Senate
18 July 1907

3^rd Parliament · 2^nd Session

QUESTION
- MAIL SERVICE TO EUROPE
QUESTION
- TOBACCO WASTE
QUESTION
- IMPERIAL CONFERENCE
QUESTION
- PREFERENTIAL FREIGHT CHARGES: WESTERN AUSTRALIA
QUESTION
- TELEPHONE SERVICE
QUESTION
- CONTRACT IMMIGRANTS
QUESTION
- COMPULSORY VOTING
QUESTION
- COTTON PRODUCTION
MAKINE SURVEY
AGRICULTURAL IMPLEMENT MAKERS
ORDER OF BUSINESS
BILLS OF EXCHANGE BILL
- Second Reading
PAPERS
QUESTION
- PRINTING COMMITTEE
QUESTION
- COMMONWEALTH MAIL STEAMERS
PUBLIC SERVICE REGULATIONS
ADJOURNMENT
- Order of Business : Friday Sitting

The President took the chair at 2.30 p.m., and read prayers.

page 649

QUESTION

MAIL SERVICE TO EUROPE

Senator WALKER:
NEW SOUTH WALES

– I desire to ask the Vice-President of the Executive Council, without notice, if he will be kind enough to inform the Senate when he does hear that the guarantee of . £25,000 in connexion with the cancelled mail contract to Europe has been paid?

Senator BEST:
Vice-President of the Executive Council · VICTORIA · Protectionist

– I understand that the Postmaster-General is pressing for payment, and as soon as the money has been paid, it will be my duty to inform the Senate.

page 649

QUESTION

TOBACCO WASTE

Senator PEARCE:
WESTERN AUSTRALIA

asked the Minister representing the Minister of Trade and Customs, upon notice -

Was it the practice of the Customs Department to insist on dust, stems, and other refuse of tobacco leaf, used in manufacture, being destroyed?
Was an allowance made to the manufacturer, in the amount of duty to be paid, for such waste?
Is it a fact that one tobacco firm in Sydney is now selling this waste?
If so, is this done with the consent of the Minister ?
If the firm referred to is allowed to sell the waste instead of destroying it, is an allowance still being made as before for waste, in calculating the amount of duty to be paid ; and, if so, to what extent?

Senator BEST:
Protectionist

– The answers to the honorable senator’s questions are as follow : -

Yes, as prescribed by Regulations 8 and 10 of Statutory Rules No. 65 of 1905.
Yes, in accordance with section 75 of the Excise Act 1901.
The Minister is unable to say definitely, but there is no objection to sale after the waste has been destroyed as prescribed by regulations, viz., mixed to the satisfaction of the officer with manure, kerosene, or other matter approved by the Comptroller.
The Minister does not interfere with disposal of waste after treatment as described in preceding answer, except to see that regulations 9 and 10 of Statutory Rules No. 65 of 1905 are carried out in regard to immediate removal from factory and purpose for which waste is used.
Yes, allowance is being made in accordance with section 75 of the Excise Act 1901, which states -

A refund of the Customs duty paid on the importation of leaf tobacco may be made in respectof all stalks, refuse, clipping or waste arising from the operations in any factory and destroyed in the manner prescribed.

Senator PEARCE:

– Arising out of the answer, I desire to ask the Minister whether it is not a fact that the past method has been to mix the waste with kerosene, and then to burn it?

Senator BEST:

– I have no personal knowledge on the subject. I would ask my honorable friend, if he does not mind, to give notice of a question, or, if he so desires, I shall be very happy to make inquiry and let him know.

Senator PEARCE:

– I prefer to ask a question to-morrow without notice.

page 649

QUESTION

IMPERIAL CONFERENCE

Whether honorable members of the Senate will be supplied with copies of the Blue Book containing the report of the recent Imperial Conference held in London ; and, if so, when ?

Senator BEST:
Protectionist

– The answer to the honorable and learned senator’s question is as follows: -

Yes. The report is now being printed. Copies will, it is expected, be available next week.

page 649

QUESTION

PREFERENTIAL FREIGHT CHARGES: WESTERN AUSTRALIA

Senator NEEDHAM:
WESTERN AUSTRALIA

asked the Minister representing the Minister of Trade and Customs, upon notice -

If he is aware that complaints are continually being made by the settlers in the northwestern portion of Western Australia that, owing to preferential charges imposed by the shipping companies, they are forced to send their produce to Europevia Singapore, instead of Fremantle?
If so, will the Government include a provision in the proposed Navigation Bill preventing this or any other diversion of trade, and thus secure for our producers the full advantage of their natural ports?

Senator BEST:
Protectionist

– The answers to the honorable senator’s questions are as follow : -

No complaints have been received by the Minister, but full inquiries are being made, and, as soon as possible, the information desired will be made available.
Point raised will be considered.

Senator DE LARGIE:
WESTERN AUSTRALIA

– Arising out of the answer, I desire to ask the Minister if he is quite sure that therehas been no complaint made about these rates on the north-western coast of Western Australia?

Senator BEST:

– I have made inquiries, and that is the answer which has been supplied to me by the Department.

Senator de Largie:

– It is erroneous.

page 650

QUESTION

TELEPHONE SERVICE

Senator CHATAWAY:
QUEENSLAND

asked the Minister representing the Postmaster-General, upon notice -

What was the number of applications for telephones for the years ending 31st December, 1905 and 1906 respectively ; the number of lines connected for the same periods ; and the applications in hand at the end of each year?

Senator KEATING:
Minister for Home Affairs · TASMANIA · Protectionist

– The answer to the honorable senator’s question is as follows : -

Inquiries are being made, and a reply will be given as soon as the necessary particulars have been obtained.

page 650

QUESTION

CONTRACT IMMIGRANTS

Senator TURLEY:
QUEENSLAND

asked the Minister representing the Minister of External Affairs, upon notice -

What number of immigrants has arrived in Australia under contract to the Colonial Sugar Refining Company ?
What are their nationalities?
Did any of such contract immigrants leave the ships at Fremantle?
What is the number and nationality of those who left?

Senator BEST:
Protectionist

– The answers to the honorable senator’s questions are as follow : -

107 Spaniards, 82 British.
Yes.
7 Spaniards. Three of these men subsequently continued their journey in another vessel.

Senator FINDLEY:
VICTORIA

– Arising out of the answer, I desire to ask the Minister whether the immigrants who left the vessel at Fremantle were engaged under contract by Mr. Hughes, who is acting on behalf of the Colonial Sugar Refining Company, and, if so, under what conditions were they engaged ?

Senator BEST:

– I have no personal knowledge, but I shall be happy to supply the honorable senator with the information privately, after inquiry.

Senator Findley:

– No; publicly.

Senator BEST:

– If my honorable friend will be good enough to give notice of a question I shall supply the information on Wednesday next.

page 650

QUESTION

COMPULSORY VOTING

Senator DOBSON:
TASMANIA

asked the Minister of

Home Affairs, upon notice -

Is it the intention of Ministers to introduce a Bill making provision for compulsory voting at all Federal elections?

Senator KEATING:
Protectionist

– The answer to the honorable senator’s question is as follows : -

Not this session. The matter may be considered at a later date.

page 650

QUESTION

COTTON PRODUCTION

Senator DOBSON:

asked the VicePresident of the Executive Council, upon notice -

Did the Prime Minister, in accordance with his promise, communicate with the British Cottongrowing Association with reference to the association growing cotton in Australia, and as to offering them facilities for doing so?
Have the Government anything to report as the result of such communication, or any correspondence to table?

Senator BEST:
Protectionist

– The answer to the honorable senator’s questions is as follows: - 1 and 2. There is no trace of any such correspondence. If the honorable member will give a reference to the promise alluded to a further inquiry will be made.

page 650

MAKINE SURVEY

Motion (by Senator de Largie) agreed to-

That all communications between the Imperial Government and the Commonwealth Government on the question of marine survey of the northwest coast of Australia be placed on the table of the Library.

page 650

AGRICULTURAL IMPLEMENT MAKERS

Motion (by Senator Needham) agreed to-

That there be laid on the table of the Senate a return showing -

The names of all firms of agricultural implement makers who have secured exemptions under section 2 of the Excise Tariff Act 1906.

The rates of wages paid to, and the hours of labour worked by, the employes of such firms as lodged with the Registrar of the Commonwealth Conciliation and Arbitration Court.

page 650

ORDER OF BUSINESS

Senator SirJOSIAH SYMON (South Australia) [2.40]. - I desire to ask the VicePresident of the Executive Council, if it is not inconvenient to him, to postpone the

Bills of Exchange Bill until the Commonwealth Salaries Bill has been dealt with. If he will adopt my suggestion it will give me an opportunity of speaking upon a Bill which is a practical measure dealing with a practical difficulty.

Senator BEST:
Vice-President of the Executive Council · Victoria · Protectionist

– I have no objection to adopting the suggestion of my honorable and learned friend. Personally, I should have preferred him to deal together with the Commonwealth Salaries Bill and the Judiciary Bill ; but I understand it would be inconvenient to him to do so before Wednesday next. If he prefers to go on with the Commonwealth Salaries Bill this afternoon, well and good; or if he prefers to deal with the two Bills together on Wednesday next I shall be happy to meet his convenience.

Senator Sir JOSIAH SYMON (South Australia) [2.43]- - I certainly would be lacking a sense of appreciation if I did not thank my honorable and learned friend for his reply. As he adopted the course of dealing with the two Bills together, honorable senators might prefer that it should be followed by other speakers. If he is in a position to allow me to deal with the two Bills together on Wednesday next, I shall be most happy to do so if that falls in with the views of honorable senators. Since the adjournment of the Senate yesterday I have considered the two Bills very carefully, and it seems to me that it would be possible to deal with them separately. However, I appreciate what my honorable and learned friend says, and I am not in a position - because of the absence of papers which I thought might be here - to deal with the Judiciary Bill, which involves very serious constitutional questions which the other Bill does not, certainly not to the same extent. I shall be glad to fall in with the view of my honorable and learned friend and postpone what I have to say on the Commonwealth Salaries Bill until Wednesday next, when the two Bills can be dealt with together.

Senator BEST:
Vice-President of the Executive Council · Victoria · Protectionist

– What I did propose was that we should go on with the Bills of Exchange Bill this afternoon. It is a very important and comprehensive Bill, which under ordinary circumstances should command the attention of the Senate both to-day and to-morrow. If the suggestion made be adopted, then, if we should dispose of the Bill earlier than is now anticipated, the Commonwealth Salaries Bill may be discussed. It will be understood, however, that the consideration of that Bill and the Judiciary Bill will thereafter be postponed until Wednesday next. I can only act with the concurrence of honorable senators, and if there is a general understanding to that effect I am willing to go on with the Bills of Exchange Bill this afternoon. It is a measure which should command critical attention on the part of honorable senators.

Senator NEEDHAM:
Western Australia

– I should like to ask the VicePresident of the Executive Council if, supposing the proposed alteration in the order of business takes place, the Senate will have business to go on with this evening?

The PRESIDENT:

– Private business is set down for this evening.

Senator NEEDHAM:

– I object to any change in the order of business to suit the convenience of any member of the Senate if it involves an early adjournment.

The PRESIDENT:

-The honorable senator may ask a question, but he will not be in order in debating the matter.

page 651

BILLS OF EXCHANGE BILL

Second Reading

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

– I move -

That the Bill be now read a second time.

