9th Parliament · 2nd Session
The Deputy President (Senator Newland) took the chair at 3 p.m., and read prayers.
-I ask the Minister representing the Prime Minister if it is a fact, asreported in the press, that, Sir J ohn Monash, owing to the conflicting evidence submitted to him with regard to the estimates of the cost of building a second cruiser in Australia, has been un able to make a recommendation? If the report is not correct, will the Minister state what is the present position?
– The Government has received Sir John Monash’s report, and is giving the matter consideration. As soon as the report has been fully considered, it will be placed before Parliament, together with the decision of the Government.
– I ask the Minister representing the Treasurer if the board of directors for the Commonwealth Bank has been appointed, and when it is likely that the names of the gentlemen chosen will be made public?
– No appointments have yet been made. The matter is now under the consideration of the Government.
– I ask the Minister for Home and Territories if members of the proposed Federal Capital Commission have yet been appointed, and if so, what are their names?
– No, they have not been appointed.
asked the Minister representing the Prime Minister, upon notice -
– The right honorable the Prime Minister supplies the following’ answers to the honorable senator’s questions: -
Accommodation fob Public OFFICERS
asked the Minister for Home and Territories, upon notice -
– The answers to the honorable senator’s questions are as follow :-
asked the Minister representing the Minister for Works and Railways, upon notice -
– The answers to the honorable senator’s questions are as follow : -
asked the Minister representing the Minister for Trade mid Customs, upon notice -
What progress has been made with the equipment and erection of existing and proposed lighthouses on the Western Australian coast!
-The honorable the Minister has supplied the following answer to the honorable senator’s question : -
As to existing lights, the following work has been accomplished:- Cape Naturaliste, power increased; Bathurst Point, converted to automatic, power increased and character made distinctive; Cape Conscription, converted to automatic, power increased, and character made distinctive; Jarman Island, converted to automatic, power increased, and character made distinctive; Gantheaume Point, converted to automatic, power increased, and character made distinctive; Point Cloates, power increased; North-West Cape, power increased;- Cape Leveque, power increased; Cape Leeuwin, apparatus being manufactured, to increase flower and length of flash. As to proposed lighthouses, the position is as follows: - Eclipse Island, light now under construction; Legendre Island, Escape Island, and Sandy Bay, optical apparatus has been ordered.
asked the Minister representing the Minister for Works and Railways, upon notice -
What action is being taken to carry out the recommendation of the Joint Committee of Public Accounts relating to the Lithgow Housing Scheme, contained in the report of the committee on this subject presented to Parliament on the 28th March, 1924, viz.:-
When is it expected that the electric lighting will be available in the settlement,as it is understood that the wiring of the houses was completed in December, 1923, and of the street mains in May, 1924?
– The answers to the honorable senator’s questions are as follow : - 1.(a), (b), and (c). The works referred to have been carried out, and consideration is being given to further improvement by laying out and planting grounds.
Bill read a third time.
Order of the day in the name of Senator Gardiner for appointment of a select committee to inquire into the amount of pensions paid to returned soldiers and widows and dependants of soldiers discharged.
Debate resumed from 27th August (vide page 3628), on motion by Senator Wilson -
That the bill be now read a second time.
– When the debate was adjourned last night, I was proceeding to show what I believe to be the present position in relation to bills of lading.I desire to refer to paragraphs 3 and 7 of articleiii. of the rules as set out in the schedule. It will be noted that clause 7 of the bill to which I am directing my attention relates particularly to paragraph 3 of articleiii., and I think it most important that we should fully consider what paragraph 3 means when read in conjunction with paragraph 7 of the rules relating to bills of lading. Paragraph 3 of articleiii. of the rules which are being validated by this legislation reads -
After receiving the goods into his charge, the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things -
Provided that no carrier, master or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received or which he has had no reasonable means of checking.
It is, I think, quite clear that the document referred to in that paragraph is a received for shipment bill of lading, and when read in conjunction with paragraph 7 it can have no other interpretation. Paragraph 7 of articleiii. reads -
It is clear that the document referred to in paragraph 3 of articleiii. is not the document referred to in paragraph 7 as a shipped bill of lading. It is apparent that the document referred to in paragraph 7 as the document previously taken up by the shipper relates to a receivedforshipment bill of lading originally issued when goods were left in charge of a carrier. Bearing in mind what I believe to be the legal position in relation to the contract to which I referred last night under a shipped bill of lading as against a received-for-shipment bill of lading, I desire now to refer to clause 7 of the bill, which reads -
A bill of lading issued in accordance with paragraph 3 of articleiii. of the rules shall for all purposes …
It will be seen that it is mandatory - be deemed to be a valid bill of lading with the like effect and capable of negotiation in all respects, and with the like consequences as if it were a shipped bill of lading.
I do not know what object the Government have in view, what they are attempting to achieve under this particular provision. I shall be interested to hear from the Minister how it is proposed in relation to contracts negotiated on the other side of the world - and this is the important point - to make it mandatory that a received for shipment bill of lading shall for all purposes be as negotiable a security as ifit were a shipped bill of lading. Most of the goods which we send overseas are bought on letters of credit which are established there. Those letters of credit contain certain definite stipulations. I have never yet seen one which does not stipulate that all drafts drawn on the foreign buyer by the purchaser of the goods in whose favour the letter of credit is issued shall be accompanied by the shipped bill of lading. It seems to me that it is useless to tryto destroy the validity of that contract. I do not think that our legislation here can deal with, or abrogate, a contract which has been definitely entered into and negotiated on the other side of the world. I do not know whether it is intended to do that, but, if it is, I consider that it will be very difficult by a legal fiction to make . a received for shipment bill of lading prima facie evidence of an event which has not happened. That is the position. What is attempted to be set up here is to make the received for shipment bill of lading prima facie evidence of the shipment of the goods. I do not see how that can be done. I wish to refer to another aspect of the case. Whilst I am extremely doubtful whether it is possible for this Commonwealth legislation to apply to contracts which are initiated on the other side of the world, I think that it will have full legal effect in regard to interstate trade and commerce.
– It is not wanted in respect of interstate trade.
– I do not know whether it is or not.
– Speaking from memory, I think that is specifically excluded by clause 4.
– Clause 4 (1) reads -
Subject to the provisions of this act, the rules contained in the schedule to this act (in this act referred to as “ the Rules “) shall have effect in relation to and in connexion with the carriage of goods by sea in ships carrying goods from any port in the Commonwealth to any other port whether in or outside the Commonwealth.
Apparently it is included !
– What about sub-clause 2 of clause 4 ?
– That relates to intra-state trade. It is clear that our powers of trade and commerce do not permit us to legislate in regard to intra-state trade. We cannot do that. But once this measure becomes law it will be binding upon interstate trade and commerce. It may be, as. Senator Thompson says, that it is not required in relation to. such contracts. Nevertheless, I point out that it will be binding in relation to them, and it may set up a situation which would be inimical to our own trade. I am not sufficiently experienced to express a definite opinion, but that, I think, would be the effect.
Clause 7 of the bill has been taken from the New Zealand Mercantile Law AmendmentAct of 1922, to which I wish to refer for a moment. The particular part of the New Zealand act. which is incorporated in clause 7 is the last section of the act. If honorable senators will compare it with the clause in the bill they will find that it is essentially the same.
Every “ received for shipment “ bill of lading shall for all purposes be deemed to be a valid bill of lading with the same effect, and capable of negotiation in all respects, and with the same consequences as if it were a bill of lading acknowledging that the goods to which it relates had been actually shipped on board.
I shall now proceed to point out that the last section of the New Zealand act in relation to received for shipment bills of lading is safeguarded in a number of ways, which makes it an entirely different provision from that proposed to be incorporated in- this bill. Section 3 (1) ofthe New Zealand act of 1922 reads -
In this section the expression “ ‘ received for shipment ‘ bill of lading “ means a shipping document issued in accordance with the provisions of this section, signed by a person purporting to be authorized to sign the same and acknowledging that the goods to which the document relates have been received for shipment.
The act then proceeds to lay down what I refer to as safeguards in regard to these received for shipment bills of lading -
No “ received for shipment “ bill of lading shall be issued (a) until the goods are in possession of the owner of the ship or of some person duly authorized on bis behalf; (b) except for a named ship in which space has been actually reserved; (c) earlier than twenty-one days before the time when the ship is expected to be in port in readiness to load ; but the issue of a “received for shipment” bill of lading shall be sufficient evidence until the contrary is proved that the requirements of, this sub-section have been complied with.
It goes on to say - “ ‘
Every “ received for shipment “ bill of lading shall contain a provision that, in the event df the goods being unavoidably shut out from the named ship, the ship-owner shall forward the goods by his next-available ship, or, at his option, by a ship of some other owner, or by a ship sailing within a specified number of days, but otherwise on the same terms and conditions, mutatis mutandis, as if the goods were actually shipped by the named ship.
– That is the present practice.
– A practice which is. based on the absolute necessity of having definite evidence that the goods are shipped by a particular ship.” Honorable senators will have noticed that the provisions of the sub-section which are set out have the effect of making the received for shipment bill of lading a shipped bill of lading. That was the intention of the New Zealand act. I point out, further, that, though New Zealand passed that act, it has never operated in relation to foreign trade, although within New Zealand it is probable that it has operated. It has not operated in relation to . foreign trade because of the same difficulty that I foresee in this case, namely, that the contracts in relation to which the goods became the object of commerce were made on the other side of the world, and that the New Zealand law could not apply to a. contract which originated there. Although New Zealand put this legislation on its statute-book, it has not been able to operate it, since the financial in stitutions’ there have taken up the same attitude that has been adopted during along course of years in Australia, and” the banks have steadfastly refused to negotiate other than shipped bills of lading. I could say a good deal more in relation to this matter, but I ask the Government, in view of the great importance of the issues involved - and I think that the Minister will readily acknowledge that they are of the utmost importance - to hesitate, awl give reasonable time to enable those most concerned, those who have to find the money, to look carefully into- the subject. My first objection is that the proposal is a departure from the principle of uniformity. I have no objection whatever to those clauses of the bill that provide for the nullification of . any special conditions of bills of lading which oust the jurisdiction of the Commonwealth courts. That is quite another matter. The rules lay down that certain parties may, if they so desire, arrange for special conditions, but a special condition that is put into a bill of lading against the desire of the consignee in Australia, ousting the jurisdiction of our courts, is a definite hardship to our people, and I think that the Government is justified in attempting by legislation to remove it. Clause 7, however, has a very direct bearing upon the rules, altering to some extent, I believe, their purpose and legal effect, and in that way varying the uniformity of the legislation which it was originally intended to establish in various parts of the world. Then, again, it seems to me that the proposal brings into one of the most important of all the contractual obligations in relation to overseas commerce a whole sea. of doubt and uncertainty. As 1 attempted,” briefly, to state last evening, the law of merchants, the practice of the courts, and the almost unvarying practice throughout the world in relation to these matters, has established such precedents that all parties know exactly where they stand; but under* clause 7 nobody will know where he stands until some one finds out to his cost, and then commerce will have to revert to whatever position is then established by the law. Assuming that it is possible, and I do not think it is, for legislation, passed by the Commonwealth Parliament to affect the contractual obligations initiated in Great Britain or in a foreign country-
– It is certain that it cannot be done.
– I am practically certain that it cannot, but, in any case, I think that it would be detrimental for Parliament to attempt to setup such a situation. In any case the inclusion of the clause is, if the legal position is as I believe it to be, misleading. If there are persons who desire to have the banks negotiate these received-f or-shipment bills of lading, that can be secured under the terms and conditions of the contract into which they enter. It is open to anybody to have his goods shipped on a received-for-shipment bill of lading, and to put those conditions into the letters of credit which he establishes, and he can give the bank the full legal right and authority to draw on letters of credit against the receivedforshipment bill of lading. Once that has been done he must honour his draft when it comes along. But for the Government to step in and say to the banks-
– The banks will please themselves what they take.
– Yes; but it throws an obligation on the banks that is hardly fair to them. The shipping companies have desired for some time to have these drafts negotiated on receivedforshipment bills of lading. I think that I know why the trouble has arisen. Almost the whole of it has occurred in relation to our wool credits. Inasmuch as the banks have never negotiated or bought the drafts drawn on the letters of credit until they have had a shipped bill of lading to attach to the drafts, according to the terms of the contractual obligations they have entered into, and owing to the fact that the wool-buyers have to pay for the wool when they purchase it, there has always been a hiatus between the time the wool is bought and the time when it its shipped. The banks are, I think, in the habit of charging intereston the money which they advance to pay their customers pending the time when they can reimburse themselves by drawing against the letters of credit. I believe that the practice of the trade for a long time has been that those who establish the letters of credit always strenuously refuse to pay this interest, with the result that it has come out of the wool-buyers’ commission, or whatever form his payment may take. I have not the slightest doubt but that the real reason for that is that those who buy the wool on the other side of. the world are very anxious to have their wool shipped, but, if there is nobody in Australia to see that it is sent by the first available vessel, the possibilities are that a competitor may obtain prior shipment. On that account they put the onus on the man who is representing them in Australia to see that the wool is shipped, and he knows that if he can obtain prompt shipment he will have little interest to pay. Therefore, he naturally busies himself to secure shipment as quickly as he can. The shipping companies have always had a good deal of trouble with the wool-buyers. There has always been a certain amount of fighting to see who can get his wool away first, even where space has been booked. Naturally, I suppose, wool-buyers are very anxious to see the banks negotiate received for shipment bills of lading, because the hiatus to which I have referred immediately disappears once that is possible; but in effect the contracts entered into on the other side of the world, in establishing letters of credit, stipulate for these shipped bills of lading, and it cannot, therefore, be done. I do not think the responsibility for remedying that difficulty rests upon the Government. I think it rests upon the individual who wants received for shipment bills of lading negotiated. The individual can negotiate for these himself, and the best plan for him to adopt is to definitely stipulate for them in the contracts into which he enters. I have endeavoured to put the case clearly. I admit it is involved and somewhat difficult, but in a matter of such grave importance the Government will be well advised to leave well alone. If they allow the Senate a little time, I have no doubt the position will be carefully and exhaustively investigated, and Ministers will be then able to state definitely whether all parties, particularly those who are vitally involved, are perfectly satisfied that the position as set up in the bill holds no risk for them. It may be that on a close examination of this more or less complex subject it will be found that all is well. I doubt it, but it may be possible to arrive at a solution satisfactory to all parties concerned. All I now ask is that sufficient time be given to permit of that full and detailed consideration which the importance of this involved subject warrants.
