9th Parliament · 2nd Session
The Deputy President (Senator Newland) took the chair at 3 p.m., and read prayers.
The following papers were pre sented : -
Public Service Act - Regulations amended - Statutory Rules 1924, No. 113.
Defence- Report (dated6th July, 1923) in connexion with the Royal Australian Naval College, Jervis Bay, and the Royal Military College, Duntroon, by Professor Sir T. W. Edgeworth David, K.B.E., C.M.G., D.S.O., Professor, Sydney University, Major-General Sir C. B. B.. White, K.C.M.G., K.C.V.O., C.B., D.S.O., Chief of the General Staff, and Captain G. F. Hyde, Royal Australian Navy, Second Naval Member of Naval’ Board.
The DEPUTY PRESIDENT.- I have to announce that a communication has been received from Miss Barker expressing, on behalf of the members of the family of the late Senator Barker, their appreciation of the resolution of sympathy passed by the Senate on the occasion of the death of the late senator.
asked the Minister representing the Minister for Trade and Customs, upon notice -
What is the approximate average amount of duty paid on reapers and binders imported into Australia?
– The information is being obtained.
Bill (on motion by Senator Pearce.) read a third time.
Bill (on motion by Senator Crawford) read a third time.
Motion (by SenatorFindley) agreed to-
That the report from the Printing Committee, presented to the Senate on 6th August, 1924, be adopted.
Bill received from House of Representatives, and (on motion by Senator Pearce), read a first time.
Motion (by Senator Pearce) pro posed -
That the bill be now read a third time.
– My reason for speaking on the third reading of the measure is that the bill is now quite different from what it was when introduced by the Minister (Senator Pearce). Its most important feature consists in the extraordinary amendment so skilfully engineered by the Minister and Senator Greene. I refer to the amendment which provides for the issue of notes against securities held in London. To me it is quite refreshing to know that a change has come over honorable senators opposite since July of last year. Probably this is because we have the advantage of Senator Greene’s presence ; because last year, when I was putting forward, in a practical and common-sense way, a proposal to issue notes against gold in the Treasury with a view to paying off portion of our war indebtedness, honorable senators opposite were almost unanimous in their opposition to it. My suggestion then was that the additional issue should be on the basis provided by the original act, namely, a gold reserve of 25 per cent., and I showed that on that basis there was still a margin of £46,000,000 available. Almost without exception, honorable senators, by their interjections and later by their speeches, showed strong antipathy to the proposal. What a change has come over honorable senators since then ! They are now prepared to issue notes on securities held in London. What is the reason for their change? Is it because we now have with us a distinguished senator from my state? Has Senator Greene convertedhis friends ?
– The honorable senator pays me too much honour.
– Well, I am trying to avoid the suggestion that perhaps my remarks under this heading last year converted them. It is possible that, in the recess, they ruminated upon what I had to say then, and that they have come round to my point of view. I have looked up my remarks on the occasion referred to, and I intend to make a note of the interjections then made. I want specially to refer to one. made by Senator Glasgow, because he was most pronounced in stating his viewpoint. I put forward the suggestion that we could increase the note issue by about £26,000,000, and to that extent could redeem our war loans. In my opinion, that was a modest proposal, since we had a clear margin of £46,000,000. Nevertheless,- it met with quite a round of opposition. Senator Glasgow interjected -
The honorable senator wishes Australian currency to follow the course of the German mark.
Of course, I did not wish anything of the kind; but the honorable senator thought that such an issue of Australian notes against our gold reserve might have that tendency.
– So it would if we issued notes to any extent.
– Apparently the honorable senator still holds that view. Let us look at the position fairly. If, in July of last year, the issue of £20,000,000 of Australian notes against gold in the Treasury and the credit of the Australian people would have sent Australian currency in pursuit of the German mark, where will our currency get to if we issue £20,000,000 worth of notes against securities held in London? That is a fair question to ask.
– Nobody proposes to do that.
– Then what is the reason for the amendment in the act?
– It is not with the object of issuing £20,000,000 worth of notes, anyhow.
– “Well, I have heard some honorable senators opposite say that it is proposed to pay for the coming wool clip with the notes, and to do that I suggest we shall require £60,000,000 worth of new paper. I have also heard it said that the notes are to be issued to relieve the balances held in London, and I have read that those balances go as high as £70,000,000. I have here a. number of remarks by recognized authorities on finance. It might be as well if I gave honorable senators the benefit of their opinion. Mr. George J. Cohen, president of the Commercial Banking Company of Sydney, referring to the exchange position recently, said -
The balance of exchange with London at the present time is largely in favour of Australia, though I do not think that the accumulations in London are as large as they are, by many, supposed to be. This condition has been brought about largely by transfer of Government and municipal funds borrowed abroad, and by invisible exports, i.e., money remitted here for investment and other purposes, pf which there is no record. The amount of these invisible exports must, I imagine, be very considerable. The only way in which money can be brought from London now is by import of goods.
That is wisdom which I feel justified in emphasizing.
Sena tor Drake-Brock man. - And that is what honorable senators on this side have been hurling at the honorable senator over and over again, but he would not accept or believe it.
– I am sorry that the honorable senator should have said that, because I have never been so benighted as to argue that all largo transactions between Australia and the Mother Country are not in the nature of an exchange of commodities. I have repeated that truism on every occasion that has presented itself in this chamber.
– But the honorable senator has camouflaged it pretty successfully. .
– I am afraid that the honorable senator, is so busy interjecting that he never has time to listen to what- 1 have to say. A perusal of my Hansard speeches, interesting as they may be, shows that interjections from Senator Drake-Brockman are more numerous than from any other honorable senator. It would appear that he never waits long enough to hear what I have to say, or that, having heard it, he is incapable of understanding any one who talks ordinary commonsense. _ He thinks only of himself, and has not time for any one else. However, I do not wish to bo drawn into personal exchanges with the honorable senator, so I shall desist. I was referring, when diverted by interjections, to my remarks in July of last year, in favour of increasing the issue of Australian notes upon the credit of the Australian people and gold in the Treasury with a view to paying off portion of our war indebtedness. On that occasion Senator Drake-Brockman was the most frequent interjector in opposition to my proposal. Now I find him favorable to the issue of notes against London securities. Mr. Cohen has pointed out that the only way in which money can be brought from London now is by the importation of goods. That is one of the things which the Senate should consider. When speaking only a few weeks ago on this subject I emphasized that our accumulated surplus in London was due to the fact that we had not a free interchange of commodities with Britain. Our produce enters Great Britain without any barrier, but products from the Mother Country have to surmount a Customs barrier of 30 per cent, or more. This is one of the causes of the present huge surplus in London. This gentleman, Mr. Cohen, speaking of the note issue, said -
In connexion with any expansion that may be found necessary, it is most important to provide, as far as possible, for the return, within a reasonable time, of notes issued to meet the temporary need, and to avoid any excessive issue with the consequent inflation of credit.
That is something which should be brought under the notice of the Government.
– Does the honorable senator agree with Mr. Cohen’s remedy?
– I have not come to his remedy, but before I have finished Senator Greene will understand that the very sound advice given by this banker has my utmost approval.
– I do not object to that if the honorable senator will quote the whole of it.
– Mr. Cohen went on to say -
I must say that I look with apprehension on the proposals that notes should he issued against securities in London, and that Bank of England notes should be made legal tender here. The adoption of either of these proposals would mean decided inflation, with all its dangers, and, instead of improving the position, would, in my opinion, eventually make it worse, and would lead to serious trouble.
That is the opinion of a man well qualified to speak.
– Yes, and then he went on to say that, in his opinion, the banks should issue their own notes, and get over the trouble.
– And what is the difference?
– The banks are deliberately bringing pressure to bear in order to secure the right to issue their own notes again.
– They will never get it.
-“ Never” is a long while, and the concessions I have seen them secure from this Parliament makes me safe in declaring that I would not prophesy that they will never get it. All that they have to do is to1 induce the Government to introduce a bill to give them the right to issue notes again, and no one on the Government side of the Senate will oppose it. Another financial expert has expressed similar views. I do not pretend any acquaintance with him, but as a responsible newspaper has given him a column of its space to deal with the exchange question, one may readily accept him as a financial expert.
– The newspapers gave me the same amount of space, but I do not claim to be a financial expert.
– The newspapers gave the honorable senator, for his speech on the second reading of this bill, an amount of publicity that has never been given to any other senator. Before I gathered the purpose of that publicity, I said that it was so much in excess of the importance of the honorable senator’s utterance, that, like the chess player who is always wondering what the next move will be, I would wait until the next move was made. Now I know that the reason for it was that pressure was being brought to bear on the Government to do something; and because the Government have yielded to that pressure I am now addressing myself to this question. The publicity given to the honorable senator’s speech was a part of that pressure. The honorable senator urged that before this bill was passed, a royal commission should be appointed to inquire into it, and I venture to say that Senator Foil’s amendment for the appointment of such a royal commission was , also part and parcel of the pressure of the private banks upon the Government to give them the concession to issue their own notes. At any rate, I shall .quote now the remarks of Mr. Butchart, an exchange broker of Melbourne. According to the newspaper from which I am quoting, this gentleman, who was formerly chief inspector of the London Bank of Australia, in an address delivered before the Legacy Club., blamed the banks for the present exchange difficulty in regard to Australia’s trade with England. This is the newspaper report of this gentleman’s address: -
Here was the Teal reason for the present exchange difficulty. The real reason was that the banks had made such large advances of a non-liquid character, which they could not pay off by ready cancellation of deposits being set ofl’ against the advances to liquidate them. The delinquents were the bankers; they were at fault. As .a British financial expert had put it “A big note issue told more of the past than of the future, and proved not that the moment had come for a change of course, but that the navigation was already at fault, and the ship was on the rocks.” It was the bankers who ‘desired to increase the note issue to cover up their over-trading. One banker recently said the remedy was to cease borrowing in London. He (the speaker) wondered if this -were the same man who in December, 1920, said the only way to bring about a satisfactory state of things was to float a loan of £10,000,000 in London. Circumstances altered morals. (Loud laughter). It was hoped that whoever was put in charge of the note issue would be wise enough and strong enough to appraise rightly advice gaven by bankers. With one or two .honorable exceptions they had no principles, but were men of expediency. The golden rule to be followed by the authority m charge of the note issue should be - “ Due limitation of the amount of the currency to maintain its “purchasing power; keep your weather eye on the condition of credit, and let the request of the bankers for more notes go hang’”.
That is very .sound advice.
– And -yet the honorable senator wants to issue more notes against the gold now held in Australia.
– I do- not ‘know that I can -say anything more in regard to the honorable senator’s interjection than that it is on a level with his usual stupidity.
– And the honorable senator’s remark is quite in keeping with his usual rudeness.
The DEPUTY PRESIDENT (Sena tor Newland).- Order!
– If my remark is out or order, let me withdraw it and say that the honorable senator’s interjection is’ not on a level with his usual stupidity.
The DEPUTY PRESIDENT.- I may have been somewhat lax in permitting interjections, but I now ask honorable senators to hear Senator Gardiner in silence.
– I do not know what to do in addressing myself to this question.
– Cease being rude.
– If honorable senators will persist in attributing to me, by means of interjections, something altogether apart from what I have said or have in mind, they must take their change in the way of replies. I am endeavouring to ‘show that one authority on ‘finance has declared that the bankers may “ ‘go hang “ so far as their demand for an increased note issue is concerned, and that it is their own over-trading that has brought about the present position and has caused them to clamour for an increase in the note issue. It is a claim that must be resisted. As honorable senators can gather from remarks during this debate, efforts which have been made for a considerable time to get the Notes Issue Board to issue notes have been resisted by that board. Yet the Government have now inserted in this bill a provision to compel the board to issue notes, not on gold in the’ vaults here, and not on the credit of the people of Australia, but on credits held in London. By the votes recorded, the members of the Government and their supporters have done something which was never contemplated in the past. I trust we shall not hear any more of those indiscriminate interjections that we are sending our currency in pursuit of the German mark. No such statements can be made in regard to any of our proposals when it is remembered that the Government now propose to issue notes against ‘Securities held in London. The private banks were insisting upon a further issue of notes, ,and in my opinion ! one of their chief reasons for so doing was to acquire the right to again issue notes. I presume the next move on the part of the Government will be to give the associated banks that power. No one would expect honorable senators with experience, and particularly the Minister (Senator Pearce), to immediately concede such a point to the private banks, because that would be acting in too candid a way. The method adopted by the Government was to break down the prejudice which existed against increasing the note issue against the gold reserve by embodying in the bill an amendment which gives the Commonwealth Bank the right to issue notes against securities held by the London branch of that institution. The fact that the Government have gone that far is a. clear indication that they have little respect for Australia and its currency. Is no limitation to be imposed? If a government other than the one now in power, particularly one composed of members of the party which I represent, were, to recommend the issue of additional notes, such a government could be reminded that the Bruce-Page Government issued notes against securities held in London. If that can be done notes can be issued upon the flimsiest possible security. The flood gates have been thrown open, and our Australian currency is now faced with the gravest possible danger. I am not one of those who oppose a reasonable inflation of the note issue, provided the gold reserve is adequate. That is shown by the remarks I made twelve months ago. The notes in ‘circulation can never be in excess of what the people require. It would be just as reasonable to bake more bread than was required, and endeavour to compel the people to consume it. The community will not use more notes than it requires in the conduct of business, and when the limit is reached the balance will find its way back to the Treasury. We have not yet reached the limit, but the Government suddenly submit this proposal, which was decided upon after the Treasurer (Dr. Earle Page) had been in conference with the representatives of the private banking institutions. We were informed by a Minister in this chamber that an agreement had been reached, and that in consequence of the decisions arrived at this amendment would be incorporated in the bilL That may’ be the Minister’s way of doing business, but it is not mine. It does not suit me, and that is why I am protesting against it. The issue of notes in the manner proposed will lead to disaster, because the security is altogether inadequate, particularly as the Government have no control over the securities held in London. The proposal to issue notes against securities held in another country is one of the worst proposals ever submitted. The accumulated surplus in London is not due solely to the difference between our exports and imports. It has not been sufficiently large over a, number of years to create such a large surplus. Some will probably say that the Commonwealth Government, the State Governments, and municipalities have been borrowing money in London, and that the borrowed capital can only come to Australia in the form of goods. I am inclined to think that that is true. On an average we impose a 30 per cent, duty on goods imported from Great Britain, which means that for every £100 we borrow in London we receive only £70. This is one of the many important questions which the present Minister for Trade and Customs (Mr. Pratten) will have to consider. That Minister has already stated that he intends to recommend the removal of the preference given to Great Britain over other countries on all goods in which there is not 75 per cent, of British material and labour. Great Britain is not a great producing country. Her industries are engaged largely in gathering up and manufacturing the raw products of other countries, and - then disposing of them. The woollen goods Great Britain manufactures consist largely of the wool purchased in Australia, and its iron and steel manufactures comprise the products of Spain and other countries. I have raised this question particularly to show that the minds of our Australian statesmen are not alive to the fact that the barriers between Australia and Great Britain in the matter of trade are responsible for the accumulated surplus in London and for the tightening of title money market. Our position is due to the fact ‘that we take .a selfish view of these matters, and believe that there is only one country to be considered. Senator McDougall very rightly pointed out that we have to produce more to sell more,- and purchase less.