– That is the question. Supposing for a moment that there is no doubt in the mind of any honorable senator of our capacity to take away from any particular State, other than the State of issue, its power to tax bills of exchange, I would put it to honorable senators, that this is a very convenient and fair provision. There is no reason why a document of this kind, once issued in the Commonwealth, should be subjected in any other State, and in the ordinary course of its currency until it arrives at maturity, to any additional taxation. I would briefly urge on honorable senators some of the reasons why we think it desirable that there should be only one duty paid. We have the power, under sub-section xvi. of section 51 of the Constitution, to legislate with regard to bills of exchange and promissory notes. It is therefore competent for us to legislate as to whether or not bills of exchange are valid in relation to their stamping. That is to say, we can legislate that bills of exchange shall be negotiable and’ usable, as they are to-day, without any stamp at all. We have the power to do that if we choose, and if we have that power, “ surely we have the smaller power contained in it to say that bills of exchange are valid and usable if they bear the duty stamp of the State only in which they are issued. We do not propose to take the revenue arising from the stamping of these documents. We propose to allow the State in which the bill q is issued to continue to get the benefit of that revenue, but we do not want any other State than ‘ the State of issue to come in and superadd any obligations of this kind which will, involve the necessity of contributing to the revenue of that other State. In sub-section xxxix. of section 51 of the Constitution, Ave have all the incidental powers necessary to the execution of any of the powers contained in the other thirty-eight sub-sections of that section. Under subsection i. of section 51 of the Constitution, we have the power to legislate with regard to trade and commerce between the States and between the Commonwealth and the outside world. The negotiation of bills of exchange might not of itself be regarded as an act of trade or an act of commerce, but still I think honorable senators will agree with us that they are the instrumentalities, so to speak, of trade and commerce.- They are part and parcel of the transactions which go to make up the trade and commerce of a community, and we might have the power to legislate fully on this subject, even under that heading. Again, we have the fullest powers to impose taxation, provided that there is no discrimination between the States, under sub-section n. of section 51 of the Constitution. Another consideration in this regard is the provision contained in section 92 of the Constitution that, after the ionposition of uniform duties, trade, commerce, and intercourse throughout the Commonwealth shall be absolutely free. It may be argued with very good reason that te impose charges or taxes upon these instrumentalities of commerce is an interference with that very freedom of trade and intercourse for which the Constitution provides, and which the Federal authority is bound to maintain. I am pointing out these matters at this stage in order that if the subject is discussed at any length hereafter, honorable senators may be in a position to know what is in my mind when submitting that, both for reasons of convenience and reasons of constitutionality, it is desirable that we should have the powers contained in clause 7 of this Bill. It has been held in a case in the United States Supreme Court that it is unlawful for a State to impose stamp duties upon bills of lading used for the transport of gold from one State to another, on the ground that it is a violation of the fundamental principle of the Constitution relating tq the establishment and maintenance of free-trade and free intercourse between the States comprising the Union. I would now direct attention to clause 9, which defines an inland bill as a bill which is, or on the face of it purports to be -

both drawn and payable within Australasia ; or

I draw attention particularly to the use of the word Australasia. Commonly in the Acts of the Federal Parliament the word. Australia is used, and is defined under our Acts Interpretation Act as practically synonymous with the Commonwealth. Under the definition clause of this Bill, Australasia means -

Australia, and any Territory under the control of the Commonwealth, New Zealand, and the Fiji Islands.

Therefore, any bill which is, or on the face of it purports to be, both drawn and payable within the Commonwealth, or even in New Zealand or Fiji, and which is current in the Commonwealth, would come under the provisions of this measure relating to an inland bill. In the definition of an inland bill of exchange under the Bills of Exchange Act of Tasmania, the word “ Tasmania” appears where Australasia occurs in this clause. Honorable ‘ senators will naturally ask, as I would in the circumstances, why we make Australasia, as defined in the interpretation clause, the territory which will determine whether a bill is inland or foreign. The provision we have adopted is similar to that which has heretofore existed in all the States excepting Tasmania. Another provision to which I would direct attention is sub-clause 2 of clause 65. This was not contained in the original Bills of Exchange Act of 1882 of the United Kingdom. Sub-clause 1 of clause 65 appears in the Imperial Act of 1882, but not subclause 2, which reads -

An order on demand, drawn by or on behalf of a banker at one place of business on and payable by the banker either at the same or at some other place of business, shall, for the purpose of the protection of the banker under this section, be deemed to be a bill payable to order on demand.

That provision has been found necessary by reason of the decision in a celebrated English case. The earlier part of the clause protects a banker who in the ordinary course of business passes a demand draft whereon the indorsement is forged, and provides that it is not incumbent upon the banker - to show that the indorsement of the payee or liny subsequent indorsement was made by or under the authority of the person .whose indorsement it purports to be, and the banker is deemed to have paid the bill in due course, although such indorsement has been forged or made without authority.

There the Imperial Act stopped, and it was subsequently determined that that section did not apply to a bank cheque or draft from one branch of the bank to the other. A case, known as The Capital and Counties Bank v. Gordon, arose where there was a forged indorsement on such an instrument, and where the bank sought the protection of the provisions in the Imperial Act similar to those in sub-clause 1 of clause 65 of this Bill, but it was held that they did not cover a bank cheque or draft from one branch of the bank to the other. In nearly every State in the Commonwealth legislation has subsequently been adopted to cure that defect in the law. Honorable senators will see in the margin reference to the Victorian, Queensland, South Australian, and Tasmanian Acts. There is a Western Australian provision to cover this defect, and it has exactly the same effect as sub-clause 2 of clause 65. It gives to the banker a like protection in the case of bank cheques and drafts from branch to branch, but as the wording is very different from that in the Acts of the other States and in this Bill, we have omitted reference to it from the marginal note, because we thought it might be misleading. New South Wales adopted subclause 1 of clause 65 from the Imperial Act as it stands, but went even further, and made provision which had the effect really of saying that in such cases, where the indorsement was forged, and the banket had paid the cheque or draft honestly, and in the ordinary course of business, the indorsement would be deemed to be what it purported to be, and so throw upon the individual who was defrauded a loss which we do not like to share the responsibility of putting upon him. The New South Wales provision in that respect was singular. The omission of any reference to Western Australia in the marginal note is due, not to the fact that that State has not a provision to the same effect, but that its provision is different in form “ from those prevailing in the other States; and though the effect is the same, we thought that it would be misleading to include a reference to the Western Australian Act. Here, I may say, with regard to the marginal notes to this Bill, that wherever there is anything touching upon a matter that is a little singular, or a departure from the Imperial enactment, attention is drawn to it by reference to a State enactment on the subject. If we have not followed States enactments exactly in every respect in language, I can assure honorable senators that any departure made does not involve a departure in principle. Such departures as do occur are made purely for drafting purposes - perhaps to achieve what is considered to be a better form of expression; but certainly there is no departure in principle. The only reason why I am dealing with this question is to draw attention to particular divergences from the Imperial Act of 1882, and the necessity for them’. The next clause to which I invite attention is clause 81. It is designed to amend the law in a matter in which it is considered that the law may fairly, and reasonably, in justice to all parties, be amended. That law was declared so far as Australia is concerned, in the case of The Colonial Bank of Australasia Ltd. v. Marshall. The circumstances of that case were, as I remember them, these : There were two or three individuals who were concerned in a joint account. I forget whether they were trustees. They had their account in the Colonial Bank. One or more of them was living, not in Melbourne, but in some country portion of Victoria. The ordinary procedure which they followed in drawing on the bank was that the cheques were sent to the drawers in the country with the amounts filled in, and their names were signed. Then the cheques were returned to the other drawer in the city. But through a fraud on the part of one of the parties, after a cheque had actually been signed by one or more of the three, the amount for which it was drawn was altered. The cheque was presented to the bank. There was no apparent evidence on the face of it that there had been any fraudulent alteration in the words or figures. The bank honestly and in good faith honoured the cheque as presented to it. The other drawers who had signed it for the lesser amount before it was altered subsequently took action against the bank, and recovered the difference between the amount for which they had signed and the amount for which the bank : had honoured the altered cheque. After going through various courts, the case finally came before the High Court of the Commonwealth, which decided that the bank was liable, and that the drawers were not liable by reason of negligence, which the bank alleged against them for their action in signing the cheque in the form in which they did.

Senator Dobson:

– Was the negligence proved or was it merely alleged?

Senator KEATING:

– I do not know whether it was actually proved.

Senator Sir Josiah Symon:

– The Court held that there was no evidence of negligence on the part of the drawers.

Senator KEATING:

– I said, “ The negligence alleged,” because I forget whether it was proved. The case afterwards went to the Privy Council, which sustained the decision of. the High Court. Some doubt had been expressed in Great Britain for some years previously as to what would be held to be the law in such a case. As far back as 1829 a similar case had been decided differently. That is a celebrated case, which most students of law have to read, and is known as Young v. Grote . The circumstances of it were that a customer of a bank leaving home left with his wife his cheque book or a number of cheques signed in blank with authority for her to fill them up for such amounts as she might require. The husband’s clerk filled up a cheque for a certain sum - let us say , £50. He showed it to the lady, who was satisfied, and afterwards he fraudulently altered it by putting in a figure and writingin words. Ultimately he cashed it for, let us say, £450.

The customer sued the bank, and sought to throw the responsibility upon it, but the Court held that he and not the bank had to bear the loss. But the reasons assigned for that decision were so various that some doubt has always been entertained as to its soundness. When it came before the Court of Appeal it was decided by, I think, four Judges that the loss should fall upon the customer, and not upon the bank, but if I remember rightly each of the four Judges assigned for his reason a different principle. One based his judgment upon the negligence of the customer in leaving his cheques about in such a form. Another based his judgment upon the doctrine of estoppel - that where an individual takes a certain course of action he is precluded from setting up certain circumstancesin his favour. Another Judge based his decision upon a different ground altogether. The result was that the decision had been canvassed for a great many years, though no British Court ever accepted the responsibility of saying that the decision in Young v. Grote was bad law. The High Court of Australia, however, bridged this chasm, and took the responsibility of saying that the old decision was bad law. That the High Court did in Marshall v. The Colonial Bank, holding that the decision in Young v. Grote. did not govern, and throwing the responsibility and loss upon the Colonial Bank. That decision, as I have said, was afterwards sustained by the Privy Council. The view that we take is that where an individual is a customer of a bank, and is drawing cheques upon that bank, it is due from him to the bank that he should observe ordinary care and caution, and not be guilty of negligence. Therefore we propose in clause 81 to amend the law in this particular. We provide that -

Where-

a cheque, drawn on a banker by a customer, has been drawn by the customer with negligence, and

the negligence of the customer has afforded facility for the fraudulent alteration of the amount of the cheque, and

the cheque has been fraudulently altered so as to increase its amount, and

the cheque as so altered has, in good faith and without negligence, been paid by the banker, the banker shall not be responsible or incur any liability by reason of having paid the cheque, but shall be entitled to charge the customerwith the amount of the cheque as paid by him.