– I agree with Senator Greene that this is a very important bill, dealing, as it does, with the whole law applying to the sea carriage of goods and the contractual obligations and liabilities relating to bills of lading. It repeals the Sea Carriage of Goods Act 1904, and is, I understand, the result of various conferences held, not only in Australia, but also overseas, one of the most recent being held at The Hague in 1921. It attempts to codify the law, not only interstate, but also international, dealing with the shipment of goods. That it will succeed in doing so I am not prepared to say, after listening to Senator Greene. One would expect that in a bill of this nature an obligation would be imposed on the shipping companies to provide seaworthy vessels, and that they would be liable for acts of negligence or incompetency on the part of their servants. As the bill attempts to provide uniformity in respect of this particular class of legislation, it is very important that the rights of shippers of goods should be adequately protected. That the measure will have a world-wide effect is shown in clause 4, which provides - (1.) Subject to the provisions of this Act, the rules contained in the schedule to this Act . . . shall have effect in relation to and in connexion with the carriage of goods by sea in ships carrying goods from any port in the Commonwealth to any other port whether in or outside the Commonwealth.
The first point I seek to establish is that some obligation should be imposed on the carriers of goods to provide seaworthy ships, but clause 5 seems to relieve them of any liability in that respect. It reads as follows : -
There shall not be implied in any contract for the carriage of goods by sea to which this Act applies any absolute undertaking by the carrier of the goods to provide a seaworthy ship..
– If the honorable senator will look at articleiii., he will see that the carrier is bound, before and at the beginning of the voyage, to exercise due diligence to -
– I do not claim any particular knowledge on this subject, and I commend Senator Greene for the thorough way in which he has dealt with it. That, after all, is only characteristic of the honorable senator, since he never takes up a subject unless he deals with it thoroughly. I am merely asking for information, and I shall be glad to hear how the article which Senator DrakeBrockman has just read can be reconciled with clause 5, which appears to relieve the carrier of any responsibility for the seaworthiness of the vessel. I wish, also, to call attention to articleiv., paragraph 2, which provides -
Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from -
Various maters are specified, such as the act of God, an act of war, quarantine restrictions, and so forth, for which they are not to be held liable. They all seem reasonable enough, except the provision that they shall not be responsible for loss or damage arising or resulting from -
Act, neglect, or default, of the master, mariner, pilot, or the servants of the carrier in the navigation or in the management of the ship.
That is an extraordinary provision. Apparently, neither the carrier nor the ship will be liable for anything. Unless it can be shown that other regulations govern this provision in some way, I shall feel disposed, in committee, to move for its deletion, because it appears to exonerate completely the carrier and the ship from any liability, due to the negligence of their servants. I am aware that shipping companies have a very important work to do, and I agree that they should be adequately protected.
– The honorable senator will find worse provisions in the present bills of lading.
– After the lengthy deliberations and the many conferences that have been held, the bill should certainly be an improvement on the present practice, otherwise there could have been no reason for its introduction. I hope that the Minister in charge of the measure will be able to furnish a satisfactory explanation concerning the provisions to which I have directed attention.
– One may assume from the remarks made by the honorable senator who has just resumed his seat (Senator O’Loghlin) that he does not know vary much about bills of lading. I agree that they are extremely difficult documents to understand. Many persons who have been handling them practically all their lives really know very little about them. Senator Thompson stated, by way of interjection, that this provision in bills of lading was as old as Noah’s Ark. That is very nearly true. There are many older provisions which, from the point of view of the owner of the goods shipped, are very difficult to accept. Senator 0’Loghlin has directed attention to paragraph 2 of article iv., which states that neither the carrier nor the ship shall be responsible for loss or damage arising or resulting from any act, neglect, or default of the master., mariner, pilot or the servants of the carrier, in the navigation or in the management of the ship. It must not be forgotten, however, that there is an obligation upon the owner to provide a competent master and a capable ship’s company for the navigation and management of the ship. Having insisted upon that precaution, surely we have gone far enough. A competent master, being but human, may, of course, be guilty of an error of judgment.
– In that case, the damage would be covered by insurance.
– I was just about to make the same remark. We provide against errors of judgment, which any mau may make, by a system of insurance which has grown up, and which covers all these risks.
– But the provision I object to makes mention of neglect or default, not errors of judgment.
– Senator O’Loghlin, having given this subject two or three minutes’ consideration, -would alter what has been the subject of conferences between men of wide experience of the last 25 year’s. Agree.ment was only recently arrived at, and the recommendations of the conference are embodied in the schedule to this bill. I think I know a great deal more about bills of lading than Senator 0’Loghlin does. Probably, also, I know more about the law relating to bills of lading, and more about the law of merchants, and, possibly because I do know a little more than he does, I would hesitate a long time before I would dot an “ i “ or cross a “ t” in the schedule to this measure. Certainly I would not do it after two or three minutes’ consideration and the casual reading of the bill, i Senator O’loghlin. - How can the honorable senator say that I have only given it two or three minutes’ consideration ?
– 1 know the honorable senator could not have considered it for more than a week at the outside.
– The honorable senator is quite right.
– I have had the measure before me for tho same time, and I have an advantage over the honorable senator in that I possess some knowledge of bills of lading and the law, and yet, as I have said, I would not advise any alteration of the schedule. I agree almost entirely with the remarks made by Senator Greene. Therefore, it is not necessary to go over the ground which he covered in his speech. With him, I see danger in any attempt to tamper with this matter. I urge the Government to give very careful consideration to the provisions of clause 7. I understand that a similar measure has been passed in Great Britain, adopting the schedule, exactly as it appears in this bill, and covering that schedule with a bill, to all intents, the same as this measure, but without the provisions contained in clauses 7, 9, and 10. I think clauses 9 and 10 may be retained, but not clause 7. Senator Greene has shown how, in New Zealand, with even greater limitations and certain Safeguards, there has been an attempt to convert a received for shipment bill of lading into a bill of lading. In practice, it has been found that this cannot be done. A similar attempt was made in the United States of America. The Hayter act provided that a received for shipment bill of lading should be, for all purposes, a bill of lading. When that law was under review in Great Britain, it was decided that, in spite of its provisions, a received for shipment bill of lading was not a bill of lading as understood in Great Britain, and as understood ‘ under the law of merchants. Consequently, the American act, which sought to endow a received for shipment bill of lading with all the attributes of the well-known bill of lading, was on absolute failure. Now, it appears, we are attempting to do the same thing.
– In the United States of America there was an attempt to give received for shipment bills of lading’ in respect of goods on rail at Chicago and other inland centres, and ‘obviously there was grave risk of miscarriage.
Senator DRAKEBROCKMAN.Yes, but the principle is the same. I believe this provision has been inserted at the instigation of the shippers, but without very much consideration on the part of the Government. Otherwise I cannot see how it got into the bill. It may be very desirable that a provision similar to that in clause 7 should be included in both Australian and British acts, but it is a fact that it is not in the British law, or in the law of those other countries to which we ship our wool. I am afraid, therefore, that if clause 7 is retained, doubt will be created as to its possible effect upon bills of lading. I appeal to the Government to consider this matter very carefully. I know they are aiming to overcome contemplated financial difficulties in connexion with the present wool clip. It is estimated that Australia this year will produce about 2,000,000 bales of wool worth at current rates about £72,000,000. It is thought that, if a received for shipment bill of lading could by some means be converted into an ordinary bill of lading, as soon as the wool was bought and put into a shed for the purpose of ultimate shipment, a received for shipment bill of lading could be sent to London, where the contracts originated, and the money lifted, thus relieving the financial situation. I fear that is a vain hope. Credits are established in England. Those who provide the money expect to receive a bill of lading, a document which, in effect, shows that certain goods have been put on a ship for shipment to their ultimate destination. That is what they contract for, and that is what they are entitled to receive. If they do not receive an ordinary bill of lading they will be justified in refusing to negotiate any other instrument. Senator Greene quoted two well-known cases which have a direct bearing on this subject. The Diamond Alkali case, the second mentioned by the honorable senator, is reported in King’s Bench Division 1921, vol. III., page 443. The Marlborough, Hill case, the first one referred to by the honorable senator, established that a received for shipment bill of lading was little more than a receipt for goods handed over to a shipper for the purpose of shipment. Although at the time the decision was made there was some doubt as to how far it actually went, the Diamond Alkali judgment definitely determined that the document was nothing more than a receipt for goods. It was not a documentor title such as an ordinary bill of lading, capable of negotiation.
– Why should it not have the same value as a bond certificate, which is a negotiable document ?
-It would be a negotiable document within Australia. I do not wish to deal at length with the legal aspect of this question, particularly at this juncture. Bills of lading are surrounded by all sorts of difficulties and customs which have been accepted by merchants through generations, and have become the law governing shipping matters generally, not merely in the British Empire, but all over the world. To attempt to force something new on to the law of merchants is a dangerous proceeding. All we can succeed in doing is to create a doubt as to the position. Under the existing law there is no doubt. The schedule to the bill has been drawn up after very careful consideration, and defines the presentposition in regard to bills of lading. It does not seek to introduce any new principle, but is merely an attempt to codify and unify the law, which has grown up as a result of custom, more than anything else, during the last 100 years. It is true there is a number of acts of Parliament on the statute-books of various countries’ which have endeavoured, from time to time, to deal with this matter. All these acts of Parliament and the custom of merchants, not only in respect to bills of lading, but also in regard to many other things, having been considered, a code of rules has been adopted which it is hoped will be accepted in all countries. They are at present, in many respects, unwritten laws, but are accepted principles governing the trade intercourse of merchants. They will have, in fact, to be passed by various Parliaments. I warn the Senate of the danger of endeavouring to insert in this bill a new principle which is not embodied in the present law. Other nations are as busy as we are in placing these rules on their statute-books. They have already been passed in Great Britain, but I understand they will not be proclaimed until January next,, or until the various parts of the British Empire, at all events, have passed a similar measure. T do not think any other portion of the British Empire will endeavour to pass a provision similar to clause 7 of the bill. If all portions did it would, perhaps, have some effect. If this is the only country legislating in this particular direction, it will have no greater effect than I have already indicated.
– Such a provision, if enacted, would be binding on our interstate trade.
– Undoubtedly, but I do not think it is required in that trade. In my opinion, it would not be binding on overseas trade.
– It would be from this side.
-It would not be binding on interests in Great Britain which establish credits for buying our wool, wheat, and other products, and which have stipulated that a shipped bill of lading, and not a received for shipment bill of lading, is essential.
– I think that is perfectly clear.
– I have no doubt about it, and if that is the position, what is the advantage of adopting clause 7, when persons over whom we haveno jurisdiction can dictate the terms ?
– They mightsay that they willaccept.
– They might. Under this clause they are in a position to decide which course they will follow. Provision is made in the bill for ordinary bills of lading, andfor received for shipment bills of lading. Under paragraph 7 of articleiii., a received for ship- ment bill of lading may be taken as an ordinary bill of lading.
– It gives theshipper an option over twodifferent kinds of bills of lading.
– That is so. Provision is made for a shipped bill of lading, which is well known to the merchant, and also for a received for shipment bill of lading, which is of comparatively recent origin. The latter system has been triedin America, New Zealand, and in other countries. Persons who establish credits in London, and who provide the money for the purchase of produce in Australia, are at libertyto say that they will or will not negotiate a received for shipment bill of lading. They are at liberty to say if they desire a shipped bill of lading, which they are accustomed to receive and negotiate.
What more is needed? Even if clause 7 of the bill is adopted, we shall beno nearer our objective. The individuals or institutions who have the money, and who establish the credits overseas for the purchase of our products, have the last word. We cannot dictate to them, whatever laws we pass. I was prepared to deal with this subject somewhat fully, and to quote from a number of judgments and documents which I had collected,but, since Senator Greene has discussed it at length, I shall not do so. During the short time at my disposal I have endeavoured to grasp the meaning of the bill. Unlike Senator O’Loghlin, I do not profess for one moment to fully understand it, but I know sufficient concerning it to realize that it is very dangerous to endeavour to graft a new principle on to an old system. I trust theGovernment will give the matter very carefulconsideration before they finally commit themselvesto the retention of clause 7. I have not gone fully into the subject, as Senator Greene has already dealtwith it closelyandeffectively, and hasshown, in excellent language and clear logic, that in clause 7, the Government aresuggesting a very dangerous departure from accepted principlesgoverningthe law ofmerchants.
– The principal remarks in the speeches of SenatorGreene and Senator Drake-Brockman were directedto the received for shipment bills of lading concerning which I do not share their apprehension. I do not intend to dispute the legal position as outlined by Senator Drake-Brockman, but Iconsider that the Government have very good legal advice behind them, andknow where they are when they submit such a clause. The few remarks I have to make in connexion with the measure will be from the commercial, and, probably, the commonsense, point of view. It seems to me that if clause 7 remains in the bill no harm will be done, and it may provide a great convenience to the shipping community. The provision maynot betaken advantage of, but it willbe there if required. I do not consider it as being in the same category as the American experience, because the trouble there arose in consequenceof receivedfor shipment bills of lading being given for goods placed on railatChicago and other great inland manufacturing centres. From the situation which thus arose a good deal of discontent was created. I understand that the object in view in this instance is very largely to facilitate the financing of wool shipments, and a provision of this nature may be a great convenience. A shipper may send 10,000 bales of wool to the wharf for shipment by a certain steamer, which may be sailing a fortnight later, and. if it is legal for him to obtain a signed received for shipment bill of lading it will assist him.
-Under this bill he could put wool into a shed on any wharf and not ship it for twelve months. It would still be covered by a received-for-shipment bill of lading. There is no limit as in the New Zealand act.
– That is a different matter. If the provision is taken advantage of, the vessel in which a consignment is to be shipped should be indicated and a time limit imposed.
– But there is no limit.
– The banks could insist upon it. If a representative of one of the reputable business houses went to a bank with the necessary documents, including a received for shipment bill of lading, for shipment by a certain steamer within a specified time, the bank would be prepared to negotiate. It would be an improvement, and a great convenience to the people concerned. There might be occasions when the banks would turn it down and have nothing to do with it, but as there is a. chance of its being a convenience, I see no harm in allowing it to remain. The same principle is. being observed to-day in interstate shipping. I have had a great deal of shipping experience, and had I the legal knowledge of Senator Drake-Brockman, or the felicity of expression possessed by Senator Greene, I might make a valuable contribution to this debate; A shipping receipt is made out in the following form : - “ Received from………… for shipment by the company’s steamer ………. or any other of the company’s steamers.” If the goods do not go by one vessel, they go by another. Such a document is negotiable, and is never questioned by bankers. What is proposed is only an extension of that principle.
– The honorable senator is saying that the King’s Bench Division does not know what it is talking about.