Where is this buying less to end ? If we continue to produce more and to buy less what will happen ? If we buy less, we use less of the goods which hitherto we required. I ask Senator McDougall how are we to sell unless we buy ? Other people cannot buy our goods unless we buy theirs. There must be an interchange of goods between nation and nation, or buying and selling between nations will cease. When dealing with our financial proposals, we must consider that the act of selling involves also the act of buying. We must realize that we cannot continue to sell unless we continue to buy. In a country like Australia the remedy is not to sell more and buy less. We must buy more from others in -order to enable them to purchase more of our goods. It is by buying more from outside that we enlarge the circle of our customers and increase our business. That is at the root of the present financial “hold up.” Honorable senators know that in business circles generally there is at present practically a financial “ hold up.” Men who have been conducting businesses for years - men, with good reputations and good businesses - now find that the advances from the banks, upon which they have hitherto depended, are not ‘so easily obtained as formerly. Many reasons are given. They are told of the restriction of the notes issue, that money is tight, and that instead of advancing more, the banks must call up their securities. They are told that they must prepare for difficult times ahead. Now we have the Government introducing legislation along those lines in that it proposes to issue notes against London credits. A little while ago when I mentioned the sum of £20,000,000, I was glad to hear Senator Pearce interject that the amount involved would be nothing like that sum. A note issue of £20,000,000 is a huge one to make upon foreign securities - I mean “ foreign “ to be interpreted as applying to all countries outside Australia. To issue notes against securities in London is to issue notes against foreign securities, as those securities are removed from the jurisdiction of our courts. If trouble arose at any time we would have to depend upon the decisions of courts outside the Commonwealth. I am not complaining of the action of the committee in deciding these matters as it has ‘ done. I am not even complaining of the sudden conversion of some honorable senators. Senator Glasgow on the 6th July, 1923, said that he would issue no more notes against our gold reserve. Yet to-day he is prepared to vote to issue notes against securities in London. That is a remarkable change in the attitude of the honorable senator.
– The stick was used on the Government’s supporters.
– The change in the attitude df Senator Glasgow is one of the most remarkable changes I have witnessed in this chamber.
– Why does the honorable senator not mention the names cif all who have changed their attitude regarding this matter ?
– 1 do not want my speech to be marred by personal attacks on honorable senators. Twelve months ago Senator Glasgow was so emphatic that he said that anything in that direction was to chase the German mark along a very dark alley. I am not surprised at the conversion of Senator Foll, because my experience has been that he generally votes the opposite way to that which he has indicated in his speeches. During the second-reading debate he moved for the appointment of a royal commission to inquire into the Commonwealth Bank Bill.. Two or three days later he told us that he desired to withdraw his motion. He said that he had got all that he wanted, namely, the issue of notes against credits in London. Had the honorable senator informed us that he was in favour of the whole of the bill, except in so far as it did not provide for the issue of notes against credits in London, and that he desired the assistance of other honorable senators to secure its amendment in that respect, he would have acted in a straightforward manner. Actions such as those of Senator Greene in indicating to the Government that, unless it conferred with the bankers, he, Senator Foll, and other insurgents, would hold up the bill, may come off once in this chamber, but once only. Should the Senate become aware of ulterior motives on the part of any honorable senator, it will look with suspicion on future amendments from that quarter. Senators Greene and Foll practically presented a revolver at the Government, saying, in effect, “ We shall join the Opposition against this bill, and assist them to hav9 it referred to a royal commission, unless you grant the issue of notes against credits in London.” I repeat that actions of that kind succeed but once in this chamber. The action of Senators Foll and Greene in bringing the Government to heel is a great triumph for them, but so far as I am concerned - I say it openly and truthfully - if ever such demands are made on the Government, and my vote is sought to assist in enforcing them, I will, if acquainted with, the facts, support constitutional government rather than allow a small minority in this House to direct the affairs of the country. The Government can depend upon it, that no small insurgent section of its supporters in this House shall use Opposition members to secure something which ‘ cannot be obtained in a straightforward manner. I was very much incensed at the flippant manner in which Senator Foll asked leave to withdraw his amendment, stating he had got all that he wanted. I take this opportunity to indicate to the Government a course of action which will relieve them from the awkward position in which they will be placed should a few of their supporters endeavour, by means of a revolt, and by holding up the business of this country, to obtain what they want. Opposition members in this Parliament are not willing to place themselves at the beck and call of the private banking’ institutions of this country merely at the request of honorable senators who are subservient to those interests. Some honorable members may consider that that is strong language to use, but the time has arrived for plain speaking. This proposal is the worst which has yet been brought forward in this Parliament. No government has yet introduced into the Senate any measure of such importance and magnitude as the one before us. It is a danger to safe banking in Australia. The whole complaint of honorable senators on this side against the management of the bank in the past is that it has proceeded too safely, and, therefore, too’ slowly. No honorable senator on this side has ever raised his voice to complain concerning the Notes Issue Board. “We gathered from Senator Greene’s speech, and from Senator Foil’s utterances, that efforts had been made to get the Notes Issue Board to do something in this direction, and that the board had refused to do so. A final effort was successfully made to compel them- to do so. Legislation is now being passed to bring this about. I desire members of another place to know what has happened in the Senate, and the reason why the Government made this concession to one or two honorable senators. I do not think I need delay the Senate any longer. I have promised the Minister to assist to the utmost extent in expediting the passage of this measure. I do not mean to suggest that I am prepared to consent to any curtailment of the rights .of honorable senators to free discussion. Every honorable senator having had full opportunity to express his opposition to the bill, a vote will be taken on the third reading without undue delay, and there the matter will end. As to all the other business that ‘the Government may introduce, the Opposition will give it full consideration, and, when the Government desires to adjourn, whether for a. short recess or a long one, it will have to shoulder full responsibility for its actions. The Government alone is responsible for the conduct of the business of this chamber, and the Opposition is certainly not in the humour to share any of that responsibility. We on this side realize that that responsibility is grave enough already, and is calculated to sink in the sea of public opinion all who support the Government. I am glad to see Senator Greene in his place at the present moment, for I feel sure that my remarks concerning him and Senator Poll call for some reply from him.
– Unfortunately, I did not hear the whole of the honorable ‘Senator’s speech.
– I am not permitted under the Standing Orders to repeat my remarks, but, before the honorable senator left the chamber this afternoon, he heard quite sufficient of my speech, I think, to realize the lines on which I was proceeding. Senators Greene and Poll virtually presented a pistol at the head of the Government, and demanded that it should concede to the private banks the right to obtain notes issued against London securities. Failing the granting of this they threatened to hold up the bill. I condemn’ such a practice in- the strongest terms. It is a practice in the strongest terms.. It is a scheme that is not likely to succeed a second, time- Senator Greene will need to give a remarkably convincing explanation of his action., not only to the Senate, but also to the- people he represents.
.: - It was not my intention to speak on the third reading of the bill, but, as Senator Gardiner has repeated certain statements that he made in a- less elaborate form when the measure was in the committee stage, it is desirable that I should say a word or two regarding the particular amendment to. which he has directed the greater part of his criticism. Senator Gardiner will recall the fact that the intention to introduce, the amendment was not sprung om, the committee, but was announced at a comparatively early stage of the second-reading debate, when the terms of the amendment were also indicated.
– That was an amendment for the appointment of a royal commission to inquire into the position.
– I am referring to the amendment foreshadowed by the Minister (Senator Pearce), relating to the permissive power to be granted to the new board of the Commonwealth Bank, since large credits are now held in London, to hold portion of their reserves against the Australian note issue in securities at the other end of the world. If, instead of doing that, the board simply issued Australian notes, and invested the fund’s in Australian securities here, it would not relieve the exchange position in the same way. Senator Gardiner started out, as I understood him, by twitting honorable senators on this side of inconsistency owing to their declining to follow him in his proposal, made some time ago, that in view of the high ratio to the note issue of the present gold reserve which has been built up under the administration-‘ of the late Government and the present Ministry, we should use the wide- powers that exist under the Australian Notes Act to pay a considerable portion of the debts of the country. That would involve the issuing of notes to a large extent, but necessarily within the limit allowed by the Australian Notes’ Act. Senator Gardiner seemed to think that his was- a perfectly sound proposition,, and that the proposal of the Government, by the amendment moved by the Minister, was quite unsound. I venture to say that if either of the two propositions be economically unsound, it is that by Senator Gardiner, and not the proposal he has been discussing to-day. If history teaches us any lesson m relation to the- inflation of currency, it is the danger of a government proceeding to. pay its debts by issuing paper money. There are a number of notable examples’ in the history of nations which should be a warning to us. We only need to remember what has been the experience with the French assignat, the ‘ ‘ greenbacks “ of the United States of America, the German mark,, the Russian rouble,, and the Austrian krone. What set the ball rolling and eventually Led to the financial debacle in those countries, was the attempt by the Government to pay its debts by the issue of’ paper currency which it made legal and Inconvertible tender. So far as I know,, that has been the beginning of the trouble in every instance. Senator Gardiner proposed to foll’ow that course - only’ to a limited; extent,, I admit, but it would be the beginning of the downward path. I am not going to say that there have not been some transactions in connexion with the . Australian notes issue that have been perilously near following that track. One such step was taken not so long ago, when £6,000,000 worth of notes were issued to the banks in connexion with the redemption of the war gratuity loan obligations. In that case the Government was- under a definite obligation to the banks to issue currency, and there was a good d’eal of excuse for what was done. The fundamental principle in relation to the issue- of currency, however, is that, if there is any additional issue, it should be directly against debts owing to the country in respect of goods which are sold and pass into consumption-. Currency which is issued as the result of transactions in goods which are sold and1 pass into consumption is vastly different from the currency which arises from the product of the. printing- press, issued by the Government simply as payment or public debts: I d& not. wish, this afternoon,, to enter into a long, detailed discussion’ of. this very vexed and difficult problem, hut I feel that Senator Gardiner, if he. will pardon me for saying so, has not quite grasped the true principles underlying what has been done. He persists in talking about the difference’ between issuing notes against credits, as he calls them, in London, and issuing notes against the gold and the credit of the Australian people. The notes which will be issued under the amended proposal, against which the honorable senator has directed all his criticism, will be issued in exactly the same way as any other Australian notes, and they will be backed by the gold reserve and by the credit of the Australian people.
– Then why put the new clause in the bill ?
– The security behind the notes will be exactly the same with this difference, and only this difference, that when we come to invest the money made available by the issue, instead of investing it in Australian securities here it will be invested in money or British securities in London, Senator Gardiner forgets that the original Australian Notes Act, for which he and his party were principally responsible, provided for that very form of security being held by the Australian Notes Board, or by the Treasurer of the day, who then controlled the note issue. There is no difference in principle between the two issues. Senator Gardiner went on to say that he believed the time had come when, owing to the expansion of trade in Australia, it was necessary to issue more currency. On that, I largely agree with him. I frankly admit that the utmost care must be exercised under the present abnormal conditions, owing to the fact that the note is inconvertible, and that gold is immobile. Working, as we are, under a Government issue which from its very nature prevents the desirable feature of elasticity coming into the issue, and the normal adjustment of it from day to day, to the actual trade requirements of the country - a disability which is inseparable from the class of issue that Australia has - it is all the more incumbent upon those in control of the issue to see that every care is exercised, and that there is no undue inflation. I would say, quite frankly, to the board ofthe Commonwealth . Bank that in the present circumstances, if it had the slightest suspicion that there was over-trading in the community at any time and additional notes were required to carry on the normal trading needs of the country, it would be perfectly justified in declaring its intention of issuing additional notes only provided a fairly high rate of interest was paid on those so lent to the banks. Of course, under normal conditions, and when there is a free interchange of gold between the nations, the customary method, in Great Britain, at all events, is to employ the rise or fall of the bank rate to adjust the exchange position from time to time. It is almost impossible, under existing conditions, to apply that principle to its fullest extent, because we have not free gold. I want to say, in conclusion, that I regret very much that Senator Gardiner should have imagined for one moment that I, or any other honorable senator on this side of the chamber, was actuated by any ulterior motive in connexion with anything we did to ensure the passage of the bill.
– Thenwhy didthe honorable senator ask for a royal commission, and then vote against his proposal ?
– I still hold the opinion that the Government would have been well advised if, before it introduced the bill at all, it had sent the whole question to a royal commission for investigation, or if it had taken some other steps to throw into the arena of public discussion, for the widest possible consideration, the proposal it was bringing forward. The Government then would have had the advantage of valuable advice from a great number of men with sound experience of financial matters. May I add that when I said of the Treasurer and the Secretary to the Treasury that they had had no banking experience, I meant nothing that was personally derogatory to them. No man can fairly claim to possess all the knowledge and experience which, in my opinion, are essential for the proper public discussion of this subject. We want the expression of many views, because there are many angles from which this question may be viewed. I do not profess, for a single moment, to have acquired a knowledge of more than the barest outline of some of them; but I felt, and I still feel, that it would have been wise if the
Government had taken the step I suggested. However, I recognize that, under existing conditions, the primary producers of this country are suffering a very serious handicap. I feel that finance in Australia, as Senator Gardiner himself pointed out this afternoon, has been for some considerable time extremely difficult. Money has been very tight. This financial stringency has held up many important business ventures, lt has prevented many perfectly justifiable additional enterprises from being undertaken; but I believe that by means of this amending measure we shall probably find a way out and a solution of our difficulties. I believe that this way out will be very much along the lines against which Senator Gardiner directed most of his criticism this afternoon. For this reason, and in view of the very definite statement that the Government proposed to take action along the lines indicated, I felt justified in taking the risks and saying that I was prepared to do what I could in committee to shape the bill in a way which I thought best in the interests of the bank and Australia. I want my friend, Senator Gardiner, to disabuse his mind entirely of the thought that I, or any one else so far as I know, was actuated by any ulterior motive in connexion with this measure. One could go on almost indefinitely talking about this subject. X have tried in the few words which I have addressed to the Senate this afternoon to clear up the misconception under which I felt confident Senator Gardiner was labouring, and to assure him that if he himself was satisfied that it would have been safe to issue notes along the lines that he proposed, and to which he referred in his opening remarks this afternoon, it is infinitely safer to do what the Government is now proposing to do.
– I have no desire to delay the passage of the bill, but I cannot allow the present occasion to pass without having a last kick at it, for we shall have no other opportunity.- A perusal of the measure as originally introduced and the bill in its amended form convinces me that the efforts made by Senator Greene and other ministerial supporters have not been effective in perfecting it. It might just as well have been passed in its original form. The underlying prin ciples of the bill as introduced, namely, an alteration in the control of the bank and an increase of its capital, are still in the measure. This increase of capital is to be secured by borrowing money upon which the country will have to pay an excessive rate of interest. All the arguments employed by Senator Greene and other honorable senators have not convinced me that the measure is going to be of any great advantage to the community, or that it will ease the present financial situation due to a dislocation of the exchange position which, in its turn, has been brought about by financial troubles in other countries. So far as I can see, this bill will not smooth out our difficulties. I do not profess to have a very great knowledge of banking or finance, but I know that the present capitalistic system, if it is to continue, must be dominant in the solution of currency and other financial problems. I have no desire to say anything . against the capitalistic system in this country, as at present constituted. In my opinion the social system under which we are living cannot continue under the existing system of finance. I object that this question of finance should always be surrounded with such an air of mystery. Men alleged to be wise in finance think that the man in the street is incapable of understanding these problems, which, we are told, should be left to experts. We all know that our capitalistic system is controlled by the banking institutions of the Commonwealth. The bill as amended has not been improved. Suggestions from this side of the chamber were never entertained, and the amendments that were incorporated in the measure have not interfered with its main principles. When the first Commonwealth Bank Bill was introduced capitalists and financial institutions became alarmed. The Labour party, we were told, should never have contemplated entering the arena of finance. The banking authorities did all in their power to prevent the Commonwealth Bank from becoming the great institution it is today. We were told that we would be unable to get a manager for it. Financial authorities, one or two of whom - including a director of the greatest banking company in New South Wales- - were then in this chamber, declared that by establishing the Commonwealth Bank the Labour party would sink millions of the people’s money. Experience has proved those apostles of finance to be entirely wrong. The Labour party intended the bank to be a national bank, in which the people’s money would be secure. I was one of the unfortunate individuals who suffered as a result of erratic investments by private banking institutions many years ago. Because of the widespread failure of private banks there arose the need for the Commonwealth Bank, with the credit of the country behind it. I am afraid, however, that the career of the bank will not be continued along its present lines. I believe that before long the savings bank business will be dispensed with. Authority to do this is given, in this bill, to the board. The Labour party intended that the bank should become an important institution, for the encouragement of- industrial and rural -enterprises. Unfortunately, in this bill the Government refused to accept an amendment which would have enabled the bank to develop in that direction. Up to the present, it has not materially helped industrial or rural development, but such a bank, with the credit of the nation behind it, must ultimately overshadow all the private banking corporations of the Commonwealth, and reap some of their gains. In the earlier stages of its career the bank made satisfactory progress, but latterly something went wrong. The bill, as it leaves the Senate, will do what it was aimed to do - prevent’ the Commonwealth Bank from getting some of the gains which private banks wish to monopolize. I believe that there is a combine among the banks. Of course, they deny its existence. Mr. J. G. Cohen, the veteran banker of Australia, denies that the banks had anything to do with this bill. He declares that it was not submitted to them for their’ advice. The Government claim that they have had the advice of bankers, and yet these people say they were not asked to give it. If the Government did get advice from some quarter, I want to know where they got it”. So far they have not answered that question. All we know is that an alteration has been made, and we are not aware who instigated it. So far as I can see, the purpose of this bill is nothing but an attempt to interfere with the policy of the Labour party. It is a direct move against the principles of a national bank.
