Senate
11 November 1914

6^th Parliament · 1^st Session

PRESENTATION OF ADDRESS-IN-REPLY
R. M. FERGUSON,
- Governor-General
- Melbourne, 29th October, 1914
ASSENT TO BILLS
QUESTION
- COCOS ISLAND NAVAL ENGAGEMENT
QUESTION
- NEW GUINEA
QUESTION
- WIRELESS TELEGRAPHY WORKS
QUESTION
- UNLOADING INTERNED BOATS
QUESTION
- TRANSMISSION OF NEWSPAPERS BY POST
QUESTION
- WAR NEWS
EXPEDITIONARY FORCES
- Vaccination - Canteens
PAPERS
QUESTION
- HOLIDAY PRIVILEGES
QUESTION
- WIRELESS SYSTEM
QUESTION
- RAILWAY CONTRACTS
QUESTION
- NOTES AND SPECIE
TELEPHONIC SERVICES
- Unley : King Island
QUESTION
- BRENNAN MONO-RAIL
QUESTION
- NATURALIZATION OF GERMANS
DEFENCE BILL
BANKRUPTCY BILL
ADJOURNMENT

The Clerk announced to the Senate that the President was unavoidably absent from the sitting.

The Deputy President took the chair at 3 p.m., and read prayers.

page 412

PRESENTATION OF ADDRESS-IN-REPLY

The DEPUTY PRESIDENT. - I have to announce that on Thursday, the 29th October, the President, accompanied by honorable senators, waited upon the Governor-General and presented the Address-in-Reply, and that His Excellency was pleased to make the following reply : -

Mr. President and Gentlemen,

In receiving the Address which has been adopted by the Senate in reply to the Speech delivered by me on tho occasion of the opening of the First Session of the Sixth Commonwealth Parliament, I desire to thank yon for your expression of loyalty to Our Most Gracious Sovereign the King.

page 412

R. M. FERGUSON,

Governor-General

Melbourne, 29th October, 1914

page 412

ASSENT TO BILLS

Assent to the following Bills re ported : -

War Precautions Bill.

Judiciary Bill.

Crimes Bill.

page 412

QUESTION

COCOS ISLAND NAVAL ENGAGEMENT

Senator PEARCE:
Minister of Defence · Western Australia · ALP

– I ask leave tq -read a statement to the Senate.

Leave granted.

Senator PEARCE:

– I desire to acquaint the Senate with the following information regarding the destruction of the Emden by H.M.A.S. Sydney: -

About noon oil Monday, 9th November, a telegram was received at Navy Office from Cooos Island, stating that a three funnelled warship had arrived off the island, and was landing a party of men in boats. Communication with Cocoa immediately ceased. It was realised at Navy Office that this must be the Emden, and efforts were at once made to get into touch with Sydney, then believed to be in the vicinity of Cocos Islands. An urgent telegram was despatched to the Perth Radio Station, forwarding a code telegram to be made on the highest power, of which this station in capable, with the “ en clair “ preamble, “ Very urgent. Do not reply,” followed by the. Sydney’s call sign, and the telegram informing her of the Emden’ s presence at Cocos Island.

No further information was received nntil i p.m. on Tuesday, 10th inst., when the Eastern Extension Company brought to Navy Office a telegram received from Cocos that the Sydney was engaging Emden, and that Emden was a wreck on the north of Keeling Island.

This news was confirmed half-an-hour later by a telegram received by the Naval Board from the Naval Commander-in-Chief on the China station, stating that the cable from Perth to Cocos was out of order, but that the - one between Cocos and Batavia was still working. He reported that on the night before Cocos Station had managed to send a short message on extemporized “ instruments that Emden had been engaged by a British cruiser, but that the result was not yet known, and that the German landing party had seized the schooner and left the island. The CommanderinChief stated that later information had been received from Cocos that Sydney had arrived there, and that Emden was wrecked on the north coast of the Island. He added that he was informing Admiralty. A more complete account was received on the morning of Wednesday, 11th. It was then ascertained from Cocos by a telegram forwarded by the courtesy of Mr. Webster, Adelaide representative of the Eastern Extension- Telegraph Company, that Cocos had temporarily restored communication, and was able to supply further particulars. It appears that Emden arrived at 6 a.m., and sent three boats witE a landing party, consisting of three officers and forty men, with four maxims. The Island immediately sent out an urgent wireless call for help, which was received by Sydney just before the installation was smashed by the Germans. The landing party had apparently just completed their work of destruction, and actually put off to the ship when the Sydney hove in sight. The Emden at once put’ to sea, leaving her boats behind. On clearing the Island the Emden apparently opened the action on the Sydney, and it is stated that her shooting was at first excellent, but after she had been under fire from the Sydney her shooting fell off considerably. It is gathered that Sydney must have poured an accurate and deadly fire into Emden, as the latter very soon lost two funnels and a mast, whilst the whole of the after part of the ship was on fire. The action lasted an hour, the Emden being then apparently in a sinking condition and completely on fire.

The captain evidently decided to beach the ship, as she is reported to be wrecked on the north of the island. The Sydney reoeived very slight damage; the casualties consisting of three killed and fifteen wounded. The names have not yet been reported. After Emden was beached Sydney picked up tho doctor of Cocoa Island and his assistants, and proceeded to the help of the Emden. The result of this visit is not yet known. The German landing party seized two months’ provisions, and made off in the schooner Ayesha. The manager of Cocos Island station reported that they had been well treated by the Germans, and were all well. The following are the particulars of Sydney and Emden: -

Sydney - Light cruiser, 0,400 tons; speed, 25 knots; armament, S six inch guns, 4 3-pdrs.

Emden - Light cruiser, 3,600 tons; speed, 24 knots; armament, 10 4.1 inch guns.

The Sydney has recently come out of dock, and has, therefore, an advantage in the matter of speed.

The Government have received this cablegram from the Secretary of State for the Colonies: -

Please convey to your Government my hearty congratulations complete success achieved by H.M.A.S. Sydney, in putting an end to the career of the Emden.

The following message was received by the Governor-General from the merchants of Kingston, in Jamaica: -

Hearty congratulations Sydney’s naval victory. Hurrah for Australia.

Mr. Henry Marks, of Suva, has sent this cablegram : -

Australians in Fiji congratulate Commonwealth first naval victory.

I have received from the Minister of Defence for the Dominion of New Zealand a message congratulating the Commonwealth and the Sydney on her brilliant achievement, and also messages from the Governors of South Australia and Tasmania.

Senator NEEDHAM:
WESTERN AUSTRALIA

– Is it the intention of the Government to submit to Parliament motions to enable both Chambers to place on record their appreciation of the signal service rendered by the officers and men of the Sydney in engaging and crippling the Emden in this time of national crisis ?

Senator PEARCE:

– The matter will receive the attention of the Government.

page 413

QUESTION

NEW GUINEA

Appointments at Rabaul.

Senator KEATING:
TASMANIA

Senator Keating:

– Are they prohibited from being sent by post?

Senator PEARCE:

– Not permanently.

Senator Keating:

– May one send a newspaper now through the post to Great Britain ?

Senator PEARCE:

– One may post it.

Senator Keating:

– Will it be transmitted ? I do not want to know the reasons, but I want people to know that it may be useless for the time being to post newspapers abroad. Would it be useless for the present to post newspapers?

Senator PEARCE:

– No, it would not.

Senator STEWART:
QUEENSLAND

– I ask the Minister representing the PostmasterGeneral whether, so far as the Commonwealth authorities are concerned, any newspapers posted in Australia, and addressed to the “United Kingdom, will be allowed to reach their destination ?

Senator GARDINER:
Vice-President of the Executive Council · NEW SOUTH WALES · ALP

– Yes ; but they may be subject to some delay.

Senator Guthrie:

– -What is meant by “some”?

Senator Findley:

– Oh, what does the honorable senator want? Why does he not’ get on the housetops ?

Senator PEARCE:

– May I be allowed to intervene for the purpose of saying that, if any honorable senator will see me privately, I will give him the information which Senator Stewart seeks? When I give any honorable senator that information, he will know why it cannot be made public.

page 414

QUESTION

WAR NEWS

High Commissioner’s Reports

Senator READY:
TASMANIA

– I have received complaints from three important centres in Tasmania, namely, Queenstown, Gormanston, and Strahan, that the daily reports as to the progress of the war issued from the High Commissioner’s office are not being posted publicly. I am informed that at Strahan the reports have not been posted until several days after their receipt, and, in other instances, it is alleged they have been posted only after the matter contained in them has been published in the newspapers. Will the Minister make inquiries with a view to remedying this complaint?

Senator GARDINER:
ALP

-I ask the honorable senator to give notice. Inquiries will be made, and an answer supplied to the honorable senator.

page 414

EXPEDITIONARY FORCES

Vaccination - Canteens

Senator BARKER:
VICTORIA

– I desire to direct the attention of the Minister of Defence to the following letter which has been forwarded to me -

Sir, - I wish to bring under your notice thatreatment meted out to some of the members of the Australian Imperial Expeditionary Forcegoing to England. We have refused to be inoculated, and were put off the boat into a steam launch at 1 o’clock on Sunday morning, and landed in Albany without either a shilling in our pockets, or not knowing where we were going to, only had to be landed. After landing and waiting about an hour, a corporal from the fort came clown and marched us up to the fort - about 2 miles. Then there were no blankets or food for us. Only for the kindness of some of the fort men, some of the poor devils would have went hungry, as they shared their breakfasts with them. Some of the men had money, but very few, and very little, which they shared with them they knew. Speaking for myself and eight comrades that came off of A4 s.s. Pera, I think the treatment we have received is very scandalous.