– I have said nothing of the kind. If the honorable senator had stated that I had said that the Government’s legal advisers did not know what they were talking about, he would be nearer the attitude he himself has adopted. I am not discussing this question from the legal aspect, but am merely dealing with it from a common-sense point of view. As a member of the commercial community, I welcome the bill as something which has been wanted for a long time. I am only disappointed that there is not in it that uniformity which I thought had beenobtained. Probably the difficulty is confined to one clause; if so, it is not a very great weakness. In the past the fact that we have had differing bills of lading has caused great inconvenience and loss to both importers and exporters. Personally, I am glad that by the bill matters will be capable of settlement in Australia, as hitherto loss has been incurred because the venue was in a foreign country. I am disappointed that a sample bill of lading has not been included in the bill. Possibly that is impracticable, but it would be very desirable to have a uniform bill of lading capable of being used on all occasions. A bill of lading, as honorable senators know, is a very complex document. It is the result of years of trading, and has been handed down from time immemorial The stage has been reached when we should have a plain, straightforward document, setting out that certain goodshave been received from persons mentioned therein for shipment to a specified place in a named ship. In that view I am supported by commercial authorities. All reference to pirates, the perils of the sea, or the acts of God, and other dangers referred to in the present bills of lading should be, and now will be, dealt with by statute. Honorable senators are probably acquainted with the rigmarole in the bills of lading now in use; Such a cumbersome document should be done away with, and a simple form adopted, relyingon the law behind it for details. It is in keeping with those connected with marine insurance. Some insurance companies are so wedded to the old customs that they continue to use forms beginning with a reference to God, and concluding with “ amen “ ; and containing a lot of legal verbiage which it tires one to read. I welcome the bill, and hope that it will soon become law.. Serious objection has been taken to clause 7, but as it provides a convenience which may be largely availed of, I consider that it is advisable to retain it.
– For a long time there has been a desire to obtain uniformity in matters relating to shipping, and the subject was carefully considered at ‘the Imperial conference; hence this bill. Senator Greene made a forcible speech in connexion with clause 7. Merchant princes, shipping people, bankers, and the legal fraternity hold different views on the matter, and I am forced to admit, with Senator O’Loghlin, that I do not know very much about it. When one reads a bill of lading, he sees on one side that the ship-owner is not responsible for the safe transit of the goods, and on the other side of the document he reads what he believes to be proof that a ship-owner is responsible. Documents of that nature are difficult of interpretation to the ordinary layman.
– No commercial man would ship anything if he first read a bill of lading.
– We are told that simple bills of lading, such as we all desire, are not practicable. The sole desire of the Government is to ensure uniformity in these matters. I realize that a received for shipment bill of lading must contain terms .and conditions of which the banks will approve; otherwise they will not lend money on the document. In these matters the banks always have had the last say, and I suppose that they always will. In view of the fact, that there is such a difference of opinion regarding the effect of clause 7, I consider that it would be best to adjourn the consideration of that clause until its effect can be more carefully considered. We have no right to pass a bill hurriedly, and then discover, later, that a mistake has been made. The Government does not desire to do that. I- hone that the Senate will agree to the second reading of the bill, in which case I shall ask, later, that progress be reported, so that tha questions which have been raised may be carefully and exhaustively gone into before further progress is made.
Question resolved in the affirmative.
Bill read a second time.
Clause 1 agreed to.
Debate resumed from 6th August (vide page 2841), on motion by Senator Pearce -
That the papers be printed.
– I have read with a good deal of interest the budget which has been presented by the Treasurer. With many of his statements I agree, but there are one or two outstanding features of his speech to which I desire to draw attention. I was disappointed that the Treasurer did not refer to one very important institution, namely, the Institute of Science and Industry^ The recent war brought prominently before the peoples of the world a realization of the vital place which science holds in the development of a nation. The general public are beginning to realize that research laboratories are the important centres from which the science which improves products, abolishes waste, establishes new industries and preserves life, may reach out helpfully into all the nation’s activities that are dependent on the transformation of matter. “ It is through this same science that modern civilization is superior to ancient primitive barbarism. Just in what respects are we ahead of our forbears? A series ot Olympic games has recently been held. Could the present champions hold their own against those of olden times? How would a Roman consul, or an Egyptian priest, score under a modern intelligence test? I would not hesitate to say that the result would be unsatisfactory.
Modern mau has . at his command the accumulated knowledge of the ages. He can out-rival his early predecessors in his speed of travel, either upon, under, or above the earth or the sea. It is science that gives him the power that runs his engines, and the metals that make his machines by means of which he negotiates either the earth, the sea, or the air. Science might also be called upon to show cause for some of the momentous changes that have occurred in the world. For example, the powerful confederation of commercial cities about the Baltic, known as the Hanseatic League, owed its rise largely to the herring when they shoaled abundantly in the surrounding seas. But, in 1424, these fish suddenly disappeared from that region to reappear in that of the North Sea. That brought about the fall of the powerful league, and at the same time gave rise to the sea power of the Netherlands and our own great Empire. What caused the migration of the herring? Scientists tell us that the alkaline reserve of fish is very sensitive to changes in the carbon dioxide content of the water, and that the desertion of the shores by them after storms is due to the carbon dioxide of the air being mixed with the sea water. This drives the herring away. Then, again Beuchels, a Dutchman, discovered a new method of curing herring, so that they could be preserved and sent all over Europe for use during certain religious festivals. The Dutch boats extended their cruises along the British coast, and the British Navy was used by Charles I. to keep the Dutch from fishing in British waters. This led to war between the two nations. At- this time Grotius, the celebrated Dutch jurist, wrote his famous treatise Mare Liberum, advocating the doctrine of the freedom of the seas, and Seldon, the British jurist, replied with his Mare Clausum, defending the British claim.
Then, again, the search for a rare polymer of isoprene, called by the Indians caoutchouc, set the Belgians cutting off the hands of little children in the Congo, and led to similar atrocities in the Putumayo. This all occurred because the scientist was behind his time in the manufacture of rubber. Numerous similar instances might be cited if time permitted, but, turning to the other parts played by science in the course of civilization, we note that scientists have found that chemical changes of almost inconceivable minuteness, affect the balance .of the body. For example, adrenalin produces a perceptible effect upon the muscles in a dilution of 1 in 330,000,000 parts. Its action brings about the liberation of glycogen from the liver for the use of the muscles, and at the same time increases the rate and force of the heart beat, thus promoting effective muscular innervation. It is interesting to consider for a moment the action of this hormone in the removal of fatigue from the muscular system. During continued effort there is a gradual accumulation of the waste products of physical activity clogging the muscular mechanism, together with the depletion of ite store of energy, thus inducing fatigue. The irrigating action of the blood washes these waste products from the muscles, and at the same time deposits glycogen, an energy-producing sugar. Thus, by the action of this hormone, continued action is possible, for it has been calculated that adrenalin will accomplish in less than five minutes that which otherwise would re-, quire an hour’s rest.
In the little-understood field of hormones - which may for convenience be called chemical substances produced in an animal organ, which being carried to an associated organ by the blood stream, excite in the latter organ a functional activity - much has been accomplished. The hormone that Professor Abel extracted from the pituitary body has a very high potency, for it can be detected in a dilution of more than 80,000,000,000 parts. In a recent copy of the. journal of the American Medical Association, Allen and Doisy set out details - particularly interesting to breeders - of a new hormone, which when injected into the female animal makes her assume the prerogatives of leap year irrespective of the calendar.
Goldsmith, in his work on Mechanism and Physiology in Sex Determination, contends that sex in birds and animals depends upon a balance of opposing hormones present in each sex. It seems, then, that we must regard sex, with all it means throughout the range of animate nature, with all its influence on the development of art, literature, morals, and social life, as essentially a chemical affair, regulated, repressed, stimulated, or reversed by minute quantities of certain definite compounds in the blood. Later experiments indicate that a certain specific vitamine, a mysterious substance which in minute quantities is essential to life, is necessary in the food for reproduction, in addition to being essential for growth and health. This, too, may evolve a reinterpretation of history, for the deletion from the food of a certain vitamine known as “ X “ or “ Y “ may. bring; about far-reaching changes in the habits. Further, the chemist can so sensitize a man by an injection of hematoporphyrin that he will be light struck and die if he ventures out of doors, even on a cloudy day, yet will feel well so long as he remains in the house.
The late Jacques Loeb exhibited frogs which had no father but a fatty acid, and he held that the artificial production of living beings from lifeless matter might some time be achieved in the laboratory. He discovered that when the unfertilized eggs were subjected to treatment with butyric acid in a hypertonic solution of sea water it brought about a normal fertilization. Loeb also fed sugar to plant lice, which resulted in the sweetening of their disposition ; they grew wings. The administration of alcohol, aswe might expect, prevents any approach to this seraphic state. Other scientists have shown that the addition of magnesium chloride to the sea water used in the scheme of artificial parthenogenesis will cause the fish to develop one eye in the centre of thehead instead of the ordinary two.
– Did the honorable senator say that life has been produced from inorganic matter?
– No; but that Loeb said that he thought that it might some time be possible.
– That has been said for the last thousand years.
– Neither I nor anybody else who knows anything at all about science can draw the dividing line between what is organic and what is inorganic matter. Hitherto the scientist has confined himself to the task of providing the conveniences of life. In future he may gain control of life itself. He may mould stature and character, as the sculptor his clay. There is one nation to-day carrying on extended research in order to isolate a vitamine that may be added to the food of the people in order to increase their average height.
The world knows too well the evil influences on the race of certain chemicals, but some day the scientist will turn his attention to the preparation of compounds that will contribute to human welfare instead of woe, and will stimulate virtues instead of vices. During the war the scientist of necessity concentrated his attention on the preparation of compounds that were dangerous to human life, and the result was incalculable.
Take, for example, the preparation of dichlordiethyl sulphide, or what is commonly known as mustard gas. This com - pound was first made by Guthrie, an Englishman, in 1886, but he found it so dangerous to work with that he abandoned the investigation. It was then practically consigned to Beilstein’s Dictionary, which was an epitome, amongst other attributes, of thousands of organic compounds that had been invented and never utilized. But on the 12th July, 1917, our soldiers were sprinkled with this villainous substance. Its success was so great that the Germans henceforth relied almost entirely on its poisonous qualities. The making of so dangerous a compound on a large scale was difficult to overcome. Yet it was successfully solved. The raw materials are: chlorine, alcohol, and sulphur. The effectiveness of this gas depends on its persistence. It is a stable liquid, evaporating slowly, and not easily decomposed. It acts like steam, producing burns that range from a mere reddening to serious ulcerations, always painful and incapacitating. As a result of the experiences in the last war, I believe that chemical warfare will be the warfare of the future, and that nation will be especially favored that stands highest in science and industry.
Science is also most beneficial in times of peace. In this great country, where we are now starting a new cotton industry, how essential it is that the infant footsteps should be efficiently and effectively guided. It is not too much to say that in the United States of America the chemist added some £30,000,000 per annum to the value of the crop by discovering ways of utilizing the cotton seed that was at one time thrown away or burned as fuel. The genealogical table of the offspring of a cotton seed shows the marvellous ramifications into which it enters. On cutting open the seed it will be observed that it consists of an oily mealy kernel encased in a thin brown hull. The hulls, amounting to from 700 to 900 lb. a ton of seed, are ground up for cattle feed or paper stock, or used as a fertilizer. The kernel of the seed, on being pressed, yields a yellow oil, and leaves a mealy cake. This last, when mixed with thehulls, makes a good fodder for fattening cattle. This seed contains about 40 per cent. of protein, a compound that forms the characteristic constituents of the tissues and fluids of the animal body, and is, therefore, also a valuable feeding stuff. The seed also contains about 20 per cent, of oil, which can be recovered by means of hydraulic pressure. This oil, when purified, is frequently sold as pure olive oil. Some of the fat contents of this oil can be hardened by hydrogenation, and sold after treatment as margarine, a substitute for butter. It was claimed that margarine was deficient in vitamines, those mysterious substances which in minute amounts are necessary for life, and especially for growth, but this was quickly overcome by mixing the margarine with a small quantity of butter, or churning it -with some milk, and thus was supplied all that was deficient.
I need hardly remind honorable sena- . tors of the destruction of the -cotton crop in America by the boll weevil. Naturally this had a very serious effect on the oil mills of the states, but chemists were able -to advise the mill-owners that peanuts would produce an excellent substitute for the cotton seed. It was found that the pea-nut ‘Contains 50 per cent, of oil and 30 per cent, proteins. The result was that in 1916, after the ravages of the boll weevil, the southern states had over £11,000,000 added to their wealth. As meat .and dairy products become scarcer and dearer, we shall become increasingly dependent on vegetable fats. “We should, therefore, devise means of saving what we throw away, and raise as much as we can within our own borders.
In order to show exactly what can be obtained from a cotton seed, I have prepared a table. It is based on Dr. Slosson’s table, but I have made a few alterations. The table is as follows: -
This table shows the many ramifications into which the cotton seed enters, and enables one to readily appreciate the fact that the scientist will play a very vital part in the development of this industry. There is no doubt that we are gradually substituting for the natural world an artificial world, moulded nearer to the desire of men’s hearts. In the ancient drama it was the deus ex machina that came in at the end to solve all problems of the play. It is to the same supernatural agency, the divinity in science, that we must look for the uplift of society.’ It is by means of applied science that the earth can be made habitable, and a decent human life made possible. Therefore I contend it is a crime against society for the Government not to make available in the most simple manner possible the uses of the Institute of Science and Industry. I maintain that the Government should deal with the situation both firmly and effectively. If the want of efficiency lies in the control, alter it. If not, wherever the fault lies, remedy it.
– Alter the Government.
– I do not know that the Government thoroughly appreciate the position. I am trying to make them appreciate it. Nothing should be allowed to stand in the way of this most necessary adjunct to our present system of civilization. Our public will become increasingly enlightened in the achievements of science, and will eventually demand that something be done to ensure the firm establishment of the institute that should be developing the power of science in every domain which science touches.
At this point, I want to bear witness to the good work that has been done in our serum laboratory at Royal Park. It is doing the class of work for which the people of Australia are looking, and which is likely to be of material benefit to them. Our research laboratories in the Defence Department are also doing excellent work, and the Government are bound to aid their activities, so that when any crisis does arise, the chemists anay be ready to deal with it.
– Is that possible with the money available?
– It is utterly impossible for the people who are controlling these laboratories to do anything like the work they should be doing with the meagre amount of money placed at their disposal.
I should like to deal with the development of science at greater length, but no benefit would be derived from_doing so. Therefore I pass for the moment to the subject of standardization. Those concerned with industrial development have long felt the absolute necessity for some system of standardization in connexion with’ our products. If Australia is to profit by the experience obtained during the industrial development of the older countries, an effective scheme of standardization is necessary, as the industrial development of the Commonwealth is now at the critical stage at which the introduction of satisfactory standards would be most effective in promoting efficient, and therefore economical, results. The latter is especially necessary at present, in view of the heavy burden of debt due to the war. Standardization is receiving keen attention, and is being strongly organized in all the more highly developed industrial countries. Its value in preventing wastage of labour and materials, and generally in facilitating economic production, was clearly demonstrated during the war. National “ standardizing” bodies are now at work in Austria, Belgium, Canada, Prance, Germany, Great Britain, Holland, Italy, Japan, Norway, Sweden, Switzerland, and the United States of America; and all these, with the exception of the British Engineering Standards Association, have been created during or since the war. Standardization is, therefore, of national importance to Australia, since our industries, without its aid, will be placed at considerable disadvantage when competing with those of countries in which it is in active operation.