At the very outset the Commonwealth Bank did not become as formidable a competitor with the private banks as was originally intended. Its functions were curtailed,* and its powers were limited, because it was likely to interfere with the monopoly held by private institutions. What that monopoly was may easily be gathered from the fact that half a dozen men would meet in some office and determine what the rate of exchange should be, and how bills should be discounted; and every private banking institution had to fall into line. But when the Commonwealth Bank was established they were faced with the competition of an institution which was outside the ring, and from that time onwards they have used all their endeavours to have its functions curtailed and its powers limited. At last they have succeeded. The Government have fallen down in front of the foes of the Commonwealth Bank. They are now willing to permit of its slaughter in the interests of private profit-gaining institutions. As the members of the -present- Government are not wonderful financial experts - the Treasurer has made such heinous blunders that his financial record does not give one the impression that he ought to be regarded as a great financial expert - there must be something, of which we have not been told, behind this attempt to curtail the powers of a great national institution, and save the private banks by eliminating all competition with them. Prior to the establishment of the Commonwealth Bank, this little combine to which I have referred, could gamble as they liked with the people’s money. They were doing this to such an extent before the bank smash of the early nineties that unfortunate people lost their life savings which they had placed on fixed deposit in the banks, having. been induced to do so by the offer of a rate of interest that any one in his sane judgment would know the banks could not pay. When the institutions closed their doors for reconstruction, the workers were left lamenting for all time. Many people went to their graves without being repaid. I understand that the Commonwealth Bank, which was to be a people’s bank, is now to become, a bankers’ bank. . Senator Greene has tried to explain what this means, but, in my opinion, a central bank is an institution that discounts for other banks and does work for those institutions. It is a
Bort of combine that exercises a certain amount of control over the financial operations of the Commonwealth. If that is the case, this reactionary piece of legislation must have been introduced by the Government at the dictates of its masters. There is a certain amount of outside influence behind every party, but- the outside influence behind the present Government is stronger than that which has been behind any of its predecessors in office. At any rate, it is sufficiently sinister to force Ministers to take steps to destroy a great piece of Labour legislation’. Fortunately, everything points to the early advent of Labour to power. When that comes about the bank will escape from the bond3 forged for it by this bill and will then fulfil its historic destiny. I have not the slightest doubt it will again be placed on the pinnacle of fame it has earned throughout the world. In Canada, the United States of America, and other parts of the world, its success has been held up as an object lesson to the people of other countries to induce them to undertake their own banking. This bill has been brought forward at the dictates of the financial institutions to drag the bank down from that great pinnacle to which it was raised by the brains and foresight of one who is now departed from this life. However, I have done my duty in regard to it. With a few others on this side of the Senate, I have attempted to defeat the objects of those who are behind the Government in this move. We have failed. Although the bill has been altered in certain details the main principles have not been touched, but like an old boxer leaving the ring after defeat, I do not give this departing measure my blessing but give it, rather, one last kick.
– Before this bill leaves the Senate, I wish to say that I thought of using the present opportunity to insert in it a safeguard in the public interest, namely, to oblige the bank to keep a certain amount of its assets in cash or liquid form. That intention was dictated, as I have already mentioned, by my observance of the experience of Australia in the early nineties. I believe that the law in regard to the control of banking has not been altered from what it was at that “period in Australia’s history, and that the banking legislation of to-day does not compel the banks to keep within easy reach a negotiable part of their assets which would enable them to withstand any sudden demand upon them. I have already quoted the opinion of a leading banker given before a royal commission in New South Walts at the time to which I have referred, that too much attention was paid to the necessity for keeping a gold reserve in respect of notes in circulation, and not sufficient attention to the more vital necessity of compelling the -various banking institutions to keep a substantial cash ‘reserve, and securities in a fairly liquid and negotiable form, so that these might be made available to meet any sudden demand made upon the institutions. I intended to ask the Senate to agree to some such safeguard in the case of the Commonwealth Bank, so that a recurrence of the unfortunate -experience of the early nineties might be avoided, but I now realize that to do so would be to place the bank in a very disadvantageous position as compared with other banks. To call upon the Commonwealth Bank to keep within easy reach a valuable portion of its assets in order to meet a sudden demand, such as was manifested in the early nineties, and not to call upon the other banks to do likewise, would impose on it a handicap that would seriously interfere with the carrying on of its business on a profitable scale. Therefore, it would not be fair to apply this safeguard to the bank owned by the Commonwealth while not applying it to private institutions. Nevertheless, my conviction is not undermined that some such safeguard is absolutely necessary in order to compel the banking institutions of this country to conduct their businesses on safe, sound, and rational lines, so that they shall never again furnish us with the spectacle of the early nineties, when thousands of people were ruined as a result of the careless, rash, and almost criminal action on the part of some people conducting banking in this country. The law to-day is the same as it was at that time, and it is open for the same thing to recur; yet no action is taken to prevent such a possibility. I realize, as the Minister has pointed out, that the Commonwealth Bank has behind it the credit of the nation. The good faith of the people is a most important/ asset, and is something that does not stand behind any private bank. With the security behind the- Commonwealth Bank there is not the necessity to apply to it. the safeguard that would be warranted in the case of private banks. However, I take this opportunity to record my conviction that a general banking bill ?s required to deal with that class of bank which extends its operations beyond the limits of a state. Since such a bill is not before us, if my suggestion were applied to the Commonwealth Bank only, it would impose a handicap on an institution which stands least in need of a safeguard which should be, in my opinion, applied to all banks operating in Australia. The other point to which I wish to direct attention is that raised by Senator Gardiner, who referred lengthily and very interestingly to what he called a novel departure in arming the board of directors of the Commonwealth Bank with power to issue notes in Australia to banks which may have their balances in London.. Senator Gardiner mentioned the danger of departing from the established practice, and paid that- it was not wise to issue notes against other than a gold security. Up to a certain point 1 am in agreement with the honorable senator. At the same time I have to ask myself if the time will ever come when there may be a necessity to depart from this principle, and when the departure may be made without any danger arising. Whilst I am supporting this bill embodying the amendment which Senator Gardiner considers so objectionable, I am doing so in the firm belief that the powers which are to be given to the board will not be abused. I believe that the old and established principle of acknowledging and, accepting gold as the only safe basis must in the main be observed. Gold, as every one who has studied the subject knows, is a convenient substance and one which will always be accepted by the nations of the world at its face value in liquidating debts. It possesses a rare measure of exchangability, and having that unique quality it is superior to any other substance in existence to-day. Generally speaking, paper currency is not accepted beyond the boundaries of the countries in which it is issued, although Bank of England notes were accepted by the German Govern ment in 1870, in payment of the huge indemnity which that country demanded of France. We have, however, not many Banks of England in the world. The ordinary paper in circulation is not of great value beyond the borders of the country of its origin. Although Senator Gardiner very laudably objects to currency being placed upon other than a secure foundation, instances can be quoted in which departures have been made, and where no evil results have followed. A case I have in mind is in connexion with the issue of notes under the Canadian Banking Act. The Canadian Bank is conducting business on sound and safe lines, and it has the power to issue notes on a different basis from that proposed in this bill. It issues notes upon gold deposited in the treasury, notes issued by the Canadian Government, and upon the unimpaired sharpe capital of the company. In addition the Government do not call upon the .bank to put up any security for an excess issue, but allows it to do it under statutory authority. Assistance is given in this direction only in particular instances, such as in connexion with the shipping of the wheat crop, which is a loading feature in the industrial life of that dominion. The bank is allowed to issue ten per cent, above the stipulated amount, and an additional deposit of gold or an increase in the unimpaired share capital is not required. The Bank of British North America is also allowed to issue notes on dominion securities in excess of the stipulated amount up to 25 per cent, of its unimpaired capital. It will therefore be seen that there has been a departure from the established principle to enable the Canadian Bank to facilitate the commercial transactions of the country without injury to the public credit or the possibility of a financial catastrophe such as Senator Gardiner contemplates. The securities held in London represent the accumulated balance which has been built up in various ways. These balances are locked up, so to speak, owing to the exchange rates being against Australia, which makes it difficult to transfer the funds to Australia. The securities which the amending provision of the bill is to cover are of such an unquestionable character that I am justified in saying that they are quite as good as gold.
Short-dated bills are first-grade securities, and are just as good as gold deposited either in London or in Aus-, tralia. As this surplus cannot be used to facilitate business in this country, it must be regarded as a dead asset. Every one knows that it is most difficult to obtain credit from the banks even on tho most reliable security, and I therefore trust that the board will utilize the power which this Parliament has given it in a plenary fashion, and see that the currency of this country is not unduly inflated. I am satisfied that as the Government will charge the board with the responsibility of seeing that the currency is not inflated it matters very little after all whether the currency is on the basis of gold held here or whether it is on its equivalent held in London. I trust that the bill will be the means of placing the Commonwealth Bank in a better position than it has hitherto occupied, and that it will be of greater service to the Commonwealth than with its lesser powers it has been in the past.
– The three* principal amendments which have been made in the Commonwealth Bank Act will not, in my opinion, tend to improve the position of the bank. Originally the bank was conducted by a Governor, but it has now been decided that its operations shall be controlled by a Governor, Deputy Governor, and six directors, with a number of subsidiary state directors. Although some are of the opinion that considerable improvements could be effected in the control of the bank, I am not at all hopeful that the alterations made will prove beneficial. The Government have also decided to place the note issue department under the control of the Commonwealth Bank, and to issue notes against securities held in London. The time is long overdue for the enactment of some of the powers conferred upon the Commonwealth by the Constitution, included in which is the power to pass a general banking bill. The Government, no doubt, have been too busy attending to. their own domestic affairs to give attention to this matter. I have no particular objection to placing the note issue department under the control of the Commonwealth
Bank, but I strongly object to the maimer in which it has been decided to dispose of the profits derived by the bank’ from its ordinary business, and also from its control of the note issue. The Commonwealth Bank ought to be able to stand upon its own resources, and should be empowered to use the whole of its profits in extending its operations. The Government is silent on that point. Apparently, it does not care whether the bank extends its business or not. Clauses appear to have been inserted in the bill with the definite object of preventing the extension of the bank’s operations. Take, for instance, the decision not to interfere with the disposition of the profits from the Notes Issue Department. Surely that department is part and parcel of the business of the bank, and, as such, its profits should be used by the bank for the purpose of extending its operations. Since the establishment of the notes issue branch, profits totalling £9,600,000 have been made. The whole of those profits should be used to extend the operations of the bank, chiefly in the. direction of establishing branches throughout the Commonwealth, and, as far as possible, elsewhere;’ but that, apparently, is not the Government’s intention. On the contrary, its desire appears to be to cripple the bank by utilizing the profits in other directions. The Government has also decided that the profits made by the bank itself shall be disposed of in such a manner as to rob the bank of its legitimate property. “Dp to the end of December, 1923, the total profits made by the bank were £4,570,000. This bill proposes that a little less than half of those profits, namely, £2,000,000, shall be transferred from the redemption fund to the bank reserve fund, making the latter fund about £4,000,000, which is to be used for any purpose in connexion with its banking business. That is a step in the right direction. In addition, the bill provides that in future onehalf of the neb profits from the banking business shall be applied to the liquidation of the national debt. A more ridiculous proposal it would be almost impossible to imagine. Why should the profits of the Commonwealth Bank be used to reduce the national debt? Surely there are many other ways by which the national debt :may be liquidated. I do not agree that the tightness of the money market is due to the causes mentioned by Senator Greene. That tightness and the existing unemployment in the Commonwealth are due to other causes, which Senator Greene, together with a limited number of other senators, do not care to discuss in. this chamber. Both are due to the fact that the best of our land is monopolized by people who do not put it to its best use. I tried, unsuccessfully, to secure an amendment that the bank should not be permitted to hold land indefinitely, but I realized that it would be unfair to handicap the Commonwealth Bank in that manner, and that a proposal of that nature must wait until such time as a general banking bill is introduced. That, I hope, the Government will do at an early date. I am unable to understand why the Government should in this bill seek power to issue notes against credits held in London by privately-conducted Australian banks. According to the latest figures furnished to us in the budget, there is at the present time, £56,890,225 represented by the notes in circulation. Of that amount £34,518,426 is held by the banks, and £22,371,799 by the public. I should like the Minister to say why he desires to secure the power to issue more notes, when the banks now hold notes representing over £34,000,000. The Minister has given no reasonable answer to that question, which I raised at an earlier stage. The proposal to issue notes against credits held in London is an entirely new departure, and no one has yet given us any indication of the way in which the proposal will work out. In my opinion, its effect will be to increase the credits held by the private banks in London, and to make the position considerably worse than it is now. I hope that in this I am mistaken, and that the result of the’ Government’s action will be to make money cheaper. I point out that if the currency is increased by machinery being put into operation to print millions of new notes - from some statements made in this ‘ chamber I presume that that will be so - the excess credits in London totalling £35,000,000 will be increased. If the Government issues a large number of new notes, it will, in my opinion, increase the cost of living considerably, and at the same time it will give no compensating advantage to that great army of men and women who are on fixed salaries. The bill is not one which should receive the endorsement of this Parliament, and I shall vote against the third reading.
Question - That the bill be now read a third time - put. The Senate divided.
Majority . . . . 7
Question so resolved in the affirmative.
Bill read a third time.
– I move -
That the bill be now read a second time.
When, a few days ago, I moved that the papers in connexion with the budget be printed, I gave particulars of the expenditure, which included that on works and buildings. It is, therefore, unnecessary for me to repeat them. This bill is to appropriate the money for the purpose of carrying out the works and buildings programme for the year. Any delay in the passing of the bill will mean that we shall not be able, during the course of the year, to expend the whole of the money which is voted. As the passing of this measure will enable these works to be proceeded with at once, I urge the Senate, subject, of course, to any legitimate criticism, to agree to it without delay. I draw attention to the main items, so that honorable senators may devote themselves to them, and thus be prepared to deal with the bill when it reaches the committee stage. The main items are -
– Why is no expenditure from revenue debited to the PostmasterGeneral’s Department this year?
– It was announced last year that the Government proposed to debit Post Office expenditure from loan, and establish in connexion therewith a sinking fund of, speaking from memory, 2^ per cent, and downwards, based on the life of the work, so that during the life of the work we should be making an annual payment that would extinguish the debt.
– Are there no replacements ?