In other words, we say. that if a man is negligent in drawing his cheques, and leaves opportunities for them to be altered in such a way that an alteration is not de- tectable by a man in ordinary circumstances carrying on the business of the bank, then he, and nor the bank, shall bear the loss. I think we can commend that alteration of the law to honorable senators. A provision to the same effect has already been made in Queensland since the decision in Marshall v. The Colonial Bank, and another alteration of the law to a like effect has been made in Tasmania. The Tasmanian amendment goes further.. than we propose to do in some respects, throwing upon banks the responsibility of publishing the section affecting this matter in their cheque books. I do not know that we need make provision for the publication of the law by such means as that. I have now indicated to the Senate in what respects this Bill makes divergencies from the basic measure, if I may so call the Imperial Act of t.882 ; and I think that, with the explanation which I have given of these divergencies, honorable senators will realize that I was quite correct in saying that they are not departures from the principles upon which that measure is founded. They are simply divergencies necessitated by experience in the working of the law. I think that the measure ought to commend itself to a cordial reception from honorable senators. It is not a Bill of a party character. It is designed to convenience the trade, commerce, and finance of the community. It is desirable, in view of the trade relations that we have with the mother country, that our law upon this subject should approximate as closely as possible to that of Great Britain. I do not think that there is any departure from that law proposed by this measure which has either not been acquiesced in or will not be followed by the mother country herself. There is one provision in this Bill, clause 65, sub-clause 2, as to which it will be noted that the mother country has not adopted amending legislation. The reason for that is that in the particular case that came before the Courts in which a defect in the Bill of Exchange Act was disclosed, the defect was cured, so far as Great Britain was concerned, by” reason of the fact that an old Stamp Act met the case. We have not that Stamp Act, or any law of the kind, in operation in Australia. It was not necessary to amend the Bills of Exchange Act in Great Britain in the way in which we propose to amend it here, and in the way in which, in the meantime, it has been amended in each of the States. I omitted to mention that point in dealing with clause 65 ; but I do not think that there is any other clause in the measure to which special attention need be drawn. With the explanation that I have given of the divergencies from the original Imperial measure of “1882, I think I can say that, in submitting this Bill, we are asking honorable senators to pass a satisfactory code for the whole Commonwealth. The Bills of Exchange Act of Great Britain, and the Bills of Exchange’ Acts which have been -passed by nearby all the States of the Commonwealth, are here practically codified. In these circumstances it will, I think, be recognised that there is very little room for discussion of a. party character, and that the measure is a utilitarian one, and one which affects the vital interests of trade and commerce throughout the Commonwealth. It will, when passed, be conducive to a greater measure of convenience to those who are engaged in trading, financial, and commercial operations throughout the whole Commonwealth.

Senator Sir JOSIAH SYMON (South Australia) [3.30]. - This is a Bill of a character which covers a good many Bills which come before the Federal Parliament. They are included in a category of which it is impossible to over-estimate the importance. In the framing of the Constitution one great desire - it was also an urgent necessity - was that a great many subsidiary matters should be dealt with by the Commonwealth Parliament. Even although they might ‘not be regarded’ as involving great executive dr constitutional powers, still they were ‘of importance, because they were intended to secure that uniformity amongst the States, and that’ evenness of law and administration without which, of course, the Federation would only have brought about confusion instead of advantage. Measures of that kind have usually been regarded and spoken of as more or less machinery Bills. In strictness machinery Bills are those which are required to enable the Federal Executive powers to be brought into effective play. Bills of the character of that which is now under consideration rest on ,a rather higher platform than purely machinery Bills, because thev involve not merely matters of machinery but also legislation which’ prior to Federation was entirely in the hands of the

States. To give an illustration, the legislative powers given bv the operative part of section 51 are made applicable to “postal, telegraphic, telephonic, and other like services,” and these have already been exercised. Then in another paragraph comes a subject which I believe is now being dealt with in another place, and that is quarantine. Next, in paragraph xv., we find a provision which enables the Commonwealth, again with the view of securing uniformity throughout the States, to legislate with regard to weights and measures. The next paragraph is that under which the present Bill is introduced, namely, “ Bills of exchange and promissory notes.” Honorable senators will see that, although there may not be a great deal that is fresh in respect of this measure - nothing very startling in the way of a new legal departure from what we have been accustomed to in the States - still it is very important and very essential from the point of view which has been indicated and emphasised by Senator Keating, namely, in respect of securing uniformity in a matter of so much importance. It is scarcely necessary to add further emphasis to what he has said on the subject of the importance of this department of our law. If there is one department of human affairs more than another which requires everything that can be done to facilitate the operations therein, and to remove all elements of confusion, it is that which relates to trade and commerce. Whilst I do not quite agree with my honorable and learned friend when he seeks to found the new law proposed to be enacted by clause 7 on the suggestion that otherwise there might be an interference with freedom of trade, still I do agree that every’ element of restriction ought to be removed as far as possible. I do not regard bills of exchange and promissory notes quite as mv honorable friend described them, as involving really trade and commerce, or. their regulation, and therefore coming within the power given by the Constitution to this Parliament. They are not merely necessary, but absolutely indispensable to the conduct of trade and commerce. The trade of a country does not depend on the handing over of so many sovereigns, or the exchange of specie for goods. It depends on credit. Trade itself is a mere system of barter, and the bills of exchange and promissory notes which rest on that intangible thing known as credit are really the instruments of exchange, as their name imports, to enable trade to be properly carried out, which otherwise would be impossible. Cash transactions over the counter are extremely convenient, and I have always thought that they ought to be more encouraged than they are, but big transactions can only take place with the existence of a gigantic system of credit, and of those instruments of exchange which are called bills of exchange, promissory notes, and cheques. Nothing is more striking in the history of British progress and trade than the development of that branch of the law, out of which the common law relating to bills of exchange and promissory notes has arisen. The law, before the codification took place in respect of bills of exchange and promissory notes, was properly described as the law merchant, and I’ doubt very much whether any portion of the English common law has rested on a wiser and broader foundation of justice - a better and broader foundation of what is desirable for the commerce of a great country - than that particular body of the law. Difficulties always will arise in connexion with a far-reaching system of law, and difficulties did arise in connexion with the development of this branch of the law merchant. Decisions of great variety were given by the Courts, no doubt owing to the differing facts in each case, and led in many respects to a difficulty amongst commercial men and bankers “ in ascertaining exactly what the law on a point was. That very laudable movement, which began a good many years ago for the codifying of what I might call the floating body of English law, in particularly departments such as the law of evidence and others which I could mention, was, after a time, extended to that branch of . the common law which related to bills of exchange and promissory notes, and the result was an Imperial enactment on which this Bill is founded. Honorable senators, of course, are familiar with the codification which was made in the law in respect of sales of goods. That is a most excellent example, and no measure I think has been more useful than that comparatively short measure codifying the law in a most excellent and lucid way. No one can deny that the codification with respect to bills of exchange and promissory notes has been equally well done. I believe that every lawyer will agree that it has been well done. The States have adopted the Imperial code, and nothing more need be said in respect of the desirability of utilizing the Imperial Act. The next step is to exercise the power which was wisely conferred on this Parliament by the Constitution, to enable us to realize the fruits of the Union by having that uniformity amongst the States which it was one of the objects of Federation to bring about. It is obvious that if each State were ‘ permitted to continue to legislate in respect of these important matters, we might find the law of one State differing from the law of another State, and commercial and trading affairs brought to a condition of terrible confusion, so far as regards bills of exchange and promissory notes. I think we shall all join in saying that it is a very proper thing that we should exercise this power at the very earliest opportunity. On this occasion there is no question of implied power, because we have express power to make a law which will supersede the States laws on the subject, and prevent divergencies should they happen to arise It is not merely a matter of convenience, but it is our dutv to do this so that the resident in northern Australia may have in his hand a code relating to bills of exchange and promissory notes, which is equally available to and binding upon the resident in the southern part of Tasmania. If we succeed in doing this, we shall have taken one more step towards realizing the object for which we federated. The Minister very properly pointed out divergencies between this Bill and ‘ the Imperial Act. I think the honorable senator acted wisely in confining himself to that, in so lengthy a Bill. But when the Bill is in Committee, it would be well that he should be prepared to point out to honorable senators, so far as possible, the corresponding sections in the States laws on the subject, and in the Imperial enactment. He did, in referring to the divergencies, allude to the necessity of calling- attention to these things, so that honorable senators should not be under the impression that they were being asked merely to adopt a transcript of the Imperial enactment. When we had the Copyright Bill before us, its consideration in Committee occupied a long time, though, in view of its importance, not a minute longer than I think was necessary. But in dealing in detail with that measure I think we were delayed a little because of the inaccuracies, as I think I may call them, in a great many of the marginal notes. References were made to -provisions in other laws as though they were identical with the provisions contained in the clauses of that Bill, when, as a matter of fact, there were very serious discrepancies between them. These inaccuracies were remedied by amendment, and further information was given to honorable senators, but it led to some little delay in the passing of the Bill. However, I think the Minister is right when he says,that care has been taken in this instance that the references shall be accurate. To come to the special departures from the provisions of the Imperial Act, the first is to be found in clause 7. That is the clause, which restricts the taxing powers of the States in respect- of these particular instruments. Personally, I should be sorry to pronounce any final opinion upon the matter, and when a provision of the sort is introduced we have always the consolation that there is a vista of litigation opened up which is, r think, the proper avenue through which these problems are to be solved. So that we need not absolutely set ourselves up as a tribunal to decide that this is or is not the right thing to do. But if, on the face of it, there is a doubt, to say the least of it, I think it would be much better that we should stay our hands, and allow such a matter to be the subject of further legislation after more mature consideration.

Senator Turley:

– We should not ; do anything that’ would cause litigation.

Senator Sir JOSIAH SYMON:

- Senator Turley will not expect from me an unqualified assent to that, but, speaking of it as a matter of prudence and not of principle, I am not sure that I disagree with the honorable senator. We should not do anything which would cause litigation, and I aim obliged to Senator Turley for mentioning that, because it leads me to say that we ought, in the first place, to be extremely careful that we do nothing which, on the face of it, looks like an interference with States rights, or with the power of a State to seek its own revenue by whatever method is lawfully open to it. And, in the second place, we ought to do nothing which might lead to that interesting phase of litigation, with which some other Bills on the paper are concerned, as to the relative powers of the States and the Commonwealth of taxation or non-taxation. I take the view at present that this Parliament cannot curtail the power of the States to impose stamp taxes ‘ on instruments which are either made in or payable out of a State, or which come within its jurisdiction. It seems to me that we could not by this Bill impose stamp taxes on those instruments. The power to impose stamp duties, of course, exists in the States. They have the power to collect revenue by means of stamps on whatever documents, with the exception of those affecting the Crown, they choose to make subject to stamp duty. It appears to me to be a strong thing for us to say that the State shall not impose stamp duty on particular documents within their cognizance. I cannot better illustrate this point than by referring to paragraph a of sub-clause 2 of clause 7, which says -

In the case of a bill of exchange, not being a cheque, the State in which the bill is drawn -

Then this is the whole point -

The mere fact that a customer signs a cheque upon which there are spaces before the amount in words and in figures is not sufficient evidence of such breach of duty towards his banker as will give rise to estoppel or to a claim for damages, if another person, subsequently to such signature, fraudulently inserts in such spaces other words and figures, so as to increase the amount, and the banker is thereby induced to pay away the larger amount.

The decision proceeded upon the question of fact that there was no evidence of negligence in that particular case. It was admitted that the law was, that if there had been evidence of negligence, the bank would have been excused. The Privy Council, in a very interesting judgment, reaffirmed what had been decided here, saying that there was no evidence of negligence on the part of the respondents proper to be left to the jury. All that had appeared was that there must have been sufficient space for the fraudulent operator to commit a forgery of the cheque in: respect of the amount, but what they said was, “ You must go a little further than that, otherwise you would have to measure what the space would have to be to constitute negligence. One man might be in the habit of leaving a little space before he wrote in the amount, and it would be monstrous to say that he was to be liable to a loss of that kind because somebody else fraudulently forged a larger amount.’’ Honorable senators will see how difficult and how wrong it would be to lay down any hard and fast rule in a case of that kind. Certainly, as the High Court said, the mere fact alone of a space being left ought not to throw upon the drawer of the cheque the obligation of indemnifying the bank against the consequences of somebody else’s fraud or forgery, in respect of which the bank is liable by the ordinary doctrine that if a man pays a forged instrument, whether as to amount or signature, he must bear the loss of it. The Minister, as a lawyer, will see at once that clause 81 does not alter the law in any way. It simply says -

Where-

a cheque, drawn on a banker by a customer, has been drawn by the customer with negligence, and

the negligence of the customer has afforded facility for the fraudulent alteration of the amount of the cheque -

But all that has to be found as a fact just as before -

the cheque has been fraudulently altered so as to increase its amount, and
the cheque as so altered has, in good faith and without negligence, been paid by the banker, the banker shall not be responsible or incur any liability by reason of having paid the cheque, but shall be entitled to charge the customer with the amount of the cheque as paid by him.