Many years ago, the Institution of Civil Engineers, England, one of the oldest technical and professional bodies in the world, was instrumental, in collaboration with other technical bodies, in founding the British Engineering Standards Association. The specifications issued by the organization have since been accepted even in some foreign countries. They have undoubtedly fostered
British trade,, and have greatly assisted in the development of the engineering and metallurgical industries. The Australian manufacturer of materials of any kind has such a comparatively limited market for his output that it is essential that every means should be adopted by him to secure efficiency of production if his product is to compete with imported material.
Brief consideration of the subject will show many other directions in which industries will be favorably affected by the provision of satisfactory standardization. Our railways, roads and buildings, our iron and steel industries, and many others, all afford numerous instances of the need of standardization of both materials and methods. The essence of the success of the British Standards Association is that its standardization’ work has been purely voluntary, and has been brought about by the co-operation of all directly interested in it. The specifications agreed upon, therefore, equitably conserve the interests of both the consumer and the producer, and their general acceptance is of mutual advantage to both. From the consumer’s point of view little need be said beyond those two outstanding facts - that standardization brings about a reduction in price, and an improvement in quality. At this point I may supply a few concrete examples.
In steel production one firm rolling small sections of steel bars, horseshoe steel, &c, is obliged to keep 80 sets of rolls. As the average daily wage-sheet is £70, and as it takes one hour to change a set of rolls, £9 is spent upon unproductive labour. Sometimes three or four changes of rolls are necessary per week. A considerable reduction of the number of sections would be possible without impairing the efficiency of the supply, with a consequent reduction in wages and time. A reduction in the variation of sections would further reduce this loss by stabilizing the demand for certain standard sections, thus enabling large stocks to be carried, and avoiding frequent changes of rolls.
In the highly technical industry of three-phase motor manufacture, standardization should be possible. Three-phase motors ranging from 1 to 50 horse-power are made in twelve different sizes, necessitating twelve different patterns; in four different frequencies necessitating 4S patterns; in five different voltages necessitating 240 patterns; in five different speeds necessitating 1,200 patterns; in three different styles as to method of drive, &c, necessitating 3,600 patterns, and in three different types - ventilated, enclosed, &c. - necessitating 10,800 patterns. What Australian manufacturer could carry all these patterns? An adoption of one frequency, which could be done without impairing frequency, would mean a reduction to 2,700 patterns; and a reduction to one voltage would mean 540 patterns. A further reduction would also be possible in regard to speeds, &c. In interdependent industries a reduction in one line of an article frequently means a corresponding reduction in dependent manufactures. There are, for example, 60 to 70 different sizes of bedsteads made, which might bc reduced to, say, six, entailing also in the sizes of mattresses manufactured a reduction from 60 or 70 to 6. One firm supplying steel goods to collieries has twenty different patterns of skip wheels. The skips are all 10 ton, uniform gauge skips, and the wheels are all 12-ia. wheels: In some cases two or more patterns are for supplying wheels to the same colliery. There is no need whatever for more than one design other than the individual fancy of the purchaser. The need for a standardized system in engineering work is illustrated in the case of maps. The position in “New South Wales in this regard is set out in, the following table of comparison: -
The waste of effort and time involved in the comparison of plans is obvious. It should be possible to take the maps of all government departments and correlate them. All these are matters that should receive attention. There- are others of which I could speak, but I do sot wish to tire the Senate.
– Go on. We are all much, interested . in the honorable senator’s speech..
– That the Commonwealth. Government thoroughly appreciates the importance of the work that is. being done in this direction is seen in the fact that- it has added £5,000 to the Estimates so that the Standards Association may be able to carry on. As a member of the Standards Association’s main committee, I thank the Government for the very great interest it has taken in the work of that body.
– Can the honorable senator give us an illustration of what has been done in regard to architects’’ specifications for cement?
– Formerly, every engineer and every architect in- Australia made his own cement specifications, which was almost impossible for the manufacturers. Today the Standards Association, with, the approval of the Commonwealth Government, has introduced a standard specification. It does not simply say, “ Here is a specification, take it or leave it.” All interested in the preparation of the standard specification - architects, engineers, manufacturers, and users - are formed into a panel, so that when the specification comes out it is satisfactory to all, and the result is that in Australia to-day we have a satisfactory standard specification. As president of the Institute nf Engineers, and a member of the1 Standards Association’s main committee, I can say that both bodies, are extremely grateful to the Commonwealth Govern-‘ ment for the, interest it has displayed in their work.,
– The honorable senator has given us another good reason for unification.
– That is another question. I pass now to another phase of the budget that is- of great interest to- many people, namely, finance. A certain section of the public feel that the present protective tariff has failed to improve the price of grain and live stock, and, on. the other- hand, has very materially increased the costs of all the- implements used- in. connexion with: primary produc tion.. Speaking of the- world generally; these difficulties have been accentuated from the- fact that agriculture, in relation to manufacturing, is an. over-expanded industry. This- is particularly true of grain and live stock. Europe, which before the war was the manufacturing centre of the world, and also the world’s chief market for farm products, has so greatly reduced its ability to produce and export manufactured goods, and also its ability to pay for farm products, that the balance has fallen far out of equipoise, with the result that producers throughout the world are suffering seriously. Prices of manufactured goods are, consequently; excessively high, owing to the falling-off in manufacturing activity, whilst prices- for farmers’ products are relatively low, as a consequence of the relative excess of agricultural production.
It is obvious that if the balance is. to be restored, it must be by increasing manufacturing activity, or by reducing certain, agricultural activities through the world,, or by both.. Another factor in reducing the cost of these commodities is the unsettled financial state of Europe generally. It is to be sincerely hoped that this condition of affairs will be improved’ as the outcome of suggestions made by the Dawes Committee. Ill-advised attempts are being made in other parts of the world to adjust the balance by artificial means. The proposed McNary-Haugen bill in the United States of America is one such attempt. Under- this measure it is proposed to buy up the exportable surplus of wheat, flour, corn, rice, wool, cattle, sheep, swine, or any food product of cattle, sheep or swine, whenever the domestic price falls below its average relation to the general price level, as determined by the ten’ pre-war years. By this means it is hoped to raise the domestic price- of these products to their pre-war parity with other domestic prices, and it is further designed to make the protective tariff’ upon these articles effective. It is obvious that any tariff will have little effect on most of these products, because the exportable surplus must compete- at world’s parity. The bill goes on to provide1 that this export surplus is then to be sold in- foreign markets at the highestprices obtainable:. It is to be expected that this surplus will be sold at a considerable loss. The bill further proposes to make up this loss by collecting from the producers a sum sufficient to cover the deficiency. If, for instance, twothirds are consumed in the home markets, and one- third exported to foreign countries, it is expected that the producer will benefit so much by the higher prices in his own markets thathe will be able to contribute to any loss occasioned by the sale in foreign markets. It will be obvious that the effect of this measure would be, as Dr. Anderson, the well-known economist, says: -
The outcome of a bill of this sort would be a temporary lift for the grain and live stock sections, also an opportunity for the shrewd creditors of farmers to make their collections, and then go out of business. Ultimately there would be a worse congestion., more disorder, and lower prices, as a consequence of an actual increase in production of these commodities. Again it is obvious that ifprices are to be fixed, either absolutely or in relation to one another, then governments must undertake, by authoritative measures, to guide and control the production and consumption of the nation. This is the essence of socialism.
Socialism is a system under which the industrial life of a country is subject to authoritative control, and under which a central authority seeks to determine the production, the distribution, and the consumption of wealth. Authoritative control callsfor public planning ofthe most exact and elaborate kind. It calls for a degree of intelligence and concern on the part of the Government, for the common good, which cannot be found in any country, and of which humannature is probably incapable. Even assuming absolute goodwill and honest purpose, the problems are far too intricate to be handled in this way. The effort to give an all-round protection is in the nature of things illusory. Governments create no wealth. All they do is to distribute it, and usually with waste in the process.
Anotherobjection to the McNaryHaugen Bill is the collection of the equalization fee, which has to be collected from individual farmers as a buffer against losses on export sales. It would be interesting to know under what provision of the American Constitution the Federal Government could impose a civil liability on the farmer. What is there to prevent agents purchasing from farm and farm for cash, at not the full market rate, but still anamount in cash greater than that which the law prescribes, and avoiding thecollection ofthe equalization fee? Thus, with an immense interference with the ordinary liberty of bargain and sale,a colossal failure would seem to be assured.
The difficulties of all sections of the people, particularly in Tasmania, are aggravated, in common with others, by the great increase in recent years in Commonwealth and state taxation. It is, of course,obvious that any state needs a rapidly increasing revenue, in order to undertake new expensive public services, or to improve old ones. Now, taxation in the modern state isalways atransfer of the spending or saving power front individuals to the state. From this one can get the true starting point of the canon of “ ability to pay,” as the criterion of sound taxation. Asound tax must conform, says J. A.Hobson, in Taxation inNew State, to two negative conditions, which are vitally connected with each other. (1) It must not remove or impair any instrument of, or incentive to, essential or useful processes of production. (2) It mustnot remove or impair any essential or usefulelement of consumption. In other words, the really taxable elements of income, those which have a true ability to bear taxation, must be those that are unnecessary to maintain or promote socially serviceable processes of production or consumption. The one condition -relates to the origins or sources of income, the other to the uses to which income is applied. Inmy opinion, taxation in Australia has now reached a level that is above the community’s ability to pay, and is not in conformity with the essential conditions to which I have just referred.
When the Commonwealth Government collects taxation inexcess of its needs, it hitsthe states, particularly the smaller states, unnecessarily hard. The surplus at the30th June was nearly£ 2,600,000. Of this amount Tasmania, ona per capita basis, contributed over £100,000, all of which, on the Treasurer’s showing, was unnecessary for the actual exigencies of Commonwealth finance. I need hardly point out to honorable senators that this is altogether too great an -amount for a small state like Tasmania - 4o find unnecessarily.
I am pleased to note that the Treasurer, in his budget proposals, proposes to assist mining. I think, however, that the taxation relief proposed is altogether too low. I submit for purposes of comparison, the Revenue Act of the United States of America, for 1924. Under this measure the rates of taxation are much reduced. Under the act of 1921, the normal rate on citizens was 4 per cent, on the first §4,000 above their personal exemptions, and 8 per cent, on all above that amount. The new normal tax arrangement contains three brackets. The first 34,000 above personal exemptions is to be taxed at 2 per cent., the next $4,000 at 4 per cent., and all over $8,000 at 6 per cent. Surtaxes, too, have been -scaled down all along the line. The personal exemption for a married person, or the head of a family, has been fixed at $2,500, regardless of the amount of income. The last section in the new act is one that our Treasurer might adopt. It agrees to a 25 per cent, reduction in income taxes paid for the year 1923. To those who have already paid their entire tax a refund is due. The United States Treasurer has announced that these refunds will be made automatically, without act-ion on the part of any taxpayer.
Australian taxpayers are groaning under their present burdens, and relief should ‘be afforded wherever possible.
– We have already made a reduction of. 10 per cent.
– Yes ; but I should like to see the Government go a step further. There are other matters upon which I should like to speak, but as I have already occupied, unduly, perhaps, the time of the Senate, I shall bring them forward on some other occasion.
– It is astounding to find wellinformed persons so confoundedly ignorant on the subject of taxation. We are informed that taxation should be imposed upon those who are able to pay, but with that contention I entirely disagree. The proper basis of taxation is that which is a nightmare to some people, but which has been ‘so clearly laid down by Henry George. Otherwise well informed legal and other authorities laugh at the idea of one quoting the opinions of such an eminent authority on the question of taxation, but I remind them that despite the opposition to the principles which he laid down, the system is making substantial progress even in Australia. At the Federal Capital Territory it is proposed to appropriate for communal purposes the whole of the unimproved land values. Large areas have been leased to various persons for pastoral and other purposes, for which the lessees are paying the Commonwealth Government the full annual, rental value. That is directly, definitely, and completely in accord with the principles enunciated by the authority I have mentioned. Quite recently the Senate approved of regulations laid upon the table by the Minister for Home and Territories (Senator Pearce), in which it is definitely provided that the proposed building leases shall be put up at auction, and that the lessee shall pay 5 per cent, upon the value of the highest bid, which is supposed to represent the full annual rental value of the land.
– But the Government own that land.
– That statement is quite correct. Instead of selling the land the Government propose to lease it at the unimproved value by appropriating its annual rental value. Senator Crawford will remember that in Queensland more than 30 years ago, despite strong opposition, a proposal was adopted to levy the whole of the rates required for raising revenue for local purposes upon this system, which has become firmly established. That is also in strict accord with the proposals laid down, not by Adam Smith and Hobson, bub by Henry George. It is true that a number of reactionaries got behind the scenes and extracted from the poorer people moneys raised in the form of Customs duties and other infamous methods to subsidize the local governing bodies, which was a wrong thing to do.
– It was necessary in the case of certain outlying districts.
– It may have been in the early days, but I am glad that it it not now done. When the first New
South Wales Labour platform was being prepared, I sat up all one night in obtaining the adoption of a proposal whereby the whole of the revenue required for local governing purposes should be obtained upon land values. That proposal became a plank of the Labour party’s platform, and remained there until a bill, known as the Local Government Act, was introduced, in which it was provided in strict accordance with the principles of Henry George, that in the country districts the whole of the general rates imposed by these bodies should be upon the unimproved value of the land. The system has worked so well that very little opposition of a tangible character on the part of the shires has been offered. The measure gave the municipalities the option of deciding whether they would raise rates upon improvements or upon unimproved land values, but it was provided that unless the local governing bodies imposed an unimproved land values tax of at least Id. in the £1, the then existing state land tax would operate and would be collected by the state. When that enactment was made, the municipalities, with very few exceptions, immediately adopted land values taxation as the basis for general rating purposes. To-day, with the exception of- two or three municipalities, the whole of the revenue raised for general purposes is obtained on the unimproved value of the land, without any graduation, exemption rebates, or progressive systems. It is quite true that in the city of Sydney, working under a different act, and controlled to a very large extent by men elected under the old franchise, for a time the city’s progress was retarded. Fortunately, the Hon. Richard Meagher, when Lord Mayor, with the support of a majority of Labour aldermen, succeeded in bringing into operation an act passed some years previously, with the result that since 1916 the whole of the general rates in the city of Sydney have been collected upon the unimproved value of the land. It is true, of course, that as the result of the work of certain reactionaries, the city council has misappropriated electric lighting funds, which it has swept into the general coffers of the municipality, to the extent of about £25,000 annually. That is wrong, and it is hoped that, before long, this amount will be returned to the electric light users. The system of taxation in operation throughout ‘ the whole of New South Wales for local government purposes is working so well that I know I am correct in saying that in no country towns are building operations more active than in those of New South Wales, which is mainly due to the operation of this systern. It not only affects Sydney, but also every municipality throughout the state. It is not now nearly so profitable to hold vacant land out of use as it was when taxation was imposed upon improvements, although under the present system the whole of the rental value of the land is not appropriated. In the city of Melbourne, which is operating under a different system, a person who extends a structure is immediately pounced upon by the civic authorities merely because he is providing employment, improving his property, and attempting to beautify the city. People sometimes wonder why unemployment is so prevalent in Melbourne.