– This bill deals only with new works. It may save discussion if I give particulars regarding the expenditure for oil and fuel storage. The Oil Agreement Act 1920 provided for the establishment by the AngloPersian Oil Company of the industry of refining mineral oil, and for the erection of an oil refinery in Australia. The Commonwealth Oil Refineries Limited was to be formed with a capital of £500,001, of which the Commonwealth was to contribute £250,001. The Commonwealth subscription was fully paid before 30th June, 1924, the Commonwealth thus acquiring a controlling interest in the refinery company. The object of the company is to import crude oil until local supplies are available, refine it in Australia, and put the products - such as motor spirit, kerosene, and fuel oil- on the Australian market. When local supplies of crude oil become available) they are to be utilized, instead of supplies being imported. The erection of the refinery at Newport, and the provision of the necessary tanks and wharfage,, have been practically completed, and the refining of oil has been commenced. It was found, however, that further capital was required to enable the company to attain the full objects for which it was formed. The Oil Agreement Act of 1924 provided for the capital of the company being increased by £250,000, representing 250,000 shares at £1. each. The Commonwealth’s share of this increase is £125,000, of which £31,250 was advanced during last financial year; the balance of £93,750 is being provided on this year’s Estimates. I suggest that, as the items in the schedule to the bill are mainly a matter for consideration in committee, the Senate pass the second reading without delay. Any information desired by honorable senators will be furnished in committee, as far as Ministers are able to do so.
– I should like the Minister to consent to the adjournment of the debate. I do not think the adoption of that course would seriously delay the passage of the measure.
Debate (on motion by Senator Gardiner) adjourned.
Debate resumed from 6th August (vide page 2836), on motion by Senator Wilson -
That the bill be now read a second time.
– The problem of defence has for a long time been calling for something like reasonable consideration. The trouble is that Australia has no fixed defence policy. Some Minister in charge of the Defence Department occasionally develops a spasmodic desire to spend a million of money and the sum is forthwith voted, but effective defence is brought no nearer than before. Only six years have elapsed since the armistice was signed, and we have spent since the war,, in round figures, £4,000,000 per annum on the so-called defence of Australia. But with what result? If we are to believe those men who by reason of their positions and qualifications are entitled to advise us, no result of any value has been achieved. I intend to approach the consideration of the bill, not in a party spirit, but ‘with a desire to advance the interests of the country. Before Parliament commits itself to any expenditure upon a navy it ought to consider whether we have any effective defence at the present time. In conversation with the Honorary Minister (Senator Wilson) the other day I somewhat jokingly remarked that I would support the defence proposals of the Government if it intended to spend £100,000,000 for the protection of Australia. To my mind, any comparatively small naval expenditure would be equivalent to throwing money into the ocean. The expenditure should be sufficient to give Australia real defence ; it is no use wasting a million here, and scrapping a battleship there. Before any expenditure is decided upon there should be a conference of men whose service and capacity would enable them to arrive at a sound conclusion on some of the most important aspects of the defence problem. In the first place, we should decide how much money Australia is prepared to expend in this direction. It is useless to propound a scheme and then be met with the question: “But from where is the money to come?” I do not bind my colleagues to the views I am about to express, for I venture to say that the Labour party’s defence proposals are very much the same as those of the Country party, or the National party - they are in the minds of the individuals, and are not outlined in the party platform. I think I can safely say that expenditure upon anything like an adequate defence of Australia will never be shirked by the Labour party. What we do object to, and what is most repugnant to me, is the expenditure- of money on defence without, any practical result. It would be- better to have no navy and no Defence Department than to carry on, at a cost of £4,000,000 per annum, a department which is supposed to prepare this country for defence, but which in reality makes no provision whatever for it. I am inclined to look upon General Monash as a soldier whom Australia takes seriously. Here are some of the observations he is reported in the press to have made in regard to Australia’s lack of defence -
The air force was a sham.
There were no tanks.
They had no Mills bombs.
There was not enough munitions in the country to last 24 hours.
Conditions in regard to the defence of Australia were most unsatisfactory. Things were going to pieces.
It is a deplorable thing to realize that the men we are training to-day could not be adequately equipped.
In my opinion, the position of Australia, in 1924, is not as favorable as it was in 1914.
The present compulsory system of training Australian youths is farcical.
The Minister for Defence should not speak on. this subject without having given it careful consideration. The following are extracts from press reports of remarks by the Minister (Mr. Bowden) : -
Mr. Bowden emphasized the fact that Australia was not prepared to meet ari emergency.
The position regarding munitions was serious.
At present the position of our fixed defences and our artillery units is serious, so far as munitions is concerned.
The coast defences of Australia, are in a deplorable condition. The loss of efficiency in the Australian Navy is staggering. So says the Minister for Defence, Mr.. Bowden.
Mr. Bowden used the word “ appalling “ to describe the present conditions of the local defences.
When I came to realize the appalling conditions of the defence of Australia. . . ,
The greatest problems were those of the supply of arms and munitions. The supply on hand was very inadequate.
It was no good saying we had seven or eight submarines, when those in charge of naval defence knew these were obsolete and - could not be used.
Mr. Bowden admitted that the question of air defence was not as satisfactory as it might be. . . .
Senator Drake-Brockman has a record of active service, and a general knowledge of military- affairs, which entitle his views to respect. I find,’ from Hansard, that the honorable senator stated, in the course of a speech, on the 28th March last -
I can say that, at the moment, Australia could not equip one division, let alone five. As a matter of fact, if we desired to put a division in the field in Australia to-day, we could not find sufficient equipment for it.
The truth is that even if we could call upon them, we have not the arms or equipment for them.
We, at the present moment, could not find more than 50,000 men available and fit to take the field. In any case, we could not equip them.
We are not able to-day to provide the munitions of war.
If we were suddenly called upon to defend ourselves we would not have enough munitions, war equipment and the things necessary to maintain an army for 24 hours.
At the present time we are not getting full value for the money we are spending.
Those are important extracts from Senator Drake-Brockman’s speech. Though I have lifted them from their context, I have not in any way misrepresented the honorable senator. Are we to continue this system of spending millions of pounds on defence for such a result, or axe we going to Lave a well considered defence scheme, not for this and the next financial year, but one that will continue irrespective of the Government in office until at the end of, say, 20 years, we shall have something that looks like a defence system, and which might be of some use to us if we were attacked? At present, notwithstanding the expenditure of many millions of pounds, we are in a helpless position. We are not prepared for anything like a serious emergency. Another attempt is now being made to improve the position. We have here a proposal to spend £4,500,000 on two cruisers, to be built in England. I expect some honorable senator will say that one only will be built in England and the other in Australia. But we shall have to wait till certain people decide whether Australia is able to build cruisers, before we determine whether both shall be built in England or whether one shall be built there, and one in Australia. On the relative merits of freetrade and protection honorable senators generally know my views. On this question of naval defence, I say that if the cruisers could be built in Great Britain for £2,000,000, and if built in Australia they cost £10,000,000, I would prefer paying the £10,000,000. I make that statement definitely in order that I may not be . misunderstood, for I realize that the defence of Australia must ultimately fall upon Australians. If, then, we are to start with a serious defence scheme, and if we are to spend £4,500,000 on cruisers, what better proposal could we have than to start building the cruisers here now, even if they cost £10,000,000 ? We may be quite sure that, as the result of experience gained, the second cruiser will cost less than the first, and as we continue the work, gaining experience and knowledge in the business, we shall be able eventually to build Australian cruisers in Australia as cheaply as they could be built in any other country. This question is a very serious one. I hold the view that the expenditure of money outside Australia for the defence of Australia, is worse than useless. I have heard it said that we want these cruisers for the protection of our trade routes. I believe Senator Payne will agree with that statement.
– I do, indeed.
– Do honorable ‘ senators really believe that the trade routes of Australia could be protected by two cruisers of the type which the Government has in mind 1 Let us examine the position and make a few comparisons. Australia has a coast-line of approximately 8,850 miles; England, Scotland, and Wales, a coast-line of approximately 4,600 miles; France, a coast-line approximately of 1,084 miles; and the United States of America a coast-line of between 4,000 and 4,500 miles. “ What kind of a navy is required for the protection of the coast-line and trade routes of those countries ?’ I do not intend to go very closely into the details’ of the naval vessels required for the protection of Britain’s coast-line, but I should like to say that, unfortunately for Australia, our statesmen incline to the view that the methods employed for the protection of Britain’s coast-wise trade should also be adopted for the protection of Aus- ‘ tralia’s coast- line and trade. But there is this important difference between the two countries: Britain is a manufacturing nation. Practically the whole of her raw materials -and nearly the whole of the foodstuffs required for the sustenance of her people come from across the seas. The experience of the war showed that if her supplies were cut off for any length of time Britain would fall. She depends upon an uninterrupted flow of raw materials and foodstuffs for the maintenance of her position as a manufacturing nation and the feeding of her people. Australia is in an entirely different position. Our exportable commodities are chiefly primary products. We require no fleet for the protection of our food supplies. Having, unfortunately, only a few people in this country and an abundance of foodstuffs, our position is secure. I suppose that if an enemy had command of our trade routes Australia would be the ideal home of the protectionist. We should then have abundance of goods for Australian people. We should be a self-contained nation, for we could manufacture everything that we required. That,, surely, is the protectionist’s ideal!
– The honorable senator is quite wrong. The protectionist’s idea is to tax foreign goods to get revenue.
– If Australia were attacked, and if an enemy fleet had command of the seas but could not land a sufficient force to subdue the country, we should still have sufficient food and clothing for our people. We could get along all right, although there might be difficulty. If, on the other hand, Britain were attacked, and if an enemy fleet had command of the seas - if her sea communications were cut - the Mother Country could not hold out for any length of time. Therefore, Britain’s coast-line and trade routes must be effectively protected. Let us see what it costs Britain to do this. This is important to Australia, because, since the war we have been spending considerable sums of money every year, and, according to the authorities I have been quoting this afternoon, we are in a worse position than ever. On page 89 of the London Daily Mail Year-Book, 1924,j there is some interesting information by a well-known naval authority, H. W. Wilson.
– A good man.
– Unquestionably. And I should like to say something of his namesake in this chamber - the Minister who introduced this bill. Senator Wilson, in the course of his opening remarks, referred to Mr. Ramsay MacDonald, the Prime Minister of Great Britain. In that connexion, I thought the honorable senator went into a great deal of unnecessary detail. He told us that on the occasion of a Court function the right honorable gentleman, rather to the surprise of his friends, attended in full Court dress, with a sword dangling by his side. All that the honorable senator said on this- subject clearly indicated that he and his friends are incapable of appreciating Labour’s viewpoint of responsibility and office. Apparently it did not occur to the honorable senator that Mr. Ramsay MacDonald had no intention of breaking away from the recognized customs and traditions of the Mother Country.
– I thought I paid him a compliment.
– I thought so, too, at first, but later I realized that the Minister’s remark suggested inability on his part to appreciate the character of a Labour Prime Minister. He and those who think with him appear to be under the impression that a Labour Government and the Labour party in Great Britain would not conform to the conventions and ideals of the rest of the community. There are many people who think that. There- are some who believed that the Labour Government in Britain would reverse the defence policy of the Mother Country, and would cease to build warships. We want to realize that Mr. Ramsay MacDonald, for the present, at all events, is in charge of the House of Commons with all the responsibility of maintaining the prestige of Britain; and I am satisfied that, whatever obligation the position involves, he and hie party will not shirk it. Now let us see what is necessary for the effective protection of Britain’s coastline and trade. I find, from the Tear-Book to which I have referred, that the following vessels are necessary : -
Officers and men, 100,000; annual expenditure, £58,000,000.
That expenditure and those ships are necessary for the defence of the Mother Country with approximately half the coastline of Australia. Would anything short of that expenditure on naval defence be of any use to Australia ?
– Yes, Britain’s naval expenditure is not merely for the defence of Britain, but is for the defence of the whole Empire, including Australia.
– Take, for instance, the number of trade routes to be guarded.
– Of course, there are many trade routes, and we learned during the war that this immense armament, even with the support of the navies of Japan, Italy, and France, and eventually the American Navy could not protect Britain’s shores from bombardment. The trade routes were never safe, because a new force in naval warfare had almost reached perfection. Had the use of submarines been understood in the first months of the wax as well as it was understood in the concluding months, it is very hard to say what would have been the outcome of the struggle. It waa not until 1917 that the Germans began to make effective use of submarines in the destruction of vessels carrying food to Great Britain. Had they done so in 1914, the result of the war might have been different. One can imagine almost anything happening in a conflict, conducted as it will be tomorrow if hostilities are declared between two first-class powers. The effective battleships and armoured cruisers of Great Britain are as follow: -
These vessels are all of greater tonnage than the Australia. The best British naval authorities do not anticipate that vessels of this type will be required for the defence of Australia. I am unable, to follow their reasoning, but when the Washington conference decided that certain vessels were to be scrapped, the best naval authorities of Britain evidently decided that Australia required no battleship, because our only battleship had to be scrapped. I declared at the time that the Australian sentiment for an Australian navy would sink with the Australia. I venture to prophesy that this will be borne out by facts, and that in future Australia will concentrate on defending itself by means of the strong arms and stout hearts of Australians armed and equipped by Australian factories. Australia will never again venture upon the building of a navy.
– Is it not the policy of the Labour party to do away with military training f
– Tes, with the absurd military training that produces the results to which I have alluded. The policy of the Labour party can be well summed up in one sentence: “ We are prepared to scrap the whole of the existing system of defence, which is only a pretence.” It is something that - we pay for but which gives us nothing, and it must go. What we want in Australia is a defence system that each year will leave us in a better position to defend ourselves than we were in the previous year. I would scrap the whole system of compulsory training, because I can quote the opinions of military officers who realize that compulsory training has -broken down of its own weight. That is to say, we have spread our efforts over the whole continent in an attempt to train every one, with the result that more men do not attend drills than those who do attend them. We want to scrap compulsory training, because the men in charge of it have made it the miserable failure that it is to-day.
– And what would the honorable senator substitute for it?
– The millions we are now spending on a defence system that, on the authority of the best men we can quote, give us nothing, should be spent on establishing factories to give us arms and equipment, engines for flying machines, submarines, quick-firing guns, and vehicles necessary for the rapid transport of troops, and on the provision of roads to enable that transport to be carried out rapidly. Such a policy would carry us a long way further than the spending of £4,000,000 a year on a system of defence, only to be told by the people who are spending the money that we have nothing to show for it. Before I was led away to the discussion of land defence questions, which are quite in keeping with the bill, I was giving the Senate some idea of the magnitude of the British Navy and its importance to the Empire - or, to use a term which I prefer, the Commonwealth of Nations. Britain has to maintain this navy because of her peculiar position. She is dependent upon outside sources for the employment, the clothing and feeding of her own people. We sometimes meet persons with a shallow view, who ask, “ Do you think that we in this Commonwealthof Nations should ask Britain to maintain this navy while we escape any portion of its cost? “ If Britain is spending £58,000,000 on a navy, and we are spending nothing, it does not mean that we are not doing our share of the work of Empire development. We have very few people in Australia. We and our fathers before us have made this outpost of the Empire habitable for 6,000,000 people. Some of those who are listening to me’ to-day will live to see 16,000,000 people in Australia, and in turn their children will live here in a British community of perhaps 60,000,000 people. But the whole cost of the development of this outpost of the Empire has fallen upon the pioneers of Australia. Whatever assistance Britain has rendered in the shape of loans has. been, not more than she has always been ready to render to any other country. Will any one affirm that the building of thousands of miles of railway is not playing just as effective a part in the defence of the Empire as the building of a battleship to cruise in the North Sea? Those who say that the making of roads and the clearing of land to make this continent habitable, or that making two blades of grass grow where only one grew before is not taking a part in the task of holding together the British Commonwealth of Nations, are not viewing the matter, as I do, through Australian eyes. Our expenditure on defence per head of the male population considerably exceeds that of any other portion of the Empire, so that we are not under a compliment to any one. I quote again from the Daily MailYear Book the following in regard to the British Navy : -
The fleet in commission was thus organized -
Atlantic Fleet. - 9 battleships, 2 battlecruisers, 11 light cruisers, 46 destroyers, 14 submarines, 1 aircraft carrier, several drifters, 3sea-going oilers, 1 minelayer, and 2 repair ships.
