3rd Parliament · 4th Session
The President took the chair at 2.30 p.m., and read prayers.
Senator MILLEN (New South. WalesVice President of the Executive Council) [2.31) - Mr. President, with concurrence, I desire to submit a motion relative to the recent death of Sir Frederick Holder. In doing so I am fully conscious of the sense of personal loss which animates us all today. I beg to move -
That the Parliament records its high appreciation of the many and eminent services rendered to the Commonwealth by the late Sir Frederick Holder, particularly during his tenure of the arduous office of Speaker from its first assembling until his decease on Friday last. Inspired by a lofty conception of the duties of his office, he presided over the House of Representatives with conspicuous ability, firmness, and impartiality. An unsparing devotion to administrative duties was associated with a personal courtesy which endeared him to members and officers of the House. The founding of a National Library has been among the most important of his special interests. All citizens of Australia will concur in tendering their profound sympathy to the bereaved wife and- family of a most distinguished Australian, whose loss is deeply felt by the whole community.
I am conscious that no motion which we may adopt, no words which we may .use iti supporting it, will . do more than faintly express the feeling so universally aroused by the tragic death of Sir Frederick Holder. But weak though our effort may be, it is meet that we should pay our tribute to the memory of one who rendered signal service to his State,’ and whose personal attributes endeared him to all who, like ourselves, were privileged to claim his ac.quaintance. There are those present more familiar with, and, therefore, - better able than I am to speak as to the great and - loyal service rendered bv the deceased gentleman to his own State. But this we all know, that in rendering’ that service he displayed a full, many-sided, and well-balanced intellect, a strenuous if quiet determination, an unfailing courage, and, above all, a simple and unaffected devotion to duty. In the- days, sir, when he stood a foremost fighter in party conflict, he always remembered his own lofty ideals, keeping them before him as shin- ing beacons by which he directed both his political and personal conduct. In later years he rendered yeoman service as one of the framers of the Constitution, helping the Union into being, and working always as one who sought to do his duty, and who regarded the work as greater than the work-, men. Still later, when we assembled here for the first time as representatives of a united Australia, his high character and great ability indicated him as the first Speaker of the House of Representatives. On the occasion of his selection for that high office, he expressed, to use his own words, his “ deep sense of the obligation placed upon him, and his determination to maintain the high reputation which the office of Speaker had borne in all parts of the Empire.” With what great capacity he discharged that obligation, how closely he adhered to that determination, we in Parliament can bear testimony. The first Speaker called to direct and control members who had been trained under varying parliamentary conditions, his task was indeed difficult; he was called upon to explore an unknown region ; but he has left behind him a trail . blazed for the guidance and assistance of his successors. The measure of success he achieved in solving that difficulty, as well as the manner of it, added to his own reputation and conferred upon Parliament great and lasting service. Clear in vision, sound in judgment, firm, tactful, just, and courteous, he secured to the full the confidence of those over whose deliberations he presided, and amply justified the high resolve with which he assumed the duties of his office. But great as have been his public services, I think it is perhaps his personal qualities which will induce us to treasure his memory the most. A kindly, if undemonstrative, man, with a simple nature, but unfailing courage, a warm heart, and above all a lofty and serious conception of life and its duties, he had more friends than he knew of. Whether we regard him as serving his State or the Commonwealth, or in his association with educational, social, philanthropical or religious movements, we can see him always moving with earnestness and sincerity,’ giving the best that was in him. Regarding him, it may be said that “though dead he yet speaketh,” for his career stands as a guide, an inspiration, and an appeal to those who follow him. May I, sir, add one word concerning those whose grief is greater than our own? It is not possible for us to turn aside the shaft of a great bereavement, but we may hope that our resolution, and the respect and sympathy which will go with it, will carry some little measure of comfort tohearts which are bowed in sorrow, and toa home which is wrapped in grief.
– As one who had known the late Speaker tor many years, and watched his career, not merely in politics, but in public life in many directions, I rise with sincere feelings of emotion to second the motion. I sympathize with the people of South Australia at the loss of a representative who for many years had possessed the entire confidence of the State. And I also sympathize with the lady who has lost a faithful and loving husband, and the family who have lost the protection of a good’ father. When he entered Federal politics Sir Frederick Holder rose superior to those party principles and sectional ideas which may have possessed the minds of other men. His whole object in life seemed to be to carry out his duties in the best interests- of the people with whom he often came in contact. I am sure that there is not a senator here to-day but feels the deepest sympathy with the family of the late Speaker, and the deepest regret at the loss, not only to South Australia, but to the whole Commonwealth, of a statesman such as the late Sir Frederick Holder was. It is, sir, with very deep and sincere regret that I second the motion.
Senator Sir JOSIAH SYMON (South Australia) [2.40]. - The late Sir Frederick Holder was to me a friend of many years standing. With four other honorable gentlemen who are now members of the Senate, I was his colleague in the Australian! Federal Convention which framed the instrument of Australian Union. For these reasons, and as a senator from the State in which Sir Frederick Holder was born, and to which he rendered, as my honorable friends who have preceded me have indicated, devoted service, I should like to join in trying to express the honour we wish to do to his memory, the memory of a man whose name will live in the Federal story of Australia. But for these reasons I should not have said one word on this occasion, because we are all feeling deeply the grief which the sad event has occasioned to the whole of the community, and more particularly to the members of the Federal Parliament, whether in the Senate or in the House of Representatives. I should have hesitated to add one word after the excellent and eloquent words which have been spoken by the Vice-President of the Executive Council, followed by my honorable friend, Senator McGregor, on the other side; but there is one aspect to which I should like to call attention, and which I think ought not to be forgotten. The late Sir Frederick Holder was not born to wealth as the world reckons. Fortune did not come to him with a smiling face. He was an example of the - ….. divinely gifted man
Whose life in low estate began.
He owed nothing to high patronage. The road which he pursued was not made smooth and easy for him. He made bis own way, and carved out his own career, by the great qualities which he possessed. He made his merits known by his own capacity, and the elements of that capacity, to some of which my honorable friend the Vice-President of the Executive Council has so touchingly alluded, were known to all of us. He had industry and sagacity, and an alert intelligence beyond that which is commonly allotted to mankind. Hehad a clear and calm judgment. To singleness of purpose and extraordinary lucidity of expression he united a directness of mind and a simplicityof character which made him loved by everybody. No man was ever less of a partisan. No man was everless moved by heat and clamour. He entered the South Australian Parliamentis a member of the House of Assembly in the year 1887, the year in which I ceased to be a member of that Parliament. But our acquaintanceship then began and it ripened into a friendship which I ever valued, and into a confidence which, in common with every one else who met him, I continually reposed in him. He inspired confidence, and he returned the confidence felt in him bv giving the best of his counsel and advice. After a career of public service in South Australia, which is regarded as one of the precious possessions of that State, the late Sir Frederick Holder in 1897 entered the National Federal Convention. Honorable senators who were members of that Convention, and some of whom are here to-day, will bear me out when I say that he rendered conspicuous service there, and to his efforts in several directions the success of the work of that Convention was largely due. I can never forget the strong and steadfast position which he assumed in 1899 in the cause of Democracy in maintaining our right to the unamended Constitution. It was a great fight, and for him it involved a great strain. But the call of duty to which the VicePresident of the Executive Council hasalluded was sufficient to stimulateand strengthen him in that arduous contest. In 1901 he entered the Federal Parliament and became the Speaker of the House of Representatives. It is impossible to add to what has been already said of the universal admiration which all inside and outside of Parliament felt for the noble, the impartial, and the absolute high quality of the manner in which he discharged his duties. It will be a pattern to his successors, I verily believe, for many years to come. My honorable friend, the VicePresident of the Executive Council, also referred with great emphasis to Sir Frederick Holder’s devotion to duty. On that pointI should like to say that duty is a path that all may tread, and at all times Sir Frederick Holder trod that path with a firm and unfaltering step. His even footstep could be heard right up to the tragic moment when the lamp of his life went out - until God’s finger touched him and he slept. As for him “ after life’s fitful fever, he sleeps well ; “ as for us his life remains a great pattern and a great example. He died not full of years, but full of the esteem, and the honour of all men.
He grave his honors to the world again ;
His blessed part to heaven, and slept in peace.
He can have no better epitaph than that he sought the good of his fellow men, and loved to do his duty.
– I should like to say one or two words before putting the motion to the Senate. I wish to express my deep feeling of regret at the death of ourlatefriend, Sir Frederick Holder. During the last few vears I had the opportunity of coming into intimate association with him, and I knew his character to be such as has been depicted here to-day and elsewhere by other persons. He was of upright, fearless, conscientious character ; a man whom it was an honour to have as a member of the Federal Parliament of Australia. His work was not confined solely to his labours in the House of Representatives during the past eight years, hut extended throughout the Commonwealth, to every phase of life in which he took an interest. As a personal friend, I learned that he was a man not only to be esteemed and respected, but to be loved ; a man upon whose word one could at all times rely, and upon whose friendship on all occasions of difficulty one might confidently depend. That such aman should pass away from us under the sad circumstances of the late Sir Frederick Holder’s death is a great loss. Whether we speak as members of this Parliament, or as personal friends of the deceased gentleman, we may well exclaim -
Thou hast swum too soon the sea of death ; for us
Question resolved in the affirmative, honorable senators standing in their places.
– It will be the duty of the Clerk to prepare a communication for transmission to Lady Holder, embodying the resolution, and intimating the respect with which it was received and agreed to.
– Perhaps I shall be expressing the wishes of a large number of honorable senators if I suggest that the sitting of the Senate be suspended for a short period, say, till 4 o’clock.
– I take it that as a mark of esteem and respect to the late Sir Frederick Holder, the Senate desires to suspend its sitting, and I shall therefore leave the chair until 4 o’clock.
Sitting suspended from 2.53 to 4 p.m.
– I desire to ask the Vice-President of the Executive Council, without notice, whether it is a fact, as stated in the newspapers to-day, that 470 pensioners in Queensland have been deprived of their pensions pending the passing of the Old-age Pensions Bill? If so, will the Government provide for the passing of a Bill for the payment of back pensions to those persons?
– I am not aware as to the exact number, but a number of pensioners in Queensland are in the position indicated bv the honorable senator. But the Old-age Pensions Act Amendment Bill, now with the other branch of the Legislature, is retrospective to that extent, and provides for the payment of the back pensions referred to.
– I am not in a position to give the honorable senator any more information than that which has appeared in the newspapers during the. last few days. If the honorable senator will give notice of a question, I shall be in a position to obtain information.
asked the VicePresident of the Executive Council, upon notice -
– The answers to the honorable senator’s questions are as follow : -
– Arising out of the Minister’s answer,I desire to draw attention to the fact that the information in question was given a few years ago for the year then passed. It is only necessary to continue the figures for a later period. I suggest that there is really no difficulty in supplying the information.
– The honorable senator will, of course, understand that I have merely furnished him with an answer supplied to me by the Department. I have no personal knowledge of the working of the Department. If the honorable senator will so far oblige me as, later on, to give me a memorandum of the statement which he has just made, I will endeavour to obtain further information on the subject.
Is it a fact that the value of the exports of coffee from British Papua to Australia has been as follows: - 1903-4,£500;1904-5,£120; 1905-6,£915;1906-7,£700;1907-8,£470?
Is it a fact that the area under coffee in
Queensland was as follows: - 1906-7, 256 acres; 1907-8, 304 acres?
Papua and the increased cultivation of coffee in Queensland taken place since the passing of the bonus on Australian-grown coffee?
Yes, with exception of the year 1903-4, which should be£560.
The question of reduction is now receiving consideration.
asked the Vice-President of the Executive Council, upon notice -
Whether the Senate will have an opportunity of discussing the terms, &c., of the contract proposed to be entered into by the Government with the proprietors of the London Daily Chronicle ?
– This matter is under consideration, with other offers reSating to advertising. It would not be practicable to submit all such contracts for discussion.
asked the VicePresident of the Executive Council, upon notice -
In view of the complaints which have been made as to the inadequacy of the ventilation and light in the new Telephone Exchange at Adelaide, will the Minister of Home Affairs obtain from the Medical Officer of Health of the City of Adelaide, or some other competent authority, a report in connexion with the matter ?
– The answer to the honorable senator’s question is as follows : -
A report has already been furnished by the Health authorities and duly considered. A mechanical system of ventilation is being introduced as recommended by responsible departmental officers.
The lighting will be regulated to the requirements of the type switchboard adopted.
MINISTERS laid upon the table the following papers : -
Report of Investigations into the question of shearing wet sheep.
Northern Territory - Copy of correspondence between the Commonwealth and South Australian Governments, dated 15th October,1906, to 16th July, 1909.
Public Service Act1902 - Amendment (Provisional) of Regulation 171. - Statutory Rules 1909, No. 89.
Federal Capital - Proposed Site at YassCanberra - Report by Chief Engineer for Harbors and Water Supply re flow of Cotter River, from 1st January to 7th July, 1909, as presented to the Legislative Assembly of New South Wales.
Extracts from report submitted to the Honorable the Minister for Defence by MajorGeneral J. C. Hoad, C.M.G., Inspector-General Military Forces of the Commonwealth, in connexion with tour of duty in the United Kingdom and the United States of America, 190S-9.
Motion (by Senator Sir Robert Best) agreed to -
That leave be given to bring in a Bil! for an Act to amend the Patents Act 1903.
Bill presented, and read a first time.
Debate resumed from 23rd July (vide page 1629), on motion by Senator Sir Robert Best -
That this Bill be now read a second time.
– When this Bill was under discussion on Friday last, I referred to one of the monopolies which we have in operation in Australia. It has been stated to me by a sugar manufacturer that he was not able to sell his product on the market if he took a very much lower price than that which the monopoly was able to get for its product. The monopoly practically governs the whole Australian market in that respect. This gentleman, with others, has now been bought out by the monopoly.
– To which monopoly does the honorable senator refer?
– To the Colonial Sugar Refining Company.
– It- is not a monopoly.
– The company is practically a monopoly, which fixes prices throughout Australia. ATo one is able to deal with the Colonial Sugar Refining Company except upon its own terms.
– The Millaquin Refinery is still in existence. -
– That is the property of one of the banking institutions, which has had advanced to it about half a million pounds. But the Millaquin Refinery has had to follow in the footsteps of the Colonial Sugar Refining Company, and has- no say in regulating the sugar market of Australia. A friend of mine, some time ago, was running a fairly large business, and handling a considerable amount of sugar. He was dealing with the Colonial Sugar Refining Company, through one of its agents. He said, “ I am prepared to give you an order for so many tons of sugar.” But ‘the company replied, “No; we do not- do business in that way. We shall not allow you to speculate in our product. Your business enables you to dispose of so many tons of sugar per month, and that is all you are going to get, whether you like it or not. We know exactly what your trade is, and we will supply you merely with what ‘-ou require for carrying on your business.”
– He could get sugar from a number of other places ; from Java and Hong Kong, for instance.
– But a retail grocer is scarcely able to order his sugar from Hamburg, Java, or any place outside of Australia.
– Hong Kong sugar is .being sold every week in Australia.
– How much? Very little sugar that is brought from outside is sold in Australia. The Colonial Sugar Refining Company is able to control our sugar market. I pointed out last week that the Queensland growers had passed a resolution asking the Federal Government to take steps in the direction of establishing a refinery, so that they might be able to get out of the clutches of this monopoly. I will quote the comment of one of the Brisbane daily newspapers upon the resolution.