– Are there no unemployed in Sydney?
– Unemployment is prevalent in Melbourne because an obsolete system, is in force. One of the principal issues now before municipal electors is whether the system of taxing improvements, as is done in Melbourne, is to be continued, or whether the enlightened system adopted in Queensland, and, later, in New South Wales, is to be followed. What is the position in South Australia, Tasmania, and other states? In almost every case this method of securing local revenue has been adopted.
– In that case, what is the honorable senator complaining of?
– I object to the disparaging remarks which are continually made concerning Henry George, and to which we have to listen on every occasion when the subject of taxation is mentioned. No question is of greater importance, and honorable senators know it. What do we see in the Commonwealth to-day 1 On every hand bounties are being given to assist various industries. The Government is doing all that it can, by imposing heavy taxation, to prevent industries from being firmly established in this country. But when it comes to a question of dealing with the land-owners of the Commonwealth, every care is taken to see that they get off very lightly. Already in the Commonwealth a small instalment of land values taxation is in .operation. From that .source we obtain about £2,000,000 per annum, whereas from the Customs House the revenue received is about £36,000,000 per annum. Yet, in face of that, we are told by honorable senators on the other side, and also by some on this side, that Customs taxation is imposed for the purpose of encouraging local industries. It should be evident to any one that it is quite impossible to secure revenue from goods which are imported from low-waged foreign protectionist countries. This scheme of taxation was laid down by the shrewd conservatives who drafted the Federal Constitution. They decided that, from the revenue derived from foreign-made goods, they would hand back to each of the states the sum of - 25s. per head of population, in order to save them from taxing the people themselves. I believe that that scheme is still in force. I would welcome the retirement of the Federal Government from the sphere of income taxation, and allow it to. retain the whole of its revenue from the Customs House. It is. absolutely wrong for one government to collect money, and then to hand it over to another government to be spent. New Zealand nas, to some extent, .adopted land values taxation, and I am hopeful that in the near future the Government of Great Britain will also take the necessary steps to see that the land-owners of that country pay a fair share of its taxation. That of late years they have not done !so is evident when we consider that(She amount received from them in taxes is less than £2,000,000 per annum, whereas the total revenue -of Great Britain is in the vicinity of £800 ,’000, WO “ per annum. Let us consider for a moment the scheme of taxation which has been foisted upon .’the people of this country. In Australia the motor car has ceased to oe a luxury, and has become a necessity. Yet; this modern necessity is seized upon by the Government ‘for revenue purposes. it a man buys .a new motor car, he has to pay from £50 to £75 import duty on it. Ib is only natural that, if .some motor cars are made locally,, their price will -be in the vicinity of that changed ,for the imported .cass. A direct tax. is thus .imposed upon the people who desire to use modern means ‘of transport. From whatever angle we look .at >the Customs taxation it is objectionable and offensive. A great number .of .people in Australia desire ,to drink either spirits or beer, but the -Customs House has caused the price to be greatly increased.
– Thereby lessening ihe consumption.
– The increased pries does not lessen the consumption at all. All that it does is to create greater revenue, and -thereby save the landowners from direct taxation. That is the only reason for the existence of the Customs House.
– If the tax were removed, instead of a man having one nobbier, he would have two.
– That is an erroneous idea. Following that reasoning, those who have cellars in which liquor is stored should be drunk all the time; but we know that that is not so. The people of Australia are, for the most part, sober. Unfortunately, they have to pay too much in the way of taxes on the beer and spirits which are imported. Some .people say a great deal concerning the desirability of encouraging local production, but what do we find? If a man proceeds to make beer, ale or porter, containing not less than 2 per cent, of proof spirit a gallon, he is forced to pay ls. 9d. a gallon in excise duty. Why should a mon be required ,to contribute ls. 9d. towards the revenue because he makes a ‘gallon of beer ? The Government talks of encouraging local industries, yet it penalizes, to the extent of ls. 9d. a .gallon, every man who makes beer. That means .that every man who drinks .a pint .of beer contributes about 3d. to the .revenue. “While the position in respect to beer is bad enough, when we come to spirits we find that it is much worse. In the case of brandy, distilled wholly from wine, the excise duty is 26s. a gallon, lin the case of blended brandy the duty is .27s. a gallon, which also is the duty on apple brandy. That is a grave injustice to Tasmania. “Whisky, distilled from barley mailt, is subject to an .excise duty .of ,26s. at gallon, or (about 3s. ‘3d. a bottle’. Some time ago I endeavoured to have placed upon >every -bottle <a statement showing the -cost. < of production, and the .’amount of .duty imposed i It ‘is a great pity that that suggestion has mot been dieted :upon., because then a man would know that .every time he bought ,a bottle ;of malt , whisky lie was contributing 3s. .3d. to the .revenue <of ±he country. Blended whisky is subject to an excise duty of 28s. a gallon, or 3s. 6d. a bottle. I should like to know why a man who desires to invest his money in goods of this kind should be fined by the Crown for doing so. I refer particularly to the locally produced article. If the Government desires to encourage Australian industries, it should remove the excise duty altogether. If that were done, it would completely prevent the importation of beer andspirits from other countries, and would provide work in this country.Rum - one of Queensland’s famous productions - is subject to an excise duty of 28s. a gallon, or 3s. 6d. a bottle.I am referring to the Australianmade article. On previous occasions we have been asked to assist the bananagrowers and the sugar-growers of Queensland.
– What is the connexion between bananas and rum?
– An import duty has been imposed on bananas, and the result is that to-day it is impossible to obtain in any of the cities of Australia bananas that are worth eating.
– That is not so.
– I say, without fear of successful contradiction, that to-day it is quite impossible to obtain in Australia bananas equal to Fiji bananas.
– The bananas obtainable in Australia are better than Fiji bananas.
– That is a matter of opinion. The import duty on bananas has been a splendid thing for the landholders in the northern parts of New South Wales and the southern portions of Queensland, because they have obtained fabulous prices for their land. Perhaps the “bunchy top,” which caused losses to those growers, came among them as a form of punishment. I believe that Queensland rum is equal to the best West Indian rum.
– It is the best in the world.
– Why is it necessary to impose an excise duty of 28s. per gallon on “ the bestrum in the world “ ? That is no encouragement to Australian industries. It means at least 3s. 6d. a bottle to the purchaser. If the Government did the right thing it would at least review these infamous excise duties. It would be better if they were entirely repealed. In the case of blended rum the excise duty is 293. a gallon, equal to 3s. 7½d. a bottle. The whole of these excise duties are imposed, not with the object of preventing the use of liquor and tobacco, but solely for revenue purposes. If the Government were genuinely opposed to the liquortraffic it would prohibit it.
– Are not beer and spirits luxuries?
– The proper method of raising national revenue is to impose a straight-out land tax.
– Would the honorable senator tax the land that a poor man has to live upon, and leave- the luxuries untaxed ?
– The land upon which poor men live is of very little value. The valuable land is that fronting streets in large cities. In Sydney, recently, some land was. sold at £1,750 a foot, and that price is typical of the value of all the land in the street. A small area of such land is probably worth more than half a dozen farms. The men who can pay fabulous prices for city land should be taxed heavily, and not the poor farmer. The excise duties imposed on beers and spirits manufactured in. the Commonwealth are a distinct menace to the industries.
– I think that the honorable senator will find that the brewing companies are paying good dividends, and so are the tobacco manufacturers.
– The excise duty on hand-made tobacco is 2s.1d. a. lb., but why should a smoker be compelled to contribute to the national revenue to that extent ? The manuf acturer, of course, immediately passes the duty on to the consumers, since he either reduces the size of the plug of tobacco, or increases the price.
– The city landowner would pass on the honorable senator’s proposed land tax in the same way.
– It could not be done if the tax were applied generally: The import duty on finely cut tobacco, suitable for cigarettes, is 7s. a. lb., but a. fine imposed on smokers to that extent will not prevent them from smoking.; they enjoy it so much. On my recent visit to the Mandated Territories, I noticed in one place that one of the duties of the schoolmaster was to hand out rations of tobacco to all the native children attending the school. I suppose a majority of the people of Australia use cigarettes or tobacco, and it seems wrong to fine tl.em for doing so. The excise duty on handmade cigarettes is 2s. 8d., and on the machine-made article, 3s. 8d. per lb., and there is also an import duty of 7s. We know that articles required for the official use of the Governor-General, the State Governors, and the Commonwealth Parliament are admitted free of duty.
– The honorable senator agrees to that.
– I consider that the Governor-General and the State Governors, as well as the Commonwealth Government, should have their tobacco free. But why, I ask, should the rest of the people be penalized ? It seems extraordinary that an intelligent community should tolerate an excise duty on the liquor they drink and the tobacco they smoke. It is entirely erroneous to contend that taxation should be levied in accordance with the people’s ability to pay. We should not tax labour, or the product of labour. The people should not be punished for being industrious. As soon as a man earns a substantial salary he is pounced upon by the federal and state authorities, and is taxed in proportion to his income. Instead of penalizing those who render a service to the community, we should tax the man who holds land, whether in large or small areas, and fails to put it to a profitable use. I should like the Government to wipe out the income tax and the excise duties, but I realize that there is strong opposition to any attempt to raise the bulk of the revenue by means of a direct land tax. In New South Wales, many years ago, when Sir Patrick Jennings and Sir George Dibbs were at the head of affairs, they introduced a bill to impose a tax of $d. in the £1 on unimproved land values. But the measure was promptly thrown under the table. A further proposal was brought down some time later by Sir Patrick Jennings, to impose a nominal tax on unimproved land values. When some of the astute gentlemen in the Upper House saw the bill, they said, “ This is a proposal to tax us”; and they promptly threw the bill under the table. It may be remembered that when Sir George Reid made an effort to impose a tax of Id. in the £1 on land values, the Upper House again threw out the meausre; but Sir George appealed to the country, and then intimated to the
Legislative councillors, that if they passed out his bill again, he would pass them out. The Legislative Council, regarding it as the lesser of the two evils, agreed to impose a tax of Id. in the £1 on land values. The advocates of this reform did not go to sleep ; they kept ham- ‘mering away, with the result that later on the principle they advocated was incorporated in the Local Government Act. To-day, although the land-owners of New South Wales are called upon to contribute a nominal amount to the state revenue, the principle that those who own the country should pay for its administration has been, to some extent, adopted. The idea of penalizing a man who renders service to the community should have been exploded long ago.
– Is the honorable senator talking of a land tax?
– Yes. I think I have made the position so clear that when a measure is proposed to place an excise duty on spirit produced from doradilla grapes it will be given no quarter. We shall be in a position to tell the Government that they ought no longer to penalize local industry. I have made these few remarks because it was said a little while ago that the proper basis for taxation was ability to pay. That idea was exploded years ago. The proper basis for taxation was laid down by Henry George, and that is that a man should pay tax in proportion to the unimproved value of his land, irrespective of its area.
– The first thing that struck me on perusing the budget papers, and after reading the Treasurer’s speech, was their clearness, and the fact that the financial statement could be made within a few days after the close of the financial year reflects the greatest credit not only on the Treasurer himself, but also on the officers of the Treasury, upon whom he, of course, must rely for the assembling of the immense amount of detail contained in it. Senator Grant made his attitude on the land tax, as he says, perfectly clear, but, to my mind, all that he made clear was his belief in that method of taxation. He would make the land bear all the taxation necessary to provide revenue for the administration of the country. I have given some thought to this subject - though perhaps not so much as the honorable senator, who is always thinking and talking about it - and I cannot be led to believe in the fairness of a land tax. I can understand the states imposing such a tax - I believe that necessity has driven them to it - but I cannot see what necessity there is for the Commonwealth to do so. The Commonwealth land tax was introduced many years ago, possibly, to some extent, for the purpose of producing revenue, but mainly for the purpose of breaking up big estates. That it has not succeeded in doing. A land tax is not a just tax, particularly in its application to rural lands. It is not generally recognized that the land which the farmer works is the machine with which he earns his living. The farmer is actually taxed twice, first upon the income he makes from his land, and then upon the land itself. It is unjust that the individual who invests his money in land should be called upon to pay taxation on that land before even he can make a start to use it to produce an income for himself,, whereas another individual who invests his money in a business, or in the purchase of tools of trade or machinery, with which to produce an income, pays taxation only on the income he derives, and not on that which has produced his income, and certainly not, except to a very small extent, on the land upon which his business or factory is situated. A rural producer’s income is solely derived from the land, and because of the operation of a graduated land tax, the more land he has the more tax he pays. He actually pays two taxes, one on the land he occupies, and one on whatever he makes out of the land. It is most unfair.
Every one was pleased to find the Treasurer admitting that the financial position would admit of a reduction of 10 per cent, on the tax on incomes, and an increase in the income tax exemption to £300. This will afford relief to persons with incomes up to £1,200; but I am sorry the exemption was not fixed at £300 in respect of all incomes. I am sure it could have been done without unduly embarrassing the finances. Although a man may have a salary of about £1,000 a year, he may have considerable obligations, yet his only relief will be the 10 per cent, reduction in the rate of the tax.
I hope that the time is not far distant when the Commonwealth will get out of the field of income taxation altogether. With that object in view, several conferences have been held between the Federal Government and State Governments. If the Commonwealth left the field of direct taxation to the States, which I believe it will do before very long, various functions which the Commonwealth now performs could be entrusted to the states. For instance, wisely no doubt, the Commonwealth Government have made available to the states £500,000 for the construction of main roads, and £500,000 for wire netting. I was a member of a State Government when this assistance was afforded, and I admit I grasped the opportunity to secure some of the money for Tasmania. I looked upon it as a windfall for the state, but I think a sounder policy would be for the Federal Government to cease levying income tax, and for the states to raise all the money they need for wire netting, road construction, and other purposes which are within their province. The functions of the states and the Commonwealth could then be more clearly defined. At present, the average individual does not. know where to draw the line between Federal and state activities. When a deputation waits upon a Federal Minister for assistance in a certain direction, he says, “No. That is a state function.” When a deputation waits upon a State Minister and makes a request, he also says, very often, “No,” and declares that he is being asked to do something which is within the province of the Commonwealth Government. The line of distinction could be drawn more clearly if the Federal Government abandoned income taxation and land taxation; in fact, all direct taxation.