MediterraneanFleet. - 6 battleships, 6 light cruisers, 18 destroyers, and many small craft.
China Station. - 5 light cruisers, 18 sloops and gunboats, 6 submarines.
Africa Station. - 2 light cruisers, 4 small craft.
Bast Indies. - 3 light cruisers, 3 small craft.
North America. - 4 light cruisers, 2 sloops.
New Zealand. - 1 light cruiser, 2 sloops.
Australia. - 2 destroyers.
Canada. - 2 destroyers.
That is the Empire’s navy. We are asked to extend it by building two cruisers for replacement. Senator Wilson has told us that when Mr. Bruce was in London he had an offer to build a cruiser for £1,900,000. The price has already crept up to £2,100,000, and I suppose that by the time Parliament has passed this bill and a contract has been let, and the people who build these vessels in the Old Country know that we actually intend to have one built, the price will be at least £2,500,000. Senator Wilson knows as well as I do that the naval authorities are continually making changes in the construction of these vessels. I have heard ill-informed men talk about the cost of building the cruiser Adelaide. As a matter of fact the plans of the ‘Adelaide were altered time after time to suit the changes necessitated by the war. Things which were deemed unnecessary when the vessel was begun were found to be absolutely necessary later on, and alterations had to be made. Yet people who look only at the actual cost of construction and at the time occupied in building the Adelaide declare that the time occupied is an indication of how long it would take to build other cruisers.
I am opposed to the building of these cruisers. For all the good the money to be spent Upon them will do in the matter of defending Australia it might just as well be thrown into the ocean.
– Would the honorable senator propose that Australia should do nothing ?
– I oppose as criminal the proposal to spend millions of pounds on cruisers and leave the community unarmed and helpless. We can only spend money on defence in proportion to the money availably.
– Would the honorable senator support a proposal to add to the amount provided for military defence a further provision for an efficient compulsory training system ?
– I am making my own position clear. To provide an adequate naval defence for Australia at the present co3t of construction would absorb approximately £100,000,000. Therefore, as we cannot nearly approach that - it is a moderate estimate for the naval defence of Australia - we certainly should not waste £4,000,000 in building two cruisers. I know Senator Payne cannot appreciate that aspect of the question.
– I cannot.
– I shall now give the Senate some idea of the magnitude of the American navy, which has to protect a coast-line 4,000 miles less than our own. Are more vessels required to protect America than .to protect Australia? With a more extensive coast-line, more vessels are needed for our protection. According to the publication from which I am quoting, the cost of each of the firstclass battle-ships required by America is about £8,000,000. America has the following battle-ships : -
The figures which I have quoted give one an idea of the enormous size of the vessels, their number, aud the men required to man them. I do not think I need quote further from the -figures relating to the American navy, except to say that their submarines and cruisers are in proportion to the number -of battle-ships. The American fleet is large in number, effective, and up to date, and my view of naval defence is that, unless our naval strength is equal to a first-class naval power, we should not waste a few million pounds in the direction proposed. If we had millions to spare, I could quite understand some one suggesting the construction of two cruisers to protect our trade routes.
– We are only suggesting a unit to act in conjunction with the British fleet.
– I can visualize Australia as being the most populous portion of the British Empire, if the Empire stands together long enough. I can also understand that there are more important things to be done than to assist Britain in the matter of naval construction. In 1909 we considered the question of whether we should increase our naval subsidy to Great Britain.
– Great Britain’s navy is our navy up to a certain point.
– I realize that it is. I realize, too, that this country is one of Britain’s best customers, and that it is to her interest that her navy should protect us. Britain is one of our best customers, but we have never asked her to construct railways, to undertake the conservation of water, or to assist in other ways in the development of this great outpost of the British Empire.
– She has recently offered to do that by offering to loan us money practically without interest.
– I have not heard of that; but, at any rate, we can best assist in this “holding together” business by proceeding to do our share in the most sensible way. I have shown that it costs £71,000,000 for the upkeep of the American Navy, and £58,000,000 in maintaining the British Navy.
– What number of men are required?
Senator- GARDINER. - I gave Great Britain’s figures as 100,000, and I have no doubt that the American figures, which I cannot locate at the moment, are also given in the publication fro:m which I am quoting. I also note, according to this . authority, that the battleship is still the backbone of the fleet and the bulwark of the nation in sea defence. That statement is worth giving, because if we are to undertake naval construction it should be in the direction of building battleships. In my opinion, however, the real defence of Australia can best be assured by submarines and aircraft. Japan has also an efficient navy. I am not one of those who fear attack by Japan, although we have great statesmen, such as Senator Drake-Brockman, who put forward the proposition that every nation must be regarded as a potential enemy. Japan had the opportunity during the late war to attack us, if she so desired. I do not think such a favorable chance will occur again. At that time we had stripped Australia of its manhood, its arms and equipment, and our ships had been sent to the North Sea. Notwithstanding that, our honorable little ally never broke her pledge. Had Japan looked with jealous eyes upon Australia it is only reasonable to assume that at a critical stage of the war - in January, February, and March, 1918 - when it was very doubtful what the issue was to be, we would have been attacked. Loyal to her old alliance with Great Britain, Japan honored her obligations. Having lost that opportunity, is it likely that Japan would risk an attack upon Australia at a time when there is likely to be a force sufficiently strong to make an effective landing impossible ? Any one who has read of the Gallipoli campaign knows that within a few hours’ steam of a base, and with the British Navy, including the biggest battleship then afloat, the Queen Elizabeth behind them, 120,000 Australian, British, and French soldiers, had the greatest difficulty, in effecting a landing. It is true that they occupied a small strip of territory, and held on for eight months, but they did not do anything effective. The Turks on that occasion did not have a force anything approaching that which Australia could put up against an invading army. The following facts in regard to the Japanese Navy are of interest: -
There are 28 light cruisers in the Japanese Navy built, building, or projected, of 30 knots or upwards. The Japanese destroyer forcer is extremely efficient and admirably trained, and consists of 113 modern destroyers, with 60 older and smaller boats.
If such- a force were to attack us, what would be the use of two cruisers? They would naturally take refuge in some protected harbour from a force which would outnumber them a hundredfold, and the guns of which would outrange their own. To spend £4,500,000 on building cruisers for our defence is equivalent to throwing the money into the sea, because their construction will not be completed for two years, and they will have to be scrapped in ten years. At that mighty review of Britain’s naval strength at Spithead a week or so ago, of the 192 ships that took part, only one was of a pre-war type.. It will therefore be seen that these vessels will no sooner be completed than they will become obsolete - perhaps before they are off the stocks. Can we reasonably undertake the construction of vessels which are likely to be of so little value to us? I do not think we can, and we should not waste one shilling on such expenditure. Let us imagine there waa in the vicinity of this building, one of the gun men who have been making Melbourne notorious during the last few weeks, and that he had in his possession an automatic pistol,, capable of firing eight or nine shots in rapid succession. We could say to one of our members, “Here is a pea-rifle; go and attack him.” The person so directed, would doubtless be brave enough, but he would question the wisdom of the action. To construct two cruisers to oppose battleships is similar to sending a man with a pea-rifle to attack a man in possession of an automatic revolver.
– Cruisers may not be called upon to attack battleships. The honorable senator remembers what occurred in connexion with the Emden.
– But the cruisers it is proposed to construct may never be used at all. They have to be used within ten years or be scrapped. We are told that the Adelaide is to be replaced by one of these new cruisers.
– No, the Sydney and the Melbourne are to be replaced by them.
– The battleship Australia was considered useless when she was sunk in order to honour an agrees ment. Why was not a British battleship sunk ? We had in power a Government so patriotic and so determined to honorably carry out its contract with other nations, that it was responsible for the sinking of not only the Australia, but also a number of new guns which had never been unpacked. These guns were placed on board the Austrafia and sunk with her. No one has a greater admiration for those who honour agreements and more contempt for stupid conduct than I have, but guns that had never been used were placed upon that battleship and went down with her. A governmentthat had any fear of Australia being attacked, or possessed any common sense, would not have permitted that tobe done. The British naval authorities had no fear of Australia being invaded, or they would not have left us with only two cruisers, while they have 100 cruisers and other modern battleships. The Honorary Min ister gave us .a little glimpse of the Government’s policy in regard to aircraft. We are ‘informed that submarines operate effectively for 200 miles from the coast, and I suppose we can safely say that aeroplanes are capable of doing the same. My idea of effective naval defence for the Commonwealth would be to enlarge Cockatoo Island Dockyard ‘and extend the factories in which engines for submarines and aeroplanes are manufactured so that we should be well equipped in the event of war. I believe that £2,000,000 would be sufficient to construct three well-equipped submarines, and that the expenditure proposed would be sufficient to build seven or eight. Will any one say that submarines and aeroplanes would not be able to more effectively defend Australia than fast cruisers? Battleships would hesitate before attacking vessels transporting troops or goods, if they knew that submarines were operating against them.
– Over what range could submarines operate?
– Over 200 miles.
– Submarines would not afford very much protection to our trade routes. Outside that radius what would happen ?
– Would these cruisers go beyond that limit ? Senator Payne. - I think so.
– As we are all anxious to get to the truth of the matter, let us suppose that a vessel was travelling from Australia to England.. How far would a cruiser accompany it?
– It would depend on circumstances. Senator Elliott. - To Colombo.
– In that case we should have but one cruiser left in Australian waters. In any case, each cruiser could only protect one ship.
– In war time ships travel in convoys.
– We had experience of what was done in war time. Our best ships went to protect Britain, because it was said that there they would be most serviceable. Our trade routes were at the mercy of any enemy that could reach them. A nian who talks of two cruisers protecting our trade routes from Rockhampton to Hobart, from Perth to Sydney, and from Sydney to Melbourne, as -well as the hundreds of vessels going in different directions, is making absurd statements.
– Two enemy cruisers could work havoc along those trade routes. As the honorable senator will recollect, one enemy cruiser did do so.
– That is so. But two cruisers would not prevent a repetition of what then occurred. Let us consider the position if our two cruisers went out to attack an enemy cruiser which was supported by a battleship. All the enemy cruiser would have to do would be to get under the wing of the battleship, and our cruisers dare not get within range of it.
– The Emden was not under the protection of a battleship.
– No ; because the German battleships were locked np in the Kiel Canal. Owing to the effectiveness of the submarines, the magnificent British Navy also spent most of its time under cover.
– The German submarines were unable to prevent the transport of men and munitions from England to France.
– Nor did they prevent the American, army from reaching France.
– The distance between England and France is not great, and that stretch of water was well protected. We all know that narrow passages only were provided for vessels to travel from one country to the other. Lord Fisher said that the North Sea was sown with mines; but when a vessel went down he said that it was due to a German mine. Britain protected her own Grand fleet from submarines by stationing them in a secure place, waiting for the day when the German fleet would come out. But it is ridiculous for us in Australia, with no fleet to protect anything - the big vessels of the British fleet being thousands of miles away - to think that by spending £4,500,000 on the construction of two cruisers we shall be doing something for naval defence. I shall vote for no. expenditure on defence until the Government places before us a programme extending over a period of years. If a workable scheme is presented, all parties are patriotic enough to assist in carrying it out. What is the use of introducing a scheme which is only a waste of the people’s money ? While our defence farces are handicapped for want of equipment, millions of pounds are to be wasted. I have here the report of the Inspector-General of the Australian Military Forces. (Extension of time granted.) Lieutenant-General Sir H. G. Chauvel, G.C.M.G., K.C.B., Chief of the General Staff, in his report on the Australian Military Forces, said -
With regard to the question of the provision of arms, equipment and ammunition, I wish to state very clearly that these essentials do not exist in this country in sufficient quantities to enable our formations to be given their war outfit when raised, on mobilization, to war establishment; and there are no reserves to replace wastage.
Will Senator Elliott vote to waste money in the building of two cruisers when the Inspector-General of the Forces says that those forces are not equipped ?
– The equipment is being provided at the same time as the cruisers.
– Genera] Chauvel’s report continues -
The allocation by the Government of the sum of £250,000 during the present financial year for the purchase of munitions will effect a slight, improvement in this matter, but very much more is required before any substantial qualification can he made in the statement above.
That is the report of the man responsible for the inspection of our forces. Dealing with mobilization stores, he said -
No improvement has been effected in the matter of mobilization stores since the submission of my last report. The stores in the 1st, 2nd, and 3rd Military Districts we still overcrowded. It is most desirable that t)he necessary mobilization stores in the 4th and 6th Military Districts be erected at an early date, and also at the additional place of mobilization selected in New South Wales. Extra storage accommodation is also required in the 1st, 2nd, and 3rd Military Districts.
So far as land forces are concerned, we are practically helpless.
– Nothing that the honorable senator has read from the report supports that contention.
– I am aware that the report may not convey much to the honorable senator’s mind. Regarding aerial surveys, General Chauvel said -
Little or no advance has been made in the development of aerial surveys during the last year, and the technical difficulties outlined in the last report have still to be overcome before practical results can be achieved. The test survey of the Geelong sheet proposed last year was not proceeded with, owing to the shortage of personnel and machines of the Royal Australian Air Force.
And, in connexion with, the remount service, his report stated that the position was growing worse, and that the Indian Government, previously our greatest customer, was looking elsewhere for army horses. Australia has ceased to produce army remounts. Dealing with ordnance workshops, the report states -
A question which has been prominent for the past four years, but with which little progress has been made owing to financial stringency, is the establishment of ordnance workshops, which must exist for the efficient upkeep of military equipment. Great difficulty was experienced in all military districts in getting both men and material to carry out the repairs to the post bellum equipment, and the lack of proper workshops was a severe handicap. Contract ‘work in connexion with material of this description is undesirable. It can be done much more efficiently and economically in departmental workshops. At present machinery is lying idle and valuable material is deteriorating.
Those things should be noted. General Chauvel’s statements show me-
– The need for more expenditure in. that direction.
– They show me that here in Australia there has been such neglect in the provision of stores and equipment that, if we were attacked, the means of defending ourselves on land do not exist. It is sometimes said that the Labour party is against defence. I admit that we’ are pacifists. I believe that the good-will of nations can be obtained by straight dealing.
– I have heard the honorable senator say that we were showing a warlike spirit because we attempted to provide for defence.
– I think that the Australians are a warlike people. The best fighter is the pacifist, because patience abused turns to fury. A good fighter who will adopt every means to avoid a fight will not readily leave off fighting once he starts; he stays there till the fight is over. If the honorable senator had had as much experience of pacifists as I have had in connexion with political organizations, he would not underestimate their ability to fight. The Labour, party believes that friendly relations between nations can be maintained by fair trading and honest dealing. Some one may ask, “ Are you prepared to throw away your arms and other means of defence, and trust to that good, feeling being maintained?” Should Australia be attacked by another nation, I feel that I could riot conscientiously ask our people to fight unless they were provided with the means of defending themselves. Rather than be in the position that we could fight only for a given time, I would provide equipment so that, if war came, we could say, “ There is a machine gun for every four men fit to use it, and an ample supply of munitions. There is also a rifle for every man able to use one, and plenty of ammunition.” If Australia did that, and had her coast defended by airships and submarines, the British Navy itself could not win a footing here. If the money which we’ are wasting on what we call “ defence “ were spent in the development of the country, we could double our population in a very short time. That would provide greater security for Australia than all the cruisers we could build. “When two distinguished statesmen - Senator Wilson and Mr. Bruce - went to Britain and gave an order for one, and perhaps two. battle cruisers - I do not mean necessarily that they signed a contract, but they evidently let it be known that when they returned to Australia’ an order would be placed in Britain for the building of two cruisers-
– In view of the assurance which I have given, the honorable senator is not justified in making that statement.
– One of the Government’s own supporters said that one vessel was already being built in England. I think that some of the people who attend the caucus know more than does the Minister himself.
– There is only one person present at my caucus, and that is myself.