The DEPUTY PRESIDENT -Order r May I ‘call ‘ honorable senators’ attention to the fact that this is question time ?

Senator BARKER:

– I am bringing this complaint forward with a view tohaving an inquiry made into it.

Senator Pearce:

– The honorable senator will have an opportunity to discuss grievances on the Supply Bill.

Senator BARKER:

– Some men on board the Katoomba were landed at Albany, after having travelled from Sydney to Broadmeadows, and after having remained at the latter place for eighteen days. These men were left at Albany because they were not vaccinated. Will the Minister make inquiries into the matter, with a view to ascertaining the facts ?

Senator PEARCE:
ALP

– If the honorable senator will give notice of his question, I will have inquiries made.

Senator BLAKEY:
VICTORIA

– I desire to ask the Minister of Defence whether it is a fact that thirty men have been returned from Albany who were members of the first Australian Imperial Expeditionary Force because, after they had been vaccinated upon one arm, they refused to be vaccinated on the other?

Senator Millen:

– Was the first operation successful ?

Senator BLAKEY:

– Yes. These men. are returning here with arms like footballs. If what I have asked be a fact, will these men be eligible to volun- teer for the third or second Expeditionary Forces, and will thev be deprived of any of their pay?

Senator PEARCE:

– Reports have been received concerning a number of men who have been sent back, and those reports assign reasons why they have been sent back. The reasons are not those which are indicated in the honorable senator’s question. If he will give notice of his question, I will furnish replies in detail.

Senator BLAKEY:

asked the Minister of Defence, upon notice -

As the General Officer Commanding has ordered vaccination of the troops against both “typhoid and small-pox, and as there are other diseases for which medical men recommend inoculation, including rheumatism, tuberculosis, scarlet fever, carbuncle and similar infections, syphilis, gonorrhoea, pneumonia, meningitis, catarrh, cholera, human glanders, -diphtheria, &c, will the General Officer Commanding order inoculation of all troops for each of these as well as for small-pox and typhoid?
Will these inoculations safeguard the physical health of the force or debilitate it?
Can the General Officer Commanding assure the Minister that two or more different inoculations will not bo mutually destructive, and that, when fully carried out as above suggested, the internal war in the constitution of each soldier will not be more destructive than the German bullets?

Senator PEARCE:

– The Acting Director-General of Medical Services has furnished me with the following replies : -

For precaution against diseases mentioned other than typhoid and small-pox, inoculation is not advised.
In some cases they would undoubtedly protect the health of troops for a varied time.
Inoculation to prevent typhoid, and vaccination against small-pox, are not antagonistic. These diseases destroyed more soldiers in the South African war than were killed by bullets.

Senator TURLEY:
QUEENSLAND

– I ask the Minister of Defence -

Is it a fact that no wet canteens are allowed in any camp in connexion with the Expeditionary Forces ?
Are members of the Expeditionary Forces prohibited from taking alcoholic drink into camp ?
Does this prohibition apply to officers of the Forces?
Have the wet canteens been prohibited on all troopships in the employ of the Commonwealth ?

Senator PEARCE:

– The answers to the honorable senator’s questions are - .

Wet canteens have been abolished in all camps. “
The men are prohibited from taking alcoholic liquor into camp.
The same prohibition does apply to officers.
Wet canteens were allowed on the first troopships, but are not to be allowed on any future -troopships.

page 415

PAPERS

The following papers were presented : -

Customs Act 1901-1910 -

Proclamation (dated 23rd October, 1914) prohibiting the exportation of wool.

Proclamations 2 (dated 28th October, 1914) prohibiting respectively the exportation of hides and sheep skins.

Lands Acquisition Act 1906 - Land acquired under, at -

Phillips Ponds, South Australia - For Railway purposes.

Scottsdale, Tasmania - For Defence purposes.

Papua. - Ordinances of 1914 -

No. 5. - Supply.

No.6. - Constabulary.

Public Service Act 1902-1913-

Postmaster-General’s Department. - Promotion of P. Sukroo, as Postmaster, Grade IV., 3rd Class, Roebourne, Western Australia.

Regulations amended, &c. -

Statutory Rules 1914, Nos. 149, 153, 157.

War, European -

Telegrams of congratulation on destruction of German cruiser Emden, and announcement re the Konigsberg.

Correspondence regarding the naval and military assistance afforded to His Majesty’s Government by His Majesty’s Oversea Dominions.

Correspondence relating to gifts of foodstuffs and other supplies to His Majesty’s Government from the Oversea Dominions and Colonies.

Despatch from His Majesty’s Ambassador at Vienna respecting the rupture of diplomatic relations with the Austro-Hungarian Government.

Grant in aid to the Government of Belgium: Cablegram from the Secretary of State for the Colonies communicating message from the King of the Belgians.

page 415

QUESTION

HOLIDAY PRIVILEGES

Senator READY:
for Senator Guy

asked the Minister representing the PostmasterGeneral, upon notice -

Regarding holiday privileges to temporary employ6s in the ISlectrical Department (linesmen’s branch), whether the same treatment prevails in the State of Tasmania as in each of the other States; and, if there is any differentiation, will the Minister be good enough to give the reasons for such?

Senator GARDINER:
ALP

– The answer is -

The Deputy Postmaster-General, Hobart, reports that, owing to a misreading of the instructions laid down regarding certain holidays, temporary linemen of this Department in Tasmania were not paid for such holidays, but the mistake has been rectified.

page 416

QUESTION

WIRELESS SYSTEM

Senator LONG:

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

If it is the intention of the Government to substitute the Australian system of wireless for the German system now in use at Pennant Hills and Fremantle stations?

Senator GARDINER:
ALP

– The answer is -

Important parts of the Commonwealth system have already been installed at the Sydney station, and similar action at the Perth station is being taken.

page 416

QUESTION

RAILWAY CONTRACTS

Senator DE LARGIE:

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

Will the Minister for Home Affairs lay on the table of the Library a copy of the specifications and schedule which were furnished to the Engineer-in-Chief, under which Mr. Teesdale Smith carried out his contract for the Yeelanna-Minippa Railway, South Australia?
Was the contract let to Mr. Smith by the Commonwealth Government for the construction of part of the Transcontinental Railway based on the price Mr. Teesdale Smith had for the Yeelanna-Minippa railway?

Senator RUSSELL:
Assistant Minister · VICTORIA · ALP

– The answers are -

The documents are the property of the South Australian Railway Department. The Commissioner of Railways for that State was furnished with the terms of the honorable senator’s question, and I will lay upon the table of the Library the copy of specification furnished by the Commissioner.
No. The correspondence with Mr. Tees- dale Smith, which has been printed and tabled, referred to the Minippa-Dccrces contract. No. 120/1013.

page 416

QUESTION

NOTES AND SPECIE

Senator DE LARGIE:

asked the Minister representing the Treasurer, upon notice -

What is the number of Australian notes in circulation?
What is the amount of specie held by the banks of Australia?

Senator PEARCE:
ALP

– The answers are -

The circulation on9th November, 1914, was £15,403,881.
The amount of specie held by the banks in Australia on 30th June. 1914, was - Gold coin, £35,637,000; silver coin, £1,104,000; bronze coin, £42,000; total, £36,783,000.

It is estimated that the average amount of coin and bullion for the September quarter was- Coin, £34,000,000; bullion, £1,000,000; total, £35,000,000.

page 416

TELEPHONIC SERVICES

Unley : King Island

Is it proposed to open a telephone exchange at Unley, South Australia?
If so, what arrangements are being made with that object?

Senator GARDINER:
ALP

– The answers are -

Yes.
A’ site has been purchased, and an exchange building will be erected thereon. A tender has been let for the exchange equipment.

Senator READY:

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

What steps were taken by the Postal Department with reference to the request of the King Island people to institute telephonic communication on the island?
What is the present state of the negotiations for such a telephonic service?
Will the Minister lay the papers and correspondence in this connexion on the table of the Library?

Senator GARDINER:

– The answer is -

Inquiries arc being made of the Deputy Postmaster-General, Hobart, and his report, together with the relative papers, is expected in the course of a day or two, when replies will be furnished to the questions.

page 416

QUESTION

BRENNAN MONO-RAIL

Senator KEATING:

asked the Minister representing the Prime Minister, upon notice -

Has the Commonwealth Government taken any action towards the acquisition of the Australian rights in the Brennan mono-rail, or towards adopting the system for Commonwealth purposes if practicable; if so, will he inform the Senate of the nature and extent of such action?

Senator PEARCE:
ALP

– The answer is -

No. The opinions of experts as to the possible value of the invention, and its utility to the Commonwealth, have from time to time been obtained. No determination has, however, yet been arrived at. I may add that, in accordance with a resolution passed by the Senate on16th April, 1914, on the motion of the honorable senator himself, the complete departmental file on the subject was laid on the Library table, and remained there for about two months. I shall again lay the papers on the Library table if the honorable senator so desires.