It is somewhat novel in these blatant days of outcries against capitalists and employers of labour, that an effort should be made by these very employers to shift their responsibilities and obligations on to a central authority. The nationalization of industries may be a good thing in theory from the socialistic point of view,’ but the willing manner in which men who have sunk their capital in the profitable production of sugar-cane are inclined to hand everything over to the Commonwealth Government shows that there are two sides to the question. In taking over a proposition of this magnitude there is the possible loss as well as the possible profit to be considered. The debit side of the balance-sheet is conveniently ignored by a certain unthinking section of the community. If the sugar-growers are not satisfied with the treatment received from the mill-owners and refineries, let them co-operate and erect mills and refineries for themselves. If they are sincere in the opinion that the State should control the manufacture and refining of sugar, then they should have shown their sincerity by proclaiming themselves Socialists, and “demanding the Government to take control of not only one industry, but all industries. Co-operation for a specific purpose is a doctrine preached by the energetic ; Socialism is preached by the “ failure “ and the sluggard. It is a pity that this fact was not recognised by the sugargrowers of Bundaberg yesterday.
– Is that quotation from the Courier?
– The name of the newspaper is not stated, but it was either the Courier or the Daily Mail.
– What is the date of the newspaper?
– This extract was published in May, 1909. That was the comment of a daily newspaper on the demand of these people that they should be relieved in some way from the extortions of the monopoly. The article in which the quotation appeared comments : -
This is a fair example of the arguments used against the growing desire of the primary producers for a “ State-owned or State-aided central refinery.” To mention the debit side of the
The total value of the company’s shares is now about four million pounds sterling more than their actual paid-up value, and the annual dividend this year reaches the stupendous sum of ^285,000, to say nothing of the undisclosed profits.
Later it says : -
One can almost imagine Mr. Rockefeller and his Standard Oil Trust with its profits of over ^12,000,000 annually, asking the American people a similar question such as “ If you don’t like our doings, why don’t you go into business yourselves?” and the answer would be the same in both cases. There is one important difference^ however, between the two situations, and that is that while many of the American Trusts and monopolies have not only got beyond the reach of private competition, but have almost beaten the Government itself, those of Australia, including the sugar monopoly, are still within reach of Government control, and the sooner the matter is taken in hand the better it will be, not only for cane-growers, but for the community generally. As for the parrot cry of “ Socialism,” it is simply a piece of inconsistent absurdity, because if a central refinery is to be condemned as socialistic, the Queensland Central mill system must be socialistic too, and condemned accordingly. Few, however, would dare to say that (with one or two badly-situated exceptions) these mills have been anything but a pronounced success. They give to the grower all there is in his business so far as raw sugar values are concerned, and the refinery would carry the matter to its logical conclusion by giving him all there is in his business, right up to refined sugar values. If this is “ Socialism “ then there is nothing in a name, and it would be at least interesting if those who are so ready to condemn, would explain how it could in any way repress the individual enterprise or energy of the cane-grower, seeing that on him, as on most people, the hope of a higher reward should certainly not have that effect, but be decidedly stimulating. It also displays either lamentable ignorance or libellous animosity, to use the terms “ failure “ and “ sluggard “ in connexion with Australia’s cane-growers, and if the glib critic who did so, had first taken the trouble to inquire into the standing of the delegates responsible for the passage of the resolution, he would have discovered that such expressions were entirely inapplicable to any of them, or to the people who sent them to the Bundaberg Conference.
Although the monopoly controls the whole of this work, and is able to say to all the other sugar growers in Australia, and practically to the other refiners, that they will be able, perhaps, to get rid of their sugar at its price, yet it seems to me that under this legislation the Government will not be able to intervene. I feel quite satisfied that so far as this Bill is concerned, the Colonial Sugar Refining Company will beat the Government nearly every time. I believe that it is acting in the interests of its shareholders. But the cane growers think that they are placed at a very great disadvantage. They have published some tables in which they set out the value of their cane so far as it can be ascertained, and the amount received for it from the company. For instance, when sugar is £19 a ton, the amount offered by the company for a ton of cane is 15s. 6d., and I might add that only tons of cane are required to make a ton of sugar. The actual value of the sugar contents of the ton of cane is ^3 os. od. if all is extracted, £2. 14s. 8d. if 90 per cent, is extracted, and £2 8s. 7d. if only 80 per cent, is extracted. The canegrower realizes that in spite of everything which has been done on his behalf by the Government, so far as the work is. concerned, the monopoly is able to step in and take for itself an enormous portion of the value he produces every year. He contends that if it is fair for this Parliament to have a voice in fixing the wages which he has to pay j it is also fair for the Government to say that the monopoly shall npt be allowed to take a very large portion of the value which he produces.
– Are the cane-growers complaining that they do not get a fair deal ?
Senator TURLEY. They are complaining that they do not get a fair deal at all.
– Are they doing very badly just now ?
– I do not know that they are doing badly. At any rate, whether they are doing badly or not, they do not see why there should be in existence a monopoly which is able to take from them a great deal of the value of that which they produce.
– 1 hear that some of them take trips to Europe.
– I am glad 10 hear the interjection. I believe that quite a number of the members of the Sugar Producers’ Association are in a position to take trips to Europe every year if they like.
They are men with large interests, who have been fairly lucky. They have a considerable area under cane, and, therefore, are able to do very well out of the industry.
– The men I was referring to are small men.
– What does the honorable senator mean by “small men?”
– They are not rich men, but ordinary men.
– I can find men with not a very large area to farm who occasionally are able to take a trip to some other part of the world. I can also find fruitgrowers or orchardists who are able to travel.
– And politicians, too !
– Yes, I dare say that the honorable senator could afford to take a trip to the other side of the world tomorrow if he desired.
– Just the same as the honorable senator.
– No, I only wish that I could. As a matter of fact, I am not in a position to do so. The first conference of the Sugar Cane Growers’ Union of Australia was held on Thursday and Friday, 18th and 19th February, 1909. These men, I may explain, were practically forced out of the other organization by the bigger men, who wanted to control the whole of the industry. They found that they must do something to protect their own interests, and, therefore, they formed an organization which embraced a very large number of the smaller men engaged in growing sugar cane. On the second day of the conference they passed the resolution which I read last week to the effect that the Government be called upon to take some step in connexion with the establishment of a refinery. I quote the following extract from the report : -
Mr. Kirwan urged the necessity of a Commonwealth refinery ; he quoted the following figures in support of the motion. Take the average cost of manufacture at 7s. 6d., and the cane value at £2 per ton, £1 12s. 6d. was left them; lake from that 12s. 6d., being the average price paid for cane, then the refiner had a profit of £1 each ton of cane.
All the statements in this report emanated from men who had been engaged in the industry for a long time.
– Does not the Colonial Sugar Refining Company give as much as the other refiners give?
– No, nothing like as much.
– As much and a little more?
– It has not done so yet. I know cases where the company has been paying, with a bonus, up 10 17s. and 17s. 6d., when the men who supplied the central mills received with a bonus added over £1 a ton. The company buys that raw sugar afterwards. The Millaquin people do not take a great deal of that sugar ; they mostly get sugar which is made in their own district, at the back of Bundaberg, the Isis, and other districts. I do not think that from a business stand-point any one could find fault with the system of the Colonial Sugar Refining CompanyIt pays to good men very good wages for their services. But the business is organized in such a way that it knows exactly the requirements of every man who deals with them. It knows the quantity of sugar which he is able to handle, and it supplies him with that quantity and no more until he is able to prove that his business has grown and needs a larger supply. I do not think that the Bill or the method proposed by the Government will touch that sort of business. It seems to me that although we may render to the Government every assistance to make this legislation as strong as possible it will be ineffective. The Minister of Trade and Customs, in introducing the Bill, said that if, when passed, it were found to be ineffective, the case of those who advocate the nationalization of industries would be far stronger than it is now. But, during the time all this experience is being gained, we shall be doing nothing to relieve those who are, at present, suffering from the effects of monopolies such as I have outlined. I have no wish to labour the question. I point out that, so far as I can see, perhaps the biggest monopoly so far in existence in Australia, which is able to control one branch of industry so effectively that no one dealing in the same commodity has a show, will not bc touched by this legislation. We on this side will do all we can to make this legislation effective, but I am afraid that the Government will not be prepared to go far enough to render any practical service to those who are suffering from the monopoly to which I have referred, and from other monopolies at present existing in Australia.
Question resolved in the affirmative.
Bill read ti second time.
Clauses 1 to 4 agreed to.
Clause 5 -
After section seven of the Principal Act the following sections are inserted : - “ 7a. - (.1) Any person who, in relation to trade or commerce with other countries or among the States, either as principal or agent, in respect of dealings in any goods or services, which are the subject of competition, gives offers or promises to any other person any rebate, refund, discount, concession or reward, for the reason, or upon the condition express or implied, that the latter person -
deals, or has dealt, or will deal,or intends to deal, exclusively with any person, either in relation to any particular goods or services or generally ; or
deals, or has dealt, or will deal, or intends to deal, exclusively with members of a Commercial Trust, either in relation to any particular goods or services or generally; or
does not deal, or has not dealt, or will not deal, or does not intend to deal, with certain persons, either in relation to any particular goods or services or generally ; or
is or becomes a member of a Commercial Trust, is guilty of an offence.
Penalty : Five hundred pounds. (2.) Every contract made or entered into in contravention of this section shall be absolutely illegal and void.”
– I direct the attention of the Minister of Trade and Customs to the words, “ in respect of dealings in any goods or services which are the subject of competition,” in the first part of the proposed new section 7a. The wording is somewhat novel. I do not think it is to be found in the original Act, and I should like to know exactly what these words mean.
[4 35]. - The object of using these words is, I think, to identify the proposed section with dealings in regard to goods or services which are the subject of competition.
– But what will happen where there is no competition, as in the case of the Colonial Sugar Refining Company mentioned by Senator Turley ?
– Where a monopoly is involved, it is dealt with by another section.
– But we require to deal with secret rebates where there is a monopoly.
– The case dealt with by SenatorTurley was rather that of monopoly, and did not raise the question of rebates at all.
– It did, absolutely. That is how the Colonial Sugar Refining Company hold their trade.
– Yes; they give retail grocers a rebate.
– I do not know that they do so now.
– Dealing in sugar is certainly a subject of competition, because there are other sellers of sugar besides the Colonial Sugar Refining Company.
– Dealing in sugar is not, to any great extent, the subject of competition in Australia.
– I think that it is a subject of competition. For instance, there were considerable imports of sugar last. year.
– Of refined sugar?
– And they were sold by the Colonial Sugar Refining Company at precisely the same rates that they sell their own.
– So far as monopolies are concerned, and that is the phase of the subject to which Senator Turley particularly referred, they are dealt with under section 7 of the principal Act, which provides -
Any person who monopolizes or attempts tomonopolize, or combines, or conspires with any other person to monopolize, any part of the trade or commerce with other countries or amongst the States, with intent to control, to the detriment of the public, the supply or price of any service, merchandise, or commodity, is guilty of an offence.
Penalty : Five hundred pounds.
– The Government has not attempted to deal with that, although provision is made for it in the principal Act.
– That is so. I cannot say exactly what inquiries have been made in regard to the particular company that has been referred to ; but section 7 of the principal Act is the one which is intended to deal with such cases as were brought under our notice by Senator Turley.
– The wording to which I have referred seems to be a qualification. Surely there is some reason for the use of these words, which, so far as I know, are novel. They seem to impose a limitation.
– I have stated what Ibelieve to be the reason for the use of the words. I shall, however, send for the draftsman and ascertain the object he had in view.
– Services, for instance, would relate to the business of shipping companies.
– Yes. The leading meaning of services in this connexion is transportation. The words are the widest that could be used.
– It seems to me that these words, if they have any meaning at all, must limit the scope of the proposed section. That can be clearly seen if it is read without them -
Any person who, in relation to trade or commerce with other countries or amongst the
States, either as principal or agent,….. gives, offers, or promises to any other person any rebate, refund, discount, concession, or reward - and so on. Surely that would include all trade and commerce we desire to protect under this clause. I shall give the Minister one case where it seems to me the use of these words would impose a limitation. Between Port Darwin, in the Northern Territory, and Wyndham, in Western Australia, there is only one vessel trading, a boat called the Woy Hoy. In the circumstances it could not be said that the trade was the subject of competition.
– It does not follow that that trade is not likely to become the subject of competition.
– But the proposed section deals with trade, which is the subject of competition, and not merely with trade which, is likely to become the subject of competition. If the shipping company conducting the trade between Wyndham and Port Darwin called upon a shipper to sign an agreement which was against what is laid down in this Bill, that would not be a breach of the law, because it could not be contended that this particular trade was the subject of competition.
– Could not the shipping company make their own terms? There being no competition, they need not give rebates.
– In making their terms they should not be allowed to contravene the law. Why should they be exempt from the law?
– Does not the honorable senator see that the question of exclusive dealing could not arise in such a case, because the shipper must deal with the only company carrying on the trade.
– Even so. Surely we do not desire to give the company conducting the trade the power to embody in any of its agreements conditions hostile to the spirit of this law ?
– The shippers must deal exclusively with this company.
– That is where the danger comes in. By the use of the qualifying words to which I have referred, the owners of the boat now running between Port Darwin and Wyndham might bind a shipper in such a way as, perhaps, to prevent him from taking steps to introduce competition in the trade.
– Does not the existing condition show that the trade is sufficient to warrant the use of only one boat ?
– That is quite beside the question. A shipper who felt that he was unjustly treated by the company might desire to take steps to bring about competition with them, and he might be unable if these qualifying words are used to protect his interests, if he were called upon, in contravention of the spirit of this law, to sign an agreement promising for twelve months to send his goods only by the boat run by this particular company. He would be unable in such a case to induce any other company to take up the trade.
– Without such an agreement there might continue to be only one ship with which he could trade.
– There is only one ship engaged in the trade at the present time, merely because it is not sufficient to warrant the running of more than one ship. If the honorable senator thinks that we should not limit the operations of monopolies, I am not addressing my remarks to him. A shipping company, to prevent itself from being subjected to competition in the future, would merely have to induce every shipper at Wyndham and Port Darwin to sign such an agreement.
– But the provision declares that anybody granting a rebate shall be liable to a penalty.
– Only where trade is subject to competition. If the words to which I have directed attention are retained, the very persons who might otherwise be induced to bring another vessel into the trade would be debarred from so doing, because another vessel would not compete for it in the absence of some inducement. If, by the retention of these words, we permit shippers to sign agreements under which the whole of the trade will become tied to one boat-
– The probability is that, under the circumstances outlined, there would not be a ship engaged in that trade.
– The honorable senator need not talk like that. The vessel to which I have referred is not engaged in the trade between Wyndham and Port Darwin from philanthropic motives, but from motives of profit. There is no reason why we should not safeguard the interests of the shipper at the places I have mentioned, just as we do those of the shippers at Melbourne and Sydney. Why should this qualification be inserted? If it be a good thing for shippers to be able to make these agreements, why insert the words “which are the subject of competition” ? Seeing that they constitute a limitation, I think that they should be eliminated, and, unless some satisfactory explanation* for their retention is forthcoming, I shall move in that direction.
– The insertion of the words referred to is very ill-advised. They not only constitute a limitation of the clause, but absolutely weaken it. The principal Act is entitled “An Act for the Preservation of Australian Industries, and for the repression of Destructive Monopolies.” In our endeavours to amend it, and to make it stronger, it is now proposed to insert words which will affect “ goods or services which are the subject of competition. “ Now, if there are two words which are absolutely contradictory, those words are “monopoly” and “competition.” To that extent their use is extremely illadvised. We are not now attempting to deal with the repression of industries which are the subject of competition, but with industries in which there is no competition - in short, in which monopolies exist. Consequently, to prescribe certain penalties, as in the cases of persons who do something in respect of “goods or services which are the subject of competition,” is to travel outside the professed intention of the Act. It is not in industries in which competition exists that we desire to prescribe remedies, but in industries in which there is no competition. It has been, said that the case cited by Senator Pearce is unworthy of our atten tion, because there is only one vessel engaged in the trade between Wyndham and Port Darwin.
