Bank?
– The New South Wales people, and that is a stronger argument for the position I am taking up. As a matter of fact, the New South Wales Savings Bank gives a higher percentage of interest, and gives interest upon larger amounts, than the Victorian Savings Bank does. Consequently the Savings Bank in New South Wales is a field for investment.
– Does the honorable senator think that that is relevant to the subject?
– I certainly do. I am now dealing with the argument that it is unwise and dangerous to pass legislation of this character because it restricts the flow of commerce. I am pointing out that in a country where there has been the greatest amount of so-called restriction there is the greatest general prosperity.
– I think the honorable senator is in order.
– There is another point. Coghlan points out by referring to the probate duties how wealth is distributed amongst the people. He gives a return showing how many persons in each hundred who die leave over ,£100 to be administered by the Probate Office. He finds that in New South Wales 16.65 per cent, of those who die leave over £100. In Victoria, the percentage is 24.18. That shows a very general ‘diffusion of wealth in this State. What we are seeking is not the aggregation of wealth in a few hands. One of the charges against legislation such as I support is that it will make a few manufacturers wealthy. I point to these figures as showing that the State in which the people have been able to save the! most, as shown by the records, is that State in which legislation has been most in accordance with the ideas which I advocate. Coghlan goes on to say -
These figures show a distribution of property not to be paralleled in any other part of the world ; and in a country where so much is said about the poor growing poorer and the rich richer, it is pleasing to find that in the whole population one in six is the possessor of property, and that the ratio of distribution has been increasing with fair regularity in every province of the group. Victoria has the widest diffusion of wealth of the individual States ; South Australia comes next to Victoria; then comes New Zealand.
It is rather significant that the order of wide distribution of wealth is in the degree to which States have resorted to this kind( of legislation. Therefore, I think honorable senators will see first of all that I have shown that there is some real substantial danger ; and then that there is no proof of our general prosperity being retarded by taking such action. Some figures have been quoted, and I think I may say have hardly, been fairly quoted, by Senator Symon in relation, to the increase in the number of agricultural implement makers employed. Perhaps at this stage, however, I may ask leave to continue my remarks) to-morrow. Leave granted ; debate adjourned.
page 2832
Senator PLAYFORD laid upon ‘ the table the following papers: -
Report of the Imperial Defence Committee upon a general scheme of defence for Australia.
Memorandum respecting the proclamation of the Papua Act, and draft letter re the appointment of a Royal Commission to inquire into the affairs of British New Guinea.
Senate adjourned at 10.40 p.m.
Cite as: Australia, Senate, Debates, 15 August 1906, viewed 22 October 2017, <http://historichansard.net/senate/1906/19060815_senate_2_33/>.