Senator KEATING:

– Arising out of the answer to my question, I wish to ask whether, in future, for the convenience of honorable senators, when papers are laid on the table of the Library in response to requests for information, some steps will be taken to officially inform the Senate, or the honorable senator moving for the papers, of the fact? I may add that I was not aware that these papers had been tabled in the Library, although I had moved for them.

Senator PEARCE:

– As one who has suffered in the way suggested by Senator Keating’s question, in the past, I shall endeavour to see that something is done to inform the honorable senator who has. moved for them that papers have been laid on the table of the Library.

Senator Keating:

– An announcement on the subject from the Clerk of the Senate would supply the information to all honorable senators.

page 417

QUESTION

NATURALIZATION OF GERMANS

Senator KEATING:

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

Has the granting of applications for certificates of naturalization made by persons of German birth absolutely ceased?
Since what date has such granting ceased, and does the cessation affect applications received before such date?
If any such applications are now being granted, upon what terms and under what circumstances?

Senator GARDINER:
ALP

– The answers are -

Yes, except in some special cases.
1st October, 1914. Yes.
The only applications from alien enemies now being proceeded with are in respect of persons over sixty years of age.

page 417

DEFENCE BILL

Motion (by Senator Pearce) agreed to-

That leave be given to introduce a Bill for -an Act to amend the Defence Act 1903-1912.

Bill presented and read a first time.

page 417

BANKRUPTCY BILL

In Committee “(Consideration resumed from 23rd October, vide page 313).

Clause 62, as amended -

Where a sequestration order is made against a debtor, he shall make out and sub mit to the official receiver a statement of his affairs. . .

Any person stating in writing that he is a creditor of the bankrupt may, personally or by his agent, inspect the statement at all reasonable times, and make a copy thereof, or extract therefrom, but any person untruthfully stating himself to bc a creditor or agent shall be guilty of a contempt of Court, and shall, on the application of the trustee, be punishable accordingly.

Upon which Senator Keating had moved -

That in sub-clause 3, line 2, after the word “may” the following words be inserted: - “ without payment of any fee, and any other person on payment of the prescribed fee may.”

Senator GARDINER:

– We are dealing with this form, and not with rules and regulations. In answer to Senator Senior I said that there were four States in which it does not obtain. Senator Keating asked me a question regarding it, and put it in such a form as to cast a doubt upon ray veracity.Now I invite him to show in what respect my statement is inaccurate. He merely asserts that it is inaccurate, but does not attempt to prove it. The moic this matter is debated the more I am satisfied of the difficulties that would result from keeping open this door for the convenience of traders. We must recollect that we are legislating, not for a little State, but for a large continent. In view of the ramifications of the trading community, it is unfair to seek the insertion of provisions of this kind in regard to every bankruptcy which occurs. The adoption of the amendment would mean the employment of an army of clerks, and it might mean that some persons would avail themselves of the information contained in the debtor’s statement in a way that is not contemplated. Judging from Senator Keating’s remarks these records would be preserved for years. It might therefore happen that a person who had heard a whisper that an individual was not strictly honest in his trading relations in years gone by, might use the information thus obtained to put a wrong complexion upon current happenings. The more the matter is discussed the more I feel unable to agree with Senator Keating. At the present time the only persons who are entitled to ask for the information that is contained in a bankrupt’s statement are his creditors and their agents. But under this amendment it is proposed to confer that right upon 5,000,000 of people. To my mind nothing could be more absurd than to grant facilities for obtaining this information. The more Senator Keatinsr presses his case, the more reason do I see for maintaining the position which exists at present in four of the States.

Senator Keating:

– The honorable senator wants star chamber courts of bankruptcy.

Senator STEWART:
Queensland

– The Vice-President of the Executive Council is maintaining tho traditions of Ministers in charge of Bills in a most excellent manner. Instead of attempting to deal with Senator Keating’s argument he has merely stuck to his Bill. My experience of Ministers in charge of Bills is that they will never listen to reason. An honorable senator may advance a thousand good reasons for altering a clause, but a Minister will not accept one of them. He proceeds on the assumption that the measure of which he has charge is perfect. I regret very much to see an honorable senator like the Vice-President of the Executive Council, who at one time was a very pronounced Democrat, sinking into the ruts of Conservatism in this fashion. Bankruptcy is a public act; it is not a private affair at all. When a man becomes bankrupt, he submits his affairs, not only to his creditors, but to the general public, and the public have a right to know the circumstances connected with the man’s bankruptcy. The Minister has said that if the amendment were agreed to the whole of the people of Australia would turn themselves into a private inquiry agency, and, without rhyme or reason, would be poking their noses into the affairs of any person who might become a bankrupt now or did become bankrupt at any time during the last twenty years. No man will put himself to the trouble or expense of inquiring into the bankruptcy of any trader unless he is interested in the latter as a creditor, or the bankrupt approaches “him for the purpose of trading after his bankruptcy. It is extremely desirable, in the interests of commercial morality, that every opportunity should be given to examine into a trader’s business career. If the VicePresident of the Executive Council had any idea of the amount of swindling that is going on every day in the year in Australia in connexion with trading, he would welcome rather than object to the amendment. Without the amendment this measure will play directly into the hands of mercantile agencies. They will be able, without payment of any fee, to obtain information concerning the affairs of every bankrupt, and will then charge the public fees for circulating that information. I have no fear that, under Senator Keating’s amendment, public

Senator SENIOR:
South Australia

– What is proposed is to make the record of insolvency a permanent record, and there must be attendants provided in offices at which searches of the record have to be made. It will probably be found necessary to preserve the record in strong-rooms, and if I go to a public office to make a search, there must be attendants provided to assist me. The record I wish to see may appear in a certain volume for a. certain year. He would ascertain from an index the particular year in which a person had gone insolvent. All this service has to be rendered, it may be, to satisfy the curiosity of one person, but Senator Guthrie thinks that no fee should be charged. I contend that for services rendered to persons there should be some payment made. The Minister, true to the old proverb of sticking to the Bill, says that, because the law is to operate over a larger area in the future, therefore the service should be rendered free. Surely the fact that the law will deal with a large territory rather than with a small district is a strong reason in favour of requiring a fee to be paid for a service rendered. I do not think that there has been any . argument advanced by the Minister to-day against the amendment except that he has the practice of four States on his side.

Senator Lt Colonel O’Loghlin:

– even that is disputed.

Senator SENIOR:

– I am giving the ^Minister the benefit of the doubt. The ordinary rule is that when a person goes to an office in which legal and other documents are preserved and desires to make a search he is asked to pay a fee for the privilege. The Minister has not shown a reason why a fee should not be charged for a search made under this clause. Senator Guthrie is in favour of a free search, and apparently he is willing to load up the cost of government. He might as reasonably ask that his sugar : should be delivered at his door by the

Colonial Sugar Refining Company rather than by his grocer. Just as he is prepared to pay his grocer for rendering an intermediate service, so he should be prepared to pay an officer for the service of opening a volume at a particular page and facilitating a search. A man, in paying a fee for a search, is only recouping the Government for the trouble they have taken to provide him with the desired information.

Question - That the words proposed to be inserted be inserted (Senator Keating’s amendment) - put. The Committee divided.

AYES: 14

NOES: 14

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Clause, as amended, agreed to.

Clauses 63 to 69 agreed to.

Clause 70-

The committee of inspection shall consist of not less than three nor more than five persons…..

Senator KEATING:
Tasmania

– In accordance with notice, I move -

That the words “less than three nor,” line 2, be left out.

Amendment (by Senator Keating) agreed to -

That the word “three” be left out, with a view to the insertion of the word “ two “ in lieu thereof.

Senator STEWART:
Queensland

– I would direct the attention of honorable senators to paragraph 5, which says -

The committee may act by a majority of their members present at a meeting, but shall not act unless a majority of the committee are present.

Now, if a committee consists of two persons, where will the majority come in? Clearly the committee could not act unless all its members were present.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I think that the objection raised by Senator Stewart renders some amendment of the clause necessary. If the Committee will allow it to pass in its present form, I will undertake to have it recommitted at a later stage, with a view to meeting the difficulty which has been suggested.

Clause, as amended, agreed to.

Clause 71 -

No member of a committee of inspection shall, while he is a member of the committee, except with the express sanction of the Court, directly or indirectly, by himself or his wife or parent, or any employer, partner, clerk, agent, or servant, be entitled to derive any profit or advantage from any transaction arising out of the bankruptcy.

Senator KEATING:
Tasmania

– I move-

That the following proviso be added to subclause 1 : - “ Provided, however, that this section shall not apply to the supply by any member of the committee of any goods necessary to carry on the estate of the bankrupt at the rates or prices then current or ruling for such goods.”

The object of my amendment is to enable a member of the committee, who may be a creditor, in certain cases, to supply the goods which may be necessary to carry on the estate of a bankrupt at the rates or prices then current, without making any application to the Court. We all know that very frequently the affairs of a bankrupt are carried on just as if there had been no bankruptcy. They are carried on by the trustee under a committee of inspection, or by whoever represents the creditors. In order that a bankrupt’s business may be carried on, it may be necessary to obtain from his merchant the goods which he has been accustomed to sell to the public. One of his creditors may be a merchant who has been in the habit of supplying him with a large variety of goods. If the creditors choose to appoint that merchant to the committee of inspection, it may be necessary for him to continue to supply such goods. My amendment aims at obviating the necessity of applying to the Court in cases where goods are being supplied at the current or market prices. An application to the Court might involve delay, and, in the interim, the committee of inspection might be unable to obtain from a third person the necessary goods to carry on the business. If a few days, or a week, were absorbed in making an application to the Court, and the bankrupt’s business was not able to supply its regular customers, it is quite conceivable that its trade might be transferred elsewhere. My amendment is designed to provide for the ordinary carrying on of the bankrupt’s affairs. I hope that the VicePresident of the Executive Council will consider it upon its merits, and in a favorable light.