– What about probate duties?
– It would be impossible for the Commonwealth to do everything at .one fell swoop.
– Why do it at all?
– Because the states would then have the opportunity to raise for themselves the revenue necessary to carry out the functions which are properly within their province.
– Hand in hand with the abandonment of direct taxation by the Commonwealth, would the honorable senator drop the per capita payments to the states?
– Probably. In that case some of the states with smaller populations would need to be recompensed, but, at any rate, if the Commonwealth abandoned the field of direct taxation to the states, the per capita payments, if they were not dropped altogether, could be reviewed.
In his financial statement, the Treasurer announced that it was intended to introduce legislation to validate some past assessments of land tax. I understand that these assessments apply to leases. What is actually meant, I have tried to ascertain, and we shall probably learn when the bill is introduced, but the greatest care will have to be exercised in order to see that no injustice is done. Some appeals against assessments are now under review in the courts. I understand that some taxpayers have actually won their appeals, or, if they have not actually won them, are just about to do so. Tbherefore, in introducing legislation to validate assessments, care must be exercised not to interfere with cases where appeals have been successfully upheld. When a taxpayer appeals against an income tax assessment, he is obliged to lodge the amount of tax at which he is assessed. Sometimes large sums of money are involved, and sometimes two or three years elapse before a decision is given, but no interest is paid on the amount deposited by the taxpayer, although he may be successful in his appeal. A little while ago a judge, in giving his verdict on an appeal, said that he could only interpret the legislation as it was passed by Parliament, but he alluded to the unfairness of the Commonwealth in holding the taxpayer’s money for a certain length of time, and then returning it without paying interest on it. The taxpayer whose money is locked up in this way might have been usefully employing it in a business. In the proposed bill I hope the Government will make provision to give a judge the right to order the payment of interest when a taxpayer’s capital is returned to him. I ask leave to resume my speech at a later date.
Leave granted; debate adjourned.
Bill received from House of Representatives, and(on motionby Senator Wilson) read a first time.
Sitting suspended from 6.28 to 8 p.m.
Abolition of British Preferential Tariff
Debate resumed from 3rd July (vide page 1840), on motion by Senator Duncan -
– This motion, which was submitted by Senator Duncan several weeks ago, and was criticized by the Leader of the Opposition (Senator Gardiner), was moved, I believe, owing to the disappointment that had arisen in consequence of the action taken by the British Government in. relation to Empire preferential trade. When we look into the subject in an unprejudiced way, we have to realize that it is one on which we must naturally take sides.. We have either to have Empire preference to place us on an equal footing with our competitors, or advocate a lowering of the standard of living in Australia. It is our policy to conduct Australian industries on a satisfactory basis, to pay good wages, and generally to make the conditions under which the operatives live thoroughly congenial. That stage has been reached in connexion with many of our industries,and while we were consuming or using all we produced, we were on safe ground,but we have nowreached the stage when we must successfullymarket our surplus overseas, or production will be retarded. The question of preferentialtradewas carefully and fully considered at the Economic Conference, at which I was privileged to represent Australia. Full consideration was given to the subject of extending trade within the Empire, and the following five points were submitted for consideration: -
The conference had the assistance of many eminent gentlemen in Great Britain, who, during the war period, handled such questions as the stabilization of prices, and it was after the most careful consideration that.it was decided that the onlymethod by which the dominions could be benefited, after allowing for increased trade, and maintaining the standard of living in the country of production, was by means of a preferential tariff. That was unanimously decided upon. The sub-committee, ofwhich I was a member, after exhaustively going into the whole matter, re- turnedto the Economic Conference, and recommended that assistance could best fee rendered toy preference. That basisthe conference thereupon decided to adopt. Senator Gardiner, in debating the motion, said that it was not theprice which Great Britain would pay, but the extent to which thecost of living of the British people would be increased by the granting of preference. I have always regarded Senator Gardiner as a great freetrader, except, of course, when the construction of cruisers is under consideration. The honorable senator , said that the British Government could not be expected to do anything that would increasethe cost of living to itsBritishpeople.
– That is nota fair way ofputting it.
– I do not wish to be unfair. Senator Gardiner’s declaration was quite consistent with bis attitude on tariff matters generally.
I desire, however, to draw the honorable senator’s attention to the fact that a dominions preferential tariff would not be the means of increasing the cost of living to theBritish people. The honorable senator was, I think, dealing principally with the larger issue of preference versus freetrade, which was given greater prominence during the election campaign than was the question of imperial preference which was discussed at theconference. The question of Britain granting a preferenceto dominion dried fruits was fullyconsidered. For the information of the Senate I may explain that under the tariff of Great Britain dried raisins, figs, and plums are dutiable at 10s. 6d. per cwt., while those produced within the Empire enjoy a preference of one-sixth. The proposal of the Economic Conferencewas not to increase the dutyon Australian dried fruit in any shape or form, but to admit such products free. In that respect the cost of living to the British people would not have been increased - the Australian products were to be admitted free, and those of foreign origin were to remain dutiable at the same rate as before. Again the duty on currants is 2s. per cwt., but those of Empire origin are subject to a preference of one-sixth. The proposal was to admitallcurrants producedwithin the Empire duty free, and to consider what increase in duty was necessary to make the preference effective. In regard to other dried fruits which are admitted free, it was proposed to impose a duty of 10s. 6d. per cwt. The proposal in connexion with preserved fruits,which are not dutiable except f or sugarcontents, was, in addition to the duty for sugar contents, to impose an all round duty of5s. per cwt., except on fruit pulp for jam. Preserved fruits produced within the Empire were to be admitted free. It will, therefore, be seen that in discussing the five points I have mentioned there was no suggestion of taking action in the direction of increasing the cost of living. In speaking in the House ofCommons, the Prime Minister of Great Britain (Mr. Ramsay MacDonald) quoted SenatorGardiner, who, in referring to the Commonwealth tariff,said -
Plain sheet iron, up to and including1.16th inch in thickness, is subject to a. duty of65s. per ton.
That is correct so far as it goes, but the British Prime Minister was using Senator Gardiner’s statement in connexion with tariff questions, and did not mention to the Commons that there was a preference of 35s. per ton granted to the British product. The duty under the general tariff is 100s., and under our British preferential tariff it is 65s. per ton. Mr. Ramsay MacDonald also quoted Senator Gardiner as follows: -
The British manufacturer has to buy our wool, pay freight upon it to Great Britain, make it up into textiles, and pay the freight back here, and even then we areso afraid to meet our British brother in competition that we place an impost of 30 per cent. upon him.
– I adhere to that statement.
– Yes, but the honorable senator did not state that there was a duty of 45 per cent. on foreign importations, showing that British productions have a preference of 15 per cent. under our tariff. Senator Gardiner further stated -
I point out that that country - Great Britain -manufactures bar, rod, angle, and tee iron, and we say that they shall pay 44s. duty on everyton of that iron they send to Australia.
That is true, but the duty on foreign importations is 80s. per ton. The preference given to British manufactures was not mentioned in the British Prime Minister’s speech. The people of Great Britain know a great deal less concerning tariff matters and preferential duties than do those in Australia.
– The Minister does not include public men?
– That must be the position, because I do not think Mr. Ramsay MacDonald would deliberately mislead the House.
– He was dealing with a proposal to provide for preference in a freetrade country.
– He was not dealing with the question of preferential trade, but with tariff duties. It will be seen from what I have quoted that Senator Gardiner was not dealing with the question from the same stand-point as the British Prime Minister. When the right honorable the Prime Minister sailed for Australia he left this question of wines, with which he had dealt very fully, to the Board of Trade. When I returned from Canada I wrote to Mr. Webb, and drew attention to the fact that the treaty between Spain and Great Britain placed Australia at a disadvantage. I pointed out that we had not only repatriated our own soldiers along the River Murray, but had also placed 25,000 exImperial soldiers on the land. I did not ask that the duty should be increased in the case of other countries, but that there should be a reduction of the existing duties so far as Australia was concerned. On the 21st March, Mr. Webb wrote me as follows: -
As the matter about which you wrote to me on 17th March is one that primarily concerns the Treasury, I have sent your letter to the Chancellor of the Exchequer for his consideration.
I then wrote to the Chancellor of the Exchequer, and received from him the following letter, dated 30th April, 1924: -
You will have seen from my budget speech that the Government do not feel able to recommend Parliament to endorse the proposal relating to tariff preference put forward at the Imperial Economic Conference. This being the case, it will not surprise you to hear that I cannot accept your proposal for an increase of the. preference upon light wines. I am afraid that this decision may cause you disappointment, and I am sorry that this should have to be so, but I feel sure that you will appreciate my position and that of the Government of which I am a member.
I wrote to the Chancellor the following morning in theseterms : -
I am in receipt of yours of the 30th ultimo. I can quite see in the circumstances that you could not agree to an increase in the preference upon lighter wines. May I most respectfully draw your attention to the fact that in asking for a lower duty was in lieu of a position created by a treaty with Spain, which gave a foreign country an advantage over that of our own. May I repeat on behalf of the repatriated men, and also on behalf of the migrants from this country, which include 25,000 of your ex-service men, that it is not, in our opinion, asking too much that the duty should be reduced (not increased) to the extent of placing Australian producers upon a basis of equality with a foreign country in the British market.
I must impress upon you that this is outside the scope of preference. It is unquestionably a matter of equality, and surely is deserving of your very serious consideration before you are prepared to make the terms of your letter to me, now under reply, final.
I can only repeat, as I did previously in my letter to the President of the Board of Trade of the 17th March last, now with you, that this matter, both in sentiment and in principle, is one of great import in the development of this Empire of ours.
As I am leaving London next week en route for Australia, I should appreciate your further consideration, and the favour of an early reply.
To that the Chancellor replied on the 5 th May -
I have carefully considered the further arguments put forward in your letter of the 1st instant, on the subject of the wine duties. I am afraid that I can see no way in which your wishes could be met except by reducing the duty now charged on Empire light wines, and I ain sure that it would be impossible to persuade Parliament that such a proposal was outside the scope of preference, as you suggest. In these circumstances, however much I may regret not being able to meet your point of view, I fear that I must adhere to my previous decision.
I have given those particulars to the Senate to show that a great deal more could have been done by the Government of Great Britain without increasing the cost to the people of that country in any way. Considerable advances have been made in some directions. The people in the Old Country are beginning to realize that if it is to achieve anything the Empire must learn to feed itself. In that direction we have made a great number of converts. People are thinking more of these matters than previously. The more people we get from the other side of the world through our immigration schemes, the greater will be the consideration given to Australia. The issues which were placed before the people of Great Britain at the last election were not the same as those which were submitted by the Imperial Economic Conference. When the election was over, and a division was taken in the House of Commons on this important question of preference, the motion was defeated by only six votes in a house of 550 members. The press of. Great Britain, as well as public opinion there, considered generally that the decision was almost a victory for preference. I make bold to say that the day is not far distant when Great Britain will extend preference to this country and to the dominions generally. I do not say that Australia is without fault in this matter. We must do more to help ourselves by finding markets for our products and by letting the world know what we produce. Honorable senators will agree that a great deal is being done in this connexion by the Empire Exhibition, now being held at Wembley, where we hope to reach with our products approximately 40,000,000 of people. Since that exhibition opened there has been a tremendous advance in the demand for Australian products. Sir Joseph Cook cabled recently that the exhibition had greatly increased the demand for Australian butter, and only this week a cable was received by the Government that the Australian dried fruits that were sold in Great Britain during . the last few weeks represented 85 per cent, of Great Britain’s dried fruit trade. Wu cannot expect to achieve everything in a few hours, but I say emphatically that a feeling is growing among the people of Great Britain in favour of Empire preference. During the last twelve or eighteen months, the tendency in that direction has exceeded the expectations of the most optimistic. Whilst Senator Duncan may be’ disappointed at the result of the vote in the House of Commons, I feel certain that before long we shall get the preference that we desire. A good deal has been said about the Singapore Naval Base. We were told that a base would never be established there, but not long after that we heard rumours that the construction of that base was still being very seriously considered. Although Great Britain is 12,000 miles from Australia, she still provides the best market for Australian products. There are many men in the Old Country occupying high positions - some of them members of the House of Lords, with both time and money at their disposal - who are very interested in Australia’ and her welfare. Having been brought personally in touch with the discussion of this question in the Old Country, and having heard the debates in the House of Commons in connexion with it, I do not hesitate to say that I believe that the whole thing will come out as we desire. To carry this motion would place us in a worse position than we are now in. The people of Great Britain, I feel sure, realize that in the matter of preference, Australia has played the game. Senator Duncan has given figures to show that Australia’s preference to Britain represents a total of £8,000,000 per annum. I hope that we shall always continue to give her that preference, as we owe her a great deal. Senator Gardiner spoke of Australia’s little navy. I say unhesitatingly that, at the best, our navy can only be a unit of the British Navy. In view of the growth of public opinion on the other side of the world, and of the advance that has been made towards our objective, I’ ask Senator Duncan to withdraw his motion for the present.
– I have listened carefully to the remarks of the Minister (Senator Wilson). The motion is practically a request to this Parliament to withdraw the preference which is operating to-day in favour of GreatBritain as against other countries. Senator Duncan inferred that the British Labour Government had more sympathy with Soviet Russia and the people of foreign countries than with the inhabitants of Australia and the other British dominions.
-it looks like it.
– It is true that Australia gives preference toBritish manufactures, but it should be remembered that we have adopted a protectionist tariff for the purpose of establishing Australian industries, and our first preference should be given to goods manufactured in our own country. Preference toGreat Britain was intended to operate only in regard to those goods that we were not in a position tomanufacture. The people ofGreat Britain have stood practically for free trade.
– Have I not quoted manyBritish duties ?
– They are imposed principallyfor revenue purposes.
– Why should preference beshown to Spain ?
– I understand that there is a uniform duty in Great Britain, and the Government there is not prepared to give greater preference to Australia thantoother countries.
SenatorPearce. - No. Spain, under a treaty, pays a lower duty than Australia on the wines it exports to GreatBritain.
– I do not know the object of that, and I amnot aware whetherthat duty was imposed by the MacDonald Government or its predecessors.
– It was a previous Government that put the treaty with Spain into effect.
– I am sure that the MacDonaldGovernment has not been actuatedbyany antipathy towards Australiaor its people. I believe that it wouldgivepreference to the Commonwealth over foreigncountries if such a policy werenot inimical tothe interests of Great Britain. I am not an advocate of Australian preference, even tothe United Kingdom,since Ibelieve that our first dutyis toourselves.I favourabso lute and effective protection. It is poor consolation to an Australian who has lost his employment in, say, the iron trade, to see goods made by pipe moulders or blacksmiths in the Old Country, dumped on the piers in this country. He derives no satisfaction from the fact that the importation of such goods has resulted from preferential trade with Great Britain. My preference begins and ends in protection.