– If there is a doubt about what is proposed on constitutional grounds, we should, perhaps, hesitate to pass it, but it would certainly be a orovision greatly to the benefit of the general community. T cannot understand the States being so selfish as to endeavour to impose a tax on communication between State and State in reference to bills of exchange.

Senator Best:

– Our object is to facilitate trade and commerce.

Senator MACFARLANE:

– Undoubtedly. I do not think that Senator Symon was quite right in saying that the benefit of the clause would be derived bv the larger bankers, and the richer classes of the community. The advantage, for the most part, would be secured by the smaller customers of the banks. With reference to clause 81, which deals with the matter of negligence in paying cheques, I am of opinion that, if a customer of a bank is negligent, he ought to bear the responsibility of any loss that may occur; but at the same time we ought to be careful to see that, the banker is not excused for his negligence. If when a customer draws a cheque bankers do not take proper care to see that it is perfectly clear, the bank ought to be liable for its negligence. As a business man, I consider that the Bill will help the trading community to understand better the law regarding communications and transactions of a financial character between State and State, and therefore I shall support it.

Senator Lt.-Col. GOULD (New South Wales) [4.28]. - I should like to say a few words with reference to this Bill before the second reading is agreed to. It may be regarded by some honorable senators as rather unusual that the President should take part in a debate on the second reading of a Bill. But I hold the view that, as the various States are represented by the same number of senators, and as it is also provided by the Constitution that the President shall not have a casting vote, but only a deliberative vote, the object of the Constitution was not to prevent any State from having the full benefit of the services of its representatives in the Senate. Every senator coming from every State is constitutionally placed on an equality, so far as voting power is concerned. That being the case, it appears to me that where the President can, without raising any question of party feeling, take part in a debate on the second reading of a Bill, there ought to be no objection to his doing so. I certainly feel, however, with regard to any matter upon which there is likely to be a large amount of party feeling that it might be regarded as indecent for the senator occupying the position of President to take part in debate. I believe it to be the desire of the Senate that the President shall be a man capable and willing to discharge the duties of his office honestly and conscientiously, and without bias or favour. Holding that view, I should like to say with regard to this Bill that, in my opinion it is desirable that the law regarding these matters should, so far as it can be done, be codified. An Act dealing with bills of exchange or banking business is of great interest to the people of the community, and every citizen should have the opportunity of knowing, in as simple a form as possible, what the laws is, not only in his own State, but in the Commonwealth. One of the objects of Federation is to promote intercourse and trade between the States. We do not want to throw any difficulties or barriers in the way of intercourse and trade. Laws are not simplified for the lawyers, but for the people. It is, therefore, a very great advantage to the community to simplify the laws where it can be done. Where we find an excellent system of law such as exists in Great Britain with regard to bills of exchange and promissory notes, it will be of very great advantage to the Commonwealth to adopt, as far as possible, that system in its integrity. It helps the community generally to understand what the law on a subject really is. It assists materially in getting questions which are taken before the Courts determined according to principles which have been laid down by Judges in the old country, in which cases are constantly occurring. It has been pointed out by the Minister in charge of this Bill that with one or two exceptions it is really a reprint of the law as it stands in Great Britain, and as it has stood in most, if not in all, of the States in the Commonwealth. The honorable gentleman pointed out that there are a few changes and alterations, and in this connexion drew our attention to clause 7. So far as the object of this clause is concerned, it must commend itself to every one who desires to simplify trade and commerce between the various Dortions of the Commonwealth. It provides that there shall be only one duty stamp placed upon bills of exchange or cheques or promissory notes. But why it should provide that in the case of a cheque the stamp duty shall be payable to the State in which the cheque is payable, and that in the case of a bill of exchange the stamp duty shall be payable to the State in which the bill is drawn, I do not understand, nor do I know why a distinction of that character should be made. At the present time if a man draws a cheque on

bank in another State he need only put on the duty stamp of the State in which the money is payable in order to get his banker to honour it. But whilst I consider that it would be a very great convenience to the public to require the duty stamp of one State only on a bill of exchange or promissory note - and I do not care which State it is - I realize that there are considerable difficulties in attempting to pass legislation in the way in which it is proposed to pass clause 7 of this Bill. 1 perceive the advantage and the desirability of the provision, but the question is : Would it be legal? We know that the States are not inclined to accept the law as it is given by the Commonwealth, if they think that it infringes in the slightest degree on their rights or privileges. While I realize that we can legislate generally on bills of exchange and promissory notes, still when it comes to a question of dealing with the revenue of the States it appears to me that we are now asked to take a step which we shall not be able to justify and maintain if a case be taken to the High Court or to the Privy Council. Is it, therefore, wise to introduce legislation which, if passed, might involve persons in unnecessary litigation? Suppose that we did enact clause 7 of this Bill. A State might say, ‘ ‘ A bill of exchange must bear a duty stamp on it. ‘ ‘ Our law would say that stamp duty was not payable on that particular bill of exchange, and then would come a conflict between the State and the Commonwealth with regard to the validity of the provision. But the State might go still further, as has been done in some cases in New South Wales, and say, “ Unless a duty stamp is affixed to certain documents within a prescribed period, not only shall the person concerned be subject to a penalty., but the document shall be void.” We might get over that difficulty by enacting that the document shall not be void. If a case were to come before the High Court in its original jurisdiction, no doubt it would accept our law. But the probability is that the proceeding would be taken in a State Court, and it might say, “ As there is no duty stamp of this State on the bill of exchange, we shall not allow a judgment to be given in favour of the person who is suing for the amount.” The matter would probably go, on appeal, to the High Court or to the Privy Council. Then the ques ts arises whether the Parliament of the Commonwealth, by enacting a law of this kind, is not going beyond its legislative power under section 51 of the Constitution, and attempting to interfere with the taxation of the States. We know that in each State bills of exchange are subject to stamp duty for revenue purposes. Under our Constitution, there are only two cases in which we have an exclusive right to tax, and that is in the matters of Customs and Excise. Is it wise to pass a clause which might invite litigation? Let me assume for the sake of argument that the clause is absolutely good, and that the document, in order to be recovered upon, need not bear any duty stamp. The State may say, “ In every case where a bill of exchange is accepted, or is drawn, and does not bear a duty stamp, the acceptor or the drawer shall be liable to a penalty of or £50.” There again we find a difficulty in our way. My contention is that in the interests of the community at large, it is much wiser to avoid raising a question of very grave doubt in the minds of the people ; and one which might involve many persons in unnecessary litigation of an expensive and uncertain character. Unless our course is absolutely clear, we had better not attempt to take that line of action. The la-w to-day requires two duty stamps to be placed on a bill of exchange or promissory note if drawn in one State and payable in another. Let the law remain as it is, unless we can say that we are absolutely clear as to our right to make an alteration that would stand the test of an action in the Courts. I hope that the provision in clause 7 will not be adhered to. Clause 81 provides that, where the negligence of a customer in drawing a cheque on a bank has afforded facility for the fraudulent alteration of the amount, then the bank shall be protected. The clause has been inserted in the Bill in consequence of the decision in the case of Marshall v. The Colonial

Bank of Australasia Limited, and the Minister has mentioned that in Queensland and Tasmania provision has been made to protect a bank in a case where a cheque has been fraudulently altered through the negligence of its customer. It is well to ascertain the particulars of the case which has given rise to clause 81. We are familiar with the ordinary doctrine as to negligence, and that if there be negligence, that to a certain extent should protect the person who suffers in consequence of it; but, in the case of Marshall v. The Colonial Bank of Australasia Limited, the doctrine seems to have been so treated that it has become a very serious matter to the mercantile world. Upon referring to the Commonwealth Law Reports, it will be seen that in this case -

The plaintiffs, W. L. Marshall and H. J. Day, and one R. Myers, were the executors of Ann Myers, and, as such executors, kept a banking account with the Colonial Bank of Australasia Limited, at Melbourne. This account was, at all times, in credit. There was evidence that the bank was only to pay cheques signed by the three executors. It was the custom that Myers should fill up the cheques and forward them to the other executors for their signatures, after which they were returned to and signed by him and issued. Myers, on different occasions drew open cheques for £10, £2 6s. 4d.,£50, £10, and £10 respectively. He wrote the amounts in words and in figures, so as to leave considerable spaces before these amounts, and in writing the amounts he began each number with a capital letter. These cheques were forwarded to the other executors, who signed them as they were drawn, and returned them to Myers, who wrote in other words and figures so that the cheques appeared to be for the following amounts respectively, £110, £32 6s. 4d., £150, £110, and£110. Myers then cashed the cheques, receiving the larger amounts, and appropriated the moneys in excess of the smaller amounts to his own use.

The cheques were presented, and paid, and then the executors sued the bank for the money which they held was due to them -

The action was tried before Madden, C.J., and a jury of six. The following questions, amongst others, were put to. the jury, and they gave the answers set opposite to them respectively -

Were the cheques, or any of them, drawn by the plaintiffs negligently ? Answer - Yes.

If you answer No. 1 in the affirmative, then could the bank, by the exercise of ordinary care and caution, have avoided paying the cheques so altered ? Answer - No.

According to the jury, the cheques were altered in consequence of the negligence of the executors, and it was not possible for the bank to have protected itself, because the cheques did not show on their face that there had been the slightest tampering with them, and, moreover, the alterations had been made in consequence of the negligence of the executors in leaving cheques practically open, and sending them back to one of their number, and, of course, the cheques were paid without negligence by the bank.

Were the cheques altered and increased by Myers with the knowledge and authority of the plaintiffs? Answer - No.

Apparently, one executor kept the accounts, and, in drawing the cheques, took care to leave sufficient space to enable him to alter the amounts when they came back to him, and he so altered them after his coexecutors had signed with the smaller amount filled in. The executors signed the cheques and gave them to him, and thus placed him or any other person who might get possession of them in a position to make such alterations in the amounts as to defraud the banker, who was bound to pay the cheques when presented, to the tune of£400 or£500. The proposal submitted by the Minister is intended to rectify that anomaly. I do not propose to read the judgment in the case referred to, but to quote the short head-note to it. This is what the Court found -

As between banker and customer there is no absolute and unqualified duty on the part of a customer in drawing a cheque to take precautions against forgery.

That may be the existing law. I do not raise that question, but is there any man in the Commonwealth who would say that if two people enter into business relations, the one who is guilty of negligence should escape the consequences of his negligence, whilst the other, who is not so guilty, should suffer ? That is the effect of the law as it appears to me. In the case referred to the persons guilty of negligence did not suffer, whilst the man who, in consequence of their negligence paid money away, had to suffer the loss of that money.

Senator Best:

– The Privy Council upheld that decision.

Senator Lt Col GOULD:

.- I am aware of that. I am not raising the question of what the law is, but of whether it is wise that we should continue the law in that way, and whether it did not come as a great shock to the majority of people to find that the law is as it was laid down in that case. The High Court also found -

All contractual relations impose upon the parties a mutual obligation that neither shall do anything to hamper the other party in performing the contract or to delay him in performing it. The mere fact that a customer signs a cheque, upon which there are spaces before the amount in words and in figures, is not sufficient evidence of such breach of duty towards his banker as will give rise to estoppel or to a claim for damages, if another person, subsequently to such signature, fraudulently inserts in such spaces other words and figures, so as to increase the amount, and the banker is thereby induced to pay away the larger amount.