Senator GARDINER:
. Vice-President of the Executive Council · New South Wales · ALP

– The honorable senator must see that his proposal would open the door to a very grave danger - the danger of permitting a committee man to supply goods - especially as the clause provides that the Court may grant the necessary permission.

Senator Keating:

– The adoption of the suggestion of the Vice-President of the Executive Council will be attended with more risk, because the big creditor will stand off the committee, and will thus be free to supply like an ordinary outsider.

Senator GARDINER:

– The clause is very clear, and, to my mind, offers every facility which should be offered. If a man wishes to supply goods to enable a bankrupt’s business to be carried on, he should cease to be a member of the committee. If he wishes to remain a member of the committee, then it is open to him to make an application to the Court for the necessary permit. I am very sorry that I have to appear in the role depicted by Senator Stewart - that of a Minister tenaciously sticking to his Bill. But it appears to me that this is one of the clauses in the measure to which I can adhere with complete justification.

Senator KEATING:
Tasmania

– The course open under the clause as it stands as indicated by the Minister is, to my mind, attended with the very risk which he attributes to the amendment. If the principal creditor is appointed to the Committee, it will be open to him to refuse to go on the Committee. Should he do so, he will not then be debarred from supplying the estate with goods. It may be to the interest of the estate and of the bankrupt that the principal creditor should supply the estate with goods, and he may supply them at his own terms. I am assuming in that case, of course, as the Minister did, a lack of bona fides on the part of the principal creditor, and an intention to abuse the position which he holds. If my amendment were carried, and he were appointed to the Committee, he would be able to supply the estate, but at market rates and prices without having to apply to the Court. If, as under the clause, a member of the Committee is obliged to apply to the Court in order to supply the estate, the application, no matter how expeditiously it may be dealt with, will involve delay, and it might be a delay which would prevent the bankrupt’s estate supplying goods to ordinary customers, and cause the permanent loss of their trade to the estate. It is to avoid that that I have submitted my amendment. I can understand that the clause, as printed, might be, as stated, in the interests of the lawyers; but, while I am prepared to consider their interests, Ave have also to consider the interests of the community. When a man becomes bankrupt, the carrying on of his estate is invariably very largely dependent upon his then creditors. Where they are merchants, as is most frequently the case, it is in their interests, as well as in those of the bankrupt, that the business should be carried on as if nothing had happened, because profits may be made for the continuance of the business which will redeem the bankrupt from his position. If the largest creditor is a member of the Committee of inspection, and is permitted, as I propose, to supply the estate without amplication to the Court, but is tied down to current rates and prices, the bankrupt will be advantaged, and not prejudiced.

Senator Ferricks:

– Does the honorable senator consider that the tying down as regards rates and prices could be made effective ?

Senator KEATING:

– I do, because otherwise, under my amendment, the largest creditor could not continue to supply the estate except by an application to the Court, which would be attended with delay, involving loss of business. The estate might be a country business, with a particular line of tobacco, for which the bankrupt had the sole agency. This might have attracted a certain number of cus tomers, who, incidentally, would bring other custom to the business. The largest creditor might be supplying this line, might object to the delay involved in an application to the Court to continue to supply the insolvent estate, and might, in the meantime, dispose of the line to a competitor in business, with the result that business and custom would be diverted from the estate. Under my amendment, the largest creditor could continue to supply the estate without an application to the Court, so long as he did so at current prices. Under the clause, the highest creditor could not supply the estate without the sanction of the Court upon application if he were a member of the Committee of inspection. He will, therefore, refuse to go on the Committee, will be in the position of a non-creditor, and, as the creditors will be dependent upon him very largely to keep the estate going, he will be able to supply the estate on his own terms.

Senator Turley:

– Cash transactions.

Senator KEATING:

– He will be able to fix his own. terms, because he will not be tied up in any way. Those interested in the estate will be very largely dependent upon him, because they cannot go to an outsider, who would say, “ I shall certainly not supply an estate that is in bankruptcy at the present time except for absolute cash.” Under the Bill, the estate will be largely in the hands of the biggest creditor, who, refusing to go on the Committee of inspection, may dictate his own terms for the continuance of the bankrupt’s business. I am prepared, in this matter, to subordinate the interests of the lawyers, and consider the interests of the bankrupt and the community generally, in order that the bankrupt’s estate mav be carried on as if nothing happened, so far as that can be reasonably provided for.

Question - That the words proposed to be inserted be inserted - put. The Com.mittee divided.

Ayes … … … 6

Noes … … … 24

Majority … … 18

Question so resolved in the negative.

Amendment negatived.

Clause agreed to.

Clauses 72 and 73 agreed to.

Clause 74 -

The Court, on the application of the Official Receiver or trustee, may from time to time order that post letters addressed to a bankrupt at any place or places mentioned in the order shall for such time, not exceeding three months, as the Court thinks fit, be re-directed, sent, or delivered by the Postmaster-General to the OfficialReceiver, or the trustee, or otherwise as the Court directs.

Amendment (by Senator Keating) agreed to -

That the word “three” be left out, with a view to insert in lieu thereof the word “ six.”

Clause, as amended, agreed to.

Clause 75 agreed to.

Clause 76 -

The Court may, on the application of the trustee, or of any creditor (at his own expense, and on such terms as to costs as the Court thinks fit to impose), at any time order -
1. the bankrupt or his wife; or
2. any person known or suspected to have in his possession any of the estate or effects belonging to the bankrupt, or supposed to be indebted to the bankrupt, or to be able to give information respecting the debtor, his dealings or property, to attend before the Court, or before any other Court having jurisdiction in bankruptcy, or before any stipendiary, or police magistrate, to produce any documents in his custody or power relating to the bankrupt, his trade, dealings, property, or affairs…..

Senator STEWART:
Queensland

– Sub-clause 1 seems to be contradictory in terms. I refer to the expression, “At his own expense.”

Senator O’LOGHLIN:
SOUTH AUSTRALIA · ALP

-Colonel Sir Albert Gould. - That applies only to the creditor; it does not apply to the trustee.

Senator STEWART:

– The expression may be held to apply to either. If a creditor applies to the Court he will have to pay all the costs himself.

Senator Turley:

– The Court may make an order then.

Senator STEWART:

– But it says, “ at his own expense.”

Senator Needham:

– That means at the expense of the creditor.

Senator STEWART:

– It means that if a creditor makes an application of this kind he will have to pay the costs of the application. The trustee’s costs, of course, would come out of the estate ; but if a creditor makes an application at hisown expense he will have to pay the costs. I think that the intention would be expressed more clearly if this phrase were used -

At his own expense, or on such terms asto costs as the Court thinks fit to impose.

Senator GARDINER:
Vice-President of the Executive Council · New SouthWales · ALP

– This provision simply gives to a creditor the right to have a person brought before the Court for examination. The Court may at any time order the attendance of the bankrupt or any person known to have information. I think it is very wise to provide that some person shall be responsible for bringing any persons before the Court, and surely that person should be the one whotakes that course. I think that if Senator Stewart will read the provision carefully he will find that it does not overstep the mark or do injustice to creditors.

Senator O’LOGHLIN:
SOUTH AUSTRALIA · ALP

-Colonel Sir ALBERT GOULD (New South Wales) [5.45].- If a trustee makes an application to the Court, he is entitled to have his expenses paid’ out of the estate ; but if a creditor desiresto take action he must do so at his own expense, and then it will be in the power of the Court to declare how the costs shall be paid. That, I take it, is clearly the meaning of this provision, although the words used may not be so apt or clear as one would desire. There is no questionthat it is a correct principle that if a person other than a trustee makes an application, and the Court thinks that he was justified in so doing, it should direct the costs of the application to be paid out of the estate.

Clause agreed to.

Clauses 77 to 79 agreed to.

Clause 80-

In the distribution of the property of a bankrupt there shall be paid in priority to all other debts -
1. all wages or salary of any clerk or servant, not exceeding £50, in respect of services rendered to the bankrupt within four months before the date of the sequestration order; and
2. all wages of any labourer or workman, not exceeding £50, whether payable for time or piece-work, in respect of services rendered to the bankrupt within four months before the date of the sequestration order.
Where a debt has been proved which ineludes interest, or any pecuniary consideration in lieu of interest, or any claim founded on a claim for interest, the interest consideration or claim shall, for the purposes of dividend, be calculated at a rate not exceeding Five pounds per centum per annum, without prejudice to the right of a creditor to receive out of the estate any higher rate of interest to which he may be entitled after all the debts proved in the estate have been paid in full.

Senator KEATING:
Tasmania

– I gave notice of my intention to move that after the word “bankrupt,” in line 2, the following words should be inserted - or debtor who makes an assignment or composition under this Act for the benefit of his creditors generally.