– That would involve prohibition.
– I am a prohibitionist to the extent that I have always advocated laws to regulate the hours and determine the wages and working conditions of Australian workmen, so that there may be established and maintained in this country ahigherstandard of living than exists in any other partof the world.
– The honorable senator says, “ Ourselves first and second, and we shall also take what is left over.’”
SenatorHANNAN . - The Australian workmanwho is forced out of employment by reasonof the importation of cheaplyproduced articles from abroad, even if theycome from another part of the Empire, canhardly be expected to favour preference to the British manufacturer in those commodities that can be produced in Australia.
SenatorGrant. - Would the honorable senator keep Britishgoods out ?
– Yes, if possible.
SenatorGrant. - I wonder from where he expects the revenue to come.
-We can continue to obtain our revenue as we get thegreat bulk of it to-day. There are various methods of taxation. For instance, there is the land tax that my friend, Senator Grant, advocates, and there is also the income tax. We make no attempt to produce numerous articles that could be manufactured in this country, and a number of things that are produced today arenot sufficiently protected. I place Australia first, and I should give first preference to Australian manufactures and Australian workmen.
SenatorElliott. - Is the honorable senator in favour of preference for those articlesthatwe do not produce here?
– I know of no articles that we could not produce in Australia if we were given an opportunity to doso.
– Would the honorable senator give preference to Great Britain?
– I am not keen about any preferences, and I am quite sure that we shall not receive much preference from the Parliament of Great Britain. The motion before the Senate contains a specific reference to the Soviet Government of Russia. What has been done by the British Government in regard to Russia ?
– They have flung their arms around the necks of the Russian Government:
– I believe that the action taken by the Labour Government of Great Britain in regard to Russia will always stand to the credit of Great Britain and the Labour party.
– I have been trying to find out exactly what has been done by the British Government in that matter.
– So have I.
– Yet the honorable senator commends the British Government.
– I can only be guided by what I have read in the press. I cannot be expected to have any official knowledge, but it seems to me that the British Government has made a reasonable attempt to open up trade with Russia; not solely for the benefit of that country, but prompted by business considerations. The economic conditions existing in both countries have, no doubt, been a considerable factor in determining the course of action taken.
– Concessions have been granted by Britain to 30 odd countries, but Australia has been excluded.
– I am not aware that any special preference has been given to Russia. I know that there is a tremendous market to be exploited in that country. Every honorable senator knows that, unless the commercial life of Russia is revived, the trade of Europe will not become normal. Great Britain is faced with the tremendous problem of finding employment for an army of 2,000,000 men, and that employment cannot be given by means of a system of trade preference to Australia. Great as the issue mayappear to us, it is not of great moment to the British authorities.
– Great Britain still has as many unemployed as it had before the Labour party obtained power there. As a matter of fact, there are more.
– That is not so.
– I can only be guided by the information published in the press that there has been a considerable reduction in the ranks of the unemployed of the Old Country.
– It is stated in today’s press that there is an increase of 30,000.
– The Labour Government, according to the newspaper reports, is making some attempt to stabilize the trade of Russia, and in doing that, it is realized that the Government is acting also in the interests of Great Britain.
– Does the honorable senator believe Mr. Ramsay MacDonald or Mr. Snowden? They take opposite views.
– They are entitled to do so; but I do not profess to know their precise views.
– The honorable senator feels sure that Mr. MacDonald is right.
– I take the view that the British Government was. not animated by any antipathy to Australia in refusing to adopt this scheme. The motion submitted by Senator Duncan is very cleverly worded. On the one hand, it requests this Parliament to withdraw the preference which it now gives to Great Britain, because of the failure of the British Government to enter into a preferential arrangement with Australia, and on the other hand it points out that the Government of Great Britain, which refuses that amount of preference to Australia, is giving preference to other countries, notably Russia.
– Which is very regrettable, is it not?
– It is not regrettable. The British Government is rendering a service to the civilized world by what it is reported to be doing for Russia to-day. No doubt it would have suited some honorable senators opposite if it had openly professed its desire for a continuation of the policy operating in Russia, to which strong exception has been taken; but if the people of that country and their rulers are attempting to restore normal conditions, surely the efforts of the labour representatives in the British Parliament to assist them is a laudable one. I believe that that is all Mr.Ramsay MacDonald and his followers are doing.
– Should they not have helped Australia first, adopting the honorable senator’s own policy?
– We certainly say “ Australia first,” and the British Government probably say “Great Britain first.”
– And “Russia next.”
– They have not said “ Russia next “ ; but they do declare that the people ofRussia are entitled to help, and I feel that the help so given must ultimately benefit the world. I do not think any honorable senator can take exception to the action of the British Government in that direction. I would not support the motion.
– I am surprised at such a statement from a man who says that his policy is “Australia first,” and declares that he is a protectionist.
– I would support it if I had the right to alter it, but it has not been submitted as a protest against Great Britain’s failure to adopt a policy of preference to Australia. Its primary purpose is to express in black and white the opposition to Great Britain’s attitude towards Russia.
– I can assure the honorable senator that that is not so.
– The attitude of the British Government towards Russia is highly commendable, and in the best interests of the workers of Great Britain. Russia was one of Great Britain’s allies during the war.
– Not Russia, but the people of Russia.
– The people who constitute Russia to-day were Great Britain’s allies during the war.
– They let us down very badly, and nearly caused us to lose the war.
– The people of Russia did not let us down. We were let down by those who were mostly closely associated with the ruling classes of Europe.
– The allies were not let down by Russia until the present crowd got control of that country.
– We were officially informed that while the men of Russia were fighting and striving against many adversities they were bought and sold by the treachery of their own rulers.
– They were sent into battle without arms.
– And often without proper clothing.
– Ludendorf says that the Germans were responsible for sending Lenin to Russia.
– One of the best things that resulted from the war was the overthrow of Czardom and the formation of the Russian Republic. The Labour party do not stand forRussia itself, but the people of that country having gone through their trials and tribulations, it is one of the most fortunate occurrences of recent months that Labour has secured control in Great Britain, and has made an honest effort to help the people ofRussia to restore their country to a normal condition. In ordinary circumstances, I would vote against a proposal to have preferential trade with any other portion of the British Empire, because I stand for protection of the most effective character, but I must also vote against the motion because I still persist in the belief that it has been cleverly worded for a certain purpose, and that Senator Duncan has not been altogether honest in his manner of submitting it.
– I have listened to the speeches that have been delivered in this debate with a great deal of interest. The speech by Senator Hannan has particularly interested me, and I take the first opportunity to assure him and the Senate that my motion was not drafted with any sinister motive. I simply felt when I submitted it that it was time some protest was made by the Commonwealth Parliament against the action of the British Parliament in refusing to endorse the resolutions of the Imperial
Economic Conference upon preference within the empire. I do not know, any more than Senator Hannan does, the attitude of the British people except from what I am able to glean from time to time in the press. But I do know that the British Parliament, after fully considering the matter, by a narrow majority turned down the proposals for preference within the empire, although it had agreed to reciprocal trade treaties with over 30 countries. In this regard I do not blame the British Government. I blame the British Parliament. I could have inserted in my motion the names of those 30 odd countries, but I felt that it was not necessary to do so. I considered it imperative, however, that I should indicate at least one country lest it might be said that, although I claimed that the British Government had entered into reciprocal trade relations with other countries, I could not mention one of them. I simply mentionedRussia because it was the last country with which a reciprocal arrangement had been made. Seeing that it was so far removed from Great Britain and was not a country to which Great Britain was under an obligation to anything like the extent that it was to Australia, I felt that it could fairly be quoted in the motion.
– Russia is one of Britain’s greatest markets.
– I know that it is, and also that Great Britain is one of Russia’s greatest markets.
– Even when Russia was constituted in an orderly fashion it was never as good a market for British manufacturers as Australia.
– No. When I submitted my motion I gave figures to show that Australia was one of the very best markets of Great Britain, and that Russia was not nearly so good a market for British manufacturers as Australia has always been.
– Leaving out of consideration the question of kinship altogether.
– Yes. In the circumstances, I felt that it was scarcely fair on thepart of Great Britain to extend to Russia a preference it was not prepared to give to Australia. Senator Hannan made a point of the fact that ho believed in the policy of “ Australia first,” and he told us that, after Australia, of course, it would be all right to show some special consideration for Great Britain. He also told us that there were millions of unemployed in Great Britain. A few short months ago a very powerful section of the Labour movement in Australia, the Sydney Labour Council, invited the workers of Australia to subscribe to a loan to assist the people of Russia.
– It was oversubscribed a number of times.
– But there has never been any attempt on the part of Labour organizations of Australia to float a loan for the benefit of their fellowworkers in Great Britain, who, according to Senator Hannan, are starving in their millions.
– They have never failed to subscribe every time their assistance has been asked.
– But they have never floated a loan for the benefit of the unemployed of Great Britain, whereas they have floated a loan for the benefit of the people of Russia. I should like to know what has become of the professions of honorable senators opposite and their policy of “ Australia first, and Great Britain second.”
– For every shilling the Australian worker has sent to Russia the workers of Great Britain have sent twenty, despite all their unemployed. The money was raised for quite a different purpose from that suggested by Senator Duncan.
– I do not know the object of raising this money for Russia any more than I know the object of the British Parliament in entering into a preferential trade arrangement with Russia, and not with Australia. In his speech, Senator Wilson showed very clearly his opinion of the action of the British Government. He has just returned to Australia with the most recent information it is possible for us to get, and has assured us that there is every indication’ that, in the near future, the British Parliament will alter its attitude upon the matter of preference within the Empire. Almost in his concluding words the Minister said he felt sure that the British Parliament would alter its decision. There are many indications that he is right. This being so, perhaps it would not be wise at the present moment to press the motion to a vote, although I believe that in the present temper of the Senate it would be carried. Inthe circumstances, I prefer to allow the matter to rest until wesee what the British Government proposes to do. It would, of course, be extremely awkward if this motion were carried by the Senate, sent to another place, and adopted there, and if, acting upon it, the Government brought down proposals to abolish preferential duties to Great Britain, and later, when an arrangement had been come to with the British Government for preferential treatment of Australian goodsin the British market, for Parliament to go through the formal process of reinserting thepreferential duties in the tariff. Although I believe that the motion ought to be carried as a protest against the action of the British Parliament, I realize that, because it might to someextent prejudice the negotiations that are still being conducted with Britain, and which the Minister assures us will, inall probability, be satisfactorily concluded to the mutual benefit of both Australia and the Mother Country, in the circumstances it would be wise not to proceed further with it. Therefore I ask leave to withdraw the motion, reserving to myself the right, if the circumstances warrant me,to place it again on the business-paper, and to press it to adivision.
Motion, by leave,withdrawn.
Appointment of Select Committee
Debate resumed from 21st August (vide page . 3437), on motion by Senator Gardiner -
That a select committee beappointed to inquire into the case ofMr. William Dunk, with full power to send for persons, papers, and records, and to move fromplace toplace, such committee to consist of Senators Graham,J. B. Hayes, H. Hays, Payne, Thompson, McDougall, and the mover.
– This is one of those unsatisfactory cases that arise from time to time. Here was a man who, whatever his motives, during the war stated his age to be many years less than it actually was, and on the strength of that statement, was accepted for service as a munition worker under a definite agreement. One of the conditions of that agreement was that whilst he was not guaranteed employment on arrival, on board shin, while pro ceeding to the other side of the world, he was to be treated to all intents and purposes as if he were a seaman in the employ of the Commonwealth, and in the event of injury during the voyage, he was to be entitled to compensation under the Seamen’s Compensation Act. The agreement was incorporated in the indentures signed by all persons who left Australia at that time for employment as munition workers in Great Britain, because there was always a risk that the vessels on which they were proceeding to England might besunk by submarines, with consequent loss of life or injury to those on board. It seems to me perfectly clear that having signed that agreement, the Commonwealth Government was liable, under the provisions of the Seamen’s Compensation Act, to pay Mr. Dunk compensation for any injuries received. Through the courtesy of Senator GardinerI have had an opportunity ofperusing the file dealing with this case. It includes many memoranda, some written bythe Crown Solicitor, all showing clearly that Mr. Dunk was employed bythe Commonwealth, and that the terms of the agreement entitled him to compensation under theSeamen’s Compensation Act. In view of the fact that all through the court cases, and in the arrangement made by the Government with Mr. Dunk, the Commonwealth admittedthat he had been injured during the voyage, it seems futile now forthe Minister tobring up a memorandum from anofficer ofhis department statingthat the department questioned whetherMr. Dunkhad really been injuredduring the voyage to England.
– That is notso. I read the medical officer’s reportmade afterMr. Dunk had arrived in England and had reported to the High Commissioner that hehad been injured. That report did not show that he had been injured.
– I suggest that it is of no use now to raise that question. In the court proceedings the Commonwealth admitted injury.
– The statement had been questioned, but apparently the High Commissioner overlooked it.
– It is futile now to raise that point. The Commonwealth should stand up to its admission that he was injured during the voyage.
– And he was compensated.
– We come now to the question of compensation. It is quite clear, that, after a great deal of trouble, Mr. Dunk agreed at a certain period to accept a lump sum as final compensation for his injuries.
– And it was paid to him.
– There is, however, internal evidence on the files, which suggests that when he accepted the lump sum as final compensation, Mr. Dunk was quite conversant with the provisions of the Seamen’s Compensation Act. Evidently he knew the procedure. I do not propose to raise the question whether, when he accepted a lump sum as final compensation, he did so in perfectly good faith, but evidently he was well aware that, unless and until the registrar had accepted the compensation as adequate compensation, and given his certificate in the terms of the act, the Government, even after it had paid the lump sum referred to, was not relieved of its responsibility. I was not aware of this until Senator Gardiner drew my attention to a letter from Mr. Dunk’s solicitors, Messrs. Wihdeyer, Fawl, and Osborne, which, as honorable senators from New South Wales know, is one of the most reputable firms of solicitors in Sydney. This point was definitely raised in their letter. It appears that the registrar had refused to give a certificate as to the amount of compensation unless and until either Mr. Dunk had intimated that he was entirely satisfied, or until a judge of the court had given his certificate that it was sufficient. It is impossible after only a cur sory review of the file, to give an exact’ precis of the- whole case, but my impression is that Mr. Dunk was entitled to compensation under the Seamen’s Compensation Act, and that the act lays it down that the registrar must give a certificate as to the adequacy of the compensation paid. It is incumbent upon the Commonwealth to carry the case to the point where it can get the certificate, because, until the certificate is issued, the Comomnwealth will be liable to pay compensation indefinitely, notwithstanding that it paid a lump sum to Mr. Dunk.