– Hear, hear.
– I wish to impress upon Senator Gray that one of the chief objects of this Bill is to prevent the granting of rebates which are not justifiable and proper.
– May* there not be instances in which one vessel may enter into a certain trade because of the inducement which has been offered by shippers?
– That is precisely the point I desire to make. Let us take the case which has been cited by Senator Pearce. We can easily conceive of a company carrying on trade in certain waters of the Commonwealth, which, by reason of having granted rebates in a wholesale fashion, has acquired a monopoly in that trade. We shall not improve that state of affairs by the insertion of these restrictive words, or by saying, in effect, “ Because we find that you are carrying on services which are not subject to competition, we intend to let you severely alone.” As a matter of fact, it is only in cases where companies or individuals are carrying on services in which competition has been killed that we desire to interfere. When I look into the meaning of the words to which attention has been directed, I am astonished that such a qualification should have been introduced, because they are so absolutely contradictory of its whole purpose. I do not object to the use of the words “ goods or services.” The word “services” is a very comprehensive and safe one, from the draftsman’s stand-point. In the interests of the Bill, I am quite prepared to move the elimination of the words “which are the subject of competition.” If they are omitted, what harm will result?
– A good deal of harm may result in a small way.
– By their omission we shall be enabled to deal with a monopoly which otherwise we could not touch. If the words are retained, the answer of interested parties to this provision will be, “ We have a monopoly, and because of that your Act represents only so much waste paper.”
– The effect of the words will be to exempt from the operation of the clause anything which is already a monopoly.
– Precisely. -What sort of topsy-turvy legislation is this? Is the Minister of Trade and Customs desirous - as most of us are - of repressing monopolies, or is he going to say that because a monopoly exists he has introduced into this Bill a new clause which will not touch it?
– Are there not two distinct matters to be dealt with - one the repression of monopolies, and the other the repression of injurious competition?
– The title of the principal Act is - “ A Bill for an Act for the Preservation of Australian Industries and for the Repression of Destructive Monopolies.” If we are going to amend that Act, for the purpose of repressing monopolies, we must take care that we do not allow any monopoly - destructive or otherwise - to escape from the operation of the law. But that is exactly the result which will be brought about if this proposed new section be passed in its present form. .If the Minister of Trade and Customs does not move for the omission of the objectionable words to which I have referred, I shall certainly do so.
Senator Sir ROBERT BEST (Victoria - Minister of Trade and Customs) [4.54]. - Since Senator Pearce mentioned this matter, I have had an opportunity of discussing with the draftsman the meaning which he meant to attach to the words of which complaint has been made. I understand that his main object was that which I have already suggested. The words refer to goods which are recognised as the subject of competition - goods in connexion with which rebates are chiefly -granted. The draftsman used them for the purpose of more clearly identifying the provision with trade and commerce. From what I learn, it appears that they are capable of a wider meaning than was at first anticipated, and after consultation with him, I think that the provision will be made more comprehensive and effective by their omission. It is probable, as my honorable friends have pointed out, that where a monopoly exists the objection would be taken that the industry was not subjected to competition, and thus the very cases which we desire to assail we might be precluded from touching, if we retained these words. Upon further consideration, I think that the clause will be rather strengthened than otherwise by their omission. I move -
That the words “which are the subject of competition “ be left out.
Senator GUTHRIE (South Australia) [4.57J. - I am rather afraid that the Minister of Trade and Customs has absolutely forgotten the title of the Bill. The whole tenor of his speech upon the motion for the second reading of this measure was that it was directed against the shipping rings of Great Britain. The point which I desire to make is that if the Bill be passed in the form which he suggests, we shall absolutely destroy, instead of preserve, one of the biggest industries in Australia. From where does the competition come to which the Australian ship-owner is subjected? It comes from the French, German, and cheap ‘Chinese and coolie manned vessels trading on our coast. If the Minister, after considering this matter, had inserted the words “ subject to foreign competition,” I could have understood his action. But the moment this Bill is placed upon our statute-book, the Australian MercantileMarine will become a thing of the past. At the present time our coastal trade is, to a large extent, in the hands of Australian companies. The Parliaments of Australia have done nothing to protect those companies. The latter have had to protect themselves. How have they done this? By looking after the trade. Now it is proposed to say to them, “ The way in which you hitherto have protected yourselves is absolutely illegal.”
– Why, the honorable senator himself recommended the course which we are now taking.
– The recommendation which I signed as a member of the Navigation Commission was in favour of the abolition of rebates as soon as our coastal trade was absolutely in the hands of Australian owners. In other words, when the Australian coastal trade is in the hands of Australian shipowners and seamen, I am prepared to support the abolition of rebates, but not before.
– Hear, hear.
- Senator Macfarlane, who was a member of that Commission, bears out mv statement. It is the logical position to take up. But under’ present conditions, we allow the ship-owners of the whole world to come in and compete, with cheap labour and cheap ships, and the Government are prepared to say that the Australian ship-owners shall not lie permitted to protect themselves. In fact, the whole proposal is absolutely destructive.
– There are times when a Minister is apt lo give way too easily and without due consideration. I venture to say that the Minister of Trade and Customs has done so in this case. The proposed! new section under consideration is designed for a specific purpose, namely, to provide against unfair competition. It is intended to prevent a competitor from offering some secret advantage or concession to his client. I can quite understand that if we leave out the words in question, in cases such as Senator Pearce has instanced there will probably be injustice. Take the case of a steamer trading between two ports, one being a mining port on the west const of Tasmania. The inhabitants of the latter port may desire a ship to come there for the purposes of trade. But on account of the dangers and difficulties a steam-ship owner may not be willing to go to the port unless he receives promises of continuous support. Accordingly he makes arrangements to that effect.
– This provision does not interfere with such an arrangement.
– It absolutely does. . It alludes to the giving of - offers or promises to any other person of any rebate, refund, discount, concession, or reward.
There may be a case where a large merchant promises a ship-owner to give him the whole of his custom. In return, the owner may say “Although the freight would ordinarily be £1 per ton, I am willing to take your goods for 15s. per ton, on condition that you give me the whole of your trade.” Or the ship-owner may give the merchant a discount of 10 per cent, or 20 per cent. That would be a rebate, and the large customer would be likely to become an offender, and liable to a penalty of ^500. I quite agree with the contention that if we want to deal with monopolies this is not the right way. But if we want to interfere with unfair competition, the proposed new section is quite right.
Senator Sir JOSIAH SYMON (South Australia) [5.5]. - I think that my views upon this disjointed system of legislation are pretty well known. I have resisted the whole system every time an instalment of it has come before the Senate. I have endeavoured if it wo* inevitable that some legislation should be passed, to improve what was submitted to us as much as possible. Unfortunately, the views of some of my honorable friends appear to have undergone a change in this respect. But it does seem to me that the argument which has been addressed to the Committee illustrates the absolute importance of reducing this system of legislation in relation to industrial trusts to something like a harmonious whole, instead of being, as it is now, a “ thing of shreds and patches.” I think that it is an entire discredit to our statute-book. That has been my opinion throughout, and it is my opinion now. Instead of the Government bringing down another shred or another patch to the system, it ought to have taken the whole of our legislation on the subject, into consideration, and submitted a homogeneous proposal that would have given us a fair prospect of carrying out the object which we all have in view. Because, however much we may differ, we who used to sit on the Opposition side of the Chamber were agreed that it was desirable that mischievous trusts, monopolies, and combines should be ended, lt was equally the- view of my honorable friends who now occupy the Opposition benches that things of the kind which are detrimental to the trade of this country, and to the consumers, should be put a stop to. The remedy of my honorable friends was nationalization ; and I am bound to say that the ineffectual efforts which have been made by the past Deakin Government and the present Deakin Government are tending to lead people to consider whether there is not a good deal in favour of the proposition for nationalization in matters of this kind. ‘ I have not come to that conclusion myself, but I warn my honorable friends that this patchwork system is going a long way to disgust people, who want to put a stop to the present scandalous state of things, with the methods which we have adopted, and may induce them to cast their minds further afield for other remedies. In this case my honorable friend Senator Guthrie complains with great vehemence that practically, if we strike out the words which the Minister properly suggests should be struck out - and that will be to make a very small amendment in a very bad clause - we shall do away with the shipping monopoly.
– No, we shall do away with the shipping industry.
– And the shipping industry is a monopoly. It is a most mischievous monopoly. Senator Guthrie, however, stands up for the rights of the shipping monopoly and objects to the elimination of these words, because without them this provision would destroy, as he suggested, the coastal shipping mono1 poly which is at present a burden upon the producers of Australia.
– Would the honorable senator have no shipping industry in Australia?
– Does the honorable senator mean that we cannot have an industry unless we have a monopoly ? His is a perfectly legitimate argument, but it is not an argument which can be used effectively by one who supported’ the Deakin Government so strenuously when that Government introduced measures with the object of destroying monopolies.
– No; the preservation of industries.
– As Senator Clemons pointed out, the title of the Act of 1906,. which was the joint work of my honorable friends who now sit in Opposition and of the Government headed by the present Prime Minister, was absolutely contradictory. It was for the “ preservation of Australian industries.” “ Just so,” says Senator Guthrie, “ that means the shipping industry ! “ But it was also for “the suppression of~ destructive monopolies.” But my honorable friend, Senator Guthrie, would wipe out that part of the measure. He does not want that.
– I did not say so.
– I think that my honorable friend’s vehemence is, from his own point of view, justified.
– He says that the monopoly is beneficial.
– I never met a monopolist who did not say that he was a benefactor of his species. Every tyrant says the same thing. When I come to my honorable friend, Senator Mulcahy, I am still more puzzled. I confess that, using the small amount of intelligence with which I have been endowed, I really cannot make out what this proposed new section is for. If it is for the purpose of preventing monopolies. - which already have an enormous power by virtue of being monopolies - from increasing that power by giving rebates, and so forth, then it is abundantly clear that the words which have been objected to ought to be struck out.
– There is nothing about competition in it.
– My honorable friend has hold of one end of the stick, but he has let go of the other. He looks at the matter from one point of view, but he overlooks another point of view - as he may well do if he does not see it. I will not say, concerning my honorable friend, that there are “ none so blind as those who will not see.” What my honorable friend is striving for is a very legitimate thing. Suppose there is an individual who is in competition with somebody else in the same trade. It is desired to prevent him from giving rebates, and, by means of them, securing the trade of his customers for a certain period, and preventing it going somewhere else. My honorable friend desires that every individual engaged in a particular business shall be precluded from the giving of rebates which may have the effect of injuring the business of another person.
– I simply pointed out the effect of removing the words objected to. I did not say a word in favour of the proposed new section.
– Does the honorable senator say that it is intelligible?
– That is quite another thing.
– I should think so. If these words be left out, what harm can be done to any one? The provision is made effective as regards monopolies. It is also made effective as regards any individual trader or company who, by means of a rebate, is doing something which is prejudicial to another person’s business in the same trade. But if we are going to stop rebates, we ought to stop them thoroughly and altogether.
– How can we do. that ?
– The Government have undertaken the task. 1 am not the sponsor for the Government. But I commend Senator best for saying that the elimination of the words in question will be an improvement. Why should not this prohibition, which is a mischievous and wrong thing, be applicable to all services, whether they are the subject of com.petition or not?
– It may be applicable to a large shipping firm, but not to a small community.
– Does the honorable senator wish to make an exception,’ as regards the giving of rebates, in favour of the large man or the small man ?
– No, I want to protect a small community which could not get a company to send a ship unless some consideration was given.
– Just so, but what is the good of keeping in the words “subject to competition?” That will’ not do any good. The honorable senator wants a different kind of exemption. He has laid his finger on one of the de:fects of this kind of legislation, as he did before. I remember very well when he addressed the Senate exhaustively and to our great instruction, on the Bill of 1906, and again on the Bill of 1907, when he pointed out that these measures were simply in the nature of a prohibitive Tariff.
– That is a painful remembrance.
– It ought not to be, because I agreed with Senator Gray at that time, and I am sure that he agrees with me still.
– I do not wish to do an injustice.
– Quite right. My honorable friend’s object will not be helped by retaining these words. The proper course is to recast the provision, or put in some exception in the direction of giving protection to the particular class of goods he refers to. At any rate, if this is to be a Bill to prohibit rebates that might work mischievously, it ought to be general, applying to everybody and everything. Certainly if it is restricted to goods which are the subject of competition, it will exempt a monopoly, like the shipping monopoly, which already exists, because it will be able to say that there was no competition and that therefore the provisions of this proposed new section could not apply.
– I am glad to see that the Minister is amenable to reason. I think that the time has arrived when we should be extremely careful in dealing with any legislation of this kind. On two or three occasions our legislation has been declared ultra vires by the High Court. It is only a week or two since it decided that certain portions of the principal Act were invalid. Again, we are asked to pass a measure of this kind, but in almost its first important provision we are able to pick holes. When Senator
Pearce called attention to the effect of the words ‘‘which are the subject of compete tion” the Minister really did not know where he was. He had to consult with the draftsman, and then agree to move their deletion. Whatever good this provision may contain - and I do not think that it contains much good - would be destroyed by the retention of the words. In my opinion they would give rise to almost endless litigation. Certain persons have already been put to large expenditure in testing the validity of our legislation in this direction, and the retention of these words would,, in my opinion, bring about another series of legal worries. If the words are retained the trouble will be to prove where competition comes in, and whether it is fair or unfair. Senator Pearce gave a very apt illustration when he cited the Wyndham case. Whether rebates are given on a small or large scale it is a very nefarious practice, and ought to be suppressed with a very strong hand. This part of the Bill is headed “Repression of Monoplies,” but if we retain these words we will certainly encourage the existence of monopolies, not only in the shipping trade, but in other directions. T hope that the High Court will not be afforded another opportunity to declare that any provision we enact is ultra vires.
– I agree with Senator Symon that, this provision ought to be recast. I should like the Minister to state how he defines the word “services.” The discussion has been confined more particularly to shipping, but the word “ services “ will, I think, extend to banks. It is well known that the banks are accustomed to impose many restrictions ; for instance, to require that customers shall deal with them only, and do this, that, and the other thing. The banks, of course, will not’ have a regular rate for everybody, but certain concessions will be given to certain customers. Is the Minister prepared to deal with the banks? If he is not, we certainly ought not to pass the proposed new section as it stands. I should like very much to see the Bill thrown out, because I do not think that it would be of any use except to give pinpricks and cause persons to say that useless legislation is passed. In my. opinion this provision will certainly include the banks.
– In what way will it affect them?
– Have the banks one rule for all?
– That has nothing to do with the matter.
– If the banks give a preference to any man this provision will apply.
– The honorable senator means that if a bank charges one man 5 per cent, and another man 7 per cent., for his overdraft, it will apply.
– Is not that a preference?
– That is a rebate ?
– It may cause the Minister some trouble to deal with the banks, but if he does his duty, he will be bound to use this provision against them. I, for one, would like to see it eliminated or recast.