Since the amendment was circulated, the Minister has, in the course of the debate, intimated that the purpose of the Government with regard to this measure is to have it, like a war-ship, in several distinct water-tight compartments. That is to say, bankruptcy and assignment is each a division of the. Bill complete in itself, and so, too, with regard to the other methods of a debtor compounding or meeting his liabilities with his creditors other than by complete payment. Iwant to get an assurance from the Minister with regard to effectuating the object of my amendment. In my second-reading speech I dealt at some length with this subject. I pointed out that the Bill did not seem to me to make it clear that when a man assigned his estate, or compounded with , his creditors, or took advantage of one of the other forms provided by the Bill, the same priority would be given to wages debts due by him as is given in cases of sequestration. With sub-clause 1 of clause 80 in the Bill, it is abundantly clear that where there is a sequestration order a clerk, or a servant, or an em ploye, will have a priority in claim up to £50, and for four months. But where, instead of the man’s estate being sequestrated, he takes advantage of some of the other provisions and assigns his estate for the benefit of his creditors generally, my contention is that a clerk, a servant, or an employe, should, in relation to the distribution of that estate, stand in precisely the same position as if the man were technically, as he is actually, a bankrupt, and that the same priority of claim should subsist. If the Minister can show me where in the Bill it is so provided, or where it will be so provided, I shall be prepared not to deal with the amendment now, because I think it is the general feeling of the. Committee that the wages or the salary of a clerk, or a servant, or an employe, shall not alone be entitled to priority of claim in respect to the estate of a bankrupt, but shall be entitled to priority of claim wherever a man takes advantage of the Bankruptcy Act to relieve himself as against his creditors. All that I gave notice of my amendment for was to make it abundantly clear that there would be no doubt whatever about this point. I would like to know what is the attitude of the Minister.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I am quite delighted to be able to give the assurance asked for. Senator Keating will find that provision is made in clause 156 regarding one part of his amendment, and in clause 184 regarding another part. In asking for an assurance the honorable senator has stated exactly the form in which the Government wish the measure to be passed, and that is that each compartment shall be separate from the others. Clause 156 reads -

The creditor shall have the same rights as to sot-off, mutual credit, lien, and priority, and joint and separate assets shall be distributed in the same way, as in bankruptcy,

Senator Keating:

Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [5.56].- T do not think the proposal is at all extravagant. Not every proved debt will carry interest. A man giving a promissory note has to pay certain interest, and 6 per cent, would be a reasonable rate. The discount sometimes exceeds 6 per cent. A man who borrows now, and gives first-class security, cannot get money under 5 per cent., and will probably have to give 6 per cent., unless the amount is very large. The Minister might well accept the amendment, because it applies only to cases where a man is entitled by law to the payment of interest. If money is cheap, the rate will probably be fixed at 4 or 5 per cent., but no matter how dear it may be it cannot go above 6 per cent.

Amendment negatived.

Clause agreed to.

Clauses 81 to 83 agreed to.

Clause 84-

The property of the bankrupt divisible amongst his creditors, and in this Act referred to as the property of the bankrupt, shall not include -

Property held by the bankrupt on trust for any other person;

Senator KEATING:
Tasmania

– In accordance with notice, I move -

That the following new paragraphs be inserted after paragraph (a) : - (aa) Property included in a bill of sale, or stock mortgage, or lien on wool or crops, executed and given by the bankrupt and duly registered and valid according to the laws for the time being of any State; (aaa) Life assurance policies so far as exempted by the laws of the State applicable to the same.

– Other creditors may give him valuable security also.

Senator KEATING:

– But the other creditors should know, and they are regarded by the law as knowing, that the debtor has already pledged his property, and it does not belong to him morally, technically, or legally. Why should we, in the circumstances, take away from the man who has made the advance what morally, technically, and legally belongs to him?

Senator Gardiner:

– The honorable senator wishes to take away from the unsecured creditors what belongs to them, although they may have been prior creditors of the debtor.

Senator KEATING:

Senator GARDINER:

– Exactly; but it will be accentuated, because a farmer can get no credit anywhere unless it is based on a bill of sale to secure every man who does business with him, and that will mean registration, the giving of innumerable bills of sale, and the making public of a man’s position in a way which ought not to be done. As regards the conduct of business, if we lay ourselves out to give much greater security to one class of creditors than to another class, we shall compel a trader to take a bill of sale as soon as credit is given to a person. There were two propositions put forward by Senator Keating in his amendment. One of them I accepted forthwith, because I recognised its fairness; but as regards the other proposition I must stand by the clause.

Senator KEATING:
Tasmania

– The Minister has asked me if I will point out where in the Bill the mortgagee of real estate gets an advantage over the mortgagee of personal estate. It is in the very clause which I am seeking to amend. Clause 84 reads -

The property of the bankrupt divisible amongst his creditors, and in this Act referred to as the property of the bankrupt, shall not include…..

But, subject to this A’ct, it shall include -

All property which belongs to or is vested in the bankrupt at the date of sequestration, or is acquired by or devolves on him before his discharge.

When the holder of real estate mortgages it, by English law that property is vested in the mortgagee; the mortgagor has an equity of redemption in his mortgage, and it is because of that it is transferred to the mortgagee for the term of the mortgage, with an equity of redemption in the mortgagor, so that the legal estate does not pass with the bankrupt property. Let us now look at paragraph 3 -

All goods being, at the date of sequestration, in the possession, order, or disposition of the bankrupt, in his trade or business, by the consent or permission of the true owner - which is the case of a bill of sale, under such circumstances that he is the reputed owner thereof.

Those are the circumstances of the bill of sale. It deliberately says, “ All property vested in him,” and if it is mortgaged as real estate, that property is vested in the mortgagee with the equity of redemption for the mortgagor. He has not a legal estate, but he has an equitable right to redeem the property in certain circumstances. That property does nob pass, but if it happens to be foods, although they belong to someody else to whom they had been transferred by way of mortgage, and he allows the bankrupt to remain in possession of them as the reputed owner, as he must do in order to remain in business, it passes. There is the distinction between- the two. There is no reason for it but the principle of feudalism, which runs right through the law of property. We have derogated from that principle to some extent by legislation in Australia, and there is no reason why we should not here do so again.

Question - That proposed new paragraph aa be inserted (Senator Keating’s amendment) - put. The Committee divided.

AYES: 4

NOES: 21

Majority … … 17

AYES

NOES

Question so resolved in the negative.

Amendment negatived.

Amendment to insert new paragraph acta agreed to.

Clause, as amended, agreed to.

Clause 85 agreed to.

Clause 86 -

Senator KEATING:
Tasmania

– I have given notice of an amendment in this clause with the object of making it apply to assignees or trustees in a composition. The clause is a restriction of the right of creditors under execution or attachment. It is desirable to make the law uniform. The Committee has already decided not to protect the man who advances money on the security of a bill of sale. Are we going to protect the execution creditor if a man happens to assign his estate or compound with his creditors? If that is not covered by this clause, I propose to move the amendment of which I have given notice, to the following effect: -

That after the word “bankruptcy” the following words be inserted: - “or the assignee for creditors generally, or the trustee in a composition under this Act.”

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I ask the honorable senator not to move the amendment. The Bill is made up of separate compartments, and some amendment on the lines indicated may be necessary in another part. The Bill will be before the Committee for some time, and if this amendment or something that will achieve the same object is found not to fit better into another part of the Bill, a full opportunity will be given to the honorable senator to have this clause reconsidered so that he may move his amendment later on. My information is to the effect that it would be more effectively dealt with in another part of the Bill.

Senator Keating:

– Am I to understand that the Minister recognises the justice of restricting the execution creditor in the case of a composition and in the case of an assignee just the same as in the case of a sequestration ?

Senator GARDINER:

– I am not saying anything of the kind.

Senator KEATING:
Tasmania

– I respect the desire of the VicePresident of the Executive Council to adhere to the system which has been followed in the Bill, and under which the several methods of bankruptcy are provided for in separate divisions, each of which is a watertight compartment in itself whilst being part of one harmonious whole. I do not desire to disturb the har mony of the draftsmanship of the measure, and if I could be sure that in other portions of it dealing with compositions and assignments, a similar restriction would be placed on an execution creditor to that which is placed on an execution creditor in the case of bankruptcy, I would be satisfied. I would like an assurance from the Vice-President of the Executive Council to that effect. Is he prepared to make it clear that the execution creditor in the case of assignments or compositions shall have no advantage over the execution creditor in the case of bankruptcy ?

Clause agreed to.

Clause 87 (Duties of sheriff as to goods taken in execution).

Senator BAKHAP:
Tasmania

– I would like an explanation of

Bub-clause 2 of this provision, which seems to me to constitute an extraordinary interference with the ordinary processes of Courts, quite apart from bankrutpcy proceedings. It appears to be an absoutely anomalous provision. Under it an ordinary debtor summoned for the recovery of a debt is to be proceeded against, and yet the money which the sheriff derives from the sale of the debtor’s property is to be held by that officer in expectation of a possible bankruptcy.

Senator Gardiner:

– There is a similar provision in the New South Wales Act.

Senator BAKHAP:

– Sub-clause 2 provides -

Where, under an execution in respect of a judgment for a sum exceeding £20, the goods of a debtor are sold or money is . paid in order to avoid sale, the sheriff shall deduct his costs of the execution from the proceeds of sale or the money paid, and retain the balance for fourteen days, and if, within that time -

notice is served on him of a petition having been presented by or against the debtor, and

a sequestration order is made against the debtor thereon, or on any other petition of which the sheriff has notice, the sheriff shall pay the balance to the trustee, who shall be entitled to retain it as against the execution creditor.