– That makes the party a difficult one with which to deal. In another place Mr. Bayley said that one of the cruisers was already being constructed in England, and the Minister there did not deny his statement. ‘ I object to the building of the cruisers, because I consider that our defence system should take into account what money it is proposed to expend for .the next twenty years, and to what particular purpose it is to be devoted. Nothing short of that will appeal to me. My idea is that we should establish the factories necessary for the manufacture of all that we require for the defence of Australia.
– What about the training of the men who are to use them?
– That matter could be considered a long while after the material to fight with had been supplied. It might be desirable to train a staff as the nucleus of a defence force, but it seems to be forgotten that we have in Australia to-day thousands of officers who are better trained for war than any we have ever had. Those men have been thrown aside as if they were of no value, whereas, under an intelligent system, their services could have been utilized. If voluntary schools had been established, they might have been called together for the discussion of military subjects, and their services would have been available to the country without any expense being involved.
– That has been attempted, but it has not proved a greatsuccess.
– It could easily be made a success. The first thing necessary is to provide for the manufacture within Australia of the means for defending ourselves. The training of the men to use the equipment can proceed while we are waiting for the attack. If we are to build naval vessels, instead of spending this £4,000,000 on the construction of a couple of cruisers, let us build seven or eight submarines. Personally, I prefer to rely on the flying machine, for I think its possibilities are not yet realized.
– Aeroplanes become obsolete more quickly than cruisers.
– That would not matter if we had factories manufacturing interchangeable parts in order to maintain supplies of up-to-date aircraft. With five or six factories centrally situated so that they could be economically operated, it would not matter how soon the equipment became obsolete, for the factories would be constantly producing war-like material of the most modern type. In a country like Australia we could have thousands of men trained in this class of work. They could be fitting themselves for such service, and at the same time could be engaged in turning out commercial articles. I do not contend that such factories should ‘necessarily return interest on the money invested, but they would certainly serve an admirable purpose. Rather than spend money on building cruisers, attention must be devoted to submarines and aircraft, but I place first and foremost the establishment of factories in all parts of Australia to manufacture the material required for defence. The possibilities of my suggestion are unlimited. I appeal to the Minister, even at this, the eleventh hour, to advocate, not the spasmodic expenditure of a few millions, but a system based upon Australia’s capacity to pay. Our expenditure arising out of the late war amounts to about £30,000,000 per annum, including pensions, reparations, maintenance of the injured, &c. That indicates to some extent the financial possibilities of a nation of less than 6,000,000 people. I contend, therefore, that the Government will do well to scrap its pretence at dealing with the defence problem - because what we have is a pretence rather than a defence system - and start anew by adopting an adequate system to which all parties can agree, and which will have continuity, irrespective of changes of government. I have quoted several authorities to show that Australia has no defence system at the present time. The Government would be well advised to withdraw the bill, and. prepare a wellconsidered scheme. Australia will never have adequate defence so long as we continue to spend a million here and a million there in this spasmodic fashion.
Debate (on motion by Senator John D. Millen) adjourned.
Sitting suspended from 6.28 to 8 p.m.
.- I move-
That a select committee, consisting of Senators Kingsmill, Cox, Elliott, Foster, Duncan, Grant, and the mover, be appointed to inquire into the allowances being paid to warrant officers, non-commissioned officers, and other officers retiring from the Defence Department, with full power to send for persons, papers, and records, and to move from place to place.
The inquiry should be a simple one - an inquiry into the subject of superannuation benefits or retiring allowances paid to warrant and non-commissioned officers of the Defence Department, who have been retired. I shall refer very briefly to two officers, and since they have discussed the matter with me I shall take the liberty of mentioning their names. One is Warrant Officer Ingall, a retired officer with a record for splendid service in several states, notably in New South Wales and Tasmania. Probably he is one of the ablest warrant officers that we have ever had in New South Wales. For 36 years he rendered excellent service to that state and later to the Commonwealth. He was retired in 1922 without a pension or superannuation benefits. The other case is that of Warrant Officer Gale. His term of service was not quite so long as that of Warrant Officer Ingall, but the circumstances of his retirement are so peculiar that I feel confident the Senate will agree to the motion for the appointment of a select committee to make the necessary inquiries. The composition of the suggested committee is such that it will be representative of both sides of the Senate. I do not want, and will never ask for, the appointment of a committee so constituted that it will be likely to return a finding in accordance with my own views. I want the committee to be absolutely unbiased so that it may deal with the cases that come before it on their merits.
– Has the honorable senator ascertained if the honorable senators whose names appear in the motion are willing to act?
– I have spoken to Senators Kingsmill and Cox. I also mentioned the matter to Senator Duncan, but I doubt if he is willing to act on it.
– I told the honorable senator that I could not.
– There is not a very big selection, but certainly I have interviewed a number of those honorable senators whose names are on the list.
– Bas the honorable senator had an opportunity of consulting Senator Foster?
– Senator Foster is not often here, but I have consulted him. He told me that he was quite willing to act, as he recognizes that he always gets a fair deal from honorable senators on this side. The inquiry should involve only a couple of days’ sittings, so that I do not think there will be any difficulty in obtaining sufficient honorable senators to serve on it. I can perhaps best explain Warrant Officer Gale’s case by quoting the following letter which he sent to me : - 30 Windsor-street, Paddington, 1st May, 1924.
Sir, - Just a few facts in connexion with my case re superannuation: -
I was discharged on the 14th February, 1923, having reached the age for retirement, viz., 60 years, according with the D.A. after 23 years service in the Permanent Forces and 10 years in the Militia Forces of N.S.W.
Previous to my discharge the amount of £5 13s. 5d. had been stopped from my salary for contributions to the Superannuation Fund. On making application ‘for superannuation after discharge I was informed by the Finance Officer -of this State on 7th September, 1923, that it would be necessary to complete 26 fortnightly payments, and to forward the sum of £30 16s. 9d., which was done, making a total of £36 10s. 2d. paid into the fund.
After a time, 4th October, 1923, I was informed that I would receive a pension of £14 18s. 9d. per year, or a weekly pension of 5s. 8Jd. The thing seemed so absurd to me that I wrote to the president of the board asking if some mistake had not been -made, but he assured me that no mistake had been . made, and after much correspondence I had to seek other means of trying to get some sort of justice.
I find on investigation that W.O. W. Smith and W.O. T. Chedgy, both members of the Permanent Military Forces, who had been discharged months before the Superannuation Act came into force, are receiving a pension of £70 per annum, and they never contributed one iota to the fund. In reply to a letter for a consideration of my case, the Secretary of Defence, Mr. T. Trumble, stated that with a view of remedying such anomalies representations for the amendment of the act had been made to the Treasurer. Up to the present I have heard nothing about it. His letter was dated 13th Mardi, 1924.
– The following is a copy of the letter sent by District Paymaster, 2nd Military District, to Warrant-officer Gale: -
With reference to your application for a pension under the- Superannuation Act, I have to inform you that the board advises that the amount necessary to complete 26 fortnightly payments in your case is £30 16s. 9d. I shall be glad if you will forward the amount to this office as early as possible.
I direct attention to that letter. Warrantofficer Gale had been contributing for five units of pension, which would have entitled him, upon retirement at the age of 65 years, to a pension of £130 per year, and yet he was called upon to pay £30 16s. 9d.’ in a lump sum. Then upon his retirement he got a pension of only £14 10s. 9d. a year, which works out at 5s. 8£d, per week. My first action when this case came under my notice was to arrange an interview between Warrantofficer Gale and the Minister for Defence. The warrant-officer stated his case, and was advised by the Minister that, as there were other anomalies of a similar nature, the Government intended to introduce a bill to remedy them. I waited, and when Parliament met I asked certain questions. The Honorary Minister (Senator Wilson) will remember that, last week, I asked whether the bill was to be introduced. His answer was vague and most unsatisfactory. He told me that the Defence Department was pressing to have this matter settled, but could not get it completed. In the circumstances, I think that an inquiry by a select committee, as proposed, will do a great deal of good, and result in the remedying of many grave injustices. If, as has been stated, a certain department is preventing the necessary legislation from being introduced, the proposed inquiry will probably expedite a settlement of the difficulty.
– The Superannuation Board has been definitely instructed to draft a scheme, and it is now engaged on that work.
– The Minister has just told us that the Superannuation Board is drafting a scheme. Speaking from memory, I think that, very shortly after Parliament adjourned last year, I brought this matter under the notice of the Minister, for Defence, and, as I have already stated, I waited until Parliament met before taking any other action, as I was given to understand that amending legislation would be introduced. Admitting that the Superannuation Board is drafting the necessary amending legislation, these men cannot wait indefinitely for consideration. Therefore, I ask the Senate to agree - to the motion for the appointment of the select committee, because, whilst I have mentioned only two cases in which it is apparent grave injustice has been done, I know there are others. Warrant-officer Gale’s record is an excellent one. Upon his retirement he was given the honorary rank of lieutenant in recognition of his meritorious services, and as evidence that the department was highly satisfied with his work. Although he was over the age limit, he volunteered times out of number for active service, but, as he was a very useful man for the training of men who had enlisted in the Australian Imperial Force, he was kept in Austrafia. It is extraordinary that, after 23 years of service, and after he had paid over £5 for superannuation benefits, he should have been called upon to pay £30 16s. 9d. in a lump sum, and then receive a pension of only 5s. 8Jd. per week. If the Minister will give me a definite promise that the necessary legislation will be introduced this session - I am sure that, if introduced, it will be passed - I shall not press for the appointment of the select committee. But when we get nothing but vague answers it is time that the Senate took up the matter and had a full inquiry into it.
Debate (on motion by Senator Wilsonadjourned.
.- I move-
That a Select Committee be appointed to inquire into and report upon the case of First Lieutenant W. W. Paine, such Committee to consist of Senators Gardiner, McDougall, Foll, Greene, Cox, Elliott, and the mover, and to have power to send for persons, papers, and records, and to move from place to place.
Realizing the limited time at the disposal of honorable senators, and the great amount of business to be transacted, I bring this matter before the Senate with some degree of reluctance, but so far as I can see, there is no other means of securing redress for this returned officer, who has been unsuccessful in obtaining from the Repatriation Department that to which he believes he is entitled. He was wounded at Gallipoli and returned to Australia. When in Australia on home service he was repeatedly operated on in various hospitals, and the real point at issue is whether or not the septic condition if his body is the result of wounds he received in the war. There is a conflict of evidence upon the point. I have here a certificate from the medical superintendent of St. Vincent’s Hospital, Darlinghurst. It is as follows : - 28th November, 1923.
This is to certify that W. W. Paine was admitted to St. Vincent’s Hospital on 26th September, 1923, and discharged on 31st October, 1923.
During that time he was operated on for ischio-rectal abscess, but the relief afforded was only temporary and a further operation of a more radical nature will be necessary to ensure a cure. The condition has been present for some years, and it is more than probable that the sinus tracks up into the rectum, i.e., a fistula-in-ano.
There is also a certificate from Dr. Hughes as follows: - 5th December, 1923.
Mr. Warren Wyllie Paine was operated on by me at No. 4 Australian General Hospital, Randwick, on November 2nd, 1917, for an ischio-rectal abscess.
Lieutenant Paine’s efforts to secure redress from the department failed. This is one of the letters he received - 24th March, 1924.
I am desired by the Hon. the Treasurer to advise you that, in reply to representations made on your behalf, he has received a report from the Chairman of the Repatriation Commission to the effect that the commission has gone very carefully into your case. They state that, on the evidence available, they could not trace a sequence regarding the several abscesses from whichyou have suffered and, consequently, could not relate the latest abscess, i.e., the ischio-rectal, to any occurrence happening on service. They, therefore, have no option but to disallow your claim.
I am enclosing the medical certificates of Dr. Chisholm Boss, Dr. F. Curtis Elliott, Dr. O’Gorman Hughes and Dr. J. H. B. Brown which you desired to be returned to you. (Signed.) C. BAGOTT,
I have also the following certificate from Dr. Curtis Elliott: - 12th December, 1923.
Mr. Wyllie Paine was operated upon early in 1917 for ischio-rectal abscess in No. 4 A.G.H. This condition started shortly after healing of g.s.w. of arm.
The following is a letter he received from the matron of the Randwick Military Hospital : - 24th June, 1924.
Your letter to hand regarding your being inRandwick Military Hospital during the years 1915, 1916, and 1917. I remember perfectly well your being treated for abscesses on your body after your septic arm had healed. Sister Powellwho was theatre sister at No. 4 A.G.H., is here with me, and she says that you will find the records of your operations in the theatre register; she recorded them herself. Hoping you are well.
Following upon some verbal representation I made to the Repatriation Department in connexion with this case, I received the following letter: - 5th July, 1924.
Further to your verbal representations on behalf of Mr. Warren W. Paine, Lieutenant, 1st Battalion who is claiming that the ischiorectal abscess from which he is suffering is the result of his war service, I have now to inform you that the whole case was placed before Sir George Syme, of the Medical Advisory Board for an opinion as to whether the abscess referred to could be connected with the condition caused by war wounds. Sir George Syme in his opinion states, “ I do not regard this as a war service disability.” (Signed.) J. M. SEMMENS,
Against the opinion of Sir George Syme, I have the following certificate of Dr. Jarvie Hood : - 15th July, 1924.
I have to state that 1st Lieutenant W. W. Paine, 1st Battalion, Australian Imperial Forces, was in No. 4 A.G.H. from 1915 to 1918 at intervals, suffering from septic wounds of right arm and left leg. While there I saw him frequently, and while there he developed an ischio-rectal abscess, which was, in my opinion, the direct or indirect result of the septic condition he was in.
I invite the attention of honorable senators to this certificate. I understand that Sir George Syme is at the head of his profession in Victoria, just as Dr. Jarvie Hood is at the head of his profession in New SouthWales. Had the department secured the services of Dr. Jarvie Hood, no doubt the Minister for Repatriation would have accepted his opinion instead of that of Sir George Syme, and the returned officer would have been given at least the benefit of the doubt.
- Dr. Jarvie Hood says that he saw Lieutenant Paine frequently in the No. 4 Australian General Hospital, and that he had developed an ischio-rectal abscess which was the direct or indirect result of his septic condition.
– But the septic condition developed long after Lieutenant Paine recovered from the wounds he had received.
– That is not quite correct.
– It is correct. At least seven doctors have expressed a view contrary to that of Dr. Jarvie Hood.
– I do not know who the seven doctors are, but if a man who occupies the position in his profession that Dr. Hood does, has expressed an opinion of this sort, Lieutenant Paine should undoubtedly get the benefit of whatever doubt there may be. If Dr. Hood’s language conveys any meaning at all, it is that the abscess from which Lieutenant Paine suffered was due to the septic condition he was in as a result of his war service. I was of opinion that the production of this certificate would have some weight with the Repatriation Department, and I- presented it to the Minister, Dr. Earle Page. On the 17th July last, Dr. Earle Page sent me the following reply: -
I have examined the files of Lieutenant W. W. Paine and I concur in the opinion expressed by Sir George Syme and the Medical Board that it is impossible to relate his disabilities to war service.
I do not question Dr. Earle Page’s ability to diagnose a case such as this from the files dealing with it, but a medical man who has had personal experience of the claimant should be in a better position to come to a correct decision than one who is as busy as tha Treasurer must be. I do not suggest that the Minister did not give very careful attention to the matter, but, with all due respect to him, Dr. Hood, who saw Lieutenant Paine frequently from 1915 to 1918, was in a better position to express a reliable opinion upon the case than one who had merely undertaken the task of examining the departmental files.
– When ‘ I suggested , that I should bring the matter under the personal notice of the Treasurer, did not the honorable senator indicate that if that Honorable gentleman looked into the matter he would be perfectly satisfied with his decision?
– I have no recollection of saying that. Nothing short of what I wanted would satisfy me. I want this man to undergo a further operation and to get an increased pension. Following upon representations I made to the Repatriation Department and to the Minister on his behalf, I received a letter from Paine.