– Like the last speaker, I think it does not matter a great deal whether the words referred to are retained or deleted. I desire to give the longest possible tether to those who believe in this kind of legislation, in order to satisfy them that it is not worth’ the paper it is written on. I do not wish to give them an opportunity to say by-and-by that their measure was restricted in its passage through Parliament, and consequently their purpose could not be given effect. So far as things subject to competition are concerned, this ‘ provision is directed at the present shipping ring, but I do not think that it would have the slightest effect in that direction, because, as a matter of fact, the shipping trade at present is not the subject of competition. The coasting trade is practically in the hands of a big shipping federation. When the Ocean Shipping Commission was inquiring a few years ago into the conditions of the Australian trade, there were a few little companies outside the big shipping ring which Senator Macfarlane will remember was then referred to by merchants as an octopus. Since that time, the largest of the small companies has been taken into the ring, and to-day ‘the coasting trade is practically in the hands of the ring.
– They will use the screw just now to wipe out even a little cutter.
– That is quite true. In Western Australia, some time ago, I think there was one ship-owner, namely, Mr. Bateman, of Fremantle, who was crushed out of the coasting trade of his own State by the big shipping ring with this system of rebates. Every one must realize that a small ship-owner cannot give rebates and compete with large companies. If a man’s trade does not extend beyond two ports, the rebates count for nothing.
– They use the InterState rebate to work out a man who operates inside the State.
– Yes. The InterState trade may count a great deal to the trader. If we allowed these words to stand, and a case were taken to the High Court, probably it would decide that the coasting trade was not subject to competition, and that therefore the provision did not apply. Looking at the matter from that point of view, it is clear that if these words are allowed to remain, the Bill will be foredoomed to failure. If we intend to try the effect of anti-trust legislation, we should pass it in its most drastic form. We should then probably find out, what honorable senators opposite have so far failed to discover, that such legislation is not worth the paper on which it is printed. We know that in the case referred to, there has been no competition for a long time, and that there will be none, even if this Bill is passed. The ring will continue to control the whole of the trade, and we cannot prevent them. We can legislate against the payment of rebates; but they can continue to pay secret rebates, and we shall be unable to get at them. This has already been proved by the experience of America. In the United States, they have had a much, longer experience of the operation of the rebate system, in a more aggravated form than it has yet assumed in Australia; and their legislation, which has been in force much longer than ours, has been found to lie totally inadequate to remedy the evil. I have very little hope that this Bill will be of much use.
– What is the honorable senator’s hope?
– I did not think that Senator Gray was in any doubt as to what my principles are. They are well defined and well known. It occurs to me that Senator Symon’s remarks indicate that some light on this subject is beginning to dawn, even upon him, and that he is coming to believe that ours is the proper cure for these evils. I am satisfied that this kind of legislation will prove to be of very little service, and this Bill will be worse than, useless if the words to which reference has been made are retained.
Senator Sir ROBERT BEST (Victoria - Minister of Trade and Customs) [5.34]- - I understand the position taken up by my honorable friends opposite, and I have no right to complain of it. Our contention is that there are certain trusts and monopolies which are regarded a? a menace to the community. They constitute evils and sores on the body politic, that we should endeavour to remedy. The design and object of this legislation is to deal with the system which has to so great an extent created these evils. Unless, following upon well-defined lines, we can by legislation of this kind control trusts and monopolies, we can understand the contention of our honorable friends on the other side, that nationalization is the only remedy for the evils complained of. I ask honorable senators to say whether they are prepared to admit that they are unable to control monopolies that are evil. I do not contend that all monopolies are evil. According to the terms qf the Bill, we propose to deal only with those whose operations are detrimental to the public. I appeal to my honorable friends to say whether they recognise an evil and , will make no effort in the interests of the public to control it. It must be borne in mind that we are not here proposing to introduce any new principle. The principle is already embodied in the original Act. In that Act we have legislated against any person entering into a contract in relation to trade or commerce, with the intention to destroy or injure, by means of unfair competition, any Australian industry ; and we have provided that the competition shall be deemed to be unfair unless the contrary is proved -
If the defendant with respect to any goods or services which are the subject of the competition gives offers or promises to any person any rebate refund discount or reward upon condition that that person deals, or in consideration of that person having dealt, with the defendant to the exclusion of other persons dealing in similar goods or services.
It was found that prosecution was too much encumbered by our present legislation, and it is desirable that we should simplify our procedure in order to carry out the object of the principal Act. In this Bill, we have gone no further. We simply say that, instead of having to prove all the various things I have already mentioned, the mere fact of giving a rebate upon the condition of exclusive dealing - (because that is the foundation of the whole thing - shall constitute an offence. Senator Guthrie delivered a most vehement speech denouncing myself and honorable senators for seek ing to deal with a recognised monopoly, so far as our coastal trade is- concerned. Honorable senators know the method bv which the Shipping Conference controls the coastal trade.
– And they know the family lawyer, with whom a family exclusively deals. *
– He is a very useful person.
– Of course ; he is a recognised necessity. As I understand the matter, certain shipping firms have agreed to form a conference or ring. They have determined exactly what freight sHall be paid, and have arbitrarily fixed the terms on which they shall trade. The evils associated with this particular monopoly have already been set out in classic and graphic language by Senator Guthrie and some of our honorable friends on the other side in a report submit’.pd to Parliament. The members of the shipping ring say to the shipper, “ We shall compel you to ship with us on our own terms. If you are a good boy at the end of twelve months, we shall be at liberty, if we are sodisposed and inclined, to return to you a certain sum of money. But if, in the meantime, you attempt to deal with anybody else, or should be in any way a party to or privy to dealing with any one else, these refunds will go into our own pockets, and you shall not get a penny of them.” Senator Guthrie charged the Government with endeavouring to crush the industry. We are endeavouring to do nothing of the kind. We wish to protect the public by preventing the creation of conferences or rings, such as those which have in other places worked most disastrously to the interests of the public. I have already pointed out that the shipping .ring in South Africa set State against State, and brought the Governments of the various States largely under their control. This is the kind of thing we are trying to control by this legislation. I urge that at this particular juncture, when these monopolies are merely budding in Australia, it is our duty to exercise control ; as the stronger they grow, the more difficult they will be to deal with. Senator Mulcahy misconceives the object of this provision. I am personally of the opinion that the cases referred to by Senator Pearce and one or two other honorable senators could be dealt with under this proposed new section, whether the words objected to are retained or not.
With the draughtsman, I do do not attach very much importance to them, and if honorable senators think that it would make the provision clearer to omit them, by all means let us leave them out. Senator Mulcahy quoted a possible case, affecting the coast of Tasmania, where a number of shippers might induce a certain shipowner to run a small boat between particular places by promising to give him their trade for a particular time. Such a case would not be touched by the Bill. That would be a perfectly legitimate contract for the ship-owner to undertake.
– They would agree to trade with him exclusively.
– The ship-owner, in such a case; is not seeking jo build up a monopoly by granting rebates on the condition of exclusive dealing. The Bill would not touch a legitimate contract such as Senator Mulcahy has mentioned.
– It would operate in the case of a concession or award.
– A rebate implies a certain fixed schedule of rates.
- Senator Macfarlane suggests that this provision would interfere with the practice of banks, and affect interest on overdrafts and exchanges. The- honorable senator has made that allegation under a misconception. It would not interfere in the case of such dealings between a bank and its customers, because they would not involve a condition of exclusive dealing, or the fixing of a definite schedule of rates.
– Rebates are given in banking, as well as in other business.
– Of course, and there is no objection to discount being given by banks, unless on the condition of exclusive dealing. There would be no interference with anything done in the open market and in the usual and ordinary Wai: of trade”.
– Would the Bill affect banking under any condition, and, if so, under what condition ?
– First of all. I have told my honorable friend that the Bill deals with goods and services. I cannot conceive of any banking case - and certainly no such case was mentioned bv “Senator Macfarlane - which would come within the terms of this Bill ; but, if tankers are guilty of the offences mentioned here, and which constitute a recognised evil, they must desist, as well as everybody else. But in the ordinary course of dealing I am not aware of any transactions of theirs which, would come within this provision. I would further urge that this proposed section has been introduced in pursuance of the terms of the principal Act and on the recommendation of that group of the Navigation Commission which included Senator Guthrie, and which, after pointing out the arbitrary conduct of monopolies, and particularly of the shipping monopoly, said -
As your Commissioners consider that the rebate system is open to grave abuses, and calculated to seriously prejudice the commercial and industrial interests of the Commonwealth, they recommend the introduction of legislation at an early date, making it illegal for the owner, master, or agent of any vessel to give rebates or other advantages to any shipper or consignee of goods, if the condition of such rebates or advantages is that there shall be exclusive shipment by a certain vessel or vessels.
– The Minister of Trade and Customs should also read that portion of our report in which we recommend that the coastal trade should be given to Australian ships.
– I do not know that that portion of the report has any bearing upon this provision. In discussing the question of rebates the section of the Commission to which I have already referred says -
Upon the point that the limitation of the coastal trade to vessels complying with Australian conditions would result in a monopoly, a considerable amount of evidence was received. lt was freely stated that a combine does already exist, by which the rates for passengers and cargo carried by the companies in the Steam-ship Owners’ Federation are regulated. Its extent may be gauged from the fact that out of about 188,000 tons engaged in Inter-State traffic, less than 10,000 are outside the ring. It would appear that the combine has been in operation for a long time, and complaints of a very strong and emphatic character were received as to its methods.
I do not desire to detain the Committeeby reading those complaints, but honorable senators will see that in the clearest possible manner we are seeking to put an end to a system which is an acknowledged evil. If my honorable friends admit - as they have done - that an evil exists, surely it is not unreasonable to suggest, as we do by this clause, that that evil should be rectified in a simpler and more direct way than we have previously attempted. I commend the proposed new section to the favorable consideration of honorable senators.
– I do not wish to vote for this provision without thoroughly understanding it, and I confess that I have not yet grasped its full meaning. It appears to me to be very drastic. So far, the discussion has centred around the word “ services,” which is a very comprehensive term, and one that is not confined merely to shipping. I regret that I have not yet heard anything in regard to its bearing upon the question of goods. I am not sure that it would not prevent a manufacturer from appointing a person as sole agent for his goods–
– It will not apply to the relations between a principal and his agent.
– If one individual agreed to deal exclusively with another who consented to grant him a certain rebate, would the provision be applicable? Suppose, for instance, that a coal company said to an individual, “ If you will purchase our entire output and refuse to buy coal from any other company we will grant you a certain rebate,” would the provision be applicable?
– If the rebate were given on the condition of exclusive dealing, it would.
– But would it apply if exclusive dealing were brought about by stipulating for the supply of a certain quantity which would cover all requirements ?
– I am not clear upon the point. I wish to know how it affects persons dealing in goods. If, for example, a manufacturer in Victoria were to say to a firm in New South Wales : “ Provided that you will take a certain quantity of my goods, I am willing to supply you at a special rate conditionally that you deal with me only,” would that constitute unfair competition?
– Under this provision, it would.
– It seems to me that the provision so far as it relates to goods has not yet been clearly explained. I shall be glad if the Minister of Trade and Customs will tell us how it will affect people who deal merely in goods, and not in services.
– If I were a manufacturer of blankets, and - knowing that the demands of a certain individual would be about 500 pairs during the season - I said to him : “If you will purchase 500 pairs qf blankets from me during the year “ - which would mean that he would purchase from me exclusively - “ I’ will make you a certain concession,” would that constitute unfair competition? A case which readily occurs to my mind in this connexion has reference to the east coast of Tasmania. Some time ago, Captain Hall, who then owned a steamer, visited various farmers in that portion of the State, and offered to make terms with them to provide a weekly steamer service. He did not attempt to bind all of them, or to grant similar terms to all. Instead, he went to the bigger farmers, and said : “ If you will guarantee me your trade for twelve months, I will Carry your produce at a certain price,” which was not his ordinary price. It seems ‘to me that this provision is designed to prevent such an arrangement being entered into. Further, the fact appears to have been overlooked that it will follow a section in the principal Act which deals specifically with monopolies. Personally, I believe that the whole Bill is mischievous. Indeed, that has been my opinion of it from first to last.
– - I am very glad to hear that Senator Mulcahy has arrived at that conclusion.
– 1 made the same statement two years ago.
– -Then I hope that the lapse of two years has brought about’ a change, and that the honorable senator has discovered a better method of dealing with the position with which we are faced than that which he condemns. We must all recognise that it is idle to condemn legislation iff we are not prepared to suggest something better in lieu thereof. What does Senator Mulcahy propose to substitute for this kind of legislation ?
– Does the honorable senator think that there is no medicine in the world other than that which he choosesto prescribe?
– I have not proposed anything yet. When the Labour party are in office, it will be time enough to expect them to prescribe remedies.
– When I am a member of the Government, I shall be prepared to prescribe remedies.
– The honorable senator is a supporter of the Government. I understand he was an active agent in bringing about the recent fusion.
– May I ask the honorable senator to make his remarks relevant to the question?
– Since Senator Mulcahy has been a member of this Chamber, he has been identified with almost every party. As he has chosen to give a concrete instance, and as the Committee seems to have been converted into a sort of political kindergarten, [ propose to cite another. Take the case of the timber trade in Western Australia. In that State, there is a very large co-operative concern, which is controlled and managed entirely by working men. It is one of the most successful institutions of the kind in Australia. If that institution were to enter into a contract with some person or company under which it undertook to supply that person or company with the whole of its output in railway sleepers, would its operations come within the scope of this provision?
– Not unless it refused to sell to any person who also purchased supplies from somebody else.
-But they are the producers. They have got rid of the middle-man, and deal directly with the consumer. I hope that the same principle will, in time, be applied all round. The middleman should be wiped out. He is one of those costly agents in modern production that our trust’s have shown us how to dispense with. I desire to inquire whether, if a co-operative timber company enters into a contract to supply the whole of its timber to one firm, it will run counter to this Bill?
– Not if it entered into such an agreement without the condition that the buyers should not be allowed to deal with any one else.
-That element of restriction does not enter in the care to which 1 refer. If the Government are really in earnest about this matter, I am convinced that they will ultimately have to fix freights on the coast of Australia. That will be the next step in our anti-trust legislation. Not that I am entirely opposed to the existing shipping ring. T quite recognise that their position would be intolerable if they hnd not some means of controlling competition. That is the evil which thu anti-Socialist, and particularly the
Free Trader, has to contend with. We used to be told by our Free Trade friends that the true remedy for monopoly was Free Trade, and that trusts could not exist under a Free Trade policy.
– I am not aware that any one ever said that.
– If I had time to wade through the reports of Senator Pulsford’s speeches on the Tariff, I could find instances where he has made such statements. In fact, it is a well-known principle, as advocated by Free Traders in the past. The political economist who first pointed out the fallacy, in answer to the arguments of Cobden and Bright, was Karl Marx, and every development in trade demonstrates more clearly as years roll on that he was right. Neither Free Trade nor Protection will prevent the growth of trusts. Free Traders may say that competition is the life of trade, but capitalists know it is the death of profits, and prevent competition wherever they can. I recognise that competition is often injurious. I am not a supporter of cutthroat competition. I know what it leads to, both in the case of the workman and the owner of capital, in any industry to which it is applied. But there is no competition on the Australian coast at the present time. The whole business is a huge monopoly in the hands of a few who have crushed out the small ship-owner. But it is absurd to suppose that freedom of competition would lead to the cessation of such monopolies. In Great Britain there are a number of railway companies, apparently in competition with each other; but in reality it is not so, because there are arrangements with regard to freight.
– The competition is ir. the means adopted to get the traffic.
– Quite so, and that is the reason why heavy freights have to be charged. Great cost is incurred in paying touts to get business for the companies. I hope we shall be able to take to heart the lessons taught by legislation of this character. If we do, we shall not trouble very much, about making an alteration in this provision as it stands. T repeat, however, that there is no competition in the Australian shipping industry, and if’ the provision went before the High Court, I feel sure th-it the Court would hold that it would not apply to shipping because of the absence -e “f competition. I shall support the amendment.