That seems to contemplate an unnecessary postponement of the payment of the proceeds to the execution creditor. Because a man has been sued for a particular debt, it does not necessarily follow that he is really bankrupt. Yet under this provision the sheriff would be compelled to hold over the proceeds of the sale in expectation of a possible bankruptcy.

Senator GARDINER:
Vice-President of the Executive Council · New South [Wales · ALP

. - To my mind the clause is quite clear and quite correct. The money is to be handed to the trustee-

Senator Bakhap:

– The sheriff has to hold it for fourteen days in expectation of a possible bankruptcy.

Senator GARDINER:

– Which is quite a reasonable expectation when other creditors are pressing.

Senator Bakhap:

– In another part of the Bill we have given the judgment creditor a preference. Now it is proposed . to prevent him getting the money immediately it is in the hands of the sheriff.

Senator GARDINER:

– The money is held by the sheriff only for a brief period. If, within that period, other creditors take action, they must all be paid in proportion to their proved debts.

SenatorLt.-Colonel Sir Albert Gould. -Why should the term be increased from seven to fourteen days ? Seven days is the term prescribed in the New South Wales Act.

Senator GARDINER:

– In matters of this kind it is well to recollect that we have to cover a bigger territory than New South Wales.

Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [8.46].- 1 take it that we are not going to centralize everything in Melbourne. I presume that if judgment be obtained against a man in Western Australia the matter will be “dealt with in that State under the bankruptcy law of the Commonwealth. That being so, surely the term of seven days, which is that prescribed in the New South Wales Act, would be sufficient.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

.- The point which I made was that the reason for increasing the period from seven to fourteen days is

Lt be found in the fact that we have to cover a larger area than is comprised within the State of New South Wales. Of course, most of these matters will be dealt with in the particular States in which they occur.

Senator KEATING:
Tasmania

– I think that the Committee is indebted to Senator Bakhap for having directed attention to this clause. Instead of the marginal note reading “ Duties of sheriff as to proceeds of sale,” it should read, “ Invitation to bankruptcy.” After a man has been sued, and judgment has been given against him, if execution has issued*, and the sheriff has received the proceeds of any sale of the debtor’s goods, that officer is entitled, under this clause, to deduct his expenses and to retain the balance for fourteen days. Why? Why was the man sued? Because he owed the plaintiff a certain sum of money. Why, then, should that money be retained by the sheriff for fourteen days? I repeat that the clause is an invitation to other creditors to bankrupt a debtor. A demand might be made upon a man for the payment of £25, and he might deny his indebtedness. The circumstances might be such as to decide him not to go into Court. Judgment would accordingly go against him by default, and the plaintiff might issue execution. Then, after the debtor had paid over the amount of the judgment with costs, the sheriff would be able to retain the money for fourteen days.

Senator Findley:

– Take another view. Suppose that one claimant desired to get in first, to the detriment of other creditors.

Senator KEATING:

– The other creditors are entitled to consideration, but they should look after themselves. What is to prevent a judgment creditor from garnisheeing a judgment?

Senator Findley:

– He would get his money by taking that course.

Senator KEATING:

– Then what would become of the other creditors? The clause is purely an invitation to bankrupt a man against whom a judgment has been given. We should hesitate seriously before we assent to any such provision.

Senator Bakhap:

– It is absolutely in conflict with clause 86.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– This clause is quite clear and distinct. After notice has been served on the sheriff, that officer is obliged to hand over the proceeds of any sale to the trustee, so that all creditors may be treated alike.

Senator Keating:

– Read paragraph 1 of clause 86.

Senator GARDINER:

– To oblige the honorable senator I will. It says -

Where a creditor has issued execution against the goods or lands of a debtor, or has attached any debt due to him, he shall not be entitled to retain the benefit of the execution or attachment against the trustee in bankruptcy, unless he has completed the execution or attachment before sequestration, and before notice of the presentation of any petition by or against the debtor.

The clause which we are now considering contains an exactly similar provision. It will prevent the smart man from getting in first and thus securing the whole of the proceeds of the sale.

Senator BAKHAP:
Tasmania

– Clause 86 is absolutely in conflict with sub-clause 2 of the provision now under consideration. Under clause 86 a creditor who has issued execution against the goods or lands of the debtor is secured if the execution has been completed. But what is “completion”? Sub-clause 2 of clause 86 provides -

For the purposes of this Act, an execution against goods is completed by seizure and sale.

Sub-clause 2 of clause 87, however, affirms that the creditor may be deprived of the money due to him for fourteen days. It declares that if notice is served on the ‘sheriff, notwithstanding that execution has been completed, the proceeds of the sale are not to be handed to the execution creditor.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– The honorable senator is confusing two things. Under clause 86 the matter is completed, and the creditor gets his money. Where judgment has been given, and seizure and sale have taken place, the creditor has the money in hand.

Senator Keating:

– No, the money may still remain with the sheriff.

Senator GARDINER:

– Clause 87 deals with a different process, where judgment is obtained, and notice of sequestration is given, and the matter is allowed to go no further. Both clauses appear to me to be quite reasonable.

Senator Bakhap:

– They are in conflict because, under clause 86, a creditor upon judgment is given protection’, and in. defiance of that, under sub-clause 2 of clause 87, the money awarded to a creditor, upon judgment, may be seized while in the hands of the sheriff.

Senator GARDINER:

– Clause 86 deals with what takes place where the whole matter has been completed, whilst clause 87 deals with the proceedings to be taken where, upon one creditor making a claim, other creditors take proceedings to bring about sequestration in order to secure their share. In that case, the matter not having been completed, the money is held for the trustee who is entitled to retain it against the execution creditor. That appears to me to be perfectly reasonable. Clause 86 deals with a case in which a creditor takes action against a debtor whilst other creditors, if there be any, do not take steps to get their share. We could not make provision that a man having received his money on a judgment under the law should be obliged to hand it back again; but where it may appear that a creditor to secure himself is trying to get all there is in an estate, and other creditors take steps to sequestrate the estate in order to secure their share, the matter is held over for consideration by the trustee.

Senator KEATING:
Tasmania

– There is a distinction between clauses 86 and 87, but it is not that which the Minister has put before the Committee. Clause 86 is of general application, and provides that, where a creditor has issued execution against the goods or lands of a debtor, or has attached any debt due to him, he shall not be entitled to retain the benefit of the execution or attachment against the trustee in bankruptcy, unless he has completed the execution or attachment before sequestration, and before the notice of the “presentation of any petition by or against the debtor. That means that if he has completed execution before sequestration, or before notice, the execution creditor is entitled to the full benefit of his judgment. But under this clause it is stated that an execution against goods is completed by seizure and sale, and not, as the Minister would have honorable senators believe, by the execution creditor having the money in his pocket. He does not seize or sell; it is the sheriff who does that. Under sub-clause 2 of clause 87 it is provided that a different course shall follow where the judgment is for a sum exceeding £20. I want to know why that should be so. If the amount happens to be £20 or more the sheriff is entitled, under clause 87, to hold it for fourteen days, and, if during that time he gets a notice of sequestration, the execution creditor is defeated. If the amount be under £20 the execution creditor gets it, and if it be over £20 the sheriff holds it for fourteen days, and that is really the distinction between the two clauses.

Senator Story:

– Perhaps it is considered that less than £20 is not worth dividing.

Senator KEATING:

– Apparently not. If the amount be over £20 the sheriff sets it aside for fourteen days, giving an opportunity for sequestration to take place, or to have a notice served upon him of the presentation of a petition in insolvency, in which case he holds the amount, not for the execution creditor,, but for the trustee. The Minister will agree that that is really the distinction between the two clauses. I consider the provision of clause 87 purely an invitation for other creditors to bankrupt the debtor. I have pointed out that it does not apply in the case of an attachment, but only in the case of an execution. If I obtained judgment as a creditor for the sum of £20, with £2 added for costs, I would not issue an execution, because, if I did, the sheriff would be obliged under clause 87 to retain the money for fourteen days. But if I find that some other person owes the debtor £20 I take proceedings to garnishee that debt which will add a few more guineas to the costs ; I get it, maybe £26, which the sheriff cannot touch. The clause will not protect creditors against the attachment of a debt due to the debtor, But will only protect them in the case of an execution for over £20. I hope that the Minister will see his way to omit this provision of clause 87 altogether.

Senator BAKHAP:
Tasmania

.- I move -

That sub-clause 2 be loft out.

Senator Findley:

– Why?

Senator BAKHAP:

– Because it is in conflict with clause 86.

Senator Gardiner:

– Senator Keating has just said that it is not in conflict.

Senator BAKHAP:

– I move the deletion of the sub-clause for reasons which seem to me to be sufficient, and which I believe will cause Judges in bankruptcy when this matter comes before them to make comments similar to those I have made here.

Amendment negatived.

Clause agreed to.