Some honorable senators may say that, looked at from the banker’s point of view, that is very unfair and unjust, but the banker must do the best he can to take care of himself. But I would point out that the customer of a bank is also liable to suffer. It is a great convenience to men who have the control of various sums of money passing through their hands to have some place of safe custody in which to deposit it, and from which it may be drawn upon as required. If the law is not made reasonable and fair as between the banker and his customer, the former may be compelled to take extreme measures to protect himself, and I ask whether it would be wise in the interests of the public that he should be driven to such a course of action. All that we have to do in a matter of this kind is tosay what is fair and reasonable. We do not desire to place any man in a false position. We know that if a banker chooses to pay on a cheque that is false he must put up with the loss, because it is a part of his duty to know his customer’s signature when it comes before him, and not to pay on a forgery. That is perfectly legitimate and right. But if a customer may, if he desires to rob a bank, be in a position to do so, simply by leaving a space before his figures on a cheque, so that the amount may be increased, he should be deemed guilty of negligence, and might fairly and justly be made to bear the brunt of any loss to the bank due to his negligence. Senator Symon, in dealing with this matter, said that it was a question of negligence, and he doubted whether the provision in this Bill would assist by providing a remedy. So far as I can see, the Bill goes far enough to assist in remedying the evil. I should not urge that the provision made should be such as would place the customer in the hands of the bank in any way whatever, but I do say that if a customer of a bank is so negligent and careless in drawing his cheques as to cause loss, it should fall upon his shoulders, and not upon those of a person who is innocent and who knows that, if he does not pay the customer’s cheque while there is money to his credit, he will very properly be mulct in damages for so injuring the credit of the customer. I think that it is reasonable for the Senate to pass such a provision as has been indicated by the Minister. At the same time I point out my objection to clause 7. I should like to say that, in putting these views before honorable senators from this place on the second read ing of the Bill, I simply exercise what I regard as the trust imposed upon me by my constituents in sending me to the Senate. 1 think it would be lamentable if, in the Senate, where the States have equality of representation, the mere fact that a senator was raised to the most honorable position in which the members of the Senate can place him should’ prevent him from rendering to his constituents the service they expect from him.

Question resolved in the affirmative.

Bill read a second time.

In Committee -

Clauses 1 and 2 agreed to.

Clauses 3 and 4 postponed.

Clauses 5 and 6 agreed to.

Clause 7 -

The State Acts set out in the First Schedule shall, to the extent specified in that schedule, cease to apply to bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act.
Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act shall not be subject to stamp duty under the laws of any State other than -
1. in the case of a bill of exchange (not being a cheque) - the State in which the bill is drawn ;
2. in the case of a cheque - the State in which the cheque is payable;
3. in the case of a promissory note - the State in which the note is made.

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

– I am very much indebted to honorable senators who addressed themselves to the second reading of the Bill, and who have given such attention to this clause to which I directed their notice. It is quite possible that it might be argued that, providing as we do that bills of exchange, cheques, and promissory notes shall not be subject to stamp duty under the laws of a State, the form we have adopted to give effect to the principle is inconsistent with our position in relation to the States. I think, however, that we can bring about the same object without giving occasion for any such criticism. We propose to take away from the States the power to make invalid by their legislation!, instruments the validity of which we say should be determined by Commonwealth legislation. We have full power under section 51 of the Constitution to legislate with regard to bills of exchange and promissory notes. We can, therefore, lav down what are the essentials for a valid bill of exchange, and it will not be denied that if we choose we can say that no stamp shall be necessary. If we can say that, we can say that only one stamp shall be necessary. When we say, as we do in this clause, that bills of exchange shall not be subject to the stamp duty of a State, it may be, as some honorable senators have pointed out, that we are expressly stating that we are going t’o interfere with the States powers of taxation. I have drafted an amendment to take the place of the first portion of sub-clause 2, which I will submit for the consideration of the Committee. Honorable senators will agree that it is desirable that there should be no conflict of authority between the States and the Commonwealth as to the validity of an instrument of this kind. It would be idle and futile for us to set out the requisites and essentials for a negotiable instrument of service throughout the Commonwealth if a State might step in and say, “We shall tax bills of exchange drawn in this State, or made payable elsewhere, and if any such instruments are not stamped they shall be void and of no account, or shall not be recognised in our Courts. ‘ ‘ I think we are all agreed as to the principle, and honorable senators will find nothing in the amendment I submit which can properly be met with the criticism already addressed to the clause as it stands. I propose to strike out the first portion of sub-clause 2 down to the word “than” in line 9, with a view to making the sub-clause read as follows : -

No bill of exchange, cheque, or promissory note drawn or made after the commencement cf this Act shall be invalid or inadmissible in evidence in any Court by reason only that it bears no stamp under the laws of any State, other than -

The remainder of the clause would read as it stands, and we should simply provide that these instruments shall not be invalid or inadmissible as evidence by reason of the fact that they do not bear the duty stamp of a State. I find that in Chalmers’ Treatise on Bills of Exchange, at page 362 of the 6th edition, it is stated -

The holder of a bill or note which is void for want of a stamp may, nevertheless, bring an action on the consideration against the party to whom he gave the consideration, though he cannot use the instrument as evidence. As the bill is void, the omission to present or give notice of dishonour is immaterial.

The absence of a stamp in that case made the bill void, and also made it inadmissible as evidence. All that we propose to provide by the amendment I submit is that no bill made, drawn, or accepted under our legislation shall be invalid or inadmissible in evidence by reason only that it bears no stamp under the laws of any State other than as provided in1 paragraphs a, b, and c. If the amendment I propose is agreed to, while the instrument would be protected and be admissible in evidence, the Stamp Act of a State might still subject some individual negotiating it to a penalty, and so I propose to provide further that - -

No person shall be liable to any penally under the laws of any State by reason only that he is the drawer, acceptor, indorser, bearer, or holder of any bill of exchange, cheque, or promissory note drawn or accepted within the Commonwealth that bears no stamp under the laws of any State other than as set forth in the preceding paragraph.

In those circumstances we do not say to the States, “ We are going to cut down your powers of taxation.”

Senator Lt Col Gould:

– The Government take power to do it all the same.

Senator KEATING:

– We simply say, “ These bills are not to be invalidated only by reason of the fact that they do not bear a second stamp.” I do not think the States themselves will cavil at all at our giving effect to the principle, and I think we are doing it in a manner which cannot reasonably evoke any hostile criticism from any one. In these circumstances, I do not think the High Court, if the question came before them, would hesitate to hold that a bill was not invalid if the Federal Parliament had legislated to the effect that it was not to be invalid only by reason that it. did not bear a second stamp, although the High Court might say we had adopted rather a wrong attitude in enacting that bills of exchange were not to be subject to stamp duties under the laws of any State. I move -

That the words “ Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Act shall not be subject to stamp duty under the laws of any State, other than,” lines 6 to 9, be left out.

Senator BEST:

– When Senator Stewart’s amendment is before the Committee it will be in order for us to tell him what we think of it. Senator Dobson is too previous. What we desire now is to carry out the objects of the Bill without interfering with the taxation rights of the States. But we have no intention of assisting in carrying any such proposal as Senator Stewart has outlined. Therefore, the unjust criticisms that Senator Dobson saw fit to launch against the Government were unjustified.

Senator Lt Col NEILD:
NEW SOUTH WALES · FT

-Col. GOULD (New South Wales) [5.21]. - I should like to say, as I raised a question about the wisdom of clause 7, that the suggestion made by the Minister in charge of the Bill commends itself to me, and that I shall support it. I thoroughly believe in the principle of having only one stamp duty upon the various documents with which this measure deals. As to the State that should derive revenue from that duty I offer no opinion just now. We can perhaps leave the clause as it stands in that respect. But the method proposed by the Government gets over the difficulty that I pointed out, and I heartily commend it to the acceptance of the Committee.

Senator DOBSON:
Tasmania

.- I am sorry that Senator Best thinks that I have been guilty of unjust criticism. The clause with which we are dealing has evidently been framed with great care and thought, and it was carefully explained by the Minister. What I criticised was the action of the representatives of the

Government in paving the way for an amendment which would practically sweep away the whole clause, and deprive every, State of revenue which it is entitled to collect.

Senator Keating:

– That is an utterly unfounded and unfair statement.

Senator DOBSON:

– I do not think that it is.

Senator Keating:

– If an honorable senator wishes to submit an amendment on a Bill, I think that it is the duty of the Government to assist him to have it discussed.

Senator DOBSON:

– I beg to differ, and because I differ from the Minister, it is not fair for him to say that I am unjust. Scores of amendments might be suggested which it is not the duty of Minsters to pave the way for, but to oppose. It is, in my opinion, their duty to oppose Senator Stewart’s amen diment.

Senator Best:

– So it will be opposed.

Senator STEWART:
Queensland

– We have had a remarkable exhibition from Senator Dobson He appears to think that no one in the chamber has any rights except himself. I am thankful that he does not occupy a position as Minister. If he did, I am afraid that senators holding such opinions as mine would not receive much courtesy at his hands. In my view, any senator who wishes to propose an amendment should receive assistance from the Government whether they are opposed to it or not.

Senator Best:

– That is one of the cour*tesies of the Senate.

Senator STEWART:

– I am much astonished at the way in which Senator Dobson has acted. I think that- the sub-clause before the Committee ought to be negatived. I know perfectly well that the States receive large amounts of revenue from the taxation of bills of exchange, but it is a most unfair and illegitimate system of taxation. It taxes trade, commerce, and industry. Every time a man draws a cheque he is taxed to the amount of one penny. Every time he signs a promissorynote he is taxed. Why should that be? The principle that ought to govern taxation is that a man should pay according to his means, not according to the number of cheques he draws, or the number of promissory notes he signs, or the number of bills of exchange that he grants. That is a stupid basis for taxation. The object is, of course, to throw the weight of taxation off the shoulders of people who ought to bear it. But I intend to attack this system of taxation every time I get an opportunity. It is a bad system, and is financially unsound. On that account, it is time that the Senate should exercise its wisdom and its patriotism by absolutely prohibiting the States, as apparently it has the power to do, from imposing taxes upon the people in this manner.

Senator TRENWITH:
Victoria

– - The Bill which we are considering does not initiate any new law. It does not annul any law. The intention is by a Federal Act to codify the laws of the States. The point urged by Senator Stewart against the clause under consideration is that we ought to nullify the deliberate legislative intentions of the States in regard to the taxation of bills of exchange. Now, to do so, would, in my opinion, be extremely unwise. It would be distinctly un-Federal, and would give rise in each State to such a feeling of discontent as would perhaps be disastrous. The question itself is highly debatable. It is quite possible to argue in quite the opposite direction from that taken by Senator Stewart. A stamp duty, if in other respects it is equitable, is probably the most effective form of taxation, because it constitutes every citizen a member of a vigilance committee to see that it is paid. It is, therefore, practically impossible to evade payment.

Senator Walker:

– It is a form of direct taxation.

Senator TRENWITH:

– Yes ; but « it has- this great advantage, that in every transaction there is one party whose business it is to see that the duty is not evaded. That is an extremely desirable principle. Our greatest difficulty is to devise forms of taxation which will not be evaded, and the ingenuity of wrong-doers is continually being exercised in order to frustrate the intention of the Legislature. From that point of view a stamp tax is perhaps the most desirable tax which it is possible to conceive. The question of whether it is good or bad hardly comes under our consideration, when we view the unwarrantable interference it would be with the independent action of the States. The Federal compact was rendered necessary by the fact that certain of our conditions of life made it impossible to control them all in the common interest, because they extended beyond the boundaries of a State. This is a proposal to limit, to hamper, to destroy, the internal sovereignty of the States.

Senator Givens:

– No.