.- I intend to support the amendment, but I have risen to ask the Minister whether he will be good enough to interpret the reference he made in his last vehement speech, when he asked the Committee whether, recognising the evil, we were not prepared to do something to abate it ? I do not know to whom the honorable senator referred, but certainly his remarks had no reference whatever to me and to the party to which I belong.
– I was talking about the rebate system.
– I am prepared to go as far as the Government desire in regard to legislation of this character. But, at the same time, I feel that our efforts are vain, and that we shall not by these means accomplish the end which, seemingly, we have in view. We desire to prevent trusts, which are injurious, from carrying on their practices to the injury of the people of this country. I am in harmony with the Government in that matter. For that reason I. shall support the omission of the words referred to, believing that by such means we shall prevent a good deal of misunderstanding. Senator Guthrie, I presume, thinks that the words should remain, and that unless they do the great shipping industry of Australia will be at the mercy of something which is foreign to our present condition of things. I do not know what it is, but I do know that, prior to the formation of the shipping ring, a good many of the Australian shipping companies did very well indeed for a considerable time. I admit that there came a time when the shipping industry here was in a very bad way, not from lack of trade, but from the desire of some companies to cut out others. Then they had no competition to face ; and to-day they are in a similar position.
– The companies combined to wipe out any competition that there was.
– But there is competition now.
– Throughout my experience, the local ship-owners have enjoyed - to a very large extent - the trade of Australia. They now have all the trade, and no competition to fear. The only competition which ever injured the shipping trade of Australia was that which took place between the local companies ; but, of course, that has been removed by the “ honorable understanding “ to which they came. The Government are now seeking, to prevent the “ honorable understanding “ from injuriously affecting the general public. I am prepared to go every foot of the way which the Government are prepared to go. At the same time, I think that any legislation of this description which may be passed, will not achieve the end to which they seem tobe driving.
– In his reply, the Minister quoted to some extent from the report of the Navigation Commission, but he failed, and I think unfairly failed, to quote that portionin which they said that our shipping industry had a right to the coasting trade with one small exception.
– Will the honorable senator tell me what I did not quote ?
– I am reminding the Minister that in their report the Navigation Commission laid down as a first principle that the coasting trade should be reserved to Australian ships. That is a principle with which, I think, every one agrees; but, so far, Parliament has given no effect to it. For his own protection, the ship-owner wants to keep out the foreign trader. It may be urged here that there is no danger of foreign shipping coming into the Australian trade; but when [ mention that last week no less than two outside ships took freights from Newcastle in competition with our own ships, honorable senators will see that there is some competition in that direction to be feared. It is not a question of the number of ships which come in, but a question of ships being put on the -berth and disturbing the freights. We all know that if the earnings of ship-owners are reduced, the wages of their men will be reduced. The intent of the Government in bringing down this legislation in the first instance was good ; and that was to preserve Australian industries. Why was the first Bill on the subject introduced ? It was brought in to preserve the local manufacturers of harvesters. But what is the position to-day regarding that industry ? We do not know where we are. As a sort of excuse for the attempt to protect the manufacturers of harvesters, the first Bill embraced the repression of monopolies. Now, what monopolies were intended to be repressed when we passed that measure ? Undoubtedly, it was brought in, first to encourage local industry, and” secondly to repress the foreigner who was– competing with local industry. Surely every one can recognise that those were the two main objects in view. In proposing that legislation, the Government were trying to shut out foreign competition. The words proposed to be deleted from this provision are “ which are the subject of competition.’”’ In Victoria; we find a hat industry which is subject to no competition, .and which deals exclusively with one wholesale warehouse.
– Another hat factory might be established to-morrow.
– They are all subject to competition.
– This Bill, if passed, will ‘have very far reaching effects. Suppose that this provision is passed as it
Stands, and that I ask a manufacturer to supply me with certain articles, and that he declines to deal with me. He will be subject to a penalty under the provision. I am told, on fairly good authority, that a certain hat factory in Melbourne refuses to supply goods to the Co-operative Society.
– The tweed mills do the same.
– Exactly. Parliament is now called upon to lav down principles for the High Court to administer, and we all ought to consider well the far reaching effects of the measure. If we enact such provisions as these, I am afraid that, instead of encouraging Australian industries, they will be likely to strangle them.
– I think that Senator Guthrie’s reference to the hat industry requires ventilation. The people of Australia have consented to very high duties being imposed on hats, in the hope that the local production of them would be encouraged; but the result has been that the various hat factories refuse to sell except through what is commonly known in Melbourne as “ the Lane.” Hats which are sold to “the Lane” at about 4s. 6d. each, cost the wearer 10s. 6d., and the sum of 6s. is divided in profit between the retailer and the wholesale man. By this means, the establishment of the industry in Australia is very materially retarded. But for the fact that two profits have to be made - one of them seems to me to be wholly unnecessary - it might be possible either to sell the same quality of hats as now produced, or to produce a better quality at a greatly reduced price to the wearer.
– I do not suppose it matters very much whether we agree to or reject the amendment.
– That says very little for the Bill.
– My honest opinion about the Bill is that, having regard to the kind. of support they are getting, it will, in the hands of the present Government, be utterly without value. When I remember how bitterly a number of honorable senators, who are now supporting this legislation, opposed it in the past, I am tempted to think that it will be a mere matter of form to place this measure on the statutebook. The Government, even if they were willing, would not be allowed to put the measure into force.
– The honorable senator must not go into that. He should make his remarks relevant to the amendment.
– If the amendment is carried, and the measure is honestly administered, the consequences will be very far reaching indeed.
– That is what is desired.
– We shall not know where we are.
– I am almost certain . that the astute people who are connected with commerce will find some easy way of circumventing any provision to control their action which we may include in this Bill ; for that reason, I do not think the matter worth discussing, and I shall give it up.
– I should like to have some further explanation of the meaning of the word “ services,” as used in this Bill. In its ordinary signification, the word covers a great deal, and I should like tq, know exactly what it will include as used in this Bill. I am afraid that if strictly administered, this law, as Senator Stewart has observed, would involve very serious consequences. The honorable senator probably knows that I am not by any means a supporter of the measure.
– The word “goods” and the word “services” are both intended to have the very widest meaning as used in this Bill.
– I wish to ask the Minister’s view on an actual case, and he will therefore admit that I am putting a practical question. I have personal knowledge of an instance where persons engaged . in a particular trade asked that a boat should be put on to enable them to carry on their business. The ship-owner appealed to agreed to put on’ a boat, but only on certain conditions, without which he claimed it would not pay. He asked for a specific undertaking that the shippers would pay freight at a specific rate on a certain tonnage, and that other conditions should also be complied with. Assuming that a boat is put on in such a case, and that after a certain length of time, when it is shown that the business is a prosperous one, another ship-owner expresses a willingness to put on a boat as well. The shippers say they will be very pleased to avail themselves of the extra boat on the same conditions as are asked bv the first ship-owner. The second ship-owner might contend that, since the business had become prosperous, those conditions were unfair, and he might claim that the first ship-owner was carrying on a monopoly, and had had the advantage of the monopoly for a number of years. I wish to know whether such an arrangement would come under the provisions of this Bill?
Senator Sir ROBERT BEST (VictoriaMinister of Trade and Customs) [7-52]. - I wish Senator Gray to understand that the case he has quoted is that of a contract between certain individuals for transport at a particular rate, the shippers undertaking to ship their goods for a given time at that rate. Such an arrangement would not be affected by this Bill. First of all, there is no question of a rebate or concession involved ; and secondly, no consideration or condition as to exclusive dealing, and these are elements which must be present to constitute an offence under this proposed new section.
– Suppose that exclusive dealing for a certain time were part of the arrangement?
– In the case mentioned, the ship-owner could enter into contracts with whom he pleased, and no question of preference would be involved. I wish honorable members to understand that in order to come under the operation of this provision in such cases, it would have to be shown that a rebate, concession, or discount was being paid on the condition of exclusive dealings because these are the elements that create the monopolies we are trying to control.
-Colonel CAMERON (Tasmania) [7.54].- Senator Gray has referred to the case of a shipping firm making terms with a number of shippers because there is no other shipping firm engaged in the busi ness. But suppose another shipping firm desires to cut into the trade, could they not bring the first shipping firm before the Court, on the ground of an agreement involving exclusive dealing?
– No; because it would be a matter of contract.
– I think we should have some further explanation of this matter. Senator Best, in reply to Senator Cameron, has said that in the case cited by Senator Gray, the Bill would not apply, because there would have been a contract entered into.
– And because there would be no rebate and no exclusive dealing provided for.
– I did not say that there would be no rebate.
– I take the case cited by Senator Gray, and assume that a contract is entered into between the parties for, say, twelve months. At the end of six months a new company puts on a boat, and quotes half the rates charged by the first company. If the shippers, or a number of them, deserted the first company and gave their business to tha new company, would they not be liable for a breach of contract?
– Even if this measure were in force, the contract entered into between the shippers and the first shipping company for a particular period would be upheld?
– Of course it would, assuming that it was a valid contract.
– Would that not open a way to an evasion of the provisions of this measure? Suppose a shipper made a contract with Senator Macfarlane’ s shipping company to carry the whole of his goods for twelve months at a particular rate, would that be an evasion of the terms of this Bill?
– Not unless the shipping company refused to carry the shipper’s goods if he sent goods by vessels belonging to some other company.
– Suppose it were a part of the contract that all the shipper’s goods should be sent by Senator Macfarlane’s shipping company, and that it was because the shipping company secured all the business that they quoted a low rate?
-They made a concession in the rate?
– Exactly. Would the Bill apply in such a case?
Amendment agreed to.
– I am not anxious to throw cold water on the efforts of the Government, but I wish to ask them to accept one or two amendments. I wish to have the words “ or receives from “ inserted after the word “ to “ in line 8, and the word “ unfair “ after the word “ any “ in line 8, so that this portion of the proposed new section would readgives, offers, or promises to or receives from any other person any unfair rebate, refund - and so on. As the word “ unfair “ may have adifferent signification to some people to that which it has to those who desire to have the amendment made, I may say that I propose, at the end of the provision, the insertion of an explanation of what the word shall mean in this Bill. I intend to move the insertion at the end of the proposed section of the words - “ Unfair “ in this section means unfair in the circumstances and to the detriment of the general public.
Surely it will be admitted that there are cases in which the payment of rebates would not be detrimental to the general public, and would not, therefore, be unfair. This Bill is regarded in the commercial world as a very contentious one, and the amendments I suggest are submitted on behalf of persons interested in commerce. I agree with other honorable senators that the word “services” has such a very wide signification that it is doubtful whether there is any business at all that would not be more or less affected by this Bill, even though it might not constitute a monopoly. Honorable senators are aware that persons who buy goods in large quantities obtain an advantage over those who purchase only a small quantity. A steamer might be put on to a certain trade route, under a promise of support for a certain time. Some one, seeing that the steamer was paying well, might wish to start an opposition steamer, and those who began the service might feel justified, in order to retain their business, in demanding a promise of support from those who had induced them to start the service. If, in order to do so, they quoted a special rate of freight, that might be regarded as involving the payment of a rebate. I move -
That after the word “to,” line 8, the words “ or receives from “ be inserted.
Senator Sir ROBERT BEST (Victoria - Minister of Trade and Customs) [8.1]. - My honorable friend has now launched an amendment which, if adopted, would practically neutralize any good that might otherwise be contained in the Bill. He knows that the object of this measure is to simplify procedure, and yet he seeks to encumber it with a provision relating to “ unfair” rebates. Now, what are “unfair” rebates? The honorable senator endeavours to define them by saying that they are rebates which are unfair in the circumstances, or which operate to the detriment of the public. May I remind him that an expensive action at law would be necessary to ascertain as a fact whether, under the circumstances, a rebate was fair or unfair?
– Does the Minister say that the granting of a rebate in itself is wrong ?
– We are attempting to strike at an evil. We know that there is a recognised system of rebates which has proved an all-important factor in the upbuilding of monopolies. In the principal Act, we legislated against that system, but, upon attempting to put sections 4 and 6 of that Act into operation, it was discovered that so many matters had to be proved that it was practically impossible to obtain a conviction. Hence it is that we have resorted to a simpler method of procedure by seeking to provide that the granting of a rebate conditional upon “ exclusive dealing “ shall be regarded as an offence.
– If the Government desired to do business with a particular firm, and it they were offered special terms, would such a concession be regarded as an unfair rebate?
– Of course it would not. This provision does not attempt to interfere with the ordinary discounts allowed in trade. It merely seeks to strike at the system of granting rebates upon the ground of “exclusive dealing.” I have already quoted freely, with a view to showing how that system has been abused to the detriment of the public. If we have to resort to litigation to ascertain whether or not a, rebate is unfair, I maintain that any monopoly will be able to defeat the objects of the measure
– Can the Minister cite one case in Australia in which injury has been inflicted on the public?
– I can only refer my honorable friend to the report of the Navigation Commission itself, which sets out in the most glaring terms the evil practices which have been resorted to here, and the injuries which have been inflicted on the public.
– There are any number of instances. There is a Western Australian Shipping Association, for example.
– I also embraced the opportunity to show the abuses of which various conferences are capable, to outline the. arbitrary way in which they have acted in regard to various States, and to point out how they practically control the whole of the transport trade of South Africa. These are extreme cases, but they show what is possible under the system to which we are seeking to put an end.
– The amendment which Senator Walker lias submitted is one which I thought- the Minister of Trade and Customs would have straightway accepted. The Bill in its present form declares that the granting of rebates shall be a criminal offence, and Senator Walker’s proposal would make the acceptance of such rebates a similar offence. The question of unfair rebates will have to be dealt with subsequently. In my opinion, the words “ or receives from “ cannot be inserted in this provision. Perhaps the Minister will agree to the suggestion of Senator Walker, and embody his idea in a. new clause.
Senator Sir ROBERT BEST (Victoria - Minister of Trade and Customs) [8.8]. - In reply to Senator Pulsford, I wish to say that I endeavoured to deal with Senator Walker’s amendment as a whole. It is obvious that the words “or receives from” cannot be inserted here,, because they would be inconsistent with the terms of the provision itself. They will require to be embodied in a new clause. I should like fo see such a clause circulated before subscribing to the honorable senator’s proposal, because, in my judgment, it is capable of some abuse. We are endeavouring to repress monopolies, and it would be very inconsistent if we struck at some poor hardup trader in the grip of a monopolist, who was practically forced to accept a rebate. We wish to strike at the monopolist, and not at his victim.
– If the Minister is willing to embody my idea in a new clause, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment (by Senator Walker) proposed -
That before the word “ rebate,” line 8, the word “unfair” be inserted.
– I should like to support this Bill for many reasons. In the first place, I realize the terrible injury which may be inflicted upon the public if some steps are not taken to control large monopolies. But there is an equally dangerous aspect of this Bill, which makes me doubtful whether I ought to support it. There appears to be no intermediary between the Minister, who will put trie law in motion, and the delinquent. Surely there ought to be some such intermediary as the Inter- State Commission, otherwise an appeal should be allowed to the High Court. In the absence of such a provision we shall be absolutely at the caprice of the Minister in office for the time being.
– I would point out that the word “ unfair,” which Senator Walker desires to insert before the word “ rebates,” is already in the Bill. The marginal note to this proposed section reads:- “Unfair concessions by persons.” That is all that my honorable friend asks should be recognised. He merely desires to make it illegal for unfair concessions to be granted. Does the Minister of Trade and Customs recognise what is stated in the marginal reference?
– When the provision is read as a whole, certainly.