Clause 88 -

Any settlement of property …. shall,
1. if the settlor becomes bankrupt within two years after the date of the settlement - be void ‘ against the trustee in the bankruptcy; and
2. if the settlor becomes bankrupt at any subsequent time within ten years after the date of the settlement - be void against the trustee in the bankruptcy, unless the par- . ties claiming under the settlement can prove that the settlor was at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settlement, and that the settlor’s interest in the property passed to the trustee of the settlement on its execution.
Nothing in this section shall affect or prejudice the title or interest of any person who, before sequestration, and without notice of the presentation of a petition, has bond fide and for value purchased or acquired, from the persons entitled to the benefit of the settlement, covenant, or contract, the money or property the subject thereof, or any interest in such money or property…..

Senator KEATING:
Tasmania

– In accordance with notice I have given, I move -

That the word “ ten,” line 8, be left out, with a view to insert in lieu thereof the word “ six.”

The clause deals with £he voidance of a settlement under certain conditions. The ordinary term of limitation under English law for the recovery of debts that are not specialty debts is six years, and I think that the term in this case should also be six years. We have to go back to the reign of Elizabeth for the first legislation against settlements of this kind, and I am under the impression, without immediate reference, that it is in the Statute 13 Elizabeth, chapter 5, that the term of ten years is provided for. In these days the term of six years has been almost uniformly adopted in connexion with responsibilities of this character. The amendment would mean that if a man made a settlement of his property upon his wife, and went bankrupt within six years after the making of the settlement, it would be void unless the parties claiming under the settlement could demonstrate that at the time he made it he was, without the property he then settled, perfectly solvent, and able to pay his debts, and unless they were also able to prove that the property actually passed at the time of the settlement from him to the trustee of the settlement. That is necessary to prove that it was a bona fide settlement, that it actually took place, and was not merely a cloak.

Senator Turley:

– Does it apply to both personal and real property?

Senator KEATING:

– Yes, to all property. I think that it is too much in these days to ask us to go back ten years. In these times of rapid progress and keen business competition it is going back a long time to go back beyond six years. Five years is adopted in regard to some of these settlements. I should like to hear the Minister say that the amendment is acceptable to the Government.

Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [9.7].- The Minister in charge of the Bill has on several occasions quoted from the law in New South Wales in support of the provisions of this Bill, but I should like to -point out that in this case the Bill provides for doubling the terms provided for under the New South Wales law within which settlements may be voidable. Under paragraph (i) a settlement becomes void if the settlor becomes bankrupt within two years after the date of the settlement. That is to say, that the fact that a settlement was made within two years of the bankruptcy of the settlor is sufficient to void it whether the bankrupt was solvent or not at the time he made it. Under the New South Wales Act the term in that case is one year. Again, with regard to paragraph (ii), to which Senator Keating alluded, the term provided for in the clause is ten years, whilst in the similar provision of the New South Wales Act the term is five years. I have not had an opportunity to refer to the Acts of the other States noted in the margin, but I am strongly of opinion that it would be found that they would not assist the Minister in this proposal to prolong the term during which a settlement may be voided. Senator Keating referred to the fact that under the Statute of Limitations a man cannot, unless, in exceptional cases, recover a debt after a period of six years if the debtor sees fit to take advantage of the Statute. I suppose that honorable senators are accustomed to destroy receipts that are six or seven years old, because they recognise that the

Statute of Limitations would apply to those accounts. A man may have destroyed all evidence of the payment of an account which is seven or eight years old, but his creditor at that time might say, “ I have looked through my books, and have found no record of the payment of that account. I will sue him for the amount.” It is very difficult to prove that the debt has been paid. There are the books to show that the debt has been incurred, but there may be no entry of the payment, although it may have been made. Therefore, the law steps in and says, “ Beyond the period prescribed in the Statute of Limitations we will not allow you to recover. If it is not worth your while to take steps in six years to protect your interests, you deserve to receive no assistance from the law, unless there are special reasons such as absence beyond the seas or a specialty debt”: that is a debt which is acknowledged under seal, and which may be recovered within a period of twenty years. Now, is it wise for the Committee to attempt to put upon a man who made a settlement nine years ago, and who unfortunately finds himself involved in difficulties, and has to become bankrupt, the responsibility of showing that nine years before he was in absolutely solvent circumstances, and able to pay the whole of his debts without having recourse to the settled property in any way ? Without an amendment of this kind there will be no safety assured to any individual. Suppose, for instance, that a man who is in a small way of business has a property, and can pay every creditor 20s. in the £1, makes a settlement of a property in favour of his wife and children so as to protect them in the future if anything should happen to him. He carries on his business, possibly gets into a more extensive field, and then makes an unfortunate speculation eight years later which necessitates him going into the Bankruptcy Court in order to pay his creditors whatever assets he may have.

Senator Lt Colonel O’Loghlin:

– He does not know for eight years whether the settlement is effective.

Senator Lt Colonel Sir ALBERT GOULD:

– No ; at the end of eight years he is to find out that his settlement is of no value simply because he may not be able to give the particular proof which is required. I think that I might fairly raise an objection to the first part of the provision which says that a settlement should be absolutely void if it was executed within two years prior to the bankruptcy. I doubt very much whether any man with whom an honorable senator is transacting business could give a clear and distinct statement of his position eight or ten years ago. How is a man to prove his circumstances at that time? He will have to produce the whole of his books - frequently men destroy their books after a lapse of five or six years - or he may not keep books ; yet by this provision the onus is put on the man to prove that he was solvent eight or ten years before a certain event. It will be a fatal mistake, I think, if the bankruptcy law of the Commonwealth is made very different from the bankruptcy law which exists to-day, not only in the States of the Commonwealth, but throughout the whole of the British Dominions. It will be an unwise act to make our law more stringent and more difficult both to creditor and to debtor than that which obtains elsewhere. Already to-night we have enacted a provision which is in direct derogation of the law of New South Wales with regard to liens on crops or wool, because such instruments are by the State law specially protected against bankruptcy. We are engaged in passing a measure which will produce some conundrums for the Courts to decide, when by the exercise of simple common sense we could avert all difficulties. Of course, the question will be raised by-and-by, Does the bankruptcy law of the Commonwealth override the State laws which have protected particular transactions? If a man has given a lien over his crop, and becomes bankrupt, the official assignee will step in to the deprivation of the man who has advanced the money. It is a common thing for a man to borrow money from a bank or a financial institution to enable him to cultivate his crop or shear his sheep. Such a security will become valueless; at any rate, it will need a decision of the High Court to know whether it is valueless or not. Honorable senators must recognise that men are not likely’ to advance cash on a rotten security - that is a security of no value -in consequence of a law which the Commonwealth Parliament has seen fit to pass. I trust that the Minister has realized the difficulties which will arise if in the case of a settlement the period is extended from five years to ten years. Senator Keating has suggested a period of six years, but I think that the period of five years is quite ample. The bankruptcy law of New South Wales, which was consolidated in 1898, provides for a period of five years. Can the Minister point to any comparatively modern legislation which contains a provision such as he wishes to enact here ? We are not likely to help the Commonwealth by enacting provisions which are too severe and too difficult. On the contrary, we ought to pass laws which will regard the present circumstances of individuals and their need to obtain assistance wherever it may become necessary, so that they may make their way satisfactorily where otherwise they would become bankrupt.

Senator Lynch:

– You propose to give a settlor a clean sheet after six years?

Senator Lt Colonel Sir ALBERT GOULD:

– As far as the settlement is concerned, I propose to give the man a clean sheet in six years. If persons cannot deal with a matter in their own interests during that period, if they choose to sleep on their rights, why should they be allowed to interfere and injure the rights of other people which have been honorably acquired ? I hope that the Minister will consent to reduce the term, at any rate to the period mentioned by Senator Keating.

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

– I think that I may accept the amendment; I consider that the reasons given in support of the proposal are unanswerable.

Amendment agreed to.

Senator KEATING:
Tasmania

– In accordance with notice I move -

That the words “ the presentation of a petition,” in sub-clause 4, be left out, with a view to insert in lieu thereof the words “ an available act of bankruptcy.”

If my amendment is passed sub-clause 4 will read -

Nothing in this ‘section shall affect or prejudice the title. or interest of any person who, before sequestration, and without notice of an available act of bankruptcy-

In clause 50 it is- provided ‘that a debtor commits an act of bankruptcy in each of the cases enumerated in paragraphs a to h. The mere presentation of a petition against a “man is nob the only ground on which a man- may be bankrupted. If he commits any of the acts- enumerated in clause 50 he has committed what is known as an available, act of bankruptcy, and if that is known by a person it should be equivalent even to knowledge of the presentation of a petition. A man may no. be aware of the presentation of a petition, but he may be aware that a debtor has committed an available act of bankruptcy, and to all intents and purposes he is just as well aware that the man is bankrupt or on the verge of bankruptcy, as if he knew that there was a petition being presented against him.

Senator Senior:

– Has not sub-clause 4 reference’ to the presentation of a petition under clause 87?

Senator KEATING:

– No, it. is the presentation of a petition to bankrupt a man, and the expression is used again in the last line of sub-clause 1 of clause 90. I think it is a common thing on the part of the draftsmen of ‘ Bankruptcy Acta to make, not merely knowledge of the presentation of a petition, but knowledge of the existence of an available act of bankruptcy, quite sufficient to put a man on his guard, and to prevent him taking advantage of that knowledge to trade with a bankrupt or with persons through him to the detriment of the other creditors. The effect of this will be to make the man not merely liable to lose the interest he endeavours to acquire when he is conscious of a petition having been filed against a debtor, but equally liable to lose that interest which he has not bona fide endeavoured to acquire when it is known to him that a man is practically in bankruptcy, because he has committed an available act of bankruptcy.