Senator TRENWITH:

– Most assuredly it is a proposal to take away from the States the power to adopt within their own areas whatever form of taxation they may think best. I ask honorable senators to remember that this is a Federation based on the principle of two sovereignties - a sovereign Federation within the area prescribed in the thirty-nine articles of the Constitution, and sovereign States in all other directions. As a most ardent Federalist, I believe that every possible consideration should be given to the sovereignty of the States where it is not necessary to interfere with them in order to render our intercommunication more convenient. There was no need for the Federation, except to deal with matters which extended beyond the power of a State, and the only reason for dealing with the question of bills of exchange is in order that all the citizens of the Commonwealth may know the whole law of bills of exchange by reference to one Act of Parliament. But this Parliament should not interfere with the incidence of taxation within the respective States.

Senator Stewart:

– It proposes to interfere.

Senator TRENWITH:

– No ; it only proposes to make clear, and to render (possible procedure within the desire of the respective States, under a single Act of Parliament. There is no need for us to legislate on this question in a prohibitive direction, preventing the States from doing what seems to them desirable, because the incidence of this Bill does not necessarilv extend over the border of a State, and therefore does not call for Federal interference. I would strongly urge Senator Stewart to consider the equity involved in the principle of leaving to each State what the Federal compact declared with reference to its internal affairs - absolute sovereignty.

Senator BEST:
Vice-President of the Executive Council · Victoria · Protectionist

– I rise to make a suggestion in order to get a direct vote on the all-important question which’ Senator Stewart desires to submit. I would suggest to my honorable colleague that he should withdraw his amendment, and move merely to strike out all the words down to the word “State.” If these words are deleted as we desire, then the amendment of Senator Stewart will be defeated. If on the other hand the words are retained, then the honorable senator will have carried the object which he has in view, and by a subsequent amendment he can move to strike out the words “ other than.”

Amendment, by leave, withdrawn. Senator, KEATING (Tasmania- Minister of Home Affairs) [5.42]. - I move -

That the following words be left out, “ Bills of exchange, cheques, and promissory notes drawn or made after the commencement of this Art shall not be subject to stamp duty under the laws of any State,” lines 6 to 9/

I shall afterwards move to substitute the following words : -

No bill of exchange, cheque, or promissory note drawn or made within the Commonwealth after the commencement of this Act shall be invalid or inadmissible in evidence by any Court by reason only that it bears no stamp under the laws of any State other than.

Senator GIVENS:
Queensland

– I have no objection to the Minister accomplishing his object in that way if the proposal of Senator Stewart be defeated. If Senator Stewart’ presses his amendment to a division I shall certainly vote for it. Senator Trenwith formulated the most extraordinary and fallacious line of argument I have ever heard here. He said that this is merely a codification of the laws of the States, so as to bring them all into line, but I submit that it is very much more than that. It is an assumption by the Federation of the responsibility for all legislation concerning promissory notes, bills of exchange, and cheques. It is really a federalization of the law on these subjects, and it is for us, not for any State, to say what the conditions of the law shall be. Senator Trenwith went on to emphasize the alleged fact that by prohibiting the States from taxing these documents, we were interfering with their sovereign, rights to impose any sort of taxation they chose within their territories. I submit that the States have no such sovereign rights within the Federal sphere. Directly we federalize the legislation concerning bills of exchange, promissory notes, and cheques, we shall immediately bring them within the Federal sphere, and the States will have no right to tax any instrumentalities of the Commonwealth. There is shortly to be introduced a proposal for the Commonwealth to take over the control of lighthouses and beacons. Suppose that after the transfer was made the States should say “ Those buildings were our property once. They now belong to the Commonwealth, and ‘we shall put on them a heavy tax.” The States would be able to defeat almost any object which the Commonwealth in its wisdom might think proper to seek to attain. We should have one State imposing one sort of tax, another State imposing a tax of different degree, and we should have no real federalization in the matter. The Commonwealth is given power by the Constitution to deal exclusively with bills of exchange, promissory notes, and cheques. 1o presume an extreme case, it might be held in a particular State that postal notes were undesirable things ; that, instead of being an aid to commerce, trade, and enterprise, they were a hindrance, and the State Parliament might proceed to impose a prohibitive tax upon them. Where would the Federation come in then? In such a case our Federal legislation in this respect would become a dead letter. Is that the system of Federation which was contemplated by the Convention or by the Constitution as we have it? Senator Trenwith’s argument must, I submit, be considered utterly fallacious. I should like to urge a few reasons why I think Senator Stewart’s amendment should commend itself to the good sense of the Committee. That honoI able . senator very properly pointed out that the true principle of taxation should be a man’s capacity to contribute towards the revenue of the country’. I would supplement that by saying that he should also bp asked to pay in proportion to the benefit he receives. These two principles should be the foundation of any system of taxation imposed in either the Commonwealth or the States. Suppose, for instance, a man owes £1 : He is unable to pay it at the m(,ment, but thinks he will be able to pay it next week, and he signs a promissory note for £1 - and it should not be forgotten that, after all, a cheque is only a promissory note, payable on demand - is he to be taxed to the extent of one penny because of his poverty, and his inability to pay at the moment? That is what such taxation means. The ‘mam is not taxed because of his ability to contribute to the revenue or in proportion to the benefit he receives, but because of his inability to pay a certain amount at the moment. That is a totally wrong principle of taxation, and we, as representatives of the people, should rectify it. We do not propose to enter the sphere of the States at all. Within their sphere they should have the right to impose as much stamp taxation as they think fit. Under existing circumstances, the States are not content with taxing a man because of his poverty, and compelling him to put a stamp on an I.O.U. for £1, but when he l:as paid the £1, the other fellow is taxed id. for the receipt. If that system of taxation commends itself to the wisdom of this Parliament, I may be excused for saying that I have no very high opinion of such wisdom. Senator Trenwith further pointed out that, in his opinion, a stamp tax is desirable, because there are always two parties to the transaction, and that is a safeguard to prevent the evasion of the tax. In my opinion the great evil of existing systems of taxation is not that some people evade a particular tax, but that a large number of people, and especially the wealthy persons in the community, evade taxation altogether, by keeping taxation that would affect them off the statute-book. I am the more pleased to support Senator Stewart in his amendment, because I believe that, by preventing the imposition of taxation which, in my opinon, should not be imposed, and depriving States Treasurers of revenue improperly collected, it will have the. effect of compelling them to turn their attention to the arch-evaders of taxation in the past to secure revenue from them.

Senator St Ledger:

– Who are the arch evaders of taxation?

Senator GIVENS:

– The big land monopolists, and there are several others, also. For the benefit of the legal light on the other side, let me point out that it must be patent to any one who has given any study to the law, that nine-tenths of the time of our expensive Courts is taken up in administering the. laws relating to property. The general taxpayer, who has no property to go to law about, is being compelled to pay for the administration of property laws for the benefit of those who own property, and should be compelled to meet this expenditure. I might elaborate that argument until I wearied the Committee. It is not a part of our duty to find ways and means for raising revenue for the States.

Senator St Ledger:

– Surely we are not going to prevent the States from raising revenue ?

Senator GIVENS:

– Within their sphere they should be allowed to raise any revenue they please. For that the people of each State will be responsible. But I say that if we permit them to tax our instrumentalities we shall be paving the way to. future action on their part, which might have the effect of rendering our legislation null and void. I quoted as an extreme case the imposition of prohibitive taxation by a State on promissory notes, on the score that they really are a brake upon commerce, and should be abolished. Such action within their own sphere by the States would render our legislation in this connexion null and void. I have not heard Senator Stewart, or any one else, propose that the States should be prevented from imposing any local stamp taxation they please. Provided they do not go out of their own sphere they mav impose as much taxation as they please in the way of probate dutv, stamps on receipts, or a stamp duty on returned empties if they please. But in our sphere we must be supreme, and it must be for us to say what should, or should not, be done in connexion with matters which are placed under our control by the Constitution, which has been ratified by the people of Australia.

Senator ST LEDGER:
Queensland

– I am in the very happy position of being able to congratulate the Minister upon a proposal on right lines to get out of a very awkward position indeed. I am delighted to have heard the two speeches which have been made by representatives of my own State, Senators Stewart and Givens, as it seems to me that they are urging the Committee to take action which, if their view is adopted, would have the effect of reducing the revenue of the State which they represent. I shall also be delighted if, on a future occasion, they will repeat those speeches in the State of Queensland, whose revenues would be bound to be affected by the legislation they propose.

Senator Stewart:

– We have proposed the same thing before on dozens of occasions.

Senator ST LEDGER:

– I may say that I was delighted to hear those two speeches.

Senator Stewart:

– The honorable senator will hear the same ‘thing again.

Senator Givens:

– The honorable senator is at liberty, if he pleases, to distribute my speech throughout Queensland.

Senator ST LEDGER:

– There can be no doubt that, as Senator Trenwith ably pointed out, the imposition of a stamp duty upon documents by a State is one of the most just methods of raising revenue, and there is no reason why a State should not tax its citizens in such a way.

Senator Gray:

– Why ?

Senator ST LEDGER:

Senator McGREGOR:
South’ Australia

– The question before us is one which deserves very serious consideration. I wish to see the Constitution (protected, and intend to become a defender of it on this occasion. I have listened carefully to the arguments of the learned and the unlearned members of the Senate, and am going to take the side of the unlearned. If section 51 gives this Parliament the same power to deal with promissory notes, cheques, and bills of exchange, as it does with respect to patents, quarantine, trade marks, and Customs and Excise, undoubtedly we have the power to do what Senator Stewart proposes. Would it not be a ridiculous position in connexion with our patent laws if the Government proposed to permit the States to collect fees in connexion with patents, or to put a stamp tax on them? Would it not be ridiculous for the Federal Government” to propose to allow the States to legislate as to the manner in which trade marks should be applied? If that be admitted, it must also be acknowledged that in bringing down a Bill of this description affecting bills of exchange, promissory notes, and cheques, the Government are only giving partial effect to the Constitution. Either they should give full effect to our power or leave it alone. I quite agree with Senator Givens and Senator Stewart that stamp duties such as those with which we are dealing are absurd, inasmuch as they compel the poor man with a cheque for10s. to pay the same duty as is paid by a rich man with a cheque for £500 or £5,000. If that be inequitable, as it evidently is, the sooner we create a condition of uniformity and equity the better. ‘ There might, for instance, be no tax on promissory notes, cheques, and bills of exchange in Western Australia, and there might be a very heavy tax in Queensland. If the Federal Parliament finds such a condition existing, or even if it recognises the possibility of its existing, it should interfere so as to give every person carrying on business in this country the same chance, whether he be a merchant, a working man, or a shopkeeper. I would rather see the Bill dropped altogether than have it passed in a form in which it might create friction between the States, and inequality between citizens in various parts of the Commonwealth. We should deal with documents of this description exactly as we have dealt with Customs and Excise, trade marks, and patents. I shall support any amendment that will make the Bill as effective as the Constitution will permit it to be made.

Progress reported.

Sitting suspended from 6.30 to 7.45 p.m.

page 680

PAPERS

Senator KEATING laid upon the table the following paper : -

Notification of the acquisition of land at Young, New South Wales, for postal purposes.

The Acting Clerk laid upon the table the following paper : -

Return to an order of the Senate, dated 10th July, showing the persons in the clerical and professional divisions of the Public Service exempted from the provisions of the Public Service Act.

page 680

QUESTION

PRINTING COMMITTEE

Senator HENDERSON (Western Aus port from the Printing Committee ; and in order that honorable senators may thoroughly understand the purport of a recommendation which it makes, I may mention that the Printing Committee of the two Houses have hejd a joint meeting, at which they decided to meet on the Thursday of each week.

Report read by the Acting Clerk as follows : -

The Printing Committee have the honour to report that they have met in conference with the Printing Committee of the House of Representatives.