– I think that there is justification for inserting the word “ unfair,” not only in the marginal note, but in the provision itself, and, therefore, I cordially support the proposal of Senator Walker. I wish now to direct attention to one or two other matters. I hold in my hand a copy of the New South Wales Railway Guide, ;..and I find that the railway authorities o:f that State are in the habit of granting a concession which they term a rebate. This rebate is given to traders in regard to the. tickets or passes purchased for their commercial travellers.
– But the Railways Commissioners will give the concessions to anybody.
– If the freight of a firm amounts to ^1,000 per annum, the rebate will be 5 per cent, on one or two tickets. The concessions go up by ^1,000 of freight at a time, until when the freight payable per annum reaches£19,000, the rebate is 95 per cent.
– But there is no condition that the trader shall trade only with the railways.
– The big man, however, gets a large concession, while the small man gets practically nothing. If by Federal legislation we are to declare that the whole system of rebates is inherently wrong, we then and there strike a blow at the legislation of the States. Further than that, the States Governments differentiate in the matterof traffic rates on goods. They give the man who sends large consignments a reduction or rebate as compared with the charges made to the sender of smaller quantities. In Victoria, the concession is called not a rebate, but a reduction; but the reduction operates just in the same way as in New South Wales. I suggest that it is desirable that we should look ahead, and ask ourselves where we are going. I also bring under the notice of the Committee a famous case in regard to rebates on freight which was dealt with some years ago in England. In the year 1888, the case of the Mogul Steamship Company Limited v. McGregor, Gow, and Company, and Others, was tried. The defendants consisted of ten other companies, including the Peninsular and Oriental Steam Navigation Company.The defendants had, by agreement, made arrangements whereby they undertook to give to all shippers by their vessels a rebate at the end of the season of 5 per cent. The Mogul Steamship Company, who were not in the agreement, desired to enter into the trade, and brought an action against the combination of companies. The case was first tried by Lord Chief Justice Coleridge. Afterwards, it went to the Court of Appeal, and finally to the House of Lords. In the first trial, it was held that - the association being formed by the defendants with the view of keeping the trade in their own hands, and not with the intention of ruining the trade of the plaintiffs or through any personal malice or ill-will towards them, was not unlawful, and that no action for a conspiracy was maintainable.
Lord Chief Justice Coleridge, in the course of his judgment, said -
One word in passing only on the contention that this combination of the defendants was unlawful, because it was in restraint of trade. It seems to me that it was no more in restraint of trade, as that phrase is used, for the purpose of avoiding contracts, than if two tailors in a village agreed to give their customers 5 per cent. off their bills at Christmas on condition of their customers dealing with them and with them only. Restraint of trade, with deference, has, in its legal sense, nothing to do with this question. But it is said that the motive of these acts was to ruin the plaintiffs, and that such a motive, it has been held, will render the combination itself wrongful and malicious, and that if damage has resulted to the plaintiffs an action will lie. I conclude that if the premises are established the conclusion follows. It is too late to dispute, if I desired it, as I do not, that a wrongful and malicious combination to ruin a man in his trade may be ground for such an action as this. Was then this combination such? The answer to this question has given me much trouble, and I confess to the weakness of having long doubted and hesitated before I could make up my mind. There can be no doubt that the defendants were determined, if they could, to exclude the plaintiffs from this trade. Strong expressions were drawn from some of them in cross-examination, and the telegrams and letters showed the importance they attached to the matter, their resolute purpose to exclude the plaintiffs if they could, and to do so without any consideration for the results to the plaintiffs, if they were successfully excluded. This, I think, is made out, and I think no more is made out than this. Is this enough? It must be remembered that all trade is, and must be in a sense, selfish ; trade not being infinite, the trade of a particular place or district being possibly very limited, what one man gains another loses. In the hand to hand war of commerce, as in the conflicts of public life, whether at the Bar, in Parliament, in medicine, in engineering (I give examples only) men fight on without very much thought of others, except a desire to excel or to defeat them. Very lofty minds, like Sir Phillip Sidney, with his cup of water; will not stoop to take an advantage, if they think another wants it more. Our age, in spite of high authority to the contrary, is not without its Sir Phillip Sidneys; but these are counsels of perfection which it would be silly indeed to make the measure of the rough business of the world as pursued by ordinary men of business. The line is in words difficult to draw; but I cannot see that these defendants have in fact passed the line which separates the reasonable and the legitimate selfishness of traders from wrong and malice. In 1884 they admitted the plaintiffs to their conference; in 1885 they excluded them, and they were determined no doubt, if they could, to make the exclusion complete and effective, not from any personal malice or ill-will to the plaintiffs as individuals,’ but because they were determined, if they could, to keep the trade to themselves: and if they permitted persons in the position of the plaintiffs to come in and share it they thought, and honestly and, as it turns out, correctly thought, that for a time at least there would be an end of their gains. The plaintiffs’ conduct cannot affect their right of action if they have it; but it is impossible not to observe that they were as reckless of consequences in regard to the defendants as they accuse the defendants of being in regard to themselves; they were as determined to break in as the defendants were determined to shut out ; and they made their threats of smashing freights and injuring the defendants a mode of rather forcible suasion to the defendants to let them into the conference. If they have their right of action, why they have it ; if they have it not, their own conduct disentitles them to much sympathy. On the whole I come to the conclusion that the’ combination was not wrongful and malicious, and that the defendants were not guilty of a misdemeanour. I think that the acts done in pursuance of the combination, were not unlawful, not wrongful, not malicious; and that therefore the defendants are entitled to my judgment.
Judgment for defendants.
The defendants were not content. They brought the matter before the Court of Appeal. Of the Court of three Judges, Lord Esher, Master of the Rolls, was for granting the appeal. Lord Justice Bowen and Lord Justice Fry were against that course, and the appeal was consequently dismissed. I need not quote from their lordships’ judgments.
– What anti-trust legislation was in operation in England then?
– Let me deal with one matter at a time. If the honorable senator will “ mark, learn, and inwardly digest “ what I am about to quote, it will do him good. The case was taken to the House of Lords. Judgment was not given until 1891, when quite a number of noble lords spoke to the matter, and one and all confirmed the judgment originally given by Lord Chief Justice Coleridge. I will make one or two brief extracts. Lord Halsbury said -
Now, after most careful study of the evidence in this case, I have been unable to discover anything done by the members of the associated body of traders other than an offer of reduced freights to persons who would deal exclusively with them ; and if this is unlawful it seems to me that the greater part of commercial dealings, where there is rivalry in trade, must be equally unlawful.
In concluding his judgment, he said -
I am of opinion, therefore, that the whole matter comes round to the original proposition, whether a combination to trade, and to offer, in respect of prices, discounts, and other trade facilities, such terms as will win so large an amount of custom as to render it unprofitable for rival customers to pursue the same trade is unlawful, and I am clearly of opinion that it is not.
Lord Watson, in concluding his remarks on the case, said -
My Lords, in this case it has not been proved, and it has not been suggested, that the respondents used either misrepresentation or compulsion for the purpose of attaining the object of their combination. The only means by which they endeavoured to obtain shipments for their vessels to the exclusion of others, was the inducement of cheaper rates of freight than the appellants were willing to accept. I entertain no doubt that the judgment appealed from ought to be affirmed. I am quite satisfied with the reasons assigned for it by Bowen and Fry,
L.JJ., and the observations which I have made were not meant to add to these reasons, but to make it clear that in my opinion the appellants have presented for decision no question of fact or law attended with either doubt or difficulty.
Lord Bramwell, another eminent Judge, confirmed the same view, as did also Lord Morris and Lord Field; the latter Judge concluding with the words -
I think the Appeal fails, and ought to be dismissed.
Lord Hannen, the last of the Law Lords to speak, ended with the words -
It appears to me that, in the present case, there is nothing indicating an . intention to injure the plaintiffs, except in so far as such injury would be the result of the defendants obtaining for themselves the benefits of the carrying trade, by giving better terms to . customers than their rivals, the plaintiffs, were willing to offer. For these reasons, I think that the judgment of the Court of Appeal should be affirmed.
Order of Lord Coleridge, C.J., and order of the Court of Appeal, affirmed, and appeal dismissed with costs.
I think those opinions are well worthy of thought and attention from every honorable senator. We need to be very careful as to what we are doing. I am at one with everybody who wishes to smash unlawful combinations. By all means let us do so, and let us take the power to do so. But in our legislation let us safeguard our proposals so that we shall not run the danger of doing more harm than good. I trust that the Government will accept the proposal to insert the word “unfair,” which, I repeat, is in the marginal note.
Senator Sir ROBERT BEST (VictoriaMinister of Trade and Customs) [8.31]. - I do not quite understand why Senator Pulsford referred to the cases which he quoted. If they are to be read or understood at all, I should say that they go to show almost conclusively why the Bill should be supported. Let us look at the facts. In the Mogul case the Judges all held that, according to the law, a particular combination was not a wrongful or malicious combination having for its object the smashing up of some other company. But the fact cannot be ignored that, although it was not unlawful, yet the operation of the combination was the crushing out of competition. Realizing that the public had to pay an excessive price for freight, and were injured in other ways, by reason of the creation of a monopoly and the crushing out of competition, this Parliament passed a Bill a few years ago with two objects - first, to put an end to monopolies, or to control them, so far as they were detrimental to the public ; and, secondly, to put an end to the conference and rebate system. We recognised that by the rebate system certain monopolies had been created in various parts of the world. We accepted the best form of legislation which, to some extent, had been deterrent j we relied as far as we could on the best features of the Sherman law and the Elkins law. These laws were in operation and had for their object the control of combinations. Being aware of the evil of combinations and of the possibility of controlling combinations in their earlier stages, we enacted a controlling law. Hence the cases which my honorable friend quoted can have no possible application to this Bill. The Senate affirmed that it was undesirable that the rebate system should be carried on, and embodied that determination in the parent Act. The object of the present measure is to simplify the procedure in order to achieve that determination. Senator Walker intervenes with an amendment which, if carried, would revive all the old troubles. It would simply impose upon the law authorities all the original troubles, create all the former difficulties, and make litigation so expensive that the law would probably not be resorted to. The monopolist, being able to command the highest legal talent, would be likely to upset all our calculations. Hence, our object is to secure simplicity in procedure, and that simplicity is embodied in the terms of the Bill.
– And the simplicity is a fine of £5°°-
– That undoubtedly is the penalty for every offence.
– It is the maximum penalty.
– If my honorable friend thinks that it is not enough, let him try to increase the amount to £1,000. I trust that he will not press his amendment. Senator Pulsford also referred to the railways, and quoted the practice which obtains of making certain rebates and reductions to large customers. The Bill does not touch that system at all, for an obvious reason. The Railways Commissioners have fixed a scale of rebates which is offered to the whole of the public, and not to any individuals exclusively. Their system contains no stipulations for exclusive dealings by customers.
– The general public do not ship 10,000 tons.
– The Railways Commissioners intimate to the whole of the public that if their trade reaches certain proportions they will receive the prescribed concessions. No one is picked out for favour or preference. The scale goes forth to the world, and every individual whose trade attains to a certain amount is entitled to a proportionate concession. Consequently, the provision does not touch the case to which my honorable friend referred.
– I am very sorry if I did not make it quite clear that I did not bring forward the Mogul case as an exposition of the law on the subject. I read the opinionsexpressed by a number of very eminent Judges in the Old Country to show what they thought of the character of the trade, and the fact that they found that there was nothing morally wrong in it. That is the point of view that I wanted to put before honorable senators. The Minister also referred to my remarks about the large discounts given by the Railways Commissioners in connexion with goods, and a certain class of passenger tickets. He said that the system is open to all the community. If he thinks that that is the way out, perhaps the shipping community will try, under the Bill, to devise a way out. According to his statement, all that they will have to do will be to say: “ If you ship a certain amount of freight bv our vessels, you will get a certain discount.”
– Plus the condition that the person ships by no other line.
– The shipping company will be able to forego that condition, and make a simple contract that any-, body shipping by their line, within the next twelve months, goods which yielded a certain amount of freight, would get a percentage of discount, which is to rise cr fall in proportion to the trade.
.- There is no doubt that in tackling the relationship of monopolies to the public we have a serious question to deal with. Senator Guthrie has made it evident that we have a pretty strong combination, possibly a beneficent one, established on our coast. But a combine, however beneficent it may be, has teeth, and it is just as well for Parliament to give an intimation that combines must be very careful how they use their teeth. It is quite right that traders in a possible conflict with powerful monopolies should not, in addition, be subject to immense expense while seeking to procure the infliction of penalties for the improper use of trade, or the monopoly of a trade against them. I am inclined, however, to think that it would be dangerous to insert the word “ unfair,” considering the circumstances which” we are. trying to combat. If the word “ exclusively “ were inserted, the honest trader, monopolist though he might be, would be sufficiently guarded. If the monopolist went outside the common meaning of the word “ exclusively,” he would certainly be punished. But if his proposals extended to the whole community, that would not be an arrangement detrimental to the public interest. For example, suppose that certain sugargrowers got rebates for shipping 500 tons of sugar by a certain, line, that other growers desired to ship by that line, and that their sugar was refused because they had not sent away 500 tons previously, that would be an unfair use of the combine’s position. But suppose the combine offered to allow a discount of 10 per cent, to every grower who shipped 500 tons of sugar in a’ season, whether he had dealt with the line previously or not or intended to do so in the future or not, and a discount of 12 J per cent, to every grower who sent along 1,000 tons of sugar in a season, irrespective of any other condition, that would not be exclusive dealing. I think that the insertion of the word “unfair” would give the big shipping combines and monopolies too wide a loophole. It would be pre:ferable to use the word “exclusively.”
– I really expected some observations of a very different ^character from Senator St. Ledger, who has recently published a “work on Anti-Socialism.
– I cannot allow the honorable senator to discuss the question of Socialism.
– Is not this Socialistic legislation? I have heard even the Chairman of Committees describe it as such, and condemn it on that account. I expected Senator St. Ledger to give us his usual oration, and to suggest that this legislation proposes an interference with trade and capital.
– I admit that it is an interference with capital.
– I propose to make some quotations from the evidence given before the Navigation Commission on the question of rebates. It is very hard indeed, to say when they are fair or unfair. Personally, I cannot see how they can be justified. Where there is fair dealing there is no necessity for them, and if they constitute unfair dealing the whole trade in which the system is adopted must be condemned. I do not know whether honorable senators opposite are prepared to go that far. There is certainly a very unfair system of rebates in force in the coastal trade of Western Australia. I can assure honorable senators that one witness who suffered from the operation of the system, was a man in a large way of business as a merchant and in a smaller way of business as a ship-owner. I refer to Mr. Bateman, a very large merchant and ship-owner of Fremantle. He is a member of a family who have been in business in Western Australia for nearly two generations, and yet by the operation of the system of rebates, he was actually driven out of the shipping trade. I could have understood such a thing in the case of a mushroom firm, or one that had only recently been established in business. Mr. Bateman was asked when before the Navigation Commission -
It has been suggested that the system of deferred rebates is of benefit to the merchant, because he gets regular freights right through, owing to the shipping companies having certain business ?
He replied -
I think it is a very questionable benefit. I think it reacts on the consumer in the end. The consumer would have to pay more for the stuff. As a merchant myself, I say there is no benefit.