– Are we to understand -that if the report of the select committee were not in the form the honorable senator desired, he would still be dissatisfied-?
– I mean to exhaust every possible form which Parliament will permit me to exercise- - I am not particular as to the time taken - to obtain for this case the consideration to which it is entitled. Some years ago, when men were being urged to enlist, innumerable promises of an indefinite character were made, and it was never anticipated that advantage would be taken of technicalities to prevent ai soldier from receiving additional . surgical treatment or a higher pension. Paine is now receiving only 12s. 6d. per week. The letter which I have received from Paine reads - 10 Lytton-street,
Dear Sir. - I am in receipt of your letters of the 31st July and 4th August instant, and wish to thank you for the efforts you are making on my behalf.
In the letter from the Minister for Repatriation to yourself (copy numbered 14605) it is stated inter alia tha£- “ The ischio rectal abscess did not appear until 11th September, 1917, long after his discharge. This complaint was considered by the surgeon who performed the operation on 2nd November, 1917, not to be the result of service, and by another examining doctor to be due to ‘ infection of recent origin ‘. The departmental medical officer reported it had been established that there was no sequence of abscesses from the date of his discharge to October, 1917.”
The above statements are, to say the very least of it, very misleading - in fact, they are Untrue.
The facts are, briefly, as follow: -
I returned from active service in July, 1915, and was discharged , on the 4th August, 1916, as medically unfit on account of gunshot wounds in right arm and left leg., For the period, July, 1915, to August, 1916 (thirteen months), I was an. out-patient, receiving treatment, at the Randwick Military Hospital. The treatment I received was for the wound in my arm, which was septic. After a long series of vaccine treatments the wound in my arm closed (about December, 1916), or some seventeen months after my return to Australia, and four months after my discharge. I was discharged on 4th August, 1916, with a suppurating septic arm.
The sepsis evidently remained in my system, as a series of abscesses formed on various parts of my anatomy, principally on the right side of -my neck. These abscesses were treated at the Randwick Military Hospital.
After another series of vaccine treatments,an ischio rectal abscess occurred, and early in 1917 (during the month of February, I believe), I reported this trouble to the medical officer at Liverpool camp (where I was then engaged on home service), and was sent to
Randwick Military Hospital, where I was operated on by Dr. Curtis Elliott (about February, 1917). See Dr. Curtis Elliott’s letter in Repatriation Department’s files.
Therefore, you will see that the Minister for Repatriation’s statement that, “ the ischio rectal abscess did not appear until 11th September, 1917,” is untrue, and also that there is, to my mind, ample .proof that there was a “ sequence of abscesses from the date of my discharge to October, 1917.
There is every reason- to believe from the foregoing that my medical records are very incomplete, and therefore it is extremely desirable, and, may I say, essential that a select committee be appointed to inquire into the whole of the circumstances and to peruse the whole of the evidence relative to my case, and should such committee be appointed, I shall welcome the opportunity of appearing before them in person to substantiate, by documentary evidence and otherwise, all statements made by me.
You already have certificates from Dr. Jarvie Hood, and other eminent medical authorities, supporting the contention that the ischio rectal abscess is a direct or indirect result of my war service.
I have been compelled to attend other than military hospitals for treatment of my complaint, owing to the Department of Repatriation refusing to treat me under their medical scheme.
The final suggestion in the Minister for Repatriation’s letter, that I should now go to civil hospitals for treatment is, in all the circumstances, resented.
Should there be any further particulars that you require, I shall be pleased to give you same immediately.
– The statement I have made is in accordance with the official records.
– Dr. Jarvie Hood’s certificate does not say that his condition is due to war service.
– He says that, in his opinion, the abscess is the direct or indirect result of Paine’ s septic condition.
– He does not say that the septic condition is due to war service.
– That is understood. It appears to me that this is the only means by which I can obtain justice for this man. I believe the people of Australia are strongly in favour of giving every consideration to the claims of incapacitated ex-soldiers, who should in all instances be given the benefit of any doubt which may exist. The committee I propose would consist of seven members, four of whom are returned soldiers ; and I am sure that if the case were fully investigated a recommendation would be made to the effect that Lieutenant Paine is entitled to further treatment, and also an increased pension. I trust the Government will at the earliest possible moment bring in a bill to enable the Repatriation Department to deal with cases of this character. It was an easy matter for those who returned from thefront in good health to re-establish themselves in civil life, but men who cameback incapacitated, or who are now feeling the effects of illness, consequent upon war wounds, find it extremely difficult toundertake work which will return them a living wage. As the Government are in possession of all the facts, I trust that an adjournment of the debate will not be sought, but that the motion will be agreed to without a division.
– I second the motion. I support all Senator Grant has said concerning the disabilities experienced by men who are indisposed owing to illness consequent upon war service. A number of cases in Western Australia have been brought under my notice,, in which men who returned from the front have been unable to follow their ordinary avocations owing . to disabilities such as those -mentioned by Senator Grant. One case in particular is that of a young man named Tucker, who served abroad for three years and ten months, received a good discharge, and on his return endeavoured to follow his ordinary work, but after a week found it impossible to do so. He was under the doctor’s care for fifteen months, and during that time his wife and children were dependent upon charity. Twelve monthsafter the termination of the war Tucker contracted an abscess on the liver, and after being operated upon he was in hospital for seven months with a tube in his side. Since that time he has not been able to do anything. The doctors whohave watched the case are of the opinion that the abscess on the liver may have been contracted as the result of dysentery, from which he suffered while at the front. He has endeavoured to prove that his present condition is due to war service. The two doctors who had him under observation had also suffered from the same complaint when they were on active service. Their condition, however, was not sufficiently grave to be reported to the authorities. Scores of similar caseswhich I could enumerate all require investigation. Something should be done to enable these men to get that to which they are justly entitled. After doing their bit “in the great war, they are thrown on the wings of the world, and their wives and families have to be kept by public subscription. Such a state of affairs is a disgrace to this country. I hope that the Senate will take notice of Senator Grant’s remarks, and act upon them.
Motion (by Senator Crawford) -
That the debate be now adjourned. - put. The Senate divided.
Majority … … 7
Question so resolved in the affirmative.
Order of the day for the resumption of the debate (vide page 1840) on motion by Senator Duncan, called on, and debate (on motion by Senator Wilson) adjourned.
Exemption of British Ships prom Coastal Provisions.
Order of the day for the resumption of the debate (vide page 2652), on motion by Senator Ogden, called on, and debate (on motion by Senator H. Hays) adjourned.
Debate resumed (vide page 2915).
– I listened with pleasure to the remarks of the Minister when introducing this bill, and was glad to learn that the Government was taking the question of defence very seriously. The Honorary Minister has told us that at the Imperial Conference the defence question was discussed by the delegates from the different portions of the Empire, and that they were all seised of the great importance of arriving at a satisfactory solution. I was also pleased with a considerable portion of the speech of the Leader of the Opposition. With many of his statements I agreed, but not with other portions of his speech. The honorable senator told us that Australia had a certain coastline, which he compared with the mileage of the coastline of the United Kingdom and that of the United States of America. He indicated that the protection of the coastlines in those countries required a considerable amount of expenditure. I want to show that we, also, should spend considerable sums on the protection of our coastline. I was sorry that the Leader of the Opposition gave expressionto some pessimistic views. He certainly made one or two flights of optimism, and indulged, occasionally, in a flash Of humour. His speech reminded me very much of a story that I once heard. In a village of Ireland, an amateur veterinary surgeon treated the donkey of the local squire, and when he sent in his bill it read - “ To curing your honour’s donkey till it died, 10s.” Senator Gardiner would have us carry on only the internal work of Australia, and provide practically nothing for her actual defence until we were in extremis. During the last few years, much has happened to affect the world’s naval and military position. First came the Washington Conference, and, as a result of that conference, the Washington Pact. Again, the American Parliament passed the Johnson-Reed bill, under clause 12b of which Asiatics are not permitted to enter American territory. We must therefore realize that a new phase of the situation has opened up. The result appears to be that the “Washington Pact goes by the board. That being so, it is time that the people of Australia took into consideration the very grave situation which. may arise, and which is generally referred to as the problem of the Pacific. What is the problem of the Pacific? It is the awakening of the teeming millions of people, who are inhabiting the upper regions bordering on the Pacific Ocean - their adoption of western methods, the improvement of their standard of living, with a consequently intensified struggle for existence, and a scramble for space on which to live. We have to take into account the position of Australia both nationally and geographically in relation to those regions. In 1914, the strategic naval centre was in the North Sea. With the defeat of Germany, the alteration of the boundaries of various countries in Europe, the collapse of Russia, and the opening of the Panama Canal, that strategic centre has shifted from the North Sea to the Pacific Ocean The problem of the Pacific is the problem of Japan. In Japan there are 60,000,000 people living in narrow islands, with only one-sixteenth of the land fertile, and an annually increasing population. To provide for their growing numbers and the improvement in the standard of living among her people, she is already pressing on the margin of subsistence. She must enter seriously into competition with other countries in the marketing of her manufactures, and she must also obtain additional land. Japan is then faced with the great problem which has bred wars since time began. For as tribes and nations of the past outgrew the resources of their territory, they moved on, and hacked their way to fertile lands adjoining. I desire to point out to Senator Gardiner that although Japan, when our ally, acted honorably durthe war, she has still to fight for her position in the world. Japan, like the United Kingdom, is a manufacturing nation, and must have markets for her manufactured products. Across a comparatively narrow sea she sees the awakening of 400,000,000 people to whom she is related both geographically and racially. She feels that her geographical circumstances give her a special right to the exploitation of these markets. But the rest of the world, that is doing all it can to secure the trade of China, has said, “ No; there must be an open door.” What is Japan to do? Australia has refused the Japanese admission to the Commonwealth, and the United States of America, by her exclusion bill, has adopted a similar attitude towards these people. Where are the over-flowing millions of Japan to find room ? Surely the Pacific problem is the modern riddle of the Sphinx! It is useless for the people of Australia or America, or any other people, to shut their eyes to the problem, for it does not consist of the things of which dreams are composed. It is no use talking of disarmament at the present juncture unless the causes of naval armaments are removed. I should be in favour of disarmament if there were no possibility -of any naval or military struggle. It may be interesting to follow the tactics adopted by the Japanese in working out their destiny. I hope that it will be thoroughly understood that I am not speaking in antagonism to Japan; I desire only that my remarks shall serve as an object-lesson. Japan has her destiny to fight for; but we also have ours. The Government must realize that an expenditure of two, three, or four million pounds is not sufficient to meet the needs of the situation. Just prior to the late war, Germany had certain rights in China - rights that had been ceded to her under duress’. On the 15th August, 1914, Japan sent an ultimatum to Germany that she must part with her possessions in- China without conditions or compensation, in order that the Japanese Government might hand them back to China. Germany,- as is well known, .did not comply -with the request within the time specified by Japan, and thereupon a Japanese force, in company with a contingent of British soldiers, landed in the province of Shantung and seized the German concessions. Japan then took possession even to the extent of establishing civil government in addition to garrisoning with troops. In the beginning of 1915, Japan, having made up her mind to hold those rights in China, sent an ultimatum to the Government at Pekin intimating, under the famous 21 points, that it would be obligatory for China to consent to the transfer of all German rights and privileges to Japan. The military establishment of the Chinese Government was not sufficiently strong to enable it to dispute the matter with Japan, and accordingly it had to agree. But it will be remembered that, in 1917, when the Chinese determined to throw in their lot with’ the Allies, all those rights which had been ceded to Germany were abrogated. The Japanese Government, appreciating this position, again exchanged notes with the Pekin Government. Unfortunately foi* the justice that one should read in the Treaty of Versailles, the framers of that- treaty allowed the lands that were sacred to the Chinese to be given over to the rapacity of Japan. One might continue to give illustrations of the polley of Japan. Take Korea, which . stood in the road of Japanese penetration into China. Not even 43 centuries of historical existence could secure the Korean people from the endeavour of their powerful neighbour. In 1894-5, at the time of the Chinese and Japanese war, Japan compelled China to renounce her protectorate over Korea. In 1904-5, at the time of the Russo-Japanese war, Japan declared a protectorate over Korea, and in 1910 she annexed it. Then she set out to obliterate the national entity of the Korean people, and to make the country Japanese. For this purpose she employed a network of spies, and exercised a rigorous news censorship throughout the land. Japan introduced a reign of terrorism, against which the Koreans naturally retaliated. The Koreans were hopelessly crushed under the chains by which they were fettered. The manifesto of these people, as an appeal to the justice of the world, makes pathetic reading. I remind honorable senators again, that I am not speaking in antagonism to Japan, but for the purpose of furnishing an object lesson to Australia. If these are the facts, and I assure honorable senators that they are, it is necessary for the people of Australia to look- to their defence establishments. It is utterly futile to imagine that it will be sufficient to build two or three cruisers. There must be naval bases. And here I shall come into conflict with some of my honorable friends. In my opinion, a base nt Singapore alone’ would not meet the situation. After the battle of Jutland, Admiral Jellicoe furnished a report, dated 15th October, 1915, and his main contention was that it was necessary to have bases close to the scene of action. In spite of the fact that the British fleet was one-third stronger than the German fleet, he refused to engage it, because it was 500 miles distant from his main base. What, then, is the position in regard to the Pacific problem? We were told at the Washington Conference that Great Britain had renounced any intention of further fortification of Hong Kong. Why? For the very simple reason that Hong Kong is backed by a country over which England has no control, and it would be a simple matter for Japan to dispatch an armed force and attack Hong Kong from the rear. As regards the American position, Bywater, the great American naval writer, points out that the Philippines, being only a short distance from Japan, could be captured by that power in three days.
– Is there any hostile base within 500 miles of Australia ?
– Then what becomes of the honorable senator’s argument ?
– There is no hostile base within 500 miles of Australia, but, on the other hand, there is no base within many thousands of miles of Australia from which we would assist a fleet in defending us. Pearl Harbour, in Hawaii, is 5,000 miles away, and it is 6,000 miles to the nearest British base.
– Then we must depend on ourselves.
– Yes, to a large extent, with the aid of the British Navy. Admiral Jellicoe put the position clearly when he said that there should be three kinds of bases. First - Arsenal bases with adequate docks, stores, safe anchorages for the entire, fleet, and strong defences. Second - Operating bases supplied with sufficient means for . repairing ships so that they may reach No. 1 bases, and with sufficient fortifications to protect a fleet. Third - Points d’appui, with fortified places for covering fleet from attacks of destroyers, &c. Now, what is the position in relation to
Japan? With the centre of any naval storm in the Pacific Ocean, Japan has many bases fulfilling these conditions. She has also bases and points d’appui in the Yellow Sea and Korean Straits. Under the five power pact Japan has agreed to renounce her right to fortify the Pescadores, Formosa, Rin-Kui. and the Bonin Islands. But it must be remembered that these are now sufficiently fortified. The principal base at Sassebo dominates Shanghai, whilst Port Arthur covers the entrance to the Gulf of PechihLi. If the United States of America entered into war with Japan, its fleet would have to steam 5,000 miles, and then, begin a movement that would sweep the Japanese fleet into its own territory. The American fleet, or any other, would need to be in first-class condition to undertake such a venture, and it would require bases from which to operate. Suppose, for argument’s sake, that war between those two countries was declared. Japan could promptly destroy the whole of the fortifications in the Philippines, she could lay her mine fields, and she could have her points d’appui and her intelligence bases whenever she required them. Japan has the good fortune to have a mandate over the Marshall Islands - that long string of islands stretching south, which seem to have been designed by nature to provide for submarine bases. An American fleet, leaving Pearl Harbour, would have to travel a distance of 5,000 miles at a speed governed by that of its slowest vessel, and it would probably have to carry with it a floating dock, or something of that kind. Apart from that disability, its present capital ships have a speed of 2 knots below those of the Japanese. Suppose Great Britain decided to take part in such a struggle. She has Hong Kong, which she could never reach. The Singapore base would be 2,000 miles from the scene of action, so that these bases would not help the situation. I do not wish to be misunderstood. I do. not suggest that the Singapore base is of no value. It might be of material value as an oil depot, and for many other purposes, but of itself it would not be sufficient. Thus all the fleets of the potential enemies of Japan are remote from the theatre of war, and the initiative will thus rest with J apan as long as these conditions prevail.