– Is there no other alternative - a judgment of the court?
– I said that the Government would be liable until it received a certificate from a judge.
– And Judge Scholes has already given his verdict.
– Judge Scholes said, at the particular period of the action, that no further moneys were payable to Mr. Dunk, because he had been overpaid, but the judge went on to say that when moneys became due, there was nothing to prevent Mr. Dunk from suing the Government. That is the position as I understand it. In my opinion, there is an obligation on the Commonwealth to go to the court, if the. registrar will not give his certificate, and get a judgment of the court that the amount paid is full, sufficient, and a satisfactory settlement of the claim. In view of the trouble which Senator Gardiner has gone to in connexion with this matter, and its generally unsatisfactory nature, I ask the Minister to look, into the point I have raised and see if it is not possible to have the case definitely settled one way or the other. Instead of the obligation being on Mr. Dunk to goto the court to get what he considers his due, there is an obligation on the Government to approach the court for a final determination of its liability under the. Seamen’s Compensation. Act. The Crown Solicitor, in one memorandum which I found on the file, admits that the case is one which hasto be considered under the Seamen’s Compensation Act. There is an earlier memorandum from the Crown Solicitor expressing a contrary opinion, but in the last one I am able to locate that is the definite opinion of that officer. In these circumstances I think the Minister should take the course I suggest.
– I am prepared to have that point reported upon by the AttorneyGeneral’s. Department. As it is a new point, and one which was; not raised by Senator Gardiner, I would suggest that the honorable senator ask leave to continue his speech at a later date to enable that aspect of the question to be considered.
– I am prepared to do that if the Minister will acquaint the Senate with. the. report of the Crown Solicitor on the point raised. I ask leave to continue my remarks at a later date.
Leave granted; debate adjourned.
Debate resumed from 7th August (vide page 2917), on motion by Senator Gardiner -
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.
– I am going to ask Senator Gardiner to withdraw this motion. If he will not consent to that course, and it is pressed to a division, I shall ask the Senate to vote against it. I direct the attention of honorable senators to the fact that the Treasurer (Dr. Earle Page), in the most unequivocal terms, said in introducing the budget -
When the Superannuation Bill was under discussion in Parliament, a promise was made by the Government that arrangements would be made to amend the act to provide for the special conditions of the defence service. Subsequently, a committee of officers of the Defence Department submitted a scheme, which some time ago was referred for actuarial investigation. On receipt of the actuarial report the matter will be immediately dealt with by the Government with a view to legislation. Any new provisions will date from the 1st July, 1924.
Again referring to the question he stated -
The utmost expedition is being ensured in regard to this matter, which is very technical and difficult. As many actuaries as possible are already engaged in the work.
Honorable senators conversant with the work of warrant officers and noncommissioned officers know that it is a very difficult and technical procedure to formulate a superannuation scheme on an actuarial basis in relation to them, because although many of these men served for upwards of thirty years, their service was in five-year periods. At the end of each period of five years they were re-engaged. The work of investigation is being pressed forward, and we trust that we shall soon be in a position to introduce the necessary amending bill. In any case, irrespective of the date at which the measure is passed, those concerned will not suffer because the scheme will come into operation asfrom the 1st July, 1924. If a select committee were appointed it could not do more than is being done by the officers who are inquiring into the matter. Although Senator Gardiner’smotion relates to retiring allowances I understand that he really has in mind a superannuation scheme, because in the strict sense of the term retiring allowances are of a different character. As inquiries are being conducted with the utmost expedition it seems unnecessary to appoint a select committee before which the actuarial experts would have to appear to give evidence when their time might be better employed in completing the investigations on which they are engaged. As it does not appear that any good purpose would be served by adopting the motion, I trust that Senator Gardiner will consent to its withdrawal.
– On the definite assurance of the Minister that an amending bill, providing for these men, will be introduced, I am prepared to accede to his request.
– As soon as the report is available, the necessary legislation will be introduced, and, in view of that assurance, I trust the motion will be withdrawn.
– In view of the definite statement of the Minister (Senator Pearce), which I interpret as a distinct promise that the Government will, with reasonable expedition, introduce amending legislation, I am prepared to withdraw the.motion. As the Minister states, the officers now conducting the actuarial investigation will probably be able to ascertain for our use the inf ormation which would be obtained by a select committee. The motion was submitted by me because the replies I received to certain questions suggested that the Government intended to postpone consideration of the matter. If it is their intention to expeditiously proceed with amending legislation to cover the case of these officers who have served their country well for a number of years, and some of whom are in a most distressing condition, I shall not proceed further. I accept the definite assurance of the Minister, and ask leave to withdraw the motion.
Motion, by leave, withdrawn.
Debate resumed from 21st August (vide page 3445), on motion by Senator Grant -
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.
– In common with the mover of the motion, I believe that if any doubt exists as to whether an ex-soldier’s incapacity is due to war service, he should be given the benefit of the doubt. According to the report quoted by the Acting Postmaster-General (Senator Crawford),I am of the opinion that it is doubtful if this man has been treated as fairly as he might have been.
– His case was reported on by at least twenty doctors.
– That may be so. I submit, for the information of the Senate, the following statement supplied by Lieutenant Payne to Senator Grant in answer to the report quoted by the Minister. It reads: -
I say that my medical records are incomplete, and that if the complete records of the whole of my case were before Parliament, I am sure that there would be no opposition to my securing the treatment of my case as a war disability.
General Hospital, Randwick, the medical officer who gave me the anaesthetic was Dr. Alexander, and Dr. Curtis Elliott performed the operation. The reason given for my being operated on in the ward and not in the operating theatre was that the theatre was too fully engaged, and my case was urgent. However, my official records state that I was first operated on for an ischio rectal abscess in September, 1917 yet Dr. Curtis Elliott’s statement of 12th December, 1923, reads: - “Mr. Wyllie Paine was operated upon early in 1917 for ischio rectal abscess inNo. 4 Australian General Hospital. This condition started shortly after healing of g.s.n. of arm.” “ Early in 1917 “ can hardly be meant to construe “ September, 1917.” Dr. Curtis Elliott’s statement that “ this condition started shortly after healing of g.s.n. of arm “ is also significant.
The matron of No. 4 Australian General Hospital also states, “ I remember perfectly well your being treated for abscesses on your body after your septic arm had healed.”
First vaccine treatment to clear up septic wound, and close wound in the arm, August, 1916.
Discharged (arm still discharging), August, 1916.
Wound in arm healed up, December, 1918.
First operation for ischio rectal abscess, January or February, 1917.
Operation to remove bullet from leg (was this wound then septic?), March, 1917.
Second operation for ischio rectal abscess, September, 1917.
Yet Dr. O’Gorman Hughes gives the opinion that the ischio rectal abscess originated four months prior to his examination, which would be about June, 1917. Even were Dr. Curtis Elliott’s and my own statements that I was operated on “ Early in 1917 “ incorrect, in Dr. O’Gorman Hughes’s opinion there was a period of, only six months from the date of my septic wound closing to the date of the origin of the ischio rectal abscess, not two years as stated by the Honorary Minister.
– The letter continues -
That is a statement which has been handed to me. If there is the slightest doubt, thisman should be given the benefit of it.
– The disabled soldier always gets the benefit of the doubt, if there is one.
– I question that statement of the Minister. He may be sincere and honest in making it, but, in the case of many men whom I know, the facts are not as he states. If the Government has an opportunity to defeat the returned men, it leaves no stone unturned to do it.
– The Government never interferes in these cases.
– The Government takes the report of the doctor in preference to the statement of the soldier, or any one else; and the doctor whose report it accepts is on the side of the Government every time and all the time. If the Minister does not know that, it is time that he realized it because it is absolutely true. When the soldier, who was promised fair consideration on his return, is pleading for a pension, the Government simply takes the doctor’s evidence and says that the complaint from which the soldier is suffering existed before his enlistment. If that is so, why did the doctors in the first place say that the man was sound in wind and limb and fit to go to the war? They were wrong in either the first or the second case. The doctors say that a man is fit and well enough to fight, yet, when he comes back with a complaint caused by his war service, they say that the trouble existed before he went to the war. That isnot honest on the part of the medical practitioners. I know of many cases where returned men have not been given the benefit of the. doubt, but in every instance the Government have accepted the views’ of the medical practitioners. Many soldiers have stated their cases to me, and every time I have made representations on their behalf I have been told that the trouble existed before their enlistment. This man should begiven the opportunity to state his case before some competent’ tribunal. If that were done, there would be no ground for any charge of unfairness on the part of the Government.
Senator Hoare has not understood this particular case, as the disease from which this main is suffering is not classified asa pre-existent disorder.
– It is a. post-war complaint.
– As men advance in years, various troubles must be expected to develop. Unless we are to adopt the principle that every man who went to the war shall, on. becoming ill, receive a pension, I do not see how we can say that when a case like this arises a pension should be granted.
– We must rely on the doctors; there is no other authority on whom we can rely.
– The Repatriation Commission is comprised solely of returned men who look on these matters sympathetically.
– Does the honorable senator think so ?
– Yes. One has only to look at the figures to see that. There is a far greater pensionlist to-day - six years after the termination of the war - than immediately after the armistice was signed.
– Many of the pensions are cut down, without apparent reason.
– The medical officers on the commission are all returned men, and they look into these matters very closely. A. man who has for some time lived a comparatively idle life may imagine that he is much worse than he really is. Possibly, I have dealt withfar more of these cases than has Senator Hoare,and I know that the doctors, in this state, at least, carefully and sympathetically consider them. Nevertheless, in the particular case which has been mentioned, there does seem to be room for doubt, as we all know that mistakes sometimes occur in connexion with these medical records.
SenatorCrawford. - We have the man’s own statement, made a few months after the operation was performed, in which, his refers to his other disabilities, but makes no mention of an ischio-rectal abscess.
– There is a distinct statement in his letter that, closely following on an operation for a gunshot wound, there was another operation for an abscess. The record of that operation seems to have disappeared from the file.
– There is arecord of an operation, but of a different nature. In that case a bullet was removed from his leg.
– He says that there was an operation on his arm, then one for the abscess, and, later, one , to extract a bullet from his leg.
– The records do not show that. They give a different history.
– That would easily be accounted for if the record of the first operation for abscess had disappeared. The difficulty can be solved easily, and I urge the Minister to make a further effort. The two doctors - Dr. Alexander, who administered the anesthetic, and Dr. Curtis Elliott, who performed the operation, and who gave some details concerning it - may have some notes from which they could supply a copy of the document which is said to be missing. If not, as the operation was urgent and was performed in the ward, instead of in the operating theatre, the circumstances should be remembered by them. It should be possible to get in touch with those twodoctors to verify the man’s statement.
– Does itnot strike the honorable senator as peculiar that the man did not mention that operation, if it took place?
– That omission certainly raises a doubt, but it might have been an accidental omission on his part. So long as these is a chance of an injustice having been done,the Minister should leave nostone unturned to make quite sure of the position. It seems wrong to refuse this man an opportunity to put matters right. I know that, in many cases, the medical files arenot correct. Ihave in mind the case of a man inGippsland who was wrongly classified as suffering from venereal disease. A leaf or two from the file of another man ofthe same name had become mixed with hisfile, and he was refused treatment. Eventually the matter wasstraightened out. We all know that these things sometimes occur, and that files get mixed. That might have happened in this case. While there is the slightest chance of injustice having been done,the Minister should notlet the matter restbut it seems like using a steam hammer to crack a nut to appoint a select committee to inquire into this case. I hope that it will be possible to do in another way all that is required.
– I am quite prepared to make further investigations into the matter, but I do not think that a Select committeewould serve a useful purpose.
– It is only as a last resort that I seek the assistanceof the Senate in regard to an individual case. The Minister (Senator Crawford) wishes to impress upon honorable senators that a long time elapsed betweenthehealing of this man’sarmand thefirstappearance of the ischio-rectal trouble.Inthe course of ‘the statement whichhas been read, Lieutenant Paine gave thesequence of his illnesses-
– Senator Crawford denied that Lieutenant Paine said there was any lengthy interval between the two conditions.
– That makes my case all the stronger. Lieutenant Paine states -
I was first operated on for an ischio-rectal abscess either in December, 1916, or in January or February, 1917. The exact date of this operation should be procurable from my records, but it is not. Thisoperation was performed inthe officers’ ward at No. -4 Australian General Hospital,Randwick. The medical officer whogaveme the anaesthetic was Dr. Alexander, and Dr. Curtis Elliott performed the operation. The reasongiven for my being operated on in the ward, and not in the operating theatre, was that the theatre was too fully engaged, and my case was urgent. However, my official records state that I was first operated on for an ischiorectal abscess in September, 1917. Yet Or, Curtis Elliott’s statement of 12th December, 1923, reads - “ Mr. Wyllie Paine was operated upon early in 1917 for ischio-rectal abscess in No. 4 Australian General Hospital. This condition started shortly after healing of gunshot wound of arm.” “ Early in 1917 can hardly be construed as “ September, 1917.”
– He might easily have been out in his dates. He was not quite sure to a month.
– That is quite natural. Who of us can cast his mind back four or five years? Lieutenant Paine’s statement continues -
Dr. Curtis Elliott’s statement that “ this condition started shortly after healing of gunshot wound of arm “ is also significant.
I ask honorable senators to bear in mind that this man left the country in good health. He has undergone a great many operations ; so many, in fact, that he does not know the number.
– He remembers this particular operation, and he remembers the date.
– He was shot in the arm, and on his return to Australia he was operated on repeatedly. He has a wife and four children, and now he desires that the Government should defray the cost of a further operation, which he hopes will result in his permanent cure.
– In cases where the Government is liable to provide hospital treatment, it is also liable for the payment of pensions.
– So it should be.
– Such payments can only be made in accordance with the act.
- Dr. Jarvie Hood is of the opinion that the complaint is due to war service.
– Dr. Hood is a physician, but the other medical men who have reported on the case are surgeons.
– The opinion of Dr. Hood is that the complaint is due directly or indirectly to war service.
– That opinion was given six years after he saw the man.
– He has seen him since, but some of the doctors acting for the Government have never seen him, and are guided only by the incomplete records furnished by the department. This man’s body was weakened in his country’s service, and in my opinion his blood was poisoned, with the result that the ischiorectal trouble supervened. The only way in which the necessary evidence can be obtained is by the appointment of a select committee. As it will be impossible for Lieutenant Paine to obtain redress in any other way, I confidently ask the Senate to support the motion.
Question - That the motion be agreed to - put. The Senate divided.
Majority . . . . 1
Question so resolved in the affirmative.
That the committee report to the Senate on 11th September next.
Senate adjourned at 10.3 p.m.
Cite as: Australia, Senate, Debates, 28 August 1924, viewed 22 October 2017, <http://historichansard.net/senate/1924/19240828_senate_9_108/>.