He went on .to explain how the system affected him as a ship-owner. He was asked-
Will you give an instance of the unfair working of the system? and he replied -
Yes. It affected me in two cases. At the latter end of 1903 I -had a vessel loading at Singapore. In the following month a circular was issued by certain companies interested in the trade between Singapore and Australia and New Zealand, to the effect that in the future if their shippers sent cargo to Australia except to Western Australia by any boats other than their boats, or to Western Australia except by the boats of the Western Australian Steam Navigation Company and the Ocean Steam-ship Company, they would be deprived of their rebates on shipments to all ports of Australia; and the rebate was the heavy rebate of 20 per cent. If my vessel went to Singapore again for cargo the people who are in the habit of shipping to Western Australia and buying from the merchants of Western Australia and the Eastern States, would absolutely refuse to execute orders for shipment by my boat. They would otherwise jeopardize not only the rebates on cargo to Western Australia, but their rebates on cargo to the Eastern States as well. As this would mean a very big thing to them, it would be beyond possibility for me to get cargo from outside people for my vessel. It would even stand in the way of my getting - even getting - a man to buy cargo for my own ship; because if he bought cargo which was shipped in my ship it would be a contravention of the rebate arrangement. As merchant and shipper, I would be under a disability in trading to Singapore.
That evidence from a man of the standing of Mr. Bateman proves that the rebate system operates in such a comprehensive way that it is impossible to provide any satisfactory method to put an end to it. The more I examine legislation of this kind the more satisfied I am that whatever our proposals may be we shall be unable to abolish the rebate system. It is a natural evolution of the capitalistic system, and those whose capital is invested “in enterprises of this kind will bring the system into force in every way they can. In fact, there is no other course open to them. The danger to capitalists of unbridled competition is so great as to justify me in saying that the rebate system, whether fair or unfair, will continue, and, therefore, all such legislation must be doomed to’ failure. That, I think, must be admitted, even by honorable senators opposite who are adherents of an obsolete fiscal system.
– - Is that the system which Senator Pearce advocates?
– I know that Senator Pearce has as little confidence in Free Trade as in Protection as a remedy for this evil. The adoption of no particular fiscal system will put an end to it. It can be put an end to only in one way, and I am satisfied that Senator Gray would rather do anything than adopt that way.
– Does the honorable senator say that all rebates are wrong?
– Yes, there can be no manner of doubt about that. I have made up my mind that this Bill is only so much waste paper, and that we are merely playing at legislation in passing a measure which is doomed to failure. At the same time, I am prepared to assist the Government to put such legislation on the statutebook in order that it may be proved, if further proof is necessary, that this kind of legislation must prove worthless to attain the end for which it is passed.
– Honorable senators will notice in the marginal note to this proposed new sec tion a reference to “ unfair “ concessions. It will, therefore, be admitted that the provision is directed only to unfair rebates, and I am, therefore, at a loss to understand why the Minister should object to the insertion of the word “ unfair “ as I propose.
– Does not my honorable friend see that the rebate system, plus the condition of exclusive dealing, must be unfair in any case?
– Does the honorable senator object to the word rebate?
– No; I object to the insertion of the word “ unfair.”
– In sub-section 2 of section 6 of the principal Act, there is a description of what is deemed to be unfair competition. The sub-section provides -
In determining whether the competition is unfair regard shall be had to the management, the processes, the plant, and the machinery employed or adopted.
And so on. As the word is not excluded from the principal Act, I must press my amendment to a division.
– I shall vote with Senator Walker, because I regard this provision as an exceedingly dangerous one in the absence of any intermediary between the Minister, who will put the law in motion, and the delinquent.
Senator TURLEY (Queensland) fq.2]. - Senator Walker’s definition of “ unfair “ has completely altered the whole complexion of his amendment. He says that “ unfair “ means “ unfair in the circumstances.” In what circumstances? Competition may not be unfair to the public, notwithstanding that it may be grossly unfair as between different traders. I do not know whether Senator Walker would regard as unfair competition the system of accepting rebates which was recognised by certain merchants’ in Queensland. Evidence concerning that system will be found on page 1193 of the proceedings of the Navigation Commission, which are set out in Vol. 3 of the Parliamentary Papers of 1906. Mr. Hockley, of Maryborough, was asked -
Do you as a shipper get a rebate allowed you on all shipments? - They arrange for a rebate.
Is that with whomsoever may be acting for you? - Yes, with the merchants.
Could you state what the amount of the rebate is? - Ten per cent., I believe.
Have you any knowledge of some goods being brought here on a vessel outside that combine which were sold by auction ? - Yes ; the goods comprised a variety, including cement, pig-iron, and such like.
Did you purchase any of those goods at any time? - Yes, I believe we did.
Did the shipping companies take any exception to your purchasing it, owing to the boat by which it was imported being outside the combine ? - Yes.
Did you lose your rebate on account of your doing that? - Yes.
What did the rebate amount to? - I could not say from memory; the rebate is only paid after twelve months - that is, a rebate earned this month would not be paid until this time twelve months.
It might have been anywhere from six months to nine months’ rebate that you lost? - Yes.
Did you get any information about it, or did they send any one’ to you respecting the matter ? - Yes, they simply sent us a notification, which was given to us by their agents verbally.
Was he a local agent, and what was his name? - He was the local agent of the company ; I could not give his name.
I suppose you consider action of that kind rather interfering with your individual liberty as a commercial man ? - I do.
By Mr. Chanter. - Being satisfied about the existence of combines, in shipping, can you make any suggestions to the best method of breaking down these rings - for instance, if the Commonwealth were to make the giving of rebates il legal, would that have any effect? - Yes; I believe it would have a good effect.
Upon page 1195 we find recorded the evidence of a sawmill owner in the same town - I refer to Mr. Hyne. It was his vessel which brought certain timber back from Sydney to Maryborough - the ship’s original starting place - where it was sold by public auction. What do we find? That because certain merchants in Maryborough purchased that timber in open competition - not because they had any connexion with shipping goods by another steamer - they had to forfeit the rebate which had been accruing to them for some time. Mr. Hyne was examined as follows -
By the Chairman. - Is it a fact that you have brought cargo back in the boats which took your timber to Sydney? - Yes. The back loading consisted of bar iron, barbed wire, cement, bran, pollard, flour, and goods of that description.
Did you bring these goods back for your own use or for sale? - Some of them were for sale, bought in Sydney for the purpose, and others were for merchants in the town of Maryborough.
Did you personally have some of those goods sold by auction or publicly? - Yes; in October, 1903, we sold 250 casks of cement.
Can you say, of your own knowledge, whether any of the people trading with the shipping companiesyou mentioned, bought any of those goods at auction? - Yes, they did.
And with what result? - They lost their rebates from the shipping companies; they were verbally told that their rebates would be cancelled.
Do you know for certain that they absolutely lost their rebates because of that? - I could not say definitely whether it was on account of that particular transaction; but on subsequent transactions I am absolutely certain they did.
In the transaction referred to, they were told they ran a risk if they did it again? - Yes.
Could you give the Commission the names of any persons who were notified to that effect? - Messrs. Hockley and Company, Messrs, Horsburg and Company, and Graham, and Gataker, in this particular instance.
You cannot say whether they actually did lose their rebates? - No.
Did you bring back cargo in your vessel from Sydney later than that in1897? - Yes; we were bringing it back every month.
Could you give a definite instance where any person or company actually lost the rebate because of shipping cargo by you ? - Yes ; in the case of Walkers (Limited), Horsburg and Company, Hockley and Company, and Oclvicks and Martin.
By Mr. Chanter. - Did you find great difficulty in getting back loading for your vessel in consequence of those rebates? - Yes.
If such rebates were made illegal would it advance the interests of your industry by giving you a greater opportunity for trade? - Yes.
Mr. Henry James Hope was examined, as will be seen by reference to page 1197, as follows : -
By the Chairman. - There are other mills here in. Maryborough besides your saw-mill, are there not?- Yes.
How do those other mills ship their timber? - One has a boat of its own, but the export they do is very little. I am practically the only one in this place who has taken up the exporting of timber seriously.
Those mills have no timber to offer you? - We would take it for them if they had.
But up to the present they have not desired to send any by you, nor have they shipped any by the combine? - I could not say whether they had shipped any by the combine. I am disposed to think that they have. I may also mention that I quoted for the delivery of some cedar logs in Sydney, to be delivered by my own vessel. I wrote to a firm in Cairns, from whom I previously bought similar logs, but they wrote back stating they could not supply me, otherwise they would lose their rebate. The letter I received was as follows : -
Cairns, 30th September, 1905.
Messrs. Hyne and Sons, Maryborough.
We are in receipt of yours of 22nd instant, and now beg to confirm our wire advising that we had asked Mr. James Lyons to quote you for silky oak logs, which we understand he has done. We may state that we are unable to quote for shipment by any other than the asso; ciated company’s steamers, otherwise we should lose our accrued bonuses with those companies.
Burns, Philp, and Co.
On another occasion, our agent in Bowen wanted to sell some coal. He saw Burns, Philp, about it. He wrote down to us the following : -
Bowen, 20th November, 1905.
Dear Sirs, -
Yours of 17th inst. to hand. I have spoken to the manager of Burns, Philp, and Company, and he tells me he cannot be supplied by your vessel; however, I will get rid of whatever you can send in your baskets, and I will see the manager of the Meat Works for next season’s requirements if possible.
So that I was not allowed to sell coal in Bowen nor buy cedar in Cairns, or ship for or sell any cargo to people in Maryborough.
Mr. Harrington, the manager for Walkers (Limited), on page 1201, was examined as follows : -
By the Chairman. - Do you import anything to Maryborough from any of the States outside Queensland? - We import from Sydney and Melbourne chiefly.
By what shipping do you carry the goods which you import from those places? - The coastal steam-ship companies we have to do with here- the A. U.S.N. Company, Howard, Smith and Company (Ltd.), and the Adelaide Steam-ship Company.
Practically all your imports must come by those boats? - Yes, by either of those three lines.
Are there any other steamers trading to Maryborough besides those? - The boats owned by the saw-mills carry timber and coal. Two of them were running to Sydney for some little time. One is known as the steamer Hopewell, and the other the schooner Mayflower.
There are other boats which trade here? - Yes.
Is there any system of rebates adopted by those companies you have mentioned? - Yes. In 1897 they issued a circular saying they would allow a rebate of 5 per cent, payable after the expiration of six months. I have now in my hand the original circular. That rebate was to be given on all goods shipped by us, provided we confined our entire shipping business to them.
The date of the circular is 13th August, 1897.
On page 1202 the same witness points out how this practice hampers the possibility of his firm manufacturing boilers, machinery, &c, for the mining and sugar refining industries which are carried on in Queensland. He was examined as follows -
Do you think that condition of things tends to hamper trade in your particular business? - Unquestionably ; we have been hampered, and have lost a volume of business through it. I told Mr. Newman and their agents over and over again that they were simply attempting to close our gates; that as soon as I received their circular in 1897 I was quite sure of it. I tendered for three steam boilers to be delivered at Port Mackay, which might be 300 or 400 miles from here; the rates were given at £60 each boiler, that is j£i8o for the three. They would possibly weigh 12 tons each. I told them that on such rates the business would certainly pass us. that I was sure of it, and it did. lt went to Messrs. Babcock and Wilcox, of Glasgow, who make patent water-tube boilers, which they ship in segments, and the freight on them becomes less on account of their being so handy for transport. There is one piece which would weigh about 5 tons, the remaining segments probably 1 ton each or less. Those would be delivered from Glasgow to Mackay at about half the freight we quoted from Maryborough to Mackay. I. could repeat similar instances. Our firm have lost volumes of business on the coast, and the companies themselves have lost the carriage of it. These goods now coming from England or America as it may be, have come in other bottoms oversea.
Here is evidence of what are considered to be fair rebates by the shipping companies. The companies argue, “ We get a certain volume of business, and consequently we allow you these rebates.”
– Does the honorable senator think that it is wrong to make an arrangement that a firm shall do all a customer’s business on certain terms?
– I think such an arrangement is altogether wrong. It is wrong to say, “ We will allow you a certain concession, provided you do not deal with any one else.”
– Did the Babcock and Wilcox boilers come in under special rebates ?
- Mr. Harrington pointed out that his firm would have had the making of these boilers had anything like reasonable rates been given to them ; that the rates were So high, and the rebates operated in such a manner that his firm could not possibly compete with the boilers sent out from the Old Country.
– Mr. Harrington pointed out that the reason why his firm could not make the boilers here was that they were patented in Australia, and the people in England would not allow them to be made here.
– The local manufacturers were hampered bv the shipping monopoly system round the coast.
– Whatever the real reason may have been, I have stated the reason given to me by Mr. Harrington when I was in Maryborough.
- Mr. Harrington’s evidence before the Commission was given on oath. Some honorable senators may say that there was fair dealing on the part of the shipping companies. I say that it. was not fair at all. It is quite true, as Senator Pulsford pointed out, that the Railways Commissioners grant concessions, but at the same time any person who does business with the railways to the same extent is entitled to the same concessions. The railways do not say, “Any goods which you send between any two points must be carried by us.” Any person is allowed to take advantage of the best means of transit available to him. If the word “ unfair “ is to be inserted, the Bill might as well be dropped. At the same time, I do not think that this measure wilt be effective. I honestly believe that the companies are strong enough to beat this, sort of legislation in the Courts. Whether there is a question of fairness or unfairness or not, in every instance the companies have been financially strong enough to command the best legal talent and have fought from one Court to another until they won. I do not think that combines are going to be controlled in this way. Still we shall not oppose any legislation which the Government bring forward with this object in view. The peculiar position now is, that we find a Government bringing down a measure of this character, and their own supporters moving amendments having the effect of emasculating the Bill. Honorable senators on the Opposition side of the chamber are not prepared to support amendments having the effect of weakening the Bill and creating loopholes for monopolies already existing to carry on their practices, and defy the intention of Parliament.
Question - That the word “unfair”proposed to be inserted be so inserted - put. The Committee divided.
Question so resolved in the negative.
Proposed new section, 7a, as amended, agreed to.
Proposed new section 713 consequentially amended, and agreed to.
– I move -
That the following new section be inserted : - “7c. -1. Any person who, as principal or agent, in relation to trade or commerce with other countries or among the States, enters into a contract with any employé with the intent to restrain the freedom of contract of the employé either as a principal agent or servant in relation to any such trade or commerce after he has left his service, is guilty of an offence. Penalty : Five hundred pounds. “2. Every contract made or entered into in contravention of this section shall be absolutely illegal and void.”
The justification for moving this amendment is contained in the clause of an agreement, which I read some time ago, relating to the Vacuum Oil Company. I am given to understand that a similar form of agreement is quite common. Let me first of all deal with the legal aspect of the matter. The point, of course, will be taken that such an agreement cannot be made illegal by Commonwealth legislation if it applies only to State disputes, such as the bakers’ dispute in Victoria. In various cases in America, especially in the case of N. C. Brooks v. Southern Pacific Company, it has been held that -
Congress may prescribe, as between an InterState carrier and such of its employés as are engaged in Inter-State commerce, that the carrier shall be liable for the death or injury of any such employé while so engaged which may result from the negligence of a fellow servant.