The Commonwealth Government should be in constant communication with the rest of the Empire on the subject of naval defence. I appreciate the remarks made by the Honorary Minister (Senator Wilson), in introducing the bill, when he suggested that steps were being taken in that direction. He pointed out that at the recent Imperial Conference representatives of the Empire came together, and realized that definite steps would have to be taken towards the establishment of effective Empire defence. God forbid that the day should ever come when there will be a shadow over our navy, but if it should so happen Australia will no longer be a proud white race. Japan, feeling that she must have room for her teeming millions, that are increasing in numbers year by year, sees, away to the south, as one of her professors has said, a great land with boundless possibilities, and inhabited by a mere handful of people, a large percentage of whom are deposited upon five or six spots on the wonderful continent. Does any honorable senator dare to tell me that Japan does not look on this land of ours with rapacious eyes? Japan naturally feels that here we have a land merely fringed with a few inhabitants, a land of boundless possibilities, and in their eyes a land flowing with milk and honey. Yet some folk will tell us that this country is not worth defending. It is a crime to the race for Australia not to do her part in supplying a portion, at all events, of the fleet that will defend our shores and make us safe from attack. Our birth-rate is declining, and our immigration scheme is largely a farce. On the other side there is a people with an increasing birth-rate, and a large overflow of natural population each year. In view of these facts, it is no use our merely considering the expenditure of a few million pounds for defence. We have to give consideration to a comprehensive scheme of Empire defence, to a co-partnership in which we should join to maintain and hold this great Empire of ours. Henry Ford, when speaking to a friend of mine recently, said that he would like to visit Australia. “ Oh, yes,” said my friend,’ “ you would like to come to Australia and see our wonderful land? “ “ No,” replied Ford, “ I do not want to see your wonderful land, but I do want to see your wonderful white race.” If we believe in this principle of a White Australia, and if we stand for all that a white race means, we should be prepared, if necessary, to fight for those ideals. They can never be mixed with the ideals of an Asiatic people. If they are worth fighting for - if, as Senator Gardiner suggested, the stalwart sons of Australia think that this land is worth holding - then we shall have to do something for our defence. It is not a question merely of constructing a few lines of railway in a certain direction, or the establishment of a few mills or factories. We shall have to do something substantial. Japan, believing in her destiny, is fighting for her place in the sun. That she intends to take her place in the councils of the world is shown by the fact that she is spending 42 per cent, of her total revenue on . her military and naval establishments. Does it mean nothing to us when we read in our newspapers statements from documents that are absolutely authoritative that there is remarkable activity in Japanese ship-yards? I am not blaming Japan. Japan has to reach out for her destiny. If we believe that we, too, have a destiny ; that our sons who died on distant shores did not fight in vain, we should get busy and take our place in a comprehensive defence scheme worthy of the British race.
– I listened very attentively to the eloquent address delivered by the honorable senator who has just resumed his seat (Senator Millen), and I could not help thinking that no amount of money which we might be asked to spend under this bill would satisfy him. If he had his way a. scheme for the defence of ‘ Australia would cost very much more than £2,500,000. It would take something like £50,000,000 or £60,000,000 to do all that he wants. I was also very much surprised at his remarks concerning Japan. Japan is our ally in peace just as she was our ally during the years of war. Therefore it ill becomes any man in the public life of Australia to utter words that would in any way irritate a friendly nation. The honorable senator told us that Japan had covetous eyes on Australia. That statement has been repeated time and oft during the last twenty years. We ought to look at facts as they are, and not conjure up imaginary dangers.
– At the same time, we should not bury our heads in the sand.’
– So far as I am concerned, I have no intention of doing that. The opinion I hold to’-night is the opinion that I have held for many years . I believe that Australia should not be dragged into every little trouble that may be created in some other part of the world. The bill proposes to appropriate the sum of £2,000,000 for the construction of two cruisers. A cruiser, in my opinion, is a battleship. Instead . of devoting our energies to the building of battleships we should be giving our attention to the building of friendships.
– But why not both ?
– Friendship is a more effective means of defence than a battleship. If we follow the advice given to us by Senator Millen we shall be devoting our energies to the building of battleships instead of friendships. We are a war-weary world. Nearly all the nations are still bleeding and staggering from the effects of the last war. I appeal to my friend, Senator Millen, who is an eminent engineer, to say if there is not more need for the building of roads, railways, harbours, and the carrying out of water conservation schemes rather than for the construction of cruisers ? The world is somewhat changed to-day. We have had the Washington Conference, which determined on disarmament.
– It did nothing of the kind.
– The Washington Conference was convened for the purpose of considering the question of disarmament. Australia was represented at that gathering by Senator Pearce.
– What did the conference do ? That is the point.
– The conference decided upon a limitation of armaments. Certainly that was a step in the right direction, and to-day we should be considering the question of further disarmament instead of the building of cruisers. Is it not a fact that the Australia was sunk in accordance with the terms of the Washington Conference ?
– That vessel was obsolete any how.
– It is also possible, with the progress of modern ideas of naval construction, that even before the keels of these cruisers are laid their plans will be obsolete.
– What remedy does the honorable senator suggest?
– I shall tell the honorable senator before I’ resume my seat. Fortunately we have recognized the principle of open diplomacy. I think it is admitted that as a result of open diplomacy there is now an evident desire on the part of responsible statesmen the world over to bring about the economic stability of the nations. Even at the present time there is a conference sitting in London to deal with the question of German reparations and to endeavour to lay the foundation of the world’s future peace.
– There is no open diplomacy about that conference.
– It was brought about by open diplomacy. Mr. Ramsay MacDonald, the British Prime Minister, placed all his cards on the table, so did M. Herriot, the French Prime Minister. But for that fact the conference would not have been sitting. That gathering* is dealing with a very serious ‘question, and we all hope that it will be successful. The Prime Minister (Mr. Bruce), speakingin another place, spoke of the League of Nations as being the hope of the world. Up to the present it has only been a league of some of the nations of the world. By his recognition of Russia and by his invitation to the representatives of Germany to the Reparations Conference, Mr. Ramsay MacDonald is helping to bring about a league of all the nations so that eventually we may be far removed from the dangers of -war. Referring again to the Washington Conference, I remind the Senate that when Senator Pearce returned to Australia he declared that the decisions of the conference would enable ‘us to devote our energies to the arts of peace. Will the Minister say that in considering this proposal for the construction of two cruisers we are doing that ?
– No, but we are devoting our energies to retaining and protecting the peace.
– My honorable, learned and gallant friend, with all his legal and military knowledge, cannot read into Senator Pearce *s remarks any other meaning than that the decisions of the Washington Conference, according to the Minister, should have enabled us to devote our energies to the arts of peace.
– But the honorable senator does not always accept what Senator Pearce tells him.
– I have known Senator Drake-Brockman long enough to realize that it is necessary to weigh very carefully his interjections in order to ascertain what he means and to arrive at what he- seeks to achieve. The construction of cruisers would certainly not be engaging our artisans in the arts of peace.
– How many artisans would it be engaging?
– If I had my way not one Australian artisan would be engaged on the construction of cruisers. Australia’s artisans would be engaged in the manufacture of implements of construction, and not in the manufacture of implements of destruction.
– The honorable senator’s leader has advocated the construction of submarines.
– My leader speaks for the party, but I am giving my own opinion. The Washington conference had a very laudable object in view, and it would please me if another conference were held to repress the efforts of the nations of the world to provide additional means of warfare. Another eminent statesman, the Right Hon. William Morris Hughes, said -
The Washington conference has achieved great things. Its decisions guarantee peace in the Pacific as far as any effort of man can guarantee it.
Senator Millen emphasized the point that future danger lay in the Pacific.
– That is so.
– The honorable senator said .that the Pacific would be the cockpit of future activities, yet we have Mr. Hughes’s word that the Washington conference guaranteed peace in the Pacific as far as any effort of man could guarantee it. Why then the need for this extra expenditure? Senator Millen also emphasized the danger of an attack from Japan. I do not share his opinion in that regard. I see no danger now or in the future of an attack from that source, hut in any case if Australia is to be attacked by Japan two cruisers will not repel the J apanese navy. . From what other direction can we be in danger of attack? Only from Europe, where there are hundreds of thousands of people starving. In another place the Prime Minister said that he could not see any danger of attack from Europe, and he did not say that he was anxious about any immediate attack from Japan. Mr. Marks, another member of the House of Representatives, who can speak with expert knowledge of naval matters, and whose opinion therefore should be heeded, ha3 no fear of an attack from Japan. Mr. Bruce asked himself the question, “ Can an expeditionary force be sent against us?” and he admitted that it was impracticable. Therefore, there is no danger of an .attack from Europe or Japan, or of an expeditionary force. I am not quoting the opinion of a Labour member or the views of a Labour journal. I am putting in the witness-box eminent men who hold political views entirely different from mine. If we do build two cruisers, will they ever be in a position to protect our trade routes ? I am afraid that if our trade routes are to be dependent upon the protection likely to be afforded to them by two cruisers it will be good-bye to our trade relations with other parts of the world. We ought to be frank in this matter. We should tell the people that more than two cruisers are necessary to protect the trade routes of Australia.
– One cruiser settled the Emden.
– It may take twenty cruisers to settle another Emden. No one can take up the dogmatic attitude that our trade routes will be protected if we build two cruisers. Are not our trade relations with other parts of the world maintained at present without these cruisers? And if we have the vessels, will our trade routes be more open than they are at present?
– The honorable senator would delay the taking out of an insurance policy until the burglar came in.
– When I take out an insurance policy, I want it to be an effective one. Senator Drake-Brock- man cannot tell me that the building of two cruisers will be an effective insurance policy for Australia.
– It will be an effective contribution towards an insurance policy.
– When I insure my property I shall take out an effective policy, and will not bother about a contribution towards one. The Public Accounts Committee was recently engaged in considering the possibility of making Australia self-contained in the matter of munitions supply. After all, we must fall back upon the first principle of defence, and that is our capacity to manufacture in Australia the munitions which may be necessary in the event of attack. Suppose we do have two cruisers in active commission and there is a sudden attack upon us from any source. What will our position be? It is disclosed in the report of the Public Accounts Committee dated the 19th July, 1924. That report contains a history of the effort now being made by the .Munitions Supply Branch of the Defence Department to make Australia self-contained in the matter of munitions, and from it I quote the following : -
Drawing on his experiences abroad, and guided by consultations with the experts of the British Government, Mr. Leighton prepared a comprehensive report, dated 27th May, 1919, concerning the production of munitions in Australia, and formulated proposals for setting up an organization for executing the work in the Commonwealth. . . .
The first step to be taken to secure the manufacture of munitions in Australia was the establishment of a properly equipped laboratory and inspection department, with qualified chemists and engineers, who would have the necessary knowledge to turn local industries and raw materials to practical use in time of need.
In the defence of Australia we should extend our operations in that direction. I would rather spend money upon that object than upon the building of cruisers. The report of the Public Accounts Committee proceeds -
An examination of the principal materials required for manufacture disclosed that Australia possessed or could manufacture the majority of those most essential, and could, therefore, look forward to reaching a relatively high degree of self-containment when it had facilities for turning those materials into articles of specific use in war.
No one will doubt Mr. Leighton’s qualifications to speak on such an important subject. The Public Accounts Committee has. proved that there are, within the bounds of this island continent, nearly all the raw materials necessary for making Australia self-contained in the matter of munitions if we ever put our hands to the work of manufacturing them. Our cruisers may be sunk, our trade routes may be closed, but we have here all materials ready to manufacture that which would enable .us to repel any attack. The report of the committee proceeds -
The actual scheme of operations could, however, only be determined by an expression of Government policy regarding the strength and nature of the Defence Forces, and what these forces were designed to accomplish. . . .
On the 13th August, 1921, the Munitions Supply Board was constituted, a statutory body under the Defence Act with the same personnel as that of the Board of Factory Administration, whose powers and functions were transferred to the new board. The personnel of the Munitions Supply Board comprised -
Chairman - Mr. A. E. Leighton, F.LC, Comptroller-General of Munitions Supply.
Members - Colonel T. J. Thomas, O.B.E., Finance Secretary, Department of Defence; Mr. M. M. Maguire, O.B.E., Assistant Secretary for Defence.
In addition to any other powers or functions conferred upon it by the Minister, the board has power to deal with the following matters: - (o.) Provision of such armament, arms, ammunition, equipment, supplies, and stores of all kinds as may be demanded by the responsible authorities and duly approved.
As the inquiry of the committee developed, it found that the board was exercising all its powers, and had done splendid work. In dealing with the amended proposals the report states -
The scheme of 1919 was based on the assumption that military requirements demanded that the factories should be maintained on a prewar output, but the arrival of large quantities of military stores from abroad brought about a lessening of demand upon existing factories.
Further, the drastic reduction of Defence Estimates made towards the end of 1921, and the curtailment of the universal training system, necessitated a change in policy. Up to June, 1922, it had been the practice to run existing factories largely as trading concerns.
This was costing about £700,000 per annum, In order to establish new factories and obtain the necessary plant, tools, equipment, &c, an additional £400,000 would have been required, making an annual total of £1,100,000.
I am submitting these extracts from the report because the inquiry conducted by the. committee was a lengthy one, and at its sittings valuable evidence was tendered. The committee came to the conclusion that we should concentrate more on making Australia self-contained in the matter of defence, which is more desirable than to undertake the construction of two cruisers which would be of little use in the event of an attack. The report goes on to say -
The 1922 programme of the Munitions Supply Board, which has received the endorsement of the Government,, is. based on the following assumptions: -
that under peace conditions the sum available for munitions supply purposes is limited to £492,000 per annum; (2i) that the total cost of new construction and establishments as at present proposed is spread over six years
that existing factories are maintained on a nucleus basis.
That is the kernel of the proposals. The committee endeavoured to bring about a change in factories working under this scheme, whereby iri certain establishments a portion of the premises would be set aside for the manufacture of munition supplies so that operations could be effectively carried out at given centres when the occasion demanded it. Provision has now been made not only to conduct these factories in time of peace, when employment will be available to our artisans, but to have a reserve of material and of skilled men capable of carrying on the necessary manufacture in the event of war. The money allotted has not been spent during any one of the six years mentioned, because the department has not been ready to proceed, but I believe from now onwards this scheme will work more effectively and rapidly. I wish to again emphasize the point that I am opposed to the construction of cruisers, but if Parliament determines that two are to be built, I shall strongly advocate that the work of construction be undertaken in Australia by Australian workmen.
– The honorable senator has used the same arguments that were employed a good many years ago when the Labour party proposed to construct three cruisers. The proposal was contemptuously described as one for a “ tin-pot “ navy.
– I am a much older mak than I was then, and I am now much wiser in the matter of naval and military defence.
– If the honorable senator is ever on this side of the chamber he will tell another story.
– No matter on which side I am seated, I shall never change my principles. I sacrificed my seat in this chamber rather than sacrifice my principles, and I am here again holding the same principles. I was once an enthusiastic advocate of compulsory military training, but I am not to-day. I move -
That after the word “ That.” the- following words be inserted : - “ as efforts are being made by the President of the United States and the Prime Minister of. Great Britain to convene another conference to deal with the question of further disarmament, and in view of the early sitting of the League of Nations, it is the opinion of this Senate that expenditure upon naval construction should be deferred for the .present.”
Debate (on motion by Senator Duncan) adjourned.
Senate adjourned at 9.57 p.m.
Cite as: Australia, Senate, Debates, 7 August 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19240807_senate_9_108/>.