The following resolution was carried : - “ That it be a recommendation from the Joint Printing Committee to the Senate and the House of Representatives that, except in cases of extreme importance and urgency, no order be made for the printing of a document presented until the same has been referred to the Committee for consideration and report.”

The Joint Committee recommends that, in addition to the papers already in print, the following papers be printed : -

Return of persons employed in cigar, tobacco, and cigarette manufactories of the Commonwealth.

Report of the Conference on Wireless Telegraphy, with Appendices. Dated Melbourne, 13th June, 1907.

Geo. Henderson,

Chairman Printing Committee of the Senate. Committee-room, 18th July, 1907.

Motion (by Senator Henderson) proposed -

That the report be adopted.

Senator STEWART:
Queensland

– I do not wish to raise any factious opposition to the motion ; but I think that the Senate might consider whether it is wise to leave the whole matter of printing public documents to the Printing Committee. It has always appeared to me that any paper which is of sufficient importance to be tabled ought to be printed. What is the purpose of laying a paper on the table ? It is so that it may be seen by honorable senators. If it is not printed, then each honorable senator must go to the table to ascertain its contents. But if it is printed, it is circulated, and each honorable senator may read it in print and not in manuscript or typewriting. I still hold that every document that is tabled ought to be printed without an order or without a reference to the Printing Committee. So far as the report advises that no paper be printed until it has been recommended by the joint Committee, I am opposed to it, because I do not think that that is in the best interests of the members of the Senate.

Senator Turley:

– This is only a recommendation. Quite independently of that the Senate can order a paper to be printed.

Senator Guthrie:

– Only an urgent paper.

Senator Henderson:

– An urgent or any other paper.

Senator STEWART:

– If that 5fe the meaning of the recommendation it has no value. I desire to refer to an inconvenience which has been caused to myself on many occasions, and which has probably been felt by others, and that is, that sometimes when Ministers are presenting papers they read the titles so indistinctly that honorable senators sitting at the end of the Chamber do not know what subjects the papers deal with. When Ministers are performing that duty they ought to speak in such a tone of voice that every honorable senator, even if he is deaf, will know what paper is being presented. Otherwise a very important paper may be laid on the table without an honorable senator, who is interested in its contents, being aware of the fact.

Senator FINDLEY:
Victoria

.- Evidently Senator Stewart did not pay close attention to the recommendation of the Printing Committee, otherwise he would not have been so critical in his objection. The Printing Committees are composed of men who are as anxious to facilitate business as ‘are those who, like the honorable senator, take exception to this report. There is no desire to curtail any privileges or any necessary expenditure in connexion with documents which will be of service or use to honorable senators. Last year the Printing Committee of another place found fault with the Printing Committee of the Senate because there had not been a joint sitting. No fault could be attached to our Printing Committee, because it had not been notified by the other Printing Committee of their desire to have a joint sitting. However, we did meet to-day, and during a short discussion it was pointed out that on innumerable occasions printing had been ordered by the other House, and that similar printing had been ordered by the Senate, so that there was unnecessary expenditure. With a view to preventing unnecessary printing, it is the intention of the two Committees to meet each Thursday. When a paper of importance is tabled the recommendation, if it is adopted, will enable an honorable senator to rise and move that the document be printed.

Senator Pearce:

– That right is granted in a standing order.

Senator FINDLEY:

– We have no desire to interfere with any standing order, or to curtail the privileges of any honorable senator. Surely Senator Stewart has sufficient confidence in the Printing Committee, composed as it is of a number of men who have had practical experience of printing, to know that they will not do anything to inconvenience members of Parliament, particularly in connexion with documents.

Question resolved in the affirmative.

page 681

QUESTION

COMMONWEALTH MAIL STEAMERS

Senator HENDERSON:
Western Australia

– I move -

That this Senate is of the opinion that, in the best interests of the Commonwealth, the Government should purchase and control a fleet of mail steamers capable of maintaining a fortnightly mail service between Australia and Great Britain.

Information received from Mr. T. A. Coghlan, Agent-General of New South Wales, shows that a boat of 12,000 tons register, with a speed of 16 knots per hour, could be obtained for £355,000, not including the cost of pantry fittings, cutlery, &c. This estimate is for a steamer with reciprocating engines, but we strongly recommend that turbine engines, the type of which appears to be the latest and most efficient, should be adopted. The total cost of each mail steamer, inclusive of turbine engines and fittings as mentioned above, would be £375,000, and a fleet of eight such boats .would be sufficient to give a fortnightly service between Brisbane and London. The type of steamer specified would be 2,000 tons larger than the Mongolia and Marmora, the largest vessels of the P. and O. “Company engaged in the Australian trade. The total cost of the eight steamers would be £3,000,000.

Senator Walker:

– Where is the money to come from ?

Senator HENDERSON:

– I will try to show the honorable senator in a few minutes -

This estimate is well within the mark, judging by the evidence of Mr. Kenneth Anderson, Chairman of the Orient Steam Navigation Company, who says that the cost of eight new steamers for an accelerated service of 662 hours, the same as the P. and O. Company now gives, would be not less than £2,800,000.

– The hororable senator must bear in mind that there would be a large amount of covering charges.

Senator HENDERSON:

– Let me include the covering charges, and see what it means. In paragraph 4 the Commission show an intense desire to get honestly at the best facts to guide them to the most correct solution of a difficult problem. They deal very lucidly with the expenditure involved in such an undertaking, and wind up with this statement -

Our estimate of the annual cost of. this enterprise is£1, 207,000.

Senator DE LARGIE:
WESTERN AUSTRALIA · ALP; NAT from 1917

– And they also pay a much better wage.

Senator HENDERSON:

Would not affect them. They do not affect the boats engaged in carrying out the exist- ing mail contract.

Senator Givens:

– If private companies reduced their passenger fares inordinately to increase the opposition to the Government boats the producers of Australia would be the people who would benefit by the reduction.

Senator HENDERSON:

– Undoubtedly they would.

Debate (on motion by Senator de Largie) adjourned.

page 688

PUBLIC SERVICE REGULATIONS

Senator FINDLEY:
Victoria

.- I move -

Thatthis Senate, pursuant to section 10 of the Acts Interpretation Act 1904, disallows Regula tion 66 of the Commonwealth Public Service Act 1902 as amended by Statutory Rule No. 70, 1907, and affirms that such Regulation should be amended by -

Striking out in paragraph 2,. line 1, all words after the Word “ is “ down to and including the word “days” in line 2, and inserting in lieu thereof the words “on duty on seven or more consecutive days “; and by striking out, in line 3, the word “may” and substituting the word “ shall.”

In paragraph 3, line 1 - By striking out all words after the word “ is “ down to and including the word “days” in line 2, and inserting in lieu thereof the words “ on duty on not more than six consecutive days “ ; and by striking out all words, paragraph 3, lines 5, 6, . 7, and 8.

When the Appropriation Bill was being discussed last session, I brought under the notice of the Minister representingthe Postmaster-General the fact that there were numbers of telegraphists in various States, particularly Victoria, who were working many consecutive days, including Sunday, without a day off, and that, although the Department charged double fees for telegrams sent on Sunday, the officers received no additional remuneration for their work on that day. The Minister representing the Postmaster-General promised to have inquiries made. I subsequently had personal interviews with the PostmasterGeneral, and shortly afterwards received from the Public Service Commissioner a communication to the following effect -

After full consideration of the whole circumstances in connexion with Sunday work, the Public Service Commissioner has decided that, on and from the 1st of March, when an officer works six days per week, one of which is a Sunday, he should be granted extra payment at trie rate of half a day’s pay if full time be worked, or, if employed for less than a full day, a sum proportionate to the time so employed. The. provisions of regulation 66 are still to apply as regards payment to all officers who are required to work seven days per week, but it is the desire of the Commissioner that the number of these officers should be reduced to the utmost possible extent compatible with the public interest, and wherever, without undue disadvantage by rearrangement of staff or otherwise, arrangements can be made by which every officer will be freed from duty for one day in seven, it is desirable that such should be done.

Since then regulations have been framed by the Governor-General in Council, and have appeared in the Gazette, making certain alterations in the direction desired bv those who are called upon to work for these long periods. Whilst the new regulations do, in a measure, minimize the difficulties under which telegraphists were working, they are still, to my mind, and in the opinion of those mostly concerned: too elastic, because, if they are permitted to go in their present form without any protest, it will be possible, under the second paragraph of regulation No. 66, for telegraphists to work seventeen consecutive days, including two Sundays, without having a day off. It will be possible, also, under paragraph 3 of regulation 66, for men to work thirteen consecutive days without having a day off. Whilst a number of telegraphists object, on conscientious grounds, to working on Sundays, and get their Sundays o’ff in consequence, there are others who, although they, perhaps, have not such strong Sabbatarian principles, have a decided objection to work more than six consecutive days without having a day off. It may be urged that the rush . of business necessitates the employment of men for these long continuous periods. If there is an insufficiency of operators, I understand there are a number qualified to fill vacancies in the Department, and only too anxious to be called upon by the Public Service Commissioner to do so. In order to give effect to the wishes of the Public Service Commissioner, as mentioned by him in his communication to me, I desire that Sunday work shall be paid for at time and a half, and also that telegraph operators shall have a day’s rest after performing six consecutive days’ work. It is true that they get time and a half now, but it is also true that they are called upon to perform additional work because they get that time and a half. Typical cases have been brought under my notice, showing that on 1st July last there were three telegraph operators off and two performing overtime work; on 2nd July there were two officers off and three performing overtime work ; on 4th July there were four officers off and fifteen performing overtime work; and on 5th July there were two officers off and nineteen performing overtime work.

Senator Keating:

– Where was this?

Senator FINDLEY:

– At the Central Telegraph Office, Melbourne, so that, although these men had time off because they had worked on a Sunday, their brother officers were called upon to work overtime - and received no remuneration for it - in a measure, in order to make up their time off. So, in their turn, these men will have to do overtime work to make up for other men having time off on other occasions. I do not think it is the desire of the Department to take any undue advantage of regulations. But it is with the object of preventing any possibility of ‘ a regulation being ambiguous that I desire the amendments I suggest. I hope that ‘ in addition to Sunday work being recognised by additional payment, the natural desire of these officers for a day’s rest after six consecutive days’ work, will be acceded to. I may say incidentally on behalf of the telegraphists that they do not desire Sunday work if it can be avoided. They are not anxious for it because it carries with it additional remuneration. The feeling of most telegraphists throughout Australia is that they would like to have Sunday off if it is possible, as well as most folk in other walks of life. Typical cases showing long consecutive periods of duty in the month of June last have been brought under my notice. They include six cases of men who worked ten, eleven, twelve and thirteen consecutive days without a day off. This applies not only to Victoria, but to’ the whole Commonwealth.

Senator Needham:

– To every State.

Senator FINDLEY:

– The new regulations as drawn up by the Public Service Commissioner also provide that -

In all cases where an officer resides on the premises where his duties are performed, and his attendances for work on Sundays are intermittent and for brief periods, he shall not be entitled to claim any additional pay for those attendances.

If that regulation is allowed to become operative, it will do an injustice to a number of men who are residing on the premises at telegraphic offices in different parts of the Commonwealth. In several places in South Australia, and one or two in Victoria, and I understand in some of the other States as well, officers are called upon to perform’ duties on Sundays at 9 o’clock in the morning, 5 o’clock in the afternoon, and 9.30 at night. Although, perhaps, the time that they put in at the work they are called upon to perform on Sunday may not amount in the aggregate to more than one or two hours, still they have to be at their offices at the hours mentioned, and that means that they have to give up the whole of their Sunday.

Senator Needham:

– That system obtains at Port Darwin.