Senator GARDINER:
Vice-President of- the Executive Council · New South Wales · ALP

– I have listened attentively to the honorable senator, but I do not think the phrasing will be improved if the amendment is carried. There is nothing as definite in an available act of bankruptcy as in the presentation of a petition. I shall stand by the clause as printed.

Amendment negatived.

Clause, as amended, agreed to.

Clause 89 agreed to.

Clause 90 (Protection of bona fide transactions’ without notice).

Senator KEATING:
Tasmania

– I have given notice of an amendment to the same effect as the; last, but : in view of the decision of the Committee in that case I do not propose to move it.

Clause agreed to.

Clauses 91 to 95 agreed to.

Clause 96-

Subject to this Act, the trustee may . . .

Sell all or any part of the property of the bankrupt … by public auction. . . .

Senator KEATING:
Tasmania

.- I move-

That the words “ by publio auction “ be left out.

As the clause stands, the sale must be by public auction. I would make it. competent for the trustee to sell if desirable by private contract. In many -instances a sale by public auction means a sacrifice. In some instances tenders are called, and it would be desirable to leave the matter open.

Senator Lt.-Colonel Sir ALBERT GOULD (New South Wales) [9.34].- The general idea has always, been that public, auction gives much greater safety and security,’ and prevents the property being disposed of privately without full knowledge tb “the “detriment of the estate and the creditors.” Senator Heating’s object might be. attained by adding after “ public auction “ the words “ or public tender.” If neither of those methods succeeded the Court might allow the trustee to enter into private negotiations. The utmost publicity is always desirable in these, matters.

Senator SENIOR:
South Australia

.- In South Australia the general practice is to call for tenders. This results in the realization of a larger amount for the benefit of the estate, whereas private tendering is- apt to result more for the benefit of the merchant than for the benefit of the estate or the creditors. Better results can be obtained by public tender than by public auction.

Senator GARDINER:
Vice-President ofthe Executive Council · New South Wales · ALP

– I shall accept the suggestion of Senator Gould and Senator Senior to add the words “ or public tender,” but I do not like the idea of striking out the words “ by public auction,” because publicity is a great safeguard.

Senator Keating:

– I -withdraw my -amendment.

Amendment, by. leave, withdrawn.

Amendment (by Senator Lt.-Colonel Sir Albert Gould) agreed to-

That the words “ or public tender “ be inserted after the word “ auction.”

Progress reported.

page 448

ADJOURNMENT

Destruction of German Cruiser “ Emden.” - Military Raids. - InterState Commission Reports. - Order of Business.

Senator PEARCE:
Minister of Defence · Western Australia · ALP

– In moving

That the Senate do now adjourn,

I desire to make available further particulars in regard to the destruction of the German cruiser Emden,. The following cable, dated 11th November, has been received from Mr. Webster, the manager of the Eastern Extension Telegraph Company, Adelaide: -

Following further particulars from company’s doctor Ollerhead. Returned from Keeling, reports Emden’!) captain unwonnded prisoner. Kaiser’s nephew also unwounded.

I understand that the Kaiser’s nephew was an officer on the Emden -

About 200 killed. About thirty wounded tuken off Emden, some remaining Keeling, will be picked up by ship returning from Cocos. Nothing seen Ayetha-

That is the launch on which the landing party escaped -

Island will bc visited frequently while unaaptured. Sydney sunk Emden’t collier as flooded prior capture.

I presume that the Germans themselves flooded the collier, and that she was afterwards sunk by the Sydney.

Senator KEATING:
Tasmania

– Can the Minister inform the Senate whether it is the intention of the Government to make any announcement in regard to the recent military raids upon suspected premises? If it is intended to make any announcement, either as to the result of those raids or as to the circumstances leading up to them, when may it be expected 1

Senator RUSSELL:
Assistant Minister · Victoria · ALP

– On the 28th October I promised Senator O’Keefe to institute further inquiries in regard to when the Inter-State Commission is likely to report upon the need for Tariff revision. To day I received tie following reply from the Minister of Trade and Customs -

With reference to the attached excerpt from Ilansard of 28th October, I am advised by the Chief Commissioner, Inter-State Commission, that the Commission expects to be able towards the end of the present year to furnish an interim report as contemplated by section 46 of the Inter-State Commission Act.

Senator PEARCE:
Minister of Defence · Western Australia · ALP

– In reply to Senator Keating, I can only say that the military raids recently undertaken under the War Precautions Act were carried out by the Attorney-General’s Department. I am not in a position to say whether the Attorney-General intends to make any public statement in regard to them, but I will bring the representations of the honorable senator under his notice. In regard to the business to be dealt with to-morrow, I propose to move the second reading of the Defence Bill, and I may tell honorable senators that we also expect to receive from another place a Supply Bill, which it will be necessary to pass through all its stages at our next sitting.

Question resolved in the affirmative.

Senate adjourned at9.47 p.m.

Cite as: Australia, Senate, Debates, 11 November 1914, viewed 22 October 2017, <http://historichansard.net/senate/1914/19141111_senate_6_75/>.

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Senate11 November 1914

PRESENTATION OF ADDRESS-IN-REPLY

R. M. FERGUSON,

Governor-General

Melbourne, 29th October, 1914

ASSENT TO BILLS

QUESTION

COCOS ISLAND NAVAL ENGAGEMENT

Senator PEARCE:Minister of Defence · Western Australia · ALP

Senator PEARCE:

Senator NEEDHAM:WESTERN AUSTRALIA

Senator PEARCE:

QUESTION

NEW GUINEA

Senator KEATING:TASMANIA

Senator de Largie:

Senator KEATING:

Senator PEARCE:ALP

QUESTION

WIRELESS TELEGRAPHY WORKS

Senator LONG:TASMANIA

Senator PEARCE:ALP

QUESTION

UNLOADING INTERNED BOATS

Senator McDOUGALL:NEW SOUTH WALES

Senator PEARCE:ALP

QUESTION

TRANSMISSION OF NEWSPAPERS BY POST

Senator KEATING:

Senator PEARCE:ALP

Senator Keating:

Senator PEARCE:

Senator Keating:

Senator PEARCE:

Senator Keating:

Senator PEARCE:

Senator STEWART:QUEENSLAND

Senator GARDINER:Vice-President of the Executive Council · NEW SOUTH WALES · ALP

Senator Guthrie:

Senator Findley:

Senator PEARCE:

QUESTION

WAR NEWS

Senator READY:TASMANIA

Senator GARDINER:ALP

EXPEDITIONARY FORCES

Vaccination - Canteens

Senator BARKER:VICTORIA

Senator BARKER:

Senator Pearce:

Senator BARKER:

Senator PEARCE:ALP

Senator BLAKEY:VICTORIA

Senator Millen:

Senator BLAKEY:

Senator PEARCE:

Senator BLAKEY:

Senator PEARCE:

Senator TURLEY:QUEENSLAND

Senator PEARCE:

PAPERS

QUESTION

HOLIDAY PRIVILEGES

Senator READY:for Senator Guy

Senator GARDINER:ALP

QUESTION

WIRELESS SYSTEM

Senator LONG:

Senator GARDINER:ALP

QUESTION

RAILWAY CONTRACTS

Senator DE LARGIE:

Senator RUSSELL:Assistant Minister · VICTORIA · ALP

QUESTION

NOTES AND SPECIE

Senator DE LARGIE:

Senator PEARCE:ALP

TELEPHONIC SERVICES

Unley : King Island

Senator GARDINER:ALP

Senate
11 November 1914

Senator PEARCE:
Minister of Defence · Western Australia · ALP

Senator NEEDHAM:
WESTERN AUSTRALIA

Senator KEATING:
TASMANIA

Senator PEARCE:
ALP

Senator LONG:
TASMANIA

Senator PEARCE:
ALP

Senator McDOUGALL:
NEW SOUTH WALES

Senator PEARCE:
ALP

Senator PEARCE:
ALP

Senator STEWART:
QUEENSLAND

Senator GARDINER:
Vice-President of the Executive Council · NEW SOUTH WALES · ALP

Senator READY:
TASMANIA

Senator GARDINER:
ALP

Senator BARKER:
VICTORIA

Senator PEARCE:
ALP

Senator BLAKEY:
VICTORIA

Senator TURLEY:
QUEENSLAND

Senator READY:
for Senator Guy

Senator GARDINER:
ALP

Senator GARDINER:
ALP

Senator RUSSELL:
Assistant Minister · VICTORIA · ALP

Senator PEARCE:
ALP

Senator GARDINER:
ALP

Senator PEARCE:
ALP

Senator GARDINER:
ALP

Senator KEATING:
Tasmania

Senator GARDINER:
Vice-President of the ExecutiveCouncil · New South Wales · ALP

Senator KEATING:
Tasmania

Senator O’LOGHLIN:
SOUTH AUSTRALIA · ALP

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

Senator SENIOR:
South Australia

Senator GARDINER:
Vice-President of the Executive Council · New South Wales · ALP

Senator O’LOGHLIN:
SOUTH AUSTRALIA · ALP

Senator O’LOGHLIN:
SOUTH AUSTRALIA · ALP

Senator KEATING:
Tasmania