On the other hand, it has also been held that in the case of a person being injured, or of trouble arising inside a State, the State is solely responsible, and the State legislation must prevail. I am not attempting to provide a remedy for such cases as, say, the bakers’ dispute, unless we can imagine a case arising on the border of Victoria and New South Wales; where we have a town on either side, and where the control put over one person will extend to that person carrying on operations in another State. Here we have a chance to do a little towards stopping what I certainly think is an evil, and what Senator Turley, judgjng by his remarks the other day, thinks is a very serious evil, not only inside a State, but even among States. Let us take a very simple instance under the agreement I read to honorable senators the other clay, and here let me say that I rather object to the careless manner in which one of the daily newspapers reported what was said. It reported me as objecting to the way in which “some employés” were compelled to sign agreements, whereas I used the term “all employés.” Let me take the case of a clerk who is engaged in an office in Sydney, and gets an opportunity to go to an office in Brisbane. If he is an honorable man, and holds honorably by the document to which he put his signature, he is not allowed to be in any way instrumental in obtaining orders during the prescribed period from any customer for the goods dealt with. That is an unreasonable restriction to put upon anybody, and I believe that, as a matter of public policy, it would not hold good in a Court of law. Suppose that we have in Melbourne a firm called “A” manufacturing boots, and in Brisbane a firm called “ B “ manufacturing boots; and suppose that the firm “ A “ has employed a man for a certain period to travel for the sale of its boots, and that, after he has travelled through Queensland for a certain period, the firm called “ B,” having heard from its own travellers that be is a smart man, with a good presence, and a good salesman, offers an engagement to him. If this rule which has been operating amongst certain firms is allowed to apply, that traveller cannot engage himself with the firm called “ B “ in Queensland. It is said that these men are engaged as travellers, and in that way have opportunities to ingratiate themselves with certain people in order to sell their employer’s goods. I do not care twopence for the supposed extra shilling or two which they get a week for the purpose of buying drinks for customers, because my experience as a business man tells me that when a man goes to buy he tries to get the best goods he can at the lowest price, and is not largely influenced by the consideration that the traveller has a nice dark moustache, or is clean shaved, or has a grey beard. The man’s manners do not occur to him when he is dealing. If a man has received a certain amount of education and possesses engaging manners that is part of his capital, and the employer has no more right to exploit his ingratiating manners than he has to exploit his muscle. Of course, my honorable friends may say that I am asking a great deal at their hands.
– The honorable senator is.
– I think that if any honorable senators had, by reason of their ability, raised themselves to the position of good travellers, or good clerks,’ or good accountants, they would hold that they should not be compelled to sign a document which required them as honorable men to refrain from doing certain things.
– Why is a man compelled to sign it?
– A man is compelled to sign the agreement because he cannot get an appointment . without doing so.
I have put the case before honorable senators^ - of course, the Minister may have other views - and I leave them to judge the fairness or otherwise of my amendment. I only regret that I have not the eloquence and the ability which some of my honorable friends opposite have to put the proposal forward in forty different phases, but always in a strong way. I hope that the amendment will be carried.
[9.40]- - I have no doubt that honorable senators’ feel much sympathy with the views put forward by Senator Chataway, and the case which he specially referred to, where a company in a particular State bound down its employes in what appeared to be a harsh way. There is no doubt that if we could put an end to a practice which obtains to some extent in other States, it would be our duty, so far as we could, to do so.
Senator Gray.Within reason.
– Of course, within reason. It is of no use to shut our eyes to what is taking place every day, and that is that the vendor of a business is bound down not to start a business in a certain area within a given time. If Senator Chataway were purchasing a business, he would make sure that he was protected in that way. But the whole point of the present law is that the agreement must be reasonable in its nature. This measure does not cover such cases as have been referred to by Senators Turley and Chataway, where the engagements are made within a State. Under the Constitution, we have no control over a case of that kind. That is purely a matter for State regulation. I confess that I find very great difficulty in imagining what particular class of cases a provision of this kind could apply to. It would have to be a case in relation to trade or commerce within the States, or to over-sea traffic. There might be an occasional case of the kind. But I do not think that the provision, if adopted, would be likely to cover many cases. It deals with a class of employment which at present does not occur to my mind. I am not aware of any class of engagements to which it would apply. But, sir, there is another point to be considered. I do not think that the amendment can be received, because it is quite outside the scope of the Bill. The object of the Bill is to amend the Australian Industries Preservation Act 1906, and that Act provides for the preservation of Australian industries and the repression of destructive monopolies. The object of this amendment, however, is to deal with something outside the purposes of that Act, and that is the relationship of employer and employé. We have a standing order which says -
Any amendment may be made to any part of the Bill, provided the same be relevant to the subject-matter of the Bill, and be otherwise in conformity with the rules and orders of the Senate.
– I think that that standing order has been amended.
– I do not think so.
– Does it not now provide that where the object of the Bill is to amend an Act, an amendment relative to the Act may be proposed?
– That was not the effect of the ruling which was given.
– The ruling to whichI think my honorable friend refers permitted a senator to propose an amendment of the principal Act for certain purposes and within certain limits, andI believe that it had some reference to an instruction to a Committee. But, even if we take the principal Act, we findthat it has no reference to the relationship of employer and employé.
– Does not the Minister think that the word “services” in this proposed new section might cover my amendment?
– No; this provision deals with unfair concessions so fax as services are concerned. The amendment seems to me, sir, to be quite outside the scope and intention of the Bill, and I submit that point to vou for consideration.
– We are dealing with a Bill to amend the Australian Industries Preservation Acts of 1 906-7. The original Act and this Bill deal exclusively with monopolies and commercial trusts, and it appears to me that the amendment submitted by Senator Chataway is not relevant to the Bill, and does not come within its title. It deals, I think, with a matter of industrial legislation, which is one on which any State Parliament could legislate. I cannot see how it can be considered relevant to the Bill before the Committee.
Clause, as amended, agreed to.
Clauses 6 to 9, and title, agreed to.
Bill reported with amendments.
Motion (by Senator Millen) proposed -
That the Senate do now adjourn.
– I desire to take advantage of the opportunity which this motion gives me to refer, with very great reluctance, to some remarks which were made by the Minister of Trade and Customs on last Thursday night, the 22nd July, as reported in the Argus of the 23rd. The honorable senator was addressing the Hawthorn branch of the Australian Women’s National League, and is reported to have said -
Mr. Joseph Cook was most hopeful and anxious to be present that evening, but at the last moment he had come to him and expressed extreme regret that owing to the disregard of the usual amenities of parliamentary life, he had been denied a pair by the Opposition, and so was not permitted to be present.
The only inference to be drawn from these words is that the usual amenities of parliamentary life have been disregarded this session, and that pairs have not been given. When the Minister for Defence made that statement, he ought to have known, if he did not know, that the amenities of parliamentary life to which he referred were being regarded.
– By whom?
– By the Labour party, whom the Minister of Customs was accusing. The honorable senator should have known that at the time he spoke pairs had been given, and he should have been careful not to make statements from a public platform which perhaps he would not make on the floor of this chamber. He went on to say -
In these circumstances, Mr. Cook had remained at his place in Parliament to resist an unworthy and improper effort on the part of the Opposition to saddle the community with an additional burden of no less than£1, 100,000.
– What was the additional burden?
– The reference was to an effort made by members of the Labour party in another place to extend the benefits of the Old-age Pensions Act. The point I wish to make is that if the Minister of Trade and Customs had made that statement on the floor of this chamber, and had suggested that any member of this Parliament in taking certain action, or in making certain remarks, was actuated by improper and unworthy motives, he would have been called upon to withdraw the statement. I do not think it is right for any Minister of the Crown, or any member of this Parliament, to stand upon a public platform, and accuse any other member of being actuated by unworthy or improper motives in taking a certain line of action. I say that in doing so, the Minister of Trade and Customs degraded the position he occupies as a responsible Minister of the Crown. On the question of pairs, the honorable senator proclaimed, so to speak, from the housetops that the Opposition had denied pairs. I remember that towards the end of last session, when Senator Best sat on the Opposition cross benches - when the smiles with which he usually greets us were not so frequent as they are now - and when Senator McGregor occupied the bench which the honorable senator and his colleague, Senator Millen, now occupy, I asked for a pair on an occasion when, because of a domestic illness, I was placed in a very serious position. Party feeling at that time ran just as high as it is running to-day. I had already given pairs to honorable senators then in Opposition who were placed in a similar position, in order to allow them to get away to see a sick wife or a sick member of their families. But when I asked that a similar courtesy should be extended to me, it was refused. I r!id not take the platform, and addressing the Women’s National League, or a Labour league, complain to Australia that 1 had been denied a pair.
– Who refused the pair?
– I shall not mention the names of those who refused, but f was refused a pair by opponents of the Labour Government. The Minister of Trade and Customs has stood upon a public platform, and tried to make political capital out of a matter of this kind, and, if he has been correctly reported, he used words which he would not have dared to use in this Chamber. I say that the honorable senator, in so doing, was sinking party politics to the lowest depths of political depravity ; and I now ask him to offer some explanation of the words he used.
[9.56]. - Senator Needham has not been too delicate in introducing this matter to the attention of the Senate. If he will examine what I have said, he will find that I repeated what was told to me, and what, if necessary, I could have amply verified. I congratulate my honorable friend on his statement that the parliamentary courtesies are not to be suspended - on having withdrawn the fiat of his leader.
– I never made any such statement. I said that the usual parliamentary amenities to which the honorable senator referred were at the time in full swing, and that pairs were being granted.
– To Colonel Foxton?
– Does Senator Needham say this on the part of the party to which he belongs? If so, I congratulate him. It is the first I have heard of it. It is true that one pair was granted; but it is equally true that many pairs were refused, and that in the particular case to which I referred, the usual courtesy was denied to my honorable colleague, the Minister of Defence.
– I should not give the honorable senator a pair to enable him to go to a meeting to talk nonsense about the Labour party.
– I should have been delighted to take Senator McGregor with me on the occasion referred to, and he could have relied upon obtaining a fair hearing. Senator Needham has surprised me very much by his reference to what he says took place last session. It is a great pity that the honorable senator should have been refused a pair in the circumstances to which he has referred.
– So far as I know, it is not a fact.
– I know that I was personally refused a pair last session, although I was anything but well at the time. But that is past and gone, and I need now only assure Senator Needham that if the usual courtesies of parliamentary life are again to prevail, and I earnestly hope that it may be so, no one will more cordially hail the announcement than I will.
– Now that this question has cropped up, it would be as well to carry it a little further, in order to make the position quite clear. If this had been the first session in which pairs had been refused, I could have understood the outcry bv our political opponents; but I can remember quite well in my experience of the Senate since the opening of the Federal Parliament, that pairs have been refused time and time again.
– Mostly by the honorable senator’s party.
– Let the honorable senator give the dates.
– I could mention specific occasions, and the dates could be ascertained by looking up Hansard. I remember one very glaring case, where Senator Findley, who is again, unfortunately, laid up, was confined to a sick bed. That was during the very heated debate on the Kalgoorlie to Port Augusta Survey Bill, in which Senator Best took a very prominent part.
– I afterwards put the Bill through for honorable senators opposite, so that they must not complain.
– We quite recognise the nimbleness of the Minister of Trade and Customs. But I- would remind him that when Senator Findley was lying on a sick bed I endeavoured, without success, to obtain a pair for him. Of course, there is no obligation on the part of political opponents to grant pairs to enable absentees to indulge in electioneering tactics.
– But I think there was some question raised as to whether Senator Findley had given the honorable senator authority to pair him.
- Senator Findley made the position very clear afterwards, and I produced his written authority. Time and again have pairs been refused in this chamber. Probably no honorable senator has given pairs more frequently than I have, and I have been positively disgusted when I have found that some honorable senators whom I had obliged refused to return the compliment. I consider that I am one of the most regular attendants in this chamber.
– I think that the honorable senator is entitled to a holiday.
– It is very seldom that I require a pair for my own convenience. I do not see why those honorable senators who are regular in their attendance here should give pairs to enable their political opponents to devote time to their private affairs or to enable them on the public platform to disparage the work of the Opposition.
– I am sorry that I was absent from the chamber when Senator Needham spoke. But I understand, from the remarks of the Minister of Trade and Customs, that Senator Needham has stated that on one occasion, when a relative of his was lying in the hospital, he was refused a pair. I think ‘ his statement has reference to an occasion when I was acting as Opposition Whip, and, that being so, I should like to place the facts of the case upon record. Senator Needham and I had been very good friends up to that time, and on several occasions I had paired with him whilst he -was visiting a relative who was ill.
– The honorable senator never paired with me once whilst I was visiting a relative. I give his statement an emphatic contradiction.
– Very well. Then, on several occasions when he was leaving the parliamentary precincts, I promised that, if occasion arose, I would pair with him. In this connexion I particularly recall one instance in which a division was taking place. The bells were ringing, and Senator de Largie came to me and inquired, “ Have you a pair for Senator Needham? He is down the street.” I replied, “ I will give him a pair.” I admit that the honorable senator with whom I was willing to pair him was also absent.
– The pair was a dead one.
– Senator de Largie then said something to me, to the effect that I could go to another place which was even warmer than this chamber.
– I do not think that I ever said anything of the kind.
– That is the only occasion upon which we have experienced the slightest difference of opinion on the question of pairs. I know that Senator Needham thought at the time that I had treated him rather badly, and I endeavoured privately to express my regret to him ; but he was not prepared to discuss the matter with me. I repeat that, since Senator Dobson became Chairman of Committees, that is the only occasion on which there has been the . slightest difference of opinion in regard to pairs.
– By way of personal explanation, I merely wish to say that on no occasion during the troublous period to which I. have alluded - and that was the only occasion during last session upon which I asked for a pair; in fact, I thank it was the first and only occasion since I entered this Parliament - did I speak to Senator Chataway in reference to pairs, either in a good, bad, or indifferent way. He never promised me a pair during the whole of that time, and I give his statement a most emphatic contradiction.
– I regret that this question has been again introduced here. I had hoped that as the session proceeded any little heat that had been engendered would pass away, and that the ordinary courtesies of political life would be restored. But, seeing that the question of pairs has been revived, I am induced to hope, by the statements of some honorable senators opposite, that even now there is a possibility of our getting back to our old footing. I should, however, like to remind them, when they urge as an excuse for their refusal to give pairs events which happened in previous sessions, that that was not the reason given some time ago in the official declaration of why pairs were “ off.” The reason advanced as to why pairs were officially refused to us was not because on a previous occasion we had refused pairs, or because misunderstandings had arisen between honorable senators ; but merely because of certain political developments.
– No pairs have been refused in this Chamber.
-The honorable senator may be quite correct in his statement. Certainly, the pair-book is not full; but I notice one entry in it in which Senator Chataway ‘s name appears opposite that of Senator. Needham. Under our Standing Orders, I am bound to accept Senator Needham’ s declaration that on no occasion did he pair with Senator Chataway
– The pair to which the Vice-President of the Executive Council refers, was given to enable Senator Chataway to go to Sydney for the purpose of bringing back his wife.
– Whatever the honorable senator’s declaration may be, I accept it. I merely draw attention to the fact that Senators Needham and Chataway were paired on 26th October, last year. Of course, I do not know who sought the pair. But what I wish to impress on honorable senators is that the refusal of the
Opposition to grant pairs now is not prompted by the refusal of other honorable senators to grant pairs last session. That was not the reason assigned by Mr. Fisher. So that honorable senators opposite are rather late in making these excuses-
– We make no excuses.
– Are we to understand that the official declaration as to the prohibition of pairs has been withdrawn?
– There never was any such prohibition.
– I am in a position to affirm that there was an official refusal by the head of the Labour party to grant a pair to one of my colleagues, and what is more, the refusal was accompanied by the statement that pairs were officially “off.” Are the declarations which we have heard to-night to be regarded as an intimation that better counsels have prevailed, and that the practice which has ordinarily obtained is to be revived? I sincerely hope so. I take no exception to the mariner in which any honorable senator may choose to express his individual views. But I hope that in this Chamber we shall at least get back to the old practice under which a courtesy offered by one side was readily responded to by the other.
Question resolved in the affirmative.
Senate adjourned at 10.12 p.m.
Cite as: Australia, Senate, Debates, 28 July 1909, viewed 22 October 2017, <http://historichansard.net/senate/1909/19090728_senate_3_50/>.