Senator FINDLEY:

– As those officers have to give up at any rate nearly the whole of Sunday, the Department should treat them justly. They are not asking for anything unfair, but if those who perform continuous work on Sunday are to receive additional remuneration, those who do intermittent work should also be treated in the same way, and the time they put in should be aggregated, and paid for accordingly. I feel this matter only needs to be brought under the notice of the Government for them to see that, under the regulations as drafted, injustice might be done to those doing this work. If the regulations are amended in the way I desire, friction will be avoided, and satisfaction given to those most seriously concerned.

Senator KEATING:
Minister -of Home Affairs · Tasmania · Protectionist

– The honorable senator in moving this motion correctly expressed the situation when he said he believed it was not the desire of the Department to take advantage of any regulations to the prejudice of the officers employed in it. The circumstances .to which the honorable senator has referred have received the attention and consideration of the Postmaster-General, and also> of the Public Service Commissioner. The Government desire to bring about the same result as the honorable senator seeks to achieve. So far as that portion of his motion is concerned, which relates to the alteration of paragraphs 2 and 3 of new regulation 66, there is no objection to it on the part of the Government. It may remove a certain amount of ambiguity that at present exists, and bring about with more certainty the result which the honorable senator, in common with members of the Government, desires to attain. But I cannot say that with regard to the other provision contained in his motion; namely, that which proposes to eliminate the following paragraph -

Provided that in all cases where an officer resides on the premises where his duties are performed, and his attendances for work on Sundays are intermittent and for brief periods, he shall not be entitled to claim any additional pay for those attendances.

There is no desire on the part of the Government to obtain from its officers services for which it does not pay. The honorable senator fairly put it that many of the officers who are employed on Sundays are employed intermittently, and for brief periods. We recognise that, though the actual time of occupation on a particular Sunday may be very little, yet the hours during which the officer is called upon to discharge his duties may be such that his Sundays are, so to speak, spoiled for him. As the matter stands at present, the Public Service Commissioner can, and does, consider every individual case upon its merits. It will be recognised that it is impossible to make a hard-and-fast rule. In justice to the Department, and to the officers themselves, we cannot have a rule applying with equal force to every individual officer as to the amount of remuneration that he shall receive for what may be called casual or intermittent service on Sundays. It may be that one man has to do a little work that occupies him ten minutes or a quarter of an hour, and that then he is done. Another man may be occupied for even less than a quarter of an hour. In every case, I am assured, the Public Service Commissioner gives special consideration to the circumstances. We want to avoid providing by a hard-and-fast rule that in every instance where an officer in residence is called upon to perform some little service on. Sunday he > shall be entitled to. claim Sunday or overtime pay. One of the difficulties connected with carrying out such a rule would be that, quite apart from the financial aspect of it - and if every such officer were to receive extra payment it would involve a considerable and unjustifiable increase of expenditure - we should have to place ourselves entirely in the hands of the officers, and there would be no effective check upon them to determine what time they were occupied, or how far the performance of duties on Sundays was reasonably justified. If we made it a hardandfast rule that officers were entitled, no matter how intermittent or brief the services performed on Sundays might be, to demand extra pay, we should be completely in the hands of the officers themselves, and it might be that a particular officer might so arrange his work during the week as to postpone doing it until Sunday, and so Le able to claim Sunday pay. We should thus bring about the defeat of the result that we are trying to achieve, namely, the discouragement of Sunday work. I ask honorable senators to consider these facts in connexion with the motion, and I feel sure that they will be prepared- to do what is a. fair thing so far as both the officers and the Department are concerned. It surely would not be reasonable to lay down a hard-and-fast rule that every officer in residence, no matter what work he did on Sundays, should be entitled to Sunday allowance proportionately to the time he was occupied in it, when we should have no effective check, and when, indeed, there might be no necessity for the Sunday work at all. There is no desire to relieve the Department of the legitimate responsibility which it owes to any officer byreason of such circumstances as have been referred to by Senator Findley. But it will be realized that if there were to be a hard-and-fast rule it would be practically placing the amount of remuneration to be paid in such cases in the hands of the officers themselves. I make no reflection or imputation whatever upon the integrity and the honesty of the officers of the Commonwealth Public Service. We are entitled to congratulate ourselves that in the large body of officers we have throughout the Commonwealth there have been both in the experience of the Commonwealth Government and of the States previously so few instances of anything of a dishonest nature. But it really would not be a businesslike position to place the determination of payment for Sunday work in the hands of so many interested individuals without any check upon them.

Senator Needham:

– But some consideration must be given for time worked on Sundays.

Senator KEATING:

– I can assure the honorable senator that consideration is given. The Public Service Commissioner looks into every instance in which an officer makes a claim for an allowance by reason of the fact that he is employed on Sunday. Every case is considered on its merits. I think that system is better than laying down a definite rule. In half-a-dozen cases there may be four in which the Public Service Commissioner considers that some remuneration should be paid to the officers on account of their engagements on Sundays, but in the other two cases he may consider that the circumstances are not such as call for special treatment. It may be that in those two cases the officer who happens to be residing on Commonwealth premises simply has to attend to one or two minor matters which, though in the interests of the Commonwealth, may be equally in his own interest. Honorable senators should, I think, be satisfied that this system is preferable to a hard-and-fast rule which would either entitle a number of officers who are doing work of mutual advantage to themselves and the Commonwealth, to special remuneration, or which, on the other hand, might disentitle men from receiving remuneration under circumstances such as has been referred to by Senator Findley. So far as the remaining portions of the motion are concerned, I see no objection to them, but I ask the honorable senator not to press the part of his motion regarding the elimination of this particular proviso. I shall be glad now, and at all times, to help any honorable senator in securing that cases such as have been referred to shall be dealt with on their merits ; but I ask the Senate not to take any action that would be productive of such results as would deprive us of that safeguard or check which, on common business principles we should always have in regard to applications for special remuneration on account of overtime. Of course, in the case of officers who do not reside on Commonwealth premises, but have to attend at public offices to do Sunday work, we have a check. We have the means of determining whether the Sunday work is necessary, and what the extent of it is.

But we have no such check in the case of residential officers. The present system, as I ‘have already assured the Senate, conserves the right of every individual who is called upon to do work on Sundays to the calm consideration of his claim upon its merits.

Senator NEEDHAM:
Western Australia

– I desire to ask the Minister a question in reference to the duties of officers employed on Sundays. The paragraph to which I wish to allude says -

Provided that in all cases where an officer resides on the premises where his duties are performed, and his attendances for work on Sundays are intermittent and for brief periods, he shall not be entitled to claim any additional pay for those attendances.

Question - That this Senate affirms that such Regulation should be amended by striking out in paragraph 2, line 1, all words after the word “ is “ down to and including the word “ days “ in line 2, and inserting in lieu thereof the words “ on duty on seven or more consecutive days “ ; and by striking out, in line 3, the word may “ and substituting the word “ shall “ - resolved in the affirmative.

Question - That this Senate affirms that such Regulation should be amended in paragraph 3, line 1, by striking out all words after the word “ is “ down to and including the word “ days “ in line 2, and inserting in lieu thereof the words “ on duty on not more than six consecutive days “ - resolved in the affirmative.

Question - That this Senate affirms that such regulation should be amended by striking out all words, paragraph 3, lines 5, 6, 7, and 8 - resolved in’ the negative.

page 693

ADJOURNMENT

Order of Business : Friday Sitting

Motion (by Senator Best) proposed -

That the Senate do now adjourn.

Cite as: Australia, Senate, Debates, 18 July 1907, viewed 22 October 2017, <http://historichansard.net/senate/1907/19070718_senate_3_36/>.

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Senate18 July 1907

QUESTION

MAIL SERVICE TO EUROPE

Senator WALKER:NEW SOUTH WALES

Senator BEST:Vice-President of the Executive Council · VICTORIA · Protectionist

QUESTION

TOBACCO WASTE

Senator PEARCE:WESTERN AUSTRALIA

Senator BEST:Protectionist

Senator PEARCE:

Senator BEST:

Senator PEARCE:

QUESTION

IMPERIAL CONFERENCE

Senator BEST:Protectionist

QUESTION

PREFERENTIAL FREIGHT CHARGES: WESTERN AUSTRALIA

Senator NEEDHAM:WESTERN AUSTRALIA

Senator BEST:Protectionist

Senator DE LARGIE:WESTERN AUSTRALIA

Senator BEST:

Senator de Largie:

QUESTION

TELEPHONE SERVICE

Senator CHATAWAY:QUEENSLAND

Senator KEATING:Minister for Home Affairs · TASMANIA · Protectionist

QUESTION

CONTRACT IMMIGRANTS

Senator TURLEY:QUEENSLAND

Senator BEST:Protectionist

Senator FINDLEY:VICTORIA

Senator BEST:

Senator Findley:

Senator BEST:

QUESTION

COMPULSORY VOTING

Senator DOBSON:TASMANIA

Senator KEATING:Protectionist

QUESTION

COTTON PRODUCTION

Senator DOBSON:

Senator BEST:Protectionist

MAKINE SURVEY

AGRICULTURAL IMPLEMENT MAKERS

ORDER OF BUSINESS

Senator BEST:Vice-President of the Executive Council · Victoria · Protectionist

Senator BEST:Vice-President of the Executive Council · Victoria · Protectionist

Senator NEEDHAM:Western Australia

The PRESIDENT:

Senator NEEDHAM:

The PRESIDENT:

BILLS OF EXCHANGE BILL

Second Reading

Senator KEATING:Minister of Home Affairs · Tasmania · Protectionist

Senator Sir Josiah Symon:

Senator KEATING:

Senator Best:

Senator KEATING:

Senator Sir Josiah Symon:

Senator KEATING:

Senator Sir Josiah Symon:

Senator KEATING:

Senator Walker:

Senator KEATING:

Senator Walker:

Senator KEATING:

Senator Dobson:

Senator KEATING:

Senator Sir Josiah Symon:

Senator KEATING:

Senator Turley:

Senator Sir JOSIAH SYMON:

Senator Turley:

Senator Sir JOSIAH SYMON:

Senator Walker:

Senator Sir JOSIAH SYMON:

Senator Walker:

Senator Sir JOSIAH SYMON:

Senator Dobson:

Senator Sir JOSIAH SYMON:

Senate
18 July 1907

Senator WALKER:
NEW SOUTH WALES

Senator BEST:
Vice-President of the Executive Council · VICTORIA · Protectionist

Senator PEARCE:
WESTERN AUSTRALIA

Senator BEST:
Protectionist

Senator BEST:
Protectionist

Senator NEEDHAM:
WESTERN AUSTRALIA

Senator BEST:
Protectionist

Senator DE LARGIE:
WESTERN AUSTRALIA

Senator CHATAWAY:
QUEENSLAND

Senator KEATING:
Minister for Home Affairs · TASMANIA · Protectionist

Senator TURLEY:
QUEENSLAND

Senator BEST:
Protectionist

Senator FINDLEY:
VICTORIA

Senator DOBSON:
TASMANIA

Senator KEATING:
Protectionist

Senator BEST:
Protectionist

Senator BEST:
Vice-President of the Executive Council · Victoria · Protectionist

Senator BEST:
Vice-President of the Executive Council · Victoria · Protectionist

Senator NEEDHAM:
Western Australia

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

Senator WALKER:
New South Wales

Senator MACFARLANE:
Tasmania

Senator KEATING:
Minister of Home Affairs · Tasmania · Protectionist

Senator STEWART:
Queensland

Senator DOBSON:
Tasmania

Senator BEST:
Vice-President of the Executive Council · Victoria · Protectionist

Senator Lt Col NEILD:
NEW SOUTH WALES · FT

Senator DOBSON:
Tasmania

Senator STEWART:
Queensland